Dynamic executive no more...................

I am sorry to advise you of the sad demise, in Pune, on May 26, 2013, of Shri.W.S Tambe, former Executive Director of  RBI.  He was 86 years old. He was the Executive Director during  the period 1979 to 1983 -- the I G Patel era. Though he was in charge of DBOD he had contributed to Staff welfare measures in a big way. A dynamic Senior Executive, Shri Tambe was  highly respected, very intelligent and friendly to all. He joined the World Bank after his term in  RBI was over.

May his soul rest in peace.

- P.P.Ramachandran (via e-mail)

RBI Governor to attend credit disbursement camp

........Mr. Rama Rao said the camp was aimed at sensitising bankers in favour of meeting the targets under the RBI’s scheme. Although the scheme envisaged credit delivery by banks from Rs. 25 lakh to Rs. 1 crore in a hassle-free manner, without any collateral security and third party guarantee, implementation of the scheme was quite disheartening for want of awareness and motivation in bankers, the FAPI president pointed out...........

Read | The Hindu

(Re)quest for VITALINFO..............

First of all, congratulations and thank you very much for taking efforts by spending your precious time for updating the daily news about banking industry for the benefit of all. I learnt that you are sending the daily Vital Information about banking to all the members whoever enrolled with you. I also learnt that it is very useful for updating our knowledge about the banking sector including RBI. I am requesting you to add my mail id in your data base for getting VITALINFO Dailyzine regularly. 

Regards

S. Purushothaman, Manager

Centre for Advanced Financial Research and Learning (CAFRAL)

Reserve Bank of India (RBI)

Mumbai

HDFC Bank manually clears 1.61 lakh cheques in a day

HDFC Bank conducted a full-fledged Business Continuity Plan (BCP) drill during which it processed a record 1,61,373 instruments worth Rs 1,130 crore in a single day in Ahmedabad. The exercise was carried out recently under the guidance of the Reserve Bank of India (RBI) to check the readiness and manual processing capacity of its back-up centre, in case of any disruption in the electronic clearing system in the future, the bank said in a statement...........

Read - HBL

Nabard suggests three-way joint venture for women’s bank

..............A top Nabard official told the ‘Committee to prepare a blueprint for the proposed India’s first Women’s Public Sector Bank’ that the Government should hold 26 per cent stake in the proposed bank, which will be run by women exclusively for women, while public sector banks and Nabard will together hold 74 per cent. “This (partnership between the Government, public sector banks and Nabard) will ensure good governance, focussed attention to the principal objective (lending exclusively to women entrepreneurs, achieving financial inclusion and women’s empowerment) and availability of resources at an appropriate cost,” said the presentation.............

Read - HBL

Coming soon: debit-cum-credit cards to help you shop freely

.....What's more, such a card will switch automatically from debit to credit mode when cash runs out in an account. The card will act as a credit card in case of unavailability of funds in a customer's account and debit card when the account has sufficient funds. Unlike the current practice of a maintenance fee, this card will be given free to customers.....

Read - Hindustan Times

Expand branches in unbanked rural areas: RBI

...........“To facilitate speedier branch expansion in unbanked rural centres for ensuring seamless roll out of the Direct Benefit Transfer/EBT Scheme of the government, banks are advised that they may consider front-loading (prioritising) the opening of branches in unbanked rural centres over a three-year cycle co-terminus with their FIP(2013-16),” RBI said..........

Read | Business Standard

RBI plans open market operations

The Reserve Bank of India is looking at conducting open market operations (OMO) after assessing the Government's cash balance, according to Deputy Governor, H.R. Khan. "We will assess (the liquidity situation) and then see what the government balance is...wether it is short term or long term," Khan told reporters on the sidelines of a conference on Business Correspondent Model to check financial inclusion.................

Read - HBL

Delays push new bank permits close to polls and uncertainty

D Subbarao, the outgoing Governor of the Reserve Bank of India, is unlikely to begin receiving applications for new bank licences before his term expires in early September. This has created a problem for the finance ministry: it pushes back the date for the grant of the licences to the middle of 2014 from the February-March period it was expecting. This would mean the first banks would get their papers only after the general elections...............

Read - IE

Deadline for new bank permits could be extended

The Reserve Bank of India (RBI) is likely to extend the deadline on applications for new banking licences by a month or two, according to senior officials. Earlier, the central bank had said the deadline for these would be July 1.......

Read | Business Standard

Private banks rain goodies on staff as talent war hots up

.......Jobs in the banking sector are likely to boom after remaining dull throughout 2012, once the Reserve Bank of India issues licences to new players. However, according to headhunters, the recruitment drive would gain momentum only if new banks decide to focus on retail business and not remain confined to corporate banking............

Read - Hindustan Times

RBI asks banks to disclose details of capital issuance

.............The new rule, issued to conform with Basel III banking capital reforms, will be applicable from July 1 and lenders should report details on their September-end balance sheets, the central bank said in a statement..........

Read | Business Standard

Cobrapost sting: I-T notices to ICICI, HDFC and Axis banks

...........In its report on accusations against the three banks, RBI had said there were instances of splitting cash deposits below Rs 10 lakh to avoid reporting it as a cash transaction.It said the banks were found to be accepting cash of Rs 50,000 or more without a permanent account number (PAN)..............

