Delhi’s Kangra Co-op bank took a team of RBI to show the difference the bank’s loan has made to lives of its customers. According to a bank release RBI was impressed.........
The very purpose of VITALINFO is to provide a platform for wider dissemination of updated information related to and happening of events in and around RBI.
Tuesday, November 27, 2012
Muthoot Finance applies for white label ATM licence
.....In June, RBI had issued the detailed guidelines for WLAs. Suresh Kumar, joint general manager of Muthoot Finance, told Business Standard, “We want to leverage our presence in rural markets, as RBI wants most WLAs in tier-II to tier-VI centres, and most of our branches are located in these centres.”.....
Seriously, can you really trust your documents with your bank
.....The IDBI customers mentioned above is to get Rs 3.5 lakh as compensation from the bank for losing his title deed. As per, the RBI Banking Ombudsman (BO) Annual report:
A complainant approached the BO alleging that the bank was not returning original title deed kept as a security for housing loan availed, even though the loan had been fully paid.The bank replied that they were not able to trace the documents and had arranged for a certified copy of the documents and handed over the same to the complainant. The BO observed that loosing of original Title Deed was a serious lapse and the certified copies can never substitute the originals. The bank was directed to pay compensation of Rs 25,000 to the complainant for deficiency in service........
Nabard raises concern over rising NPAs in SHG lending
n the one hand, the number of self-help groups (SHGs) obtaining a loan from banks has been coming down over the years, indicating weakening of the movement in India. On the other, increasing bad loans from SHG portfolios are keeping commercial banks from lending to them. The National Bank for Agriculture and Rural Development (Nabard) has already raised an alarm over rising non-performing assets (NPAs) in SHG lending, in its recent report called Status of Microfinance in India, 2011-12............
JK Bank disburses Rs 1,566 cr to priority sector in 6 months
.....The Chief Secretary impressed upon the banks and other concerned functionaries to take concrete steps to ensure that the Credit Deposit Ratio of 40 per cent is achieved by the end of March, 2013 as advised by the Governor, RBI during his visit to the State......
Read........
Monday, November 26, 2012
Walk the talk for fiscal fitness
 |
| RBI Governor D
Subbarao goes for morning walk in Kochi on Thursday. He was in town to
declare Ernakulam as the first district having ‘meaningful financial
inclusion’ in the country
Our Governor was in Kochi
(Ernakulam) on November 22, to participate in the Dedication Function on
"Meaningful Financial Inclusion" in Ernakulam District. Governor who
arrived Kochi on the previous day stayed in our VOF at Kochi. The next day
early morning he went for walk through the streets of Kochi along with Shri C.
V. George General Manager O-in-C Kochi office. Governor might have thought
nobody would notice him. But the Times of India, captured this rare photo and
published in the front Page on November 23, 2012 in Kerala edition.
Governor during his
inspiring and very interesting speech referred to about this walk and let me
quote from his speech:-
"this morning when i
walked through the streets of Kochi, I came to a junction, where there were a
few migrant labourers. There were labourers from Bengal. Odhisa, Jharkhand and
from as far away as Manipur. There were a few from my home state Andhra, to whom
I could speak in Telugu. I asked one of them how much he earned. He said that
he earned Rs. 550/ per day which I thought was quite impressive. He said that
he send money home sometimes fortnightly. He visited his hometown once in six
months. When I asked him how he sends his money, he said he send it through
ATM. Even the Governor of RBI has not sent the money through the ATM".
Narration of this incident
raised a big laughter from the audience when he said that even the Governor could
not send money through ATM.
- V.Reveendran,
AGM, RPCD, Thiruvananthapuram
|
Parliament nod needed on FEMA rules for implementing FDI: CAIT
....."The FDI notification can be valid and effective only if the amendments made by RBI in rules and regulations of Foreign Exchange Management Act,1999 (FEMA) are approved by "each house" of Parliament which is an inherited provision in Section 48 of the FEMA Act," CAIT Secretary General Praveen Khandelwal said in a statement. ......
RBI to take action if liquidity tightness persists: Dy governor
The present liquidity tightness caused by festival related demand for currencies and rise of government balances, if persists, then the central bank will take action to address the problem, H.R.Khan, Deputy Governor of the Reserve Bank of India said today. However, he expects the tightness to be short lived which is likely to be ease.......
Central bank to simplify KYC norms
The Reserve Bank of India ( RBI ) will soon come up with guidelines to simplify know-your-customer (KYC) norms and to make Aadhaar the proof for address and identification. “In the next few days, we will come up with guidelines on simplification of KYC norms and use of Aadhaar both as an address proof and identification proof,” said RBI Deputy Governor H R Khan , while speaking at Bancon 2012. According to Khan, there are also thoughts on coming up with policy measures on the International Bank Account Number , which will facilitate portability. “We are also trying to marry banks and post offices in an electronic fund management system,” he said. He also stressed on the means by which the payment system could work as a catalyst for financial inclusion. Khan said India was the second largest in terms of cash usage to gross domestic product. He said efforts were being made to make India a “less-cash society”.........
