This refers to the report “RBI slams banks for LAF misuse” by Manojit Saha (March 21). It is surprising to read that the Reserve Bank of India (RBI) has now expressed displeasure at the fact that some banks are borrowing under the Liquidity Adjustment Facility (LAF), on-lending the funds to other banks and earning a spread as a result. LAF, as has been rightly observed, is a secured facility available to banks for borrowing against surplus government securities in their portfolio and is not unsecured call money. Since there may be banks with inadequate surplus government securities to pledge with RBI and borrow directly, there was nothing sinister in surplus banks lending to them from LAF-borrowed funds. This way liquidity is managed in the system without much volatility in the call rates. This has been discussed with senior RBI officials in the past and the bank’s treasury officials have been clearly given to understand that it was perfectly in order for banks to lend to other entities from LAF-borrowed funds. RBI should not keep changing its stand, since it may aggravate volatility in the overnight money market. - S Ravindranath, Coimbatore
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, March 25, 2011
RBI Penalizes Gujarat Co-operative Bank for Violating Anti-Money Laundering Guidelines
Mumbai (ABC Live):The Reserve Bank of India has imposed a monetary penalty of 1.00 lakh (on The Uttarsands People Co-operative Bank Limited, Uttarsanda, Dist. Kheda, Gujarat, in exercise of powers vested in it under the provisions of Section 47(A)(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (AACS) for violation of Reserve Bank of India's guidelines of requirement of reporting of cash transactions in excess of ` 10.00 lakh to Financial Intelligence Unit-India (FIU-IND), as required under Anti-Money Laundering (AML) guidelines. Information to this effect was made by Ajit Prasad, Assistant General Manager, RBI through Press Release: 2010-2011/1358. The Reserve Bank of India had issued a show cause notice to the bank, in response to which the bank submitted a written reply. After considering the facts of the case and the bank's reply in the matter, the Reserve Bank came to the conclusion that the violations were substantiated and warranted imposition of the penalty.
BANKING M&A TO BE UNDER PURVIEW OF CENTRAL BANK
The government, for now, has sought to put to rest the issue of who is to regulate mergers and acquisitions (M&A) in the banking sector, by conferring the power on the Reserve Bank of India (RBI). The Banking Laws (Amendment) Bill, 2011, tabled in the Lok Sabha recently, comes in the wake of pressure from RBI to clarify the matter. Predictably, the Competition Commission of India (CCI) is not very pleased at this development. While not officially grumbling, officials in CCI say if monitoring powers over banks’ M&A are taken away from the competition watchdog, there could be similar demand in other sectors. For the record, a senior CCI official said: “There is no turf war. This is a dynamic situation. Tomorrow, if the government feels CCI should regulate (bank) M&A’s, it can do so.” The Competition Act itself empowers the government to allow such exemptions, he noted. Under the Competition Act, 2002, CCI has the power to regulate combinations (M&A) which cause or are likely to cause an appreciable adverse effect on competition within the relevant market in India. The Act also allows the government to make exceptions in the larger public interest if a particular industrial segment needs to be out of its purview. The banking Bill proposes to insert a new section, 2A, in the Banking Regulation Act, 1949, to exempt mergers of banking companies from applicability of the Competition Act.The RBI had expressed reservations about putting bank M&A under the purview of the CCI. It felt any other watchdog would not be able to appreciate the complexities in banks’ mergers. Though the Competition Act was passed in 2002, CCI became functional only in May 2009. It had notified rules relating to mergers only recently. This is the third major occasion where the government has tried to address RBI reservations on regulatory issues. After a spat between the regulators for the capital markets and the insurance sector on unit-linked products, the Union finance ministry had decided on an oversight panel chaired by the finance minister. After RBI resisted, the central bank governor was made vice-chairman of the mechanism. There were similar RBI objections to the proposal for aFinancial Stability and Development Council. It was decided to have one sub-committee of the Council, to be chaired by the RBI chief. The opposition from RBI was because it used to chair the coordination committee between financial sector regulators and these decisions by the finance ministry diluted its earlier role. The banking laws amendment bill also proposes to empower RBI to call for information and returns from associate enterprises of banking companies and to inspect these, if necessary. This may lead to a turf war, if these associate enterprises fall in other regulators’ domain, analysts said. RBI had expressed reservations about putting bank M&A under the purview of the CCI.
Thursday, March 24, 2011
95% of farmer households in NE sans banking - Deepak Mohanty
Executive Director of the RBI, DK Mohanty addressing the gathering at the ‘Financial Outreach’ camp held on Wednesday, March 23 in at Chumukedima village.
DIMAPUR, MARCH 23 (MExN): The Reserve Bank of India as part of its platinum jubilee celebrations is currently in the midst of ‘Financial Outreach’ campaign to reach out to the ‘unbanked’, particularly at the rural areas. The mission is to extend hundred percent ‘financial inclusion’ to every household in the country. The Executive Director of the RBI, DK Mohanty was in Dimapur on Wednesday, March 23 attending one such outreach camp organised at Chumukedima village. Today’s was the fifth such camp held in the north east this year. Other officials present at the camp included - Surekha Marandi, Regional Director, RBI Guwahati; Kevikha Kevin Zehol, Deputy Secretary, Finance; CC Mitra, Director, IIBM; BB Sangma, Banking Ombudsman, Guwahati; Dr Bhaskar J Sharma, GM SBI, Guwahati; Dr US Saha, GM, NABARD, Dimapur; DC Maongwati Aier and officials from other financial institutions. The apex financial institution of the country has already conducted one at Khonoma village under Kohima district in November last year during the first phase of the campaign (2009-10). The efforts of the RBI, notwithstanding, Mohanty revealed that 75 years since the foundation of the RBI: “As many as 145 million households or about 43% of the adult population in the country still do not have access to banking…” The situation is grimmer in the north east. “About 95% of the farmer households (in the region) do not have access to formal finance.” It is high time that the villagers should the take lead role side by side with the formal banking system in making their villages as productive units and self sufficient, Mohanty challenged. As such, the RBI is on mission mode to bring the remaining 47% of the population under the fold of mainstream banking system inorder to achieve ‘financial inclusion’ in every nook and corner of the country. “We are here with you today to share your dream of ‘financial inclusion’ and interact and share your experience regarding availability of banking services and understand the problems… in a better way. In this mission, everyone has an important role and responsibility to play and the rewards and benefits will also be enjoyed by all.” To this end, he informed that there are a plethora of initiatives which have been launched for the northeast like capital subvention (financial assistance) for recurring expenses for opening branches, provided the state governments concerned grant the premises and security. Mohanty emphasized that the RBI want to ensure that every adult villager has a bank account and are able to save their money and avail bank loans. Emphasizing on loans, he said that they are unlike subsidies or grants. Loans should be used mainly for productive purpose since they have to be paid back with interest, he stressed. “Once you pay back your loan you will have a good rapport with the bank and you will get a bigger loan in the next round which will be a win-win situation for both the bank and you.” “There is also a plan extend banking services to all villages with population of 2000 and above by 2012.” “The RBI has identified 196 such villages in Nagaland and allotted to various banks. The services will either be brick of mortar branches, through once a week mobile services or through banking correspondences according to the capacity of the banks,” he said. He also put in a word of caution, urging the villagers to be wary of unscrupulous companies and other entities collecting deposits from the general public illegally under various schemes through network marketing. Some of these companies even claim fraudulently that they have the RBI’s approval, he further warned.
