.....B.K.Mishra, the banking ombudsman for Odisha chaired the meeting and elaborated the benefits of banking ombudsman scheme as well as initiatives taken by the RBI to make banking more customer friendly in the country. He said in a State like Odisha awareness abut banking ombudsman needed to be enhanced. Senior vice president, Banking Codes and Standards Board of India (BCSBI), Mumbai also took part in this meeting and through his speech highlighted the features of code of commitment of banks to customers........
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.
Saturday, May 24, 2014
Finmin officials propose I-T exemption of Rs. 30K
North Block – the seat of the Union finance ministry – is seeing marathon meetings, wherein top government officials are preparing representations for the new government, key among them being increasing the income tax exemption by Rs 20,000-Rs 30,000, addressing the retrogressive taxation and taking up expenditure reforms. In their efforts, the finance ministry babus are likely to work through the weekend, before the new government under prime minister elect Narendra Modi is sworn in on Monday.............
Not in race of Finance Minister, says Deepak Parekh
...."The people in the government who are running the country, they have to take a view, they have to then decide whom they want to take advice from, do they want advice or they know it, what are the areas they want to pick expertise from, which are the areas they take expertise from,".....
Reserve Bank of India 'cannot reverse' order on district central cooperative banks
...............However, RBI promptly replied that the decision cannot be changed as there was no such provision in the Banking Regulation Act. The state has also filed an appeal before the ministry of finance (MoF) against the RBI decision. To this, the RBI has said that there is a provision to file an appeal if an existing licence is cancelled, but not if an application to get a licence is turned down, said a source..............
SBI shows some promise in bad loans management
.......While the reduction in outstanding bad loans is similar to the trend seen across public sector banks this quarter, the fall in slippages for SBI is encouraging. Details of asset sales and the sectoral break-up of slippages and other numbers would provide more clarity and are awaited. The bank also seems to have delivered on its third promise of focusing on cutting costs.........
CRR a useful tool in RBI's hands: SBI chief
....."In my wisdom, the CRR is an useful monetary tool in RBI's hands and it depends on how it was being used by the regulator," ......
Court dismisses petition challenging SARFAESI Act
........As per the guidelines issued by the Supreme Court of India, when an asset is treated as a NPA by the respective banks, a rigorous recovery machinery is put into action. It is this provision, which adopts the directions or guidelines relating to asset classification issued by the RBI was put to challenge before the court as unconstitutional, said the order issued by the division bench comprising of Justice N Paul Vasantha kumar and Justice M M Sundresh...............
SBI exploring ways to declare Mallya ‘wilful defaulter’
.........The source said that as per RBI guidelines, it would have to be proven that the borrower had diverted funds which he taken from the bank and is not paying up despite having the ability to pay. “If we are sure on these two points, then the bank will declare Mallya a wilful defaulter,” the source said.........
RBI simplifies Documentation for NBFC Registration
.........It is further advised that the Checklists mentioned are indicative and not exhaustive. The Reserve Bank can, if necessary, call for any further documents to satisfy itself on the eligibility for obtaining registration as NBFC. In the event of the Reserve Bank calling for further documents in addition to those mentioned in the checklist, the applicant company must respond within a stipulated time of one month failing which...........
FIEO hails RBI moves to boost exports
....FIEO chief stated that RBI could consider incentivizing those exporters who show a larger commitment to exports as against the stipulated 20 percent by allowing a commensurate increase in the import cap assigned to them. FIEO Chief further stated that given that India is a major consumption centre gold future have seen a jump following the announcement. The announcement of allowing STH /PTH also reflects that resolve of the New Government towards free market economics as against a canalized/restricted regime in order to propel business both within the country and outside, ....
FICCI, IDBI sign pact for cheaper credit to MSMEs I
...The FICCI-CMSME and IDBI partnership will grant best pricing offered at the relevant time by IDBI including concession of 100 bps and charging of processing fee as low as 0.10 per cent to the proposals referred by FICCI-CMSME, the industry chamber said in a statement.......
Friday, May 23, 2014
Rajan predicts ‘revolution’ in banking industry
Rajan,
the RBI governor, delivered an impassioned speech at the Competition Commission
of India on Tuesday, where he laid out the two "grand bargains"
between banks and government that shaped the country's present financial
landscape – and more recent developments that are breaking them down.
