There appears to be a sudden rise in instances of ATM skimming. Over the past few days, a number of bank account holders in Bangalore have complained that money was illegally withdrawn from their accounts through ATMs and several have lodged police complaints……….
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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.
Tuesday, February 14, 2012
Regulating the regulators: A K Bhattacharya
Nominating two ministry bureaucrats on the RBI board could give credence to the government’s penchant for playing Big Brother
…..The ostensible reason for nominating two senior finance ministry bureaucrats on the RBI board is to strengthen the coordination between the central bank and the government. However, that reason does not sound very convincing. Instead, the move seems to be yet more proof of how the government functions at its own pace, making virtually no distinction between what is necessary and what is not…….
Read............... City of London official to meet top Indian bankers
......Key issues on the agenda will include the RBI's banking roadmap, infrastructure investment and the insurance and pensions sector. Mr Fraser said: “This visit comes at a critical time, not only for the City but for the global economy as a whole. India is a growing part of the global economy and benefits from the investment made by companies from London — and across the globe.......
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Subbarao Satisfied With Impact of Rupee Action
India's central bank is satisfied with the impact of the measures it took to stem the rupee's slide against the U.S. dollar towards the end of 2011, Governor Duvvuri Subbarao said Monday.
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INDIA: MFIS STEP UP SECURITISATION DEALS
….The reason why banks are chasing a few MFIs for securitisation deal is the recent Reserve Bank of India (RBI) directive narrowing the scope of priority sector lending norms governing banks. RBI recently disallowed banks from classifying loans given to non banking finance companies (NBFCs), other then MFIs, as priority sector lending. As per the RBI norms, banks are required to lend 40 per cent of their adjusted net credit to the priority sector. Direct agriculture loans should constitute 18 per cent of priority sector loans for Indian banks……
Read............Indian MFIs have deviated from idea of micro credit: Muhammad Yunus
…."They (MFIs) moved away from the idea of micro credit. That has created all the problems," said Yunus, in a media brefing in Mumbai. "MFIs based in Andhra Pradesh have drifted from their mission…..
Read............Nimbus guarantee puts 3 banks under RBI lens
The Reserve Bank of India (RBI) is probing the role of three public sector banks (PSBs) — United Bank of India (UBI), Punjab National Bank (PNB) and Indian Bank — for allegedly flouting norms in providing bank guarantees of R2,000 crore to Nimbus Communications against an intangible collateral, adding a fresh twist to the ongoing legal wrangle between the Indian cricket board and its estranged telecast partner...........
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Consumer confidence in financial situation up in Dec: RBI survey
...... RBI started conducting the quarterly survey on consumer confidence in 2010. According to it, the change in consumer confidence has the potential to affect real economic activities through the changes in business sentiments and the findings of the survey on confidence level of consumers can be of use for policy making purposes.
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Are RBI's remittance numbers telling the whole picture?
....... The RBI's data is, however, treated as sacrosanct with little outside scrutiny. If transparency is the best disinfectant, it is amazing just how little India is willing to carefully look at the sources of the $50 billion inflows that the RBI calls "remittances".
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Is RBI's victory in reversing rupee decline temporary?
The Reserve Bank of India's victory in reversing a sharp decline in the rupee may be short-lived and the currency will remain vulnerable unless the problems of a hefty fiscal and current account deficit are addressed………….
Read......... Will RBI regulation prevent a gold loan bubble?
Given the scale at which the business of lending money at usurious rates against the collateral of gold is growing, RBI now seems to be worried about the possibility of a gold loan bubble building up in the system and is contemplating tighter regulation for the sector...........
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Manappuram Fin ‘will ensure' compliance with RBI norms
....To enhance governance and better manage growth to the next level, the Board also decided to constitute an independent committee under the chairmanship of Mr Jagdish Capoor (former Deputy Governor of RBI and former Chairman of HDFC Bank). This committee will review relevant aspects of operations, systems, controls and organisational structure, including Board composition and effectiveness...............
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Monday, February 13, 2012
Financial literacy: Catch them young
Rajpreet Kaur wants her 16-year-old son to be money-smart. She wants him to learn the importance of money so that he can make informed financial decisions later in life. "I have a separate savings plan for my son. But I don't want him to depend on that. I encourage him to use his pocket money judiciously so that saving becomes a habit," she says. But Kaur's son hasn't imbibed the lesson of financial literacy that his mother has been trying to teach him. "He chooses to be his own money manager. He spends all his pocket money on food, stationery and other things that he fancies," she rues. Kaur is not alone. Many parents face trouble in controlling their children's expenses and demands as kids prefer to manage their own finances. But it's time parents put their foot down, stress experts. Counsellor Geetanjali Kumar says that in today's world it has become crucial to inculcate in kids the importance of saving money. "There has to be a clear distinction between needs and wants. Parents must constantly ask the question - how useful will a product be? However, most parents don't do that," says Kumar. The inability to say no usually arises from guilt. Parents "want to give their kids a life they never had". But instead of giving in to every demand of their children, parents need to talk to them about terms like fixed deposits and savings. They should be taught how to budget and prioritize their purchases," says Kumar. In an attempt to introduce children to financial literacy and teach them the importance of managing finances, Reserve Bank of India came up with special comics and games for them five years ago. A set of five comics - including 'Raju and the Sky Ladder' and Money Kumar' - were printed by the bank. The books talked of monetary policies, savings and inflation. The Regional Director of RBI, Chandan Sinha, says that financial literacy for kids is very important for financial inclusion. "The idea is to catch them young. Moreover, in India people generally invest in physical assets. The initiative is one way of shifting from physical assets to financial assets," Sinha said.
