CIC: Government employees have an equal stake in good governance

Chief information commissioner says citizens should get proactive about government functioning through the use of RTI. But this should not become a tool to harass officials. Rather, there should be minimum friction between the information seeker and the provider. "Even a government servant spends only 32% of his time at his job and he is an ordinary citizen for the rest of the time. His stake in the ruling government is much lesser than in his citizenship. So it is in his benefit to uphold the Right to Information and improve governance," Shailesh Gandhi, central information commissioner, said today. Mr Gandhi was addressing a seminar on "How to use the Right to Information effectively," hosted by Moneylife Foundation at Ravindra Natya Mandir, in central Mumbai.  The central information commissioner described the history and scope of the Act and outlined the provisions, and even elaborated on the proper format and procedure for citizens to seek information. He explained the functioning and powers of public information officers (PIOs) and deemed PIOs. "The procedure and system should be so smooth that there is minimum friction between the information seeker and the provider," Mr Gandhi said. 

Referring to an observation made by V.S.Das, Executive Director of the Reserve Bank of India, on the needless and voluminous queries that tax an organisation's resources and time, Mr Gandhi said the RTI should not become a tool to harass officials. He also drew attention to the definition of 'public authority' in the Act to point out that cooperative housing societies, unless specified by a government body or funded substantially by the government, cannot be termed as public authorities. However, he argued that public-private partnerships should come under the RTI Act. "A lot of public assets will be shifted to these PPPs soon, so these should be covered by the RTI. Otherwise, it will be like a fraud, when public resources are privatised without anybody's consent," Mr Gandhi said. The central information commissioner also talked about section 4 of the RTI Act, which relates to suo moto dissemination of information by public authorities, which he said is at the heart of the Act. On the matter of exemptions mentioned in the Act, Mr Gandhi gave examples from his personal in this area saying that government deals with any private businesses or parliamentary papers (six months after they are tabled) must not be exempted from the purview of the Act. "A PIO cannot deny information just by saying that the matter is sub judice or that it is personal," he said.  Asked about the proper way to sensitise people about the Right to Information and how to become pro-active in demanding good governance, Mr Gandhi said it requires a combination of lobbying and campaigning to develop a culture of transparency.  On disciplinary penalty for erring PIOs, the central information commissioner said, "Asking for more penalty is not a solution. Lots of corrective measures can be taken by the authorities within the framework of the law available." But he agreed that a time frame must be specified for the second appeal as well.

On the inspection of files under the Act raised by a participant, Mr Das, who is the appellate authority at the RBI, said that in case information was left out of the manuals and other documents, or they are not updated, the people should draw the bank's attention to this. On this matter, SS Mundra, Executive Director, Union Bank, said, "In physical form, most information is available at the offices."  Mr Das said RTI activism has a long way to grow. "Very few applications are received from less developed areas of the country. It we get only two applications from Tripura and four from Assam this year, I think there is a need to educate people on the scope of the Act," he said. Mr Das outlined the RBI's engagement with the Act, how the highly centralised operation had spread out to all its regional offices, and said that the RBI has proactively disclosed a lot of information on its website. "Being the central bank of the country, it is our duty to disseminate information and also protect sensitive data," he said. In six years since the RTI Act was adopted, the RBI has received over 18,000 applications, but only 16% of these have gone for first appeal.  In this respect Mr Mundra added, "There are doubts in the mind of both the provider and the seeker of information. The central information commissioner can dispel these doubts and give us guidelines on how to access and disseminate information." He said Union Bank was committed to organise six seminars on different topics with Moneylife Foundation this year and felt privileged to be a part of this initiative.  This seminar is the latest in a series of discussions on RTI organised by Moneylife Foundation, which have been very popular with alert citizens, activists and civil society workers.

Moneylife

JIMS holds National Seminar on Indian Banking

The objective of this seminar was to identify the emerging trends in this sector while keeping in mind the international perspective, in the context of global financial turbulence. Jagan Institute of Management Studies (JIMS) Group of Institutions, an institute of excellence in the field of management studies and technical education, today organized a National Seminar on “Indian Banking: Robust; Reliable; Resurgent”. Outlining and emphasizing the inspiring story of Indian banking sector that successfully sailed through the financial tornado witnessed by the global as well as the Indian economy a few years ago JIMS, organized the day-long seminar at PHD House in the capital. Present on the occasion were Chief Guest Nagesh Pydah (Chairman & MD, Oriental Bank of Commerce), Guest of Honour, Chandan Sinha (Regional Director, Reserve Bank of India) among others. Multiple technical sessions were organized on issues such as ‘Survival in Turbulent times and Strategy for Risk Management’, ‘Beyond Centralized Core Banking Solutions: Issues and Way Forward’ and entrepreneurial opportunities through working capital loans etc. Speaking on the occasion Dr. J.K. Goyal, Director, JIMS said, “JIMS takes pride in organizing a National Seminar on the robust and resilient Indian banking sector. The objective of this seminar was to identify the emerging trends in this sector while keeping in mind the international perspective, in the context of global financial turbulence. The success story of Indian banking sector could be attributed to the sound policies of our apex bank and fiscal stimulus packages provided by the Government. The experiences shared by the experts here at this platform today are bound to help our students in understanding, at a deeper level, the banking operations and appreciating our banking institutions.” The seminar was well attended by executives from banks, financial institutions, corporate, academicians, research scholars and JIMS’ students.

IIFL 

Sholinganallur taluk yet to get treasury account

CHENNAI: More than 18 months after coming into existence, the Sholinganallur taluk  office on Old Mamallapuram Road (OMR) remains without a bank account where money paid for land transactions, community certificates and other jobs can be deposited. Presently, applicants deposit the required sum at the SBI branch attached to the Tambaram taluk office on GST Road and submit the receipt at Sholinganallur. There is an SBI branch near the Sholinganallur taluk office but the RBI is yet to give its nod for the branch to receive money from the applicants. "The taluk office was opened on December 31, 2009. We gave complaints to officials at all levels of governance including CM's cell on grievances and commissioner of treasuries and accounts," says G Satish of Semmenchery. Most of the applicants are senior citizens and women, who come to get certificates for land patta, birth and death certificates, copies of land records and other documents, are the most affected. The distance between Sholinganallur and West Tambaram is 36km and the two are not directly connected by bus. People have to change two buses to reach Tambaram and walk another two km to the bank. "Delays, either at the taluk office or at the bank, force us to visit the taluk office often. For elderly people like me, it is physically tiring," says K Sarawathi of Perungudi. After a Government Order was issued on December 24, 2009, bifurcating Sholinganallur and Alandur taluks from Tambaram, the taluk office at Sholinganallur began functioning on December 31, 2009. Since then, however, it has not got proper administrative and infrastructure facilities. Officials say they have taken up the issue with the government many times. "The government has also written to the RBI for its nod to allow the SBI branch at Sholinganallur to receive amount from people coming to the taluk office but nothing has been done."

