.................Recycling of credit does not happen in the context of accumulation of non-performing assets and restructuring of assets. As rightly pointed out, the RBI is in a dilemma, and how it is going to face it is worth watching. Maybe the RBI has some innovative ways to rescue the economy from the situation with positive results.
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.
Thursday, May 2, 2013
Regulators, get serious
.................The Reserve Bank of India, some believe, has been harsh on new banking licence applicants. How could it insist as a precondition that at least 25 per cent of the branches should be located in rural areas, they argue. Why push them into the rural backwaters where banking is conspicuous by its absence, is their refrain..........
Financial literacy stall opened
.....Regional Director of RBI (Hyderabad) A.S. Rao, who inaugurated the stall, said financial literacy would help achieve inclusive growth. The stall propagates on currency management, entrepreneurship, study loans, facilitation of development of preferred sectors, credit cards, banking ombudsman and precautions to be taken in investing in deposits.........
Banking boom in Diphu
.............A town which house 63654 thousand people, and nine banks and their branches plus numerous divisions of a rural bank on the periphery of this small class II town to serve the people, seems quite out of proportion, but reason for sudden boom in the banking sector centring Diphu town, headquarter of Karbi Anglong Autonomous Council is based on purely speculative prospect............
ATM expansion has urban bias
......It’s difficult for customers living in semi-urban and rural areas to find ATMs (automated teller machines) while easy for those in metro cities. The reason being banks are installing more ATMs in urban areas than in rural ones. Banks have installed just 1,931 ATMs in the rural areas ........
DA Increase for Bankers from May, 2013 to July 2013
..............Based on the above calculations the new DA will be @ 84.15 %, for the months of May, 2013 to July 2013 onwards [The DA for February 2013 to April 2013 was 80.25%] i.e. increase of 3.90 %. (increase of 26 slabs).........
Reinventing the growth wheel
............However, apart from the quantum of rate cut, the other important aspect will be to see RBI’s assessment of the Indian economy and its guidance for the current financial year. Action by the central bank will be important, but it will not be the only factor that will decide the fate of the Indian economy in the current fiscal and beyond. ........
It's time RBI supports growth
Over the last couple of years, the central bank has not cut rates significantly for a wide variety of reasons. Even though core inflation (non-food manufacturing inflation) started softening a while ago, the central bank held on to rates as both fiscal and current account deficits along with consumer price inflation stayed above its comfort zone. Now, it seems that the central bank will have little reason to justify its hawkish stance on rates.......
RBI to go for rate cut, project lower inflation, higher growth
............This will be RBI Governor D.Subbarao’s fifth and last annual monetary policy since he took over the reins in September 2008 after the collapse of US investment bank Lehman Brothers Holdings Inc. that plunged the world into an unprecedented credit crunch. In relative terms, this is possibly Subbarao’s easiest policy as low inflation and the even lower inflation outlook in the short term—because of a drop in crude and gold prices and insipid growth indicators—will help him make up his mind on the rate trajectory. Inflation is expected to rise only after he leaves the corner room at the Indian central bank’s headquarters on Mint Road in Mumbai in September.........
RBI does not have clear inflation objective: Richard Illey
........ RBI does not have a clear inflation objective. It is trying to address a pretty wide menu of options in inflation. The CPI is a better measure for the consumer. The sticky nature of CPI largely reflects two things. The high food inflation is putting a lot of pressure on the CPI and food inflation is also stubborn. A more elevated CPI is an impediment to aggressive rate cuts.........
Run-up to RBI annual policy review
.................“RBI will take a cautious stance and reiterate that the recent developments in terms of softening of inflation and commodity prices, if the trend continues then probably there can be more rate cuts. But I do not think they will give a clear signal of more rate cuts as on May 3 because they are very conditional that way. RBI will wait and watch to see how things pan out. The guidance may not be as hard as it was in March. ......
RBI given the go-by
......Some banks have advocated that the RBI should have reduced CRR and SLR to increase the money supply. But while during the previous occasion CRR was also cut, the response from banks was negative. Under such circumstances, the open market tool of RBI has failed to bring in the desired result. The culprit is the “base rate” system, which is not effective, and the banks, including SBI and public sector banks, do not want effective implementation of the base rate system.......
RBI probes sale of gold coins by 30 Indian banks
.........The central bank is studying the business practices of 30 banks to ascertain any mis-selling of these products and to find whether such products are being sold as a pre-condition for offering the regular banking services, sources said. The RBI is also looking into complaints that bank staff are being pressurised by their senior officers to sell gold coins and other gold-related products in lieu of incentives..........
Praful warns against Chinese aggression
.........“Due to the non-availability of a level-playing filed, the Indian power generating equipment manufacturing industry has been severely dented by foreign competition, especially by China,” the minister said in a letter to D Subbarao, RBI Governor. He has asked the RBI to help the domestic industries get finance on the same rates as Chinese Exports credit or stop allowing......
Saradha due to formal financial system's failure: RBI
......“The fact that people have to rely on such entities (chit funds) for their saving needs indicates a failure on the part of the formal financial system to reach out to such groups and earn their trust and confidence through a transparent and responsive customer service regime” said K C Chakrabarty, Deputy Governor, RBI, at an event in Pune yesterday........
India Inc expects RBI to cut interest rate
............."The central bank must cut interest rates aggressively, or else the industry will witness more non-performing assets hitting the overall economic sentiment. Banks will also take a huge collateral damage (otherwise)". ....
Odisha: Investors duped of Rs 20,000 cr by fraudulent firms, authorities admit lapse
................The Reserve Bank of India (RBI) lists 17 non-banking financial companies registered in Odisha and none are permitted to raise deposits from investors. But fraudulent companies attract depositors posing as mutual fund firms and even as real estate businesses. With regulatory bodies like the RBI, SEBI, the state finance department and the state police failing to act together, the fraudsters get away with hundreds of crores.........
Credit Guarantee Fund for education loans planned
........The Reserve Bank of India advised the banks in November 2012 that ‘service area’ norms were not applicable in case of educational loans. Hence, banks had been advised not to reject any application on the grounds that the residence of the applicant did not fall under the bank’s ‘service area.’ As regards the rates of interest charged on educational loans, Mr. Meena said the RBI had de-regulated the interest rates. With effect from July 1, 2010, all banks had to price their loan products, including education loans, linked with the base rate of the bank.........
Dhanlaxmi Bank seeks RBI’s approval to raise capital
...........Under RBI norms, no single individual or entity can acquire more than 5% stake in any bank. They can exceed the limit only if the apex bank says so. The bank is raising the money to meet the higher reserve requirement under international Basel III banking rules. “At this stage, we are in discussions with three to four investors to identify eligible parties. Once RBI approves the share issue, we would like to do it by the end of this month,” ........
SC dismisses petition against FDI in multi-brand retail
...............In this case of FDI, the policy does not suffer from any of these, the order dictated by a bench presided over by Justice R M Lodha said. The government has the competence and authority to make policy regarding FDI and the power exercised by Reserve Bank of India was valid..........
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