Part of inflation has been suppressed: Dr Subir Gokarn

......We have right through this period been making the distinction between what is measured and what is suppressed. To an extent our assessment of inflation situation does take into account the fact that some of inflation is suppressed because prices that should be paid for certain products are not being paid.......

Read - ET

IRCTC Mobile included in RBI inter-banking payment

......The NPCI has enabled such companies as IRCTC, Reliance Mutual Funds, Dish TV, Shoppers Stop, and SpiceJet with inter-bank mobile payment services, and all a user needs to do is download a mobile banking app to their smartphone enter the seven digit ID and Mobile PIN that are provided by the bank......

Read.........

Unclaimed funds in banks

Huge amounts of funds are lying unclaimed and are in inoperative in many  banks. The Reserve Bank of India ( RBI) should issue a directive that all banks may inform their customers/ depositors about their funds lying for years together. After the expiry of time- bound period, all unclaimed funds should be transferred to a special fund at RBI from where it may be claimed afterwards by claimants either directly from RBI or through concerned banks.

- Subhash Chandra Agrawal (FPJ)

Interest on savings bank deposits may fall

......“It doesn’t look like savings bank deposit rates would start falling in a hurry. The falling interest rate cycle has just begun. RBI has cut rates once and it seems reluctant to cut again. If we have a prolonged slowdown in the economy, we may see rates falling. It depends on how economic growth pans out,” ......

Read - BS

Is The Boom In Banking Industry Really Fruitful

......As a result of development and growth in the industry, the banking industry has come up with several job opportunities for the people. The interests of the foreign ventures into our banking industry have given rise in several necessary job profiles which needs man power. These job opportunities are not limited to just one category of banking industry but available for both the sectors of private banking as well as public banks. RBI being the apex court of the Indian banking industry, today a majority of job opportunities comes from here for handling their policies and managing the internal system effectively. RBI recruitment are very much in demand. Apart from this, the experts from banking industry have predicted that RBI recruitment 2013 demand is going to cover a total of 30 -40% of banking job opportunities in the coming years.......

Read........

Applications invited for RBI CHAIR PROFESSOR

...... Chair Professor is expected to undertake research in the relevant field and publish papers in international / national refereed journals based on his/her research.   Selected candidate may opt to teach in Institute’s academic  and executive education programmes. Chair Professorship is initially awarded for three years; it may be extended by another three years.......

Read.......

Financing viable MSME NPA units is a national priority

The Reserve Bank of India (RBI) is now considering relaxation of NPA (non-performing assets) norms for housing projects. Earlier, the NPA norms were relaxed for infrastructure loans. But the MSMEs (micro, small and medium enterprises) which are the worst sufferer of the revision of NPA norms from 180 days of default to 90 days of default are still reeling under such predicament....... 

Read - The Pioneer

Indian Bank CMD Bhasin appointed IBA Deputy Chairman

T M Bhasin, Chairman and Managing Director of Indian Bank, has been appointed Deputy Chairman of of the Indian Banks Association (IBA), an apex body of public sector, private sector and foreign banks in the country.....

Read.....

Banks convert Rs.500 crore of Basix’s debt into equity

......“It makes sense for Basix to take the CDR route as banks have converted a large part of debt into equity. If CDR didn’t happen, Basix would not have survived,” said Santosh Singh, analyst at Espirito Santo Securities Ltd. “However, the fact remains that CDR is only a temporary relief and they will have to recover money from the ground.” Late last year, the Reserve Bank of India (RBI) had framed regulations to govern the sector. According to RBI norms, MFIs with more than Rs.100 crore of loans must operate with a margin of 10%. The government is also in the process of finalizing national regulations for the sector.

Read - Mint

Yes Bank to launch a broking subsidiary 'Yes Securities'

Yes Bank has received Reserve Bank of India approval to set up a broking subsidiary, Yes Securities Private Ltd. This subsidiary will have a capital of about Rs20 to 25 crore. The broking business will compliment our retail liabilities and wealth management proposition,'' said Rana Kapoor MD & CEO Yes Bank. It would bring granularity in our current and saving account base. The focus would be on retail broking,''.......