TOI

Threshold level for inflation is 4-6%, says RBI

The Reserve Bank of India (RBI) said on Saturday if inflation stayed beyond the threshold level of four-six per cent, it could hurt economic growth in the medium term. “The Reserve Bank’s current assessment suggests that the threshold level of inflation for India is in the range of four-six per cent. If inflation persists beyond this level, it could lower economic growth over the medium term. These costs, therefore, necessitate monetary policy response to control inflation,” Deepak Mohanty, Executive Director, RBI, said in a speech at the Indian Institute of Technology, Guwahati. With high global commodity prices likely to stay firm, the threat to price stability from global inflation continues to persist. Mohanty said the stance of the central bank was to bring down medium-term inflation to three per cent, which was consistent with the country’s integration with the global economy. “In this direction, monetary policy aims to contain perceptions of inflation in the range of 4-4.5 per cent, with a particular focus on the behaviour of the non-food manufacturing component,” he said, setting aside the theory of high inflation seen as ‘new normal’. India’s headline inflation has stayed much above RBI’s comfort zone for more than a year now, despite policy tightening measures. RBI has hiked the key policy rates by 11 times since March 2010. The central bank’s inflation management became more challenging, as supply side factors stoked food inflation. As Mohanty pointed out, inflation remained high on account of high food prices, rising rural incomes, high global commodity prices and increase in administered fuel prices. “Inflation has remained elevated and persistent over 18 months now. The inflation path was influenced by a number of domestic and international supply shocks.” He emphasised monetary policy recognised that over the long-run, high inflation was inimical to sustained growth, as it slowed investment by creating uncertainty which posed significant risks to future growth. “It was indicated by the Reserve Bank that bringing down inflation, given its generalised nature, even at the cost of some growth in the short-run, should take precedence,” he added.

BS

Reducing food inflation will take time: Pranab

Conceding that double-digit food inflation is worrisome, union finance minister Pranab Mukherjee on Saturday said the monetary policies of the Reserve Bank of India (RBI) will take some time to have an impact. "The double-digit food inflation is a matter of concern. There is a seasonal factor, but apart from the seasonal factor, there are supply constraints in some critical agricultural products which we have to remove," Mukherjee told reporters in Kolkata.  Stating that so far as the demand side was concerned, the monetary policies adopted by the RBI will take some time to have their impact, he said: "It will take some time to have full impact on the demand management. "In short and medium term, we are trying to improve the supply constraint so that the moderating influence of the inflation is felt in the coming weeks," he added. Food inflation was recorded at 10.05% for the week ended Aug 20, as onion, fruits, vegetables and protein-based items turned more expensive.

HT

How much is too much? Legal experts debate new bank norms

However, the question is are the restrictions threatening to make a Frankenstein out of RBI or is RBI opening a Pandora’s Box and the sector will be impacted uncontrollably?

Read...... 

‘Business confidence levels have dipped' - Industry bodies want RBI to cut interest rates

Major industry bodies have come out with reports indicating a decline in business confidence levels and have called upon the Reserve Bank of India (RBI) to cut interest rates to boost sagging industry. The Federation of Indian Chambers of Commerce and Industry (FICCI) and the Confederation of Indian Industry (CII) have in their separate reports expressed concern over the global economic downturn and the U.S. fiscal position and the European debt overhang which in addition to the domestic factors were generating uncertainty about the economic outlook. The FICCI business confidence index (BCI) was at the lowest level in the last two years, while the CII quarterly BCI showed a decline by 8.9 points. Both the exercises were carried out in August. The CII, however, said expectations for the second quarter indicated a modest recovery, while FICCI forecast a further slowdown in gross domestic product (GDP) growth rate during the third and fourth quarters based on U.S. and India GDP growth correlation. Both CII and FICCI seemed to agree on the GDP growth rate for the current fiscal. The former expects it to be in the range of 7.5-8 per cent while FICCI puts it at 7.9 per cent. According to CII, most firms do not plan to increase investment plans and FICCI maintained that corporates saw a significant downward pressure on profit margins, affected by high interest rates and input prices. The CII held high interest rate and high raw material cost as the two top business concerns and FICCI pointed to the 11 times increase in interest rate by the RBI and said the tightening monetary policy had resulted in sharp slowdown in industrial growth and had also impacted consumer demand. FICCI suggested a cut in interest rate to boost corporate confidence including those of exporters who had taken a hit as well. According to the CII, other factors of concern to the business community are global economic and political instability and institutional shortages.

HBL

New banking guidebook: What does it mean to the industry?

Watch the video..........

RBI for doing away with subsidised credit for farm sector

Pune The Reserve Bank today made a case for doing away with subsidised credit for the agriculture sector, saying timely availability of funds is more important. "Pricing of credit needs to be market-based to ensure effective flow of credit to all sections of the agricultural community," RBI Deputy Governor K C Chakrabarty said at the National Seminar on Productivity in Indian Agriculture here. "Emphasis has to shift from subsidised credit to timely and adequate credit at reasonable cost especially where credit delivery system is very weak and complex," he suggested. The Government of India provides 2 per cent subsidy on the short-term crop loan. The short-term crop loan is available to farmers at 7 per cent. It is also important to carefully monitor the usage of credit right from the input to the output stage so as to ensure proper utilisation, he said, adding, monitoring of credit should not only be limited to crops but also to related activities that are funded by financial institutions like NABARD. He also suggested that the delivery of credit by co-operative sector need to be improved and NABARD should play a key role in converging credit services with other requirements that support agriculture and allied activities, including updating the farmers which help in facilitating completion of production cycles and ultimate value creation. Although, he said, schemes such as Kisan Credit Cards have helped in improving credit linkage to farmers but we need to urgently look into ways to increase the supply of agricultural credit especially to small and marginal farmers. There is a need also a need to strengthen micro-insurance, particularly for small farmers to adequately weather vagaries of nature, which affect these farmers more adversely, he said.  

