......Following a proposal from NCM to permit interest-free banking—a variant of Islamic banking—the finance ministry has asked the Reserve Bank of India (RBI) to take a fresh look at the matter. Until now, the central bank has maintained Islamic banking is not feasible in India as existing regulations do not permit interest-free transactions.......
The very purpose of VITALINFO is to provide a platform for wider dissemination of updated information related to and happening of events in and around RBI.
Monday, June 4, 2012
Task forces on Maoists, fake notes
.....Official sources said task force on FICN will study the problem of the fake Indian currency notes (FINC) in the state and devise an effective strategy to combat the menace. This task force will comprisJyotirmoy Chakravarty, additional DGP (BIEO) as chairman and Anurag Agarwal, deputy IGP (CID), Surendra Kumar, deputy IGP (western range) and one representative from Reserve Bank of India/State Bank of India as members.........
India looks at the US to check fake currency notes
India is planning to seek technological cooperation of the US to check the flow of fake Indian currency notes the way Washington does to put a stop of circulation of counterfeit USD. Impressed by the American technology, which has a database of each counterfeit US dollar -- photograph, from where it originated, its route of travel and people behind its circulation -- India is all set to ask the US to help it curb the menace, mostly originating from Pakistan. ...........
‘SPMCIL is debt-free now’
.... The Security Printing Presses at Hyderabad and Nashik are engaged in printing of passport, visa stickers, postal stationery, non-judicial stamp papers, and other security products. Thus, SPMCIL caters to the requirement of high security products viz., coins, currency notes, passport, etc. of the country. Keeping in view the future demand of indents for currency and coins by the RBI, investments are done in the Mints and Currency presses. Similarly, investments are also being made on passport papers based on future indent..............
Chinatrust Commercial Bank to open branch at Sriperumbudur
Chinatrust Commercial Bank is set to open its second branch in the country at Sriperumbudur, near Chennai, on June 6. Chinatrust, the only Taiwanese bank operating in India, at present, has a branch at Connaught Place in New Delhi. The bank recently secured permission from the RBI to open its second branch in India, says a release from the bank.........
L&T Finance Holdings: NBFC today, bank tomorrow
.....That is not hard to believe given that L&T Finance's larger game-plan is to throw its hat into the ring when the RBI begins to hand out new banking licences. Having a presence across the entire chain of “lending, saving and investing” may sound pretty ambitious for a NBFC. But it is quite realistic for a bank. So, even as the RBI readies its norms for new banking licences, L&T Finance seems to be well ahead in the race to become a bank........
Govt backs banks' entry into commodity futures trading
Amendment Bill may be tabled in Monsoon session despite RBI's reservations
.....The RBI has been against allowing banks to enter this sensitive area, as there is no “autonomous and independent” commodity regulator in the country. The Forward Markets Commission, which regulates commodity players, comes under the administrative control of the food and consumer affairs ministry. A Bill to provide autonomy to the commodities market regulator will be tabled in the next session of Parliament after Cabinet approval.......
Corporate worry lines
...Corporate India's scorecard for the latest March-ended quarter has little to offer by way of cheer, with profits after tax for the 3000-odd companies to have declared results so far falling more than 13 per cent over the previous year. That shouldn't really surprise, given a weak rupee, which has pushed up costs of imported inputs, and very little moderation in interest payouts, despite the Reserve Bank of India (RBI) initiating a cut in its policy rates. In any case, the latest decline is only a continuation of a trend of declining profits that began two quarters ago. What is truly disturbing about the March quarter results is the weakening sales momentum. Annual sales growth, which was holding up at over 20 per cent in the past many quarters, has dropped to below 13 per cent......
Sunday, June 3, 2012
We have reached the bottom: C Rangarajan
Would you accept that inflation has become the Achilles' heel of this government?
Inflation is a phenomenon that affects a large section of the country. So, a high level of inflation is not conducive to economic growth and prosperity of the country.
Has the government failed to tackle it?
Earlier, as governor of the Reserve Bank of India, I had taken a very strong position on that and I have always regarded that the primary objective of the central bank is to tame inflation. In the last two years, we have been confronted with a situation in which the strong action to contain inflation was also viewed by some as coming in the way of faster economic growth. The first year of inflation was really food inflation. That is a totally different kind. Come the second year, the food inflation got generalised. In addition to that, there was some food inflation because of the rise in the price of vegetables. Now, any strong action on the monetary authority was viewed by some people as coming in the way of faster economic growth.
RT Nagar heist: Police turn screws on careless banks
.....While investigating recent robberies of banks in the city, the police have found that all such incidents happened due to the negligence of banks and security agencies who are not following Reserve bank of India’s (RBI) guidelines regarding security arrangements while transporting cash. “Banks and security agencies are not following RBI guidelines because they are insured against losses. If money is stolen or robbed, banks are not bothered because they will get it reimbursed by insurance agencies,” a senior police officer said on the condition of anonymity.........
Trams go classless as government allows quiet fare hike
..........According to transport minister Madan Mitra, the change finally came out not because of political ideology but for the sake of simple, everyday convenience. CTC was facing a lot of trouble returning change to passengers as there are very few 50 paise coins in circulation, he said. The minister has been harping on this problem for the last two months, and even asked the chief minister to write to RBI about the lack of small change. He reiterated the issue during a press conference on Friday, soon after his meeting with the chief minister, and suddenly announced a fare revision for trams and CSTC buses................