Under
the first bargain, he explained, commercial banks received low cost deposits,
access to the RBI's liquidity facilities and "some protection from
competition" in return for financing the government, opening branches in
unbanked areas and making loans to priority sectors (farmers and students, for
instance).
Rajan
said this bargain is "under threat" as banks increasingly face
competition from financial markets and real assets for household savings, while
the government "cannot continue to pre-empt financing at the scale it has
in the past".
The
central bank is "committed" to lifting the barriers of entry facing
new banks. It granted two new commercial bank licences last month and is moving
towards a system where banking licences will be available all year round – or
"on-tap", as Rajan put it.
This
does not mean that every pretender will be handed a licence – Rajan stressed
that only "those who have a proven track record and reasonable
capital" will be approved. There are, however, ‘differentiated' licences
available for smaller institutions and "those who see synergies in doing
only one part of the banking business" such as payments.
"Small
banks tend to be better at catering to local needs, including needs of small
and medium businesses," Rajan explained, while "a payments bank,
which will take deposits and offer payment and remittance services but be
constrained to invest all its funds in safe instruments such as government
securities, could be very synergistic with other existing services."
Not
everyone is convinced of their value. Rajan said some of his colleagues at the
RBI consider payments banks "unviable", while others are concerned
they would "skim the cream of banking business away from regular
commercial banks". Rajan, however, seems ready to take a leap of faith.
Payments
banks would, he argued, reduce the obligations imposed on commercial banks,
specifically by buying government securities (for liquidity purposes) and
allowing commercial banks to diversify.
Rajan
also called for changes to the role commercial banks play in achieving financial
inclusion. Even if they are forced to extend financial services to remote
areas, he said, banks will not necessarily reach out to the local population.
"The
reality is that if the mandate is unprofitable, banks will find ways to avoid
them," he said. "Not all forms of inclusion can be made profitable,
but we should give banks the freedom to try new approaches, perhaps drawing in
other institutions that can traverse the last mile to the underserved where
necessary."
The
second bargain Rajan outlined was between the public sector banks and the
government. These banks undertook "special services and risks" for
the government, he explained, and received their backing in return.
Public
sector banks tend to fund large, risky infrastructure projects. Rajan warned
this kind of financing is becoming more sophisticated, and public sector banks
may struggle to meet the new challenges as "past hiring freezes have
decimated their middle management" and they are "constrained by
government rules and second-guessed by vigilance authorities".
RBI’s role in Modi government
..While RBI will have a role in context of monetary policy measures, action on part of government will automatically dwarf the role of RBI. The central bank can definitely contribute as many central banks do in context of overall policy framework in the country and should not setting economic policy for growth. In the days to come, the government will decide what kind of role RBI has to play not by changing the governor or its key officials, but by initiating action.
Seven steps to an economic rebalancing
The analogy of what might happen to an aircraft when it suddenly drops from 40,000 feet to 20,000 feet in a matter of seconds is one that lends itself to describing the state of the Indian economy. After smooth sailing at close to nine per cent growth rate it suddenly dropped to less than five per cent in a very short time, leaving behind unemployment, social unrest, banking woes and stuck projects in its wake. The huge task before the Narendra Modi government now will be to quickly revive the economy. In doing so............
Five bank unions to protest Nayak panel report
......"Bank employees will also be asked to give their views on the committee's report in their individual capacity to the Reserve Bank of India (RBI). The RBI has sought public views on the committee's report." Besides AIBEA, the protesting unions are All India Bank Officers' Association (AIBOA), Bank Employees Federation of India (BEFI), Indian National Bank Employees Federation (INBEF) and Indian National Bank Officers Congress (INBOC).........
93rd State Level Bankers’ Committee meet
....... Regional Director RBI (J&K State) K K Saraf, General Manager NABARD Ranbir Singh, Deputy Secretary, DFS (MoF), GoI A K Dogra other senior officers of banks, RBI, NABARD, state government departments and developmental agencies attended the meeting. Abdul Rahim Rather appreciated the banks for improving the credit-deposit (CD) ratio which is above 40 percent in aggregate. “Even as it’s a significant achievement to surpass the CD ratio target, overall progress still remains considerably below the national benchmark of 60 percent, hence banking fraternity need to redouble their efforts to meet the benchmark in the current financial year,” he said...........