KYC can be non-inclusive
......SHGs need to and do park their surplus and unused savings with bank, and this need to be encouraged with special relaxations especially when these account are opened by women SHGs. This suggests the need for a more gender-sensitive policy, especially while handling women SHG members. Besides this, the RBI should also support some facilitating operational guidelines while handling such sensitive accounts, where the prime intent is facilitating the thrift culture and enabling inclusiveness of these poor communities in the formal system. Taking a cue from the World Bank report, and appreciating the unique individual characteristics and its influence in the financial behaviour of poor households, RBI needs to treat SHG-based savings as a part of its financial inclusion drive.
From Aadhaar to mobile banking, strategies for India's war on cash take shape
.....What sets apart the *99# initiative from other mobile telephony services presently offered is that the *99# connectivity is under the Unstructured Supplementary Service Data (USSD) platform where each dial-in results in a live connection with the banks server. This is similar to the system used in pre-paid phones to check balances and numerical literacy would be enough to operate the account. Also since it is not based on SMS or GPRS connectivity and there is no charge on the user. The government is pushing mobile banking also because it will provide those in remote areas an opportunity to access their Aadhaar accounts even if banks are not around nearby. The service is the first time banks and telecoms have come together at industry level is the brainchild of the National Payment Corporation of India (NPCI). According to AP Hota, MD & CEO, NPCI the new service best suits India as it is simple and secure as no information is stored in the mobile device. " Ninety percent of phones used in the country are GSM phones and this service works on all GSM phones irrespective of handset make, cost, operating system or even the telecom service provider" said Hota......
RBI to soon allow Aadhaar for banking transactions
The central bank is likely to issue a circular on this within a week, says Deputy Governor H.R. Khan
....The central bank will soon issue a circular allowing the use of the Aadhaar as KYC, one of its Deputy Governors, H.R.Khan, said on the sidelines of Bancon, the annual bankers’ conference in Pune. Currently, then Aadhaar card carries a disclaimer that it cannot be used as an identity to conduct banking transactions. “KYC norms will be further relaxed soon to allow the use of any one document, which has both address and identity proofs. We will allow the Aadhaar card to be used as proof of identity,” Khan said. The central bank is likely to issue a circular in this regard within a week, Khan said......
Thackeray's shadow
Bal Thackeray ’s death appears to have disproved the common notion that the Shiv Sena no longer wields much influence over workers’ unions in Mumbai. The walls outside the offices of the Reserve Bank of India and the Mint had prominent boards put up by the unions of both institutions carrying obituaries of the Sena leader.
BS
Where caution is welcome
.....Although not spelt out, RBI’s caution is basically confined to the entry of industrial houses into banking. The structure of Indian banking so far, industrial houses do not directly own a bank — although in many cases they have sizable shareholding in individual banks — has a lot in its favour. Through a variety of regulatory rules, the RBI has ensured that no individual group, irrespective of its shareholding, can control a bank. The situation will change radically if large business houses get a direct foothold. For them, banking will not be the core or even the main business. No matter what safeguards are put in place, it will be a herculean task for the government and the RBI to keep a watch over the infringement of rules. Inter-connected shareholding will stress regulators, and is not a desirable outcome of reform. That is why the RBI wants more powers to check possible shenanigans.......
A case for paying interest on CRR balances
.....In the current situation, if 8-9 per cent interest is paid on the balance kept with the RBI, banks will most likely rush to keep funds with central bank and that will reduce the liquidity in the system. It may be noted that banks maintain 6-7 percentage points more SLR than the required 23 per cent when the risk-free return on SLR securities is 8-9 per cent. Therefore, it can be safely assumed that if 8-9 per cent interest is paid liquidity will automatically flow from the system to the RBI. The liquidity impounded will be 10-12 times the interest paid. Similarly, when the system requires more liquidity, the interest paid on the balances kept with RBI may be reduced which will compel the banks to draw the funds from their accounts with the RBI and use for advances or investment......
A reduction of 10-15 bps in interest rate is possible: D Sarkar
What is your outlook on interest rates for your bank and the banking sector as a whole?
Interest rates may soften a bit and everybody is talking about it. RBI had said it may do something in the last quarter. So, there is a possibility to bring down the rates.............
Food subsidy is of paramount importance: Rangarajan
.....The former RBI governor said taming inflation by the right balance of monetary and fiscal policies was also important at the moment and the government was tackling the issue with extreme seriousness. Rangarajan said rating agencies should take note of the various measures being taken by the government......
