You can keep banking fraudsters at bay and how

Bangalore, Feb 28 (PTI) Have you used your birthday or wedding date as PIN or password in ATM, debit and credit cards or written those behind them? Then it's not the wisest move you could do to keep banking fraudsters at bay, say experts. "Best thing for any bank customer is to change the password on a regular basis," says Mahesh Rajaraman, Head-Risk Control, HDFC Bank. "Using birthday or wedding day as passwords would ensure that people close to you may try to use it at ATMs," he cautioned while talking to reporters here. No bank would ask its customer to share their credit card number and PIN, Rajaraman said, adding, customers should only use secured sites while transacting online. "Don't pass on personal information in social media", he warned. "People try to give their date of birth. It's important your password does not match that date". RBI Ombudsman, Karnataka, M Palanisamy, said fraudsters sometimes succeed because of banking customers being "careless". Phishing mails appear as if they are sent by concerned banks. "Never respond to any phishing mails," Rajaraman said. "Never part with your password and personal data with anybody".

IBN Live

Insurance help online

.....For a long time, the judgements of the apex consumer court have been available on the website www.consumercom.nic.in. Subsequently, the orders of the consumer courts at the district and the state levels were also put up on this website. Similarly, on the banking regulator’s website — www.rbi.org.in — one could see the orders of the banking ombudsmen. The orders of the insurance ombudsmen, however, remained inaccessible to the public. Now finally, these orders have been made available.......

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Should banks sell insurance at all?

“…......as stated by the IBA (Indian Banks’ Association) representative, the banks are unwilling to assume any responsibility, or risk, of the result of their mis-selling. RBI is also wary of banks taking on the role of a ‘broker’ as it would mean that they assume the role of a ‘principal’ in the sales process with the consequential responsibility and potential risk. Possibly the banks are better aware of the deficiency in the sales process practices by them and hence their reluctance to assume any risk.”.......

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Rupee - What leads to the change in the currency's value?

.....The RBI manages the value of the rupee with several tools, which involve controlling its supply in the market and, thus, making it cheap or expensive. "Some ways through which the RBI controls the movement of the rupee are changes in interest rates, relaxation or tightening of rules for fund flows, tweaking the cash reserve ratio (the proportion of money banks have to keep with the central bank) and selling or buying dollars in the open market," ........

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At Dhanlaxmi, time for pay cuts, old-school banking, exits, gold loans

Dhanlaxmi Bank, the Thrissur, Kerala-based lender, is set to announce a 5-40% cut employee pay packages under a new dispensation after the surprise exit earlier this month of its managing director and CEO Amitabh Chaturvedi………….

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Dhanlaxmi Bank extends ED's term

The saga of leadership change at Dhanlaxmi Bank has taken a new turn, with the board offering chief executive designate P B Jayakumar an extension of two years as executive director — from March 1 to February 28, 2014. According to sources, Jayakumar’s retirement was due this month. His appointment as managing director and chief executive officer of the Thrissur-based lender is subject to the approval of the Reserve Bank of India (RBI). Since the central bank is yet to sanction his new role, the bank has decided to extend his term as an executive director to ensure he is still employed with the lender when the approval is secured..............

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RBI to assist in setting up vault for Padmanabha gold

A Supreme Court-appointed committee has directed the Reserve Bank of India ( RBI) to give technical handholding in setting up a foolproof state-of-the-art vault to preserve the Padmanabhaswamy temple treasure. ................

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Two more no more...............

I regret to advise you of the sad demise of Shri.K.N.Bhargava on Friday 24th, February 2012 in Ghatkopar, Mumbai. He was 79 years old and retired as F Grade officer from the then Exchange Control Department. May his soul rest in peace.

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

Regret to inform the sad demise of Shri B.G.Savanal, Ex Joint Controller ECD at PUNE on 26th February 2012. He was 87 years old. May his soul rest in peace.

As reported by M.M.S.Rekhrao (via e-mail)

Indian corporates struggle with FCCB redemptions

……….In a recent speech touching on the topic, V.K. Sharma, Executive Director at the Reserve Bank of India, criticised corporates for relying on FCCBs to convert to equity. “So I would urge business and industry to fully provide domestic rupee/foreign currency resources to meet potential liabilities under FCCBs, rather than hope that FCCBs will be converted.”......... 

