Lock into debt schemes as interest rates peak

……………The interest rates are at their peak levels with the Reserve Bank of India (RBI) signaling a softening in the monetary policy in its previous quarterly review last month. The RBI is expected to cut the key interest rates, going forward, in the near to medium terms, if the inflation rate stays down. It is an opportunity for all investors - those with a high risk appetite and the risk-averse - to lock-in to debt instruments that offer high interest rates for a medium to long term………

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Parking of Starbuses continue in Kasturchand Park

..... Around 140 Starbuses have been parked in KP towards RBI square-Railway Station road since last 21 days…………..

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'Now, address your banking grievances to the ombudsman'

PANAJI: With an aim to facilitate quicker and smoother resolution of banking customers' grievances, the Reserve Bank of India (RBI) banking ombudsman for Maharashtra and Goa, V Ramachandra Rao, has said that he would visit Goa every month to address complaints and bring about conciliation between banks and customers. Rao, who was addressing mediapersons on the banking ombudsman scheme of the RBI, said that the role of an ombudsman has come into prominence after the movement for a Lokpal. The RBI began the banking ombudsman scheme in 1995, and has 15 banking ombudsman offices in the country. The current version of the scheme was last amended in 2009. Rao, who said he was the "banking lokpal", requested people to come forward and send their complaints against banking related grievances on loans, credit cards, operation of accounts, delay in payments of drafts or any other deficient service to the banking ombudsman. He said his role was helping customers and protecting the interests of depositors of banks. MAR Prabhu, general manager of RBI's Goa office, said people could also submit their complaints to the RBI Goa office which will then forward the same to the ombudsman. Speaking on the charges levied by banks for pre-closure of home loans, Rao said "recently 34 major banks have agreed to do away with the charges." "These banks hold 95% of the home loan portfolio," he added. Rao said Goa had the best banking infrastructure with 3,180 branches. He also said only 5% of the complaints received by his office originated from Goa, but added that it doesn't mean banking services were perfect in the state.

TOI

Advisers seek wider role for IES in economic policy-making

................ “The role of the IES has to be reassessed where it is actually involved in policy at the middle level. It has to be taking day-to-day decisions on economic policy-making.”.....................


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RBI to open its offices in all NE States – V.S.Das

Reserve Bank of India (RBI) will soon open its offices in all North East states to cater to the needs of bank facilities. This was disclosed by RBI Executive Director, V.S. Das during a financial Outreach Camp organized by RBI at Changki village of Mokokchung district on 8th February 2012. He also assured to open a Branch Office of Allahabad Bank at Changki village shortly. Describing RBI as Bankers Bank and custodian of economy in the country, Das said RBI has embarked on organizing financial outreach camps in villages throughout the country since RBI Platinum Jubilee celebration in 2009-10 focusing on bringing awareness amongst the people regarding banking facilities available and to make an attempt at making available such facilities to every adult citizen in the targeted area to bring them under the fold of mainstream banking. Giving a strong signal to all nationalized banks in the country for offering better bank services to the customers, the Executive Director urged all banks to provide better bank service by going to the door steps of customers. He also laid stress on the need to provide quality facilities and identifying their priority areas to accelerate the tempo of economic development in the country. On the other hand Executive Director called upon the customers to be a good bank customer. The Changki financial Outreach Camp of RBI, inaugurated by V.S. Das was the third such programme in the state after Khonoma in 2009 and Chumukedima in 2011. The one-day camp was attended by villagers of Changki and neighboiuring village under Mangkolemba Su-division. The camp was also addressed by RBI Regional Director, Guwahati Surekha Marandi, top officials of Nationalized Banks in the region, Deputy Commissioner Mokokchung and other official from the state government. In their speech, Deputy Commissioner Mokokchung, Lithrongla G. Chishi and Wati, Additional Secretary, Finance, Government of Nagaland expressed their gratitude to RBI for organizing the camp and hoped that it would help banking culture among the masses. Earlier, V.S. Das had an interactive session with School children Self Help Groups in a move to inculcate them banking culture. On the occasion, various banks and Agri and Allied Departments set up exhibition stalls to disseminate information regarding credit facilities/government schemes available for the benefit of villagers and the participants. The facility of exchange of soiled/mutilated notes and exchange of currency notes with coins was also extended on the occasion. RBI and other Banks had presented gifts to schools and SHGs to mark the camp.

http://iprnagaland.gov.in/component/k2/item/1610-rbi-to-open-its-offices-in-all-ne-states?tmpl=component&print=1

RBI reaches out to Naga hamlet

On a quiet winter morning on Wednesday, bosses of the country’s banking sector descended on the sleepy village of Changki, about 30km from the Assam-Nagaland border, to highlight the importance of financial literacy at the grassroots..............

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9213 villages to have banking facility soon

PATNA: To comply with the Reserve Bank of India (RBI) prescription, all 9,213 villages in the state, each with a population of 2,000, would have banking facility through bank correspondent (BC) model by the end of the current fiscal, ending March 31........... 

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Systems beyond silos

........RBI Governor D Subbarao has made an important speech at a recent RBI conference. The speech emphasises that RBI is being asked to do too much, and there are conflicts in delivering the various objectives placed on RBI. Financial stability cannot and should not be the sole responsibility of RBI, for which, as the Governor points out, RBI has no mandate...........

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The great ATM robbery in the making

“We are writing to all the banks across the city to enforce RBI safety guidelines by providing a unique PIN number for every account holder and for each transaction……..

