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| Peep into past Duvvuri Subbarao, RBI Governor, takes a look at the photos of his predecessors exhibited at the RBI gallery at the Indian Business Museum in the Indian Institute of Management, Kozhikode, on Friday |
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, July 7, 2012
Dr. Subbarao inaugurates RBI gallery at the Indian Business Museum at the IIM-K
Industry chiefs queue up to meet Rangarajan
If you think the Yojana Bhawan on Parliament Street in the national capital is hogging all the limelight after the Prime Minister took over the Finance portfolio, you are wrong........
......The RBI Governor, Dr D. Subbarao, and the Life Insurance Corporation Chairman, Mr D.K. Malhotra, are also likely to meet Dr Rangarajan soon......
Ban elevator economics
.....Though a policy statement is not expected to provide either a theoretical or empirical backing of its assertions, it nevertheless is expected to have some such support, albeit one lurking in the background. The RBI policy statement accepted that growth had slowed to exceptionally low levels, that headline inflation remained inflated, and concluded that a cut in interest rates would increase inflation without improving investment. So if symmetry holds, as it should, an increase in interest rates would not hurt investment (“relatively small” effect) but would have a disproportionately large effect in reducing inflation. Which is precisely what RBI has been doing for the last year and a half—with the result that both investment and growth have collapsed, and inflation has not moderated. So the RBI policy statement is not supported by either reality, or logic.......
Inflation v/s growth: RBI may not cut rates immediately
....However in India, the central bank is battling inflation versus growth. Inflation measured by the wholesale price index (WPI) for the month of May stood at 7.55%. With monsoon being below average for the month of June, inflation could rise further in the coming month. "Though the economic environment is conducive to a rate cut, high inflation and poor monsoon progress is a concern. Hence the central bank may maintain a status quo in the coming monetary policy," .......
Is RBI the one-eyed hawk in a world of blind bankers?
......Interestingly, since the world is giving away money for free, the pressure will be on the Reserve Bank of India (RBI) to follow suit and cut rates. With a repo rate at 8 percent, the RBI now has probably the highest rate in the world. The question is: is it just a obstinate hawk that refuses to see reason, or it is the one-eyed man in a world led by the blind?....
RBI to pursue wait and watch strategy on rate cut, may not follow global peers
......The presidential polls are currently a hurdle for any strong reforms from the government to tame the burgeoning fiscal deficit. The deficit is a repetitive concern which RBI has been highlighting as one of the reasons behind its inability to cut interest rates as a strategy to boost growth. Reacting to the triple booster from its global peers, RBI Governor D. Subbarao told reporters, in Chennai, that central bank is sensitive to inflation and committed to bring it under control. "We will continue to make all efforts," he said. Leaving interest rates untouched is one such effort. But some promising steps from the government could propel RBI to take a rate-cut decision in its ensuing policy review on July 31. Until then, India is not likely to be part of the global orchestra........
Greed and fraud: Lessons for India
....The fraud has two major lessons for countries like India that are nascent players in the world of advanced financial instruments. On November 10, 1998, the Mumbai inter-bank offer rate (Mibor) was set up on the lines of Libor as a benchmark rate for all interest rate swaps, forward rate agreements, floating rate debentures and term deposits. The Reserve Bank of India (RBI) may have to monitor Mibor more closely now with adequate checks and balances to ensure that banks and financial institutions do not report suppressed rates to paint a rosy picture of their financial standing. Though unlike in the western world, most key rates in India are determined or benchmarked by RBI, scrutinising Mibor by the banking regulator would go a long way to prevent a Barclays kind of scandal in the Indian market.......
RBI revises criteria for declaring dividend by UCBs
The Reserve Bank of India (RBI) said urban cooperative banks (UCBs) which have less than 5% of non-performing assets (NPAs) and comply with capital to risk-weighted assets ratio norms may declare dividends without its prior permission..........
Fin Min asks RBI to ready final norms for bank licences
Prime Minister Manmohan Singh is keen to finalise the guidelines for new bank licences. Bloomberg UTV has learnt that the finance ministry, headed by the Prime Minister, has asked the Reserve Bank of India to ready the final norms for bank licences...............