Tour the rare history of currency
Misprinted notes, Satvahan century coins, rare items, old postcards and various other things that would take you on a tour to history are on display at Chatuhshrungi Seva Samiti Cultural auditorium. The exhibition organised by the Numismatic Society of Maharashtra was inaugurated on Saturday and is open till Monday............
'Textile debt recast will not pressure banks' profitability'
.......The finance ministry will consult Reserve Bank of India for giving a two-year moratorium repayment and convert working capital eroded into term into term loans with three-five year repayment period. The government is also mulling a special provision in non-performing assets norms to avoid asset reclassification for these loans.
Dhanlaxmi Bank Q4 operating loss widens; union demand RBI enquiry
Dhanlaxmi Bank has posted operating loss of Rs76.71 crore for the quarter ending March 2012, an increase of 110% as compared to a quarter earlier. While the results are clear indication of the poor strength of the bank, there has been no action from the regulator, the Reserve Bank of India (RBI). The bank’s union which has been raising the alarm from long time has demanded an enquiry by the RBI..................
SBT launches month-long KYC campaign
State Bank of Travancore has launched a month-long campaign highlighting the need for updating of Know Your Customer documents. This is being done with a view to creating awareness among customers about the need to update KYC details, an SBT spokesman said here. Directives of the Reserve Bank of India and the Centre require that all bank accounts be KYC-compliant by June 30...................
Complain to branch manager first
.....Give the bank 30 days to respond, if no solution is forthcoming you can then approach the banking ombudsman in your area. The contact details are available on the Reserve Bank of India's Web site. The banking ombudsman is a regulatory body that evaluates any complaint from a neutral standpoint and ensures that a customer's concern is addressed..........
My View on "Are PSU banks trustworthy?":
While the concern is appreciated,let us also remember PSBs have a transparent reporting system. Beyond frauds, financial institutions both inprivate and public sector are forfeiting account-holders' money in the name of 'inoperative accounts', unclaimed deposits and so on where the amounts involved are much larger.There is no public sector-private sector or government divide in appropriating small depositors' funds.The numbers and amounts mentioned here will make sense only if comparative figures of private sector banks as also the types of clientele these banks are handling are also discussed.
- M G Warrier, Thiruvananthapuram
Widespread weakness in GDP components
The Indian elephant is limping. Which means this elephant can't dance — at least not for a while. While the poor industrial production numbers all along hinted at lacklustre economic growth, the services sector that still held the show thus far is now showing initial signs of giving in. If this trepidation is proved right in the next couple of quarters, then urgent measures may have to be taken to shake the economy out of lethargy. And such measures would have to come from the government and not just the RBI............
India GDP shock: A gasping elephant? Or tortoise?
.......Robert Prior-Wandesforde, a senior economist at Credit Suisse, probably sums up best what all of us feel right now: “It is hard to describe India’s March quarter GDP release as anything other than shocking,” he said in an investor note. He was confident the figures will “send shivers down the spines” of senior politicians, who in turn will pressure the RBI to further slash key lending rates. (We would tend to agree, although it’s unclear whether any of those senior politicians have a spine in the first place.).......
Falling GDP: Who’s to blame?
.......Finance minister Pranab Mukherjee has blamed the Reserve Bank for high interest rates, and while it is true the RBI has raised interest rates 13 times since October 2010, each time it has been compelled to do so with the government failing to take fiscal steps needed to meet supply side constraints. These constraints fuelled food inflation, which then spilled over to manufacturing. High interest rates of 10-13 per cent for creditworthy corporates has certainly stifled growth: margins are not large enough to absorb such high rates. Demand has also slowed, and many companies can’t utilise even 70 per cent of their capacity. The RBI needs to cut interest rates immediately by at least one per cent, if not more, for growth is as important as inflation concerns. And the RBI must remember it is not the sole guardian of inflation..............
India must capitalise on the G20 opportunity
......Terms of lending, such as the need for collateral to obtain a loan, has excluded many households from gaining access to funds. The microfinance finance segment routed through the private sector has been mired in controversy, after severe setbacks in Andhra Pradesh. Ideally, the vital components of inclusion stressed by the Reserve Bank of India in a recent speech, would consist of ease of access to funds, particularly to vulnerable population, affordable cost of obtaining funds, and transparency in the process of fund disbursement. These objectives have not been met to a large extent by the above initiatives. In fact, India ranks 50 among 100 nations, according to a world-wide survey that measures financial inclusion with respect to the extent of bank penetration............................
Outages, limited workforce bruise manufacturing PMI
.............As demand outpaced supply, both input and output prices rose, prompting HSBC Chief Economist for India Leif Eskesen to caution the Reserve Bank of India (RBI) against any monetary easing. RBI is slated to come up with its monetary review next month............................
Petrol price hike impact on inflation is 10-15 bps: Gokarn
............Petrol price hike, however, may have had an impact on inflation by 10-15 basis points, he adds. Gokarn also believes that fall in oil prices has provided some relief on inflation. The rupee has been losing value against all the major currencies, especially the American dollar, since April and hit an all-time low of 56.52 yesterday. It has shed nearly 24% year-to-date...........