TOI
International year of Co-operatives – NAFCUB Zonal Conference
NAFCUB is holding a conference which will give a unique opportunity to all the CEOs to come together, exchange views/experience on all facets of urban banking sector and to find avenues to propagate the United Nation’s theme of International Year of Cooperatives, “Cooperative Enterprises Build a Better World”. The conference ie expected to be graced by RBI Executive Director Shri S.Karuppasamy and RBI Hyderabad Regional Director Shri A.S.Rao.
Scarcity haunts smaller denomination currencies in state
INDORE: Disappearance of currencies belonging to small denominations like Re 1, Rs 2 & Rs 5, from the state has opened up a host of problems for businessmen, especially small-time traders and commonman together. While the Reserve Bank of India (RBI) has stopped printing of banknotes of small denominations from Re 1 to Rs 5, the scarcity still persists despite adequate minting of coins of the small denominations. Again, certain coins are allegedly being used by local small time jewellers for casting them in the jewelleries and it may be a reason behind the lack of such currencies……….
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The coin confusion
Earlier, it was easy to know the value of a coin with a quick look. Now, with the introduction of new coins, it is not so. The following pairs of old and new coins look the same: (a) 50 paise and Rs 1; (b) Rs 1 and Rs 2; and (c) Rs 1 and Rs 5. As a result, every time a citizen wants to hand over change to a bus conductor or a shop he has to see the denomination. If he happens to see the obverse of the coin he has to turn it around to see the reverse that contains the value. It becomes irksome when one has to hand over several coins to buy a ticket in a moving bus while standing. With the use of vending machines and public telephones, it is necessary that the size and shape of coins remain the same, even though the metallic content may be altered to forestall arbitrage. It is a matter involving a billion people in daily transactions.
A Seshan, Mumbai (BS)
RTI order on RBI board meetings
The Central Information Commission last week directed Reserve Bank of India to provide the minutes of the board meetings for the last two years on a CD to Kishanlal Mittal, who sought the information under the Right to Information Act. If any of the details are exempt under the RTI Act they may be severed. The commission also directed RBI to disclose minutes of its meetings on its website. It shall be done by April 1, 2012 of all board meetings held thereafter. When Mittal asked for these details, initially, RBI resisted it stating that the papers were “voluminous, spread over several files and concern various departments of RBI. The task of screening and compiling them would be extremely laborious and time consuming. As this would disproportionately divert our resources, we are not under obligation to provide them.”
BS
SEBI to track market information on social networking sites like Facebook, Twitter
……Another financial sector regulator, Reserve Bank of India (RBI) is also considering a presence on social networking platforms like Twitter. Late last year, RBI conducted a survey to know whether it should make its web interface more interactive with features like discussion forum, live chat and blogs on its website, and by having a Twitter presence for information dissemination…….
Read..................Fighting inflation the wrong way —Sonali Ranade
....The RBI has not been candid about the cause of Indian inflation beyond talking vaguely of the need for fiscal consolidation. Nor has the RBI chosen to focus on core inflation, which is inflation after food and energy prices are stripped out of headline inflation.....
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The great Indian fiscal hoax - S.S.Tarapore
............In the absence of fiscal adjustment, the country could face an uncontrollable inflation which would particularly hurt the weaker segments and this can explode into nasty social turmoil. Thus there is no option but to undertake an early fiscal adjustment. The fiscal should not become the great Indian hoax.
Details
Finance Ministry begins work on a fresh fiscal consolidation road map
...... The RBI, which is under pressure to cut rates to revive growth, has cautioned it will not be able to start monetary easing till there is meaningful fiscal consolidation. "There is an inflexion point beyond which fiscal deficits militate against growth. Government borrowing is not bad per se, but excessive borrowing is," RBI Governor D Subbarao said earlier this month.
Read...........Housing loan may get Rs. 3 lakh tax exemption
In a bid to boost housing sector credit, the government is contemplating to enhance income tax exemption for up to Rs 3 lakh paid as interest on housing loans in a year, from the existing limit of Rs 1.5 lakh..........
Read.......The $50 billion question : Devesh Kapur
India is more vulnerable than it appears. Most of what RBI calls remittances could be disguised capital flows
……..Unfortunately, while there are growing concerns about the quality of NSS data, at least they are put out in the public domain for researchers to use, scrutinise and criticise. The RBI’s data is, however, treated as sacrosanct with little outside scrutiny. If transparency is the best disinfectant, it is amazing just how little India is willing to carefully look at the sources of the $50 billion inflows that the RBI calls “remittances”.
Read........ Economists wide of the mark in projecting India's growth rate
………However, according to the latest estimate of national income prepared by the Central Statistical Organisation (CSO), the GDP growth will not be even 7 per cent. It has been projected at a three-year low of 6.9 per cent, down from 8.4 per cent in 2010-11. The others, including Planning Commission Deputy Chairman Montek Singh Ahluwalia and RBI Governor D Subbarao too were way off the mark…………
Read....... Global summit to have six sessions
The three-day "Global Summit on Changing Bihar", scheduled to begin on Friday, would be spread over six plenary sessions and 10 thematic workshops. Experts of national and international repute would attend the summit which would have threadbare discussions on various issues. RBI Governor D Subbarao and Planning Commission deputy chairman Montek Singh Ahluwalia would be among the key speakers…………
Read..........Bombay Mercantile Bank holds BoD elections after 12 years
……………..“A shareholder of the Bank had filed a petition in Mumbai High Court for conducting elections. It was on this petition that the High Court directed the RBI to conduct the elections within 90 days.”..................
