No-frills accounts aren’t a nuisance: D Subbarao

...."By and large banks have outsourced the 'last mile' to intermediaries such as microfinance institutions and self-help groups. This is a model that has worked, and one that we should pursue, and refine. Nevertheless, the question is, 'is there a business case for banks to do some of the last mile themselves? Can banks rely entirely on outsourcing? Isn't there a valuable experience to be gained by banks by dirtying their hands more and reoccupying the last mile?" .........

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Central Bank of India scraps levy on NEFT transactions up to Rs 1 lakh

Central Bank of India has made all National Electronic Funds Transfer transactions up to Rs 1 lakh free from levy of any charges with effect from July 1, 2012...........

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RBI nixes textile sector’s plea for debt revamp

The RBI has rejected a debt restructuring proposal from the textile industry. The industry was hoping for a Rs 35,000-crore package. However, the Reserve Bank of India said it had no objection to a two-year moratorium on term loans and conversion of working capital into working capital term loan (WCTL) within a timeframe of three-five years.............

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Making gold work

This refers to the article ‘‘Managing gold, a policy challenge’’ (Business Line, July 6). This is a timely alert to the Government and the RBI to manage India’s domestic stock of gold to the country’s advantage. Instead of handling the issue piecemeal, the Government and the central bank should evolve a gold policy which should factor in:

The imbalance between import and export of gold and gold-based products;

Mapping the domestic stock of gold and jewellery;

Gradually converting the official gold stock with government and banks into standard gold, acceptable internationally;

Charging inspection fee (there should be arrangements for inspection) and an annual charge payable to government on gold beyond a stipulated limit retained with private individuals/institutions.

This will partly finance the security costs borne by the government.

- M. G. Warrier Mumbai (HBL)

Gold investor? Restrictions on coins can curtail your options

Rupee depreciation and higher outflows of dollar in the form of imports have been concerns of the government for some time now. While the government has been taking measures to curb import of gold into the country by hiking duties and taxes, Reserve Bank of India (RBI) too, has started doing its bit. The central bank has already asked banks to go slow on gold coin sales, and a proposal to ban them from the sales is also doing rounds. Financial Chronicle evaluates the likely impact of such a measure on banks, investors and other investment avenues in gold........

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RBI working to resolve issues facing microfinance industry: Governor Subbarao

....The Reserve Bank of India (RBI) is working to resolve the issues facing the microfinance industry, including compliance to capital and provisioning norms, to bring the ailing sector back on track, Governor D Subbarao said, as per media reports from Chennai.......

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Whammy after whammy for India’s Muslims

....Now, with India back on the slow trail, the world’s second largest Muslim population awaits darker days. Through five straight years of over 8 per cent growth in 2007, economists were projecting an annual expansion rate of 11 per cent from 2011 on. But in the last week of June, the Governor of Reserve Bank of India, D Subbarao, admitted for the first time that the “potential” for India’s economic growth has “come down”. Mr Subbarao was not exaggerating. In the post-2008 era, India’s economy experienced rapid deceleration.......

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Jain Irrigation gets RBI nod to launch agri NBFC

Jain Irrigation Systems has obtained regulatory approval from Reserve Bank of India to launch a new non-banking finance company (NBFC), which will focus on farm sector and operate in rural and semi-urban areas. The NBFC, to be named Sustainable Agro-commercial Finance Ltd (SAFL), will commence as a joint venture with Jain Irrigation, promoter entities and IFC, a member of the World Bank Group, as equity shareholders. Some banks and financial institutions will join the equity shareholding at a later stage, the micro irrigation company said........... 

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SKS soars on buzz that RBI may ease norms for non-banking finance companies

....The latest spurt in the SKS scrip comes on the back of Reserve Bank of India Governor D Subbarao's comments that the apex bank was mulling relaxing norms on provisioning, net worth and capital adequacy for NBFC MFIs. "In particular, Andhra Pradesh-based MFIs, saddled with huge losses, large NPAs (non-performing assets) and eroded capital, are facing an especially acute problem in complying with the capital and provisioning norms. RBI is working on resolving these issues, so that MFI operations can get back on track," Subbarao is quoted as having said......