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Help borrowers take informed decision, RBI tells banks

Mumbai: Concerned over reluctance of banks to provide loans on interest rates favourable to borrowers, the Reserve Bank has asked the lenders to share adequate information with them so that they can take informed decision. "How many banks are willing to go an extra mile and interpret the guidelines in favour of customers? The discriminatory practices that banks adopt while sanctioning loans on a floating interest rate basis to new borrowers is possibly the best example in this regard," RBI Deputy Governor K C Chakrabarty said here recently. He was speaking at the annual conference of Principal Code Compliance Officers on 'Banking Codes and Standards Board of India -- Customer Service and Consumer Protection-Issues and Challenges'..............................

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Banks achieve 100% financial inclusion in state

...... The Governor of the RBI, during the review meeting with the CMDs / top management of banks at Bangalore on January 30, 2012, had advised that a minimum of 15 per cent unbanked villages should be covered by brick and mortar branches and credit linkage should be raised from the present level of around 45 per cent to 50 per cent by July 31, 2012.

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Bank staff justified in their overhaul call

……These figures are calculated on the basis of banking sector analysts up to March 31, 2011 provided by research agency, ICRA, and the Reserve Bank of India (RBI), taking an error margin of 3 per cent into account. All the Central Trade Unions have jointly given a call for general strike tomorrow on February 28, 2012. Apart from wages, employment security, opposing Khandelwal Committee appointed to review the staff issues in the proposed Banking Law (amendment) Bill, and outsourcing of work, there are a few pertinent issues that are actually plaguing the banking sector among the demands raised by the staff unions……………..

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More coordination between central banks

.....In India, RBI had little to do except to make sure that the deficit financing needs of the government were met in an orderly way by a captive banking sector. Fighting inflation was not thought to be a task of monetary policy but tackled by rationing and price controls. The received wisdom used to be that physical planning had priority over merely financial accounting. RBI was a good research centre, but little else..........

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RBI mulls ‘annualised effective rate’ by banks

Reserve Bank of India Deputy Governor KC Chakrabarty has proposed the formation of an ‘Annualised Effective Rate’ to tackle the confusion arising from different services, incentives and charges by different banks. .............

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India thrives not by growth alone

...............There are academics who write about them without having the benefit of experience in government or the Reserve Bank of India. Then there are the ‘insiders' — those associated with policymaking or crisis management putting down their views after retirement. Finally, there is the ‘privileged' class of economists who have shared “revolving door” relations with the Washington-based Twins and the government. They are the blessed ones who carry sacerdotal authority and write for the pink papers. Shankar Acharya belongs to this class...........

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Why banks will ignore FinMin’s request to cut lending rates

.............. In other words, an inflation-wary RBI is unlikely to jump the gun on interest rates. Even if by some miracle the RBI does cut the repo rate, the benchmark policy rate that is currently at its highest since March 2008 at 8.5 percent, the truth is most banks will be unable to follow suit.........

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The dilemma ahead of midterm review of monetary policy

.............. RBI would continue to stay concerned both on inflation and growth going into FY13 and as of now bias seems to be on inflation. The external factors are not expected to turn growth supportive in the near future. While RBI’s priority would be to guide inflation into its tolerance level of 4.0-6.0%, it is also important to support the Government in its efforts to address fiscal issues through growth supportive monetary policy.............

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Responsible lending key to microfinance

Microfinance is a very emotional word and small credit plays an important role in taking small farmers and entrepreneurs out of poverty. But microfinance cannot bring the financial inclusion because in our system we don’t allow microfinance firms to accept deposits.............

I think it is important for any financial system that the credit culture is not eroded. What is worrying me is that the whole debt restructuring process is dependent on 50% recovery. The excesses happened in lending should also be kept in mind when we talk about such kind of reaction. There is a clear case of overlending and there is a clear case of forgiving that borrowing as well. So the message should be there has to be some kind of responsibility..............

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Microfinance industry may get a lifeline

….“The new guidelines, if implemented, are going to hugely help MFIs as banks will have to lend in large amounts to them to meet their lending targets. Since most of the NBFCs cater to priority sector related segments like agriculture, women and other weaker sections, NBFC-MFIs can expect a fair share of bank credit,”.....

