Nabard to refinance loans of farmers in scarcity-affected areas

........Nabard is considering a special line of refinance at 7.5 per cent to enable banks to finance farmers for cultivation/purchase of fodder. The scheme would be finalised in consultation with the state government," said Prakash Bakshi, chairman, Nabard, who was on a visit to scarcity-affected villages in Rajkot district on Tuesday......

Read - BS

Moneyspinner Subrata Roy spins new yarn: direct retail

...Roy has been thwarted both by the RBI and Sebi. A few years ago, the RBI asked Sahara India Financial Corporation to return all deposits by 30 June 2015. The company proclaimed last year that it was winding it up earlier..............

Read.........

Union govt gives clean chit to HSBC’s India employees

....The bank’s India staff was cleared after a preliminary report from the Financial Investigation Unit and the Reserve Bank of India (RBI), sources said. However, both the agencies have been asked to continue with their investigation and maintain surveillance of the bank’s activities. Sources added that the two have sought more details on HSBC from US authorities......

Read - DNA

Who killed the India growth story: Delhi, not Mint St

.....Everyone is looking for a villain, and right now the only one available to politicians is Duvvuri Subbarao, the Reserve Bank Governor, who has held his ground on interest rates in order to force policymakers to cut subsidies and give him room to ease monetary policy. A few days ago, Finance Minister P Chidambaram made pointed references to this and said he would take “carefully calibrated risks” to lower rates and stimulate investment..........

Read........

M K Singh takes over as RBI Regional Director Chandigarh

Mr M K Singh took over as Regional Director, Reserve Bank of India, Chandigarh. He will look after functioning of Himachal Pradesh, Punjab, Haryana and UT Chandigarh. Before joining here, Mr Singh was the Regional Director of RBI in Patna and was looking after the states of Bihar and Jharkhand. Mr Jasbir Singh, who was Regional Director Chandigarh, has been transferred to RBI, Central Office, Mumbai as Executive Director.

http://news.webindia123.com/news/articles/India/20120813/2043262.html

RBI tells banks to include compensation in cheque policy

.....The RBI has come up with the abovementioned directives as it has noticed that in the CCPs and compensation policies of various banks there is no mention about the compensation in respect of the delay in realisation of local cheques. Instances of delayed credit to customers' accounts without any compensation for the delayed period beyond the time line indicated in the CCPs, in respect of local cheques, have been brought to the RBI’s notice......

Read.........

Core banking: RBI’s half-baked directions to banks

RBI has just come out with guidelines for issuance of “Payable at par/Multi-city” cheques to all eligible customers in a standard format. But the RBI should have thought of many other possibilities of offering a wide variety of services using CBS. Here is a list of benefits it could have allowed.........

......But unfortunately, many public sector banks in our country are either slow in providing innovative services to the customers or do not bother to find out the customer’s needs. They only act on getting a direction from the RBI, which alone with a little foresight can make the life of bank customers a little more comfortable and convenient in these trying times.

Click to read more.............

Polymer rupee notes: Slow or no progress?

.....In fact, in order to counter this menace, a couple of months ago, it was reported that in a pilot scheme to introduce polymer rupee notes, an unannounced entry into the market was made in selected cities like Bhubaneswar, Jaipur, Kochi, Mysore and Sheila, to test the market or public reaction.  So far, however, the Reserve Bank of India (RBI) has not yet made its findings public on this score. Nor do we know the quantum of such currency or the unit or face value.  But the crucial point is what is delaying the actual introduction of polymer rupee notes at least in the higher denomination of Rs 500 or Rs 1,000 as a start, as the majority of the counterfeit notes detected were in Rs 500?......

Read............

Improvident

...........The only saving grace is that, as compared to RBI which has said unclaimed fixed deposits in banks (R425 crore) can be appropriated by a depositor education fund, the labour ministry has said the funds in the inoperative accounts can’t be transferred to anyone else. What good that does to subscribers is not clear though.

Read..........

Critical thinking on development issues

.....MIDS, as it is popularly known, was founded in 1971. It is located at Gandhinagar, Adyar, Chennai – 600 020; Website: www.mids.ac.in. The institute was reconstituted as a national institute in 1977 under the joint sponsorship of the Union government and the Tamil Nadu government. The Reserve Bank of India established a Chair in applied research in regional economics in the institute in 1985. The central bank had been granting fellowships to Ph.D. scholars. Later on, the RBI made it an endowment......

Read - The Hindu

Inflation too high for comfort - RBI

...."The task for the RBI is to restrain demand. What is the task for the government? The task for the government is to generate supply so that we produce more and that will bring down inflationary pressures," Subbarao said in a speech at a event in south India.......

Read - BS

Economic reforms need an urgency of purpose, RBI governor says

 Implementing economic reforms with sincerity and urgency of purpose is essential to return to the high growth trajectory, said Reserve Bank of India Governor D Subba Rao ............

Read - TOI

6% growth won’t get India anywhere: Subbarao

....“We must look to grow 10 per cent for another 15 years in order to raise our status from a low-income country to a medium-income one,”.........

Read - HBL

Declining investments a cause for concern: RBI

....Reserve Bank of India (RBI) governor D. Subbarao reiterated his concern about inflation on Monday, saying it remained above the central bank’s comfort level, and called monetary policy the first line of defence even when inflation was coming from supply shocks.......

