.......The RBI has repeatedly advised banks to strengthen their credit monitoring mechanisms. All the PSBs have thus put in place dedicated credit monitoring departments at the corporate as well as at the secondary and tertiary levels to monitor accounts at an early stage of showing stressed signals. Regardless of these efforts, cash recoveries together with upgradation to standard category have been overshadowed by a higher level of slippages. In the case of the top five to ten banks, the sharp rise in NPA levels is on account of a few big-ticket advances and because some restructured accounts have not turned at the pace anticipated...............
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.
Monday, December 3, 2012
A cup of morning tea...........
Special Greetings to Shri Mangesh Tarambale for successfully completing two years of VITALINFO. Let there be many many more years of success. God Bless You.
- A U Shaikh, Ex-AGM, Premises Dept, Mumbai
Carry on Mangesh for years to come. May God bless you with all the energy & vitality required to keep the early morning cup of tea/coffee called "VITALINFO" ready for the EXRBITES Group by the time the members get up.
Regards
B.D.Mahajan, Ex-DGM,
Sir, Yes, very appreceative, yeoman service to the group, many thanks !
Onkar Nath, Ex-Manager, Jammu
Congratulations and greetings on the second anniversary. Every day, we share and enjoy the results of Mangesh's work, which he starts when most of us are sleeping. We are grateful. Many happy returns of the day to VITALINFO!
- M.G.Warrier, Ex-GM
Congratulations and greetings on the second anniversary. Every day, we share and enjoy the results of Mangesh's work, which he starts when most of us are sleeping. We are grateful. Many happy returns of the day to VITALINFO!
- M.G.Warrier, Ex-GM
Dear Shri Mangesh Tarambale, congratulations on successfully completing two years of Vitalinfo. I find that Vitalinfo is a very good source of information and is very useful to a retired banker like me. you are rendering a very good service. May God bless you with health, wealth and prosperity.
Yours truly,
Sarveswara M.V
Cybercrime in RBI chief's name
.....A forged letterhead of RBI showing its address as Shantipath in Chanakyapuri New Delhi is an attachment and the mail ends with "Yours in service D Subbarao RBI Governor". The letter reads "Reserve Bank of India Union Pay Settlement Committee and the ATM International Inc wishes to congratulate you on the successful emergence in our ongoing fund remittance promo to all ATM card users across the globe. The mail also asks the mail recipient to furnish personal details including name address contact number age and occupation and a fee of US $350. The mail claims that only after that an amount of $1.8 million will be transferred to their account. .......
Are you ready for the new cheque regime?
.....The CTS will do away with the need for physical movement of cheques from a bank branch to a clearing house before the amount is credited to the customer’s account. Instead, entrenched with standardised features such as watermarks and a pantograph, cheques will be cleared electronically through an encrypted and highly secure online gateway........
Accepting a new high
...... “I am not saying that we would definitely change the number, but we will certainly revisit our strategy.” Could this be a prelude to revisit the aggressive monetary policy position of the central bank in its quest for low inflation? If that is so, then there is danger that RBI’s stance will lose credibility........
Cash transfer—are banks ready?
........One way of meeting the challenge could be allowing new banks to open shops. The banking regulator is not willing to do so unless the law that governs banking regulation in India is amended and RBI is empowered to supersede the board of a rogue bank. It is insisting on this as a precondition to allowing industrial houses to open banks as it feels that without this power, it will be difficult to supervise smart corporations who can divert money to their own group companies and deny funds to competition. Incidentally, among the first set of banks that was allowed to set shops in 1994 there was at least one corporate house...........
IIP crawls, all eyes on RBI
......However, falling global oil prices and declining core inflation as well as growth offered the RBI room to adjust interest rates, RBI deputy governor Subir Gokarn said last week. While inflation remains iffy, largely due to food products, at 5.3%, GDP growth in the March quarter was the lowest in nine years. As Citigroup economist Rohini Malkani puts it, “While our base case is one more round of rate easing, subdued trends in growth coupled with lower core inflation could result in the RBI easing more than ours as well as market expectations.”......