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Fitch gives cautious outlook for NBFC sector

….Last year, the Reserve Bank of India (RBI) excluded bank loans to NBFCs from the priority sector category, thereby reducing banks' incentives for direct lending to NBFCs.  Presently, about 65 per cent of the NBFC funding comes from banks. The RBI's move "will increase funding costs for NBFCs in 2012 and beyond," Fitch said, adding that the outlook for 2012 is stable……

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Consolidation seen in NBFC space: Fitch

..... If the Usha Thorat Committee's recommendations, stipulating a minimum net worth of Rs 5 crore and asset size of Rs 50 crore for registration of NBFCs, are implemented, then the small NBFCs segment could undergo major consolidation, the agency said in a report. A majority of the non-deposit taking NBFCs are small in size and regulatory supervision becomes heavier only when their asset size exceeds Rs 100 crore.......

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On microfinance

The report “Small loans add up to lethal debts” (Feb. 26) on debtor suicides linked to microfinance companies was heart-rending. That the poor, who believe that small loans can improve their living, become victims of the companies run by so-called financial wizards, is unfortunate. It appears that the companies are no better than the mahajans of pre-independence days.

Aditya Anirudh, Bangalore

Micro-finance institutions, established to provide small loans to the disadvantaged sections, have been lured into the path of becoming for-profit organisations. Manmohanomics and Monteknology have played a crucial role in making India a global market in which retailers and middlemen become millionaires while food producers are left to kill themselves. The patrons of liberalisation have a lot to explain to the bereaved families of those who have committed suicide in the past two decades because of their inability to repay debts.

Krishnaprasad Balan, Chennai

The report is excellent but the readers should know the brighter side of microfinance too. Because of the Andhra Pradesh fiasco, institutional resources to MFIs virtually stopped for almost a year. The industry has just come out of the crisis, with the RBI intervening to soothe the market and funders realising that it is safe to lend to MFIs which operate in credit-ready markets initially developed by them. The borrowers, in repeat cycles of borrowing, see this transparent mechanism as a far cheaper and desirable option. Many MFIs graduated from the initial mission of empowerment and social development to become lenders. The RBI has now virtually capped the market by indirect regulation. Why did Rajyam, mentioned in the article, borrow Rs.1.18 lakh? If she needed the money to invest in her livelihood activity, it points to the failure of the banking system. It is precisely this unfilled space in the rural credit market that the MFIs have occupied. Borrowing from eight different MFIs indicates a sad feature of an unhealthy microfinance market. Rajyam borrowed beyond her capacity — a situation akin to the state of the urban credit card industry three years ago. In the case of Rajyam and many others, the over-enthusiastic “profit-only” MFIs were responsible for dumping money in unprepared markets.  The article should teach the nation what should not be done. But, let us not conclude that all microfinance is bad.

Ananda Mukherji, Chennai (HBL)

It's the Economy, Stupid!

It was as if someone flipped a switch at midnight, December 31, 2011. The flipping of that switch magically turned around all that was terrible about India’s economy into the zone of happy faces and markets headed north………………

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iCreate Software sponsors IBA Risk & Compliance 6th Annual Summit, 01 Mar 2012, Mumbai

Organized jointly by Indian Banks' Association and SP Media, publisher of India Banking Review, this is the country's flagship conference for policy level debate on issues related to risk management and regulatory compliance in banking……………..

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Governance and Financial Regulation to be the focus of Oxford India Business Forum 2012

....The panel will include Sir Thomas Harris, Special Advisor, Standard Chartered Bank; Usha Thorat, Director of the Centre for Advanced Financial Research and Learning (CAFRAL), Reserve Bank of India; Ms Chitra Ramkrishna, Joint Managing Director, National Stock Exchange........

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Indian Railways defies reform

.......A decade ago, Rakesh Mohan, an eminent economist and former Deputy Governor, RBI, in an exhaustive report on Indian Railways, observed that the contours of policy, regulatory and management functions of the railways are fuzzy. He also said that Indian Railways is perhaps the most studied institution in this planet. Perhaps, now, it is time to ask some eminent political economists why Railways remains static, despite so many study reports.

