........“India is probably the most exciting market for mobile money in the world,” said Michael Joseph, the man credited with the success of M-Pesa in Kenya. Now in London, he heads mobile money programs globally for Vodafone. “When India takes off,” he said, “it will eclipse anything we’ve done in Kenya.” Indian regulators concur. “We have not set a target, but it is going to happen,” said the Reserve Bank’s Deputy Governor, Harun R. Khan, who oversees the nation’s payment systems. “I’m optimistic about its future.”.........
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, December 5, 2013
The financial the alchemists
.............In modern economics, central bankers are alchemists, converting paper into precious metals or money. Remember the mantra signed by the Reserve Bank of India Governor on our currency notes: “I promise to pay the bearer the sum of rupees…”? At one point, this literally meant the promise to convert currency notes into silver rupees. Today, if you go to the Reserve Bank to demand such a conversion, you would be thrown out. To be sure, alchemy is not quite dead, if one goes by the popularity of bitcoins..........
Financial inclusion: viable model critical
...... In order to make growth truly inclusive, there is a need to broaden and deepen the reach of banking, giving wider access to the financial services. Financial inclusion provides the poor an opportunity to build their savings, make investments, avail of credit, and insure themselves against income shocks and emergencies. In a dynamic economy, it is imperative that the banking system be flexible and competitive to meet the objectives and demands made by the various constituents of the economy............
Banking on women
.......The proposal has, however, traversed through several doubts concerning its viability as there is a plethora of woman’s cooperative banks and self-help groups (SHGs) with sound knowledge and experience of handling credit issues. Some would argue that government could have achieved a similar goal by altering the definition of priority sector lending to include women or could have compelled the 28 public sector banks to prioritise lending to women entrepreneurs..............
For women's bank, it's save more, borrow more
........"It is important to establish a banking relationship through the opening of bank accounts before thinking about loans. Convincing people about this is a 'tough call'," says an official. The higher interest rates could also push up the bank's finance costs. Yet the bank enjoys certain advantages. Being a new-generation bank, it is free of legacy issues, like high cost-to-income ratios that some fellow public sector banks have to grapple with. According to data from the Reserve Bank of India, the cost-to-income ratio of banks in India is 44.53 per cent (the Basel III norms suggest banks should strive to achieve a ratio of 40 per cent). Moreover, the use of an established software and good hardware support could keep cost per transaction low........
HCBL Co-operative Bank Limited wins Banking Frontier Award 2013
........Frontiers in Co-operative Banking Awards are organized each year by the Banking Frontiers to recognize efforts and achievements of Co-operative Banks in the country. Preceding the award ceremony was a National Conference which was organized in the morning session and was attended by various delegates and bankers from all over the country. The theme of the conference was 'Hello Tomorrow'. The inaugural session of the conference was addressed by Shri Babu Nair, from Banking Frontiers. Chief Guest for the Conference was A.K.Bera, Chief General Manager, UBD, RBI. He discussed the issues and problems faced by UCBs and suggested ways and means to improve the position of UCBs.........
'Bring regional rural banks, NBFCs into the credit rating system'
In order to check asset quality in the banking sector, the urban co-operative banks, the regional rural banks (RRBs) and the smaller non-banking finance companies (NBFCs) should also be brought into the system of credit rating, said J Sadakkadulla, Regional Director of Reserve Bank of India, Chennai. Delivering a keynote address on the importance of credit information to financial institutions at the fourth Annual Credit Information Conference in Chennai organised by the Credit Information Bureau (India) Ltd (CIBIL) and TransUnion Software Services, he said, "Those who are left out, the urban cooperative banks (which as a whole is as good as a commercial bank), RRBs, the smaller NBFCs should also be gradually brought into the system."...........
Building a bullet-proof national balance sheet
........This newspaper has often argued—even in the Reddy years, when he was under attack from New Delhi—that while the Indian central bank should consider inflation control to be its key goal, it should also look at other targets such as financial stability, exchange rates and credit flows............
Rediscover Nagpur's Motha Rajwada & heritage RBI
Glorious 90th Anniversary of RBIEA, Chennai
 |
| The circular issued by RBI Employees' Association in connection with its 90th Anniversary |
I
salute the RBEA, Channai on the occasion of it 90th Anniversary as also
for the glorious journey from 1923 when it was called Madras Currency
Association till date when RBEA Chennai is the proud unit of the AIRBEA.
RBEA, Chennai's contribution to the cause of the RBI employees in
particular and of the working class in general is huge and praiseworthy.
The unit always rose to the occasion when there was need. I
firmly believe that as long as the society is divided into classes on
the basis of economic disparities, trade union shall remain the
fundamental necessity to protect the interest of the working class.
- G N Pandey
Congratulations to Chennai
friends for being part & witness closely such a pioneer trade
union of rbiets. Their role in All India RBEA has been immense . It is
no lesser than the Calcutta . In academics they continue to excel .
Their publications for departmental written examinations &
interviews have helped everybody undertaking such tests.Many of the
staff members who wished to enrich their knowledge about RBI in
particular refer to such books published & distributed by RBEA
Chennai. We have to acknowledge the role of RBEA in showing the path
& motivating Associations of officers & class IV staff.
