...........Such mismatch can be avoided if banks are able to access long-term funds at relatively low cost. The RBI’s latest move — which follows Finance Minister Arun Jaitley’s Budget announcement — facilitates both. Banks today are required to keep ₹4 out of every ₹100 mobilised as deposits with the RBI, on which they earn no interest. They also have to compulsorily invest another ₹22.5 in government securities, apart from earmarking 40 per cent of their credit to so-called priority sectors. These pre-emptions...........
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.
Friday, July 18, 2014
Building on BRICS
...........Viewed from this perspective, the new institution's initiatives will only supplement IMF and World Bank, and there is enough unattended space for the new bank. There are limitations in the "already impaired" vision of the rich, and the poor cannot wait on the sidelines for their basic needs to be met.........
BRICS bank gets the thumbs up from IMF
The International Monetary Fund on Thursday welcomed the move to set up a new BRICS development bank, saying that it is ready to work with the Bank’s leadership. “I would like to congratulate you on hosting a successful meeting of the BRICS leaders in Fortaleza, Brazil, and especially on establishing the Contingent Reserve Arrangement,” IMF managing director Christine Lagarde said in a message conveyed to the Brazilian President, Dilma Rousseff.....
A development bank for developing nations
..............The getting together of the five leading developing nations is attractive as they had a combined share of around 20% of the global GDP in 2013 (IMF). However, all the nations are quite different in terms of politics, economic structures and governance. The concept of BRICS is more notional as these are countries which are geographically spread out with little competitive advantage in terms of distance or physical contiguity. Hence, this experiment will set a new financial trend.........
Banks to benefit more than HFCs through long-term bonds: Icra
...............The guidelines say banks can raise long term resources to finance their long term loans to affordable housing through minimum regulatory pre-emption like exemption in the mandatory government security holding and cash reserve ratio and priority sector lending, Icra said. The state-run banks, which have a better presence in the lower ticket loans segment, will benefit more as the definition of what constitutes as affordable housing has been enlarged, it said............
Loan waiver: A.P. urges RBI to extend repayment period
.............Mr. Ramakrishnudu told reporters here on Thursday that normally RBI would give one year’s moratorium and five-year period for repayment but it agreed for a three-year period this time, including moratorium. “We are asking that to be extended to seven to 10 years”, he added. Besides urging RBI to fix the upper limit at Rs.1.5 lakh, the State government wants gold loans up to Rs. 50,000 to be rescheduled..........
Bad loans hit cooperative banking sector in state
..............With 4,839 branches and 1,576 ATMs, cooperative banks have made their presence felt in every nook and corner of the state. In rural areas, cooperative banks are the only banks available to a large section of population. The Reserve Bank of India (RBI) and commissioner of cooperatives have joint control over banks. RBI can suspend the business of banks and appoint administrators by dismissing the board of directors. According to Dhanajay Dhoipode, joint registrar of cooperative societies, 10 banks have administrators as the RBI had dismissed their board of directors to save the banks and their depositors as bad loans piled up.........
COMING SOON TO DALAL STREET - A HUMDINGER . 20,000-Crore ` Share Sale by SBI
...India's largest bank is in discussions with the finance ministry over its financial requirements. The government is expected to support the plan as it's open to lowering its stake in state-run banks to 51%, besides which it doesn't have anywhere near the money needed to infuse the capital they require...............
Ethiopia seeks out Indian banks to boost investment
.........."Previously the Ethiopian government tried to support (investment funds) by availing investment finance with 70:30 ratio - 70 percent loan and 30 percent equity," Ethiopia's Minister for Industry, Ahmed Abetew, told IANS. "But nowadays, the demand for loan is higher than available loanable funds," he said. "That is why the presence of SBI presence is very crucial here in Ethiopia for availing investment funds for Indian companies as well as other companies."..........
