BANKING ON TRUST

 Public sector banks in India are a symbol of security and trust. With the support of government, these banks have evoked for generations a sense of assurance among borrowers when they deposit their hard-earned monies. Be it products or new initiatives, public sector banks have been at the forefront. Take for instance, the recent government's decision to announce an 'All Women Bank' in public sector, which was cheered by all and sundry. This new public sector bank is expected to add to the enriching experience of the customers by offering more customised solutions catering to varying needs...........

Read - ET

Srikrishna panel insists on single unified regulator in financial sector

The financial legislative framework is set to change with sweeping changes to be recommended by Justice (retd) BN Srikrishna chaired Financial Sector Legislative Reforms Commission (FSLRC). Despite vehement opposition from various financial regulators, FSLRC proposes a unified regulator for the rest of the financial sector barring the Reserve Bank of India, which will work as the monetary authority, banking and payment sector regulator in the interim.........

........The commission recommends converting Deposit Insurance and Credit Guarantee Corporation into a new body called Resolution Corporation and Securities Appellate Tribunal to be changed to Financial Securities Appellate Tribunal, which will hear appeals against all financial regulatory agencies including RBI. The commission recommends Financial Stability and Development Council (FSDC) to continue as it is. Two new entities have been proposed - Debt Management Office, carved out of RBI and Financial Redressal Agency (FRA)............

Read | Business Standard

FSLRC working group on banking reforms endorses new organisation structure for urban cooperative banks

................The Working Group (WG) set up by Banking Financial Sector Legislative Reforms Commission (FSLRC), has endorsed policy recommendations of the Malegam Committee for creating a new organisation structure for urban cooperative banks (UCBs) to deal with the issue of dual control. The WG headed by Kishori Udeshi, former deputy governor of the Reserve Bank of India said, “any cooperative society accepting deposits exceeding a specified value must fall within the regulator purview of the banking regulator (Reserve Bank of India-RBI).”..............

Read - Moneylife

Will new banks be a gamechanger? - S.S.Tarapore

......The M.B.N.Rao Committee should examine whether the new bank should be yet another public sector bank, albeit with a mandate of being managed by women for women, or should it be an oversight agency to monitor operations of all banks relating to women and whether the new banks should also be a refinancing agency? For instance, the oversight agency could require all banks to convert at least one per cent of their branches in a period of one year to all-women’s branches operated by women exclusively for providing credit to women. This way, about a thousand all-Women’s branches would be set up in a year. It would take a public sector Women’s bank decades to set up a thousand branches.........

Read - HBL

6 banks may merge to create two big players

...........Past bank mergers indicate that the two biggest challenges have been technology and human resource management, Bank unions fear there could be cultural issues as well and widespread transfers of employees of smaller and weak banks if they are merged with strong banks. Overlapping branches also could lead to job losses. With RBI having called for applications for setting up new private sector banks, consolidation in the sector is inevitable, particularly among public sector banks, says a government official..............

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The movement against the no-cheque proposal

Moneylife Foundation was joined by members of All India Bank Depositors’ Association, Mumbai Grahak Panchayat, All India Bank Employees’ Association and Mumbai Mahanagar Vyapari Seva Parishad in its campaign against the RBI’s foolhardy proposal to disincentivise the issuance and usage of cheques. The participants are in the process of framing points of action against the RBI move as well several other anti-consumer initiatives of banks.................

Read - Moneylife

My View on "Doctors to ask RBI to make coins blind-friendly"

GOI and RBI should act on this report without waiting for formal petitions from organisations. Minting of coins world over did factor in the need to make coins ‘blind-friendly’ till vulgar commercialization and aggressive ‘outsourcing’ of works like minting of coins profit-motive overtaking humanitarian considerations. Going a step further, RBI should take a lesson from this and continue the size-difference in currency notes which will help easy differentiation of denominations. Let us not follow $ Lords in everything as this geographical area is yet to catch up with developed countries in several development indicators including literacy.

- M.G.Warrier

Growth, Development and Governance

Good governance ensures trust in banks and non-banking financial intermediaries: Anand Sinha

For an economy to perform well and for the financial system to be stable, good corporate governance would be required across all these segments. Regulatory governance refers to control exercised by regulators over firms through statutes, policies and regulations.......