PSBs sore over FM push for IBA chief from pvt banks
While prodding the private sector lenders to be more active in BANCON – the annual banking conclave – finance minister P Chidambaram also suggested of making future chairpersons of Indian Banks’ Association from private sector banks. Typically, the IBA chairman is selected from public sector banks as they have majority in the bank body, in terms of voting power........
Banking consolidation is inevitable: FM
Finance Minister P Chidambaram today revived the debate on amalgamation of public sector banks saying some consolidation is inevitable as Indian banks would vie for the top slot in the global banking system in the next few years. He also advised banks to be different from each other and assured the finance ministry would not attempt to impose any uniformity................
Banking on short takes
.....Tamal Bandyopadhyay, who has emerged as an acute observer of the Indian banking scene, has managed to dispel both these reservations in this unfussy book. He has converted journalistic weakness into strength and told the story of the HDFC bank in a manner that only a truly accomplished reporter can — in fascinating, rather than mindless, detail.........BANCON 2012: FM nudges RBI on banking licences again
........."Let me emphasise that the three powers that RBI wants are already there with the RBI. It is already there in the regulation, it is there in the powers to grant the banking licences," he said. "I am sure the RBI acknowledges and appreciates the well-considered position of the Government and will take the process forward," he told reporters after inaugurating the two -day annual national banking summit (Bancon 2012) ......
RBI must allow new banks, says FM
In a stern message to the Reserve Bank of India ( RBI) on the contentious topic of issuing new bank licences, Finance Minister P Chidambaram made it clear that RBI has the powers to issue new licences and expressed the hope it will take the process forward " appreciating" government's position. " Whatever powers, whatever authority there was in 1993, remains on the law books today. In fact there are more power and authority now in place." He was speaking at the launch of a book ' A Bank for the Buck' on the history of HDFC Bank by financial journalist Tamal Bandyopadhyay in Mumbai on Saturday. " I am keen that there should be more banks. That is the policy of this government. The policy was announced by my predecessor in his budget speech in a year and half ago. This government's intention is to urge the RBI to quickly finalise the guidelines." His remarks assume significance in view of the reluctance of RBI to move ahead with the policy of granting new bank licences in the absence of changes in the Banking Regulation Act, which is awaiting approval of the Parliament.........
'India must have world size banks'
...."We must create at least 2 or 3 world size banks. China has done it. And if India wants to be and as it will be the third largest economy in the world...we must also have one or two world size banks and some consolidation is inevitable," .........
Read - FE
India's banking sector has changed a lot, set to change further: KPMG
.....With increasing volume and complexity of the banking business, it will be imperative for the regulator to move gradually towards more offsite monitoring than onsite. Technology will play a much larger role in the overall supervision of the banking system. There are likely to be transformational changes in the entire regulatory system for financial services.........
Nagpur Municipal Corporation general body to end RBI sq naming row
NAGPUR: The Nagpur Municipal Corporation (NMC) general body is likely to put an end to the ongoing controversy over RBI square's name. The naming committee headed by deputy mayor Sandip Jadhav has agreed to name RBI square as Samvidhan square and the stretch of road from Akashwani square to Ladies Club after former chief minister Vilasrao Deshmukh. The general body will take a final decision on the committee's resolution..........
10- rupee note to be collector’s item, so preserve it!
Stock up the 10- rupee currency notes as they are to become a collector’s item, though only in the distant future as the Reserve Bank of India ( RBI) has decided to gradually replace them with coins that last much longer than the paper currency and hence cost- effective. Minister of State for Finance Namo Narain Meena disclosed this in the Lok Sabha on Friday, saying the currency notes have a life span of “ just eight to nine months” and hence RBI plans to gradually replace them with coins. He, however, declined to set a deadline for the end of the 10- rupee notes era, pointing out that speed of the replacement depends on the capacity of the mints to supply the coins..........
Co-opting the consumer with positive banking
.....Most bankers’ lives are monotonous and they have stopped thinking and learning. They get up early, travel to work in the morning, go home tired and return to the same routine the next day. Bankers should start their day with a positive attitude saying “How can I be a better banker”. This will change the dull faces of boring bankers and they will start trying to do their jobs better........
Better days ahead
.....“The new banks will be at a disadvantage to existing banks due to absence of an existing client base and the requirement for new banks to ensure 25 per cent of branches in unbanked areas from the outset. For existing banks, the requirement is for only new branch additions. Therefore, they continue to have a large proportion of branches in high business opportunity areas. Also, creating a strong CASA franchise is far from easy, as Yes Bank can testify after struggling to create a meaningful CASA franchise over eight years. This is not to deny that a banking licence would be a positive, but merely stressing that they come with complications. So valuations can’t go out of the window on such expectations,” ..........
