Thursday, March 22, 2012

Bank cricket losing its charm for want of jobs

………..Shridhar Korgaonkar of RBI was of the view that the job opportunities will get the interest back in to the tournament. “It is one of the biggest tournaments for bankers. Many leading cricketers have participated in it, but lack of job opportunities to cricketers is just not helping the cause. It is sad to see that these youngsters who play on stipend or contracts will not get jobs in future. The management should create opportunities for the young cricketers, otherwise it will be very difficult in future.”…………….

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Can Mumbai ever become international Financial Hub?


....... Of course, the sign of things to come was apparent at one of the functions to debate on the topic. When Rakesh Mohan, the then RBI Deputy Governor, got up to speak on the topic, the sound system fell silent. In desperation, he asked: "Can this city become one?"
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Banking Ombudsman: Slipping Badly

.............On one hand, RBI has deregulated rates and charges and does nothing about the rampant mis-selling of insurance and other products by banks. On the other, stricter account-opening and KYC rules as well as linkages, electronic payments of bills or auto debit on loans and mortgages, make it difficult for customers to switch banks. We need proactive BO to hear customer issues, dispense justice and also provide feedback to RBI to frame better regulation. Is RBI listening?

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RBI offices to remain open on Mar 31 for special clearings

……"With a view to facilitating accounting of all government transactions of the current financial year (2011-12)...all regional offices of Reserve Bank of India and branches of agency banks have been advised to conduct "Special Clearings" with same day return clearing in the evening or night of March 31, 2012," the central bank said in a notification……..

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Strengthen NPA database through existing systems: RBI

……."The RBI plays an important role in providing a large pool of statistics as public good. This, however, puts on it the concomitant responsibility to provide timely, reliable and meaningful data and its dissemination, by harnessing technology to its fullest possible extent,"……
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Stricter norms for jewel loans by NBFCs

.....In a significant move, the Reserve Bank of India (RBI) has tightened the rules for lending against gold jewellery by non-banking finance companies (NBFCs). It has now made it mandatory for NBFCs to maintain a loan-to-value (LTV) ratio of not exceeding 60 per cent for loans granted against the collateral of gold jewellery. Also, it has made it compulsory for them to disclose in their balance sheet the percentage of such loans to their total assets............
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Read - The Hindu

PPF may earn you 9% from April 1

Just a week after the interest rate on deposits to the employees’ provident fund was slashed by 1.25 per cent for 2011-12, the government is set to hike the rate of interest on small saving instruments like the Public Provident Fund (PPF) starting April 1............

Read - Indian Express

Impatient banks move ahead with… RATE CUTS

Tired of waiting for the Reserve Bank of India (RBI) to cut rates and give them a cue, commerical banks are taking matters into their own hands. While substantial cuts in bank base rates have not yet happened, lenders have begun giving small reliefs in various products, to ensure that the customer gets a fair deal...................

Read the full Story - DNA

RBI to conduct survey on collateral issue of banks in J-K

…."As a point was raised about denial of credit facility to entrepreneurs on the demand of collateral is concerned, RBI will conduct a study, a survey in J&K (in this regard to find out for itself)," RBI Governor D Subbarao told a bankers conference Wednesday………
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Take the short-term route

.... However, the Reserve Bank of India's (RBI) capital injection hasn't quite stabilised the debt fund market (March typically sees a tight monetary situation). In the last six months, the apex bank injected Rs 2 lakh crore into the banking system, by lowering the cash reserve ratio (CRR) and through open market operations (OMOs)…..
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SKS Microfinance in focus after RBI extends deadline for micro-lenders' provisioning

…..SKS Microfinance will be in focus as the deadline for new provisioning and asset classification norms has been extended by a year. The Reserve Bank of India (RBI) has deferred the implementation of asset classification and provisioning norms for non-banking financial company-micro finance institutions (MFIs) to 1 April 2013, from 1 April 2012. The move is after taking into account the difficulties faced by MFI sector and the representation received by it, RBI said in a notification………
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No rebate on investment in infrastructure bonds to hit taxpayers


Taxpayers may have got some relief through the increase in the basic exemption limit and widening of the 20% tax slab, but the government has taken away a crucial tax saving option. The budget for 2012-13 has not extended the Rs 20,000 rebate available for investments in infrastructure bonds this year, which was over and above the Rs 1,00,000 maximum rebate available under Section 80C. Infrastructure bonds allowed taxpayers in the highest 30% slab to save a maximum of Rs 6,180 in tax……


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Wednesday, March 21, 2012

Subbarao meets J & K Governor

Jammu, Mar 20: Dr. D. Subbarao, Governor, Reserve Bank of India met N. N. Vohra, Jammu and Kashmir Governor, at Raj Bhavan here this evening. During their meeting, the Governor and Dr. Subbarao discussed various important issues relating to the speedy socio-economic development of the State, functioning of the banking sector in the State and ways to enhance financial inclusion, particularly in the rural areas.
Greater Kashmir