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RBI asks banks to innovate cost effective village branch model

Chennai: The Reserve Bank has asked banks to develop cost effective village branch model in order to promote financial inclusion. "Indeed, I think there is a strong case for a much larger effort on innovating a cost effective village branch model," RBI Governor D Subbarao said .........

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‘RBI outreach programme yet to make an impact at the grassroots’

The outreach programme of the Reserve Bank of India is yet to make any big impact on the target audience. The RBI Governor, Mr D. Subbarao, in his oration at IOB’s Platinum Jubilee function, said, “The actual benefits of the programme, aimed at financial inclusion, have not reached the backward communities in villages, which were the real target,” he said...........

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Pension - updation - tension - RED SALUTE 2 RBI CHENNAI COMRADES !

July 5th 2012 witnessed a big crowd at the entrance of RBI CHENNAI buildings demanding PENSION UPDATION mainly among other issues. On behalf of all the members of both RBICF and EXR I thank the moderators S/S CHANDRIAH AND MADAN GAURIA for the efforts they took in organising the members of the demostrations. At 8-30A.M many retired and serving comrades gathered at the entrance. I will failing in my duty if I do not mention Shri Nair who was very much ahead of time and virtually the reception committee at the gate. The number swelled and we could see a float of many white and white cars stremaing in and many of top executives in full suit came into attend the Board Meeting. S/S Sameer Mahadik and AG came and the members were excited to see the leaders. At 9.30 A.M our Governor Dr.D. Subbarao called in all the representatives and assured them of positive outcome in the near future. The leaders addressed the gathering.Com Sameer made an excellent speech and COM AG thanked all those who present so early on a scorching Thursday in Chennai. Chenani leads the way once again. RED SALUTE 2 RBI CHENNAI COMRADES !

- S.Venugopalan, 7-A, Prashanthi Apts.
T.M.Maistry St.Vannandurai, Chennai - 600 041
Ph: +91 44 42151321

RBI board meets to review economic scenario

RBI Governor D Subbarao (C) chairs the RBI Board meeting in Chennai

Chennai : The Central Board of the Reserve Bank of India met here today to review the key economic, monetary and financial developments. RBI Governor D Subbarao chaired the meeting held at the Reserve Bank's Regional headquarters..... 

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Need to revolutionise banks’ HR management

....While we are facing a crunch of manpower – can we use our retired people in some way – we are paying them pension and reasonable medical benefits already – can some contracts not be worked out for them? Again, can we not provide some empowerment to them to leverage on their inherent loyalty? They could be useful in brand building efforts, or perhaps, in our financial inclusion initiatives. It is, definitely, an avenue that could be explored.........

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Managing gold, a policy challenge - K Kanagasabapathy

The RBI can learn a trick or two from Turkey in order to absorb gold into the financial system, thereby turning it into a productive asset

....The RBI Act, 1934, permits the Reserve Bank to purchase and sell gold. It does not apparently permit allowing banks to hold CRR balances in terms of gold. However, the Banking Regulation Act, 1949, permits banks to maintain SLR in gold. One way out is to amend the RBI Act to permit CRR balances in gold. But, given the flexibility at the disposal of RBI, it can prescribe a liquidity ratio — combining both CRR and SLR — which will bring gold under the ambit, along with cash balances and investments in government securities.......

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Rajendra Prasad's bank a/c kept alive after 50 yrs

.....Prasad's account is perhaps the only bank account in the country which is not only open and functional but also seen interest income being added to it . Usually after the death of a bank account holder, the money in there is passed on to the legal heirs on completion of certain formalities. Gupta said no one has come till date to claim for the money........

