MUMBAI: Reserve Bank of India Governor Duvvuri Subbarao will meet select bank chief executives on Thursday to discuss risk-based supervision in banks, with recent sting operations on some private banks providing the backdrop. The Governor will be joined by former Deputy Governor Usha Thorat in Mumbai for a half-day workshop that will explore methods by which banking supervision could be strengthened, said two people familiar with the agenda.......
The very purpose of VITALINFO is to provide a platform for wider dissemination of updated information related to and happening of events in and around RBI.
Monday, March 18, 2013
Remember Caesar's wife
.....As the banking supervisor, the Reserve Bank of India (RBI) needs to look at these claims from the perspective of supervisory efficiency. If, in fact, this was a regular practice by the banks concerned, should it not have come to the notice of the supervisory process? If it did, was this explicitly communicated to the banks that were found to be indulging in this activity? If it didn't, it suggests a lacuna in the supervisory framework......
Rangarajan Sees Elbow Room for RBI Governor
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| The former RBI governor’s statement is significant as he had backed the central bank when it refused to cut rates for most of last year, despite pressure from the government. |
Both hands now
........And since much of the RBI’s actions are predicated on the belief the government is serious about fiscal consolidation, the government’s commitment to a Food Security Bill continues to be worrying, more so given the level of provisioning the Budget has done for food subsidies. Which is why a 25 bps rate cut on Tuesday looks more likely than a 50 bps one.
RBI's Sinha to offer L&T top brass governance tips
MUMBAI: Reserve Bank of India (RBI) Deputy Governor Anand Sinha will address the top brass of engineering conglomerate Larsen & Toubro (L&T) on governance issues in banking, cementing the seriousness of the group's desire to own a bank. Sinha will address the executives on "governance in banks and other financial institutions", says the information posted on RBI's website.......
Read - ET
RBI conducts outreach programme in Nagaland
The Reserve Bank of India conducted a Financial Outreach Programme at Mhainamtsi Village in Peren District today. Addressing as the Chief Guest R. Gandhi, Executive Director, Reserve Bank of India said that during the past few years RBI has been consistently making responsibility to visit villages to spread awareness about the importance of financial inclusion and availability of financial services and products...........
RBI Recruitment 50 Posts of Meritorious Sports persons / Quota 2013
Reserve Bank of India Invites applications from interested Meritorious Sports persons for the following Posts :
RBI should cut interest rates: SBI chairman
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| "At present, the CRR is 4 per cent. It should be reduced to 3.5 per cent and the repo rate, which is at 7.75 per cent, should be reduced to 7.25 per cent. This would result in lowering of interest rates on all loans, which would boost the economy," |
Policy pointers
.....The Finance Minister has made it very clear that having budgeted for a reduction in the fiscal deficit, thus delivering on his promise to keep it within reasonable limits, he expects the RBI to ease monetary policy. There need not be a quid pro quo — after all monetary policy has to take note of inflation challenges, but such has been the impact of the budget messages, backed, as usual, by some strong lobbying that the RBI will have to reduce the policy rate by at least 0.25 percentage points.......
RBI credit policy: Will Mint Street and Dalal Street unite to sustain FII flows?
......The expectation is that the reduction in the fiscal deficit creates conditions for the RBI to cut interest rates and that this will revive private investment. However, as the RBI has pointed out repeatedly, high interest rates are not the principal deterrent to investment today. The real weighted average lending rate in 2011-12 of 3.8% was way below the average of 7% in the boom period 2004-08..........
RBI's largesse may spark rally
......If RBI doesn't cut at all, the market will crash. If RBI does cut by a minimum, the market will lose some ground or, may be, remain, unaffected. If RBI does gamble on kick-starting growth and makes a larger cut of 0.5 per cent, there will be a rally. If Subbarao believes a big cut makes sense, he will probably wait for the next policy review, in April, when there are more data. ......
RBI action: Toss-up between pause and 25 bps cut
........Clearly there is space for monetary policy easing, analysts said. Reasons: Fiscal adjustment is underway with significant reduction in deficit with credible measures and assumptions; also borrowing numbers are realistic. Although there is a case for 25 bps cut, analysts are not sure whether the RBI will cut the key repo rate. "We think that it will be a toss-up between a pause and a 25bps cut," said a note from Deutsche Bank...........
Finance Ministry plans 100% e-refunds
......A Permanent Account Number (PAN) linked with the bank account number, just like Aadhar, is integral to the Income Tax department's plans. It wants the central bank to facilitate this ceding so that the scope of the amount being transferred to a wrong account number is eliminated. However, RBI is not comfortable with the idea of making PAN linkage mandatory for electronic transfer of all income tax refunds. .....
