Ringing in the new

Challenges that awardees of new banking licences face 

....The new banks cannot survive by being mirror images of existing banks. They have to harness their knowledge based on products they are familiar with. The applicants are a diverse bunch including non-banking financial companies (NBFCs) engaged in asset or commodity-based financing, industrial houses (engineering, infrastructure, telecom, media, technology companies), services companies (transporters, distributors, exporters, importers), all of them scattered across geographies. The successful transition from an NBFC to a bank, for instance, will depend on strong management, as it would be moving into new businesses with uncharted risk areas............

Read - Business Today

India's Best Banks 2013

.......In a recent interview with Business Today, RBI Governor Raghuram Rajan emphasised on speeding up the loan recovery process through debt recovery tribunals and asset reconstruction companies. "Our institutions dealing with distress are under-developed. That will make it hard for banks to take risks if they have no hope for recovery. We have to improve them," he said..........

Read - Business Today

Reciprocity sword hangs over big foreign banks

........The reciprocity principle in the RBI norms on subsidiarisation for foreign banks in the country meant that overseas lenders would be given near-national treatment here only if their home countries allowed Indian lenders to open branches without much restriction, people familiar with the development said. The chief of an Indian private bank said the reciprocity clause should be strictly followed in the interest of fairness. “We face immense hurdles in opening branches abroad, despite giving a lot of elbow room to banks of those countries when they operate in India. A level playing field is a must,” the banker said............

Read | Business Standard

RBI may issue bank licences in phases

The Reserve Bank of India (RBI) is likely to give out the much-awaited bank licenses in a phased manner, with public sector or quasi public sector enterprises getting the nod within January next year, given the fact that their track records are open and in public domain. This would mean a relatively less stringent due diligence process, a source familiar with the development said on the condition of anonymity. RBI may issue the rest of the licenses by the middle of next year...........

Read - HT

Come November - Pensioners' plight - S.Santhanam

An article by Shri S.Santhanam, General Manager (Retd), NABARD

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

From a wannabe MF, the NPS should go back to basics

...... The NPS needs to be at par with the other pension products in the market in terms of tax breaks. And the compulsory annuity of 40% of the corpus at retirement needs better options than are available today.

Read - Mint

5 reasons why inflation will moderate

.........In an Op-Ed in The Hindu, IGIDR Professor of Economics Ashima Goyal concurs with this position, saying ‘hopeful signals’ are emerging on the many nominal variables that have persistently contributed to high inflation in the past couple of years. ............

Read | Business Standard

Nitish asks banks to increase CD ratio

......Kumar made the appeal at the State Level Bankers Committee meet here and stressed on increasing the disbursement of education and agriculture loans, which was low in the state. He rued the slow progress in opening of bank branches in the state and said no panchayat should remain without a bank branch.......

Read | Business Standard

RBI steps will lower yields: Finance minster

....."Interest rates in government bonds have risen temporarily, but we hope that some measures the RBI will take, and when the next set of inflation figures come, if food inflation moderates, it's possible that the G-sec rates will go down,"...........

Read - TOI

HC admits winding up plea against UBHL

....UBHL had claimed that the plea of winding up deserves rejection as it had given corporate guarantee only in favour of KF Aero, a special purpose vehicle through which KAL acquired three aircrafts, and assignment of such a guarantee in favour of the bank by KF Aero discharged UBHL from any liability towards the bank. UBHL also claimed that Reserve Bank of India, which permitted it to give corporate guarantee to acquire aircraft, did not permit assignment of such guarantees............

Read - The Hindu

Is it appropriate to mention in commercial communications, “it is computer generated letter / report / statement / advice and therefore does not require any signature”.

.............Most of Foreign banks had since long started issue of term deposit advices with no signature of bank official. It bears the legend above. Some PSU banks too joined the bandwagon. Actually as per RBI directives on deposits banks are required to issue term deposit receipts and not advices and by receipt it is implied that it should be properly signed by competent official of the bank............

