Recent reform measures a good beginning: Kochhar

TOKYO, OCT 13: 

The Government’s recent measures are a good beginning to improve the investment climate, ICICI Bank’s Managing Director and CEO Chanda Kochhar said here today. ”...some of the measures that have been announced by the government (of India) in the recent past is a good beginning to start improving the investment climate,” she said at a seminar on ‘The Role of Asia in a Changing World’ on the sidelines of IMF-World Bank meet here........

Read - HBL

Chidambaram calls for 'calibrated risks' from RBI

........."Decision making in life is about taking risks. That's my view," Chidambaram said. "But I'm not the governor.".............

FM tells RBI to cut rates, again, almost

This time, it’s more straightforward. Finance minister Palaniappan Chidambaram said interest rates “must come down”. If that sounds like an order, it is. The usage of ‘must’ as a verb is unlikely to be lost on Duvvuri Subbarao........

Read - DNA

Swap rates curve suggests RBI may ease interest rates

.....The RBI holds its next quarterly policy review on Oct. 30, and many economists believe it will keep its policy repo rate unchanged at 8.0 percent, due to concerns over an inflation rate that is the highest among major Asian economies...........

Read - FE

The interest in growth

...... Other reforms steps have been initiated even if Parliament may not pass all of them. And the moves on GAAR, on retrospective taxation, on retail-FDI among others have excited investors—the National Investment Board is another such, but has to demonstrate its effectiveness. In which case, RBI can’t take refuge in the old argument that the government wasn’t doing its fair share of the heavy lifting.......

Read - FE Editorial

Goa chamber of commerce and industry wants RBI to draw up package

PANAJI: The Goa chamber of commerce and industry (Ghas urged the Reserve bank of India to draw up a package for rehabilitation of people adversely affected by the stoppage of mining in Goa.........

Read - TOI

Aphro Trust MD, aide arrested in Bangalore

...CCB police had issued a lookout circular against Yesudoss for violation of RBI guidelines and collecting money after offering people bank loans. All airports were alerted to prevent Yesudoss from leaving the country. Investigators earlier froze 14 accounts operated by Yesudoss and other trust members in three private banks............

Read - TOI

Gopalkrishna, Gandhi in race for RBI Dy Governor Feb 2013

Two senior most Executive Directors of the Reserve Bank of India- G Gopalakrishna and R Gandhi - are in the race for the post of Deputy Gvernor that will fall vacant after the Anand Sinha retires in February 2013. Although the central bank has recommended an extension for Sinha, the government is unlikely to accept this, sources said. "Those two Executive Directors are the potential candidates for the post of Deputy Governor. Extension for Sinha remains a remote possibility as he will turn 62 next February. The government will have to set a new precedent if it extends his tenure beyond the age. It is unlikely," a senior RBI official told moneycontrol.com on condition of anonymity.........

Read..........

RBI to open branches in Union Territories soon

.....While Puducherry is governed by Regional Office in Chennai, Lakshaweep is controlled from Thiruvanandapuram. Similarly, The Regional Offices at Mumbai and Ahmedabad control the Union Territory of Goa and Daman & Diu and Dadra and Nagar Haveli respectively. The new proposal is expected to bring the functioning of banking sector in Union Territories under the effective monitoring of the RBI.........

Read - The Hindu

Panel set up to speed up financial inclusion

Amid slow progress in bringing the entire population under banking network, the RBI today announced setting up of a high level committee to “spearhead” efforts to ensure accessible financial services in the country. The Financial Inclusion Advisory Committee (FIAC) under RBI Deputy Governor K C Chakrabarty is expected to suggest appropriate regulatory framework to ensure that financial inclusion and financial stability move in tandem, the RBI said in a statement............

Read - HBL

RBI Chief Hails Fed Chairman

.....Subbarao welcomed Bernanke's "unconventional policies" and demonstration of the "enormous range, depth and power of the central bank policy arsenal" to deal with the worst US downturn since the Great Depression in the 1930s. "As a central bank, we empathise with the Fed's concerns. The (economic) crisis has pushed central bank policy-making into uncharted territory," Subbarao said in a speech released on the RBI website............

Read..........

RBI assigns lead bank role for Chhattisgarh's 9 new districts

The Reserve Bank of India on Wednesday said that it has assigned separate lead bank responsibilities to SBI, Dena Bank and Central Bank for nine newly carved districts in Chhattisgarh this year..........

Read.........

