Mobile banking seeks boost

While many banks have mobile banking for retail customers, some are vying for corporate clientele

.... To boost mobile banking in India, the Reserve Bank of India lifted the cap of Rs 50,000 on daily transactions in December. However, the banking regulator empowered banks to set limits based on their own risk perception and with approval of their respective boards.....

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Phone bills-credit score: a fair link-up?

.... The banking ombudsman scheme is working well and has successfully brought down the level of consumer grievances in the retail lending sector. RBI also monitors “consumer unfriendly practices” and makes sure that the banks are “persuaded” to give up such practices. A case in point is the manner in which most major banks have agreed to waive prepayment charges on existing floating rate loans (even where the contracts with the consumer provided for such a charge).....

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Loans get cheaper as rivalry squeezes rates

Interest rates on bank loans are finally heading south. Even before the Reserve Bank of India (RBI) signals a reversal in the interest rate cycle, banks are embarking on cutting lending rates, at least on select loans, bowing to the need for expanding business in the face of competition............

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Investor of last resort

....With what it is being asked to do now in terms of bailouts, LIC will be second only to the Reserve Bank of India (RBI) in its financial relationship: if RBI is the lender of last resort for the government, LIC is fast becoming its investor of last resort.The enabling change—removing the 10% cap on LIC’s investment in government-owned companies—has been made recently so that LIC can bail the government out of its divestment disaster.The systemic implication of this change and how LIC is being used are dangerous. If at any time RBI acts tough with the government, LIC is well positioned to become an on-tap lender to the government. This is a systemic danger.........

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RBI creates awareness about fake currency

Tirupati: How to find out whether a foreign currency is fake or genuine? How to transfer money from one country to another? These doubts can be clarified at the Reserve Bank of India’s exhibition and interaction programme. RBI inaugurated a two-day exhibition and interaction programme here on Saturday to spread awareness among the public about fake currency and fraud activities. It is the ninth exhibition in the state. It was earlier conducted at places including Hyderabad, Nizamabad, Guntur and Vizag. Speaking to The Hans India, Basheer, Deputy General Manager of RBI, said that the programme’s aim was to create awareness among students, children, public and educated youth about fake currencies, bogus lotteries, fraudsters false promises and to know about the NRI banking activities and money transfer from one country to another. He advised the public not to fall prey for fraudsters’ promises, whether they are lotteries or multi-level marketing schemes. “That is the reason, we invited principals, faculty, academicians and industrial associations’ representatives,” he added. The same exhibition will be organised at Nellore town from February 21, for two days, he said.

http://www.thehansindia.info/News/Article.asp?category=5&subCategory=4&ContentId=40614

Workshop on " Managing Global Turbulence"

The Bombay Chamber of Commerce & Industrys Banking, Finance & Economics Committee is organising a Workshop on " Managing Global Turbulence" with special reference to SMEs on February 21 at Rangeshwar Hall, Y. B. Chavan Centre, Mumbai. The keynote address will be delivered by Dr. Subir Gokarn, Deputy Governor, RBI, other speakers include Jamal Mecklai- Chair, Economic Policy & Affairs Group, Bombay Chamber & CEO, Mecklai Financial, Samiran Chakraborty- Regional Head of Research India, Standard Chartered Bank, Sajjid Chinoy- India Economist, JP Morgan & others.

FPJ

India’s gold fetish —Sonali Ranade

.....The RBI must proactively think in terms of creating an institutional structure for comprehensive management of gold in the domestic economy. Given the deregulation of all interest rates, the RBI has considerable leeway in using markets to create a market for gold that minimises the use of physical gold as an investment vehicle while being transparent to all investors.The RBI should set up Gold Bank of India, which would take in deposits in gold and also lend gold against adequate collateral to other banks and institutions. It would have complete freedom to import or export gold.......

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Rejuvenating the Cooperative Sector

........Perhaps a more important feature of cooperative development is that the penetrative out- reach of the command area of the rural cooperative is formidable as emphasized by V. K. Sharma ( see RBI Bulletin Jan 2012). Commercial Banks and Regional Rural Banks ( RRBs) account for some 33,000 rural branches. In sharp contrast, the network of cooperative credit institutions accounts for a total of 1,22,590 service centres: 33 State Cooperative Banks with 953 branches: 371 District Central Cooperative Banks ( DCCBs) with 12,858 branches: and 109,000 Primary Agricultural Credit Societies ( PACs). Thus although in terms of magnitudes of flow of credit, the role of cooperative credit institutions is somewhat modest, the ubiquitous presence of these institutions is quite obvious. This has great relevance for financial inclusion. Unfortunately, Reserve Bank of India ( RBI) seems to think that financial inclusion is the exclusive prerogative of commercial banks. There is a need to involve cooperative credit institutions in this exercise............

http://epaper.fpj.co.in/Details.aspx?id=15817&boxid=14229578

RBI asks banks to formulate UCI code for customers

The Reserve Bank of India has advised banks to consider putting in place unique customer identification (UCI) numbers for customers and filter out multiple banking facilities availed by them through a de-duplication exercise.......

“The banks could also work jointly to set up a shared database which would enable them to securely see information on a customer (KYC information and facilities availed from various banks etc.) based on a unique identifier i.e. his Aadhaar ID,” says KC Chakrabarty, Deputy Governor, RBI

RBI asks banks to formulate UCI code for customers - Indian Express

Women's SHG fund to get cabinet nod in next meet

.... The ministry of rural development had suggested that loans given to SHGs be brought under priority sector lending of banks and recommended a dedicated national bank for women SHG instead of a one-time fund.  "Both the issues need approvals from the Reserve Bank of India. As of now there has been no significant development on any of these proposals,".......

