The government and the Reserve Bank of India (RBI) are yet to formulate guidelines on Indian banks' entry into Pakistan. Central banks of both countries have gone slow on working out regulatory issues including know your customer (KYC) norms..................
The very purpose of VITALINFO is to provide a platform for wider dissemination of updated information related to and happening of events in and around RBI.
Thursday, August 16, 2012
ING Vysya Bank steps into gold loan business
ate sector ING Vysya Bank has stepped into the gold loan business to fund working capital needs of small and medium enterprises (SME) sector.........
Credit card spend touches record high in first quarter
Credit card spending in the country touched a record high during the April- June quarter, thanks to innovative incentives offered by card issuers to their customers. In the first three months this financial year, consumers spent Rs 28,465 crore on their credit cards across point-of-sale (POS) terminals, latest data released by the Reserve Bank of India showed. On a sequential basis, spending on credit cards increased 9.9 per cent, its fastest rise in the past four quarters......
Wednesday, August 15, 2012
'Agricultural land, plantation, farmhouses in India out of NRI, PIO reach'
PANAJI: NRIs and PIOs cannot purchase agricultural land, plantation property or farmhouses in India, said A Subramanya, Manager, Foreign Exchange department, Reserve Bank of India, Panaji. At a seminar organized in collaboration with the Institute of Company Secretaries of India and Gon 'Acquisition of Immovable Property by Non-Resident Indians', Subramanya said there are no restrictions on the number of residential or commercial properties that NRIs and PIOs can be purchased. ..........
Financial inclusion: Miles to go
.....As K.C.Chakrabarty, the Deputy Governor of RBI and in-charge of financial inclusion, noted in a recent speech, “Even where bank accounts are claimed to have been opened, verification has shown these accounts are dormant. Few people conduct any banking transactions and even fewer receive any credit.” Even now, not more than 40% of the population have access to bank accounts. Despite increase in banks’ presence in rural areas, more than half of the 6,00,000-odd villages across the country do not have access to banking.........
RBI asks banks to frame clear policy on deposit rates
...."It has been observed that there are wide variations in the interest rates offered by banks on single term deposits of Rs 15 lakh and above and those offered on other deposits (i.e. deposits less than Rs 15 lakh) of corresponding maturities. Further, banks are offering significantly different rates on deposits with very little difference in maturities," RBI said the notification on Tuesday.........
The Leaderboard: Raghuram Rajan
.....Based on his previous writings, we can expect Mr. Rajan to push for increased foreign direct investment, anti-corruption legislation, and a possible easing of regulatory moves that have thus far limited foreign investment. The Reserve Bank of India (RBI) should expect continued scrutiny from Mr. Rajan, since he believes that the RBI is complicit in high government borrowing- a claim the RBI has already denied.
Chidambaram to meet bank chiefs on Aug 18
Finance minister P. Chidambaram will conduct a quarterly review of public sector banks’ (PSBs) performance on August 18. This will be Chidambaram’s first meeting with PSB honchos after he took charge of the Finance Ministry on July 31. The meeting comes in the backdrop of the economy facing challenges on the growth, inflation, and policy reform fronts........
Karnataka Bank Opens 400th ATM at Bejai Church Complex
....."The Bank plans to install another 50 ATMs by the end of this year. As per a survey conducted by the Reserve Bank of India (RBI), among the 52 banks that provide ATM facilities, Karnataka Bank is in the fourth position, which is a praiseworthy achievement,".......
Two youth held with fake currency
.......The upgraded quality of CFIC (printed in the latest series of currencies of Reserve Bank of India) made it difficult to differentiate it with genuine currency notes...........
Aggressive approach & a clear business model is needed for cashless e-payments
.....The recent steps by RBI to cap the merchant fees for debit cards have the ability to provide the much-needed fillip to the payment business. The hope is that e-payments will grow by 100% year-on-year and that payments can become all pervasive. However, good intent needs to be backed by speed and a clear vision of the end goal. Today, the Indian payment industry is lacking due to low investments and unclear business models for private and foreign operators........
Read - ET
Read - ET
RBI panel for increasing investment limit for FIIs in government securities
....The 13-member group, headed by RBI Executive Director R Gandhi, has made various recommendations on G-Sec market, retail participation and interest rate derivatives market.......
Tight policy may have deepened slowdown, says Subbarao
....“Firstly, the tight RBI policy stance. Secondly, the issue of infrastructural bottlenecks. Third, the lagging economic and governance reforms and governance issues affecting the investment sentiments,”.......
RBI caps bank investment in group business
Banks will find it tough to put money in group businesses such as insurance and other financial service companies with the Reserve Bank of India prescribing a ceiling for investment by lenders in group businesses...........