Hit by the rupee
.........Going by what some of the BJP’s favourite economists like Arvind Panagariya have said, it might well be in favour of a weak rupee. Panagariya had been sharply critical of Duvvuri Subbarao when he was RBI governor for not buying enough dollars when he had the chance — buying dollars would have increased forex reserves and also kept the rupee weak. There is no robust relationship between......
Ache din for Gold jewellery Industry
...The latest measure from RBI will curb smuggling in the 2nd biggest world gold buyer after china. After the curbs from RBI to control CAD , the move created parallel unofficial channels of entry for gold, and some estimates point at nearly 200 tons of illegal imports in 2013 alone. While the Supplies will improve with this latest directive, the bullion industry is still eyeing further relaxation on the curbs for the industry to come back to normalcy.........
RBI set to restore $ 2-lakh limit for spending abroad
The Reserve Bank of India is likely to again allow individuals to spend $ 200,000 per year abroad, including in real estate, reversing a clampdown imposed in August 2013, that had brought the limit down to $ 75,000. The move is a confidence-booster measure the new government is expected to welcome as a sign that India has successfully navigated the rupee meltdown, which began in May 2013..........
Soaring demand for SBI
Like other government-owned banks, State Bank of India (SBI) may be troubled by non-performing assets, but it remains the first choice among government employees. Till recently,...........
IDFC seeks RBI nod for Rajiv Lall as chief of its proposed bank
.........."Rajiv Lall's name has been proposed for the post of MD & CEO of the bank. The business plans for each business group are being worked out,'' the banker said on condition of anonymity. "The consumer banking unit at the banking entity would be headed by Naval Bir Kumar.'' This team is planning to begin its consumer banking foray by launching home loan products. However, the strategy is still being deliberated and a business decision is yet to be taken.''
State wants RBI to relent on stricken DCCBs
................State cooperatives secretary Rajgopal Deora has sent a letter to RBI saying that even as the state government had prepared a bailout package earlier, it could not be granted due to the election code of conduct coming into force. Now, in principal approval has been granted to the package, on the basis of which RBI may reconsider its decision. The procedure calls for an appeal to be filed before the ministry of finance to overturn RBI's decision. The process has already begun. The state government has also asked RBI to release funds remitted to the Nagpur DCCB specifically for payment of teachers' salary and hailstorm-hit farmers..............
Bank boards as 'NPAs'
...........In general, it seems the questions nobody has asked are: can PSB board members really provide the management with guidance and control as their mandate formally requires? Does the composition of the board matter for the bank's performance during a crisis? Attempts to improve the quality of PSB boards have been made in the past without results. For example, the Ganguly committee on corporate governance in banks had raised some critical issues way back in 2002. Among other things, the committee had suggested that the boards must have eminent people who are capable of providing a necessary oversight coupled with their duties of loyalty to the shareholders and provide the necessary checks and balances. The board should also be empowered to question the management and ...............
Task for Narendra Modi: Finance ministry draws up action plan to fix Rs 2.4 lakh-crore bad loan mess
...The RBI, in its recent guidelines on Joint Lenders’ Forum and Corrective Action Plan, had specified timelines for cases where the lenders have chosen to recover bad loans, in addition to other timelines on restructuring and wilful defaulters. But the delays continue. Former RBI deputy governor K C Chakrabarty had pointed out that an emerging but unwelcome trend in the banking sector was the rise in large value frauds (of above Rs 50 crore) in consortium lending accounts. He said in some cases, there was a lag of over 12-15 months in declaration of the same case as fraud by different banks......
IDBI, SBI group report higher write-offs than recoveries in FY14
....Public sector bank (PSB) executives said the write-off indicates cancellation from an account of a bad debt or worthless asset. The provisions are made for such accounts in line with regulatory norms............
