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Friday, June 7, 2013
Make Planning Commission a monitoring body: Bimal Jalan
FinMin for independent CDR oversight body
..........“An independent oversight mechanism which will not have any government representative or any serving banker but some experts who scrutinise from the correctness point of view whether the case referred is genuine,” was Takru’s description of what was envisaged, at the sidelines of the Skoch summit here. “Going to the committee will not be mandatory for a bank. It would act as only an advisory body, helping the bank vet a particular case.”.........
Approach to Financial Inclusion Worth emulating in India
........This is a very thoughtful move and it can work wonders to bring under banking fold the less privileged and people of small means. It meets two objectives simultaneously to inculcate banking habit among the people and mobilise savings though in a small way which can be creatively deployed.................
Spot-fake drills hit right note at Sonagachhi
KOLKATA: Saturday afternoons witness an unusual activity at Sonagachi in central Kolkata, the city's red-light district. Two dozen-odd sex workers huddle into a room for a training session on detecting fake notes. Shatabdi Saha, a bank official who works with the Usha Multipurpose Cooperative Society where most of Sonagachi's 10,000-odd sex workers hold accounts, conducts the hour-long sessions that became absolutely necessary because, she says, many customers had started palming off fake notes to the sex workers. The society has also installed a fake note detecting machine at its office at Sonagachi............
TRAINING FOR COOPERATIVE BANK AUDITORS BEGINS
A three days special programme for training for auditors of urban cooperative banks began on Wednesday (June 5). The programme is sponsored by RBI Jharkhand. The objective of the programme is to equip the statutory auditors with the requisite knowledge and skills in credit appraisal, post credit supervision et cetera..............
Read - The Pioneer
Read - The Pioneer
FSDC: RBI Governor D Subbarao nails point but misses others
RBI Governor Duvvuri Subbarao says the Financial Stability and Development Council (FSDC) should only be a coordinator, and not play a bigger role in financial regulation. The concern that the government should not undermine the authority of regulators is valid. But the notion that the RBI is doing a fine job at present is not..........
Finance Ministry seeks comments on FSLRC recommendations
A day after Reserve Bank of India Governor D. Subbarao’s observations made it clear that the apex bank and the government were not on the same page on ways of ensuring financial sector stability, the Finance Ministry on Thursday invited comments and suggestions from all stakeholders on the report of the Financial Sector Legislative Reforms Commission (FSLRC)..........
My View on "FSDC should not encroach autonomy of existing regulators: RBI"
To those who were following the relationship issues between Finance Ministry on the one side and all financial sector regulators on the other side, it was evident from the very beginning that setting up FSDC was the formalization of the continuing efforts by Finance Ministry to act as a super regulator over all regulatory bodies in the financial sector. Experts in the field had minced no words to point out that this will destabilize the equilibrium deftly built up by eminent persons who headed Finance Ministry and RBI in the formative years of financial regulation in India and consciously maintained by their successors till the recent past. Viewed in this context, the concern expressed by Dr Subbarao on June 5 at the 7th International Banking and Financial Conference 2013 should get the attention it deserves from all stakeholders.
- M.G.Warrier
Fiscal deficit, a black hole - A.Seshan
....There is another aspect of fiscal deficit about which I wrote in this daily (‘The Fiscal Deficit Conundrum’, February 7, 2002). While the central bank lending to Government is considered as deficit financing, the interest paid by the latter and returned to it by the RBI at the end of the year as part of a transfer of the surplus of income over expenditure is treated as revenue receipt. No doubt, the interest paid and the corresponding annual transfer together have a neutral effect in their consolidated balance sheet. However, the impact on the economy is substantial because while the payment of interest is mere book entry, the year-end transfer is a real transaction generating funds for the Government....
PNB chief K R Kamath re-elected as Indian Banks' Association chairman
The Indian Banks' Association (IBA) announced on Thursday that it has re-elected K R Kamath, chairman and managing director of Punjab National Bank (PNB), as its chairman for 2013-14............
Food prices to remain high: RBI
......"We see food prices continue to remain high, partly because income levels have gone up. Increasing real informal wages has been a major drive of inflation," RBI Executive Director Deepak Mohanty said here. "We have higher inflation. We are also a developing nation and so it's good to have some amount of inflation," Mohanty said.........
JK Bank major contributor to priority sector lending
Srinagar, June 6: Banks operating in J&K have extended credit aggregating Rs.4,918.14 core to 3,79,676 beneficiaries during FY 2012-13 against annual target of Rs.6,094.50 Crore to 3,54,302 beneficiaries under Priority Sector registering achievement of 81%............
Read - Greater Kashmir
Read - Greater Kashmir
Close extra bank accounts
It's a problem that most salaried people face. When shifting jobs or cities, the new company would ask you to open an account with their bank. So, what should you do with the old account? Most of us just forget about it. But, it could come back to haunt you. For instance, when you are filing income tax returns, the assessing officer may seek data of all your accounts or as the Cobrapost revelations show, it might even be misused to launder black money........