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In terms of economic fundamentals, we are fine: Ex-RBI Governor Bimal Jalan

….I wouldn't like to comment on what I could have done or what the RBI should do. But fortunately for us, the inflation scenario has improved. That's a great advantage. Inflation rates might still be higher than what we want, but there is no severe problem like there was, say, 3 or 4 months back when prices were very high. This is a ripe time, therefore, to boost investment in the economy……. 

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SBI to decide on cutting lending rates for students and small businessmen on Tuesday

…….While SBI may be taking a lead in cutting education loan rates, Central bank was first to lower home loan rates and Bank of Maharashtra lowered its base rate, although marginally, last week. Decision to cut rates comes after Reserve Bank of India (RBI) signaled a reversal of interest rate cycle in January…………

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Indian Bank introduces account portability facility

NEW DELHI: State-owned Indian Bank has introduced account portability feature which allows its customers to retain the account number even if they change the branch. The facility would enable the customer to have the freedom of operating his or her account from any of the branches, Indian Bank said in statement. "The customers can shift his or her account to any of the desired branch any number of times, without any change in the account number, with just a change in home branch code," it said. "Customers can approach his home branch or the transferee branch with the request letter for transfer of account," it said. Home branch having the customer's account certifies the know your customer (KYC) documents while transferring the account to another branch, it added. Indian Bank has got the account portability feature in-built in core banking software, for transfer of the deposit accounts from one branch to another branch, it said.

ET

Private banks lobbying with Kerala govt for biz share

Thiruvananthapuram : The Reserve Bank authorisation to open up the Central/State Government business to ‘all private sector banks' has triggered intense lobbying locally...........

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No RBI Word yet on KR Pradeep’s Appointment at Lakshmi Vilas

Professional links to cos he audits seen as a hindrance to his appointment as bank’s chairman

RBI is holding back the approval to appoint chartered accountant KR Pradeep as the chairman of Lakshmi Vilas Bank as the regulator believes his professional relationships may come in the way of decision making at the helm of the private sector lender. “KR Pradeep runs an accounting firm under his name out of Bangalore and handles the accounts of various corporates which is one of the concerns raised by RBI,” said a person familiar with the regulator’s view. “RBI has also asked the bank to suggest two new names for the post,” said the person not wanting to be identified. The Karur-based bank has been without a chairman for more than a year now after S Narayan retired in January 2011. PM Somasundaram, MD and CEO at the bank, could not be reached for comments. But Pradeep said in a text message: “RBI is actively considering my name for approval.” The central bank’s hesitation in the approval is also due to the fact that Pradeep falls under the promoter category, which owns about 11.5% stake in the bank, said the person. RBI is paranoid about people with corporate links at the top of a bank as there are chances of prudence in lending getting compromised. This is one of the reasons why it has been imposing conditions even in case of proposed new banking licences. The central bank has called the bank’s senior management for a discussion on the appointment this week. “They had asked us to submit two additional names but the question of doing that does not arise since Pradeep’s name has been cleared at the AGM,” said another person who knows the bank’s stance. “We are not pursuing the matter actively as there is an MD and CEO running the bank.” Somasundaram, an alumnus of Standard Chartered, joined Lakshmi Vilas Bank in 2010 to transform the sleepy community lender into a full-fledged bank that could prepare it to compete with the giants such as ICICI and HDFC Bank which have begun encroaching into its territory. While he managed to reduce the bad loans, it has a long way to go in terms of products and services.  “We are working hard to shed the image of an old private sector bank,” Somasundaram said in an interview with ET last year. “We want to play the role of a new generation bank by offering services on par with leading private sector banks. For this, we need to focus on retail and improve our services.”

ET

Will appointment of auditors by regulators enhance independence?

.... Until 2005, the RBI was directly involved in the appointment of auditors in public sector banks. Currently, public sector banks appoint auditors under the supervision of RBI. The accounting profession generally believes that auditors enjoy a higher level of independence when regulators appoint auditors. In October 2011, the then President of the Institute of Chartered Accountants of India, Mr. Ramaswamy, argued in favour of appointment of auditors of public sector banks directly by the RBI.......

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White-label ATMs have hurdles of cost and competition to overcome

The Reserve Bank of India (RBI) may have come out with its draft guidelines last week allowing private operators to set up white-label ATMs (WLA) or stand-alone ATMs. But it is never going to be an easy task for the operators considering the costs involved in setting up private ATMs and in competing with the bank ATMs in attracting crowds.............

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Bank rate lives to die another day

............Being the discount rate, the bank rate should technically be higher than the policy repo rate but it took nine years for RBI to realize this. One wonders what prevents the Indian central bank from killing the bank rate as it has become irrelevant.................

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Too early for comfort

...Will the lower inflation figures prompt the RBI to commence the long awaited phase of interest rate reductions? A monetary policy review is due in March and on the face of it, the January inflation figures do improve the odds for a round of monetary easing.....

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IBA seeks tax relief for foreign banks to incorporate locally

….According to the RBI paper, all new overseas banks in India will have to locally incorporate themselves, and existing players, particularly the systemically important ones, will be encouraged to opt for local incorporation and act as subsidiaries of foreign parents. But the apex bank is yet to announce its guidelines. According to tax experts and bankers, foreign banks are unlikely to convert their branches in to subsidiaries unless the huge tax burden is removed…..

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Cheque transaction value down 6.4% in Dec: RBI

Total value of transactions through cheques across the country amounted to Rs 8.17 lakh crore in December 2011, down 6.4 per cent compared to the same month last year. Banks cleared cheques worth Rs 8.74 lakh crore in December 2010, according to the Reserve Bank of India (RBI). ............

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Govt to provide adequate capital to PSU banks: Pranab

.... To strengthen risk management mechanism, RBI has issued issued draft guidelines, envisaging that the equity capital of a bank should not be less than 5.5 per cent of risk-weighted loans. These guidelines envisaged more stringent norms on capital adequacy, Mukherjee said, adding, "on our part, the government has committed to maintain the minimum 8 per cent Tier I (equity capital) in all public sector banks which is over and above the regulatory requirement of 6 per cent.".....