Read..........Dhanlaxmi Bank on austerity drive, to cut staff salary
A week after he took charge of Dhanlaxmi Bank, PG Jayakumar decided to cut costs to strengthen the financial position of the Thrissur-based private lender. The austerity drive would include salary cuts, reduction in travel expenses and decrease in discretionary spends……….
Read...........Profit-taking on the horizon
Domestic liquidity squeeze likely as RBI moves to narrow money circulation
....There is worry on the domestic liquidity front with the RBI opening another window for liquidity adjustment facility from February 10 onwards......
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Official data gives no cause for optimism
.... On the one hand, inflation, which had remained stubbornly highly during last year, has come down and the Reserve Bank of India (RBI) has leeway to soften its policy to accommodate growth concerns. There has been so much criticism over “policy paralysis” and indecision in public policy that the government will be forced to act.....
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Dhanlaxmi Bank’s untold story: why the CEO had to go....
......Finally, RBI needs to answer a few questions. For instance, how could a bank—closely monitored by the regulator—be allowed to open 66 branches shortly after the new CEO took over? What were the RBI observers (initially it had two, and later one) doing when Chaturvedi was expanding business as if there was no tomorrow? And, how could the regulator okay Chaturvedi’s second three-year term in October last year if it was convinced the bank had indeed indulged in accounting irregularities?..........
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Manappuram cuts off from group firms after RBI notice
...“The company will take immediate steps to completely ring-fence its operations from those of other entities owned or controlled by VP Nandakumar (executive chairman of the company) and his family to ensure that there is no overlapping of assets, branches or personnel between companies,” a press release issued by the company said on Sunday. To further enhance governance, the board will constitute an independent committee, under the chairmanship of Jagdish Capoor, former deputy governor of RBI and former chairman of HDFC Bank, the press release said..........
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Sunday, February 12, 2012
Banking awareness prog at DPS
Dimapur, February 11 (MExN): RBI and the Orchid Foundation Guwahati will organize a Banking Awareness programme at DPS Dimapur. The RBI Ombudsman will conduct the programme from 12 noon to 2:00 pm on February 13. Parents, senior students and teachers of the school shall attend the programme. Mongkum Jamir, Managing Director of Symbios (P) Ltd will be the chief guest.
The Morung Express
Why RBI regulation is must for gold loan firms?
In the first place regulator like the RBI is unlikely to have the wherewithal to be able to monitor customer practices across the length and breadth of the country, that's going to be RBIs first big challenge. The second big challenge will be to ensure that the industry remains and that the baby is not thrown out with the bath water…………
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Recycling microfinance
……The new regulations by the Reserve Bank of India (RBI) on microfinance have prompted MFIs to go for a makeover, in order to cope with the new limitations imposed on them. While some are going for product finance and morphing into non-banking financial companies (NBFCs) that can finance anything, others are rigidly staying on in the terrain of offering small credit to the poor in rural and urban India………
Read..........MFIs step up securitisation deals
…The reason why banks are chasing a few MFIs for securitisation deal is the recent Reserve Bank of India (RBI) directive narrowing the scope of priority sector lending norms governing banks. RBI recently disallowed banks from classifying loans given to non banking finance companies (NBFCs), other then MFIs, as priority sector lending. As per the RBI norms, banks are required to lend 40 per cent of their adjusted net credit to the priority sector. Direct agriculture loans should constitute 18 per cent of priority sector loans for Indian banks……………
Read...............Exuberant Indian markets gloss over economic reality
…..“We don’t expect the RBI to be aggressive in easing rates as inflation worries are still not completely mitigated. We expect it to be cautious in easing interest rates,”………….
Read...........GDP growth rate prospects positive
………Investors have to be careful while using this GDP estimate as a factor in their investment strategy. The Central Statistical Office has been one of the last organisations to recognise the deceleration in the GDP growth. But, with the Reserve Bank of India (RBI) announcing that the peak in the interest rate cycle has been reached, the macroeconomic fundamentals will only get better from the current levels……………..
Read.................The Hunt For Rs 2,70,000 Crore
.........The M. Narasimham Committee’s second report on banking reforms in 1998 was prophetic: “Given the dynamic context in which banks are operating, further capital enhancement would be necessary for the larger Indian banks. Against the background of the need for fiscal consolidation and given the many demands on the budget for investment funds in areas like infrastructure and social services, it cannot be argued that subscription to the equity of public sector banks to meet their enhanced needs for capital should command priority.” It was suggested that the government cut its stake in state-run banks to 33 per cent. Is it time to revisit the proposal? ................
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A crisis ignored
....................The advance estimate of national income in 2011-12, released recently by the Central Statistical Organisation points to a decline in India’s GDP growth rate from 8.4 per cent last year to 6.9 per this year. The government, obsessed with growth rates, is deeply disappointed. Hence there is already talk of the need to respond and demands that the Reserve Bank of India should reduce interest rates are being heard.................
