EDB introduces account portability

Srinagar, Feb 25: Here is some good News for customers of Ellaquai Dehati Bank. Bank has introduced account portability feature for transfer of customer from one bank branch to another branch. “The account portability is done in the system within minutes and is hassle free. Staff at our branches is trained to execute the facility,” said A K Razdan, Chairman EDB, at a meeting held here. A statement said under this facility the customer can shift his/her account to any of the desired branch any number of times, without any change in the account number, with just a change in the home branch code. The facility would enable the customer to have the freedom of operating his/her account from any of the branches of the bank. “Recently bank introduced Electronic Fund Transfer scheme under (NEFT) arrangement with RBI for bank to bank fund transfer which will be highly beneficial to our customers especially to fruit growers in the rural areas. With a broader network of our branches operating in the 13 Districts of the State, these facilities will be a great comfort to our customers for easy access to fund transfer and banking facility in nearby branch of their work place/residence,” statement said.

Greater Kashmir

G20 finance ministers, central bankers meet in Mexico

…..Indian Finance Minister Pranab Mukherjee is not participating in this meet as he is pre-occupied with the Budget preparations back home. The country is being represented by RBI Governor D Subbarao and Economic Affairs Secretary R Gopalan……..

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IDBI Intech to offer data mining, business analytics solutions

….."This too is a product which has a market due to RBI regulations. We see a market of Rs 200 crore for this product. Public sector banks have to be partially compliant with automated data flow regulations of the RBI by June and fully compliant by December. So, we see a huge potential here."........

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NMCC asks RBI to lower interest rates | NMCC

If you think the Reserve Bank of India will start reducing repo rates in its March 15 policy review without giving credence to the fiscal deficit situation, think again. For the way long-term interest rates would move will depend largely on the fiscal deficit and the flow of funds from abroad........

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Small loans add up to lethal debts

The microfinance industry pursued a path of rapid business growth in recent years; two investigations now link it to debtor suicides............

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Fiscal deficit holds the key to changes in interest rate: Montek

If you think the Reserve Bank of India will start reducing repo rates in its March 15 policy review without giving credence to the fiscal deficit situation, think again. For the way long-term interest rates would move will depend largely on the fiscal deficit and the flow of funds from abroad..........

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Are jewellery saving schemes a good investment option?

...................Though one may argue that jewellery saving schemes give higher returns compared to banks whose recurring deposits give a return of 9-9.5 per cent, that comparison is quite incorrect due to the unequal risks involved. Unlike banks and NBFCs which are regulated by RBI, jewellers do not fall under the purview of any regulatory body. You may thus be left with limited recourse if you entrust large sums, especially to small time jewellers. The Reserve Bank of India is however said to be mulling over bringing such schemes under its purview, on the mushrooming of these schemes in the market.

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‘Financial inclusion programme to serve villagers better'

P. Vijaya Bhaskar, Executive Director of the RBI distributing a cheque to self help groups members at Krishnasagar in Khammam district on Friday

Financial literacy holds the key to attain economic self-reliance and herald inclusive growth, said P. Vijaya Bhaskar, Executive Director, Reserve Bank of India (RBI)

He was speaking at an outreach and financial literacy awareness camp at Krishnasagar village in Burgumpadu mandal on Friday. Addressing a large gathering of farmers, members of self-help groups and others, Mr. Vijaya Bhaskar said the financial inclusion programme was aimed at spreading financial literacy and extending the banking services to the villages. The RBI has been implementing the financial inclusion programme to bring more number of people especially the rural masses under the banking network. Business correspondents are being appointed in the unbanked villages having a population of over 2,000 and zero balance accounts were being provided to the rural poor as part of the endeavour to ensure banking services to the villagers. All these initiatives are intended to achieve the set goal of financial inclusion, he remarked. Later, addressing the students of the tribal welfare junior college in the village, Mr. Vijaya Bhaskar emphasised the need for financial education. Students should equip themselves with the requisite financial knowledge like the functioning of banking system its products and services, he said. During his speech earlier, the Integrated Tribal Development Agency, Bhadrachalam, Project Officer Praveen Kumar said the tribals constitute 28 per cent of the total population of the district. He deplored that the reluctance on the part of some bankers to provide loans to the tribal people of SHGs was depriving the latter of an opportunity to avail subsidies under various government schemes. Mr. Vijaya Bhaskar asserted that steps would be taken to ensure prompt sanction of loans to all the eligible SHGs. He disbursed loans sanctioned by the APGVB under the bank linkage to the members of the SHGs on the occasion.

HBL

Chandigarh Rose Festival gets underway

..... H.S. Kalra, a retired Reserve Bank of India employee who was visiting the festival with his wife said: "We have been visiting the festival since many years now. It has become an annual affair for us. This time, the fresh fruit and flower decorations are better than the last time."............

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Bank employees to strike work

All Class three and four employees of the Reserve Bank represented by the All India Reserve Bank Employees' Association and All India Reserve Bank Workers' Federation will take part in the country-wide strike called by the trade unions on February 28. The Union government and the RBI management's neo-liberal economic policies have badly affected the functioning of the bank and its employees, said a release issued by the association.