CRR debate

Apropos ‘Banks should learn to live with CRR’ (Business Line, October 10), there is certainly some substance to a few bankers asking for either complete abolition of CRR, or as an alternative, payment of interest on CRR deposits. Money held as CRR is dead money. Our Finance Minister has gone on record saying that the RBI should pay interest on CRR up to 7 per cent. Australia, Canada and Sweden do not have any CRR. In the US, it is applicable only on transaction deposits and not on time deposits. Maybe, RBI can think of different CRR rates for different banks, depending upon their lending character.

- V Sasthamani (HBL)

'Majority change mind on fin products post online research'

........"While the final purchase of the product or service is still done offline – internet research influenced 2 out of 3 applications - with 24 per cent users buying/applying online, 70 per cent applying offline and 38 per cent buying offline influenced by online," the report said........

Read - Express India

Bounced cheques: SC ruling makes prosecution easier

......It has been observed lately that the trend of reversing important judicial decisions has been on a rise i.e. a decision is reversed due to a difference in the opinion of the different benches presiding over matters pertaining to the same question of law and sharing the same background as to the facts of the case. Such a practise is being adopted more often by the Supreme Court, which being the highest court of law is regarded as the epitome for all legal issues......

Read - Moneylife

Fake notes, higher quantity and better quality

......Reports from the RBI show many seizures have been from banks and sometimes from the RBI itself. Of the total seizure in the first half of this year, the RBI accounts for Rs 10.47 crore more than police and other agencies do. It is a measure of the high quality of the notes that they have been penetrating banking channels.......

Read - Indian Express

Currency note

.....RBI's instruction to deliver currency notes to hill districts by-road instead of helicopter was deliberated during the meeting which was also attended by RBI officials......

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

Coming soon: Automated cash deposit machines

Soon, you may be able to deposit cash in specially designed ATMs and get an instant alert on your cell phone confirming immediate credit to your account. Banks are exploring options for automated cash deposit machines, after tasting success in allowing cash withdrawals through ATMs. At least, two public sector banks – State Bank of India and Punjab National Bank - are testing such facilities here, inform sources in the know..........

Read - HBL

Lucknow presents 2,000 years of numismatic history

..........“We are India's largest numismatic firm and first numismatic auction house. This is our 66 th auction in India,” he claimed. One of the earliest and rarest banknotes in Indian monetary history will also be put up for auction...........

Read - BS

S&P ratings

This refers to the report “Again, S&P warns of lowering India’s rating” (Business Line, October 11). The Indian media should have understood the game agencies like this play. The release of this report, about which Standard & Poor’s later clarified to media that “….we did not issue or announce anything on India sovereign rating today. We simply published our regular Asia-Pacific sovereign report card, which does not have any new information on India’s rating”, coincided with the visit of Fed chief and US Treasury Secretary to India. Despite the clarification, the release dampened the mood of India Inc. and the bourses in India.Dwelling on the politics and economics of UPA II, the rating agency laments about matters which an external agency should not be worrying about.

- M.G.Warrier (HBL)

As NPAs rise, stress on bank assets to stay for 12 months

......Data released by the Reserve Bank of India (RBI) earlier this month showed that NPAs in the banking system were the highest in the past five years. Net NPAs rose sharply to 1.28 per cent in 2011-12 from 0.97 per cent a year ago. However, there are a few bankers who are of the view that the incremental NPAs will be lower. “I am not saying that NPAs will come down. But the incremental NPA formation in the quarters going forward will be.............

Read - BS

Ease ECB norms for 2G auction: DoT to RBI

............The department of telecommunications (DoT) had asked the finance ministry to ease the ECB guidelines to enable for financing for telecom companies for the upcoming 2G auction that is scheduled to begin from November 12. Now the finance ministry has in turn written to the Reserve Bank of India (RBI) requesting for a one-year window for refinancing rupee debt via ECBs by telecom companies for the upfront payment..................

Read.....

Forget Chidu, RBI and Sebi must probe DLF and Vadra

......The question is whether Sebi and RBI are going to get into the act, given that they are independent regulators and have no need to follow the finance ministry’s diktat on Vadra’s private status. Neither RBI nor Sebi can abdicate in this case.

Read........

Deposit growth is not at all satisfactory & that is a challenge: D Sarkar

What is your outlook on lending rates and deposit rates?

We had reduced our base rate in May. We are looking at inflation numbers and also waiting for RBI to announce the further course of action. In the course of time, there are chances of reduction in the cost of deposits, as well as lending............