Multiple bank accounts may just be more pain than gain
............."Frauds can occur, at times, in collusion with insiders, as they know that the account holder has either forgotten about the account or has shifted and is not likely to return. So, fraudsters initially with start by making a small withdrawal; keep a watch for some time and thereafter withdraw the entire balance. Despite various systems that are in place, frauds do take place in inoperative or dormant accounts,"
Depositors of Lokseva Co-op Bank in dilemma
.........Kiran Sonawane, RBI-appointed administrator of the Lokseva Bank said the current 12 per cent Non-performing Assets (NPAs) of the bank will be brought down to 10 per cent soon. He said a request will be made to the RBI for increasing the withdrawal amounts for sensitive cases such as student expenses, ailing people and those who need financial support for marriages............
Loan once rejected may always be rejected
..."We have to see some cohesion among PSBs. There will be a joint forum to share information for large cases. If one bank says no to a loan other banks should be aware of it. Then it's up to the bank whether it still wants to extend the loan,".....
Bank to pay for letting client's wife renew FD minus his nod
.........The FDs were renewed by the bank under a new scheme on Kriplani’s name after they matured in 2012, on his wife’s instructions. But Kriplani said the bank can’t do that without his consent. The forum observed, “Merely because Vira Kriplani is the wife of the complainant and she was holding a joint saving account, the defence taken by the bank cannot be accepted............
Read - TOI
Bank slapped with Rs 3 lakh fine for unsolicited calls to custome
Annoying a customer through unsolicited promotional phone calls, text messages and emails has cost HDFC Bank Rs 3 lakh. The State Consumer Disputes Redressal Commission slapped the bank with the fine for "harassing" a senior citizen despite his request to unsubscribe from promotional calls. ............
Two SBI employees booked for fraud
Two employees of a State Bank of India (SBI) branch here have been booked for allegedly committing fraud, police said today. The alleged fraud, which involves illegal transfer of Rs 1.15 crore, took place at the SBI branch in Kadiri area and came to light during inspection of accounts, they said. ..........
Thursday, May 22, 2014
Making government banks bankable
........The key shift that needs to be made is in the relationship of the government with the public sector banks. Till now, government control, especially through the finance ministry, has been complete with the banks being used to achieve objectives of state policy. This “government-as-sovereign” role has deeply politicized governance in these banks. Directors on the board are appointed either in keeping with anachronistic provisions of laws such as the Banking Regulations Act, 1949 or through political interference. As a result, ............
Indian Banking At Cross Roads ?
........Thus in nut shell we can say that there are challenging periods ahead for Aam Banker, as they have to continue to struggle with long working hours, poor salary and pressure from unions to go on strikes frequently on issues on which they may not be interested to go on strike etc. They have to bear the wrath of the government and public for the ills for which they are not directly responsible. Now they need to take their independent decisions rather than swayed by emotions. If bank reforms take place in the right earnest and government holding is brought just below 50%, they will have more positive impact than negative vibrations. In such a situation officers may be out of CVC clutches and RTI. They will not be forced to give loans purely on political and corrupt considerations. With options of new banks, youngsters can look for greener pastures elsewhere. However, ............
Read.........
Monetary relics
.....For a start, the RBI could remove the SLR/CRR obligations on long-term bonds or deposits raised by banks to fund infrastructure projects. This is especially relevant in an economy in dire need of big-ticket investments. Given that infrastructure already accounts for over a third of all outstanding loans by banks to industry — not to mention a significant portion of their stressed assets — banks may well be reluctant to lend further ............
Recovering NPAs
.............This refers to the Charan Singh's article "Why are NPAs higher in public sector banks?"(May 20). Comparing non-performing assets (NPAs) and the recovery practices of private and public banks is like comparing apples and oranges since the internal ecosystems both work in are poles apart. The very fact that private banks have urban, higher ticket-size assets and mostly do not tread in the muddy backwaters of the Indian economy - infrastructure and direct agriculture - helps ........
New Govt to decide on RBI Dy Governor appointment
.......The Prime Minister’s Office has now returned the file to the Department of Financial Services in the Finance Ministry with a note that the next Government will take a call on the RBI Deputy Governor’s appointment, sources close to the development said.............
