Reserve Bank of India Governor Duvvuri Subbarao said the central bank needs to reduce inflation to 5 percent or lower. “We need to bring it down to more acceptable levels of 5 percent or even less than 5 percent,” Subbarao said today in a speech at Cornell University in Ithaca, New York........
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Wednesday, August 29, 2012
India's Central Bank Governor Refuses to Play Politics With Inflation
Dr. Duvurri Subbarao, Governor of the Reserve Bank of India, will appear at Asia Society in New York on Wednesday, August 29 at 6:30 p.m
.....The Reserve Bank of India, led by its Governor Duvurri Subbarao — who will appear at Asia Society in New York on Wednesday evening — has held firm arguing that high interest rates are needed given India's stubbornly high inflation rate. As the Deputy Governor of the bank said in an interview this month, "inflation risks" are trumping risks to growth. This is bankeres for saying that rates cannot be cut as long as prices remain high. Subbarao, a long time civil servant at the Indian finance ministry, was believed to have been chosen as central banker in 2008 because he was seen as being unlikely to buck his political masters. If so, he has proven the government wrong repeatedly and made it clear the task of fighting inflation will not be diluted by short-term political calculations.......
Jalan: Inflation Bigger Concern Than Growth
Inflation remains the bigger concern for India even as the near-term growth prospects of Asia's third-largest economy have deteriorated considerably since the beginning of the year, said Bimal Jalan, a former central bank Governor. His views echo those of the Reserve Bank of India, which has maintained a tight monetary stance even as it slashed its estimate on domestic growth for the fiscal year through March 2013.......
RBI says India's import cover reserves may fall further
Reserve Bank of India (RBI) Executive Director D K Mohanty on Tuesday said the country’s import cover reserves might fall further this financial year in the absence of capital inflows. At the end of March, India’s foreign currency reserves were at about seven months of import cover according to data from the central bank. The senior central bank official said financing current account deficit was becoming a problem since capital was not flowing in for a number of reasons. “But we want to maintain our lifestyle and consumption... So, we have to dip into the reserves. We are drawing from the reserves, we built in the pre-crisis period and since then we are not adding anything, it is coming down,” said Mohanty.....
RBI Shillong - Lensview
The 29th office of the Reserve Bank of India
RBI to launch Rs 1,000 notes with rupee symbol
Banknotes to bear signature of RBI Governor, Year of printing 2012 will be on reverse of banknote
...."The Reserve Bank of India will shortly issue Rs 1,000 denomination banknotes incorporating rupee symbol, with inset letter 'L', in both the numbering panels, in the Mahatma Gandhi Series-2005 with improved security features," ....
SBI officers protest against 7-day schedule
....... central government offices, secretariat and apex banks like RBI, Nabard etc are having 5-day week, where no difficulty is being experienced at their end. Besides employees' organisations in the banking industry are pleading for a 5-day week in the banking industry and the proposal is pending with the Indian Banks' Association,....
Read - TOI
Read - TOI
SBI chairman presses for abolition of cash reserve ratio or CRR
Pratip Chaudhari, chairman of SBI defended his views on CRR saying that when the Deputy Governor (Dr Chakrabarty) was a bank chairman, he was asking for the same......
New chief for Nabard AP region
....Nair, who began his career with Reserve Bank of India in 1980, moved to Nabard three years later. “Before joining the AP Regional Office, Shri. Nair headed a corporate level team in Mumbai," ....
Read - HBL
Read - HBL
Dr. K.C. Chakrabarty - Keynote address at Financial Conference on System...
Dr. K.C. Chakrabarty, Deputy Governor of RBI, addresses the keen audience at the Financial Conference on Systemic Risk organized by Great Lakes Institute of Management, Chennai.
Indiscreet at RBI
Years before Governor D. Subbarao came to the Reserve Bank of India, a predecessor had turned meetings with public sector bank chiefs into a sort of extended classroom session, with the latter at the receiving end. The meetings used to be dreaded by the then chiefs of the bank........