SBI ties up with RML for cheaper agri info for customers
.............The information, to be delivered in SMS form in nine languages, will include updates on weather, input prices, crop diseases, government schemes/initiatives and market prices of produce, it said in a release. "As per the new understanding, the service would be made even more affordable to SBI's agri customers," it said.........
Thursday, July 17, 2014
RBI needs RaRa - A.Chandramouliswaran
Mere statutory independence alone may not be sufficient for the RBI to act independently since much depends on its functionaries to safeguard its autonomy. Have the persons, who argue eloquently today for the autonomy of the RBI and voice their opinions about the dominating nature of the ministry officials, done their small part for protecting the independence of the RBI is a question better left to their conscience.
The present Finance Minister is a brilliant person and from all indications publicly available seems to be getting on famously with the Governor. I am sure he could be trusted not do any thing, which would erode the autonomy of the RBI, without consultation with the Governor. Hence, the fears on account of the FSLRC recommendations are unlikely to come true.
In the unlikely event of the Government implementing the recommendations of the Srikrishna Commission in regard to the Monetary Policy Committee etc etc, Dr Raghuram Rajan could think of stepping down from the post so that posterity would not blame him for downgrading the Institution. In my humble opinion, RBI needs, at the present juncture and for the successful tenure of the NDA Government, Dr Raghuram Rajan more than the latter needing the RBI!
- A.Chandramouliswaran
Srikrishna's JudgeMendations
My View on "Where the Twain Shall Meet":
Now on FSLRC report should remain a reference point. As the FSLRC Chairman opted to write a report which he thought would satisfy the then FM and did not listen to his own colleagues in the Commission, or convince them as to why he was not able to go with them on vital issues, the final product (FSLRC Report) has several deficiencies that will surface as and when the government takes up the recommendations for initiating legislative or ‘executive’ action. Notes of dissent from 4 members out of seven who signed the report are indicative of the Chairman’s approach. The Commission wrote the report as if it was a ‘judgement’ whereas the task assigned to it was to make ‘recommendations’. The irritation being expressed by Justice Srikrishna in the context of Dr Rajan’s June, 2014 observations about certain ‘recommendations’ has to be viewed from this perspective.
- M.G.Warrier
Time will tell who behaved like 'NAWABs
My View on "Regulators function as Nawabs: Srikrishna":
The original Srikrishna while giving 'GEETOPADESHA' to Arjuna took ample care to take the disciple into confidence at every stage, by allowing him to raise doubts and clearing them 'online'. Gita was a 'consensus' report. Justice Srikrishna failed to convince (about the stance he took while writing the report) four out of seven members who signed the FSLRC report. Time will tell who behaved like 'NAWABs'
- M.G.Warrier
Give new declaration for lower tax deduction
................Typically, employers calculate the tax liability of their employees on the basis of the investment declaration given by the employees. The taxes are computed after taking deductions into account and the sum is deducted from the employees’ salaries in 12 instalments. Experts expect the Finance Bill to be approved in both Houses of Parliament by August. That means till July, most salaried individuals are likely to pay tax at the earlier income tax rates. In the meanwhile, most employers are expected to update their payroll software. Once the new tax rules come into effect,..........
RBI - Recruitment for the post of Assistant
he Reserve Bank of India invites applications from eligible candidates for 506 posts of “Assistant” in various offices of the Bank. Selection for the post will be through a country-wide competitive Online Examination and Interview.
The full text of the advertisement is available on the Banks’ website www.rbi.org.in and is also being published in the Employment News/ Rojghar Samachar on or after July 26, 2014.
Application will be accepted only Online through the Banks’ website.
Important Dates:
| Website Link Open | 16.07.2014 to 06.08.2014 | |
| Payment of Examination Fees | Online | 16.07.2014 to 06.08.2014 |
| At Bank Branches | 18.07.2014 to 11.08.2014 | |
| Schedule of Online Test (Tentative) | Varied dates around fourth week of September 2014 | |
Police and SBI blame each other over false arrest
.........The branch manager allegedly found that 91 currency notes of Rs.1,000 each were 'fake', and called the police who arrested the two men. The police even procured a four-day remand for further interrogation, but when the RBI checked the notes two days later, they were found to be genuine. Based on the report, the judicial magistrate Aashish Saldi, on May 20, discharged both personnel. The case will now come up for hearing on October 16.
