Canara Bank launches technology-enabled Kisan credit card scheme

....The National Payment Corporation of India (NPCI) has developed the debit cards for Kisan credit card borrowers under its brand name of 'RuPay' cards. The credit facility of Kisan Credit Card enabled through debit cards will help farmers not only avail the loan from the bank but also would provide the convenience of drawing cash from ATMs of Canara Bank as well as others.....

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HDFC Bank launches credit card for doctors

Private sector lender HDFC Bank rolled out credit cards for doctors to cater to medical fraternity's specific needs, as part of its plans to launch total one million credit cards in current fiscal to deepen its presence in credit cards space,............

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SBI launches Business Debit Card for SME and business customers on foundation day

....The event was attended by its Chairman Shri Pratip Chaudhuri, Dr. Subir Gokarn , Dy .Governor , RBI, Bank's Managing Directors Shri Hemant Contractor and Shri A. Krishnakumar, other Central Board Directors, past Chairmen of the Bank, executives of Public / Private Sector Banks, eminent business persons and staff members along with their families......

........On the occasion, the Bank also launched for its SME and business customers, State Bank Business Debit card, having an array of attractive features including Cash Deposit facility, option of setting up Point of Sale terminals etc.......

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Clear skies cloud rate-cut hopes

.....RBI Governor D Subbarao in a seminar organised by the Confederation of Indian Industries on June 19 admitted that monsoon will play a key role in determining the central bank’s actions on interest rates. “When I joined service, I did not worry about monsoons. But when I first went as sub-collector in Andhra Pradesh, there was drought in one of the districts and then I realised how not only economic prospects but also emotional well-being are tied to the monsoons. Then I moved away from the field and stopped chasing monsoons. So, at the end of my career, when I’m at the RBI, I sort of look at monsoons with lot of anxiety, love and lot of expectations. It is very important for us,” he added........

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Subbarao stresses on importance of local language

....“Every bank should conduct a Town Hall event in a chosen State entirely in the local language. In this regard, they may coordinate with Reserve Bank’s Customer Service Department and Department of Communication to draw up a programme. This will be our collective effort to reach out to people in their own language,” he said while awarding Rajbhasha shields at Mumbai last week........

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Will you miss the finance minister?

.......Mukherjee also made sure that RBI lost its autonomy by empowering the finance ministry to resolve all disputes between regulators. The original idea was to end the turf war between the capital market regulator and the insurance regulator on unit-linked insurance plans; but the finance ministry smartly used that opportunity to set up a statutory joint panel, headed by the finance minister, to resolve any such disputes among any of the financial sector regulators. RBI wanted the government to take a relook at the proposal to set up a statutory panel, but Mukherjee didn’t budge. The decisions of a statutory panel are binding and, to that extent, the finance ministry has become the super regulator, eroding RBI’s autonomy..........

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Coordination between RBI, Central Govt need of the hour - T.V. Gopalakrishnan

The preamble of the Reserve Bank of India Act 1934 says ‘Whereas it is expedient to constitute a Reserve Bank of India to regulate the issue of bank notes and keeping of reserves with a view to securing monetary stability in India and generally to operate the currency and credit system of the country to its advantage.’ This gives an impression that the Reserve Bank has complete grip on the economy and the financial system where the Central Government, State governments, various markets, financial and other institutions and varieties of instruments and people interact and carry out transactions involving transformation of information and high technology. But, it has its own limitations and unless and until the Central Government gives full support and functional autonomy in letter and spirit, implementation of the preamble is practically rendered difficult..........

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A wish list for the Common Person - S.S.Tarapore

With the change of guard at the Ministry of Finance, every pressure group will have its own wish list. In the din of all this the Common Person's voice will be totally drowned but this voice must be heard and what could be the wish list? First, the Common Person has no defence against inflation. The current inflation rate on a year- on- year basis is 7.8% on the Wholesale Price Index ( WPI) and 10.4% on the Consumer Price Index ( CPI) is clearly outside the RBI's comfort zone of 5% and the long- term cherished goal of a 3% inflation. All wings of policy must work relentlessly towards this objective.......

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Centre not doing enough on fake currency: Parrikar

........"Whatever Reserve Bank of India pumps in (genuine currency) is flushed out by Pakistan. There is a massive influx of duplicate notes in the market," Parrikar told an annual general body meeting of Goa Chamber of Commerce and Industry (GCCI) in Panaji Saturday evening.........

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Padmanabhaswamy Temple: Expert committee to start temple inventory of vault A

....The RBI is finalizing the design for the strong rooms that will strengthen the vault security. The advanced gemology equipment procured from Germany has also arrived and will be installed at the workstation tomorrow. When asked if the presence of an underground tunnel linking the temple to the sea would change the design of the RBI's vault, Nair said, "The committee fully supports the scientists from the Centre for Earth Science Studies in their study. But no information regarding the presence of a tunnel has been passed on to us."

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Challenges and opportunities ahead for banks

......The RBI has come out with the phased roadmap for Basel- III framework implementation for the next five years. The need for risk capital as well as growth capital is likely to lead to higher capital requirement for the sector. ......