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

India's first all-women bank: ‘Good experiment, but let’s wait and watch’

......I should say the Bharatiya Mahila Bank is a very good initiative. The announcement made 8-9 months ago, in the Union Budget was certainly a welcome step. The focus in in this case is that the Board would be predominantly a women's board, and it's expected that the women on the board would be able to tailor-make schemes for the women to implement them on the ground. So maybe there will be synergy between those who are designing products and those who are using those products at the grass-root level - be it deposit schemes, credit facilities, or timings and days of operations............

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

Bharatiya Mahila Bank starts operations with seven branches

........"The setting up of the Bharatiya Mahila Bank is a small step towards the economic empowerment of women. It is also a reflection of our commitment to this cause. I am sure that the bank will fulfill the objective with which it is being established, namely financial inclusion of women and providing them equal and easy access of financial services," Prime Minister Manmohan Singh said while inaugurating the bank's first branch in Mumbai's Nariman Point. But not many appear convinced.........

Read | Business Standard

All-women bank born, aims for financial inclusion

Watch the video.............

New bank salutes girl power

.........The bank — which will be governed by a board of directors comprising eight women — is arguably the first of its kind in the world. Many banks in the Gulf and in the West have experimented with women-only branches. Bank Melli in Iran opened a women-only branch with great fanfare at Mashhad in June 2010. Dubai Islamic Bank opened a similar branch in 2001. And in 1964, the National Commercial Bank opened a women’s branch in Scotland where “you would need more than a ravishing smile to win an overdraft”. But it would be hard to find an entire bank with multiple branches that’s run by women alone............

Read - The Telegraph

Bharatiya Mahila Bank targets break-even in 3-5 years

 Bharatiya Mahila Bank Ltd (BMB), India’s newest public sector bank, is likely to break-even in the next “three to five years” and total business will rise to Rs.60,000 crore by 2020, finance minister P. Chidambaram said after inauguration of the bank on Tuesday. For Indian banks, total business is combination of deposits and advances. “In due course, the bank will be listed,” he said............

Read - Mint

Women bank starts with Kitchen loans

..........On day one, the bank introduced “kitchen loans” and assured higher interest rate on savings bank accounts to lure women customers. Women can borrow loans to redo their kitchen space, the place where most women spend most of their time, according to the bank’s chairman and managing director, Usha Ananthasubramanian. The loan can be availed for `50,000-700,000 at 2.5% above the bank’s base rate. The bank is yet to announce its base rate or the minimum lending rate. Other special products include loans for setting up catering services and hygienic day-care centres for children of working women. BMB also announced savings bank account interest rate of 4.5% for deposits up to `1 lakh and 5% for balances above `1 lakh. Most public sector banks offer 4% while a number of private sector banks are providing 5-6% on the savings bank account........

Read - DNA

RBI orders loans for women at 7 pct

................."This subvention will be available to all the PSBs on the condition that they make SHG (self help group) credit available at 7 per cent in the 150 districts," the RBI said in a notification. Likewise, the regional rural banks (RRBs) will be subvented to the extent of difference between the lending rates and 7 per cent for the FY-2014 on the condition they make SHG credit available at 7 per cent, it added.................

Read - FE

India's first women-only bank hires 1/3rd men for entry-level position

......The Institute of Banking Personnel Selection (IBPS), an assessment organization that conducts tests for financial institutions, has published a "provisional" list of 103 successful candidates for the post of probationary officers for the Bharatiya Mahila Bank, which had announced 115 vacancies for the entry-level post in September.........

Read..........

Good response to coin exchange mela

..............According to Prakash Gangur, Senior Manager of the bank, coins worth Rs. 6.2 lakh, bundles of fresh notes to the tune of Rs. 7.3 lakh and soiled notes worth Rs. 4.75 lakh were exchanged at the mela; such was the response that the mela was over as early as 3 p.m. Banks normally offer coins as change to customers, but this exercise followed instructions from the Reserve Bank of India to distribute them to general public as well.This time, the mela was only a daylong event.........