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Ben Bernanke, the great innovator

There are several central bankers one could admire, especially those who held steadfast against widespread political opposition because the measures took time to take effect. Notable in this regard is of course Paul Volcker, who slew the dragon of inflation. In India, there was C Rangarajan, who did much the same thing, and Y V Reddy who explicitly targeted asset prices when it was unfashionable, indeed heretical, to do so............

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Banks seek RBI guidelines on shifting procedure

NOIDA: Banks that have been displaced by the Supreme Court order have written to the lead district bank asking %it to forward a request to the RBI to issue standard guidelines on the shifting process. Banks have expressed %their inability to shift out by March 5, considering that some are yet to find alternate commercial locations.  Meanwhile, those banks that have opted for the Noida Authority's new land scheme may have to approach the court too seeking an extension of the March 5 deadline. Noida Authority has said that it will seal all banks operating from residential plots even if they have opted for the scheme.

TOI

Bosses take stock of policy steps

.....“This is a pre-budget FSDC meeting. The finance minister heard all the regulators. Of course the RBI has responsibility both for macro-economic management and for banking regulation. The outcome of today’s meeting will be reflected in the budget,” RBI governor D. Subbarao told reporters here. Apart from the RBI governor, the meeting was attended by Sebi chairman U.K. Sinha and PFRDA chairman Yogesh Agarwal and secretaries in the finance ministry....

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Pranab Mukherjee to skip G-20 Ministerial meeting in Mexico

NEW DELHI: Finance minister Pranab Mukherjee will skip the meeting of G-20 Ministers and governors of central banks in Mexico between February 24-26 as he is pre-occupied with his next Budget, sources said. "Finance Minister will not be attending the G-20 Ministerial," a source said, adding that RBI Governor D Subbarao will be participating in the three-day deliberations. Mexico is holding the Presidency of the G-20 this year and the Ministerial deliberations will culminate in the Summit of leaders to be held at Los Cabos later in the year.

TOI

Provide incentives for investment in financial assets to discourage gold imports: C Rangarajan

.... India's massive gold imports that are fuelling an already bloated current account deficit have drawn concern from the country's top policy advisory body. The C Rangarajan-headed prime minister's economic advisory council (PMEAC), in its review of the economy, has suggested more incentives for investments in financial assets to discourage gold purchases in the country.......

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Govt to cover exempt sectors in second phase of XBRL roll-out

.... The regulators, including the Reserve Bank of India and the Securities and Exchange Board of India, have also started implementing XBRL..........

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RBI may cut interest rate by 100 bps this year: Citi

....“Given that the RBI has said that the quantum and timing of rate cuts would be dependent on fiscal consolidation, we expect the repo rate to be cut post the Budget (due on March 16), that is, RBI’s April 17 annual policy review,”.......

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Cards to make Metro travel easy

......The cards will be issued by the bank to its customers but it is up to the bank to charge its customers for it. However the travel fare for a passenger will be the same whether he uses a Metro Card or a Combo card. In future, if Reserve Bank of India (RBI) rules permit, the card can be extended to retail etc., said sources..........

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P C George to hold 'Satyagraha' on Feb 27

KANNUR: Government Chief Whip P C George Sunday said he would organise a Satyagraha in front of Reserve Bank of India (RBI) on February 27 to protest ..............

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JNNURM, farmers’ loan waiver scheme under CAG lens

.... In the farmers' debt waiver scheme, the CAG has received banking data from RBI and has also examined the books of state-owned banks and regional rural banks. CAG has scanned the disbursement of debt waiver made by public sector banks across the country with sample field visits......

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Workshop on foreign exchange held

Interactive sessions dispel myths surrounding overseas transactions

RBI uses the workshop to familiarise the public on its niche products

Event targeted mainly at students, small-scale industries aiming at opportunities abroad

To dispel the myths and unfounded fears on foreign exchange and for motivating the public to make use of the overseas banking services, Reserve Bank of India is conducting an interactive session for all the stakeholders in Tirupati. The two-day event began at Shilparamam (Urban Haat) on Saturday morning with an exhibition by the RBI along with various lead banks in the State such as Indian Bank, State Bank of Hyderabad, State Bank of India, Andhra Bank and Syndicate Bank. As part of its financial inclusion plan, RBI is holding the event to familiarise the niche products as well as to caution the public on the pitfalls ahead. After Hyderabad, Nizamabad, Visakhapatnam and Guntur, this one at Tirupati is the fifth in the series of meetings.

Exhibition

The exhibition titled ‘Foreign exchange and you' aimed at spreading awareness on FE showcased the options available for residents and non-residents, the rules for foreign direct investment in India, overseas direct investment, external commercial borrowings etc. The event is targeted mainly at students aiming at higher education or employment abroad and small-scale industrialists with an export-oriented venture. While information will be disseminated to students on foreign university remittances, account operation procedures, NRI accounts etc., the industrialists will be explained the features of export finance, formalities for import, Letter of Credit, FEMA regulations among other things. T. Prasad, Commissioner, Municipal Corporation of Tirupati (MCT) inaugurated the event, while A.S. Rao, Regional Director of RBI, Hyderabad, interacted with the visitors and clarified their doubts on various issues. The expo will be open till 6.30 p.m. on Sunday. 