Read - ET

‘Private banks imprudent lenders to DCHL’

State-run lenders led by Canara Bank allege irresponsible lending by some banks contributed to ongoing crisis

......If the borrower fails to repay a bank’s loan, all lenders in the consortium are forced to classify the loan as bad and set aside money for it. But this does not happen under multiple lending. According to Raman, under current Reserve Bank of India (RBI) norms, major lenders to the same borrower should share information. State-run bankers raised this issue with financial services secretary D.K. Mittal and RBI Deputy Governor Subir Gokarn in separate meetings last week, according to bankers familiar with the development. Analysts blame indiscriminate diversification for the crisis at DCHL. The company ventured into areas such as aviation and book retail besides bidding $107 million for Deccan Chargers in 2008.......

Read - Mint

Consumers are taken in by insurance hardsell

......The RBI, IRDA, SEBI and PFRDA (Pension Fund Regulatory Development Authority) are major stakeholders in the financial literacy programme. But each stakeholder tends to act in isolation. Insurance mis-selling within bank premises is not controlled by the RBI (on the ground that it is in no way involved in the selling process). The IRDA is supposed to act in such cases, despite the number of occasions when insurance is bought under bank pressure. If a bank branch is like a country, then an insurance wing operating out of a bank branch is like a foreign consulate located in that country. A country cannot remain silent on any irregularities in visa issuance by the foreign consulate located within its boundaries. The RBI should also note that the fee income of banks is paid by banking customers. It is not because of insurance they visit the bank branch, but because of their banking needs.......

Read - HBL

If you go by their ad, YV Reddy could become the next governor of Bank of England

......To begin with, there is no nationality specification. The ad does not say that the governor would have to be a British citizen. Which means, in theory, that central bankers or senior finance professionals from other countries could also head the Bank of England. For example, YV Reddy, Usha Thorat or Montek Singh Ahluwalia could, if they wished, become serious contenders. Another striking feature, at least by Indian standards, is how early the British government is going about finding a new governor. In India, even for the most senior positions, advance succession planning is taboo. The incumbent would be on extension for months or the post would be vacant for years before the relevant selection process gets completed. ......

Read - ET

How Rao made Manmohan India’s ‘accidental reformer

......However, in order to put his plan into action, he would need an effective firefighter. Even before the final word on his coronation was out, Rao had approached the famous economist and former Governor of the RBI, IG Patel, to join his team. Patel, ever the pragmatist, had begged off and suggested another career bureaucrat, Manmohan Singh, as a possible choice. Rao’s need was for someone who was an acceptable face to the IMF and the World Bank, who knew the economy and understood the web of levers that controlled political decision-making. Singh qualified on all counts.......

Read........

‘One Rank, One Pension’ a continuing process: Ministry

......The sources said the overall aim of the package was to cover the gap in a phased manner. It was the third time the government increased pensions of ex-servicemen after the Sixth Pay Commission recommendations had been implemented in 2008. “Every ex-serviceman has benefitted from this latest exercise, which has several measures aimed at enhancing the pension of pre-2006 persons below other ranks (PBORs) pensioners and family pensioners.” This would benefit about 13 lakh pensioners, the total cost entailed being Rs. 1,400 crore......

Read - The Hindu

My View on "Updation of Pension for RBI retirees"

The latest affidavit confirms Bank’s intention to stand by the March 1992 circular committing updation of pension as and when salaries of serving employees are revised. The technical hurdle created by GOI at some stage is sought to be removed by amendment to RBI Pension Regulations, 1990 approved by Central board and forwarded to GOI in October 2011. One hopes this gets sorted out fast and the already approved revision of Family Pension is given effect to fast. Another plea I would like to make to the Governor is to be merciful and grant some reasonable rise in the Ex-Gratia paid to pre-1986 retirees (youngest among them would be nearing 85 now). This institution can afford these costs.

M G Warrier

Egg-proofing inflation

The new Chief Economic Advisor Raghuram Rajan’s argument that inflation is being fuelled by people who have become rich and are demanding food products such as milk, eggs and meat rather than cereals (Business Line, September 26) may be right theoretically, but his solution will help only the rich, in whose household budget food items have low share. The more immediate priority should be to address the impact of price rise on the majority of Indians who spend more than 70 per cent of their earnings on food, shelter and healthcare.