Banks must build a structure to provide superior and efficient customer service - Deepali Pant Joshi
Inaugural address by Dr Deepali Pant Joshi, Executive Director of the Reserve Bank of India, at the Conference of Principal Code Compliance Officers of banks, convened by the Banking Codes & Standards Board of India (BCSBI), Mumbai, 20 May 2014
.........Financial consumer protection, when reinforced with financial inclusion and financial literacy, will lead to enhanced financial stability. We have had a great thrust on financial inclusion; as a result, several new consumers of banking products have come into the banking system. We have to ensure adequate customer protection for these new users of banking services. We have to help them through financial education, literacy and awareness to use the diverse range of products and services offered by the banks. Awareness of the customer has to be increased. With greater awareness of customers, must come, heightened responsibility of the provider of financial services. Please appreciate that today RBI, BCSBI and banks are all working under a greater lens of public scrutiny and under Right To Information...............
Read........
Bharatiya Mahila Bank included in second schedule to RBI Act
.......Post inclusion in the second schedule or commercial bank category, the lender becomes eligible for loans from RBI on bank rate and also acquires membership of clearing houses. Also, it provides that any activity of the bank would not adversely affect the interests of depositors. The Reserve Bank in a notification today said, ". The name of Bharatiya Mahila Bank Limited has been included in the Second Schedule to the Reserve Bank of India Act, 1934.".............
રિઝર્વ બેન્કમાંથી ૨૦ રૂપિયાની નકલી નોટ મળી
.........તમારા ખિસ્સામાં પડેલી ૫૦૦ કે ૧૦૦૦ની જ નહીં પણ ૨૦ અને ૫૦ રૂપિયાની નોટ પણ નકલી હોઈ શકે છે..! હાલમાં જ રિઝર્વ બેન્કમાંથી ૨૦ રૂપિયાની નકલી ચલણી નોટ મળી આવી છે. છ મહિનામાં ૨૫ લાખ રૂપિયાથી વધુની ૪૨૦૦થી વધુ નકલી ચલણી નોટ શહેરની એક ડઝન બેન્કમાંથી મળી આવી છે. ઉચ્ચ પોલીસ અધિકારીઓનું સ્પષ્ટ કહેવું છે કે, પાકિસ્તાન ભારતને પાયમાલ કરવા માટે હવે ૧૦૦૦ કે ૫૦૦ નહીં પરંતુ આવી નાની ચલણી નોટો પણ છાપવા લાગ્યું છે........
Raghuram Rajan's RBI to banks: Make all new ATMs talking machines from July
...........The RBI's directive today came on its prior advice to banks in 2009 to make bank branches and ATMs accessible to people with disabilities and make at least one-third of the new ATMs installed as talking ATMs with Braille keypads. "It is, therefore, reiterated that banks should make all new ATMs installed from July 1, 2014, as talking ATMs with Braille keypads," RBI said in a notification............
नई पहल, अब ATM से निकलेगा 50 रुपये का नोट
.....RBI ने निर्देश दिया है कि अगर ATM में 500 रुपए के नोट रखे हैं तो उसमें 100 रुपए के नोट होने चाहिए। इसी प्रकार 100 रुपए के नोट हैं तो उसमें 50 रुपए के भी नोट होने चाहिए। RBI से मिले इस आदेश के बाद कुछ बैंकों ने अपने ATM में 50 रुपए के नोट डालने शुरू कर दिए हैं।
Read......
RBI defers Aadhaar-linked payment plan mechanism
..........."This was communicated by the regulator to Indian Banks Association...While the project has not been scrapped, it has been kept in abeyance," said a banker. IBA is the association of bank managements. "It took a while for RBI to take the decision... that we believe is because of the importance that the UPA II government had placed on Aadhaar. It was a favourite project under Nandan Nilekani, who everyone thought was very close to the power centres. The panel's report was not made public,"
SBI Launches Tab Banking Service
.........Under Tab Banking, the bank’s staff will visit the customers at their home or office and by using the tablets get complete formalities for opening an account like photographs of applicant, scan identity/address proof and fill in the application in front of the customer and upload it to the central hub for further processing.........