NGOs told to introspect
.....Dr. Rao, who has been appointed member of the Economic Advisory Board of the Reserve Bank of India (RBI) recently, delivered the keynote address at the inaugural of a two-day national seminar on “Nation Building – Role of NGO s – Agriculture and Rural Development”, organised by the Department of Political Science of M.R. College (Autonomous) ......
Banks gain little of what gold NBFCs lost, local lenders real beneficieries
In the past two quarters after the Reserve Bank of India (RBI) capped the loan-to-value, gold loan non-banking financial companies (NBFCs) have de-grown their book sizes and just the two major players have lost a business of over Rs 9,000 crore. However, banks, which have been active in the gold loan space, do not seem to have benefitted much from this. Instead, the unorganised moneylenders and pawn brokers are the ones who would have gained more from the loss of gold loan NBFCs..........
Bright side to India’s gold fetish
......PAPER GOLD DOESN’T WORK
This has the Reserve Bank of India thinking up yet newer ways to curb gold purchases. Could banks offer some kind of ‘paper gold’ or derivative gold so that the country does not have to actually import gold in order to satisfy its masses? Well, the paper gold idea has been tried, but has not enjoyed great success.........
Read - HBL
Too many curbs on gold import will push up smuggling: PMEAC
........"If we ban gold imports, the smuggling will go up... there are already indications that smuggling of gold has gone up in the last three months,".........
Read......
Adding glitter to paper gold
.....Exchange-traded funds (ETFs) with gold as the underlying assets are mutual funds listed on the stock exchange. Many such ETFs have been launched recently, and are flourishing. Obviously, many more new products are necessary for a more complete integration that alone will make an impact on gold consumption. RBI Deputy Governor Gokarn made out a persuasive case recently for new gold-backed financial products such as modified gold deposits and gold accumulation plans besides gold-linked accounts and pension products. Many of these are popular in important financial centres such as Singapore. The average citizen in those places is better informed about the financial markets — exchange rates, gold prices and so on. That would make it easier for the authorities to popularise new innovative products, linking gold to the banking system......
The golden rule
What can a central bank do to control the demand for gold? Precious little, going by a conversation between two respected former governors of the Reserve Bank of India, C Rangarajan and Y V Reddy, at an event organised by the Indira Gandhi Institute of Development Research. Reddy joked that the prejudice against gold has a gender bias. He looked at Rangarajan and recalled that he once told him that his wife (Rangarajan’s) had this fondness for gold and kept buying it. Rangarajan tried to dissuade her, but in the end he agreed that she was right.
BS
Is gold boon or curse for India?
......"We are concerned about gold, lending against gold by non-bank finance companies (NBFCs) because of financial stability concerns and we have been concerned about gold from an external management perspective because of the pressure it puts on current account or capital account depending on your account for it," he explains. Subbarao was speaking at the Indira Gandhi Institute of Development Research (IGIDR) annual conference. However, he clarifies that RBI has not put any fresh restriction on gold but only barred banks from lending for purchase of gold...........
'Fake currency is a crime that knows no boundaries'
......What the world is concerned about is – among other things they are concerned about – grave crimes with grave ramifications like terrorism, human-trafficking, drug-trafficking, and smuggling. These are grave crimes, which know no borders. Fake currency is a crime, which knows no borders. These crimes are committed and those crimes are punishable under specific laws. But the proceeds of the crime continue to flow into the economy........
President invited for Uttar Pradesh assembly's 125-year celebrations
.....In a letter written to the president, the chief minister said it was the wish of the legislators and the people of the state that Mukherjee be the chief guest at the momentous function, scheduled between January 8 and 10, 2013. Akhilesh Yadav also wrote to Communications Minister Kapil Sibal for release of a special commemorative stamp and to union Finance Minister P. Chidambaram for release of a special coin by the Reserve Bank of India (RBI) for the anniversary......
