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.
Friday, April 12, 2013
Inflation-indexed bonds likely in a month: RBI
Inflation indexed bonds: Will it find buyers?
........Inflation index bonds will be linked to the wholesale price index (WPI) and indexation will happen every six months. The maturity period is likely to be in the range of 7-15 years.
But, the calculation of coupons needs to be simple to understand and transparent for it to get more retail participation. Also, the distribution mechanism would play a crucial role...........
Cobrapost expose: RBI mulls action against erring banks
Reserve Bank Deputy Governor H R Khan on Thursday said the central bank is initiating action against ICICI Bank, HDFC Bank and Axis Bank in connection with allegations of money laundering by Cobrapost. “Actions are on the way. Scrutiny has been done, actions are being taken both in respect of systemic level and at the individual banks,” he said when asked if RBI has completed investigations on Cobrapost exposes. “I will not be able to tell you the details but actions are being taken. Actions are being initiated both at the system level and the individual bank level,” he said on the sidelines of an event organised by National Housing Bank in New Delhi.............
Bank Licences: RBI should make financial inclusion an opportunity not an obligation - Janmejaya Sinha
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| ..........The RBI should allow the recipients of new licences time to comply with the guidelines as it did to the earlier recipients of bank licences. About 18 months after starting operations should be a fair period for such compliance. Overall, I believe the guidelines deserve our praise.......... |
Banks looted to finance terrorism: Security expert
...Based on the concept of crypto currency, Bit coin is an internet-based alternative currency which uses electronic signatures and was developed in 2009. Sivanandhan, who is the Security Adviser for the Central Security Cell of the Reserve Bank of India, said that unfortunately investment in security was still considered a redundant expenditure by banks and financial institutions. He added that banking surveillance was yet to leverage the possibilities of video analytics............
My View on Updation on "Pension Updation............."
The news is welcome. But pensioners and their associations have to be on guard. The Mandarins of the Ministry of Finance (MoF) may yet launch a rearguard battle to dilute the benefits by making the updating of pensions prospective, i.e., from 2012 for which the revision of pay scales is due, rather than retrospective. If the principle is approved, logically the retired staff are entitled to arrears in relation to the past revisions of pensions. Secondly, the RBI should pay interest on the arrears at the Bank Rate. These issues may be taken up, if required, after the approval of the proposal is officially announced and the Bank issues a circular to implement it. Raising them at this stage may only help the MoF to delay the final decision. Unlike on the last occasion legal action may be taken early if the two points are not conceded. Augmenting the “Fighting Fund” with contributions from the pensioners should not be difficult.
- A. Seshan
No doubt this is a good news. We had Rs 7184 crore in Superannuation Fund as on 30 June 2012.Keeping in view the demographic and financial structure of RBI pensioners,if we compute an annual pension of Rs 2 lakh (which is on the higher side) for 10,000 pensioners, the entire expenditure would be Rs 200 crore p.a; whereas the yield on our Superannuation Fund @ GOI Bonds would be Rs 560 crore.Even a minuscule interest component would be sufficient to cover the cost of Pension Updation. Then why should we approach GOI as a SUPPLICANT and give them a written assurance that the cost would be met by our own internal earmarked funds when their legit and otherwise expenditure play havoc with the finances of our country i.e. result in drastic increase in fiscal deficit leading to depreciation in Re, inflation, increase in interest rates etc.Anything which impacts exchange rate, interest rate,inflation, money supply i.e. variables of monetary policy, it is they who should get clearance from us. Seventh Pay Commission announcement would be done by the year end. Prior RBI approval should be obtained for this. Another question, why Pension should be restricted to 50% of last pay. Why can't we be flexible and fix the same at 70%,80% or 100% of last pay when Fifth Pay Commission has opined that RBI can give pension updation depending on its financial strength.We are not a burden on our country in a way Central Bureaucracy is. This type of issues which concern handful of RBI employees where no external financial impact is there, should best be left to RBI.
- Sitendra Kumar
When RBI is mandated to manage the monetary policy and to ensure the onerous task of maintaining the value of the Rupee and in effect to try and achieve 'Growth with Stability', is this glorious institution not capable enough to find solution on its own to a less important problem like 'Updation of Pension' of Retired Employees. I feel wiser counsels should prevail and the GOI should leave the issue to RBI Management to suitably solve the issue without raising unnecessary spoke in the wheel.