HBL

RBI lifts Rs 50,000-a-day cap over mobile banking transactions

....."Banks are increasingly extending mobile banking facilities to their customers. Interbank mobile payment service developed and operated by National Payment Corporation of India has also enabled real-time transfer of funds through...mobile phones between accounts in different banks. The volume and value of mobile banking transactions is also showing an uptrend," RBI said in a statement.......

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Lowering of key rates by RBI depends on fiscal deficit: Montek

…."Interest rate is going to be determined predominately by what happens to the fiscal deficit. The industry is convinced that no matter what happens to fiscal deficit, the RBI will lower the repo rate,".....

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Eurozone needs package to tackle debt crisis, says Pranab

……RBI recently said the European debt crisis pose a major downside risk to country’s overall growth outlook and the continuing uncertainty there “will adversely affect Indian growth through trade, finance and confidence channels”..........

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SBI & its associate banks top list of banking ombudsman complaints

.........State Bank of India (SBI) and associates figure prominently in the list of the annual report of the banking ombudsman scheme for the year 2010-2011 accounting for 31 per cent of the total complaints received against them. Nationalised banks were second in the list with 29 per cent of complaints, followed by 24 per cent against private sector banks and 10 per cent against foreign banks, said the Report released by the Reserve Bank of India on Friday......’

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Maharashtra tops debit card usage for shopping: Survey

The usage of debit cards for shopping purpose was the highest in Maharashtra followed by Andhra Pradesh, as per the findings of a survey commissioned by the Reserve Bank of India to assess customer satisfaction in the usage of ATMs across the country...........

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Customer complaints: PSU banks better than private ones

Public sector banks have usually recorded a greater share of customer complaints. When compared with the number of complaints registered with private sector banks the former appear to have better record in customer satisfaction. Of the total complaints with the Reserve Bank of India's Banking Ombudsman as of March 2011, private sector banks (including foreign banks) accounted for as much as 35 per cent, a high figure given that they hold only 12 per cent of the total deposits and loan accounts...........

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Concerns on ATMs, credit & debit cards top complaints

While lenders are keen on diverting basic banking facilities from the traditional branch model to the automated electronic route, the area needs more attention in terms of efficiency, according to the annual report on the banking ombudsman released by the Reserve Bank of India (RBI). The report also said call centres set up by banks to address customer grievances are not able to fulfil their objective effectively. According to the report, 24 per cent of the total complaints received by banks in 2010-11 pertained to transactions carried out through automated teller machines (ATMs), debit and credit cards. Complaints filed in this category primarily related to unsolicited cards & policies, charging fees on ‘free’ cards, abusive calls, skimming of cards, excessive charges, wrong debit to accounts and non-dispensation of money from ATMs. RBI said most queries relating to credit cards were handled by call centres, adding the staff employed at such centres was not very familiar with the card products and the customers of banks. “As such, the response from the call centres is not helpful in resolving customer grievances,” RBI said in the report. Issues related to pension payments ranked second in the list of grievances. Non-adherence to the prescribed working hours and delays, refusals and failure to offer services were other areas of complaints. In 2010-11, there was a drop of 10 per cent in the total number of complaints, though at 94 per cent, the rate of disposal was the same as that a year ago. RBI Deputy Governor K C Chakrabarty, who is also the appellate authority for the banking ombudsman, said the small drop in the number of complaints did not point to any specific trend. “What is a matter of satisfaction is the rate of disposal has been sustained,” he said in the report. Selling unsuitable products and charging unfair or unreasonable fees pose challenges to customer services in the Indian banking industry, he added.

BS

Think before you draw money

…“Besides, ATMs, we suggest, should not be located in deserted areas because people can easily access them. There is already an RBI guideline for single PIN transaction that will require banks to generate a new PIN for each transaction that will be sent to the customer’s mobile phone,”....

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TN & UP have highest value of NPA properties in 2011-12: says NPAsource.com study

....Total NPAs in India as of March 31, 2011 were more than Rs. 90,000 crore as per the statistics released by the Reserve Bank of India (RBI) which does not include co-operative banks, SFCs, FIs & NBFCs, whereas globally this figure would run into trillions of dollars...........

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RBI to meet lenders on rising bad loans - Economy and Politics

RBI Deputy Governor K.C. Chakrabarty says that the meeting likely to take place on 29 February or 1 March

....“RBI might want to understand about any possible systemic risk in the system due to rise in bad loans, which would help them to formulate their policies to address this issue.”The central bank and commercial banks have insisted that the situation is not alarming and the Indian banking system is resilient enough to tide over the problem........

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RBI should use bank lending to push companies file reports with Registrar of Companies

The Companies Act, 1956, mandates all kinds of companies - private, public, Section-25 company, closely-held company or a company in which the public is substantially interested - to file annual reports with the Registrar of Companies (RoC). These reports include financial statements and annual returns, essentially, of directorships and shareholding pattern. However, many companies routinely fail to comply with this norm.  The Reserve Bank of India should now step in and ask banks to withhold credit to companies that fail to comply with reporting requirements.........

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ICICI Bank receives RBI nod for Infrastructure Debt Fund

Leading private sector lender ICICI Bank has received an in-principle approval from the RBI to set up the country's first Infrastructure Debt Fund (IDF).The fund would cater to the country's fast growing infrastructure sector, which requires investments worth $1 trillion in the 12th Five-Year Plan period (2012-17)...........

