RBI’s wasteful plan to fly notes to Chhattisgarh

NAGPUR: The Reserve Bank of India's (RBI) strategy to dodge the Naxals in Chhattisgarh seems to end precisely at the point where the danger actually begins. RBI office in Nagpur, which is supposed to supply currency notes to banks in Chhattisgarh, has been airlifting the consignment to this trouble-torn state since about a year. The aircraft for the purpose is supplied by Chhattisgarh Government. RBI felt this was a smart move to avoid Naxals who may be lurking to loot the cash on the ground. However, the exercise is actually quite silly and a waste of public money. The aircraft flies the notes from Nagpur to Chhattisgarh capital Raipur or, at the most, to Jagdalpur, which is also a town well-connected with a highway.  Up to this point there is hardly any danger from Naxals. From there, the notes are transported to the bank branches in interior Bastar region where the real Naxal strongholds are. But this part is being done by road as has always been the case. The cash is carried in guarded vehicles.  Perhaps after realization of futility of this plan, there was a change recently. Now notes are taken by train to Raipur and then flown to Jagdalpur. This also is quite redundant as Raipur-Jagdalpur road is considered safe with civilian vehicles including passengers buses plying night and day. Naxals do not carry out operations on such roads as traffic piles up within minutes on either side. RBI thus ended up pushing up cost of exercise without minimizing any risk. The really perilous areas begin after Jagdalpur and there the notes continue to be taken as it was before. The consignment is either lifted by the banks' representatives or RBI officials take it to respective banks or currency chests (store-houses for currencies commonly used by the banks) in vehicles having armed escorts.  Chhattisgarh is facing Naxal problem for long. All this while, notes have been supplied by road in escorted vehicles after reaching them to Raipur by train, said an insider. The bank's regional director at Nagpur Phulan Kumar preferred not to divulge much details. He said a different route is used each time. A senior official in Chhattisgarh police said there were plans to develop helipads in interiors so that helicopters could land there.  RBI officials are provided routes on the basis of intelligence inputs on Naxal presence. "Although the road up to Jagdalpur is considered safe, the Naxals may even strike there. So it is better to fly at least till this town," said the official. A system under which RBI will supply notes up to Raipur or Jagdalpur from where the respective banks will lift the supplies is also being considered, informed a source.  The earlier plan of airlifting the consignment from Nagpur itself was proving cumbersome as only a limited quantity could be flown. Notes can be transported in bulk through trains.  For state government aircraft, RBI work is low priority and it is assigned after other engagements are fulfilled. This often holds up the notes' remittance. Taken by train, the notes remain at Raipur until airlifted according to the plane availability, said a source. 

TOI

RBI's automated data reporting norms to create Rs 500-cr mkt for IT firms

The Reserve Bank of India’s decision to automate the process of filing regulatory reports appears to have opened a door of opportunities for technology firms. Industry players expect banks to invest over Rs 500 crore over the next one year to migrate to the new system of automated data flow. Mid-sized software companies are also sensing an opportunity to cross-sell their other banking software products along with the automated data flow solution. For instance, iCreate Software, a Bangalore-based information technology firm, has already secured contracts from HDFC Bank, IndusInd Bank and Dhanlaxmi Bank within three months of launching their automated data flow solution Biz$core ADF. IndusInd Bank has decided to use iCreate’s enterprise business intelligence solution along with the automated data flow software. While the latter will help the bank in meeting compliance needs, the business intelligence solution will aid in managing information effectively for business requirements. Vivek Subramanyam, chief executive officer of iCreate, stressed the need for a technology solution to remove manual intervention in regulatory reporting. “Automated reporting increases the level of confidence on data, and decision-making becomes more accurate,” he told Business Standard. “There are 150 to 250 types of regulatory reports that banks have submit to RBI at periodic intervals. We are completely focussed on this opportunity and are engaging with the entire banking fraternity to position our Biz$core ADF solution.” He said the company’s automated data flow solution cost “single to early double digits” crore of rupees. In August, Ramco Systems, a software firm in Chennai, launched an automated data flow solution to help banks adhere to RBI guidelines on submission of regulatory reports without manual intervention. “Our ADF solution,” says Kamesh Ramamoorthy, chief operating officer of the Chennai-bases software firm, “can be deployed on any database management system. It can go live within weeks.” However, some banks are likely to rely on their in-house teams to develop this software instead of outsourcing it to a technology firm. According to a senior official of a Mumbai-based private sector bank, if the in-house technology team of a bank is strong, then developing the software makes more sense as the lender can customise the solution according to its requirements. Another option is that the bank will build the software on its own, but will seek assistance of a technology firm for integrating it with the main system. But most banks are expected to use third-party software as they have to comply with RBI’s guidelines within a specified time period. “It is not their core operations,” says an industry expert. “Hence, they will choose products of software companies to meet the guidelines.” The new guidelines on automated regulatory report filing were released after the central bank was alarmed by the trend of eroding profitability of state-run banks soon after the retirement of the chairman. The move is aimed at minimising the scope of errors and manipulation in reports that are submitted to RBI at periodic intervals by banks.

BS

Nobel lessons for RBI

...Sargent and Sims’s work on rational expectations show that policymakers cannot depend on information asymmetry to tame inflation. But it also makes clear that government policies that change incentives like those meant for the social sector programmes suffer no such problem. A clear prescription for keeping hands off the rate tools and hands on the outreach programmes......

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Sargent, Sims and RBI

...These economists have used a lot of econometric modelling to prove their theories and, given the nebulous and symbiotic relation between the two sets of factors, RBI should probably build a strong theoretical basis for its policy actions based on empirical evidence. This will explain, if not resolve, the ongoing debate of the tenuous relationship between interest rates and inflation, where the majority view is gravitating towards the school that given the lags involved, we may just about be shooting in the dark.....

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Dhanlaxmi bank hits 52-wk low on union allegation

... Our representatives have already met RBI in Thiruvananthapuram last week,” G.D.Nadaf, general secretary, AIBOC, told Moneycontrol.com. “We briefed RBI about Dhanlaxmi’s current financial strength and sought for its immediate intervention............

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Maha CM offers support to MSC Bank in appointing new board

Mumbai : In a bid to revive the Maharashtra State Co-operative Bank Ltd (MSC), whose board of directors were dismissed by the Reserve Bank of India (RBI) in May this year, the Chief Minister Prithviraj Chavan today said that the bank should follow the guidelines of the apex bank strictly while conducting its operations. He also said the state government would support the bank in appointing a new board of directors. "If the bank has to function properly it should follow the guidelines laid down by the RBI strictly," Chavan said speaking at the concluding function of the Centenary year of the MSC bank at YB Chavan centre here. The RBI after dismantling the MSC board had appointed state government’s agriculture secretary Sudhir Goel and planning secretary Sudhir Shrivastav as administrators. Chavan also said, "the government would lend its support to the bank to appoint a new board of directors. Whatever errors were committed should be accepted and rectified."