Subsidies need to be cut: RBI Deputy Governor
.......Mr.Gokarn said that in a situation of increasing demand and falling supply, the depreciation of rupee was inevitable. The rupee-dollar rate had fluctuated in a non-linear fashion, as had happened in the case of several international currencies. Certain currencies were able to resist depreciation.........
Fiscal consolidation critical for high growth
The fiscal consolidation is a critical area in India’s economy and controlling it requires abolition of subsidies, which remains a key factor, Dr Subir Gokarn, Deputy Governor, RBI has said..........
Saturday, June 2, 2012
Gokarn-speak raises rate cut hopes
The prospects of monetary easing in the mid-quarter policy review on June 18 brightened on Friday. Apart from falling commodity prices and an economic slowdown (on Friday’s Brent crude price fall and yesterday’s GDP growth figures were the most immediate reasons), the market took comfort from Reserve Bank of India (RBI) Deputy Governor Subir Gokarn’s comments in Kochi on Friday. Gokarn said though the slowdown had been in line with the RBI’s expectations, slowing GDP growth and the oil price fall provided more room on rates. He also said the growth slowdown was accompanied by a fall in core inflation and reiterated the need for a rate reversal to support growth.......
Can’t arrest rupee fall if driven by weak fundamentals: RBI
“If the rupee fall is due to fundamental weakness of the economy, or due to global factors, then the RBI cannot support it,” the RBI Deputy Governor, Dr K.C. Chakrabarty, told reporters on the sidelines of an HR summit of the state-run banks here.....................
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RBI move triggers coin shortage
Even on a peak summer day in May, it is easy to notice long queue of people scrambling, outside the office of Reserve Bank of India in Kolkata, for one the most circulated commodity around —small denomination coins, of one two and five rupees. RBI opens up its counters every morning for exchange of high denomination notes with coins, but over the last six months the wait for the small metal pieces is just getting longer. The wait is not without reason. In fact, it is a business of sorts. Adjacent to the RBI premises sit scores of people who buy coins and sell them with huge premium. Over the last three months the price of small denomination coins in gray market has shot up by almost double. Thus, while three months ago, hundred coins of one rupee were selling at a premium of Rs 10, at present same coins cost Rs 20. Notably, it is illegal to sell coins, as they can only be exchanged. One of the key reasons for sudden demand and supply-mismatch for coins is the recent RBI decision to curtail bulk issuance of coins to traders through its offices.................
RBI asks three dist coop banks not to accept fresh deposits
The Reserve Bank today asked three district central co-operative banks not to accept fresh deposits including in its savings banks account. The three banks are Osmanabad District Central Co-operative Bank, Jalna District Central Co-operative Bank, and Dhule and Nandurbar District Central Co-operative Bank. "The directions issued to the above mentioned district central co-operative banks stipulate that they shall not accept fresh deposits including saving bank account, current accounts, fixed deposit accounts, recurring deposit accounts and/or any other deposit by whatever name called," RBI said in a notification...............
18 June policy: RBI is caught between rock and hard place
.....While most economists reckon there will once again be pressure on RBI to consider another round of rate cuts on 18 June — finance ministry mandarins have been talking of it often — RBI Governor Subbarao will now have to weigh the possibilities very carefully. In April, RBI already effected a deeper than expected cut in the key repo rate of 50 basis points against expectations of a token 25 bps cut. The latest growth figures, of course, also mean RBI may need to take a relook at the growth-inflation balance and examine whether, given the gyrations of the rupee and its depreciation, it can consider putting growth ahead of inflation in its list of concerns. However, economists reckon it will be increasingly tough for the central bank, particularly with the latest PMI number.........
Don't hold your breath on an RBI rate cut: Mark Konyn
................In some respects, I think the policy options still remain rather narrow for the RBI. The slowdown that we are seeing is a reversal of that period of excessive growth that generated the overheating in the economy and the subsequent inflation. I certainly wouldn’t be holding my breath waiting for a rate change. I would certainly be looking for more constructive policies coming out of the government......................
RBI worsens the UPA blow
If UPA’s populism wasn’t bad enough,
RBI’s misguided interest rate policy
finished off what growth was left
You raise rates galore, and what do you get;
The economy weaker, and deeper in debt;
I am the RBI, and I will do more;
Because I owe my soul to the monetarist store
(With apologies to Tennessee Ernie Ford, “Sixteen Tons”)
RBI's 28th round of inflation study begins
..............RBI in a statement said it has engaged agency Beaumont Consultancy Services to conduct this round of the survey. "Inflation expectations are subjective assessment of around 4,000 households across 12 cities proposed to be covered in the survey round and are based on households' individual consumption baskets," it said........................
RBI Panel Eyes Easing Bond Ownership for Foreigners
A committee set up by the Reserve Bank of India has suggested that India should make it easier for foreign investors to own Indian government bonds. In a draft report released late Thursday, the committee noted that just a few investors hold most Indian government bonds, and many of the bonds are rarely traded in the secondary market. Making it easier for foreigners to own them could improve liquidity...........
Young jobseekers prefer PSUs, domestic companies
..........While the Reserve Bank of India (RBI) and State Bank of India (SBI) emerged as the most preferred employer for under-graduate business students in the country, engineering and MBA students chose technology giant—Google as their ideal employer in a survey conducted among 8,356 students across Indian colleges by Universum, a global consulting firm that helps companies improve their attractiveness to prospective jobseekers.................