Read - Mint

Banks begin reviving special schemes

.......RBI’s latest data shows bank advances, as of July 27, had grown 17.2 per cent over a year, while deposit growth lagged at 13.8 per cent. The central bank has projected deposit growth of 16 per cent in the annual monetary and credit policy for 2012-13. "Concerns that deposit growth has significantly been slower than credit growth for a prolonged period of time is something we have been watching closely and that was one of the issues we discussed with bankers on Monday," RBI Deputy Governor Subir Gokarn had told Business Standard in an interview after the first quarter policy announcement last month......

Read - BS

Loan restructuring skewed towards corporate borrowers: RBI

RBI's outspoken Deputy Governor KC Chakrabarty makes a serious accusation. In a speech supported chapter and worse with statistics he says, public sector banks restructure much more than private banks

Read and watch video...........

Can't Abandon Inflation Agenda, Says India's Central Banker

.....“Clearly the argument is that if you cut rates, you will get some rebound, some stimulus for investment. But on the other side, we're dealing with a relatively uncomfortable inflationary situation. The inflation objective cannot be abandoned,”..........

Read........

Loan recast: PSBs bear the brunt

........The Reserve Bank of India (RBI) argues if economic downturn is the reason for debt recast, that should reflect across all bank groups and not just PSBs..........

Read - BS

A question of autonomy

.....it would be desirable if the government sticks to policy making and allows banks the freedom to take decisions in an increasingly competitive environment. Reserve Bank Governor D. Subbarao and his predecessor, Y.V. Reddy, have come out on the side of the banks. Micro-management is bad for banks and, in the long run, hurts the interests of the major shareholder, the government too.......

Read - The Hindu

Not RBI alone

In his column “The RBI’s free pass” (Policy Rules, August 11), Mihir S Sharma is too strident in singling out the Reserve Bank of India (RBI) for the drop in net profit margins of the sampled companies and for the decline in growth. Margins depend on input costs also, more so in the manufacturing sector in which non-availability or high cost of raw materials (like minerals) and power and transportation take a heavy toll........

Read - BS

Recapitalizing India’s banks

....Investor confidence will, however, require a substantial dilution of government ownership and not merely what is required to raise a sufficient amount of money. A lower government stake will also restrict ambitious civil servants in the finance ministry from interfering into the day-to-day business of the banks and its board. While this may be the right approach, under the conditions that prevail in the government, it may be asking for too much. Any loss of ownership and control is likely to face opposition both inside and outside the government. But if government-owned banks are to meet this regulatory challenge, sooner or later, the government will need to overcome this resistance to change or else banks, taxpayers and the economy at large will continue to be locked in a suboptimal situation........

Read - Mint

Court restrains 7 from continuing as Tamilnad Mercantile Bank directors

...........Following the court order, the bank is now left with five directors, including the new MD & CEO KB Nagendra Murthy. There are two RBI nominees KN Rajan and K V Rajan. The other two directors are P Mahendravel (who represents the Nadar Mahajana Sangam which had promoted TMB) and S Sundar, formerly with the SBI.

Read - ET

Dhanlaxmi Bank in trouble? What to do if your bank goes belly up

....As a depositor you don’t really need to be worried about your bank going belly up, well almost. Reason being, the deposits which you make with your bank come with some sort of a safety net. This safety net, in banking parlance is an insurance provided on your deposits by Deposit Insurance and Credit Guarantee Corporation (DICGC). This corporation comes under the wings of the Reserve Bank of India (RBI) and as its name suggest, offers an insurance cover on the deposits you make and also guarantee credit. Says, a senior officer, who did not want to be named, from the DICGC, “All commercial banks are covered by DICGC. ” All foreign banks which are currently functioning in India, as well as co-operative banks and rural regional banks are also covered........

Read..........

SBI might absorb one associate bank this year

State Bank of India (SBI) is likely to merge one of its five associate banks in the current financial year. The board of the country’s largest lender has given its approval for the merger, and SBI will now start the process of identifying an associate for the merger............

Read - BS

Can RBI, finmin turn a new leaf ?

“the appearance of autonomy is as important as the actual autonomy itself” and “the very existence of a joint committee will sow seeds of doubt in public mind about the independence of regulators”

.....RBI is answerable to Parliament and, hence, no governor can afford not to consult the finance minister on critical policy decisions. Besides, the government also employs another way of controlling the central bank—the Trojan horse strategy. It’s no coincidence that a majority of RBI governors have been former finance secretaries, including Subbarao. The five-year term of Subbarao’s predecessor Y.V. Reddy that ended in September 2008 is particularly well known for what Reddy himself dubbed as “creative tension”. Reddy’s book, India and the Global Financial Crisis: Managing Money and Finance, a compilation of 23 speeches delivered at various forums in India and abroad offers glimpses of the serious differences between the finance ministry and the central bank on many critical issues........

Read - Mint

India leads the world in inflation - S.S.Tarapore

......But at the present time there is considerable pressure on the RBI to undertake monetary easing. Given the unacceptably high inflation rate, monetary easing would be hazardous. Hence, the RBI deserves full support in its cautious approach to monetary easing. While the fisc is weak and cannot afford to undertake further easing, pressures would mount to ease monetary policy. In other words, monetary policy will be the sacrificial lamb to appease the powerful lobbies. There are overt pressures from the government to goad the RBI to reduce interest rates. What is of concern that policymakers and opinion makers genuinely feel that all that it takes to stimulate growth is lowering of interest rates. Thus, sooner or later RBI will be forced to reduce interest rates......

