The Confederations of Indian Industries (CII) said that the Reserve Bank of India should work in tandem with the government to revive the economy. CII president and Infosys executive vice-chairman Kris Gopalakrishnan said that RBI should ease rates by at least 100 bps in this year..............
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.
Friday, July 5, 2013
RBI Guv’s Last Hurrah: Listen to FM, Slash Rates - Charan Singh
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| Good way to go out...... |
(The author is RBI Chair Professor at IIM-Bangalore)
Read - ET Mumbai Edition page 14
RBI backs Chidambaram's call to banks to cut lending rates
......When the Reserve Bank calibrates its short term policy interest rate, the expectation is the monetary transmission will takes place and the banks should respond by calibrating the lending rates.........
RBI not targeting any exchange rate: Subbarao
Subbarao prods banks to hasten monetary policy transmission
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| Board meeting |
Action against some more banks on the anvil: D Subbarao, RBI Chief
CHENNAI: Reserve Bank today said it will take action against some more banks for alleged violation of regulatory norms following an expose by a news portal. "Well, we have taken action against specific banks. Action against some more specific banks is in process. We will take a final view on that," RBI Governor D Subbarao told reporters after the board meeting here.............
Police to get training to deal with ponzi schemes
CHENNAI, JULY 4:
The RBI Staff College would train senior police officials to deal with cases associated with fraudulent money collection schemes, said D. Subbarao, RBI Governor. Chairing a special Sate-Level Bankers’ Committee meeting here on Thursday, he said banks in Tamil Nadu should speed up opening of branches and bank accounts in remote areas of the State as infrastructure in Tamil Nadu was relatively better. According to a press release from the Press Information Bureau, in the next two months, the State Government will identify 10 districts of where business correspondents can be trained, with the help of banks, in actual banking activities so as to facilitate financial inclusion.............
My View on "VITALINFO - Philosophically speaking............"
Mangeshji, you deserve all the praises and greetings from the members of the group. Your effort to keep retired people connected to the world - the banking and finance where they lived for over four to five decades. Hearty congratulations. Wish you all the strength and spirit to continue your task untiringly with all energy.
- Aarupathi Mani (K S Iyer)
The death that was not.............
I died yesterday. Quite a few of you may jump in your seats. I also
jumped in my seat when my eyes fell to the news item appeared in local
paper; Sharad Fadnavis is no more. I panicked and pinched myself to
ensure that I was not in heaven, or more appropriately, in hell. I
reread the obituary and it dawned on me that it related to my
namesake,lot of details matching to a great extent. There was a
photograph also but some of my friends whom I have not met since ages
may very well believe it to be my own taken in my younger days. I
braced myself to receive telephone calls and condolences, but to my
great surprise, none was received. Intrigued by this, I again
went through the news and then realized the reason for my
unpopularity. The deceased Mr. Fadnavis was a water conservation
specialist (may God bless his soul) and my nearest and dearest
relative, including my better half would also never believe that I could
be a specialist in any field, let alone water conservation.
- Sharad Fadnavis, EXRBITES Group
Bankable innovations
..........The Union Government has shown a strong commitment to boosting credit to this sector and has instructed public sector banks to play a pivotal role in providing critical assistance. The Government wants to double the credit flow to this sector in the next five years. To back this, Reserve Bank of India (RBI) has mandated all scheduled commercial banks to achieve 20 per cent year-on-year credit growth to the sector............
Chidambaram rushes to do what Subbarao couldn’t
What Reserve Bank of India (RBI) Governor D. Subbarao could not do through a series of rate cuts, India’s finance minister P. Chidambaram now wants to achieve through a gentle nudge..............
Read - Mint
Read - Mint
New banks to increase inclusion, create new jobs: Survey
The Reserve Bank's decision to allow new players in the banking sector would result into improvement in efficiency, increase in capital base to meet the credit needs of the economy and generate huge employment opportunities, says a survey by industry chamber Ficci....................
Open more banks, but not at depositors' cost
..........The RBI must now scrutinise all the new applicants thoroughly as failure of public deposit-taking banks has wider and far-reaching implications than in case of other industries. These concerns are more valid in the post-2008 global financial crisis era than they were when the government had decided to open banking for the private sector in early 1990s............
Bank licences for corporates in national interest: RBI
......"We debated extensively on the matter and the decision to allow corporates to apply for bank licences was done in the national interest," Subbarao said. "As Indian banks go out and open branches abroad and foreign banks come and set up operations inside the country, there is no way we cannot implement Basel III,"...........
RBI to consult govt on Aditya Birla Nuvo’s banking licence application
Chennai: The Reserve Bank of India (RBI) intends to consult the government about any possible conflict of interest in Aditya Birla Nuvo Ltd seeking a banking licence and Aditya Birla Group chairman Kumar Mangalam Birla being on the board of the central bank, RBI governor D. Subbarao said on Thursday...........