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Lock into debt schemes as interest rates peak
……………The interest rates are at their peak levels with the Reserve Bank of India (RBI) signaling a softening in the monetary policy in its previous quarterly review last month. The RBI is expected to cut the key interest rates, going forward, in the near to medium terms, if the inflation rate stays down. It is an opportunity for all investors - those with a high risk appetite and the risk-averse - to lock-in to debt instruments that offer high interest rates for a medium to long term………
Read...........Parking of Starbuses continue in Kasturchand Park
..... Around 140 Starbuses have been parked in KP towards RBI square-Railway Station road since last 21 days…………..
Read............Saturday, February 11, 2012
'Now, address your banking grievances to the ombudsman'
PANAJI: With an aim to facilitate quicker and smoother resolution of banking customers' grievances, the Reserve Bank of India (RBI) banking ombudsman for Maharashtra and Goa, V Ramachandra Rao, has said that he would visit Goa every month to address complaints and bring about conciliation between banks and customers. Rao, who was addressing mediapersons on the banking ombudsman scheme of the RBI, said that the role of an ombudsman has come into prominence after the movement for a Lokpal. The RBI began the banking ombudsman scheme in 1995, and has 15 banking ombudsman offices in the country. The current version of the scheme was last amended in 2009. Rao, who said he was the "banking lokpal", requested people to come forward and send their complaints against banking related grievances on loans, credit cards, operation of accounts, delay in payments of drafts or any other deficient service to the banking ombudsman. He said his role was helping customers and protecting the interests of depositors of banks. MAR Prabhu, general manager of RBI's Goa office, said people could also submit their complaints to the RBI Goa office which will then forward the same to the ombudsman. Speaking on the charges levied by banks for pre-closure of home loans, Rao said "recently 34 major banks have agreed to do away with the charges." "These banks hold 95% of the home loan portfolio," he added. Rao said Goa had the best banking infrastructure with 3,180 branches. He also said only 5% of the complaints received by his office originated from Goa, but added that it doesn't mean banking services were perfect in the state.
TOI
Advisers seek wider role for IES in economic policy-making
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RBI to open its offices in all NE States – V.S.Das
Reserve Bank of India (RBI) will soon open its offices in all North East states to cater to the needs of bank facilities. This was disclosed by RBI Executive Director, V.S. Das during a financial Outreach Camp organized by RBI at Changki village of Mokokchung district on 8th February 2012. He also assured to open a Branch Office of Allahabad Bank at Changki village shortly. Describing RBI as Bankers Bank and custodian of economy in the country, Das said RBI has embarked on organizing financial outreach camps in villages throughout the country since RBI Platinum Jubilee celebration in 2009-10 focusing on bringing awareness amongst the people regarding banking facilities available and to make an attempt at making available such facilities to every adult citizen in the targeted area to bring them under the fold of mainstream banking. Giving a strong signal to all nationalized banks in the country for offering better bank services to the customers, the Executive Director urged all banks to provide better bank service by going to the door steps of customers. He also laid stress on the need to provide quality facilities and identifying their priority areas to accelerate the tempo of economic development in the country. On the other hand Executive Director called upon the customers to be a good bank customer. The Changki financial Outreach Camp of RBI, inaugurated by V.S. Das was the third such programme in the state after Khonoma in 2009 and Chumukedima in 2011. The one-day camp was attended by villagers of Changki and neighboiuring village under Mangkolemba Su-division. The camp was also addressed by RBI Regional Director, Guwahati Surekha Marandi, top officials of Nationalized Banks in the region, Deputy Commissioner Mokokchung and other official from the state government. In their speech, Deputy Commissioner Mokokchung, Lithrongla G. Chishi and Wati, Additional Secretary, Finance, Government of Nagaland expressed their gratitude to RBI for organizing the camp and hoped that it would help banking culture among the masses. Earlier, V.S. Das had an interactive session with School children Self Help Groups in a move to inculcate them banking culture. On the occasion, various banks and Agri and Allied Departments set up exhibition stalls to disseminate information regarding credit facilities/government schemes available for the benefit of villagers and the participants. The facility of exchange of soiled/mutilated notes and exchange of currency notes with coins was also extended on the occasion. RBI and other Banks had presented gifts to schools and SHGs to mark the camp.
http://iprnagaland.gov.in/component/k2/item/1610-rbi-to-open-its-offices-in-all-ne-states?tmpl=component&print=1RBI reaches out to Naga hamlet
On a quiet winter morning on Wednesday, bosses of the country’s banking sector descended on the sleepy village of Changki, about 30km from the Assam-Nagaland border, to highlight the importance of financial literacy at the grassroots..............
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9213 villages to have banking facility soon
PATNA: To comply with the Reserve Bank of India (RBI) prescription, all 9,213 villages in the state, each with a population of 2,000, would have banking facility through bank correspondent (BC) model by the end of the current fiscal, ending March 31...........
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Systems beyond silos
........RBI Governor D Subbarao has made an important speech at a recent RBI conference. The speech emphasises that RBI is being asked to do too much, and there are conflicts in delivering the various objectives placed on RBI. Financial stability cannot and should not be the sole responsibility of RBI, for which, as the Governor points out, RBI has no mandate...........
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The great ATM robbery in the making
“We are writing to all the banks across the city to enforce RBI safety guidelines by providing a unique PIN number for every account holder and for each transaction……..