Tata Comm hopes new services will boost White Label ATM business
............“We are witnessing better transactions than estimated. In some instances, they are similar to bank ATMs. Our strong focus on the right locations and innovative ways of deployment, such as neighbourhood formats, kirana stores and Porta Cabins ensures that the ATM rollout, especially in deeper geographies, is viable to operate,” said Sanjeev Patel, CEO, Tata Communications Payment Solutions Ltd (TCPSL). A wholly owned subsidiary of Tata Communications, TCPSL plans to set up 15,000 WLAs by 2016 as mandated by the RBI............
A year after currency crisis
.................Since the rupee hit its nadir on August 28, 2013, (68.85 against the $), becoming the worst performing Asian currency, its fortunes have changed after RBI Governor Raghuram Rajan announced steps to attract inflows on his first day in office (September 4). A look at how changing macroeconomic fundamentals helped the rupee gain strength....
'BRICS should frame own internet governance model'
.............."Snowden's revelations have demonstrated the need for secure email, calendaring, messaging, search, file-sharing and storage and video systems, which would protect BRICS' economic and cultural spaces, as well as leaders and citizens from Five Eyes spying," the statement said. Five Eyes is a term used to signify the alliance of five major countries that share intelligence - the UK, the US, Canada, Australia, and New Zealand.............
A useful lender?
............The question remains: what is the purpose of the BRICS Bank? After all, both India and China have questions about the governance in their banking sectors; is it the case that a new bank, such as this, is likely to help matters? India itself is unlikely to need it. Existing multilateral lenders are not strapped of funds at the moment, and Indian projects do not have to jump through too many onerous hoops to qualify...............
BRICS Bank: worthless at best, a disaster at worst
.........In other words, there’s little going for the BRICS Bank other than the little whiny post-colonial voice that still lives within all of us, the one which readily insists that anything that the US and the West have power in is worse for India than something the Chinese run. The problem is that setting up the BRICS Bank merely reduces the power of any argument we would want to make about substantial reform to the IMF and the World Bank. And, in any case, what that internal whiny voice counsels is stupid – and, in the long run, suicidal. Remember how China blocks the Asian Development Bank from funding projects in our Northeast? .............
A bank made of different Brics
.....The bank can help India considerably as it is a capital-starved country. For example, to fund infrastructure creation alone in the years ahead, India needs close to $500 billion. That sum cannot be obtained from a single source or even a couple of sources. The greater the number of lenders, the closer India can come to getting its hands on that kind of money. The bank can..................
BRICS Joint Forex Action Not Discussed but 'Worth Thinking About': RBI
The five BRICS countries have not discussed coordinated forex intervention in global markets, but it is an idea "worth thinking about," Reserve Bank of India (RBI) deputy governor Urjit Patel told Reuters on Tuesday. The leaders of the five top emerging market economies agreed on Tuesday on a landmark deal to create a $100 billion development bank and a reserves fund of the same size to challenge Western dominance over global finances. While the BRICS nations..............
Old Plan to Merge HDFC and HDFC Bank Back in Focus
...........A possible merger of the two group companies could create a financial behemoth that could eliminate costs of doing the mortgage business for both, say analysts. HDFC, which is at the receiving end during days of high interest rates, may benefit more from the merger. Benefits for HDFC Bank, which earns fee income from origi nating mortgages for its parent, will be lesser. “Since the RBI has cleared the impediment, they can think about it,“ said Vaibhav Agrawal, vice-president research, Angel Broking. “At least on paper, the hindrance is removed.“ There is no proposal yet, though top executives from both the organisations have discussed the issue in the past ............
