The mechanics of money - Dr.D.Subbarao

...........It is not that as Governor I don’t get the time to read. I do. But the time that I get is irregular – not the most conducive for book reading. I keep telling myself that I must read for at least half an hour every day, but have failed so far. So, when I finish reading a book, it feels like a big accomplishment. It’s also comforting because I am at least trying to live up to the hype that the RBI Governor is a well-read person.................

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To fix whistleblower, bank moves from verse to worse

............The real reasons for going after Mr. Tuljapurkar appear to have little to do with poetry and seem far more prosaic. He has been a thorn in the flesh of his management. Both, as an alert employee and, for a while, as Workman Director on the bank’s Board. He has also drawn the RBI’s attention to the BoM’s odd handling of some corporate accounts and advances which, he charges, are being favoured at the expense of BoM’s main depositors — lakhs of small farmers, working people and retired employees. But the BoM leadership has something more against him. They suspect him — with no basis or proof — of being the whistleblower behind a story in The Hindu, July 7, 2012. That story exposed how the bank had granted a Rs. 150-crore loan to a defaulter owing BoM Rs. 40 crore by greatly weakening the terms of the original sanction letter. The defaulter company was a part of the United Breweries (UB) group headed by Vijay Mallya. The expose embarrassed Bank Chairman and Managing Director (CMD) Narendra Singh, sparking a whistleblower witch-hunt...........

Read | The Hindu

India’s Small-Change Problem

.......Data from the RBI’s latest annual report in 2012 show the total supply of small coins, those of less than one rupee denomination, fell sharply to under 15 billion pieces by the end of March 2012 from about 55 billion in 2011. The reason for the drastic decrease was a decision to withdraw the 25 paise piece (worth a quarter of a rupee) from circulation. However, there wasn’t a corresponding increase in coins of one rupee denomination............

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Illegal withdrawals at ATM centres: People are losing money again!

.....“Prima facie, it appears that unsuspecting customers across several banks have fallen prey to a skimming attack by fraudsters. As it involves more than one bank, it would only be fair if we comment further only once we have ascertained the facts. We would like to state that our system is secure and this matter has nothing to do with the recent system upgrade,” ........

Read - Moneylife

Recruitment to the post of Officers in Gr ‘B’ (General)-DR

 Reserve Bank of India (RBI) has published the recruitment notification for 98 vacancies for the Post of Officer Grade-B (General)............

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Medical camp for retirees at Pune

Marsh India Ltd arranged a free medical checkup camp in Pune for three days from June 10-12, 2013. It was conducted at College of Agricultural Banking and at SRL laboratory during the period. Around 120 ex-employees  took the benefit of the medical tests consisting of blood sugar, lipid profile, ECG, basic Eye check up, BP and BMI. The participants were very happy with the arrangements and extended their thanks to organizers and also the administration of CAB. The Local Retired Employees Association coordinated with Marsh India Ltd for smooth conduct of the medical tests. The Association Secretary thanked the Principal, Vice Principal and AGM (Admn) for allowing the use of premises for the purpose. He also thanked the team of Marsh India and specifically Rachana Oberoi conducting medical camp in Pune for retirees and staff of SR laboratory for efficient and excellent arrangements and courteous behaviour. S/Shri S D Datar, president, L V Kulkarni Secretary of the Association, S R Kolhatkar, P W Nirkhe,  S D Purohit and Y P Varadkar took lot of efforts for successful conduct of the camp. Shri A P Kale was of great help in arranging the event.

- S D Purohit 

RETIREMENT SAVINGS

.....Get a glimpse of the future of your income and expenses. Know the complete story of your post-retirement financial situation. Get to know how much you really need...............

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Punjab aims to be first to launch public treasury site

....."We have written a letter to the Reserve Bank of India seeking its permission to authorise the banks for the services. We hope to receive the permission very soon and the portal will likely be operational by next month. Once operational, the contractors' or vendors' payments would be directly credited to their account, bringing transparency in the system."......

Read | Business Standard

Finance ministry to seek Cabinet nod for all-women bank

............, the proposed bank will lend mostly to women and women-run businesses, provide support to women Self Help Groups  (SHGs) and their livelihood. Moreover, it will employ predominately women, which addresses the gender-related issues and empowerment and financial inclusion. However, it will take deposits from both men and women. Earlier, a committee headed by headed by former Canara Bank chairman MBN Rao and comprising of bankers and other experts had prepared a blueprint for the all-women bank.

Read - Moneylife

Wake up call: UCBs falling prey to mafias

...............The most worrying thing is the unscrupulous politicians have cynically used cooperative banks located in the country’s largest state UP for making thousands of crore of their black money white. According to the CBI information, most of laundering is done through fictitious accounts. Sources say the massive amount of black money thus made white by politicians could easily be used for subverting democratic norms and processes in the country. What passes comprehension is the RBI’s refusal to share information on grounds of confidentiality. But HT feels information on cases of fraud or violation of the guidelines by banks could be shared as intelligence inputs. Sources say the RBI is subject to the accusation that it has been rather slow in taking action even when it had enough information on the erring banks.................

