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.
Tuesday, October 22, 2013
Mint Road now closer to North Block
Rajan vs RBI - Ila Patnaik
.......In summary, we may expect the outcome on RBI’s initiative on interest rate futures to be different if the Governor’s view prevails over the old RBI mindset in which the command and control instinct dominated. If, instead, in the old style, ways are found to restrict, stifle, manipulate, control and micro-manage the interest rate futures market are found by the staff used to dealing in the old way, this could become another failed attempt.............
Raghuram Rajan's tough battle against bubbles
...........You have to feel sorry for India's new central bank Governor, Raghuram Rajan. He recently pointed out that the flood of money from developed countries could have a major impact on the policies of developing countries and sows the seeds of another crisis. He complained, "Are we in a world where we continue to blow up bubbles elsewhere?" The response was less than satisfying. Instead of concern or sympathy all he got was a shrug. ............
Solving the conundrum
........We have also seen that there has been a lot of thrust being put on inclusive banking, meaning thereby that banking has to be taken to the poor so that they have access to the formal system and do not have to go to the moneylenders. To this effect, RBI has linked new bank licences with the opening of 25% branches in non-banked rural areas. The contention here is that while NPA growth is serious, there can be some contradictions with the objective of inclusive banking as the propensity of priority sector loans going bad appears to be higher than that of regular loans.............
Core inflation - A.Seshan
After repeated criticism of the irrelevant application of the western concept of "core inflation" in the wholesale price index (WPI) the Reserve Bank of India (RBI) gave it up. Instead, it has used the term "non-food manufactured products inflation" from the Annual Policy Review for 2013-14 onwards. I am surprised to find, in some recent statements of the authorities, a reference to the core inflation again..................
The guar gum example - Subir Gokarn
During my childhood, I was regularly required to eat a vegetable, which was unequalled in its combination of fibrousness and bitterness. Nobody in the family actually liked it, but, for some reason, it found its way on to the table. I have generally managed to avoid it after exiting the parental establishment and really never gave it a second thought, let alone imagined that I'd one day write a column on it.......
Pay through the nose to rent bank lockers
It will not come as a surprise if people soon start stowing valuables and precious items under their bed instead of renting out a locker in the neighbourhood bank. There are several complaints how banks are taking advantage of the soaring demand for lockers to force customers to shell out lakhs of rupees for a decent-sized locker. Leading the pack are none other than nationalised banks that have almost made it compulsory for any customer seeking a locker, to invest in fixed deposits and open an account, in violation of the Reserve Bank of India (RBI) rules........
DA (Projected) from November 2013 to Bank Staff
....On the above data its average comes to 237 and it is equivalent to 1960=100 CPI 5409 and 637 slabs. On the above data bank employees DA is expected to be increased......
Re-thinking Financial Education
.....Therefore, while educating the financially excluded poor about the fundamentals of financial literacy for eg- why invest, why save, why insure etc, as is done by RBI under National Strategy for Financial Education, such approaches should be adopted in the financial literacy initiatives by RBI, PFRD, IRDA and other stakeholders. Initiatives to disseminate financial education should be based on the insights from the MicroSave study and cues should be taken from IFMR trust’s KGFS, to make them meaningful and effective in promoting financial inclusion in India.
Bankers to reschedule loans to farmers
........The bank officials also said that they also wanted to provide a helping hand to the victims while agreeing to reschedule loans to farmers and fishermen. Joint Director of Agriculture Department has been asked to issue letters explaining the damage to the respective farmers. Andhra Bank DGM A. Ramakrishna Rao, RBI Assistant General Manager Anuradha and Srikakulam DRDA Project Director P. Rajanikantha Rao were present .
RBI asks banks to justify low credit-deposit ratio
At the 83rd meeting of the quarterly State Level Bankers’ Committee (SLBC) held in the city on Monday under the chairmanship of Finance Secretary of Goa, P. Krishnamurthy, J.B. Bhoria of the Reserve Bank of India (RBI) questioned the banks as to why there was no improvement in the credit delivery and improvement in the Credit-Deposit ratio of the banks in Goa.......