Government had no outstanding loans from RBI as on May 25
Government had no outstanding loans from RBI as on May 25, the Reserve Bank of India said in its weekly statistical supplement on Friday........
Are PSU banks trustworthy?
few weeks back, Bloomberg UTV revealed that the country's public sector banks have reported frauds amounting to nearly Rs 9,000 crore to the Reserve Bank of India. But that's not all! PSUs have also informed the RBI that out of this, nearly Rs 600 crore was siphoned off in home loan segment alone and this only in the last three years. So is public money safe in PSUs?..........
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Banks haunted by worries about recast debt
.....“If a borrower firm faces some stress or difficulty, banks have two options. One is to let the company suffer and initiate recovery measures or to assist the company to regain health and get back to business normalcy,” said K.R. Kamath, chairman and managing director of Punjab National Bank. “Banks generally prefer to do the latter based on the outcome of the viability study conducted. One can’t rule out some of such loans turning bad.” Banks began restructuring loans on a broad scale in the aftermath of the 2008 global financial crisis. They recast about 5% of their loans following a directive of the Reserve Bank of India. At least 10-15% of such loans have turned bad for most banks...........
India Inc: Depoliticise economic decisions
........Harsh Mariwala, chairman and managing director (CMD), Marico Industries. Now, the to-do list is long and exhaustive, as there has been complete inaction by the government. So, the attention shifts to the Reserve Bank of India (RBI). “Tackling inflation using monetary policy tools is a short-term approach. Supply-side bottlenecks have to be tackled. There has to be a strategy in place on how to deal with supply-side constraints. Increasing rates and curtailing the investment appetite are a piecemeal approach. It only hinders growth,” Mariwala adds........................
Bank deficit eases as RBI avoids exchange market
.....On reporting Fridays banks prefer to show less liabilities. This is done to keep their cash reserve ratio (CRR) costs down. CRR is a mandated zero interest balance that banks have to maintain with RBI. High liabilities mean that banks would have to maintain more balances with RBI.........
The BRIC Currency Swap Proposal Is A Global Game Changer
......With the credit rating agencies such as S&P downgrading India, small- and mid-cap companies are struggling to get dollar loans at reasonable interest rates. Drawing on a swap line from China, the Reserve Bank of India (RBI) can offer attractive loans to businesses through the Export-Import Bank in renminbi to finance Chinese deals without having to worry about inadequate dollar supply. There is geopolitical risk in this, however...................
BEML, RBI score as action resumes
Narrow win for RBI
When the league restarted on Friday, Reserve Bank of India (RBI) edged out Electronics and Radar Development Establishment (LRDE) 4-3 in the ‘A’ Division before Bharat Earth Movers Limited (BEML) eased past Controllerate of Inspection Electronics (CIL) 2-0 in the Super Division encounter......
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When the league restarted on Friday, Reserve Bank of India (RBI) edged out Electronics and Radar Development Establishment (LRDE) 4-3 in the ‘A’ Division before Bharat Earth Movers Limited (BEML) eased past Controllerate of Inspection Electronics (CIL) 2-0 in the Super Division encounter......
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State Bank India launches drive to reach farmers at their doorstep
......farmers from small villages are still deprived of the bank schemes and facilities. Considering this fact, we are planning to launch an Ultra Banking Scheme (UBS) in small villages where the banks have still not reached and their population is less than 2,000. Initially, we have identified 48 villages in the district for the launch of the UBS and the Reserve Bank of India (RBI) has also given its approval in this connection.....................
Friday, June 1, 2012
RBI panel calls for greater FII play in G-Secs
The group, headed by the Executive Director of RBI, R Gandhi, has said the government and regulators could raise the investment limits for foreign portfolio investors, or FIIs, in phases. "FIIs, by being global players, can provide the much-needed diversity of views in the market, thereby providing more opportunities for trading," the draft report on enhancing liquidity in G-Secs and interest rate derivatives markets said. The group has also called for participation by overseas portfolio investors in the interest rate derivate market............
New security system at RBI
.....“The material for the boom barriers is designed in full core steel, ensuring maximum safety against corrosion. It is being installed at the entry point of RBI. The barrier is normally closed and opened only when bank vehicles enter," a top source in RBI said. The bank already has security measures like perimeter wall intrusion alert system and security officials. The bank General Manager, Mr C.V.George, had also sought the assistance of the local police in beefing up the security...........
Little Impact on Banking Due to Strike
....As per the data available with the Reserve Bank, there was only a marginal drop of 3 per cent in the clearing transactions today. "While on a normal day, the value of clearing transactions is around Rs 10,000 crore, it was Rs 9,700 crore today showing a marginal drop," a RBI official said......
Rural banking cannot be overlooked: Tingalaya
....Mr C Sambasiva Reddy, Chairman of KVG Bank, said the bank has adopted a clear-cut roadmap under various parameters as directed by the Union government, Reserve Bank of India and Syndicate Bank. The bank plans more grama sabhas to reach out to the farming community with simple credit products to even remote villages....