Read - The Hindu

Missing ATM guard aids attack

.....While police believe it is inexplicable that even big banks fail to follow simple security measures, they are quick to point out that the Reserve Bank of India guidelines do not prescribe a mandatory security guard. A senior RBI official told TOI from Mumbai: "Banks have some responsibility. They operate independently and not everything needs to be written and sent to them." The official also pointed out that the apex bank has, in fact, given specific guidelines to employ security guards at ATM centres located in remote areas and those in the proximity of educational institutions. "We have also issued guidelines directing banks to relocate or completely remove ATM kiosks from remotely-populated areas as they are vulnerable to crime," she said, adding there are guidelines which mandate that banks have an arrangement with local police in sensitive places or where thefts are common..........

Read - TOI

Will seek RBI help to make banks deploy guards: police

 “We have decided to bring this lacuna to the notice of the Reserve Bank of India through the Home Department seeking necessary directions in this regard.”

Read - The Hindu

Should Government look at introducing a currency note of 200 denomination?

...... For several reasons mentioned below I think Govt and RBI can closely examine the suggestion of introduction of currency of Rs 200 denomination.............

Read.......

Privileged and under-privileged banking customers

......Most of the so-called extra/special benefits that are sought to be extended by private banks to this handful lot of super-rich so-called ‘privileged customers’, who hardly ever seen to set foot into private bank branch portals, more often than not they are seen to leave bank visits to the secretary or chauffer. Consequently, the benefits remain a mere eye-wash, as they are seen to be hardly availed of by many as they matter little to them.......

Read - Moneylife

Why public sector banks underperform

...........Things have gone worse in the current financial year, setting alarm bells ringing for the banking regulator, the Reserve Bank of India (RBI), which has promised new guidelines for recognition, resolution and recovery of loans in trouble. The easing of asset classification norms after the 2008 global financial crisis has "killed credit quality," says one central banker. "Things are quite out of control," says another, pointing to the volume of restructured loans...........

Read | Business Standard

Forget leaky PDS, it's the banking system that needs a fix

Large numbers are generally used to grab attention to a crisis.RBI Deputy Governor K.C. Chakrabarty, known for his outspoken views, did exactly that when he said that Indian banks have written off a whopping Rs 1 lakh crore over a period of 13 years...............

Read | Business Standard

RBI checks with banks on prospective entrants

.....RBI, which is now screening the applications to confirm if the candidates are complying with the fit and proper criteria, before sending it to the high level advisory committee headed by former central bank governor Bimal Jalan. For the initial screening, the banking regulator has sought additional information from the aspirants which includes additional balance sheet, source of funding, possible investors and their source of funding, among others...........

Read | Business Standard

Competition act to cover forced bank mergers: MCA

.......MUMBAI: The corporate affairs ministry has turned down the Reserve Bank of India's request for a blanket exemption from the Competition Act for forced mergers of distressed banks initiated by RBI. The central bank had sought exemption under Sections 5 and 6 of the Competition Act, which requires prior approval from the government before a merger..........

Read - TOI

Chit funds regulation: SC notice to Centre, RBI

The Supreme Court on Tuesday issued a notice to the Centre, the Reserve Bank of India (RBI) and Securities Exchange Board of India (SEBI) seeking their response on a PIL for putting in place a proper mechanism to regulate functioning of chit funds in the country. A bench headed by Chief Justice P. Sathasivam asked the government and the institutions to file their response within four weeks..........

Read - The Hindu

FinMin, RBI panel discuss 49% cap on FII investment

........The Budget had put forth the proposal saying that FII and FDI definition should be clarified, below 10 percent would be FII and above that would be FDI. The panel which includes the Economic Affairs (EA) Secretary Arvind Mayaram, Reserve Bank of India (RBI) Deputy Governor HR Khan as well as Securities and Exchange Board of India (Sebi) EDs is looking at building this transition mechanism.............

Read..........