ICICI Bank introduces convenient banking service for Indians migrating to Canada
.............The service, 'ICICI Bank Global Banking – Hello Canada', offers a customers the ease of opening a Canadian Dollar account with ICICI Bank Canada along with an NRI (non-resident Indian) savings account with the bank in India. The customer can open both accounts with simplified documentation by visiting ICICI Bank's branch in India only once................
Decision-making in PSBs
.......... While these structural changes are welcome, as the P J Nayak Committee pointed out, the rot lies in the weak processes followed at the board-level deliberations and decision-making. The agenda papers and proposal notes put up to the board leave much to be desired and hide more than what is disclosed. Different directors playing to their constituencies do not take the management to task ............
Indian Bank pays dividend to govt
...........This is over and above 30 per cent interim dividend paid by the bank to the government on January 25, 2014, Indian Bank said in a statement. The bank had paid Rs 103.15 crore as interim dividend.........
Govt, RBI to tighten loan recovery norms
The government and the Reserve Bank of India (RBI) are looking to further tighten recovery norms for wilful defaulters to counter the persistent issue of rising non-performing assets (NPA) — loans that do not yield returns. While the issue is being looked into and discussions expected to start soon, sources said that defaulters if found wilful, might not be given the flexibility of time and recourse processes which unnecessary derails the recovery process...........
Name & shame: Banks can publish photos of wilful defaulters, says SC
In a move that may discourage firms from defaulting on bank loans, the Supreme Court has allowed lenders to publish names and photographs of wilful defaulters in newspapers in the larger public interest. The apex court said that the decision to resort to this measure would be taken by officers of the rank of general managers and above............
RBI to consider farm loan recast for 3-year period
........The offer includes moratorium on payment in the first year and repayment of the entire loan along with interest in the remaining two years, according to the sources. When contacted, the representatives of local banks said they were yet to receive any information in this regard. According to officials engaged in the loan waiver/reschedulement exercise in both the states, the banking regulator also sought to know if the governments would be able to back this plan. The RBI also made it clear that the gold loans, even if taken for agriculture purpose, would not be considered under the scheme.........
Wednesday, July 16, 2014
Dr. Subbarao’s guest lecture at IIMB
Dear Friends,
We were privileged to have Dr. D Subbarao, speak at IIMB. He discussed about the global crisis of 2008 and India's response. He specifically shared the view that during the crisis it is very difficult to know the reasons and make mid-way correction and the policy maker does not have the benefit of hind sight. In the initial stages of the crisis, monetary policy was accommodative but then, with hind sight, probably, liquidity should have been drained faster and earlier than it was during his tenure. Also, a number of good suggestions are offered to the Governor but then the Governor has to take into consideration many different aspects of the economy before taking a decision. One such issue was related to building of international reserves. These and other important economic issues being presently debated in the country discussed by the former Governor.........
Hope you find it interesting.
Thanks
Charan Singh
Banks will discover the importance of SMEs: H R Khan
............."Banks will discover the importance of the SME segment for profitability and growth and new models to serve the SME segment profitably will be found, as more than three-fourths of the segment is still waiting to be served." .....
Where the Twain Shall Meet
..........Developing trust between the government and the central bank was visible even before the first step was taken by the government on either fiscal prudence, or committing to eliminating subsidies. When Rajan last month cut the statutory liquidity ratio of banks, the proportion of deposits to be held in government bonds, it was a sign of buying into the new government's promise. But the bonhomie could just be confined to fighting inflation. When it comes to changing the regulatory structure, it may not be smooth sailing given the many power centres and the recommendations of the Srikrishna Committee which could be the bedrock of reforms. Also, the internationalisation of Indian government securities and derivatives could put the RBI and the government in opposite camps. Despite his credentials as an advocate of free market practices during his career as a professor of finance, Rajan is seen to be slipping into the role of a typical regulator defending the turf and being conservative. Although he had argued for liberal markets, some believe that many of those ideas would be in cold storage...................