Read - BS

Freebie boost for new home loans

.......RBI had earlier cautioned banks saying that a higher-than-expected hike in interest rates could have an adverse impact on their asset quality. "We have asked banks to ease lending to the sector as it is critical for the revival of the economy, they have started the process and in the next few months things are set to become better," said a senior finance ministry official who refused to be identified.

Read - Hindustan Times

Geithner, Bernanke discuss global economy with RBI, India Inc

US Treasury Secretary Timothy Geithner and Fed Reserve Chairman Ben S Bernanke Wednesday discussed global economic situation, monetary policies and some banking issues of mutual interest with RBI Governor D Subbarao and other top officials.........

Read.......

SUBBARAO V/S BERNANKE - THE SAME DIFFERENCE

........Both are different but there is a line of similarity running between the two, especially the trying circumstances. Given below, in a nutshell are the nuances of both the men. We cannot compare apples and oranges but certainly the characteristics of two fruits............

Read........

Banking on RBI

.......Though the government is trying to fast-track the process of handing out new bank licenses to convince the world that India is once again on the reforms path, the process is proving to be a bit tricky since RBI continues to insist it needs the Banking Regulation Act to be changed to allow it to remove the board—sure, it has dealt with crisis situations like Global Trust Bank which was bailed out by Oriental Bank, but it would be quicker with the Banking Regulation Act changed..........

Read - FE Editorial

स्वच्छ लखनऊ के लिए दौड़े बैंकर्स........

........हाफ मैराथन की शुरुआत सुबह 7.30 बजे भारतीय रिजर्व बैंक के गोमती नगर स्थिति क्षेत्रीय कार्यालय से की गई। सभी प्रमुख बैंकों से 10-10 धावकों ने इसमें शिरकत की। आरबीआई के डिप्टी गवर्नर हारुन आर. खान ने हरी झंडी दिखाकर मैराथन का आगाज किया। पांच किमी लंबी हाफ मैराथन एसबीआई के प्रधान कार्यालय पर समाप्त हुई। इसके बाद क्लब द्वारा हजरतगंज चौराहे से लेकर एसबीआई प्रधान कार्यालय तक मानव श्रृंखला का निर्माण किया गया। इसमें 2,000 से ज्यादा बैंकर्स ने शिरकत की। कार्यक्रम के अंतिम चरण में आईसीआईसीआई बैंक की हजरतगंज शाखा परिसर में लखनऊ मैराथन और स्वच्छता एवं स्वास्थ्य पर आधारित स्लोगन लेखन प्रतियोगिताओं के विजेताओं को पुरस्कृत किया गया। समापन पर आरबीआई के डिप्टी गवर्नर ने बैंकर्स को सामाजिक दायित्वों को पूरा करने के लिए आगे आने की नसीहत दी। इस अवसर पर आरबीआई के क्षेत्रीय निदेशक रबी एन मिश्रा, आईसीआईसीआई बैंक के जोनल प्रमुख निपुन जैन के साथ ज्यादा बैंक के वरिष्ठ अधिकारी मौजूद रहे।........

Read.......

Independence daze

...........it was a “fine tradition” that no member of the US Treasury or executive commented at all on monetary policy decisions or their effects, and that it was an essential part of ensuring the independence of the central bank. In India, the Reserve Bank of India is also technically independent, but New Delhi apparently has a very different view on whether commenting on monetary policy affects the independence of Mint Road.

Read - BS

RBI will issue bank licences, but who will decide?

...........The question that many in RBI’s Department of Banking Operations and Development (DBOD)  – which has  formulated many important norms in the past be it real estate exposure or gold loan – are asking is that RBI may issue licences but will it be able to take decisions independently without the interference of the government?  DBOD will issue the final guidelines on banking licences and also vet the applications of the prospective entrants. In mid-2009, a note was prepared in RBI to debate whether to have more banks in the country. No decision was taken at that point in time. It had surprised many in the central bank that a finance minister in his Budget speech was announcing that RBI would consider issuing fresh licence – something unprecedented. This perhaps explains that pace at which the central bank approached the entire issue. 

Read - BS

RBI: Battle vs. Inflation Far From Over

The Reserve Bank of India's battle against high inflation is "far from over" and it intends to focus on reining in price pressures for some more time, said RBI Deputy Governor H.R. Khan. "Monetary policy would for some more time need to focus on inflation while using available space to support growth to the degree it can," Mr. Khan said, according to the speech made on Saturday and available on the central bank's website.......

Read......