Chakrabarty had same views on CRR as a banker: SBI chief
....“What I want to say is that it’s just a view. When he (Chakrabarty) was a bank chairman, he was also of the same view (reducing the CRR),” Chaudhuri said. He made the remarks with a big smile, but the message was loud and clear......
CRR Row
The SBI chairman is reported to have said that CRR does not help anybody and is unfairly put on the banks, and has asked why it is not applied to insurance companies and mutual funds, which are also mobilising deposits from the public. The US has a required reserve ratio that is as high as 10% on transaction deposits above a certain limit on a graded scale against 4.75% in India. For fighting inflation, the central bank of China raised the reserve requirement several times during 2007-11. At one point, it was as high as 21.5%. Countries like UK are able to use open market operations (OMO) successfully to carry out monetary policy because of their developed financial markets. In India, due to constraints arising from lack of autonomy, the RBI has to use the OMO to groom the market for the flotation of government securities through buybacks, thus monetising fiscal deficit retroactively. Until this situation improves, it has to rely on CRR for having some control on money supply.
- A SESHAN (ET)
The SBI chairman has made a valid suggestion, and his view is shared by the entire banking industry. It was expected of the regulator to study this suggestion and not reply rudely. The RBI deputy governor has not only snubbed the SBI chairman, he has given a clear message to other heads of banks not to offer good suggestions to the RBI.
- P H SADEKAR (ET)
- A SESHAN (ET)
The Chairman of SBI has raised a question for debate as to why cash reserve ratio (CRR) cannot be phased out as it does not carry interest. Instead of having a healthy discussion on the statement, the remark of the Deputy Governor of RBI “either comply or do business elsewhere” is unfortunate. The RBI would do better to revisit its policy on CRR.
- Mariappan (HBL)
Outdated instrument
This is with reference to “Chakrabarty frowns at SBI chief’s views on CRR phase-out” (Business Line, August 28). It is unfortunate that a man of Chakrabarty’s stature made the remark. Many experts have opined that CRR has outlived its purpose. Most of the central banks have stopped using this instrument.Valuable capital is being immobilised by the RBI using an outdated instrument.
The public has a right to know the logic behind Chakrabarty’s statement.
- Vishnumurthy Adiga (HBL)
Rude Reply
The SBI chairman has made a valid suggestion, and his view is shared by the entire banking industry. It was expected of the regulator to study this suggestion and not reply rudely. The RBI deputy governor has not only snubbed the SBI chairman, he has given a clear message to other heads of banks not to offer good suggestions to the RBI.
- P H SADEKAR (ET)
This refers to “Phase out Cash Reserve Ratio” (Business Line, August 24). The SBI Chairman deserves to be complimented for questioning a notion that has outlived its utility. This issue has been analysed well in the article “Interest on CRR, a big mistake” (Business Line, August 24). Let us hope for more reforms that suit the changed economy.
- K. Gopalan (HBL) RBI norm to make banks shun loan securitisation
The securitisation market in India may shrink after the Reserve Bank of India (RBI) on August 21 curtailed credit enhancements on direct assignment deals (bilateral deals), whereby a loan which is sold from the books of an originator (often an NBFC, or a micro-finance institution or other financial institution) to an investor (often a bank, mutual fund or a private equity investor). This will result in fewer banks accessing the securitisation market to meet their priority lending targets. Banks are the biggest investors in this segment.........
Baby steps to bank reforms unlikely to bring cheer
....State banks also tend to be forgiving when corporate borrowers get into trouble, and a RBI deputy governor recently said India’s debt restructuring process is biased in favour of state banks and big borrowers. An RBI panel has proposed tighter rules around the process. “Occasionally there are concerns about the government exercising its ownership rights not through the established channels which is the board mechanism but outside of the board,” RBI Governor Duvvuri Subbarao said last month, responding to the government’s influence over state banks.......