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RBI releases database to locate bank branch, related information
....."Users of this database can search for bank branches /offices on the basis of the name of the centre, some key words in the address and combinations of state/district/bank. "The information in this branch locator will be updated on a daily basis. The information is downloadable in excel format from this branch locator," RBI said in a notification.......
Banking frauds: State run banks to adopt innovative mechanisms and global practices
.....From the regulator's perspective, Vijaya Bhaskar, ED of RBI explained that fraud is an area of concern as it undermines the trust, which is the foundation stone of the banking business. He emphasized that the three lines of defense against Fraud - the employees, the systems and controls and the external agencies like the regulator and law enforcement agencies- should be strengthened.........
FinMin asks banks to pare cheque-based transactions
The Finance Ministry has asked public sector banks and regional rural banks to bring down cheque-based transactions by popularising electronic payments. It has directed these banks to pare cheque-based transactions by at least 20 per cent in the current financial year in the top 20 per cent branches in terms of business volumes. Further, banks’ board of directors have to set targets for shifting customer transactions to the electronic mode and monitor them on a quarterly basis..........
Solar ATMs for rural India
Vortex, a young Chennai-based company, could be adding new energy to India’s rural economic growth with its award-winning solar-powered automatic teller machines (ATMs). Called “Gramateller Indi” (“graamam” means “village” in Tamil), the low-power consumption machines operate at one-tenth the cost of conventional ATMs. State Bank of India, the country’s leading banking chain, has already ordered 300 Gramatellers; 19 other banks are using these sun-powered cash venders in villages and small towns. The immediate demand for the solar ATMs reflects and empowers India’s quietly surging rural economy, estimated to be worth about US$450 billion. Rural India, considered the backbone of the national economy, is expected to overtake the urban market in size by 2017................
New ATMs for differently-abled will make transactions easier
......The Union Bank of India (UBI) will launch a fully accessible, speech-enabled, bilingual ATM in Thane’s Passport office on Saturday for differently-abled people. It will be the first such ATM in the city. “UBI is the first bank in the country to deploy fully-accessible ATMs to help the differently-abled make transactions independently,” .......
Sacrificing growth necessary to rein in price rise: Subbarao
....Subbarao informed that a 15-year old girl from Andhra Pradesh had written a letter to him saying that she had seen newspaper reports about RBI's plans to start plastic currency as a pilot project. She had expressed her doubts over the environmental friendliness of plastic currency, he added. The RBI governor said he then asked officials to conduct detailed environmental studies. The Centre for Environment Studies, Nagpur had conducted vigorous studies and informed the RBI that carbon footprint of plastic currency is lower than paper currency, he added. Pointing out that countries including Singapore and Australia have plastic currency, Subbarao said, "Plastic currency is suitable to India as it can withstand our weather conditions." .......
Reserve Bank of India to introduce plastic money on pilot basis
KOZHIKODE: The Reserve Bank of India (RBI) is planning to introduce plastic currency on a pilot basis as it has been proven to be economical and environment-friendly when compared to paper currency, said RBI governor D Subbarao here on Friday................
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ICT based financial inclusion - carving a new path through innovation - K C Chakrabarty
Address by Dr K C Chakrabarty, Deputy Governor of the Reserve Bank of India, at the
Inaugural Plenary session of the 7th BANKing TECH Summit 2012, Mumbai, 28 June 2012
.......Recently, I came across the report submitted by Consultative Group to Assist the Poor (CGAP) and ACCESS based on the “Retreat on the Business Correspondent (BC) model” which was jointly organized by the College of Agricultural Banking (C.A.B.), Reserve Bank of India and ACCESS. The report spells out the challenges faced by both banks and BCs in extending facilities to the recently financially included and to the financially excluded. The findings indicate that the banks have to ensure that the BC model finds space in the business strategies of the banks and not in the footnotes of their annual reports and that the banks should make client acquisition under this model a business proposition; and not treat it as a CSR activity. An important observation indeed!...........