Moneycontrol

Maharashtra co-op bank may miss March deadline

Maharashtra State Cooperative Bank (MSCB), whose board of directors was dissolved five months ago, is expected to miss the deadline of March 2012 to get the banking licence. For 1906-founded institution has to meet crucial criteria of four per cent capital-to-risk (weighted) assets ratio (CRAR).

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Banks can't arbitrate

Some banks may agree to a particular interest rate during negotiation, but increase it at the time of sanction. The Reserve Bank of India does not bother to regulate such practices, but the national commission has given a landmark ruling that will help those in similar situations.....

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Customer first, RBI tells banks

.....To create awareness about the ombudsman scheme, the RBI has suggested that the ombudsmen should annually share with the local media information on complaints received and resolved, including important cases and awards given. The banks will organise a series of town hall events to create awareness about customer service. The system will attempt to reach out to the customer, impart knowledge, and empower them….

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RuPay may Open the Gateway to Inclusion

The new local card payment service provider will reduce the overall transaction cost for banks by introducing competition to international card schemes and is likely to charge a lower processing fee. It is being seen as a tool to reach out to the rural unbanked, reports Sangita Mehta

A few years ago, an arm of the Reserve Bank of India had launched the inter-bank ATM switch, a device that allows automated teller machines to talk to each other. This prompted the RBI to waive off an additional transaction fee that debit card holders incurred on using ATMs of other banks. The move, which initially faced the flak of the banking industry, led to an explosion in ATM usage across the country. Another such flare-up looks imminent with the upcoming launch of RuPay, a domestic payment gateway akin to global networks such as Visa and MasterCards. Though industry experts are once again skeptical on the government playing the role of a service provider, if the ATM experience is anything to go by, creation of a domestic payment network will widen the role of credit providers, giving a boost to financial inclusion in the country’s vast rural hinterland. Coming at an opportune time, when electronic payments are being seen as a tool to reach out to the unbanked, the RuPay card system — an initiative of the RBI-promoted National Payments Corporation of India — is creating unease among global card associations as it will reduce overall transaction cost for banks by introducing competition to international card schemes. Recently, Visa invited some 50 Indian urban co-operative banks to make a presentation on its products with an aim to lure local lenders to join the global payments network. Visa’s efforts to connect with urban cooperative lenders, hitherto not a priority for card associations such as Visa and MasterCard, just five months ahead of the RuPay launch is being viewed by experts as prompted by fear of impending competition. Currently, Indian banks pay . 200-300 crore to Visa and MasterCard for processing debit and credit cards. This cost is expected to come down after the launch of RuPay card system, which is likely to charge a lower processing fee. The benefit of a lower fee will be reaped by customers as well to whom the banks pass on the cost. The RuPay system will also lower the cost of transactions for shops that are reluctant to use the electronic mode of payment on which they currently lose 1.5% of their margin. “Currently, the merchant fee is significantly high and there is room to bring it down,” says AP Hota, chief executive officer, NPCI. China already has its domestic payment network Union Pay, a benchmark against which RuPay may be compared. Union Pay has 200 member banks, including 30 outside China, and is accepted in 104 countries. The European Union has also been talking about a region-wide payments network.  The RuPay system also aims to build an environment in which payment information remains within the country. “Why should the transaction go international and expose itself to various risks,” says Hota.

Highlighting the high cost of creating a payment network, Visa and MasterCard feel that payment networks work better when there are fewer of them. Ajay Banga, chief executive officer, MasterCard, in his maiden visit to India, after taking charge, pointed out that the launch of a local card system will not dilute the relevance of global card networks. Several countries where domestic proprietary networks were set up had turned to MasterCard to ensure that banks have the latest technologies, including fraud management, sophisticated scoring, fast transaction approvals, among others, he said. If every country strives to set up its own payment network, it would not only be very expensive, but also lead to systemic inefficiencies, he added. Amex and Visa also feel that they will continue to remain relevant in a market where growth opportunity is immense. Of the total bank consumer transactions in India, less than 5%, or nearly . 1.14 lakh crore, are in the electronic form. While the urban middle class is slowly migrating to electronic payments for bills, millions of man hours are still wasted by people standing in queues. Uttam Nayak, India head of Visa, says that the country has a long way to go in electronification of payments. “But where I look for answers is in the kind of investments they (NPCI) will bring in. Secondly, they will have to convince customers that it is the most secure, reliable and convenient mode of payment,” he says.

ROAD MAP

In the first stage, NPCI has launched the RuPay debit card. The first such card was issued by Gopinath Patil Parsik Janata Sahakari Bank. Although, not a debit card, the RuPay ATM card allows customers of rural banks and small cooperatives to access a wider ATM network. According to Hota of NPCI, which has PSU banks as its stakeholders — the roadmap for RuPay is ready. The company plans to start with a RuPay debit card by the end of this fiscal, which will be accepted in 50,000 domestic merchant establishments. In the initial phase, RuPay will not have an international reach and can be used only for domestic transactions. “But, currently, over 94% of all transactions by Indian cardholders are within India,” says Hota. “However, we will have a leeway from the RBI to talk to international players about the acceptance of this card outside India.” Subsequently, NPCI will roll out credit cards, but that would be three years from now.

CHALLENGES
The immediate test for the RuPay payment system will be to strike a chord with rural merchant associations and shops in order to build a payment network where the poorest customer has access to electronic fund transfer. Also, such a network would require an investment of more than . 1,000 crore by the banking industry without immediate returns. The Unique Identification Authority of India and Indian Banks Association have identified the need for 12-14 lakh micro-ATMs, which are point of sale machines given to business correspondents.  Moreover, an increasing usage of mobile transactions, which enable direct debit through mobile phones, could pose a major challenge to the RuPay.

ET

Safety cover for deposits

...The least that the Government and the Reserve Bank of India could do is revise upwards the current Rs 1 lakh insurance limit on retail deposits, which was fixed in 1993. The Damodaran Committee on Customer Service in Banks had recommended that this be raised to Rs 5 lakh....

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RBI meet on training in Hindi at Corporation Bank in Mangalore




(From left) Dr S Rajagopal, GM, RBI, Bangalore, H S Saini, GM, Corporation Bank, Narendra Singh, Executive Director, Corporation Bank, Kamala Rajan, Chief GM, RBI and Principal, College of Agricultural Banking, Pune, Vivek Maindargi, Asst GM & Member Secretary of CCTH, Ravi Kumar, GM, Staff College, RBI, Chennai and John D'Souza, Dy GM, Corporation Bank at the meeting of the Coordination Committee on Training in Hindi under the auspices of College of Agricultural Banking (CAB), RBI at Corporation Bank in Mangalore.