ExpressIndia

NRB urges RBI to purchase its US$ reserves for IC

KATHMANDU  -  Nepal Rastra Bank (NRB) has urged its Indian counterpart—the Reserve Bank of India (RBI)—to open its window for purchasing Nepal’s US dollar reserves in exchange of Indian currency. Currently, the Nepali central bank sells its US dollars to Indian commercial banks to get IC. If RBI opens the window, NRB can sell its dollars to the Indian central bank in case it is unable to find better exchange rate in the Indian market. “If RBI’s rate is better than that of the market, we can get IC from RBI which will be beneficial for the country,” said a senior NRB official. NRB had proposed the Indian central bank formally in this regard a month ago when Nepali officials visited the Indian central bank. “We also proposed the same during RBI governor D Subbarao’s recent Nepal visit,” said the official. Nepal has increasingly been purchasing IC in recent years due to huge trade deficit with India. As of the first 11 months of last fiscal year, Nepal’s trade deficit with India stands at Rs 200.87 billion, up by 26.2 percent compared to the same period in the previous year.  Not only has the trade deficit, Nepal’s trade dependence on India also risen to 66.9 percent as of the first 11 months of 2010-11 compared to 56 percent a year ago.  According to officials, NRB usually purchases IC twice a month by selling $20 million each time. “Lately, we are purchasing IC three to four times a month,” the official said. That’s why Nepal’s IC reserve has also increased to IRs 31 billion as of Aug 13 from the usual reserve of Rs 20-25 billion, according to officials. As of the first 11 months of the last fiscal year, NRB purchased IC worth IRs 111.31 billion by selling $2.46 billion. The central bank had purchased IRs 102.09 billion by selling $2.19 billion in the same period a year ago.

The Kathmandu Post

Inflation a serious problem, says Montek

New Delhi : The Planning Commission today termed the current inflationary situation in the country as a “serious problem” but exuded confidence it will improve by the end of the year. “Inflation is a serious problem. We need to worry about that... inflation, as of now, cannot be said to be under control,” the Planning Commission Deputy Chairman, Mr Montek Singh Ahluwalia, told reporters on the sidelines of a CII event. His comments came a day after food inflation entered the double-digit zone after a gap of over five months. Meanwhile, headline inflation, which also factors in manufactured items and fuel products, has been above the per cent mark since December 2010. Mr Ahluwalia, however, said high inflation is a global phenomenon. “Everywhere in the world inflation is higher...,” he said. Asked about his views on the likely trajectory of inflation in India, he said: “I am not predicting but I hope that by the end of the year it will be lower.”  He said the price situation is being constantly monitored. “That (inflation) is not the Planning Commission’s immediate concern. We look at it in the medium term... I am sure both the RBI and the Finance Ministry are doing what is necessary,” Mr Ahluwalia said. The Planning Commission Deputy Chairman also said that the country’s economic growth this fiscal would be around 8 per cent, lower than the 8.5 per cent achieved in 2010-11. “Growth (in 2011-12) will be 8 per cent... It is quite clear that we are cyclically seeing a slowdown compared to last year...,” he said. He further added: “Growth in India is going to be lower than in the last year but that is also true of the rest of the world. If India grows at 8 per cent in the current year, it will be the second fastest of any country in the world“. Mr Ahluwalia has in recent days maintained that economic growth this fiscal will not be more than 8 per cent, lower than government’s projection of around 8.5 per cent.

HBL

A Profile of Banks 2010-11

The Reserve Bank of India has, today, placed on its website A Profile of Banks 2010-11 . The publication, being seventh volume in the series, provides bank-wise and bank group-wise information on important performance indicators of all scheduled commercial banks, excluding regional rural banks, for the period 2006-07 to 2010-11. The publication covers about 18 important indicators, including return on assets, capital adequacy ratio (CRAR), business per employee, and profit per employee. To facilitate comparison, the publication also provides aggregates at bank groups and all banks level for 2010-11.

Highlights

·         Business per employee across the bank groups increased during 2010-11 over 2009-10, except for new private sector banks.

·         Profit per employee across the bank groups increased during 2010-11 over 2009-10, except for State Bank of India and its associates.

·         At all banks’ level, employees' productivity show improvement in terms of both business per employee and profit per employee; these two indicators have been increasing since 2006-07.

·         Profitability in terms of return on assets of all scheduled commercial banks at aggregate level improved during 2010-11. At bank group level, all the bank groups witnessed an increase in return on assets during 2010-11, except State Bank of India and its associates, which witnessed decline in return on assets.

·         CRAR of all banks at aggregate level declined during 2010-11.

·         Net NPA ratio of all scheduled commercial banks at aggregate level declined during 2010-11.

Copies of the publication can be obtained from the Director, Division of Reports and Knowledge Dissemination (Sales Section), Department of Economic and Policy Research, Reserve Bank of India, Amar Building, Ground Floor, P. M. Road, P. B. No.1036, Fort, Mumbai - 400 001. This publication is also available at the Reserve Bank's website on the Internet at ( www.rbi.org.in ).

Moneycontrol 

‘Our panel seeks to resolve problem of expenditure classification'

....If inflation shows signs of declining, it may be appropriate for the RBI to reverse the trend. But if it does not, I think the present stance will continue......

Read..............

Why NBFCs should not be treated as banks?

What's in a name? A lot, if you are a non-banking finance company (NBFC). For one, though, you are virtually a bank, at least as far as the assets side of your balance-sheet is concerned, you play by a different set of rules compared to banks.

Read........ 

Salman Khan is like Reserve Bank of India

Mumbai: Salman Khan is like Reserve Bank of India. He creates money for him and his industry the way Reserve Bank of India mints money for the nation. RBI is bankers bank that delivers money or cash to all the banks. The same way Sallu Bhai delivers hit after hit, this giving hope to the industry. Irrespective of the economic slowdown or the best time for economy, the maverick bhai of the filmdom always comes with one surprise after the other, bringing smiles back on parched lips.

http://nvonews.com/2011/09/03/salman-khans-bodyguard-box-office-report-suggests-a-huge-hit-in-the-making/

RBI’s Tough Guidelines

This refers to the edit 'Cautious Opening' (ET, Aug 31). The RBI's new draft guidelines for the issue of fresh banking licences have defined some strict parameters. But the best among them is the stipulation to ensure 25% branches in rural India. But chances are that very few new banks will be ready to meet this particular criterion. In such a scenario, how the central bank will pick and choose new banks would be interesting to watch.