- Ranjit Kumar Rehan
Let
us congratulate RBI Employees Association, Chennai unit for completing
90 years. It is a pleasant surprise that Association
is older the RBI itself. On this occasions let us salute all our
dedicated leaders who sacrificed their lives for betterment of our
future.
- Madan Gauria
UBFU Letter About Bank Strike
....The Discussion Paper also proposes that the Banks may resort to merger of Banks to become international Banks. Our Banks are meant for our own economic development and hence this is clearly unwarranted. Further merger has its own adverse implications to the detriment of the employees and officers working in the Banks. RBI has also issued recent guidelines by which it is proposed to give the Foreign Banks, near national status and even a scope to take over our domestic Banks. Already, the foreign capital and investments in our Banks have been increasing and now the move is to allow the foreign banks to take over our Banks. In the name of Reforms, the Banks are also outsourcing the regular jobs in the Banks on contract basis thus increasing the risks involved...........
Bank hiring set to surge
..........Banks are looking to ramp up recruitment in the next four years to fill in the vacancies emerging out of a shortage of manpower. Both public and private banks plan to increase their reach in rural and semi urban sectors as part of a financial inclusion programme. Industry observers point out that the RBI’s grant of new licences in January will also result in significant employment opportunities in the coming years..............
Harsh Kumar Bhanwala set to become new Nabard chief
Harsh Kumar Bhanwala, executive director at India Infrastructure Finance Co. Ltd. (IIFCL), has been short-listed for the post of chairman of the National Bank for Agriculture and Rural Development (Nabard). An appointment committee headed by financial services secretary Rajiv Takru has cleared Bhanwala’s name for the post, according to two people familiar with the development. They requested anonymity. Bhanwala’s name is, however, yet to be officially announced.....
Watchdog Sinha to Get 2 More Years
......It
is clear the government has backed Sinha to steer the regulator for
another term, said the people quoted earlier. If the proposal is
approved by the Appointments Committee of the Cabinet, Sinha will be
only the second chairman after DR Mehta to secure a five-year term. GV
Ramakrishna, who headed Sebi when it became a statutory regulator in
1992, was in office for four years but left after differences with the
government over a probe against a firm controlled by a family member of
the then prime minister PV Narasimha Rao..........
Read - ET
Bitcoin sets sights on India
..........Industry watchers point to the growing acceptance of Bitcoin in countries such as China, the US, Canada and Japan. China Telecom, Baidu and others have recently started accepting Bitcoin payments and the Government has put out advertisements to create awareness around this payment mechanism. Recently, businessmen such as Bill Gates and Richard Branson have thrown their weight behind the Bitcoin. However, banking authorities have remained tight lipped and Indian banking authority, the RBI is waiting and watching and do not have an official policy on regulating it.
It’s unfair to say OMO distorted yield curve
....The inter-linkage between the fiscal and monetary policy is well-documented in the Indian context. In the initial years, the RBI used to subscribe to government deficits through issuance of ad-hoc treasury bills that led to automatic monetisation of government debt through increase in reserve money. Later, rapid strides were made to reduce the fiscal dominance of monetary policy by introducing a system of "ways and means advances" and even later by prohibiting the RBI from subscribing to primary ..........
Bank lending to small, tiny units must be stepped up, says K.C. Chakrabarty
Banks need to urgently step up lending to micro, small and medium enterprises (MSMEs) to bridge the wide gap between credit demand and supply in the sector, which is crucial for the economy, according to K. C. Chakrabarty, Deputy Governor, Reserve Bank of India......
The extra burden on state-owned banks
..As Reserve Bank of India Deputy Governor K.C. Chakrabarty pointed out recently, “new private sector banks and foreign banks were able to manage their asset quality better than PSBs (public sector banks) as they were quick in identifying NPAs, while PSBs resorted to retrospective restructuring to report lower NPAs initially...........
Keen to remove restrictions on banking with India, says Iran's Reza Nematzadeh
Iran is keen to remove restrictions on banking with India and is hopeful the Reserve Bank of India (RBI) will address the issue as the two countries try to increase trade, particularly oil imports............
Fix responsibility on top brass for bad loans, says union
....... the Association also wants responsibility fixed on banks’ top brass for the loans that have turned bad, allow banks to share information on non-performing assets and wilful defaulters under the Right to Information Act, and declare wilful loan default as a criminal offence. Vishwas Utagi, General Secretary, Maharashtra State Bank Employees Federation, an affiliate of AIBEA, said public money is at stake when banks enter into one-time compromise settlements with loan defaulters, or write off bad loans or allow corporate borrowers to restructure debt..........
Poor functioning of ATMs in Mangan and RBI’s Clean Note Policy highlighted
......Reacting on recent news items appearing in some local dailies regarding non acceptance of scribbled banknotes from the public after 01 January, 2014 by commmercial banks, Mr Yadav clarified that as of now there is no such RBI notification, hence the members of the public need not panic. However, he stated that the RBI directive on Clean Note Policy of 2001 and the recent circular of 14 August 2013 was addressed to the banks wherein they were asked to sensitise their dealing officers and tellers/staff to stop writing/scribbling of any kind on any part of the banknote to ensure the achievement of the objectives of RBI’s Clean Note Policy and also the mechanised processing of banknotes.........