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Nehruvian rate of growth

..... The Reserve Bank of India (RBI) is unlikely to set monetary policy based on this new inflation measure in the near future, given that the data series is yet to be tested for consistency, etc. Nonetheless, the inflation rate is high enough to warrant tempering of rate cut expectations.....

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High security chamber mooted to keep temple treasures

.......... M V Nair, eminent conservationist and co-ordinator of the Supreme Court appointed committee, said the blueprint of the proposed chamber would be prepared by experts from the RBI...................

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RBI takes a leaf out of Chinese model to curb speculation

The recent steps taken by Reserve Bank of India (RBI), similar to the China model to curb property speculation don’t seem to have worked too well. Instead, genuine buyers have been feeling the brunt even if it’s for now……

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RBI ups tenure of gold loans by 30 days to 270 days

The Reserve Bank of India said it has extended the maximum tenor for loans to import gold to 270 days from 240 days, effective immediately.  The new maximum includes 90 days for manufacture and export of gold products, instead of 60 days previously, and 180 days to fix the price and for repayment, the RBI said.

ET

eMudhra, Watchdata team up to offer data validation tech for banks

...........eMudhra has set up an R&D team to develop online authentication techniques for Indian consumers, and has developed SWYS Key authentication techniques in conformation with standards prescribed by the Reserve Bank of India. According to a press release, eMudhra's system allows the user to validate the key data and further digitally sign the transaction to ensure that “what you see is what you sign” and have a safe transaction..........

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MLT passed away............

I regret to advise you of the sad demise of Shri.M.L.T.Fernandes, retired Executive Director. He was 77 years old and he passed away in Mumbai on Friday 24th February, 2012. He was affectionately known as TOM and was a very popular Executive of the Bank. Many in our Group would have worked with him.  He was my C G M when I was Head of the U B D in Trivandrum.

May his soul rest in peace.

 
P.P.Ramachandran (via e-mail)

‘RBI outreach programme ensures inclusive growth'

Reserve Bank of India Chief General Manager V. Vasanthan speaking at the valediction of the RBI outreach programme at Elavanur village in Karur district on Saturday

Karur : Reserve Bank of India (RBI) lays stress on inclusive growth wherein all stakeholders have access to proper banking services. Every citizen, especially those in the rural areas, must be a positive stakeholder in the process, said RBI Chief General Manager, V. Vasanthan. At the valediction of the RBI outreach programme conducted at Elavanur village in K. Paramathi union in the district on Saturday, Mr.Vasanthan said the RBI during its platinum jubilee celebrations a couple of years back decided to spread its message of existence directly to the masses, who already were getting the benefits of the banking system through other banks controlled by the RBI. Thus, the outreach programme came about and a total of 76 villages were chosen across the nation in which the RBI officials camped and spread banking awareness.Poverty eradication. Helping eradicate poverty and ushering in economic development through a proper understanding of the needs of the people and creating awareness of the schemes, credit facilities and efficacy of the banking services besides instilling in the people the need to save money for a bright future were the core areas of the programme, Mr.Vasanthan explained. Elavanur in Karur district, Mookaiyur in Ramanathapuram, A. Mathur in Pudukkottai, Thiruvalanthurai in Perambalur, and Manalmedu in Puducherry were chosen as the target villages to implement the programme. While the RBI has already completed its engagements in Elavanur, Mookaiyur and Manalmedu, at A. Mathur and Thiruvalanthurai, the programme has reached the conclusion stage, the senior RBI official indicated. Mr.Vasanthan spoke on the strength of savings and the power of money. Stating that banks provided the right avenue for safe saving, “We have to spread the message of the power of saved money to every household, especially in the rural places. Economic development involving every individual and making available banking services to the poor is the need of the hour and the RBI is precisely doing just that through the outreach programme.'' The RBI wanted to ensure that the fruits of the banking services and monetary policy reached every rural doorstep in time to usher in economic development, he said adding that banks had a pivotal role in ensuring that happened. Making available credit facilities was a priority, he outlined. RBI General Manager M.M. Majhi noted that the thrust of the outreach programme was ensuring success of initiatives such as the financial inclusion scheme and that in turn was to ensure that credit reached the needy. Opening of no frills account benefited all the downtrodden, he explained. Aravakurichi MLA K.C. Palanisamy, Karur Revenue Divisional Officer S. Shanthi, NABARD General Manager, Chennai, Vasudevan, Assistant General Manager A. Parthiban, Pallavan Grama Bank Chairman S. Rangarajan, Chief Regional Manager, Indian Overseas Bank, Dindigul Region, C. Anbu, Director IOB Rural Self Employment Training Institute, K. Chandrasekaran, Lead District Manager Murugesan, and Elavanur Panchayat president Gnanasekaran were present.