Subbarao’s job just got harder – thanks to Q4 GDP crash
It is true that the Reserve Bank of India (RBI) has to address the GDP growth fall but it will have to be allowed to do so in a manner that is not disruptive. The sharp fall in fourth quarter GDP growth to 5.3 percent against market expectations of 6.1 percent places an additional burden on the RBI Governor D Subbarao. The central bank is fighting inflation, the rupee’s fall, liquidity and government borrowing. The below-trend GDP growth has all and sundry clamouring for the RBI to ease monetary policy. The fact is that the RBI cannot just focus on easing policy to raise GDP growth expectations. Every action of the RBI will have an effect on one macro factor or the other and the RBI has to do a fine balancing act. Hence it is advisable to stay off RBI and let its do its job.....................
RBI draft report says need to raise FII invest limit in bonds
.....The RBI’s working group released its draft report on Thursday outlining measures to boost liquidity in government securities and interest rate derivatives market........
Captivating synchrony
.............A. Boothalingam, retired GM and Deputy Controller, RBI, is a musician in his own right. Having learnt Carnatic music from stalwarts such as Kittamani Bhagavathar, D.K. Jayaraman and K.V. Narayanaswamy, Boothalingam has given music performances in sub-senior slots during the December Season..........................
Growth dives, govt in denial mode
........."It will inevitably send shivers down the spines of senior coalition politicians, who will no doubt be heaping pressure on the Reserve Bank to react and react aggressively," ...................
India's woes are homegrown
....A better approach than leaning on the RBI would be for New Delhi to enact progressive policies to support investment. Politics will make that difficult, though, and India's economic parameters could get worse. New Delhi could find this difficult cycle is very hard to break.
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Growth at 5.3%: Time for RBI to rework its priorities
......However, with the latest growth figures of below the psychologically important 6 percent mark, RBI will doubtless have to go back to the drawing board ahead of its June 18 policy review. Economists reckon that with this inordinate slowing down of the growth rate, core inflation would also be coming down, and it was therefore necessary for the central bank to rework its growth-inflation priorities and place growth above inflation in its list of concerns........
........The spotlight, once again, will be on Subbarao and RBI. How the RBI Governor assesses the situation and whether he reworks his growth-inflation priorities will hold the key in the coming days. A growth figure which is the lowest in nine years surely deserves attention.
India's shocking GDP: What are RBI's options now on June18?
..........Sujan Hajra, Chief Economist, Anand Rathi Securities is not convinced that a mere rate cut will make any difference in the tight liquidity situation. He stresses that for transmission of loose monetary policy, the system needs liquidity surplus. "So, CRR cut, OMO or perhaps a combination of both may give the push. I personally expect about Rs 2 lakh crore of OMO and Rs 1 lakh crore of CRR cut, that’s 1.5% and RBI infusing Rs 3 lakh crore of liquidity in the system.”
India’s ‘shocking’ GDP growth may send shivers to coalition politicians
Credit Suisse, in its hard hitting analysis says that India’s GDP growth for the March quarter is much below expectations and coalition politicians may put more pressure on the RBI for easing rates.......
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CII demands immediate economic revival package
...........CII said that their primary demand is that RBI should cut repo rate and cash reserve ratio (CRR) by at least 100 basis points, which would make borrowings cheaper besides boosting sentiment.................
India now a 'gasping elephant'!
......"... traction on deep rooted structural reforms is needed to significantly improve the inflation-growth trade-off in the short as well as medium term," HSBC Chief Economist for India & ASEAN Leif Lybecker Eskesen said, adding that the RBI will have to approach any further easing with "caution".
Rupee decline, wobbly markets and 'lowest' GDP growth highlight inept handling of economy by UPA-II government
....Senior policymakers appeared to be pinning their hopes on the RBI cutting rates. "It is critical to appreciate that there is no scope for any further fiscal stimulus, but if inflation moderates, then RBI has a greater room to exercise its power," C Rangarajan, chairman of Prime Minister's Economic Advisory Council told ET...................
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Rupee fall: Did RBI ask PSU banks not to purchase dollars?
The rupee spiked, breaching 56 to the dollar, on market chatter that the RBI has asked state oil companies to restrict purchases of dollars through four state-run banks, but senior officials from the RBI and oil firms said the talk was not true. A senior official at the Reserve Bank of India called the rumours “preposterous” and said he was not aware of any such directive being issued...........
Thursday, May 31, 2012
Six districts are underbanked in Karnataka
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| Review on performance: (From left) Mr Subir Hari Singh, Additional Chief Secretary and Development Commissioner, Government of Karnataka; Mr S.V. Ranganath, Chief Secretary, Karnataka; Mr M.G. Sanghvi, Chairman, SLBC and Chairman and Managing Director, Syndicate Bank; Ms Uma Shankar, Regional Director, RBI; and Mr S.N.A. Jinnah, Chief General Manager, Nabard, at the State Level Bankers committee meeting in Bangalore on Tuesday |
The State Level Bankers’ Committee (SLBC), Karnataka, has identified six districts in the state as underbanked districts. The districts are Bidar, Bangalore rural, Chamarajanagar, Gulbarga, Koppal, and Raichur. It has initiated steps to open bank branches in these districts before September 2012 as directed by the Reserve Bank of India (RBI).................