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RBI for customer-friendly savings bank deposit rate policies

....“The big banks have yet to respond to this...Reserve Bank looks forward to more active play in the Saving Bank segment with banks coming out with some customer friendly innovations especially aimed at attracting low income households, presently outside the banking sector,” ........

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RBI vision document on payments: An evaluation

.....it is commendable that RBI has released a payments vision document. Such a document gives an opportunity for us to understand the mind of a government agency, and discuss and debate its priorities and actions. But writing a vision statement is a chance to step away from the familiarity of set ways and ask the big questions. RBI should not squander this opportunity.

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Is There a Problem with RBI’s Communication?

.......Previous RBI Governors, including Mr. Subbarao’s predecessor Y.V. Reddy, would only share their outlook on India’s economy and interest rates once a quarter, and then in language that was almost impenetrable. Mr. Subbarao changed the rules. He instituted mid-quarter policy meetings and set up calls with analysts to get inputs on the economy. The bank began to release the minutes of its advisory committee meetings on interest rates. “At a very personal level, I would like to de-mystify the office of the Governor,” Mr. Subbarao said in 2009......

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Twice bitten, now shy: RBI keeps close watch on inflation

Even after entering a rate reversal cycle, the Reserve Bank of India (RBI) is refusing to give up on its fight against inflation. Caught off-guard on inflation projections in the past two years, it is maintaining a hawkish stance. Yesterday, RBI Governor D Subbarao said the central bank was "deeply sensitive" to the problem. "We are committed to bringing inflation under control. It has been our effort over the last two years and will continue to be our effort," he said.......

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Improving the domestic payment system

The Royal Monetary Authority (RMA) will tie-up with the Reserve Bank of India sometime between the third or fourth quarter of this year, on the cross border connectivity to enable the shared payment network. This plan falls under the Bhutan Financial Switch (BFS) project, which is being done in collaboration with all the commercial banks and the RMA.........

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India has scope to cut government borrowing: R Gopalan

India still has some scope to reduce government borrowing, Economic Affairs Secretary R Gopalan said on Thursday on the sidelines of the Reserve Bank of India's board meeting........

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All eyes on RBI as China, Britain and Europe central banks cut rates

Central banks in China, Britain and Europe have wielded monetary levers to stimulate their economies, raising hopes the Reserve Bank of India (RBI) could do the same at home soon. But experts said Governor D Subbarao would wait to see inflation cool before obliging with a rate cut........

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Rate-fixing scam forces NSE, dealers to find ways to improve rate calculation method

.... Last year, the Reserve Bank of India (RBI) came out with a cryptic communique, the implications of which were lost beyond the money markets of Nariman Point and Bandra. But it unsettled the game plan for many punters in the currency market and forced some to change tack.  The innocuous circular was a simple announcement on how the central bank was changing the way it calculates the daily 'reference rate' for some of the major foreign exchange rates. The RBI had done this for the first time and there was a reason for it......

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Micro finance institutions: RBI concerned on monitoring deficiences

........"The central government is bringing out a law to govern the MFI and has proposed RBI as the regulator. The concern is whether we have the set up to oversee small MFIs without affecting the quality of supervision.".............

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Financial inclusion: Are 63,000 more ATMs enough?

....At present, the country has more than 90,000 ATMs, according to the Reserve Bank of India. In a bid to encourage ATM transactions, the central bank had recently allowed non-bank entities to set up, own and operate ATMs, labelled white label ATMs. According to the RBI, ATM adoption by customers has modified personal banking in India and banks have played a major role in this.......