Cheque clearing plaints force review of uniform holiday calendar
.....A Reserve Bank of India circular has attributed the delay to ‘taking extension for return-clearing on days which are not declared as holiday under uniform holiday calendar’. The circular said that the Department of Payment and Settlement Systems did not favour providing blockage/extension on days which are not declared as holiday according to the calendar. It may be recalled that the uniform holiday calendar was launched in Chennai and Mumbai last year and covered several States/Union territories.............
Inflation control tops RBI agenda for new govt
........With inflation-control on top of RBI Governor Raghuram Rajan’s mind, sources familiar with the developments said implementation of the Urjit Patel committee’s recommendations will be the main agenda the central bank will take up for discussions with the new finance minister. The Patel committee had suggested inflation targeting should be RBI’s singular mandate and the central bank should be accountable for meeting the target.........
Bank fined Rs. 12,000 for not returning property documents
..After this the complainant requested the bank to hand over his agreement documents. The bank however failed to do so. Aggrieved by this, the complainant approached the forum and filed a complaint. The forum after going through the complaint asked the bank to file its reply. The bank however failed to do so. The forum while passing orders maintained that after the complainant had repaid the entire loan amount, it was the bank’s duty to hand over the documents, but it did not do so. ..........
Many NBFCs Not Following Rules, Says Home Minister
.........The RBI code asks all NBFCs to publish their interest rates on websites and other media. The loanees should be given awareness on interest rates and other conditions. ‘’Though the RBI is the authority to act against such violation, the police can act up on specific complaints,’’ he said. The minister said micro-finance agencies are also liable to follow the RBI guidelines...........
RBI shores up currency reserves
.......“The RBI maintains a foreign exchange reserve buffer that is commensurate with the needs of the Indian economy,” the central bank said. Meanwhile, an RBI committee is reviewing measures rolled out last year to stabilise the rupee, according to one of the officials. Those steps included currency swap concessions for banks raising money from abroad and a special dollar window to state oil companies.......
Reserve Bank of India eases gold import rules
........Commenting on the RBI decision, the All-India Gems and Jewellery Federation (GJF) Chairman Haresh Soni said this is a positive step for the industry as supplies will increase. It will help in reducing the domestic gold prices as this smoothening of supply will help in reducing the premiums, which currently is ruling at USD 80-90 an ounce, he said. India is the largest importer of gold, which is mainly utilised to meet the demand of the jewellery industry......
Wednesday, May 21, 2014
RBI plans radical overhaul of customer protection norms
RBI to austere customer care; says banks must shape up
.......Banks may soon have to pull up their socks if they want to avoid being named and shamed. Starting next year, the Banking Code and Standard Board of India (BCSBI), a watchdog set up by the RBI will publicly declare the names of all those banks that failed to adhere to the customer service rules prescribed by them. BCSBI says it has already started grading banks based on the quality of their services and hopes that this will force banks to behave better. AC Mahajan, Chairman, BCSBI says, “Governing council decided monitoring codes for so many years then why not start rating banks.
RBI GOVERNOR IN MODI ERA - TO BE OR NOT TO BE...................
.............RBI is accountable to the Finance Ministry and not the
Parliament but at the same time, RBI Governors have been strong enough,
independent enough to never allow the Finance Ministry to dictate what should
go into its monetary policies. Rajan’s predecessor, Subbarao was extremely
independent, even to the extent where he and Chidambaram could not see
eye-to-eye as he refused to toe the line set by the Finance Ministry. Rajan is
also unlikely to dance to the tunes of the new Govt and his steadfast focus on
keeping a tight leash on inflation will continue..............
FM choice, Rajan retention & reforms to drive mkt mood :DBS
......"The triggers for further equity action will be the new government's reform agenda. In the immediate term, selection of the finance minister and decision to retain the RBI chief are likely to provide a boost to sentiment and keep the rupee supported," ........
The fifth 'C' gets going at ICICI Bank
...........The CEO says she has no problems if people refer to her as a boring banker because of the bank's obsession with caution, as the so-called boring part of any banking business gives the core operating revenues. "The extra cream and cherries will depend on how the environment moves. In the banking business, you have to take risks, but the risk should be understood, quantified and priced in. It is risk management and not risk avoidance," Kochhar says. The move has paid off well in the current business environment as even though non-performing assets, or NPAs, and restructured assets have gone up requiring higher provisions, the bank has been able to increase its net interest margins, giving it the ability to absorb the extra risk.............
