..........." Inflation at around 6 percent gives scope for rate cut," Rangarajan said. The central bank has been maintaining tight monetary policy for the last three years to contain inflation.However, he admitted that even at 6%, inflation was high and it needed to be reduced further. RBI Governor D Subbarao will announce the Monetary Policy Statement for 2013- 14 on May 3. Earlier this month, even Finance Minister P Chidambaram had favoured further interest rate cut by the Reserve Bank as headline inflation has softened................
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.
Wednesday, April 24, 2013
The missing link in inflation theory
........For instance, to control inflation during economic expansion during 2005 lasting until 2007, RBI followed a contractionary monetary policy. The tighter credit policy of April 2007 was influential in reducing inflation rates from 6.7% to 3.5% within the next four months. But contractionary demand management policy may not be a good idea to control inflation especially when the cause of food price inflation is supply-side factors. What is required is the use of supply management policies like investment in suitable infrastructure, developing new technology to improve agricultural productivity and efficient supply chain management............
Assocham for quick action against rogue finance firms
Industry body Assocham on tuesday made a strong pitch for bringing the rogue finance companies to task for duping investors by promising abnormally high returns. "We want quick action to be taken against the rogue companies which are neither registered with SEBI nor having the RBI permission for collecting money from the public," Assocham National Vice-President Sunil Kanoria said.............
Chit fund scam: RBI, bank alerts in December ignored by WB govt
.............“We had informed the Reserve Bank of India (RBI) that we were not comfortable with the operations of the chit funds which offered above 40 per cent returns to the public, mainly in the rural areas. We have asked the state government to protect depositors’ interest,” said a banker who attended the SLBC meeting in December.............
Chit Funds or Cheating Schemes?
..... The Saradha incident also provides ammunition for policymakers to lean on the State governments to tweak their chit fund laws, to grant SEBI or RBI powers to seek information and inspect the books of chit funds. Financial institutions, as a class, are prone to the risk of ‘contagion’. Not only can the operational failure of an entity be transmitted to others, bad reputation too can fasten on just as well to other entities, to the detriment of the industry as a whole.............
More safety measures for funds transfer
....Once banks implement the measures that RBI has asked for, it could help curtail frauds. “A normal user will have a small list of beneficiaries, whereas a fraudster will typically try to add a number of beneficiaries to make subsequent tracking and recovery difficult. By capping both the number of beneficiaries and the amount, the extent of fraud can be limited,” ...........
Money laundering: HDFC Bk sings RBI's tune on systemic risk
........."While we had our own internal audit, we have ordered for a forensic investigation by consultancy firm Deloitte. At the same time, the regulator too is doing its own scrutiny. As of now, there is no transaction of this type (money laundering), which any of these audits receives. There is no systemic risk,".......
Predictably, the 30% bank does it again
.....HDFC Bank’s secret sauce for the metronomic consistency in profit growth is a tweaking of provisions. The bank maintains a “floating” provision on top of the regular loan-loss provision for specific bad assets. This buffer allows it to maintain net profit growth in its desired range. For the March quarter, the bank set aside a lower sum for bad loans. Despite that, its provision coverage ratio (for bad loans) is not much changed at 80%........
‘Pvt, foreign banks must say yes to education loans'
..... “Many times, directives of the RBI do not work. It is the inner appreciation and corporate philosophy that must include this. Hence, banks need to finance aggressively to educate people. Society attitude needs to change towards this.”........
SBI launches prepaid card with relaxed KYC norms
.....The card is an open loop prepaid card and will be available at all SBI branches. It can be used for cash withdrawal at any ATM of SBI and its associate banks free of cost and at other banks' ATMs for a fee. It can also be used at Point-of-sales (POS) terminals at merchant establishments, at any merchant site accepting VISA cards for e-commerce transactions. It can also be used as an add on card for existing account holders on VISA network. SBI already has 75,000 POS terminals and plans to double this number in a year..........
YES Bank launches Sustainability Series
......The Sustainability Series, conceptualized in association with UNEP FI (United Nations Environment Program Finance Initiative), GIZ (Gesellschaft fuer Internationale Zusammenarbeit GmbH) and RIRA (Responsible Investment Research Association), will aim to promote Sustainable Finance in India within the Financial Sector. The Sustainability Series was inaugurated by Reserve Bank of India (RBI) Deputy Governor Dr. K. C. Chakrabarty. While speaking at the inaugural function, Chakrabarty said, “Environmental viability is not independent from Financial Viability and one needs to innovate to find viability in Sustainability. Indian Banks play an important role and they need to approach sustainability not just from a reporting lens but in a holistic manner.”................