BAL GOVIND, Noida (ET)

RBI guidelines

1.  This refers to “Raising the bar” (editorial, Sept. 1) on the set of “draft” guidelines issued by the Reserve Bank of India permitting the entry of new private banks. It is quite paradoxical that our policymakers cry from the rooftops for merger of public sector banks while simultaneously opening the gates to more private banks. The disastrous collapse of the much talked-about private banks is a matter of the immediate past that demands a serious study and reversal of wrong policies. The government has done precious little on rural credit despite the shocking number of farmers' suicides. The record of private banks in this area is well known. Further, the draft guidelines pose a threat to hard-earned savings in these new banks, enabling take over by foreign capital after five years of inception. The issues raised by employees of nationalised banks must be taken note of.

S.V. Venugopalan, Chennai

2. Further to the Finance Minister's budget speech in March 2010, the modified policy on the opening of new branches by promoters and corporate bodies has assumed importance. The recent RBI amendments issuing licences for opening new branches have taken a pragmatic view towards enhancing the Indian economy. The banking sector can now reach remote corners of the country.

K.V. Balachandran,Chennai (HBL)

In RBI's interest

“The slowdown has arrived” (Business Line, September 1) made interesting reading. Today's inflation numbers clearly indicate that the RBI should not relax its inflation watch and continue its hawkish stance. Why are real estate prices so high? If prices are reduced, will not demand pick up? Automakers have not indicated a major decline in sales. In fact, there have been increases in certain cases. Why the cry for low interest rates?  The RBI has resisted pressure from interest groups to reduce interest rates. Kudos to the RBI to sticking to its dharma of inflation control! As the RBI governor rightly stated, economists should be people-oriented.  Given the present difficulties in sourcing External Commercial Borrowings (ECBs), corporates should prepare for much tighter liquidity and higher interest rates.

Srinivas (HBL)

What are the PMO, the RBI, and the finance ministry smoking? - Surjit S Bhalla

Dr Subbarao, the governor of the Reserve Bank of India, has outlined five principles for policymaking. How does he, and his ultra-hawkish monetary policy, stack up against his own principles? Let us find out.

The first principle is that “people matter”. Presumably that means that both growth and inflation matters: the latter because it hurts purchasing power, and the former because it hurts jobs. Inflation has been stuck at a high level of 8 to 10 per cent for the last six months, and that is both good news and bad news. Good that it hasn’t increased, and bad that it is too high.

On growth, the RBI’s record is not only not good, it is plain bad. Industrial growth has crawled to the slowest pace in the last 10 years (excepting the global recession months between September 2009 and October 2010), and growth in construction, where jobs and income and people really matter, has come to a standstill. According to the latest GDP data, year-on-year construction growth was just 1.2 per cent.

Second principle: when economists build models, they should fit it to the real world, and not the “real world to the models.” What reality has the RBI targeted? It alone, in the entire policy making world, utilises a monetarist model to tackle inflation. Worse, it alone uses the WPI as an indicator of inflation. If the US were to use this indicator, then it would presently show inflation at a 6 per cent annualised rate versus the 9 per cent observed in India. Given that developing countries have a 2 to 3 per cent higher inflation rate than developed countries, it does not seem that Indian inflation is that much out of line. So maybe the good doctor can tell us about whether he is living in a model world of virtual monetarism?

Third — fourth and fifth and sixth? — principles: “Economic policymaking is more than a straight application of textbook knowledge; you need to apply judgment, avoid groupthink and have a sense of history.”

History and Judgment: Subbarao’s RBI increased the repo rate by 125 basis points from 6.75 per cent to 8 per cent in the space of just 3 months. This is the second fastest increase in history, nearly matching the gallop from 8 to 9 per cent in June-July 2008. In an eerie repeat of history, at the time Dr Reddy instituted the record hikes, industrial production growth had slowed to a near zero per cent rate in August 2008, actually 1.9 per cent. According to the new IIP index, August 2008 witnessed a low growth rate of 5.4 per cent; in both April and May 2011, IIP growth was a low 5.8 per cent.

The history lesson continues. In 2008, just two months after the record hikes, and level, of the repo rate, the world economy entered a big-time slide. In 2011, at the time of Subbarao’s BMW speed hikes, the world economy is also in trouble. There was serious talk of a Euro, and European, crash. No one is raising rates anymore, and just a few days back, Brazil has actually reduced the repo rate notwithstanding the fact that inflation in Brazil is some 2 to 3 per centage points higher than the Brazilian “target” or “comfort” level.

Groupthink: RBI’s hawkishness, and policy, has been nose-led by the groupthink of several domestic journalists and many investment bank economists. The argument by these scholars has been repetitive and grossly misleading. Unlike what their peers do in other countries, these scholars have failed to note the decline in the more accurate CPI inflation (from a level of 16.5 per cent in January 2010, to a flattish 9 per cent for the last 1 year) and the fact that commodity prices are a major determinant of WPI inflation — and that the trend in international commodity prices is something they, or the RBI, can do precious little about. To reiterate, even in the very low-inflation US economy, wholesale or producer prices are up a hefty 6 per cent. Indeed, non-groupthink would dictate that Dr Subbarao take the lead of his counterpart in Brazil.

Textbook knowledge: In the non-application of text book knowledge, the RBI has made a grievous mistake, and with slowing growth, grievously is India paying for it. In recent months, the RBI has constantly been mentioning one price as a major contributor to India’s high inflation: the absolute price increases set by manufacturers of non-food items. It calls it “pricing power”. According to the RBI, this pricing power is indicated not by an increase in relative prices, but by an increase in absolute prices!

If input costs go up by 10 per cent and output prices by 5 per cent, the RBI would have us believe that there is pricing power on the part of the firm when in reality (assuming productivity and technological change to be zero) the firm is going out of business. Textbook economics would say that pricing power means at least an increase in the price of output relative to the price of inputs. According to the latest GDP data, manufacturing inflation (output prices) has stayed steady at 5.5 per cent since Jan-March 2010; the GDP deflator (input prices) has averaged close to 10 per cent. In the good overall inflation years of 2004 to 2007, inflation in the manufacturing sector averaged a higher 6.1 per cent, and GDP deflator inflation averaged a lower 4.7 per cent. One did not hear of the possibility of pricing power then.