RBI holds outreach programme at village Surara


Jammu, Mar 20: Reserve Bank of India, Jammu conducted an outreach programme today at Surara village in Samba district of Jammu and Kashmir as part of its financial inclusion and awareness drive. Dr. D Subba Rao, Governor of RBI graced the occasion. Among others Mushtaq Ahmed, Chairman and CEO, J&K Bank Mubark Singh district Development Commissioner, Samba M. Rajeshwar Rao, Banking Ombudsman, Delhi and J&K State S.C Rabra, Chief General manager NABARD, other senior government officials and bankers attended the programme. A large number of villagers including women senior citizens, MNREGA beneficiaries, farmers, teachers and students also attended the programme, an official statement said. The Governor visited to the stalls/pavilions set up by various SHGFs/NGOs, NABARD, Government Departments, RRB, J&K Bank and RBI a the venue showcasing their products and services. J&K Bank extended facilities of exchange of torn and soiled notes to the residents. The Governor RBI also interacted with residents and enquired about the problems and difficulties faced by them in getting banking facilities.  He advised bankers to take effective steps for redressal of the problems raised by the SHGs, NGOs and the residents. The Governor RBI also interacted with the school students from Government Middle School, Surara and Government High School Nichla Surara. Dr. Subbarao impressed upon them the importance of financial literacy and highlighted important functions of RBI, and features of genuine currency notes were also explained to the students. The programme was inaugurated in presence of a large gathering. K.K. Saraf, Regional Director, RBI Jammu in his welcome address highlighted the objective of holding the financial literacy programme in the village. Addressing the gathering Governor RBI touched upon the important functions of RBI viz. issuing and managing currency, controlling inflation through formulation of monetary policy, expanding outreach and banking awareness deposit insurance scheme, etc. He highlighted the facilities of no frills account’, General Credit Card, Kissan Credit Cards and overdraft facilities against these accounts and also explained the BC model and mobile Banking scheme through which the above banking facilities could be availed. He advised the villagers to avail the services offered by different banks and to harness the natural potential available in the village and thereby improve their economic condition.

RBI will respond to market demand, if needed: Subbarao

……"this campaign for the financial inclusion is a shake campaign, this is done by the public sector banks, private sector banks and foreign banks soon".  "So the idea is that every bank must participate, all the banks are doing this, how they do this, we left it to them", he said adding "there are various banks to prepare the financial inclusion plans which are discussed and approved in the boards and then are recommended"…….
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RBI Not Looking to Internationalize Use of Rupee

……His comments come amid concerns that the central bank could go back on its long-term aim to make the rupee fully convertible--a requirement for its internationalization--if the risk of the local currency's depreciation escalates.......
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Finance Minister meets the Directors of the RBI Central Board

.....The Union Finance Minister was addressing the customary post-Budget meeting of the Central Board of the Reserve Bank of India held in New Delhi today. Besides Dr. D. Subbarao, Governor of the Reserve Bank, Deputy Governors Dr. K.C.Chakrabarty, Dr. Subir Gokarn, Shri Anand Sinha and Shri Harun R. Khan of the Reserve Bank attended the meeting.......

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Cheques valid for 3 months from April 1


BANGALORE: Bankers' cheques and other monetary instruments will have only a three-month validity beginning April 1, 2012, instead of the existing six months, a Reserve Bank of India (RBI) communique has said. The change is a consequence of an RBI notification on November 4, 2011. Cheques, drafts and pay orders will have a validity for three months from the date they've been drawn. Those having cheques and other monetary instruments with six-month validity before April 1 will have to remit them before this date, when the expiry of the validity will be reduced to three months. After April 1, these instruments will be valid subject to their adherence to the new 3-month rule.

TOI

Small savings set to fetch higher returns

There is finally some good news for individuals in a season of duty hikes and provident fund rate cut. The government is raising interest rate on small savings schemes such as National Savings Certificate (NSC) and post office deposits by 20-50 basis points…………….
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SBI 'banking' on alternative channels

….“Following the recent slowdown in the world and domestic economy, the MSME sector has been affected and the need of hour is to diversify their product line and markets,”…….
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'No immediate steps for rupee convertibility on capital account'

...............“On internationalisation of the rupee, I don’t really see it at this point of time an explicit, strategic objective.... I think the focus, at least in the short- to medium-term policy on capital account management, is gradual liberalisation, though with cognisance and action to mitigate the risks.”................. 

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RBI rejects Dhanlaxmi Bank's priority sector waiver request

The Reserve Bank of India (RBI) has turned down Dhanlaxmi Bank's plea for a one-time waiver of priority sector lending target as tight liquidity forces it to rework its balance sheet, said two people familiar with the development………
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RBI extends deadline for micro-lenders' provisioning

 .... “Taking into account the difficulties faced by the MFI sector and the representation received from these, it has been decided to defer the implementation of asset classification and provisioning norms for NBFC-MFIs to April 1, 2013,” the Reserve Bank of India (RBI) said……..
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Pressure mounts on RBI to cut key rates

A few banks may even move ahead and cut loan rates before RBI announces its monetary policy on 17 April. Pressure is mounting on the Reserve Bank of India (RBI) to cut its key policy rates even as it keenly watches the inflation trajectory in Asia’s third largest economy. On Monday, at the central board meeting of RBI in Delhi, finance secretary R.S. Gujral hinted that the government wants the central bank to lower its policy rates......