Read | Business Standard

RBI distressed by rising number of illegal schemes: Subbarao

In its effort towards financial inclusion, the Reserve Bank of India Governor D. Subbarao said women demanding banking services is the biggest accomplishment in the last four years. He was speaking after the frontline managers’ conference on business correspondent (BC) model in Pune...............

Read- HBL

I-T Dept will come down hard on banks violating KYC norms

............Now, data related with Form 60 is being looked into. The Department has also obtained an enquiry report of the Reserve Bank of India, which identified a number of cases in which neither PAN nor Form 60 was obtained by the banks. Not only this, dummy PAN has been quoted in case of multiple entities, it has been alleged. This issue was discussed in the two-day Annual Conference of Chief Commissioners and Director Generals of Income Tax, inaugurated here by Finance Minister P. Chidambaram on Tuesday.........

Read - HBL

‘Fly-by-night’ finance company in Vizag downs shutters

............These schemes do not have the approval of the Reserve Bank of India. As many as 1,800 depositors fell into the trap and the company mobilised Rs.5 crore in a span of just four months and wound up its operations in January this year and escaped with the money by duping the investors.................

Read | The Hindu

It may be worth giving the first inflation-indexed bonds a miss

The more one learns about the government’s inflation-indexed bonds (IIBs), the less it seems like a real effort to give the saver a good deal. The Reserve Bank of India (RBI) has put out details about how the scheme will work in practice, and the examples given are not particularly exciting..............

Read......

India’s Golden Problem

...Addressing that issue might be possible with a slightly bolder option – allowing the Reserve Bank to issue gold bonds. This system would allow households to take their physical gold and exchange it for certificates – not only will these be redeemable at any point but they will also be transferable, allowing holders to buy and sell these certificates at prevailing market rates. It will also be cheaper for households, eliminating their explicit (vaults, bank lockers) and implicit (risk of fire, theft) holding costs. The Reserve Bank can then put these assets to work by lending it out to jewelers and earning a return while simultaneously curbing gold imports......

Read...........

What's next for gold borrowers?

......Under such circumstances, unless you are in need of immediate funds, it’s best to look at other cheaper resource-raising alternatives. Taking into account the present value of gold per gram and the margin requirements, you will have to look for other modes of raising funds such as a personal loan, loan against assets like property or fixed deposit........

Read | Business Standard

Why should depositors from better banks pay for cooperative banks’ failure?

..........What is worse, co-operative banks are poorly regulated under the dual regulation of the Reserve Bank of India (RBI) and the Registrar of Cooperatives. It is an open secret that RBI's supervision is completely ineffectual when it comes to co-operative banks, because of the enormous political influence wielded by their promoters.............

Read - Moneylife

More than a dozen co-operative banks go belly up. Should you worry?

.........The good part is that Reserve Bank’s credit insurance arm has paid Rs 159.85 crore to depositors of 13 cooperative banks which went bankrupt during April 2012 to March 2013, according to DICGC.

Read.........

Why enhance education loans?

.........Now, banks stung by bad loans are buying insurance to cover default risk, which should make borrowing costlier for students. The total value of all currently disbursed loans, according to Reserve Bank of India data, is Rs 5,510 crore. In 2011-12, the ratio of bad loans was 4.5 per cent, and according to banking experts, has gone up in 2012-13 by another 100 basis points. That makes it important to ask ourselves should we be treating educational loans as other loans.............

Read.........

Singapore NPA norms hit banks

..............Banks such as State Bank of India (SBI), Bank of Baroda (BoB), Bank of India (BoI) and ICICI Bank, who have businesses in Singapore, are the ones affected by this. While banks don’t reveal the exact geographical break-up of their international advances, between 5-10% of the international lending for these banks could come from Singapore operations................

Read - FE

SBI chief may get extension, LIC & UTI await new heads

.....The real surprise has come at SBI where the finance ministry is said to be backing an extension for Chaudhuri, arguing that the second line of leadership is not in place. Of the three managing directors, Diwakar Gupta and Hemant Contractor are due to retire over the next few months, while A Krishna Kumar and S Vishwanathan have less than two years of remaining service, a prerequisite to be considered for the top job. Another two years for Chaudhuri would give him a four-and-a-half year term,..........

Read - TOI

The ills of public sector banks, SBI included, can be traced to their parentage

.......This is not to hold a blind brief for public sector banks. Admittedly, they are often lethargic and function more like bureaucracies than like commercial ventures. But the very fact that many of the top-rung at new private sector banks cut their teeth in these very same PSBs that are now being condemned should give lie to the naïve belief that the latter are inherently ‘unbankable’ as one business daily scathingly put it............

Read ET

Talks on for merger of bank with SBI

State Bank Group Chairman Pratip Choudhari has said that the procedures for the merger of one of the associate banks with the State Bank of India (SBI) will be set rolling in the second quarter of this financial year. He told presspersons here on Tuesday that consultations were now progressing for identifying the associate bank that would figure in the merger exercise..........

Read | The Hindu