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My View on "Micro Finance in India"

The need of the hour is GOI and RBI taking note of the changed scenario, post-emergence of commercial MFIs and move fast towards timely regulatory solutions. Although uniform regulations would be ideal, considering the multiplicity of agencies operating in the area, it would be desirable to restate the roles of the existing regulators and supervisors through an appropriate guidance from the central bank, after appropriate consultations, instead of micro-management based on study reports influenced by views of stakeholders many a time limited to narrow constituency interests. This initiative could cover NBFCs, MFIs enjoying bank credit and cooperatives which would leave only a minority of players in the field. Time is running out as delay of roughly six months would mean crossing one recovery-cycle of micro-credit, by which time, beyond financial losses to the lenders, considerable loss of faith in the system can take place. The MFI issue has already grown beyond reasonable proportions and become a Centre-state issue with political implications. Even where legislative support from state or Centre is necessary, the central bank must provide guidance. It will be near impossible for the stakeholders to arrive at a consensus on costs and margins in a lucrative business like this. Some MFIs have taken the controversy as an excuse for moving to other pastures leaving the Self Help Groups (SHGs) and small borrowers in lurch or have shifted their area of operation from one state to the other where state governments accommodate their recalcitrant behavior. Delay in finding a solution will, therefore, mean closure of livelihood occupations for millions of MFI borrowers who depend on short term credit for carrying on with the ventures they have taken up with hope.

- M G Warrier 

Bank credit to farm, SME sectors forms over a third of bad loans

medium enterprises (MSMEs) were the main contributors to banks’ bad loans in 2011-12. Agriculture and MSMEs used up only a fifth of bank credit, but they accounted for 36 per cent of banks’ non-performing loans, data from the RBI’s latest Financial Stability Report show.

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Debt repayments due within a year amount to half of forex reserves

.....A Reserve Bank of India (RBI) press release says: “The ratio of short-term debt by residual maturity to foreign exchange reserves worked out to 50.1% at end-March 2012.” ......

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Managing expectations the wrong way

......On June 25, the Reserve Bank of India, in consultation with the government, announced a package of measures aimed at boosting dollar flows into the country. The fact that it has commanded so little attention so far is most certainly because the context in which it was announced, the extraordinary hype before it was made and its inevitable failure to lift the sentiment of the markets have all become prime topics for discussion, completely overshadowing the RBI’s package. A closer look at the extraordinary developments would throw up many useful lessons for policy-makers and lay people alike.....

Read - The Hindu

SBI baga 1st prize for in-house Hindi magazine 'Prayas'

UBI bags 2 first prizes

Dena Bank opens branch at Amraiwadi, in Gujarat

Heed the BoP warning

......Which is exactly how the warning issued by RBI, however carefully worded, should be interpreted. It is implicitly stating that there is only so much the central bank can do. It has probably reached the limits of its policy capacities. From here on, therefore, the inability of the government to contain the fiscal deficit slippage would exact a severe macroeconomic price from an economy that is already struggling.

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Stagflation

.....There is no agreement among commentators if the current situation can be termed as stagflation. The monetary policy dilemma in India is very similar to what a central bank would face during stagflation. If the Reserve Bank of India lowers rates to support growth, it will risk fuelling inflation, and if it raises rates further, it might end up affecting the growth momentum....

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RBI launches online platform for trading in G-secs

....The newly launched online trading platform is an additional facility to the existing system for trading by GAHs through primary dealers. RBI further said that the access to the module will be subject to controls by the respective primary dealers.......

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Rural scheme wages go online in Ganjam

,,,,The wages would be directly transferred to their account through the Regional Electronic Clearing Services (RECS), provided by the Reserve Bank of India (RBI), without intimating the district authorities. The block authorities are only to intimate the amount to be given to the beneficiary, he added. "It will help in quick payment of the wages to the beneficiaries and also to arrest the corruption on payment of the amount," the officer said.....

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Finance ministry, Sebi likely to recast regulations to allow companies to use ‘call & put options’ in M&A

......Ministry officials will soon meet with Sebi and the Reserve Bank of India to work out details of the new rules, including incorporating safeguards to check speculation, a finance ministry official told ET. "The norms need to be revised in line with today's economic realities and changes in the capital market," the official said.........

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A very curious slowdown

The RBI data on the industry wise deployment of credit show that between 23 March 2012 and 18 May 2012 loan outstandings to the coal, petroleum and natural gas industries went down from Rs. 70,060 crore to Rs. 62,770 crore.........

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Rupee volatility is here to stay: Rashesh Shah, Edelweiss Group

The rupee has lost almost a fourth of its value against the dollar in last one year. This fall has created a chorus of demands from industry as well as sections of the political establishment that the Reserve Bank of India (RBI) should step in and use its foreign exchange reserves to stabilise the value of the rupee. The RBI, on the other hand, has been categorical that it will only step in to curtail the volatility and not to support the value of rupee at some pre-determined price............

