Take money out of the system to tame inflation: Lord Paul

..........."We need to control inflation which will hurt the industry, because the only way to control is to tighten the money flow. That is the temporary measure, but you have got to take (it)...This is the only way to control inflation...take money out of the system,"...........

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RBI monetary review: Banking sector focussed on performance

Even as the Reserve Bank of India (RBI) is readying to cut the repo rate for the first time in three years in its monetary policy review next week, bankers have little to cheer when it comes to performance........

Read - Business Today

Economy facing challenges but we'll overcome them: Manmohan

....Dr. Subbarao, while expressing concern over the widening fiscal and current account deficits, asserted that the economy now (in 2012) was far more resilient than what it was in 1991. The current downturn, he noted, was a short-term phenomenon and the economy was mature enough to absorb ‘shocks' and the country's growth story was intact. “The structure of the economy has changed [since 1991]. Our financial markets are more mature, more diverse and much deeper. They have the resilience to absorb shocks,” he said.....

Read - The Hindu

RBI gold loan norms hit NBFCs

.......The RBI's recent regulations have hit the top as well as bottomline of the NBFCs. In India, gold buying is a regular process, and the attraction to the yellow metal is expected to continue..

The regulations may negatively affect the gold loan business in the short term for NBFCs but, in the long term, the overall gold loan market is set to grow as long as the demand for gold is growing in the country.

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'Microfinance Bill impediment for self-help groups'

... The Microfinance Bill in its present form may hurt the growth of the Self-Help Group (SHG) programme being run across states to bring people above the poverty line, according to Union rural development minister Jairam Ramesh. “The Bill needs to be rewritten. MFIs are not instruments for poverty alleviation,” Ramesh said in an interaction with reporters after he reviewed initiatives by NABARD in an SHG-bank link programme.......

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Approaching a banking ombudsman

....There is also a listing of the addresses and area of operation of the different BOs in the RBI Web site along with hyperlinks to mail your complaints to them. You can either click on these links and email the BO directly or fill up the online complaint form in the RBI Web site. A written complaint can also be filed. A printed form is available for the same. Note that there is no fee/charge for filing........

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Demand for coins goes up on Vishu eve

Kochi : As Vishu, the old Malayalam New Year is just two days away people are queuing up in front of the Reserve Bank of India (RBI) counter here to collect fresh coins and currency notes...........

Read - Deccan Chronicle

Banks told to allow customers to use NEFT facility

....The Reserve Bank of India has advised all banks to allow their customers to use the National Electronic Funds Transfer (NEFT) facility for repaying loans. This directive comes as the RBI has received some complaints from customers regarding non-acceptance of NEFT for credit to loan accounts, thereby causing inconvenience to them.......

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Banking channels hit by counterfeit notes

BANGALORE: Despite new security protocols adopted by the RBI and stringent measures taken by public sector banks (PSBs), counterfeit notes continue to be pushed through “banking channels” via innocent customers and hawala operators on a day-to-day basis. Many bankers say, “The volume of transactions is so huge that it is not possible to detect every fake Indian currency note (FICN) that is circulated by conduits surreptitiously either sandwiched between bulk deposits or in the ATMs.” According to RBI Annual Reports, the number of detection of FICNs has increased from 1,04,743 pieces detected in 2006 to 4,35,607 pieces in 2011. “With 90 per cent detection, it shows there is a high level of awareness among bank employees,” the report claims.....

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High court notice over proposed merger of cooperative banks

AHMEDABAD: The Gujarat high court on Friday issued notice to authorities after a PIL challenged the proposed merger of the Kalupur Commercial Co-operative Bank Ltd with Surat's Udhna Citizen Co-operative Bank Ltd. The HC sought reply from the Centre, the Reserve Bank of India, the co-operative registrar and banks' authorities within a week's time on petitioner Consumer Protection and Analytic Committee's plea……………

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Crisis hits cooperative banks in Maharashtra

….The crisis of these banks is mainly attributable to a tight stranglehold the unscrupulous politicos have long exercised over them. Additionally, the banks have seriously been damaged by a series of financial scandals. The DCCBs get money from the banks that in turn get their fund from National Bank of Agriculture and Rural Development (NABARD). As these banks play an important role in the distribution of agricultural credit, their collapse would have serious consequences.…..

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Court notice to state, RBI on cooperative bank irregularities

.... A division bench of justices Bhushan Dharmadhikari and Prasanna Varale also served notices to National Bank for Agriculture and Rural Development (NABARD), Reserve Bank of India and state cooperatives commissioner besides MSCB. Anil Kilor pleaded for petitioner Jan Manch while Bharti Dangre represented the government………….

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RBI to conduct onsite inspections on banks' overseas arms

In a bid to stem the cascading impact of global economic turmoil, the Reserve Bank of India (RBI) has decided to delve deeper into international businesses of domestic banks. The regulator has revived the process of making onsite visits to foreign branches/subsidiaries of domestic banks after more than two decades, a source from RBI told Moneycontrol.com. "In two weeks time, a core team from the department of banking supervision (DBS) at RBI will start conducting such onsite visits. It will conduct random inspections on any/all overseas branch(s) if they sniff problems in the concerned region. Currently, the focus is on Singapore and Hong Kong," said the source on condition of anonymity.…………

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Coming: a mortgage guarantee company

....The dream of banks and Home Finance Companies (HFCs) is going to be realised very soon as NHB (National Housing Bank), the regulator for HFCs, has set up a Mortgage Guarantee Company (MGC) which will be operational soon.........

