............What, however, surprised analysts was the post-policy interaction with the Governor. To a question on whether RBI would raise the policy rate any further, given the higher, end-of-the-year CPI inflation forecast, the Governor replied the central bank was done with its policy rate hikes, which had factored in this projection; he further clarified RBI would now observe inflation as it unfolded going forward and would only act if the out-turn was significantly different than predicted. Though taken aback by the Governor’s clarifications—these didn’t quite match up to his perceived image of an inflation fighter—the implications didn’t take very long to sink in. The Governor’s explanation had completely broken the perceived link between the policy rate and headline CPI inflation............
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.
Wednesday, November 27, 2013
Move Over, Rajan
RBI
Governor Raghuram Rajan cannot bring inflation down. Only politics can. The
sooner politicians, policymakers and analysts realise this, the sooner we will
have realistic solutions. Inflation has three different drivers. One is the
large fiscal deficit, which creates demand for goods and services in excess of
the supply. Another is steady increase in fuel prices as part of a programme of
gradual decontrol in a context of volatile global energy prices and a weak
rupee. And the third is a steady increase in the demand for fruit and
vegetables and a range of protein foods such as lentils, milk, meat, fish and
eggs. To squeeze any of these inflation drivers, you need good politics.
Finance minister P Chidambaram has said that he would hold the deficit down below
4.8% of GDP. And his determination is clear and credible. But this is not
enough............
Read - ET
RBI has no option but to dance to the Fed's tunes
..............Nor for that matter would any 'self-respecting' central bank. And the RBI as we all know is nothing if not hugely self-respecting!! So let's see what happens between now and 18 December.
Read - ET
RBI warns bank customers to be wary of fraudsters
........Participating in an outreach programme organised by the RBI at Padangady village in Belthangady taluk of Dakshina Kannada district on Tuesday, G. Padmanabhan, Executive Director of RBI, said that as bankers embraced technology there would be people to dupe them. Customers have to be careful in such a situation. Some people are getting messages on the mobile phones or emails where they are offered huge amounts in lotteries. In such cases, people are asked to pay some amount in advance to the sender to get the money. Padmanabhan urged customers not to fall prey to such traps...............
Need to increase use of electronic payments: Khan
NEW DELHI, NOV 26:
India needs to work towards increasing the use of electronic payments and usher in a lesser-cash based society, H.R.Khan, Reserve Bank of India Deputy Governor, has said. Khan, who visited RBI’s stall at the India International Trade Fair here on Monday, rued the limited use of card-based payments at the stalls put up at IITF. There is also not so good acceptance of money through cards by shopkeepers, he added. Khan expressed hope that situation would improve during the next year’s edition of IITF and there would be improved acceptance for card-based payments...........
RBI balm fails to reduce foreign banks' headache
.......Uncertainty also remains on the stamp duty front. RBI said a new section, 8E, had been inserted in the Indian Stamp Act, 1899, vide Banking Laws (Amendment) Act, 2012, and notified in Gazette of India, exempting foreign lenders from paying stamp duty on converting branches into subsidiaries. A senior banker, part of the compliance team of a foreign bank in India, said: “We understand that stamp duty is a state subject and we are not sure if the central government, through a gazette notification, can override state laws. We need to be absolutely certain if we don’t have to pay stamp duty before we decide to set up a subsidiary here.”.......
A hero for whom giving is joy
NAGPUR: Sometimes you just stumble on a real hero living in your midst. It is rare to find anyone engaged for decades in silently wiping others' tears without seeking self-attention or even claiming to be a Good Samaritan that he certainly is. Jaiprakash Chaurasia, a retired employee of Reserve Bank of India, finds joy in giving. He joined the RBI as an assistant in 1978 and retired in August 2011. For every month during his 33 years of service, he made it a point to donate the amount that he earned by way of overtime allowance...........
Litmus test for VITALINFO - Exemplary performance
Hi Mangesh
You are really worth for RBI. You are like a newspaper to all of us giving
full information about all around of Banking Industries. Keep it up. God bless
u dear and give enough strength to continue with this kind of good work.
- K. Swaminathan, Ex Private
Secretary
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Dear Tarambale,
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huge intellectual task which you are performing magnificently. God bless you.
Our good wishes to you. Regards.
- B K Katyal, Ex
Chief General Manager
Dear Shri Mangesh,
I am now addicted to
VITALINFO and I appreciate your exemplary performance. You are simply the great
and no words are enough to praise your untiring effort in executing this wide
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Dear Mangesh,
Good Morning ! Congrats for ur gr8 work. I read all the comments. Regards
- Sushama Dhawde, Private Secretary
- Sushama Dhawde, Private Secretary
Whither secularism? Govt releases Rs. 5 coins with Vaishno Devi emblem
...........However, the RBI appears to have pushed aside this
traditional concept of commemorative coins. According to RBI sources, it has
issued six other commemorative coins this year. These include coins for 150
years of Kuka Movement, 150th birth anniversary of Swami Vivekananda, 150th
birth anniversary of Motilal Nehru and 150th birth anniversary of Madan Mohan
Malaviya. The RBI only came up with a statement on April 26, 2013, that
coins the picture of ‘Mata Vaishno Devi’ in the centre were minted by the
government and were put into circulation by the central bank. There has been no
explanation or justification to promote the introduction of such an unusual
practice..........