Bad vaastu of rupee symbol caused its fall: Expert
An inauspicious symbol is behind the fall of the Indian rupee and a slump in the economy, aims a vaastu shastra expert in Guwahati. According to vaastu consultant Rajkumar Jhanjhari, 50, the lower horizontal line of the symbol has 'slit the throat' of the Indian rupee leading to its slide. Dharmalingam Udaya Kumar, assistant professor in the design department of IIT-Guwahati, had designed the rupee symbol in 2010. They symbol was incorporated in currency notes of 10, 100, 500 and 1000 from January and in notes of 20 and 50 from April this year. The symbol is a combination of the Devanagari "?" (ra) and the Latin R without its vertical bar. The designer's concept note had explained that two parallel lines at the top represent the Tricolour and depict an equality sign symbolising the nation's desire to reduce economic disparity..........
Rupee’s roller coaster ride
........Doing a post-mortem of rupee depreciation, the RBI has blamed the international financial crisis while others hold domestic factors to be equally responsible. Subir Gokarn, Deputy Governor, Reserve Bank of India, said the rupee was under severe pressure largely due to global factors arising out of political uncertainty in Greece. “Now in the last two or three days the pressure has been global. Rupee responds to very strong global forces,” he said during a programme organised by Indian Chamber of Commerce (ICC).He added that increased demand for dollar from importers and capital outflows were adding to pressure on the Indian currency. C.Rangarajan, Chief Economic Advisor to the Prime Minister echoed RBI, “Globally, the US dollar remained strong against a basket of major currencies with the euro remaining under pressure as the European Union leaders’ pledge to unitedly fight against the debt crisis failed to impress investors.”......
Financial inclusion for whose benefit?
.......In a recent article, Mr K.C. Chakrabarty, Deputy Governor, Reserve Bank of India, defined financial inclusion as “the process of ensuring access to appropriate financial products and services needed by vulnerable groups such as weaker sections and low-income groups at an affordable cost in a fair and transparent manner by mainstream institutional players.” That is an excellent definition, and one which is capable of transformational change — if implemented in letter and spirit. The trouble is, when it comes to implementation, the process has been largely driven by government fiat and regulator-pushed (even if implicitly so) quota regime............
Banks' credit-deposit ratio for West Bengal falls to 64%
...............UBI, the convenor to state level bankers' committee in Bengal, held a meeting with senior officials from state government, Reserve Bank of India and other lenders on Wednesday. ""I am not delighted,"" state finance minister Amit Mitra told bankers at the meeting. ""We have to find out the factors behind the low CD ratio."....................
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Morgan Stanley gets RBI nod for banking licence
Leading US bank Morgan Stanley has received an in-principle approval from the Reserve Bank of India (RBI) for a banking licence............
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Improving priority sector lending norms main focus: IDBI
.......... do not expect any immediate policy announcement from the RBI. The macro economic indicators are still not showing concrete indication for policy movement either in one direction or the other. I would expect the RBI would continue to watch these indicators carefully as it moves towards June 18 announcement.................................
Was 2011-12 India’s worst year since the global crisis?
....In short, growth so far below what RBI considers the trend rate of growth of around 7.3%, could mean the central bank becomes more worried about growth than about inflation.........
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Don't blame the eurozone
,,,,,,,,,,,,A comparison of actual FDI vis-a-vis the potential level determined on the basis of macroeconomic factors showed that "actual FDI which has generally tracked the potential level till 2009-10, fell short of its potential by about 25% during 2010-11… this large divergence between actual and potential was partly on account of rise in policy uncertainty", according to a recent Reserve Bank of India (RBI) study on 'Foreign Direct Investment Flows to India'...........
Left in a limbo
.....The country's banking system, which remained dormant in the area for quite sometime for reasons obvious, had suddenly taken a fancy to give advances to the MFIs that mushroomed across the country in recent years. This is borne out by the figures of the Reserve Bank of India (RBI) which reported that the outstanding credit of scheduled commercial banks to MFIs during the last three years rose from Rs. 5,572.15 crore in March 2009 to Rs. 7,960.21 crore in March 2010 and to a mammoth Rs. 15,467.58 crore in March 2011. But following the fracas of a few leading MFIs, particularly in Andhra Pradesh, slapping exorbitant interest rates which led to suicides of hapless and harried borrowers, the State government enacted the Andhra Pradesh Microfinance Institutions (Regulation of Moneylending) Act 2010......
Infra finance cos to have uniform risk weight: RBI
The Reserve Bank of India (RBI) has allowed infrastructure finance companies (IFCs) to have a risk weight of 50% on bonds that cover their public-private partnerships as well as commercial operation date projects........
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Historic moment for the IMF
......While the IMF should be applauded for taking a hard look at its view on regulating cross-border finance, we think further revision is needed in order for the Fund to have a policy that will truly be useful for nations to prevent and mitigate financial crises..............
Indian bank business shrinking in this fiscal, says RBI
Deposits and advances with Indian banks have shrunk so far in the fiscal year that began in April, with sluggish economic growth crimping loan demand, the Reserve Bank of India said on Wednesday...........
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India GDP growth could dip below 6%
.....the central bank, which delivered a surprise 50 basis–point cut in interest rates in April, finds itself restrained in its ability to boost growth with further rate cuts, due to continued inflation pressures.
The RBI is seeking a return to “trend growth” of 7% to 7.5% for the economy. But given the latest indications, “the economy will struggle to see year-on-year growth return to trend anytime soon, which in turn will reinforce the dilemma facing the RBI,” .......