PSU banks under lens for ‘fixing’ savings account rate
Competition Commission of India, the fair play watchdog, has decided to look into the common, 4% interest rate being paid by all public sector banks on savings bank deposits despite the Reserve Bank of India moving to an unregulated regime in October 2011. "They seem to be acting in tandem and it needs to be investigated. Because of this policy, small depositors are losing out and banks are also losing business," said a CCI official, who did not wish to be identified. The official also said that banks such as Kotak Mahindra and Yes Bank, which had started paying up to 7% on savings bank deposits, had seen a surge in inflows. .........
Few ATMs disabled-friendly
.....To a query to the RBI via an RTI application filed by Singh seeking the number of ATMs made accessible to disabled, the reply sent on October 31, 2012, states "this department has no infor -mation". To another query on action taken by the department of banking operations and development following the RBI's letter to the department of banking supervision in January 2012 to ensure compliance by banks, the reply stated deputy chief commissions, office of the chief commissioner for persons with disabilities and ministry of social justice, government of India, have been advised to look into the matter.......
Cheque signature mismatch may lead to criminal proceedings: SC
...." Just as dishonour of a cheque on the ground that the account has been closed is a dishonour falling in the first contingency referred to in Section 138 of Negotiable Instrument Act, so also dishonour on the ground that the ' signatures do not match' or that the ' image is not found', which too implies that the specimen signatures do not match the signatures on the cheque would constitute a dishonour within the meaning of Section 138 of the Act," the bench said......
Chidambaram asks banks to give more education loans
Around 24 lakh students took loans for education with banks having an outstanding amount of Rs 52,000 crore, Union Finance Minister P Chidambaram said today, as he asked banks to lend more money for this purpose.......
Thousands of depositors trapped in scam-hit coop bank
.....“The Board of Directors jointly and severally failed to exercise control and supervision over the sub-committees and overall control and manage the affairs of bank in the interests of shareholders, depositors and the public by violating various guidelines issued by RBI in various circulars,” said the re-audit report, prepared by Kirtane and Pandit. On a writ petition filed by the depositors, the Bombay High Court stayed sale of the bank’s immovable properties. It also issued orders not to cancel the bank’s licence without its prior permission, but the RBI on February 10, 2012 issued notice revoking the licence.......
Saturday, December 1, 2012
FM’s pushing too hard
Microfinance in Banking Industry: Challenges faced by the banks
....The Reserve Bank of India appointed a sub-committee of its board to look into issues concerning the microfinance sector and its implications on policies of the banks. Then the RBI Deputy Governor said “Already banks have been allowed direct lending at a small charge in remote areas through business correspondence and technology have been introduced to reach out the unbanked areas” With a view to improve poor people, a pilot project for providing micro credit by linking Self-Help Groups (SHGs) with banks was launched by National Banks for Agriculture and Rural Development (NABARD) in 1991-92 with a view to facilitating smoother and meaningful banking with the poor. RBI had then advised commercial banks to actively participate in this linkage programme. The scheme has since been extended to Reginal Rural Banks (RRBs) and co-operative banks.......
Panel to probe defunct RBI unit's functioning
VADODARA: The syndicate members of M S University (MSU) on Friday constituted a four-member committee to probe the functioning of Reserve Bank of India's Endowment Unit in the last 10 years. The committee has been asked to submit its report within six weeks. The decision comes in the wake of embarrassment that the university faced last week after country's apex bank dragged the state university to an Ahmedabad court by filing a civil suit demanding recovery of Rs 97,63,000 for not appointing a RBI chair professor.......
Govt proposes high-level committee to check investment frauds
New Delhi: With an aim to safeguard the investors from possible frauds involving collective investment schemes, the government has proposed a high-level committee of members from Reserve Bank, Sebi, Corporate Affairs Ministry and Economic Office Wing of state police departments. The Finance Ministry has requested all states and union territories to set up such a committee to enable enhanced information-sharing among the concerned agencies.........