Read - The Hindu

Online RTI remains far cry for NRIs

.... Department of posts had offered its e-commerce portal of department of posts at to help Indians living abroad in filing RTI applications. The matter is stuck now as Reserve Bank of India (RBI) has put a number of technical conditions, including security issues, before the service can be opened up for the consumers……

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RBI advocates implementing corporate governance code for SMEs sector

Reserve Bank of India (RBI) on Thursday said there is a need to implement a corporate governance code for SME sector. "There is a need to implement SME's corporate governance code," RBI Deputy Governor K C Chakrabarty said while speaking at the Economic Times Thought Leadership Conclave.He said that in spite of various measures taken by the RBI and the government, availability of credit to Small and Medium Enterprises (SMEs) continues to remain a major issue in the development of the sector in the country. "Adoption of corporate governance framework by SMEs in India is indispensable for taking this sector to a higher growth trajectory," he said……….

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Major strides: India opens door to more trade with Pakistan

…..…The Reserve Bank of India (RBI) and the State Bank of Pakistan (SBP) have held several rounds of talks in this regard and a very positive situation has emerged. “Both RBI and SBP are in favour of opening up of branches on both sides of the border,”……

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Banks meet RBI’s credit, deposit targets

Banks have managed to meet the credit and deposit growth targets the Reserve Bank of India (RBI) set for them in the fiscal ended 31 March. The latest data from RBI shows banks managed to achieve a credit growth of 19.3% and a deposit growth of 17.4%. RBI’s targets were 16% and 17%, respectively. RBI had lowered its credit growth forecast to 16% from 17% in its January monetary policy
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Bank deposits in the district Rs 35,202 crore

…..V Raveendran, Assistant General Manager, Reserve Bank of India, and K T Thrivikraman, District Development Officer, NABARD, reviewed the performance of banks. V R Muralidhar, District Manager, Deputy/Assistant General Managers of various banks, senior officers of various government departments and others participated……..

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"Financial regulatory structure riddled"

……………The Reserve Bank of India, for instance, is the banking regulator besides a banker to the government and also a monetary policy maker. Apart from regulatory and quasi-regulatory bodies, there are central and state government ministries involved in policy making, said secretary general D.S. Rawat. A Financial Stability and Development Council (FSDC) has recently been set up for macro-prudential supervision of the economy. Its mandate includes addressing functioning of large financial conglomerates and inter-regulatory coordination issues besides promoting financial literacy and inclusion. But the FSDC is neither a statutory body nor an oversight agency…………

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RBI Governor’s perennial dilemma: Growth Vs inflation

..... The Reserve Bank of India (RBI) is again facing a chicken and egg situation, as it has the unenviable task of deciding its priority, whether controlling inflation or propelling growth, when it announces its annual monetary policy on 17 April, 2012. The central bank has been flooded with suggestions and expectations, bordering on pressure, to cut interest rates and ease liquidity with a view to encourage growth, which has fallen below 7% during 2011-12. The macro-economic indicators, however, are giving contrary signals, indicating on the one hand continued high inflation and on the other, slower growth of industrial production. The index of industrial production (IIP) numbers of February 2012 just released shows a growth rate of 4.1%, which is much below expectations, What will the RBI do under these circumstances is being watched with keen interest......

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Pranab orders probe into ‘baffling’ IIP data

….The latest episode is seen to have cause a huge dent to the already sagging credibility of economic data in the country. Even RBI has in the past complained about the volatility in data……

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Hard decisions needed to boost economic sentiment: Rangarajan

…..Asked if he saw a case for rate cut by the Reserve Bank of India (RBI) in its credit policy to be unveiled on April 17, Rangarajan said, "It's not just a monetary policy (by RBI). I don't think adjustment on interest (rate) alone will bring about the desired results. All that we really need to do is to push up the sentiment in the economy."……….

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This is a serious handicap for policymakers: C Rangarajan

Dealing with data when he was the Reserve Bank of India governor, as the Finance Commission head and now as the chairman of the Prime Minister’s Economic Advisory Council, C Rangarajan finds the index of industrial production numbers (IIP) for January a serious handicap…………

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70% expect RBI to cut rates on Tuesday: CNBC-TV18 poll

The dismal IIP performance has raised hopes of a rate-cut from the RBI come Tuesday. Among 70% of those polled by CNBC-TV18 expected the RBI to cut repo rates by 25 bps. A minority 15% expect a 50 bps cut. About 45% of the respondents expect a 25 bps CRR cut. But a majority 55% expect no change on the CRR front. According to C Rangarajan, chairman, PMEAC, "It's not just a monetary policy (by RBI). I don't think adjustment on interest (rate) alone will bring about the desired results. All that we really need to do is to push up the sentiment in the economy."………..