HBL

Failure of governance reason for Eurozone debt crisis: RBI

MUMBAI: The ongoing sovereign debt crisis in countries of eurozone owes its origins to governance failures, according to a senior Reserve Bank official. Speaking at a conference of Kerala Management Association at Kochi yesterday, RBI Executive Director G Padmanabhan said the 2008 global crisis and the current debt problem in eurozone suggests that merely having a strong regulatory and supervisory framework is not enough, without proper enforcement of the rules and regulations. "If we take a careful look at the present sovereign debt crisis roiling the eurozone, it should not take us too long to realise that this crisis also owes its origins to governance failures. "The only point of difference between this and the 2008 crisis is that the entities which are at the root of the present crisis are sovereign governments and not the usual suspects which are 'profit-seeking' corporations," Padmanabhan said. The text of his speech was uploaded in the central bank's website. According to Padmanabhan, there was a clear element of acquiescence on the part of core euro members to enlarge the circle of Euro zone at the cost of non-compliance with the tenets of Maastricht Treaty. "How did the crisis surface? By admission of the Greek Government that the fiscal statistics it had earlier presented may not be true and the true position could be significantly worse," he said. Padmanabhan said the European debt crisis has prompted a discussion on governance and sovereign debt. "There seems to be interplay between governance performance and the debt level. Better governed countries can afford higher levels of debt. Conversely, badly governed countries can tolerate only lower levels of debt," he said. According to him, mere financial and economic measures, in absence of reform in governance, may not be sufficient to address the problems countries like Greece face. "This is also why even after the Greek parliament passed the austerity measures as a precondition for further assistance, the market is reluctant to accept it as a watershed and displays a great deal of skepticism," he said. 

ET

Subbu sab jaanta hai: RBI chief is right to remain a hawk

…..If we take the RBI’s main role as an apolitical risk manager, Subbarao is clearly right to take a more cautious view compared to his political bosses. He has to keep the powder dry against future fiscal relapses. Subbarao did the right thing by holding off on a more chirpy policy statement. As the Kotak Mahindra ad goes: “Subbu sab jaanta hai…”

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Dr.Bimal Jalan - Emerging India - Book Review by P.P.Ramachandran

India is ruled by an ex- RBI Governor and ex- Finance Minister.The PM’s Economic Advisory Board is headed by another ex- RBI Governor. Yet the nation is teetering on the precipice of economic decline with a reduction in annual growth and burgeoning inflation. Why, with such a fund of expertise? The book under review is an attempt to solve this riddle.

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Individuals-promoted banks ‘not successful' – Usha Thorat

Mangalore, Feb. 18: Former Deputy Governor of Reserve Bank of India Ms Usha Thorat has observed that the experience of the RBI over the past 17 years has been that banks promoted by individuals, though banking professionals, either failed or merged with other banks or had muted growth. She said only those banks that had adequate experience in broad financial sector, financial resources, and trustworthy people, and strong and competent managerial support, could withstand the rigorous demands of promoting and managing a bank. Drawing the attention to the RBI's August 2010 discussion paper on licensing of new banks, Ms Thorat, who is also Director of Centre for Advanced Financial Research and Learning, said when financial sector reforms were initiated in India in the early nineties, guidelines for licensing of new banks in the private sector were issued in January 1993 and subsequently revised in January 2001. The objective was to instil greater competition in the banking system to increase productivity and efficiency. She said the revised 2001 guidelines, by and large, were still cautious in nature. Large industrial houses were not permitted to promote new banks. Under the policy, 10 new banks were set up in the private sector after the 1993 guidelines and two new banks after the 2001 revised guidelines. Out of these, seven banks have survived, of which, four have been promoted by financial institutions, she said.

HBL

Old private banks asked to step up coverage in areas of operation

 

Mangalore, Feb.18:  Old generation private sector banks, while focusing on their territories and niche business, should enhance their coverage in their areas of operations to source more customers without increasing cost and risk, according to Ms Usha Thorat, former Deputy Governor of the Reserve Bank of India and Director of the Centre for Advanced Financial Research and Learning. Speaking on the theme ‘Old private sector banks in India: Challenges and opportunities' at the 88th Founders' Day celebration of Karnataka Bank Ltd here on Saturday, she said there has been a fairly steady growth in deposits and advances for old private sector banks but their market share has gone down, especially after 2005. “This is most probably due to the aggressive actions by the new private banks to source more customers and offer a whole slew of services to them thereby increasing their value to the bank,” she said. Their strategy should be to capitalise on their strength of knowledge of the region and business to increase the outreach and coverage in their areas which have witnessed very high economic growth in the recent past. More inclusive banking will be good business while keeping concentration risk low, she said. Ms Thorat suggested that there should be a conscious efforts not to get tempted into sensitive sectors that may give higher returns - exotic products that are not very well understood and those that pose higher risk. Equally there should be conscious efforts to see that the liability base is well diversified and on a large retail deposit base, she said. An attempt should be made to move carefully into regions that show good potential for growth and where banking services are not so well developed. Being present largely in areas which have had very high growth has created an enabling environment for the old private sector banks to grow reasonably, but with falling market share. Focus on small ticket loan accounts and increasing outreach will prove to be a good strategy. “Small business can be good business” should perhaps be the slogan going forward, she added.