M.G. Warrier (HBL)

Banks Plan Common Job Interviews

20 lenders may give Institute of Banking Personnel Selection the interview mandate; SBI will not be part of it

It may become a lot easier to get a job at nationalised banks. Banks are planning to have a common interview that could open up opportunities in one go in many banks for candidates, who now have to give multiple interviews for jobs in various banks.  Public sector banks, which recruit about 30,000-40,000 people a year on an average, expect to save time and cost once this common interview becomes a reality. As many as 20 banks are expected to give the mandate to Institute of Banking Personnel Selection, or IBPS, to conduct the common interview on their behalf....... 

Read - ET

OUTSOURCING OF BANK JOBS – BENEFITS AND RISKS

Nowadays, we very often hear about outsourcing of bank jobs in India.  What are their implications and intricacies?  What are the benefits accruing and risks involved, if we encourage it?  Why do the Trade Unions oppose it tooth and nail?  Why are the Government of India, Reserve Bank of India and Indian Banks Association very particular about outsourcing of bank jobs?..........

Read........

It is a fake money, Honey!

......RBI spokesperson Alpana Killawala 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.”......

Read.........

Cheque clearance through email

Reserve Bank of India General Manager M. Dash on Tuesday said that the bank was taking banking technology to new heights by introducing a unique system of cheque clearances through email. Speaking at an awareness programme on payment of taxes of the State government through e-mode, Mr. Dash said the mail system for cheque clearances was already introduced in Hyderabad on a pilot basis this year and it was proposed to cover the entire State by the end of next year. As the first step, the RBI had involved 20 banks based in Hyderabad for the mail-aided cheque transactions.......

Read - The Hindu

‘Adhesive man’ glues technique to daily life

......“Prime Minister Indira Gandhi was not impressed by the colour of the note we presented and asked us to go to the RBI Governor. But surprisingly, Dr Manmohan Singh okayed the note within seconds.” ......

Read - The Pioneer

Now, ATMs that scan your hand to shell out cash

TOKYO, SEP 26: 

Forgot your ATM card at home? No worries, this Japanese machine will scan your hand and give cash. A regional bank in Japan on Wednesday started operating ATMs for cash withdrawals, deposits and balance inquiries that do not require plastic cards but instead identify account holders by scanning their hands.......

Read - HBL

Making the case for Financial Literacy – Understanding and Addressing Challenges

......Many institutions such as FINO tried to fill this gap, including, which provides a “last-mile” or doorstep banking service through their BC network to clients who don’t have access to formal banks. Despite this effort, low levels of literacy and financial awareness are still impediments to NPFFI goals. Therefore, RBI initiated ‘Project Financial Literacy’ to disseminate information about financial services and products to groups including rural and urban poor, which was undertaken by many institutions using the classroom based FE format, though this format has inherent challenges:......

Read....

Microfinance India – State of the Sector Report 2011

ACCESS Development the publisher of the Microfinance India – State of the Sector Report has made it’s latest annual report available for free download. The 2012 Microfinance India report will released later this year at the 9th Microfinance India Summit 2012.

......The situation came to a stage where the central bank, reluctant so far, set up the Malegam Committee to look into the issues. Several rounds of discussions between the MFIs and their networks and the State, and with the Reserve Bank of India (RBI) did not see any breakthroughs. Based on the Committee recommendations, the RBI issued a set of comprehensive guidelines, which will significantly change the way MFIs have operated so far. Irrespective of these prudential guidelines, the banks have not regained their confidence in bringing in substantial new debt......

Read........

Agriculture back in focus as growth estimate gets downgraded by banks

......From Morgan Stanley to Citigroup to Standard Chartered and the Reserve Bank of India, nearly every other bank has downgraded India's growth estimate citing a possible poor farm output which is compounded by the global uncertainty owing to the sovereign crisis. It is a reflection of the hard reality that agriculture, notwithstanding its low contribution to the GDP, will remain significant enough for the overall growth just because of the sheer population that it supports......

Read - ET

RBI to take up deposit-to-equity proposals by UCBs

The Reserve Bank of India will consider financial restructuring proposals of stressed urban co-operative banks (UCBs) involving conversion of deposits into equity or debt instruments. This move comes as financially stronger banks are unwilling to acquire weak UCBs, where the deposit erosion is large. In such situations, restructuring of the liabilities (deposits) of the weak UCB may be a viable proposition, said the RBI......