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PSBs to miss farm lending target?

.......According to guidelines issued by the Reserve Bank of India on lending to the priority sector, banks are required to achieve a target of 18% of the total credit towards agriculture. The finance ministry has also asked banks to show specific reasons for not being able to achieve the set targets.......

Read - Hindustan Times

RBI: Budget proposals will check inflation


MUMBAI: The Reserve Bank of India on Tuesday supported Finance Minister Pranab Mukherjee's budget proposals and said it would help in moderating inflation that is hovering at 6- 7%. " Food prices are going to play a role as we have some stabilisation and even softening, either because of monsoon in the short term or because of initiatives of the government made quite explicit in the budget that would also help to contain inflation...," RBI Deputy Governor Subir Gokarn said. Asked if the RBI has enough monetary headroom in the light of hardening global crude oil prices, he said, " space is the question of how prices itself evolves. I think its not a meaningful thing in terms of global crisis in which commodity prices remains so firmly and so rigid." 

FPJ

Amid year-end rush, banks scramble for bulk deposits

.........The cash crunch is partly due to market borrowings by the Union government and the RBI interventions in the foreign exchange markets since December to contain the rupee volatility.

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Panel to advise sector-specific cure for NPAs

..... The committee will have representation from the finance ministry, the Reserve Bank of India and some banks. The government has already indicated that containing bad assets will be an important parameter while evaluating the performance of the top brass in state-run banks.........

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Disclosing FII, NRI investments is must, says RBI

...... The Reserve Bank of India has said that companies will have to mandatorily informed the central bank when FII/NRI/PIO investments in them reach sectoral cap or statutory limit…..
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Global financial crisis impacted India significantly: RBI

........ "The global financial crisis impacted India significantly, notwithstanding the sound banking system, negligible exposure of banks to sub-prime assets and relatively well-functioning financial markets," RBI Deputy Governor Anand Sinha said……..
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Ethos of our economy

Regardless of our attaining a seven per cent GDP growth rate in the current year, the stark fact is that the innards of the Indian economy aren't working in the way they should. This is precisely what the central message of The Economic Survey for the current financial year projects, something which cannot make anyone with the nation's well-being in mind, happy...............

Read - HBL

A week of confused policymaking

......The RBI's mid-quarter review of monetary policy did not surprise by its preference for the status quo on the repo rates. Operating within the narrow objectives of price stability, its actions were predictable, if disappointing, for those in the organised economy who hold rising interest rates responsible for a decline in investor sentiments. So do some policymakers. But what cannot be forgotten is that a tight money policy has checked one of the drivers of growth, real-estate, from overheating the economy. For the RBI, inflation still haunts the economy, a view that other policy players share reluctantly, eager as they are to show that their fiscal and legislative initiatives have worked to pull back its relentless climb.......

Read - HBL

Tuesday, March 20, 2012

Yesterday, today and a little bit of tomorrow


Review of Bimal Jalan's book Emerging India: Economic Politics & Reforms
……….Part three covers quite extensively the banking space, which starts with a recollection of the Asian crisis and how we managed it through some conservative policies followed by the Reserve Bank of India (RBI). Though he sounds self-laudatory on occasion, he highlights some of the concerns at that time that are, quite ironically, also the issues that germinated the recent financial crisis — risk management, transparency, regulation and supervision, capital requirements and, most importantly, ethics. In a way, the RBI did display foresight in attempting to strengthen these inherent processes. The discussion on the virtues of a flexible exchange rate regime and caution against capital account convertibility, which distinguished India from the other Asian nations, has also been covered here……………..
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The facts, gentlemen


While cautioning economists and asking them to look at the facts instead of just going by economic theories at the IMF-Icrier “China and India—Sustaining High Quality Growth” conference in the capital, former RBI Governor YV Reddy had an interesting story. As a young man, he went to an astrologer who told him he had no hope of getting employment as he was uneducated, but he needn’t panic as, later in life, his father would bail him out. The 20-something Reddy told the astrologer he was wrong since, not only was Reddy quite educated, his father was long dead. This got the astrologer quite worried and he examined Reddy’s palm again and again, then said that since astrology never lies, it was obvious the palm wasn’t Reddy’s! 

FE

Bending, not bowing


The annual chat between the FM and the RBI Board of Governors has an equally significant lunch that follows it. But on Monday, as the policy mavens and a distinguished janata waited, the lunch time had to be repeatedly postponed. The reason was that the FM was busy in Parliament with the motion of thanks to the President. The delay, we were told, had nothing to do with the FM’s team’s disappointment with the delay in the rate cuts.

FE

Single-point ‘know-your-customer’ to ease form-filling headaches

......At present, each sectoral regulator — the Securities and Exchange Board of India (Sebi), Insurance Regulatory and Development Authority (IRDA), the Reserve Bank of India (RBI), Pension Funds Regulatory and Development Authority (PFRDA) and the Forward Markets Commission has different KYC requirements.........

Read - Hindustan Times

The Good, the bad and the ugly

There was volatility and uncertainty due to major events on the domestic front. We had the IIP numbers, inflation for the month of February, the Railway Budget, Economic survey, RBI credit policy meet and the Union Budget. Due importance was given to the RBI policy and Union Budget...........