RTI made easy: Government to set up call centres website for filing applications
While the government is consistently blamed for diluting the RTI (Right to Information) Act in several ways besides making illogical amendments at the state level, it is gearing up to make filing of RTI applications by just making a phone call. Citizens will not have to take the pains of either writing a RTI application or taking the pains to post it or physically deliver it. Proposals for setting up such privately run call centres have been advertised by the “Department of Personnel & Training” (DoPT) with the last date of submission being 10 July 2012.............
Wednesday, May 30, 2012
'Correction' in Re to aid cut deficit: Rakesh Mohan
Former RBI Deputy Governor Rakesh Mohan tells CNBC-TV18 that the fall in the rupee is to be seen as a correction, He explains that the new level of the rupee vis-Ã -vis will make the country competitive and aid in reducing the current account deficit. Mohan adds that the RBI has a very tough road ahead and needs to use every option that is available.
Click to read an edited transcript of the interview
Kerala needs more centres to dispense currency'
Thiruvananthapuram, May 29: The Syndicate Bank Staff Association has requested the Reserve Bank of India to open satellite centres in the State to deal with currency and coin distribution. The request comes in the context of a RBI move to close down its counters delivering these services in state capital and metros. It has found a mention in the RBI annual policy statement for 2012-13. Distribution of currency notes and coins would now be channelled only through currency chests and bank branches. There are five coin/currency dispensing counters at the Reserve Bank regional office here and two associated with its Kochi office. Mr K. S. Bhat, all-India Secretary, of the Syndicate Bank Staff Association (SBSA), said that the RBI move would affect interests of business and the general public. He urged trade unions as well as the banking public to come forward in protest against this move and force the Centre to take up the matter...................
RBI cancels Chatrapur co-op bank licence
The Reserve Bank has cancelled the licence granted to Chatrapur Co-operative Bank Ltd, Chatrapur, Odisha. With the cancellation of its licence and commencement of liquidation proceedings, the process of paying the depositors will be set in motion subject to the terms and conditions of the Deposit Insurance Scheme. The RBI said that the bank had ceased to be solvent and with all efforts to revive it having failed and the depositors being inconvenienced by continued uncertainty, the RBI delivered the order cancelling its licence after the close of business on May 23................
RBI asks NBFCs to verify documents before opening biz accounts
......"For sake of clarity, in case of proprietorship concerns, it has been decided to lay down criteria for the customer identification procedure for account opening by proprietary concerns. "Accordingly, apart from following the extant guidelines on customer identification procedure as applicable to the proprietor, NBFCs/RNBCs should call for and verify documents before opening of accounts in the name of a proprietary concern," RBI said in a notification..................
Shake-up in banks’ shareholding?
............The Bill will also give RBI the power to supersede the board of a bank for up to an year and to call for information from banks’ associate companies. These are truly significant changes in that they create the enabling conditions for the banking regulator to take bank ownership and governance to another level, primarily for private sector banks. However, these are necessary but not sufficient conditions. The sufficient conditions can be created through further ......
DMs asked to submit list of new bank branches, business correspondents
In a bid to complete Financial Inclusion in the State, all the district magistrates had been directed to submit the list of new bank branches and business correspondents (BC) of their respective districts in one week. They had also been asked to take initiatives to increase Credit Deposit Ratio.Chief Secretary Alok Kumar Jain issued these instructions to district magistrates in a video conferencing at Secretariat on Tuesday. Recently RBI Governor D Subbarao had agreed to relax the set standard of 1,000 population for opening of bank branches. There ought to be a bank branch in every 5 km distance and a BC in every 2 km distance. He directed the DMs to identify the location and submit the list to him in one week and to ensure connectivity while choosing the location............
LIC hikes interest rates on loans against policies
.....Meanwhile, the All-India Bank Depositors Association and former deputy governor S S Tarapore have suggested to the Reserve Bank of India that premature termination of fixed deposits should be allowed for survivors in a joint fixed deposit account. "The logic behind this is that the joint holder has to usually face a lot of expenses and should not be further penalized through imposition of an early withdrawal penalty," said Ashok Ravat, secretary of the association.
NPAs not a systemic issue:RBI
KVG Bank aggressive on financial inclusion front
The Karnataka Vikas Grameen Bank (KVGB) under the financial inclusion scheme has covered 418 villages and of this, 53 villages have brick and mortar branches. Meanwhile, the bank plans to open 50 regular branches and 50 ultra small branches and achieve a business-level of Rs 13,000 crore. Declaring 50 more villages as solar villages and establishing nine financial literacy centres are other schemes. KVGB chairman C Sambasiva Reddy told reporters here that the bank’s net profit for the year 2011-2012 stood at Rs 128 crore showing a growth of 35 per cent. The bank’s capital plus reserves have risen to Rs 839 crore from Rs 711 crore.
BS
Tardy lending performance raises concern at bankers' meet
.....The RBI Regional Director Uma Shankar said that to make financial inclusion meaningful it is necessary for banks to actually lend to people who have been given new accounts. “Only a small portion of the villages with a population of more than 2,000 persons have been provided with credit facilities,” Ms. Uma Shankar noted. She also urged banks to review and monitor the functioning of banking correspondents appointed by banks. “Banks need to ensure that the conduct of their correspondents does not affect their reputation,” she said............