No-frills accounts aren’t a nuisance: D Subbarao
...."By and large banks have outsourced the 'last mile' to intermediaries such as microfinance institutions and self-help groups. This is a model that has worked, and one that we should pursue, and refine. Nevertheless, the question is, 'is there a business case for banks to do some of the last mile themselves? Can banks rely entirely on outsourcing? Isn't there a valuable experience to be gained by banks by dirtying their hands more and reoccupying the last mile?" .........
Central Bank of India scraps levy on NEFT transactions up to Rs 1 lakh
Central Bank of India has made all National Electronic Funds Transfer transactions up to Rs 1 lakh free from levy of any charges with effect from July 1, 2012...........
RBI nixes textile sector’s plea for debt revamp
The RBI has rejected a debt restructuring proposal from the textile industry. The industry was hoping for a Rs 35,000-crore package. However, the Reserve Bank of India said it had no objection to a two-year moratorium on term loans and conversion of working capital into working capital term loan (WCTL) within a timeframe of three-five years.............
Making gold work
This refers to the article ‘‘Managing gold, a policy challenge’’ (Business Line, July 6). This is a timely alert to the Government and the RBI to manage India’s domestic stock of gold to the country’s advantage. Instead of handling the issue piecemeal, the Government and the central bank should evolve a gold policy which should factor in:
The imbalance between import and export of gold and gold-based products;
Mapping the domestic stock of gold and jewellery;
Gradually converting the official gold stock with government and banks into standard gold, acceptable internationally;
Charging inspection fee (there should be arrangements for inspection) and an annual charge payable to government on gold beyond a stipulated limit retained with private individuals/institutions.
This will partly finance the security costs borne by the government.
- M. G. Warrier Mumbai (HBL)
Gold investor? Restrictions on coins can curtail your options
Rupee depreciation and higher outflows of dollar in the form of imports have been concerns of the government for some time now. While the government has been taking measures to curb import of gold into the country by hiking duties and taxes, Reserve Bank of India (RBI) too, has started doing its bit. The central bank has already asked banks to go slow on gold coin sales, and a proposal to ban them from the sales is also doing rounds. Financial Chronicle evaluates the likely impact of such a measure on banks, investors and other investment avenues in gold........
RBI working to resolve issues facing microfinance industry: Governor Subbarao
....The Reserve Bank of India (RBI) is working to resolve the issues facing the microfinance industry, including compliance to capital and provisioning norms, to bring the ailing sector back on track, Governor D Subbarao said, as per media reports from Chennai.......
Whammy after whammy for India’s Muslims
....Now, with India back on the slow trail, the world’s second largest Muslim population awaits darker days. Through five straight years of over 8 per cent growth in 2007, economists were projecting an annual expansion rate of 11 per cent from 2011 on. But in the last week of June, the Governor of Reserve Bank of India, D Subbarao, admitted for the first time that the “potential” for India’s economic growth has “come down”. Mr Subbarao was not exaggerating. In the post-2008 era, India’s economy experienced rapid deceleration.......
Jain Irrigation gets RBI nod to launch agri NBFC
Jain Irrigation Systems has obtained regulatory approval from Reserve Bank of India to launch a new non-banking finance company (NBFC), which will focus on farm sector and operate in rural and semi-urban areas. The NBFC, to be named Sustainable Agro-commercial Finance Ltd (SAFL), will commence as a joint venture with Jain Irrigation, promoter entities and IFC, a member of the World Bank Group, as equity shareholders. Some banks and financial institutions will join the equity shareholding at a later stage, the micro irrigation company said...........
SKS soars on buzz that RBI may ease norms for non-banking finance companies
....The latest spurt in the SKS scrip comes on the back of Reserve Bank of India Governor D Subbarao's comments that the apex bank was mulling relaxing norms on provisioning, net worth and capital adequacy for NBFC MFIs. "In particular, Andhra Pradesh-based MFIs, saddled with huge losses, large NPAs (non-performing assets) and eroded capital, are facing an especially acute problem in complying with the capital and provisioning norms. RBI is working on resolving these issues, so that MFI operations can get back on track," Subbarao is quoted as having said......
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