ICICI Bank Organizes Coin Exchange Mela in Haldwani
Haldwani: ICICI Bank, India’s largest private sector bank, organized a Coin Exchange Mela at its Haldwani, Tikonia, Govind Vallabh Pant Marg branch, under the guidance of the Reserve Bank of India. The Coin Mela was organised to offer a free facility of exchanging................
Valuable, but not logical
My View on "Need to incentivise investors to move away from go...":
In an environment where even men wear gold anklets and chains and where the investors are not sure of realizing their investments in the shape in which they have deposited, and where wearing ornaments is part of culture for women, it is difficult to take the valuable suggestion of Subir Gokarn to a logical conclusion.
- Yerram Raju
Window dressing
.....It is tough to understand how delayed payment of amounts that have already become payable will reduce expenditure. Anything is possible because we are hearing about thousands of crores of "unclaimed" deposits with the Employees' Provident Fund Organisation, Life Insurance Corporation, banks. With all the development in technology, can we not think of a more transparent accounting system for public funds?...........
Read | Business Standard
A fine on late refunds
..........The government cannot bully law-abiding taxpayers from their rights because of economic mismanagement. In fact, there should be a stipulated time for I-T refunds or,.....
It’s Time to Allow NBFCs to Take Financial Inclusion Story Ahead
.......“To
ensure that the banks give adequate attention to financial inclusion,
they must view this as a viable business proposition rather than as a
corporate social responsibility or a regulatory obligation. For the
business to remain viable, it would be important to focus on increasing
usage of existing banking infrastructure,”
said KC Chakrabarty, Deputy Governor of RBI, and one of the vociferous
proponent of financial inclusion for several years. Any banker, of
course in private, will tell you how ridiculous these rules are and how
much time they have to spend to overcome these, rather than fulfilling
them. Public sector banks are the ones who have borne the brunt of these
rules. In the process,..........
HCBL Bank targetting beggars for financial inclusion
...........In India, this is probably the only bank catering to this segment (beggars). So far, the Bank has already opened accounts of about 160 beggars in Lucknow under the relaxed Know Your Customer (KYC) norms of the Reserve Bank of India (RBI). “By opening their accounts, we want to include the lowest strata of social pyramid in the banking channel,” HCBL Cooperative Bank CEO Pawan Kapoor told Business Standard................
Tips to hasten FinClusion
My View on "Banks go on rural overdrive, but profitability a w...":
Profit and financial inclusion do not always go together. Banks cross-hold risks and transfer mechanism takes care of the entity's profit. What really holds up the functioning of rural branches is the placement of personnel and HR policies of banks that have not moved in tune with the requirements of rural branches. While working in rural branches, it is knowledge of banking and systems coupled with moving with the culture of the rural areas that would yield dividends. No branch from day one would not run on profit. There is always a cooling period. This could be five years in some centers and three years in some others. The other alternative is invest in technology upgradation of Primary Agricultural Credit Societies, invest in HR practices, adopt some of them and increase the reach. This would help in cleaning up the grassroots rural credit institutions and empower them with technology and higher human skills with cross-fertilization from the commercial banks. This would hasten the financial inclusion goals of PSBs and it is the least cost option in the long term.
- Yerram Raju
Local area banks want more leeway to mobilise deposits
..........In its Report on Trend and Progress of Banking in India — 2012-13, the RBI said LABs show promise of small-scale banking institutions that can be experimented with on a larger scale in future. The Reserve Bank’s Discussion Paper ‘Banking Structure in India: The Way Forward’ has recommended the creation of more number of smaller banks in the private sector with the objective of achieving financial inclusion at the local level..........
RBI: Just good intent isn’t enough to treat customers fairly
......... RBI’s intent to extend TCF from banking products to third-party products is welcome. But RBI will need more than just good intent to solve this problem given the sophistication of banks to check boxes to meet regulatory requirements. RBI should move fast before the markets rebound to put in place more effective measures of customer protection than this statement of intent............
Banks alone not to blame
..............At the BANCON meet, central bankers perhaps stunned bank chiefs with stinging criticism of the rising proportion of troubled assets in state owned banks. With linguistic inventiveness, a Deputy Governor expressed his righteous indignation by preferring to talk not of the banks of the future, the theme of the conference, but of the “future of banks”. Other central bankers too joined in with less rhetorical concerns about rising NPAs, the trouble with debt recasting and poor appraisal systems......
Co-op bank customers asked to give account details
As part of all India drive to keep a check on black money, illegal transactions and money laundering, income tax (I-T) department has issued notices to around 1,100 cooperative banks and credit societies in the state. According to sources, I-T department has asked all the customers of the cooperative banks who have cash deposits over Rs 5 lakh to furnish the details of the amount. Also, if the customer has received Rs 10,000 or more in interest from the bank, ..........