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Now, ATMs can advertise financial products

Banks with a large network of automated teller machines (ATM) will now be able to generate additional revenue by advertising financial products offered by other institutions. With an eye on financial inclusion and to incentivise banks for opening ATMs in remote areas, the finance ministry has allowed bank-owned as well as outsourced ATMs to display advertisements of other financial products. RBI will soon issue guidelines in this regard. The State Bank of India having about 80,000 ATMs currently is likely to benefit most. Among private players, Axis Bank and HDFC could also gain. Banks with a small ATM network would benefit by getting more visibility for their products at large bank ATMs. These products carry the approval of various regulators like the Reserve Bank of India, Securities & Exchange Board of India, Pension Fund Regulatory Development Authority and the Insurance Regulatory Development Authority. A finance ministry official said it had been a long standing demand of the industry to allow outside vendors to advertise financial products of other banks and financial institutions apart from the products of the sponsoring bank for a fee. The official added that the advertising revenue would enable banks to reduce transaction costs of ATMs. Currently, banks work on a outsourced model based on per transaction basis for ATM deployment. The cost of setting up of an ATM is about Rs 5-6 lakh. Advertising revenues can offset a part of this cost and make the proposition more viable for banks.

BS

Gold loans at last draw RBI’s attention

........Some 14 months late, the RBI has "cautioned members of public that those who deposit money with Manappuram Finance or MAGRO, do so at their own risk". The warning should have come much earlier...................

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'Govt keen to promote microfinance'

“Micro finance sector is already being governed by RBI, it does not require a money lenders act,”………….

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Rangarajan disappointed at IIP; hopes FY13 GDP to be 7.5%

....... Rangarajan also assured that the government's immediate aim was to bring down inflation to 6%, but when it falls to 6.5%, one can expect the RBI to ease rates. However, IIP is not the data that the Reserve Bank of India looks very closely at, especially the provisional numbers, because they tend to be very volatile. Definitely for policymaking, the WPI numbers are more crucial. The next WPI numbers are to be declared on February 14.…….

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‘Reduced loan to further dampen realty market’

Reserve Bank of India’s recent circular to commercial banks to reduce the loan to value (LTV) ratio for home loans has created havoc in Ahmedabad’s slowdown-affected realty market...............

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Comexes wait for critical mass

.... In a separate move, the finance ministry has already sought the Reserve Bank of India’s (RBI) opinion on allowing banks to hedge their risks on commodity futures and RBI is understood to have asked banks to give their views. Banks are prepared to enter this space because it helps them manage their risk while financing the commodity trade or companies. In fact, several banks have bought stakes in commodity exchanges. For example the State Bank of India holds 5.2 per cent in MCX and IDBI Bank holds 10 per cent in new exchange UCX......

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India Inc seeks interest rate cut, cites low IIP growth

..... "The RBI needs to move quickly from its pause on interest rate hikes to a policy of cutting rates to encourage investments."......

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Now, banks must pass exam for deposits

Bihar government has decided to deposit its capital only in banks which pass a test based on the Credit Deposit Ratio (CDR)............

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More trouble for Dhanlaxmi Bank says trade union

.......... “…the apex bank, RBI (Reserve Bank of India), showed its displeasure on the MD after getting the memorandum from the AIBOC regarding the health of the bank. It is common man’s guess that the MD has put in his papers due to the intervention of RBI because of his non-performance. However, he is still using his clout with the media to project himself as a martyr. A post mortem is needed to uncover the full dealings of the MD and his associates, right from October 2008 onwards.” ..............

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Professor Ray offers a series of Workshops on Data Envelopment Analysis in India

.... The final leg of his tour took him to Reserve Bank of India (RBI), the central bank of the country, in Mumbai (known previously as Bombay). There he delivered an invited lecture at the Head Office of RBI on the measurement of productivity in banks, and offered an assessment of the impact of liberalization in the Indian banking industry comparing the performance of public sector, private, and foreign commercial banks. Apart from the lecture, he offered two days of hands-on instruction on how to measure efficiency to a group of young officers at the Economics and Statistics Division of RBI.......
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Solvency, auditing guidelines for LLPs on the cards

The government is set to introduce stringent solvency and auditing norms for limited liability partnerships (LLPs), which would increase the compliance burden for them but bring in more transparency to satisfy the regulatory concerns raised by the Reserve Bank of India...............

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No foreign donations for political parties, media

The rules follow the Foreign Contribution Regulation Act 2010 which seeks to replace the earlier Act of 1976. The main difference between the new Act and the old is that political parties have for the first time been debarred from receiving contributions from abroad……………..

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Can't afford to let fisc run loose : S S Tarapore

........ In the absence of fiscal space for a stimulus, the chorus advocates that the Reserve Bank of India (RBI) should refrain from “monetarist” policies. There is endemic confusion in the minds of the expansionists as they label any cautionary policy as being “monetarist”. Needless to say, this is a totally erroneous interpretation of “monetarist” policies. No “monetarist” would accept India's permissive monetary expansion as being consistent with a “monetarist” policy.................

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Inflation will reaccelerate over the next few months

............Reserve Bank of India, to its credit, has remained vigilant. Remember, they have essentially nowhere indicated that the next move is to cut interest rates. They have basically given a couple of scenarios under which there will be a cut, but have not committed to that. So I’ll give them full credit and all of those factors which have been in the last policy review. So by summer, we think the Reserve Bank of India will essentially have to reverse course and essentially stop its easing of monetary policy trajectory...............