Read - FPJ

No policy paralysis, but complexities remain: Y V Reddy

.....I would not agree that there is policy paralysis. There are policy difficulties and the initiative would depend on political and economic considerations. We should also be realistic that how much our social context, political context permits us to do,” Reddy said while delivering the 17th Prem Bhatia Memorial Lecture.............

Read - Indian Express

Right guy at the wrong time ?

.....A government official involved in taking decisions at the highest level, who spoke on condition of anonymity, conjectured that Rajan is being brought in to ultimately head the Reserve Bank of India. The current governor of the central bank, D. Subbarao, who was handed a second term at office, will retire in September next year. “Some may argue Rajan does not have enough administrative experience to be the governor of RBI,” the official said. “But then Ben Bernanke (chairman of the US Fed) also did not have any.” That assurance may have convinced Rajan to join the government.

Read - Mint

Students from UK institute get a taste of RBI functioning

Emma Nowak, pursuing her second year economics degree at the Newcastle University Business School, was always keen to experience and learn more about the procedures carried out at a central bank first-hand. Through her institute, not only was she able to do this but was also able to learn about the central bank and financial policies from the experts. And, all this was done at the Reserve Bank of India (RBI) in Pune. Students of the Newcastle University Business School are on summer internship opportunity, as a part of their global exposure. Six undergraduate students from the institute were a part of a programme to intern with RBI in Pune for six weeks. "Today, employers are less than enamoured with such international study ‘tours’, and expect to see international experience programmes founded on good pedagogical foundations. The Reserve Bank of India Summer internship programme is, therefore, such a wonderful opportunity, something we would like to replicate with other companies across the world," ...................

Read more - BS

Finance ministry wants RBI to pay 7% interest on CRR deposits

The finance ministry has suggested that the Reserve Bank of India pay 7% interest on the mandatory deposits parked with it by banks, one among several measures proposed to lower rates even if the central bank does not ease the monetary policy..........

Read - ET

Still southward bound

....Incidentally, a look at rupee debt suggests an interesting possibility. FIIs bought Rs 46,000 crore of rupee debt in the past 12 month and domestic institutions bought an unbelievable Rs 3.8 lakh crore of debt. This is a pointer to the size of the borrowing programme. But it also boils down to a massive bet on rates falling soon. There would be staggering capital gains available on the debt segment as and when, RBI does cut. It may be worth taking modest exposures in medium-term debt funds. This looks to be low risk since RBI is unlikely to hike......

Read - BS

Car seva

D K Mehrotra, who is three or four months into his job as chairman of LIC, the country’s largest insurer, was so solicitous of the comfort of financial services secretary D K Mittal that he managed to create a traffic jam in Mumbai. Both were at the Reserve Bank of India (RBI), Mittal for the central board meeting, and Mehrotra for the customary lunch RBI hosts afterwards. Later, when they were waiting for their cars outside the central bank headquarters, Mehrotra’s was the first to drive up. He then offered Mittal his car but the financial services secretary chose to wait for his car instead. But Mehrotra continued to press his offer, apparently oblivious of the long line of cars forming behind his. Eventually, he reluctantly got into his car after Mittal literally forced him in. Even then, he asked his driver to pull up a little ahead and wait till the car assigned to Mittal, who has been in the news recently for sending public sector banks detailed suggestions on their functioning, arrived.

BS

Micro-managing banks

.......The person, at the centre of the news, D. K. Mittal, the financial services secretary, is, however, unfazed by the criticism. According to him, the intention is to jolt state-owned banks out of their “lazy banking habits and force them to lend more to small-scale and agriculture”. Those are words reminiscent of a bygone era. Rarely does one hear such statements, at least in public in the reform era.........

Read - The Hindu

Undermining RBI

Any domination or interference of the Central government in the functioning of the central bank of the country (‘Govt should not undermine RBI’, Business Line, August 11) may not be in the interests of the economy as a whole. If legislations such as Fiscal Responsibility and Budget Management Act and relevant provisions in our Constitution are adhered to by the Government, no friction can arise.

- K. Gopalan Bangalore (HBL)

Are you being shortchanged?

.......Besides, no less than 13 coin-vending machines have been installed in RBI Kolkata, where all one has to do is insert the currency notes to get the coins of the same value. These vending machines are dispensing no less than Rs 5 lakh in coins every day. RBI is even bearing 50% of the cost banks will incur if they install these machines in urban areas and a whopping 75% in rural areas. Around 70 coin-vending machines have already been installed by various banks in Kolkata and suburbs. And yet, when it comes to giving you the change, there seems to be a perennial crisis. Strangely enough, there is a mad scramble in front of RBI's Kolkata office coin exchange counters every day. But who are these people who are exchanging bank notes for coins? It's impossible to keep a record of that, says the RBI. But ironically, these very coins are then 'sold' for a price right outside the RBI building. It's another matter that 'selling' coins is illegal; these can only be exchanged......