Onions Bring Tears to RBI’s Rajan as Prices Surge: India Credit

........“Structural weaknesses and seasonal volatility are being combined and that’s why we’re seeing gains in double digits,” Rao said. The RBI “will be closely monitoring food and fuel inflation over the next couple of months when food prices are broadly expected to decrease. If that doesn’t happen then the RBI would be forced to raise rates at a faster pace.”

Read.......

Policy enigma

......The measures proposed in the RBI’s monetary policy are hardly intelligible to the lay people for whose benefit they are supposed to work. But they have every right to understand them. After all the patient should know what medicine is being given to her/him. Unless the jargon is understood it would be difficult to judge the efficacy of the twin goals -- arresting inflation and accelerating growth -- announced in the recent review of the monetary policy for this year.............

Read - Deccan Herald

RBI should and will keep inflation under control: Andrew Michael Spence

Andrew Michael Spence, recipient of the 2001 Nobel Prize for economics (along with George A Akerlof and Joseph E Stiglitz), favours the Reserve Bank of India (RBI)’s stance on containing inflation, despite some sections seeking polices to boost growth. Spence is also on the same page as RBI Governor Raghuram Rajan as far as monetary stance is concerned........

Read | Business Standard

Bad loan lessons

.......... PSU banks are to blame for not being alert to warning signs—for 10 corporate groups, Chakrabarty points out, while bank credit more than doubled between 2007 and 2013, their overall debt rose 6 times. But there are larger lessons to be learned for all concerned.

Read - FE

RBI - Lessons from the past? - R.C.Mody

This refers to the report "RBI asks banks to increase bad loan provisions" (November 17). When faced with a similar situation the Reserve Bank of India (RBI) had appointed, in July 1974, a study group to frame guidelines on bank credit (known as the Tandon committee). The group, inter alia, examined whether norms could be evolved for the debt-equity ratio to ensure minimal dependence on bank finance. And as a result of its deliberations,..........

Read | Business Standard

Trouble at the bank

.....More worryingly, banks are able to recover fewer bad loans with each passing year. While nearly half of the reduction in NPAs in March 2001 was due to higher recoveries, this ratio is down to around 29 per cent today. While PSU banks clearly need to answer for this, it is something the RBI and the government also need to worry about. It is clear the debt recovery tribunals and the Sarfaesi mechanism are not working.............

Read - IE

Calling the bluff

The RBI Deputy Governor must be appreciated for finally calling the bluff of PSBs. While a host of relevant issues such as need for stringent appraisal, lax credit risk management and regulatory control draw a holistic picture of the NPA scenario, K. C. Chakrabarty missed out on some critical issues at the grassroots level. The principal issue is the poor skill level of decision makers, who take credit decisions out of crisis rather than conviction. The rush by PSBs to increase the size of their balance sheets ahead of perceived mergers further aggravated matters. Finally the important role of internal audit as an extended arm of the regulatory process and its efficacy as an early warning system should have found a place in his discourse. 

- D. Prem Nath, Thiruvananthapuram (HBL)

PSBs’ burden

Reserve Bank of India officials are quite right in flagging the risks to public sector banks from mounting bad loans. Gross non-performing assets (NPAs) of these banks have doubled as a percentage of their advances over the last three years. At over 4 per cent, this number is twice that of private banks. Worse, PSB books don’t fully reflect the real magnitude of the problem. Restructured assets (loans rescheduled at the behest of the borrower) make up another 8 per cent of PSB portfolios.............. 

Read - HBL

Kinks in the non-performing assets of banks

.......However, given the tricky bye-laws and categories of credit management in the Indian banking system, headline numbers can be misleading. As a presentation made by Reserve Bank of India deputy governor K.C. Chakrabarty at a recent conference shows, Indian lenders have resorted to devices such as technical write-offs and restructuring loans to show a reduction in their non-performing assets.........

Read - Mint

The NPA conundrum

........RBI, on its part, must address the broader issue of compelling banks to get into inclusive lending, where such risks may be high and will ultimately impinge on the quality of bank assets. Evidently, at some stage, we must be practical when it comes to lending and let this sense override emotion.