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Arua achieves 100% financial inclusion

RBI has asked banks to provide banking facilities to 70,000 villages having population of more than 2,000 people by March this year

As a part of Reserve Bank of India’s outreach programme, RBI deputy Governor Anand Sinha visited Arua village in Faridabad district of Haryana on Thursday. Arua, which is one of RBI’s model villages, has achieved 100% financial inclusion. Syndicate Bank, which has opened a branch in this village, has opened 915 no frills account for villagers in the past few months. The outreach programme is aimed at spreading the message of financial inclusion and financial literacy and checking the progress of the spread of banking facilities in the area. RBI had started its outreach programme in 2010, wherein a team from RBI goes to villages across the country and interacts with the people there about banking facilities and also helps them in getting accounts opened, guides them on how they can avail loans from banks and also tells them about various government schemes that the people can avail of. In his address to the villagers, Sinha elaborated the advantages of opening a bank account. “If you go to keep money in your homes, either it may become bad, get stolen or the value of your money will be static and won’t increase. If you keep it in the bank you’ll get returns”. Sinha said banks are using a combination of the banking correspondent model and brick and mortar branches to achieve financial inclusion. “You can’t have one model, it has to be a combo of al. Because as far as the BC model is concerned it’s very important as a brick and mortar may not be very economical. But brick and mortar branches have their own advantage”, he said. RBI has asked banks to provide banking facilities to 70,000 villages having population of more than 2,000 people by March this year. Sinha added that banks are on track to achieve this target.

Mint

Training cum Awareness programme on Fake Indian Currency notes and Non Banking Finance Companies” for the Officers of Sikkim Police

1. Reserve Bank of India, Gangtok on February 07, 2012 conducted “Training cum Awareness programme on Fake Indian Currency notes and Non Banking Finance Companies” for the Officers of Sikkim Police. The programme was intended to impart knowledge on detection and proper ways of disposal of Fake Indian Currency notes and give vital inputs about Non Banking Finance Companies by experts from Reserve Bank of India.

2. While inaugurating the workshop at Royal Plaza, Shri E.E. Karthak,General Manager/O-i-C, RBI Gangtok in the presence of Shri Akshaye Sachdeva, IPS, IGP, Sikkim Armed Police, Smt Mrinalini Srivastava, IPS, SP, CID, Sikkim Police mentioned that with the recent seizure of fake notes to the tune of Rs 2.25 Crore in New Delhi, it has been understood that the counterfeiters have achieved a ‘zero-error counterfeiting capability’, with all the features in a genuine Indian currency note being present in these counterfeit notes. It took the experts long hours to identify each note. The seized notes have all the basic security features of Indian Currency notes namely Micro printing-used by RBI to combat counterfeiting, Gandhi watermark, Security thread, 100% cotton paper, embossing by insertion of Intaglio images and electro yet watermark. These counterfeits are smuggled from Pakistan via Jammu to India to fund terror operations. The alternative routes for trafficking of the counterfeits are the porous borders of Nepal, Bangladesh and the sea. Nationwide raids by the National Investigating Agency has lead to arrests of 14 people smashing an international racket involving the smuggling and distribution of Fake Indian Currency notes by Pakistani agents through their Indian operatives.

3. He further stated that a lot of private finance companies, namely Bharosa, Stock Guru (now curbed) etc have been collecting deposits from the general public with the promise of very lucrative returns. These Non Banking Finance Companies have been luring gullible investors under the pretext of being deposit taking NBFCs as licensed by the Reserve Bank of India. The investors in such companies often find themselves as victims of financial frauds who under normal recourse approach police officials. In the light of such activities it becomes important to equip the Sikkim Police Officers with an understanding of Non Banking Financial Companies so that such malpractices are curbed with immediate effect.

4. Speaking to the participating officers, Shri Akshaye Sachdeva IPS, IGP, Sikkim Armed Police, Government of Sikkim highlighted the vital role the Sikkim Police has played in nabbing fraudulent NBFCs namely Bharosa, Teena Finserv and Stock Guru etc. He also indicated the problems faced by the Sikkim Police in distinguishing the legitimate areas of operations of the NBFCs. He also highlighted the issue of public dilemma in registering complaints against these companies in hopes of getting the promised returns by these companies. He also commended the pro active policing undertaken by the police in registering suo moto cases against these fraudulent NBFCs in the past. 

5. The guest faculty from RBI Kolkata namely Shri Kishore Pariyar, DGM, Department on Non Banking Supervision and Shri S.N. Mitra, AGM, Issue Department gave specialized input for the functioning of NBFCs and the features of Genuine Indian Currency notes respectively.

- As reported by Tenzing Namgyal, Executive Intern, Reserve Bank of India, Gangtok

FinMin shortlists 17 bank GMs for ED posts, to notify soon

...... According to the industry grapevine, the Reserve Bank of India (RBI)wished to discontinue with this old practice of shifting CMDs. The banking regulator was of the opinion that CMDs of smaller banks should continue to drive effort to elevate their banks to the higher level instead of stepping into larger banks. Accordingly, the regulator sent a note to the ministry of finance in this regard.........

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Rs.18.46 lakh mutilated, soiled currency exchanged at camp

TIRUCHI : The day-long special camp for the exchange of soiled and mutilated currency notes organised by the zonal office of the Indian Bank in association with Reserve Bank of India here on Wednesday evoked good response. The camp was held at the Rockfort branch premises of the Indian Bank in the city. A total of 512 persons from across the district, including the customers of other banks, exchanged soiled and mutilated currency notes worth Rs.18.46 lakh at the camp. K.Manoharan, deputy general manager and zonal manager of the Indian Bank, who inaugurated the camp, said that the main objective of the camp was to bring down the circulation of soiled notes. C.T.Muthu, AGM, zonal office, explained to the customers the techniques to identify fake currency notes, and proper maintenance of notes. The bank had conducted similar camps in Pudukottai town and three other surrounding villages a week ago.  Jagannathan, branch manager of Tiruchi main branch, and Kumaravel, branch manager, Rockfort branch, were present.