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Risk Management - The New Accelerator

HYDERABAD CHAPTER MEETING Risk Management - The New Accelerator Aug 04, 2012 9:00 AM Cost : Free Meeting Venue Hotel Katriya, Raj Bhavan Road

9:00 – 10:00 Registration, Tea, Coffee & Networking 10:00 – 11:00 Plenary Session 10.00-10.05: Welcome address: Manoj Agarwal, Group Editor, Banking Frontiers 10.05-10.15: Introduction to the Conference: B. Yerram Raju, Regional Director, PRMIA, Hyderabad Chapter 10.15-11.00: Keynote Address by Chief Guest: Dr. D. Subbarao, Governor, Reserve Bank of India 11:00 – 11:30 Tea, Coffee, Networking, Exhibition Visit 11:30 – 13:00 Panel Discussion: Basel III – Capital Responses Panel: CEO/CROs of 10-12 Banks M. Narendra, Chairman & Managing Director, Indian Overseas Bank B. A. Prabhakara, Chairman & Managing Director, Andhra Bank K. Venkataraman, CEO, Karur Vysya Bank Ltd Srinivasan, CEO, Federal Bank Ltd. Vijay Krishnaswamy, Member, Steering Committee, PRMIA, London and Consultant, Hyman Robertson LlP, London, the Financial Consultancy Group. Confirmation from the rest is awaited. Moderator: Amitabha Guha, Former Dy. Managing Director, State Bank of India Rapporteur: B. Yerram Raju, Regional Director, PRMIA, Hyderabad 13.00 - 13.45 Lunch, Networking, Exhibition Visit 13:45 – 15:15 Panel Discussion: Technology and Operational Risks Panel: Experts from Leading Technology Service providers and Basabi Bhattacharya, Regional Director, PRMIA, Kolkata Chapter Moderator: Prof. Satchidananda Sogala, Founder & CEO , Srichid Technologies Private Limited & Regional Director, PRMIA, Bangalore Chapter Rapporteur: V.N.Sastry, Professor, IDRBT, and Member, Steering Committee, PRMIA, Hyderabad 15:15 – 15:30 Tea, Coffee, Networking, Exhibition Visit 15:30 – 16:30 Panel Discussion: People and Process Risks Panel: R. Bhaskaran, Director, Indian Institute of Banking and Finance, Mumbai. G. Ravi Prakash, President, HR, CRISIL, and other experts from banking and finance industry Moderator: M. Sitarama Murthy, Former Managing Director, State Bank of Mysore and Steering Committee Member, PRMIA, Hyderabad Rapporteur: N.N. Nigam, Formerly Chief Vigilance Officer & Steering Committee Member, PRMIA, Hyderabad 16:30 – 17:30 Rapporteurs Summary Vote of Thanks: M. Sanjaya, Former General Manager, RPCD, RBI & Steering Committee Member, PRMIA, Hyderabad Map data ©2012 - Terms of Use Map Satellite Hybrid

www.prmia.org

A Higher Standard For Risk Professionals

Master Class On External Commercial Borrowings (ECB’s) and Trade Credits

......To encourage better usage of these financial funding tools and also to update and inform Corporates various rules, regulations and risk management issues related to the ECBs and Trade Credits, ASSOCHAM in association with JIMS Rohini, New Delhi is conducting one day Master Class on “External Commercial Borrowings and Trade Credits” on 9.30 A.M, Thursday, 19^th July 2012, ASSOCHAM House, 47 Prithviraj Road, New Delhi. The program will have a key note address by Sr. Official, Foreign Exchange Dept., Reserve Bank of India, New Delhi followed by technical session by eminent speakers drawn from banking sector ......

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The future of urban co-operative banks in Ahmednagar district

To foretell what would be the fate of urban co-operative banks (UCBs) in the next 25 years is like predicting whether there would be timely and sufficient rainfall in Ahmednagar district. It is very difficult to talk about the future of any banking institutions. I have seen an unparalleled change in banking industry over the last 25 years. Acceptance of deposits, lending and investment in government securities as dictated by Reserve Bank of India still continues to be hardcore of banking but money transfers in no time and similar services based on computer systems and internet services through service delivery channels and payment gateways has acquired a tremendous significance..........