Reduce variation in FD rates, RBI tells co-op banks
......."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," RBI said in a notification to these banks........
In the name of NPA
Crores of rupees are being written off in several banks in the guise of non-recovery. The NPA accounts of other banks are taken over. Subsequently, these accounts are classified as NPA and written off. Some of these accounts are compromised paying paltry sums. Is the RBI willing to publish the quantum of such written-off accounts for the last five years?
- M T Thomas (HBL)
Bank mergers
With reference to “Fifth wheel of match making” (Business Line, August 27), the Finance Ministry’s changed stance of bringing bank mergers under the ambit of the Competition Commission of India is timely. At a time when policy makers are still after mega-mergers among public sector banks, notwithstanding the failure of big banks globally, keeping bank mergers out of the purview of the Competition Act is unethical and pro-cartelisation. The Government, the RBI and a section of bankers are for the merger of associate banks with SBI. Is this not creation of monopolies? By downsizing, cost is sought to be reduced. But in a country such as India, with 60 per cent of the populace financially excluded and only 5 per cent of villages with banking facility, bank mergers for pooling capital and big loan disbursements will not serve national interests. And this plan of bank mergers is part of a larger design that includes selling majority shares of PSBs to private entities, major foreign equity participation and outsourcing of basic banking services.
- K.S. Krishna (HBL)
Floating rate deposit not a good idea now
The deposit is meant to enable investors to benefit from rate hikes, but given that interest rates have peaked, the product’s timing isn’t right......
Read - Mint
Should Banks Be Allowed in Commodity Futures Trading?
.....By and large, Indian banks (both public and private) lack market knowledge and expertise to benefit from trading in commodity futures. The RBI has also expressed concern on the risks posed by domestic banks that lack expertise and skilled manpower to deal with such risky trading instruments........
Read......
Read......
Banks may get more time to meet priority sector target
The Reserve Bank of India (RBI) may relax some of the priority sector target for banks on a case-to-case basis but has asked the lenders to ensure the funds are reaching the beneficiaries. In a meeting with RBI Deputy Governor K C Chakrabarty on Tuesday, bankers voiced their concern on the revised priority sector lending norms that had excluded some sectors from the priority list...........
RBI may not relax priority lending
The Reserve Bank of India is unlikely to relax priority sector guidelines despite bankers pitching for easing of the norms. Though RBI officials met bankers on Tuesday to discuss issues faced by them and to seek feedback on the guidelines, bank chiefs are not optimistic about any major relaxation......
Read - Indian Express
Reforming India’s banks - Renu Kohli
.....the political privileges from public ownership of banks are far too many for any drastic change in ownership and control. Shareholding beyond 5% will require RBI’s sanction; the regulator can be trusted to ensure no single group or entity gets excessive control. Likewise, foreign domination concerns are overdone: Lessons learnt from the crisis—many foreign banks with significant presence in some countries suspended lending as their parents shrank balance sheets, exacerbating a credit squeeze—are well internalized by a cautious RBI. The proposed reforms will only contribute to the betterment of banks.
Suchitra Krishnamoorthi files complaint against HSBC bank
......Suchitra explained that HSBC follows the practice of obtaining blank LOIs (Letters of Intent) from their clients and filling them up on their own will. "Often, they don't even inform the client concerned. Obtaining blank LOIs is a clear violation of SEBI (Securities and Exchange Board of India) and RBI (Reserve Bank of India) guidelines, which state that every debit made by the bank on any client's behalf, must have the client's corresponding mandate and signature. Failure to do so is fraud," ..........
Existing banking licence policy may be reviewed
The RBI has received feedback on the review of the existing policy on the banking licence and according to our sources in the finance ministry say that they feel that the current policy is a comprehensive policy whereas you require different norms for mid-size, small and big banks,.....