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Now, ATMs can advertise financial products
Banks with a large network of automated teller machines (ATM) will now be able to generate additional revenue by advertising financial products offered by other institutions. With an eye on financial inclusion and to incentivise banks for opening ATMs in remote areas, the finance ministry has allowed bank-owned as well as outsourced ATMs to display advertisements of other financial products. RBI will soon issue guidelines in this regard. The State Bank of India having about 80,000 ATMs currently is likely to benefit most. Among private players, Axis Bank and HDFC could also gain. Banks with a small ATM network would benefit by getting more visibility for their products at large bank ATMs. These products carry the approval of various regulators like the Reserve Bank of India, Securities & Exchange Board of India, Pension Fund Regulatory Development Authority and the Insurance Regulatory Development Authority. A finance ministry official said it had been a long standing demand of the industry to allow outside vendors to advertise financial products of other banks and financial institutions apart from the products of the sponsoring bank for a fee. The official added that the advertising revenue would enable banks to reduce transaction costs of ATMs. Currently, banks work on a outsourced model based on per transaction basis for ATM deployment. The cost of setting up of an ATM is about Rs 5-6 lakh. Advertising revenues can offset a part of this cost and make the proposition more viable for banks.
BS
Gold loans at last draw RBI’s attention
........Some 14 months late, the RBI has "cautioned members of public that those who deposit money with Manappuram Finance or MAGRO, do so at their own risk". The warning should have come much earlier...................
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'Govt keen to promote microfinance'
“Micro finance sector is already being governed by RBI, it does not require a money lenders act,”………….
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Rangarajan disappointed at IIP; hopes FY13 GDP to be 7.5%
....... Rangarajan also assured that the government's immediate aim was to bring down inflation to 6%, but when it falls to 6.5%, one can expect the RBI to ease rates. However, IIP is not the data that the Reserve Bank of India looks very closely at, especially the provisional numbers, because they tend to be very volatile. Definitely for policymaking, the WPI numbers are more crucial. The next WPI numbers are to be declared on February 14.…….
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‘Reduced loan to further dampen realty market’
Reserve Bank of India’s recent circular to commercial banks to reduce the loan to value (LTV) ratio for home loans has created havoc in Ahmedabad’s slowdown-affected realty market...............
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Comexes wait for critical mass
.... In a separate move, the finance ministry has already sought the Reserve Bank of India’s (RBI) opinion on allowing banks to hedge their risks on commodity futures and RBI is understood to have asked banks to give their views. Banks are prepared to enter this space because it helps them manage their risk while financing the commodity trade or companies. In fact, several banks have bought stakes in commodity exchanges. For example the State Bank of India holds 5.2 per cent in MCX and IDBI Bank holds 10 per cent in new exchange UCX......
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India Inc seeks interest rate cut, cites low IIP growth
..... "The RBI needs to move quickly from its pause on interest rate hikes to a policy of cutting rates to encourage investments."......
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Now, banks must pass exam for deposits
Bihar government has decided to deposit its capital only in banks which pass a test based on the Credit Deposit Ratio (CDR)............
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More trouble for Dhanlaxmi Bank says trade union
.......... “…the apex bank, RBI (Reserve Bank of India), showed its displeasure on the MD after getting the memorandum from the AIBOC regarding the health of the bank. It is common man’s guess that the MD has put in his papers due to the intervention of RBI because of his non-performance. However, he is still using his clout with the media to project himself as a martyr. A post mortem is needed to uncover the full dealings of the MD and his associates, right from October 2008 onwards.” ..............
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Professor Ray offers a series of Workshops on Data Envelopment Analysis in India
.... The final leg of his tour took him to Reserve Bank of India (RBI), the central bank of the country, in Mumbai (known previously as Bombay). There he delivered an invited lecture at the Head Office of RBI on the measurement of productivity in banks, and offered an assessment of the impact of liberalization in the Indian banking industry comparing the performance of public sector, private, and foreign commercial banks. Apart from the lecture, he offered two days of hands-on instruction on how to measure efficiency to a group of young officers at the Economics and Statistics Division of RBI.......
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Solvency, auditing guidelines for LLPs on the cards
The government is set to introduce stringent solvency and auditing norms for limited liability partnerships (LLPs), which would increase the compliance burden for them but bring in more transparency to satisfy the regulatory concerns raised by the Reserve Bank of India...............
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No foreign donations for political parties, media
The rules follow the Foreign Contribution Regulation Act 2010 which seeks to replace the earlier Act of 1976. The main difference between the new Act and the old is that political parties have for the first time been debarred from receiving contributions from abroad……………..
Read.....................Friday, February 10, 2012
Can't afford to let fisc run loose : S S Tarapore
........ In the absence of fiscal space for a stimulus, the chorus advocates that the Reserve Bank of India (RBI) should refrain from “monetarist” policies. There is endemic confusion in the minds of the expansionists as they label any cautionary policy as being “monetarist”. Needless to say, this is a totally erroneous interpretation of “monetarist” policies. No “monetarist” would accept India's permissive monetary expansion as being consistent with a “monetarist” policy.................
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Inflation will reaccelerate over the next few months
............Reserve Bank of India, to its credit, has remained vigilant. Remember, they have essentially nowhere indicated that the next move is to cut interest rates. They have basically given a couple of scenarios under which there will be a cut, but have not committed to that. So I’ll give them full credit and all of those factors which have been in the last policy review. So by summer, we think the Reserve Bank of India will essentially have to reverse course and essentially stop its easing of monetary policy trajectory...............