Read - HBL

RBI may hold rate in Oct policy

...... "In the last two years, we have been able to bring down the rate of inflation but I admit that inflation is still high and it should come down further,” RBI governor Subbarao said at a function in Himachal Pradesh yesterday. Market participants said while RBI will be keen to support growth, a rate cut is not imminent and the central bank will continue to infuse liquidity so that credit flow to the productive sector is not hampered.......

Read - BS

Banks entice customers to buy gold with special schemes

Despite the RBI discouraging consumers from buying gold, banks under its purview are enticing consumers with schemes to buy gold. For example, SBI group banks, including State Bank of Hyderabad and State Bank of Travancore, have devised special loan schemes to buy gold. These banks have tied up with over 37 jewellery retail brands across the country “of a certain standing” and offer loans to buy gold jewellery from these shops. The jewellery will be deposited with the bank till the consumer pays off the loan.......

Read - HBL

RBI allows NRIs to pick-up shares, debentures at face value

......"It has been decided that in cases, where non-residents (including NRIs) make investment in an Indian company in compliance with the provisions of the Companies Act..., such investments may be made at the face value subject to their eligibility to invest under the FDI scheme," RBI said in a circular.......

Read - ET

India yet to see any fallout from QE3, says RBI's Gokarn

......Answering a question from Business Standard on the sidelines of the annual India Investment Forum in New York, Deputy Governor Subir Gokarn said: “To the extent that they have an impact on domestic dynamics, either on growth or inflation, that’s something we’ve got to take into account.”......

Read - BS

Barclays to shut three branches in India

......However, it is not yet known whether the bank will have to face some regulatory issues as the closure of branches are located in non-metro areas. Typically the Reserve Bank of India (RBI) allows a foreign bank to open an urban branch once it opens a rural/semi-urban branch and vice versa. The source said all the factors would have been taken into account before the announcement, but conceded that the wishes of RBI, which has been persistent in taking banking to the hinterland, may have prompted the opening of branches in such places.......

Read - TOI

RBI extends deadline for mandatory forex clearing to January 1

 The Reserve Bank of India has asked the local currency market association to defer the deadline for mandating that lenders route their forward trades through a domestic clearing house by three months, market participants told Reuters. The new Jan. 1 deadline gives players time to iron out concerns that some foreign banks have over terms such as potential default liability exposures and capital charges in settling at the clearing house......

Read - ET

I don’t know if the economy has bottomed out: Rajan

......What is your outlook for inflation?

Core inflation, which the RBI (Reserve Bank of India) generally looks at, is in the 5-5.5% range; with some help it can be brought below 5%. What has proved harder so far is the CPI (consumer price inflation) which includes substantial food elements, which have been on an upward trajectory, where the supply-side constraints are significant. ......

Read - Mint

Bank credit trails services boom

......This highlights the somewhat lopsided flow of credit to the service sectors, prompting the Reserve Bank of India to now lay fresh emphasis on the need for banks to go into the interiors — to nondescript towns and cities — and expand credit linkage in those areas. The added incentive being that providing loans to these segments, particularly for productive purposes, could also help in addressing the issue of retail inflation.......

Read - Indian Express

NBP approaches RBI to open up branches in India

The National Bank of Pakistan (NBP) has formally approached the Reserve Bank of India (RBI) for the opening of two branches in India with a view to facilitate trade between the two countries, sources in the banking industry told The News on Tuesday.......

Read.........

4 years at the helm

Reserve Bank of India Governor D Subbarao, who took charge of the central bank in September 2008, amid the global financial crisis, has completed four years. Here are some of the areas which he would like to focus before his two-year extension comes to an end in September 2013..........

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

RBI to launch core banking solution portal

General Manager, Reserve Bank of India, Hyderabad, M Das,h speaking at the ‘Awareness campaign for popularising e-payment initiative’ workshop held at Rajahmundry on Monday

Reserve Bank of India General Manager Mr. M. Dash has said that the bank is going to launch core bank solution portal from next month from which banks, government departments and even customers can do e-banking through this portal. Addressing awareness campaign for promoting e-tax initiatives to different bankers of Rajahmundry on Monday, Mr. Dash said bankers have to bring awareness among the public on e-receipts, e-products and more utilisation of e-banking services.......

Read - The Hindu

KLE team heads to zonal finals of RBI quiz

......Uma Shankar, Regional Director, RBI, gave away prizes to the winners. She expressed her happiness over the quality of participation. She said that the competition was held to create financial awareness among youngsters.