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Chakrabarty downplays Cobrapost exposé

.....“Allegations doesn’t mean flouting (of KYC norms). There is not a single transaction which has taken place” K C Chakrabarty, deputy governor, RBI who is incharge of bank supervision department in central bank told reporters today. “We cannot take action based on allegations, (only) if we find something ...that is a continuous process” Chakrabarty said adding supervisory process of RBI is very effective. If we find something is wrong, we will always take action......

Read | Business Standard

No poison in Cobra bite; ICICI Bank, Axis Bank bounce back after RBI clean chit

...........An undercover sting operation across India by Cobrapost caught everyone by surprise, even the banking regulator - Reserve Bank of India (RBI). However, recent comments by the Dr. K.C Chakrabarty, Deputy Governor of the Reserve Bank of India suggested most allegations were baseless, ET Now reported..............

Read - ET

Banks to Cover Whistleblowers

.... Chanda Kochhar of ICICI Bank Aditya Puri of HDFC Bank, and Shikha Sharma of Axis Bank have conveyed their displeasure at some of their employees being caught on camera advising clients on avoiding taxes. They have uniformly said there is zero tolerance for such acts. “The bank lays very strong emphasis on ethical behaviour and has zero-tolerance policy with violation in this regard,” Kochhar wrote in an email to ICICI Bank staff. “Any breach in this regard will not be tolerated,” .........

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RBI may tighten KYC, other norms if needed: Deputy Governor KC Chakrabarty

......."Let us not unnecessarily downgrade ourself. Our system to prevent money laundering is perfect, absolutely nothing (wrong with it)," he said. Chakrabarty also said RBI will further tighten the anti-money laundering norms if needed. "If we find there is a need to further tighten any guidelines, we'll do that." The comments come even as the RBI, Finance Ministry and the banks concerned are probing the allegations that some officials of these banks offered to facilitate money laundering........

Read - ET

30 banks to switch to risk-based supervision from April 1

......."The risk-based supervision system is likely to be implemented from April 1. The RBI has decided to implement it in 30 large banks. These banks were called for a meeting today with the RBI," Indian Banks Association chairman and PNB chief K R Kamath told reporters after the meeting with the top RBI brass led by deputy governor KC Chakrabarty. The new system will bring in a uniform methodology to check the health of the banking system, as against the CAMELS framework used at present which follows a compliance-based and transaction-testing approach................

Read - ET

No information dissemination before annual policy in May: Subbarao

.....''We've given the rationale in the policy statement. This is a mid-quarter policy, therefore there is no dissemination at that level, we stand by that,'......

Read | Business Standard

RBI moots tax proposals to incentivize returns from investments made abroad

To attract more inflows to Indian companies from their investment in overseas join ventures and wholly-owned subsidiaries overseas, the Reserve Bank of India has proposed a host of measures including exempting dividend from tax and providing tax credit for underlying corporate tax paid by them  in the host country. The proposals assume importance since these returns form part of current account balance, which has become a major source of worry for the government......

Read | Business Standard

Conmen sending bogus RBI mail to dupe people

............"This is ludicrous. Why would the British government pay me 5 lakh pounds when I have not made any claim. The bogus mail asks you not to disclose this fact to anybody until the amount is deposited in your bank account. Why should RBI ask the beneficiary to maintain secrecy."............

Read - TOI

Nilekani gives RBI, bankers presentation

The Unique Identification Authority of India (UIDAI) chief, Nandan Nilekani today made a presentation before the RBI brass and bankers on the initiatives being taken under Aadhaar project and the way forward for its integration with the banking system...............

Read - Business Line

A Common Keeper of Bank Accounts

........the government wants to step up efforts to open a bank account for every beneficiary and to seed every account with Aadhaar. It has persuaded the RBI to allow banks to recognise Aadhaar as sufficient know-your-customer (KYC) data. This is welcome, as it would make it easy to open bank accounts. But more needs to be done.............