Banks to have extended working hours on March 30, 31: RBI
The Reserve Bank of India (RBI) asked banks to have extended working hours on March 30 and 31, 2011, to facilitate receipt of government revenue from members of public even at late hours. It has been decided in consultation with the Controller General of Accounts that all regional offices of RBI and branches of agency banks conducting government business will suitably extend the banking hours to conduct government business by keeping their counters open for the purpose on March 30 and 31, 2011, the central bank said in a statement. This will facilitate receipt of revenue from members of public even at late hours, it said. It will help in accounting of all the government transactions of the current financial year (2010-11) by March 31, 2011, it added.
RBI to Indian banks: work harder - James Lamont
Duvvuri Subbarao, India’s central bank governor (pictured), is never short of recommendations of how India can reach double digit economic growth. A few months ago he was touting more foreign direct investment to make what he called the “quantum leap” from India’s current 8.5 per cent growth rate to something nearer neighbouring China’s. But a recent fall in FDI has persuaded Subbarao to turn to domestic savings as the key. His latest recommendation won’t make him friends among the country’s more somnolent bankers, who are already under pressure to deliver a massive expansion of services to reach tens of millions of unbanked Indians in the years ahead. “For the double-digit growth that we aspire for we will need to have savings…and for that to happen we need to encourage savings,” the governor of the Reserve Bank of India told a meeting of international bankers in New Delhi this month. “Banks will have to raise the interest rates they offer to depositors and reduce the interest rate they charge from borrowers.” The catch is that banks would have to cut their very healthy profits – unless they make their own “quantum leap” in efficiency and target more fee income. India’s banks have for long enjoyed cosy margins and benefited from regulated interest rates on savings accounts. They have reaped rewards from an under-banked market with few alternative capital market instruments for depositors and lenders. It has been an almost effortless way to make money. Surprisingly, that and uncomfortably high inflation hasn’t deterred Indian savers. India’s savings rate has risen from about 20 per cent of GDP to more than 30 per cent during market liberalisation over the past 15 years. Nonetheless, Mr Subbarao wants to strike a blow for consumers. In gentle tones, he is calling time on fat interest rate margins of about 3 percentage points. He is also making an appeal for more efficiency among banks that employ a lot of people and are badly in need of technological advance. The underlying message is that India’s banks, among them 26 publicly owned institutions, need to work harder for their profits, and benchmark themselves against international peers. To enable them to cut lending rates, banks will have to reduce wage bills and transaction costs, weed out non-performing assets and seek efficiencies through technology. Banks have traditionally defended their high operating expenditure. After all, India is a big, unconnected country with a lot of people on low incomes. They claim not to be out of whack with counterparts in Latin America and elsewhere in Asia, like Indonesia. They have, however, responded to a more dynamic environment by bettering their return on assets and lowering staff costs. The run-away success of the Indian IT outsourcing and business processing industries has shown how India can radically cut operating costs for financial institutions overseas, among them Citigroup, Bank of America and JP Morgan. Mr Subbarao has a point asking why the same efficiencies should not be brought to bear at home.
http://blogs.ft.com/beyond-brics/2011/03/23/rbi-to-indian-banks-work-harder/Deposit growth improves, but more needed to meet RBI target
Banks must garner Rs 1.5 lakh cr in last fortnight this yr to meet 18% growth target. Deposits grew at a pace of 16.58 per cent over a year as on March 11, as compared to 16.45 per cent the earlier fortnight. In a fortnight, banks were able to garner Rs 56,517 crore worth of deposits due to attractive interest rates. The Reserve Bank of India (RBI) had projected an annual growth rate of 18 per cent in deposits and 20 per cent in bank advances. As on March 11, bank credit grew at 23.2 per cent. While the growth in advances has been better than expected, growth in deposits was limited by high inflation. Also, interest rates offered on fixed deposits were low for a major part of the current financial year. “The real interest rate was negative for most of the year. Very high inflation did not allow allocation of savings to bank deposits, as interest rates offered by banks on fixed deposits were also low at around seven per cent,” said Vaibhav Agarwal, vice-president, research, Angel Broking. He expects deposit growth to be 17-18 per cent by the end of March. Inflation has been high through the year. The Wholesale Price Index (WPI) for February was at 8.31 per cent, while it was 8.23 per cent in January, 9.41 per cent in December and 8.08 per cent in November. RBI expects inflation to be at eight per cent in March. Bankers, on the other hand, are confident of achieving the 18 per cent growth projection. “It should be achievable, as there is usually a brisk offtake in the last fortnight of a financial year. Also, there will be huge roll-overs lined up in the last 10 days, which the banks can re-price and retain the existing portfolio,” said S Govindan, general manager, Union Bank of India. “Every bank will deploy serious marketing strategy at the month end, so that they can show higher deposit growth in the balance sheets for the financial year 2010-11,” said a senior official with Central Bank of India. He said there would be huge deposit mobilisation in the last week of this month. Deposits in the banking system were Rs 44 lakh crore at the end of March 2010. Banks will have to garner around Rs 1.5 lakh crore more in the last fortnight this year if the 18 per cent growth target is to be achieved over last year’s figure. Deposits as on March 11 were at Rs 51 lakh crore.