Read - The Hindu

Urmi school wins Vadodara round of RBI quiz

......Nearly 800 students from the participating schools had turned out to cheer their respective teams. Participants took home gift vouchers, besides a certificate of participation, along with an informative booklet on the RBI and a memento, awarded by Reserve Bank's Regional Director for Gujarat, Sudarshan Sen.

Read - TOI

Former SBI chairman, OP Bhatt on panel to hunt for new Irda chief

 Former State Bank of India chairman OP Bhatt has been appointed on a panel that will assist in the search for the next chief of Insurance Regulatory and Development Authority, a move that signals Bhatt's return to the establishment. Bhatt was at odds with the Reserve Bank of India on several issues when he headed the country's largest lender from 2006 to 2011, but with the change of guard at North Block, he seems to be back in favour....... 

Read - ET

Updation of Pension for RBI retirees

My understanding of the approval, by the Union Cabinet yesterday, of "ONE RANK ONE PENSION"  for armed forces employees and ex-servicemen organisation employees is that upgradation of pension has been approved for them. With this move, it would be unfair to deny such a benefit to RBI employees. It has been reported that there is now a better understanding between the FM and the Governor. The present FM is a very intelligent person and no IAS official, however brilliant he/she may be, can boast of a better intellectual equipment than that of the FM. In fact, the minor criticism some times levelled against the FM is that he doubles as his Under Secretary in that he goes into minutest details of each and every case. If we wish to be more charitable to him, we would have to readily concede and appreciate that he has eye for details without missing the macroeconomic and big picture. He cannot be taken for a ride by any bureaucrat. Our Governor is a highly accomplished person (his academic achievements are such that all of us can be proud of-- Gold medallist in IIT, First rank in IAS besides being a Ph.d) and would have known all the details of our Pension case. If he takes an appointment with the FM exclusively for the Pension case and presents the case before the FM, I have no doubt that the FM would be sympathetic to our case and approve the proposal. The present FM is not one who would be simply guided by his ministry bureaucrats and has the courage and conviction to give his decision with out the need of any crutch of favourable notings from his ministry officials.

I hope our Governor, whose sympathy for our case has been appreciated and voiced by all the serving and retired employees, does this quickly. He could perhaps tell the FM that once a favourable decision is taken, the Mumbai High Court could be informed of the decision by the Retired Employees Association, who had approached the court against the withdrawal of the Pension upgradation granted in the past upto a certain period,  as well as the Bank and the Government and and submit to the court for withdrawal of the petition. Ministry of Law, Government of India, on whose advice perhaps the matter is being allowed to remain with the Mumbai High Court, should not have any objection to this move.

- A. Chandramouliwaran, Former Executive Director

Read - Bank's affidavit - Sent by L.R.Parab (via e-mail)

Beware, the message is not from RBI

Playing officials of the RBI, cheats are on prowl in Jammu Kashmir. They send SMS messages to gullible people telling them that they have won prizes.......

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

Fraudulent tax refund mails in circulation

......The fraud mail originates from the 'tax refund department', bears the address 'service@incometaxindia.in' and has a subject line which says 'tax refund notification alert'. The language and format of the mail is strikingly similar to any formal correspondence from the I-T department. It addresses the receiver of the mail as 'Dear valued taxpayer' and goes on to say that you are "qualified for a refund which could run into as much as Rs 50,000". The mail asks the reader to 'click' on the hyperlink to place a tax-refund request. The hyperlink opens to the homepage of the RBI, but the website address panel shows www.chatbordel.de. The page asks for bank name, ATM number, ATM PIN number, CVV number, card expiry date and transaction password.......

Read - ET

CRR has merits, asserts Gokarn

.......“The CRR is an instrument with multiple attributes. It is a tool to manage liquidity, which is often an end in itself, but can also have monetary implications,”......

Read - The Hindu

Bank review meet held

Dominic Presentation MLA inaugurating the DLRC meeting in Kochi. Lead District Manager KR Jayaprakash, RBI Assistant General Manager KJ Joseph, Union Bank of India Deputy General Manager S Jayamohan Nayar, District Collector PI Sheik Pareeth and NABARD representative Thrivikraman are also seen

...... Banks in the district are going ahead with the process of Meaningful  Financial Inclusion. The survey conducted by Kudumbasree Mission revealed that there are nearly 20 percent adults in the district without bank accounts. Ward-wise campaigns by banks to open accounts are progressing.  Banks will also offer remittance services and micro-insurance policies. The process is expected to be completed by the end of October 2012......