Read - FE

Automatic stabiliser

In textbook macroeconomic models, a floating exchange rate is viewed as an automatic stabiliser. When the balance of payments of an economy is under stress because of a large current account deficit or a drop in capital inflows, the currency depreciates, causing exports to increase and imports to decline, thus easing the stress. In the other direction, when there is a surplus situation, the currency appreciates, causing the current account deficit to widen, which eases the pressure. Of course, textbook models are oversimplifications, but that does not make them.....

Read | Business Standard

Bond yield spike should ease on RBI action: Chidambaram

Finance Minister P Chidambaram on Tuesday said the sharp rise in yield on government bonds, driven by high inflation, was temporary and would come down on the Reserve Bank of India (RBI) taking some steps. "We hope that with some measures the RBI will take, and when the next set of inflation figures come, if food inflation moderates, it's possible that G-sec rates will go down,"......

Read | Business Standard

Tea growers explore bitcoin option to expand global biz

.........However, the lack of domestic bitcoin exchange is now holding up plans to formalise the process. According to Ms. Peterson, Tealet is now approaching established exchanges that “we can integrate our growers’ business with”.  While bitcoins are not illegal in India, the Reserve Bank of India is “watching and learning about the developments in bitcoin” even though it has no intention of regulating it right now.

Read - The Hindu

Post Offices Can’t Sell Gold Coins

The finance ministry has cancelled India Post’s tender for sale of gold coins through its post office network through out the country. India Post had sought to sell gold coins at a time when the government is discouraging commercial banks to sell gold coins. The finance ministry has cancelled the demand. “The tender is cancelled” said finance minister P Chidambaram at a media briefing following the launch of the Mahila Bank on Tuesday............. 

Read - ET

Yet another PIL filed against Aadhar

Another public interest litigation has been filed has in a Kerala High Court questioning the government's move to link various welfare payments such as cooking gas subsidy with the unique identity or Aadhaar number. The petition, which has been accepted by the Supreme Court today, has also made the Reserve Bank of India and Election Commission a party. Court, has reportedly, asked the government and the central bank and election commission to respond to it........

Read | Business Standard

Has the global financial crisis dented central bank independence? - Grace Koshie

Grace Koshie looks at the post-crisis role of central banks, examining issues of fiscal dominance and weaker policy freedom in an increasingly inter-connected world demanding ever-greater transparency

...................The debate about the central bank’s mandate and its independence is an old one. The relationship between central bank autonomy (the words ‘independence’ and ‘autonomy are used interchangeably in this paper though these words could have slightly different connotations) and the inflation rate has been extensively investigated by the empirical economic literature. There is a fair degree of consensus that a single mandate such as inflation targeting is best for central bank credibility and for its independence. Today, there are 28 countries that use inflation targeting as a sole mandate, fixing the consumer price index as their monetary policy goal over a timeframe of two to three years................

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

The Reserve Bank's mission impossible?

............In the past, the job of the Reserve Bank of India (RBI) Governor tended to be relatively easy because delivering on RBI's mandate of low inflation commanded political and social support. The interests of North Block and Mint Road were broadly aligned. But the growth boom of the 2000s changed all that. Pursuing growth was privileged over slaying high inflation. In August last year, when growth began to fall below 5 to 6 per cent and, critically, when this deceleration began to seem more permanent, panic galvanised policymakers into reform action. But high and sustained inflation has never elicited a comparably robust policy response..........

Read | Business Standard

Election Commission allows launch of first all-woman Bharatiya Mahila Bank

.....The Election Commission has allowed the launch of the first all-woman Bharatiya Mahila Bank in the country tomorrow but asked government not to open its branches in Delhi and Madhya Pradesh and neither do publicity of the bank in these poll-bound states. In a letter to the Finance Ministry, the Commission has said government should ensure that no publicity of the bank opening be done in poll-bound states.............