RBI proposes tweaking FII debt limits: source
The RBI has proposed to the finance ministry reducing the minimum lock-in debt investment periods for foreign institutional investors as a way to boost inflows and help protect a weakening rupee, a senior official said on Tuesday. The Reserve Bank of India has also proposed recasting the investment limits within the countrys existing debt categories, an official with direct knowledge of the proposals told Reuters, given more than a third of foreign investment limits across all Indian debt categories are unutilised. He declined to be identified because the proposals have not been publicised. .........
Timely intervention by CM saves four district cooperative banks from their licences being cancelled by RBI
Ahmedabad, Tuesday: Timely intervention by Gujarat Chief Minister Narendra Modi had saved four district central cooperatives of the four districts from their licences being cancelled by Reserve Bank of India (RBI)................
New priority lending norms will hit pvt, foreign banks most
.....Banks may be encouraged to ensure that the number of outstanding beneficiary accounts under ‘small and marginal farmers’ and micro enterprises’ each register a minimum annual growth rate of 15 percent, the committee says. These new sub-targets, experts believe, will be a big challenge for private and foreign banks, since the lending levels for these banks are well below these new targets. The RBI’s view seems to be that it is now time foreign and private banks, having done business in India for long, join as equal stakeholders in the objective of greater financial inclusion. The aim is to increase direct lending to those who have a lack of access to credit and those sectors which generate large employment. How the foreign and private banks respond to these targets remains to be seen.
Moily irked by growing demands for selective exclusion from CCI scrutiny
.....After the banking regulator Reserve Bank of India made a pitch for exempting bank mergers from the ambit of the Competition Commission of India (CCI), there have been demands from other sectors, especially those like telecom which have their own regulators...............
High govt borrowing may crowd out pvt sector – RBI
The government’s large borrowing could crowd out credit to the private sector, Duvvuri Subbarao, governor of the Reserve Bank of India said on Tuesday. The situation would become more critical if there is fiscal slippage, he said at a conference of state finance secretaries in Mumbai.........................
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Inflation: RBI asks states to address supply side issues
Ahead of mid-quarter monetary policy review, Reserve Bank Governor D Subbarao on Tuesday asked state governments to address the issue of supply side bottlenecks against the backdrop of rise in prices. Addressing state finance secretaries here, he said both the centre and the states have important role in generating and promoting the supply response so that inflation could be managed within the comfortable zone.............
India GDP: not looking good
“There are only two [factors that could force] RBI to look at cutting rates. One is what happens to Greece and if there is some severe shock waiting for us. And the second is if growth over the next one or two quarters continues to remain close to 6 per cent – if that is the scenario then RBI would feel compelled to cut rates,”.......
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The rupee saga
The partially convertible rupee on Tuesday closed at 55.67/68 per dollar, 0.9% below its previous close of 55.1850/1950
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Time is ripe for an NRI bond issue to support rupee: Indranil Sen Gupta, India Economist, Bank of America Merrill Lynch
.....RBI Governor D Subbarao is really losing the game of expectations rather than facing capital outflows. Of the $20 billion that the RBI sold in October-January, almost $8 billion remain parked in banks' forex nostro-balances and thus have not left the economy. All the forex market is probably looking for is a commitment that the RBI will rebuild reserves abandoning its policy of trying to appreciate the rupee at the cost of buying forex.........
Rupee fall will not last very long: PM
Dismissing any comparison with the 1991 external debt crisis, Prime Minister Manmohan Singh today said the fall of rupee is a matter of concern but was confident it will not last very long. He said the rupee depreciation was taking place against the backdrop of the global economic problems and the Euro zone debt crisis and expressed optimism that solutions will emerge at the G-20 Summit in Mexico next month...............
Read - Indian Express
The rupee: a reality check
.............Unlike countries such as China, our official policy is not to target any particular exchange rate. The Indian central bank has stuck with this hands-off policy, allowing the market to determine the value of the rupee. One way of looking at the current slide is to consider it an overdue correction after a long period of overvaluation, when the strong capital flows into India sent the rupee soaring. RBI has done well to not target an exchange rate, because recent economic history shows us how difficult it is to defend the value of a currency in a world where capital flows freely across borders...................
Tuesday, May 29, 2012
Banks asked to ensure every family has at least one savings bank account by June
.....It is important that all such accounts are active and do not end up like no-frill accounts, a majority of which are dormant and hence unviable," said a top executive of a public sector bank. The government has also decided to extend its financial inclusion drive, called 'Swabhimaan campaign', to habitations with population of more than 1,000 in the north east and hilly states as per the 2011 census. The ministry maintains this model of financial inclusion is not in conflict with the blueprint prepared by the Reserve Bank of India. "There are no differences and the RBI's model of "one district-many banks-one lead bank" is being followed," another finance ministry official said.
RBI asks co-op banks to formulate norms for conversion of FDs
Reserve Bank on Monday permitted cooperative banks to formulate policies to check the practice of premature conversion of fixed deposits into other deposit schemes by customers with a view to obtaining higher interest rates. "In order to facilitate better Asset Liability Management (ALM), it has been decided to permit banks to formulate their own policies towards conversion of deposit with immediate effect", RBI said in a notification..........
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