Will look into possible conflict of interest in Birla's bank licence plea: RBI
Chennai: RBI Thursday said it will look at whether there is any conflict of interest arising out of a bank licence application filed by Aditya Birla Nuvo, whose group Chairman Kumar Mangalam Birla happens to be on the board of the central bank. "We have to take a view on that. This is a very recent development," Reserve Bank Governor D Subbarao told reporters after a meeting here of the central board.........
'Industry approves RBI conditions on new banks'
.........A big majority (88 per cent) gave a thumbs-up to RBI's condition that applicants be prepared to set up at least 25 per cent of branches in hitherto unbanked rural centres. Currently, only 35 per cent of the population has a formal bank account, as compared to an average of 41 per cent in other developing economies............
India Central Bank to Take 3-4 Months to Examine Bank Applications
CHENNAI—India's central bank will take three to four months to examine the 26 applications it received for an unspecified number of bank licenses it plans to issue, Governor Duvvuri Subbarao said Thursday. The applications will then be vetted by an independent panel of experts before the Reserve Bank of India makes its final choice........
New bank licences: Tough obstacle ahead, says Fitch
.......According to the agency, the new banks won't increase competition in the medium term because of additional profitability pressure from their expansion plans and the financial inclusion conditions. " New entrants may bring some much-needed innovation to a sector where only around 50 per cent of households have access to banking services" Fitch said..............
New banks is not equal to old business
...... The
late RK Hazari was an illustrious Deputy Governor of your institution.
Hazari produced a brilliant report in the 1960s which showed how
cleverly our business houses used the permit-license raj to enrich
themselves and hold back economic growth of the country as a whole. The
control of banks and insurance companies by the honourable business
houses was in fact cited frequently those days as having baneful
economic consequences............
One regulator, two voices
One department of the RBI says there is no forex exposure to be hedged, another penalises companies for not doing so
...One department of the RBI has proposed that non-bank finance companies (NBFCs) progressively reduce the period for classifying loans into the non-performing category (NPA). From the present 180/360 days, the period is to be brought down to 120 days and then 90 days. That will bring in regulatory parity with the banking sector, the RBI says.But is a narrow focus on reducing perceived “regulatory arbitrage” blurring other policy objectives? One wonders if this is an appropriate time for making the borrowing environment even tougher for those “financially excluded” segments catered to by the NBFC sector. As it is, the economy is quite weak and lenders (NBFCs included) will be circumspect in expanding their loan book..............
RBI clamps on rupee speculation overseas
........However, even before the slide began, RBI had issued a circular on April 25 specifying that foreign entities/structures with equity participation of Indian firms offering financial products linked to the rupee (such as non-deliverable trades involving foreign currency, rupee exchange rates, stock indices linked to the Indian market, etc) will have to take its approval. Their activities, if without the central bank’s approval, would be treated as violation of the Foreign Exchange Management Act (Fema), the circular clarified...............
Life after 60
.........In the absence of substantive reforms before the general elections of 2014, economists said the currency will remain under pressure. Part of the reason is that going by the real-effective exchange rate, which measures a currency’s export competitiveness against a basket of other major currencies, the rupee, despite its depreciation, is in the “neutral” territory, while .........
RBI conscious of need to be supportive of economic growth: Subbarao
....."We don't have an exchange rate target. We don't have exchange rate plan. We try to manage volatility in the currency movement, volatility very broadly defined, and we use also the instruments at our command. I have nothing more to say on that,"............
FM Lifts Bulk Deposit Cap on State Banks
Finance
minister P Chidambaram has instructed his ministry to lift the cap of
15% on bulk deposits for PSU banks, a move that would help them raise
more deposits, but may at the same time, increase their cost of funds.
When Chidambaram raised the issue of slow deposit growth at a meeting
with bank chiefs on Wednesday, some bankers said that the 15% cap has
been a stumbling block......
Read - ET Mumbai Edition page 12
Read - ET Mumbai Edition page 12
Rising NPAs in education loans worry bankers
CHENNAI: Bankers can expect to breathe easy on account of delinquencies in education loans. The government has proposed to set up a credit guarantee fund to address educational loan defaults. "The insurance scheme for educational loan is pending with the government. If it comes into force, banks would be more proactive about lending to meritorious students at the branch level," Dr K C Chakrabarty, Deputy Governor, RBI, said..........
Govt banks writing off more loans than they recover
Public sector banks are writing off more loans than they recover, despite repeated advisories from the finance ministry. In the fourth quarter of the last financial year, of the 26 state-run lenders, as many as 17 banks had written off more loans than they recovered. The write-off by these 17 banks in the January-March quarter of 2012-13 was higher than the write-off by all the 26 public sector banks in 2011-12................
HFCs set to tap ECB market after RBI reviews guidelines
Housing Finance Companies (HFCs) are all set to raise money through external commercial borrowings (ECBs) for affordable housing projects. RBI last week had revised the norms for raising ECBs for HFCs. “We have received application from HDFC” said R V Verma, chairman, National Housing Bank (NHB)...........