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RBI credit policy: CRR cut or rate cut?

Watch the video...................  

Subbarao, pls set more realistic inflation targets

..... If inflation does trend down sharply, the RBI will have room to cut policy rates aggressively. The RBI should not be expected to stick to its forecasts throughout the year, but forecasts should broadly be in line with policy actions rather than policy actions being driven by forecasts going wrong.

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Why expectations are high that RBI may cut rates

……… According to the RBI, reducing the key policy rates to promote investments depends on a moderation in the inflation rate and fiscal consolidation. The RBI has been following a tight monetary policy stance since the beginning of 2010, following a spike in prices of commodities. For a change this time there is widespread expectations that the central bank may cut the key policy rates to accelerate growth and investments………..

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Will the RBI change its mind?

……It is critical that the RBI should cut the repo rate and should start doing that now. For, every passing week means a loss of 21.8 billion rupees in investment, 73.6 billion rupees in GDP and 30,000 in employment. The deeper the cut, the sooner the economy will recover. But the rise in repo during inflation was in baby steps; and the fall may not be faster. At best a 25 bps is likely next week when the RBI goes in for its quarterly review. That is not enough but can at least be the beginning.……

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Time not yet ripe for rate cut : K Kanagasabapathy

....The RBI will, therefore, be compelled to balance other downside factors, which may not warrant an immediate cut in policy rate. These vulnerabilities arise from an unsustainable external sector, including pressure on the rupee, high inflation expectations, and serious fiscal imbalance, combined with some of the adverse banking indicators........

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Independent DMO likely to manage govt's borrowing: Sources

.........the government’s point of view is that there is a conflict of interest in the inherent responsibility of the RBI as the monetary authority and as a debt management body as well, since it would be biased towards a low interest cost regime. Hence the government says that debt management should be a separate independent and autonomous body, which now has been envisioned in this bill and the DMO is likely to be an independent body.............

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RBI to issue Rs 20 and Rs 50 notes with rupee symbol

MUMBAI: he Reserve Bank will soon issue Rs 20 and 50 notes with the rupee symbol. "The Reserve Bank of India will shortly issue of Rs 20 and Rs 50 denomination Banknotes without inset letter and with (Rupee) symbol...bearing the signature of D Subbarao, Governor, RBI," the central bank said in a statement. The design of these notes to be issued now is similar in all respects to the banknotes in Mahatma Gandhi Series 2005 issued earlier, except for rupee symbol, RBI added. The Indian rupee got an unique symbol, a blend of the Devanagri 'Ra' and Roman 'R', in 2010, joining currencies like the US dollar, euro, British pound and Japanese yen in having a distinct identity.

http://economictimes.indiatimes.com//articleshow/12639875.cms

Gold management needs a makeover - M G Warrier, Former General Manager, RBI

.....Establishment of ‘Gold Corporations' with state participation could also be debated. Such an institution can act as a depository where the gold possession of individuals now in bank lockers and the pledged gold can find a safe shelter, provided the purity can be ensured, and the ‘Corporation' can find the resources and skill to deal in gold and retain the customers' confidence.

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Financial inclusion and literacy should go hand-in-hand

With less than half of India’s 1.2 billion-strong population having access to organized financial services, the urgency in implementing financial inclusion activities begs no second-thoughts. However, the push of financial inclusion activities (increasing availability of financial services infrastructure) alone is not enough to bring more people under the fold. Financial literacy programmes need to go hand-in-hand with financial inclusion initiatives to create the pull for accessing formal channels of finance. Further, these programmes need to be tailored to take into account the demographic profile and regional differences of the target population for a stronger impact......

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R.H. Patil, founder of NSE, dies at 74

....Apart from NSE, Patil was instrumental in setting up NSDL, National Securities Clearing Corp. Ltd, Stock Holding Corp. of India Ltd and Credit Analysis and Research Ltd. He also served as chairman of various committees of the Reserve Bank of India, including the technical advisory committee on monetary policy. Other jobs that he held included executive director of IDBI Bank, chairman of the disinvestment commission of India and chairman of UTI Asset Management Co. Pvt Ltd, apart from being a board member of several prominent Indian corporate houses.......

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Coriander’ has Aadhaar number

Nandan Nilekani, the Chairman of the Unique Identification Authority of India, (UIDAI) hopes that Aadhaar card and rural mobile telephony will bring transformation in rural India, but the cards being issued at times spot some real gaffe. Here is one case. A coriander plant in rural Andhra Pradesh received its unique identification number and of course a card for itself with the photo of a mobile phone. An Aadhaar card with number : 4991 1866 5246 was issued in the name of Mr Kothimeer (Coriander), Son of Mr Palav (Biryani), Mamidikaya Vuru (Village Raw Mango), of Jambuladinne in Anantapur district. As the card displayed the photo of a mobile phone, officials have no clue of the address where the card has to be delivered……..