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You have to shell out more

...........It has been reported in the press that the Reserve Bank of India (RBI) has directed banks to exclude the cost of stamp duty, registration fee, service tax, VAT etc., while funding house property. The National Housing Bank (NHB), the regulator for Home Finance Companies (HFCs), may follow suit soon.In other words, the home loan aspirant will have to bring in higher margin money (property cost less the loan amount), as home loan eligibility reduces considerably, from the above measures..............

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Aviation NPAs a manageable problem: Chakrabarty

Mumbai : The Reserve Bank on Friday said the stress being faced by lenders from their exposures to the aviation sector is a “manageable problem”. “Yes, aviation is a problem ... a problem, at this stage we feel is manageable,” RBI Deputy Governor KC Chakrabarty told reporters on the sidelines of an event here. Chakrabarty declined to make account-specific comments but said RBI is keeping an eye on the developments. He also said the specially convened meeting on NPAs announced after the January 24 policy announcement, will be held either on February 29 or March 1.

IE

Kingfisher lenders to meet again mid-next week

 ...... The development comes in the backdrop of reported refusal by Mallya to stand personal guarantee for fresh funding and the lenders' insistence on the promoter brining in at least 25 percent of its funding needs as fresh equity. It may also be recalled that RBI Deputy Governor K C Chakrabarty's had on Wednesday in Bangalore that "banks are commercial entities. If they feel that by supporting a unit, the unit can survive, they must explore that possibility. Banks are risk-taking entities".......

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Govt does not admit to existence of bonded labour: Bombay HC

.... Public prosecutor Pandurang Pol informed the court that the Reserve Bank of India (RBI) has schemes for micro-financing of poor people, including those in rural areas. However, the same does not cover bonded labourers as one of the main conditions of lending is repayment,......

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PIL against two finance firms

.......A public interest litigation petition has been filed in the Madras High Court Bench here seeking a direction to Reserve Bank of India (RBI) to cancel licences granted to two non-banking financial companies — Muthoot Finance Company and Manappuram Finance Company — both based in Kerala on charges of levying exorbitant interest on gold loans........

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Goldmine in family silver

..........And unlike banks that have strict guidelines and need RBI’s permission for branch expansion, NBFCs are not bound by such rules for branch expansion. Muthoot Finance’s branch count as on December 2011 was 3,480 while Manappuram’s stood at 2,738. Compare this with the branch network of the decade-old Punjab National Bank that stands at 4,000 and the inequality is obvious.............

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Golden Jubilee Celebration of Reserve Bank of India, Bhubaneswar

Governor Sri M C Bhandare Inaugurating the Golden Jubilee Celebration of Reserve Bank of India, Bhubaneswar

 

RBI workers urged to observe industrial strike

The All India Reserve Bank Employees Association and the All India Reserve Bank Workers' Federation on Thursday urged its members to jointly observe the strike called by central trade unions across the country on February 28. "The call to the RBI employees to join the strike on February 28 was given to show solidarity with the working class in the country," Samir Ghosh and SV Madhadik, general secretaries of AIRBEA and AIRBWF respectively said in a statement in Kolkata.

DNA

Centre nominates D. K. Mittal on RBI's central board

.....Mr Mittal's nomination follows the recent amendment to the RBI Act, 1934, allowing the Central Government to nominate two Government officials to the central board instead of one. The RBI Governor has been underscoring the importance of central bank autonomy at various public forums. ......

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RBI Governor asked to fix gaps in tax immunity schemes

….."The RBI needs to ensure that banks entrusted to implement said (tax immunity) schemes place necessary checks and plug the holes and also monitor the implementation of the schemes in right earnest," Special CBI judge A K Mendiratta said while hearing a nearly two-decade-old case……..

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Not so high

..............In recent years, speeches by RBI officials have veered into smug exercises of self-praise. A greater recognition is needed that RBI has failed on the central bank’s prime task: delivering price stability. Achieving price stability will be a slow and long battle, one critically interwoven with household expectations. ................

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Increase education loan lending: Nair Committee recommendations

.......The committee headed by MV Nair, chairman, Union Bank of India, in a report suggested to that limit under priority sector for loans for studies in India may be increased to Rs15 lakh and Rs25 lakh in case of studies abroad, from existing limit of Rs10 lakh and Rs20 lakh, respectively. The RBI has sought comments on the report of the Committee............

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Experts discuss RBI's recos on priority sector lending

The RBI committee under the current Union Bank Chairman MV Nair has come out with its recommendations on lending to priority sector. It has reviewed the existing guidelines on lending to priority sector categories including agriculture, MSME and export. In an interview to CNBC-TV18, BA Prabhakar, CMD of Andhra Bank, MV Nair and N Seshadri, ED of Bank of India, discuss pros and cons of the recommendations........