Centralised mart for G-Secs players soon
....Further, according to RBI Deputy General Manager R R Sinha, the panel has suggested that insurance companies, provident funds and other financially sound entities be permitted to participate in the IRS market. The working group, comprising market experts, RBI officials and other stakeholders, was according to Sinha, constituted under the chairmanship of RBI Executive Director R Gandhi to explore ways to enhance liquidity in the G-Secs and interest rate derivatives markets..........
Banks, post offices may be roped in to sell G-Secs
Bank branches and post offices could be used as distribution channels to get retail investors to invest in government securities, according to a Reserve Bank of India panel......
Five reasons why Indian rupee would continue to fall
 |
| The Indian rupee has shed close to 25 per cent value over the past one year. It is likely to fall further. Here are reasons why the Indian currency could be under pressure. |
The rupee and the J curve
....Unlike China, however, slowing growth has not resulted in slowing inflation. Wholesale inflation remains stubbornly above seven per cent and retail inflation is in double digits. The economy seems stuck in a low-growth, high-inflation equilibrium – reminiscent of the late 1990s – such that the Reserve Bank of India’s hands are tied even as growth continues to flounder.......
When will RBI lower interest rates?
.....The finance minister has already spoken of ‘calibrated risk’, i.e. lower interest rates, amongst other things, to revive growth. But the RBI is on record to say “…as the multiple constraints to growth are addressed” - a euphemism for government action – it will “suitably adjust its monetary policy stance”. Assuming the government does ‘something’ over the next two weeks, will monetary action follow suit?.....
Lower inflation: Time for another Chidu-Subbu tete-a-tete
.....Given the multiplicity of factors, it will indeed be a tightrope walk for policymakers. How much RBI and the finance ministry understand each other’s concerns will determine the way monetary policy will move in the near term. An ideal time for another heart-to-heart chat between Chidambaram and Subbarao, perhaps. Just to ensure both sides are on the same page, unlike a few months earlier.
One-third of slowdown due to interest rate hikes, says Gokarn
Reserve Bank of India (RBI) Deputy Governor Subir Gokarn on Tuesday said the central bank had come to a rough conclusion that about a third of the slowdown was due to interest rate hikes and the rest due to a combination of other domestic and global factors.......
Read - Indian Express
Read - Indian Express
Rate cut hopes rise as inflation eases
.....Finance minister P Chidambaram's comments that interest rates are high and the government will take steps to ease the burden have also added to expectations. But RBI is still worried about the inflationary pressures in Asia's third-largest economy. Governor D Subbarao said on Monday that inflation remained "above our tolerance level". But some experts say slowing growth, sliding exports and industrial output and overall gloomy outlook may prompt the central bank to ease rates. .......
Interest rates that are out of sync with fundamentals are unsustainable
.... If the RBI is going to withdraw liquidity through the CRR on the one hand and then pump in liquidity by paying interest on these impounded balances on the other, the CRR, as a tool of monetary policy, loses all meaning. It would be a case of taking away with one hand and giving with the other — a completely pointless exercise. It is not sustainable because unless interest rates in an economy reflect underlying macroeconomic fundamentals, it will not be possible to sustain interest rates at that level for long without it resulting in serious macroeconomic imbalances..........
Statistical chimera
Inflation has yielded ground neither to the RBI’s monetary policy aggression nor to the pious entreaties of the Government. The public has reason to worry.
Read - HBL
Freeze accounts of fraud accused: Cops
...........The arrests in the case followed a release from the RBI Department of Non-Banking Supervision, Chennai Regional Office against Aphro Trust and its associates functioning from Teachers Colony in Kolathur. The release said the Aphro Trust and its associates were not regulated by the RBI as claimed and warned the public..........
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......
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..............
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......
Tuesday, August 14, 2012
Who killed the India growth story: Delhi, not Mint St
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.
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......
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?......
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.
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......
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.......
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 ............
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,”.........
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.......
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......
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,”..........
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
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.......
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
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........
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.
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........
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............
Monday, August 13, 2012
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........
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......
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.
Students from UK institute get a taste of RBI functioning
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..........
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
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.........
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......
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,' .........
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............
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
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...........
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.......
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,”............
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.......
Gold import caused high current a/c deficit last year: Rangarajan
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...........
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..........
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......
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............
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.........
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............
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.........
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.............
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......
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...........
Saturday, August 11, 2012
Subba row
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| 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. |
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”..........
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.........
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..............
Leadership deficit main reason for slump in manufacturing: RBI Deputy Governor HR Khan
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..............
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........
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.............
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.......
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........
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.........
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........
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)..........
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.......
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........
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...............
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