HBL 

“Banks have to do a balancing act during debts recovery”

G.S.Hegde, Principal Legal Advisor to Reserve Bank of India speaking at a workshop on SARFAESI in Madurai on Saturday

Two-day workshop on SARFAESI Act inaugurated

Banks have to do a great balancing act when it comes to the subject of debts recovery. They have to ensure that the bank recovers the debts and protects its liquidity and at the same time it should not put the borrower in embarrassing situation said, G.S.Hegde, Principal Legal Advisor to Reserve Bank of India. Delivering the inaugural address at the two-day workshop on SARFAESI Act (The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002,), titled ‘Is SARFAESI a complete code for recovery,' here on Saturday, Mr. Hegde talked about the days of debts recovery prior to the days of Debts Recovery Tribunal Act and the transitions and also cited how the Delhi High Court had mentioned that the DRT Act as unconstitutional. SARFAESI Act allows banks and financial institutions to auction properties (residential and commercial) when borrowers fail to repay their loans. It enables banks to reduce their non-performing assets (NPAs) by adopting measures for recovery or reconstruction. Mr. Hegde mentioned that the banks should have only trained recovery agents and every bank shall have a grievance redressal forum with regard to debt recovery. He also spoke on how important it is to deal with humaneness and cited Justice A.R.Lakshmanan's observations in a case where he says how recovery agents have become modern day Shylocks in his words “A man's self-respect, stature in society are all immaterial to the agent who is only primed at recovery. This is the modernised version of Shylock's pound of flesh.” Speaking earlier, D. Stanley David, presiding officer, DRT, Madurai said that bank officers should not have a closed mind and drive out the borrower but have to help him at the maximum to see whether he could avail loan. A seminar book was released by N. P. Rajan, Deputy General Manager, Indian Bank, Madurai Zone and the first copy was received by K. Lakshmipathikumar, DGM, Canara Bank, Madurai circle. The workshop among others deals with topics on, What is fair valuation of secured interest, Priority of charges, Agricultural Land and The Companies Bill-2011. Pala Ramasamy, Advocate, L. Balaji, Valuer were the convenors of the workshop.

HBL

TAFCUB colsely monitoring affairs of Urban Co-OP Banks

A State-level Task Force on Co-operative Urban Banks (TAFCUB) working under the direct control of Reserve Bank of India (RBI) was closely monitoring the affairs of the Urban Co-operative Banks, said RBI Regional Director A S Rao here today. Participating as chief guest at the 37th branch opening function of the A P Mahesh Co-operative Urban Bank Limited, a leading Multi State Scheduled Bank at Champapet, near here, Mr Rao said the compliance of regulatory norms and working of Urban Co-operative Banks has improved. The Directors of Urban Banks have also to update their knowledge on the guidelines issued by the Regulatory Authorities for better monitoring the affairs, Mr Rao said and added the unbanked areas still exist in the state and the bank managements should throw light on it, he suggested.

http://news.webindia123.com/news/Articles/India/20120226/1935471.html

Mahesh Cooperative Bank opens 37th branch

Hyderabad, Feb. 26: The AP Mahesh Cooperative Bank opened its 37th branch in Hyderabad today, with plans to open two more in the next few months. Mr Ramesh Kumar Bung, chairman of the bank, said the bank had crossed a business of Rs 1,800 crore, which was the target set for March 31, 2012.  Mr A.S. Rao, Regional Director of RBI, Hyderabad, expressed happiness over the bank's steps to avoid in-house lending, apart from its initiatives to upgrade technology. 