RuPay card launched
....M. Vijaykumar, Lead District Officer, Reserve Bank of India, said SHG members should become retainers of the banks instead of defaulters......
Read - The Hindu
Discrepancies in Lakshmi Vilas Bank’s corporate governance and business practices: RBI
The banking regulator, Reserve bank of India, conducted an inspection of Lakshmi Vilas Bank (LVB) and found that the bank fell short in many accounts in its business practices and corporate governance standards........
Tuesday, August 28, 2012
Open letter to RBI Governor D Subbarao
Dear Dr D Subbarao,
At the outset, thanks for championing the cause of the poor and the downtrodden of our country. Your statement at Tiruvananthapuram makes a refreshing departure from the stand taken by the powers that be in the government, who are voicing their concern over the slow growth of the economy due to high interest rates, unmindful of the galloping inflation causing havoc in the life of a large majority of people of our country. You were right when you said “Inflation is a regressive tax for the silent poor.” You are perfectly right in saying “Powerful and resourceful corporates may protest high interest rates, but there also exists a vast majority of silent poor who suffer worst from high inflation. Unlike in the former’s case, their voice is not heard in the media…” We salute you for airing your views boldly and firmly and for not relenting under pressure from the industry bigwigs coupled with the media.......
The Moolah Queen
| The Mann Deshi business school, Udyogini, aims to create more than 1 million women entrepreneurs by 2020 | ||
What do you call a rural cooperative bank that offers a pension fund, a life insurance scheme, a business school to boot and just deals with women? Meet Chetna Gala Sinha — she calls it the Mann Deshi Mahila Sahakari Bank. Sinha, a portly woman in her fifties, is the founder of this women’s cooperative bank based out of Mahaswad village, Satara district.............
Read...........
ICICI Bank CEO Chanda D Kochhar denies bad loan risks
....."Asset quality problems for the banking industry are not as acute as perceived," Kochhar, head of India's second-largest bank, said. "Temporary cash-flow problems in projects with gestation period of as much as 15 years don't make it a bad loan." Kochhar's view differs from the Reserve Bank of India, which in a June 28 report said the condition of lenders is likely to worsen this year on an increase in soured credit. ......
Play by rules or look elsewhere, RBI's message to SBI boss
 |
| "If the SBI Chairman is not able to do business as per our regulatory environment, he has to find some other place," RBI Deputy Governor K C Chakrabarty said in a sharp reaction to Chaudhuri's recent comment that CRR does not help anybody and it was unfairly put on banks..... |
SBI chief gets taste of RBI's tongue-lashing
....Chakrabarty was responding to a question from the audience at a conference on systemic risk here. The tongue-lashing took many by surprise, as it was probably the first time that a top RBI official resorted to such a public reprimand for the chairman of the country’s largest bank.......
Controlling inflation will lead to interest rate cut: K C Chakrabarty
......Talking about an inclusive economy, he said said the banks should reach out to poor and should extend credit facility to those who required. Today only 10% of the people have access to bank credit, Chakrabarty noted. “Today the poor saves and rich borrow, which will increase the systemic risk,” he said.........
Cash Reserve Ratio: A non-performing asset for banks?
.......The RBI puts the onus squarely on the government for the rising inflation in the economy, saying that it is due to supply side constraints and the fiscal deficit caused by the rising subsidy burden but can do nothing about it. And it does not bring down the interest rates fearing that it would fuel inflation and tinkers with the monetary policy by reducing the SLR, when the banks needed reduction in CRR to shore up their profits. RBI expects the banks to reduce their lending rates without any corresponding reduction either in repo rate or CRR. This amounts to punishing the banks for the inaction of the government......