Obituary
Shri GUL BUTANI (70), our colleague from Economic Department expired on May 19, 2014 at USA. He was a brilliant officer and a wonderful associate while in the Bank. May his soul rest in peace.
- PM PRITHIANI
RBI to take over management of Telangana’s public debt from 2 June
.........."Under the agreement, which shall be effective from 2 June, 2014, the Reserve Bank of India shall carry on the general banking business of the Government of Telangana, manage its rupee public debt and act as the sole agent for investment of Government’s funds," RBI said in a release today...........
Inflation control tops RBI agenda for new govt
............While some of the recommendations of the panel have already been implemented, the government’s comfort is required for pushing through some of the other key suggestions, such as setting up a five-member monetary policy committee (MPC) with a majority of the members representing RBI. The finance ministry under P Chidambaram had raised its reservations on the issue and made a detailed presentation to the Prime Minister’s Office (PMO). Since no conclusion was reached during the previous government’s tenure, sources indicated Rajan would engage with the new government on this issue...........
New govt must get stalled projects off the ground on priority: bankers
.......Bankers want the government to push economic development on a priority basis. Pressing issues such as policy stability and simplification of business regulations should be carried out seamlessly, they said. For the last two years, India has seen sub-five per cent annual growth; for this year, most growth estimates stand at 5.5 per cent......
RBI introduces common registration form for various NBFCs
.........."Now, there will be a common application form for Non- Banking Financial Companies (NBFCs), Non-Banking Financial Company-Micro Finance Institutions (NBFC-MFIs), NBFC-Factors and Infrastructure Development Finance- Non-Banking Financial Companies (IDF-NBFCs),"...........
NBFCs should follow fair practice code: Ramesh Chennitala
Home Minister Ramesh Chennithala on Tuesday urged non-banking financial companies (NBFCs) to follow the Fair Practice Code stipulated by the Reserve Bank of India (RBI) last year. They would face action if they failed to comply with the code, he said..............
RBI to have regular process of bank licences: Rajan
Reserve Bank of India Governor Raghuram Rajan Tuesday said the central bank would soon announce a regular process of granting bank licences, ending the current system of giving it in tranches. "The Reserve Bank of India is committed to freeing entry in banking," Rajan said at an event organised by the Competition Commission of India.............
RBI chief floats policy balloons
..........PSBs, said Rajan, were in a worse position than their private counterparts in attracting human resources. In the past, he said, PSBs had the best talent; today, past hiring freezes had decimated their middle-management ranks, with private banks having also poached talented personnel. He advised state-owned banks to recruit laterally. "But, to do so, they need to be able to promise employees responsibility, as well as the freedom of action."...........
RBI says introduction of payments banks can reduce SLR ratio
......A payments bank, which will take deposits and offer payment and remittance services, will be constrained to invest all its funds in safe instruments such as government securities, Rajan said. The RBI governor said the proposed Post Bank could start as a payments bank, making use of post office outlets to raise deposits and make payments. The Department of Posts had applied for a banking licence in the last round. At that time RBI said it would consider the application of Department of Posts separately in consultation with the government. Rajan said a commercial bank could convert itself into a payments bank by maintaining 100% SLR margins, indicating that regulations will not favour a payments bank unduly..........
Recommendations to Improve India's Public-Sector Banks' Governance Are Credit Positive
.........Although we do not think it is likely that the government would allow its stake in public-sector banks to fall below 50%, there is a higher probability that the government would implement a watered down version of these recommendations. Even such an outcome would be credit positive for public-sector banks.
Bank licences: RBI may bet big on small NBFCs
............ “A number of eminently practicable suggestions have been made to reform PSBs. We need to examine all these ideas carefully, many of which will help give public sector banks the flexibility to compete in the new environment.” Rajan did not quite agree with outgoing finance minister P Chidambaram's idea of Indian mega banks, which can compete on a global scale. “Rather than focussing on mergers (to form mega banks), it is better to have a good management structure and proper governance in place for all banks.”...........