State Bank of Indore merger in interest of public: Govt
The acquisition of State Bank of Indore by State Bank of India (SBI) last year was in public interest, the Rajya Sabha was informed on Wednesday. The merger was in “overall public interest,” Namo Narain Meena, minister of state for finance, said during a debate over the SBI (Subsidiary Banks) Amendment Bill, 2010, in Rajya Sabha. “Now, they (State Bank of Indore customers) can deposit and withdraw money from all 14,000 SBI branches,” he said. The upper house later passed the bill, seeking to omit all references to State Bank of Indore, acquired by SBI in July last year. He assured members the interest of employees would be protected. He added banks were doing a “commendable job”, with their performance being unaffected during the global recession. “The credit goes to the Reserve Bank of India and the banks alike,” he said.
Top bankers, regulators & legal experts to assist Sri Krishna in FSLRC
NEW DELHI: An eclectic mix of bankers, former financial regulators and legal experts have been named members of the Financial Sector Legislative Reforms Commission, or FSLRC, to be chaired by Justice Sri Krishna. D Swarup, former pension regulator, P J Nayak, former Chairman Axis Bank; K.J.Udeshi, former Deputy Governor RBI, C Achuthan, legal expert and part-time member of the law commission; J R Verma, former member Securities and Exchange Board of India and Justice Debi Prasad Pal feature have been appointed as members of the FSLRC to re-write and clean up financial sector laws of the country. The mandate of the Commission would be wide and may include a review of the pay scales in RBI, PFRDA, IRDA and SEBI , said a government official privy to the development.
RBI’s proposal rejected, realtors may be barred from seeking licences
NEW DELHI: The finance ministry has opposed the Reserve Bank of India's suggestion to restrict foreign direct investment in new banks to 49%, saying the change in norms will hurt investor sentiment. It has also asked the central bank to bar real estate firms from seeking banking licences and alter conditions relating to financial inclusion and stake dilution by promoters. "The rollback of the current FDI norm from 74% to 49% will not send a good signal to investors and is avoidable," a senior finance ministry official said. "We have asked the RBI to reconsider this." The central bank's suggestion was part of its comments on the draft guidelines for new bank licences, which it submitted to the finance ministry earlier this month. The RBI was expected to issue the draft guidelines for new bank licences before the end of this month, but the differences of opinion with the finance ministry could delay the process. The ministry has asked the RBI to ensure the guidelines clearly say that the new banks will be exempted from Press Notes 2, 3 and 4, which revamped the country's foreign investment policy and procedures. Without the exemption, these banks would become foreign banks if overseas investment in them crosses 50%. This would lead to imposition of the same restrictions on them that apply on foreign companies. The government is already struggling with policy issues in respect of private lenders, such as ICICI Bank and HDFC Bank , where foreign holding is more than 50%. The ministry has also suggested that the RBI should disqualify any group that has exposure to real estate from seeking a banking licence. "A lot of issues have risen with real estate companies who got 2G licences," said the official. "We would like to avoid such a situation." The central bank had suggested that companies that derive 10% or more of their income or assets from real estate, construction or broking activities should not be eligible. The finance ministry has also opposed the RBI's suggestions on financial inclusion and stake dilution by promoters of new banks. The central bank had proposed to make it mandatory for new entrants to have at least 25% of their branches in rural areas with population of less than 10,000. The ministry, however, wants it to allow new banks to open one-fourth of their branches in tier-III to tier-VI cities, having a population of up to 50,000. The ministry has also differed with the central bank on the schedule and the extent of dilution by promoters. The RBI had suggested that the promoter holding in the new banks should be brought down to 15% over a period of 10 years. But the ministry wants promoter holding to be brought down to 20% after a period of five years and other shareholders should not hold more than 10% stake. "This will help in maintaining a balance between promoters' interest and good corporate governance norms," the official said. The finance ministry has also said that promoters should have an initial minimum shareholding of 40%, which should be locked for five years. The ministry has supported the RBI's draft guidelines on initial minimum capital of Rs 500 crore, but has suggested that this should be raised to Rs 1,000 crore over a period of five years. "This will ensure that there are sufficient funds for initial smooth operations and also bank licence aspirants will have to be committed towards expansion," the official said.
Bid to arm RBI with sweeping powers
New Delhi: The government has sought Parliamentary nod to give sweeping powers to the Reserve Bank of India to inspect books of all associate enterprises of a bank, including its holding company. The regulator is poised to get more powers to not just confine itself to holding companies but even a subsidiary company or a joint venture of the holding company. This means that if the holding company of a bank has a subsidiary which is in education or fertilizer business, RBI will have powers to inspect their books as well. At present, RBI has to seek assistance from sectoral regulators and the Registrar of Companies (RoC) to inspect the books of entities that are not regulated by it. The proposal may also expose RBI to criticism of stepping into the domain of other regulators such as those for insurance, capital markets, pensions and Forward Markets Commission which oversees futures trading in commodities. The banking regulator, which acts as the central bank and also oversees the functioning of the bond, currency and money markets, has generated considerable controversy in recent years by protesting against any move to dilute its role. RBI regulates the functioning of banks and NBFCs, which in recent years have tried to become one-stop financial stores by setting up subsidiaries to manufacture and sell insurance policies, mutual funds and pension plans. Besides, several players have investment banks and brokerages. Some of them have also set up private equity funds, which RBI is keen to regulate given the global debate on these investment vehicles. After a lengthy turf battle with RBI, the finance ministry seems to have turned the corner and tilted the regulatory scales in RBI’s favour. While defining bank associates, the Banking Laws (Amendment) Bill 2011 that was introduced in Parliament on Tuesday has proposed that RBI be given powers to look at entities that control the composition of the board or other bodies governing the company. Similarly, any entity —which in RBI’s opinion exercises significant influence on a bank in taking financial decisions—can be probed by the regulator. The bill has proposed to allow RBI officials to inspect the financial statement of any shareholder as it provides for inspection of accounts of those “able to obtain economic benefit from the activities of a banking company”. The move comes at a time when the government is egging RBI to issue new banking licences. The regulator had sought more teeth before issuing the draft guidelines. The list of new powers includes ability to supersede bank boards for up to 12 months and appoint an administrator to manage affairs. The administrator would be required to seek shareholders’ nod to appoint new directors within two months of taking charge. The regulator is also proposed to be given powers to define “fit and proper persons” who can acquire 5% or more stake in a bank. In any case, a stake acquisition beyond 5% will need prior approval of RBI.
