India’s adviser favours no intervention in forex market now

The Reserve Bank of India need not intervene in the forex market as of now to prop up a weakening rupee, the chief economic adviser in the finance ministry said on Friday. The partially convertible rupee ended at 51.17/18 to the dollar on Thursday, after touching the day’s low of 51.28, a level not seen since 16 January. The unit had closed at 50.66/67 on Wednesday. “This is not that place where I would recommend intervention,” Kaushik Basu said……

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End of the road for SUUTI, new AMC to hold all assets

……..Also, the Reserve Bank of India (RBI) had previously rejected the proposal to reduce margin requirement from the existing limit of 50 per cent. This would imply that half the assets of the new AMC would have to be kept free, which may cut loans to roughly Rs 15,000 crore. The ministry has since reportedly been in consultation with the RBI to relax rules regarding margins and interest rates. It is not clear if the central bank has agreed to any of these proposals………

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Financial services to be kept out of SAFTA talks: Government

The government has decided to exclude financial services from the SAARC agreement on trade in services, following strong objection from the Reserve Bank of India, or RBI. The central bank has argued that India has already allowed access to foreign banks under the World Trade Organization agreement…………..

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Foreign exchange reserves grow to $294.82 bn

India's foreign exchange reserves grew by $862 million to $294.82 billion on the back of a rise in the core foreign currency assets (FCAs) for the week ended March 16, the Reserve Bank of India said in a release……………..

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Financial inclusion needs version 2.0 : Puneet Chopra

The rapid expansion of business correspondents does not mask the cracks in the scheme

……One of the fundamental shifts needed by banks is to recognise and support BCs as a legitimate and full-service channel — an addition to branches, ATMs, kiosks, mobile and Internet channels. This would certainly be a winning proposition for all. All marginal customers can get doorstep (and perhaps superior) services; banks can decongest their branches, and focus on high net worth customers; while BCs would have a healthier business case. Bradesco Bank and Caixa Econômica Federal in Brazil (which, like India, follows a bank-led agent model) have adopted this approach with a great degree of success. Providing a balanced mix of financial products is another critical step needing to be taken and rapidly so……..

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Microfinance programme now has an economy-wide impact

….The paper finds that the typical microfinance programme, when made widely available, can have significant aggregate and distributional impacts, and that the general equilibrium (GE) effects through wages and interest rates are quantitatively important…….

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Greater Mumbai Co-op Bank unveils new logo



Symbolic identity

Mr S. Karuppasamy (right), RBI Executive Director, and Mr Narendrakumar Balota, chairman of the Greater Bombay Cooperative Bank, at a press conference to unveil the bank’s new logo in Mumbai on Thursday

Capital requirements for co-ops to jump manifold: RBI

….."Depending on the location and area...we are coming up (with the guidelines for cooperative banks). There will be liberal norms for setting up a bank in backward areas and slightly tougher norms in the banked areas," RBI Executive Director S Karuppasamy told reporters here. He said under the existing norms, a cooperative bank can be set up with a minimum capital of Rs 15 lakh, which will now be increased to Rs 50 lakh for banks in the backward areas and Rs 3 crore for urban areas which already have banking infrastructure. About the timeline for new guidelines, Karuppasamy said, "We are in the final stage... will come out with it shortly."……

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Cooperative bank earns maximum profit with minimum staff

The Reserve Bank of India has adjudged Manapparai Town Cooperative Bank as one of the 10 cooperative town banks in the State which have earned maximum profit employing minimum staff.

A three-member team of the Reserve Bank of India from Chennai, which visited the cooperative bank to conduct an annual inspection, had disclosed this, said G.Balachandar, special officer of the Manapparai Town Cooperative Bank while addressing its general body meeting held recently............

Read - The Hindu

Dena Bank celebrates International Women’s Day

Dena Bank marked the International Women's Day in the presence of Shyamala Gopinath, Retd. Deputy Governor, RBI. The occassion was graced by Nupur Mitra, the First Chairperson & MD, Dena Bank & Executive Director, Ashok Dutt, Chairman of Women Cell of the Bank and RK Gupta, GM, Dena Bank.

FPJ

Release of currency

The Reserve Bank of India (RBI) would henceforth release 100-note bundles of Rs.1,000 denomination that are not numbered in the regular sequence. In a release here, the RBI said this was to prevent the circulation of counterfeit currency.