No RBI role, Rupee to recoup on its own
......Mayaram hoped the currency will appreciate once the economy is back on an upward curve without any effective intervention by the RBI. "I don't think RBI would have to effectively intervene for strengthening the rupee. We believe, once the slowdown bottoms out, the rupee will strengthen"......
Read - Express India
Two-thirds of bank deposits have no insurance cover
.....The falling insurance cover is due to the rising proportion of high-value deposits. Bank depositors enjoy insurance cover on deposits up to Rs 1 lakh. This means that if a bank goes belly up, each account will still recover up to Rs 1 lakh from the Corporation.Some experts feel that the situation calls for a revision in the insurance cover offered. The insurance limit of Rs 1 lakh per account was set way back in 1993. With inflation averaging 6.5 per cent in the last two decades, a Rs 1 lakh deposit then would equal Rs 3.3 lakh at today’s prices. Bankers, however, counter that this may not pose much of a risk to small investors, as most are likely to have deposits of less than Rs 1 lakh. In fact, banks have deposit accounts (savings and time deposits) numbering 107 crore. Of these, 99.6 crore deposit accounts, or 93 per cent, have less than Rs 1 lakh as balance.........
Govt panel suggests consumer campaign against ponzi schemes
A government panel has suggested running a public campaign under the
flagship consumer awareness programme 'Jago Grahak Jago' to guard the
gullible investors against multi-level marketing (MLM) and pyramid
structure companies collecting money through ponzi schemes. The
recommendation has been made by the inter-ministerial committee, headed
by Consumer Affairs Secretary and comprising of members from Reserve
Bank of India, Finance Ministry, Corporate Affairs Ministry and Law
Ministry among others,.......
Centre open to Islamic banking, says Rahman
......Sources said that by asking for amendments, the RBI wants to put the ball in the government's court on the issue. The government and the RBI do not appear to be on the same page on the matter. Asked if the RBI was not cooperating with the government, Khan said, "I have not dealt with them so far. I will talk to them on the issue." The government, on its part, has been pushing for the introduction of Islamic banking for quite some time. The then Union Law Minister Salman Khurshid had written to the Planning Commission and the RBI to look into the issue. The National Commission for Minorities had a meeting in May this year to discuss the issue, which was attended by finance ministry officials.......
Gold-backed instruments can bring down gold imports: Gokarn
....“Essentially role of innovation is not denying people to invest in gold, but find ways to give them gold like qualities (through new instruments). That might give some solution to the larger scale (gold) imports” Gokarn said while speaking at Bancon conference in Pune..........
RBI considering four alternatives to gold
......Given Indians’ yen for gold and the pressure on the current account due to its import, the Reserve Bank of India is considering introducing four gold-related instruments to ease the physical demand for the yellow metal. The instruments are modified gold-deposit scheme (GDS), gold-linked account, gold-accumulation plan, and gold-pension plan, said RBI Deputy Governor Subir Gokarn at the Bankers Conference in Pune.......
Steps to discourage gold imports on cards
Concerned with the drastic depreciation in the Indian rupee against the greenback raising alarm bell for decision makers, the Standing Committee of the Reserve Bank of India (RBI) on gold is meeting on Monday to take immediate measures to discourage import of yellow metal. Gold is seen as unproductive asset causing monitory management issues.........
Banks want RBI to allow gold buyback
Banks have asked the Reserve Bank of India to allow them to buyback gold which is not allowed at present, though banks are allowed to sell gold coins. In an interaction with Subir Gokarn deputy governor, RBI, at the annual banking conclave BANCON, State Bank of India’s chairman Pratip Chaudhuri suggested such a move which will in turn will improve market liquidity. “Today all the banks are selling gold but RBI does not allow to buyback their own gold. Suppose somebody has taken gold from my bank and the same gold, without opening the seal, comes back, banks are not allowed to buyback. What would be the underlying thoughts as it is impeding the liquidity of gold holdings,” Chaudhuri asked the regulator in an interaction which followed by a speech by Gokarn on the country’s gold import problem...........
Bank told to pay 42 thousand to man whose account was hacked
......The commission took into consideration the RBI guidelines which state that it is the bank's liability to the customers on account of unauthorized transfer through hacking, denial of service on account of technological failure, etc needs to be assessed and banks providing internet banking should insure themselves against such risk. "The appellant (bank) has not explained whether they have acted in accordance with these guidelines. The deficiency in service on the part of the appellant is proved beyond doubts," the commission said. .....