Regulators function as Nawabs: Srikrishna
...........Defending the recommendations to separate the regulatory, investigatory and adjudicatory responsibilities of the financial sector regulatory bodies such as the Securities and Exchange Board of India, the RBI, the Insurance Regulatory and Development Authority and others, Mr. Justice Srikrishna said regulators such as the State they represent were for the people and not vice versa. “The problem is that we have created regulators that function as mini State or ‘Nawab’…We [in the Commission] believe that, in a democracy, no one, not even the President, not even the regulator, is above the rule of law,” he said........
Justice Srikrishna defends FSLRC recommendations
Critical remarks made last month on the Financial Sector Legislative Reforms Commission (FSLRC)'s recommendations by Reserve Bank of India (RBI) Governor Raghuram Rajan were met with a heavy dose of resentment on Tuesday when the commission's chairman and retired Supreme Court judge Justice B N Srikrishna sought to separate the views of 'the independent academic Dr Rajan from that of RBI Governor Dr Rajan' on certain aspects............
Trust the RBI
This refers to “Devious agenda to erode RBI’s autonomy” by S S Tarapore (July 14). The RBI should be independent with a clear mandate of protecting the currency. Price stability is the main responsibility of the central bank. It should be given a free hand in targeting inflation, and that target should be the CPI, as the RBI Governor Raghuram Rajan believes. The Government cannot instruct the RBI to cut rates when the CPI inflation goes out of the RBI’s comfort zone. We can find a lot of ways to suck out all the NPAs and free up capital in the banking system. All these problems can be solved if we trust the RBI to find solutions to our current problems.
- CR Arun
Aiming at the wrong target
...........This would represent a major departure from the current ad hoc arrangement, wherein RBI targets some combination of a number of different nominal variables, such as nominal gross domestic product (GDP), the exchange rate, Wholesale Price Index, and so on, and in which the central bank is not obliged to reveal to the public exactly what it is targeting and why. While there is much debate on whether CPI targeting is appropriate for an emerging economy such as India, that is for another time. Here, I would like to explain what is meant by "inflation targeting" in the first place, and where this policy - now used by leading central banks around the world - originates...........
The Indian Banks’ Association is shockingly anti-consumer
...............But the way, the bank lobby fought to keep giving savers minimal return and the time it took the RBI to do this speaks of IBA’s successful lobbying might. Bank consumers are not a unified entity and are unable to fight back................
8th Half Yearly Get-Together of Ex-RBIites
Hello dear Friends,
It looks that the days are rolling very fast; for, before the impressions of the previous get-together could fade away, it was already time for another get-together. This was held on Saturday 5th July 2014, in which many of you participated. Here is a brief report thereof.
Before giving a clout of the event, we, the organizers thank the participants who attended the meet in good numbers. For your information we state that 176 invitations were sent in all against which 132 of our friends responded. We consider this as a very encouraging one.
About the Meet:
The assembly was at 10:30 AM. Most of the participants had reached the venue quite early and even seen exchanging pleasantries / chatting amongst them, enjoying their cup of coffee/tea, with biscuits and cashew nuts. While the atmosphere was so encouraging, this went on for nearly an hour. This scene was very pleasant to oversee since some of them happen to come for the first time and they expressed happiness for the re-union with their beloved friends after a long gap of 10 to 15 years.
The meeting started around 11.30AM with Invocation by Shri.N.M.Rajashekharaiah followed by obituary reference of our departed friends and a minute’s silence was observed. It was a very sad moment as the departed souls images flashed in everybody’s mental screen. This however, was overcome when Shri.S.Venkata Subba Rao, our chief organiser of the meet got on to welcome the gathering. This was followed by our next programme of honouring our seniors who had completed 80 years of age, viz., S/Shri.K.Gopalan and N.Subba rao. While Shri.Gopalan (ex-CGM NABBARD) was honoured by another elder person, Shri.E.P.G.Subramanyam (ex-DyGM, RBI), Shri.Subba Rao (ex-MGR RBI) was honoured by Shri.N.D.Vasanth(ex-Dy GM). Shri Gopalan spoke few words in response to the honour.