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Co-operative banks look to ramp up their technology

..........The co-operative banking sector has been a great tool for the average Indian since a very long time. Highly customizable operations, great familiarity with the clients, low technological usage and an old school working environment  have characterized the sector ever since it came into existence, and this is precisely the image that an individual would carry about it. The image though is completely obsolete, and one needs to understand that the concept of changing with time does indeed apply to the banking sector. But the people cannot be entirely blamed for their perception, irrespective of the lack of information about the subject, as the banking system in India has always been late to respond to progressive changes.......

Read - ET

Forty-five cooperative banks may face regulatory action

.....“Most of these banks are struggling to raise funds due to multiple constraints, including a lack of support from respective state governments and their poor managements,” said Prakash Bakshi, chairman, National Bank for Agriculture and Rural development (Nabard). “Since these banks have been given several extensions to achieve the required capital, there is a possibility that there will be strict action on these banks, including barring them from operating further if they fail to achieve the required capital,” Bakshi said. Nabard is the nodal agency to regulate cooperative banks and regional rural banks. Though RBI is unlikely to shut these banks at once, it may bar them from raising fresh deposits and giving loans............

Read - Mint

Ticket booking through cells soon

.....According to sources, the Railway Board has approved the scheme and the RBI has given mandatory clearance to it. According to a Board official, railways has made a slight modification in the newly-developed software to check misuse of the scheme. Railways intends to make this scheme simple for cellphone users. A customer is required to download the application to book his journey ticket through cellphone,..............

Read - TOI

Bank loans to minorities at all-time low

.......Despite all scheduled commercial banks being served a master circular by the Reserve Bank of India (RBI) last July, instructing them to boost PSL to minority communities based on the PM's 15-Point Programme for Welfare of Minorities, they have failed to comply. The SLBC report admits that banks were 'advised to ensure that lending to minority communities be given a thrust and banks should aim at achieving 15%of their priority sector lending to minority communities', It pegs its target achievement at a meagre 6.4 per cent............

Read - TOI

Waiting for Fed to talk up sentiment

........For the RBI, it's a Hobson's choice. The slowing IIP may offer a compelling case for cutting interest rates. But with the rupee still hovering close to its all-time low, and consumer inflation not showing any substantive reduction, pruning interest rates could turn out to be counter productive.............

Read - IE

RBI plans to revive stressed loan market for banks, ARCs

The Reserve Bank of India (RBI) is planning to add momentum to the lacklustre stress loan sales market wherein banks dispose off their non-performing loans to the asset reconstruction companies (ARCs). Recently, Usha Thorat (former RBI dy governor), the director of the Centre for Advanced Financial Research and Learning (Cafral), a non-profit organization funded by RBI, has held a meeting with banks, ARCs and rating agencies in this regard, two people familiar with the development told ............

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Murky macroeconomy

......The monetary policy scenario has become significantly more complex as a result of the sharp rupee depreciation in a short period of time. This will slow, if not reverse, the downward trend in inflation over the next few months. Further, in the absence of a rapid increase in capital inflows - for which there are no obvious triggers, either external or domestic - the likelihood is that the rupee will continue to lose value, intensifying inflationary pressures even more.......

Read | Business Standard

Let the Banks Take Due Care

The RBI has done well to pull up Axis Bank, HDFC and ICICI Bank for violating KYC norms and anti-money laundering laws. The penalty imposed should be an eye-opener for other banks. But personal responsibility should have been fixed to recover at least some portion of the penalty from officers. If the violations continue, the government must take steps to nationalise these banks. 

- KV SEETHARAMAIAH, Hassan (ET)

Steps to check gold imports showing results, says Mayaram

...the high current account deficit (CAD) is still a concern for the government, but the recent steps to check gold demand have started having an impact. The ministry last week raised the customs duty on gold to 8% while the RBI has put restrictions on banks on importing gold.......

Read - IE

Will RBI spoil the bond party?

.....Now, all the eyes are on the mid-quarter review of monetary policy, which is scheduled for Monday. The bond street fears that RBI might play a spoilsport by not cutting the repo rate further. According to treasury officials of banks, this would lead to yields rising and the treasury portfolio of banks will be left bleeding.......

Read | Business Standard

Rupee slide, no surprise

............RBI Governor D Subbarao has rightly expressed his helplessness, given the central bank has not been targeting that a specific exchange rate. The foreign currency reserves at the disposal of the RBI are limited, and are in any case, too precious to be spent on changing the direction of the market.............

Read | Business Standard

Is the worst over for rupee?