Read - Moneylife
SBI’s chief’s call for scrapping the CRR (cash reserve ratio) is irresponsible
Had the issue been raised by anyone else, it could have been out down to ignorance. But when the question, ‘Why is CRR (cash reserve ratio ) not applied to insurance and other companies who are mobilising deposits from the public?’ is raised by Pratip Chaudhuri, the Chairman of The State Bank of India (SBI), the country’s largest commercial bank, desperation, rather than ignorance, is, perhaps, the only reason..........
CRR is a cost, manage it: Chakrabarty tells SBI
...The RBI Deputy Governor asked: “What is the regulatory system for? Whether to reduce it [CRR] to zero or increase it, the regulator had the right to decide.” Asked if the Reserve Bank would seek the opinion of banks on this issue, he said, “Why should I take others’ opinion. My regulatory system is not based on what the opinion of other people is.” When pointed out that many countries did not have CRR, he said, “several countries are not having. But several others are having.....
Swipe for more than cash at White Label ATMs
.....According to RBI norms, WLA operators are permitted to display advertisements and offer value added services. “While running advertisements on the WLA screen would be permitted, such advertisements should disappear once the customer commences a transaction in order to ensure that the customer is not distracted in any way during the process,” RBI said in the guidelines......
India offers vast scope for Islamic banking
....Selective attempts to introduce Islamic finance-modelled products by private sector finance companies in the past have all failed due to regulatory issues as well as opposition from political parties. But a new initiative by the National Commission for Minorities, a constitutional body charged with the welfare of minority groups, in support of the idea has prompted the federal finance ministry to refer the issue to the Reserve Bank of India, the Indian central bank, for a fresh look.......
Government considering to set up an agriculture credit risk fund
......A finance ministry official said the government is looking into this proposal along with many more suggestions but no final decision has been taken yet. "We have received various propositions from banks, banking association IBA and even the Reserve Bank. We are looking at all options," the official said. An RBI committee headed by MV Nair had also recommended a Credit Guarantee Scheme for small and marginal farmers. ......
Include financial sector in proposal to make regulators accountable
....Regulatory agencies in the financial sector should also be merged. There can be two regulators: a macroprudential regulator and another regulator to cover market transactions. The RBI fits the bill as a macro-prudential regulator. The other unified regulator can oversee the entire gamut of products including stocks, bonds, insurance, pensions, commodities, derivatives, etc.......
Read - ET
Economy is in need of rescue: Adi Godrej
......."We have suggested to the RBI that steps should be taken to reduce the repo rate, reverse repo rate and the CRR. If these measure are taken then I think investments will gather momentum and growth will be restored,".........
India's 'boring' banking system remains robust: Parekh
...."To my mind, the winning strategy for banks in India is 'Basic Banking Model' - what is otherwise known as 'boring banking'. There is enough of retail business potential for all existing banks, new banks (as and when fresh licences are given), NBFCs and microfinance companies and other players," ......
Desperado
Less than a month into his new job as India’s finance minister, P Chidambaram is in a hurry to rev up the economy’s sputtering engines. But with inflation still high – the rate just dipped below seven per cent for the first time in 32 months — the central bank in Mumbai is reluctant to help by cutting policy interest rates. So Chidambaram wants to rely on the magnanimity of the US Federal Reserve, the European Central Bank and the Bank of England. He is nudging local companies to take more loans denominated in foreign...........
Defreeze investments
.......The Reserve Bank of India’s (RBI) prescription of ‘expenditure switching’ – cutting subsidies and other revenue spending, and redirecting the resources so released into public capital outlays – is a timely reminder on the state of capital formation in the economy. What the Indian economy is now experiencing is no ordinary slowdown, but something far more serious: A near-collapse of its investment cycle.........
Sebi proposes no-frills demat account for small investors
....The move follows a facility of no-frills savings account already in place at various banks as per directions of the banking sector regulator RBI.........
Lakshmi Vilas Bank's practices are flawed and has failed to monitor accounts diligently: RBI
The Reserve Bank of India has picked holes in the business practices and corporate governance standards at Lakshmi Vilas Bank. The private sector lender says it is plugging the gaps pointed out by the regulator. The RBI has said the staff had been negligent in monitoring accounts and that the promoter group had been raising stake in contrast to its direction to lower the holding, an inspection report shows............
