This is how RBI wants banks to reach smaller villages

...... RBI Deputy Governor K C Chakrabarty has been advocating for a profitable branch model of financial inclusion. According to a rough estimate, 50% of Indian populations still remain either under-banked or unbanked. "While all the efforts made for financial inclusion have expanded the access to banking services, it is important that quality services are provided through the newly set-up information and communication-based delivery model," RBI had said.

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RBI Monetary Policy for 2012-2013: Policy on deposit rates requires change

.....The Reserve Bank of India (RBI) has been de-regulating interest rates on bank deposits in bits and pieces over the last several years. While doing so, it has created an artificial divide between the rich and poor by taking an arbitrary decision in allowing banks to offer differential interest rates on deposits. In the case of fixed deposits, RBI had allowed banks to offer higher or lower than the normal interest rates for single-term deposits of Rs15 lakh and above. Again while de-regulating interest rates on SB (savings bank) accounts, the RBI once again created an arbitrary divide by stipulating that banks are free to offer different rates for SB depositors maintaining a balance in excess of Rs1 lakh in the account. The RBI has never given any rational explanation for allowing such discrimination......

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SEBI & RBI: Aren’t regulators accountable for the use mess

....An investigation began only after a change of guard at USE. As always, several directors of the USE including two former CEOs, have quit in quick succession. Meanwhile, Shyamala Gopinath, the RBI deputy governor in charge, who inaugurated all four forex-derivatives bourses, has moved on to a nice post-retirement directorship at the NSE. We believe that these openly capricious rules were all designed to help the NSE.......

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On The Turnpike - Book review by P.P.Ramchandran

THOSE LOOKING FOR A QUICK AND COMPREHENSIBLE INSIGHTS INTO THE WISDOM AND FOLLIES OF INDIAN ECONOMIC POLICY OVER THE LAST 60 YEARS WILL FIND THIS BOOK INSTRUCTIVE AND AMUSING.

TCA Srinivasa- Raghavan is a well known analyst whose columns have adorned several financial dailies. He had a role to play in Third volume of RBI History. The book under review is a ‘Coffee- Table book’ brought out by the Finance Ministry on the occasion of the Indian Economic Service completing fifty years. One must say the Ministry of Finance has put no restraint on the author......


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RBI lays down road map to make banks safer, avoid crisis repeat under Basel Committee recommendations

MUMBAI: The Reserve Bank of India has laid out a six-year road map to make Indian banks safer and avoid recurrence of the 2008 crisis, but it will need an estimated Rs 1.5 lakh crore in capital at a time it is scarce................

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Banks must maintain 7% core capital: RBI's Basel III norms

........ Reserve Bank of India (RBI) on Wednesday directed Indian banks to maintain a minimum tier I capital or core capital which is equity and reserve under the final guidelines on Basel-III capital regulations. Moreover, the regulator, for the first time, asked lenders to keep a capital conservation buffer of 2.50%. "These guidelines would become effective from January 1, 2013 in a phased manner," RBI said in a statement........

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Bank deposits, advances fall through April

Bank deposits and advances fell through April, after rising sharply towards the end of the previous financial year. The growth in deposits over the year was 13.3 per cent while loans grew 17.6 per cent, as on April 20, showed data released by the Reserve Bank of India (RBI) on Wednesday............

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Forget twin deficits, India has quadruplet deficits to worry about

...............Already, the latest purchasing managers’ index (PMI) print indicates that while the economy is still expanding, there are major input and output cost pressures, indicating that while the RBI did stick its neck out and cut the repo rate by a deep 50 basis points (something critics have frowned upon), there are risks associated with it since inflationary pressures are still intense. Clearly, RBI has put growth concerns above inflation this time round, and the results will have to be assessed in detail over the next few months...........................

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Kerala suicide figures in RS; action sought against bank

.....a medical college student in seventh semester in Cochin had to discontinue education after being denied loan by State Bank of India. The loan was denied under an RBI directive to banks to not to sanction loans to students admitted under management quota..................

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Are NPAs really bottoming out?

The Reserve Bank of India has hinted that non-performing assets (NPAs) of the banking system have almost bottomed out. In an interview with Mint, Anand Sinha, Reserve Bank of India’s deputy governor, has said that he expects NPAs should have bottomed out by now as world economies have shown signs of improvement. As far as India is concerned, he says that despite the potential upside risk, inflation has subsided now and there has been a rate cut, which can result in lesser NPAs.......

