New Paradigms in RBI Thinking

Some things are said, some are implied. The RBI may not have hiked the repo rate in April, but there is now a clear and implicit shift in RBI thinking. Though such a shift is based on sound rationale, it does have the wherewithal to change the interest rate structure more frequently. 
What is this perceived change in RBI thinking?........

Read - ET

Attitudinal change on M&As need of the hour for RBI

When Reserve Bank of India Deputy Governor KC Chakrabarty said the central bank should end 'regulation by discretion', the plain-speaking banker was not letting out a state secret. He was stating what was common knowledge, but something that is hardly discussed. The Reserve Bank of India, though, remains probably the only vital institution in the country without taint, and the need for attitudinal change to regulation — especially to takeovers and amalgamations of companies in the financial........... 

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RBI has scotched speculation in the currency market but dangers lurk

........ Contributing to the recent phase of rupee stability in the last couple of months were measures which the Reserve Bank of India (RBI) had taken, particularly in terms of weeding out unnecessary speculative demand for the US dollar, thereby creating a buffer. In addition, a good amount of foreign portfolio flows were coming into India. Of course, an underlining factor playing an important role in the currency market is the hope of a stable government coming to power. While in equity markets this desire is being reflected in movement of indices, with a majority of players being physically demonstrative about it, this is not the case with currency market stakeholders. They are........

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India's growth rate will pick up soon: RBI Governor Rajan

........Rajan also reiterated his view on the growth rate being inextricably linked with curbing inflation. "I have always stressed that stimulating growth and controlling inflation are not opposed to each other. Inflation is what is standing in the way of India's growth," he added. Rajan was addressing student members of the Oxford Union Society (OUS) on his way to Switzerland,........

Read | Business Standard

Do not feel sad for regulators

My View on "RBI's soft approach - A Chandramouliswaran": 

RBI does have muscle power those officers who have inspected the group will bear a testimony to this. We must say hats off to Supreme Court judges who had courage to take action against the group chairman for failure to comply. The group had even taken the Honorable Supreme court for ride for two years. The group have the backing of political class as also legal support from top lawyers of the country. The group had also tried to browbeat judges, We are proud of judiciary. Please do not feel sad for regulators as they do not have powers to act beyond a limit. The officers of SEBI should be complimented for courage to confront the group.

 - Ravi Sharma

Raghuram Rajan signed Rs 1000 banknotes to come up shortly

........"The RBI will shortly issue Rs 1000 denomination Banknotes incorporating rupee symbol on the obverse and reverse, with inset letter 'L' in both the numbering panels, in the Mahatma Gandhi Series-2005 bearing the signature of Raghuram G Rajan, Governor,".........

Read | Business Standard

No penalty if minimum balance not kept in dormant bank account

......“It is advised that henceforth banks are not permitted to levy penal charges for non—maintenance of minimum balances in any inoperative account,” RBI said in a notification. Several banks, including the State Bank of India, do not levy any charge if the minimum balance is not maintained in an inoperative savings account............

Read - HBL

Interest earned on tax refund is taxable

............The interest amount that is paid back is considered “income from other sources”. So, while filing returns for the financial year (FY) in which the refund was given, the interest will be taxable as per the tax slab rate of the person. Say, in the financial year ending March 2013, excess tax was paid and the refund was made in the financial year ending March 2014. While filing returns for FY14, the person will have pay tax on the interest income.............

Read - Mint

RBI lets 10-year-olds sign cheques, do net-banking

.........IF a 10-year-old sig­ns a bank cheque for you, don’t doubt his bona­fides. The Reserve Bank of India broke new ground on Tuesday, allowing minors above 10 years to open and operate savings bank accounts and recurring bank deposits and save in bank fixed deposits independently, without requiring a guardian, which was the practice till now. Such minor bank account holders will be entitled to most of the facilities, including use of ATM, cheque book and internet banking..........

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Aadhaar-linked cards put on hold

 In a move that will bring relief to banks and credit card issuing companies, the Reserve Bank of India has put on hold an order requiring all future credit card swipe machines and ATMs to be capable of biometric authentication. The central bank has instead decided to launch a pilot project where issuers of prepaid cards are allowed cash withdrawals on the basis of biometric authentication.  The move comes on the wake of banks complaining that implementing biometric authentication across all point of sales terminals (credit card swipe machines) was proving to be a challenge.........

Read - TOI

Heading to an ATM in Mahabaleshwar? Read this first

...........Pune: Did you spend one of your last few weekends at Mahabaleshwar, and made a quick dash to any of the ATMs in the market area for some money? Then here is something you should know. Investigating three cyber thefts, in the area, it has been revealed that all three involved ATMs over the weekend. Further investigations indicate something very shocking - the police suspect that cloning/ skimming devices have been used in these ATMs. ..........

Read - DNA

Inspired debate

My View on "Don't malign RBI": 

It is true that no body from BJP has asked for the removal of Shri Raghuram Rajan. He is best GUV in living memory. This debate is an inspired one and actively encouraged by IAS lobby as this prestigious post has been bagged by someone who does not belong to their circle. At present I am in Sydney and I have seen reports that Reserve Bank of Australia is mandated to keep inflation level between 2 to 3% which at present is running at 2.9%. The Australian Government is raising resources by other means like newly introduced Debt tax but not by increasing fiscal deficit or public borrowing. we require such independence. 