Cartelisation, not competition, decides banking service charges
.................Clearly, there are a lot of questions that need answers. From the consumer's perspective, the most positive aspect is that the RBI is now willing to engage with customers directly, hear their issues first hand and offer to examine the merits of each demand. This was evident from the fact that although Dr Chakrabarty personally took all the questions during the open house, the programme was attended by all those who would interact with the consumer. Present at the meeting were AC Mahajan, chairman of BCSBI and Mr Narayana Raja its chief executive. Dr Deepali Pant Joshi, executive director of the RBI, Supriya Pattnaik, chief general manager (CGM) of RBI, Rosemary Sebastian, Banking Ombudsman of Mumbai, M Balachandran, director of National Payments Corporation of India (NPCI) as well as former CGMs in charge of customer services-Kaza Sudhakar and Jagan Mohan Rao. DG Kale, general manager in the Consumer Services department at RBI was also present.
“Banks should not be selling third-party products,” RBI Deputy Governor
................... "My view is that banks should not be selling third party products. In fact, life insurance has been in India since independence, but till 1994-95 there were no banks selling insurance or mutual fund products. I fully support that the regulator must decide what is mis-selling. It must decide that if the bank is selling insurance products, what should be the conditions required to be fulfilled.”.........
Penalty on erring banks aimed at 'naming and shaming'
............Chakrabarty today sought to clarify that some misconception about the fine. “Please understand the fine of Rs 1 crore is per violation, and not overall fine,” he said. Chakrabarty added that in a democracy, Parliament is supreme and if Parliament has taken some decision, one should respect it............
‘Hiking penalties not the only solution for KYC violation’
.................. “It is one crore per incident. We must also understand – we cannot use fines indiscriminately. If I start fining, ultimately, banks are profit making organisations; they will pass it to the customer. And then again you will come back to me saying their charges have gone up, they are charging higher rate of interest. Fine is only for naming and shaming, we cannot create a system where we say that people will violate the regulation and by paying the fine, it is ok.”
Bancassurance: Irda proposes, Reserve Bank disposes
......Moreover, banks, according to the Irda, are not required to set up any separate subsidiary for entering into insurance while the RBI insists otherwise. Also, while Irda allows all the banks to enter insurance broking, the RBI has preferred a selective approach where the banking regulator will allow banks on a case-by-case basis, a senior official said. The RBI stance is in conflict with the Budget speech of finance minister P Chidambaram who cleared the way for bancassurance in India by allowing bank branches to sell insurance policies............
RBI's gold import restrictions: Right diagnosis, wrong treatment
The Reserve Bank of India (RBI) has correctly diagnosed the root cause of both the rising current account deficit (CAD) and the weakening of the rupee: India's insatiable appetite for gold. But the same cannot be said of the treatment it has chosen to cure the ailment. It has imposed restrictions on gold imports, the largest item on India's import bill after crude oil...........
Golden cures
.......Though the KUB Rao committee had suggested various innovative solutions to tackle gold imports in February, the response to them has been quite lacklustre. Inflation-indexed bonds, which Rao had recommended, have been issued in niggardly amounts and could do with a hefty increase. Little has moved on the other suggestion of dematerialisation of gold...............
RBI and Imporrt of gold
........RBI is right and a very straight forward institution and its thinking is always on the right lines as far as public good and economy's interests are concerned.
CAD likely to be under 5% this fiscal: Montek
........“There are clear indications that our fiscal situation is improving and our current account deficit is clearly coming down,” Ahluwalia said at the sidelines of a summit. CAD, which is a key indicator of a country’s external vulnerability, arises when a country’s total imports of goods, services and transfers is greater than exports........
‘Barring NBFCs from taking deposits will cripple them’
........“Without access to this avenue of fund-raising, the companies will be totally dependent on the banks,” he said. “Relying on just one credit channel will be a huge risk.” Moreover, since small NBFCs did not enjoy credit rating, bank finance would be inaccessible to them. The entire NBFC sector was concerned about the RBI governor’s statement..........
Motor & General Finance to surrender NBFC licence to RBI
“...board of directors have decided to voluntarily surrender certificate of registration to Reserve Bank of India which was being held in category B that is non accepting deposits non banking finance company,” .........
Chidambaram urges banks to cut rate, discourage gold buying
Finance Minister P Chidambaram urged banks to pass on the benefits of policy rate cuts to their borrowers. At the same time, he stressed on scarping the fetish for gold investment. Higher imports of gold is fuelling the widening current account deficit............
Hope some banks will be licenced before March 2014: Chidambaram
......."We need more banks, we need more branches. We need them in the small towns, in the block headquarters, and the backward regions of the country especially the North Eastern states and the hill states,"........
Chidambaram tells banks to contain NPAs
Finance Minister P Chidambaram today asked public sector banks to increase profitability by containing non-performing assets (NPAs) in view of the huge capital requirements over the next five years because of the implementation of Basel-III norms. Speaking at the annual general meeting of the Indian Banks’ Association, Chidambaram said huge provisioning for NPAs is eating into the profits of state-owned banks. He asked the banks to take steps to reduce NPAs.............
