........Nevertheless, actions with regard to monetary policy alone cannot revive the growth. These have to be supplemented by efforts towards easing the supply factors and stepping up public investments along with continuing commitment of the government to fiscal consolidation. The Monetary authority- RBI, as such, is exercising its obligatory alertness against possibilities of resurgence of inflationary pressures. The RBI has undisputedly evolved itself into one of the most alert monetary pulse readers and acts real time. ............
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, May 13, 2013
Monetary policy: Highly subdued, devoid of any nudge
....The overall message one can infer from this policy is that RBI can think of easing monetary policy further only if inflation is brought under threshold level and other requirements which basically come under the domain of the Government to give a thrust to the growth of the economy are in place......
NABARD shifts blame for corporate warehousing scheme to FinMin, RBI
In the eye of the storm for funding corporate warehousing projects on terms far softer than those offered to poor farmers, the National Bank for Agriculture and Rural Development (NABARD) is now blaming the Ministry of Finance (MoF) and the Reserve Bank of India (RBI) for the transgressions.........
RBI’s misplaced agenda in J&K
......The reason for RBI seeking its application is rather simple and borders on being innocent: the inapplicability of SARFAESI hampers lending by commercial banks in the state. Ergo, the credit deposit ratio (CDR) is abysmally low. This is at best a partial truth. SARFAESI is neither a necessary nor a sufficient condition for bank lending. At worst, inapplicability of SARFAESI should increase the risk of lending in J&K which, in turn, should have an impact on the pricing of loans and not the volume of lending. Be that as it may, Subbarao will do well to look at RBI’s own annual publication............
'Collectors' rush to make hay as coins become rare in Bangalore
Will the real inflation rate stand up please?
......The RBI often says it looks at all inflation measures. But by announcing a formal forecast only for WPI inflation, it pretty much confirms that it cares less about retail inflation. This preference for the WPI is also responsible for the weak fight against retail inflation. The central bank's approach has resulted in a perverse outcome of two perceptions of inflation.......
Growth forecasts: fanciful or realistic
...........These developments were fairly obvious even to the uninitiated. Maybe, an expert body like the EAC was constrained in not having a forum to update its forecasts. Its reports are published twice a year. The RBI has eight policy statements which it can use to revise its projections. Explanations apart the EAC and some other institutions, notably the Planning Commission, should disabuse the notion that they are being deliberately optimistic and puff up projections............
A fraud prevention body?
.....Specific bodies (such as RBI and Sebi) either individually or together require to be assigned the responsibility of identifying and preventing such Ponzi schemes. The regulators would have to be adequately equipped with human and other resources for such regulation as well as being suitably empowered in legal terms........
RBI’s rate cut benefits new borrowers only
.......This anomaly is mainly because when RBI cuts its policy rates to provide cheaper liquidity to banks, they instead of cutting their benchmark rate, which is called base rate, lower the margin that they charge over and above the base rate...........
Tilak Memorial blanks RBI
Tilak Memorial blanked Reserve Bank of India 4-0, while Jupiter edged past Southern Blues by an odd goal in five, on the opening day of the BDFA ‘B’ division football league here on Friday......
Read - The Hindu
Read - The Hindu
Sale of Top Jobs in Railways Nailed - Is Banking Sector Not Equally Guilty for Sale of Top Jobs ?
........This transparency is necessary to expose the nexus between Members of the Boards of banks and politicians / bureaucrats in the light of Bansal episode. If RBI fails to do so, let such relations be exposed at social websites like Face Book from where these will be picked up by media persons and hopefully bring greater transparency. I wish some honest people in RBI and CBI will listen to our feeble voice.
Smart phones take banking to a new high
.....“Branch banking serves customers from the old generations even today. The dependence on branch banking was reduced by 75% with the introduction of Automatic Teller Machines. Then came internet banking, which further reduced the number of customers visiting bank branches. But in the past one year or so, following the revolution of mobile internet protocol, the number of users has registered a growth of eight times,” ..........
Prepaid debit cards: A weak link in bank security
A brazen gang of cyber criminals, who stole $45 million from bank ATMs in 27 countries, exposes an Achilles heel in the global financial industry: prepaid debit cards. Cyber security experts and industry analysts say the burgeoning use of prepaid debit cards for everything from gift certificates to disaster relief handouts is making it easier for hackers to withdraw large amounts of money before detection.............
Regulation for financial consumer protection – present status and future directions
Opening remarks by Dr K C Chakrabarty, Deputy Governor of the Reserve Bank of India, at the Conference of Principal Code Compliance Officers – 2013, organized by the Banking Codes and Standards Board of India (BCSBI), College of Agricultural Banking, Pune, 29 April 2013
.......I believe that an important cause for deficient customer service is the inability of banks to understand the specific expectations of diverse customer groups and to devise product, pricing and delivery strategies that are best suited to meet these expectations. Many banks would not be aware of the number of customers they have or the number of products they offer. While a plethora of products might be available on paper, many of them might not be actively offered to customers. Hence, understanding their customers and understanding their own product offerings needs to be the starting point of any customer service framework......