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RBI may cut rates on respite from inflation

The time is ripe for the Reserve Bank of India (RBI) to start the rate reversal cycle. economists say. This is because owing to a high base effect, inflation is expected to remain low for a few more months. Economists expect a cut in the repo rate, or the rate at which banks borrow from RBI, in at least one of the two policy review meetings scheduled for the March-April period…………

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The new normal

In an interview to The Wall Street Journal, Reserve Bank of India Governor D. Subbarao has said that the Indian economy can manage a maximum of 7% growth without stoking inflation. This is significant, especially as it comes from Subbarao, known to choose his words carefully. What he is trying to say is that unless the current bottlenecks in the economy are fixed, the Indian economy will have to get used to a much lower rate of growth than what it recently experienced: 9%. In other words, this is going to be the new normal. It is more than double the low growth rate trap that India found itself in the 1970s—the so-called Hindu rate of growth—but lower than the ideal. The writing is on the wall: reform or perish. Low growth will hit tax buoyancy and curb spending, especially for the raft of inclusive measures. But is the UPA listening?

Mint

Cost of a rate cut delay in India

......... It is critical that the RBI resume rate cuts. Every week of delay costs in terms of investment and income. The RBI need not wait for its quarterly review to engineer a change. It can do that at any time to correct financial imbalances. The immediate need is a lower rate and it has to be initiated now. Each passing week means a loss of Rs 21.8 billion in investment and Rs 73.6 billion in GDP.

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How fast can India grow?

..... “We are not locked into a 7% growth rate. We should certainly accelerate that, and it’s certainly possible to do that, but for that, supply responses must come.”......

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What is non-inflationary rate of growth (NIRG)?

Employee retirement benefit costs up 45% at top- 100 cos

Public sector banks face more pressure...............

.............While, the liabilities have increased significantly in the last one year, the proportionate rise in assets has not been commensurate, which would impact profits..................

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Repositioning will improve operations: Nabard

State-run National Bank for Agriculture & Rural Development (Nabard) has justified its restructuring and repositioning exercise, based on the recommendations of the Boston Consulting Group. Speaking to Business Standard, chief general manager K R Nair said the exercise was aimed at improving the scope of operations by increasing the production credit and investment credit portfolios, as well as their impact. Nabard has said the repositioning initiative did not replace or modify its traditional credit and development functions…………..

…………..All India Nabard Officers' Association, a representative body of 2,700 officers have said it was apprehensive that the Boston Consulting Group's recommendations, if implemented without wide-scale debate, would lead to dilution of Nabard's role.

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National policy on investor awareness to be out soon

........... We have also been working very closely with the Reserve Bank of India (RBI) and others to provide a national policy on investor events. We think grievance redressal and investor awareness both have to go hand in hand. So we have been working with RBI and others towards this national policy and the final outcome is going to come out very soon; the draft policy has already been approved.........

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Aadhaar panel favours e-payment for all social safety net schemes

....The task force has also suggested that the Reserve Bank of India may consider recognising the Aadhaar letter as proof of identity and proof of address for money transfer. The central bank should notify guidelines for interoperability of business correspondents. The RBI should publish a policy in conjunction with the Government to formulate a plan and set targets for reducing the usage of cash in the Indian economy.For banks, the task force has suggested that at least one microATM be deployed in every bank branch. Banks have been asked to deploy a network of one million business correspondents.........

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India Police Crack Down on Coin Scrapping

..... “The letter, dated June 29, 2010, issued by RBI just requests the manager of Punjab National Bank’s Mascati Market branch in Kalupur to extend exchange facility of old and mutilated notes and coins to Gupta and six others. However, Gupta was blacklisted in February 2011, when we suspected him to be misusing the facility for profit-mongering.”......

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Soon, coin to mark Bhagat Singh's birth centenary

BARNALA: The Bhagat Singh aficionados' are elated over union government decision of introducing Rs. 5 coins having legendary martyr picture. The reserve bank of India(RBI) has announced to soon introduce coins devoted to martyr' birth anniversary with Bhagat Singh picture on one side of the coin………….

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Black money & Prez Patil: Is it time to scrap Rs 500-1,000 notes?

…………One such decisive step was taken in January 1946 when currency notes of Rs 1,000 and Rs 10,000, which were then in circulation, were demonetised primarily to curb unaccounted money. The higher denomination bank notes of Rs 1,000, Rs 5,000 and Rs 10,000 were reintroduced in 1954, and were again demonetised in January 1978. This action was taken through the with the passage of the High Denomination Bank Notes (Demonetisation) Act, 1978..........

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ICIF Discusses Islamic Finance& Banking at BHU

…………..The paper concluded stating that Government of India – Finance Ministry & RBI – should now re-examine its stand on Islamic Finance and create an attractive environment for Islamic Finance investors to participate in the market as undertaken by modern, secular and industrialised countries. It would go a long way to contribute a lot to the inclusive growth of the marginalised and the minorities…………..

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Subbarao not keen to continue after present term

.......... "Criticism is part of the game when you are making public policy. It's legitimate that people criticise. And I'm comfortable the criticism comes from both sides, which must mean we are at least partly right, that some people think we are right,".............

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Subbarao doesn’t want to be RBI governor again

Reserve Bank Governor D Subbarao, who has been having a tough time in dealing with spiralling inflation without hurting economic growth, does not want a third term at the helm of the central bank. “No,” he said when asked by the Wall Street Journal Online edition whether he would like to serve another term after his current tenure expires in September 2013............