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Arua achieves 100% financial inclusion
RBI has asked banks to provide banking facilities to 70,000 villages having population of more than 2,000 people by March this year
As a part of Reserve Bank of India’s outreach programme, RBI deputy Governor Anand Sinha visited Arua village in Faridabad district of Haryana on Thursday. Arua, which is one of RBI’s model villages, has achieved 100% financial inclusion. Syndicate Bank, which has opened a branch in this village, has opened 915 no frills account for villagers in the past few months. The outreach programme is aimed at spreading the message of financial inclusion and financial literacy and checking the progress of the spread of banking facilities in the area. RBI had started its outreach programme in 2010, wherein a team from RBI goes to villages across the country and interacts with the people there about banking facilities and also helps them in getting accounts opened, guides them on how they can avail loans from banks and also tells them about various government schemes that the people can avail of. In his address to the villagers, Sinha elaborated the advantages of opening a bank account. “If you go to keep money in your homes, either it may become bad, get stolen or the value of your money will be static and won’t increase. If you keep it in the bank you’ll get returns”. Sinha said banks are using a combination of the banking correspondent model and brick and mortar branches to achieve financial inclusion. “You can’t have one model, it has to be a combo of al. Because as far as the BC model is concerned it’s very important as a brick and mortar may not be very economical. But brick and mortar branches have their own advantage”, he said. RBI has asked banks to provide banking facilities to 70,000 villages having population of more than 2,000 people by March this year. Sinha added that banks are on track to achieve this target.
Mint
Training cum Awareness programme on Fake Indian Currency notes and Non Banking Finance Companies” for the Officers of Sikkim Police
1. Reserve Bank of India, Gangtok on February 07, 2012 conducted “Training cum Awareness programme on Fake Indian Currency notes and Non Banking Finance Companies” for the Officers of Sikkim Police. The programme was intended to impart knowledge on detection and proper ways of disposal of Fake Indian Currency notes and give vital inputs about Non Banking Finance Companies by experts from Reserve Bank of India.
2. While inaugurating the workshop at Royal Plaza, Shri E.E. Karthak,General Manager/O-i-C, RBI Gangtok in the presence of Shri Akshaye Sachdeva, IPS, IGP, Sikkim Armed Police, Smt Mrinalini Srivastava, IPS, SP, CID, Sikkim Police mentioned that with the recent seizure of fake notes to the tune of Rs 2.25 Crore in New Delhi, it has been understood that the counterfeiters have achieved a ‘zero-error counterfeiting capability’, with all the features in a genuine Indian currency note being present in these counterfeit notes. It took the experts long hours to identify each note. The seized notes have all the basic security features of Indian Currency notes namely Micro printing-used by RBI to combat counterfeiting, Gandhi watermark, Security thread, 100% cotton paper, embossing by insertion of Intaglio images and electro yet watermark. These counterfeits are smuggled from Pakistan via Jammu to India to fund terror operations. The alternative routes for trafficking of the counterfeits are the porous borders of Nepal, Bangladesh and the sea. Nationwide raids by the National Investigating Agency has lead to arrests of 14 people smashing an international racket involving the smuggling and distribution of Fake Indian Currency notes by Pakistani agents through their Indian operatives.
3. He further stated that a lot of private finance companies, namely Bharosa, Stock Guru (now curbed) etc have been collecting deposits from the general public with the promise of very lucrative returns. These Non Banking Finance Companies have been luring gullible investors under the pretext of being deposit taking NBFCs as licensed by the Reserve Bank of India. The investors in such companies often find themselves as victims of financial frauds who under normal recourse approach police officials. In the light of such activities it becomes important to equip the Sikkim Police Officers with an understanding of Non Banking Financial Companies so that such malpractices are curbed with immediate effect.
4. Speaking to the participating officers, Shri Akshaye Sachdeva IPS, IGP, Sikkim Armed Police, Government of Sikkim highlighted the vital role the Sikkim Police has played in nabbing fraudulent NBFCs namely Bharosa, Teena Finserv and Stock Guru etc. He also indicated the problems faced by the Sikkim Police in distinguishing the legitimate areas of operations of the NBFCs. He also highlighted the issue of public dilemma in registering complaints against these companies in hopes of getting the promised returns by these companies. He also commended the pro active policing undertaken by the police in registering suo moto cases against these fraudulent NBFCs in the past.
5. The guest faculty from RBI Kolkata namely Shri Kishore Pariyar, DGM, Department on Non Banking Supervision and Shri S.N. Mitra, AGM, Issue Department gave specialized input for the functioning of NBFCs and the features of Genuine Indian Currency notes respectively.
- As reported by Tenzing Namgyal, Executive Intern, Reserve Bank of India, Gangtok
FinMin shortlists 17 bank GMs for ED posts, to notify soon
...... According to the industry grapevine, the Reserve Bank of India (RBI)wished to discontinue with this old practice of shifting CMDs. The banking regulator was of the opinion that CMDs of smaller banks should continue to drive effort to elevate their banks to the higher level instead of stepping into larger banks. Accordingly, the regulator sent a note to the ministry of finance in this regard.........
Rs.18.46 lakh mutilated, soiled currency exchanged at camp
TIRUCHI : The day-long special camp for the exchange of soiled and mutilated currency notes organised by the zonal office of the Indian Bank in association with Reserve Bank of India here on Wednesday evoked good response. The camp was held at the Rockfort branch premises of the Indian Bank in the city. A total of 512 persons from across the district, including the customers of other banks, exchanged soiled and mutilated currency notes worth Rs.18.46 lakh at the camp. K.Manoharan, deputy general manager and zonal manager of the Indian Bank, who inaugurated the camp, said that the main objective of the camp was to bring down the circulation of soiled notes. C.T.Muthu, AGM, zonal office, explained to the customers the techniques to identify fake currency notes, and proper maintenance of notes. The bank had conducted similar camps in Pudukottai town and three other surrounding villages a week ago. Jagannathan, branch manager of Tiruchi main branch, and Kumaravel, branch manager, Rockfort branch, were present.
