The irony of paradoxes !

......But the RBI has to work very hard for this as Indian banks follow no voluntarism most of the time. After the long spell of policy inertia, the RBI is finally making plans to allow more licenses to new banks but that alone will not guarantee its entering of bonhomie with the finance ministry. Still they stand at distances while discussing the fate of economy. This dumps the prospect for change.............

Read..........

CAD: A slippery slope that may stop Reserve Bank of India in its tracks

The frequency with which a topic comes up in a discussion indicates the significance of it. By that yardstick, current account deficit takes the centre stage at the Reserve Bank of India policy making as inflation and fiscal deficit are pushed to the background. The central bank Governor Duvvuri Subbarao referred to the current account deficit, the excess of spending overseas over earnings, at least 22 times in a call with economists on January 30.............. 

Read - ET

Fake notes of Rs 8.83L deposited in A’bad banks

Over Rs 8.83 lakh in fake currency notes have been deposited in various banks across the state over a period of six months, according to a complaint lodged by Special Operations Group (SOG) with the Crime Branch on Sunday in this regard.............

Read - Ahmedabad Mirror

RBI should ‘cheque’ out its position

.....Some Scandinavian countries have rung the curtain on cheques already, with Internet banking and its adjunct electronic payment taking firm root. Britain has said that 2014 would see the last of cheques. The RBI seems to be in a tearing hurry to join these worthies — and some would go to the extent of saying that it has got its priorities wrong. Some would argue that for a country such as India with a huge rural population, the country has jumped the gun by becoming a ‘service economy’ even before developing sound agrarian and manufacturing bases as necessary adjuncts. Cynics see a similar trend in the RBI’s tearing hurry — seeking to free the country of cheques, even as banking penetration is hardly complete, with banks being conspicuous by their absence in large swathes of rural India. But in all fairness to the RBI, it must be said that usage of cheques can be minimised by incentivising its non-usage and disincentivising its usage in places where they are in vogue.......

Read - HBL

Ombudsman washes hands of internet banking frauds

The infinite ease of internet banking has made it a great hit among urban customers. But if one of them loses money in an internet banking fraud and if the bank does not reimburse the victim, the Banking Ombudsman too could well wash his hands of it. The Maharashtra State Banking Ombudsman has refused to intervene in a dispute between a Kolhapur-based businessman, R. Unnithan, and his bank claiming that the case involves ‘elaborate documentary and oral evidence.’.........

Read - The Hindu

Grabbing depositors funds

The RBI will be the latest to join the bandwagon on grabbing funds lying with banks to implement a Depositor Education & Awareness Fund (DEAF). The question is: Will the Fund actually serve depositor interest or live up to its hilarious acronym and remain deaf to consumer issues? Deposits and benefits that remain unclaimed after 10 years will be transferred to DEAF. RBI has already initiated a process of disclosing unclaimed deposits, although there are plenty of complaints about the transparency with which individual banks have been implementing this..........

Read - Moneylife

Regulatory forbearance on NPAs must never be a permanent feature

......The Reserve Bank of India (RBI) has done well to accept the broad thrust of the recommendations of the expert group set up to look into prudential guidelines on restructuring advances. The committee had suggested a phased end to regulatory forbearance (central bank-speak for turning a Nelson's eye to impaired bank assets). ...........

Read - ET

Single regulator may cure many ills

....As far as banks and non-banking finance companies (NBFCs) are concerned, it is important for them to first obtain permission from RBI before applying to Sebi for an investment advisory license. We hope RBI allows department or divisions of banks and NBFCs that render investment advisory services to get regulated by Sebi, keeping in mind the larger interest of the customers.............

Read - Mint

INTERVIEWS TO FILL PSU BANKS’ CHAIRMEN BY NEXT WEEK

The appointment’s committee will hold interviews to fill PSU banks’ chairmen posts before mid-February, within a fortnight of new secretary for banking services Rajiv Takru taking charge as the three-year term for the interview panel comes to an end in about two weeks. Since waiting for the new panel could delay appointments, the outgoing panel will rush. So, aspiring candidates are gathering information on Mr Takru.

ET

Reining In NBFCs

.....In September 2010, the RBI constituted a committee headed by Deputy Governor Usha Thorat (she was just about to retire) to look at how to better regulate NBFCs. The Thorat committee submitted its report, and the RBI has now sent its draft guidelines based on it to the finance ministry. If all the recommendations in the RBI draft are accepted, the NBFC universe will see a shakeout and lots of exits. In fact, over 70 per cent of NBFCs may have to deregister from the RBI. The Thorat committee recommendations and the RBI draft have drawn howls of protest from NBFCs, especially the smaller ones. Even some of the...........

Read........

Change in Directorate

.....Central Government, vide its notification dated February 04, 2013, has nominated Shri. Rajiv Takru, Secretary, Department of Financial Services, Ministry of Finance, to be a Director on the Central Board of Directors of State Bank of India.......

Read - HBL

Rajiv Takru nominated on RBI Central Board

The Central Government has nominated Rajiv Takru, Secretary, Department of Financial Services, Ministry of Finance, New Delhi as a director on the Central Board of Directors of the Reserve Bank of India.........

Read...........

‘Who are you?’ asks Sebi’s adviser regulation

............The Reserve Bank of India (RBI) needs to ensure that banks fall in line because bank branches are dens of mis-selling at the moment. RBI must lean on banks to get Sebi Adviser Regulation-compliant. The regulation navigates the regulatory turf quagmire of dealing with banks by asking banks, non-banking financial companies (NBFCs) and other corporate bodies that have bundled advice and vending to segregate the two. What this means is that the bank branch will now have..........