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Karnataka Bank Launches Gift Card, Travel Card

Mangalore, Feb 22: Karnataka Bank has launched two more new technology driven and user friendly products, i.e. KBL Gift Card and KBL Travel Card for the convenience of its customers and also the general public. Usha Thorat, former Deputy Governor of RBI and director of CAFRAL launched these new products on the occasion of Founder’s Day celebration on February 18. The highlights of the Gift Card are freedom from selecting the perfect gift, card available in denominations starting from Rs 500 to Rs 25,000, Validity in India and ready to use and shop, dine and purchase online. The highlights of the Travel Card are card is available in nine currencies, safe and easy way to use and carry foreign currency, this card can be frequently reloaded as per the request, accepted worldwide at over 1.6 million ATM, 25 million merchant outlets asn websites verified by VISA, four digit PIN will help to secure all ATM transactions, signature based security for transactions at merchant outlets, 24 hour call centre support for blocking lost/stolen card and balance amount can be exchanged at identified branches.  

http://www.daijiworld.com/news/news_disp.asp?n_id=130174

Tier I capital of 12% to reduce risk for NBFCs: Usha Thorat

Director of Centre for Advanced Financial Research and Learning (CAFRAL) Usha Thorat tells CNBC-TV18 that they have recommended increasing the tier I capital of non-banking financial companies to 12% so as to reduce their risk to sensitive sectors……………………..

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XLRI meet on financial inclusion

....The event is planned to cover broadly the emerging areas of innovations in financial inclusion, social finance, insurance, and risk management for asset poor and marginalised communities. Over 60 speakers from industry, RBI, Nabard, SEBI, BSE, SBI, SIDBI, and other stake holders are to participate in the event.

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Extract: 'Emerging India' by Bimal Jalan

Bimal Jalan is one of India's well-known economists. He was Governor of the Reserve Bank of India from 1997 to 2003. He has held several top positions in the ministries of finance and industry and in the Planning Commission. He was also Chairman of the Economic Advisory Council to the Prime Minister and represented India on the boards of the IMF and the World Bank. His book 'Emerging India' was recently published by Penguin India.

Here is an extract from the book..............

ASSOCHAM reservations over Basel III

Industry body ASSOCHAM on Wednesday expressed reservation on earlier implementation of stringent Basel III draft guidelines for banks as proposed by the Reserve Bank of India (RBI) due to existing strong regulatory and provisioning norms ahead of the global benchmarks already in place………………

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Growth to improve next fiscal on rate cuts: RBI

........"...we give guidance in our quarterly policy statements in October and again in January, which is to say that the tightening has peaked, and from here onwards, it's that we've got to come down, that we have to start easing," ..............

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RBI Deputy Governor - CRR cut possible, if needed

OMOs better than CRR cuts

.... After releasing Prime Minister’s Economic Advisory Council (PMEAC)’s Review of the Economy for 2011-12, Rangarajan, who was RBI governor in 1990s, said: “In my view, OMOs are better instruments as you can calibrate and time it according to liquidity conditions. I have favoured OMOs as appropriate instrument for injecting liquidity into the system.” His comments come a day after the Reserve Bank of India deputy governor Subir Gokarn said the central bank will consider another CRR cut to infuse liquidity into the system......

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The modernization of old private banks

...... The quaint animal, ‘old generation private sector banks’, is a species created by the age-old system of the Reserve Bank of India’s (RBI) classification of Indian banks. This group comprises private sector banks that existed before a fresh set of licences were given to set up ‘new’ private banks in the early 1990s. But the current public sector banks – except the State Bank of India group – are themselves a product of nationalization of many of these old private banks. So, the remaining ‘old generation private banks’ are simply the ones that were considered unimportant for nationalization.....

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Walls and laws

.....However, in 2009, after 14 years to mull the issue, the Bombay HC upheld the Lawyers Collective’s challenge to the RBI’s permission, ruling the Advocates Act 1961 applied to litigation as well as non-litigation practice, and non-Indian nationals can enrol as advocates in India only if, reciprocally, their country allows Indian lawyers to practice in the same manner there. ......

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No spectacular turnaround in growth likely: RBI

....There is no “big difference between 6.9 per cent and 7.1 per cent or below seven per cent,” he said, adding that the country is aspiring for 8.5 per cent to 10 per cent growth. “It has definitely slowed down. Next year also we don't expect a spectacular turnaround… at least that is not seen if we continue to work the way we are working,” said Dr Chakrabarty.....

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Don't take economic growth for granted: FM

Acknowledging that growth has now slowed to less than seven per cent, Pranab says the RBI's tight money policy has impacted investment and consumption growth through high cost of credit………………

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Review of Economy 2011-12: Summary

.......Adequate safeguards needs to be taken to prevent any negative fallout of the government borrowing programme on the financing needs of the private sector. It must be incontestably demonstrated that government finances are indeed on the path of fiscal consolidation thus reinforcing the final pillar of macroeconomic stability.

