......I really do not have the ability to make a number call. I have not been looking at the numbers that closely, but there are two issues that we have to emphasise on the structural side. One is clearly that the rupee depreciation is helping exports grow and imports are contained. Anything that is imported that has a domestic competitor now and the advantage will now swing to the domestic producer. That is a very positive response to the rupee depreciation. But the other............
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Saturday, December 7, 2013
Administering FEMA (Foreign Exchange Management Act) - evolving challenges : G.Padmanabhan
Inaugural address by Mr G Padmanabhan, Executive Director of the Reserve Bank of India, at the Authorised Dealers’ Conference, Agra, 30 November 2013
...........In the original FEMA regulations, it was provided that it was in order to issue a partially convertible debenture against foreign direct investment. In 2006–07, when external commercial borrowing was discouraged, companies responded with an obvious dodge: a partially convertible debenture with a nominal part slated to be converted to equity was used to camouflage a commercial borrowing. We responded by excluding a partially convertible debenture from the list of securities that can be issues against FDI and to be treated as a debt. I am afraid the game is not yet over because the vice of treating a partially convertible debenture as debt is that someday, when appropriate incentives are there, it can be used to camouflage an equity investment.......
RBI Executive Director calls for robust market
.....So far, we have responded by restricting the freedom of market participants to enter into derivative transactions with a view to curbing speculation and panic-driven trades. Looking ahead, we shall perhaps have to build a robust market which will provide an ample opportunity for all kinds of trades, even speculative ones, without upsetting the apple cart," said G Padmanabhan, executive director of RBI at the Authorised Dealers' Conference at Agra on November 30. Padmanabhan also believes that there is a need to provide adequate instruments suiting every market participant's hedging strategy. "Hedging is an agent's choice, depending on his risk appetite. The market must provide adequate instruments suiting every market participant's hedging strategy. As of now,......
Planned Retirement vs Panned Retirement: A Perspective
With assured pensions becoming a thing of the past, Retirement Planning has become an imperative for every Indian. A higher cost of living, the advent of aspirational lifestyles, evolving socio-cultural equations and volatile economic dynamics all contribute to necessity of planning for retirement as soon as one starts earning. However, a recent study ............
'Numaish' gets over 4,000 applications
.........Amongst the new attractions this year are displays by the Reserve Bank of India (RBI). In view of increasing cases of fake Indian currency in circulation in Hyderabad, RBI is putting up 30 stalls to educate the public about the differences between genuine and fake currency notes.......
RBI hits the jackpot with dollar deposit scheme
The Reserve Bank of India (RBI)’s out-of-the-box move to woo dollar deposits by protecting banks from currency risks has been a big hit. Banks have managed to mobilise $34 billion in foreign currency deposits since the special swap scheme was flagged off in September. This is much higher than the sums...
RBI seeks intelligence on bank licence applicants
........In almost identical language, the letters from RBI refer to the bank licensing exercise in which Mint Street has laid stress on the "fit and proper" status of the applicants. The letter has asked the agencies to provide details of the status of investigations, if any they have filed against any of the promoters or other members of the concerned groups. So while the CBI will have to give information that Aditya Birla Group chief Kumar Mangalam Birla has been named in an FIR filed by CBI in the allocation of Talabira-II coal block, it is, however, not clear if this will be a reason for the RBI to stall the application from the group............
Parliament panel opposes bank licences to industrial groups
......The standing committee also questioned the rationale behind the view that more banks will help in achieving greater financial inclusion. It pointed out that as of March 2013, only 17% of the total branches of private sector banks was in rural areas. “Given such a background, the Committee are apprehensive that industrial/business houses may not be geared to achieve the national objectives of financial inclusion, priority sector lending etc,” it said. The committee said the RBI should ensure that for every three branches opened in urban areas, there is one in a rural area.............
Urban bank faces de-licensing threat
The Cuttack Urban Cooperative Bank, which serves the banking needs of over three lakh customers and 65,000 shareholders, is facing the threat of getting its banking licence withdrawn by the Reserve Bank of India (RBI). The threat is apparent for the urban cooperative bank (UCB) is unable to go for core banking solutions (CBS) within the period stipulated as prescribed by the RBI............
Urban co-op banks allowed to act as PAN service agents
The Reserve Bank of India has given permission to financially sound and well managed urban co-operative banks (UCBs) to act as PAN (permanent account number) service agents or PSAs. UCBs can become PSAs by entering into a tie-up with UTI Infrastructure and Technology Services Ltd (UTIITSL), with prior approval from the RBI.........
MCA, RBI to discuss insurance cover for public deposits
The Ministry of Corporate Affairs will hold consultations with the Reserve Bank on the mandatory insurance cover that has been proposed for public deposits garnered by companies. The proposal, being mooted under the new Companies Act, comes against the backdrop of rising incidents of investors getting duped by fraudulent money pooling schemes...........
Private banks increase interest on credit cards
.... “Generally, credit card rates are so high that even a 100-bps increase in the cost of funds does not have any material impact. The interest rates on credit cards depend on risk perception. Given the uncertain economic environment, the risk of default has increased. This prompted some banks to increase their rates,” ...........
'Punching debit card PIN at shops may be risky'
.... "Logically, due to lack of privacy at shops, there is a possibility of misuse of the system. Now, to resolve this alleged lacunae in the customer service, our bank will suggest to our product team that the shops need to provide a secluded place for the ATM card swipe machine which should offer adequate privacy for the customer while punching his/her PIN." The product team will then forward the suggestion to the RBI authorities for corrective measures in the guidelines........