Yields hold near 3-week high before bond sales
Eleven-year bond yields held near a three-week high on speculation demand for the notes will wane as the government starts debt sales for the new fiscal year in April. The yield on the 8.08% note due August 2022 was at 8.12% after Tuesday's trade, compared with 8.13% on Monday, according to RBI's trading system. Monday's closing level was the highest since February 25. The government plans to borrow . 4.17 lakh crore ($92.7 billion) in the next fiscal year beginning April 1. The government and Reserve Bank of India representatives will meet on March 25 to fix the bond auction schedule for the next six months, a finance ministry official said March 19, declining to be identified as the budget information was confidential.
Wednesday, March 23, 2011
Teaser loans deny old customers benefit of lower rates
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Emmett J. Rice, Former Fed Governor, Is Dead at 91
Emmett J. Rice, a former Federal Reserve governor, World Bank executive and adviser on economic development who helped Nigeria set up its banking system in the 1960s, died on March 10 at his home in Camas, Wash. He was 91. In the early 1950s, while an assistant in the economics department at the University of California, Berkeley, Dr. Rice received a Fulbright fellowship that took him to India, where he became a research associate at the Reserve Bank of India. His studies of economic development there became the basis for his doctoral dissertation.
Meet of Supreme Audit Institutions begins
KOCHI: The Global Working Group of Supreme Audit Institutions (SAIs)from 19 countries is meeting at Kumarakom from March 21 to March 23. Organised by the Office of the Comptroller and Auditor-General of India, the global group meets annually in different member-countries, with the last meeting held in Sydney in March 2010. The conference addresses issues of contemporary relevance and include topics such as ‘Improving communication between SAIs and their stakeholders, capacity-building of SAIs, auditing third-party service providers and fallout of the global financial crisis. The RBI Governor will speak on ‘India and the Global financial crisis- collateral damage and response’.
Beware that tax refund is scam!
NEW DELHI: Cyber crooks are on the prowl this financial year closing and are using phishing attacks and hoax-alerts to gain access to account details of individuals who have filed their Income Tax returns online, warn experts. "It is the season of income tax returns. Many people file them online. Cyber criminals use this time to launch phishing attacks through emails as many people are not aware of these things," says Vinoo Thomas, Technical Product Manager, McAfee Labs. "An email is sent to a number of people, saying IT refund is available. Once it is clicked, the user is directed to a website that looks like that of IT dept. And there, they ask you to disclose your personal financial details in a form. That information will end up with a scammer who can empty your credit card or bank account in no time ," he adds. For the financial year 2010-11, the Income Tax department has processed over 38 lakh e-filed returns. According to cyberlaw expert, Pavan Duggal, unawareness among public and technical sophistication of the cybercrooks has led to increase in phishing attacks in recent years in India. "People do not know that their financial details can be targeted and misused through Internet. Also, they seem unaware of the policies of financial institutions and government departments to contact their customers," says Duggal. What further complicates the matter, according to him is the technical sophistication of such crooks. "If users are becoming aware of such frauds, these criminals are developing techniques to counter this awareness. The phishing emails and web sites are made to appear exactly same as that of the original one which confuses the users," says Duggal. The recent examples of phishing attacks include RBI phishing scam, ICC World Cup 2011 scam and Valentine Day scams. "Collecting e-mail addresses from spam mail vendors is not a big deal. People still mention their e-mail address openly on forums and social media networks that makes life easier for online fraudsters. People still don't use spam filters," says Thomas.
Primary aim is price stability: RBI Governor
KOCHI: Reserve Bank of India primary concern is to maintain price stability, Governor Duvvuri Subbarao said on Tuesday. RBI raised interest rates last week for the eighth time in 12 months, in line with expectations, and warned both of inflationary pressures and emerging risks to growth. The fight to contain the relentless march of inflation, especially in food prices, has become the focus of RBI and the central government in past few months. India's wholesale price index rose an annual 8.31 per cent in February on higher fuel and manufactured product prices, well above Reuters forecast of 7.79 per cent and higher than January reading of 8.23 per cent.
K. R. Ananda, Regional Director, RBI addressing presspersons
K. R. Ananda, Regional Director, RBI (Tamil Nadu and Puducherry), addressing presspersons in Chennai on Monday. Sumam Jyothi (left), DGM, RBI and G. P. Borah, General Manager, Issue Department
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Banks never sleep, but RBI does - Monika Halan
I wonder why the Reserve Bank of India (RBI) has got its head buried in sand over the extent of lies that bankers tell their customers in their attempt to hit them with inappropriate financial products to earn their bonuses and meet their targets. And I wonder how banks can calmly tell angry customers who protest that the products recommended and promises made by their staff (relationship managers) are not the responsibility of the bank. “The person who sold this to you has moved from our bank, what can we do?” is the most commonly heard excuse to the customer. I recently met an artist at a do. As I tanked up about art, a subject I know nothing about, she reciprocated by asking me questions about financial products. Her story turned out to be the story that I hear over and over again. The average story goes like this: The trusted bank sends its “relationship manager” who knows how much money there is in the account. He usually comes with an insurance company guy. They both sell inappropriate products by lying about product features and what they will return. And when the customer complains some years later, the bank coolly talks about that person having moved on. “And can we sell what you bought and put you in something new now?” And hit the customer with another harmful product. The artist’s story goes like this: She tells the relationship manager that she is an artist (a pretty famous one at that) and does not have regular income flows. Has a son she is funding through college. Needs cash in two years’ time. She wants a one-time bullet investment as she cannot make regular annual contributions. This was last year. Guess what is sold? Yup. A 20-year premium paying unit-linked insurance policy. He sold it saying it is a three-year product. That the Rs3 lakh put in over three years will become Rs5 lakh. When the policy reaches her and she sees it (yes finally found a person who looks at documents, she had actually orange-highlighted the premium paying term till 2029) and calls up the “relationship manager” to ask how he could sell her something that was so long-term, he says: “I am there. Don’t worry, you will not have to pay after three years.” Now, after the new rules post September 2010, he comes back and tells her that it is actually five years premium-paying term. And that he is there. Don’t worry. This is where she calls me and says “I’ve been cheated”. When I looked at the policy document, I see worse signs of the crime. He has put her in a conservative fund and had circled the 10% growth fund value to show what her return will be. Cheating at every step. She now recalls that he would carry away every bit of paper he wrote on to explain the product to her. She only has the notes she made. The problem with this story is that it is not a story in isolation and rampant cheating by the banks continues. Why it is taking RBI so long to put in basic suitability guidelines is something that is beyond reason. What can you do till some rules come into the country? Do not trust what your bank relationship manager tells you. Do not buy products they recommend. The only recourse you have is to search for information and ask the right questions. Don’t have any other place to buy from? OK, do this: For every product that the banker suggests, get him to write the key features on a piece of paper and sign it. That should have details of: How long do I need to invest in this product for it to work for me? If I invest Rs100, how much of this will be invested? Each year, how much is taken out as costs? Am I investing in equity, debt or a balanced fund? If the banker refuses to do this, you know that he is lying about the product he wants to sell. Keep the money in a fixed deposit. Don’t buy the product he recommends. End note: Another investor alert (if I blow any more whistles, my cheeks will explode, I think): Don’t buy medical insurance to soak up the Rs15,000 deduction. They’re selling it saying that there is a new tax break. There isn’t. We already get a Rs15,000 deduction on the premium paid on medical insurance, but we don’t use the entire limit because we don’t need to. A basic cover does not cost that much and a budget of about Rs10,000 a year is usually enough for a good medical cover. For a family of four (with dad at about age 40), a total cover of Rs5 lakh should cost you between Rs8,000 and Rs12,000. Don’t discontinue your old policies to buy new ones.