HBL

Third ED appointment in large banks delayed

The appointment of a third executive director (ED) in public sector banks, scheduled on April 1, has been delayed due to bureaucratic hurdle. The government was expected to appoint additional EDs in six large public sector banks — Punjab National Bank, Bank of Baroda, Canara Bank, Bank of India, Union Bank of India and Central Bank of India — to begin with. Appointments for other banks were to follow: Smaller institutions such as Bank of Maharashtra and Dena Bank, which have one executive director, were to get a second……

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MP bankers' meet focuses on priority sectors

BHOPAL: Financial inclusion is yet to percolate completely in the state. The State Government was requested to look into the possibility of institutionalizing some kind of cadre from among the youth in the State for BC work on behalf of the banks, according to the state-level state-level bankers' committee. The 146th meeting of State Level Bankers' Committee (SLBC) held here on Wednesday observed that one of the major impediments faced by banks in this respect is of selecting right kind of Business Correspondents (BCs). The meeting co-chaired by the state Chief Secretary Avani Vaish and M V Tanksale, Chairman and Managing Director of the Central Bank, reviewed the performance of the bank during the quarter that ended in December 2011. Addressing the participants Vaish informed that special attention is being given to priority sector and allied sector by the state government. A separate budget for agriculture and allied sector has been conceived and introduced in the state in this year's budget. A total outlay, incorporating the various demands related to the agriculture sector together, has been projected, so that the progress on agriculture becomes clear. He solicited the co-operation of banks for this. It was also said that thrust has been given to agriculture and allied sector in the Budget 2012. Govt of India's desire to identify potential in the Agriculture in each area and focus on it for development was underlined. For effective implementation of Green Initiative of Government of India, Central Bank of India has decided to provide e-Treasury services in Madhya Pradesh. In this context, the State Government was requested to ensure that all EBT payments to beneficiaries who have been issued Smart Cards should be made through smart cards only. The meeting was attended, amongst others, by R Parasuram, Additional Chief Secretary, Ajay Nath, Principal Secretary-Finance, Aruna Sharma, Principal Secretary - Panchayat & Rural Development, Ashok Shah, Commissioner-Institutional Finance and S Choudhary, GM and Officer-in-Charge, RBI, Bhopal.

TOI

RBI Governor D Subbarao’s maiden visit to Jammu & Kashmir

SRINAGAR: RBI Governor Dr D Subbarao's maiden visit to J&K did not impress him at all. Finding the banking sector lending barely 35 percent of the funds within the state led him to fix a target of 40 percent for the next fiscal……………

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RBI's Gokarn Says Inflation in India `Heading Down'

Reserve Bank of India Deputy Governor Subir Gokarn speaks about the impact of oil prices on the nation's economy and monetary policy. He spoke yesterday with Susan Li at the Credit Suisse Asian Investment Conference in Hong Kong.

Watch the video..... 

Liquidity crunch due to high inflation: Chakrabarty

RBI Deputy Governor K C Chakrabarty on Thursday said supply will remain squeeze as long as inflation remains high.  "Liquidity will be tight when we are fighting inflation. But settlements are also happening. Liquidity will remain tight till inflation comes down," Chakrabarty told reporters………

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Financial chaos on the cards - S.S.Tarapore

While the Finance Minister has heroically tried to address the fiscal crisis, the RBI Governor would be well-advised not to take his foot off the brakes until there are clear signs of sustained fiscal consolidation...................

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RBI deferring norms to ease MFIs operations

....With the Reserve Bank of India deferring provisioning norms of bad assets for NBFC – microfinance companies, most players hope this would ease operations for the next six months atleast, helping them maintain net worth and capital adequacy ratio as well, a measure of their financial strength..........

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New gold standard

.....The gold loans are also usually of small ticket sizes made for periods of six months to a year. That – apart from the inherent value of the collateral itself – makes them less risky vis-à-vis lending to power projects or even home loans of 15-20 years' tenure. Moreover, it is not clear how exactly the RBI has arrived at 60 per cent loan-to-value ratio as a safe outer limit for NBFCs, even while not mandating it in respect of gold advances by commercial banks. This, despite the likes of Muthoot and Manappuram Finance having far less proportion of bad loans on their books compared with regular banks. ........

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Gold loan cos welcome RBI move; analysts say will trim margins

……However, analysts said the RBI measures would squeeze their margins and curtail growth. "The RBI measures are negative for the gold financing NBFCs as it will erode their margins and curtail their future growth rate,"…….