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Know it all

RBI Deputy Governor Dr KC Chakrabarty was in a mood for quotes at a recent lecture on the ‘Uses and Misuses of Statistics’ at BHU on March 20. Some of the famous ones he used in his address: “The safety of science depends on the existence of men who care more for the justice of their methods than for the value of any results obtained by using them”; “All knowledge is, in the final analysis, history. All sciences are, in the abstract, mathematics and all methods of acquiring knowledge are essentially statistics”; “Measure again and again to find out the difference and difference of the difference.” And finally, “There are three kinds of lies: lies, damned lies and statistics”.

FE

Need to implement SME's corporate governance code: RBI

 …..There is a need to implement SME's corporate governance code," RBI Deputy Governor KC Chakrabarty said while speaking at the Economic Times Thought Leadership Conclave here. Chakrabarty said that in spite of various measures taken by the RBI and the government, availability of credit to Small and medium enterprises (SMEs) continues to remain a major issue in the development of the sector in the country……

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'Hard decisions needed to boost sentiment'

….“I think hard decisions are required in terms of creating proper environment for industry to grow,” he told reporters while replying to questions. Asked if he saw a case for a rate cut by the RBI in its credit policy to be unveiled on April 17, Rangarajan said, “It’s not just a monetary policy. I don’t think adjustment on interest (rate) alone will bring about the desired results. All that we really need to do is to push up the sentiment in the economy.”……..

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System-Based NPA Reporting Improves Transparency

When recently asked about the reason for spike in Non Performing Assets (NPAs) of select Indian banks, RBI's Deputy Governor Subir Gokarn attributed it to the migration of NPA calculation from manual reporting to an IT system-based approach . By bringing to the fore previously unreported NPAs the system based approach led to an increase in the overall NPA reporting…..

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Govt, RBI will take steps to revive IIP: FM

Attributing the "disappointing" industrial growth performance to tight monetary policy and global factors, finance minister Pranab Mukherjee on Thursday said that the government and RBI would take steps to revive growth. "These (IIP) figures will have bearing on monetary policy announcement scheduled for next week. The government along with RBI will take required steps to revive activity in the economy," .......

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Chambers disappointed, want a rate cut

Expressing disappointment at 4 per cent growth in manufacturing, the FICCI President, Mr R.V. Kanoria, said, “A reduction in interest rates of at least 50 basis points should be seriously considered by RBI as part of its next monetary policy.” .............

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RBI may cut policy rate by 25 bps, feels market

…….“Bond markets have discounted a 25bps rate cut in the annual policy because of poor industrial production numbers. So, markets are expecting RBI to cut rates to support growth,” said T S Srinivasan, general manager-treasury at Indian Overseas Bank. He added the uncertainty on the government being able to reign in the fiscal deficit might limit RBI’s comfort in starting the monetary easing cycle. During its mid-quarter review, RBI had said a credible plan for fiscal consolidation was essential to have lower inflation…….

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RBI may ease CRR to inject cash: Kidwai

....Reserve Bank of India (RBI) may look at further easing of CRR, which may eventually inject more money into the system, Naina Lal Kidwai, country head India and director HSBC Asia Pacific, said on Thursday. Her statement came days before the apex bank is scheduled to announce its credit policy and also at a time when the industry has been stressing more on a repo rate cut. In March this year, the RBI ......

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India's Subbarao contrasts Fed and ECB's roles during financial crisis

Reserve Bank of India (RBI) Governor Duvvuri Subbarao said on April 9 how the co-ordinated international response to the current financial crisis comes in stark contrast to the un-co-ordinated actions during the Great Depression of the 1920s and 1930s, when the "animosities of the inter-war period prevented a co-ordinated policy response". But Subbarao added during the opening address of the Fourth PR Brahmananda Memorial Lecture in Mumbai, that ..........

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RBI may consider easing forex trading curbs: Deputy governor

…….The Reserve Bank of India will consider gradually relaxing curbs on intra-day position limits in the forex market that were imposed in December to curb speculative bets on the rupee, a deputy governor said. The central bank will consider such measures "within the overarching prerequisite of facilitating genuine hedging needs of the customers," H.R. Khan said in a speech at a foreign exchange dealers' conference in Zurich, which was put up on the RBI website on Wednesday………

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RBI holds meet on currency management

PATNA: The 13th high-power meeting of the Standing Committee on Currency Management (SCCM) for Jharkhand state, falling under the jurisdiction of RBI Patna issue circle, was held on Monday here to discuss issues relating to currency management, including implementation of clean note policy, customer services, availability and retail distribution of notes and coins, detection-impounding-reporting of fake Indian currency notes and movement of treasure. Regional director, Bihar and Jharkhand, Mohit Kumar Singh chaired the meeting. The meeting was attended by SP, CID (EOW) S Tabrez, senior officers from the department of posts, controlling heads/senior officers from major banks in Jharkhand and officers from the issue department, RBI, Patna. SCCM is the apex forum in the state set up to bring together commercial banks and other government agencies on a common platform to discuss and sort out issues/challenges in areas of currency management, keeping in view the broad policy framework and customer satisfaction.