India Inc wants RBI to put end to rate hikes
.........Industry chambers including Confederation of Indian Industry, and representatives of credit rating agencies held pre-monetary policy discussions with RBI top brass including Governor Raghuram Rajan. The second quarter review of monetary policy is slated on October 29, 2013. CII suggested that the RBI should sends out a signal that there would be no further tightening and the Central Bank would start to move to a more accommodative monetary stance............
Installment under reverse mortgage scheme to be tax free: National Housing Bank
With an aim to make the reverse mortgage facility more attractive for senior citizens, the government has decided to give tax break on installment earned by pledging his residential property. Now it has been decided that annuity would be tax exempt, National Housing Bank Chairman and Managing Director R V Verma said........
E-KYC to be accepted for verification: Irda
Insurance Regulatory and Development Authority (Irda) said on Monday that the e-KYC (electronic know-your-customer) services operationalised by the Unique Identification Authority of India (UIDAI) will be accepted as valid KYC process for insurance. Earlier, Irda had informed insurers that a letter issued by the UIDAI containing details such as name, address and Aadhaar number was a valid document for customer identification..........
RBI eases rules for expanding bank network
The Reserve Bank of India (RBI) told banks that extension counters, satellite offices, mobile branches, Central Processing Centres (CPCs), service branches and administrative offices can be freely opened in any centre.............
Slow progress in registration for Aadhaar leaves officials worried
Though Dharwad is one of the districts where the Direct Transfer of Cash (DTC) scheme has been launched as a pilot project, the slow progress in Aadhaar registration has left the authorities worried. The issue came to light at the district lead bank meeting held here on Monday. Pralhad Joshi, MP; zilla panchayat chief executive officer P.A. Meghannavar; lead district manager Basavaraj Hoogar, Reserve Bank of India representative R.P. Chaudhari, and National Bank Agriculture and Rural Development (NABARD) assistant general manager Y.N. Mahadevaiah took part in the meeting.............
UID Aadhaar card: Ambition sans innocence
.....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.”........
Don't treat medical tourists as criminals: Prathap Reddy, Apollo Hospitals
....I began in a different era, when the struggle started with a big question mark on how to fund a hospital. To fund my first hospital, I had to make 20 pilgrimages between Delhi and Reserve Bank of India in Mumbai. After that, I remember writing to the then prime minister Rajiv Gandhi that I wish I had set up a beedi or beer factory instead of starting a healthcare company............
Getting it wrong on gold
......Indian demand for gold is inelastic which means the price, whether high or low, is immaterial to the demand/consumption of commodity. About 800 tonnes or more of gold— whether priced $2000 per troy oz or $1000 per troy oz, will land in the country somehow. Since the 10% duty fosters an arbitrage through grey channels, more imports will be unofficial than official. So, the administrative steps may appear logical but curbing imports has initiated large-scale smuggling of gold. Therefore, national wealth will not be accounted correctly in the country’s balance sheet.........
Hunt for Gold at the cost of tax payer's money-irrational - Dr.T.V.Gopalakrishnan
In India, some very strange events do take place and people's attention is easily diverted from all major and serious issues.The latest rush for gold based on a some self styled saint's dream has really caught the attention of all and the Government has been dragged to chase the mirage at the cost of tax payers' money.............
Read.......
Amanath Bank’s shareholders approve takeover
............“Shareholders have approved the takeover unanimously. While we normally would have about 500 shareholders participating in the regular general body, Sunday saw a turnout of more than a thousand since a historic decision was being taken,” bank’s President Naseer Ahmed, said. The decision would be conveyed to Canara Bank, RBI and Registrar of Cooperative Societies, he added.............
RBI to favour price control, EMIs may not come down
....Reserve Bank of India (RBI) Governor Raghuram Rajan is widely expected to raise the repo rate —its key lending rate — by 0.25% points in its quarterly credit policy review next Tuesday. So, expect your EMIs to stay elevated, if not rise further.......