Monika Halan works in the area of financial literacy and financial intermediation policy and is a certified financial planner. She is editor, Mint Money and can be reached at expenseaccount@livemint.com
Call for financial inclusion in State
KOCHI: Reserve Bank of India (RBI) Governor D. Subbarao has urged people to strive to convert Kerala into a model State in terms of banking and financial services. He was addressing a meeting of villagers and representatives of various non-government organisations at a function organised at the government school at Vengoor west village, near Perumbavoor, in Ernakulam district, on Tuesday. The visit was part of the financial inclusion initiative of the RBI. The village had been identified as unbanked as per RBI norms. Mr. Subbarao visited the Financial Literacy and Credit Counselling Centre and the Rural Development and Self-Employment Training Centre, set up by the lead district bank, Union Bank of India, at Perumbavoor. He addressed a meeting there. Earlier, he visited Sree Sankaracharya University of Sanskrit, Kalady, and addressed students and teachers there. Vice-Chancellor J. Prasad, Pro-Vice-Chancellor S. Rajasekharan, Registrar K. Ramachandran and others received him. He gave away prizes to winners in quiz programme. The RBI Governor will address the Global Working Group of Supreme Audit Institutions, a forum of Auditors General of 19 countries, at Kumarakom on Wednesday.
DSC needs Rs 4cr in coins for April
GURGAON: With the revised toll rates for the Delhi-Gurgaon Expressway set be executed from April 1 midnight, the concessionaire, DSC Ltd, is literally gearing up for change. It has requested the National Highways Authority of India (NHAI) to communicate to the Reserve Bank of India to provide Rs 4 crore in coin denominations for the first month.
Banking Bill could draw investors to old private banks
The proposed Banking Amendment Bill, if approved by in the Parliament, could trigger investor interest in some of the old private sector banks, say market participants. Among other things, the Amendment Bill seeks to remove the restriction on voting rights. Currently, voting rights for a single investor are restricted to 10% of the total, even if that investor owns more than 10% in the bank. “Old private sector banks stand to benefit from the amendment bill,” said Chokkalingam G, ED—CIO, Centrum Wealth Managers. “If the existing cap on voting rights goes, many foreign investors will be keen to buy sizeable stakes in banks,” he said. The Reserve Bank of India is finalising guidelines for allowing corporates to enter the banking sector. Analysts feel non-banking finance companies (NBFCs) too would be interested in picking up stakes in existing banks to foray into banking business. Removal of 10% voting rights would encourage higher shareholding in a bank, by a single investor. The intention is to increase voting rights limit in proportion to shareholding. It is some kind of prelude to the new banking license,” said Bipin Karba, chief financial officer, at Dhanlaxmi Bank. However, Reserve Bank nod is needed for acquiring 5% or more share in banks.. “This move will certainly increase interest of NBFCs to get into banking business. They will try to acquire old private sector banks to kick-start banking business with an existing set-up,” said a head of an old generation private sector bank adding that his bank is ready to be acquired if the acquirer has a sound management background. Old generation private sector banks are currently run by individuals, not by any anchor investors with majority stake holding. For example, Kotak Bank and IndusInd bank (new generation private sector banks) are promoted by Kotak group and Hinduja group respectively. However, there is no single promoter for banks like Karur Vysya or Lakshmi Vilas or Dhanlaxmi. The amendment bill also proposes to allow banks to issue preference shares subject to RBI’s regulatory guidelines. “This is another avenue to raise capital other than plain equity or debt options. It is helpful to maintain higher capital adequacy ratio in times of rapid expansion in the loan book,” said Dhanlaxmi’s Karba. Meanwhile, analysts look for further cues from the Amendment Bill once it is fully passed by the parliament.
Mobile banking vans to speed up financial inclusion: BoB
Under the financial inclusion plan, Bank of Baroda (BOB) has decided to harness the mobile banking van (MBV) route to provide banking services in remote areas of the country. In the next one year, BOB plans to launch 25 new MBV units all over the country. The model has already been successfully tested by the bank in Gujarat and Bihar, while two such units were today launched in Uttar Pradesh by BOB Chairman and Managing Director M D Mallya. He was in town to chair the UP State Level Bankers’ Committee (SLBC) meeting to review the progress of financial inclusion programme as mandated by the Reserve Bank of India (RBI). BOB is the Uttar Pradesh convenor of SLBC and has 17 lead districts here, including two in Uttarakhand.
RBI Sets Holding Co Rider for Bank Licence
The Reserve Bank of India will allow a promoter or a promoter group to establish new banks if they set up a holding company, which will own the bank and all other financial services companies regulated by the central bank or other financial sector regulators. The holding company structure is described in the draft guidelines that the central bank has sent to the finance ministry last week. The guidelines are not final but provide a clue to its thinking. The norms governing new banks will be made public once the finance ministry responds. Such a structure is aimed to ring fence the regulated financial services activities of an industrial house, including the new bank, from other activities such as manufacturing and trading that are not regulated by financial sector regulators. In his Budget speech, the finance minister had said the Reserve Bank of India would release a set of rules governing new banks before March 31. The rules will come into force only after a public discussion.