Tuesday, April 23, 2013
Lower inflation gives RBI greater space to cut rate: Rangarajan
New Delhi: Moderating inflation will provide "greater space" to the Reserve Bank to cut interest rate to promote sagging growth, Prime Minister Economic Advisory Council Chairman C Rangarajan said on Tuesday. "I would say that decline in WPI is higher than what was expected. It gives greater space for monetary authority to act," he said while unveiling the review of economy for 2012-13..................
Create More Banks, Chit Funds will Die
...... It makes no sense to force banks to open branches in rural areas. Instead, the government should allow the use of low-cost technology, like mobile banking, to spread financial inclusion. The Reserve Bank of India should embrace the idea of allowing mobile companies or their joint ventures with existing banks to offer banking services.
Read - TOI
RBI may allow 7-8 new banks
The number of new licences to be issued, which would be much higher than what the prospective applicants had estimated, was arrived at after rounds of discussions with the government. In its discussion paper on the matter, released in August 2010, RBI had said a “few” licences would be given, leading the market to believe the number would be three or four. According to banking industry sources, the government, which is keen on financial inclusion through spreading formal modes of credit to all parts of the country, insisted that more new players be allowed...........
Co-op banks can't use Sarfaesi for debt recovery: Gujarat HC
The high court here has said cooperative banks cannot use the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act (Sarfaesi), 2002, for recovery of debts from its defaulters. A bench of Chief Justice Bhaskar Bhattacharya and J B Pardiwala, in a common judgement, today declared the central government notification dated January 28, 2003, bringing cooperative societies within the purview of the Act as null and void. They said this clashed with the Banking Regulation Act, 1949................
Teaching the honest to become dishonest
......The consequences are inevitable. Banks are now unwilling to lend to the agricultural sector, unless backed by collateral, which can be easily sold off. As a result, marginal farmers, who do not have collateral to offer, are compelled to borrow money from moneylenders at usurious rates.........
Is the good news for real?
After a long, long time, there is some favourable news on the economy. The International Monetary Fund (IMF), in the latest edition of its flagship publication — World Economic Outlook — says that the Indian economy has bottomed out, meaning that the worst is over............
Beware the nostrums of economists
...........“The ideas of economists,” John Maynard Keynes famously wrote, “… are more powerful than is commonly understood. Indeed the world is ruled by little else.” He might have added that the ideas of economists can often be dangerous. Policies framed on the basis of the prevailing or dominant economic wisdom have often gone awry and the wisdom was later found to rest on shaky foundations...........
Tips to replace non CTS-2010 compliant cheques
............The customers who have deposited non-CTS cheques as post-dated cheques
(PDCs) for EMIs to a finance company, or bank for repayment of a loan,
will have to replace these with the compliant ones for instalments after
31 July. The non-compliant cheques will not be honoured by banks and
will amount to non-payment and default on the part of the customer..........
How can having a single customer ID help
.....The Reserve Bank of India had advised the banks to lay down a customer identification process, which should be carried out at different stages such as banking relationship, carrying out a financial transaction or when the bank has a doubt about the authenticity/veracity or the adequacy of the previously obtained customer identification data. This requirement can be easily met by the bank if it has a unique ID per customer. Hence, most banks are now being seen taking initiatives to provide one customer ID per customer..........
Campaign against fake cell phone messages
.............A few gullible people responded to the messages by sharing personal details including bank accounts and also paid initial amounts as “service charges”. However, after receiving the amounts, the senders would vanish. Mr. Narasimhachar said the advertisement inserted by the Reserve Bank of India recently was appreciable but the apex bank had confined itself to disowning its role as claimed by the fraudsters. The apex bank should receive complaints from public and refer the matter to the police in doubtful cases, he said...............
RBI for lower commission to curb KYC abuse like money laundering
The Reserve Bank may push private sector lenders to rationalise the commission they pay to wealth and relationship managers, as it tries to check dubious transactions and flouting of know-your-customer norms.........
Prof loses 87k from salary a/c in debit card fraud
....... “The
bank neither informed me about the transactions, nor ever asked me to
register for SMS alerts. In fact, an official said they cannot give an
assurance if either the insurance firm or the bank can
reimburse the money. They also asked me to send documents to their
Bangalore head office despite submitting the FIR and documents here,”.........
Read - TOI
Credit card abuse up, debit card users more prudent
.......“Though we have not seen this trend in our base, but if the numbers do say that, then it is a matter of concern as people only withdraw cash from ATM machines (using a credit card) when they have absolutely no money,”..........