TOI

Obituary

M. SOMASUNDARAM, Aged 82 Retd Staff Officer Grade-B RBI, expired on 10-4-2012 at his residence in Ayanavaram.  9884027739/9840837739

The Hindu

Business correspondents serving other banks' customers will help expand financial inclusion

.....Technological compatibility is another issue. The RBI says that the technology available with the bank, which has appointed the BC, should support carrying out such operations with other banks. The RBI had mandated that transactions and authentications should be carried out online on a core banking software platform.......

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Moderation in FDI flow worries Reserve Bank

....The Reserve Bank of India (RBI) is concerned over a significant moderation in the flow of foreign direct investment (FDI) into the country in 2010-11. This moderation in FDI flow must be read in the context of other emerging market economies in Asia and Latin America receiving large FDI inflows.

According a study by the apex bank, the moderation in investment flows in India despite a faster recovery from the crisis period “appears somewhat inexplicable”......

Read - The Hindu

Low-cost bank branches under lens

TELLER TALES

* Performance parameters like opening of new accounts, deposits and advances and loan recovery would be examined

* Move to ensure financial inclusion drive is not restricted to meeting branch opening targets

* Customers at low-cost branches are to be serviced by banking correspondents, doing cash transactions where the population lives

* In 2006, banks were first allowed to adopt the BC model for delivery of services in unbanked and under-banked areas

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Mahesh Bank to expand operations in west

..... “We have already obtained approval from the Reserve Bank of India (RBI) to expand our area of operation to the entire states of Maharashtra, Rajasthan and Gujarat. We will be opening a branch each at Surat in Gujarat and Bhilwara in Rajasthan and two in the twin cities of Hyderabad and Secunderabad this year,”........

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CRR: A monetary policy or liquidity tool?

........ Following the CRR cut in January, and then in February, yields on the 10-year benchmark government bonds eased on the hope that interest rates have peaked and a rate cut is around the corner. RBI, however, disappointed the street by holding the rates during the mid-quarter review in March and sounded a hawkish note. The RBI's March statement, along with the high government borrowing numbers announced during the Budget, hardened bond yields. However, there is also a view that CRR should not be seen as either of the tools.

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RBI monetary review: Banking sector focussed on performance

.....Recently, a Reserve Bank of India (RBI) committee under former Union Bank chairman M.V. Nair had proposed that half of all agricultural credit should go to small and marginal farmers. The discussion with bankers will be based on a report prepared by the National Bank for Agriculture and Rural Development (Nabard) and RBI’s College of Agricultural Banking. Nabard officials were not immediately available for comment. Nabard and the RBI wing reviewed the existing credit delivery mechanism to farmers and suggested ways to improve the credit cover.......

Read - Business Today

What to expect from RBI on April 17?

.... A combination of economic woes and monetary tightening through tight liquidity and high cost of liquidity has killed investor sentiment and consumer confidence; both considered critical for economic development. The downtrend in growth momentum is sharp (into 6%) against a very ambitious FY13 target of 7.6% while inflation is expected to stay below 7% with support from consolidation in crude oil price and rupee. It is high time for RBI to shift into pro-growth monetary stance; considered critical at this stage to address economic woes relating to growth and fiscal deficit.........

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RBI unlikely to cut rates on April 17

... The banking system’s loan-deposit ratio has hit an all-time high of 78.1 per cent, with deposit growth still remaining below loan growth. Finally the sequential and year on year headline core inflation still remained too elevated to try to revive aggregate demand so soon. The inflation was not in the comfort zone which RBI would like it to be….....

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RBI's hard choice

...... This might be too hopeful, given that the RBI has consistently said that action from the government is needed to give it the space to cut rates. The government’s abdication of fiscal responsibility cannot have any other outcome but to force the RBI to zero in on controlling inflation.

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One cannot make a strong case for rate cuts: Leif Eskesen

...... I think it will be a close call for RBI next week, as one cannot make a strong case for rate cuts. There hasn’t been a substantial shift from inflation risks to growth risks since the last monetary policy meeting. Domestically, in terms of economic activity, there has been some moderation in overall growth. The inflation risks that RBI highlighted........

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Defaulters delay Prudential Bank liquidation

………Officials said Reserve Bank of India's clearance was required for revival of the bank as a society or again to start banking operations. However before that, the liquidation process has to be completed by clearing all outstanding dues. "The proposal of allowing the bank to operate as a society is being examined by the state government. But before giving permission, the amount to DICGC should be cleared," Prudential Bank liquidator and deputy registrar of the department of cooperation B Nanda Kishore told…….

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RBI implements web-based bidding for G-Sec primary auctions

.... Reserve Bank on Wednesday said it implemented its web-based online bidding in primary auctions of government securities. The module on web-based negotiated dealing system auction will allow internet-based direct participation of gilt account holders.......

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Lavasa plays infra card to get RBI leeway on debt recast

.... Now, lenders have approached the RBI, requesting to treat a part of the loan to Lavasa project as infrastructure funding. Till date, banks had categorised loans to Lavasa as exposure to commercial real estate. This, according to the central bank, is a sensitive sector. The banks' exposure to commercial real estate has higher risk weight, which means lenders have to set aside higher capital......