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Ill blow the trade winds

....In sharp focus is the fact that the widest ever CAD has kept India’s BoP in negative territory for the second quarter in a row, forcing the RBI to dip into its foreign exchange reserves. Once again, the BoP data highlights the huge risks in depending on volatile portfolio capital flows. A related development contributing to the economy’s vulnerability is the high level of external debt, especially of the short-term variety. Key vulnerability indicators like the debt-GDP ratio and debt-service ratio deteriorated during last year. However, despite being aware of the serious pitfalls, the government and the RBI have shown a penchant for short-termism.......

Read - The Hindu

Celebrations mark SBI's Bank Day in Lucknow

.....State Bank of India celebrated its Bank Day on Saturday. On this occasion, SBI (main branch) organised a self-help group awareness camp and a mela at Moti Mahal which was inaugurated by Rabi Mishra, Regional Director (Uttar Pradesh and Uttarakhand), Reserve Bank of India in the presence of N Krishnan, chief general manager, NABARD and K Ramachandran, chief general manager, SBI, Lucknow Circle. In the evening, as a part of the celebrations, a melange of cultural events were organised by the Bank with the active participation of the staff members.....

Read - TOI

Cops still clueless on Silsako wetland money source

....We had sent some of samples collected from the wetland to RBI, which confirmed that the notes were real. But we have no lead in the case so far," said an official from the district SP office. "The area is quite huge and surrounded by hotels, illegal settlements and education institutes. It is hard to find out the source of the money," added the official. He added that at least Rs 1.5 lakh was fished out that day........

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Staff protests RBI call to close coin counters

.....After RBI’s announcement, four recognised associations of the bank representing officers and employees had requested the bank to desist from closing the RBI counters as they served larger public interest. Protesting the decision taken by the RBI management, the members of the associations all over India staged demonstration in front of the offices on Thursday.......

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‘Friends’ lends a helping hand

......“Most of the support for the organisation is from the RBI Staff Quarters, Besant Nagar. We collect old clothes and give it to people who need them,” said Bhavana, Organising Secretary, adding, “We are thankful to Rammohan and Usha, staff of RBI, for their support.”..........

Read - The Hindu

Micro Finance in India

....The bill, introduced in May 2012, will aim to help the RBI set performance benchmarks for different sectors. These standards will be regarding justifiable means for recovering loan and other operational methods of the MFIs. The RBI is also supposed to establish a microfinance fund that will be used for providing them loans, seed capital, and grants. This fund will also be used to provide training to professionals who are working in this sector.........

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Insuring stress

 Given how sharply the economy has slowed, it’s not surprising the quality of banks’ balance sheets is worsening. RBI says as much in its latest Financial Stability Report (FSR), citing a stress test that reveals a deterioration in their capital position..............

FE Editorial : Insuring stress

Rebrand Or Perish

....can the old private sector banks still grow while sticking to their knitting? Former Reserve Bank of India (RBI) deputy governor and head of the RBI-sponsored Centre for Advanced Financial Research and Learning, Usha Thorat, thinks they can. Recently, she said that data shows that “as long as old private sector banks cater to their niche segments in their traditional areas, they have been able to survive and grow at a steady and healthy pace”........

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20 Leaders of IIT KGP IN The Glorious 60 years

....The book has a foreword by Dr Duvvuri Subbarao, Governor, RBI, and an introduction by Dr Damodar Acharya, Director, IIT Kharagpur. The book, published by Random House India and priced at Rs 150, makes for inspirational read for IITians......

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Allahabad Bank awarded RBI Rajbhasa shield

Allahabad Bank has been honoured with 3 prizes by Reserve Bank of India for 2010-11 for outstanding implementation of official language policy of the bank. J P Dua, chairman & managing director of the bank received the prizes from the RBI Governor Dr D Subbarao in Mumbai on Friday.

Volatility Is A Word

The Reserve Bank gives its Governor the best statistics possible in the country; he should invest in better macroeconomic theorists to interpret them

The economy continues to generate unfavourable news. It has been so prolific in bad news that just reporting it can be mistaken for being alarmist. However, the governor of the Reserve Bank took a recent opportunity to ask whether 2012 is going to be a repeat of 1991. A large payments deficit had coincided with a large fiscal deficit in 1991; the same combination is to be seen in 2012. We are happy that he has taken the initiative to ask the question. His answer is predictable: that it is not. And the reasons he gives are good, fair and dubious. He is right that the share of services in national income has gone up. But to argue then that services are more stable and will give stability to income variations is wrong........ 

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Urban Co-op Banks resist RBI’s stringent norms

The cooperative banking scene has witnessed a steep decline in financial standards and it explains the RBI laying down stringent rules for checking a bank’s financial health. However, the evolution of the strict norms by the RBI has ruffled the cooperative banking sector’s feathers..........

 

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Majority of SMEs call RBI decision of not easing monetary policy ‘unjustified’: Survey

 whopping 93% of industries in the SME sector opine that the Reserve Bank of India's (RBI) decision to keep the interest rate unchanged was completely out of line, according to a quick poll conducted by the apex industry body ASSOCHAM...........