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India’s Basel III problem

In order to comply with the Basel III guidelines, aimed at strengthening the global banking sector in the aftermath of the economic crisis of 2008-09, the Reserve Bank of India (RBI) recently announced its draft guidelines for Indian banks. RBI’s guidelines are more stringent than the ones laid down in the Basel III framework. The guidelines lay down strict capital adequacy norms and propose to enhance the quality of the banks’ capital by increasing the equity component therein. These guidelines also propose to augment the loss absorption capacity of the non-equity tier-1 capital and subordinated debt. Indian banks will have to reach the proposed capital adequacy requirements in a phased manner by March 2017, earlier than the 2019 timeframe laid down in the original Basel III framework........

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National Housing Bank plans to broaden its area of expertise

National Housing Bank, or NHB, plans to explore new products like credit enhancement and risk sharing financial facilities in an attempt to broaden its activity as a financier to housing finance companies once the Parliament passes the National Housing Bank (Amendment) Bill, 2012, in the Budget session………..

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Banks may run out of cover to shield trading losses

…..Bankers said that open market operations (OMOs) by RBI conducted this year helped create room for excess supply. However, OMOs may not be sufficient next year given the borrowing. In 2011-12, RBI purchased illiquid government securities worth more than Rs 1 lakh crore to offset the impact of higher-than-budgeted borrowing on yields and liquidity…….

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Markets sceptical of fiscal consolidation

.......With the next monetary policy review due on April 17, RBI should give the government a chance by beginning the easing process. Among other factors, growth of GDP will guide the fiscal consolidation in 2012-13...........

Read - HBL

RBI cancels licences of 3 Chennai-based NBFCs

....RBI, according to separate notifications, has cancelled the licences of three Chennai based companies -- Tamil Nadu Water Investment Company, Ashley Holdings and LSP Finance.......

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RBI Governor slams banks for dismal CDR in JK

RBI Governor D Subbarao (R) speaks during a special meeting of “State Level Bankers' Committee” of Jammu & Kashmir, in Jammu

…..the banking community in J&K should expand the branch network and at least 25% of new branches should be opened in villages with a population of less than 10000 souls. “They should train business correspondents and also lay emphasis on self-help group (SHG) formulation and linking them to banking activities,” he said. It was for the first time in recent past that the RBI Governor addressed SLBC in JK. “The credit-deposit ratio, which was 35% as at the end of December 2011, indicates unsatisfactory performance of banks. This is less than the half of the national average CDR of 75%,” the Governor said……..

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RBI workshop on understanding payment needs of northeast

SHILLONG: With an aim to understand the payment needs of the North East, the Reserve Bank of India is organising a workshop here this saturday, officials said today. Themed 'Enhancing Financial Inclusion through modern electronic payments systems - Look North East', the workshop has been specifically organised to understand the payment needs of the NE region and to provide impetus to the growth of electronic payments. Reserve Bank Deputy Governor H R Khan, its Executive Director G Padmanabhan and the Chief Secretary of Meghalaya W M S Pariat will address the gathering, officials said.  The workshop be attended by senior officials from the eight NE state governments, Central government agencies and Banks.

ET

RBI Governor meets J-K CM

Jammu, Mar 21 (PTI) Reserve Bank of India Governor D Subba Rao today met Jammu and Kashmir Chief Minister Omar Abdullah here and discussed matters relating to the functioning of banks in the state, and assured full support in strengthening the financial institutions…………….

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Banks should open 25% branches in unbanked areas: RBI

….."At RBI we have said at least 25 percent of all the branches opened in a given year should be opened in unbanked areas with population of less than 10,000," RBI Governor D Subbarao told a state-level conference of bankers Wednesday. "I hope that prescription would be complied with (by all the banks). It should be done in consultation with state government," the Governor further said while referring to financial inclusion and awareness drive……

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India-US trade vital for global economy: Godrej

(from Left) Mr Ron Somers, President, USIBC, with Mr Terry McGraw, Chairman, USIBC, Dr Subir Gokarn, RBI Deputy Governor, and Mr Adi Godrej, President Designate, CII, at the CIIUSIBC Leadership Round Table session in Mumbai on Wednesday

HBL

We may differ with RBI, but come to a consensus: D K Mittal

People are bound to have different opinions in any system, but they ultimately reach an understanding, says D K Mittal, secretary, financial services. In an interview with Vrishti Beniwal, he defends rumours about differences between the government and the banking regulator over issues ranging from new bank licences to bank account portability. Edited excerpts:…………

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Debate on separation of public debt office from monetary management continues

Separation of the public debt office from monetary management is being debated at policy level since as early as 1997, during which five finance ministers and three RBI governors have been at the helm. A working group on separation of debt management from monetary management submitted its report to the Reserve Bank of India in December 1997…………….

