.................With no further cost cutting and efficiency gains immediately possible in the banking sector, the need to keep return on assets attractive will result in higher borrowing costs for the real economy, the effect of which would be the same as that of involuntary monetary tightening. It is precisely to mitigate this adverse impact on.............
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, June 19, 2014
Over 200 NBFCs may be declared vanishing companies
PATNA: There are more than 200 non-banking financial companies (NBFCs) registered with Reserve Bank of India (RBI) who are facing the threat of being declared vanishing companies, said Regional Director, RBI (Patna) Manoj Kumar Verma on Tuesday. He, however, said 42 NBFCs were in good shape. Elaborating the concept of vanishing companies, Verma said if an NBFC fails to submit its annual records for a few consecutive years, the RBI sends its representative for its physical verification.........
‘Grow exotic strawberries … get your rice from Bangladesh’
...........Uma Shankar, Regional Director, Reserve Bank of India (RBI), said people should be wary of a fake website (https:/www.rbi-inonline.org/savings.html) offering banking facilities and asking people to apply online for opening Reserve Bank of India (RBI) savings accounts. RBI did not offer such services that commercial banks provided, she said. She said it was enough to provide proof of address of either the current or permanent address to open a new bank account, or while updating an existing bank account.............
Aggrieved with banker: RBI ombudsman invites your complaints
................“In order to address these issues, RBI has issued advertisements in various newspapers across the state urging people to come forward and register their complaints with the RBI Ombudsman who will take action as per the Banking Ombudsman Scheme 2006,” he said. Giving details about the scheme, he said Banking Ombudsman Scheme provides an expeditious and inexpensive forum to bank customers to seek resolution of their complaints relating to services rendered by banks. The Banking Ombudsman Scheme was introduced under...............
RBI needs to act tough - A.Chandramouliswaran
My View on "Judicial review of decisions may make RBI ‘paper t...":
With all humility, I have been maintaining for decades that RBI, even with out a judicial review of its decisions as contemplated in the "FSLRC", has been a 'Paper Tiger' which is the main reason for banks not complying, with impunity, with its regulations on various regulatory aspects. Even in recent periods, some of the well known private sector banks were allowed to escape with small amounts of fine for grave irregularities in opening accounts and in rendering help in money laundering operations. RBI should have insisted on some of the senior members of the staff of these banks dismissed by the banks. It is hoped that the present Governor acts tough in these matters in the interest of the financial system.
- A.Chandramouliswaran
Regulating the regulators
..............The timing of Reserve Bank of India Governor Raghuram Rajan’s broadside against the Financial Sector Legislative Reforms Commission’s (FSLRC) report should not detract attention from its content. Yes, his unusually forthright observations have come after a new regime has taken over at the Centre. And, as we know, the FSLRC was constituted by the previous government. That said, there is substance to the disquiet expressed by him over some of the report’s recommendations.................
Say no to super-regulator
........Rajan has rightly pointed out that shifting the regulation of bond trading to the FSLRC-proposed Unified Financial Agency would severely hamper the development of the government bond-market. Already the consolidated surveillance has seen misses in controlling the the financial market. Look at the.......
Better if RBI allowed to function with its present mandate
My View on t "Regulators need flexibility, freedom to regulate -...":
In response to the article ‘A plot to destroy RBI’ (The Hindu Business Line, May 3, 2013), I had commented:
“ Not much research is needed to conclude that finance ministry and FSLRC, in a hurry to resolve certain minor issues, ignored the evolution of the role of RBI and the care with which RBI has nurtured the financial sector. Fed Reserve and RBI function in two different worlds. To say that time is not right for dismantling or truncating the RBI which is doing creditably well as is being admitted in several international forums, would be telling the obvious.
The dissenting notes recorded by 4 out of 7 members who signed the final report are well-argued documents, which inter alia plead the case for maintaining the basic features of RBI and assert the need for allowing the central bank to carry on with its present mandates. One wonders what motivated the FSLRC Chairman to finalize the report ignoring the difference of views expressed especially by K J Udeshi, P J Nayak and Y H Malegam.
It would appear that the Commission did not get opportunity to understand the present relationship between the RBI and GOI. The regulatory apparatus plus legislations in financial sector in India are in working condition. The FSLRC’s effort to re-invent them has pushed the present regulators and supervisors to a confused state, making the possibility of an intelligent debate on the issue remote.
The idea of creating a Unified Financial Agency for all financial regulators except RBI, truncating RBI by separating Public debt Management and keeping the agency doing that work (presumably with the same work force) in RBI premises, later UFA subsuming even RBI, all give a feeling that the FSLRC was not allowed to ‘apply its intelligent mind’ and in the eagerness to satisfy all, and so fast, it has forgotten its own brief. Perhaps, the purpose would be served better, if RBI is allowed to function with its present mandate, a coordination committee sorts out issues among the remaining regulators. If GOI aim is to reduce the number of regulators, after necessary groundwork, merger of the regulatory agencies outside RBI one by one, as work stabilizes could be thought of. The twin goals of one Unified Financial Agency and managing the man-power-related issues that may arise with merger here could be better handled this way.
- M G Warrier, Thiruvananthapuram,
Subhalakshmi Panse joins Federal Bank board
..........A post-graduate in Science, Panse has a Diploma in Business Management and Masters in Management Sciences from Pune University. She also holds an MBA from Drexel University, USA. Panse was a member of the RBI appointed committee on Corporate Governance and Chairman of the IBA committee on Cheque Truncation System ....