HBL

Banks seeing rise in incidents of fraud: Deloitte

“Banks have witnessed a rise in the number of fraud incidents in the last one year,” says the survey titled ‘India Banking Fraud Survey 2012’

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Parliament panel moots wider slabs for personal income tax

.......Finally, the report wants the government to impose a peak rate of 30 per cent on annual income above Rs 20 lakh, as against above Rs 10 lakh as sought in the Bill. The report is not final and minor tweaking of these suggestions could be incorporated after a meeting tomorrow, according to the persons cited earlier. Tax slabs needed to be progressive, they said, adding, “Most of the assesses would fall in the category of Rs 3-10 lakh a year, which should get a lower income tax rate of 10 per cent.”........

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RBI nod must for India offices by companies from China, Pakistan among others

MUMBAI: The Reserve Bank today said companies incorporated in China, Pakistan, Bangladesh, Sri Lanka, Iran and Afghanistan will have to seek its permission to set up branch or liaison offices in India as general permission granted to entities of other nations will not apply to them……………….

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Let’s get our data right first

.......Official data is sacrosanct and used by analysts to take their own views, which are sent out to their clients. The media makes hay with various views of experts and analysts, which then spooks the markets—stocks, money and forex. Then, ironically, various other government bodies, such as the ministries and RBI, have to formulate their policies based on these numbers and could end up taking an incorrect call in retrospect when data is revised...................

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Home loans: Buyers want RBI reply

........ They have filed an RTI application with the Reserve Bank of India demanding to know how the banks, both private and government, sanctioned the housing loans for Noida Extension in the first place considering that many developers confess that they had known all along that the area was disputed.......

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IDBI bank to launch India's first infrastructure fund

..... IDBI Bank has sought Reserve Bank of India's approval for an NBFC, which will have a capital base of 1,000 crore. The bank will hold 30% stake in the NBFC and the rest will be held by some state-run banks and Life Insurance Corporation of India.............

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Gold loan growth pace worries RBI; Muthoot, Manappuram hit

………The central bank is now considering tighter regulations for the segment, the official said. This is could be in the form of limits on the loan that a gold loan firm can give as a percentage of the value of loan. This is also known as the loan-to-value. RBI may also restrict the maximum interest that a gold loan firm can charge its customers, and also the penalties that gold loan firms can impose……..

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Containing NPAs

Apropos of the editorial “Bank on trouble” (FE, February 4), no business is without risks and banks are no exception to that. NPAs within the limit are natural but a high level of NPAs is bound to cause concern. Few banks, especially by virtue of having a high exposure to sensitive sectors like power, realty, etc, are faced with high degree of NPAs. The reasons for more loans turning non-performing in the recent times are many. Interestingly, Indian banks today have a well-defined risk management profile in place to anticipate the risks. The immediate priority should be to bring interest rates down. RBI, in its policy round up, has indicated that the need of the hour is to address the supply-side constraints. External shocks are bound to be there in the globalised economy and banks must now learn to live with those.

- Srinivasan Umashankar, Nagpur (FE)

NPA, a multi-headed monster

.....as has been pointed out in the Financial Stability Report of RBI, while Indian banks will migrate to Basle III from a position of strength, the new standards may require adjustments in lending behaviour......

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Banks raise loan costs for MFIs

With the cost of money rising and the cap on what MFIs can charge intact, microlenders are facing a tough time

..... According to the latest Reserve Bank of India (RBI) data, bank lending to micro-credit, comprising loans to self-help groups and MFIs, fell to Rs. 21,000 crore in December 2011 from Rs. 28,820 crore in the previous year........

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Who's who to attend summit on changing Bihar

PATNA: Top honchos of various fields are expected to attend the three-day Global Summit on Changing Bihar, scheduled to open here on February 17. RBI Governor D Subbarao will also attend the inaugural and valedictory sessions.......

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Assocham bats for allowing banks as intermediaries in commodities futures market

.... "By virtue of their vast branch network, banks are in a unique position to display tickers showing real-time prices of various commodities across the country which will be the most efficient price discovery dissemination that could be implemented in a very short time,"…..

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Dhanlaxmi Bank Union allege fraud, demand merger with PSU banks

…….Rumours have been doing the round that the bank is financially stressed and may report losses of around Rs 30 crore. But the Union fears that the bank may not apart from the bank not reporting any profit this quarter, some if its customers have actually withdrawn their deposits from the bank. The Union also alleges that “who resigned as MD has withdrawn his family deposit of around Rs 5 crore from the Bank.”…….

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Did Manappuram insider bail out just before RBI deposit ban?

.......... The curious case of Manapurram Finance, the loans-against-gold company that was recently pulled up by the Reserve Bank of India (RBI), keeps getting murkier. On Monday, 6 February, the RBI barred Manappuram and a related sole proprietary firm from raising public deposits, but even before the news was out, the wife of one of the company’s promoters was selling shares in the company.............