A happy development during the period was that Shri.Venkata Subba Rao became the recipient of both the “ Kempegowda award” (of the BBMP) and “Bangalorean of the Year – 2013” (the latter is conferred by one of the most prestigious institutions – “ Bangalore Foundation”). In this background, he had sponsored an instrumental music, a classical programme – “Flute by Master Pramukh accompanied by Shri.Ananth on violin and Shri. Chandrashekhar on Mridanga.” The artistes rendered the programme for about 45 minutes which was so pleasant and absorbing that almost all the participants enjoyed the same in full measure. By then, it was 1 PM and time for break for lunch. The Lunch was sumptuous and delicious. After lunch, the participants dispersed with a sense of satisfaction.
Shri.N.D.Vasanth (ex Dy.GM) completed 50 years of married life. To celebrate this occasion, he distributed “Laddoos” to all the participants.
Shri.G.K.Jairam (ex AGM, RBI) very kindly clicked a number of snaps of RBIites and Shri.C.R.Raghavendra (ex Dy.GM – NNPP) uploaded the photos.
- ORGANISERS
Info shared by William Panakal
Make the bigger 80C investments better
.................A hike in deduction is good news as it not only lets you save on taxes but also incentivises investments in the section 80C basket, which has some good options. So, which of these should you choose?..........
Finmin to bifurcate the post of Chairman and MD in PSBs
.................“There is a proposal under consideration — we could have separate persons as chairman and managing director, as we have in the case of State Bank of India (SBI). This will help improve governance at PSBs,” said Financial Services Secretary G S Sandhu. He added he was hopeful the proposal would be cleared quickly, as the Financial Stability Development Council, headed by the finance minister, had also recommended this...........
Financial literacy essential: RBI official
The lack of financial literacy in the State is the cause of the common man falling prey to financial fraudsters, Reserve Bank of India (RBI) Assistant General Manager P. Ravindran has said. He was delivering a talk, on ‘RBI and the common man,’ organised by the Bankers Academy of Career Excellence at West Hill here on Monday. The absence of financial literacy could be disastrous, especially when they have dispensable money in their hands, Mr. Ravindran said.......
Financial Inclusion in India – a Review of Initiatives and Achievements
………….According
to committee on Financial inclusion headed by Dr. C. Rangarajan defined
financial inclusion as “The process of ensuring access to financial services
and timely and adequate credit where needed by vulnerable groups such as weaker
sections and low income groups at an affordable cost.” Financial inclusion
does not stand for delivery of financial services for all at all cost. But it
means that the delivery of financial services and products at affordable costs
of excluded sections of population and low income groups. It plays a crucial role to remove away the poverty from the country. Financial inclusion is to provide equalopportunities
to vast sections of population to access mainstream financial services for
better life, living and better income. It provides path for inclusive
growth………….
New financial inclusion plan on the anvil
The Centre is planning to launch a new financial inclusiveness programme from August 15 making two bank accounts per family mandatory. Of the two bank accounts, one account will have to be compulsorily opened in the name of a woman member of the family and..............
NABARD’s financial literacy programme on trains
.................On the occasion, NABARD Chief General Manager Jiji Mammen said that the NABARD would launch the literacy programme on another 11 fast passenger trains. The bank noticed that the financial inclusion programmes were not yielding the desired results as the rural folk were not utilising the banking services optimally. To tide over the problem, financial literacy programme was taken up, he said, adding, it was first time that trains were being used medium for means of communication..........