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RBI can't ignore impact on current a/c deficit: Reddy

Former RBI Governor YV Reddy says that monetary policy cannot ignore impact on aggregate demand and current account deficit. He said that the policy has to take care of inflation as well. "Now, if you don't impose excise duty then you'll have more fiscal deficit, which is also going to add to inflation. There are different ways and the underlying inflationary pressure, you don't increase the diesel price, then it may not show up. But, it'll have to show up somewhere else because somebody else will have to pay for it. So in the ultimate analysis, if painful actions have to be taken, by postponing painful actions, you are adding to under lying inflationary pressure which doesn't show up. My own sense is that the underlying inflationary pressure in India now is a lot more than what many people appreciate," he explains.

Watch the video................

Cases on fake currency notes reported from banks

.... “Some of the co-operative banks and small private banks do not have the facilities to detect fake currency notes. We are planning to make it compulsory at all the banks so that counterfeit currency notes cases can be detected easily,” said RBI officials.......

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Banking hours to be extended on March 30, 31 – RBI


MUMBAI (Reuters) - All regional offices of the Reserve Bank of India and branches of agency banks will extend banking hours on March 30 and 31 to facilitate receipt of government revenue even at late hours, the central bank said on Monday. The RBI will communicate details of a special clearing on March 31 to the banks separately, the RBI said. 

Moneycontrol

Annual Statistics Conference 2012 of the Reserve Bank of India

Opening Remarks by Shri Deepak Mohanty, Executive Director on March 17, 2012 at Chandigarh

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RBI asks banks to update al-Qaida list

...... "State and Central co-operative banks and regional rural banks are required to update the list of individuals/entities as circulated by the Reserve Bank and before opening any new account, it should be ensured that the name/s of the proposed customer does not appear in the list,"........

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Nabard seeks Rs 5,000 cr from Centre

........ The thrust of the financial inclusion programme is on electronic platform-based transactions. Nabard has begun work on establishing core banking solutions at more than 400 state and district central cooperative banks. It has roped in WIPRO and Tata Consultancy Services for rolling out CBS at its branches. The next phase would involve bringing about 53,000 primary agriculture credit societies on to this platform. Bakshi said this may help these to function as business correspondents in the future.

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Financial sector reforms a continuous process: YV Reddy


New Delhi : Financial sector reforms are a continuous process and fixed reforms agenda does not help in fast changing economic scenario, former RBI governor YV Reddy today said. "The financial sector reforms agenda has to serve the purpose of overall economic growth. That is one lesson from the global economic crisis," Reddy told reporters on the sidelines of conference on 'China and India: Sustaining High Quality Growth' here. Financial sector reforms should subserve the real economy, he said, adding that the world is changing fast and so are the macroeconomic conditions. Therefore, you should not have fixed reforms agenda and say some committee gave a report therefore we should do it. "Reform is a continuous process and it should be continuously evaluated, with the objective of improving the real economy," Reddy said. The conference was co-organised by the International Monetary Fund (IMF). Speaking on the occasion, IMF's Asia Pacific Department Director Anoop Singh said that India and China would lead the global economic growth in the coming years. 

BS

RBI allows foreign VCs to invest in equities via third parties

In its bid to deepen the equity and debt markets by attracting overseas funds, the Reserve Bank today allowed foreign venture capital investors to invest in securities through private arrangements or purchase from a third party....................

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RBI to FM

.....The problem is with the fiscal math for 2012-13 that the ministry is asking the rest of the world to believe in. Judging by the statement issued after the meeting, the RBI Governor has concerns on the fiscal consolidation.........

Read - FE Editorial

Unions divided over allowing biz correspondents to serve other bank customers

Move to allow business correspondent of one bank to serve customers of others has evoked mixed response from unions. While one bank union opposed it, another said that it does not have any problem if the business correspondent (BC) restricts itself to basic services. In a circular dated March 2, the RBI decided to permit interoperability of business correspondents (BCs) at the sub-agent or at retail outlet level, provided the technology available with the bank, which has appointed the BC, supports it............

Read - HBL

Subbarao Boosts RBI Transparency as India Bond Buying Climbs

The Reserve Bank of India’s tomes on interest-rate policy made Subir Gokarn despair when he was a Standard & Poor’s economist. Now a Deputy Governor, he’s part of the biggest communication overhaul in the bank’s 77-year history. “That really wasn’t the best way to do it,” Gokarn, 52, who joined the RBI in 2009, said in an interview in Mumbai last month. “Keep it short, keep it straightforward, so it takes five, 10 minutes to read and most people read it.”.............

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Budget points to lack of fiscal discipline

The critical policy week for the Indian economy — which included the Budget and RBI monetary review — proved to be a damp squib. The Budget did not take any credible steps on fiscal tightening, nor did the RBI reduce interest rates. However, RBI did effect a cut in the cash reserve ratio the week before..............

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Budget 2012: Fire fighting FM says interest rates may come down soon

The finance minister Pranab Mukherjee today held discussions with the board of the RBI. The finance ministry has indicated that it expects the central bank to reverse policy rates and help improve overall sentiment. Post the meeting, Mukherjee said that he would give due consideration to issues raised by the RBI board. Mukherjee also added that all efforts will be taken by the government to find a collective solution for problems facing the Indian economy...........