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We’re closely watching forex market, says RBI

The Reserve Bank of India on Monday said it is closely watching the forex market and will intervene only if there is excess volatility in rupee, even as the domestic currency fell to a nearly four-month low against the US dollar. “The RBI doesn’t look for a fixed level of rupee. We will only intervene if there is excess volatility,”.......

Read - Indian Express

Importance of bank account stressed

Hyderabad : The second phase of the Urban Financial Inclusion programme was held here on Monday, as part of the Reserve Bank of India's Financial Inclusion Programme. Senior officials from RBI including Chief General Manager Rose Mary Sebastian, General Manager R. N. Dash, and Deputy General Manager of the lead bank State Bank of Hyderabad Jasbir Singh Aneja spoke about the necessity of maintaining a bank account. All the districts in Andhra Pradesh have been fully covered under the programme which envisages at least one bank account per family, either for savings or for loans. For extending the programme to the slum dwellers in Hyderabad, already one such event was conducted a few months ago in Charminar.

The Hindu

Oline fraudsters use RBI name to con public

......The fraudsters copy and use the name and logo of the RBI to such perfection that even highly educated people are becoming easy victims to it. What's more, even certificates are issued with impersonated signatures and stamping of RBI's top officials. There have also been attempts to contact the victims, circulate fake mail ids and also to duplicate the RBI website.............

Read - The Hindu

RBI may set up fixed rate loan committee

Mumbai: The Reserve Bank of India (RBI) is planning to set up a committee to look into the issue of facilitating the development of fixed rate loan products in the banking system, RBI Deputy Governor, Anand Sinha said. “We will set up a committee soon to facilitate the development of fixed rate loan products in the market, which are presently absent in the system,” Sinha told reporters on the sidelines of an Assocham event here.......

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Bad loans may have peaked: RBI DG

....Given the current situation...looks like there would not be undue alarm in the near future. So, assuming that things do not deteriorate in a very significant way, the NPAs might have peaked or the asset quality might have bottomed out. The expectation is that from here on the asset quality should improve,” ........

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Agricultural Credit: Why are the government funds to boost agriculture not reaching small farmers

..........There are several such anomalies in farm-sector lending. For instance, between 2000 and 2010, according to the Reserve Bank of India, farm loans increased 755% to Rs 3,90,000 crore. And Budget 2012 has increased the agri-lending target for 2012-13 to Rs 5,75,000 crore, from Rs 4,75,000 crore in the previous year. But productivity gains during the same period-18% growth in farm yields between 2000 and 2010-don't suggest an increase remotely close to that. Neither do sales of inputs like seeds, fertilisers and tractors. "For every unit of nominal GDP growth, there is 1.3-1.5 units of credit growth," says former RBI deputy governor Usha Thorat. By that principle, a three-fold rise in agri credit should double output. But we are not seeing anything like that......................

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Govt, RBI working on changing rules to give India Inc more leeway in repaying FCCBs

MUMBAI: The government and Reserve Bank of India are working on changing rules to give corporates more leeway in repaying foreign currency convertible bonds (FCCBs) that have turned into millstones in a dismal market..............

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RBI and falling rupee: Battle just keeps getting tougher

The Reserve Bank of India’s battle to contain a falling rupee just got tougher. The current account deficit is widening and a weak global investment climate coupled with policy paralysis in New Delhi, sticky inflation and slowing growth have increased the aversion of foreign investors to India, pushing the capital account into the red. Last week’s move by rating agency Standard & Poor’s to cut the country’s credit rating outlook to “negative” has complicated matters further for the RBI, which has few options other than intervention and tinkering with rules on export credit to encourage inflows, RBI officials say..............

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Agents of change

.......Ananya Roy, also doing an internship with the RBI, has been assigned a project on FDI in retail. She has to assess the current scenario of the Indian retail sector and then evaluate the benefits (if any) of introducing FDI to the sector. Roy has so far become aware of some of the consequences of FDI in the Indian scenario on the face of infrastructure, policy and supply chain issues. “Since regulation of FDI has been a debatable issue, the perspectives of RBI and its working methods have provided me with immense takeaways. It has also helped me get better clarity on the issues of employment, food price volatility and in understanding the condition of current retailers and farmers as well,” says Roy...........

Read - Hindustan Times

Visually-challenged demand ATM cards

........“As per the Reserve Bank of India’s directive, all commercial banks should provide talking-facility with� Braille keypads at one-third of the newly installed ATMs and place them strategically in consultation with other banks,” .................

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