Default insurance
.............The Reserve Bank of India has said that India’s first mortgage guarantee company, the India Mortgage Guarantee Corporation (IMGC), can start functioning. Its capital will come from three investors – the National Housing Bank (38 per cent), an American company called Genworth Financial (36 per cent) to provide technical help and ADB and IFC (with 13 per cent each). It is interesting to note that the Government will not have a stake..............
More liquidity to help banks reduce interest rate: Ravneet Gill
The Reserve Bank of India recently said foreign banks those have more than 20 branches should have a steeper target for priority sector lending. Deutsche Bank—which has 17 branches in India—however, does not see the stipulation as a hindrance to its branch expansion plan...........
Parliament panel seeks committee to monitor NPAs
......“The committee will urge the government/ Reserve Bank of India to constitute a special NPA management cell at the highest level to review the write off, up-gradation and restructured advances and also to monitor the pace of recovery of NPAs. A report on results achieved thereof may be submitted to the committee within three months from presentation of this report,............
Bond spreads might remain at current levels till RBI monetary review
.......However, the 10-year bond spread is expected to remain at current levels. Bond spread refers to the difference between the yields of two bonds. Few companies have tapped the domestic bond market but most await RBI’s monetary policy announcement on May 3. If the apex bank cuts the repo rate, the coupon rates of corporate bonds will drop.........
Parl Panel for opening branches in unbanked areas
......."The Committee in their earlier reports had expressed their view that the rural branches should be considered as a service centre and not merely as a profit centre," Standing Committee on Finance said in a report tabled in Parliament today. "With this perspective in view, the Committee believe that the proposition of brick & mortar branches in sparsely and unbanked areas would still be sustainable in the longer run and thus needs to be pursued earnestly," it said.........
‘Focus on low-cost deposits, advances for growth’
......... in this era of keen competition when the banking industry growth rate is moderate, the quality of service and assets scores over quantity. The strength of an organisation lies in effective management of assets. Both staff and customers are critical to the growth and development in the banking sector,...............
Banks’ liquidity issues
This refers to your editorial “More freedom for cash” (Business Line, April 22). If at all banks face any liquidity crunch, it is of their own making and the RBI cannot be expected to come to their rescue. Banks in India face a liquidity crunch because of poor mobilisation of deposits thanks to poor customer service, high inflation, and reluctance to cash in on financial inclusion as a business opportunity. The way banks function now, with 78 per cent CD ratio when there is not much of demand for fresh credit, is indicative of a serious deficiency in asset-liability management. The NPA deposit ratio needs to be analysed in detail. The banking system has been having liquidity problem for quite some time and the solution for that cannot be relaxing the regulatory measures of the RBI.
T.V.Gopalakrishnan (HBL)
Bulls on a strong footing
........The second and more important trigger was the decline in the inflation numbers released last week. This sharp drop in the rate of inflation has increased hope that the Reserve Bank of India (RBI) will be more aggressive in cutting policy rates this time around. That was the primary reason behind the short covering in bank Nifty — which was on the forefront of correction for the past two months — and banking stocks were the main contributors to the rise of Nifty last week..........
Too early for optimism on trade balance
The recent fall in commodity prices might not be sufficient to bring down the country's widening current account deficit (CAD). Experts say more is needed for a significant change in this regard. The Reserve Bank of India (RBI) views the high CAD as a key challenge. RBI Governor D Subbarao said earlier this month that the CAD for the financial year which ended on March 31 was unlikely to be less than five per cent of gross domestic product (GDP).......
Regional rural banks may be allowed to tap private capital
.....The Bill, introduced by Finance Minister P. Chidambaram in the Lok Sabha on Monday, aims to amend the Regional Rural Banks Act 1976. One of the proposed amendments seeks “to make provisions for raising capital by regional rural banks from sources other than the Central Government, the State Government and the sponsor bank.” However, there is one condition — in no event should the combined shareholding of the Central Government and the sponsor bank go below 51 per cent.......
Crack the exam, select your posting
If clearing a bank exam is good enough, imagine being offered a chance to indicate your order of preference — of both the bank and the State/Union Territory you would like to work in. The Institute of Banking Personnel Selection (IBPS), the autonomous body which is in charge of conducting the Common Written Test on behalf of the participating organisations (the banks), has sent a communication to this effect to those who have cleared the CWE for clerical cadre...............