Read - TOI

Kerala chamber to provide coins of various denominations

...... 'Coin disrtibution system initiated by KCCI with the aid of RBI is to minimise in particular the difficulties faced by the trading and business community due to the accute shortage of coins in the State,' .........

Read.........

Poor will now get ATM cards

......What the new norms mean is that no customer who comes to open an account can be turned away even if he cannot maintain minimum balance" said KC Chakrabarty, Deputy Governor, Reserve Bank of India. The new directive comes after banks failed to make any major headway in `no-frills' accounts. Also a major disadvantage of the no-frills account was that without a cheque book or ATM facility the ability to conduct transactions was limited............ 

Read - TOI

Govt to PSU banks: Ensure one a/ c per family

....For financial inclusion of the excluded and to facilitate the electronic benefit transfer that banks were advised to ensure opening of one bank account per family......

Read - FPJ

Federal Bank's new Corporate Banking branch

H.R.Khan, Deputy Governor, RBI and Shyam Srinivasan, MD & CEO, Federal Bank at the opening of the Bank’s new Corporate Banking branch at Nariman Point, Mumbai on Friday

Heads of smaller PSBs may get to lead bigger lenders

The change of guard at the finance ministry has triggered fresh speculation about the appointment of chairmen of state-run banks. Chiefs of three PSU banks — Alok K Misra (Bank of India), S Raman (Canara Bank) and M D Mallya (Bank of Baroda) — will retire this year. Historically, the government nominates chairmen from smaller PSU banks as the chiefs of large state-run lenders. Under Pranab Mukherjee’s regime, it was proposed that executive directors of large banks be appointed as chairmen and the names of S S Mundhra, ED at Union Bank; and V R Iyer and R K Dubey, both EDs at Central Bank of India, were shortlisted. But with P Chidambaram back in North Block, there is a feeling that the old practice of lateral recruitment will continue. If so, Arun Kaul (UCO Bank), T M Bhasin (Indian Bank) and M Narendra (Indian Overseas Bank) will benefit because of their seniority.

TOI

Farmers may get short time to repay loan

A disappointing news for the farmers from the bankers: They may now get a shorter duration to pay back loans availed through Kisan Credit Card (KCC). As Reserve Bank of India (RBI) has made changes in the KCC scheme, it has done away with the provision of having a 12-month repayment period. Instead banks will have the discretion to fix a repayment schedule depending upon the harvest cycle of the crop for which loan has been granted...........

Read - TOI

The big problem of agricultural loans

The Reserve Bank of India (RBI) has put the biggest four foreign banks on a sticky wicket with a new policy— foreign banks with 20 branches or more face the same Priority Sector Lending (PSL) requirements as domestic banks...........

.....The shortfall must go in what bankers refer to as “penalty deposits” at the National Bank for Agriculture and Rural Development (NABARD), earning between 7.5% and 2.5% depending on how badly the bank missed the target. Why do so many banks resort to penalty deposits rather than lend more to agriculture? This is because additional viable borrowers in agriculture have been very hard to find.......

Read - Mint

Banks biased against SMEs, agri sector in debt recast: RBI

........“Public sector banks have more retail, agriculture and SME book but it’s not reflected in the restructured book, while private sector banks have more corporate book, but the restructuring quantum is very less,”............

Read - BS

Govt carrying misconception on gold NBFCs: AGLOC

......Association of Gold Loan Companies (AGLOC), not comfortable with the measures undertaken by the Reserve Bank of India, has said government has a lot of misconception about the industry.......

Read......

Gold import caused high current a/c deficit last year: Rangarajan

India's huge gold imports in the last financial year at $60 billion was partially responsible to high current account deficit, Prime Minister's Economic Advisory Council Chairman C Rangarajan has said........

Read - BS

As defaults mount, banks seek easier NPA norms

Saddled by growing stock of stressed loans, banks have asked the Reserve Bank of India (RBI) to soften its stand on the restructuring of bad assets while issuing its final guidelines. In a feedback to the regulator on the recommendations of the Mahapatra committee, which has suggested stiffer rules to deal with restructuring of non-performing assets (NPAs), banks have requested that accounts that have been restructured once should be considered as standard...........

Read..........

RBI to simplify rating parameter for UCBs: Karupusamy

Reserve Bank of India (RBI) is proposing to simplify rating parameter for Urban Cooperative Banks, RBI Executive Director S Karuppasamy said today. 'However, it will not be made public' he said while speaking after inaugurating a Seminar on 'New Supervisory Action Framework & CAMELS for UCB's' organised jointly by RBI, National Federation of Urban Cooperative Banks and Credit Societies Ltd.,, New Delhi and Karnataka State Cooperative Urban Banks Federation Ltd..........

Read.........

Cooperative banks tread where commercial banks fear

Cooperative banks are mostly the whipping horses for Nabard and RBI. But what they do not seem to take into account is the unviable propositions these banks are subjected to. A case in point is Karnataka...... 

Read...........

RBI dy guv finds CDR favouring public-sector banks

.........."Restructuring has not been done in an objective manner. It is heavily biased in favour of public sector banks. It has substantial bias towards more privileged borrowers vis a vis small borrowers," Chakrabarty said in a speech at a conference on corporate debt restructuring. Chakrabarty also expressed concern that banks would push companies to restructure their debt in order to avoid defaults that would show up as non-performing assets (NPAs) in their books............