Vijayalakshmi Iyer takes charge of Bank of India
The government has on Monday appointed Vijayalakshmi Iyer as the chairperson and managing director of Mumbai-based Bank of India. Iyer — who was an Executive Director of Central Bank of India prior to this appointment — will serve Bank of India till May 31, 2015........
Piercing the veil on foreign offices
....While, it may seem strange at first glance that the RBI is looking into matters related to immigration compliance, the reason for it seems to be national security. This is in line with the recent trend of Government authorities cross-verifying whether foreign nationals are complying with regulations in the jurisdiction of other agencies.......
Saturday, November 24, 2012
Islamic banking is a myth; RBI is right to reject it
............ “Islamic banking is not possible. There are some legal problems. We have studied the issue. We appreciate the objectives behind the request. But there are some legal problems. It can be got around not through banking, but other vehicles.” He’s partly right. But the fact is even he is partly wrong. Islamic banking is not possible even though an enabling legislation, for the whole idea is a myth and cannot be introduced in a country where normal banking exists, and which claims to be secular...........
Public sector banks must hasten with consolidation
Is the Finance Ministry preparing the ground for consolidation among public sector banks (PSBs)? Its recent missive to the 26 PSBs seems to suggest so. The Ministry said there is a need for continuous interaction between these banks to improve their functioning. This can be achieved by sharing experiences and lessons learnt which in turn will help fine-tune internal policies and procedures. Seven large PSBs – State Bank of India (SBI), Punjab National Bank (PNB), Bank of Baroda (BoB), Bank of India (BoI), Union Bank of India, Central Bank of India and Canara Bank – have been assigned the responsibility of co-ordinating the activities of 19 other PSBs in six specific areas of operation......
RBI plans to gradually replace Rs 10 bank notes with coins
....“The Reserve Bank of India has informed that in the long run, the RBI plans to gradually replace Rs 10 bank notes with Rs 10 coins in the country,” Minister of State of Finance Namo Narain Meena said in a written reply.......
Financial inclusions expanding the horizon
.....Traditionally, banking facilities in India are offered through brick-and-mortar offices. Of the nearly one lakh bank branches in the country, more than 37,000 are located in rural India. Nearly one-third of the 6,918 brick-and-mortar branches opened in the country during 2011-12 are situated in rural areas. The RBI report on ‘ Trend and Progress of Banking in India for 2011-12’ says nearly 70 per cent of these branches are situated in tier-2 to tier-6 centres. Compared to the brick-and-mortar branches, the BC model has seen rapid growth. While the branch expansion in rural areas with population of more than 2,000 registered a growth of 7.64 per cent in 2011-12, the number of business correspondents witnessed nearly 10 times that growth. The evolution of the BC model has helped the banks provide banking services to customers without having a branch of theirs. The use of mobile technology is an important part of providing banking services under the BC model. Some banks are disbursing social security schemes’ funds through the BCs.......
'Financial inclusion will benefit the poor’
........But the banks should not ignore the great business opportunity down the line. The RBI Governor said financial exclusion was more in urban areas. A sample study conducted among 107 households in Ernakulam revealed that there were people who borrowed from non-banking sources and pay higher interest. The RBI would conduct a comprehensive study to understand the dynamics of financial transactions.......
Read - The Hindu
RBI may be able to cut interest rate as inflation eases: P Chidambaram
NEW DELHI: Finance Minister P Chidambaram today expressed hope that the Reserve Bank would be able to reduce key interest rate with the further easing of inflation. "As inflation eases further, there will be an opportunity for monetary policy to take measures to mitigate growth risks," he said in a written reply to the Lok Sabha. Chidambaram said that high inflationary pressures had necessitated the adoption of tight monetary policy by the RBI.......
RBI unlikely to cut upper limit of HTM portfolios of banks
The Reserve Bank of India (RBI) is likely to keep the upper limit on held-to-maturity (HTM) portfolios of banks unchanged, at least in the near term. Though RBI had earlier said the HTM limit was high, reducing it might hit the profitability of banks. It would also lead to hurdles for the government’s borrowing programme. Asked whether the HTM limit would be reduced, RBI Deputy Governor H R Khan told Business Standard, “We are working on it, but it is very difficult to give a timeframe for that. We have to balance so many things. We cannot suddenly de-stabilise the whole thing. Banks are already under pressure and government borrowing continues to be very high.”.........
What about depositors?
It is curious that discussion on the rates that banks offer customers focuses primarily on lending rates. Almost no one looks at deposit rates, although it is obvious that if no money comes in as deposits, nothing can be lent out. The general drift of opinion today is that the Reserve Bank should be nudging lending rates down. The usual corollary to that would be lower deposit rates, or banks would not be able to maintain what is called their net interest margin . From this perspective, it is worth noting that bank deposits have been growing ever more slowly; the growth rate dropped from 18.3 per cent in 2009-10 to 16.7 per cent in 2010-11, and down further to ...........