It should be mentioned, or at least noted, that in 2008 there were strong rumours of the PMO and/or the finance ministry, dictating to Dr Reddy the July 2008 rate hike of 50 basis points. Most likely, this occurred because of a traditional misunderstanding, and panic, in these quarters about the political impact of inflation and its determinants. Something similar may have happened in the last two rate hikes of Subbarao. If that is the case, it does not say much about the “independence” of the RBI. And if that is the case, then the ban on smoking applies equally to the three sets of policymakers, and their staff, and their advisers!

The author is chairman of Oxus Investments, an emerging market advisory and fund management firm (IE)

S K Jain joins Union Bank as ED

Union Bank of India today said Suresh Kumar Jain has joined the bank as Executive Director. Jain, who joins the bank from Bank of India where he served as a General Manager, replaces S C Kalia who retired from service, a release issued by the bank said here. Having spent over 33 years in the banking sector, Jain has worked in various capacities in the country and abroad with specialisation in credit and foreign exchange, the release added.

MSN News

Banking system facing liquidity deficit: Pranab

The government today said that the banking system was facing liquidity crunch as was reflected from increased borrowings by lenders from the Reserve Bank of India (RBI). "The net borrowings by bank from RBI in the recent times, is a reflection of the deficit liquidity conditions," Finance Minister Pranab Mukherjee said to a question in the Lok Sabha. On an average, banks and primary dealers have borrowed Rs 46,298 crore on a daily basis from the RBI so far this fiscal (April-August). This is marginally lower than the Rs 46,946 crore borrowed in the previous fiscal (2010-11). "Borrowings by banks from the RBI with the government securities as a collateral is a normal liquidity management operation for banks and this happens whenever there is overall liquidity deficit in the system," Mukherjee added. According to the Minister, during 2008-09 and 2009-10, banks have placed funds worth Rs 4,212 crore and Rs 1,00,310 crore with the RBI. Banks invest in government securities as part of their statutory requirement to maintain the Statutory Liquidity Ratio (SLR), which is currently at 24%. The RBI managed the day-to-day liquidity in the banking system through its Liquidity Adjustment Facility (LAF). Under this facility, banks which are short of liquidity can borrow from the RBI (overnight) at the Repo Rate (8%), by keeping government securities as collateral. "This is in line with the best international practices," Mukherjee added. He said that increased bank borrowings from RBI indicates the strenghthening of the monetary transmission mechanism and is consistent with the anti-inflationary stance of monetary policy. As part of efforts to control inflation, the RBI has hiked policy rates 11 times since March 2010. However, inflation continued to remain on higher trajectory. The overall inflation, which crossed the 9% mark in December 2010, stood at 9.22% in July.

BS

SBI group's efficiency falls, other banks on a high

India’s largest lender, State Bank of India and its associates, fell behind other banks operating in India in efficiency in 2010-11, with a fall in both profit per employee and return on assets, compared to the previous year. “Profitability in terms of return on assets of all scheduled commercial banks at the aggregate level improved during 2010-11. All bank groups witnessed an increase in return on assets during 2010-11, except State Bank of India and its associates, which witnessed a decline in return on assets,”The Reserve Bank of India (RBI) said on Friday. SBI, which had recorded a 99 per cent per cent dip in net profit in the fourth quarter ending March 31, saw its profitability per employee down to Rs 3,85,000 in 2010-2011, against Rs 4,46,000 in 2009-2010. According to RBI, the return on assets also fell on a standalone basis to 0.71 per cent in FY11 from 0.88 per cent in the year before. For the SBI group, profit per employee and return on assets fell for the bank and its associates. Profit per employee fell from Rs 4,70,000 to Rs 4,20,000 and return on assets was down to 0.79 per cent from 0.91 per cent. SBI’s profits had been marred in the previous financial year on account of higher provisioning for both non-performing assets and staff related issues. The bank also has to provide nearly Rs 8,000 crore from its capital reserve for pension, which led to a fall in the bank’s capital adequacy ratio.

BS

ICBC, two more foreign lenders get banking permission

NEW DELHI: Reserve Bank has given permission to Industrial and Commercial Bank of China (ICBC) to start operations in India in 2011, the Lok Sabha was informed on Friday.  Besides, two other banks Rabobank International (The Netherlands) and Woori Bank (South Korea) have also been given approval to expand their presence in India.  In the last calender year, eight foreign banks, including DBS Bank, Credit Suisse AG and Barclays Bank, were given approval by RBI to open branches or expand the existing ones.  As of now, 38 foreign banks are functioning in India through 321 branches.  This information was given by Minister of State for Finance Namo Narain Meena in the Lok Sabha in a written reply.  Replying to another query, the Minister said State Bank of India (SBI) proposes to open additional branches/offices in Bahrain, Bangladesh, China, Germany, Hong Kong, United Kingdom, South Africa and Sri Lanka.  "While giving approvals for opening offices, RBI/ Government of India desires that only banks, which have the capacity to survive in a competitive global market are allowed (to mark their) presence abroad," Meena added.

ET

Tenure of home loans may be increased

..... Banks would give interest concessions on loans to MSMEs based on the rating they got from the RBI-empanelled credit rating agencies such as ICRA, CRISIL, and Dun and Bradstreet. Each bank must show an increase of 20 per cent in the amount of credit given to MSMEs as well as an increase of 10 per cent in the number of MSME beneficiaries (small units funded by the bank)......

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Inflation is big concern for RBI: RBI Deputy Governor K C Chakrabarty

NEW DELHI: With food inflation entering the double digit level at 10.05 per cent after a gap of five months, the Reserve Bank today said its main priority is to combat rising prices.  "I am again telling monetary authority anywhere in the world, inflation is the bigger concern," RBI Deputy Governor K C Chakrabarty said on the sidelines of Skoch summit here.  "Growth is always government's concern because government collects revenue. But then we (RBI) have to look at everything. We have to look at inflation. We have to balance the growth, we have to do everything," he said.  Food inflation rose to 10.05 per cent for the week ended August 20.  "Food inflation has gone up...This is really disturbing. We shall have to ensure and remove the supply constraints on food items," Finance Minister Pranab Mukherjee said after the weekly inflation data was released.  Attributing the jump in food inflation to seasonal factors, experts said it could again force the Reserve Bank to hike interest rates during its mid-quarter monetary policy review scheduled on September 16.  In its bid to anchor inflationary expectations, the RBI has raised policy rates 11 times since March 2010. In its July policy review, the central bank increased rates by a hefty 50 basis points. The short-term lending (repo) rate of RBI now stands at 8 per cent and the short-term borrowing (reverse repo) rate at 7 per cent.  Subsequently, the interest rate under the Marginal Standing Facility, an additional borrowing window, has gone up to 9 per cent from the earlier level of 8.5 per cent.