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D K Mittal on RBI central board

The government has nominated department of financial services Secretary D K Mittal on the board of directors of the Reserve Bank of India (RBI), taking the number of government nominees on the board to two. Department of economic affairs Secretary R Gopalan is already on the board. The move to have a second nominee is expected to improve coordination between government and regulator. The nomination of Mittal, a 1977-batch Indian Administrative Services officer from the Uttar Pradesh cadre, comes with immediate effect. In August last year, he had taken charge as secretary to the department of financial services after a six-month stint in the ministry of corporate affairs. A finance ministry official said on Wednesday the appointment of Mittal was by name. This meant he would continue to be a director on the board of RBI even if he moved to some other department, the official said. Speculation had been rife about Mittal being a contender to head the commerce department, after the appointment of commerce secretary Rahul Khullar as ambassador to Belgium. The commerce department was where Mittal spent the crucial years of his career — and played a vital role in propelling special economic zones and pushing India’s agenda in the Doha talks. Earlier, there was provision for only one government nominee on the board of directors of RBI under clause (d) of sub-section (1) of Section 8 of the RBI Act. Then, in December last year, the winter session of Parliament saw the Act getting amended to make provision for two government officials. The government has amended its laws to have a bigger say in the decision making of the RBI, by having two members on the central bank’s board as compared to one now. Mittal will be the 18th director on RBI board. The move had not gone well with the RBI, with some of its executives complaining that the amendment, done at the last minute, was not on the agenda earlier. The central board of RBI is appointed by the government for a period of four years to govern the affairs of the central bank. It comprises RBI governor and a maximum of four deputy governors as official directors and 10 directors from various fields and two government officials nominated by the government besides four directors from local boards as non-official directors.

BS

Sharp shots

Reserve Bank of India Deputy Governor K C Chakrabarty is known for his plain speaking and humour but bankers do not always appreciate his remarks. At a function in Mumbai organised by a small and medium enterprises (SMEs) chamber to felicitate bankers for their support to the sector, Chakrabarty said data showed that over 90 per cent of SME entrepreneurs are either self-financed or not financed. “For what are we giving these awards then?” he asked bluntly, going on to suggest ways banks could increase credit flows to the sector. Approached for his reaction to the Deputy Governor's remarks, a senior banker said with some heavy irony, “Once in a while you need entertainment.”  

BS

Reserve Bank of India financial outreach camp at Changki village

Reserve Bank of India (RBI) organized a financial outreach camp at Changki village. The camp was attended by V.S Das, the Executive Director of Reserve Bank of India (RBI). This programme is third of its kind in the state after Khonoma village in the year 2009 and in Chumukedima in the year 2011. RBI according to a press communiqué, stated that since the Platinum celebration in 2009-10, the RBI had organized outreach camps in 218 villages across the country so far. V.S Das, Executive Director of RBI in his maiden visit to Nagaland declared Changki village to be a model village in Nagaland in order to fulfill their vision of bringing all the mass to avail the opportunity of the merits of Banking. He also urge the present banking officials to encourage the system of keeping banking correspondents so that the banks can reach the doorsteps of every costumers and also to know about their grievances and mode of services first hand from the costumers. He also said RBI will have their respective offices in every state of the North East unlike now, since it is only situated in Guwahati for the whole North east and he hoped that the RBI will have an office in Nagaland shortly. RBI Executive Director also focused on the importance of financial literacy and financial education for achieving financial inclusion by sharing his knowledge to the students and the gathered villagers. He also stated that the purpose of such camp is to bring awareness among the people regarding banking facilities available and to bring them under the fold of mainstream banking. Financial Outreach Camp was also attended by officials from banking sector like regional director of North east, Guwahati, banking ombudsman for North East, chief general manager, State Bank Of India, NE circle, general manager, NABARD, general manager, SIDBI and also Lithrongla.G. Chishi, deputy commissioner, Mokokchung. 

Nagaland Post

Liquidity deficit not yet down to RBI's comfort level, says Gokarn

The Reserve Bank Deputy Governor, Dr Subir Gokarn, said on Wednesday the CRR (cash reserve ratio) cut and OMOs (open market operations) have not got the liquidity deficit down to comfort levels and there can be more buyback of government bonds or OMOs by the central bank. Though the CRR cut and repeated OMOs have had the desired impact and eased pressure on liquidity, the deficit is yet to reach the RBI's comfort level, Dr Gokarn told newspersons here. “The combined impact of the CRR cut and the cumulative impact of OMOs is starting to bring the liquidity pressure down,” he said. Banks, which were borrowing up to Rs 1,50,000 crore from the overnight window, are now doing up to Rs 1,00,000 crore, which is above the RBI's stated comfort level of a deficit of around Rs 60,000-65,000 crore in the system, he said. On its strategy vis-à-vis liquidity injection, he said, “we have not put a stop on OMOs by any means, they are still on the table but they are and will remain as a response to liquidity conditions.” The RBI keeps an eye on the overnight borrowings and the call rates before doing OMOs, he said. Call rates, which are hovering about 0.25 per cent above the repo rate, have come down to “reasonable” levels, he said. To ease the liquidity pressures, the RBI has so far bought government bonds of over Rs 70,000 crore through OMOs and cut the CRR, or the percentage of deposits banks have to park with it, by 0.50 percentage points, which infused a further Rs 32,000 crore into the system.  When asked about the possibility of a further cut in CRR, Dr Gokarn said CRR cut is much wider in nature as it is guided by both liquidity and monetary policy aspects unlike OMOs which are directed at liquidity easing only. Dr Gokarn also dismissed the notion that OMOs are done with a view to managing the yields on securities, saying it is liquidity management alone which prompts an OMO.

HBL

Gokarn Says Liquidity, Call Rate Decide Open-Market Operations

.... The motivation for open market operations has always been liquidity conditions and not the objective of targeting yields of government bonds......

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RBI wants to head public debt management agency

The Reserve Bank of India (RBI) has agreed with the government’s proposal to have a Public Debt Management Agency, but said it should be allowed to head the same............