Give retirees a break
The fact that despite nine rounds of talks, the Indian Banks’ Association and United Forum of Bank Unions could not reach a consensus is worrisome. The Government needs to intervene because the pending issues of bank retirees relating to pension updation and increase in family pension, among others, are nearly two decades old. There was some talk of wage revision way back in the 1960s. Since a majority of retirees have crossed the age of 70, these issues warrant urgent attention.
- CP Velayudhan Nair
More Insight Into Talks Held on 14th June 2014
.........The only silver lining in the meeting was that IBA is favourably inclined to consider demand of extending 100% DA neutralization to all pensioners. IBA also seems to have shown positive response to improvement in Family Pension. However, unions still need to do lot of work as IBA has not committed anything and only shown positive response. Thus, a ray of hope continues for pre 2002 retired Bank employees for 100% DA. As regards updation of pension, IBA has outlined it involves substantial financial burden to the Banks .This means in all sectors, including central and state Govt., whenever there is an industry wise wage increase, pension will also be increased. In Banking sector it is not so. Hence ......
What's your address?
..............the Reserve Bank of India (RBI)'s decision advising banks to only ask for one (current or permanent ) address and its documentary proof from prospective customers, while accepting the customer's declaration of the postal address, can be a game-changer if implemented properly. However, the rub lies in expecting banks to verify the postal address through "positive confirmation". They are unlikely to make efforts .........
Banking on payment banks
........ The payment bank concept is conceptually interesting but it will be difficult to predict if it will be economically viable. Payment banks will find it difficult to maintain a cash reserve ratio (CRR) of four per cent without any interest. And, investing only in government securities will not be........
Chandrababu discusses crop loan waiver issue with RBI Guv
Andhra Pradesh Chief Minister N Chandrababu Naidu today spoke to Reserve Bank Governor Raghuram Rajan over phone and discussed the crop loan waiver issue in the backdrop of reports that the RBI was opposing it. Chandrababu reportedly explained to Rajan the circumstances in which the TDP had promised waiver of crop loans as.........
Understanding Liquidity Management by RBI
.......LAF is a facility extended by RBI to scheduled commercial banks (excluding RRBs) and primary dealers to avail of liquidity in case of requirement or park excess funds with the RBI in case of excess liquidity on an overnight basis against the collateral of Government securities including State Government securities. As we have seen above OMO is also a liquidity management tool in the hands of RBI, but that is a tool used..........
Online trading possible with urban co-operative banks: RBI
Urban co-operative banks are now allowed to open a demat account for customers to provide online trading facility, according to the Reserve Bank of India. “However, considering the high risk involved in such services, it has been decided to allow only Scheduled Primary (Urban) Co-operative Banks, with prior approval of the Reserve Bank, to provide online trading facility to their demat account holders by entering into a tie-up with a broking entity,” the RBI said in a notification..........
RBI accords self regulatory organisation status to MFIN
The Reserve Bank has recognised Micro Finance Institutions Network (MFIN), the industry association for the micro-finance industry, as a self regulatory organisation for NBFC-MFIs. "MFIN,...Has been formally recognised by the Reserve Bank of India (RBI) as the SRO (self regulatory organisation) for NBFC-MFIs. This makes MFIN the first RBI recognised SRO in the country," the industry association said in a release today..............
RBI directs banks to disclose sector-wise advances in financial statements
The Reserve Bank of India has asked banks to disclose sector-wise advances in the ‘Notes to Accounts’ to the financial statements from the financial year 2014-15 onwards. Within the sector-wise advances, the central bank called for disclosure on priority sector (agriculture and allied activities, advances to industries sector eligible as priority sector lending, services, and .......
RBI fiat likely to temper interest in Kotak Bank
Shares of Kotak Mahindra Bank may come under pressure on Thursday, as the RBI said foreign institutional investors should seek its approval for buying more shares as FII holding in the bank, under the portfolio investment scheme, has reached the trigger limit.......
RBI keen on sub- 51% govt stake for PSBs
........" The RBI believes that the fiscal situation, the existing PSU bank management troubles, and the Nayak committee report provide the government with a good opportunity to consider lowering its stake below 51% in a calibrated manner," a banking industry official told ........
Surat Diamond Association urges RBI to exclude SME units from 90 days payment terms
.......But, the Indian banks do not make payment to the overseas parties if the buyer of rough diamonds fails to make payment within 90 days. If the manufacturers misses the deadline of 90 days, then the payment process is extended upto more than 60 days. Dinesh Navadia, president, SDA said, "We have written a letter to RBI to exclude the SME sector from the 90 days payment circular. If our demand is not met than the manufacturers will go on an indefinite strike after 10 days.".........
Power sector: A risky asset for Indian banks
...........The poor financial health of discoms in India is one of the key factors weighing on the asset quality of Indian banks, says the credit rating agency in its report, ‘Indian Banks: Exposures to State Electricity Board Distribution Companies.’ So far, these problems have almost..........
To Cut Fraud Risk, You Can Bank on Virtual, Forex Cards
..........Virtual Cards E-wallets or virtual cards are meant only for online payments. Banks like SBI, Axis Bank, Kotak Mahindra and HDFC Bank offer such facilities free of charge currently . The mechanism allows you to generate a virtual card that functions like a credit or debit card for online payments. To create a virtual card, you need to transfer the required funds from your account into this `card', set a limit, and..........
Read - ET
BTI Payments eyes grocery, telecom shops to install white label ATMs
.......The company, which holds the RBI licence for 9,000 white label ATMs, is making elaborate arrangements to install 1,000 units this fiscal. White label ATMs are not owned by banks and are just cash-dispensing machines. “We have set our eyes on Tier II, III and smaller cities and found that grocery stores, telecom shops and photocopying facilities are the ideal places to install ATMs as a lot of activities revolve around them,” .....
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