ET

Service to the nation

To educate people about financial products and services, debt management and help indebted people to come out of their problems, United Bank of India in collaboration with Ramakrishna Mission Samaj Sevak Sikshan Mandir (RKMSSSM), Belur Math, Howrah set up a Financial Literacy and Credit Counselling Centre (FLCC) on the premises of RKMSSSM, Belur Math, Howrah recently. The FLCC will provide these services free of cost.

Swami Divyanandaji Maharaj, secretary, Ramakrishna Mission, Saradapith, Belur Math inaugurated the programme in the presence of Bhaskar Sen, CMD, United Bank Of India; PK Roy, General Manager, United Bank of India; Anindita Bhattacherjee, Deputy General Manager, RBI and other senior dignitaries from Nabard and government.

Speaking on the occasion, Bhaskar Sen, informed that United Bank of India with 81 per cent of its branches located in eastern and northeastern states has been playing a significant role in financial inclusion of eastern and northeastern parts of the country having sizeable number of excluded people from the banking fold.  Sen expressed is gratitude to the Ramakrishna Mission for providing all logistic supports to set up the FLCC. He further informed that the bank has set up eight FLCCs of which four are in West Bengal. Besides, UBI has set up 10 rural self-employment training institutions to impart free training to the unemployed rural youth, women and the weaker sections of the society to enable them to be self-employed.  Swami Divyanandaji Maharaj said poverty and unemployment are the main reasons for rise of insurgency in different parts of the country. “Though our economy has been growing fast, the benefits of the growth are not equitably distributed among all sections of the society,” he observed. Swamiji opined that creating employment opportunities and linking the excluded people with the formal banking channel are the needs of the hour and that FLCC should play an important role in this direction. He further informed that Ramakrishna Mission Samaj Sevak Sikhan Mandir has been running a RUDSETI type institute jointly with United Bank of India and NABARD for creating employment opportunities by providing skill and entrepreneurship development training to the rural unemployed youth. He appreciated United Bank of India for extending loan to the trainees on completion of training to set up their own venture. PK Roy, in his deliberation, informed that the bank will set up more Rural Self-Employment Training Institutions and FLCCs in eastern and northeastern parts of the country.

The Pioneer

Conned by get-crores SMS - Student responds to phishing text, loses Rs 19000

Patna : He dreamt of becoming a crorepati overnight, but 20-year-old Akshay Kumar got gypped of a few thousands as he fell prey to a con text message doing the rounds. Akshay, a student preparing for his engineering examinations, lost at least Rs 19,000, courtesy a phishing text message — which seek out a person’s sensitive information — that he took seriously.  The message, claiming to be from a multinational cola company, was sent last Friday to the cellphone of Akshay’s brother Mukesh Kumar.  “The phone call came from an Indian number, but the person had a British accent. He said he would land at the Indira Gandhi International Airport in New Delhi that very day and would then take a flight to Patna to deliver the cheque to me. The same afternoon I again got a call from him informing me that he had reached Delhi. The man said he was in the airport customs and that I had to pay Rs 19,000 to ‘release’ the cheque,” Akshay said. Akshay said he then smelt a rat, but his reasoning got clouded by the crores he had counted as his winnings.  “I initially refused to pay up. At this, he made me talk to a lady who claimed to be from the customs wing. She told me it was a regulation and that the man was waiting with the cheque. I had calculated the prize amount in Indian currency and it came to around Rs 6 crore. I agreed to pay up and the man gave me an SBI, New Delhi, branch account number belonging to one A. Sharma. Without thinking, I deposited the money in the account. After doing so, I received a mail in the form of a scanned copy from the ‘Indian Customs Office’,” Akshay said.  After a while, Piterson called up again.  “He said he was now going to the Reserve Bank of India (RBI) for money conversion and that I now needed to pay up Rs 49,000. This got me thinking hard and I refused. To this, he handed the phone to the same lady, who now had turned into an RBI official. I could easily recognise her voice. She told me to deposit the money immediately and mailed me a guarantee letter of the RBI which stated that they were responsible and assured me the prize money would reach me,” Akshay said. By then, Akshay knew that he had been duped. “I disconnected the call but the man kept calling me saying that if I didn’t pay up, he would be stuck in the airport. I didn’t listen to him and came to the police today. I have also met RBI officials and they told me that I had been duped,” he said.  

The Telegraph

Your post office wants to become a bank. Lousy idea

Suddenly, India might have a surfeit of banks. The Reserve Bank of India recently announced draft guidelines for the entry of new private sector players even though there is no shortage of banks in the country: we have seven banks in the State Bank group, 20 nationalised banks, 21 private banks and 19 foreign banks with nearly 80,000 bank branches between them spread all over. And that’s not all. Over and above this, we have innumerable regional rural banks, and private and state cooperative banks, not to speak of non-bank financial companies and financial institutions. Now, many non-banks want to become banks......

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Now withdraw cash at an ATM without using your card

Mobile phones have already become a multi-purpose banking gateway. You can buy movie tickets, transfer funds to others’ bank account and pay utility bills, all from your cellphone. Mobile banking has just taken another step to make your life easier and wallet lighter.

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FINO: Doorstep banking for the poor