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Reserve Bank of India: Journey into History of Bank of the Bankers

......Today, RBI is an institution with a difference which works with the objective of ensuring monetary stability, monetary management, foreign exchange, reserves management, government debt management, financial regulation and supervision. It core duties also entails: currency management and operating the credit system to India’s advantage. In addition, since inception the bank has played an active developmental role, particularly for the agriculture and rural sectors. These are the snap shots from pages of history which I could snatch from the long and distinguished journey of the Bank of the Bankers.

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Agricultural lending: RBI panel for doing away with sub-targets

Reserve Bank of India working group on priority sector lending has recommended doing away with the sub-targets for direct and indirect agricultural advances. Instead, the group, headed by Mr M.V. Nair, Chairman and Managing Director, Union Bank of India, is understood to have pushed for fixing sub-limits only for lending to farmers in the small and marginal category.............

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Online banking remains under threat to MitB and Trojan attacks

....According to Reserve Bank of India, managing security is more challenging in online and phone banking as compared to other delivery channels and online threats in the form of phishing attacks, spyware, viruses, Trojans, key loggers are frequent. “Fraudsters are not only tech savvy but have clear understanding of the systems and procedures obtaining in banks,” said G Padmanabhan, Executive Director of RBI while speaking at a Secure Banking conference last year....

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Ramkinker Baij's works at Santiniketan to be cast in bronze

New Del, Feb 8 (PTI) Works by modern artist Ramkinker Baij, known for his monumental public art sculptures including the iconic 'Yaksha-Yakshini' figures outside the Reserve Bank of India here, is set to receive a fresh lease of life with the Culture Ministry releasing funds for his works to be cast in bronze........

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Companies cooking books to procure higher loans: Taxman to RBI

........ "The investigative wing of the income tax department has urged the RBI to look into this disturbing trend and consider guidelines for increased checks and balances at a recent meeting of the REIC",..........

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Will the return of food inflation stop RBI from cutting rates?

.... Reserve Bank of India Ggovernor D Subbarao has repeatedly said that controlling inflation while keeping an eye on growth remains his priority. Given the decline in WPI in December and expectations of a persistent fall in food food prices — most economists had pencilled in an interest rate cut by the central bank in March or April......

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Bank credit, deposit growth loses steam

Both bank credit and deposit growth have lost steam, as per the latest RBI (Reserve Bank of India) data. Deposits have fallen to Rs 59,31,747.95 crore during the fortnight ended January 27, from Rs 59,61,015.72 crore in the previous fortnight. Bank credit growth has fallen to Rs 44,87,967.68 crore, from Rs 44,89,866.98 crore during the same period...........

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'Deposits taken in good faith'

Under fire from the RBI for allegedly accepting public deposits while coming under the category of a non-deposit taking, on-banking finance company (NBFC), Manappuram Finance did an about-turn on Wednesday by acknowledging that it had indeed accepted deposits from the public............

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Tighter RBI rules make home loans tougher

After a rap by Reserve Bank of India (RBI) to banks last Friday regarding overstating salable value of financed property, industry experts say the residential real estate sector would face further downward pressure, especially in affordable and mid-income housing...........

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Banks seek fig leaf for bad loans

......... Reluctant to have their errors of judgment made public, in December, a dozen banks asked the RBI to relax the rules on declaring bad loans and let these twice restructured loans remain standard. Because such relaxation flouts international prudential and accounting norms, quite sensibly, RBI refused. Moreover, it believes such relaxation won’t solve the industry’s problems.............

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Memo to FM: Ignore critics; this is the time to spend better

The finance minister and the Reserve Bank of India (RBI) governor are definitely the two most powerful names in the world of business as they set the rules of the game. The former was more in the limelight in the past, but ever since the RBI began increasing the frequency of monetary policy statements, the markets watch the governor’s lips more than the FM’s...........

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RBI may cut interest rates by 100 bps this year. Here’s why

.... Prior-Wandesforde sees a continuous downtrend in inflation but says that the RBI is still going to cut rates by 100 basis points this year. He expects agricultural growth estimates to be stronger and that the industrial sector has now bottomed out......

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Meet on Feb 18 to save DCC bank: Bayya Reddy

..... “The Reserve Bank of India has warned that the licence of the DCC Bank will be cancelled and the Bank will also be closed. The conference has been therefore called to prevent this by giving agricultural loans to farmers at 1 per cent rate of interest,”......

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Savings account deregulation – are we done with the debate?

......RBI may not sit quiet if, after several months of deregulation, large banks keep the SA rate unchanged. Given the importance the regulator has attached to monetary policy transmission, this is not an outlandish thought. ..............

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UBI, Global Bank ink pact for remittances

.....As per the agreement, a person of Nepalese origin can remit funds in Indian currency within the limits stipulated by the Reserve Bank of India (RBI) to a beneficiary in Nepal, through any of the designated branches of UBI, after completing necessary KYC (know-your-customer) requirements for both remitter and as well as the beneficiary.........

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Sebi recognizes need for investor awareness

.......... Reserve Bank of India, National Securities Depository Ltd, Ficci, Pension Fund Regulatory and Development Authority, BSE Ltd, National Stock Exchange, and international representatives from at least 45 countries participated in the conference............

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RBI Governor's thought-provoking poser - B S Raghavan

The inaugural speech delivered on February 1 by the Reserve Bank of India Governor, Dr D. Subbarao, at the second International Research Conference held at Mumbai, is an eye opener in more ways than one. If anyone was ever under the impression that Dr Subbarao is more earthy and pedestrian compared to his predecessor, Mr Y. V. Reddy, that speech puts paid to it in no uncertain manner. It shows him on a par with the best of the exponents of the issues and challenges in an arena so full of unpredictable variables making even the most carefully crafted solutions go awry..............