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Urban Co-op Banks resist RBI’s stringent norms

The cooperative banking scene has witnessed a steep decline in financial standards and it explains the RBI laying down stringent rules for checking a bank’s financial health. However, the evolution of the strict norms by the RBI has ruffled the cooperative banking sector’s feathers............

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What’s Your NPA?

Kamlesh Chandra Chakraborty is not one to mince words. On 28 June, the senior-most Deputy Governor of the Reserve Bank of India (RBI) gave bank chiefs an earful on bad loans. “You have misguided your investors for the past five years by not giving your proper NPA (non-performing assets) figures.”.....

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More inter-bank links warrant greater monitoring

.......RBI said the degree of loss to the system due to failure of the ‘most connected’ bank had risen from 12 per cent of capital of the banking system to over 16 per cent in 2011. “Financial stability considerations, therefore, warrant that the risks posed by the increased interconnectedness of the few banks in the inner core to be carefully monitored, through rigorous microprudential supervision of these entities,” said RBI.........

Read - BS 

Impact of forex volatility on rupee

....The exchange rate regime in India can also be described as a “bounded float” with the removal of restrictions on many capital account transactions in the past few years. While the RBI does not target the exchange rate, nor has a fixed band for nominal or real exchange rates to guide interventions, the capital account management framework helps in the bounded float.....

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Exchange rate: Fixed or floating?

.....The Reserve Bank of India’s selective control in the forex market has been unable to control the free fall in the value of rupee in the recent months. This raises a fundamental question as to whether the RBI should consider alternative exchange rate policy options......

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Banks' gold coin imports a concern

.....For banks, selling gold coins was a lucrative proposition, as they earned Rs 100-150 for every gm of gold sold. State Bank of India Chairman Pratip Chaudhuri said, “Banks took to gold coins because customers needed them. Private sector banks were doing brisk business. So, we thought we were losing out on an opportunity and viable business.” He added gold was taking away foreign exchange and some people were possibly holding gold as the nearest proposition to holding dollars.

Read - BS 

Tweak financial regulation - Y.V.Reddy

.........In revisiting the issue of regulation in conjunction with competition and ownership, it is necessary to recognise the lessons from public sector banking in the 1970s and 1980s, particularly in developing and emerging market economies. The problems in the past with public sector banking were on due to financial repression attributable to macroeconomic policies, the lack of appropriate global standards of regulation, the existence of monopoly status, and technological obsolescence, in addition to standards of governance in public systems in general, and public ownership in particular..........

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Monetary policy for villages only

India has two economies: One for the urban rich and the other for the rural poor. The RBI should encourage the wealthy to invest in rural India by reducing interest rates there.

Like Mr Kapil Sibal’s policy of ‘one nation, one examination,’ the Reserve Bank of India has a policy of ‘one nation, one interest rate’: it offers the same rate whether it is a rich city such as Mumbai or a poor village in Keonjhar, Odisha. The fact that it has not produced the desired results has made no impact on the central bank. .................

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International Conference on Risk Management and Fraud Detention

.....Mr. Vijaya Bhaskar, ED of RBI explained in detail the regulatory expectations. He said that fraud is an area of concern as it undermines the trust, which is the foundation stone of the banking business. He emphasized that the three lines of defense against Fraud – the employees, the systems and controls and the external agencies like the regulator and law enforcement agencies- should be strengthened. He insisted that for establishing a strong anti fraud culture the first two lines are to be robust. .........

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Dr.Sandip Ghose - The honour well deserved...........

 

E-payment facility for all MGNREGA beneficiaries by Oct

.....Over six million households registered in the state under MGNREGA will benefit from the facility. The RBI Deputy Governor also rolled out an improved model of electronic receipts of the state government. The new model envisages a mechanism where the agency banks will forward the particulars of electronic receipt transactions on the day following the day of transaction to RBI-Bhubaneswar instead of sending to the cyber treasury. RBI will process the e-receipt files, debit the accounts of banks and credit the account of the state government instantaneously with the amount of e-receipts. The Central bank will also generate e-scrolls and forward the same to the cyber treasury.........

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Former Bank of Maharashtra chairman Anup Sankar Bhattacharya takes over as director of IBPS

Former Bank of Maharashtra chairman Anup Sankar Bhattacharya has taken over as the director of Institute of Banking Personnel Selection or IBPS, which conducts common admission tests for bank recruitment. Bhattacharya will replace M Balachandran who is resigning today.......

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What keeps rupee under pressure

The Reserve Bank of India announced details on balance of payment. Balance of payment is typically the sum of all transactions made between nations for a specific duration.............

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‘India must cut subsidies, push reforms to defend rupee’

......The Indian rupee is likely to slide further and might soon touch 58 to the dollar as regulatory measures by the central bank are unlikely to have any significant impact on the currency, analysts say.

“The monetary policy has its limitations. The RBI intervention won’t do much as the issue is structural,” .........