HBL

Governor Subbarao’s trilemma

..... Formalized or not, RBI will likely continue to balance price stability, financial stability, and fiscal sustainability. And this means more of the corridor approach to policy. As long as growth, inflation, bond yields, and the exchange rate remains within RBI’s tolerance levels, policy instruments will all be used simultaneously and adjusted in modest steps to keep the objective variables within limits. But if any of the target variables breaches its benchmark, the policy regime will shift to target the recalcitrant variable. And if that means pushing other variables over the edge then RBI will not hesitate to use unconventional force of its own.

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How much is too much for MFI loan rate?

K.C. Chakrabarty, the senior most Deputy Governor of the Reserve Bank of India (RBI), who oversees rural credit, among other things, says microfinance institutions (MFIs) will be around for next 10 to 15 years till commercial banks are able to reach out to every nook and cranny of the nation, but these institutions will not be able to scale up. Usha Thorat, who used to look after rural credit as RBI deputy governor till she retired in 2010, says the biggest challenge of MFIs in India is to marry scale with responsible lending. Both of them were panelists at Mint’s Clarity Through Debate conclave on microfinance and financial inclusion in Mumbai last week..........

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The awakening of the postal giant - S.S.Tarapore

There is considerable excitement about the possibility of the Postal Department approaching the Reserve Bank of India ( RBI) for a banking licence. The postal system has a wide network of 155,000 offices of which 139,000 are in the rural areas. The scheduled commercial banks have 74,000 branches of which only 22,000 are in the rural areas. The small savings schemes operated by India Post on behalf of government amount to Rs 600,000 crore. Given the sheer size of India Post and the avowed commitment of the government to undertake financial inclusion, the revamping of India Post has some urgency. The assistance of prominent international consultants has already been taken to work out a vision and roadmap for revamping the Indian Postal system to enable it to take its legitimate place in the firmament of the Indian financial system.....................

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Industries sick, industrialists fine

February 26, 2012: It's not uncommon to hear that industries are sick, but there are not many instances of industrialists being affected by this industry sickness. The reason, in a way, could be deduced from the comments of Dr Y. V. Reddy, former RBI Governor, at a meeting recently. Dr Reddy said the Bureau for Industrial and Financial Reconstruction (BIFR) had been manipulated many times. That is the reason, you find more industries sick than industrialists, he remarked.

HBL

7 bank unions call for strike on Feb 28; services may be hit

......The Centre-appointed Khandelwal panel had suggested a slew of measures, including outsourcing more and more non-core activities in a time-bound manner.The panel had also recommended raising the standard of recruitment, including the methodology and content for tests, besides making the testing of computer skills mandatory for both officers and clerks.The Khandelwal committee on human resources (HR) had also suggested that the minimum qualification for clerks and sub-staff should be graduation and class 10, respectively.

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Want to borrow money cheap? Play penny stocks

.... The borrower repays the operator through cash in installments within a pre-decided period. For the operator, this system helps boost value of his penny stocks. The lending also fetches him a neat fee without complying with the RBI norms........

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HSBC welcomes M V Nair panel report on higher priority sector lending target

.... "We welcome the report as it calls for a level playing field for all, because the proposed increase is not just for one particular sector but is flexible," HSBC India Country Manager Naina Lal Kidwai........

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'Hopeful of RBI nod for Enam-Axis deal by March'

.....Because of some bad experiences, the Reserve Bank of India does not encourage banks to run stock broking as a department, it prefers the banks to open subsidiaries for that. The RBI's reported discomfort with the deal was about the fact that Axis's brokerage subsidiary Axis Securities and sales would buy Enam, but the bank would be paying for it with its own shares.......

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Allow Kingfisher to fly into the sunset

....There are those who argue that banks should rescue the airline by infusing more funds. Even the Deputy Governor of the Reserve Bank of India, Dr. K.C. Chakraborty, is on record saying that banks are not just commercial but also risk-taking entities. He even said that if banks felt that by giving a little, they could recover their entire money, that's what they will do......

