........Whichever side of the debate one is on, there is no denying that the minimum that is needed for cash transfer is a system in place which can deliver the cash. The acknowledged fact is that there are hardly any banking services available to the poor. In illustration, this is what Dr Deepali Pant Joshi, Executive Director, RBI said in a talk delivered on 4 May 2013: “Under the roadmap for providing banking outlets in villages with population above 2000, banking outlets have been opened in hitherto 74199 unbanked villages comprising 2493 branches, 69374 Business Correspondents (BCs) and 2332 through other modes like ATMs, mobile van, etc.” And: “As per the roadmap drawn about 4,84,000 villages with population less than 2,000 have been allotted to various banks. Provision of banking services are to be made in the next three years.”.................
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.
Saturday, July 6, 2013
Welcome Women’s Bank, as Another Bank
......Now,
gender is not a good basis for licensing a bank. So, should we have one
more bank that will “mostly”, not solely, lend to women and employ
“predominantly” women? The simple answer is we need more banks. Yet
another bank makes eminent sense, as many people do not have access to formal credit. The RBI should allow more banks and also innovative forms of banking. The
government has done well to delink the licence for the state-owned
women’s bank from new private bank licences to be given by the RBI.
However, the need is to ensure that the upcoming bank to be called Bhartiya Mahila Bank, works on sound commercial principles...........
RBI campaign to create awareness on foreign exchange regulations
.......there has been a good response to the RBI programmes on financial literacy from all sections of the public, especially students. A.O Basheer, RBI General Manager (Mumbai), said the perils of financial illiteracy are too high to be ignored and therefore the public, the students in particular, should avail themselves of the outreach programmes of the RBI and learn to guard themselves...........
Foreign exchange expo
Reserve Bank of India unfurls its two-day exhibition on ‘Foreign Exchange for You’ at KRC Auditorium at GITAM University from Friday. Regional Director of RBI, Hyderabad A.S. Rao and a group of senior officials will be interacting with the visitors on foreign exchange transactions and help spread the awareness on its facilities available to residents and non-residents, rules involved in foreign direct investment in India and external commercial borrowings. The expo is open till Saturday between 10:30 a.m. and 5:30 p.m.
RBI Chief offers worship to Lord Venkateswara
............After an overnight stay on the hills, Subbarao and Urmila paid their obeisance to the presiding deity of Lord Venkateswara this morning and left the hills,................
Experian launches three new products
.......The theme for this year’s event was “The Next Frontier for Innovation, Competition and Productivity” and featured experienced and distinguished leaders from different industries, who shared their experiences on how they have leveraged data, insight and analytics in their respective organisations. The guest of honour at the conclave was Dr. K. C. Chakrabarty, Deputy Governor, Reserve Bank of India...........
'Allow banks to have pacts with up to five insurers'
.....There are other regulatory hurdles, too. RBI had said that banks assuming the role of insurance brokers could lead to a conflict of interests where the bank is also the promoter of an insurance company. “Further, some provisions of the exposure draft, if implemented, may expose the banks to reputational risks,” RBI had said in an earlier Financial Stability Report......
Make Aadhar common id for banks: RBI
........“Let us have only one ID, that is Aadhaar, which will be much more convenient to people and easier to identify,” said KC Chakrabarty, Deputy Governor, RBI. “The use of Aadhaar will help in rooting out many cases from identity frauds (due) to unauthorised documentations,”..........
All banks defy RBI circular on disclosing all service charges on their websites
.........During an ongoing research on bank charges, we discovered that banks are merrily flouting a directive by the Reserve Bank of India to disclose all charges on their websites.Not a single bank out of a sample of 20 (foreign, national and private banks), disclosed the complete list of basic banking service charges that a consumer would be charged during his day-to-day banking activities..............
Banking aspirants face a long road to Bharat
......... “Rural is going to be a challenge. It's difficult to comprehend risk because most of the rural population don't have income proofs and no proper documents. The second is that there are huge fixed costs involved; so small ticket sizes of businesses might not be enough for a branch that caters to a small area.” ...............
India's Risky Step to Boost Banks
............Experts worry that the RBI may not have the ability and staff to supervise all units and related parties of these proposed banks. "It's a challenge," said Thomas Richardson, India representative for the International Monetary Fund, adding that the RBI will need "to have additional skills and resources to keep track of the risks." But some experts say India could achieve some of this growth from existing banks itself..............
Indian Business = Good Banks
This
refers to ‘New Banks / Old Business’ (ET, Jul 5). Jaithirth Rao argues
against banking licences for industrial houses. Failed western banks
with diversified ownership structure were not controlled by industrial
conglomerates. The failure was largely due to the greed of professionals
to take advantage of the skewed incentive structure. Reference to the
late R K Hazari’s report, written in 1960s, is also not relevant as the
market conditions in India have substantially changed since then. Some
business houses, known for good governance, can add value to the banking
industry.
- S SOLOMON RAJ (ET)
- S SOLOMON RAJ (ET)
What is in new banking licence to attract companies?
.........What is in it for aspirants to get the banking license? This is the most important aspect of this analysis. The aspirants from the corporate sector have presence either in NBFC space or in financial markets or both. In the NBFC space, most are into lending to retail sector or commercial/ corporate sector or mix of both. The brokerage houses that are in the race have extended reach to mid to top end of the economic pyramid through their products and services across asset classes spanning equity, currency and commodity markets. So, for most aspirants, building client base and business around them is not an issue while the major advantage will be from building low-cost liability franchise through products that would involve use of checking accounts viz., savings and current account. The issue for them will be......
Post Bank of India?