RuPay to go global, take on card biggies
........Three banks have been given the responsibility of making the desi payment card an international one on a pilot basis. Bank of Baroda, Central Bank of India and Saraswat Bank have begun to issue the international RuPay cards. “RuPay International will be a full-fledged service from next year. Now, we are running it on pilot basis with three banks. The RuPay card payment system is an indigenously developed card system that will help the banks cut their transaction cost to one-third of the prevailing rates,” said A P Hota, managing director and CEO, National Payments Corporation of India (NPCI). Initiated by the Reserve Bank of India, the domestic payment system project is now successfully run by NPCI. RuPay symbolises India’s ability to have a domestic payment card system without having to depend on international card providers like Visa and MasterCard that dominate the Indian market today............
Slice of History - Banking Before Laws Were Enacted
As India was struggling with the transition of the partition post-independence, there were concerns as to how to protect the interests of the banking sector in the country. So until a full-fledged law was enacted, the Reserve Bank of India in 1945 recommended to the government that an Ordinance be promulgated to bring into immediate effect provisions in the Banking Bill regarding inspections. This was in addition to suggesting a system of licensing of banks and branches in India. The Ordinance was to be operative until the enactment of the Banking Bill. Accordingly, in January 1946,.........
Read - ET
Read - ET
Book value on basic economics
...........In the first book in this series, Monetary Policy, Partha Ray, professor of economics at the Indian Institute of Management (IIM)-Calcutta, spells out the theoretical background to help us take a view on such matters. He comes with the advantage that he has been director of economic and policy research at the RBI, as well as an advisor to the International Monetary Fund in Washington, D C...........
BRICS leaders create development bank
..............The new bank will be headquartered in Shanghai, China. The first president of the bank will be from India while the first chair of the board of governors will be from Russia. Sources said India's demand for an equal share in the bank has also been accepted. The deal was reached after intense last-minute negotiations to settle a dispute between India and China over the headquarters of the new bank,.....
Funds Transfer Pricing in Banks
......Volume based evaluation of
business performance is faulty simply because there is no direct correlation between volume of business done and profit earned. It is possible for a bank to increase its net profits even while there is shrinkage of its balance sheet size. If the balance sheet of the bank has increased but the profit has not, it could be because of multiple factors such as that incremental business was being done at a negative margin or........
RBI signals cheaper housing, infra loans
To boost demand for infrastructure and housing, the Reserve Bank of India (RBI) on Tuesday said banks would not have to maintain cash reserve ratio (CRR) or statutory liquidity ratio (SLR) and will not have to meet priority-sector lending targetsfor funds raised through bonds for extending credit to these sectors. While the exemption from CRR and SLR requirements was announced by the Finance Minister in his Budget speech, the banking regulator further sweetened the deal by including loans for affordable housing...........
Realtors hail RBI move to ease norms for affordable housing
...............In order to encourage infrastructure development and affordable housing, RBI today exempted long term bonds from mandatory regulatory norms like CRR and SLR if the money raised is used for funding of such projects. "It is a welcome step. This will lead to lower interest rates for affordable housing projects," CREDAI Chairman Lalit Jain said.......
Amanath bank: court’s query to RBI on withdrawal
.........Justice Ram Mohan Reddy issued directions in this regard as it was pointed out on behalf of the depositors and the ACB board that depositors were being put to severe hardship during the month of Ramzan as it had been more than a year since the restriction was imposed by the RBI. The court asked Canara Bank to re-evaluate the free-holding assets of the ACB, while directing the ACB to submit the details of mortgaged assets and the valuation of such assets made at the time of grant of loans.............
Prithvi Info Solutions: Second largest stakeholder denies investing in the company!
US-based Sarat Kumar Addanki, the second largest stakeholder of Prithvi Information Solutions, has made sensational allegations of fraud, mismanagement and possible identity theft against the promoters. He has complained to SFIO, SEBI, RBI and stock exchanges. Will they finally act against Prithvi?...........
SC refuses to stay Madhu Kapur-YES Bank case in HC
............The bank argued that the nomination of three directors, challenged by Madhu Kapur in the high court, was with the approval of the shareholders. In any case, the Banking Regulation Act did not allow challenge to the decision of the board of directors in a court of law. Therefore, the petition of Madhu Kapur was not maintainable and should not be heard by the high court, it was argued.........