HBL

RBI Guv favours more rural banks

Reserve Bank of India (RBI) Governor D Subbarao, who chaired a meeting of the Central Board of Directors of the RBI here on Thursday, emphasised on opening of additional branches by the commercial banks in the rural areas; credit support to agriculture and allied sectors by the commercial banks; financing of micro, small and medium enterprises (MSMEs); licensing of District Cooperative Credit Banks (DCCBs); and SHG-Bank linkage programmes. Subbarao also reviewed the recovery climate, the progress made in the financial inclusion plan and delivery of assistance under the beneficiaries-oriented programmes through electronic benefit transfer (EBT) mechanism; the organisational aspects of Rural Self Employment Training Institutes (RSETIs) and Financial Literacy and Credit Counselling Centres (FLCCs). The meeting was attended by eight Directors Anil Kakodkar, MV Rajeev Gowda, YH Malegam, Dipankar Gupta, GM Rao, Ela Bhatt, Indira Rajaraman and Najeeb Jung. RBI Deputy Governors KC Chakrabarty, Subir Gokarn, Anand Sinha and Harun R Khan were also present. Subbarao, along with Chief Minister Naveen Patnaik, also graced the RBI Bhubaneswar region’s golden jubilee function held at the RBI Colony here. Speaking on the occasion, Subbarao said the industrialisation drive going on in Odisha is quite encouraging. He, however, stressed the need for development of the backward districts of the State. The Chief Minister urged the bankers to keep extending credits to bail out the people during this crisis time The function came under the shadow of the model code of conduct enforced in the State because of the ongoing Panchayat elections. State Election Commissioner Ajit Kumar Tripathy directed the RBI Governor over phone not to announce anything in view of the model code of conduct being in force. The RBI authorities were also asked to remove the cutouts of Prime Minister Manmohan Singh.

The Pioneer

Sacrifice growth to scale down inflation, says Governor Subbarao

Patna : Reserve Bank of India (RBI) Governor D. Subbarao has said that a bit of growth needs to be sacrificed temporarily in order to bring inflation down. "What I want to give is a message and that is that there is no way we can bring inflation down without sacrificing some growth. People talk about it in textbook economics. You have to sacrifice a bit of growth in order to bring inflation down but that scarifies needs to be short term," Subbarao told the media here on Friday. "We scarifice in the short term, so that our medium cum growth becomes more sustainable. If there is high inflation, there will uncertainty for investments, there will uncertainty for consumers and high inflation scenario in not a use of growth," he added. Subbarao further said inflation is anemic for growth. "It is true that in economic literature, there is a concept of trading of between growth onsultations but that happens below a threshold level of inflation. At below a certain level of inflation, you can trade a bit of inflation to get a high level of growth but above a threshold level of inflation, inflation is anemic at growth," said Subbarao.  "For much of 2010, for all of 2011, we had inflation in the range of 9 to 10 percent, which is way above the threshold level and we had to act very aggressively and decisively on the monetary policy side to bring inflation down," he added.  Monetary policy is the process by which the monetary authority of a country controls the supply of money, often targeting a rate of interest for the purpose of promoting economic growth and stability. 

http://news.webindia123.com/news/Articles/Business/20120218/1930064.html

Hold DLRC meetings as per convenience of MPs/MLAs: RBI

.... Citing instances of lead banks not arranging District Level Review Committee (DLRC) meetings in consultation with Members of Parliament, the RBI has directed all such lenders to fix programmes taking into convenience of local representatives and to involve them in major activities.......

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J&K Bank organizes ‘Awareness Camps’ in rajouri and Pulwama

n an effort to bring the unbanked into the fold of banking, J&K Bank yesterday organized ‘Awareness Camps’ at Village Badhoon in Rajouri and Kakapora, Pulwama.. The camps, conducted to educate people of far-off places about the importance of Financial Inclusion, were attended by a large number of people belonging to different walks of life. Speaking on the occasion, Lead District Manager (LDM) Rajouri, Arvind Kapoor briefed the gathering about the programme of Financial Inclusion initiated by Reserve Bank of India (RBI) to bring the unbanked villages under the ambit of formal banking services. He urged the people to open bank accounts and avail all the banking services and facilities available at the Bank’s Business Units or Khidmat Centers established in their vicinity to provide benefits of economic growth to everyone. He also asked people to use smart cards and urged upon them to open their accounts through the VLEs. Those present on the occasion lauded the role of Bank in empowerment of the poor. Earlier, Chaman Lal Sharma Head Business Unit Jawahar Nagar (Rajouri) welcomed the Lead District Manager Rajouri, Panchs, Sarpanches and other locals to the camp and thanked them for sparing their valuable time for the occasion. Meanwhile, the awareness camp at Kakapora was organized by the Financial Literacy and Credit Counseling Centre, Lead Bank Pulwama in collaboration with NABARD. A large number of village elders, government officials, representatives of financial institutions and VLEs participated in the programme. The workshop specially focused on RBI‘s Financial Inclusion programme. LDM Pulwama G. R Kumar briefed the audience about the benefits of banking and stressed upon the participants to be part of greater success story by opening their accounts with J&K Bank. Present on the occasion, AGM NABARD spoke at length about the Financial Inclusion programme and its importance for the general public. He asked the audience to come forward and get banking benefits through financial inclusion programme.  He made it clear that all the facilities would be made available at the door steps of the common masses with the active participation of the business correspondents and Khidmat centers in the near future. The BDO Kakapora Fayaz Ahmad also spoke on the occasion and assured financial institutions of every help in the block for their services through Panchayat Raj system. The representatives of J&K Bank, Agriculture, Animal Husbandry, KVIB, Handicrafts and other departments also participated along with Khidmat Center owners. 

http://www.jkbank.net/pressreleasetemplate.php?id=494

JK Bank disburses Rs 2100 cr to priority sector in 9 months

.... The meeting was presided over by Madhav Lal, Chief Secretary and among others attended by Commissioner/Secretary, Industries & Commerce, Umang Narula, Commissioner/Secretary Labour and Employment, Yadullah, Commissioner/Secretary, Agriculture Production Department, Navin Chowdhary, Director, Department of Financial Services, Government of India, Ministry of Finance, Sanjeev Jindal, Regional Director (for J&K) RBI K. K. Saraf, Chief General Manager, NABARD, S. C. Rabra.....