In unchartered territory
The Reserve Bank of India is expected to soon announce the final operative guidelines for non-banking financial companies (NBFCs). An RBI-constituted panel, headed by its former deputy governor Usha Thorat, recommended tightening of rules for NBFCs, proposing that these companies should have minimum assets of Rs 25 crore. Thorat has also suggested that their minimum equity capital be raised to 10 per cent of risk-weighted assets from 7.5 per cent currently. The panel released its recommendations on December 12, 2012. However, the RBI is not trying to finalise operational guidelines based on these recommendations..............
Tides turning for Islamic banking in India?
.....“However, once the Microfinance Bill is enacted, all the microfinance activities will come under RBI and problems will surface again. Issuing of Islamic bonds – sukuk – may be made possible, though, with minor changes in the rules without making major changes in the laws,” .........
Islamic microfinance market size reaches $1b, says Pakistan body
....... if one takes an overview of the last 10 years of the Islamic finance industry, it can be observed that with the passage of time Islamic banking, Sukkuk, Takaful and Islamic fund, have progressed quickly. In the next three years Islamic microfinance will progress more quickly relative to other Islamic financial products,............
Muthoot FinCorp’s microfinance arm expanding into 2 more States
......The company, which has also applied for a name change, expects to get the NBFC-MFI approval from the RBI in three-four months. Since there is a margin cap of 10-12 per cent on the interest rate that an NBFC-MFI can charge above the bank lending rate, customers will benefit if the company gets the NBFC-MFI recognition..........
RBI earns over 40% returns from its gold reserves
MUMBAI: The Reserve Bank of India is sitting on handsome returns on its gold reserves despite the recent crash in the yellow metal's price. The RBI's gold stock of about 400 tonnes, currently valued at $25.7
billion, has appreciated 41% since it bought 200 tonnes in
October-November 2009 from the International Monetary Fund...........
Industry body recommends cut in gold's LTV ratio
KOCHI: Association of Gold Loan Companies (AGLOC) on Monday recommended a reduction in Loan-To-Value (LTV) ratio of gold in the background of recent crash in the price of the metal. "We have asked our members to conform to the 60% LTV ratio stipulated by the Reserve Bank of India, said by George Alexander Muthoot, president of AGLOC and the MD of Kochi-based Muthoot Group.............
Pilot writes to state CMs for police action in fraud schemes
In a multi-pronged strategy to deal with the menace of fraudulent chit funds and ponzi schemes, the Centre has written to state chief ministers for vigorous police action against erring entities and has also sought an increased surveillance by the RBI. Besides, the Corporate Affairs Ministry has also decided to spread public awareness about such schemes through bulk SMSs, TV tickers and messages on Post Office Passbooks, while a joint campaign is being explored with Sebi as well. ...............
Centre assures state of new warning system
....... "Other than the regulatory bodies like the Reserve Bank of India (RBI) and the Securities and Exchange Board of India (Sebi), the ministry of corporate affairs and the state government, henceforth, will interact directly so that operators can't take advantage of the gap between the multiple agencies,"..............
Mamata sets up panel to probe chit fund scam
.......“Any commission set up by the State government in its terms of reference has the jurisdiction to inquire into matters listed in the State List of the Constitution. In this instance, there are Central agencies like the Securities and Exchange Board of India and the Reserve Bank of India involved and a commission set up by the State government cannot investigate their role,” ....
India currency futures stifled by central bank rules: MCX-SX
Indian currency futures volumes have been stifled by the RBI move last year to prevent rupee weakness which has indirectly created prices variations between listed and over-the-counter derivatives, a senior official at domestic exchange MCX-SX told Reuters.............
Monday, April 22, 2013
Pathways to obsolescence - Dr.Subir Gokarn
.....Organisations succeed and grow because they figure out how to do a few things very well. These things - products or services, with all the attendant processes - then expectedly tend to crowd out everything else they do. People move up the ladder because they have been associated with successful activities. Over a period of time, the top leadership comprises exclusively people who have all come up in exactly this fashion. The focus of the organisation on these activities and the reward and recognition systems tied to them gradually leads to the disappearance of everybody who has other interests or perspectives, particularly from the top leadership......
Report summarily dismisses financial inclusion - S.S.Tarapore
.........The Commission's perfunctory handling of financial inclusion is a major lacuna in the Report. It is as though the Commission's spaceship headed for Mars, has erroneously landed on Planet Earth. Its handling of financial inclusion is totally incomprehensible and borders on dereliction of duty. It is incumbent on the part of Commission members to recant and say mea culpa ( my fault).