Technical committee to review presentation of accounts
........The terms of reference, in brief, of the Committee are: Whether the existing presentation of two separate Balance Sheets of Issue and Banking Departments needs to be merged into a single Balance Sheet of the RBI. Whether it is necessary to have separate Profit and Loss Accounts for the Issue and Banking Departments or whether the present form of a combined Profit and Loss Account will continue. Whether the disclosures presently made in the Balance Sheet and Profit and Loss Account and the notes to accounts are adequate or can be elaborated/ improved. The Committee will comprise Y. H. Malegam, Director on the Central Board of the RBI as Chairman. Indira Rajaraman, Director on the Central Board of the RBI, B. Mahapatra, Executive Director, RBI, P. R. Ramesh, Chairman, Deloitte Haskins and Sells, and V. Venkataramanan, Partner, KPMG, are the other Members. S. Ganeshkumar, Chief General Manager, Department of Government and Bank Accounts, RBI is the Member-Secretary..........
Dangers of letting govt print money
What if there was a financial system that would eliminate the need for the central government to issue government of India bonds through RBI to fund the fiscal deficit or that would end the practice of fractional reserve banking through a CRR of 4.25%? A surprising new IMF research paper entitled ‘The Chicago Plan Revisited’ by Jaromir Benes and Michael Kumhof is making waves in economic circles, especially with monetarists. The paper suggests that the world would be much better off if we adopted a system where the banks did not create our money. So, instead of a system where more money is only created when more debt is created through the money-multiplier effect, we would have a system of debt-free money that is created directly by the central government. There have been others that have suggested such a system before, but to have an IMF research paper actually recommend that such a system be adopted is a big deal...........
Money for nothing
......A former RBI Governor, Y V Reddy, put the situation in perspective in a paper presented to the Bank for International Settlements in June. He said: “In 2001-02 the problem was one of slow credit growth. We described it as lazy banking and tried to encourage banks to improve credit growth with regulatory and monetary policy initiatives. Soon the lazy bankers became crazy bankers. Excess credit seems to have been preceded by slow growth in credit. The problem is to identify the point at which credit growth becomes excessive or too rapid.”............
RBI launches inflation expectations survey of households
New Delhi, Nov 30: The Reserve Bank of India today launched the 30th round of the Inflation Expectations Survey of households with reference period October-December 2012. The central bank has been conducting the Survey on a quarterly basis since September 2005. The Survey seeks qualitative responses from households on price changes (general prices as well as prices of specific product groups) in the next three months as well as in the next one year and quantitative responses on current, three-month ahead and one-year ahead inflation rates, a central bank handout said. Giving details it said the results of the Survey are being used by Reserve Bank as one of the important inputs to the monetary policy formulation.........
Read........
Read........
REC decides not to apply for bank licence
.....The finance ministry is nudging RBI to issue new bank licences within the current framework, while assuring the law will be amended in due course of time. However whether public undertakings can establish new banks would be clear only after RBI issues the final guidelines on new licences. Media reports earlier suggested REC, PFC and IFCI were in talks with two foreign banks to jointly establish a new bank, to create more reach and have a diversified ownership.......
Barclays says RBI unlikely to cut rates on Dec 18 review
The Reserve Bank is unlikely to cut the repo rate before the end of January, British brokerage Barclays Capital said on Friday. "Repo rate cuts, which should lead to an actual easing of call money rates, are not expected before late January," it said in a report released here.......
Woman held for duping businessman of Rs.10 lakh
......."They sought Rs.10 lakh from the complainant for getting the money from IMF. The victim transferred the money into two accounts. The complainant also received emails purportedly from IMF and RBI (Reserve Bank of India) intimating him of the clearance of the said amount," said the officer. Rahmatullah got suspicious when he received a phone call purportedly from the RBI asking him to transfer another Rs.1.20 lakh for further clearance. "When the complainant verified the authenticity of the e-mails from RBI, it was found to be bogus," ......
A long haul
.......To expect the growth rate to travel sharply upwards from here is, however, to be more optimistic than what the data warrants. The 5.3 per cent GDP growth rate for the second quarter of 2012-13 means the economy has grown at just 5.4 per cent in the first six months of the year. To reach the RBI projected 5.8 per cent growth rate for the year means the economy would have to clock an average of 6.2 per cent in both the December and March quarters. On the way, it will have to counteract the recessionary conditions in Europe and a US economy swinging between recovery and another recession............