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Panel discuss oversight body for improved financial regulation

A panel of sectoral regulators headed by RBI Governor D Subbarao today discussed setting up an inter-regulatory body to improve supervision on the financial sector. The sub-committee of the Financial Stability Development Council (FSDC) also reviewed the development in the global economic and financial sector scenario, focusing on issues relating to potential systemic risks for India. "The Sub-Committee deliberated on a proposal for setting up an inter-regulatory forum for improved co-operation for effective supervision of Financial Conglomerates," the Reserve Bank said after the meeting..........

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The elusive policy mix

...... One of the reasons for the slow growth witnessed in the past year has been the adverse monetary and fiscal policy mix in the country. If there was one thing that the 2012-13 Budget was expected to redress, it was the adverse policy mix. The Reserve Bank of India (RBI)—both in its third quarter and mid-quarter review of monetary policy—had highlighted the importance of right fiscal conditions in shaping the inflation outlook and, implicitly, the speed of monetary loosening in the months ahead.Has the budget addressed this issue properly?.........

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Weak dollar flows, trade gap add to concern over inflation

 ........ If budget 2012-13 is expected to spur the Reserve Bank of India (RBI) to bring down interest rates, there is little evidence to support that presumption. RBI has already signalled its worries on the government’s gargantuan borrowing requirements that are hardly supportive of an interest rate reduction, as stated in the December mid-quarter monetary policy review..........

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FSDC panel mulls forum for financial conglomerates

......Significantly, the sub-committee, which is headed by RBI governor D Subbarao, also discussed a proposal for setting up an inter-regulatory forum for improved co-operation for effective supervision of financial conglomerates. ........

Read - Indian Express

Inflation will stabilise: Pranab

New Delhi : ......Interacting with the media after chairing the central board meeting of the Reserve Bank of India (RBI) here, Mr. Mukherjee said: “Couple of months, there will be fluctuations [in inflation] ... So I do hope that after couple of months it will stabilise”.......

Read - The Hindu

UBI gets nod to open office in Myanmar

United Bank of India, the designated Banker for Indo-Myanmar trade has got the Reserve Bank of India's nod for opening a representative office in Myanmar..........

Read - The Hindu

MFIs breathe easy with improved fund flow

........The normal situation in non-AP States, and clarity on the regulatory front (except in AP) with creation of Non-Banking Finance Company-MFIs by the Reserve Bank of India, allowing banks to buy loan portfolios from MFIs to meet priority sector obligations, have been driving this funding, say experts........

BusinRead - HBL

Why Sebi should re-open the Jalan committee report

........ it should not be forgotten that one of the main objectives behind the setting up of the committee was to frame clear policy regarding ownership of exchanges. This should be done sooner rather than later, especially given the complications that have arisen because of the lack of clear guidelines. Even so, the regulator has chosen not to frame new rules relating to the ownership and governance of stock exchanges. If the Sebi board had reservations about the recommendations of the Jalan committee, it could adopt the same approach it did with the new takeover code.................

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135 companies participate in IIMK final placements

.................Apart from major Indian and international companies across finance, marketing, operations, consulting, general management, IT and HR sectors, a slew of public sector undertakings figured in the recruitment drive at IIMK. They included ONGC, Power Finance Corporation, Power Grid and Bank of India. The Reserve bank of India and UTI also took part in the process.

Read - HBL

Monday, March 19, 2012

Co-operative banks to be linked to nationalized bank ATMs

Surat : Lakhs of account holders of co-operative banks will soon be able to withdraw money from nationalized banks' 84,000 ATMs across the country. Nearly 60 cooperative banks in the state, including 15 from south Gujarat, have started the process to get connected with the nationalized banks after Reserve Bank of India (RBI) took a decision in this regard recently……….
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Fake Indian currency recovered, three held

…..Four northeastern states – Assam, Meghalaya, Tripura and Mizoram – share a 1,879-km border with Bangladesh, part of which is porous, riverine and unfenced. The area is prone to frequent smuggling of numerous items, infiltration and occasional skirmishes. Fake currency in Rs.500 and Rs.1,000 denomination is mostly in circulation in the northeast region. Nationalised banks and various other financial institutions in northeast India have taken a series of measures, including installation of fake note detection machines, to identify fake currency.

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It's fake money, honey

………"The actual amount of fake currency floating in Gujarat could be much more - at least 10 times the amount recovered from banks," said a police official who is probing the case. The matter is now being investigated by the city police as an RBI directive makes it mandatory for all banks to hand over fake currency notes to the Special Operations Group (SOG) and the crime branch every month.…….

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Meet the right man in wrong job: Kaushik Basu never cut out to be govt economist

…….FMs haven't always had good relationships with CEAs. That's not true of Kaushik Basu and Pranab Mukherjee. However, after Bimal Jalan (CEA stint in early 1980s) I can't think of a single CEA who has had significant impact on policy. Kaushik is no exception. Perhaps times have changed. Perhaps it requires good inter-personal relationships with higher rungs of civil servants (especially North Block and RBI), which "government economists" possess and completely lateral entrants don't. What about the Economic Survey. Few CEAs paid any attention to Survey. (Arvind Virmani was an exception. Rakesh Mohan talked about it, but didn't do much.)……… 
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Where will the money come from?