Tuesday, March 22, 2011
Financial Outreach Camp of RBI to be held at Chumukedima
The Reserve Bank of India (RBI) would organise second phase of the Financial Outreach in Nagaland at Chumukedima Village, Dimapur, on March 23. Official sources here today said as part of its Platinum Jubilee celebrations, the apex bank had organised Financial Outreach Camps in various villages of the NE States in the year 2009-10. The main objective of the camp was to bring awareness among people in remote villages about RBI in general and banking in particular and bring them under the fold of main-stream banking system. Encouraged by the response and the success of the Financial Outreach Camps, the RBI has now decided to launch the second phase of the financial outreach programme in the NE Region. Its Executive Director, D K Mohanty would be the Guest of Honour. The programme would include quiz competetion for school children, banks and other participants opening the stalls.
RBI to relax norms for bank license - Deepak Mohanty
UKHRUL, MAR 21: Reserve Bank of India (RBI) will be relaxing certain norms in licensing bank authorities to open their branches in North Eastern states. Deepak Mohanty, Executive Director of RBI, Mumbai, speaking to reporters on the sidelines of a day-long financial outreach (FO) camp held in Manipur's hill station Ukhrul district headquarters, 84 km north of Imphal on Monday, said, ”We’ll be relaxing certain norms”. In a move to expand its banking facilities in north eastern region, Reserve Bank of India (RBI) is opening a new office at Tripura’s capital within May next. Deepak Mohanty, Executive Director of RBI, Mumbai, speaking to reporters on the side light of a day-long financial outreach (FO) camp held in Manipur's hill station Ukhrul district headquarters, 84 km north of Imphal on Monday, said, “We’ll be opening our next office in Agartala”. RBI’s central board meeting will also be held in Agartala in May next, he added. Entire north eastern states have only RBI Guwahati office. RBI is making all out effort to solve the unavailability of smaller denomination currency notes or coins in Manipur. “We have noted down the grievances,” Deepak Mohanty, Executive Director of RBI said.” We’re looking for an alternative arrangement as coins can be transported by air only.” Recalling the opening of an ATM booth for the first time in Ukhrul district recently, State Bank of India(SBI)’s Chief General Manager RK Garg who is the in charge of north eastern states said 3(three) more ATMs will be opened in Imphal soon. Presently SBI has around 12 ATM booths in Imphal area, Axis bank has 5, United Bank of India (UBI) has only one. “But we are planning to open two more within March end”, UBI’s Chairman and Managing Director Bhaskar Sen said. The two booths will be installed at Mao gate (Senapati district) and INA complex Moirang (Bishnupur district).With this Manipur will be having a total of around 7 ATM booths by the end of this year. Earlier, UBI chief also inaugurated its 1583rd branch at mini secretariat building of the hill town in presence of RBI’s Executive Director Deepak Mohanty, Regional Director Surekha Marandi,Manipur’s Principal secretary(works) Ramnganing Muivah, Deputy Commissioner N Ashokumar of the district, PK Roy, UBI’s General Manager(FIPS) and others.
RBI has a new Regional Director
PATNA: Mohit Kumar Singh has taken over the charge of Regional Director, RBI, Bihar and Jharkhand. Singh replaces G Mahalingam who has been transferred to financial markets department, central office, RBI, Mumbai. Singh, who joined RBI in 1981 as an officer, had also served at the bank's Chennai office as general manager, department of banking supervision. He was earlier officer-in-charge of urban banks department, department of banking operations and development and banking department at the bank's Bhopal and Kanpur offices. Singh had also served on deputation as chief vigilance officer with an associate bank in the SBI group.
India Inc profit margins eroding: RBI
Mumbai: Increasing raw material cost and rising salary bill eroded the profitability of India Inc during April-September period of the current financial year, says an RBI analysis. According to a Reserve Bank of India (RBI) study which analyses the performance of the Indian private corporate sector during the first half of the current fiscal, sales growth was robust on the back of pickup in demand. "However, despite robust revenue growth, companies in aggregate could not generate higher profit margin primarily on account of higher input prices and rise in interest outflow," the RBI study said. It said even as the sales growth in both manufacturing and the services sector was robust during the period under review, profit growth in both the sectors was comparatively lower during the period. During the first half of the current fiscal, India Inc's staff cost rose by 17 per cent to Rs 71,133 crore, the RBI study said. The staff cost grew by 7 per cent in the same period of previous fiscal. "Generally it is observed that staff costs is higher for IT companies compared to manufacturing and services sector companies," it said. In the April-September period, the expenditure on consumption of raw materials shot up by 27.7 per cent YoY to Rs 4.36 lakh crore. "Higher input cost, that led to noticeable rise in total expenditure, vis-a-vis relatively lower revenue for companies resulted in a contraction in profit growth at the operating level," the study said.
25-paise coins invalid from June 30
CHENNAI: Coins in the denomination of 25 paise and below will be legally invalid for circulation from June 30. Addressing presspersons here on Monday, K. R. Ananda, Regional Director, Reserve Bank of India (Tamil Nadu and Puducherry), said the Union Government, which has the responsibility of minting coins, has decided to withdraw smaller denomination coins of and under 25 paise. The value of such coins has eroded and they are no longer in use. People can exchange coins in denominations of 25, 20, 10 and 5 paise in the issue offices of the RBI and branches of 45 banks for their face value till June 29. A special counter has been opened for accepting such coins in the RBI office between 10 a.m. and 2.30 p.m., he said. People have started exchanging from this month and the coins totalling Rs.3,000 are being exchanged daily. “We expect this number to go up,” Mr.Ananda said. On whether the 50 paise coin would also be withdrawn, he said “We only act as agents for distributing coins minted by the government.” Officials of the RBI said there was no dearth of 50 paise coins and they are available with RBI counters. Only a few Metropolitan Transport Corporation personnel bought the coins in bulk. However, coins of the value of Rs.10 were in short supply. About the Rs.150 coin released recently on the occasion of Income Tax Department completing 150 years, he said it is yet to reach the regional office. G. P. Borah, General Manager, Issue Department, RBI, told The Hindu that the Rs.150 coin is only a commemorative coin and not for circulation. Similarly, a coin of Rs.75 value was released during the platinum jubilee year celebration of the RBI. However, it is not meant for circulation. The RBI, however, has issued a new one-rupee coin to mark its platinum jubilee. As of now, commemorative coins of denominations under Rs.10 are available for circulation. The RBI also plans to issue coins in denominations of Rs.2, Rs.5 and Rs.10 soon as part of its platinum jubilee celebrations. People may book such commemorative coins on the website of India Government Mint. Mr.Bohra said the RBI has recently launched an initiative of issuing coins in select bank branches located near nine market areas in the city. The areas include T.Nagar, Koyambedu, Washermenpet, Selaiyur, Thiruvanmiyur and George Town. In the past two months, traders have taken coins worth nearly Rs.2 crore.