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RBI’s Khan on curbing irresponsible behaviour in financial markets

 

Harun Khan, a Deputy Governor at the Reserve Bank of India, on February 6 said the unethical behaviour of financial professionals that contributed to the financial crisis has strengthened the case for increased education about social costs of crises. At the Interdisciplinary Seminar on Psychonomics in Mumbai, India, Khan said greed and fear played a big role in the way markets behaved during the recent global financial crisis, which caused severe damage to many economies around the globe. He said part of the reason was that finance and economics was being practised by a set of people who are often conditioned for self-interest and aimed to maximise utility irrespective of the welfare of others. "They were more mechanical in nature, probably due to the fact they specialised in science and technology, and with less or no input from humanities during their course of education," he said. "They had thus no compunction in mis-selling the products to unsophisticated investors and borrowers, thereby sowing seeds of disaster for households and the economy." Khan said this did not, however, absolve bankers of the unethical behaviour that ultimately led deep structural damage to the system and harmful social consequences. He argued there could be a strong case for conditioning of all those who join finance professions by way of values-based education and socially relevant experiences during their college days.

http://www.centralbanking.com/central-banking/speech/2144466/rbi-s-khan-curbing-irresponsible-behaviour-financial-markets

RBI Dy Guv underlines need for value-based education

Mumbai, Feb 7(PTI) The Reserve Bank Deputy Governor H R Khan has said there is a need for inculcating "value-based education" in students before they join the financial world as professionals. "There could be a case for conditioning of all those who join finance professions by way of value based education and socially relevant experiences during their college days," he said while speaking at a seminar at a city college yesterday. Khan said one should not evolve into "insensitive individuals" caring only for "short-term monetary gains" by putting ethics and moral values at stake. Such behaviour, he said, can disrupt financial systems by causing huge social and economic damages. Educational institutions have an important role to play in the process and injecting "individual morality and social ethics" aimed at responsible financial behaviour, he said.

MSN News

RBI direct banks to disclose the list of unclaimed

MUMBAI: The Reserve Bank of India (RBI) has directed banks to disclose the list of unclaimed and inoperative deposit account holders, in a bid to help some claimant trace their deposits. The RBI has told banks to disclose on its website names of the account holders and their address. In case the accounts are not in the name of individuals, RBI has said that the bank should provide the names of individuals authorised to operate the accounts. Over the last few decades, the unclaimed amount spread over 1.03 crore bank accounts, has risen to Rs 1,700 crore with India's largest bank, SBI and its associates topping the list with unclaimed deposits of 279.7 crore The list should provide a 'find' option which would enable public to search the list of accounts by name of the account holder. The list will includes names of depositors who have not operated their account for the last ten years. At the same time RBI has said that banks should not disclose details about the account number, its type and the name of the branch on its website. It may be recalled that finance ministry, in September 2011 had directed PSU banks to disclose names of inoperative account holders on their website in an attempt to bring about great transparency. however bank management resisted this move. Indian Banks' Association had written to the finance ministry that the move could be violation to Banking Regulations Act whereby they are not allowed to disclose the details of customers. In this case RBI has put the onus on banks to ensure that the claimants of the deposits are genuine. Banks are also required to inform public on its website about the process that they will have to follow to make a claim on deposit. RBI has said that banks will be required to complete the process by the end June 2012.

ET

Sovereign debt sustainability a political issue: Subbarao

.... "Sovereign debt sustainability is not like price stability. It is a political issue. How much debt the government raises and how they raise that debt, are a political issue and once central bank starts entering into that area, there is a risk not only that they might fail, but also crossing that line between apolitical central bank and a political function of raising debt,"................

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RBI rate cuts timing dependent on fiscal deficit

RBI rate cuts timing dependent on fiscal deficit

..... "India's elephantine economy will continue to lumber on, but it is unlikely you will see it dancing in 2012,".......

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Third party ATMs on the anvil

Banks will no longer need to own and run their own ATMs with the Reserve Bank of India finally agreeing to banks’ demand to allow companies set up third party ATM networks. Banks will become a member of the third party network so that their customers can access it..............

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RBI warns against fake emails, calls

Stating that gullible investors have fallen prey to frauds by individuals impersonating as RBI employees, the apex bank said it never contacts people through unsolicited phone calls or emails asking for money or any other type of personal information. "Many residents have already become victims and have lost huge sums of money by falling for such fictitious offers. The public is advised to register their complaints with the local law enforcement agencies," the Reserve Bank said in a statement...........

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Finance ministry opposes RBI's view to stretch priority sectors lending list

... The finance ministry is opposing a Reserve Bank of India suggestion to widen the list of sectors eligible for priority sector lending......

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No surprise on GDP, but ...

.....However, with easing of the rupee and global commodity prices remaining stable, it may be expected that the inflation rate will remain within range, so that RBI can work on the assumption of stability. The issue of course is when will RBI intervene to lower rates? It needs to be confident that there will not be a reversal in inflation and will pause till the first quarter of Q1-FY13 before taking such action........

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Spectre of sub 7% growth

....“If the RBI also shows its willingness to moderate interest rates over the coming (fiscal) year, it would be possible to return to the 8 per cent growth path.”.....

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The global risk on-off fireball

.... The recovery in the rupee is not really natural or necessarily sustainable; it is driven by a combination of the RBI’s desperate measures and global risk-on that has boosted portfolio inflows. The RBI should now consider changing tactic and intervene in the foreign exchange market to increase its foreign exchange reserves. This, in turn, will enhance its ability to better manage potential wild rupee swings. The merits of the hands-off exchange rate management notwithstanding, the RBI’s preference for this approach while also struggling with the combination of a large CA deficit and dependence on volatile capital inflows actually worsens to the very currency swings that the RBI reportedly tries to check.......