...........The decision to foray into commercial banking now is only an extension of its presence in financial services through the post office savings bank which is used by millions across the country. Apart from offering savings schemes with attractive interest rates, post office savings bank accounts can be used normally like any other bank account. The name of the game in banking is an extensive branch network. And India Post is unbeatable in this with over 1.55 lakh post offices across the country, 90 per cent of them in rural areas. How many retail banks in the country can boast of such a network? The bank with the biggest network in India, SBI, has 14,816 branches; together with its associate banks the number will not exceed 20,000. Even if India Post were to convert just 10 per cent of its branches into banks, it will be larger than SBI.........
A Hobson’s choice
The Finance Minister, P. Chidambaram’s ‘advice’ to public sector banks to cut their base lending rates highlights the classic dilemma facing governments as both upholder of public interest and owner of firms – which, in this case, happen to be listed as well. There is no doubt that in the current circumstances, a cut in interest rates will do no harm to the economy. At the least, it will help companies to partially offset the cost push pressures from the rupee’s weakening and higher fuel prices, which they are unable to pass on in a weak demand environment. Thus, from a public interest perspective, Chidambaram’s resort to moral suasion is quite justifiable. But from the banks’ standpoint, a cut in base rates – below which they cannot lend – is easier said than done.........
Mr FM, interest rates in India should be at least 17%
.........the idea behind Chidambaram’s call for lower interest rates is that people are likely to borrow and spend more. And this in turn will get economic growth going again. Theoretically this just sounds perfect. But then theory does not always match practice. Banks raise deposits at a certain rate of interest and then give out loans at a higher rate of interest. So unless the interest rate offered on deposits goes down, the rate of interest charged on loans cannot come down..............
Now Chidambaram finds a friend in bank rate cut call
.....A day after Union Finance Minister P Chidambaram’s call to banks to pass on the benefit of rate cuts to customers, RBI Governor D Subbarao on Thursday said the central bank was also ‘very conscious’ of the need to be supportive of economic growth. On Wednesday, Chidambaram had exhorted banks to cut minimum or base lending rate in line with periodic interest rate cuts being made by the Reserve Bank of India (RBI).............
Poorvanchal gets first talking ATM
........The Talking ATM has a specially designed voice interface that enables the visually challenged customers to make transactions like pin change, balance enquiry and cash withdrawal independently just by following audio instructions that they will hear through the headphones both in Hindi and English specially made for the purpose. Also the ATM machine will have at several places, brail labels that will guide these customers as how to keep the machine display-screen blank while they are transacting............
Read - TOI
RBI to study fraud schemes targeting rural Tamilnadu populace
......In Tamil Nadu, the RBI would conduct an exploratory study in one district in consultation with the State government on why people became attracted towards fraudulent schemes and the modus operandi of the operators. “We will have 11 teams comprising junior RBI officers and each team will cover two or three villages,” Subbarao said. The RBI Governor also stressed the need to sensitise police officials on the issue and the need for track disposal of seized assets of the fraudsters to repay the public deposits. Stating that the Reserve Bank Staff College in the city would draw up a training capsule, especially for senior police officials, he exhorted the State government to help the Central bank in ramping up publicity about such fraudulent schemes. “The public can complain to any regulator and all regulators will coordinate resolution of complaints among themselves,” he said.............
Banks must improve Tripura’s credit-deposit ratio
KOLKATA, JULY 5:
Banks should take measures to improve the credit-deposit ratio of Tripura to 40 per cent by March 2014, up from 34 per cent as on March 2013. At the 105th SLBC (State level bankers’ committee) meeting held in Tripura recently, banks have been asked to set up branches in 80 locations and install 170 ATMs to enable financial inclusion..................
Police suspect persons outside law enforcement
.........The police are also not ruling out the possibility that any one of their own men, perhaps those moonlighting for private detective agencies contracted by certain victims of the financial fraud or others with strong political associations, could have sourced the call data record of Sarita through illegal means and leaked it to television channels. Investigators said that other than law enforcement agencies, only the Reserve Bank of India and the Securities and Exchange Board of India (SEBI) were recently given power to access CDRs to investigate cases of insider trading and money laundering..........
Scam-accused Kedar 'brokers' property deal for coop bank's revival
NAGPUR: The Nagpur District Central Cooperative Bank (NDCCB), which was left with a hole in its balance sheet due to the government securities scam which took place 11 years ago, is likely to get an indirect bailout package from the state government. The bank, which is facing strictures from the RBI, needs Rs 44 crore to wipe out its past losses due to the Rs150 crore scam, in which its former chairman, and now a Congress MLA, Sunil Kedar is one of the accused...........
UTI finally gets a head, splits CMD post
.........More recently, shareholders rejected Puri’s candidature after he was short-listed, citing lack of qualifications as mentioned in the advertisement. Puri has a dual Masters degree from Oxford and Cambridge, while the job advertisement required UTI’s CMD to have a management degree or chartered accountant. The requirement was revised later. After the split of the CMD post, the chairman’s post is likely to be taken up by a veteran public sector official in a non-executive role................
M.S. Raghavan takes charge as IDBI Bank CMD
M.S. Raghavan has taken charge as the Chairman and Managing Director of IDBI Bank. Prior to this, he was the Executive Director of Bank of India. Raghavan will be at the helm of IDBI Bank up to end-June 2015..........
Vijaya Bank’s ‘GenNext’ branch
....... “The younger generation, with high disposal income, exposure to latest trends and innate knowledge of technology, has specific banking needs. To cater to their needs, the GenNext branch is being opened.”.....
Nabard issues clarification
.....“The RBI has the responsibility to evolve a stable, safe and secure payment system. The financial transactions like ATMs work through their payment system. Therefore, the membership to the payment system is restricted only to banks. Thus, there were no instructions from Nabard specifically to primary agricultural cooperatives as to issuance of KCC to farmers. Cooperatives should understand the emerging reality,”............
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