Politics can no longer be allowed to override economic sense
........RBI rightly says the way to stimulate economic activity without pushing up inflation is to adopt a strategy that promotes reforms-based resource mobilisation involving cuts in government spending on subsidies in order to reallocate funds for investments.........
Dhanalaxmi CEO PG Jayakumar under fire for not disclosing RBI rap
PG Jayakumar, the MD and CEO of Dhanlaxmi Bank, has incurred the wrath of some of his board members for failing disclose the Reserve Bank of India's strictures against the bank's promoters, and for defending their alleged breach of regulations with the central bank............
ED notice to cricket board, officials
..... With BCCI’s registration as a society, it should have sought permission from the Reserve Bank of India (RBI) before accepting the deposits from the overseas bidders, said sources. “However, the BCCI failed to take RBI’s permission,” said an ED official........
Monday, August 27, 2012
NRIs : Policies and procedures : S.S.Tarapore
.......Procedures for Residents Holding Joint Accounts with Non- Residents In an increasingly globalised world economy and the large Indian diaspora, it is quite common for most residents to have a non- resident as a close relative. As pointed out in the K J Udeshi Report on Procedures for Individual Non- Resident Indians, a resident can be a second name on a non- resident account and can freely operate the account, yet a resident account- holder, till recently, could not put the name of a close relative as a second name on a resident account. Following the Udeshi Report, residents are now allowed to put the second holder as a nonresident, subject to the proviso that the second holder cannot operate the account during the life time of the first resident holder.......
Read - FPJ
Complicated path towards Producers Price Index
| NO CONSENSUS |
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Read - BS
NPA rules are just fine
.....As far as the cash reserve ratio (CRR) is concerned, RBI has monetary responsibilities and it has to ensure that the macro-economic fundamentals are not only strong but also stable. The chief of India’s largest commercial bank should appreciate the role of RBI and its responsibility to ensure economic growth and price stability for which financial stability and banking stability is a must.
- T V Gopalakrishnan, Mumbai (BS)
The high cost of a free lunch
Why has inflation been so persistent despite the slowdown in growth? That’s the question the Reserve Bank of India (RBI) has been asking for some time, most recently in its annual report for 2011-12.........
RBI’s Admission
.....The RBI is of the opinion that lower interest rates alone are unlikely to boost investment climate what is required that along with cut in bank rates. The Central Government should cut expenditure on subsidies and that money should be brought into public capital. The government must cut down the fiscal deficit to improve its own economy.........
Penny-pinching RBI in trouble for copying top architect’s designs
.... But a bigger shock came a few months later, when Diwan learnt that the bank had used his design for the 21st floor to refurbish the building's 10th and 5th floor. The contractor who had executed Diwan's designs was hired again behind his back. The old designs, of course, came in handy. According to the Copyright Act, when an architect prepares a plan at the request of a client, the copyright remains with the architect. The client cannot reproduce those plans or any substantive part of them either in the form of another plan or in the form of a building itself, unless he has the architect's permission, express of implied. "The design used for 10th and 5th floors is mine. There is flagrant copying of my design, which is evident from the drawings of the lay-out of these floors," Diwan told Mumbai Mirror on Friday.....
Indian carrom team selections
....Players called for selections:
Men: Yogesh Pardeshi (PSPB), K. Srinivas (PSPB), K. Madhop Singh (Manipur), C. Bharathidasan (Tamil Nadu), Fayaz Shaikh (Maharashtra), Prakash Gaikwad (LIC).
Women: M. Parimala Devi (PSPB), S. Ilavazhaki (PSPB), Rashmi Kumari (PSPB), Kavita Somanchi (RBI), P. Nirmala (LIC), Sangeeta Chandorkar (RBI)....