Current account deficit solution lies with Reserve Bank of India
........A weaker rupee will not only help exports become competitive but also provide much needed protection to the domestic industries. It will also help shore up customs revenues. Containing inflation may become more difficult but that seems less difficult now than containing the current account deficit. Therefore, the Finance Minister should talk to the Reserve Bank Governor and find ways of tackling the problem of ballooning current account deficit through appropriate foreign exchange management policy rather than look to changes in Foreign Trade Policy.
CAD: The cad behind stunted growth?
.....In fact, we have to realize that compressing the dimensions of CAD is as imperative as financing the CAD. The CAD of 5 per cent of GDP for 2012- 13 stands as a monument to our mismanagement of macroeconomic policy. The credit of spelling out a more appropriate approach to tackle CAD should go to the Reserve Bank of India ( RBI). " With a lower growth, the sustainable level of CAD is now assessed at around 2.5 per cent of GDP. For minimizing the possibility of external shocks further disrupting India's growth sustainability over the next few years, it is important not only to focus on financing of the CAD, but also on compressing the CAD to lower, manageable levels. Otherwise, there are risks to the CAD from both domestic and external events. In the recent period, the CAD has been managed by improving debt inflows.....
My View on "RBI needs to strengthen its balancesheet: Report"
In the context of GOI expectations expressed through showing an expected receipt of Rs44,000 crore as share of profit/dividends from institutions including RBI(Budget 2013-14), this suggestion to take care of RBI's balance sheet strength gains importance. To ensure that temptations of government emanating from external compulsions do not dilute the strength of RBI’s balance sheet, GOI should take measures to augment the share capital of RBI after carrying out appropriate amendments to RBI Act. Till such time RBI should be allowed to retain surplus income by transfer to reserves. Considering the size of its balance sheet and the internal and external pressures on its income generating capabilities, as also the nature of shocks the Bank has to absorb from time to time, the central bank’s reserves need to be augmented on an ongoing basis.
- M.G.Warrier
Why UFBU and IBA Are Silent on Wage Revision ?
It is now almost two weeks since the scheduled meeting between IBA and UFBU to discuss 10th BPS issues, was postponed. It seems none of the parties are keen to fix even the next date for discussions........
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Debit card for cash, credit card for shopping
.....Such a high level of proportion of debit card-based cash withdrawals from ATMs suggests the cards industry is predominantly made up of bank accountholders taking cash out their savings and deposit accounts and then utilising it. It also indicates the level of savings-based cash coming into the economy from ATMs. Credit card-based ATM withdrawals, which would indicate borrowing-based cash coming out of ATMs, are, however, far smaller in value, compared with debit card withdrawals.......
Vijaya Bank gesture to women
BANGALORE, MAR 14:
Vijaya Bank has announced that it will start three all women branches in Delhi, Mumbai, Bangalore. Also for women entrepreneurs, the bank is offering 25 basis point interest concessions in the MSME advance and additionally, 25 per cent of CGTMSE fees in respect of women entrepreneurs will be borne by the bank............
Pvt banks may be brought under financial inclusion
...............RBI has urged the controlling heads of banks to bestow their personal attention for allocation of villages as well as provision of banking services in these villages. They have also been asked to ensure that fresh opening of adequate number of brick and mortar branches in these un-banked villages are factored in their annual branch expansion plan submitted by the bank's head office to RBI..................
RBI says would take action against HSBC based on findings in AFI report
......Replying to a Right to Information (RTI) application filed by Indian Police Service (IPS) officer Amitabh Thakur and social activist Dr Nutan Thakur, the central bank said the matter was examined during its AFI of HSBC. The RBI, however, has refused to share the findings of the AFI report. It said, “The matter was examined during AFI of the bank, however, the findings of the same are received by us in a fiduciary capacity and the disclosure of the same may prejudicially affect the economic interest of the bank (HSBC). Hence the same is exempted from the disclosure in terms of Section 8(1)(d) and (e) of the RTI Act, 2005.”......
Subsidiary route: HSBC says ready to follow RBI norms
......"We will move whichever way the RBI requires us to do," HSBC India Country head Naina Lal Kidwai told PTI on the sidelines of an event here, when asked if the bank will be fine with going the subsidiary way. The comments come in the wake of recent reports that RBI had firmed up its mind on the way forward for foreign banks and would be insisting on them to operate as subsidiaries.........