 

The 82nd meeting of the Coordination Committee on Training in Hindi ( CCTH) under the auspices of College of Agricultural Banking (CAB), Reserve Bank of India, was organised at corporate office in Mangalore. Reserve Bank reviews training efforts in Hindi of all the PSU banks once in a quarter. The meeting was hosted by Corporation Bank and chaired by Kamala Rajan, Chief GM. The meeting was attended among others by Narendra Singh, Executive Director of Corporation Bank and senior HR functionaries of all PSU banks.

FPJ

Rate hike: Bankers say enough !

The country’s leading bankers don’t want any more policy rate hikes by the Reserve Bank of India (RBI). Speaking at the Business Standard Banking Round Table in Mumbai on Monday, five of the six bank chiefs said ‘no’ when asked whether RBI should raise rates in the second quarter review of the monetary policy on October 25. Bankers gave three broad reasons for their view. First, early signs of a slowdown are becoming increasingly visible, with small and medium-sized industries already feeling the stress. Second, long-term investment demand will take a hit as confidence has taken a hard knock in the absence of policy initiatives. And third, the underlying strong domestic demand, which has kept the India story going, may have reached a tipping point. The central bank has increased rates 12 times in the past 18 months. The round-table was attended by State Bank of India chairman Pratip Chaudhuri, Bank of Baroda chairman & MD M D Mallya, ICICI Bank MD & CEO Chanda Kochhar, Axis Bank MD & CEO Shikha Sharma, Citi India CEO Pramit Jhaveri and Deutsche Bank India CEO Gunit Chadha. The bankers said in case RBI decided to hike the policy rate once again, banks would not have any option but to pass it on to customers. “If RBI does a rate hike, interest rates have to be raised because the input price increase has to find a reflection in output rates,” Chaudhuri said. Chadha said it was inevitable banks would have to transmit some of the policy rate increase to the system. Others said liquidity would be a key factor that would shape banks’ strategy in deciding future interest rates. Banks expect liquidity to dry up further. “Whether the lending rates go up or not will depend on how the liquidity situation pans out. Liquidity will be the big thing to watch in the coming two months because we are entering the festive season,” Kochhar said, adding the drying up of liquidity in overseas markets would have an impact on domestic liquidity. Bankers said they were seeing a slowdown in loan growth. Even the festive mood is yet to reflect in loan demand. On the other hand, as Sharma pointed out, there were signs of a slowdown in home and auto loan growth. The overall mood on economic growth, however, was optimistic. Most bankers pegged growth at 7.5-8 per cent. Bankers also don’t see any large-scale increase in non-performing assets. “Some large companies only need some hand-holding. Retail loans are yet to see stress on asset quality,” Kochhar said.

BS

'We have reached a tipping point'

Six leading bankers say the overall mood on economic growth is fairly bright, but the early signs of stress can’t be ignored.

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"Executive feedback on VITALINFO"

  

Industry pleads for cheaper credit

MUMBAI: Leaders of industry on Monday appealed to the Reserve Bank to cut interest rates in the forthcoming credit policy saying the economy could slide into difficulties if credit is not made cheaper.  "The entire industry was in one mind that the interest rates are hurting the economy. If the rates continue to remain high, there is a fear that the economic growth will stall or there could be some contraction as well," builder Niranjan Hiranandani said after meeting RBI Deputy Governors here. The monetary authority will unveil its second quarter credit policy on October 25. Hiranandani, Managing Director of the Hiranandani Group, said recent data like the drastic fall in factory output numbers suggested that the IIP numbers too would fall if the interest rates continue to be high.  "There is an urgent need to reduce the rates and all the industry bodies like Ficci, CII and IMC are united in that," Hiranandani, who was a part of a Ficci delegation, said. Ratings agencies and many brokerages have cut their economic growth forecasts to around 7.5 per cent in FY12 and cite the repeated rate hikes as one of the factors denting growth prospectus.  In its quest to tame inflation, the Reserve Bank has hiked its key rates a record 12 times in the last 19 months, ending up making credit dearer which has in turn affected investment activity.

TOI

RBI may hike rates again: HDFC’s Puri

The Reserve Bank of India (RBI) is likely to boost interest rates this month even after major banks urged it last week to go for a pause, HDFC Bank managing director Aditya Puri said on Monday. RBI, which broke ranks with other Bric nations last month to raise interest rates, is focused on curbing inflation, Puri said. Inflation rate remains above the level the central bank deems acceptable, Subbarao had said last month, signaling that pressure remains for monetary tightening.

FE

Palm-Top Banking

........In October, a committee headed by A.P. Hota, Managing Director of the National Payment Corporation of India (NPCI), and with members drawn from the Reserve Bank of India (RBI), Unique Identification Authority of India (UIDAI), Indian Banks’ Association (IBA) and senior bankers will sit down to hammer out a plan to make micro-ATM a pan-bank platform. ...........

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A Gold Bank: Time Has Come – S.S.Tarapore

The global economy is facing an unprecedented crisis. Policymakers in international financial institutions and national authorities have responsibilities of effective policy action to pull the global economy out of the quagmire. The international economy could be heading for a long period of low growth and high inflation. Some renowned expert economists have been advocating one final large quantitative easing (QE) in the industrial countries via printing money. There is the well known dictum that policymakers should scrupulously avoid making gloomy forecasts of an apocalypse, lest it become a self- fulfilling prophecy. Nikolai Kondratieff, a Russian economist, put forth the hypothesis that the world would be caught in the vies of a long- wave cycle. Poor Nikolai was treated with suspicion by the Soviet authorities and eventually shot in 1938 for holding such negative views. The fear today is that the world economy may be caught in a long- wave Kondratieff cycle of low output and the remedy of today’s economists of massive pump priming could devastate the world with low growth and high inflation. To the Common Person in India all this esoteric debate would appear irrelevant. The Common Person in India has been berated for investing meagre savings in an ''unproductive' asset called ''gold' thereby reducing savings and therefore, investment and output. The Common Person is urged to integrate into the financial system and to deposit savings in ''No Frills' accounts which would wean the Common Person away from the barbaric instrument of gold.