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The future of hacks

In the past few weeks, Bangalore has reportedly seen over 150 instances of money being fraudulently withdrawn from automated teller machines or ATMs. The fraudulent transactions have been carefully timed at the cusp of midnight, to bypass daily withdrawal limits. The modus operandi is otherwise unclear; footage from surveillance cameras has not been helpful. The criminals may have cloned cards by copying data off magnetic strips. They may have hacked the software that validates transactions. Or perhaps, the chips in specific ATMs have been compromised. Bangalore has a large population possessing the requisite skills. The Reserve Bank of India and the banking/financial services industry will now have to brainstorm to identify and plug the specific hole, or holes…………

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Monetary policy before Union Budget

This year will see an unprecedented inversion in the sequence of Budget and annual Credit Policy

.......However the date for RBI’s annual monetary policy is March 15 (as of this writing). Hence apart from clever economic models and analysis, the RBI will also have to exercise clairvoyance and mind-reading to be able to come up with a policy that is consistent with the fiscal stance, which will be revealed only 24 hours later. (Who knows, there may be several roll-backs of budget proposals too!)  Hence there are three possibilities: (a) monetary policy date will be postponed; (b) RBI will have secret advance insight of the Budget (dangerous! and possibly illegal); or (c) RBI will fly blind. Interesting times ahead for monetary and fiscal policy tango......

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RBI to wait for Budget proposals before rate-cut

The Reserve Bank of India has said interest rates have peaked and indicated that it would reduce them after taking into account the Budget proposals and global commodity prices….

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Slowing investment may impact GDP growth in FY12-13: RBI panel

.........“Given the fragility of the global situation and slowdown in capital flows, there was a need to remain extremely watchful insofar as the external sector was concerned,” ............

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RBI to issue Rs 10 notes with inset letter 'P'

MUMBAI: The Reserve Bank will shortly issue banknotes of Rs 10 denomination with inset letter 'P' in the Mahatma Gandhi series. "The RBI will shortly issue Rs 10 denomination banknotes with inset letter 'P', in the Mahatma Gandhi Series bearing the signature of D Subbarao, Governor, RBI, and the year of printing on the reverse of the banknote," the central bank said in a statement.  The design of these notes to be issued now would be similar in all respects to the banknotes in Mahatma Gandhi Series 2005 issued earlier.  All the banknotes of Rs 10 denomination issued by RBI earlier will continue to be legal tender, it added. 

ET

Let's bet on the economy

....No wonder, analysts Sujan Hajra and Gautam Singh at brokerage Anand Rathi expect the Reserve Bank of India (RBI), which had hiked interest rates through the last 18 months to rein in inflation, to cut rates in another six months. That will drive down borrowing costs for mortgage holders and businesses , lower the effective cost of car loans and allow banks to lend more freely. It can boost growth, which has sagged from 9% levels to below 7% now.......

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Government distorts reality on inflation

.... it is strange that the policy literature of the RBI and the Finance Ministry is silent about inflation in services, even as services accounts for nearly three-fifths of the GDP. That services sector inflation numbers are available only on a quarterly basis, does not justify their exclusion from the public documents of the RBI and Finance Ministry.......

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Pranab Mukherjee holds parleys with regulators on budget

In possibly the last in the series of pre-budget consultations ahead of the Union Budget on March 16, Finance Minister Pranab Mukherjee on Saturday had a meeting with the financial sector regulators to discuss ways and means of improving the investment climate and boosting a sagging economy.The meeting attended, among others, by Reserve Bank of India Governor D. Subbarao and SEBI (Securities and Exchange Board of India) Chairman U. K. Sinha.........

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FM holds pre-Budget talks with regulators

.."This is a pre-budget FSDC meeting. Finance Minister heard all the regulators. Of course the RBI has responsibility both for macro-economic management and for banking regulation. The outcome of today's meeting will be reflected in the Budget," Subbarao told reporters ...........

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Majority of Indian MFIs might have to close shop

.... At slightest 80% of microfinance institutions (MFIs) might have to close down in a subsequent two-three years since of tough new regulatory mandate laid down by a Reserve Bank of India (RBI) and a necessity of funds, attention executives warn……

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Outward remittances: Who gets what

According to RBI data, money sent abroad by resident Indians crossed the $1 billion mark for the first time in 2010-11. Between April and November of the current fiscal, such outward remittances stood at $628 million or around Rs 3,000 crore, down 15 per cent over a similar period in 2010-11. The dip was mainly on account of a drop in money sent for maintenance of close relatives living abroad.............

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Founders' Day of Karnataka Bank to be Celebrated on Feb 18

Mangalore : Karnataka Bank will be celebrating its 88th Founders' Day at 4.30 pm on Saturday February 18 at its head office near Mahaveera Circle here. The bank, which was established with the objective of supporting agriculturists and such other rural folks in order to bring about the development of villages, still has most of its branches in rural and semi urban areas. The bank has several loan schemes to provide loans to its rural clients at competitive rates for the convenience of agriculturists and is thus fulfilling the dreams and vision of its founding fathers, said P Jayarama Bhat, managing director of the bank. The founders' day will have a lecture by Usha Thorat, former deputy governor, Reserve Bank of India and director, Centre for Advanced Research and Learning. She will enlighten the audience about the current scenario in the international as well as Indian banking sector. Ananthakrishna, chaiman of the bank will preside. The programme will be followed by a musical concert by Sangeet Samrat Chitravina N Ravikiran. P Jayarama Bhat has invited students, customers and shareholders of the bank as well as music lovers among the general public to attend the programme. 

http://www.daijiworld.com/news/news_disp.asp?n_id=129776

Praise & tips on Montek lips

....The RBI governor prescribed the state government to switch its emphasis from traditional agriculture sector to industries and services. “You (state) cannot improve your CD ratio only through agricultural development. You must go beyond agriculture to industries and services to improve the CD ratio.”.......

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Subbarao calls for roadmap on deficit

....“Fiscal deficit is one of key drivers of inflation. It is very important that fiscal deficit has to be brought down to help control inflation. For fiscal consolidation has to be embarked upon, we need a credible commitment from the government”,......