Read - DNA

Emphasis on funding for women's skills development: Usha Ananthasubramanian

................While bank will do business with women across economic strata – high networth, middle class to low income group, there will be emphasis on funding for skills developments to help in economic activity. We are looking at assistance (credit) to set up well managed day care centres and also to start organised catering services..............

Read | Business Standard

Women’s bank learns from elder sibling in Maharashtra

For the Bharatiya Mahila Bank, the country’s first pan-India national women’s bank, it is a humble rural cooperative women’s venture in Maharashtra that has provided the critical input to succeed: How to lend to women who do not have collateral to back their loans. Chetna V Sinha, founder and chairperson of Mann Deshi Mahila Sahakari Bank, explained that this is the prime weakness in giving loans to women. The cooperative bank got around the problem by asking the woman’s husband to give an undertaking that his wife is a partner in the property and that she is taking the loan to develop her household. This is the same technique the Bharatiya Mahila Bank plans to adopt. In fact, it is Sinha who advised the new bank to do so. To become a part of the financial inclusion story, it is essential.............

Read - FE

Documentation of the history sought for

My View on "The kings of finance - Dr.S.S.Tarapore": 

The effort taken by several individuals and institutions like Reserve Bank of India with which they were associated has not been documented and placed in public domain adequately. Books like Barons of Banking and the 4 volumes of RBI History so far brought out attempt to make up for this gap. RBI should consider supporting meaningful documentation of the history of Indian Financial Sector bringing out the role of institutions and individuals, so that the present and future generation need not depend on ‘cut and paste’ solutions borrowed from nations with different history while solving India-specific problems in economic development. 

- M.G.Warrier

Need to read between the lines

My View on  "RBI Governor: Wizard of Communication - Dr.S.S.Tar...": 

Transparency in communication has received a boost in RBI during this decade. Dr Subbarao also believed in transparency in policy decisions and their implementation. Dr Rajan has the added advantage of being known for being fearless and fair while taking positions which he considered right. Some indications are available in the cover story featuring him in current Business Today (November 24 : His Own Man), for those who have not read his book Fault Lines. But his being transparent or forthright alone cannot save Indian Financial Sector. The clear messages RBI Governor gives have to be received in right spirit and acted upon in Delhi. Unfortunately, there are no positive signals yet. The initiative taken by RBI to create a rough inventory of domestic gold stock did not get the needed support. Exploiting domestic gold stock, making part of it ‘standard’ and creating a buffer stock of tradable gold will go a long way in resolving India’s present forex and CAD-related problems.  

- M.G.Warrier

Not CBI: FM needs to free the real ‘caged parrots’ — PSU banks

...........Many ideas are possible, but innovative thinking must start at the finance ministry – which has been unwilling to let go of its control of banks. Chidambaram himself may be happy to privatise a few public sector banks, but his government is a dyed-in-the-wool believer in public ownership. Like the CBI, our public sector banks are “caged parrots” answerable to different masters – politicians, the RBI, investors, and North Block, among others. Little wonder, there is little innovation.

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

Will ‘new-economy’ Rajan turn RBI on its head with Twitter and all?

...........It seems Governor Raghuram Rajan wants to throw all old school thoughts into the dustbin and bring in some new changes at the strictly conservative Reserve Bank of India (RBI). Rajan is a governor who comes without any bureaucratic baggage. His new steps, rather than beating the traditional safety drum, are likely to make the institution relevant in the decades ahead with financial sophistication........

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

Raghuram Rajan urges `dramatic remaking` of India`s banking system

........."I see over the next few years a dramatic remaking of the banking landscape," he told the Financial Times. "Both from the . . . new banks which are going to come on board, and the foreign banks which are going to be allowed to expand more freely. It will be a multiplier in terms of competition." International outfits such as Standard Chartered and HSBC account for only about 6 per cent of assets, but Mr Rajan says the RBI's new rules provide a "huge" opportunity to grow by expanding into areas such as trade finance, and even to "take over Indian banks at some point".............

Read.........