Tweak those Basel III norms

......Thus, what is economically more important at this juncture is to give more importance to growth rather than to increasing capital requirements in the banking sector, which is more or less stable. In this context, RBI guidelines on Basel III norms, which are much more stringent—minimum common equity 5.5% versus 4.5%; implementation on March 31, 2018 versus January 1, 2019—than BCBS guidelines, need some modification .......

Read - FE

My View on "Finmin tries to allay RBI fears on new bankc licences"

One of the reasons for licensing new private sector banks (this is not openly admitted!) is that they would provide competition to public secor banks leading to improved functioning of the latter. It is a moot point whether this has happened at all. The reasons seem to be the continued prevalence of restrictive practices amongst employees, aided and abetted by the Unions, leading to poor productivity and weak managements. The  lack of improved performance of public sector banks has not affected them and their employees since Goverment recapitalise banks( out of tax payers' money) and ensure an industry-wise wage agreement for the employees. The day Government stop recapitalising banks (because of lack of addition to 'reserves' of banks from internal accruals) and stop industry-wise wage agreement, we could expect progress. Employees would have to realise that the performance of their banks would determine their wage structure and other perquisites. Of course, Government, even as a majority shareholder, should not be allowed to intervene in the matter when banks have their own wage structure and various perquisites. This could help banks to improve their functioning. Incidentally, the " autonomous" RBI would also be benfitted if Government does not interfere in the wage agreement of banks as they would not then have any handle to interfere in the RBI wage structure too!! 

 - A. Chandramouliswaran (via e-mail)

Should government capitalise public sector banks?

...........In the long run, therefore, it makes no sense for the government to commit itself to the capitalisation of PS banks. Precious government resources can be better deployed in critical areas (such as power transmission and distribution) where private capital on large scale is hard to come by. In the medium term, it can use tactical measures such as merging banks where it has significantly high ownership with those where the ownership is already down to 51%...........

Read......

FinMin, RBI all set to open ECB window for affordable housing

The affordable housing segment is all set to get boost as the Finance Ministry and the Reserve Bank of India are to announce final guidelines for external commercial borrowing (ECB) very soon..........

Read - HBL

Shankar Acharya: Reforms resurgent?

.....The insurance- and pension-amending Bills will depend crucially on support from the Bharatiya Janata Party when they are placed in Parliament in the winter session. So nothing is guaranteed. As for the proposed amendments to the Competition Act, the extension of the Competition Commission’s jurisdiction to mergers and acquisition of banks seems ill-advised, when these are already scrutinised by the specialist regulator, the RBI............ 

Read - BS

Want financial inclusion? Look at the telecom sector

............Financial inclusion is something like that. The government thinks it is driving financial inclusion and takes credit. Ditto with the Reserve Bank of India (RBI) and the banks themselves. And even though I am a non-believer, I am tempted to say the Almighty smiles...............

Read - Mint

Irda gives options for bancassurance tie-ups

......Insurance industry experts say that the Reserve Bank of India (RBI) may not be in favour of banks playing broker to insurance companies. Reason: “A broker represents the customer unlike a corporate agent. In that case, all customer and related issues will have to go to the broker. In case of corporate agency the customers will be owned by the insurance company,” explained a senior life insurance executive...........

Read - BS

Corporation Bank probes into overdraft to Vadra's firm

......Bankers said while the Reserve Bank of India (RBI) did not have specific guidelines on overdraft facility, the central bank’s customer acceptance rules say banks need to closely monitor transactions with 'politically exposed persons' (PEP). The rules also mandate “intensive due diligence for high-risk accounts including those involving close relatives of PEPs and where PEPs are the ultimate beneficiary”...............

Read - BS

Push banks as brokers, not agents

.........so far the banks have been unwilling to rise to the occasion mainly for two reasons: one, as the report notes, banks’ unwillingness to assume a greater responsibility in the sales process and two, the Reserve Bank of India’s (RBI) reservation in allowing banks to become brokers. Satwalekar notes that RBI is wary of the banks taking on the role of a “broker” as it would mean that they assume the role of a “principal” in the sale process with the consequential responsibility and potential risk..............

Read - Mint

The Indian ATM Industry

......In the report, The Indian ATM Industry: Gearing Up for the Next Phase of Growth, Celent studies the latest forces shaping the Indian ATM landscape and how the industry is meeting those challenges. The ATM industry has been a focus of recent discussion in India. Several forces are driving the heightened importance of ATMs. The biggest push has come from India's central bank and banking regulator, the Reserve Bank of India (RBI).......

Read.........