- Srinivasan, Cochin
Economy is not the villain
.....Looking at the above reasons, it would appear that nothing but ‘economic malfunctioning’ led to higher NPAs. There is little to say on system identification of NPAs. All the other four factors are ‘economic’ factors. So, how valid is the ‘economy downturn’ hypothesis? The RBI Report on Trend and Progress of Banking in India, 2011-12 blamed “the slowdown prevailing in the domestic economy” as the prime cause for increase in NPAs (paragraph 4.29). In general, there are two broad reasons for any economic occurrence: (a) endogenous and (b) exogenous. While endogenous factors are controllable, exogenous ones are not. By holding the economy responsible for higher NPAs, bankers are evading responsibility for the ‘controllable’ (or exogenous) factors. However, there are ways to deal with exogenous factors........
Many slots empty, PSU banks told to ease promotions
..........RBI data shows there are about 4 lakh officers in the 29 PSU banks as on March 31, 2011. Nearly 20 per cent of them are expected to retire by 2015 while the pace of recruitment is far lower. The new rules circulated to banks by the finance ministry say they can lower the minimum experience required for a scale by three months and also relax the minimum marks in the annual performance appraisals..........
Chidambaram to sell India story in Canada, US next week
.....The Minister is likely to spell out steps taken by the government to streamline FII investment in the debt market. Sources said Chidambaram, accompanied by senior Finance Ministry officials and RBI Deputy Governor Urjit Patel, would also seek investments into various sectors, mainly infrastructure for which the government has pegged expenditure at nearly $1 trillion during the 12th Plan (2012-17)........
Bank outlook bleak
.....To be sure, the figures above are a broad brush summary. Private banks, as has been seen in the past several quarters, are likely to post earnings growth of 20% or more. Still, the economic environment being depressed as it is, banks would have depended on factors such as trading gains to shore up their profit........
Reserve Bank of India calls for FDI amendments to stop clandestine flow of cash to tobacco firms
..............RBI in a letter sent to the finance ministry has highlighted the fact that there is a need to check "circumvention of FDI norms by international tobacco companies and their conduits", sources said. The central bank has recommended that the government should incorporate a specific clause to plug this loophole. RBI has cited the example of the lottery business, in which the government has banned FDI and also introduced a specific clause pertaining to marketing as well...........
NABARD - Request for Enhancement/Revision of facilities to Officers at par with that of officers in RBI
Please refer to various provisos of NABARD Act, 1982 and NABARD Staff Rules, 1982 on the captioned subject matter. In terms of the provisos under reference, the practice in vogue since the inception of NABARD and as per the agreed upon and settlement of the issue under reference, we request the improvement/enhancement/revision of the following facilities to Officers of NABARD- .......
Read...........
Read...........
Cooperative societies to promote self-help groups
.....A senior official in NABARD said that only good working/well functioning credit societies in the district would be involved as SHPIs. The designated SHPIs will be given ‘promotional grant assistances’ by NABARD for each of the self help groups that were credit linked with it. “These grants are going to be profits for the societies,” NABARD sources said.......
Nabard starts direct credit line to coop banks
......As on March 31, 2013, five DCCBs have been sanctioned a direct credit line of Rs 181 crore by Nabard. "This is the first time that we have started such a credit line to DCCBs in Uttarakhand," said state Nabard chief general manager, S Selvaraj. Under the programme, Rs 22 crore has been released to the DCCBs of Nainital, Pauri and Udham Singh Nagar......
Kapol Cooperative Bank Files Complaint With Cyber Cell Of Crime Branch
........And the latest victim to this malicious attack is the Kapol Cooperative Bank. Since yesterday morning wild rumours stating that “”RBI cancelled licences of Kapol Bank if any body have money please take it as soon as possible. Please inform if anyone has the account in the bank”…” “Kapol Bank Marve Branch ma bahu moti line lagi che there is a rumour in mkt ke bank uthi gai che plz withdraw a money in Kapol Bank any branch plz passed on message on u r friend relative etc” As the rumour spread like wildfire, worried customers rushed to make inquiries. However, the 75 year old bank which stands on solid financial ground with total business about Rs 1800 cores has refuted any shortcomings and has lodged a complaint with the Cyber Cell of the Mumbai Police..........