Read - DNA

Wishes pour in as rosaiah turns 79



RBI Governor D. Subbarao greets Governor K. Rosaiah at Raj Bhavan in Chennai on Wednesday

‘Banks must look at last mile in micro finance’

Financial inclusion is a necessity, a pre-requisite for growth

Is there a business case for banks to do the ‘last mile’ themselves in micro finance operations? Urging them to ponder over this, the Reserve Bank of India (RBI) Governor, D. Subbarao, asked banks to look at the feasibility of ‘re-occupying the last mile’ in micro finance operations............

Read - The Hindu

Subbarao says banks treating no-frills a/cs as nuisance

Reserve Bank of India Governor D Subbarao on Wednesday expressed disappointment that frontline branch mangers treated low-income household customers as an intrusion into their time and business, and were treating “no frills” accounts as a nuisance. “The general impression I got is that frontline branch managers treat ‘no frills’ accounts as a ‘nuisance’ and low income households as an intrusion into their time and their business. This is disappointing to say the least,”.............

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India Struggles to Cushion Rupee's Fall

For almost a year, India's central bank has spent billions of dollars to support the beleaguered rupee. And yet the currency is Asia's worst-performing against the U.S. dollar over the past year. The fruitless efforts by the Reserve Bank of India shows how central banks, especially in emerging markets, often are powerless to manage pressures on their currencies if international market forces are ranged against them..............

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SC restrains RBI on approval to foreign law firms

....The court said "it is clarified that the Reserve Bank of India shall not grant any permission to the foreign law firms to open liaison offices in India under Section 29 of the Foreign Exchange Regulation Act, 1973". The expression "to practice the profession of law" under Section 29 of the Advocates Act, 1961 covered "the persons practicing litigious matters as well as non-litigious matters other than contemplated in para 63(ii) of the impugned order...", the court said........

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Disappointing to see banks with low customer footfalls: Subbarao

Guv says banks should look at financial inclusion as an opportunity to build fortune at the bottom of the pyramid

The Reserve Bank of India (RBI’s) Governor Duvvuri Subbarao today said that there is a disappointingly large number of cases of bank branches with low customer footfalls. The Business Correspondent (BCs) will drift off after a few months and ‘no frills accounts’ which remain largely inoperative. In his oration speech as part of Indian Overseas Bank’s Platinum Jubilee celebrations at Chennai on Wednesday Duvvuri Subbarao, Governor, Reserve Bank of India said that banks should look upon financial inclusion not as an obligation but as an opportunity to build fortune at the bottom of the pyramid.............

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Have banks misled investors by inaccurate reporting of NPAs?

.....Dr Chakrabarty could not have been unaware of the practices of reporting of NPAs in PSBs as he was the CMD of two public sector banks- Indian bank, one time a weak PSB, and Punjab National bank-prior to his becoming the deputy governor. Generally speaking, banks in the past endevoured to show diminished figure of NPAs, in such of those loans where the departure from the strict criteria of identification of NPA, was 'minor' which the statutory auditor accepted as reasonable.....

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TN's diversification model to help address risks: Gokarn

Tamil Nadu has managed to show resilience during the bad times mainly due its diversification, which can be a good example on how diversification is a best way for lesser risk, says Reserve Bank of India (RBI's) Deputy Governor Subir Gokarn..............

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RBI will focus on progress of south west monsoon: Subir Gokharn

CHENNAI: The Reserve Bank of India would pay more attention to the progress of the south west monsoon as it goes into its "policy date", RBI Deputy Governor Subir Gokharn said .........

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RBI wants loan rates to be more transparent

“One problem that has persisted even after the introduction of the base rate system relates to the lack of transparency in the customer-specific spread charged to a borrower over the base rate,”........

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Current account deficit has put pressure on rupee: RBI

.....“I don’t think the rupee movements are directly correlated with open market operations but are being driven by judgements on liquidity conditions and will continue to be driven by conditions on liquidity – whatever is causing the liquidity stress whether it is foreign exchange markets or something else,”......

