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| ...........Sustainable high growth sans financial inclusion is next to impossible. Equally important is productivity and efficiency where financial sector intermediation is essential in order to bring all sections of society under the financial inclusion net................. |
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.
Thursday, July 25, 2013
Financial Inclusion: A Must For Equitable Growth - K C Chakrabarty
New Banking Licences: Is Financial Inclusion At Hand?
 — Deepali Pant-Joshi, Executive Director,Reserve Bank of India |
| ..............“The 25 per cent rural presence is difficult to achieve as even the existing private sector banks are finding it hard to achieve it. That’s why we believe Indian banks must have business and delivery models to achieve financial inclusion. You simply can’t have India and Bharat when it comes to banking.”................. |
Indian Microfinance reputation still hurting from the Andhra Pradesh crisis
..........More systemically, banks pulled back from lending to any MFIs regardless of exposure to AP. The crisis had created the concern that the microfinance model was broken and that the default trend would spread. MFI liquidity dried up without new bank loans. The bubble had popped. The events spurred India’s central bank and banking regulator, the Reserve Bank of India (RBI), to address the lack of oversight in the microfinance sector. It released its Malegam Committee Report early in 2011 and adopted many of its recommendations later in the year. The regulations seemed aimed at restricting MFIs to a more narrowly focused area of the lending market. This may limit the risks inherent in pushing into new business opportunities, but it also leaves areas of the market underserved................
ASSOCHAM National Conference on Financial Frauds
Objectives of the Conference: The phenomenal economic growth the country witnessed in the recent times with increased reach and penetration requires fine tuning of legislative reforms on an ongoing basis, as to address the growing financial frauds as well as to accommodate growth. In the path to global integration and opening up of the economy, the architecture as well as reach of financial sector supervision needs to be strengthened to create a fire ball for minimizing financial frauds which of late seems to have become more prominent. The recent chit fund fraud has touched the hornet’s nest. The overlaps and well as gaps in the financial sector have tempted the tricksters to outsmart the system. Many fraud cases involve complicated financial transactions conducted by ‘white collar criminals’ such as business professionals with specialized knowledge and criminal intent.
Distinguished Dignitaries:
- Shri K. C. Chakrabarty, Deputy Governor, Reserve Bank of India
- Shri M. J. Joseph, Additional Secretary, Ministry of Corporate Affairs
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Subbarao's tenure 'worst era of performance by RBI governor', says economist Panagariya
The performance of present Reserve Bank of India (RBI) Governor D Subbarao in managing the monetary policy has been one of the worst in the history of the bank, according to Arvind Panagariya, professor of economics at Columbia University. "I am afraid...this is one of the worst eras of performance by the RBI governor," Panagariya said in an interview to The Indian Express Editor-in-Chief Shekhar Gupta for NDTV's Walk The Talk programme.............
Obituary
Stanislaus Emmanuel Aranha (78) (Ex-MD, Agricultural Finance Corporation, Ex-NABARD & Ex-RBI), passed away on Tuesday, July 23, 2013.............
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Jnana Jyothi FLCC on expansion mode across India
.............The trust was established on October 20, 2010 as per RBI guidelines. DT Pai, former chairman and managing director, Syndicate Bank and banking ombudsman, RBI is the managing trustee. The broad objective of financial literacy centres is to provide free financial literacy/education. These centres will disseminated information regarding financial products and services to various target groups, including, school and college going children. ........
3 NBFC operating in Meghalaya not guided by RBI norms
....The inquiry into the functioning of these companies was done by the Department of Non Banking Supervision at the RBI’s regional head office in Pan Bazaar, Guwahati which looks after the functioning of NBFC. Although it is not entirely correct that all NBFCs are bogus, as some are regulated by the RBI and others under the Registrar of Companies, but a vast majority of them flout norms and jump from different ventures, jumping from real estate to banking and speculative activities, which is risky..............
For note forgers think small is new mantra
...........A senior official of RBI said a few cases of fake currency notes of lower denominations had come to the notice of the apex bank, but the official failed to explain the magnitude of the problem. The value of circulated counterfeit currency notes in the category is negligible in the economy, according to the official. The paper used by RBI for printing currency notes is imported and is not available in the market, the official added..............
RBI directs banks to collect EMIs through electronic transfers
............The move is aimed at cutting usage of cheques and promoting electronic transfer. It will also save borrowers the efforts of going to branch for collection of cheque books. The notification also said that ECS also accords the same rights and remedies to the payee against dishonour of electronic funds transfer instructions under insufficiency of funds that are available under Section 138 of the Negotiable Instruments Act, 1881. “Considering the protection available, there is no need for banks to take additional cheques, if any, from customers in addition to ECS (Debit) mandates,” it said...............