Large number of banks can co-exist with few big ones: Kochhar
As new players get ready to join India's banking space, top banker Chanda Kochhar feels there is space for a few large banks and a large number of other lenders to cater to the country's banking needs. At the same time, the proposed issuance of differentiated banking licences or licensing of niche banks for specialised segments should not result in any regulatory arbitrage in the system and the core principles should be applied to all new players, said the CEO and Managing Director of ICICI Bank.........
Goa banks seeks RBI relaxation on 'mining dependent' loans
............Parrikar told reporters that banking institutions have decided to write to the RBI to relax certain norms so that the adjustments could be worked out to make repayments easier and affordable. "Banks have some technical difficulties. Today we adopted a resolution asking the RBI to address these technical difficulties. If required, the state government will also seek RBI intervention. We have requested them to relax certain norms," ...........
Canara Bank wants to settle Deccan Chronicle debt issue at one go
...........“When the promoters came to us with a request to restructure the loan, we said we will consider to settle (the cases) if they are ready for a one-time settlement of the dues,” Dubey said on the sidelines of a financial sector conclave being organised by industry body Ficci. The company is yet to respond to the bank's offer......
Two flats merged into one must get tax exemption
If two adjacent flats are bought from different people through two agreements and then converted into a single unit with a common kitchen, then the owner is exempt from paying capital gains tax, the Bombay high court has said..........
Read - TOI
Read - TOI
New rules for Gold fixed deposits
.................But SEBI is yet to wake up to thousands of crores invested by consumers in gold savings schemes of jewellerswhich can easily qualify as collective investment schemes. SEBI and RBI had replied to an Right to Information (RTI) application stating that such schemes are not regulated by them at all.............
Tuesday, July 15, 2014
Devious agenda to erode RBI’s autonomy - Dr.S.S.Tarapore
RBI's reserves need to be augmented
My View on "RBI dividend in FY15 may be more than budgeted":
The pressures on GOI and particularly Finance Ministry are such that on several occasions they succumb to them for ‘political’ or ‘survival’-related reasons. The Indian Financial Sector and government finances (including state government finances) are supported by a strong central bank. RBI’s strength depends also on its strong balance sheet. In this context, copied below is the concluding paragraph of Chapter II.1 “Strengthening the Central Bank” from my recently published book “Banking, Reforms & Corruption; Development Issues in 21st Century India”(Sampark, Kolkatta, Email: samparkworld@hotmail.com):
“Way forward
To ensure that temptations of government emanating from external compulsions do not dilute the strength of RBI’s balance sheet, GOI should take measures to augment the share capital and reserves of RBI after carrying out appropriate amendments to RBI Act. Till such time RBI should be allowed to retain surplus income by transfer to reserves. Considering the size of its balance sheet and the internal and external pressures on its income generating capabilities, as also the nature of shocks the Bank has to absorb from time to time, the central bank’s reserves need to be augmented on an ongoing basis.”
- M G Warrier
Payment banks: A viable business model?
..........Bankers say if the model is to be a success, a payment bank should neither offer fixed-deposit products nor savings bank accounts. "The payment bank model could be viable if technology is used to bring down costs. In different geographies, there are a few examples of the model being a success - Kenya and the Philippines. The payment banks need not offer any fixed-deposit products. They can only offer a current-account and a remittance-service product. The volume of transactions, as these will be in areas where bank branches are yet to penetrate, and effective use of technology could make the business model viable," said Usha Thorat, former Deputy Governor, RBI.............
RBI working on rural ATMs with low denomination currency
..............Disclosing this in Hyderabad on Monday, the RBI Deputy Governor R. Gandhi said given the typical needs of rural banking customers apart from requirement of low denomination currency, research is currently is underway on rural ATMs.......................
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