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RBI says no co-relation between OMOs, rupee

....."I don't think you can directly correlate the rupee movement with the OMOs," Gokarn on sidelines of an industry event in the southern city of Chennai, where the RBI's two-day board meeting began on Wednesday. "OMOs are being driven by judgements about liquidity conditions and they will continue to be driven by judgements about liquidity conditions, whatever is causing liquidity stress, whether it is foreign exchange market or something else.".......

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Decision analysis for interest rates

....Several analysts applauded the Reserve Bank of India’s (RBI’s) resisting cutting interest rates despite declining growth. Some quoted monetary theory to justify this; others praised the regulator’s standing-up-to-government stance. Meanwhile, the nation groaned, waiting for relief. Is this just the vaunted animal spirits in reverse, that perceive a half-full glass as half-empty? Or is there substance to the frustration of those who function in the real-world marketplace, who deliver products or services and expect rational solutions?....

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Current account deficit a major cause for rupee fall: Gokarn

....India’s current account deficit has been a major factor for the downward movement of the rupee. As the current account deficit corrects, be it due to lower oil prices, increased exports or lower imports, it will have the reverse effect, said Dr Subir Gokarn, Deputy Governor, Reserve Bank of India. .......

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Discount on debit card-payment acceptance postponed to Sept 1: RBI

The Reserve Bank today said reduction in merchant discount rate (MDR) for purchases made by debit card payment to 0.75-1 per cent, which was to be effective from July 1, will now be applicable from September 1 due to some operational issues.................

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Finance ministry pushes for lower third-party ATM fee to increase financial inclusion

 The finance ministry will push for lower third-party ATM charges in a bid to increase financial inclusion, risking further unpleasantness between the government and the Reserve Bank of India, which is not enthused by the idea...............

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Micro-lending norms to be eased in phases: Subbarao

.....where floating rate loans are concerned, existing customers have been disadvantaged vis-à-vis new customers with similar credit ratings, resulting in complaints about discrimination. To address this, the Reserve Bank has constituted a working group under the chairmanship of Deputy Governor, Mr Anand Sinha, to determine the principles that must govern proper, transparent and non-discriminatory pricing of credit. The working group is expected to submit its report by August 2012....

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RBI may relax norms to revive microfinance industry

Microfinance institutions (MFIs) in the country can breathe easy as the Reserve Bank of India (RBI) is likely to relax some of the norms pertaining to their net worth, capital adequacy and provisioning needs. The relaxations are expected to help troubled micro-lenders emerge out of the crisis. "The rollout of the new regulatory regime has run into some bottlenecks. Some MFIs are unable to comply with the qualifying asset criterion for registering as NBFC-MFI, and therefore banks are reluctant to make fresh loans to them as such loans do not qualify as priority sector lending," RBI governor D Subbarao said at an event organised by Indian Overseas Bank to celebrate their platinum jubilee here today.............

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Finance ministry backtracks on bulk deposit cap diktat banks breathe easier

....“There is no instruction by (the) Reserve Bank of India on the proportion of bulk deposits to total deposits. Banks have their internal policy on these deposits. These are short-term deposits, primarily meant to bridge the asset liability gap in the short run,”.....

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RBI should look at Islamic banking afresh: Khurshid

The Law Minister, Mr Salman Khurshid, said on Thursday that he had written to the Planning Commission and the Reserve Bank of India (RBI) on the issue of Islamic banking. He said he was quite hopeful that the RBI would look at the issue afresh and soon come up with its views after deciding on the technical issues..............

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Of Economics, Policy and Development : An Intellectual Journey by I. G . Patel

Dr. Duvvuri Subbarao , Governor, Reserve Bank of India has kindly consented to release the book, in the presence of  Dr Y.V. Reddy and Professor Alaknanda Patel.

Date: Monday 16 July, 2012 at 5.00 pm 

 

Venue: Reserve Bank of India Auditorium, Mumbai