Forget debit cards, use cash: PIN mandate is not as safe as you think
...The next question to ask is can the PIN be stored (knowingly/ unknowingly) on the card reader machine by the retailer? According to this report in the USA, instances have been known where many merchants have incorrectly stored PIN information they should be destroying after customers enter the secret code. While we agree this is a western world report, Indian fraudsters have always been inspired to copy those tricks in the domestic markets. What would stop our fraudsters? And even if your merchant would have stored the PIN inadvertently on his card machine, a hacker can easily access the retailer’s machine to get data about several card holders along with their PINs............
Card PINch
My View on "Now, a cover for card PIN-based frauds at retail o...":
This looks very much as an advertisement but for the non-disclosure of names of insurance companies. This is another window open for your card data to get in. Every insurance product is based on risk pricing. Those cards that would have occasion to go for the cover when the fraud on card occurred, would have to cough up higher premium in the following year. After introducing this measure, the POS started asking the customer for the PIN. Never disclose even if either of you is in hurry. Second, when you enter PIN it is not unlikely that the person next in key would be closely watching your nimble fingers; be watchful of your valet before coming out of the cue and the shop. Security at the POS for the card machine is very poor.
- Yerram Raju
Card transactions with Aadhaar validation need more time: experts
...........Although all transactions through debit cards are now required to be authenticated by PIN, validating financial transactions by using the biometric Aadhaar identity number database is yet to gain traction. Such a service is expected to begin in May. Not all experts are in favour of the central bank’s move to use biometrics data to authenticate transactions.......
3 cos vie for Axis Bank’s swipe biz
..... Top
three private banks account for 75% of the installed swipe machines or
electronic point of sale (POS) terminals as they are known in the
payment industry. ICICI Bank has the largest network of 2.57 lakh swipe
machines followed by HDFC Bank with 2.4 lakh. Axis
Bank, the country’s third largest private lender, also ranks number
three in POS terminals with 2.27 lakh machines. These terminals
facilitate cashless shopping transactions by swiping credit or debit
cards, helping merchants to reduce risks and costs in handling cash. Domestic
card payments are reporting explosive growth with the Reserve Bank of
India (RBI) asking banks to issue debit cards to all account holders and
increase their network of merchants accepting the cards..........
60 villages in Tirupur have no ATMs
......Seeing the critical gaps in the ATM penetration, the District Consultative Committee for Banking Development is now making requisitions to various bank branches in the rural areas in the 60 villages to install ATMs as quickly as possible.......
We want to drive higher cash efficiency in the country: Rajiv Kaul
....RBI prints money and gives it to banks. Banks have currency chests in many cities. This money then goes to bank branches and ATMs. This is where the cash management company comes. After the consumers take the money out, they spend it and it eventually flows back to banks and then to RBI. The whole cycle is not only about the movement, which is a big part of it, but also processing. You check the currency notes for counterfeits, dirty torn notes, you reconcile balances for the customers and for these banks—a lot of software comes into play there............
Banks as insurance brokers? Yes, no, maybe
.......The RBI draft has also outlined a remuneration structure so that banks don’t have much incentive to hard sell products. According to the draft, the staff engaged in insurance broking services will not be paid any incentive, in cash or kind that is linked to the income received from the broking business. The staff is also not permitted to receive any incentive directly from the insurer. “The idea here is to ensure that the banking business does not suffer at the hands of third-party income. Eventually,........
Axis Bank employees forged signature of its account holder
......Ms Sanghvi again went to ombudsman on 14th October to receive the order and the ombudsman officer (Bijani) said that, “If they cannot locate an ex-employee (Namita) for five months and not do anything about it, that means the bank is involved in it and they are blaming someone who has left the organisation.” Ms Singhvi has since approached the Department of Banking Operations & Development (DBOD) on 28 November 2013. The person-in-charge there Mohindar had asked her to wait for an answer from the Axis Bank. She has also received a reply from the RBI that “This case is not under the purview of RBI since she received the money from the ombudsman and also because she has done a police complaint.” .........
New platform for OTC forex and interest rate derivatives from Dec 30
The Reserve Bank of India (RBI) said on Wednesday that market participants will have to report trades for Over-The-Counter (OTC) foreign exchange and interest rate derivatives to a new platform developed by Clearing Corporation of India Limited (CCIL) from December 30.............
Early news is good news
....... In fact, the publication date was brought forward by almost a month, compared to the previous occasion, when it was merely a day earlier. Of course, amending schedules to soothe markets also has a flip side. If RBI does not publish the next quarter's data on March 2 or earlier, the markets may very well take this as a sign of bad news and react accordingly. This raises the larger question about the capacity of the system to release this data with less than a quarter's lag. If the capacity existed, why was this practice not begun earlier?.........
DYK: The components of WPI and CPI differ
......There are some common components in both baskets—such as fuel and food articles—but here as well, the CPI focuses mainly on end consumption linked articles whereas the WPI as a mix of both. If you look at the end .........
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