RBI says aware of risks from big firms starting banks

.......RBI will ensure that banks floated by big business houses will be at an arm’s length from their subsidiaries through amendments in the banking regulation Act, Sinha said in Pune at a seminar on India’s banking landscape: The new equations after the entry of industrial houses. Sinha said that allowing big business houses to float commercial banks will help advance the cause of financial inclusion, given their deep pockets. Globally, there are not many cases of industrial houses floating banks, Sinha said, addressing students at the event organized by ‘Mint’ in association with Symbiosis School of Banking Management.........

Read - Mint

Central bank independence and inflation

.........The performance of RBI and the central banks of some third world countries, however, are not too far from the stereotype of the policy analysts who oppose the Fed. But, even in the India and other countries where inflation had reached two-digit levels in the recent past, the segniorage does not form a significant part of government spending. It is estimated that till the 70’s, segniorage in India was not more than one percentage of the GDP and after the 70’s, it was around 1-3 percentage.  Most economists and policy analysts believe that political independence has allowed central banks to become close to the most efficiently run government institutions in the western world.  Price stability is found to be positively correlated with the degree of independence enjoyed by the central bank.

Read - BS

Taking Banks to India's Poor

.......At the time, the Reserve Bank of India and the government were trying to expand the formal financial sector, beginning with a bank account for every Indian. But banks were reluctant to open branches in remote areas. That’s where FINO stepped in as a banking correspondent (BC), an agent which takes over banks’ front end for a fee, and did the due diligence for banks in lending money and opening accounts for customers. Between 2007 and March 2009, it signed up five million customers for banks. However, over 80 percent of these accounts were inactive and banks took just cursory measures to ensure that they were in line with the RBI. Then the Central bank cracked the whip. In 2009, then RBI Deputy Governor Usha Thorat decreed that banks would have to reach 70 percent of India’s villages by 2013. Banks had no choice but look for agents who would act as their extensions.  

Read - Forbes India Magazine

Industry watchdogs rise to the occasion

.......The tensions between the RBI and the finance ministry actually have their origins in the post-2008 downturn, when Subbarao unsuccessfully opposed finance ministry's move to head the Financial Stability & Development Council (FSDA), formerly an RBI preserve. Perhaps in a bid to get a firmer grip on the RBI, the government has also amended the RBI Act to have two representatives on the RBI board instead of one as before. "The animosity between the two has come down to the level of trying to micro-manage banks, an area exclusive to RBI," says the CEO of a public sector bank on condition of anonymity........

Read - Business Today

'Centralised KYC registry can happen after UCIC issuance'

........Setting up of a centralised KYC (know your customer) registry for the entire financial sector will be possible only after implementation of the unique customer identification code (UCIC), RBI executive director G Padmanabhan said today...........

Read........

New bank licences may not need amendment bill: Sources

.....The finance ministry is working on alternatives to bring these in without the passage of the bill. There are two key obstacles, which are being faced by the government. The RBI wants powers for dissolution of a bank’s board, which it currently does not have and which the bill would bring about. Second is the bill would give RBI rights to inspect associates, which it is keen on. Sources say the government is looking at notification through a government order instead of waiting for the bill.......

Read.........

Govt looking to fast-track new bank licences

......It is high time that things are speeded up. But all of RBI’s concerns should be addressed,” said Robin Roy, an associate director at audit and consulting firm Pricewaterhouse Coopers. “RBI has been waiting for these enabling legislation and amendments to ensure that there are no strategic gaps and doubts in the minds of the stakeholders regarding regulations when it does issue the banking licences.”

Read - Mint

RBI may be allowed to supersede boards of banks

......“However, we are looking at ways to address the concerns of the regulator and also provide a clause without amendment of the law under which the RBI would be allowed to supercede a bank board to speed up the process of allowing new private sector entities to set up banks,” a senior finance ministry official said on the condition of anonymity.......

Read - Hindustan Times

Goa chief secretary asks banks to restructure loans to stakeholders in mining sector

......J B Bhoria, Regional Director, Reserve Bank of India, Mumbai, asked banks to approach RBI through the Indian Bankers' Association or through their corporate offices to have some special dispensation for the advances affected by mining in Goa........

Read - TOI

Inter School Quiz

Students of Sri Prakash Vidyaniketan bagged the first prize in the district level All India Reserve Bank of India Inter School Quiz competition, held at Timpany School recently. The nationwide contest was conducted from class IX to XII. P. Krishna Pradeep and P.V.S. Vamsi Krishna of class X bagged the first prize. The district level winners will participate in the State-level contest next month in Hyderabad. Regional Director of RBI, A. Samba Siva Rao, and Vice-Chancellor of GITAM University, G. Subrahmanyam, awarded the winning team with a cash prize of Rs.1, 000 each.