…….Even after cutting CRR twice, the Reserve Bank of India (RBI) has not yet pared its policy rate—something that doesn’t happen too often. This marks quite a shift in the Indian central bank’s monetary policy—CRR has become an independent tool for liquidity management. The reason behind the CRR cut is acute cash crunch in the system. The daily cash crunch, which peaked at Rs. 1.90 trillion in early March, could have risen further by this time on account of advance tax outflow had RBI not gone for CRR cut ahead of its quarterly review of monetary policy……..

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HDFC Bank crosses 1 m in rural loan initiative

.............The objective of the programme was to help 10 million families (40 million families) become self-sufficient through its ‘Viable Finance' initiative. RBI Deputy Governor, Dr. K C Chakrabarty, and HDFC Bank MD, Mr Aditya Puri, participated in the programme.

Read - HBL

Caveat emptor — Boon or bane?

The credit / debit card market has witnessed a fast growth with increasing number of banks offering the facility, more establishments willing to accept them and more consumers finding it a convenient mode of payment. In such a scenario, the Reserve Bank of India has issued several guidelines to protect the interests of card holders. However, issues persist..........

Read - The Hindu

Corporate finance - less capex, more financialisation

Growth feedback effect and productivity gains emanating from a steady capex in the industrial sector provides a sustainable base for GDP growth trajectory. However, a comparative analysis of the Reserve Bank of India's annual study of financials of non-government, non-financial public limited companies during the decade of 2000s over the decade of 1990s, reveal a disturbing trend. ..................

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Banks to start rate cuts after prod by govt

Taking cues from the government, banks led by State Bank of India are going to begin selective reduction in interest rates, starting this week…………

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RBI says meeting higher Govt. borrowing a challenge

The Reserve Bank has said it is a tall order to manage government’s enhanced borrowing next fiscal but it will do its best. “It is going to be a challenge managing the enlarged borrowing programme ... but certainly we will see how best we manage,” Deputy Governor H.R. Khan, who oversees the government’s borrowing programme at the central bank, said...............

Read - The Hindu

Budget 2012: Time is right for rate cut, says R. Gopalan

Can this growth scenario play out without support from the monetary policy?

The RBI takes a number of things into account. It takes into account fiscal deficit and the underlying inflationary pressures in an economy. It looks at global factors and the core inflation. RBI has to take care of inflation but it has multiple roles. It also has to look at growth. So, with all this it ismore reasonable to presume that there could be rate reversal. The time is ripe for it to happen……………
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Bond yields may stay firm amid tight liquidity

…………..Reserve Bank of India Deputy Governor H R Khan said the government’s market borrowing programme is a challenge for the central bank. However, RBI has tools like OMO, cash reserve ratio and liquidity adjustment facility (LAF) to manage liquidity-related issues…………

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Bank rate lives to die another day


…..Rangarajan’s successor Bimal Jalan repositioned the bank rate as the real signalling rate on the lines of the US Federal Reserve rate and delinked it from all refinance rates. This is in conformity with the recommendations of the report of a panel on financial sector reforms, headed by former RBI governor M. Narasimham. Jalan was in favour of using the bank rate sparsely, and focus on other instruments like repo rates, etc., to send short-term interest-rate signals…………


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'Present situation not right for rate cut'

.........."In my opinion, if the RBI cuts CRR by 100 bps...the banking system on its own will reduce interest rates. So, CRR is more important at this point of time than policy rate cuts."...........

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Clamour for 10-year NRE deposits increases

.......Banks in India received a net inflow of $1,067 million into non-resident external (NRE) accounts during November 2011, compared with $406 million in October 2011, according to the Reserve Bank of India (RBI) data, coinciding with the depriciation of the Indian rupee and the higher interest rates offered on NRE deposits. However, there are those who feel that 10 years is too long a time to take a stance on interest rates........

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Swiss bank account: The smart ones saw it coming as fewer rooms left at home to park black money abroad

……A typical transaction to move money from Switzerland involves buying a shell company in Dubai or Singapore, opening an account of the company through the Reserve Bank-approved liberalised remittance scheme that allows investments up to $200,000 a year per person. This allows the Indian resident to hold shares of a paper company having account with a bank in Dubai or Singapore. A year ago, RBI, which perhaps had a whiff of what was on, barred residents from using the scheme to float new companies. But it has hardly been a deterrent as there is an army of lawyers ready with paper companies that are up for sale…….

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ED asked to look into deals of Dubai hotelier who saved Indians from gallows

……….Indicating a nexus, the whistle blower has said despite he being an informer on whose information, the income tax survey was made, the department is withholding information regarding the seizure to the informer. Vijay Pal Singh has moved an RTI appeal for this information.  The complaint has also recorded that banks are duty-bound to report the matter to Reserve Bank of India but nothing happened.