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Bank as partner in growth - K.C.Chakrabarty

........Banks have a vital role to play in addressing several problems faced by the sector. Banks have to view themselves not just as providers of credit but as partners in the growth of these enterprises, by hand-holding first generation entrepreneurs. In financial management, MSEs do not have the size to support the competence they need. Operational skills, including accounting and finance, business planning, marketing and human resource management, etc. can often pose a challenge and necessitate support for the MSE borrowers.........

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RBI to watch Budget, other events to formulate policies

…."The inflation and interest rate cycles have peaked and have to come down and for that, the RBI will look at events like the Budget (2012-13), international crude oil prices and other variable factors to calibrate its policies," Subbarao said at the 'Global Summit on Changing Bihar'……

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Fiscal situation, a cause for concern, says RBI panel

...The level of inflation expectations, according to some members, was high and the RBI should continue to keep monetary policy tight (at the present level). It was necessary to bring down inflation significantly from the present level, even if it meant lower growth for the next few years. ..........

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RBI needs to walk the talk and release funds for banks to lend

………………..The cash crunch facing banks is for a variety of reasons, including the fact that RBI has sucked out about Rs 60,000 crore from the system by selling dollars in the market over the past four months. Simultaneously, oil prices have hardened and, therefore, oil and fertiliser importers are purchasing foreign currency in a big way in their anxiety to build up stocks. At the same time, the government continues to regularly issue bonds to keep up with its enhanced borrowing programme. As long as the cash crunch persists, there can be no hope of interest rates coming down.

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On policy actions, RBI guv goes with the minority

It seems Reserve Bank of India’s (RBI) governor D Subbarao favours the minority when it comes to monetary policy actions. Last month, Subbarao heeded the lone voice in the technical advisory committee (TAC) on monetary policy, that sought a cut of 50 basis points in the cash reserve ratio. Other members of the panel had recommended that the rates be kept unchanged, while some sought a cut of 25 basis points.........

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Policy panel voted for rate cut; Subbarao opted for status quo

.....Reserve Bank of India (RBI) Governor D Subbarao overruled the advice of a majority of external members of its Technical Advisory Committee (TAC) by keeping the repo rate steady at the monetary policy review in January............

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Online Complaints: Cyberscream

....Various regulators, such as IRDA (Insurance Regulatory and Development Authority), SEBI (Securities and Exchange Board of India), RBI (Reserve Bank of India) and the NSE (National Stock Exchange), allow you to file complaints online.......

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Pakistanis may be able to invest in India soon

.....All foreign exchange transactions in India are governed by FEMA, which came into force in 2000. This is a civil legislation and the Reserve Bank of India can make changes to allow Pakistani investments after taking approval from Finance ministry......................

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Slowing investment may impact GDP growth in FY13: RBI panel

............ RBI will put out a formal projection on India's economic growth for 2012-13 in the Annual Policy Statement in April. However, RBI's baseline scenario is that the economy will exhibit a modest recovery next year, with growth being slightly higher than during this fiscal year.……….

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Clueless, cops ask customers to be wary of ATM frauds

.....The National Payments Corporation of India, an umbrella institution under the RBI managing all ATMs in the country, has identified five ATMs as compromised in the city. Banks though are indulging in pointing as in most of the cases reported the withdrawals have been made from ATMs of banks where the affected people had no accounts.....

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Banks will continue with their schedule on setting up of ATMs

The Reserve Bank of India has draft guidelines for the setting up of White Label ATMs (WLAs). If the plan is implemented successfully then non-banking entities could set up ATM networks for the disposal of the customers.The banks, however will not withdraw from installing their ATMs. The continuous increase in the number of ATMs in the country and with that, the exponential growth in transactions is evident to the importance of ATMs. ATMs have proved to be an important factor for the banks to connect with their customers. The move from RBI of allowing WLAs has been appreciated by the banks but they are also concerned about convenience of the customers. The setting up of WLAs can lead to increase in the efficiency of the ATMs as well as it will also help in lowering of installation charges of an ATM. The Managing Director of Prizm Payment Services, Mr. Loney Antony said, "It was imperative that the RBI permit white label ATMs. It was only a matter of time. The main concern for the RBI was the regulatory framework, but with several banks outsourcing ATM management, white label ATMs are a natural extension."  

Rupee Times

Borrowing limit breather for Bengal

........On Wednesday, the Reserve Bank of India had said seven state governments had planned to raise Rs 5,600 crore through SDL auctions slated for the coming Tuesday. West Bengal was not among the seven. Today, in a revised list, Karnataka and West Bengal have joined the queue of state governments planning to raise loans through SDL……..

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New RBI home loan norms a dampener

……..…The RBI's move is an attempt to introduce an additional lever to ensure that the buyer does not overstate the realizable value of the property. This is an important metric for banks in the event that the borrower defaults. But developers say such riders will choke the industry's growth. "We are totally directionless. Does the RBI want to promote housing or kill the industry? RBI's latest move will persuade customers to defer home purchases,"……..

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Short-term rates harden amid tight liquidity

….............Liquidity has been in deficit of around Rs 1.2 lakh crore daily, despite a 50-bp (basis point) cut in the cash reserve ratio by the RBI last month. The central bank has also been infusing liquidity of about Rs 8000-10,000 crore every week via bond purchases in open market operations. However, this is being offset by higher market borrowings of Rs 12,000-14,000 crore every week by the government. Traders say the RBI’s forex intervention in the forwards market in the November-December period may also be contributing to the tightness in rupee liquidity now. According to RBI data, the central bank intervened to the tune of $1.37 billion in December and $1.6 billion in November 2011.

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Time to step up investor confidence

....What is more worrying is the composition of the fiscal deficit; it is being financed by huge borrowings that are expected to amount to Rs 5,10,000 crore this fiscal, against the budgeted Rs 4,17,128 crore. The government borrows to subsidise consumption which provides fuel for pressures from inflation and depresses investment. The RBI can reduce interest rates to prop up investments only if inflation remains under control..........