- Sitendra Kumar

Any Takers for Chidambaram’s ‘Heavy Lifting’?

.........So, when a young, good looking, and articulate RBI governor, who is also a reputed economist, gets all the kudos for a stable rupee and dip in inflation, Mr Chidambaram could not resist reminding the world, even from far away Kazakhstan, of all his efforts that went in. Besides taming current account deficit, the currency has been propped up by a large inflow of dollar deposits from NRIs who were offered generous returns. Bankers claim it was not Governor Rajan’s idea, but they who convinced him in allowing the special NRI scheme. Rajan, with his enviable standing, is still in his honeymoon period: he would be praised if things go right, but would escape the blame if things backfire. For instance, any other RBI governor would have been panned for keeping interest rates unchanged when inflation was high and then raising it when inflation had softened. But there will be...........

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FM to review banks performance on May 14

............“Besides the routine performance review, the issue of recapitalisation of banks will also be discussed during the quarterly meeting,” said a finance ministry official. The meeting with bankers will be held a day after the Financial Stability Development Council, chaired by Chidambaram, meets on May 13. The FSDC is likely to discuss the economic situation in the backdrop of the ongoing polls............

Read | Business Standard

BANKING BUSINESS

This refers to the article “Don’t expect much from new banks” (May 5). Though the issue of new licences by the RBI may add to the number of banks, it cannot meet the objectives of licensing of more banks, which is to add to the competition and improve financial inclusion. As it is, the geographical spread and concentration of banking is sufficient to make financial inclusion a reality and generate constructive competition. While the PSBs are weak with deteriorating financials, the cooperative banks and regional rural banks are too weak to make their presence felt adequately. They have not been able to fill the gaps in banking needs in their areas of jurisdiction. The private sector banks perhaps are more into businesses other than banking, and they seem to be moving without any proper direction and long-term objectives. It is time the Government and the RBI strengthen the existing set-up before experimenting with new licences. 

- TV Gopalakrishnan, Bangalore

HBL

Fourfold jump in badloans in public sector banks in 5 years

........Since RBI or the Government is not publishing the list of loan defaulters, AIBEA today is publishing the list containing the names of top 400 defaulters of Public Sector Banks. AIBEA today demanded that Banking system must be subject to the auditing of Comptroller and Auditor General of India. Banks must actually recover bad debts instead of artificially reducing the figures in the books of accounts through Corporate Debt Restructuring, selling of Non Performing Assets to Asset Reconstruction Companies at discounted rates, conversion of debt to equity capital investment by Banks...........

Read - BS

RBI cancels registration of 5 TN-based NBFCs

......The RBI said following cancellation of registration certificate, the companies cannot transact the business of non-banking financial institution. The Reserve Bank can cancel the registration certificate of a non-banking financial company under the powers conferred under the Reserve Bank of India Act, 1934.

Read - HBL

RBI restricts functioning of CKP Co-op Bank

...Further, the Mumbai-based bank cannot disburse or agree to disburse any payment whether in discharge of its liabilities and obligations or otherwise, enter into any compromise or arrangement and sell, transfer or otherwise dispose of any of its properties or assets except as notified in the RBI Directions issued on April 30......

Read - HBL

ICICI launches two special accounts for NRIs

........"We serve 1.5 million NRIs across spanning over 150 countries and process over 5 million NRI transactions annually. This experience has given us insights into the lifestyle and aspirations of NRIs and our products are designed to meet their needs,".....

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Miracle turnaround?

United Bank of India (UBI) has scripted what has to be the most stunning turnaround in recent times; from losses of R1,238 crore in Q3FY14 and R489 crore in Q2FY14, the Kolkata-headquartered bank has reported a profit of R469 crore in Q4FY14. On the face of it, the recovery seems too good to be true. How, for instance, has the bank reduced its gross NPAs by R2,592 crore and upgraded R1,488 crore of NPAs to standard assets in the span of just three months? And if it was that simple to.......

Read - FE

Carrot & stick approach behind UBI's strong NPA recovery

.......The lender appears to have adopted a carrot and stick approach to recover the money it lent. It offered incentives on repayment of dues and agreed on compromised settlements, but also unsettled defaulters with legal notices and placing them in 'wilful defaulters' list.........

Read - BS

Yes Bank Seeks Sebi’s View on Madhu Kapur’s Promoter Status

.......Yes Bank is seeking opinion from the market regulator on whether it should retain Madhu Kapur among the ‘promoter category’ in the shareholder filings since she was not the founder, though the legal heir of the co-founder Ashok Kapur. The move may be part of the bank’s view that Kapur though a substantial shareholder does not inherit the rights provided to her late husband when the bank was founded, said a person familiar with the development. “To ensure compliance with law, the bank is in the process of seeking regulatory clarifications on the matter from the authorities concerned,’’ said a Yes Bank spokesman.........

Read - ET