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RBI not to interfere in banks lending to Kingfisher

Bangalore, Feb 22: The Reserve Bank of India is not opposed to “professional decisions'' of banks like State Bank of India extending support to the liquidity-strapped Kingfisher Airlines, a top RBI official said here on Wednesday. Banks are free to lend more money to the airline if they feel the loans can be recovered, said Dr K.C. Chakrabarty, Deputy Governor, RBI, on the sidelines of his interactive session with students at a city college. Responding to a question on whether the RBI is opposed to banks extending additional loans to Kingfisher Airlines, he said, “Absolutely not”. He added that the RBI does not oppose “professional decisions of banks”.  Dr Chakrabarty pointed out that the banks were not only commercial entities, but risk-taking entities too. “If they feel that by supporting a unit, the unit can survive, they must explore that possibility,” he added. According to him, if the bank felt that by giving a little more money, it could get back the entire money, “that's what they will do”. There have been unconfirmed reports of SBI extending an additional loan to Kingfisher Airlines, despite the account turning a non-performing asset for the bank. A bank official belonging to the lending consortium told Business Line that the airline has requested for an additional short-term funding of Rs 200 crore from the consortium, adding that the banks were yet to take a call on the proposal. The 13-bank consortium has a total exposure of over Rs 7,000 crore to Kingfisher Airlines, of which over Rs 4,000 crore are in the form of term loans.

HBL

Banks undecided on lifeline to Kingfisher; airlines files new schedule

.... consortium of banks, led by State Bank of India, is looking to provide additional funds to the airline, despite some banks declaring it a non-performing asset. This despite the Deputy Governor, Reserve Bank of India, Dr K.C. Chakrabarty, telling newspersons in Bangalore that banks were free to lend more money to Kingfisher Airlines if they felt the loans could be recovered......

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MSMEs told to look for alternative funding sources

....Mr J. Meghanath, Deputy General Manager of RBI, said the apex bank had issued guidelines to banks for meeting the necessary credit requirements of the MSME sector. Banks have to achieve 20 per cent growth in MSME lending every year........

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HDFC Bank to go ahead with rollout of own ATMs

Private sector HDFC Bank does not intend to cut on its automated teller machines ( ATM) rollout plan in spite of the Reserve Bank giving an in- principle nod for white label ATMs, which will be operated by nonbanking companies. The city- headquartered lender, which presently has over 7,000 ATMs, will not cut its ATM rollout target as a result of the RBI's draft guidelines allowing nonbanking entities to set up ATMs, also called as whitelabel ATMs, HDFC Bank Head ( Direct Banking Channels) Rahul Bhagat said. Meanwhile, HDFC Bank tied- up with Visa and Monitise- promoted Movida to facilitate mobile- based transactions for its debit and credit card- holders.  

FPJ

Right facts, wrong conclusion

.....The policy of intervention and market controls was, in general, seen to be a success. But one must keep in mind the fact that the policy was a ‘success’ when RBI was not leaning against the wind. Should the policy of pegging the exchange rate involve RBI trying to influence markets in a direction opposite to that of the markets, the impact of a small intervention would be inadequate. To have a significant impact on a large, liquid market in order to defend a currency may involve much larger intervention........

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Is the rally a replay of 2010?

.... Unlike in 2010, central banks are not in the initial stages of tightening monetary policy but have instead started to loosen their purse strings. That’s a huge difference. Reserve Bank of India (RBI) deputy governor Subir Gokarn can take the credit of being one of the few who predicted this rally, when in a speech in early November 2011, he said that if a sustainable solution to the European sovereign debt problem emerged soon that would lead to global portfolio rebalancing among investors, which would mean more capital flows to India, which would result in less pressure on the rupee and, therefore, lower inflation, which would allow the interest rate cycle to turn, thus improving growth. Of course, it’s not as simple as that.....

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Economic confidence index: India at 4th

The uncertainties surrounding the world economy and a high fiscal deficit has pushed India to fourth place globally in terms of economic confidence of the people, a survey has said...............

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Indian Banking Sector: Towards the Next Orbit

Inaugural address delivered by Dr K. C. Chakrabarty, Deputy Governor, Reserve Bank of India at 9th Advanced Management Programme at IMI, Delhi on Feb 13, 2012

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RBI’s priority lending fiat to hit NBFCs

...... “There are two things which are going to impact us — the 5% cap on bank lending to NBFCs and the overall limit of 6% on spreads, or the difference between the rate at which we borrow funds from banks and the rate at which we lend. The first will restrict credit flow to NBFCs and the second will impact us because our spreads are higher than 6%.”Revankar said the NBFCs will appeal to the RBI on the two issues...............

Story

Bank robbery: Video grab gives clue to suspect

....More than 418 branches of PSU banks in the city lack even the basic surveillance facilities, not even having closed circuit television, thus pose a big security threat to their customers and staff. The Reserve Bank of India had outlined security norms, including CCTVs, burglar alarms and armed guards, for all bank branches as early as 2009. However, most PSU bank branches continue to flout these norms citing red tapism......

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‘Class A' fake notes stump officials

DUBAI: Counterfeiters are throwing up a huge challenge to authorities and money exchange houses by using increasingly sophisticated techniques to forge notes with most of the security features used in real currencies, forensic experts said. In this cat and mouse game between cops and forgers, the Indian rupee has emerged as the currency of choice, overtaking the US dollar in 2011, accounting for 10,700 pieces — or 44 per cent — of the top five fake bank notes (24,000) of different countries seized by Dubai Police last year................