FM meets bankers to review Rs 31,000-cr stalled projects
Finance minister P Chidambaram today met chiefs of select public sector banks and industrialists to review stalled projects worth Rs 31,000 crore. These include steel and power projects, road projects in the eastern states of West Bengal, Bihar, Jharkhand and Orissa...........
Their Common Threads
...........While hard-nosed politics has added a zing to the debate, experts say that in reality, it hasn’t generated widely divergent views. What seems to be emerging is a consensus—while growth is a necessity for generating resources to address poverty, the quality of growth is equally important to improve conditions of life. “Growth is not a substitute for targeted intervention, as many will not be able to benefit. At the same time, redistribution is not a substitute for growth as it cannot make up for opportunity lost as a result of slow growth,” says Subir Gokarn, director of research, Brookings India, and former Deputy Gvernor, RBI....................
Prime Minister's Office rejects Deepak Bagla for IIFCL top post
.......The official, however, said, that the PMO has asked the finance ministry to suggest another candidate for the post of IIFCL chairman, which fell vacant last month. "If the finance ministry wants to revisit the selection process or if there are serious complaints against Malla, then the process will start afresh," he said. The selection panel included Financial Services Secretary Rajiv Takru, Department of Economic Affairs Secretary Arvind Mayaram, RBI Deputy Governor Anand Sinha and HDFC Chairman Deepak Parekh............
Yellow fever
The tightening of the gold import policy by the Reserve Bank of India is a sign of its continuing concern over the large imports of the yellow metal into the country. The latest step seeks to ensure that at least 20 per cent of the gold imported from abroad is made available to the gems and jewellery exporters for export of gold products. Imports will be strictly monitored accordingly............
A wealth of opportunity
Sandwiched between China and Japan, Korea somehow has escaped the sweep of Indian businesses seeking to expand in East Asia. The ‘Look East’ policy seems to somehow overlook the most stable economy in the region. In the last fiscal, Indian direct investment in Korea, as tracked by the Reserve Bank of India, amounted to only $3.51 million. In comparison, investments in China were pegged at $66.68 million and in Japan at $19.21 million. In other words, the data on Indian ODI show that investments in Korea were.........
Foreign hand
..............What the RBI’s eighth survey suggests is that liberalisation has helped this effort to target the domestic market by opening up a host of new areas, including ones where technology intensity does not recommend foreign collaboration. Moreover, in pursuing the goal of profiting from India’s domestic market, foreign firms are far less willing to partner with domestic firms. This makes the foreign exchange cost of liberalisation high and its implications for India’s balance of payments adverse. Unfortunately, India’s policy establishment claims the opposite.
SBI warns RBI not to choke liquidity
State Bank of India Chairman Pratip Chaudhuri today asked RBI not to choke liquidity and instead raise interest rate, if needed, and called for transparency in managing rupee. "Whenever the central bank needs to defend the currency or prevent the inflation from going out of hand, please increase the interest rate, don't choke liquidity," ..........
The RBI’s Overnight Surgical Strike
..........To curb speculation on the dollar-rupee exchange rate, the RBI has undertaken a surgical strike. It has pushed up overnight interest rates—by clamping the cash it lends banks via its liquidity adjustment facility—in the domestic money market. Here, a quick buck could be made by borrowing rupees cheaply to buy dollars and rebuy rupees as the currency fell further. With a spike in overnight rates, this game gets harder to play..............
RBI move makes India Inc see red
..............“The latest move is contrary to the industry expectations and will adversely affect capacity creation and hurt economic growth. It seems growth can wait as far as the the central bank is concerned,” ..............
RBI's shock therapy: Expect more tightening if short-term rates ease
...........“The immediate impact of liquidity squeeze is more on private banks, as they are more dependent on bulk deposits, while the reliance of public sector banks on bulk deposits has significantly eased after the finance ministry directive last year,” .............
Govt looks at regular issues of sovereign bonds
.............In recent days, RBI has taken a number of steps to strengthen the rupee by increasing demand for the currency. Officials, however, say these measures would only address short-term issues. Though sovereign bonds could be a long-term answer, there is concern about increasing the external debt burden and exposing the country to foreign exchange risks during repayment...........
The rupee, over growth
............ True, a weaker rupee would make the government's fiscal deficit worse, since fuel subsidies would cost more - but the answer is for New Delhi to take the correct decisions to cut the deficit, not for it to strangle growth further in co-ordination with the central bank.
RBI holds the key
........The RBI can minimise the risk further by limiting private borrowing abroad and further curbing the import of gold till the economy gathers steam once more. If it still baulks at lowering the interest, the Central government must find a way of making it change its mind. For, we have run out of time.
After ‘pseudo CRR hike’ by RBI, a rate increase next?
.........But with these steps, the central bank seems to be trying its level best to not take the drastic step of increasing rates. But just how far will it be able to stave it off?.............