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NBFCs at business concentration risk

.....share of non-banking finance companies in the gold loan business has risen sharply with total asset size increasing to Rs 44,510 crore in 2011- 2012 from just Rs 5,480 crore at the end of March 2009, increasing the concentration risk in the business as the growth is contributed by two main companies, according to the Reserve Bank of India Financial Stability report released on Thursday.........

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Price stability and financial stability – an emerging market

Deepak Mohanty

Address by Mr Deepak Mohanty, Executive Director of the Reserve Bank of India, in the 2012 Central Bank of Nigeria (CBN) Board Retreat, Cape Town, South Africa, 27 June 2012.

......Drawing from a wider mandate, monetary policy in India has evolved to have multiple objectives of price stability, financial stability and growth. These objectives are not inherently contradictory, rather mutually reinforcing. The Reserve Bank’s approach recognises that price and financial stability are important for sustaining high levels of growth which is the ultimate objective of public policy. The Reserve Bank’s approach to financial stability has been proactive and preventive rather than reactive. Its role as monetary policy authority, well integrated with macroprudential regulation and microprudential supervision, with an implicit mandate for systemic oversight has enabled the Reserve Bank to exploit the synergiesacross various dimensions..........

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Banks must behave responsibly, says Chakrabarty

.........."Market players cannot behave in an irresponsible manner and say that it is RBI's job to provide (adequate liquidity). So, every financial institution has to manage its asset and liability in a prudential manner,"..............

Read - The Asian Age

RBI to take best possible steps to check Rupee slide: Chakrabarty

New Delhi: The Reserve Bank on Friday said it will continue to take "best possible" steps to contain the slide of Indian rupee. "Whatever best possible...What Reserve Bank needs to do, Reserve Bank will continue to do that," RBI Deputy Governor K C Chakrabarty said on the sidelines of IIMA's Citi Financial Literacy Symposium here...........

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RBI says about 9% of bank branches most reluctant to lend

The reluctance of bank branches to lend to the poor is hampering effective implementation of the Manmohan Singh government's financial inclusion scheme, being promoted as an antidote to the rising income inequality. Reserve Bank of India has found that 9% of the country's 92,690 bank branches are the most reluctant in lending. Their credit-deposit, or CD, ratio is less than 25%. Loan disbursals through these offices fell by 15.4% year-on-year to December 2011 as against a 4% rise in the corresponding period in 2009-10.................

Read ET

RBI imposes Rs2 lakh penalty on Rajasthan bank for excessive service charges

The action by the apex bank should serve as a pointer to other banks—big and small—that charge excessive service charges

The Reserve Bank of India (RBI) has imposed a monetary penalty of Rs2 lakh on the Bundi Urban Co-operative Bank located at Bundi in Rajasthan. According to a press release, the bank has been penalised for "repeated violations of Reserve Bank of India (RBI) directives relating to donation and levy of service charges on customers". A show-cause notice was sent to the bank, but the central bank found the response unsatisfactory. Levying monetary penalty for violation of RBI guidelines on services charges to customers is the first of its kind by the RBI. The action by the apex bank should serve as a pointer to other banks-big and small-that charge excessive service charges.

Moneylife

Current account deficit swells

.....“The stress witnessed in India’s Balance of Payments (BoP) in the third quarter continued during the fourth quarter of 2011-12 as well due to large increase in imports,” .........

Read - The Hindu

RBI warning as BoP deeper in red

..........Reflecting India’s growing vulnerability on the external sector, all the key parameters of the balance of payments (BoP) are flashing amber.................

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Banking on Pranab

........At the moment, it’s a problem of plenty. Omarpur, a small town on the way to Mukherjee’s home in Jangipur, has seen 20 banks spring up in the last couple of years. From private banks like ICICI Bank and Axis Bank to Bangiya Gramin Vikash Bank (a regional rural bank) and state-owned United Bank of India, the people of Omarpur are clearly spoilt for choice. There are too many banks chasing too few customers. Customers are therefore treated like royalty here. So intense is the competition among banks in Omarpur that in the last one year, around four branch managers have sought transfers because they found it impossible to meet the business targets assigned them................... 

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Gold loan business model worries RBI

RBI on Thursday expressed concerns that the business model of gold loan companies is driven by borrowings, of which, bank finance forms the major component and is increasing at a fast rate. Any adverse development in recovery by these NBFCs or an adverse movement in gold prices may have a spill-over impact on the asset quality of the banks, the central bank said in its financial stability report.

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So much of glitter

The spirited advice by a Reserve Bank of India official that Indians — especially the poor — must keep away from investing in gold because such investments are speculative, is unlikely to be heeded by many. This recent suggestion has been made by Reserve Bank of India Deputy Governor KC Chakrabarty obviously because huge amounts of gold imports are adding to the country’s current account deficit and dragging the value of the rupee down. Mr Chakrabarty’s concern is understandable..............