Hindu

Quiz Competition organised by RBI, Jammu

Quiz Competition organised by Reserve Bank of India, Jammu held at Police Auditorium, Gulshan Ground in which students from 26 schools participated. 

RBI continues with enhanced all-in-cost ceiling for overseas borrowing

The Reserve Bank of India has decided to continue the enhanced all in cost ceiling for external commercial borrowing or ECBs and trade credits. The all-in-cost ceiling includes arranger fee, upfront fee, management fee, handling/ processing charges, out of pocket and legal expenses, if any.......

Read - ET

Impact of reforms on food security - M G Warrier

.......While talking to the media after a function in Chennai on last Thursday, Reserve Bank of India (RBI) deputy governor Subir Gokarn observed that as regards fiscal problem, no solution will work unless the subsidy issue is addressed. He added that the subsidy bill is by far the largest single burden on the government finances. Reading in the context of the recent measures to tackle oil subsidy, the statement coming from the RBI could be seen neither as a threat nor a warning, but as advance information about the impending disastrous policy initiatives on the food front........

Read - Moneylife

RBI penalizes ICICI Bank and ING Vysya Bank

The Reserve Bank of India (RBI) has slapped penalties of Rs 55 lakh on ING Vysya Bank , a private sector lender based in Bangalore and Rs 30 lakh on ICICI Bank,   the second largest  lender in terms of loan book, for violating Know Your Customer (KYC) norms............

Read..........

Should banking M&As come under the CCI?

.....Another aspect to consider is whether consolidation would lead to monopolistic and unfair trade practices. The industry follows a base rate system for pricing that takes into account the cost of funds, operational costs and margins to arrive at a price. The high level of transparency and grievance redressal mechanism precludes unfair trade practices. The industry may, in effect, benefit from consolidation, given the current fragmented state, helping improve economies of scale and ability to cross-subsidise products and pricing. Additionally, appropriate risk management practices and financial strength are more crucial to the sustainability of the sector. Considering these factors, the commission may perhaps rely on RBI’s approval framework.

Read - BS

S Visvanathan appointed Managing Director of SBI

......"...the Central government, after consultation with Reserve Bank, has appointed S Visvanathan as Managing Director, State Bank of India with effect from......

Read..........

Is SBI, BoB, Union Bank and HDFC Bank lending money to builders without any security?

.......Mr Natani said he sent one letter to RBI on 13 October 2010 in this regard. “The casual reply sent by the RBI after a gap of five months shows lackadaisical approach on its part in taking timely steps to prevent commercial banks from getting involved in reckless and unsecured housing loans under tripartite agreement.” The reply by the RBI proves that its inspectors are not carrying out properly audit of these commercial banks indulged in advancing unsecured home loans in order to boost their priority sector lending.

Read - Moneylife

RBI open to raising intl e-commerce transactions cap

.......“If the system wants the limit to be enhanced, that is something that we are positively inclined to look at,” G Padmanabhan, Executive Director, Reserve Bank said on the sidelines of a CII event. Padmanabhan said the limit was set in consultation with PayPal, a major player among the international payment gateways, and added that as many as 99 per cent of the e-commerce transactions fall under the limit of $ 3,000........

Read - HBL

Sainik School Nagrota emerges victorious in RBI Quiz Competition

Jammu, Oct 08: Reserve Bank of India, Jammu organised a Quiz Competition here today as part of the RBI’s new initiative at promoting financial literacy at school level. Jammu is one of the 33 cities across the country where the Quiz was organised. The Jammu round of RBI quiz was organised today at Police Auditorium, Gulshan Ground in which students from 26 schools from in and around the city participated. The Quiz drew an overwhelming response with more than 300 students from the participating schools attending to cheer their friends and in turn winning scores of audience prizes.........

Read..........

Quizzing for financial literacy

.....The Thiruvananthapuram leg of the event, covering all the schools in the city, will be held at the Carmel Girls’ Higher Secondary School in Vazhuthacaud. The competition is for students of Classes 9th, 10th, 11th and 12th from all boards of school education. The contest in the State capital is the elimination round that covers more than 30 cities.......

Read - The Hindu

The inflation should be controlled : Rangarajan

........" The country's economy is passing through a critical situation, the growth rate is slow, and inflation high. This has to be rectified,"........