Read - FPJ
Report throws up multiple contradictions
........ In so doing, it fails to reconcile or even mention that Dr. Subbarao had, on November 22, 2007, written to the then DoT Secretary, questioning the 2G pricing: “It is not clear how the rate of Rs.1600 crores determined as far back as 2001, has been applied for a license given in 2007, without any indexation let alone current evaluation”. The report gives the impression that Dr Subbarao was against increasing the price of spectrum, which is contradicted by his letter and multiple file notings in the run up to the 2G scam.........
BCSBI invites applications for Senior Vice Presidents at Mumbai
The Banking Codes and Standards Board of India (BCSBI) is a collaborative venture set up by the Reserve Bank of India and the member banks to evolve Codes and Standards for banks to follow while dealing with customers to ensure fair treatment of customers. BCSBI also acts as a watchdog to ensure that the Codes and Standards adopted by member banks are adhered to in true spirit while delivering their services............
Read...........
Link forwarded by Dr.Pramod Kumar
Read...........
Link forwarded by Dr.Pramod Kumar
Correct, not compound
....... The fact that the large number of vacancies are intended to be filled up by compromising on job specifications shows poor succession planning. Instead of compounding the lapse by relying on internal promotions in spite of a dearth of competent personnel, the banks should use the occasion to induct fresh and better talent at different levels, and go for adding young people at foundation levels (probationary officers and the like) by adjusting the intake against higher positions..........
FinMin for cost-to-company pay structure in state-owned banks
...........IBA is likely to ask for a 25 per cent rise for the 800,000-odd employees in the 10th bipartite agreement on wage revision. The rise is due with effect from November 2012. Though wage settlement negotiations usually go on for about two years, as bank unions begin with very high expectations, this time the government might settle by the end of 2013, since general elections are due in 2014. "If PSBs have to run like a professional company, then why not behave like one and move to the CTC concept? We have given this suggestion to IBA,"...............
‘RBI has principally agreed to bank merger’
Rupee Bank administrator Anaskar says discussion on with two nationalised and coop banks
........Anaskar said that banks from Gujarat, Madhya Pradesh and Maharashtra have shown willingness to help. He said that discussions are on with two nationalised banks and the merger issue has been discussed with two urban cooperative banks including Cosmos and Saraswat Bank...........
IDBI Bank participates in the Town Hall Event at Madgaon, Goa
.......... On the occasion, normally the Banking Ombudsman selects a few
banks to put up their stalls and display the product literature and
other publicity materials based on their business and branch network. However, IDBI Bank was specially chosen to set up a stall in view of
their quick resolution of customer complaints. Smt. Rose Mary Sebastian,
Banking Ombudsman cut the red ribbon and inaugurated the stall in the
presence of Shri Dipankar De, General Manager and Principal Nodal
Officer, IDBI Bank..........
Low denomination currency notes to become history
.....Along with the currency notes of Rs 1 and Rs 2, the Rs 10 note will also be a part of history. The Union Minister of State for Finance, Namo Narain Meena, it is to be recalled, made a statement in the Lok Sabha that considering the short duration and high cost involved in the printing of Rs 10 note, Reserve Bank of India is planning to gradually phase it out. It will be replaced by the coin worth its value. Though the cost of printing a Rs 10 coin comes around Rs 6, it has long duration of circulation as it can sustain the wear and tear of time................
Credit information bureaus want access to mobile bill payment records
.........Full-file reporting is any information that captures your repayment record with any entity and is given to the bureau. The repayments could be related to utility bills, lease rentals, and telecom service. “With more mobile subscribers than bank accounts in India, this (full-file reporting) can help credit bureaus access wider range of information. We have spoken to the Reserve Bank of India in this regard,” Jayaraman said..........
Disabled people have a hard time still at ATMs
......."Apart from orthopaedically challenged people, visually-impaired are also suffering a lot as ATMs are unfriendly," Kamaraj pointed out. Even though RBI guidelines to create disabled-friendly precede the state rules, banks have not adhered to the rules. "ATMs of both, nationalised banks and private banks, remain indifferent to this issue," according to a cross section of differently-abled people.
School that makes men
A modest-looking school, it has produced numerous men who have dominated their chosen fields. Here are some of them: Dr. Badrinath of Sankara Nethralaya , tennis legend Ramanathan Krishnan, former Chief of Indian Army Gen. Sunderjee, former RBI governor Y. V. Reddy, Dr. Nalli Kuppuswami Chetty and among the younger crop, Vijay TV’s Super Singer championship winner Krishnamurthy..............