Longer wait for bank licence
New Delhi, March 21: New banking licences will be given only after the government vests more powers with the Reserve Bank of India to control the new entities — a process that is unlikely to be over in the next fiscal. Amendments to the Banking Regulation Act that will give more powers to the RBI are likely to be tabled in the monsoon session of Parliament. The act will in all probability be referred to a standing committee, effectively puncturing all hopes of industrial houses bagging a licence in fiscal 2011-12. “Empowering the RBI is essential for obtaining information about the other businesses of the corporate houses seeking banking licences in order to protect depositors’ interests,” said officials. The government is also likely to set up a panel to vet the draft entry rules framed by the RBI. “Effectively, new licences will be given by the end of 2012,” said the officials. The apex bank had brought out a discussion paper in August on licences to business houses and non-banking finance companies, and regulations to foster competition. Finance minister Pranab Mukherjee had said in his budget speech that the RBI was planning to issue the guidelines before the close of the current financial year. The Economic Survey 2010-11 had suggested two types of licences, one for providing basic banking to fulfil the obligation of financial inclusion and the other for full banking encompassing all the activities of a commercial bank. Meanwhile, the RBI has said it will look at the business plan for financial inclusion before granting a licence. “One of the criteria for evaluating an application (for new bank licence) that we will get in the due course of time will indeed be the business plan for financial inclusion,” RBI governor D. Subbarao had said earlier this month. The RBI has been contemplating whether to make it mandatory for new entrants to have a rural presence or to leave it to the competition in the market to force them to look for newer markets. Of the 600,000 habitations in the country, only about 5 per cent have a bank branch. Only 40 per cent of the population have bank accounts. India has 27 public banks, seven new private banks, 15 old private banks and 31 foreign banks.
New analysis questions RBI's understanding of inflation
Days after the Reserve Bank of India (RBI) raised its key policy rates to tame an unexpected rise in inflation in February, a new analysis claims that none of the factors considered relevant by the central bank, are crucial for understanding inflation in India. A newsletter, Developing Trends, brought out by Surjit Bhalla of Oxus Investments, and others, also projected inflation to fall to five per cent in six months, if not sooner, from the current level of 8.31 per cent, saying the rate of price rise was close to or has peaked in India. The analysis says traditional factors like money supply, fiscal deficits and new theories about the changing pattern of consumption by Indians that lead to a mismatch between supply and demand of protein-based products are not very important. “None of the traditional or new factors, held important by many analysts, and RBI, are relevant for explaining Indian inflation,” the newsletter says. It says growth in money supply was able to partly explain inflation trends during 1980 to 1995, but nothing later. “A flatter line than that between money supply growth and inflation post-1995 cannot be found.” Also, fiscal deficit, says the analysis, is able to partly explain inflation, but has the wrong sign that is, higher the fiscal deficits lower the inflation. “Obviously, this is an example of lies and statistics and all that, but nevertheless it points to the rejection of the notion (or rather the unfounded belief) that fiscal deficits have led to higher inflation in India.” However, the newsletter clarifies that it is not asserting that fiscal deficits do not matter or they do not matter in India. Such deficits are relevant for interest rates and therefore growth, which in turn can have an effect on dampening inflation. “The simple point is that fiscal deficits are not useful for explaining inflation in post-reform India at all,” it says. Then, there are new theories that say that new determinants include dietary patterns to protein and supply shortages of protein. However, the study says protein demand has been going on for the last 30 years and not just in 2009, which was the real anomaly year of Indian inflation. Then there are theories that link inflation to convergence with developed country price levels in a hurry—the convergence that was to take place over a 50 to 100 years is now compressed into a few short years due to globalisation and recent high economic growth. The analysis says covergence to developed country theory is okay, but not in such a great hurry and truly depends on several other factors—higher productivity growth in fact leads to lower inflation and undervaluation of the real exchange rate through policy intervention most likely dampens the inflation rate. Developing Trends linked Indian inflation since 1996, even since 1980s, to intational inflation. “If this is measured by the inflation of the median country in a particular year, then 71 per cent in Indian inflation since 1982 is explained. This is the highest explanation for any G20 country, with Korea, Japan and the US close behind. The analysis furhter says there is a strong sustained relatoinship between world inflation and the price of crude. “For non-OECD countries, including India, the relationship between inflation and crude is extremely robust—each $10 increase in the price of oil leads to approximately 0.5% increase in inflation. The impact is a lot less for OECD countries—a negligible and insignificant increaes of 0.03 per cent.” An increase in the price of crude, however, caused sets in motion a sequence of price events in this hyper price sensitive world, says the newsletter. “Somewhat peculiarly, but not entirely unexpectedly, world food prices increase by 3.3 percentage points for each $ increase in the price of crude.” Expectedly, copper prices rise by $0.4/lb for each $10 rise in crude.
Ineffective policy - ''Persistent tinkering has not impacted inflation.''
The Reserve Bank of India has stuck to its tight monetary policy by raising the short-term policy rates by 25 basis points. It has, in its latest review, raised the repo and reverse repo rates to 6.75 per cent and 5.75 per cent respectively and there was no surprise as the apex bank had given indications of its hawkish thinking many times in the past. The hikes, which have been resorted to eight times in the past one year, underline the concern over inflation which the RBI considers as the major challenge. In spite of all RBI and government actions inflation rose to 8.3 per cent in February. What is worrying is that persistent tinkering with policy has no impact on the inflation curve. Food prices, which drove overall price index to high levels, have cooled off now. But other factors and the inflationary environment have remained largely insensitive to policy action. There is a recognition of this in the RBI’s position. The apex bank has noted the volatility in industrial production and the weak performance of the capital goods sector. The limits to the impact of monetary policy prescriptions are being tested now. Government policies have not helped much and an adverse international climate has added to the problem. Global oil prices are ruling above $115 per barrel, with chances of further escalation. The union budget has not earmarked adequate amounts for the oil subsidy. In fact the allocation for other subsidies and social sector commitments are also inadequate and the so the government will have to go beyond its budgeted expenditure. This will create additional pressures on the fiscal situation. Though there is no revision of GDP growth figures, the rate hikes can create worries on that score. An increase in interest rates will make capital costlier and hurt consumer demand and the competitiveness of the industry. Slower growth can also lead to a fall in tax revenues and result in higher fiscal deficit. The mishap in Japan may affect economic recovery in the US and elsewhere. Exports and foreign investment prospects may be hit because of this. The erosion in the government’s credibility and standing will be another negative factor. Therefore the situation on the price front and the larger economic scenario are not the best, in spite of the RBI’s best efforts.