Details

The truck and the dog story

.......RBI and Sebi are the most advanced. They have developed IT–enabled surveillance mechanisms and reporting structures to effectively monitor technologically advanced operations in banking and markets. But they also have a limited physical presence..............

Read - BS

Small units must focus more on input costs, says Chakrabarty

.....“Lack of financing is not an issue… If a bank is not giving credit, it is because the creditworthiness (of the SME) is not proved…Those who deserve bank credit are getting it,” ........

Read - HBL

Gold management

This refers to the article “High time RBI bought more gold” (Business Line, October 5). This is a timely suggestion, which should be pursued by the RBI and the Government. The initiative taken two years back to augment gold component in forex reserves by purchasing 200 tonnes of gold from the IMF, should have been followed up with purchases. The RBI should simultaneously review its entire forex portfolio with expert support, for reshuffling it to make it robust and ensure better returns without compromising safety of investment. The Government could perhaps standardise a portion of the domestic stock of gold estimated at 18,000 tonnes. This will help reduce the gold import Bill.

- M. G. Warrier (HBL)

Signs of a resurgent gold standard emerging worldwide

..........Since then, from the world's largest democracy, India's leading advocate of monetary integrity, S.S.Tarapore, former Deputy Governor of the Reserve Bank of India (and chairman of the iconic Tarapore Committee which, during his tenure, laid the roadmap for India's capital account convertibility) published a significant piece in The Hindu Business Line entitled High Time RBI bought more gold, reprising some of the evidence of the rehabilitation of gold as the appropriate reserve asset for central banks and urging its bulk acquisition by the RBI.............

Read........

Economists divided on CRR cut in RBI policy

While bankers have demanded the Reserve Bank of India (RBI) cut its cash reserve ratio (CRR) specification, economists are divided about what is likely to happen. Business Standard spoke to 10 economists and five did not expect a CRR cut, as they felt the liquidity position was comfortable. CRR is the proportion of their funds that banks have to keep (free of interest) with RBI. It is currently 4.5 per cent of their net demand and time liabilities. Those who expected a CRR cut at RBI’s second quarter review of the monetary policy on October 30 said this would help bring down lending rates............

Read - BS

Kingfisher not systemic risk to banks, says RBI

The debt-laden Kingfisher Airlines, which owes 17 banks about Rs 7,000 crore, does not pose any systemic risk, RBI Deputy Governor K C Chakrabarty said today.........

Read.......

RBI mulls redefining 'sick unit' soon

......“We are trying to redefine sick units... very soon we will come up with a new definition,” Chakrabarty said while addressing a conference on SMEs organised by the Bombay Chamber of Commerce and Industry.......

Read -HBL

SEB debt to get special status to help banks

.......RBI regulations say that any account, other than a commercial real estate account which is restructured more than once, has to be classified as NPA. If an account is restructured twice, it is classified as NPA, requiring 15 per cent of the loan value to be provisioned if it is a secured asset........

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

Finmin tries to allay RBI fears on new bankc licences

......“We are looking at all measures that can expedite the process… RBI’s concerns are genuine and we are looking at some arrangement to address those till the Bill is passed,”........

Read - BS

Tread cautiously on new bank licences

......The more likely answer would be “local area banks” (LABs), which by definition are limited to specified geographical areas, and can therefore give more intensive and concentrated help to weaker sections in those areas. So if four new banks are to be given licences, at least two of them should be for LABs. The Raghuram Rajan Committee’s suggestion that preference be given to small and medium-sized entities might be a good idea, though the RBI has kept this in abeyance as some of them may not be able to meet the capital requirements specified by the RBI.......

Read - The Asian Age

Large groups unlikely to get bank licences in first round

.......New banks are expected to foster financial inclusion in the country and make the sector more competitive. The minimum capital requirement for each bank is expected to be Rs 1,000 crore. The RBI last gave licences to 12 private sector banks in two phases since the financial sector was opened up in 1991........

Read - FE

Raising capital to meet Basel III norms a challenge to banks: Gokarn

“... but of course many challenges lie ahead. For example, raising fresh capital to meet the higher capital requirement under Basel-III may pose challenges, especially under an environment characterised by moderating growth and worsening financial conditions,”.......