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Banks asked to roll out new farm loan products

.....Recently, a Reserve Bank of India (RBI) committee under former Union Bank chairman M.V. Nair had proposed that half of all agricultural credit should go to small and marginal farmers. The discussion with bankers will be based on a report prepared by the National Bank for Agriculture and Rural Development (Nabard) and RBI’s College of Agricultural Banking. Nabard officials were not immediately available for comment. Nabard and the RBI wing reviewed the existing credit delivery mechanism to farmers and suggested ways to improve the credit cover.......

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Govt plans to regulate pyramid marketing

...MLM schemes are mostly a state subject, according to CEIB. They come under RBI scrutiny if the entities running them function as non-banking financial companies, and under Sebi if listed......

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SHYAMALA GOPINATH TO HEAD ADVISORY BOARD ON FRAUDS

Former Deputy Governor of RBI Shyamala Gopinath will now head the Advisory Board on bank, commercial and financial frauds, which looks at cases relating to state-run banks and financial institutions, referred to it by the Central Bureau of Investigation and over which the Central Vigilance Commission has oversight. Gopinath is also on the board of the NSE as a director.

ET

Now, chamber of commerce for rural women entrepreneurs

After successfully running a bank and a business school for rural women entrepreneurs, Mann Deshi Bank is now all set to form its own chamber of commerce at Mhaswad in Satara district, 180 km away from Pune. It is formed coordination with Mann Deshi Foundation has formed the first Mann Deshi Chamber of Commerce for Rural Women in India (MCCRW) in partnership with 'President Clinton Foundations’ initiative - Clinton Global Initiative (CGI) based in New York, USA. MCCRW is first of its kind for rural women who have been created to provide women entrepreneurs in rural areas with mentorship, knowledge, and support through policy advocacy. The chamber of commerce will organize monthly workshops for members, and eventually provide targeted support to address each member’s specific needs. The announcement was made on Tuesday by Chetana Sinha, founder chairman, Mann Deshi Mahila Bank and CEO Rekha Kulkarni in Pune.……….

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Banking Act changes to give RBI needed flexibility

……Providing the regulator with more effective control of the industry and proposing to increase penalties to crores from thousands, the Bill will provide the RBI with more flexibility in its efforts to manage liquidity and rein in inflation via the Cash Reserve Ratio (CRR) tool. The words 'at least three per cent' is proposed to be replaced by 'such per cent'. The Bill also empowers the RBI to grant banks such exemptions from the CRR provisions as it thinks fit. The Bill also seeks to activate the significant funds that accrue in dormant accounts by aggregating into a single fund, which can be used to promote the interests of depositors…….

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RBI Outreach Programme for Financial Inclusion held at Dungarasan, Sihori, Mehsana on 31.03.2012

Smt. Nupur Mitra, CMD, Dena Bank addressing the gathering at RBI’s Outreach Programme for Financial Inclusion held at village Dungarasan, Tal. Sihori, Dist. Banaskantha on 31.03.2012. Seen on the dias are R-L Dr. K.C. Chakrabarty, Dy. Governor RBI, Shri Sudarshan Sen, Regional Director, Reserve Bank of India, Ahmedabad; Shri K. Chandrachoodan, Banking Ombudsman, Ahmedabad and Shri Vikrambhai Gambhirji Thakore, Sarpanch, Dungarasan village

APN News

Who can lead the World Bank? : Subir Roy

..... Looking back, no modern-day Indian could have filled the role better than I G Patel. After successively heading the Department of Economic Affairs, the Reserve Bank of India and the London School of Economics, he became one of a group of wise men who were repeatedly called upon to draw the contours of a better world. Manmohan Singh, whose career ran in tandem with Patel’s, would have been a formidable nominee had he been available and younger…….

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The conundrum before RBI : A.Seshan

.... Conundrum — a hard or puzzling question; Fallacy — faulty reasoning; Paradox — a seemingly contradictory statement, even if actually well-founded; and Pandora's Box — a process which once activated will generate many unmanageable problems.

The situation before the RBI as it prepares the annual review of policy is such that all the expressions defined in the previous paragraph are found to be applicable.....

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Why Subbarao could be the loneliest man in India today

..... As S.S. Tarapore, former RBI Deputy Governor, noted: “If the RBI is to pull itself out of the quagmire it would need to raise the repo rate from its present level of 8.5 percent to 9.5 percent.” Now you know why Subbarao is a lonely man. To fight the tide of overblown expectations on a rate cut, when the macro numbers are telling him to do the opposite, he will have to hold rates. He is not going to be the most popular gent around for a while.

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Is the independence of auditors in government banks being compromised?

....However, from the year 2008-2009, the government in its wisdom granted managerial autonomy to the public sector banks to appoint their statutory auditors, by directly sourcing the names of auditors from the panel maintained by Controller & Auditor General of India (CAG) and getting it approved by the RBI, which in effect is a mere formality. However, the RBI has informed the banks that though the autonomy is given to PSBs, the norms for empanelment and remuneration of auditors shall continue to be as prescribed by it. Further, RBI has advised all PSBs to frame their own policy for appointment of statutory central/branch auditors.......