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Sunday, March 18, 2012

RBI's financial Outreach Camp to be held

Imphal, March 17 2012: Reserve bank of India (RBI) as part of its Platinum jubilee celebrations, had organized financial outreach Camps in various villages of the North Eastern States in the year 2009 and 2010 . Encouraged by the response received and the success of the Financial Outreach Camps, Reserve Bank of India has now launched the third phase of such camps in the North East and is organizing another camp at Kimin Village in Arunachal Pradesh on March 26, 2012, according to a source from RBI. The purpose of such camps is to bring awareness regarding banking facilities and make an attempt at making available such facilities to every adult citizen in the target area and for bringing them under the fold of mainstream banking. It is very important for every adult citizen to have a bank account since a scheduled bank is not only a safe place to deposit his/her hard earned money, but also a channel which links the account holder with the broader network of payment and settlement platform enabling easy remittance and payments anywhere in India. Moreover, all can get loans from the banking system at reasonable rates of interest under various schemes for all the requirements such as education, personal needs and for business. Many of the schemes are primarily targeting Below Poverty Line citizens and underdeveloped areas of the country, the source maintained. The Camp at Kimin Village on March 26, 2012 would be inaugurated by H R Khan, Deputy Governor, Reserve Bank of India. Chief Secretary of Government of Arunachal Pradesh, Regional Director, Reserve Bank of India, Banking Ombudsman for North East, Chief General Manager, State Bank of India, NE Circle, Chief General Manager, NABARD, District Magistrates and Papumpare District will also be attending the camp. To dissipate information on various facilities/schemes, stalls would be set up at the camp by RBI, Office of Banking Ombudsman, NABARD, various banks like SBI, UBI, UCo Bank, Arunachal Pradesh Rural Bank, Arunachal Pradesh State Co-operative Bank, NEDFi, SIDBI, KVIC, KVIB, NSIC, Agriculture/Veterinary Department, the source disclosed.

RBI to be spared from wealth tax


Imagine the Reserve Bank of India (RBI) being asked to pay wealth tax. Sounds bizarre? The government has just realised that the central bank need not pay wealth tax and to stem any embarrassment it is planning to amend the Wealth Tax Act to ensure that the tax is not levied on the RBI which is the banker to the government and custodian of the country's gold reserves….....


Hiking indirect taxes a smart move, says RBI deputy governor Subir Gokarn

Finance Minister Pranab Mukherjee's Budget proposal to raise excess revenue from indirect taxes rather than touching the direct taxes is a smart move, as it does not require a Parliamentary approval, Reserve Bank has said. RBI Deputy Governor Subir Gokarn said this method improves the reliability of garnering the necessary revenue as change in indirect taxation is an executive decision, and does not have to be approved by Parliament................
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HC notice to RBI over firms’ gold loans

A division bench of the High Court of Karnataka headed by Chief Justice Vikramajit Sen has issued notices to the Governor of RBI, chief secretary of Karnataka and the Registrar of Societies for failing to regulate non-banking financial institutions Mannapuram Finance and Muthoot Fincorp, both of which deal with gold loans…….

Read - Mirror (Bangalore Edition)

Plea to set up debt management office for banks

.......It was very important that the relationship between the Union and the State governments and that of both with the RBI be taken into account before giving shape to the structure of DMO. He said the proposed debt management office should be an independent, autonomous body with equal participation of the Union and the State governments and the RBI, with independent views, goals and objectives...............

Read - The Hindu

Maharashtra govt injects Rs 50 cr into MSCB to achieve 4% CRAR

……. "The government has recently conveyed to Nabard that it was prepared to allocate Rs 5 crore or more to MSCB to achieve the CRAR of 4% from 3.95%, as shown by Nabard. Accordingly, a provision has been made and included in the supplementary demands tabled in the state legislature on Thursday. The ball is in now in the court of Nabard and ultimately of RBI to grant banking licence to MSCB."…….
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An example worth appreciating/emulating


Dear All

The following report appeared in the Hindu on March 15, 2012.

Regards

M G Warrier, Thiruvananthapuram
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A gesture of appreciation to society


THIRUVANANTHAPURAM: When H. Ganesan retired from the Reserve Bank of India (RBI) as Manager after 37 years of service, he wanted the occasion to be more than just a meeting. “I wanted to make an occasion to express my gratitude to my friends, family, and dear ones for the good things that have happened in my life. I also wanted to give back something to society because I have come up in life the hard way and have benefited from the many acts of benevolence of society,” Mr. Ganesan says. He chose to do a few things which he thought would never go waste. The Government Hospital at Fort, which has been rendering medical care to all in the locality since ages and used to be a big source of solace to Mr. Ganesan and his family, was to be the first beneficiary. “We had great faith in this hospital, its doctors, and the red-and green-coloured medicines which used to be dispensed from the huge glass bottles to everyone. I believe that government hospitals, as institutions rendering public health service, should be strengthened and patronized by more of us,” he says.