Yet, what happens the world over is that central banks, high net worth individuals, and the middle class, all quietly invest in gold. The international monetary system is flawed as it is dependent on a reserve currency which is no longer linked to gold. Pundits tell us that there cannot be a system of multiple reserve currencies. A single reserve currency concept is flawed as it has to print money which is required by other countries. This major flaw is the central reason for the strong possibility of a global collapse. The anti- gold advocates have pulled off the greatest hoax on the Common Person. Now what can we honestly say to the Common Person in India? In India, the Common Person is barraged with untruths that financial savings are good for him/ her as it yields interest, without explaining that the Common Persons savings are eroded by inflation. What is reprehensible is that in high policy circles it is argued that the saver is ''trapped' and has nowhere to go and would, therefore, necessarily part with savings at low rates of interest. What is not told to the Common Person is that if the inflation rate is 10 per cent, a fixed deposit of Rs 100 would in real terms, after 10 years, be only about one- third the amount placed. Moreover, if the rate of interest is 10 per cent, the real rate is zero. It is sad to see more and more people from the low income strata being inveigled into the financial system with misleading and false promises. The saver needs a wake up call. Gold is by no means an unproductive asset. It is, in the long- run, the safest saving instrument for the Common Person. If the saver wants to make a quick buck then gold is not the appropriate instrument. The idea of a Gold Bank was first mooted in 1992 by the then Governor RBI, Mr. S. Venkitaramanan and the scheme was approved by the then Finance Minister Dr. Manmohan Singh and incorporated in the Budget of February 1992. It is unfortunate that this path- breaking idea was prematurely aborted. Since 1992, the stringent gold regime has been significantly liberalized and a number of banks and specified agencies are permitted to import gold. A number of gold products have been developed such as interest bearing Gold Deposits with banks, Gold Exchange Traded Funds ( GETFs) and Gold Funds of Funds ( GFoFs). In this context the idea of a Gold Bank needs to be revived. The outline of the Gold Bank could be as follows: The Gold Bank could be jointly floated by the RBI together with select banks and institutions ( akin to the setting up of Primary Dealers by the RBI). The Gold Bank could initially have a 51 per cent participation by the RBI; the balance 49 per cent could be held by banks, institutions and mutual funds floating gold schemes. The purpose of the majority RBI ownership would be to initially get the scheme going. The initial capital of the Gold Bank should be at least Rs 1,000 crore. There should be a clear understanding that the RBI would divest its holdings by periodic offerings of its shareholding. The Gold Bank could be provided a rupee line of credit by the RBI against the collateral of specified gold instruments, to enable the Gold Bank to meet short- term asset- liability mismatches; the interest rate on such refinance would be determined by the RBI from time to time. In turn the Gold Bank could provide refinance to the participant banks and institutions. The RBI could also offer to undertake outright purchases of physical gold in London Good Delivery Bars at prices to be announced by RBI from time to time this should not be a Tap facility but periodic auctions could be undertaken by RBI. The objective would be to develop gold paper instruments. The Gold Bank should not deal in jewellery or trinklets, as its basic objective would be to encourage instruments of paper gold. The Gold Bank would provide a major stimulus to developing a deep and well functioning market in paper gold which would be a boon to small savers who really have nowhere to go. The initial response would be to denigrate the idea. But it needs to be remembered that the entire mutual funds industry was initially developed with a tiny start up by the RBI sponsored Unit Trust of India which garnered only Rs 6 crores in its first year of operation. The Primary Dealership idea took off only after the RBI took the lead to set up two Primary Dealers and then others jumped on to the bandwagon. The least the RBI could do is to set up a Working Group to prepare the modalities of a Gold Bank.

FPJ

Inflation below 5.5% can boost growth: RBI study

...The paper, authored by RBI Executive Director Deepak Mohanty and three other officials, found there is a positive impact on growth when inflation is up to 5.5 per cent.......

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New norms curtail ‘options' for FDI investors

....Foreign investors have already faced the regulatory ire earlier this year, with several option-backed deals inviting the scrutiny of the Reserve Bank of India and the Securities Exchange Board of India. Both the regulators believe that the put and call options and pre-agreed buy-back arrangement are in the nature of futures or derivative contracts and cannot be executed by non-registered investors. .....

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Post office, PPF rates set to rise, but not by too much

....For a finance ministry that has been advising the Reserve Bank of India (RBI) to think “out-of-the-box” on interest rates, here’s a reality check on double-standards: faced with a sharp drop in collections under post office savings schemes, it may end up recommending a hike in interest rates.......

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Commercial banks’ priority sector lending for 40 years has had limited success. It’s time for a complete overhaul

... the Committee proposes that the directed credit programmes should be phased out”: (Source: The Narasimham Committee Report, 1991).However, the RBI did not accept these recommendations for obvious reasons, but made some modifications to the priority sector lending guidelines, and continued with ..............

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The stink coming from Dhanlaxmi Bank: AIBOC raises serious allegations

....After whistleblowers raised a red flag raising questions about the operations of Dhanlaxmi Bank, the All-India Bank Officers Confederation (AIBOC) has alerted the Reserve Bank of India (RBI) regarding the bank’s wrongdoing......

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Arjun Parthasarathy: High levels of cut-offs may continue

... The fact that the RBI fully cleared the auctions at higher levels of yields without devolving a larger amount of bonds on PDs indicate that the central bank and the government are fine with paying higher yields in the auctions....

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48 villages in Himachal to have banks by March

Shimla : All villages with a population of 2,000 and above in Himachal Pradesh will have banks by March next year , a top Reserve Bank Of India (RBI) official said here. “We have identified 48 villages without banks , each will have a bank branch by early next year,” said R Gurumurthy General Manager RBI Shimla office. “In the second phase, 500 villages having 1,000 population will be covered ,” he said. “Even though the penetration of banks was much better than the national average which was 14,000 people per branch and 4,500 people per branch in Himachal, credit raising was a concern in the hill state ,” Gurumurthy said. He said there was an RBI plan to spread bio-metric banking in Himachal through business correspondents (BC) by March 2012. “This high tech scheme will have the facility of mobile banking, besides BCs will go to the doorstep of customers to collect money among other banking activities,” he explained.  Gurumurthy said the RBI was receiving many complaints from individuals, trusts and other entities regarding fraudulent communication by phone, email and snail mail. These offers relate to fictitous offers, lottery offers, lottery prizes, remittance of cheap funds in foreign currency, overseas jobs and scholarships . Such cases were on the rise across India and Himachal Pradesh . A lawyer from Rampur Bushahr had recently fallen into a trap of winning a lottery of Rs 7.8 crore and was asked to deposit Rs 38,000 online which he did and in the process lost his money. The RBI has appealed to the public to be wary of such fraudulent offers and report such cases to the RBI and the police.