Read - HBL

Money on the move proves easy pickings for ATM thieves

......The police point out that lack of security measures, violation of norms and negligence on the part of the security agencies had encouraged small-time thieves and gangsters to target such vehicles. The banks enter into agreements with the security agencies to transport cash and load it in the ATM counters. As per norms, the staff of the security agencies and those of the banks should carry the cash boxes. The security agencies have their own vehicles to transport cash, but sometimes hire private vehicles. “We have issued strict guidelines to the banks. The Reserve Bank of India (RBI) has also issued guidelines, but they have been neglected,”........

Read - Deccan Herald

Police probing finding of 4 fake currency notes

......According to police, Mr Loganathan, Assistant General Manager, RBI, Chennai, lodged a complaint with the Puducherry CID police stating that four counterfeit currency notes, one each of 1000 denomination and 50 denominations and Rs two hundred notes were found in the bundle of old and torn notes sent to RBI for replacement by the IOB and UCO Bank here......

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

Chidambaram mantra: Implement, divest, dilute

.....Signalling to the Reserve Bank of India (RBI) that fiscal and monetary policy should work in tandem to contain inflation and stimulate growth, the Finance Mnister said: “A tight money policy has dampened investment as well as growth, particularly in the industrial sector,”......

Read - HBL

Jain Irrigation banks on NBFC business to improve finances

.......Jain Irrigation had received approval from the Reserve Bank of India (RBI) in July, 2012 to float a non-banking finance company (NBFC). The NBFC, Sustainable Agro-commercial Finance, is a joint venture between the promoters of Jain Irrigation and IFC, a member of the World Bank Group. The NBFC will begin operations on a pilot basis by opening 20-30 offices in Maharashtra. It will then expand its business to other states like Andhra Pradesh, Madhya Pradesh and Rajasthan........

Read - BS

Govt amends rules to allow IDR conversion into shares

.......Government has amended the rules governing Indian Depository Receipts issued in New Delhi by foreign companies, after financial regulators Reserve Bank of India and Securities and Exchange Board of India allowed part-conversion of securities into equity shares by investors........

Read.......

Karur Vysya Bank looking to offer students fee-payment service via mobile

Students can soon reduce the drudgery of standing in queues to pay their fees. They can instead use their mobile phone and do it from the comfort of their hostels or homes, a top official of Karur Vysya Bank said.........

Read - HBL

GITAM to host IEA meet

GITAM University will host the 95th annual conference of the Indian Economic Association from December 27 to 29 with the focal theme ‘Growth and Structural Changes in Employment’............

Read - The Hindu

RBI's tight monetary policy dampened growth: Chidambaram

Even though Indian economy's growth declined to 6.5 per cent in 2011-12 and further to 5.5 per cent in the first quarter of this fiscal, it is no cause for undue worry, Finance Minister P Chidambaram said on Monday."These are challenging times for global economy. They are affecting market sentiments everywhere," the finance minister said in his opening remarks at the annual Economic Editors' Conference in New Delhi.

Citi Bank official to pay Rs 15 lakh for leaking account details

......The Delhi State Consumer Commission has ordered a Citi Bank branch manager to pay Rs 15 lakh as compensation to a credit card holder for leaking his account details to a third party. The consumer body awarded the damages saying the supply of credit card statement details of the card holder to a third party is a “violation of confidential relationship” between the bank and its customer and “betrayal of trust”........

Read - HBL

Inflation: Gold versus financial assets - S.S.Tarapore

.......Augmenting the Gold Proportion in RBI's Forex Reserves Quite apart from measures to mobilise domestic gold, the RBI should consider raising the proportion of gold in RBI's forex reserves from the present level of 9 to 20%. This makes eminent sense as it would diversify the risks as between holdings in major currencies- US dollar, Euro, yen and sterling- and gold. Such a composition of the reserves would enable a better preservation of the value of the forex reserves. It is noteworthy that China has embarked on an aggressive increase in the central bank's reserves of gold by 1,000 tonnes per year and in a few years, China's central bank will be the largest holder of gold.

Read - FPJ

Regulating the regulators

......On the RBI, FSLRC is clear that “alongside this independence, an accountability mechanism needs to be set up.” The commission wants to review the laws related to monetary policy and draft a monetary policy law emphasising the issues of independence, enumerated objectives, enumerated powers, and accountability mechanisms. The RBI has been opposing the creation of an independent public debt management agency, another recommendation by the FSLRC. The commission is for carving this function out of the RBI and making it independent. It also mooted that three functions of the RBI be performed by distinct boards which oversee the three areas of work of monetary policy, payments regulation and supervision, and banking regulation and supervision. There are hints about the need to clip the wings of regulators. .....

Read - Indian Express