KVB opens 1st ultra small branch

COIMBATORE, NOV 18:  

Karur Vysya bank has launched its first ultra small branch at Balarajapuram village in Karur district. J. Sadakkadulla, Regional Director, RBI, Chennai, inaugurated the branch. The bank has appointed a business correspondent to man this branch and provide basic services such as opening of savings account, recurring deposit account, payment and receipt of cash etc.............

Read - HBL

SBT counters for senior citizens

......An official spokesman claimed that State Bank of Travancore is the first bank in the State to open special counters for senior citizens. The bank intends to open more such counters at selected branches, he added.

Read - HBL

Banks wrote off Rs 1 lakh cr in 13 years: Chakrabarty

........In his over hour-long interaction with the bankers, Chakrabarty used hard data to support his observation and blamed complacency on credit appraisal and credit management for the present situation of high non-performing assets and high incidence of loan recasts. Chakrabarty, who joined RBI after a long career as a commercial banker, was particularly critical of the system of a “technical write-off” by the lenders, saying he does not understand the system...............

Read | Business Standard

Banking on basics

..........The new lenders who will be licensed soon will not choose to become niche banks. If the finance ministry and the Reserve Bank of India want to start niche banks, they will pile up another set of sick lenders. ..........

Read | Business Standard

Kotak Bank gears up for competition from new banks and foreign players

.....Mumbai-based Kotak Mahindra Bank, which has the nation’s highest net interest margins, will open 500 new branches at locations including small towns and villages to shelter itself from the local subsidiaries of foreign banks and new domestic rivals, chief financial officer Jaimin Mukund Bhatt said in a November 12 interview. Competition for the 65 per cent of Indians that don’t have a bank account is set to intensify after central bank governor Raghuram Rajan introduced rules on November 6 removing branch restrictions on overseas lenders that form local units........

Read..........

Banks struggle to expand in unbanked, rural areas

......As per RBI instructions, at least five per cent of these villages should have brick and mortar branches. According to latest SLBC data, banking services have been provided in all 1,877 unbanked villages in the state with population exceeding 2,000 through brick and mortar branches, ultra small branches, BCs and mobile van banking by June 30, 2012. However the SLBC has stressed on looking beyond basic banking facilities like a pure savings account, a savings cum overdraft account, recurring or variable deposit account, a remittance product to facilitate electronic benefit transfer and other remittances and entrepreneurial credit at the door step of the customers...........

Read | Business Standard

'Banks' bookkeeping leaves investors in dark'

......Banks' accounting practices have come under regulatory scrutiny following the financial crisis when a number of banks, whose accounts showed they were healthy, had to be rescued by taxpayers. Policymakers are now trying to restore confidence in banks after the crisis so they can obtain more funding from investors rather than having to rely on central bank money.............

Read' | Business Standard

RBI to offer Rs.5,000 crore to SIDBI

..........“The liquidity support comes in the wake of slowdown in the economy which has resulted in liquidity tightness in a large number of Micro and Small Enterprises (MSEs) in the manufacturing and services sector, particularly due to delayed settlement of receivables from large corporate, public sector undertakings and government departments,..............

Read - Mint

Co-op bank fraud: Deccan Gymkhana cops seek RBI probe

......."All eight accounts were fake with one common 'introducer', who is a peon (in an educational institute in Kolhapur). We have written to the RBI requesting them to probe the issue at their level. It must be pointed out that this was not just one account but eight. So we believe that there is negligence, which needs to be probed by the RBI."..............

Read - IE

Are inflation numbers reliable? You be the judge!

....As early as in July 2011, the then Reserve Bank of India (RBI) Governor, D Subbarao had questioned the reliability and frequent revisions of some of these basic data which are vital for all policy decisions of the central bank and the government. “The RBI’s policy formulation is handicapped by frequent revisions to data. We make policies in real time and if the provisional data that these are based on are inaccurate, the resultant policies can turn out to be sub-optimal choices,” Subbarao had said......