Macroeconomics maya - A.Seshan
We have read in economics about how nominal values do not reflect reality. People often have a money illusion, in which they may feel better off with a rise in their nominal incomes, although their real incomes, or the purchasing power, might have fallen owing to inflation. Economists take care of such an illusion when they compile the real gross domestic product (GDP), or the net of inflation, to reflect the true underlying value of goods and services produced in a year. But, in my view, even that is illusory.........
Banking on inclusion
.........In the past, the apex bank’s stated objective for granting new licences was to infuse competition into the banking sector, which was largely dominated by public sector banks. Consequently, new private-sector banks have brought about a paradigm shift by increasing the efficiency of the domestic banking system, and introducing newer and more sophisticated financial services like mobile banking. This time, the buzz word is financial inclusion — the process of providing access to the financial products and services needed by weaker sections and low-income groups at affordable cost in a fair and transparent manner...........
Trust to open financial literacy centres
........The Trust has already imparted knowledge to over 5.45 lakh people through 37 centres. At present, the Trust has 18 centres in the state. Trust secretary N T Hegde said that the Trust, jointly sponsored by Syndicate Bank and Vijaya Bank, was established in 2010 as per the Reserve Bank of India guidelines with an objective to educate people on financial products and services...........
Risk Management
............Dr. T. V. Gopalakrishnan, who wrote authoritatively on NPAs has written incisively on the greatest risk in the banking system — viz., the human resources. Banks are at once dependent on and managed by persons and these human agencies are prone to a high level of risks, if not properly managed. The volume throws a flood of light on risk management and is highly relevant in the light of Basel III norms. It is warmly commended to all planners, bankers, financial analysts and students of economics and banking.............
Book Review by P.P.Ramachandran
More freedom for cash
The banking industry is justified in seeking a one percentage point cut in the cash reserve ratio (CRR) — the proportion of deposits required to be compulsorily maintained with the Reserve Bank of India. True, the present CRR requirement, at 4 per cent of banks’ net liabilities, is already a 40-year-low. The demand for pegging the CRR still lower at three per cent, however, has the merit of being in line with the received wisdom that regarded it as the bare minimum level necessary for the purposes of prudent banking...........
FinMin asks banks to get ready for 2nd phase of DBT scheme
.................It further said banks also need to ensure that a secure 'server to server' connectivity is operationalised with the National Payments Corporation of India (NPCI) which will automatic download and execution of payment advise file and generate the return of file indicating status of transaction, among other things. NPCI, an umbrella organisation for all retail payment systems, is conducting a pilot run with five banks for establishing secure server to server connectivity and is scheduled to be completed in this month............
Slowdown to continue in poll year
......The Reserve Bank of India (RBI) is also expected to keep much needed rate cuts at the minimum, so as to not aggravate the government, which would not want any drastic steps during the election campaigning periods. Although the RBI has committed to bring down the fiscal deficit to below 4.5% in FY14, any significant action to achieve this is not expected. However, the rate cuts between April 2012 and March 2013 were seen as a positive move. "RBI's decision to go in for another round of policy rate cuts was very aptly timed and was almost indispensable to revive the confidence of industry," continues Dr. Didar Singh............
Wockhardt launches 'Follow traffic rules'
NAGPUR: Considering the ever increasing accidents in city, Wockhardt Hospital has launched 'Follow traffic rules' drive as part of its corporate social responsibility to create awareness among masses about the increased fatalities, especially among children, due to violation of norms. To begin with, the campaign being organized with support and consent of the traffic department will run for five days that began on Saturday. The hospital has chosen for awareness the squares like RBI, Khamla, Shankar Nagar and Law College where the traffic is heavy.............
RBI may issue clarification on bank licences by early May
......."We have received queries from various entities. RBI will be posting on its website all the relevant clarifications with regard to new bank licence guidelines by this month end or early next month so that they get ample time to file applications," a senior RBI official said........
Why more banks should come up, soon
...... A set of new banks will strengthen and expand the industry and add to the resilience of the state-run banks, besides deepening the government bond market. Competition can bring down the bond yield too, benefiting the government, which is grappling with high fiscal deficit. More importantly, competition will benefit the consumers. Let many new banks come up, even if a few of them die................
Private bank entry hurts public banks
...."There will definitely be some quantitative and qualitative effects on the balance sheet of the public sector banks. With private sector banks coming in, the market size will be shared by new entrants, which implies that growth in the size of PSBs might not have been what it could have been in the absence of such new players," ..............
With RBI nod, country’s first mortgage guarantee company to get going soon
.....“Now that the certificate of registration has been received from RBI, this new venture will soon commence operations and start entering into MoUs with banks and housing finance companies,” R. V. Verma, Chairman and Managing Director of National Housing Bank, told........