Liquidation of Charminar Bank in final stages
.......With a strong dose of help from the DICGC, by 2004 the bank paid off 80,000 of the total 1,02,000 depositors whose deposits did not exceed Rs 1 lakh. By 2007, it returned deposits to another 22,053 depositors. Later it scheduled eight installments for those depositors who had put Rs 10 lakh or more and cleared six of them until March last year. In fact, the bank had to give away the last of the installment in September 2012 to the last set of 136 depositors......
A Fixed Deposit For Polls: Mahila Bank
.........The
Bhartiya Mahila Bank will not offer any concessional rates to women,
though. “It is a commercial bank, which will follow the guidelines
stipulated by the Reserve Bank of India,” the
official said. The bank will primarily draw its human resource from
existing employees in public sector banks. “The idea is to empower women
in the country and bring banking services at their doorstep. The bank
will take initiatives to open accounts of women not only through branches but by organising camps all across the country,”..............
Don’t Arm-Twist State-Owned Banks
..........Instead
of pretending that a reduction in lending rates would revive
investment, the government should make its contribution to macroeconomic
stability and speedy project clearance. Tough curbs on the fiscal
deficit will help rein in the current account and excess demand feeding inflation. Proactive supply-side measures are needed to combat food inflation..........
RBI directive on banking charges
Dear Editor,
It refers to welcome directive by Reserve Bank of India (RBI) rightly requiring all the banks to have uniform and transparent system of levying service-charges irrespective of the service being availed from the branch where account exists, or through some other branch of the bank. Department of Financial Services (Banking Division) should take a step further by ensuring common and uniform rates of service-charges and interest-rates at least for all public-sector banks. Banks can compete by better service rather than rates of service charge and interest............
It refers to welcome directive by Reserve Bank of India (RBI) rightly requiring all the banks to have uniform and transparent system of levying service-charges irrespective of the service being availed from the branch where account exists, or through some other branch of the bank. Department of Financial Services (Banking Division) should take a step further by ensuring common and uniform rates of service-charges and interest-rates at least for all public-sector banks. Banks can compete by better service rather than rates of service charge and interest............
Why financial institutions should comply with anti-money laundering laws
......Banking industry that accepts business from high risk customers must have systems, controls and practices to manage that risk. Despite occasional aberrations, India has consistently maintained a robust Anti Money Laundering (AML) system. Historically, the country’s strict foreign exchange laws and transaction reporting requirements, together with the RBI’s Know Your Customer (KYC) policy guidelines make it difficult, though not entirely impossible for criminals to use banks or other financial institutions to launder money...........
Kochi banks top in credit-deposit ratio
KOCHI: Kerala's financial hub Kochi has ranked 20 among the country's top 200 urban centres, based on the total deposits accepted by scheduled commercial banks in these towns. In terms of the loans arranged by the banks in these centres,Kochi has come in at the 14 position.........
Rural banking push
This refers to the editorial “Licence to be cautious” (July 4). If the Reserve Bank of India’s real motive is financial inclusion, then the need for inviting new applicants is irrational. We have an almost saturated banking industry. New allotments would not solve the problem of “financial inclusion” in totality, as new organisations will take time to settle, including facing the greater challenge of rural customers...........
Extend services to rural areas, Joshi tells bankers
........Speaking at the meeting of the District Level Review Committee and the District Consultative Committee of the District Lead Bank, held at the Karnataka Chambers of Commerce and Industry (KCCI) here on Tuesday, Mr. Joshi pointed out that there was little progress on the opening of rural branches in the district. “If rural residents do not get loans in a place near to them, they will approach moneylenders who may fleece them. If we have to free them from the high-interest loans taken from moneylenders, extending banking services to rural areas is essential,” he said.............
.........An RBI official from Bangalore, Vanita Purushottam, pointed out that the bank guarantee scheme for small industrialists had come into effect from May 2013 and asked bankers to extend the facility to rural areas.........
Calculating corporates' unhedged exposure a tall task: SBI
...............The biggest problem here is going to be: how the calculations will be made. The guidelines came out yesterday night and we have not gone through the fine print. There are two or three things, which stand out. Firstly, the entire un-hedged position of the corporate across banks has to be ascertained..............
Product crack: Western Union’s remittance services
..........Till now Western Union could only enable cash-to-cash transaction from the US and the UK. In February, the Reserve Bank of India (RBI) had extended rupee drawing arrangement (RDA)—one of the provisions in that approves receiving money in India through a bank—to all the countries compliant with the financial action task force (FATF). Earlier,................
I-T dept may make d-o-b proof mandatory for PAN card
New Delhi: As part of its drive against fake Permanent Account Number, the Income Tax department is considering making proof of date-of-birth mandatory for issuance of PAN card. "The department might ask for proof of date-of-birth for issuing a PAN card. Ration cards and rent receipts might no longer be accepted as proofs of identity and address for issuance of a PAN card," sources in the finance ministry said..........
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