RIL's Rs 83,000 crore cash pile: A hint of impending big-bang acquisitions?
...A perusal of the annual report for fiscal year 2013 shows there has been some big shifting of cash in the RIL treasury. Around Rs 15,720 crore held as certificate of deposits (CDs) with banks has been liquidated. The move was forced in a way as the Reserve Bank of India (RBI) frowned upon the practice of banks creating these CDs with high interest rates towards the end of a financial year to spruce up the balance sheet. The RBI asked banks not to create such CDs and as a result this chunk of money had to be shifted. Most of this money (Rs 12,000 crore) seems to have moved to a category of unquoted mutual funds............
‘Use Ombudsman scheme for loans’
Students facing difficulties in obtaining educational loans from banks to pursue higher studies can make use of the Banking Ombudsman Scheme under the aegis of the Reserve Bank of India, Collector P Sankar said.......
Return of the moneylender
The indebted farmer has not only provided raw material for great literature but has also been a burning public policy challenge in India. A working paper released by the Reserve Bank of India last week is a timely reminder of the challenges that still lie ahead...........
Blocking investments
.............But the Reserve Bank of India (RBI) under Governor D Subbarao is already making enough effort to make this a steep climb, independent of the political shenanigans. The problem is the way the know your customer (KYC) guidelines are being deployed as a shield to block than unleash the flow of money..............
2 Rose Valley executives in 3-day police custody
......Moreover, neither Reserve Bank of India (RBI) nor Securities and Exchange Board of India ( SEBI) allowed them to collect funds under different market investment schemes in Tripura. But Rose Valley had been doing the same over the years.........
Chit funds, the south side story
..........In India, where banking penetration is still very low (40 per cent of the households still remain unbanked), chit funds have been one of the major means of multiplying money, especially in the rural parts of the country. The number of households participating in chit funds stands at 5-10 per cent of the total household population in each state (except in Delhi, the figures for which are not available). According to a study by the Institute for Financial Management and Research, Chennai, money circulated through chit funds is an average of around Rs 50,000 per household (except Kerala).............
Chit fund probe panel receives 60,000 complaints
........Serpentine queues outside the office of the four-member commission, headed by Justice Shyamal Sen (retired), have been seen ever since it began work, indicating the enormity of the scam and the massive number of people who may have been duped. Investors and agents from West Bengal and adjoining States have thronged the office to submit their papers since April 26, when the commission started receiving complaints. The last date for submissions is June 29........
The Medium Becomes The Managed
............ “These companies began by sponsoring programmes on television. From that they went on to owning the channels and newspapers. And then they went on to prey on depositors from villages with images of politicians endorsing their products.” The story of their fall, perhaps, has to be told by the 800-odd journalists who lost their jobs when some groups collapsed. And by the thousands of investors who see no hope of getting back their money.
Grey areas impacting prevention of money laundering in India
.....The skeletons are coming out of the closet. A series of exposés by Cobrapost has made Indian financial institutions look extremely vulnerable to money laundering activities. Small, as well as large financial institutions look deficient in anti-money laundering policies that they are supposed to be strictly implemented and followed. Globally money laundering activities have been rampant.......
Gogoi against cash for cheated investors
........The Assam chief minister’s comments came a day after the Reserve Bank of India governor questioned the fairness of the Bengal government’s proposal to levy additional tax on cigarettes to compensate the cheated investors of the Saradha Group. “If you go back to the West Bengal Saradha scheme, the chief minister said: ‘I will levy additional taxes on cigarettes and some other things to compensate the people who have lost money.’ Is it fair?” Subbarao had said in Srinagar. In Delhi today, Gogoi blamed “lack of regulations” by the RBI, Sebi and the registrar of companies for the mushrooming of “chit funds”..........
Saradha-like companies leave authorities perplexed
.........Even as various ministries, government departments and regulators such as Ministry of Corporate Affairs (MCA), Serious Fraud Investigation Office (SFIO) under the ministry, Department of Financial Services (DFS), the Reserve Bank of India and Securities and Exchange Board of India (SEBI) are brainstorming on the issue, officials involved say they are finding it difficult to nail down unauthorized collection of funds by numerous small time and fly-by night operators...........
After Saradha scam, investors may turn to safer havens
.....lack of proper regulation and the failure of formal financial institutions, including banks, to penetrate into rural areas were the key reasons for mushrooming of such schemes across the State. “Penetration of bank branches in the rural and semi-urban areas is poor, particularly in the East and North-Eastern parts of the country. The concept of business correspondents suggested by the Reserve Bank of India has also not taken off too well in these regions,”.......