Read - ET

A year of RBI cuts had little impact on rates

When RBI cut the repo rate, the rate at which it lends to banks, by 300 bps or 3% between 2001 and 2005, the prime lending rates (PLR) dropped by 190 bps or 1.9%. The deposit rates then fell by 438 bps (4.38%) while the overnight rates, the rate at which banks lend to each other, declined 309 bps (3.09%). ..........

Read - TOI

PSU banks get more tech-friendly

... Consumer banking is not the only area where public sector banks are seen embracing the technology. These banks have also implemented system-based recognition of nonperforming assets since the beginning of FY2011-2012. As this system completes two years successfully, experts and analysts would get stronger and clearer details about the quality of assets of these banks. This has also enabled banks to resort to robust risk management practices, which help them avoid any untoward eventuality.

Read - ET

A banking scandal highlights the problem of black money in India

.........Gauging the scale of the problem is hard. A 2010 World Bank study of 151 countries concluded that India’s shadow economy, defined as legal activity concealed from the authorities, was equivalent to a fifth of official GDP (confusing matters, it is unclear to what extent India’s official GDP already captures the black economy).............

Read - The Economist

Losses likely to mount in Bengal bank fraud

...........The modus operandi is so unusual that both the banks and the affected government undertakings are claiming to be victims of the fraud. But the money that has been siphoned off can’t be traced although the accounts through which the money disappeared are being said to be fully compliant with Reserve Bank of India’s know-your-customer, or KYC, norms............

Read - Mint

Cardholder: 'Guilty' until proved 'innocent' in case of misuse

............According to the Annual Report on the Banking Ombudsman Scheme for 2011-12, card-related complaints at 21 per cent of total complaints received, constituted the single largest ground of complaints received. Credit card-related complaints were over 5,000. While the bifurcation of complaints is not available, skimming of cards was one of the complaints, the report said. Faced with the rising number of credit card frauds happening overseas, the Reserve Bank of India has issued a directive to banks to replace all magnetic strip credit cards with EMV chip + PIN cards. In the first phase, all customers who have used their cards internationally at least once should have their cards replaced by June 30, 2013. But it is in your own interest to get your old card replaced, even if you have not used it overseas, yet.......

Read | Business Standard

5 things you need in a secure credit card

............ “Like you choose your toothpaste or your shampoo, you should also choose your credit card. People just buy a credit card become his/her bank is selling it. You should exercise your right to choose a financial product,”.........

Read - Mint

Budgeting for credit policy

The finance ministry and the Reserve Bank of India have long had a tussle over independence of decision-making for the latter, so the former may have been delighted with a public relations (PR) executive's inability to distinguish.....

Read | Business Standard

Gujarat banks see record increase in NRI deposits

For the first time in six years, pockets of banks in Gujarat bulged with non-resident Indians (NRI) deposits in 2012. Reason may be either removal of interest rate cap by RBI or the depreciating currency or both, but with Rs 5,734 crore more, deposits increased by 22% with the banks during this period. ........

Read - DNA

Progress of banks reviewed in DLRC meeting

.....LDO, RBI emphasised upon the achievement on the CD ratio of 40 per cent in the district by March 2013, which currently stands at 35.25 per cent. He said the bankers to come forward in lending in key areas, so as to achieve CD ratio. He also emphasised on the financial inclusion of all unbanked villages in the district, to be taken on priority. DDM, NABARD discussed KCC, SHGs, Farmers Clubs, financial inclusion, among other issues.

He also informed about the initiatives taken by NABARD in the last few months viz. SHG’s training programmes, bankers training programme, farmers club programme etc. in Kathua District......

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To facilitate tax payments, banks to work on March 29-31

Banks with branches conducting government business will be open on March 29 (Good Friday), March 30 (Saturday, usually a half day for banks), and March 31 (Sunday) for full day with extended hours to facilitate receipt of Government taxes from members of public........

Read - HBL

BoM gives Rs. 2.51cr-drought aid

In view of the severe drought situation in the state, Bank of Maharashtra (BoM) donated Rs2.51 crore to the Chief Minister’s Relief Fund on Thursday. The cheque was handed over to chief minister Prithviraj Chavan by chairman and managing director of the bank, Narendra Singh...........

Read - DNA