You are all hypocrites
Whenever RBI Deputy Governor K.C.Chakrabarty gets a chance to blast banks for their inefficiencies, he goes full throttle. Sometimes he can be heard shouting at bankers even through closed doors, so there is no question of his being restrained at public functions. ..........
Read - FE
More 2G victims
Yesterday, RBI Deputy Governor KC Chakrabarty was at his entertaining best before a packed audience at a Assocham banking conference. Once gagged for his ‘loose canon’ comment ridiculing RBI’s resistance to cutting rates, Chakrabarty now relies on puns to make his points. While highlighting the need to prop up growth, he also outlined the need to improve governance in government, corporates as well as RBI. “We are all victims of 2G,” he said. He added he was talking about just growth and governance. Believe it if you will.
FE
My View on "Easy option for RBI"
In view of the development,referred to above,RBI will be ill-advised to give in and withdraw its nominees on the board of public sector banks. Needless to add that RBI nominees will have to go by RBI guidelines and ensure compliance by banks, regardless what the government nominees may say. Ultimately decisions have to be taken by the Board by majority and it is expected that in such a scenario other independent directors would assert and go by what is good for the health of the bank and not for the ego satisfaction either of the government or RBI. RBI nominees on the board of commercial banks have an onerous task and they have to do a lot of homework, study the agenda to make their contribution effective. Top management of banks find lot of comfort with the presence of RBI nominee on their board and most of them in the past had advocated for their continuation when RBI planned their withdrawal. Apart from the banks which get benefited by the advice/experience of RBI nominees, the directorship also affords an excellent opportunity to RBI Officers for their all-round development in making them true banking professional. Therefore, RBI need not get unduly disturbed by this act of the MOF, and continue to pursue its policies through their nominees on the board of commercial banks including public sector banks.
M.L.Mahajan
‘Speed is key’ to raising funds abroad
.....we have a well regulated banking sector. Reserve Bank of India does not permit structured products, exotic products or leveraged products. So, we have a good, old-fashioned banking model. Hence, there is unlikely to be a situation in India when you get up one day to realise that a bank lost $2 billion due to a rogue trader.........
Non CTS-2010 cheques won’t work in 2013
.....The new advertisement published in all the national dailies read that a new series of cheque leaves, as mandated by RBI, will come into effect from 1 January 2013. The present series of cheques is required to be discontinued thereafter........
Bankers to discuss strategies for next decade
.....There will also be sessions on 'Profitably capturing rural financial services opportunity', 'Leveraging capital as source of competitive advantage', 'Defining the next frontier in wholesale banking', and a special address by Reserve Bank of India deputy governor Subir Gokarn on 'India's gold import problem: Finding solutions through financial products'......
New private banks: Look well before you leap
....What is really required now is reemphasis on the social objectives of public sector banks and retuning their activities co-terminus with the national planning process. There must be a comprehensive National Banking Policy and National Credit Plan which should outline the role and responsibilities of public sector banks in the overall economic development of the nation.......
Innovation key to banking success: Experts
Innovation will be the mantra for banks, if they have to make their presence felt in a highly competitive environment. This was the message on the inauguration day of the two-day annual bankers conference held in the city on Friday. The Indian Banks’ Association’s conference ‘BANCON’ will highlight how business model innovation in financial services will spur industry’s growth momentum in the coming decade.......
Read - Indian Express
Banks' holding company plan on hold
....The finance ministry had sent the guidelines for setting up the holding company to the Reserve Bank of India (RBI) sometime ago but the central bank has not given its comments yet. It is learnt that RBI differs with the finance ministry on some points and wants changes in some norms.......
HDFC Bank ‘ lifts’ motorcycle, told to pay Rs 55,000 compensation
....." In the absence of the terms and conditions of the loan agreement and service of recall notice, the lifting of the bike from outside the residence of the complainant cannot be said to be voluntary. " The bank committed deficiency in service by lifting the vehicle without a notice to the complainant and consent of the complainant," a bench headed by its President B B Chaudhary said while directing the bank to pay Rs 50,000 as compensation and Rs 5,000 as litigation cost to the complainant........
Credit rating agencies under fire! It’s time for SEBI & RBI to act
.....In India, credit rating agencies (CRA) are approved by two regulators, Securities and Exchange Board of India (SEBI) for capital market operations and by Reserve Bank of India (RBI) for rating of borrowers of banks. And as it is said dual control is no control. .....