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RBI hints at another CRR cut as liquidity remains tight

..... Gokarn has been maintaining that a CRR reduction is a much broader decision which is addressed in the policy rather than the bond buybacks (open market operations) that the central bank has been announcing and carrying out almost on a weekly basis to inject liquidity in the system. The midquarter review of the monetary policy is scheduled for March 15 and it is widely expected that one more CRR cut can be on the anvil.........

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'Cash deficit may make RBI cut CRR'

.....Currently, the central bank has only two options to channel primary liquidity into the system -- putting more cash with banks by purchasing some of their government bond holdings through open market operations (OMO), or cutting the CRR........

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RBI’s flip-flop on CRR – Renu Kohli

The central bank’s confusing statements on cash reserve requirements and its role show it in poor light

Confusing statements by the Reserve Bank of India (RBI) on cash reserve requirements (CRR) and its role show it in poor light. Before the January monetary policy review, the central bank drew a neat distinction between open market operations for liquidity management and the CRR, which, it maintained, was a monetary policy signal. But the surprise CRR cut on January 24 was explicitly directed at infusing permanent liquidity into the cash-starved interbank market.............

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Pioneering change

.......... Not just that, the bank has been given the permission by the Reserve Bank of India to offer its software to other banks. “Our technological infrastructure is at par with the top banks in the public and private sectors. We offer software support to other banks on cloud, where this technology has had a big impact,” says Mankikar, on being asked if cloud has a role to play in the bank’s IT backbone................

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Foreign banks must raise targets: Panel

M V Nair Committee moots sub-targets for foreign lenders - 15% for exports and 15% for small and micro-enterprises

................... The panel appointed by the regulator said the demarcation between lending to agriculture and lending to allied sectors should be done away with. “As there is a seamless interconnectedness of the entire agriculture value chain, its impact on output, income and employment in the rural economy is highly positive. Therefore, ‘agriculture and allied activities’ may be a composite sector within the priority sector by doing away with distinction between direct and indirect agriculture lending,” the report said. The targets for agriculture and allied activities were kept at 18 per cent of ANBC..................

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RBI panel for retaining priority sector target at 40%

A Reserve Bank panel on priority sector lending today recommended retaining the existing 40% ceiling for the segment while creating a sub-head of micro enterprises within the micro and small enterprise (MSE) sector. Besides, the panel headed by Union Bank of India Chairman and Managing Director MV Nair, also suggested raising education loan ceiling by Rs 5 lakh for students, under priority sector......................

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Banks wanted to do away with 40% priority sector target

During its interactions with banks, the M V Nair Committee, set up to review priority sector norms, found most wanted to do away with the 40 per cent priority sector lending obligation. "Most banks, including public sector banks, wanted the removal of the overall target of 40 per cent," said a banker, requesting anonymity. "Instead, these suggested imposing sector-wise targets, which would be easier to achieve." However, keeping the government’s financial inclusion programme in mind, no such change was included in the report, the official added. A number of reports submitted earlier had made similar suggestions, but these, too, never saw the light of day. The report submitted on Tuesday has retained the overall priority sector target at 40 per cent adjusted net bank credit (ANBC). In fact, the target has been extended to foreign lenders, with suggestions on securitisation, on-lending and priority sector lending certificates. "Also, multiplicity of targets and sub-targets was creating a lot of confusion," the official said. The committee also recommended withdrawing the distinction between direct and indirect agricultural lending. Instead, it suggested half the loans in the category should be given to small and marginal farmers. Currently, such loans stand at six per cent of ANBC, which needs to be increased to nine per cent in stages till 2015-16. 

BS

Positive signal for MFIs

..............The NBFC-MFIs, which are still facing funds-crunch owing to the adverse impact of the Andhra Pradesh microfinance crisis, stand to gain significantly if the recommendations are implemented, say experts.“We are very happy with the recommendations. This is one more signal of the RBI's and banking sector's support to MFIs,” .........

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Restore priority sector tag for indirect loans to farm, allied activities

A Reserve Bank of India committee has recommended restoration of the priority sector tag to the loans give by banks to non-bank intermediaries for on-lending to identified segments such as agriculture, micro and small enterprises, micro credit and weaker sections, subject to a cap...........

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'Counterfeit notes possession not crime'

The mere possession of counterfeit currency notes does not amount to an offence, Thane District and Sessions court has ruled while acquitting a city-based businessman who was found to be possessing such notes.................

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Union Bank hints at slashing retail lending rates

.... UBI also inaugurated its 3,000th ATM and launched a host of facilities like cash transfers to other account holders using the NEFT system, transfer to any mobile via the interbank mobile platform and a facility to remit money to anyone by keying-in just the mobile phone number on the ATM. These services were launched by RBI Deputy Governor Anand Sinha......

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RBI to issue Rs 5 coins in Bhagat Singh's memory

RBI will soon bring out Rs 5 coin to commemorate freedom fighter and martyr Shahid Bhagat Singh. One face of the coin will be divided into three portions with two horizontal lines and bear the Lion Capitol of Ashoka Pillar as well as the denominational value of Rs 5, RBI said. The other side will have the portrait of Bhagat Singh, with the words "Shahid Bhagat Singh Birth Centenary" in English. The figures 1907-2007 shall be shown below the portrait in International Numerals. The iron and chromium coins will have a diametre of 23 mm, the Reserve Bank of India said in a statement. The existing Rs 5 coins will continue to be legal tender, RBI added.