Read | Business Standard
FinMin asks regulator to probe sops to bank staff for selling insurance
......“The Government wants to know that if the agreement is between banks and insurance companies, then why are bank employee getting the incentives directly. What action is ultimately taken will depend on IRDA’s answer,”.........
P. Chidambaram wants every bank branch to hand-hold a Dalit entrepreneur
............"If all the bank branches, running into a little over one lakh, and each one of them support a Dalit enterprise, it can have large impact on the economy and the society in general. "And I want each bank branch to handhold a Dalit entrepreneur each, and then we will have 1 lakh flowers blooming in the country," Chidambaram told the meeting. Calling for more affirmative action to rid the society of the caste evil, he said socially and financially affirmative and inclusive actions like reservations for the under-privileged are the way forward..................
Indian Shadow Banker Sahara Group Seeks a License
Subrata Roy built an empire as a shadow banker, operating at the edges of India’s regulated financial system. Companies in his Sahara group take deposits from and lend money to mostly poor Indians. Now Roy wants to step into the light: He’s applying for a license to open a conventional bank. Getting approval may be hard for Roy, who’s had run-ins with the Reserve Bank of India—the nation’s central bank—and the Securities and Exchange Board of India (SEBI). ............
Reckless banking
.......There is no reason to disagree with Takru. It is an open secret that many of the companies that received large bank loans during the boom years have all sorts of problems —from excess leverage to corporate governance. The only question worth adding is: what role did the government play in this loose lending, since it controls the public sector banks?............
New Banking licenses: Confusions galore in RBI’s clarifications
.......In the 400+ list of questions, most questions came on the holding structure of the NOFHoC. The holding structure as envisaged by the RBI is either not clear, or, if it is clear, it is not practical, at least in the Indian context.
New RBI norms on restructured loans positive for most banks: Moody’s
......The higher provisioning is credit positive for India’s banks because it increases their loss-absorption buffers and incentivises them to enhance their underwriting standards to reduce credit costs, Moody’s said in a note to its research clients. In Moody’s view, the authorities’ focus on provisioning guidelines for restructured loans reflects a more proactive management of the asset cycle...........
Deficit troubles blamed for rupee slide
......K C Chakrabarty, deputy governor of RBI, said the rupee was depreciating due to the high deficits on the current account and fiscal sides, and assured the central bank would take steps to check the volatility. “The issue is that... if we have a CAD (current account deficit) and fiscal deficit, the rupee has to orderly depreciate and if it doesn't depreciate orderly, some time it would be depreciating inorderly," Chakrabarty told reporters........
Are banks ever-greening loans?
..........An analysis of the data segregating borrowers in terms of their Credit-Deposit ratio – the quantum of credit taken by banks vis-Ã -vis the amount of money deposited – show that credit disbursed to borrowers with a CD ratio of 80-100 rose by 20.4 per cent in the quarter. In the case of individuals with a CD ratio greater than 100, the quantum of credit disbursed rose by 16.7 per cent. But in the case of people with a CD ratio of 0-25, there was a 5.7 per cent decline in credit disbursement............
Kedar's sins become curse for farmers
.......Funds originating from the National Bank of Agricultural Development (NABARD), come to the Maharashtra State Cooperative Bank (MSCB), which lends it to a DCCB for giving loaning to farmers. The farmers depend on these crop loans to meet their sowing expenses. Even as PSU banks and regional rural banks also offer such loans, DCCBs are more popular because of a user-friendly system. However, a funds crunch stemming from the Rs 150 crore scam of 2002 involving the then chairman Kedar has led to NDCCB scaling down its lending by half this year............
India seeks wider access to Myanmar banking sector
India has sought wider access to Myanmar’s energy and banking sectors as the two countries targeted doubling two-way trade to $3 billion in the next two years. Public sector bank United Bank of India has set up a representative office in Myanmar and is expecting to be given permission to open full-fledged banking services, while Bank of India and State Bank of India are also hopeful of getting a nod,..........
How CIBIL goofs up credit records, resulting in denial of loan
.....While Mr Dhawan’s record would be cleared, there may be several such cases where a person's credit record or data is mixed up with someone else. In a similar case, a senior financial consultant, DM Mahalaxmi also had to go through the same trauma. The question therefore is who will compensate for the loss of repute and trauma experienced by Mr Dhawan and Ms Mahalaxmi.......
Sushil Kumar Modi to banks: Give education loans to 80k students this financial year
PATNA: Deputy CM Sushil Kumar Modi on Thursday expressed concern over stinginess of banks for not giving adequate education loans in the state to students opting for technical, medical and other such studies. He said only 1.04 lakh students from Bihar had been able to avail education loans of Rs 2,470 crore in the last six years.........
HDFC Bank told to pay Rs 5.2 lakh for misplacing cheque
HDFC Bank has been directed by a consumer forum here to pay Rs 5.2 lakh to one of its account holders for misplacing a cheque deposited by him and causing him a loss of Rs 5 lakh,...........
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