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KYC: An effective tool to fight money laundering

Money laundering poses a serious threat to the health of India’s financial sector. It is the process by which criminals conceal the origin and ownership of the proceeds of crime by legitimising illegally obtained money, channelising surreptitiously through legitimate business channels and integrating those to the financial system through ways like bank deposits, investments or transfer. Financial institutions like banks, insurance companies and stock markets are most vulnerable to such intrusion and therefore, the need to protect these institutions from the debilitating effect of laundered money. This is intended to be achieved by implementation of Know Your Customers (KYC) policy and Customer Due Diligence (CDD) guidelines across the financial sector...........

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“Expedite smart cards scheme”

.... A.J. George, Assistant General Manager of Reserve Bank of India (RBI), reviewed the banking indicators of the district. While expressing broad satisfaction, he pointed out with concern that advances to minorities was only 2 per cent instead of the mandated 10 per cent. He urged bankers to focus on this section and also improved their reporting.......

Read - The Hindu

SEBI’s ED Usha Narayanan demits office

......She also served in IOSCO’s inspection committee, RBI’s conflict of interest committee and the Government of India committee on ADR/GDR/FCCB policy......

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RBI's diktat capping debit card charges could spur usage

Come July 1, and you could see retailers across the country urging you to use your debit cards instead of credit cards. The reason? The recent directive from RBI asking banks to charge a maximum of 0.75-1% (of amount swiped) on debit card transactions at point-of-sale (POS) terminals. The objective is to make it cheaper for retailers to operate the POS infrastructure and thereby encourage use of debit cards over credit cards.............

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With fees halved, kirana shops may accept debit cards

......However, there is some confusion on who will reduce charges as the MDR is shared by the card issuing bank, Visa and MasterCard and the bank that has installed the point of sales terminal (acquiring bank). At present, the onus of recovering MDR is on the accquiring bank although most of it goes to the issuing bank. Card companies are seeking clarity from RBI on the extent of reduction by each player.......

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D Subbarao dampens fiscal stimulus hopes

......"On the domestic front, slowing growth, elevated inflation and large fiscal and current account deficits are serious concerns. The already high fiscal deficit leaves little room for the government to stimulate the economy. The current account deficit is being increasingly financed by debt flows, threatening long-term sustainability," ........ 

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....and he is now Dr.Sandip Ghose.........

VITALINFO extends Heartiest Congratulations to Ghose as he will now be known as Dr. Sandip Ghose........ Watch this space to read more tomorrow...........................  

RBI is right, critics be damned : S S Tarapore

......In an unusually hard-hitting speech, at the Indian Merchants’ Chamber on June 19, 2012, Governor Dr D. Subbarao stressed that there was nothing inevitable about the India growth story and that achieving growth was a shared responsibility of the government, the RBI and economy managers. He emphasised that the blame game cannot go on; it was not good for anyone, particularly the majority of the population. The poor are vulnerable to inflation as it is a regressive tax which hurts the poor the most; their voice, silent as it is, must be heard. Governor Subbarao comes out fighting from his corner, and this speech will go down in the annals of RBI history as one of the most powerful and frank speeches by an RBI Governor. The matter will not end here, and the RBI should be ready for a battle of attrition. The RBI can take solace in the fact that it is doing the right thing, if it comes in for bitter attack; and conversely, doing the wrong thing, if praise is heaped on it........

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RBI sounds a cautious note on algo trading

.......This is the first time a financial market regulator has revealed figures regarding the use of HFT or algo trading technology, which have been under a cloud globally. RBI has stressed the need to balance technological advancements with a pragmatic approach. “This assumes even more significance for India, as efforts are being made to increase retail participation in Indian securities markets to change the markets’ largely institutional character,” RBI said...............

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RBI caps merchant discount rates for debit card transactions

.....The RBI said the cap on MDR would encourage all merchants to deploy card acceptance infrastructure and also facilitate acceptance of small value transactions. A lower MDR, with the expected increase in transaction volume on account of network effects, would result in a reasonable ROI for acquiring banks. Till now, the MDR for debit and credit cards was the same in India. Given the different nature of the two products, there is no rationale for having a similar MDR for debit and credit cards, the RBI release said.

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No cheques: Govt, RBI want to checkmate paper money

.....Well, the good news is that the finance ministry wants to end our love affair with paper money. It has decreed that at least state-run banks must completely stop using cheques for the following purposes: payments to customers, staff, and vendors and suppliers. Moreover, “disbursement of loans and payments towards investments should be made only through the electronic mode,” reports The Economic Times. Simultaneously, the Reserve Bank of India (RBI) has put out a vision document whose goal is to reduce the use of paper money. Its vision is not to move to a cash-less society, but a “less-cash society”. (If you have trouble falling asleep, you can read the whole bally document here.) So, don’t fret too much of your bank suddenly raises charges on issuing cheque-books. They will justify it in the name of the RBI’s less-cash vision. Any excuse to charge you more. But it’s in a good cause.