RBI eases Uttarakhand flood-related claims
......Relief for the families of the 4,120 persons missing in Uttarakhand flash flood during June 14-20, 2013. All the scheduled commercial banks of the country are advised to settle the claims related to family members of the missing persons on submission of two documents according to a late evening circular form The Reserve Bank of India (RBI). The family members of the missing persons can get the claims settled by submitting two documents – the death certificate issued by the designated officer under Ministry Home Affairs circular and a letter of indemnity.........
Policy watch: P-notes: The big money laundering machine
....The RBI notification compelled banks and investors to cut their dollar positions. Curiously, nobody in the policy circles probed further. It was as if everyone knew that some FIIs had been short-selling the rupee in non-deliverable trades without prior formal sanction from P-note holders. It was as if someone powerful in the government had given them the go-ahead, confident that nobody would intervene. That is, till the RBI decided to pull the plug. P-notes were prevented from eroding the rupee.........
Soaring vegetable prices fuelling inflation: Rangarajan
... “Capital flows will not only be adequate to cover the deficit but may even add to reserves, he added. With regard to fiscal deficit, the former Reserve Bank of India Governor said there is a need to raise the revenue-GDP ratio and contain expenditure, more particularly subsidies which need to be pruned, well-focussed and prioritised. “Government has to decide which subsidies must take preference over others. What is needed is to have a fix on the quantum of subsidies to be provided as a proportion of GDP or of government revenue,” he said, adding several policy actions that may be not popular were needed...........
Banks should show real yield on fixed deposits
..........However, banks continue to follow less transparent practice with other products and most important among them is the interest paid on fixed deposits (FDs). For example, the FD pamphlets from most banks usually carry two columns - one for the interest rate and other for the "annualised yield". The explanation to the annualised yield............
Over 19,000 micro and small units turn sick in AP
...........While 7,818 sick units were reported to be potentially viable, only 3,527 units were put under nursing, according to the press release. The federation urged the RBI to hasten the process of rehabilitation of these units at the earliest.
Microfinance crisis leads to loss of 35,000 jobs
........The headcount at another microlender, Spandana Sphoorty Financial Ltd, has come down to 4,400 from 13,500 in October 2010. While some of the former employees moved to other private financiers, many still remain jobless. Before the crisis, Andhra Pradesh was the biggest market for microfinance, accounting for more than one-fourth of the total assets of the industry. The southern state is now home to about Rs.6,000 crore of bad loans. MFIs depend on loans from large commercial banks. In 2011, banks restructured about Rs.6,000 crore worth of loans to six microlenders after the Reserve Bank of India (RBI) allowed them to do so without terming them non-performing assets or bad loans.........
Hidden debit card surcharge adds 'cost' fire to fuel in Bhopal
...Last year, RBI asked banks to cap charges on debit card transactions at 0.75% for transaction values up to Rs 2,000 and 1% for larger transactions. While banks are tightlipped on the issue, petrol pump owners say they refused to pay merchant discount rate (MDR) to banks and in turn banks are passing on the charge to customers..........
Zero-liability cards are useful
............... To protect yourself against this, you can opt for credit or debit cards which have the zero-liability feature. Both Visa and MasterCard offer this feature. RuPay will start offering this by the end of this year or early January, said an official from National Payments Corporation of India. But unless your card issuing bank offers this facility, you cannot avail of it. Banks have to incur an additional cost for the insurance to cover the liability in case of a loss of card, which pushes up their cost, which is why not all banks offer it, while some offer it on select cards...........
First Indonesian bank branch
.............“Our intention is to see how can we grow our business in Mumbai, and at the same time interact with regulators, including the RBI, in terms of how fast and where can we expand our services in the country,”.....
NRI takes 5% stake in Dhanlaxmi Bank
Prominent non-resident Indian (NRI) businessman M A Yusuffali has acquired 4.99 per cent stake in Thrissur- headquartered Dhanlaxmi Bank. However, he has not disclosed the amount of investment in Dhanlaxmi. After acquiring close to five per cent stake each in Federal Bank and Catholic Syrian Bank (CSB) this year itself, Yusuffali 's latest move is very crucial for Kerala’s banking sector...........
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