Read........

Mamata Banerjee skips SLBC meeting in West Benga

West Bengal chief minister Mamata Banerjee has turned down United Bank of India's request to attend the quarterly state level bankers committee held on Tuesday. UBI, the SLBC convenor in the state, now plans to pursue the chief minister for the December meeting where Reserve Bank of India Governor D Subbarao will be present. It's now become a norm in the banking circle to invite chief ministers in state level meetings. RBI wants CMs to attend at least one SLBC meeting a year so that they can directly address the issues face by banks. .....

Read - ET

FinMin for zero charges on e-transfer up to Rs 1 lakh

......The RBI had recently said that it is 'desirable' that the benefits accruing on account of increasing volume of transactions are passed on to the customers so as to incentivise greater use of the electronic payment system.

Read......

Evolution of India reform a factor for policy - Gokarn

India's persistent inflation and sub-par economic growth has the Reserve Bank of India (RBI) caught in a monetary policy vise but conditions in the economy should not be considered static, Deputy Governor Subir Gokarn said on Tuesday.......

Read......

Inflation still at unacceptable levels: RBI Governor

......"Inflation should be brought down to provide relief (especially) to poor (people)," Subbarao said while addressing the gathering at 'Outreach Programme' to make people aware of banking services.......

Read - DNA

Subbarao hopes banks will cut lending rates

Chhaproh (Himachal Pradesh): The Reserve Bank Governor D Subbarao Tuesday expressed hope that banks would lower their lending rate in response to the recent cut in the CRR-- the percentage of deposits banks have to keep with the central bank.......

Read.......

Way to beat a cash economy

......Meanwhile, developments such as the Inter-Bank Mobile Payment Service payments platform created by the National Payments Corporation of India in collaboration with 50-odd banks will help. So will the fact that RBI has doubled the limit on daily transactions in cash to Rs.5,000 and that in goods and services to Rs.10,000. Given that India is a young nation with tech-savvy youth at home with apps, tablet PCs and Internet-enabled phones, the target appears achievable given that in July alone both m-banking transactions and their value grew 198% and 174%, respectively, over the year ago period.

Read - Mint

Economy sees a few green shoots

Analysts say gaining rupee, falling prices will help ease inflationary situation.A strengthening rupee and cooling crude oil prices over the past few months are expected to help lower inflation, ease fiscal deficit and give room to the Reserve Bank of India (RBI) to cut interest rates, besides cooling off pump prices of petrol.......

Read - Deccan Herald

Can't use Kingfisher brand as collateral, RBI tells banks

The Reserve Bank of India (RBI) has asked banks not to treat Kingfisher Airlines’ brand as collateral since it is intangible. This is because the loan has turned non-performing for most of the banks. The RBI’s rejection means lenders will have to treat their exposure to Kingfisher as unsecured, for which the provisioning requirement will go up substantially.......

Read - BS

Govt backpedals on banking reforms as Parliament bites

......Earlier, the Reserve Bank of India said that it would give fresh banking licences to private entities only after the government amended the Banking Regulation Act. However, now the finance ministry is trying to work out a method by which licences can be granted without amending the act.......

Read - Hindustan Times

Internet bankers told not to use shared computers

......The Banking Codes and Standards Board of India, an autonomous and independent watchdog body in the banking sector, has cautioned customers utilising internet banking facility against using cyber cafés or shared personal computers (PCs) to access internet banking site. The advice is contained in the list of codes issued by the board as part of improving the services in the banking industry. The codes are reviewed periodically.......

Read - The Hindu

2012 a replay of 1991? Who should you believe, PM or RBI governor?

...... And there's no disputing the PM is a politician par excellence!  Remember what the late Dr I.G.Patel, former RBI Governor and noted economist, once said about him, 'Under-rated as a politician and over-rated as an economist'. Well the PM has proved Dr Patel right! Not for the first time!......