Govt to unveil borrowing calendar on Friday
Officials of the finance ministry and Reserve Bank of India (RBI) would decide on the borrowing calendar for April-September on Friday, March 25. The Centre would conduct borrowing for the coming fiscal year in a “non-disruptive manner,” leaving enough space for private sector's investment needs.
RBI's misplaced concern
This refers to the report "RBI slams banks for LAF misuse&" by Manojit Saha (March 21). It is surprising to read that the Reserve Bank of India (RBI) has now expressed displeasure at the fact that some banks are borrowing under the Liquidity Adjustment Facility (LAF), on-lending the funds to other banks and earning a spread as a result. LAF, as has been rightly observed, is a secured facility available to banks for borrowing against surplus government securities in their portfolio and is not unsecured call money. Since there may be banks with inadequate surplus government securities to pledge with RBI and borrow directly, there was nothing sinister in surplus banks lending to them from LAF-borrowed funds. This way liquidity is managed in the system without much volatility in the call rates. This has been discussed with senior RBI officials in the past and the banks treasury officials have been clearly given to understand that it was perfectly in order for banks to lend to other entities from LAF-borrowed funds. RBI should not keep changing its stand, since it may aggravate volatility in the overnight money market. - S Ravindranath, Coimbatore
Get Real on Bank Licences - MYTHILI BHUSNURMATH
The suspense over new banking licences will soon be over. With finance minister Pranab Mukherjee announcing that the RBI is planning to issue the guidelines for new banking licences before the close of this financial year, presumably, it is only a matter of days before the RBI comes out with its final guidelines. It has already issued two draft papers inviting comments; so, the motions have been gone through and according to news reports, the final version has gone to the finance ministry for vetting. Ostensibly, new bank licences are needed to ensure competition and promote financial inclusion. The FM, in his Budget speech last year, was emphatic on that score. “We need to ensure that the banking system grows in size and sophistication to meet the needs of a modern economy. Besides, there is a need to extend the geographic coverage of banks and improve access to banking services.” RBI’s discussion paper on entry of new banks echoes this view. “It is generally accepted that greater financial system depth, stability and soundness contribute to economic growth. But beyond that, for growth to be inclusive requires broadening and deepening the reach of banking. A wider distribution and access of financial services helps consumers and producers raise their welfare and productivity.” The only difference between the FM and the RBI’s position seems to be one of emphasis. While the FM seems to regard the need for new bank licences as driven equally by the need for more sophisticated (?) banking services and financial inclusion, the RBI seems inclined to view it more as a means of ensuring greater financial inclusion. RBI governor D Subbarao is on record that financial inclusion will be one of the main criteria on which licences will be given. Either way, access to sophisticated banking and financial inclusion are the main drivers for issue of new bank licences. Take them one by one. First, the FM’s concern that we need to have banking services that ‘meet the needs of a modern economy’. As on March 31, 2009, we had 27 public sector banks, seven new private sector banks, 15 old private sector banks, 31 foreign banks, 86 regional rural banks (RRBs), four local area banks (LABs), 1,721 urban cooperative banks, 31 state cooperative banks and 371 district central cooperative banks. So, we certainly don’t lack numbers! And nor, it would seem, do we lack modern banking services, given that virtually every major foreign bank in the world has a presence in India. Hence, access to sophisticated banking products is not for want of sophisticated players. They are already here. What about financial inclusion? Here the position is less encouraging. Less than 50% of Indians have access to formal banking. Today more Indians have a mobile telephone than a bank account! If you allow for the fact that many Indians in metropolitan and urban areas have more than one bank account, the picture becomes even more disturbing with rural and semi-urban areas vastly under-banked. The far more pressing case for issuing more bank licences, therefore, is to remedy this imbalance and promote financial inclusion. Will new banks do that? If yes, the case rests and there is nothing more to be said. We must licence more banks. If not, there is no case for new bank licences; at least, not on the grounds of financial inclusion. So, let’s go back to the mid-1990s when 10 new banks were set up in the private sector (two more came up after the revised guidelines of 2001), ostensibly for the same reasons bandied about today — to promote competition and increase coverage. However, not all survived, leaving a total of seven new private sector banks on date. Seven out of 12 is not bad but it is not a score card that bolsters the case for new bank licences, especially in the light of what the 2008 crisis has taught us of the serious systemic consequences of bank failure. But we could still overlook that if the larger cause of greater coverage were served. Has it? No. Data shows new private sector banks had only 6.5% of their branches in rural areas as on March 2010. In contrast, nationalised banks had 31.6% of their branches in rural areas while State Bank of India had 32.7%. Meanwhile, the share of rural deposits and advances has come down from 10.8% in March 2006 to 9.2% in March 2010 and 8.4% to 7.5% over the same period. Therefore, whatever else the reason for issuing new bank licences, financial inclusion cannot be one. Neither can access to state-of-art banking products. So, what can? Corporate lobbying? Perhaps! But that does not mean the sector should be closed to entry. Rather that the fit-andproper test must remain the only yardstick and the RBI the only arbiter of that.
RBI accommodates IMC's recommendation on NBFCs
The Reserve Bank of India has accommodated the Indian Merchants’ Chamber’s (IMC) plea for including telecom towers in infrastructure finance definition for Non-Banking Financial Companies (NBFCs). The Chamber had recently brought to the notice of Deputy Governor Ms Shyamala Gopinath during a seminar on NBFC held in IMC on anomaly that in the same definition for banks for infrastructure loans, telecom towers were included, but not for NBFCs, a release issued by IMC said here today. The Reserve Bank has now issued a notification amending the Non-Banking Financial (Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2007 to include 'Telecom Towers' also as an infrastructure facility for availing credit facility from NBFCs, the release added.
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