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RBI seeks economists' views as inflation worries persist

The Reserve Bank of India (RBI) on Tuesday reiterated its concerns on inflation and a widening current account deficit in a meeting with economists a week before its annual monetary policy review, according to two economists who were there…….

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The only alternative to gold: inflation-indexed bonds

…..The Reserve Bank is now trying to put in place measures that will make it convenient for individuals to buy and sell gilts. However, this might take some time and might require the central bank to make sure that the public sector banks, which have built a fairly extensive branch network, use their distribution capacity to sell down government bonds without adding a steep bid-ask spread. There are also lessons to be learnt. The Reserve Bank had introduced in 1996 a network of small shops – called satellite dealers — to retail government bonds. The scheme had to be shut down in 2002 for a variety of reasons, including the fact that the market micro-structure was not evolved adequately to allow for retail participation……

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Nationalised banks to speed up processing of corporate loans

.....Until a few months back, large loan proposals could only be cleared in management committee meetings (MCMs) of the boards. “The MCM is convened only once in 20-30 days. Presence of the bank chairman and managing director, executive directors, RBI nominee director, Finance Ministry representative and two other directors is a must in the meeting......

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Court sets aside Paramount plea to quash IDBI order

.....Judge noted that Redressal Committee of IDBI had held that there was no merit in submission of petitioner and that IDBI should declare the company and its directors in RBI list of wilful defaulters, keeping in mind time frame indicated in orders of High Court.....

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Beyond interest rate cuts

.....Many a time the expectations from monetary policy get whittled down to expectations around reduction in policy rates and greater availability of liquidity. From a long-term perspective, the efficiency it injects in the financial sector in bringing down the cost of intermediation is important. A key contribution of monetary policy should be in promoting efficiency and bringing down the intermediation cost as well as spreads.......

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Banks’ business correspondents may get to sell micro-insurance

....The Reserve Bank of India (RBI) has permitted banks to use the services of intermediaries such as business facilitators and correspondents to provide banking services to expand the reach of the banking sector. BCs service 76,801 villages and 3,653 urban locations as of end-March 2011, according to RBI data......

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MFIN seeks RBI's intervention to enable MFIs to collect dues

Microfinance Institutions Network (MFIN) today sought Reserve Bank of India’s (RBI) intervention to enable micro lenders to collect their Rs 7,000-crore dues, which is stagnated since November 2010 in Andhra Pradesh. "We requested the Reserve Bank to take more direct role in the dialogue with the Andhra Pradesh government. Sidbi (Small Industries Development Bank of India) has also been doing the dialogue," MFIN President Vijay Mahajan told PTI.……..

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RBI removes `1.2 lakh cr from the banking system

.....But bankers said that the cash conditions would stabilise ahead of the RBI lean season credit policy as the government begins disbursal of plan expenditure resources to the states and return of advance tax funds into the banking system......

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Oriental Bank of Commerce cuts base rate by 10 bps

......The RBI's move in the recent months to cut the cash reserve ratio has helped OBC get as much as Rs 2,000 crore released. This money was not earning any interest when it was placed with the central bank. ......

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Credit policy important for infrastructure and banking stocks: Deven Choksey

………More than the action at this point of time the beginning of the financial year, it would be the tone of RBI which would matter a lot because if they end up suggesting that they want to bring down the rate of interest over next 4 to 6 quarters by 1% to 1.5%, then in such kind of a situation, the banking stocks particularly would find lot of favour………

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Glum external sector data worry RBI

…..According to several economists who attended the customary pre-monetary policy meeting with the Reserve Bank of India (RBI) on Tuesday, since there was no stable source of funding the gap, the regulator was concerned that if growth did not pick up, capital flows would suffer……

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Compensate bond investors at 8% for late interest credit: RBI

"........an agency bank should compensate an investor in relief/savings bonds for financial loss due to late receipt/delayed credit of interest warrants/maturity value, at a fixed rate of 8 percent per annum," RBI said in a circular……..

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Odisha opposes RBI decision to hike rate of RIDF loans

BHUBANESWAR: Strongly opposing the Reserve Bank of India's (RBI) recent decision of enhancing the rate of interest over RIDF loans by the NABARD, Odisha government today asked the Centre not to implement the new interest on loans sanctioned prior to April 2012………………

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RBI allows RRBs, cooperative banks to transfer funds online

To popularise electronic transfer of funds, the Reserve Bank today allowed regional rural banks (RRBs) and cooperative banks to participate in the centralised payment systems. With this, all the banks can now transfer funds electronically through real time gross settlement system (RTGS) and national electronic funds transfer (NEFT).……..

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More banks can join electronic payment system

In a move to popularise electronic payment system, the Reserve Bank of India (RBI), on Monday, allowed all licensed banks, including urban co-operative banks, State co-operative banks and district central cooperative banks, to transfer funds through the centralised electronic payment system as sub-members. These banks would participate in the centralised payment systems, Real Time Gross Settlement System (RTGS), and the National Electronic Funds Transfer (NEFT), through their sponsor bank, which is a direct member of this system, the RBI said in a notification to all banks.......