Read.......

Don't stunt real estate growth: DLF Chairman KP Singh to RBI

Realty giant DLF's Chairman K P Singh has said that RBI's monetary policy should not stunt the growth of real estate sector and uninterrupted access to affordable finance is vital for this business.........

Read - ET

99% households feel prices will rise, says RBI survey

Mumbai, Aug. 12: Ninety nine per cent of Indian households believe that general prices will rise in the next three months and also the full year, according to a Reserve Bank of India survey. The three months ahead and one-year ahead inflation expectations are up 30 basis points at 12 per cent and 12.8 per cent, respectively, RBI data showed. Respondents of the 28th round of inflation survey believe that prices will be on the uptrend, mainly influenced by movement in food prices. The survey was conducted simultaneously in 12 cities and covered 4,000 urban households.

HBL

RBI rejects debt SOS from textile companies

........Industry experts believe the RBI rejected the plan because it involved mostly small borrowers who do not have the resources to petition their cause like corporate giants. “Had it been a Kingfisher, the RBI would have considered it,” said S Dhananjayan, a chartered accountant from Tirupur in Tamil Nadu. The town is known as the textile hub of the south............

Read - DNA

Have you ever seen a defaulter take public transport: RBI asks banks

....."Have you ever come across the promoter of a company that has come for restructuring take public transport?" KC Chakrabarty, Deputy Governor, Reserve Bank of India questioned bankers at a seminar on corporate debt restructuring organized by the Centrum group.........

Read - TOI

Banks biased towards large cos: Chakrabarty

 “Maybe restructuring is not objective and the process is not transparent,”

Read more..........

When some debts are more equal

........Restructuring has not been done in an objective manner. It is heavily biased in favour of public sector banks, towards more privileged borrowers vis-a-vis small borrowers," Chakrabarty said. Chakrabarty expressed concern that banks would push companies into restructuring debt in order to avoid defaults that would show up as non-performing assets (NPAs) on their books. “Why should only public sector banks come before the CDR cell?” he asked remarking that this is because the process is not followed in an objective manner.............

Read - Deccan Herald

India’s industrial slump

.... Finally, the RBI seems to have veered towards limiting liquidity in the system, as part of its anti-inflationary thrust, reducing access to credit for at least some borrowers who had been earlier considered eligible......

Read - The Hindu

India to seek HSBC, StanChart details from FSA

The Reserve Bank of India (RBI) and other Indian agencies are seeking details from British financial regulator Financial Services Authority (FSA) about two UK-based global banking giants - HSBC and Standard Chartered...........

Read - Deccan Herald

Subba row

RBI guv must put the economy back on track before he goes in a year

......Subbarao can act at the cost of upsetting his bosses. But then, his real bosses are not in North Block. They are the 1.2 billion citizens who still believe that RBI is the watchdog against inflation and a doctor to rejuvenate the economy. Subbarao still has a year to go. He can meet those aspirations or leave with the economy in a deeper mess.

Read.........

RBI confirms ‘policy stasis’ is very grim

Months after former chief economic adviser Kaushik Basu had to eat his words for using the phrase ‘policy paralysis’, comes the same from a more important source. And this time, there’s no question of eating, no matter the change in phraseology. In a background paper prepared for parliamentarians, the Reserve Bank of India (RBI) has painted a grim picture of the current economic situation and policy options. It states for a revival in investor confidence, there is a need to address concerns “over policy stasis” while putting in place “complementary actions that address macro-economic weaknesses.” The RBI’s choice of the word ‘stasis’ instead of ‘paralysis’ is indeed inspired erudition. The dictionary meaning of the noun is “inactivity caused by opposing equal forces”..........

Read - DNA

Govt should not undermine RBI - M.Y.Khan

......The cap on Government borrowing, enforced by the RBI, has been violated by the Government from time to time. This limit was fixed as a mandatory cap. Today, inflation in India has become a function of Government deficit. Under the RBI Act, 1948, “the Central Government may from time to time give such direction to the bank as it may, after consultation with the Governor of the Reserve Bank, consider necessary in the public ‘interest’ ” but it is not mandatory for RBI to provide credit to Government. In the past, Government did intervene or disrupt the functioning of RBI policy, without regard to the RBI.........

Read - HBL

RBI will stick to borrowing calendar, says Khan

Reserve Bank of India (RBI) will stick to the present market-borrowing calendar (April-September) for now, as there was still time for review, said Deputy Governor H R Khan..............

Read........

Leadership deficit main reason for slump in manufacturing: RBI Deputy Governor HR Khan

MUMBAI: Reserve Bank Deputy Governor HR Khan today said "leadership deficit" is one of the reasons that hampers growth in the employment-friendly manufacturing sector. "Everybody is talking of a leadership deficit...We have the right type of entrepreneurs, the right type of aptitude, but the leadership deficit is the No 1 factor," Khan said at a Federal Bank event here..........

 

Read - ET

Government decides to put on hold the Banking Laws (Amendment) Bill

The wait for new bank licences just got longer as the government has decided to put on hold the Banking Laws (Amendment) Bill. Senior officials in the government said the Bill would not be taken up until differences are resolved between the Reserve Bank of India and the Competition Commission of India over whether the latter should have the remit to review mergers and acquisitions in the sector..............