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RBI for only ‘pure’ FDI in realty

....The Reserve Bank of India (RBI), which has taken a firm stand against allowing external commercial borrowings (ECBs) in the real estate sector, now wants to clamp down on overseas investments in the sector through instruments that carry a fixed or variable internal rate of return. The central bank seems to be clear on allowing only pure foreign direct investment (FDI) in real estate where not firms but only specified projects can accept these foreign funds. ........

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Heed the warnings

The Prime Minister's Economic Advisory Council (PMEAC), headed by C. Rangarajan, has just released its Review of the Economy for 2011-12. In many ways, the review flags off the budget season. Its views and analysis are bound to be echoed in the Economic Survey, the Union Budget and the Railway Budget. The Reserve Bank of India has scheduled a policy review in March. While its interest rate policy will remain in focus, the central bank's views on the macroeconomy count far more than they ever used to. In short, there is going to be no dearth of economic information in the coming weeks. The publication of the review is just the beginning...............

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Finmin persuades RBI to agree to SUUTI route for divestment

....However, the Reserve Bank of India (RBI) and some within the government had raised concerns about the high interest liability which comes with such loans. Moreover, the RBI had previously rejected the proposal to reduce the margin requirement from the existing limit of 50%.......

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Among nationalised banks, the small outperform the large in Q3

.......The weak macro conditions have prompted the RBI to lower the credit growth projection for 2011-12 to 16 per cent. In such a scenario, it would help the nationalised banks to adopt a calibrated approach to business growth giving equal emphasis on margins and asset quality.

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Goverment mulls PSU banks to cut loan rates by March

.... Since CRR is the slice of customer deposits that banks have to keep as cash with the RBI, a cut in the ratio following repeated rate hikes was perceived as the onset of a dovish monetary policy. But since no bank has lowered returns on deposits since the RBI action, their cost of fund continues to be high.......

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India outsourced: Manmohanomics 2.0

....... Meanwhile, progressive fiscal mismanagement threatens to usher in a fresh economic crisis. Managing the consequences of this, has once again been outsourced. The Reserve Bank of India is now entrusted with the task of ensuring macroeconomic balance in a circumstance where the union government has abandoned its role in defining and adhering to fiscal policy. So clever has been this manoeuvre that in public perception it is RBI’s failure to keep interest rates down that is being blamed for slowing economic growth—akin to blaming the fireman for causing a flood in the neighbourhood while putting out a fire........

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Relax documentation requirements

..... A recent Reserve Bank of India (RBI) circular granting this relaxation says the exchange being purchased must be for a current account transaction — and not included in the Schedules 1 and 2 of the Foreign Exchange Management (Current Account Transactions) Rules, 2000........

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SBI waives levy on savings bank accounts without minimum balance

....The Reserve Bank had clarified sometime back that it has not stipulated any minimum balance to be maintained in savings accounts. Nor has it stipulated levy of any service charge, if the minimum balance is not maintained in such accounts. Such stipulations are made by individual banks themselves, as per their board-approved policies. ........

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ED urges I-T dept, Reserve Bank to probe Google India’s forex violations

The Enforcement Directorate (ED) has decided to probe Google India further and has suggested that Reserve Bank of India (RBI) and the Income-Tax department investigate the company’s alleged forex violations. ...........

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RBI to facilitate better banking service in rural areas

IMPHAL, Feb 25: Executive director of RBI, R Gandhi inaugurated an ATM booth and also a Financial Literacy and Counseling Centre at Imphal East DC complex today morning. Later, a financial outreach program was conducted at Achanbigei village, Imphal East. Speaking at the occasion, the executive director mentioned that the RBI intends to create awareness about banking services among the rural mass through such outreach program He advised the residents to avail the services offered by banks for taking up economic activities and be a part of the banking system by opening bank accounts. He also warned the public not to be lured by the high rate of interest on deposits offered by unauthorized bodies through fictitious e-mail messages, etc. Suggesting that banks need not perceive the financial inclusion drive as a compulsion, rather they should realize that a tremendous business opportunity is beckoning in the rural sector. He stressed upon the need for adopting suitable banking models supported by ICT based solutions involving business correspondents in the remote areas. As part of the outreach program of RBI, the executive director and regional director Surekha Marandi interacted with school students and also with members of SHGs and farmers clubs. United Bank of India joining RBI’s initiative also organized a free health check up camp at the village and SBI extended a note/coin exchange facility. As a collective effort of the banks, many individuals opened no frills accounts and farmers availed KCC loans for taking up agricultural activities. Further, the banks while observing the difficulties of persons living with HIV/AIDS as a major challenge decided to extend loans to the affected persons as an endeavor towards their corporate social responsibility.