SBI Chief Criticises RBI
.............As the money market tries to figure out the rationale behind the
measures, Pratip Chaudhuri, chairman of the country’s largest lender
State Bank of India, on Wednesday questioned RBI’s wisdom in choking
inter-bank liquidity to stem the rupee fall when raising policy rates
would have communicated its intentions better to investors. “My
suggestion was that if you want to make liquidity expensive, please do
it by increasing the rate,” Chaudhuri told reporters in Kolkata. “This
is a non-transparent way of stemming the rupee fall.”...........
Base Rate, a puzzle
.......A perusal of the banking system reveals certain amount of convergence in base rates. Excepting a few cases, base rates hover around 10-10.50 per cent in most cases. With the RBI adopting a blinkered-horse like approach to quell rupee volatility, liquidity in the system is continuously squeezed. Bond yields have, as a consequence, risen. These measures already are having repercussions on the cost of funds for borrowers................
RBI's 24 steps to buy redemption for rupee
......The central bank tightened liquidity further and made it even harder for lenders to access funds with measures including lowering the amount banks can borrow under its daily liquidity window. Below is a list of currency-related measures from Indian policy makers this year:..............
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RBI’s high-risk strategy
..........In which case, it looks unlikely that RBI will call it a victory in a few weeks and restore liquidity. Many brokerages have already lowered estimates on India’s growth and more could follow. It’s not immediately clear whether the current account deficit, the original reason for the rupee’s weakness, will look better when growth slows.
RBI had no option but to kill the debt fund
.............Hence, RBI is not in a situation to sell dollars to control the value of the rupee. So, it has had to resort to taking steps that make the rupee scarce in the financial system. The trouble is that this has severe negative repercussions on other fronts. Debt fund investors are now reeling under heavy losses. Also, the return on the 10 year bonds has gone up. This means that..........
Damned if you do, damned if you don’t
.......What about policy rates? RBI has been targeting inflation which has largely been driven by food and fuel prices. Core inflation was under control and has reached one of its lowest levels in June even though generalised inflation has inched up. This does not provide comfort because the impact of ........
Don’t forget to claim Rs 10,000 deduction under sec 80TTA
...........For example, if you have received an interest of Rs18,000 from your savings bank account then you have to pay a tax on Rs8,000 only i.e. (18,000-10,000) thus Rs10,000 can be claimed as a deduction u/s 80TTA. But if total interest income from all your savings accounts is Rs9,000 only, then you don’t need to pay tax at all and the entire amount would be deductible u/s 80TTA...............
Retired banker gets Rs. 80,000 credit card shock from the US
Mumbai: Worli resident Chandrakanta Tekwani, 60, chuckled when she received an SMS informing her about a credit card transaction. She assumed it must have been used by her son, Rohit, who is studying in Karnataka. However, her worst fear came true when she received 23 such alerts in a day about Rs80,000 spent on transactions in three cities in the US...............
Card payment may require biometric check
........According to UIDAI officials, biometric authentication will be done using a USB biometric scanner costing R2,000, which will be connected to the card swipe machine at point of sale (PoS) terminals. In fact, the RBI had proposed — though at the pilot project level — double authentication of credit card transactions through Aadhaar as the move would make transactions at ATMs and PoS or merchant terminals more secure. Based on the recommendations of the Gowri Mukherjee-led working group — formed for securing card-present transactions — the RBI said that banks could consider the Aadhaar biometric authentication, along with the MagStripe (magnetic stripe), as an additional factor for authentication for card-present transactions at ATMs and POS terminals............
Rating downgrade rears its head again
Inquiry sought into loan waiver scheme
Former MLCs Vijay Sankeshwar and Mohan Limbikai have demanded an inquiry into the financial transactions of all 77 banks which received funds from the Reserve Bank of India, for implementation of the Union government farm loan waiver scheme announced in 2007–08. Addressing presspersons here on Wednesday, Mr. Sankeshwar and Mr. Limbikai, who are shareholders of Gurusiddheshwar Cooperative Bank (GCB), Hubli, said the Comptroller and Auditor General (CAG) had found irregularities in the implementation of the scheme due to the lack of proper guidelines from the Reserve Bank of India (RBI). They claimed the banks were not responsible for the mistake..........
Election of shareholder directors in public sector banks is a farce
.........Let’s not go to the Canara Bank AGM. The chairman and managing director read out the names of each of these potential directors and mentioned that they were all chartered accountants (CAs), except one, who was an engineer. He further said that all but one have been directors on the Boards of public sector banks. How on earth is anybody to know who is best qualified to be a director of the Canara Bank on the basis of this scanty information? It is as good as tossing a coin.........
UTI board meeting today, may discuss appointment of chief
...........The top post at the fund has been vacant since previous CMD UK Sinha, moved on to become the head of the Securities and Exchange Board of India. The government is said to have sought to replace him with bureaucrat Jitesh Khosla. This was allegedly opposed by ..................
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