Financial Inclusion Network and Operations (FINO), based in the financial capital of India, is an integrated technology platform and delivery channel, enabling sourcing and servicing micro customers on a large scale. It operates through a network of 20,000 field force — also called Bandhu (friend in Hindi). This field force serves as a doorstep bank and electronic teller machines in areas where banks are yet to reach or have any ATM. FINO works with 24 banks, several of the state government bodies and insurance firms like LIC, ICICI Prudential and ICICI Lombard. Each of the bandhus is equipped with handheld biometric devices that have GPRS connectivity. Every time a customer is enrolled, she is provided with a smart card. For any future banking activity like depositing, checking balance or withdrawals, they are done through the system. The data is automatically updated to the systems. In case a connection does not work, the handheld can store transactions, which are then updated to the system by visiting the nearest branch of that bank. So far FINO has enrolled 36 million customers and plans to double this base in the next few years. It has presence in 26 states and 386 districts. “Technology is playing and will continue to play a vital role in taking banking products and services to the customers at the base of the pyramid. We have developed the entire technology in-house which is having a meaningful impact on the lives of people. Out of India’s estimated 60 million below-poverty-line people, our technology solutions already reach out to over 30 million. We are proud to be a part of the Technology Pioneers. It is a true recognition of the efforts of our team and I would like to express gratitude to our technology team for this award-winning effort,” says Manish Khera, chief executive officer, FINO. FINO also partners with government agencies. For instance, it is part of payment disbursement for National Rural Employment Guarantee Act. It is also working with the Uttar Pradesh government for payments made to tendu patta collectors. The company is also foraying into mobile payment segment. The services called m-Rupya will soon be tested on a pilot basis with 20,000 customers. This service will be launched by the end of the next quarter. The company has developed the software platform for its mobile payment service through its in-house research and development team. The company plans to offer this service to its 36 million customers in India. At a time when the micro-finance industry has been shrouded in controversy, FINO has been successful in showing an alternative mode of achieving financial inclusion. FINO was formed by ICICI Bank. The idea was to create a technology firm that could provide solution catering to the financial inclusion space. However, Manish Khera, the CEO, and his team realised there was opportunity to become business correspondents. This also received a boost when the Reserve Bank of India allowed business correspondents to work as agents of banks. Since its inception in 2006, FINO has managed to attract big investors. Some of these include, Intel Capital, International Finance Corporation, some of the Indian public sector banks, LIC and more recently Blackstone Private Equity.

BS

SC issues notice to Citibank on petition filed by I-T dept

The Supreme Court has issued notice to US-based Citibank on a petition filed by the income tax department alleging that the bank was liable to pay more than R59.19 crore as tax during 1991-92 for violating the RBI guidelines on Portfolio Management Scheme (PMS). As per the RBI guidelines, certain maximum amount of interest was only permitted on the deposits. Any excess payment has not legally been permitted and, therefore, all the income of the company from portfolio management has to be treated as the income of the company against which payment of interest to the various so-called PAH was to be allowed subject to the maximum of the right permitted by RBI,” the petition stated. According to the revenue department, the bank had collected substantial amounts from corporate under PMS in violation of the RBI guidelines. 

FE

Time to come clean

The charge of government interference in the functioning of the Securities and Exchange Board of India made by its former member K M Abraham is serious and he deserves a fairer hearing from the powers that be in New Delhi than has been the case so far. To paint him as a disgruntled and corrupt element, because he was denied an extension of term and had invested in an apartment in Mumbai built by someone who had business dealings with the National Stock Exchange, as the Union finance ministry has done, is both unfair and unconvincing. It is shocking that when Mr Abraham approached the then Union Cabinet secretary and the principal secretary to the prime minister for help, the correct thing to do by a member of the Indian Administrative Service, he was asked to beseech the very person against whom he was complaining, namely Omita Paul, advisor to Union Finance Minister Pranab Mukherjee. Whatever the facts of the case, and both the charges and counter-charges require further investigation and clarification on the part of the government, the unseemly spat between the capital market regulator and the Union finance ministry was uncalled for and was a highly retrograde development. At a time when there is so much public concern about good governance and transparency in government functioning, and worries are being expressed about the independence of regulators and autonomous organisations, this kind of interference and attack is regrettable.

If the charges levelled against Mr Abraham by the finance ministry through a press release earlier this week are true, then the ministry itself owes an explanation as to what action it took before Mr Abraham went public with his criticism. The entire episode raises two important questions about public policy and the functioning of the finance ministry. First, there is the larger issue of whether appointments of regulators and heads of autonomous institutions should be made on the basis of a “three plus two” principle, under which an initial appointment for three years is followed by an extension of two years. Former finance minister Jaswant Singh did the right thing when he discontinued this principle in the case of the Reserve Bank of India Governor and gave Y V Reddy a full five-year term. If governments are uncomfortable granting a five-year term to one person, then the appointment should be made for a fixed period of only three years. To use the “three plus two” principle as a way of keeping regulators on a short leash and rewarding them for “good behaviour” with an additional two years is not a healthy practice. Second, l’affaire Abraham once again draws attention to the role and functions of an “advisor” in the finance ministry. Mr Mukherjee would do well to clarify the role of an advisor and her administrative jurisdiction in dealing with officials of the ministry, of agencies under the ministry and regulatory institutions. In the absence of such a clarification, vested interests could make a mountain out of a molehill. The finance ministry is a key instrument of central government policy and functioning. If the ministry adopts good governance practices, it would inspire the rest of the government to emulate it.

BS

RBI declares M/s Forex Achievements a fraud outfit

MUMBAI: The Reserve Bank of India on Thursday issued a clarification in which it stated that there was no company going by the name of M/s Forex Achievements registered under the Companies Act, 1956.  In a press release, the RBI clarified and cautioned the general public that M/s Forex Achievements and its website was fabricated entity, and not to deposit money with such unincorporated bodies. It said that anyone depositing money with such unincorporated bodies as M/s Forex Achievements, would be doing so at their own risk.

ET

Inclusion targets will delay breakeven for new banks

The draft guidelines issued by the Reserve Bank of India (RBI) clarify some issues such as eligible promoters, corporate structure, minimum capital requirement, corporate governance and business model. While the paper lays stress on promoter shareholding and milestones to achieve a diversified ownership in fixed timeframe, it is also very focused on the purpose of the new banks, which is financial inclusion (FI) and the related business model. The new banks will have to focus on the unbanked geographies. The regulator has been urging banks to open rural branches and has incentivised the existing banks to open 25% of branches in the rural areas. The regulator has also mentioned strict action against new banks not following the stated business model. The impact of financial inclusion on the business model is immense as the model needs to answer questions like market size, cost of funds, viability, use of technology and efficiency in operating structure for the new banks to succeed.  Banks have been working towards FI for the last five years or so. As on March 2011, a sample of 19 large and small sized domestic banks had an average of Rs600 crore credit outstanding for FI accounts. More importantly, of the total FI accounts opened, only 40% were found to be active for the last one year.  Also, given the challenge that domestic banks would have had a head-start on FI initiatives, reaching the next delta of FI customer would become that much more difficult for the new banks. Assuming that the margin for FI business is currently zero and equal split in FI and other business and a conservative 200 basis points margin for other business, the overall margin for a new bank will be approximately 100/120 basis points.  Including operating costs and technology investments will take the new banks longer to break even. Another aspect is the source and cost of funds, the new banks will face multiple challenges in sourcing low-cost deposits and will definitely have a higher cost of funds than the existing public sector and private banks. Could this lead to a situation where new banks have to issue securities to fund their business is question that every aspirant looks to need into.  A lean, low-cost and efficient operating structure is almost a prerequisite and technology will have to be optimised to achieve success. Reengineering the business model might even lead to something very innovative emerging. Non-banking finance companies (NBFCs) operating in Tier 3 to 6 centres will find it much easier to face these challenges than a completely newly set up bank.  However, they, too, would require RBI’s prior permission to convert branches to bank branches and comply with branch setup norms, as NBFC branches are very different from bank branches.  Banking is a critical and important economic sector and rightly so the regulator is taking utmost care to make sure that the new banks are used for no other purpose than banking with a FI focus.  Diversified ownership and exercise of regulatory control are essential conditions which will need to be fulfilled and seem to be the major concern of the regulator.  The safeguards in terms of promoter shareholding, divestment milestones and corporate structure and restriction on NOHC from setting up a financial services entity for at least three years from the date of licensing send out a very strong message that only very serious players with well-thought out strategy will be allowed. It seems the new bank licences will be a staggered process and it may be 2-3 years before we see a new bank becoming operational and perhaps rightly so considering that banking is a responsibility as well as an opportunity.