BS

Don't believe in 'rumours' on VRS, Nabard tells employees

National Bank for Agriculture and Rural Development (Nabard) has asked its employees not to believe in “rumours” by “black sheep” and a “self-appointed saviour” on the launch of a voluntary retirement scheme (VRS) in the country’s apex development bank. Bank chairman Prakash Bakshi sent out a communication last week to 5,000-plus colleagues, appealing them not to be “misled” by such “misinformation campaign”, instead stay together for Nabard’s growth. The hard-hitting communication dated October 5 said the management was “seriously concerned and pained” over the “rumour mongering” in Nabard and its possible negative impact. “Immediately after our last board meeting held on September 22, almost all executive directors, chief general managers and other office-bearers were flooded with telephone calls by staff members across the country that the Board has approved VRS and people will be sent home. Who spread these rumours?” he asked. “Let me say with authority that ever since I took over the role of team leader of Nabard, the word VRS has not been even uttered by me or by any directors or executive directors, or other office bearers. Even the thought of having VRS has not arisen in our minds.” Further, Bakshi wanted to locate the black sheep “desperately trying to disrupt” the Nabard family. “Let us remember that such black sheep are capable of spreading rumours. I appeal to all team members not to be misled by such rumours...” Instead, Bakshi assured the employees that the board of directors would continue to take decisions which are in the bank’s interests as well as its members. The Nabard boss said the bank had, in fact, decided to create supernumerary vacancies to promote people at the earliest. From 2012, staff members eligible for promotion in the first half of the calendar year would be promoted on January 1 itself. July 1 will be the pertinent date for such case in the second half of any year — even if it required creating temporary supernumerary vacancies. Bakshi said 1982-founded Nabard required new ideas to solve old problems. “We need to join hands with other entities and convert them into willing partners. We need to set almost impossible deadlines and resolve to adhere to them. And the fact is that Team Nabard is capable of all this.”

BS 

New classification norms for NBFC NPAs opposed

Bangalore :  Industry body ASSOCHAM has opposed the government’s classification of non-performing assets (NPAs) belonging to non-banking financial companies (NBFCs) which provides for secured and unsecured advances if the overdue period exceeds 90 days. Under the existing norms, an unsecured asset overdue beyond 90 days and a secured asset overdue beyond 180 days are treated as NPAs. "NBFCs are a major source of funding for unorganised sector of the economy. The revised classification will eventually increase capital requirements of NBFCs and their cost of lending," said the Associated Chambers of Commerce and Industry of India (ASSOCHAM) in response to draft recommendations of the Reserve Bank of India (RBI) Working Group. It also suggested an enhanced time frame of five years due to difficult and uncertain economic conditions for tier one capital for capital to risk weighted assets ratio (CRAR) at 12 per cent – instead of within three years as proposed by the group. 

IBN Live

8 cooperative banks go belly up

New Delhi: As many as 8 cooperative banks failed in this fiscal so far, resulting in credit insurance company DICGC paying a little over Rs 143 crore to depositors. Among the eight cooperative banks, which failed to repay deposits to customers, four are from Maharashtra, three from Karnataka and one from Gujarat. In the last financial year, 26 cooperative banks had closed operations. Under the norms of Deposit Insurance and Credit Guarantee Corporation (DICGC), a wholly-owned subsidiary of the Reserve Bank of India (RBI), a maximum of Rs 1 lakh is paid to a depositor in case a bank goes insolvent. The Reserve Bank's credit insurance arm has paid over Rs 143.5 crore to depositors of eight cooperative banks which went bankrupt till July in 2011-12, according to DICGC. The DICGC paid the maximum amount of Rs 48.7 crore to Ichalkaranji Cooperative Bank of Maharashtra. This was followed by another Maharashtra-based lender Samata Sahakari Bank whose depositors were paid Rs 38.83 crore. Besides, the credit insurance company paid Rs 31.9 crore to depositors of Anyonya Cooperative Bank of Gujarat and also Rs 15.37 crore to the account holders of Vidharbha Cooperative Bank of Maharashtra. At the same time, the insurer paid Rs 2.5 crore each to Laxmi Sahakari Bank of Maharashtra and Chadchan Sree Sangamehwar Urban Cooperative Bank of Karnataka.

FE

Finance ministry pushes for increase in PPF, post office rates

NEW DELHI: Faced with a cash crunch, the finance ministry is moving a proposal to increase interest rates on small savings schemes such as Public Provident Fund and post office deposits but politics may play spoilsport. Official sources told TOI that finance minister  Pranab Mukherjee will decide on the proposal over the next few days as small savings instruments have lost out to bank deposits that earn higher interest. As a result, the government has been forced to borrow Rs 53,000 crore more from the market by issuing bonds, a move that can increase interest rates further and also upset budgetary calculations. If Mukherjee approves an increase in interest rates on small savings, your PPF will fetch you at least 8.2%, instead of 8% now, while senior citizens can hope to earn around 9%. In addition, individuals will be permitted to park Rs 1 lakh in PPF accounts instead of Rs 70,000 at present. Similarly, post office deposits will fetch 50-70 basis points higher (100 basis points = one percentage point). But politics over two schemes are holding back a green light from the finance minister. Sources said the finance ministry has received several representations from individuals urging not to abolish the Kisan Vikas Patra (KVP), while nearly 5 lakh agents have opposed the move to cut the commission on Mahila Pradhan Kshetriya Bachat Yojana (MPKBY) to 1% from 4%. Officials in the tax department have complained that KVP has become one of the biggest instruments of money laundering, a concern which was even shared by a high-level committee headed by former RBI deputy governor Shyamala Gopinath. In fact, maximum instances of misuse of KVP have been found around Amritsar, pointing to the possibility of Pakistani funds entering India. So, it hasn't come as a surprise that a significant number of petitions for the scheme's continuation have come from Punjab and Haryana. 

TOI

Government's apathy to small savings schemes

...The Shyamala Gopinath Committee on Comprehensive Review of National Small Savings Fund recommended to the government a positive spread of 25 basis points, vis-à-vis government securities of similar maturities with a few exceptions, “taking into account the interests of small savers, and in view of the absence of social security among the unorganised sections of the society, as also the liquidity augmenting measures for various instruments”. ....

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RBI unlikely to halt its rate hike cycle

With the recent economic data pointing to a looming economic slowdown, some economists and analysts had inferred that the Reserve Bank of India may not increase policy rates in its October meeting, and rather watch the growth and inflation trajectory over the next few weeks. Such hopes may be short-lived. Last week, in a meeting with primary dealers—who deal in government securities, T-bills—some of the top RBI officials reiterated that the central bank’s hands were tied as long as inflation was at an uncomfortably elevated level, and it had no other option but to raise policy rates. The central bank also ruled out any open market operation (OMO) in the next few months, a step that could have infused some liquidity into the system.

TOI

Just 3.3% of urban Indian population gets home loans

...In India, there are no figures from the government agencies — Reserve Bank of India (RBI) included— about how many Indians get housing loans, especially in urban areas......