Hospital equipment

On March 1, at a function in Thiruvananthapuram, Mr. Ganesan handed over equipment to the tune of more than Rs.1 lakh to the health authorities as a token of appreciation for the service rendered to the poor. The equipment included wheelchairs, a walker, glucometers, blood pressure apparatus, nebulisers, water purifier, ceiling fans, mattresses, bed-sheets, waste buckets and the like. Mr. Ganesan says he visited the hospital several times to assess its requirements and ensure that he only bought items that would not be supplied by the government. As a token of gratitude to the staff at the RBI canteen who, he says, fed him good food all through his years in office, he handed over 14 savings bank (SB) and recurring deposit (RD) account pass books to the canteen employees in whose names he had opened bank accounts. The accounts were zero balance operable accounts with an initial deposit of Rs.900 in SB account and Rs.100 in RD account and included an insurance cover for Rs.5 lakh. He also distributed blankets and bed-sheets to 25 elderly, indigent persons. Hailing from a poor Brahmin family in the Fort area, Mr. Ganesan remembers the years of penury when he and his six siblings depended on the ‘padachoru’ and ‘prasadams’ from Sree Padmananbhaswamy temple for subsistence. He could not go for higher studies, but after he joined the RBI as a typist, he acquired MA, MBA, and M. Phil. Degrees through self-study and correspondence courses. He is currently pursuing his doctorate in Healthcare Administration at Madurai Kamraj University. “All this was possible because of the grace of God which showed itself in so many acts of kindness of many people. It was my duty to do whatever I could to thank God,” he says. 

Budget 2012: Infra bonds may no longer be tax-deductible

……….. Investors should not confuse the increase in the permission given to institutions to raise additional amounts of tax free bonds with this particular benefit. Those are tax free bonds where the interest earned is not taxed while these are bonds that allow for deduction based upon the amount of investment in the bonds and the interest income earned here is taxable.
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Budget 2012 - Merely a management game : Subir Roy

…….What is, however, most likely to happen is that the deceleration in the inflation rate witnessed in the last few months is likely to be halted, at least temporarily, courtesy the across-the-board rise in indirect taxes. Seeing this, the Reserve Bank of India is likely to go easy on any action to lower interest rates, in line with its inaction in the latest review of monetary policy. If we note that the deceleration in the growth rate over several quarters to as low as 6.1 per cent in the third quarter of the current year was critically due to the central bank’s anti-inflation policy of dear money — and that a cheap money regime may not arrive in a hurry — then how will the growth rate go up to 7.6 per cent next year from this year’s 6.9 per cent? And, without higher growth, what happens to revenue buoyancy and correction of the fiscal balance?.........
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Budget 2012: Do we need a 1990s crisis to shock us into reforms?

…..There is some hope that the RBI will cut rates in April. But with such a deficit, high global liquidity and so much left to be done to correct administered prices, it is tough to expect the RBI to oblige. Deputy Governor Subir Gokarn may have sounded appreciative of the government’s tax increases to bridge the deficit, but if month-on-month core inflation rises, as it well may, the RBI may find itself postponing the much awaited rate cut........
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Possibility of fiscal slippage is low: RBI

The Reserve Bank of India (RBI) believes that the scope for fiscal slippage in 2012-13 is low because the government’s plan to reduce the fiscal deficit is based on revenues coming in from higher taxes and had addressed the supply bottlenecks that had been worrying the RBI..................

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No service tax on Metro, taxi, 2nd class rail travel

……….As regards sale and purchase of foreign currency, it has been clarified that such activity among the banks and dealers will be kept out of the Service Tax net. However, by implication, the sale of foreign currency by dealers to individuals will attract the levy. It was also pointed out that the services provided by the Reserve Bank of India (RBI) and foreign diplomatic mission will be kept out of the purview of the tax net……..

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How to ensure safety of ur bank locker & bank locker charges

......According to the Reserve Bank of India, the relationship between the Bank and the Locker hirer is that of the ‘Bailor and the Bailee’ and not that of the “Landlord and the Tenant”. ...........

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A ferocious great of Santiniketan

......The Yaksha-Yakshi series sculpted as the mythical guardians for the Reserve Bank of India building also grab one's attention at the exhibition as does his equally well-known sculpture of Gandhi.......

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Saturday, March 17, 2012

Banking should reach all: Suma Verma


KASARAGOD, Kerala : The benefits of banking should reach all sections of society, Reserve Bank of India (RBI) Regional Director (Kerala and Lakshadweep) Suma Verma has said. She was taking part in a face-to-face programme for the customers of the Pavoor ‘satellite branch' of the North Malabar Gramin Bank (NMGB) here on Thursday. Some of the customers said they were unaware of agriculture lending schemes, interest concessions, and subsidies offered by the banks.Some said they depended more on non-banking financial companies to meet their requirements. RBI General Manager Anil K. Sharma said those making timely repayment of agricultural loans were eligible for a concessional interest rate of four per cent. RBI Deputy General Manager K.D. Joseph handled a session on detecting fake currency. Ms. Varma distributed loan sanction letters to customers. National bank for Agriculture and Rural Development Assistant General manager N. Gopalan; NMGB General Managers U. Sreenivasa Menon and K.P. Chandrasekharan; and Syndicate Bank Chief Manager Ajith Kumar Menon attended. NGB Regional Manager D. Damodaran welcomed the gathering and Manager (Kunjathur branch) Y.K. Govinda Bhat spoke.
HBL