DNA

Govt in a bind on inflation

As India's food inflation rate breached double-digit levels again, touching 10.05% for the week-ended August 20, the government and the Reserve Bank of India (RBI) are facing a major challenge: policy options appear to be fast running out on a win-win solution in the trade-off between growth and prices. The central bank has maintained that sustainable solutions to lower inflation and higher trend growth warrant adequate supply-side response from the government.  The government can consider duty cuts in essential commodities to shore up supplies, but that will entail forgoing tax revenues, which in turn,will likely upset the fiscal deficit targets. Finance minister Pranab Mukherjee on Thursday termed the inflation rate as "disturbing," obliquely hinting that the government may not be averse to taking measures to boost supplies. The RBI, which will present its mid-quarter monetary policy review in September, has raised interest rates by 11 times in the past 16 months. "The latest GDP details are supportive of another rate hike by the RBI in September," said Rajeev Malik, senior economist at brokerage CLSA, Singapore.

HT

RBI may hike rates as food inflation surges to 10.05%

"With headline inflation remaining well above 9 per cent, we expect RBI to raise key policy rates by 25 basis points at its next mid-quarterly review," Crisil chief economist D K Joshi said.

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PSU NBFCs’ banking plans may hit RBI wall

The Reserve Bank of India is unlikely to issue banking licences to public sector non-banking finance companies (NBFCs). This could put brakes on the banking ambitions of NBFCs such as Power Finance Corporation and Rural Electrification Corporation, which have shown interest in acquisitions in the banking space or securing a new licence..........

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Gold loan NBFCs cheer panel report

At a time when most non-banking finance companies (NBFCs) are complaining about higher tier-I capital reserve requirement as recommended by the RBI-appointed working group, one section of NBFCs is pleased about it. Gold loan NBFCs, one of the fastest growing financial services businesses in the country, are pleased about the recommendations, whi-ch put gold loan NBFCs on par with banks. The top three gold loans companies, Muthoot Finance, Manappuram Finance and Muthoot Fincorp, together have an outstanding gold loan portfolio of over Rs 30,000 crore. Though the RBI working group recommends a higher tier-I capital of 12 per cent for NBFCs, industry experts pointed out that in Section 6.1.11 of the report, the panel states that in view of the growing importance of NBFCs in financing-sensitive sectors, “whenever RBI raises/lowers risk weights and provisioning norms for banks to address systemic risk, such measures should also be applicable to similar assets of NBFCs.” “Our risk weightage would become lower if the recommendations are implemented and we are treated on par with banks having a gold loan portfolio,” I Unnikrishnan, managing director of Manappuram Finance, said. For gold loans with a ticket size of less than Rs 1,00,000, banks generally have to apply a risk weight of 50 per cent of the loan size, while NBFCs have to apply a uniform risk weight of 100 per cent for the entire portfolio, he said. For gold loan NBFCs, at least 60 per cent of loans are of the ticket size of less than Rs 1,00,000. So, on an Rs 10,000 crore loan book, about Rs 6,000 crore loans would be of ticket size less than Rs 1,00,000. If NBFCs get to apply 50 per cent risk weightage, like in case of banks, then on the Rs 6,000 crore loans, only Rs 3,000 crore would be considered for risk weightage. That combined with the Rs 4,000 crore loans with a ticket size of over Rs 1,00,000 would make only Rs 7,000 crore worth loans being considered for risk weightage, against the entire Rs 10,000 crore earlier. “So, even if the tier-I capital is increased to 12 per cent, we only have to maintain Rs 840 crore reserves against Rs 1,000 crore earlier, assuming the loan book size is Rs 10,000 crore,” Unnikrishnan reasoned. The move to put capital adequacy ratio (CAR) requirements for NBFCs at par with banks will reduce pressure on bringing more capital, said Thomas Muthoot, executive director of Muthoot Fincorp. “This reduced pressure to enhance capital will ensure a level playing ground for NBFCs, which were so far at a disadvantageous position compared with banks,” Muthoot says

Financial Chronicle

President to give awards to banks, MSMEs for excellence

New Delhi : The country''s largest lender SBI and few other banks will be given awards by President Pratibha Devisingh Patil for their performance in extending loans to micro and small enterprises (MSEs). As per the Reserve Bank of India guidelines, banks have to achieve 20 per cent year-on-year growth in providing credit to MSEs. Under the annual National Awards Scheme, the government recognises the efforts and contributions of the micro, small and medium enterprises (MSMEs) to the economy as well as of the banks who lend to the sector. "The SBI''s total advances increased by 82.7 per cent to Rs 77,061 crore, which is the highest among major public sector banks, in 2010-11 from Rs 42,714 crore in 2009-10," the MSME ministry said in a statement.  Others awardees include Indian Overseas Bank and State Bank of Mysore. Corporation Bank lending to micro enterprises increased by 315.2 per cent to Rs 5,011.58 crore in 2010-11, from Rs 1,207.01 crore in the previous fiscal. The banks have been asked to enhance their credit flow to the sector, which contributes about 8 per cent to the country''s GDP. Besides banks, awards would be given to various (MSMEs) for their performance in categories like R&D, entrepreneurship and quality of products.

MSN News