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IIP, inflation to decide RBI move

Two sets of data to be released this week - industrial output growth for August and consolidated monthly inflation for September - would largely determine the Reserve Bank of India's (RBI's) next move on interest rate hikes. Policy makers are facing a harsh dilemma: a slew of fiscal and monetary measures to cure inflation has not tamed prices but cast side effects on growth. The government will announce the factory output growth figures for August on Wednesday and release wholesale prices based inflation data for September two days later. With India's inflation rate racing towards worrisome double-digit levels, all eyes are on the RBI, on whether it may announce a pause in its interest rates hike cycle later this month when it presents the quarterly monetary policy review on October 25. The wholesale price index (WPI)-based inflation stood at 9.78% in August, the highest in 13 months, fuelled by costlier food, fuel and manufactured products. "Amidst mounting global uncertainties, it is unlikely for the RBI to hike repo rates at this juncture," said a recent research report by BNP Paribas. India's factory output growth in July grew by 3.3%, the slowest in 21 months, latest data showed on Monday, mirroring signs of an imminent industrial slowdown as rising input costs and costlier borrowing squeeze corporate profitability, forcing them to defer investments. The RBI has raised the repo rate by 12 times in the past 18 months to cool prices. A higher repo raises banks' borrowing costs, which in turn would raise interest rate on final home, auto and corporate loans.

HT

Need for credible fiscal plan

....Excessive government borrowings put the Reserve Bank of India in a difficult position with no option but to raise interest rates frequently to control money supply and inflation without slowing growth. ....

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The Institute of Chartered Accountants of India (Icai), the apex body of accounting professionals, wants the Reserve Bank of India (RBI) to appoint statutory auditors in state-run banks

The accountants’ body has sought the government intervention on this. Till 2005, RBI was directly involved in the appointment of auditors, but now the boards of public sector banks (PSBs) appoints auditors in consultation with the central bank. The Icai move assumes significance in the backdrop of the recent spat between the auditors’ body and the nation’s largest lender, State Bank of India (SBI), on a sharp rise in the lender’s provisions in the March quarter. During the quarter, SBI had set aside Rs.6,059 crore as provisions towards pension liabilities, 82% higher than what it had provided for in the year-ago quarter. Icai had sought clarifications from SBI on the sudden rise in its provisions and the role of auditors. “If appointments are left to bank managements, there may be a tendency to take short-cuts in these regards with possible ultimate deleterious effects on the financial health of the PSBs,” Icai president G. Ramaswamy said. “This process compromises the independence of auditors and gives an incentive for promotion of vested interest in the appointment of auditors.” Icai, however, did not respond to a specific question on why it is silent on the appointment of auditors in private sector banks. Queries sent to RBI seeking its view on the matter remained unanswered. Bankers, experts and consultants criticized Icai’s move, saying this is unlikely to make any major difference in the quality of auditing. Also, any changes in these aspects should equally apply to private and foreign banks as well, as they also deal with public money, they said. “Icai should question the entire banking sector,” Santosh Singh, an analyst with Espirito Santo Securities, said. “After all, it is not the regulator’s job (to appoint auditors). Also, whoever is compensating auditors is bound to do that in future, also.” Until 2005, the appointment of auditors in state-run banks was overseen by an appointments committee with representation from RBI, Icai and the Comptroller and Auditor General of India. In December 2005, the finance ministry offered all PSBs an option to appoint statutory auditors by their boards though the norms of empanelment, and remuneration of these auditors continues to be prescribed by RBI. Those who did not opt for this started doing so from December 2008 when RBI to a large extent dissociated itself from the appointment process. “In many cases, auditors do not see eye-to-eye with bank managements (on issues such as) like NPA (non-performing assets) provisioning, implementation of prudential norms, etc., and this is the reason auditors are at all appointed. There must always be somebody who will not look at the business from the point of view of the management, and who will look and act at it from the point of view of good governance,” Ramaswamy said. SBI had questioned Icai’s standing to question the banking major. “If they feel that something is wrong with the bank’s auditing, Icai should ask their own members,” a senior SBI official had said in August. Senior bankers express a similar view, saying the regulator-appointing auditors for PSBs were not effective in the past and the current practice should be retained. “That (RBI appointing auditors) was done earlier and the power was later given back to banks. It obviously didn’t have the desired effect,” said P.K. Anand, executive director at Punjab and Sind Bank. “The real issue is not independence, but the quality of auditing, which has seen deterioration in many cases in the recent past,” said the partner at a global consultant, who did not want to be named.
Mint

More cash into banks likely for PSU sell-off

...There could be one-off deal between RBI and government in which the central bank may cut CRR or SLR to inject liquidity in the banking system to help carry forward the disinvestment programme, a government official said......

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SBI and Bhatt

Now that State Bank of India has been downgraded somewhat by Moody's, the time has come to revaluate the tenure of its last chairman, Mr O. P. Bhatt. Four questions need answering. First, to what extent are decisions taken by him responsible for SBI's ignominy; second, what was the RBI doing about these decisions; third, why did the Government, which owns SBI, not rein him in; and fourth, what was the Board doing? The first question has an obvious answer but it doesn't solve the problem. The answer is that had it not been for decisions taken by him, the SBI would not have been looking at so many loans that will not be repaid. But he can always plead contextual judgement. We will have to leave it at that. As to the RBI, it got into a running battle with SBI from Mr Bhatt's second year as chairman. It did its best to restrain him but failed. Its representative on the SBI board would have a few stories to tell. Someone should ask her. The third question is about the Government. It is not as if the Finance Ministry didn't know of the too-clever-by-half approach of Mr Bhatt. So why did it not have a quiet word with him to do things by the book? This brings up the fourth and most important question: what role did the Board play and what role was it assigned by Mr Bhatt? What was the Executive Committee through which he operated and who were on it? Everyone in the banking circles knows the answer. It's the public's turn now, to be told. Lest someone think that I am, as they say, going after Mr Bhatt, let me say this: a downgrade of the SBI is no small matter nationally, and Mr Bhatt needs to answer some questions. Any former chairman under whom the bank took such decisions would have to do as much. 

HBL

DOWN THE HILL

The government, which includes the RBI, has put off a decision to license new banks for many months. It is presumably worried that competition would be bad for its own banks. But even without competition, the banks are running short of competent staff, and have failed for years to extend their services to rural areas. Its paternal concern for its banks has led the government to ignore national interest.....

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Reconstructing asset reconstruction firms

... There are many other issues that RBI should look into to make the asset reconstruction industry work well, such as allowing the transfer of assets among ARCs and permitting them to offer working capital support to industrial units under revival; but no model will work unless the banks themselves appreciate the importance of selling bad assets and stay away from financial incest.....

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RBI has to manage huge govt borrowing and sell govt bonds at zero fee to investors

The worst investment banking assignment is the one that RBI is saddled with. It has to sell Government of India bonds, at a zero fee, to investors whose cost of money may be more than the return from the bonds. It's a lemon from Day 1, and at some point investors will run away.....