'Rural wage hike pushing inflation, posing challenge for RBI'
................."Near 20 per cent annual increase in the wage inflation in rural areas is building up price pressures on food articles like cereals, rice and wheat, and is posing a big challenge for the Reserve Bank which is being called upon to cut the policy interest rates on Tuesday," industry body Assocham said.................
The real money laundering
............ If a regulator has to make an affidavit in the Supreme Court that it cannot find thousands of reported investors in two of such schemes — a total absence of KYC norms — how far is that from money laundering? We are not talking chicken feed here. The Cobra Post sting did not put even one rupee in the banking system; the other one has put in Rs 17,400 crore.
Read - IE
SBI officers under lens in fake currency case
.....Three officers of the Dalmianagar branch of State Bank of India (SBI) in Rohtas district have come under the scanner following a complaint lodged by the Reserve Bank of India (RBI) accusing them of depositing fake currency notes. Ram Jatan Paswan, the manager of RBI, Patna, lodged a complaint with Dalmianagar police outpost in Rohtas district on Saturday, alleging that the officials of the bank concerned sent seven fake currency notes to the RBI in Patna last January.........
The govt must bring money launderers into the tax net without further delay
......The banking regulator, RBI, too needs to take stock after ensuring financial inclusion of the poor is not affected. A handful of officials from the banks in question and their group insurance companies who were encouraging money laundering are certainly not the only exceptions in the country. Today, many banks are smart users of banking technology and can easily intercept potential cases of KYC mutilation by any of their branches. We do not know how robust their IT systems are, but we do know that there are far too many other banks in the country where even the IT systems do not exist to detect branch-level offences. RBI, the finance ministry and even the insurance watchdog need to get doubly serious........
ICICI BANK and black Money
..........The Regulators cannot be expected to keep a watch on the individual transactions which is the duty of internal supervisors,accountants and auditors.Financial intelligence Unit can however keep a watch on such high value transactions as banks are expected to report to them...........
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HDFC Bank appoints Deloitte for forensic enquiry
HDFC Bank on Saturday said it has appointed Deloitte Touche Tohmatsu India to conduct an independent forensic enquiry into the allegations that it was one of the three private banks to run a money laundering racket in the country. The private lender has also roped in Amarchand & Mangaldas & Suresh A Shroff & Co to examine if any of its employees violated the bank's code of conduct and ethical standards. The bank's internal department is also probing the matter..........
CobraPost Sting: Don't settle for the small fry, follow money trail
.......If true, the top brass in these banks (not just the officials who presumably are carrying out the mandate of the bank’s top bosses) are as much partners in crime as their customers seeking to launder black money. They have much to answer for. Meanwhile, we need to pause and re-consider: does the country really need to issue more bank licences if this is what some of our most respected banks are doing? What price ‘financial inclusion’?...........
CobraPost Sting : Wake Up Call For RBI and MoF
...... Is it possible that so many officials across India toe the same line without the patronization of top brass? This is not an isolated incident but malpractices are prevalent across country in banks now under scanner. Why ICICI Bank and RBI are shy of taking action against top brass. Delay in action by RBI will mean allowing the corrupt officials to wash out the evidence.............
Banking on unaccounted money in India
.........The scandal, which Cobrapost broke by making one of its scribes pose as a frontman for a politician with two (fictitious) wives who wanted to deposit their surplus cash with the above institutions, has come at a time when the RBI was planning to issue a series of bank licences to private players for the first time in nearly 10 years..........
‘22,000 firms not registered as NBFCs committing financial frauds’
.....“The RBI, as the regulator of NBFCs, should immediately penalise companies that are not registered with them as NBFCs…Unscrupulous companies pose as NBFCs to invest money in MLM schemes with promises of heavy but mathematically improbable returns on investments, particularly when persons originally enrolled in a scheme induce others to join the same scheme. Such schemes bring adverse publicity even for the companies that are engaged in bona fide businesses,” .....
KYC Has Become a Tool for Financial Exclusion
........ Various players in the financial services industry have been crying for a while about how onerous the KYC processes are and how it is keeping away customers. Unfortunately, while that may be true, there’s plenty of anecdotal evidence to suggest that KYC acts as a convenient filter to keep out undesirable customers. Many a time, banks and mutual fund distributors have demanded authentication in excess of what is required............