Friday, November 23, 2012
RBI Governor urges separate laws for Islamic banking
Reserve Bank Governor, D Subbrao said that separate legislation should be enacted in order to commence Islamic Banking in India. Talking to media persons here today he said under the present banking laws, Islamic banking could not be permitted in India. "There should be separate legislation for the purpose. The Kerala government had proposed to permit Islamic banking as the inward remittance is the highest here. Reserve Bank is not against the idea, but we can work only under the present legal frame work of the country," he added......
It is another first for Ernakulam
.....Mr. Subbarao said Ernakulam enjoyed many firsts. Earlier, it had achieved 100 per cent coverage under family planning and cent per cent literacy. While the average population for setting up a bank branch in the country was 13,000, it was 7,000 in the case of Kerala. In the case of Ernakulam district, the population factor got further reduced to 4,400. The feat of meaningful financial inclusion was achieved under a target-driven programme, he said. The idea is that people must utilise it to save money, to get credit, micro insurance and other products. The State had already been listed as having achieved total banking coverage in September 2011, which indicated the widespread presence of branches or alternative facilities such as services of business correspondents. The district has about 850 branches of 43 banks and about 1,000 ATMs ......UBI’s financial inclusion feat in Ernakulam
....The objectives of Meaningful Financial Inclusion is to empower people to help them in achieving financial progress. Dr. D Subbarao, Governor, RBI, said that the efforts of banks in Ernakulam are commendable.......
‘Tight monetary policy among other things impacting growth’
Attributing the economic slowdown to various factors, including Reserve Bank’s tight monetary policy, the government today said that it has been taking steps to promote investment and growth..........
Reserve Bank gives infra lending status to host of sub-sectors
In a boost to key segments like roads and bridges, telecom towers and three-star hotels, RBI today gave ‘infrastructure status’ to a clutch of sub-sectors paving a way for them to avail easier funding. In a notification, RBI said the credit facility extended by lenders (banks and select financial institutions) to a borrower in about 30 odd sub-segment of the infrastructure sector will qualify as “infrastructure lending”.....
Make RBI whim-free
......Statutory bodies should not be made subservient to the whims of ministry officials. RBI has faced problems on issues relating to banks earlier, owing to blurred clarity in powers and interpretation of law. Even today, a ten-year-old pension updation issue is shuttling between RBI and the finance ministry.
Succession plans
This refers to the report “Gokarn to continue as RBI Deputy Governor till December 31”. When will we learn to implement succession plans for top government/public sector jobs in a graceful manner? We all talk highly about the virtues of the private sector, but do we really allow the public sector to imbibe its good features? How else can one explain the difference between the selection procedures of successors for Ratan Tata and N. R. Narayana Murthy and those for identifying CEOs and top managers of public sector organisations? Another point is that it will be next to impossible to attract talent to these government positions, given the meagre remuneration offered. It suits an unstable government to have ‘yours obediently’ people who have no other place to go or those who find the postings as a stepping stone for career opportunities abroad. Not much research is needed to know why it tries to ease out people like D. Subbarao, S. Gokarn and Vinod Rai.
- M. G. Warrier, Mumbai (HBL)
Govt, RBI should take more initiatives to revive growth: Assocham
....."While the Finance Ministry has taken some encouraging steps to revive the investment sentiment, the efforts have to be supplemented by the RBI and different wings of the government," industry body Assocham said in a study..........
Nineteen rural banks merged into eight 71 left
The government seems to be preparing the ground for the merger of public sector banks (PSBs). After asking small banks to coordinate with large ones on key areas, it has now merged 19 regional rural banks (RRBs) into eight entities, despite reservations by the Reserve Bank of India (RBI). It plans to merge more rural banks by the end of this financial year. RBI has expressed its displeasure at the move, saying the finance ministry didn’t keep it in the loop while going ahead with the mergers. The ministry, however, argued it followed the Regional Rural Banks Act, which didn’t mandate consultation with the central bank on such mergers.........
Easy option for RBI
Government (Financial Services Sector Ministry) is reported to be now writing to the Nominee Directors of banks ( this would include Nominee directors from RBI) with a copy to the Chairmen of banks to ensure that their directives are carried out by the banks since RBI had objected to such directives issued to banks as micromanaging the banks. RBI have been pressing the Government for a long time to remove their nominees from public sector banks as there is a conflict of interest because of its regulatory function over banks. Government had not agreed to the request but found a solution by asking RBI to nominate their retired executives to the boards of banks. This practice was introduced but has since been given up. The latest directive from the Government would place the nominee directors from RBI on the horns of a dilemma- whether they have to follow the RBI directives or the ones from the Government especially when the directives from the Government are not in accordance with the RBI stand. In the circumstances, RBI would either have to firmly insist on their representatives being removed form the boards or instruct their officers to follow the RBI stand. The former seems to be an easier option.