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Why deflation is worse than inflation

...To be clear, what the RBI and the Government in India may be hoping for, currently, is disinflation, and not deflation. Confused? Disinflation is a drop in the rate at which prices rise, while deflation is a decline in the prices.....

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May her soul rest in peace

Smt. Leela, wife of late Shri.V.G.Pendharkar passed away on 5th October, 2011 in Pune. She was 92 years old. Some of you must have met her. I conveyed condolences on behalf of RBI  friends to VGP's son Jayant.  

As reported by P.P.Ramachandran (via e-mail)

FSDC to review fall in rupee

The sharp fall in the value of the rupee against the dollar in the last one month has left policymakers worried, even as the Reserve Bank of India (RBI) says the fall in the currency is due to global changes and nothing specific in the country is driving the fall. The issue is likely to come up for discussion at the next meeting of the Financial Stability and Development Council (FSDC) this month. A source in the council confirmed that the sharp fall in the rupee was a concern and would be discussed at the next meeting. In the last two months, the rupee has weakened by 11.52 per cent, while it has lost 7.75 per cent since September, against the dollar. Such a sharp decline in the currency was last seen in August-October 2008, when the world financial markets were facing a crisis. Between August and October 2008, rupee had fallen by 18.02 per cent, while the dollar index had risen by 17.73 per cent. However, this time, while the rupee has lost 11.5 per cent in two months, the dollar index has risen by six per cent. This means that the fall in rupee this time has been much sharper than the rise in dollar index and, hence, is seen as a run on rupee rather than just an impact of the global phenomenon.

RBI has not completely ignored the issue, but a serious response from the central bank has yet to come. RBI Deputy Governor Subir Gokarn last week said: “It is a matter of some concern that we depreciate so much in such a short time.” But he watered down the remark by adding: “But we have to put that into perspective, as this is a global phenomenon. There is nothing specific in the country that is driving this process.” Besides the concern that the fall in rupee has been sharper than the rise in dollar index, a reason for worry has been that the domestic industry has not been able to encash the fall in global prices of commodities, especially crude oil. While in dollar terms the Indian basket of crude oil has fallen 11.18 per cent since August to $101.24, in rupee terms the fall has been only 0.94 per cent to Rs 4,977 a barrel. For steel making raw materials like coking coal and iron ore, the decline in global prices have been three and five per cent, respectively, but their cost of import in India has gone up three-four per cent in the last one month. Exporters in the gems and jewellery sector may be getting better realisations for their produce, but the demand in the markets like the US and Europe has been weak. Sharp fall in rupee is a point of discussion for FSDC as measures to address the issue require the involvement of multiple agencies. RBI is known for its conservative approach in opening up capital account to increase dollar inflow, but liberalising external commercial borrowing norms and portfolio norms need contribution from other regulators too. Some tariff measures may also have to be taken. Economists, however, have been advising caution and saying the issue needs to be deliberated upon objectively. JPMorgan Chase Asia Economist Jahangir Aziz said: “While there are concerns about the depreciation of the rupee, policymakers need to study the factors driving the fall in August and September separately and objectively to avoid any knee-jerk reaction.” Aziz also believes, if global financial conditions stabilise, there is a possibility that the rupee could rebound quickly. HDFC Bank Chief Economist Abheek Barua said: “If rupee continues to fall further, it will be a worry. However, while discussing the issue, FSDC should remember RBI’s independence in responding to exchange rate volatility. It may take more measures but it cannot guide RBI on rate management.”

BS

You can be jailed for default in fund transfer via ECS

Hyderabad : If you pay your loans through the electronic clearing service, you better ensure there is sufficient fund in your account.  Else, you can land up in jail, according to a latest circular from the Reserve Bank of India. Increasingly, people are opting to repay loans or other financial commitments electronically by giving a mandate to banks for monthly deduction from their accounts on a specified date instead of giving post-dated cheques. But many of these commitments are apparently not being honoured as there is no clarity on the punishment. However, in a circular sent to banks a couple of weeks ago, the apex bank communicated that the same set of rules against dishonour of cheques, according to Section 138 of the Negotiable Instruments Act, 1881, would apply for dishonour of electronic fund transfer instruction. “Section 25 of the Payment and Settlement Systems Act, 2007 accords the same rights and remedies to the payee (beneficiary) against the dishonour of electronic funds transfer instruction as are available to the payee under the Negotiable Instruments Act,'' the RBI said. The implications of this circular for individuals and banks are significant.  “This is a welcome clarification as it brings parity between cheque-based payments and electronic fund transfers,'' Mr Nagesh Pydah, Chairman and Managing Director, Oriental Bank of Commence, told Business Line.  According to a senior official of Andhra Bank, many loan repayments through ECS mandate submitted to a bank are regularly dishonoured while maximum care is taken to honour post-dated cheques.  Most of these commitments are not being honoured as there is no clarity on punishments prescribed legally till now while remedies are available for dishonour of cheques.  “As a result, banks are also collecting a few post-dated cheques even for electronic funds transfer commitments,'' said an HDFC Bank functionary.   “The RBI's circular will give banks more teeth to ensure that the repayments through electronic mode would be more regular,'' he added.

HBL

Teaser vs. dual rate loans

...The RBI however, says that all dual rate loans are considered as teaser loans and banks must make the mandated provisions. It clarifies that such products are legitimate and they have not banned such products, but only laid down certain rules for them.....

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Bizmen, RBI trade charges over loose change

MUMBAI: A tug-of-war has erupted between traders' associations and the Reserve Bank of India (RBI) over dispensing of loose change for business. Shopkeepers allege the RBI is keeping its coins close to its currency chest. The bank, in turn, accuses unscrupulous storeowners of misusing its facility to melt coins and extract metal to make illegal profit. Coins are produced at government mints across the country. The RBI's currency chest, which is the sole carrying and forwarding agent, then transfers them to bank branches which become retailers for petty change. Businessman Sidharth Jain, who owns a medical store in the Fort area, says that the RBI has referred all shopkeepers to their respective banks to procure change. "We, for instance, require coins to the tune of Rs 20,000 a month. Initially, our needs were met by the RBI but once we approached the local bank branch, it only agreed to give us change worth Rs 2,000," he says. "Now even that is not available. We are forced to ask customers to hand out coins of all denominations, which causes friction at times." Federation of Retail Welfare Traders' Association president Viren Shah has written to the RBI to say that his members are inconvenienced by the central bank's reluctance to provide change. "We are being denied coins of Re 1, Rs 2 and Rs 5. Local banks that are obliged to give loose change as per RBI guidelines are declining this facility saying they, in turn, do not receive change from the RBI," Shah says.  This is causing concern to businessmen who are sometimes forced to pay 15-20% extra to procure change from agents. Shah has urged the RBI to ensure a resolution before demand peaks during the upcoming festival of Diwali and traders are exploited further.