Mobile banking transactions double, payments rise threefold
.......ICICI Bank, which has the largest share in mobile banking payments, makes periodic offers to its customers to encourage them in using its mobile banking services. The bank has partnered several service providers to offer its customers discounts on their products and services. It has also tied up with different billers to allow its customers in making utility bill payments........
Cheating case against Ingen
................According to complainant Dr M K Mohammed Basheer, Van Ingen entered into an agreement to sell the entire Katikulam and Alathur estates in Wayanad that comprises 246 acres of coffee estate in 2004, for which he had even taken permission from the Reserve Bank of India (RBI). RBI permission is mandatory for selling immovable property owned in India by foreign nationals...........
Meeting Basel-III norms may affect infra funding, says ICRA
As banks move to meet their capital requirements for the Basel-III norms, they might be left with less money to fund infrastructure expansion in the country, according to a study by credit ratings agency ICRA. Therefore, infrastructure-based non-banking financial companies (NBFCs) might fill in the spots that banks vacate......
Lines of foreign control
.....What the new RBI norms would do, subject to approval from the Cabinet Committee on Economic Affairs, is to define control as the right to appoint a majority of directors on board or to control management and policy decisions, issues that companies typically spell out in their articles of association anyway. That is how, for instance, the Tata group was able to retain management control of what was then called Tisco even though several Birla firms collectively owned a larger stake in it than the Tatas through the eighties. The draft norms, however, would go some way towards clearing up a critical issue,......
Arms Length Pricing – RBI Approvals are deemed irrelevant
.........The RBI is only concerned with the foreign exchange and, therefore, would look into the matter from that point of view. The RBI, at the time of giving such permission would not keep in mind the provisions of the I T Act and that is the function of the income tax authorities ................
PSU banks fret as MF debt assets outpace fixed deposits
........Worried by this development, some bankers of state-run banks have met finance ministry and Reserve Bank of India officials, expressing their concerns over the growing debt asset size of mutual funds, said a person close to the industry who didn't want to be identified. .........
Banks, mutual funds earn abnormally high returns in money markets by breaching RBI rules
.....The trades have taken place as India considers forming a unified regulatory authority that would assume oversight of trading in currency, bond and derivatives markets from the central bank. The proposal does not address regulation of money markets, which is handled by the RBI. It was unclear whether the RBI is aware of the practices. A spokeswoman for the central bank declined to comment after being provided detailed verbal and emailed queries from Reuters...........
The capital inflow problem revisited
..............Corporate debt, which serves as a signal of easy credit policy, is already at alarming levels in many of Asia’s vibrant economies. In the case of China, Hong Kong, Singapore and Taiwan, such borrowing is already over the gross domestic products of their respective nations. India’s corporate debt levels look much more manageable at about half the country’s GDP, something that might be attributed to the Reserve Bank of India’s relatively conservative stance since 2008.............
Sahara victimised for years, but won't give up: Subrata Roy
Subrata Roy, the chief of the Sahara conglomerate, one of India's biggest corporate groups, has said he feels victimised by a chain-reaction of events that began with a political vendetta, followed by regulatory clampdowns by the Reserve Bank of India (RBI) and market regulator Securities and Exchange Board of India (SEBI)............
NHB to seek RBI nod for $ 200 m ECB this fiscal
National Housing Bank (NHB) will soon seek RBI nod to allow the housing finance regulator to raise $ 200 million external commercial borrowing (ECB) under the ‘affordable housing’ window this fiscal. Although NHB had last fiscal received RBI nod for the ECB mop-up, it could not go ahead with the transaction as the approval came in the later part of last fiscal........
KSIDC partners with Islamic fund
......RBI Governor D. Subbarao, during his recent visit to the city to declare Ernakulam as a fully banked district, had responded to the issue, stating that the Banking Regulation Act did not permit Islamic banking in the country. He had also said that alternative modes were available for raising funds. While the RBI is understood to have retained its position so far, the KSIDC has chosen an alternative route to join hands with the Islamic fund managers.......
Manippady demands resignation of Union Minister Rahman Khan over bank scam
.........After investigations pointed out to Mr. Khan’s complicity and that neither the Union Finance Ministry nor the Reserve Bank of India initiated action against him, the Minorities Commission had raised the issue with the Karnataka Lokayukta in December 2012 but there has been no progress since.
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