Read - IE
Rate cut to 2009-10 level key to recovery: Ajay Shankar
.....A revival would primarily depend on the easing of interest rates by RBI to 2009-10 levels; the industry would like this soon enough. The revival would be strengthened with a competitive exchange rate so that domestic value addition isn’t at a disadvantage. An increase in investments in infrastructure, especially in roads and power plants, would stimulate industrial demand. This should, hopefully, happen soon enough, as identified bottlenecks are removed.
FII limit in G-Secs, corp bonds hiked
.....The government, which is battling a high current account deficit (CAD), is trying to attract more foreign funds into the country. CAD, which is the gap between inflows and outflows of foreign funds, was a high of 4.5 per cent in 2011-12. In the current fiscal, CAD is expected to ease to 3.5 per cent. In order to contain CAD, the RBI has already imposed restrictions on financing of gold purchases to curb speculations of the yellow metal......
Public sector banks may extend ‘festival offer’ on retail loans up to March-end
........As per Reserve Bank of India data, since the beginning of the current financial year and up to October 19, banks’ home loans have increased by Rs 25,800 crore and auto loans rose by Rs 9,100 crore. Since the growth in loans for consumer durables has been low in the financial year so far, Finance Minister P. Chidambaram has asked PSBs to consider further steps to promote credit flow to this sector.
Growth pick-up will depend on RBI policy: Sajjid Chinoy
...........If the politics gets more constructive and authorities can push ahead with the National Investment Board, a balanced land acquisition policy, and boost sentiment (so that the rupee appreciates and has a disinflationary impact allowing the reserve bank to ease monetary policy more aggressively), growth is likely to pick up in 2013. Else, the key drivers of the slowdown in the Q3 2012 are unlikely to go away in a hurry.
Struggling for a Six: The great GDP growth challenge
.......A little help from Mint Road and Subbarao would do wonders, but much of the task will have to be done by Chidambaram himself. The pace of reform holds the key. Even after the GDP figures came in on 30 November, the 30-share BSE Sensex held strong, at well above the 19,200 mark as the market continued to remain bullish on the reform agenda. However, the veteran of many a battle, Chidambaram knows only too well that bourses can be fickle.........
No chance of a sixer!
............With GDP growth in the first six months clocking just 5.4 % we will have to grow 6.3% in the second half to realise the RBI’s projected growth of 5.8% for the year. That’s a tall order, though not impossible. The only catch is that given the government’s track record to date, I would not put my money on it.
Read - ET
It’s a real race against time
.....It has been obvious to observers, notably the central bank, for some time now that the government will have to get its expenditure under control before the economy can step back on to a higher growth path. The RBI has made lower interest rates conditional on fiscal rectitude and the government has reacted by biting the reform bullet. Subsidy diversion is being trimmed through innovative cash transfers, an efficient goods and services tax is back on the table and infrastructure investments are sought to be put on the fast track......
This is the bottom: India GDP unlikely to go below 5.3%, say experts
.......“From the RBI perspective, this number should not make much difference because the central bank’s full-year estimate is similar to this. Also, this data is two months old and the RBI will be looking at current trends. The sentiment has improved, we need to see whether the industrial production data also shows improvement. “I don’t think the RBI has completely disregarded the weakness in growth, but we need to see the next two inflation readings..........
Options in gold
.....However, it is not yet clear whether RBI will make regulations needed for other banks and financial institutions to launch such products or would associate itself with these products. In any case, its intention is to curb physical import of gold, which has been weighing heavily on the current account deficit (CAD) of the country. In the financial year 2011-12 (FY12), the country had imported 1,067 tonnes of gold worth $60 billion. Some of the products mentioned by Gokarn were modified gold deposit scheme, gold pension plan, gold-linked account and gold accumulation plan......
Should gold loans be banned?
RBI’s move to prohibit bank financing of gold comes as no surprise. the question is, will it work? is there a mechanism to segregate the speculators from those who genuinely need money against gold?..........