Over 100 detained in chit fund raids
.....The crackdown, which started on Friday last week, was meant to verify the documents of NBFCs to ascertain whether they are operating with the approvals of Reserve Bank of India (RBI) and Securities & Exchange Board of India (SEBI) and to collect data about the volume of money they have collected from the depositors............
RBI fails to monitor money laundering by banks
.............."Given that a chunk of life insurance money goes toward buying government securities, is there a conflict of interest for the RBI as the government debt manager? It is easier to turn a blind eye to institutional miss-selling. Also, why did it take our magazine to expose such practices by so many bank employees? Why weren't the KYC norms followed by the banks?" Bahal asked. An email query sent to the RBI on the issue remained unanswered when the story went to press.
RBI gears up for plastic notes
......The proposed launch follows years of consultations over the feasibility of plastic notes in the country. Way back in early 2000s, the RBI had rejected a similar proposal, but it later began working seriously on trying out plastic notes, given their high longevity and growing menace of paper bills getting soiled and the rising costs of their disposal. At the same time, the successful launch of plastic notes across various countries has also led to a serious thought over similar practices in India, experts say, while adding that the concerns over greater possibility of counterfeit notes in plastic format have also been addressed to a large extent..........
Why India Post should get a banking licence
.....With this background, India Post should be the fittest candidate to establish a bank if indeed RBI wants financial inclusion, as no other public and private entity can compete with it in terms of reaching out to the rural masses. It is familiar with the art of deposit taking; has personalized relationships with rural folks who do not yet have access to Internet; and even though it does not directly invest in government bonds, it will not have any problem in fulfilling the statutory requirement of buying government bonds as it has been contributing to the consolidated fund of India. All it needs is to convert part of it into exposure to government bonds.......
Asia's Best Analysts: Banks
........Mr. Shah remains bullish on the banking sector for 2013, given the Reserve Bank of India's monetary easing policy, which is likely to result in higher loan demand by both corporations and individuals. The RBI is also expected to allot its much-discussed private bank licenses, which will be an event to watch for the sector, he said.
Decades later, Dharavi remains a maze for banks to crack
...............It is this milieu that banks have been trying to tap for decades now, hoping to move money from the huge parallel cash economy into the banking system. They have been opening branches and engaging novel methods to expand presence. But taking basic banking to the urban poor has proved easier than convincing them to use the facilities. A sparsely furnished State Bank of India (SBI) branch in Dharavi is smaller than most of its branches in the city, but more crowded with migrant labourers and small entrepreneurs on any given day............
Doha Bank seeks India base
.....Qatar-headquartered Doha Bank is looking at setting up base in India and is awaiting clarifications from the Reserve Bank of India to set up a branch network across the four metros, perhaps this financial year. Mohammed Akram Hashim, Head, Retail Banking, Doha Bank, a participant at the Business LineOpportunities Fair, said that with the RBI now looking at licensing Indian corporates to set up banks, the issue of foreign banks seeking licences is likely to be taken up. The policies for foreign banks differ and the bank is seeking clarity.......
Fundamental triggers missing
.....Changes in interest rates alone may not be enough to spur growth; the supply side of the economy needs to be stimulated. For this, either the government should increase its investment spends or create an environment to increase the confidence levels of the private sector to begin investing. Given that elections are just a year away and in fact may be held by this year end, it is unlikely that any significant improvement can be seen in policy making or real reforms for the private sector to invest for growth............
Cyber cheats hacked Pune, Bangalore companies
......Bankers say that although RBI has guidelines on outsourcing of banking functions, evolving technology makes it difficult to draw clear lines. RBI has sought to address this issue by making it clear that even in outsourced transactions, it is the bank that will be held responsible........
Samajwadi Party demands fair deal to farmers
.........The party also demanded that action should be taken against the private and public sector banks which violate the RBI guidelines as far as lending agricultural loan to farmers was concerned. Besides, a CBI inquiry should be ordered into alleged corruption in 2008 loan waiver scheme where thousands of the farmers of the State had been duped by the micro finance organisations and non-government organisations.............
No ‘green shoots’ for India Inc
......Overall, if there is a message for India Inc from this quarter’s scorecard, it is to consider some belt-tightening measures of its own, instead of perpetually looking to the Reserve Bank of India to deliver policy rate cuts.......
Banks Off to Dubai on Winsome Trail
....Significantly,
RBI has voiced concerns that if Indian banks refuse to honour the
bullion banks’ payment demands, it could be construed as sovereign
default..............
Trade Opportunities between India and Sudan
...While answering the queries from members of Sudanese Businessmen & Employers Federation, Ambassador Verma explained that Reserve Bank of India has no directives to dishonor LCs from Sudan. The Government is looking into this issue to come out with a comprehensive solution.........
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