Read - ET

I don’t Think We Are Anywhere Near ’91 Crisis

The government's decision to take a few hard steps will go a long way in changing the perception among investors, says Raghuram Rajan. In an interview with ET Now's Supriya Shrinate, the chief economic advisor says he's hopeful of some upward momentum in the coming days. Edited excerpts:

Read - ET

Fixed Income: Risks with NBFCs

......More disturbing is RBI’s belief that NBFCs are immortal. They have permitted NBFCs to issue ‘perpetual bonds’ to investors, with a 10-year option that enables NBFCs to repay but prevents the investors from demanding repayment. It is akin to writing off your wealth for a fixed rate of interest. RBI works in favour of NBFCs by just letting them increase the interest rate by a mere one percent at the end of the 10th year......

Read - Moneylife

My View.......

The issues raised deserve wide publicity and debate among people who can throw light on behaviour of interest rates. Less secure the investment you make, chances are you get higher rates of interest in the short term. NBFCs and NBFC-like institutions and even certain individuals have mobilised huge amounts of money in the past and vanished. To protect the interests of small investors, government and banks should come out with investment instruments with reasonable return. Regulators and GOI, as part of efforts to promote financial literacy, should promote awareness about the risk in being lured by advertisements offering ‘higher than possible’ returns on investments.

- M G WARRIER

Court slams PSU banks, says you are in money, not property business

Coming down on a bank for meting out 'unfair deal" to a client by selling his commercial building for Rs 18.7 lakh to recover a loan due of Rs 19,500, Kerala High Court today reminded the nationalised banks that they are only engaged in money lending and should not take up real estate business.......

Read - FE

Sebi seeks ASBA facility at all branches of designated banks

......"Based on the analysis of the current presence of ASBA facility, it is felt that there is substantial scope for increasing the reach of ASBA facility to make the application process more convenient for investors," Sebi said. "Towards this end, consultations were held with Reserve Bank of India, Indian Banks' Association and other market participants, to explore the possibility of providing ASBA facility at all branches of Self Certified Syndicate Banks (SCSBs)," it added.

Read - BS

Earnings ratios are bottoming out: Richard Gibbs

How do you interpret the Reserve Bank of India (RBI)’s recent move?

The decision to leave interest rates unchanged and to cut only the cash reserve ratio by 25 basis points reflects RBI’s concern on persistent inflationary pressures, even against a background of moderating domestic demand growth. We continue to believe the Indian economy faces difficult supply-side conditions. If these persist, ultimately, the economy’s potential growth would be reduced. Needless to say, we continue to anticipate the government would pursue further measures in respect to its ‘reform and development’ drive, as it recognises building the economy’s productive capacity is the best form of stimulus that can be delivered......

Read - BS

3 of 6 banks govt wants to help have scam-tainted past

If the state considers the Rs551-crore bailout package for the six district co-operative banks (DCBs) currently in the red, it would mean flushing taxpayers’ money down the drain. Six DCBs – Nagpur, Osmanabad, Jalna, Dhule-Nandurbar, Buldhana, and Wardha – all controlled by political heavyweights, could lose their banking licence on September 30 as per RBI directives, jeopardising credit line to farmers. The banks have a history of mismanagement and serious financial irregularities......

Read - Hindustan Times

NABARD and RBI - A 30-Year Legacy Being Upturned

The effort to edge out the Reserve Bank of India from the National Bank for Agriculture and Rural Development's shareholding does not bode well for the future of agricultural and rural credit in the country. This is particularly so, if the past experience with the Industrial Development Bank of India and the Unit Trust of India is any guide....

...... The know-all babus of the banking division of the finance ministry, who neither have an understanding of banking and development finance nor the experience, seek to keep out the RBI from NABARD and bring the institution completely under its control. Through this amendment it also seeks to subvert the autonomy of the institution, render the board powerless and emasculate its functioning. The stellar achievements of NABARD in the 30 years of its existence have been principally due to the relative freedom of ­operation permitted by the existing Act, the guidance of its board and the presence and support of the RBI as its stakeholder. All these are being sought to be upturned. An institutional legacy is sought to be obliterated by petty-minded and self-serving bureaucrats for whom “institution building” and “vision” are esoteric concepts. It is therefore in the fitness of the things to ensure that the RBI’s role as a shareholder of NABARD continues in the overall interest of the agricultural and rural finance sector of the country. ­Development practitioners, civil society activists, parliamentarians, public persons and the farmers of the country should raise their voice so that a 30-year legacy of the people is not lost forever.........

- P S Rao (psrao.99@rediffmail.com) - Pune-based development professional who has worked with the RBI and NABARD

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