Read - IE
Not much sound in Kelkar Committee
.....the committee talks of how the fiscal deficit has crowded out the private sector. While this is a theoretical outcome, in our context, this has never really been proved in the last two years. RBI has never stated that it has raised rates because the government was borrowing too much. It was an anti-inflation stance that provoked such action. Second, liquidity has never been an issue as banks were never constrained to lend to the private sector because of paucity. RBI has supplemented well with open market operations to ensure that the mismatch was corrected......
Read - IE
HSBC scraps its plan to buy RBS India assets
......However, the Reserve Bank of India (RBI) was not comfortable with the structure and directed the banks to re-work the deal. It is learnt that the banking regulator was of the view that RBS cannot sell its India branches to HSBC as part of the transaction. RBI follows a restrictive policy of offering branch licences to foreign banks. In a year, the RBI typically offers foreign banks around 12 branch licences in total. As per the revised structure of the deal, RBS was supposed to surrender its branches to RBI while the banking regulator will finally decide the distribution of these licences among foreign banks in India. While sources indicated that RBI had permitted the transaction as per the re-worked structure and has allowed transfer of some RBS branches to HSBC, the deal was called off as the banks failed to reach an agreement on certain parameters......
Friday, November 30, 2012
A flawed Approach - S.S.Tarapore
......The leitmotif of the Approach Paper is that all that needs to be done is to dismember the Reserve Bank of India (RBI), create a unified financial regulatory agency and concentrate even greater powers in an already all-powerful Ministry of Finance. While doing so, the Commission appears to be oblivious of the fact that the macroeconomic management would be greatly attenuated by its passion to hive off activity from the RBI. The endeavour should be to see how the present financial legislation should be strengthened to improve the efficiency and effectiveness of policies and to be able to enforce the regulations in a more purposeful manner. In yielding to its great passion to overhaul the system, the Commission has deviated from its central objective.......
Banking’s new lingo
This refers to the news item titled “Subbarao warns against casino banking” (FE, November 18). One more interesting term has been added to the existing vocabulary of bankers and students of financial management. “Casino banking” has been termed as the practice whereby a commercial bank engages in unduly speculative or risky financial activities with the aim of achieving high profits. Some years ago (2009), the term “narrow banking” had been in vogue. A narrow bank, in its narrow sense, had then been defined as the system under which a bank places its funds in risk-free assets with maturity periods matching its liability maturity profile so that there is no problem relating to asset liability mismatch and the quality of assets remains intact without leading to emergence of sub-standard assets. This extreme risk averseness has been also dubbed as “lazy banking” and “zombie banking”. Other such terms often referred to are: “class banking”, “mass banking”, “inclusive banking”, “logical banking”, “safe banking”, etc. What next? “Sitting-on-the-fence banking”—neither going this way nor that? “Water-on-the-duck’s-back banking”—no policy guidelines ever affect this sector? Perhaps it’s time for RBI to come out with an A to Z primer (arm-chair banking to zombie banking) to educate the layman about such interesting definitions.
- JS Broca, New Delhi FE
MSU wakes up after RBI rap
VADODARA: After the embarrassment of a civil suit filed, M S University has decided to seek the approval of the Reserve Bank of India (RBI), to fill up the RBI Chair, left vacant by the university for a decade. The university has also decided to request the country's central bank to withdraw the civil suit it filed in an Ahmedabad court. Simultaneously, MSU will write to the RBI, saying that it will appoint the RBI Chair professor within six months, if the reserve bank provides its approval.......
Banking Ombudsman: Redressal for customer complaints against banks
....Presently RBI (Reserve Bank of India) has compelled banks to hear customer on priority basis. On direction of RBI every bank has to appoint nodal office for redressal of customer grievances. Every bank has designated higher level office at head offices and other senior level officer at controlling offices and at large branches.......
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The job market
In a speech in Mumbai earlier this month, Reserve Bank of India Governor D Subbarao made a striking point about the changing world order. There was a time in the eighties and nineties, he said, when parents across the world told their children not to waste food because there are millions who go hungry. Today, he added, with the rise of protectionism in advanced countries, parents there might well be telling their children, “If you don’t get a job, Indians will take away your job.”