Read - ET

Issue Multi-City Cheques Without Charges: RBI to Banks

With a view to improving customer services and speeding up fund transfer, the Reserve Bank today asked all CBS (core banking solutions)-enabled banks to issue multi-city cheques to all eligible customers and refrain from levying clearing charges on them.  "... All CBS enabled banks are hereby advised to issue only 'payable at par'/'multi-city' CTS 2010 Standard cheques to all eligible customers," RBI said in a notification.  A 'payable at par' or 'multi-city' cheque of a bank can be cleared by any branch of the same bank in the country. The process has significantly reduced the outstation cheque clearance time........

Read.........

Additions to the basic accounts under financial inclusion plan

RBI had advised banks in November 2005 to make available a basic no frills account with nil or very low balance so as to cover a vast population which does not have access to banking services at present. It has been now decided to modify the guidelines for opening such accounts. The basic account will now include services like ATM, credit of money through electronic payment channels or by means of deposit as well as collection of cheques drawn by government departments, says a notification recently posted on the RBI website. The account holders will get ATM-cum-debit cards too and the facilities will have to be provided without any charges.............

Read - TOI

Credit cards rise for fourth month in a row

Read - BS 

Kisan Credit Cards for ATMs?

Ranchi: Aiming at increasing its spread and popularity amongst farmers, the RBI has instructed the banks to simplify Kisan Credit Cards (KCCs). The cards would be modified into electronic KCCs with debit card facilities.............

Read - The Pioneer

Anywhere ATMs

....A conventional ATM consumes 500 to 600 watts of power. They consume so much power because they use conveyor belts to move the currency notes. Also they may stop functioning at temperatures above 35 degrees. The rugged Vortex ATMs, in contrast, use a different, patented technology to move the notes without conveyor belts. In conventional ATMs, cash is transported upwards from almost floor-level, which requires a lot of power. Vortex ATMs, on the other hand, have a gravity-assisted track in which the currency notes fall into the dispensing slot. So they consume very little power (less than 100W) and can function in temperatures of up to 50 degrees.......

Read - BS

Nodal police stations to deal with fake notes in districts

.....Attributing the need of having dedicated police stations for investigating fake currency notes cases to the alarming rise in the smuggling of fake currency and excessive circulation in nationalized and private sector banks, senior police officers on Monday confirmed that four such police stations are identified in Jaipur........

Read - TOI

Cash for Casa: Banks reward staff to boost low-cost deposits

To stabilise fund flows by increasing the share of low-cost deposits, banks are giving cash incentives and recognition certificates to employees for opening the highest number of current accounts or savings accounts (Casa). The incentive is Rs 50-100 per account but there is an overall cap on how much an employee can earn through such schemes. The move also aims to cut dependency on bulk deposits.........

Read - BS

The RBI's free pass

......The Reserve Bank of India’s (RBI’s) air of technocratic and academic competence means that we may discreetly disagree with its actions, but we cannot really call it to account. The free pass that we’re giving the RBI is a mistake. The “independence” of the central bank is a cherished property, but it means independence from executive interference. It does not mean a lack of accountability. In the absence of accountability, the same errors will build up at the RBI as anywhere else: errors born of a closed mind, and a sense that you know best. Such errors are dangerous anywhere, but they are particularly unacceptable in an agency that makes macroeconomic policy — because, in spite of what you’ve been told, macroeconomics is a very incomplete subject. Compared to other branches of the discipline – econometrics, say, or microeconomics – macroeconomics too often consists of a certain amount of voodoo mumbling followed by the bellowing of a pre-prepared conclusion........

Read - BS

RBI cancels NBFI registration certificate of Maruti Sec

The Reserve Bank today said it has cancelled Maruti Securities' registration certificate for carrying on business of a non-banking financial institution (NBFI)..........

Read...........

More pain ahead

Data released by the Reserve Bank of India (RBI) on Friday shows that mean inflationary expectations during April-June inched up from the previous one by 30 basis points for the three-month and one-year periods ahead to 12% and 12.8%, respectively.......

Read - Mint

Households expect inflation to rise, finds Reserve Bank survey

Indian households expect inflation to rise by 30 basis points in the near term, primarily due to high food prices, according to a Reserve Bank of India (RBI) survey for the April-June quarter........

Read - Mint

Raghuram Rajan appointed chief economic advisor

Former International Monetary Fund chief economist Raghuram Rajan has been appointed the chief economic advisor in the Ministry of Finance. The Appointments Committee of the Cabinet approved his name on Friday, a finance ministry official said. Rajan succeeds Kaushik Basu, who would return to a professorship at Cornell University in the US...............

Read - BS

Worrying trends in monetary policy - S.S.Tarapore

.....The Reserve Bank of India (RBI) deserves kudos for setting out the rationale of its monetary policy of July 31 with painstaking effort. The global situation is increasingly worrisome. Despite all the international confabulations, the world economy has not come out of the quagmire. Never before have central banks, the world over, resorted to such unbridled money creation. The stage is now set for the global storm of 2013......

Read............

12th five-year plan draft delayed to incorporate a few new chapters

......Agreeing with former RBI governor YV Reddy’s assertion, the official said India’s growth model is such that a double-digit growth is not sustainable in medium to logn-term. The aim should be grow at around 8 per cent, which was sustainable given the nature of the economy........

Read.......