Read - The Hindu
Men: Yogesh Pardeshi (PSPB), K. Srinivas (PSPB), K. Madhop Singh (Manipur), C. Bharathidasan (Tamil Nadu), Fayaz Shaikh (Maharashtra), Prakash Gaikwad (LIC).
Women: M. Parimala Devi (PSPB), S. Ilavazhaki (PSPB), Rashmi Kumari (PSPB), Kavita Somanchi (RBI), P. Nirmala (LIC), Sangeeta Chandorkar (RBI)....
Read - The Hindu
'She-initiatives' boost female employee numbers at Citi
..... It has launched a programme called ‘Women Leading Citi’ targeting senior women at the executive level. The 18-month sponsorship programme is designed to foster the advancement of Citi’s highest performing senior executive women. Unlike several other organisations that offer standard coaching to senior level employees, Citi has targeted coaching only for emerging female talent. The programme titled, ‘coaching for success, leadership training for emerging female talent’ is for female employee in the mid-level. The programme is delivered through a series of workshops and engages senior management as coaches......
Take the right route to trading in forex
....The Reserve Bank of India (RBI) has, on more than one occasion, cautioned against overseas foreign exchange trading through Internet trading portals. It first issued an advisory in February last year, and then followed up with two notifications — in April 2011 and November 2011 (see links below). The RBI has observed that “overseas foreign exchange trading has been introduced on a number of Internet/electronic trading portals luring the residents with offers of guaranteed high returns based on such forex trading”.......
Waiting for the 'Draghi Put'
.... Economic projections continue to be revised downwards and earnings growth estimates remain in the single-digit range. Of course, RBI could also help things along with a mid-September rate cut. Going by official pronouncements and the latest consumer price index data, it doesn’t seem likely......
A booster dose is essential
....Apart from reduction in EMI and interest burden for consumer durables, a separate package for boosting the housing sector was also expounded by the Finance Minister. Cheap housing credit through a separate window (other than RBI banking channel) was also mooted via the Indian Banks Association (IBA)......
RBI widens StanChart, HSBC probe to other foreign banks
The Reserve Bank has widened its probe into the affairs of British banking giants HSBC and Standard Chartered to a host of other foreign banks for alleged breach of controls against money laundering and terror financing. Besides, capital market regulator Sebi may also join the investigations, as there are concerns of funds from these banks being routed to the stock market through foreign investors and other entities, sources said........
RBI blacklists trust
....It has been brought to the notice of the RBI that Aphro Trust has in its website www.aphrofin.com claimed to lend as per RBI regulations. However, the trust was not regulated by the RBI and has no bonafides with the RBI.......
Read - The Hindu
Read - The Hindu
FinMin may review director appointments in govt banks
Appointment of directors on the boards of public sector banks is set to be further delayed as the finance ministry is likely to review all the proposals before sending those to the appointments committee of the Cabinet (ACC). Directors’ post in most of the public sector banks – which are filled by the government — are vacant for a long time, with some lying vacant for nearly a year now. Some of the banks do not even have a chartered accountant (CA) among its directors, and, as a result, the audit committee has been headed by non-CA directors............
Fifth wheel of match making
....The proposal to give the Competition Commission of India (CCI) a veto power on bank mergers is ill-advised, for a very simple reason — they will be unnecessarily delayed. Bank mergers in India are never voluntary in the true sense of the term. And they have happened not because the virtues of consolidation have suddenly dawned on bank managements, or the boards suddenly decided to give shareholders a better deal. They have been shotgun weddings arranged at short notice with the banking regulator, Reserve Bank of India, playing matchmaker.......
Mumbai is counterfeit capital of country
....RBI spokesperson Alpana Kilawala said counterfeit notes land up at the RBI from sources such as banks and individuals who come to exchange money. "But central banks all over the world try to stay ahead of forgers; introducing plastic notes is an effort in that direction." ........