Auditors in the dock?
.............Currently, audit of companies involves reporting on whether any fraud is noticed or reported during the year. In the audit of banks, the auditor should report to the Reserve Bank of India anything found susceptible to fraud, acts of excess power, or foulplay in any transaction. Under the new Companies Bill, the auditor has significant onerous responsibility............
Current account deficit takes centre stage on Dalal Stret
........“While RBI may cut rates faster than expected, the transmission of rate cuts will be slower than in earlier cycles. The credit-deposit ratio at 78 per cent is the highest it has been over past 15 years. Even adjusting for the lower SLR, this shows that ability of the banks to cut rates is lower than in earlier cycles,”......
Panel rejects RBI proposal to limit FII investment in sec market
........."The suggestion made by the RBI of limiting FII investments to secondary market was discussed. It was felt that considering the stage of capital market, it would not be prudent to place any restriction of this kind as of now,".....
HDFC bank contravened RBI instructions: Consumer panel
......."Therefore, we come to the conclusion that the bank failed to intimate the complainant about change in AQB.which is certainly deficiency of service and in contravention of the instructions issued by RBI. It straightaway deducted amounts of Rs 723 and Rs 89 from account of the complainant...,"
RBI may cut repo rate by 25 bps: Economists
.....“Right now, the conditions should enable RBI to cut repo rate. We expect a cut of 25 basis points (or 0.25 per cent) in its policy in May and may be by another 25 bps in the next review,” .....
Chidambaram hopes for rate cut to propel growth
..."Government would welcome lower interest rates," Palaniappan Chidambaram, 67, said in an interview in Washington on Saturday, where he is attending meetings of the International Monetary Fund and the World Bank. "But how low can interest rates go is a function of a number of other factors, especially inflation, and that's a call the governor has to take."........
Shun the Cypriot connection
When looking at the major economic crisis in the Republic of Cyprus involving the exposure of Cypriot banks to the Greek debt crisis, one is reminded of the Ahmedabad-based Madhavpura Mercantile Co-operative Bank (MMCB), which was closed down by the Reserve Bank of India in June 2012 when the outstanding loans were Rs 1,100 crore, of which Rs 800 crore pertained to a shares scam............
A reprieve for the Indian economy
......Nevertheless, lower oil and commodity prices will lower inflation; and if it’s correct that people have been buying gold as a hedge against inflation, then lower inflation should also lead to lower investment demand for gold. That, in turn, could lead to an increase in financial savings, a process that should also be helped by the Reserve Bank of India’s (RBI’s) issue of inflation-indexed bonds. Does this mean the economy is out of the woods? Not really............
Risk-reward looks good now
.......We believe there is a modest monetary easing cycle ahead, given limited room for the Reserve Bank of India. Despite the weakness in macro data points near-term, over the mid-to-long term, equities should get support from secular earnings growth; our bottom-up forecasts suggest mid-teens growth for the Nifty in FY14/15. We think current assumptions are conservative (excluding consumption) and are not building in any meaningful economic recovery, and hence these might not be difficult to attain...........
‘Rural demand driving growth in light commercial vehicles segment’
......Besides discussing the challenges facing his non-banking finance company (NBFC), Revankar observed that the cause of financial inclusion will be well served if the banking regulator allows more banks, NBFCs and credit societies to come up. Further, the regulator would do well to relax the curbs imposed on NBFCs. Excerpts from the interview............
Money-laundering probe: IRDA report likely in a week
Hyderabad, April 21: The Insurance Regulatory and Development Authority (IRDA) is likely to complete investigation into the alleged money-laundering transactions of insurers within a week. “Our inspections teams have been deputed to some insurance companies and the process is on. We may have a report ready within a week on the issue,” T. S. Vijayan, Chairman, IRDA, told newspersons on the sidelines of a seminar held here.............
Read - HBL
Kerala Financial Corp brings NPA down drastically
.......This is a story of a silent but amazing transformation at the State Financial Corporation, says K. Manmathan Nair, veteran development banker. Nair has had stints at senior levels with Small Industries Development Bank of India (Sidbi) and the RBI, apart from at KFC as its managing director. The 90s saw KFC in bad shape, struggling to fulfill its mandate, even as it failed to keep pace with the changes in the post-liberalisation regime,...........