RBI ‘profit’ an invaluable fiscal prop

.....However, accounting policies of the RBI ensure that, out of the gross income, the bank makes a provision for contingency reserve and asset development reserve to take care of unforeseen developments and ensure funds for internal capital expenditure and investment in subsidiaries and associate institutions..........

Read - DNA

RBI to pay Rs 160.1 bn of dividend to government

The Reserve Bank of India on Thursday said its board approved transfer of 160.1 billion rupees ($2.9 billion) dividend or surplus profit to the government for the accounting year ended June 30, lower than market estimates, further easing cash with banks. Market participants had expected a dividend payout of about 250-300 billion rupees. The RBI follows a July-to-June accounting year. In the previous year, it paid a dividend of 150.09 billion rupees........

Read - ET 

Insurance cover also applicable to deposits in co-op banks

.......According to the existing norms of DICGC, a wholly-owned subsidiary of the RBI, a maximum of Rs 1 lakh is paid to a depositor in case a bank goes insolvent. "In terms of the provisions of the Deposit Insurance and Credit Guarantee Corporation Act, the deposit insurance coverage is also applicable to the eligible deposits held in all eligible co-operative banks," Chidambaram said in a written reply. He said the government has suggested Deposit Insurance and Credit Guarantee Corporation (DICGC) and the Reserve Bank of India to adopt to risk-based deposit insurance premium structure. This will be prior to the DICGC proposal for increasing insurance coverage limit from Rs 1 lakh to to Rs 2 lakh being approved ........

Read..........

A call for SEBI and RBI functionaries to declare assets publicly

The former Secretary calls for senior functionaries at SEBI and RBI to make public disclosure of their salaries and an annual declaration of their assets, in accordance with the spirit of Article 19 of the constitution which confers on the citizen the right to know about various public authorities. EAS Sarma, a highly respected former Secretary, Government of India (Expenditure and Power) has written the Finance Ministry calling for greater transparency and public accountability in the finance sector to enhance the credibility of the statutory institutions that have a bearing on the day-to-day lives of the people..........

Read............

Solution not far away!

....Few people are aware of the fact that the Reserve Bank of India (RBI) has directed banks to reimburse customers for wrongly debiting amounts from their accounts in what they call ‘failed ATM transactions’.
After a customer files a complaint, the bank has seven days to rectify the problem. Beyond this, it is liable to pay Rs 100 per day till the money is credited back to the account. The only catch is that the customers are entitled to this only if they lodge the complaint within 30 days of the transaction.......

Read - Deccan Herald

RBI asks banks to make financial inclusion more meaningful

The Reserve Bank Thursday asked banks to make financial inclusion more meaningful and ensure qualitative coverage through proper functioning of banking correspondents. "Banks should ensure qualitative coverage of financial inclusion through proper functioning of banking correspondents," RBI Governor D Subbarao said in a specially convened meeting of State Level Banking Committee (SLBC) after its central board meeting Thursday.............

Read.........

FM to meet PSB chiefs next week

.....In a statement earlier this week, Chidambaram had hinted at some monetary easing by RBI. He said prevailing interest rates were high and calibrated risks could be taken to stimulate investment and ease consumer burden. In the meeting, the minister would discuss issues pertaining to advances and deposits of banks, return on assets, profit per employee, and percentage of electronic transactions. The financial inclusion plans, performance of the Swavalamban scheme under the New Pension System, lending to minority communities and issues related to regional rural banks would also be discussed.

Read - BS

Rs 500 note, a favourite with counterfeiters

The Rs 500 note appears to be most preferred choice for counterfeiting. This is evident from the figures tabled in the Lok Sabha by the Finance Ministry. The Ministry informed the House that the cost of printing currency notes in the two Government presses varied. According to information provided by the Reserve Bank of India, 4.35 lakh fake currency notes were detected during 2010-11. Of this, there were 2.46 lakh pieces of notes with Rs 500 denomination, valued at Rs 12.30 crore...........

Read..........

RBI to issue Rs 10, Rs 50 notes with rupee symbol

...."The Reserve Bank of India will shortly issue Rs 10 and Rs 50 denomination bank notes incorporating rupee symbol, with inset letter 'L' in the Mahatma Gandhi Series-2005 bearing the signature of D Subbarao, Governor, RBI, and the year of printing 2012 printed on the reverse of the bank notes,".....

Read - ET

RBI to issue new 5 rupee coin soon

.....The Reserve Bank of India (RBI) will shortly issue five-rupee coins in their new shape and size. The obverse of the coin shall bear the Lion Capital of Ashoka Pillar with the legend ‘Satyamev Jayate’ inscribed below, a RBI release said..........

 

Read.......

487 cases of ATM frauds reported in 2011: Government

Banks have reported 487 cases of ATM frauds in 2011, involving over Rs 7 crore -- triple the amount reported four years ago, Parliament was informed today. As many as 153 incidents of ATM frauds were noticed in the calendar year 2008, involving an amount of Rs 2.46 crore, finance minister P Chidambaram told the Rajya Sabha in a written reply. He said the Reserve Bank does not maintain a separate data on the nature of ATM frauds..........

Read - TOI 

UBL poised for entry in India

...........An application was submitted to the Reserve Bank of India in Feb 2007. With the recent CBMs between the two countries and India allowing investments from across the border it appears UBL is poised for entry into the Indian market place, once the Reserve Bank of India's clearance is received...........