Bad news! Customer may have to pay additional R 6 to feel secure inside an ATM
.....The banks have calculated cost of security enhancement, measures including security guard, camera, and have decided to pass on the burden to customers. The proposal has been laid on the table and is yet to be approved by the central bank...............
OPEN A/C WITH FINGERPRINT
...............The
eKYC procedure will enable a customer to walk in with an Aadhaar number
and open an account by getting his fingerprint scanned. The bank’s
systems will pull all data stored online with the Unique Identification
Authority of India (UIDAI), including name, address, birth date and
photograph. It
will also save a copy of the KYC documents that are stored in UIDAI’s
servers. The bank will then print out an account-opening form with all
the details already filled in from the UIDAI servers...........
Malay Mukherjee set to join IFCI
...Mukherjee who have more than 35 years of experience in banking, joined Indian Bank as a probationary officer in 1976. Apart from working in various branches across several states like Assam, Bihar, west Bengal, Maharashtra and Gujarat, he also have the experience of working in risk management and technology management department. Mukherjee took over as Executive Director of Central Bank of India in November last year and looking after portfolios such as Credit, human resources, , operations, customer services, priority sector, recovery, among others......
SC notice to Centre, RBI over alleged PwC irregularities
....Issuing the notice, also to the RBI among others, an apex court bench of Chief Justice P. Sathasivam and Justice Ranjan Gogoi said the issues raised by the NGO Centre for Public Interest Litigation (CPIL) need to be examined..........
RBI introduces cash settled IRF on 10-year Government of India security
The Reserve Bank of India (RBI), as announced in the Second Quarter Review of Monetary Policy 2013-14, has decided to introduce cash settled Interest Rate Futures (IRF) on 10-year Government of India security. The IRF deriving value from 91-Day Treasury Bills, 2-year, 5-year and 10-year coupon bearing notional Government of India security, and coupon bearing Government of India security are permitted on the recognised stock exchanges............
MSME Ministry convenes meeting of banks on Monday
...."I have called a meeting of CMDs of various banks, including State Bank of India, United Bank of India and Canara Bank, on Monday to discuss with them the difficulties they are facing in financing to small units," Minister of State (Independent Charge) for Micro, Small and Medium Enterprises K H Muniyappa said on Friday. He added although the RBI has guidelines on providing credit to the sector, it should ask banks to be a little liberal in giving loans to the industry as it is paramount to the growth of any small business........
AIBEA releases name of top 50 loan defaulters
........Releasing the names of the top loan defaulters today, the association said, “Since the RBI or the Government is not publishing the list of loan defaulters, AIBEA will shortly publish a Booklet containing the names of the top 30 defaulters in each Bank... Since bad loans and write off is a loot of public money, we seek the support of the people in our campaign to safeguard the public money in the Banks.”........
Aiyar Questions Waiver of Rs 1 Lakh crore Bad Loans
....“But these are rich firms and the non-performing assets were removed from the books to enable the companies that were not performing to perform,” said Aiyar, adding that the Finance Minister had a lot to explain in Parliament. Aiyar’s remarks come in the wake of Reserve Bank of India (RBI) Deputy Governor K C Chakrabarty stating that banks had written off a whopping Rs 1 lakh crore in the last 13 years. He said the government called this a stimulus to economy. This sort of stimulus is good for the economy, but is providing subsidies to the poor bad for the economy? he wondered.......
No wrongdoing by Acharya, says SBI panel
........Financial Services Secretary Rajiv Takru said in New Delhi that the ministry has received SBI's internal probe report and is looking into it. He also said that he discussed the report with Bhattacharya. "SBI has submitted the internal enquiry report in respect of sanction of a loan by the credit committee headed by Acharya to the department of financial services. The members of the internal enquiry committee have noted that the sanction appears to have been given in the ordinary course of business," the bank said in a statement...........
In a first, MFI customers to be given credit scores
.......While retail customers of banks and NBFCs have been scored for some time now, the concept of a credit bureau is relatively new for the MFI sector. The score is the next step in the evolution of credit information services from a credit bureau since it provides predictive power along with credit attributes in a credit report of a customer, Patel said.......
Sebi issues advisory to general public on complaints
.....Guiding the public, Sebi today said that complaints such as those against unlisted/delisted/wound up/liquidated/sick firms and those cases which are sub-judice, do not fall under its purview. Sebi also said it does not handle complaints that fall under the purview of other regulatory bodies such as RBI, IRDA, PFRDA, CCI as well as those that come function of ministries like the Ministry of Corporate Affairs.......
Details to know about your Form 16A
....The RBI has advised the banks that they should ensure that there is a system in place that has been placed so that the form 16A can be issued in time. The emphasis is on the system so that there is no disruption to the entire process for the individual and that they are able to get the required information on time. The first thing to do for the bank is to ensure that they actually give the Form 16A to the depositor and the other point is that this should be given on time. There are a lot of cases where...........
Kingfisher on ground, banks' money up in the air
....If this year has been marked by acrimony, 2010 was a period of bonhomie between the airline and its lenders. In a controversial decision in November 2010, public sector banks, failing to read the signs of a financially sick airline, restructured Rs 7,650 crore of debt, converting a portion of it into preferential shares. The banks announced a two-year moratorium on the repayment, reduced interest and additional funding. After the restructuring, the airline’s total debt fell to Rs 6,300 crore............
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