........."What we are seeing on the rupee today is primarily on account of global developments and not so much due to domestic issues. The currency will correct itself as soon as our fundamentals are very strong, and the economy is on the right track. We are seeing green shoots of growth and inflation is coming down," ........

Read | Business Standard

Rupee struggles, officials waffle, markets fret

.......The RBI late on Tuesday also asked exporters at special economic zones to realise their dollar earnings and get them back into the country within one year in a bid to increase the supply of dollars in the market. The central bank also hastened the process of dollar inflows through online payment channels by increasing the amount that exporters can bring back to $10,000 from $3000. "The government talking up the rupee has had an impact on the sentiment.............

Read - Deccan Herald

RBI may still go in for 25 bps cut on Jun 17: Indranil Pan

......"Our main point is that the RBI needs to maintain a relatively linear trend in terms of interest rates momentum and that is the only hope that it has in this current scenario to provide some transmission given the fact that the currency dynamics does not allow it any space to provide liquidity in this system," ..........

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Weakening rupee may delay rate cutting cycles, says Nomura

........Nomura expects that so long as the currency is weakening, the RBI will delay the rate-cutting cycle because financial stability concerns will overrule its business cycle response. It believes that repo rate is likely to be unchanged in June, with rate cuts resuming after the currency stabilizes and inflation and CAD are brought to moderate levels.

Read - Moneylife

Economy not strong, RBI intervened to stem rupee fall: Ahluwalia

Reserve Bank of India intervened in the foreign exchange markets on Tuesday to halt the rupee’s slide, the deputy chairman of the country’s Planning Commission Montek Singh Ahluwalia told.............

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Giving teeth to the serious fraud office

.........Despite the tough remit set for the SFIO and the complex nature of the cases handled by it, the functioning of this non-statutory body is hemmed in on many sides. Its powers are largely restricted to examination of documents and it does not have the powers of search, seizure and arrest. The SFIO also operates within an elaborate matrix of investigating bodies with overlapping authority over such cases; the CBI, the Central Economic Intelligence Bureau, the Reserve Bank of India and the Securities and Exchange Board of India (SEBI) being some of the other bodies which have also been granted investigative roles and powers............

Read | The Hindu

The miracle of India’s negative growth

.......Obviously, this miraculous decline is man-made and the result of several factors/policies. Two prominent determinants of the negative miracle are the operation of policies by two esteemed institutions — the monetary authority, RBI, and the governance authority, the CAG. By my calculations, each of them has contributed an equal (presumptive?) loss to the Indian economy — at least 1 per cent of GDP for each of the two years, or around Rs 1.75 lakh crore each. How can such an assessment be made?.............

Read - IE

Kolkata: State govt to seek RBI, Sebi help to track scamsters

The state government will seek the help of the Reserve Bank of India (RBI) and the Securities & Exchange Board of India (Sebi) to add more muscle to the economic offence wing (EOW) and cyber crime cells (CCCs) of the state police, Kolkata Police and the different police commissionerates. The decision comes in the wake of the meltdown of the tainted Saradha Group and host of other chit fund concerns and shady operators dealing in ponzi schemes. Sources in the state finance department said though the move had been initiated in the wake of the chit fund bust, the decision to strengthen the two agencies dealing has been fuelled by two objectives..........

Read - Hindustan Times

Banks will not cut rates if central bank maintains status quo

.......According to SBI chairman Pratip Chaudhuri, it's the CRR cut - rather than a cut in repo rate - that helps banks to pass on the rate cuts. Other bankers also echoed this view, citing high deposit rates as a restraining factor for them to reduce rates.......

Read | Business Standard

Economic gloom worrisome: SBI chairman

........... “Optimism is always good, I would share the optimism. But from time to time, we should do a realty check, whether the optimism is correct................

Read | Business Standard

Higher provisioning dragged PSBs profitability: Microsec

......On the NBFC front, We believe, the Housing and Automobile finance NBFCs themselves may see revival if interest rates decline further. However, with an expectation of economic recovery is in near term, NBFCs are all set for a strong growth in the coming years. We also expect that new draft guidelines on NBFCs proposed by the Reserve Bank of India (RBI) in December 2012 (based on the Usha Thorat Committee Report) will strengthen the NBFC sector fundamentally in the long-term............

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Only 8% of gross bank credit of all scheduled commercial banks go rural areas

........Surprisingly,  Maharashtra, which accounts for more than one-fourth of gross credit by banks in the country,  has one of the lowest share of rural credit to total credit.  The gross bank credit by banks in Maharashtra as on September 2012 was Rs 1,410,952 crore, which is about 29% of India’s gross credit. However, the share of rural credit in the whooping Rs  1,410,952 crore given by banks in the state, was just 2% each at Rs 28,998 crore.........

Read | Business Standard