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I am disappointed with the numbers: C Rangarajan

The Prime Minister’s Economic Advisory Council chairman C Rangarajan expects the final economic growth to be better than the advance estimates for this financial year. In an interview with Dilasha Seth, he says investments would pick up and inflation would fall in the next financial year, providing the Reserve Bank of India (RBI) the room to cut rates. He, however, does not see much scope for reining in the fiscal deficit in the remaining three months of this financial year. Edited excerpts:

Economic growth this financial year is calculated at just 6.9 per cent, very close to that in the crisis period of 2008-09. Do you expect a revision in this when the final numbers are out?

I am disappointed with the numbers. However, I have a feeling that when the numbers are revised, growth would be slightly higher. Agriculture growth would be higher than 2.5 per cent and manufacturing growth would also be better than 3.9 per cent, as the advance estimates are based on the low numbers in the first eight months. I expect GDP (gross domestic product) for 2011-12 to be between seven and 7.2 per cent.

The gross fixed capital formation, a proxy for investment, is estimated to fall to 11.95 per cent this financial year from 14.18 per cent in the previous one. Has RBI’s tight monetary stance killed investments?
The gross fixed capital formation rate has been lower than last year’s. But investments may pick up in the next financial year, as inflation is coming down, giving room to RBI to go for monetary easing. I expect capacity creation in the form of power, roads and infrastructure in the next year, as investments would pick up.

Nominal GDP is estimated to come down this financial year, from the projected Rs 8.98 lakh crore to Rs 8.91 lakh crore. This would magnify fiscal deficit as a proportion of GDP. How do you see the fiscal deficit in 2011-12?
The deficit is going to be high. The effort should be to keep the excess —over the Budget estimate — as low as possible. I cannot give a number for the deficit. But in three months (January-March), I see some pick-up in revenue, as manufacturing increases. However, the anticipated expenditure may not come down. Overall, I feel there is little scope for controlling the deficit in 2011-12

BS 

ICICI Bank: Ready for lift-off?

.... That’s when Chanda Kochhar, managing director and chief executive of ICICI, decided that if the bank were to have any chance of a sunny future it would have to undertake some bold decisions—primarily, moving from a strategy of aggressive growth to no growth at all. “I had to make them (team members and colleagues) see that this was part of a bigger long-term strategy. So, consolidation for a period of two years was really in a way building the foundation for a growth period that we will start thereafter. We decided on no growth so that we can start growing in a much more profitable and sustainable manner,”......

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Dhanlaxmi Bank’s net profit surges 168 per cent

....In an official statement the bank said that PG Jayakumar, executive director, who has been with the bank for 34 years, has been given the charge of managing director and CEO at the board meeting in Mumbai on Monday. The board is seeking approval from the Reserve Bank of India (RBI)..............

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AIBEA demands Dhanalaxmi bank to merge with Public Sector Banks

Hyderabad, Feb 7 : The All India Bank Employees Association (AIBEA) today demanded the Reserve Bank of India (RBI) and the UPA government to take steps immediately to merge Dhanalaxmi Bank with one of the Public Sector Banks in the interest of the customers and employees and officers of the Bank. Informing this to UNI, AIBEA General Secretary C H Venkatachalam said for quite some time, the performance of the 85 years-old Kerala-Bbased private sector Dhanalaxmi Bank has been causing concern, notwithstanding the repeated statements of the Bank management that all was well with the Bank. He said in view of the deteriorating financial condition of the Bank, the Reserve Bank of India had directed a 15 point Monitorable Action Plan (MAP) and RBI has been closely monitoring the affairs of the Bank. Mr Venkatachalam said the main reason for the problems of the Bank was the management's attempt to convert this traditional Bank into an ambitious modern Bank. Many officials were appointed in the Bank with huge remuneration, unrelated to their capacity or the performance of the Bank. The name of the Bank was changed 'from Dhanalakshmi Bank to Dhanlaxmi Bank', he said and added the Corporate office of the Bank was unwarrantedly shifted from Thrissur in Kerala to Mumbai, he charged. 

http://www.newkerala.com/news/2011/worldnews-156274.html

ASSOCHAM Says India’s Gold Imports are Unsustainable

..... The study follows a report by the Reserve Bank of India, which noted that the country’s current account deficit is a cause of concern because of its rigid gold and oil demand..........

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Gold loan companies' shares crash on RBI's public deposit move

Shares of gold loan firms lost heavily on Tuesday after a Reserve Bank of India rap on a major entity, Manappuram Finance, for breaching the rules on raising money from the public........

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RBI notice not to affect our financials, credit rating: Manappuram Finance

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Manappuram’s board to weigh move after RBI ban

....The charge against the company was that it was accepting deposits through an unregistered group firm, Manappuram Agro Farms. Company officials had stated that public deposits flowing into the accounts of Manappuram Agro were ‘under the customer’s own volition’ and that ‘it was an error of judgement’.......

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Insurance regulator to get independent advisor

......A finance ministry official said the proposed advisor might be appointed from the next financial year if the premium collection does not improve in the last quarter. “It is one of the possible ideas we are working on. He/she will directly report to the government and assist the regulator with policy decisions,” he added. However, the advisor will remain outside the board. This is because the board already has a government nominee. Also, induction of an additional board member will necessitate an amendment to the Irda Act, 1999. “At least to start with, the advisor will be outside the board, because amending the Act is a cumbersome process,” the official said. “The main idea is to bridge the gap between the ministry and the regulator.”..........

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