Fixed Income is the flavour of the day
........The central bank is widely expected to cut rates by a minimum of 25 bps in its 3 May 2013 annual policy and is also likely to cut rates throughout this fiscal as the economy struggles to stay afloat. RBI rate cuts is highly positive for bond yields, which are likely to trend down throughout this fiscal. In a falling bond yield environment the best investments are in bonds and as a result of expected fall in interest rates, more and more investors are flocking to fixed income securities directly and indirectly............
NBFCs, more than banks, are at risk of default on gold loans
............Having said that, RBI must take care to keep the banking system safe and sound. The trouble with Indian banking system is that a crisis may unfold even when there is no reason for one, due to lack of transparency in the reporting structure, followed by various banks. Rumor mills are rife about how badly the bottomline of one bank or the other has been hit by falling gold prices. RBI must ask both public and private sector banks to declare their exposure and track record on gold loans, while announcing their quarterly results.
Saradha CMD siphoned off crores from 37 accounts
....The Sudipto (not Sudipta) Sen named in the gazette is son of Late Bhudu Sen of the Sanchayani Savings and Investments (India) Pvt Ltd. Police are examining records to find out whether the Saradha Group CMD Sudipta Sen is the same Sudipto Sen of the investment company registered as a residuary non-banking company under the Reserve Bank of India. According to the 39th report of the Petitions Committee submitted in Lok Sabha in January 2004, the company had collected Rs 800 crore from 50,000 small depositors.............
Sebi, RBI and ED to join forces against investment frauds
Amid a countrywide proliferation of fraud investment schemes, markets watchdog Sebi is joining forces with other agencies, including RBI, SFIO, Enforcement Directorate and state police departments, to tackle the menace. A large number of fraudulent schemes have come to the fore in recent months, wherein gullible investors are promised huge returns of up to 100 per cent in a year or two through 'bizarre and innovative' methods, a senior official said............
Trinamool has nothing to do with deposit-raising companies: Mukul Roy
........ If the State government taken timely action against such companies, many people could have been saved from ruination, he said. Asked about chit funds, CPI parliamentarian Gurudas Dasgupta said the Reserve Bank of India’s Governor had told him that such companies are under the purview of the State government.
Agents bear brunt of Saradha collapse
..........Banerjee cut his teeth in door-to-door deposit collection in the early 1980s as an agent of Peerless General Finance and Investment Co. Ltd—a residuary non-banking company, which pioneered in collecting small savings. Though it didn’t ever default on repayments, Reserve Bank of India (RBI) forced Peerless to stop taking deposits in 2005-2006. This spawned the growth of unregulated deposit-taking companies in West Bengal and other eastern Indian states. Exploiting the strength of Peerless’s impeccable repayment track record, its redundant field agents helped found new firms that went after people’s savings, mostly in rural areas...........
Blame game on chit onus
.......Addressing the press on Sunday, Dasgupta argued that the government could also have appealed to the high court to seize and auction the properties of chit fund companies that had taken investors for a ride, or written to the RBI and SEBI to act against them..............
Joint attack on fraud plans
....Sebi on its own lacks full-fledged powers to act against all kinds of “money-pooling” frauds, although a proposal to strengthen its arsenal is awaiting the government’s clearance. In the meantime, the regulator has decided to take a collaborative approach to bring to book perpetrators of these investment frauds, by seeking help from other regulatory and enforcement agencies. Sebi is tying up with other regulators and agencies depending on the needs and nature of the case, the official said, while adding that these entities include banking regulator RBI, SFIO, insurance watchdog IRDA, the Enforcement Directorate and the Economic Offence Wings and other police departments in various states.............
Court takes on ‘deposit’ firms
......The letter stated that according to the KMSS’s estimate, in the past few years, these companies had “illegally” collected around Rs 5,000 crore from investors in Assam. None of these, however, had the mandatory permission from any competent authority, be it Reserve Bank of India, Securities and Exchange Board of India (Sebi) or Insurance and Regulatory Development Authority (IRDA), to accept public deposits, it had alleged. The development assumes significance as it comes at a time when Saradha Group is facing the ire of depositors in Bengal and Bengal police are on the lookout for Sen, who has gone missing...........
1 registered chit fund, reveals RTI query
...........In response to some of the other questions, the officer in charge of EOI cell mentioned that chit funds in the state were controlled under Chit Fund Act 1982 and Registrar of Chit who is also the agriculture income tax commissioner was the controlling officer for all types of conventional chit. With regards to the action taken against any chit fund companies or owners, the reply stated that no information was available with the cell. with the cell in this regard it mentioned that EOI is the only cell concerned to take action. The Registrar of Companies and the Reserve bank of India by their respective acts can also take action, the letter further stated.............
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