http://kanglaonline.com/2012/02/rbi-to-facilitate-better-banking-service-in-rural-areas/

Pilot loan scheme for HIV-patients in Manipur

In a first of its kind initiative, the United Bank of India and the State Bank of India have decided to provide customised loans for HIV patients in the country. The scheme to “support entrepreneurship” will be launched under the aegis of the Reserve Bank of India on a pilot basis in Imphal East district. It will then be extended to the rest of Manipur and other parts of the country.The scheme was announced at an outreach programme of the RBI in Imphal East on Saturday, attended by a high-level team from Guwahati and RBI executive director R Gandhi.RBI Deputy General Manager Thotngam Jamang said the scheme had been conceptualised to help HIV-positive people gain meaningful economic activity. “Many of them have skilled knowledge and are well versed in traditional economic activities such as crafts etc. But there are few employment opportunities. These loans will support entrepreneurship. We are also looking at facilities like health check-ups etc,” he said...............

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SBI ATM inaugurated at DC Office, Porompat

Imphal, February 25 2012: Executive Director, RBI, Mumbai, R Gandhi and Regional Director, RBI, Guwahati, Surekha Marandi today inaugurated a State Bank of India ATM at DC Office of Imphal East, Porompat. Assistant General Manager, SBI, Administrative Office, Shillong Region -V, S R Saha, Deputy Commissioner, Imphal East, Dinesh Singh and Deputy General Manager, Outreach, SBI, Lead Head Office, Guwahati, S K Kandar were also present at the function. It may be mentioned that the newly installed ATM is the 28th ATM of SBI in Imphal.


http://e-pao.net/GP.asp?src=Snipp9..260212.feb12

Same-day cheque clearance near reality

The time taken for clearance of a cheque between two banks could come down to a day before long. Banks are largely in line with the Reserve Bank of India’s targets for cheque truncation.................

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Three Day Workshop on “Inflation and Monetary Management by RBI”

The aim of this Workshop is to understand the causes and implication of different measures of Inflation in India......

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RBI dances centrestage; Economy gulps for air as global typhoon grips world

..... The RBI smartly changed track and intervened in the forward foreign exchange market in November 2011 after a gap of 12 months. Even though, there is an enormous amount of economic literature on the spot market intervention by central banks, there is little on forward markets........

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Is the Indian banking industry in consolidation mode?

The past decade has been a sellers’ market as far as the Indian banking sector is concerned,” K.C. Chakrabarty recently said in a speech. The outspoken Deputy Governor of the Reserve Bank of India bluntly said this would change and banks would have to differentiate their offerings if they wanted to stay in business. “The mantra would be to innovate or perish.” Intense competition could drive “a spate of mergers and lead to consequent consolidation within the sector. The entry of new players will also spur efficiency and productivity in the system,” he added. A few mergers in local banking have been bailouts of private banks — ICICI Bank for Bank of Rajasthan, IDBI Bank for United Western Bank and Oriental Bank of Commerce for Global Trust Bank. Mergers among state-run banks (27 of them) had been mooted earlier, but we are far from it. Indian banks will be under pressure to raise capital as it is going at a premium. A year from now, they will have to migrate to Basel-3 guidelines; the cap-ad ratio will rise by 2.5 per cent to 11.5 per cent by March 2017. A Crisil estimate puts the amount needed at Rs 2,70,000 crore. While banks are adequately capitalised — barring one or two — pressure is on account of dud loans in infrastructure sectors especially power, aviation and telecom.  The recent hikes in interest rate and slowing economic growth may also adversely impinge on the repayment capacity of some categories of borrowers especially those from the small sector. “We are at the cusp of a defining decade in the banking system,” said Chakrabarty.

http://www.businessworld.in/businessworld/businessworld/content/Merging-Traffic.html?storyInSinglePage=true

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