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‘I do not go to an ATM’

Mumbai, June 28: The RBI Deputy Governor, Dr K.C. Chakrabarty, brought the house down saying that he never used ATMs after hearing the number of complaints made by customers. While the ATM machine was one of the greatest innovations in the last 50 years in terms of technology products, it did have drawbacks. “It facilitates faster dispensation of cash provided the transaction is successful. Though there have been 98 per cent successful ATM transactions, there have been no failed transactions at a branch. So where is the evolution?” he exclaimed. “The problem faced by the aam aadmi today is ‘terrorisation of ATMs’. Some (ATM machines) will swallow your cards, some require only swiping; some require keys and some do not, some provide cash on the tray while some do not, and some do not return money…,” he quipped.

HBL

Banks must ensure better IT solutions for customers: RBI

The Reserve Bank of India Deputy Governor K C Chakrabarty told banks on Thursday that their “Focus of all innovation should be on the customer” and it should never be driven only by internal processes, systems or employees but customer satisfaction..........

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RBI Deputy Governor K C Chakrabarty differs with FinMin, opposes free e-fund transfer

MUMBAI: Within a fortnight of the Finance Ministry asking banks to make electronic fund transfers free of cost, RBI Deputy Governor K C Chakrabarty today said the banking regulator is firmly of the view that the plan should not be implemented as it is commercially unviable. "We firmly believe that anything that is free of charges can never be scaled up, it cannot be made robust unless there is commercial viability...I don't think anybody will be able to provide this service free of cost; this is just not possible," ................... 

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Banks misguiding investors on NPAs, says Chakrabarty

Mumbai, Jun 28: Mr K C Chakrabarty, Deputy Governor, Reserve Bank of India, on Thursday lambasted lenders for attributing their sudden fall in profits to migration to system recognised NPA generation saying this is tantamount to misguiding investors. “You have misguided your investors for the past five years by not giving your proper NPA (non—performing assets) figures,” he told a banking technology summit organised by the industry body CII here..............

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Measuring sentiment

Like love, “sentiment” is an intangible and can’t really be measured. Its impact, however, is profound; when aroused, sentiment can completely overturn your life or, more prosaically, financial markets. While measuring sentiment accurately is, by definition, impossible, I like to put on my Don Quixote hat from time to time and tilt at such lovely curiosities. I’ve been doing that with the sentiment for the rupee and my ramblings may, perhaps, throw some light (or more confusion) on the subject.........

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Looking Ahead: Staff crunch ahead, NIBM readies PG course via video-conferencing

.....The move is aimed at countering the likely shortfall of staff in the banking industry in the next few years as several officers holding top management positions in banks are retiring. Major private and government-run banks will be connected to training sessions that NIBM will run during a year long e-post graduate programme in banking and finance (PGPBF). The decision on launching the video-conferencing facility will be taken at the board meeting of NIBM likely to be held in July in Mumbai under the chairmanship of Reserve Bank of India (RBI) Governor D Subbarao. .......

Read - Indian Express

To check speculation, RBI seeks curbs on currency futures

.....RBI is learnt to have raised the issue during a meeting of the sub-committee which is chaired by the central bank governor. In recent weeks, RBI has sought to clamp down on activities that could impact currency fluctuations and the proposal is also in that direction. The rupee has depreciated over 20% over the past 12 months and closed at 56.80 against the dollar, compared to Wednesday's close of 57.16......

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RBI Executive Director weighs financial stability objective

.....Deepak Mohanty, an Executive Director at the Reserve Bank of India, delivered a speech on June 27 in which he discussed the importance of financial stability as an element of central bank mandates, but argued that price stability should remain the first priority. Speaking at a Central Bank of Nigeria board retreat in Cape Town, Mohanty said that the recent crisis has underlined the importance of central banks' financial stability role. However, "the challenge for a central bank is to achieve multiple objectives without losing credibility as a monetary authority solely responsible for price stability," he said..................

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Concerns over asset quality of banks remain elevated: RBI

.... “Insurance companies and mutual funds are the major lenders in the Indian financial system with banks, especially public sector banks, being the major borrowers.” Banks, on the other hand, were considerably reliant on borrowings from these entities. As borrowings from mutual funds were largely short-term, the RBI said, “they could engender greater liquidity risks for the banking system.”...............

Read - The Hindu

Reserve Bank Says India Is Facing Inflation, Growth Risk

............“Threats to stability are posed by the global sovereign debt problem and risk aversion, domestic fiscal position, widening current-account deficit and structural aspects of food inflation,”................

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Bank deposit and lending patterns continue to favour big cities

......Recent Reserve Bank of India data on deposits show that wealth is getting concentrated in the bigger cities and towns. At the end of December 2011, the top 100 Indian cities accounted for 69.4% of aggregate bank deposits............

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'Need to educate public about perils of investing in gold'

Reserve Bank Deputy Governor KC Chakrabarty today said educating the common man about the speculative nature of gold investments is the key to bring down the high import of the precious metal which is straining current account and pulling down the rupee. "What will bring down gold imports is creating awareness in the society that gold is not a proper investment for the poor. It is a speculative investment. We need to change our culture," .....

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Lowering capital controls can sometimes be a bad idea

.....Indian industry is operating near full capacity, going by capacity utilization and inventory data published by the Reserve Bank of India, but the situation described by the World Bank is closer to what we saw in 2008, when the Reserve Bank of India led by Y.V. Reddy went against the prevailing global consensus and argued for a policy to control capital inflows that threatened to worsen overheated in the Indian economy.......