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Bill to amend Banking Regulations Act hangs

………The finance minister has again promised to table the bill before Parliament, but this time he may face resistance not only from Opposition parties, but also from allies, who stall new measures. The bill also empowers the Reserve Bank of India to supersede the board of banks and has an enabling provision that no individual or an entity can acquire stake in a bank above 5% without their approval. As of now, the Reserve Bank of India exercises these options under its power to issue direction, but not under the legal framework.

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Bank cricket losing its charm for want of jobs

………..Shridhar Korgaonkar of RBI was of the view that the job opportunities will get the interest back in to the tournament. “It is one of the biggest tournaments for bankers. Many leading cricketers have participated in it, but lack of job opportunities to cricketers is just not helping the cause. It is sad to see that these youngsters who play on stipend or contracts will not get jobs in future. The management should create opportunities for the young cricketers, otherwise it will be very difficult in future.”…………….

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Can Mumbai ever become international Financial Hub?

....... Of course, the sign of things to come was apparent at one of the functions to debate on the topic. When Rakesh Mohan, the then RBI Deputy Governor, got up to speak on the topic, the sound system fell silent. In desperation, he asked: "Can this city become one?"

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Banking Ombudsman: Slipping Badly

.............On one hand, RBI has deregulated rates and charges and does nothing about the rampant mis-selling of insurance and other products by banks. On the other, stricter account-opening and KYC rules as well as linkages, electronic payments of bills or auto debit on loans and mortgages, make it difficult for customers to switch banks. We need proactive BO to hear customer issues, dispense justice and also provide feedback to RBI to frame better regulation. Is RBI listening?

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RBI offices to remain open on Mar 31 for special clearings

……"With a view to facilitating accounting of all government transactions of the current financial year (2011-12)...all regional offices of Reserve Bank of India and branches of agency banks have been advised to conduct "Special Clearings" with same day return clearing in the evening or night of March 31, 2012," the central bank said in a notification……..

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Strengthen NPA database through existing systems: RBI

……."The RBI plays an important role in providing a large pool of statistics as public good. This, however, puts on it the concomitant responsibility to provide timely, reliable and meaningful data and its dissemination, by harnessing technology to its fullest possible extent,"……

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Stricter norms for jewel loans by NBFCs

.....In a significant move, the Reserve Bank of India (RBI) has tightened the rules for lending against gold jewellery by non-banking finance companies (NBFCs). It has now made it mandatory for NBFCs to maintain a loan-to-value (LTV) ratio of not exceeding 60 per cent for loans granted against the collateral of gold jewellery. Also, it has made it compulsory for them to disclose in their balance sheet the percentage of such loans to their total assets............
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Read - The Hindu

PPF may earn you 9% from April 1

Just a week after the interest rate on deposits to the employees’ provident fund was slashed by 1.25 per cent for 2011-12, the government is set to hike the rate of interest on small saving instruments like the Public Provident Fund (PPF) starting April 1............

Read - Indian Express

Impatient banks move ahead with… RATE CUTS

Tired of waiting for the Reserve Bank of India (RBI) to cut rates and give them a cue, commerical banks are taking matters into their own hands. While substantial cuts in bank base rates have not yet happened, lenders have begun giving small reliefs in various products, to ensure that the customer gets a fair deal...................

Read the full Story - DNA

RBI to conduct survey on collateral issue of banks in J-K

…."As a point was raised about denial of credit facility to entrepreneurs on the demand of collateral is concerned, RBI will conduct a study, a survey in J&K (in this regard to find out for itself)," RBI Governor D Subbarao told a bankers conference Wednesday………

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Take the short-term route

.... However, the Reserve Bank of India's (RBI) capital injection hasn't quite stabilised the debt fund market (March typically sees a tight monetary situation). In the last six months, the apex bank injected Rs 2 lakh crore into the banking system, by lowering the cash reserve ratio (CRR) and through open market operations (OMOs)…..