Read - Pak Tribune 

Govt has 'badly lost its way', hurting economy: Moody's

...."There has been little policy response from either the Reserve Bank of India or the government and with the global uncertainty dragging on, we see nothing on the horizon to lift the economy from its funk,".......

Read - TOI

Fiscal prudence

The editorial ‘Rewarding Profligacy’ (Business Line, August 7), brings out well the respective roles of the Reserve Bank and the Government. In 2004, the Centre breached the limit for revenue deficit for the first half of the financial year, prescribed by the Fiscal Responsibility and Budget Management Act.

In subsequent years, its breach became the norm, and Finance Ministers of the day expected the RBI Governor to contain inflation without worrying about fiscal expenditure. Now, it’s time for the present Finance Minister to seriously consider measures to reduce the expenditure of the government and support the RBI in achieving the projected growth rate.

- K.S. Raghavan Mumbai (HBL)

RBI signs MoU with Central Bank of Russian Federation

......"The Reserve Bank of India and the Central Bank of the Russian Federation (CBRF/The Bank of Russia), on August 3, 2012 concluded a Memorandum of Understanding (MoU) to promote greater co-operation and sharing of supervisory information between the two supervisors," ........

Read.......

Central Board meets today in Mumbai

The Central Board of Directors of the Reserve Bank of India met today at Mumbai. Dr. D. Subbarao, Governor, Reserve Bank of India chaired the meeting. Shri Anil Kakodkar, Shri Kiran Karnik, Shri Y. H. Malegam, Shri Azim Premji, Shri Dipankar Gupta, Shri Najeeb Jung, Shri G. M. Rao, Ms. Ela Bhatt and Dr. Indira Rajaraman were present at the meeting. Deputy Governors of the Reserve Bank, Dr. K.C. Chakrabarty, Dr. Subir Gokarn, Shri Anand Sinha and Shri H R Khan were also present. The meeting was also attended by Shri D.K. Mittal, Secretary, Financial Services and Dr. Arvind Mayaram, Secretary, Economic Affairs Government nominee directors on the Central Board. Dr. Mayaram has replaced Shri R. Gopalan on the Central Board post his superannuation. The meeting reviewed key economic, monetary and financial developments in the country...........

Read.........

Action plan to rein in high fiscal deficit soon: Economic Affairs Secretary Arvind Mayaram

.....Admitting that the deepening crisis in the global economy is posing challenges to the domestic economy, Mayaram said, "The global economic headwinds and fiscal deficit are threats to our growth..." Mayaram, who is also the government nominee on the board of the Reserve Bank, was talking to reporters after a meeting of the board of the central bank here........

Read - ET

MFI body wants more relaxation

.....“Though RBI has given pricing flexibility to the MFIs, it has been done in conjunction with a tightening of the margin caps. For MFIs with loan portfolios greater than Rs 100 crore, the margin cap has been reduced to 10 per cent. This reduction will put pressures on their profitability and sustainability,” ......

Read - BS

Banks fail to meet farm lending target in Maharashtra

Mumbai, Aug 9:  Dragged by the poor progress of the monsoons, banks have so far met only 57 per cent of their Rs 24,629-crore agricultural lending target in Maharashtra, a top banker said here today. Roughly about 57 per cent of the targets have been met. I believe that it should have been much more,” Bank of India Chairman and Managing Director Alok Misra, who also heads Indian Banks Association, told reporters here. RBI Governor D Subbarao had convened the state-level banking committee meeting on Thursday which was attended by the State Government officials and the bank chiefs............

Read.........

How ‘Houdini’ Chidambaram can fix the economy

.....To make Subbarao’s job that bit easier, or perhaps to provide him an incentive to loosen up, Chidambaram has made some feel-good noises to suggest that he will keep up his end of the bargain by reining in the twin deficits and simultaneously provide the triggers for investment-led growth. But how can Chidambaram go about achieving this in a drought year, when spending will have to be stepped up, and with less than two years to go for the general election, in the run-up to which too spending on programmes calculated to keep rural voters in good humour will be stepped up?........

Read..........

IIP: Chidu’s task of reviving growth just got tougher

.......Unlike other central banks which have been cutting rates to spur growth, the Reserve Bank of India (RBI) has been holding back on reducing borrowing costs, saying it wants inflation to ease first.......
 
Read......... 

Have a safe and healthy digital life: Use Internet discreetly

.......here is another feature that banks have launched in line with the guidelines of the Reserve Bank of India. It is called ‘One Time Password (OTP)’. The OTP is a random code that is sent to registered mobile number (and e-mail ID) of the customer for the customer to enter while executing a financial transaction. OTP expires after one use and is usually valid for a few minutes. As it is sent to the mobile number or the e-mail ID of the consumer, it has become very important to safe-keep the mobile and the access to e-mail ID...............

Read - DNA

Mobile-banking: A win-win combo

....The opportunity for mobile banking lies in its potential to supplant cash transactions, which dominate our daily lives. Recent amendments to RBI guidelines have allowed nonbanks to issue mobile-based semi-closed instruments, while also extending their usage to bill payments and ticketing. The industry definitely needs further liberalisation to increase the penetration of these instruments.......

Read.........