PSU banks need to free themselves from govt influence: Raghuram Rajan
.............."If public sector banks become competitive, and especially if they do so by distancing themselves from the influence of the government without sacrificing their 'public' character, they will be able to raise money much more easily from the markets. "Indeed, the better performers will be able to raise more, unlike the current situation where the not so good performers have a greater call on the public purse. Competition will improve efficiency,"...........
A Golden Opportunity to Move Forward on the Reforms Path
........So what is it that a new government with the comfort of parliamentary numbers should do? India now has several regulators in the financial sector enjoying varying degrees of autonomy and respect. Over the last decade or so, after transfer of power from the ministry of finance to the new regulators, the government has chipped away at some of the institutions. One of its failures has been the inability to accept and settle professional differences with the regulators as illustrated by the experience of Sebi during CB Bhave and KM Abraham's tenure and at RBI during the tenures of YV Reddy and later D Subbarao. A new finance minister will have to mend ties with some of the regulators, alter the terms of engagement and allow them to grow and respect them without the shadow of a mai-baap relationship, and also ensure accountability .........
Governance reforms in banks: The Nayak Committee Report
..........The Nayak committee needs to be complimented for taking the bull by its horns and addressing the issue of process squarely. While arguing for fundamental changes in the way the public sector banks function, the committee presents a compelling case by examining the performance of these banks in comparison with the private sector counterparts. The committee, starts its report by pressing the alarm bells on the performance of these banks; moves to analyse what cripples them; and then addresses the issue of governance. The of governance of bank boards is not a stand-alone issue that could be tinkered by recommending some changes here and there, but has to be examined comprehensively..............
RBI for 20% credit enhancement by banks to corporate bonds
......The limit on partial credit enhancement will be set at whichever is lower---20 per cent credit enhancement or the funds needed to raise the rating by two notches. Banks should adopt a board-approved policy on partial credit enhancements, covering issues such as assessment of risk and setting limits, RBI said in its draft norms released on Tuesday.............
Catholic Syrian Bank, Ratnakar Bank to hit capital market this year
.........While Catholic Syrian Bank is planning to raise about Rs 300 crore from the fresh share issue, RBL Bank may raise Rs 800 crore from the IPO. The two banks have been advised by Reserve Bank of India over the past few years to gear up for an IPO and now the P J Nayak committee report on governance issue of banks also states that the two banks have to list by December 2014...........
SBI plans to offer 55 lakh shares to staff at a discount
.........India’s largest bank said it proposes to offer the equity shares to its employees at such discount as may be decided by its board. The discount will be based on the average of the weekly high and low of the closing prices of the shares quoted on the NSE during the two weeks preceding the launch date, but at a price not less than ₹1,565 an equity share............
Are there really zero interest EMI schemes? Yes and no
..........In zero EMI schemes offered on credit card outstanding, the interest element was often camouflaged and passed on to the customer in the form of processing fee. After the central bank issued the circular, retailers had indeed reduced the number of such schemes. So, how are some retailers still able to offer such deals?...............
Officials undecided on foreign investment in HDFC Bank
A meeting to take the views of the industry department, finance ministry and the Reserve Bank of India (RBI) on raising the foreign investment limit in HDFC Bank remained inconclusive on Tuesday. Now, Finance Secretary Arvind Mayaram would decide whether another meeting is to be held or the matter would straight go to the Foreign Investment Promotion Board (FIPB), sources said..........
Faulty I-T server logs off taxpayers
..........“It is very unfortunate that server is down at such a crucial time. If there had been any tech ere had been any tech nical fault or delay by the taxpayer, the I-T department would have quickly issued notice. But when the department is itself at fault, nothing can be done,“...........
Read - TOI
Coming Soon: The First Bitcoin Debit Card
Bitcoin users are on the cusp of being able to spend their hard-earned cryptocurrency at any business that accepts debit or credit cards. This new development in payments has been achieved by Palo Alto-based company Xapo, which already provides hot wallet and cold storage services. This summer, Xapo will begin issuing debit card numbers to its users, and for a fee of $15, a physical card to use at brick-and-mortar locations................
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