Read - Moneylife

De-jargoned: Disinflation

.........A slowing rate of inflation is termed as disinflation. Inflation means the general rise in the price level in an economy. Disinflation is the deceleration in the pace of inflation or price rise. It is important to note that disinflation is different from deflation. Deflation is a state of continuous fall in the level of prices. So when policymakers talk about disinflation, it does not mean that the prices will fall. It simply means that prices will rise at slower pace. There is a difference...................

Read - Mint

Reserve Bank of India Recruiting 34 Assistant Manager Security Posts

.....Reserve Bank of India is inviting applications for the recruitment of Assistant Manager Security posts. Only 34 posts are available to fill up the gaps at various branches of Reserve Bank of India. Interested candidates...........

Read

When it comes to financial sector, India is way ahead of China

......India is fifteen years ahead of China in economic and financial market reforms. Interest rates in India are market determined with the RBI doing away with ad hoc government funding in the late 1990s. Government borrowing costs are market determined with the government bond yield curve being the benchmark that determines the borrowing costs for state governments, municipal corporations, banks and corporates. Indian government bond market, one of the most liquid in Asia, is well regulated by the RBI and is also fully electronic. The banking system in India is well regulated and......... 

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

Indian Central Bank Puts Limits on Low-Cost Cash

.........Two people close to the central bank, who were not authorized to speak on the record, say it will deliberately go slowly in removing the cap on funds that banks can borrow via the facility, even as it unwinds other emergency measures imposed to prop up the rupee. Having a money-market yield curve would help investors and companies better price risk across a range of maturities and should make markets more liquid..........

Read - The New York Times

Exim matters

................However, in the absence of specific instructions from RBI, the practices were not uniform and there were circumstances when some authorised dealers preferred to refer the matter to the central bank, get approval and then proceed. The latest AP (DIR) Circular no 70, dated November 8, now prescribes a uniform procedure and, to that extent, is welcome................

Read | Business Standard

RBI designates 29 bank branches to collect advance income tax

.....“Pay IT dues in advance at RBI or at authorised bank branches. It is observed that the rush for remitting income tax dues through the RBI has been far too heavy towards the end of March every year and it becomes difficult for the RBI to cope with the pressure of issuing receipts although additional counters to the maximum extent possible are provided for the purpose,”...........

Read - Mint

Pocket to wallet money for tiny tots

..........Before beginning the journey of financial education for your kids, you need to make sure that you are patient with them. As their financial acumen is minuscule when compared to yours, don’t expect them to become financial experts in one day. Set practical examples for them, which will make them easily get the concepts and value your financial decisions. In the end, you need to teach your kids to understand the value of money..................

Read | The Asian Age

For tax payers, there' more to I-T Act than exemption on income

..............Earlier, only taxpayers paying Rs 1.80 lakh or more annually as rent had to mention the PAN number of the house owner. This year, the limit has been revised to Rs 1 lakh bringing Nidhi under the provision. The change is a part of the many amendments incorporated by the Central Board of Direct taxes (CBDT) through Budget 2013-14 announcement, notifications and circulars in the current financial year.........

Red - IE

Gold smuggling into India rising. Who are the new 'Dons'?

........Reserve Bank of India (RBI) governor Raghuram Rajan has admitted that there is increase in gold smuggling. However, he said it has been on a very low base and the shrinking of current account deficit (CAD) had largely to do with the restrictions places on gold imports. Demand for gold jewellery among Indian consumers remains strong, but reduced supply has prevented this demand from being fully realised during the third quarter........

Read - Moneylife

RBI Governor: Wizard of Communication - Dr.S.S.Tarapore

Reserve Bank of India (RBI) Governor Raghuram Rajan, in his short stay at the RBI, has decisively proved that he is a communicator nonpareil

............He is decidedly the Wizard of Communication and while undertaking policies for monetary correction, he should use his persuasive skills to calm the nerves of markets. I do not tire of repeating the celebrated statement by India’s foremost monetary economics academician, P R Brahmananda, who said: ” Not caring about inflation is like going into battle without caring for the wounded, the dying and the dead.”

Read - FPJ