However, sources in the Reserve Bank allege that their hand has been forced by certain storeowners with "dubious reputations" who have been making illegal use of loose change. "These traders are creating pressure groups to procure vast amounts of loose change in order to melt coins and extract the metal. We do keep a tab on the volume of coins that individual shopkeepers procure from us and we have found that these shopkeepers seek far more than their requirements for normal business transactions," says a senior RBI official.

This, if true, is a serious criminal charge that could invite prosecution and penalty. It is a well-known fact that coins of certain denominations are worth more than their face value once they are melted down to extract metal. However, common shopkeepers like Jain say they are unaware that coins can be misused in this manner, and wonder why all should suffer for the sins of a few.

TOI

Protein shake up

..Gokarn, the Reserve Bank of India's Deputy Governor and one of India's well-regarded economists, knew something was firing up prices. In northwest Delhi's More Megamart, one of India's largest retail foodstores, homemaker Baharuna Sultana's shopping cart may hold a clue to the puzzle. ............

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Crude surprise

...It cannot be anyone’s case that India will come out unscathed of a US-EU recession, but the fall in commodity prices has to be a major saving grace. Perhaps something RBI will keep in mind later this month when it is deciding on whether to hike rates once more? Additional factors that signal a fall in economic activity are the contraction in the services PMI as well as the very flat yield curve......

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Foreign exchange transactions made easier for NRIs

The Reserve Bank of India (RBI) relaxed some foreign exchange facilities recently for individuals - NRIs and persons of Indian origin (PIO). The RBI has further liberalised foreign exchange facilities for individuals under the Foreign Exchange Management Act (FEMA). The move is expected to ease the procedures and offer more freedom to both residents and their non-resident relatives in their foreign exchange transactions.

Joint account

NRIs can now be joint holders in resident SB, EEFC, and RFC accounts. Individuals, residents in India, are now permitted to include non-resident close relatives as joint holders in their resident bank accounts. So, they can have savings bank accounts jointly with residents. It can be on 'former or survivor' basis. However, such non-resident close relatives will not be eligible to operate the account during the lifetime of the resident account holder. NRIs and PIOs are also permitted to open non-resident external ( NRE) rupee account schemes and foreign currency non-resident (FCNR) accounts with their resident close relatives as joint holders on a 'former or survivor' basis now. The resident close relative should be eligible to operate the account as a power of attorney holder in accordance with instructions during the lifetime of the NRI or PIO account holder. Gift
Now, residents have been permitted to gift shares and debentures up to USD 50,000 in value per financial year. Earlier, the limit was USD 25,000 per calendar year. Resident individuals are now permitted to make rupee gifts within the overall limit of USD 2 lakhs per financial year to a NRI or PIO who is a close relative through a crossed cheque or electronic transfer to a non-resident (ordinary) rupee account (NRO) of the NRI or PIO.

Loan
Resident individuals are now permitted to lend in rupees within the overall limit under the liberalised remittance scheme of USD 2 lakhs per financial year to a NRI or PIO who is a close relative through a crossed cheque or electronic transfer, subject to certain conditions . The loan should be free of interest. The minimum maturity of the loan should be one year.  Also, the loan should be used to meet the borrower's personal requirements or for his own business purposes in India. It should not be used for any purpose in which investments by persons resident outside India is prohibited, such as the business of chit funds, agricultural activities etc. In addition, the loan amount should not be remitted outside India.

Loan repayment

Residents can repay a loan given to a NRI close relative. Resident individuals can repay loans availed of in rupees from banks in India by their NRI close relatives. Earlier, repayment of rupee loans by close relatives here was restricted to housing loans only.

Medical expense

Residents can bear medical expenses of NRI close relatives. Earlier, residents were allowed to make payments in rupees towards meeting expenses on account of boarding, lodging and services related to it or travel to and from and within India of a person resident outside India who is on a visit to India. Now they have been permitted to meet the medical expenses as well.

ET

Only a third of bank deposits covered by default insurance

...“We have never witnessed a scenario of liquidation of a commercial bank. The RBI manages systemic risk by taking pro-active steps before the failure, by asking existing well run banks to take over the weak/potential failure cases. In other cases, banks have been asked by the RBI to infuse additional capital,” ......

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Banks must reverse wrong debit in 7 days or compensate

... would suggest that you write to the Deputy Governor (in-charge of the Banking Ombudsman scheme), RBI, bringing these facts to his notice and send it to the Customer Service Department......

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RBI Central Board to meet in Jaipur

Reserve Bank Governor D. Subbarao will preside over the meeting of the Central Board of Directors of the bank in the Pink City on October 13. The meeting of the Central Board is taking place in the city after a gap of seven years. This will be the first meeting after the recent reconstitution of the board.

Briefing newspersons on the meeting, which will coincide with the launch of an exhibition on central banking titled ‘Newsibition', Reserve Bank of India Regional Director B.P. Kanungo said the RBI Governor would meet State Chief Minister Ashok Gehlot. He would also hold discussions with the members of the Rajasthan Chamber of Commerce and Industry. The development pace of Rajasthan and its banking related issues like credit flow, priority sector lending, loans to industry and to the education sector are likely to be discussed during the meeting between Dr. Subbarao and Mr. Gehlot. The RBI Regional Office also would present its report on the State's performance on the development front, Mr. Kanungo noted. Most of the 17 members of the Central Board of RBI, who include non-official directors such as scientist Anil Kakodkar, industrialists Azim Premji and Kumar Mangalam Birla, and social worker Ela Ramesh Bhatt, are likely to attend the meeting.

The exhibition, which will be inaugurated by Dr. Subbarao on October 12 evening at the Sudarshan Art Gallery of Jawahar Kala Kendra, will be on till October 30. Mr. Kanungo said the exhibition, “Mint Road Milestones”, will depict the milestones in the 75-year-old journey of the RBI. The material for the exhibition has been drawn from RBI archives, news paper reports and a vast collection of photographs. Mr. Kanungo said the exhibition, meant to enlighten and educate people, especially the youth, would present events from 1750 to the present times providing a broad overview of the developments in the nation's economic landscape.

HBL

Single window clearance to promote affordable housing mooted

New Delhi : Affordable housing and the steps needed to grow this market came in for detailed discussions at a roundtable organised in the Capital on Friday. The conference recommended single window clearance and special incentives to builders to promote affordable housing in the country. National Housing Bank and the Centre for Advanced Financial Research and Learning (CAFRAL) jointly organised the roundtable on ‘housing finance'. The need for real estate regulation to bring about greater transparency and credibility in the industry and as a measure to protect consumer interest was also emphasised in the meeting. Ms Usha Thorat, Director, CAFRAL, later told newspersons that CAFRAL, which has been promoted by RBI, would in the coming days undertake research in the area of ‘housing finance'.

HBL