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Informal corporate rescue mechanism

.... This led to institutionalisation of informal rescue through debt restructuring via the Corporate Debt Restructuring (CDR) mechanism established by the Reserve Bank of India (RBI), in 2001. This platform was largely on the lines of the London principles and has been used quite extensively in recent times. Various Circulars have been issued by the Reserve Bank of India with regard to the CDR procedure……

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Haryana suspends giving old age pension through public sector banks

.... “We were expecting 20 lakh transactions per month, but the banks were able to do only 3 lakh transactions per month. So, we have suspended the disbursement of pension by the banks till they set up the required infrastructure,”……

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Management week celebrations to begin today

KOCHI: The management week celebrations of the Kerala Management Association (KMA) will begin on February 17. The week-long celebrations will include competitions and lectures. As part of the celebrations, KMA conducted the Young Mangers Contest on Thursday. Mayor Tony Chammany spoke on this year's theme 'Emerging Kerala' before declaring the contest open. K N Shastry, president, KMA, said management day is devoted to recognizing the importance of the profession in all spears of life. In this highly competitive scenario, expectations from managers have been increasing. Elias George, special commissioner, Industries, will deliver this year's M K K Nayar commemorative lecture. Dignitaries from different walks of life will talk on topics of contemporary relevance, and G Padmanabhan, Executive Director of RBI, will be the chief guest at the inaugural function on Friday. The celebrations will come to a close on February 23.

TOI

RBI's Board of Directors meet held at Bhubaneswar

RBI Governor D Subbarao being welcomed as he arrives for the RBI Central Board meeting in Bhubaneswar

Bhubaneswar, Feb 16 (PTI) Central Board of Directors of Reserve Bank of India (RBI) met here today to provide an overall direction to the bank's affairs in light of present economic scenario. The meeting chaired by RBI governor D Subbarao discussed the present financial situation in the country and the impact of global economy on India, RBI sources said. Among others the issue relating to the non-performing assets (NPA) with the banks was also taken up, while the question of interest rate revision was also examined in the backdrop of declining inflation, they said. RBI's central board meets at least once every quarter. Apart from holding meetings in Mumbai, Chennai, Kolkata and one in New Delhi, the rest of the meetings are held in other state capitals by rotation. Besides the governor, directors like Anil Kakodar, M V Rajeev Gowda, Y H Malegam, Dipankar Gupta, G M Rao, Ela Bhatt, Indira Rajaraman and Najeeb Jung attended the meeting here. "The governor or any of the director will not speak to media in view of the model code of conduct," RBI's Chief General Manager Alpana Killawala told reporters. The governor, according to an official release, met local bankers and Odisha government officials last evening where he discussed issues relating to opening of additional bank branches by commercial banks in rural areas, progress in financial inclusion plan and deliver of assistance under the beneficiaries oriented programmes through electronic benefit transfer (EBT) mechanism and credit support to agriculture and allied sector by the commercial banks. Besides, the governor also discussed on financing of micro, small and medium enterprises, SHG-Bank linkage programme, recovery climate and organisational aspects of rural self employment training institutes and financial literacy and credit counselling centres and licensing of district co-operative banks.

IBN Live 

RBI Governor discusses bank expansion in rural Odisha

Focus on small and medium enterprises and SHG-bank linkages

The Reserve Bank of India Governor, Dr D. Subbarao, who met the bankers and officials of the Odisha Government at Bhubaneswar on Thursday, discussed the issue of expanding banking activities in rural areas of Odisha. An RBI press release said on Thursday that the Governor discussed issues relating to opening of additional bank branches by the commercial banks in the rural areas, and also credit support to agriculture and allied sectors by the commercial banks. Progress in financial inclusion planning and delivery of assistance under the beneficiaries-oriented programmes through the electronic benefit transfer mechanism also formed part of the discussions at the meeting. Apart from this, the meeting also focussed on financing of micro, small and medium enterprises (MSMEs) in the state, and the SHG-bank linkage programme.  There was also a mention about the recovery climate in the State.  Earlier, Dr Subbarao met the Odisha Chief Minister, Mr Naveen Patnaik, and discussed issues relating to growth and development of the state. On Thursday, Dr Subbarao also chaired a meeting of the Central Board of Directors of RBI in Bhubaneswar. The Central Board meets at least once every quarter.  Apart from holding meetings in Mumbai, Chennai, Kolkata and one in New Delhi after the Union Budget, the rest of the meetings are held in other State capitals by rotation. The main function of the Central Board of Directors of RBI is to provide overall direction to the Reserve Bank's affairs, the release said. Dr Anil Kakodkar, Mr M.V. Rajeev Gowda, Mr Y.H. Malegam, Mr Dipankar Gupta, Mr G.M. Rao, Ms Ela Bhatt, Dr Indira Rajaraman and Dr Najeeb Jung (all Directors) attended the meeting. The Deputy Governors, Dr K.C. Chakrabarty, Dr Subir Gokarn, Mr Anand Sinha and Mr Harun R. Khan, were also present on the occasion.

HBL

Resurrection of the Bank rate : K Kanagasabapathy

................The Reserve Bank of India (RBI), on February 13, revised the Bank Rate by 350 basis points from 6.0-9.5 per cent, the highest one-time change in any policy rate ever. It is apparently an innocuous and technical correction, but in reality it could mean setting a new landmark for the course of monetary policy in the coming years. The announcement is on top of a series of measures rationalising the operating procedures of monetary policy, based on two path-breaking reports of the RBI Executive Director, Mr Deepak Mohanty, in the recent past. ........

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Oriental Bank of Commerce convenes its first SLBC meeting for Delhi