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India downgrade could hit banks' overseas funding: RBI

....The ability of Indian banks and corporates to borrow overseas could be hit if the country's sovereign rating is downgraded, the Reserve Bank of India said on Thursday, after recent cuts to the country's outlook by Fitch and Standard & Poor's. "A change in the current external rating of the country could have 'cliff effects', impacting both, the availability and the cost of foreign currency borrowing for Indian banks and firms," the RBI said in a report on financial stability...........

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RBI vs the govt: who will blink first?

......We seem to be moving towards stagflation, with growth at 5.3 percent and inflation (WPI) at more than 7 percent. In fact, CPI inflation for May came in at 10.36 percent, justifying the RBI’s latest stance. Even if the RBI had cut rates, there is doubt as to what extent banks would have followed it. Expectations of money printing abroad may have given the RBI some room to continue its crusade against inflation and resist pressure to cut rates immediately to ease liquidity. Also, as rightly mentioned by it, there is a risk of commodity prices rising and thus adding to inflationary pressures, if developed markets start printing money once again. The point is, how long would it wait for Quantitative Easing (QE) abroad, before finally succumbing to the pressure and cut rates? A game of brinksmanship seems to be going on in between the RBI and the government. Let’s see who blinks first. 

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Despite risks, India's financial system robust: RBI

.............."The financial system of the country remains robust despite increase in risks to stability primarily due to global risks and domestic macroeconomic conditions,"..............

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No direct risk to Indian banks from Eurozone: RBI

....The RBI felt the muted economic activity and difficulties abroad may lead to further deterioration in asset quality for banks but the situation is not alarming. The Basel-III capital adequacy norms to be implemented in phases by FY18, which aim at fortifying the capital bases of banks, may not hurt so much given our banks' strong capital adequacies but will throw up challenges,

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PM takes charge of Finance — and how!

What a stunning difference taking over Finance Ministry has made to the persona of Dr Manmohan Singh! Seemingly clueless, listless and rudderless as Prime Minister, he has suddenly begun exhibiting verve and vigour, and morphed, in a manner of speaking, into a mouse that roars! He thumps the table and orders the mandarins of the Ministry, and the presiding deities of the Reserve Bank of India, Dr D. Subbarao; the Planning Commission, Dr Montek Singh Ahluwalia; and the Prime Minister’s Economic Advisory Council, Dr C. Rangarajan; to get cracking with the task of pulling the country out of the economic morass into which it has fallen.................

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IndusInd Bank gets its first currency chest

.....Earlier, banks had to report the balances in the chest to the RBI at the close of each day. However, today typically the chests are linked up to the RBI that all transactions could be monitored by RBI real time...............

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ATM operators struggle to pass on higher capital costs

............The operators of automated teller machines (ATMs) in India are unsuccessfully trying to convince ATM makers to charge per transaction as an increasing number of banks are outsourcing the entire process from purchasing to managing the machines...............

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More inter-bank links warrant greater monitoring

....The Reserve Bank of India (RBI) on Thursday said “interconnectedness” among banks had risen in the last financial year and needed rigorous monitoring. “An analysis of the network of the Indian banking system reveals that the systemic importance of the ‘most connected’ banks has increased, warranting a closer monitoring of the banks,” said RBI in its fifth Financial Stability Report, released on Thursday......

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Banks' gold coin imports a concern

...at a banking seminar on Thursday, RBI Deputy Governor K C Chakrabarty said investments in gold should be discouraged in the current scenario, and people should consider the change in their income levels before buying gold.....................

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Elevated inflation, fiscal, current account deficits are serious concerns: RBI Governor

The Reserve Bank of India on Thursday expressed concern over the rapid rise in gold loan companies and that such firms, which are highly dependent on banks, could pose a risk to banks. In its Financial Stability Report released Thursday, the central bank also said it was worried about the placement of non-convertible debentures by gold loan companies. It also raised concers over high inflation and large fiscal and current account deficits..................

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Foreign banks face Bharat challenges

......................And then, RBI released a ‘Discussion paper on the presence of foreign banks in India’ in early 2011. Apart from a more assured point of view regarding local incorporation for systemically important foreign banks, the Discussion paper does little to shake up the game for existing foreign banks. It does, however, change the rules of entry for new entrants by defining categories of banks that may not be eligible for the branch mode of presence.................

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AP banks gearing up to complete rural coverage

.....The committee is now gearing up to open brick-and-mortar branches in all villages with population of over 5,000, as part of the nation-wide initiative unrolled by the Reserve Bank of India. The State requires 208 branches to cover all villages under this category..................

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RBI Q1 review on July 31

“D. Subbarao, Governor, will announce the first quarter review of Monetary Policy 2012-13 on July 31, 2012,” RBI said in a release. He will meet chief executives of major scheduled commercial banks on that day to discuss monetary policy issues.

The Hindu