Affordable housing: RBI nod for NHB’s $200-million overseas loan
National Housing Bank (NHB) has received Reserve Bank of India (RBI) approval for raising $ 200 million external commercial borrowing (ECB) under the affordable housing window. The housing finance regulator will mobilise this amount before end March this fiscal, R.V. Verma, Chairman & Managing Director, NHB told Business Line here. NHB will again go back to RBI once the lender is finalised and the term sheet is ready, Verma added......
RBI to give self-regulatory status to microfinance industry associations
.....RBI’s decision, announced in a statement issued by the central bank, is based on recommendations of an expert panel chaired by Y.H. Malegam on regulating the microfinance sector. MFIs are firms that loan small amounts to low-income borrowers and source money from commercial banks to do business. India’s micro-credit sector has two major industry associations—microfinance institutions network (MFIN) and Sa-Dhan. Officials at both bodies said they will apply for SRO status...........
Late payment: RBI move not enough for SMEs
..........In its announcement, the RBI adds that it has been decided to include, incremental credit, including export credit, to be extended to medium enterprises by the scheduled commercial banks, as eligible priority sector lending. This is again a welcome move. The medium-scale enterprise sector has been suffering no less than their smaller counterparts when it comes to lack of credit availability and high interest rates. In addition,.............
Is India ready to enter global bond indices?
..........First let's look at the progress made on signposts suggested by the S S Tarapore Committee for capital account convertibility (CAC). As the table shows, none of the signposts are encouraging. Further, should debt be liberalised under the compulsions of balance of payments? Probably not, because FII investment in domestic debt may be rupee-denominated but it creates an indirect claim on foreign exchange reserves as well. The recent experience.....
Bad loans for self-help groups at alarming levels: Nabard
........“More painful is the fact that loans to SHGs in the most resource-poor regions in the country reported NPAs of over 10 per cent. Further, as indicated, this potent and effective financial inclusion measure has not received the attention with bankers currently focused on opening individual accounts through banking facilitators/banking correspondents,” .......
PFRDA needs more than a new chairman
.....Will things change now that the PFRDA chairman has been asked to go? Or will he merely be replaced by a retired bureaucrat after going through the motions of an elaborate selection process? The SEBI saga outlined in the next report only shows the urgent need for greater transparency and accountability in selecting independent regulators in India.
Paying for ATMs
This refers to A Seshan's letter "A danger at any time" (November 25). Banks can certainly afford the cost of providing adequate security at ATMs. If they have been complacent about this issue, it is probably because instances of robbery at ATMs have been few and far between................
'Cannot remove manpower from ATM safety'
.....The Federation of Indian Chambers of Commerce and Industry (FICCI) also tried to get the attention of the government and the bankers. “Unfortunately, posting security guards outside ATMs is not mandated by the Reserve Bank of India,” MD of SIS-Prosegur Rituraj Sinha told Express. SIS-Prosegur is a private security service. Sinha is also the chairperson of the Cash Logistics Association of India........
UP Police to deploy personnel at all currency chests in state
....At a meeting of Reserve Bank of India and other banks authorities with Uttar Pradesh Police, Special Task Force (STF), Anti-Terrorist Squad (ATS) and Crime Branch, it was decided to ensure better coordination between bank authorities and police, IG (Law and Order) RK Vishwakarma told reporters. "Accepting the demand of banks to provide security at the state's 465 currency chests, of which eight (one each in Mirzapur and Chandauli and six in Sonbhadra) lie in naxal-infested areas, we have decided to deploy two head constables and eight constables in each chest," he said. ..........
RBI tells banks to charge for SMS alerts on actual usage basis
......"Considering the technology available with banks and the telecom service providers, it should be possible for banks to charge customers based on actual usage of SMS alerts," RBI said in a notification to all banks. "With a view to ensuring reasonableness and equity in the charges levied by banks for sending SMS alerts to customers, banks are advised to leverage the technology available with them and the telecom service providers to ensure that such charges are levied on all customers.............
Read - ET....
RBI for Aadhaar authentication on card-based transactions
In order to ensure security in card-based payment transactions taking place at point of sale (POS) terminals or ATMs, the Reserve Bank of India (RBI) has advised banks that they may adopt Aadhaar as additional authentication or move to EMV (Euro pay MasterCard Visa) chip-and-pin technology. "In respect of cards, not specifically mandated by the RBI to adopt EMV norms, banks may take a decision whether they should adopt Aadhaar as additional factor of authentication or move to .........
Bitcoin is gaining currency in India and RBI is watching
Love it or hate it, but even a conservative bank like the RBI can’t ignore Bitcoin anymore. According to a report in The Economic Times today, there are about 50,000 Bitcoin enthusiasts in the country and 30,000 of them have downloaded digital wallets to store the currency. CoinMonk, which is creating awareness about the currency in India,..........
Read...................
Bangalore to host country's first global Bitcoin conference in December
........Investors and venture capitalists are expected to attend the event, which will also see participation from the Reserve Bank of India as well as State Bank of India, the largest public sector lender. In August, ET had reported that RBI was watching and learning about Bitcoins but had no intention of regulating it.................
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