The Pioneer

RBI liberalises payment system for exporters

……………..With a view to liberalising the procedure, it has been decided to permit AD Category-I banks to allow exporters to receive advance payment for export of goods which would take more than one year to manufacture and ship...," the Reserve Bank said in a notification………..

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Set up credit risk guarantee scheme for small, marginal farmers

To address the risk in lending to the agriculture sector, an RBI committee has recommended the establishment of Agriculture Credit Risk Guarantee Scheme for small and marginal farmers................

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Bihar's global summit sees emotion, action and fights

..... The thrust and parry between the centre and the state was the subtext of the entire conference. Referring to the declining credit-deposit (CD) ratio in Bihar (around 33 per cent), Member of Parliament from the Rajya Sabha N K Singh asked RBI Governor D Subbarao why commercial banks were reluctant to give loans to Bihar. Rao was obviously not expecting a frontal attack, but he said the RBI would do its bit in chivvying banks to provide credit.......

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RBI releases draft guidelines for Basel III norms

The central bank says some of the guidelines, related to Liquidity Coverage Ratio and Net Stable Funding Ratio for funding liquidity will become binding for banks from 1 January 2015 and 1 January 2018, respectively.

Mumbai: The Reserve Bank of India (RBI) on Tuesday released draft guidelines related to the Basel III norms, an international accounting standard for banks. While the guidelines are essentially compilation of different guidelines on the standard that RBI put out time to time, the central bank said some of the guidelines, related to Liquidity Coverage Ratio (LCR) and Net Stable Funding Ratio (NSFR) for funding liquidity will become binding for banks from 1 January 2015 and 1 January 2018, respectively. The LCR is related to the “short-term resilience of banks to potential liquidity disruptions by ensuring that they have sufficient high quality liquid assets to survive an acute stress scenario lasting for 30 days,” and the “NSFR promotes resilience over longer-term time horizons by creating additional incentives for banks to fund their activities with more stable sources of funding on an ongoing structural basis,” the draft guidelines put on the website said. Banks are to give their feedback on the draft by 21, March. 

Mint

RBI wants banks to hold more liquid assets

The Reserve Bank of India said on Tuesday that banks need to maintain additional liquid assets as part of Basel III guidelines, over and above previously mandated levels.  Banks will need to adhere to these norms from the month or quarter ending June 2012, the RBI said in its draft guidelines on "Liquidity Risk Management and Basel III Framework on Liquidity Standards.".............

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Home buying: China shows the way to RBI

 ......... In 2010, when State Bank of India was offering its so-called teaser rates, former deputy governor Usha Thorat criticised it with ... 'lower interest rate in the beginning actually lures borrowers. This, itself, has the making of leveraging and putting pressure on housing prices to move up.' While SBI withdrew its teaser loans in the coming months, the banking regulator's tough guidelines have made it more difficult for genuine buyers to purchase a home. Meanwhile, property prices have continued to skyrocket. Whose loss is it?

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RBI allows 926 bank branches to receive advanced income tax

MUMBAI: For hassle free income tax collection, the Reserve Bank of India today designated a total of 926 compurterised branches of public and private sector banks to receive advance income tax for people residing in Mumbai and Navi Mumbai. "These arrangemnents have been made for the convenience of the income tax assesses," RBI said. Of the total 926 bank branches, 862 are that of public sector lendors, while the rest would be of private sector banks, including HDFC, ICICI and Axis. "Long queues and inconveniences can be avoided at the RBI counters if the assesses in Mumbai and Navi Mumbai utilize the services being made available at various designated branches of the banks and deposit their income tax dues well in advance of the last date," the RBI statement said.

ET

Front-loaders get front-loaded

.........Though the broking model, where a bank becomes an insurance broker and can sell products of all companies, was open, neither banks nor their regulator wanted accountability of insurance sales that would have come with a broking licence. Instead of standing firm against the Reserve Bank of India, the insurance regulator caved and set up a committee to look into the matter...............

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Banks hit by bad loans may get tax breaks

.....The gross NPA of public sector banks had already touched Rs 71,047 crore in March 2011. The amount has further risen drastically in the last one year. The State Bank of India, the country largest lender is saddled with over 32% of the total gross NPA level of of all state-owned banks, according to official data.......

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Commissioner meets bankers

..... a meeting held on Tuesday evening in the wake of Monday's bank robbery in Keelkattalai. Commissioner of Police J.K.Tripathy met representatives of the Reserve Bank of India headed by the Deputy General Manager. As many as 60 representatives from 39 banks in the city, both private and nationalised banks, attended the meeting......

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What the EC can learn from Indian Banks

........... Obviously, this series of safety measures has been found by the Reserve Bank of India adequate to guard against fraud. The bank, as part of the Know Your Customer norms, has the consumer’s photograph, address, e-mail id in some cases, phone and mobile numbers as may be applicable..........

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Any Time Money the all time threat to safety?

...................... Experts are now contemplating about whether ATM skimming has returned to the city with a vengeance. Acting on the basis of a report submitted to the Cyber Crime Department by the National Payments Corporation of India (a wing of the RBI which manages ATMs across the country), the cyber crime police are now investigating the five ATMs that seem to have been compromised in Bangalore...............

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