Read - ET
Comprehensive Suggestions for Restructuring of NMDFC sent to Minority Minister
......... The smaller community based financial institutions and cooperative credit societies who are closer to the community have been suffering due to number of regulatory problems posed by financial regulators like RBI and IRDA because they are not allowed to turn into bank with provision to offer equity deposits and finance. They cannot promote any insurance product without interest. Not any single scheme floated by our Central or State Governments have so far provided financial aid to any community based financial institution or cooperative credit society...........
Fast-track project clearances, banks tell Centre, States
............In its macroeconomic and monetary development document, the Reserve Bank of India has observed that lack of reliable power supply has emerged as a challenge to capacity utilisation by small- and medium-scale industries. The central bank also said that policy uncertainties in areas such as iron ore and coal mining have adversely affected the output of the steel and power industries..........
Tag road loans as secured, RBI told by Finance Ministry
The finance ministry has urged the Reserve Bank of India to consider a change in its stance that treats loans to road projects as unsecured. If the RBI sheds its reluctance to treat highway sector lending as secured loans, credit flows to the fund-starved sector could grow by at least 20%-25%, officials reckon...........
Profitability of Indian banks to dip in FY13: CII Survey
Indian banks are yet to get rid of financial bruises. In 2012-13, their profitability is likely to "decline sharply" due to two reasons: stricter regulatory requirements and stress assets, according to a survey done by Confederation of Indian Industries (CII) taking feedback from 15 lenders including five state-owned, three private sector and seven foreign entities...........
My View on "Wage Revision in Banking Sector"
Dear Shri Warrier,
Your article is ahead of its time i.e; not digestible to the intellectually challenged bureaucracy at this point of time. Rationale wage policy still eludes us. It is learnt that Shri Rajiv Takru , Secretary Financial Services, has agreed to the fact that the pensioners who retired before 2002 may be given 100% neutralisation in DA subject to fact that the entire expenditure would be met from the wage load agreed to by IBA and UNIONS. It means existing employees must agree to share the burden of long back retired employees. Will they agree? Our own D.G.(Admin) says that 70% of wage revision should be on fixed criterion and 30% should be a variable component.How is he going to cajole the UNIONS? IBA has postponed the talks which was scheduled to be held on 4 March indefinitely so as to receive necessary guidance from MoF which itself does not know how to proceed.Are wages to be fixed on the basis of views of semi literate leaders of Unions who have their own axe to grind (More LEVY) to delay the agreement or on the basis of an enlightened policy to attract talent to banking sector? Should not this matter engage the attention of FM Shri Chidambram, RBI GOV, Shri Montek Singh, Shri Raghuraman, Chief Economic Advisor etc; who have stake in India's growth where banking is of paramount importance?
- Sitendra Kumar
Women’s bank will remove prejudices: Chidambaram
.........After inaugurating Canara Bank’s new branch at Siravayal, near Karaikudi on Saturday, Mr Chidambaram said the exclusive bank for women would be started this year with six branches. He said the bank for women is being started not because women do not get financial assistance in other banks, but there has been an inadvertent bias and prejudice against women in lending loans. The proposed bank, he said would realise the needs of women and lend financial assistance for self employment, women empowerment and education............
CIC to hear appeal seeking names of SBI’s defaulters
.... In his second appeal with the CIC, the activist has quoted an earlier CIC decision in the case of P P Kaoppr Vs Reserve Bank of India in which then information commissioner Shailesh Gandhi had directed RBI to disclose names of defaulters of PSU banks on the bank's website.
Now, banks harass wives of alcoholic debtors
............Bailancho Saad is in receipt of some complaints about wives having to face harassment from bank officials when alcoholic husbands default on payments. In one such case it had to approach Porvorim police station to stop bank officials from harassing the wife. In view of a rise in such cases, Bailancho Saad wants to approach the Reserve Bank of India (RBI) to have regulations so that there is proper verification before a loan is sanctioned. "We have prepared the draft," said Martins, who says the drinking problem has reached dangerous proportions in the state and yet there is no intervention by the government.
Good response to all-women bank proposal: FM
Union Finance Minister P Chidambaram today said his budget proposal on setting up the country's first all-women bank has received good all-round response. "Though the Reserve Bank Norm says that initial capital of Rs 500 crore is enough to start a bank, the all-women bank would be set up with an initial capital of Rs 1,000 crore,".........
SBI to open 1,200 branches, 8 overseas offices next fiscal
...........Under the bank's domestic expansion plans, about 100 branches would be opened in West Bengal, Uttar Pradesh, TamilNadu, Maharashtra and Andhra Pradesh. Meanwhile, the state-owned bank is in the process of recruiting 1,500 probationary officers to man its increasing operations. The bank has received 17 lakh applications for these posts..........
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