23% rise in fake notes in private banks
.....The private banks in the country, in a report submitted to the Reserve Bank of India (RBI), has stated that it had detected 4,62,865 counterfeit notes in 2011-12 as against 3,76,460 found in 2010-11. The counterfeit notes detected by these banks during 2009-10 stood at 3,34,948.......
Read - BS
State a hotbed of fake currency?
Ahmedabad : ...On Thursday last, crime branch had nabbed a marble and granite trader from Himmatnagar, Ramesh Patel and seized Rs 29,000 worth counterfeit notes from him. The paper used to make these notes is the same grade as is used by the Reserve Bank of India (RBI) in its printing presses in India.....
DEALING WITH A TABOO IN BANKING
....Till 2007, RBI could raise CRR to 20% and the floor was 3%. Now there is neither a floor nor a ceiling for CRR. RBI also stopped paying interest on CRR in 2007 when the rate was 3.5%. CRR is a monetary tool. RBI raises CRR to drain excess liquidity from the system when it wants to follow a tight money policy to rein in high inflation. Conversely, it cuts CRR to release money in banks’ coffers. This brings down the cost of money and makes more money available with banks to lend......
Suggested directives for public sector banks
There is criticism that the Banking Division of the Finance Ministry is micro-managing banks. But what the critics must understand is that this is being done to make the bank chiefs more dynamic. However, it appears that the Banking Division is itself now running out of ideas. This article suggests a few model directives which will help make not only the chairman and managing director (CMD) but also the board more dynamic and vibrant........
Govt asks banks to ensure one a/c per urban poor family
......“These beneficiaries are not only inhabitants of rural villages but also comprises of urban poor and slum dwellers residing in the Urban/Metro centres,” the finance ministry circular to all State Level Bankers Committee said.
Read - BS
FM's constituency bankers' favourite
....the total number of bank branches in Sivagana district, from where Chidambaram hails, is 184, including 87 rural and 97 semi-urban. In 2011-12, the banks had set a target to disburse Rs 1,125.05 crore, and they disbursed Rs 1,284 crore, an increase around 14 per cent......
iCreate’s Biz$core ADF Solution Selected by Bank of America NA, India for RBI ADF Reporting
...Bank of America sought a solution to help address RBI’s ADF compliance directive by enabling automation of the various regulatory returns that the bank submits to RBI. The solution had to integrate seamlessly with the bank’s data repository and enable a straight through processing of the returns from the data repository. The solution had to be designed for quick implementation.......
Read.......
SBI mulls working on Sundays to improve efficiency
.....Being open on Sundays is said to help the branches attract the new-age working class customers where both the spouses in a household work and struggle to do banking transactions during the week. SBI, which has almost 14,000 branches across the country, counts on its large chunk of savings account deposits (at over 38 per cent) for higher margins. However, if such a move were to be made, it would be interesting how the bank unions, which had crippled banking operations across country last week protesting reform measures, take to such a proposal.......
Rajan to take charge as CEA on Aug 29
...."Raghuram Rajan will take charge as chief economic advisor in the Finance Ministry on August 29," .......
Read - BS
Read - BS
Leaders beckon Indian youth to join politics
.....Dr. Jalan said cynicism towards politics and Government functioning had attracted India’s best talents to other fields. “Take a long view towards 2025 or 2040. I would ask the youth to launch a young political movement. Give five years of your life to public service,” Dr. Jalan said......
Read - The Hindu
Visit your old bank locker before it’s too late
.....Referring to a case where arms and explosives were found in a locker, the Reserve Bank of India, in its guidelines to the banks on the operation of safe deposit lockers, advises them to strictly monitor the operations of the lockers and ask customers who have not opened their lockers for over three years (One year in case of ‘high risk’ customers), an explanation for it in writing and allow the continued use of the locker only if there is a satisfactory response........
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