A.Chandramouliswaran (via e-mail)
A heady decoction
.....“Why a bank executive sells you insurance or puts a retired person’s savings into mutual fund, which could prove disastrous? There are 100 articles about it but if you are told in what is the motivation of the person and what are the long term consequences of it, it creates an impact. It is fiction with a purpose. I was pleasantly surprised when a senior RBI official in his address to bankers asked how many of them had read The Incredible Banker. Can they take solace from the fact that what Ravi says is fiction or can it happen in real life?” Having said that, Ravi finds Indian banking more stable than global banking. “It is largely because our regulators are stronger and are not swayed by commercial interests.”......
As banks get busy replacing the cheques, people have a tough time
Come 01 January, 2013 and your all existing bank cheques will become invalid. The reason being that the banking regulator, Reserve Bank of India (RBI) has implemented cheque truncation system (CTS) effective from 01 October and hence it has asked all the banks to replace the existing bank cheques, which have already been issued by them to their customers, to new standard cheques that comply the new system. The new generation private sector banks have already complied with the RBI norm. However, the same was not the case with the state-owned banks and hence the rush among them to inform their customers through notices which have been pasted at branches and ATM kiosks........
The sources of growth
Not for a decade has growth in gross domestic product been as low as it is likely to be this financial year. Finance MinisterP Chidambaram now says that it may be in the 5.5-6.0 per cent range; the Reserve Bank’s figure is midway, at 5.7 per cent. More worryingly, while the slowdown has been caused very substantially by a shortfall in investment , there seem to be few sources of recovery on this front. As a series of reports in this newspaper over the last week has shown, the much-needed rebound of investment cannot be financed by big private sector firms, because many of them are heavily laden with debt and in no shape to undertake fresh investment.......
Soiled Currency Menace
Melas for fighting the soiled notes (currency including) fail to yield
satisfactory results, despite RBI's claim of providing enough currency
for circulation in the market........
Branch banking unlikely to go out of fashion in India
.....Banking is also changing due to the efforts of the Reserve Bank of India (RBI) to inculcate the habit of paperless payments through credit and debit cards, electronic fund transfers and mobile banking. While cheque is still the dominant mode of payment, the value of such transactions has been on a gradual decline between 2007/08 and 2011/12. Paper-based payments accounted for 52.4 per cent of non-cash transactions in terms of volume, but only 8.4 per cent in terms of value.......
RBI to issue Rs 500, Rs 10 banknotes with rupee symbol soon
....."The Reserve Bank of India will shortly issue Rs 500 denomination banknotes with rupee symbol on the obverse and the reverse, inset letter 'E' in both the numbering panels,"......
Click, and your taxes are paid from home
KOLKATA: Imagine paying all your taxes - from stamp duties to motor vehicle tax - through netbanking or a debit card from the comfort of your home or at the nearest bank counter. It could well be a reality next year. This is the final piece in an ambitious proposal by the Mamata Banerjee government to replace the fault-ridden online payment system introduced by the Left Front regime in April 2008 with a single-window, seamless interface between public and private banks, the 'e-Treasury' and the RBI.........
Dhanlaxmi appoints new auditor, says not up for sale
Old generation private-sector lender Dhanlaxmi Bank Ltd has appointed a new auditor after the controversial exit of its previous auditor even as the market is abuzz with speculation about a likely merger of the Thrissur-based bank with a large new private bank. Hyderabad-based Sagar and Associates is the new auditor. The Reserve Bank of India (RBI) approved the appointment of the new auditor after rejecting the names of three audit firms submitted by the lender........
Lakshmi Vilas Bank CEO & MD Somasundaram resigns
......In 2010-11 AFI report, RBI observed that the chairman's post remains vacant since January 2011 following which the bank recommended the name of a director, K R Pradeep, with shareholding of 4.99% for the post. RBI, however, advised the bank to suggest two more names. Very recent, sources say that LVB has recommend other two names for the post and the RBI had to get back to the bank.......
Thursday, November 22, 2012
RBI governor once again displays autonomy
The Reserve Bank of India Governor, D Subbarao has once again displayed his autonomy by defying going against the market economists'advise of rate cut during the recent monetary policy review, with only one of the six economists supporting a policy status quo.......
........The meeting was chaired by Governor D Subbarao. Other members present for the meeting include Subir Gokarn, Deputy Governors, K.C. Chakrabarty and Anand Sinha. External members present in the meeting include Y H Malegam, Indira Rajaraman, Sudipto Mundle, Errol D'Souza and Ashima Goyal. Rakesh Mohan. Shankar Acharya a member who was not present at the meeting submitted his written views. RBI officials, Deepak Mohanty, Michael D. Patra, B.K. Bhoi, B.M. Misra and Pardeep Maria were also present in the meeting.
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