Read - The Hindu

‘Note’ worthy: Fake currency flooding banks

….Sources in the RBI said in a meeting of Fake Indian Currency Notes (FICN) Co-ordination Cell (FCORD), fake currency operators are using banks in West bengal’s Malda district to introduce fake notes into organised banking channels…..

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Proposed KYC depository may not be limited to banking sector

….The central know-your-customer (KYC) depository announced in the Union budget may not be limited to just the financial sector but may include others such as telecom as well. The KYC database is expected to facilitate easier customer acquisition and reduce the possibility of fake documents being used as identity proofs.……

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Ministry wants bank audit panels to get more time to vet earnings

….The audit committee is part of the bank board. At present, both the audit committee meet and the board meeting take place on the same day, because of the price-sensitive nature of the information. The bank management first presents the balance sheet to the audit committee, which then approves and gives it to the full board on the same day. The results are communicated to stock exchanges after the board approves these……..

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Dhanlaxmi Bank to grow gold loan business

......Speaking to newspersons in Mumbai on Monday, Mr Jayakumar said gold lending is a very attractive and secure business and many banks are aggressively pursuing it. The RBI is perhaps more comfortable with banks doing this business than NBFCs because banks follow the required Know Your Customer norms before giving loans.........

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Most candidates who clear bank clerical exam are from UP

......Uttar Pradesh had the highest number of successful candidates in the common written exam for clerical posts conducted last year. The Institute of Banking Personnel Selection had conducted the exam for recruitment to 19 public sector banks in four phases during November-December 2011.....

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Be wary of investment schemes that guarantee very high returns

.....The RBI and Sebi regularly issue public notices and warnings about such schemes and companies. In a July 2011 notice, the RBI observed, "Certain firms posing as MLM agencies for consumer goods and services have been mobilising large deposits from the public (with promise of high return) by opening accounts at various banks. These funds, running into crores of rupees, were being pooled at the principal accounts of the firms and eventually flowing out of the accounts for purposes appearing illegal or highly risky."..........

Read - India Today

RBI fixes Rs 50,000 cr ceiling for market stabilisation scheme

In order to absorb excess liquidity, the Reserve Bank has pegged the quantum of intervention through Market Stabilisation Scheme (MSS) at Rs 50,000 crore...........

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RBI cancels licence of Bhadran Cooperative Bank

The Reserve Bank of India (RBI) has cancelled the licence of Gujarat-based Shri Bhadran Mercantile Cooperative Bank, following deterioration in its financial condition and save the interest of depositors. The decision was taken in view of the fact that bank had ceased to be solvent, all efforts to revive it in close consultation with the government of Gujarat had failed and the depositors were being inconvenienced by continued uncertainty, RBI said in a statement……….

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Sahara co-op society not under us: RBI

….In an e-mail response to the complaint, a senior RBI official said, “It is observed that your complaint pertains to the functioning of Sahara Credit Co-operative Society Ltd., which is a co-operative credit society. We advise that Reserve Bank of India (Urban Banks Department) does not regulate and/or supervise the functioning of co-operative credit societies.”……

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Credit growth to Gujarat small units shrinks

….“There is immense uncertainty in the market. We do not know what the Reserve Bank of India (RBI) will announce in its monetary policy review later this month. Macro economic factors are hurting. All banks are concerned about an increase in non-performing assets (NPAs),”……

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Service tax: Your bills will jump. So will inflation

……..The RBI has repeatedly urged the government to get a handle on its wayward finances in the past. However, apart from an assurance of reducing the fiscal deficit to 5.1 percent by the end of the next financial year, there was no road map on how it plans to reach that mark. So, overall, high service charges, climbing inflation and lower chances of an interest rate cut. Not a great way to start the new financial year.

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RATE CUT WILL BE A CLOSE CALL

Reserve Bank of India (RBI) Governor D. Subbarao will present the first monetary policy of fiscal year (FY) 2013 next week. Interestingly, when one looks back, the first monetary policy of FY12 was a watershed event. The RBI changed its approach of gradual calibrated tightening and surprised the markets with a 50 basis points (bps) hike in rates. One bps is one hundredth of a percentage point. RBI firmly acknowledged that in the long run high inflation hurts growth because investment suffers from inflation uncertainty............

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Crisil floats new method to measure core inflation

....According to some school of economists, the core measure used by the RBI has two drawbacks: a) It is prone to volatility: it includes base metals prices, directly linked to international price movements, which are influenced by temporary shocks and b) It is less useful for gauging future demand-side pressures: it excludes processed food prices (manufactured food)......

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Markets need more information

....Until Dr Y V Reddy became its Governor, the RBI was fairly indifferent to the importance of public communication too. He, ably assisted by Rakesh Mohan, who was the economics deputy governor, completely changed the template. The RBI didn't make the transition because it loved the public. It did so because it realised how important it was to counter the rumours on which the financial markets depended in the absence of proper central bank communication. True, there is a lot that the RBI doesn't put out and there is a lot of scope to simplify the language in which it communicates during its policy reviews.....

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