BS
RIGHTS angle
....“In the last ten years, we have handled 10,000 complaints. Hundreds of cases go to court, I have gone and argued myself!” Over the years, he has fought for transparent MRP, filed class-action suits for standardisation in the size of packaged goods, and got the RBI to implement a daily rate of interest in the savings account. “It was a significant win, benefiting over 35 lakh people!”..........
Why do ministries interfere with the functioning of statutory bodies?
.....Statutory bodies like the RBI should not be made subservient to the whims and fancies of officials in ministries for exercising the powers they are expected to exercise as part of their mandated functions. The RBI has faced problems on such issues relating to banks earlier due to blurred clarity in powers and interpretation of law. Perhaps, the RBI has learnt from the recent experiences while handling new generation private sector banks which did not survive and the interests of the clientele had to be protected by the regulator with GOI support. Last ten years or so, the RBI has been loitering around North Block for permission to continue a pension updation granted by RBI in exercise of powers available under the Reserve Bank of India Pension Regulations which is being questioned by the finance ministry that has interpreted the pension regulations differently. An amendment to RBI Pension Regulations made to conform to the GOI interpretation of the regulations is pending with finance ministry for more than a year......
RBI’s inclusion and ministry’s exclusion agenda - M.S.Sriram
............All banks, including RRBs, are fully computerized, and inter-operability networked. Wage and pension payments for the poor are to be routed through bank accounts. Identification is becoming easier. Mobile networks are spreading. Staffing of the banks is going through a demographic change due to aggressive recruitment of young officers. This was an opportunity to redefine the inclusion agenda, to make a business case for inclusion and also to redefine banking. Unfortunately, MoF is not showing the same maturity as RBI and is wasting an opportunity to demonstrate how inclusion can be achieved in a changing and interconnected world.
Currency garlands: RBI in talks with Centre
........Responding to a query on whether currency notes are allowed to make garlands to felicitate public figures or grooms in marriages, the RBI said that it had appealed to the general public to refrain from using bank notes to make garlands, decorate pandals and places of worship. The RBI said, in the press release issued on March 12, 2008, that such actions deface bank notes and shorten their life. “Bank notes should be respected as they are symbols of sovereign and the public should not misuse them so that the life of bank notes is enhanced,” the statement said........
Microfinance - From utopia to dystopia
......The Microfinance Institutions (Development and Regulation) Bill, 2012, which empowers the Reserve Bank of India (RBI) to regulate microfinance and waits Parliamentary approval, is being opposed by the Andhra government. A prominent Union minister is also against the proposed legislation. This is despite the fact that RBI wants to regulate the sector quite firmly. It had appointed the Malegam Committee, which recommended, among other things, a 24 per cent cap on interest rates. MFI representatives are uncomfortable with the Malegam Committee. Yet, the Andhra government is opposed to even RBI regulating microfinance........
Credit growth outpaces deposit growth
........“People have withdrawn more cash this festival season [making liquidity situation tight] contrary to what we were expecting,” RBI Deputy Governor HR Khan told reporters couple of days ago at the sidelines of an event here. He also admitted that there is a slight reduction in deposits and increase in advances creating the liquidity pressure.......
'Any decision on common finance regulator only after FSLRC report'
.......Under the existing architecture, the financial sector is regulated by eight agencies including Reserve Bank of India (RBI), Securities and Exchange Board of India (Sebi), Insurance Regulatory and Development Authority (IRDA), Pension Fund Regulatory and Development Authority (PFRDA) and Forward Markets Commission (FMC). As per the proposal, there would be five new agencies besides Reserve Bank and FSDC. The new ones would be UFA, Financial Sector Appellate Tribunal (FSAT), Financial Redressal Agency (FRA), Debt Management Office (DMO) and Resolution Corporation........
Banks report fraud cases involving Rs 6,457 crore in 2012
....On measures taken to prevent/reduce incidences of frauds, Chidambaram said, "RBI is sensitising banks from time to time about common fraud prone areas through issuance of modus operandi circulars on various types of frauds." He further said RBI has advised banks to introduce a system of concurrence audit and constitute a Special Committee of the Board to exclusively monitor frauds of Rs 1 crore and above.....