HBL
Banks seeing rise in incidents of fraud: Deloitte
“Banks have witnessed a rise in the number of fraud incidents in the last one year,” says the survey titled ‘India Banking Fraud Survey 2012’
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Parliament panel moots wider slabs for personal income tax
.......Finally, the report wants the government to impose a peak rate of 30 per cent on annual income above Rs 20 lakh, as against above Rs 10 lakh as sought in the Bill. The report is not final and minor tweaking of these suggestions could be incorporated after a meeting tomorrow, according to the persons cited earlier. Tax slabs needed to be progressive, they said, adding, “Most of the assesses would fall in the category of Rs 3-10 lakh a year, which should get a lower income tax rate of 10 per cent.”........
Read............. RBI nod must for India offices by companies from China, Pakistan among others
MUMBAI: The Reserve Bank today said companies incorporated in China, Pakistan, Bangladesh, Sri Lanka, Iran and Afghanistan will have to seek its permission to set up branch or liaison offices in India as general permission granted to entities of other nations will not apply to them……………….
Read............ Let’s get our data right first
.......Official data is sacrosanct and used by analysts to take their own views, which are sent out to their clients. The media makes hay with various views of experts and analysts, which then spooks the markets—stocks, money and forex. Then, ironically, various other government bodies, such as the ministries and RBI, have to formulate their policies based on these numbers and could end up taking an incorrect call in retrospect when data is revised...................
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Home loans: Buyers want RBI reply
........ They have filed an RTI application with the Reserve Bank of India demanding to know how the banks, both private and government, sanctioned the housing loans for Noida Extension in the first place considering that many developers confess that they had known all along that the area was disputed.......
IDBI bank to launch India's first infrastructure fund
..... IDBI Bank has sought Reserve Bank of India's approval for an NBFC, which will have a capital base of 1,000 crore. The bank will hold 30% stake in the NBFC and the rest will be held by some state-run banks and Life Insurance Corporation of India.............
Gold loan growth pace worries RBI; Muthoot, Manappuram hit
………The central bank is now considering tighter regulations for the segment, the official said. This is could be in the form of limits on the loan that a gold loan firm can give as a percentage of the value of loan. This is also known as the loan-to-value. RBI may also restrict the maximum interest that a gold loan firm can charge its customers, and also the penalties that gold loan firms can impose……..
Read.................Containing NPAs
Apropos of the editorial “Bank on trouble” (FE, February 4), no business is without risks and banks are no exception to that. NPAs within the limit are natural but a high level of NPAs is bound to cause concern. Few banks, especially by virtue of having a high exposure to sensitive sectors like power, realty, etc, are faced with high degree of NPAs. The reasons for more loans turning non-performing in the recent times are many. Interestingly, Indian banks today have a well-defined risk management profile in place to anticipate the risks. The immediate priority should be to bring interest rates down. RBI, in its policy round up, has indicated that the need of the hour is to address the supply-side constraints. External shocks are bound to be there in the globalised economy and banks must now learn to live with those.
- Srinivasan Umashankar, Nagpur (FE)
NPA, a multi-headed monster
.....as has been pointed out in the Financial Stability Report of RBI, while Indian banks will migrate to Basle III from a position of strength, the new standards may require adjustments in lending behaviour......
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Banks raise loan costs for MFIs
With the cost of money rising and the cap on what MFIs can charge intact, microlenders are facing a tough time
..... According to the latest Reserve Bank of India (RBI) data, bank lending to micro-credit, comprising loans to self-help groups and MFIs, fell to Rs. 21,000 crore in December 2011 from Rs. 28,820 crore in the previous year........
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Who's who to attend summit on changing Bihar
PATNA: Top honchos of various fields are expected to attend the three-day Global Summit on Changing Bihar, scheduled to open here on February 17. RBI Governor D Subbarao will also attend the inaugural and valedictory sessions.......
Read.......... Assocham bats for allowing banks as intermediaries in commodities futures market
.... "By virtue of their vast branch network, banks are in a unique position to display tickers showing real-time prices of various commodities across the country which will be the most efficient price discovery dissemination that could be implemented in a very short time,"…..
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Dhanlaxmi Bank Union allege fraud, demand merger with PSU banks
…….Rumours have been doing the round that the bank is financially stressed and may report losses of around Rs 30 crore. But the Union fears that the bank may not apart from the bank not reporting any profit this quarter, some if its customers have actually withdrawn their deposits from the bank. The Union also alleges that “who resigned as MD has withdrawn his family deposit of around Rs 5 crore from the Bank.”…….
Read.......... Did Manappuram insider bail out just before RBI deposit ban?
.......... The curious case of Manapurram Finance, the loans-against-gold company that was recently pulled up by the Reserve Bank of India (RBI), keeps getting murkier. On Monday, 6 February, the RBI barred Manappuram and a related sole proprietary firm from raising public deposits, but even before the news was out, the wife of one of the company’s promoters was selling shares in the company.............