Read - Mint

WAIT FOR RBI DEPUTY GUV URJIT PATEL’S VIEW GETS LONGER

The wait to hear the views of RBI’s newest Deputy Governor Urjit Patel is getting longer. The curiosity is more given that he was quite critical of the central bank’s way of handling inflation. It is a given that the institutional discipline will lead him to support the governor’s view, at least in public. In fact, the governor offered Patel a chance to speak to the media, but was politely declined. Will Patel change the way the RBI thinks, or will move to the way RBI thinks?

ET

‘Risk involved in investing in gold has heightened’

The steep rise in gold prices over the past few years indicates that the risk involved in investment in gold has heightened, cautioned K. C. Chakrabarty, Deputy Governor, Reserve Bank of India. This is a fact which is not recognised by people, he said at a Workshop on Financial Literacy. Some basic concepts are not fully appreciated even by seemingly literate groups, resulting in assumption of excessive risks. “One example that I often quote about the widespread financial illiteracy is the theory being floated around by the so-called ‘financial advisers’ about investment in gold being a ‘hedge against inflation’ and a ‘safe asset’,” said the Deputy Governor..............

Read - HBL

Pitching For Debt

......... Harun R. Khan, RBI Deputy Governor, is on record stating that catering to the needs of retail investors is often an essential part of the overall strategy to develop a more diversified investor base for G-Secs. “Reliance by governments on captive sources of funding, whereby financial institutions are required to purchase and hold government securities, is diminishing in many countries. Instead countries are developing a diversified investor base for their G-Secs. In the Indian context, the Statutory Liquidity Ratio prescription, under which banks are required to hold a certain percentage of their deposits in G-Secs, is also declining,” said Khan...............

Read.......

Interest on current account

.................The move will also help more flow of funds into the system for productive use. There is no reason why banks not pay interest on current account deposits. The proposal takes a balanced view and should be welcomed and, to start with, anything up to 2% appears perfectly justifiable.

Read - FE

Guv Subbarao and a Consensus that was a Discussion

It is rare for a central banker to have a slip of the tongue, especially, Governor Duvvuri Subbarao. After a surprise repo and a cash reserve cut, it was speculated that the Governor yet again go against popular view, which was that there would be only a 25 basis points cut in repo rate. At the monetary policy briefing, he uttered the near impossible word — ‘consensus’ in the Reserve Bank of India. But that was only short-lived. He immediately recovered to say that the decisions were after a discussion. Consensus will continue to remain elusive and, so, keep expecting more shocks! 

ET

IMF says central banks should be responsible for financial stability

Washington: Financial stability should become a core central banking objective alongside monetary policy, although potential conflicts between the two functions might require some institutional re-design, the International Monetary Fund (IMF) said on Monday. IMF in a study noted that although central banks had delivered low inflation, they had failed to prevent the devastating global financial crisis of 2008-2009........

Read - Mint

Most banks say benefit of rate cut to show up after 3 months

Several private and public sector banks that have not cut lending rates despite the reduction in key rates last week by the Reserve Bank of India (RBI) said they would be able to cut rates only when their cost of funds come down – which could take three months. So far, only a handful of public sector banks have cut lending rates, while the bigger players have either stayed away from any reduction, or slashed rates selectively.........

Read..........

Tax breaks likely on home, accident cover

Soon you may be able to get tax deduction on buying an insurance plan for your home or a personal accident cover. The finance ministry is considering a proposal to give additional tax benefits for purchasing these general insurance policies. The proposal, currently under examination, suggests hiking the tax deduction limit under Section 80-D of the Income Tax Act to provide an additional deduction of at least Rs 10,000 per year for purchasing a home or a personal accident cover...........

Read - IE

FII investment ceiling raised in IRB Infra, Radico Khaitan

.....The RBI said the approval is given subject to the condition that compliance with FDI policy and FEMA regulations including downstream investment would continue to remain on IRB Infrastructure Developers and Radico Khaitan.

Read - HBL

RBI urged to revamp affordable housing loans

The Union Minister of Housing has made a plea along with Finance Minister to the RBI for restructuring of loans for affordable housing in case the project is delayed due to extraneous reasons beyond the control of the developer............

Read - HBL

RBI takes UP cooperative bank CEO, directors to court for ‘money laundering’

The Reserve Bank of India (RBI) has filed a criminal case in Lucknow’s chief judicial magistrate’s court against directors and the CEO of a cooperative bank -- Indian Mercantile Cooperative Bank Ltd – for alleged money laundering worth hundreds of crores involving fictitious entities. The bank is linked to BSP Rajya Sabha MP Akhilesh Das Gupta. His wife, Alka, a former head of the bank who is still on its board, has been made a respondent by the RBI.........

Read - TOI

Grameena Vikas Bank opens 125 ultra-small branches

.....Andhra Pradesh Grameena Vikas Bank (APGVB) has opened 125 ultra-small branches across the State on Tuesday. With this the total number of ultra-small branches (USBs) of the State Bank of India-sponsored regional rural bank now stands at 230. “We are proposing to open another 170 ultra-small branches to take the total tally of 400 by March 2013,’’ K. Lakshmana Rao, Chairman, APGVB, said in a release. These branches are likely to be converted into full-pledged branches after attaining a sizable business volume according to the Reserve Bank of India guidelines.......

Read - HBL

Aircel, ICICI Bank team up for mobile money banking service

......On signing up, customers will be able to use Mobile Money service instantly on any mobile phone even without a data connection service. A customer need not have an account with ICICI Bank. Once signed on the customer will be automatically directed to the bank, he said. All the necessary regulatory permissions, including Reserve Bank of India, have been acquired for the new service.......

Read - HBL