Realty: RBI, FM reading the same but from different pages
.....Clearly, the RBI has done its bit by asking banks to take a hit on loan recast. The bigger question is can Finance Minister P Chidambram can do his bit by breaking this builder-investor-politician cartel to clean up the real estate market and ensure affordable housing in India?......
RBI announces OMO after four months to infuse cash
With cash tightening, the Reserve Bank of India (RBI) has announced open market operations on Friday, to support banks and primary dealers. Open market operation is a cash infusion measure and implies outright purchase of government securities by the RBI from banks and primary dealers. RBI’s open market operation for Rs 12,000 crore will happen after a gap of more than four months. The last such operation was held on June 22, when cash had tightened due to RBI’s interventions in the foreign currency markets to support the rupee against the dollar.........
NPAs of public sector banks on the rise
The non-performing assets (NPAs) of public sector banks rose close to one percentage point from 3.17 per cent to 4.01 per cent in six months to September 2012, the government informed Parliament on Thursday. To improve the health of financial sector, reduce NPAs and improve asset quality of banks and to prevent slippages, the Reserve Bank of India has issued instructions that each bank is required to have a loan recovery policy, Minister of State for Finance, Namo Narain Meena, informed the Rajya Sabha......
Educate public about economy: Rangarajan
The strides made by business journalism in the country since 1990 was a reflection of the growing importance of the economy and journalists must strive to create economic literacy among the people, said C Rangarajan chairman of the Economic Advisory Council to the Prime Minister. The former RBI governor made this remark while distributing the 14th annual Polestar awards for ‘Excellence in IT and Business Journalism’ ......
Right time to lock into recurring deposits
With the Reserve Bank of India (RBI) indicating policy easing on interest rates as soon as January 2013, you may well use the window to lock into high deposit rates if you are looking for assured returns. If you have a lump sum, fixed deposits would be the right instrument for you, but if you prefer regular savings, recurring deposits (RDs) would work for you........
Superior service
.......The fears expressed by the author with regard to use of financial resources by private banks can be tackled by proper supervision and control by the RBI. In fact, the central bank has done a good job in insulating the banking system from external shocks arising out of the international financial crisis in 2008. The RBI has also made timely interventions in regulating the functioning of private banks and protected the interests of the depositors in the past.
RBI wants involvement of private banks in government's joint lending plan
The Reserve Bank of India has suggested that private banks be involved in the government's proposed joint lending mechanism for corporate debt, and demanded deliberations on the issue before the policy becomes operational, according to an official............
Central Government to launch account number portability service soon
............The Finance Ministry has asked Reserve Bank of India and Indian Bank Association to issue necessary guidelines in this regard. The Finance Ministry recommended that ANP be implemented in the nation before cash subsidy scheme. The RBI recently has formed a high-level committee to prepare a roadmap of ANP. The Finance Ministry told the ANP facility can be provided to those customers whose accounts are being opened through AADHAR cards. .......
ICICI Bank Website has the Best User Experience for Online Customers
.......According to a release, user experience (UX) is a specialized field dedicated to 'ease of use' of online products and services. In the recently concluded 6th Economic Times Banking Technology Conclave, RBI's Executive Director G. Padmanabhan, during the keynote address, highlighted the importance of user experience in online banking, "Banks need to examine how they can make electronic transactions safe and secure while providing customers equal or more ease, comfort and convenience compared to branch banking.".......
Rights issue on cards for govt banks
Ahead of the implementation of Basel-III norms in the banking sector, public sector banks are looking to raise capital, with a rights issue being the preferred mode of capitalisation. Several public sector banks are of the view that allowing banks to raise capital through a rights issue, instead of a preferential allotment of shares being subscribed by the government. It would give all shareholders an equal investment opportunity...........
Bulk note acceptor at Federal Bank
THIRUVANANTHAPURAM, NOV. 29:
Federal Bank has installed a bulk note acceptor at its new branch at Thiruvananthapuram Chalai, a trading hub. The machine will work round the clock and accept bulk amounts of deposits, sort, count, and instantly credit the amount to the account of the deposit cardholder.......
Thursday, November 29, 2012
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