Thursday, February 9, 2012
D K Mittal on RBI central board
The government has nominated department of financial services Secretary D K Mittal on the board of directors of the Reserve Bank of India (RBI), taking the number of government nominees on the board to two. Department of economic affairs Secretary R Gopalan is already on the board. The move to have a second nominee is expected to improve coordination between government and regulator. The nomination of Mittal, a 1977-batch Indian Administrative Services officer from the Uttar Pradesh cadre, comes with immediate effect. In August last year, he had taken charge as secretary to the department of financial services after a six-month stint in the ministry of corporate affairs. A finance ministry official said on Wednesday the appointment of Mittal was by name. This meant he would continue to be a director on the board of RBI even if he moved to some other department, the official said. Speculation had been rife about Mittal being a contender to head the commerce department, after the appointment of commerce secretary Rahul Khullar as ambassador to Belgium. The commerce department was where Mittal spent the crucial years of his career — and played a vital role in propelling special economic zones and pushing India’s agenda in the Doha talks. Earlier, there was provision for only one government nominee on the board of directors of RBI under clause (d) of sub-section (1) of Section 8 of the RBI Act. Then, in December last year, the winter session of Parliament saw the Act getting amended to make provision for two government officials. The government has amended its laws to have a bigger say in the decision making of the RBI, by having two members on the central bank’s board as compared to one now. Mittal will be the 18th director on RBI board. The move had not gone well with the RBI, with some of its executives complaining that the amendment, done at the last minute, was not on the agenda earlier. The central board of RBI is appointed by the government for a period of four years to govern the affairs of the central bank. It comprises RBI governor and a maximum of four deputy governors as official directors and 10 directors from various fields and two government officials nominated by the government besides four directors from local boards as non-official directors.
BS
Sharp shots
Reserve Bank of India Deputy Governor K C Chakrabarty is known for his plain speaking and humour but bankers do not always appreciate his remarks. At a function in Mumbai organised by a small and medium enterprises (SMEs) chamber to felicitate bankers for their support to the sector, Chakrabarty said data showed that over 90 per cent of SME entrepreneurs are either self-financed or not financed. “For what are we giving these awards then?” he asked bluntly, going on to suggest ways banks could increase credit flows to the sector. Approached for his reaction to the Deputy Governor's remarks, a senior banker said with some heavy irony, “Once in a while you need entertainment.”
BSReserve Bank of India financial outreach camp at Changki village
Reserve Bank of India (RBI) organized a financial outreach camp at Changki village. The camp was attended by V.S Das, the Executive Director of Reserve Bank of India (RBI). This programme is third of its kind in the state after Khonoma village in the year 2009 and in Chumukedima in the year 2011. RBI according to a press communiqué, stated that since the Platinum celebration in 2009-10, the RBI had organized outreach camps in 218 villages across the country so far. V.S Das, Executive Director of RBI in his maiden visit to Nagaland declared Changki village to be a model village in Nagaland in order to fulfill their vision of bringing all the mass to avail the opportunity of the merits of Banking. He also urge the present banking officials to encourage the system of keeping banking correspondents so that the banks can reach the doorsteps of every costumers and also to know about their grievances and mode of services first hand from the costumers. He also said RBI will have their respective offices in every state of the North East unlike now, since it is only situated in Guwahati for the whole North east and he hoped that the RBI will have an office in Nagaland shortly. RBI Executive Director also focused on the importance of financial literacy and financial education for achieving financial inclusion by sharing his knowledge to the students and the gathered villagers. He also stated that the purpose of such camp is to bring awareness among the people regarding banking facilities available and to bring them under the fold of mainstream banking. Financial Outreach Camp was also attended by officials from banking sector like regional director of North east, Guwahati, banking ombudsman for North East, chief general manager, State Bank Of India, NE circle, general manager, NABARD, general manager, SIDBI and also Lithrongla.G. Chishi, deputy commissioner, Mokokchung.
Nagaland Post
Liquidity deficit not yet down to RBI's comfort level, says Gokarn
The Reserve Bank Deputy Governor, Dr Subir Gokarn, said on Wednesday the CRR (cash reserve ratio) cut and OMOs (open market operations) have not got the liquidity deficit down to comfort levels and there can be more buyback of government bonds or OMOs by the central bank. Though the CRR cut and repeated OMOs have had the desired impact and eased pressure on liquidity, the deficit is yet to reach the RBI's comfort level, Dr Gokarn told newspersons here. “The combined impact of the CRR cut and the cumulative impact of OMOs is starting to bring the liquidity pressure down,” he said. Banks, which were borrowing up to Rs 1,50,000 crore from the overnight window, are now doing up to Rs 1,00,000 crore, which is above the RBI's stated comfort level of a deficit of around Rs 60,000-65,000 crore in the system, he said. On its strategy vis-Ã -vis liquidity injection, he said, “we have not put a stop on OMOs by any means, they are still on the table but they are and will remain as a response to liquidity conditions.” The RBI keeps an eye on the overnight borrowings and the call rates before doing OMOs, he said. Call rates, which are hovering about 0.25 per cent above the repo rate, have come down to “reasonable” levels, he said. To ease the liquidity pressures, the RBI has so far bought government bonds of over Rs 70,000 crore through OMOs and cut the CRR, or the percentage of deposits banks have to park with it, by 0.50 percentage points, which infused a further Rs 32,000 crore into the system. When asked about the possibility of a further cut in CRR, Dr Gokarn said CRR cut is much wider in nature as it is guided by both liquidity and monetary policy aspects unlike OMOs which are directed at liquidity easing only. Dr Gokarn also dismissed the notion that OMOs are done with a view to managing the yields on securities, saying it is liquidity management alone which prompts an OMO.
HBL
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