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SKS Microfinance in focus after RBI extends deadline for micro-lenders' provisioning

…..SKS Microfinance will be in focus as the deadline for new provisioning and asset classification norms has been extended by a year. The Reserve Bank of India (RBI) has deferred the implementation of asset classification and provisioning norms for non-banking financial company-micro finance institutions (MFIs) to 1 April 2013, from 1 April 2012. The move is after taking into account the difficulties faced by MFI sector and the representation received by it, RBI said in a notification………

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No rebate on investment in infrastructure bonds to hit taxpayers

Taxpayers may have got some relief through the increase in the basic exemption limit and widening of the 20% tax slab, but the government has taken away a crucial tax saving option. The budget for 2012-13 has not extended the Rs 20,000 rebate available for investments in infrastructure bonds this year, which was over and above the Rs 1,00,000 maximum rebate available under Section 80C. Infrastructure bonds allowed taxpayers in the highest 30% slab to save a maximum of Rs 6,180 in tax……

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Subbarao meets J & K Governor

Jammu, Mar 20: Dr. D. Subbarao, Governor, Reserve Bank of India met N. N. Vohra, Jammu and Kashmir Governor, at Raj Bhavan here this evening. During their meeting, the Governor and Dr. Subbarao discussed various important issues relating to the speedy socio-economic development of the State, functioning of the banking sector in the State and ways to enhance financial inclusion, particularly in the rural areas.

Greater Kashmir

RBI holds outreach programme at village Surara

Jammu, Mar 20: Reserve Bank of India, Jammu conducted an outreach programme today at Surara village in Samba district of Jammu and Kashmir as part of its financial inclusion and awareness drive. Dr. D Subba Rao, Governor of RBI graced the occasion. Among others Mushtaq Ahmed, Chairman and CEO, J&K Bank Mubark Singh district Development Commissioner, Samba M. Rajeshwar Rao, Banking Ombudsman, Delhi and J&K State S.C Rabra, Chief General manager NABARD, other senior government officials and bankers attended the programme. A large number of villagers including women senior citizens, MNREGA beneficiaries, farmers, teachers and students also attended the programme, an official statement said. The Governor visited to the stalls/pavilions set up by various SHGFs/NGOs, NABARD, Government Departments, RRB, J&K Bank and RBI a the venue showcasing their products and services. J&K Bank extended facilities of exchange of torn and soiled notes to the residents. The Governor RBI also interacted with residents and enquired about the problems and difficulties faced by them in getting banking facilities.  He advised bankers to take effective steps for redressal of the problems raised by the SHGs, NGOs and the residents. The Governor RBI also interacted with the school students from Government Middle School, Surara and Government High School Nichla Surara. Dr. Subbarao impressed upon them the importance of financial literacy and highlighted important functions of RBI, and features of genuine currency notes were also explained to the students. The programme was inaugurated in presence of a large gathering. K.K. Saraf, Regional Director, RBI Jammu in his welcome address highlighted the objective of holding the financial literacy programme in the village. Addressing the gathering Governor RBI touched upon the important functions of RBI viz. issuing and managing currency, controlling inflation through formulation of monetary policy, expanding outreach and banking awareness deposit insurance scheme, etc. He highlighted the facilities of no frills account’, General Credit Card, Kissan Credit Cards and overdraft facilities against these accounts and also explained the BC model and mobile Banking scheme through which the above banking facilities could be availed. He advised the villagers to avail the services offered by different banks and to harness the natural potential available in the village and thereby improve their economic condition.

http://www.greaterkashmir.com/news/2012/Mar/21/rbi-holds-outreach-programme-at-village-surara-33.asp

RBI will respond to market demand, if needed: Subbarao

……"this campaign for the financial inclusion is a shake campaign, this is done by the public sector banks, private sector banks and foreign banks soon".  "So the idea is that every bank must participate, all the banks are doing this, how they do this, we left it to them", he said adding "there are various banks to prepare the financial inclusion plans which are discussed and approved in the boards and then are recommended"…….

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RBI Not Looking to Internationalize Use of Rupee

……His comments come amid concerns that the central bank could go back on its long-term aim to make the rupee fully convertible--a requirement for its internationalization--if the risk of the local currency's depreciation escalates.......

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Finance Minister meets the Directors of the RBI Central Board

.....The Union Finance Minister was addressing the customary post-Budget meeting of the Central Board of the Reserve Bank of India held in New Delhi today. Besides Dr. D. Subbarao, Governor of the Reserve Bank, Deputy Governors Dr. K.C.Chakrabarty, Dr. Subir Gokarn, Shri Anand Sinha and Shri Harun R. Khan of the Reserve Bank attended the meeting.......

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Cheques valid for 3 months from April 1

BANGALORE: Bankers' cheques and other monetary instruments will have only a three-month validity beginning April 1, 2012, instead of the existing six months, a Reserve Bank of India (RBI) communique has said. The change is a consequence of an RBI notification on November 4, 2011. Cheques, drafts and pay orders will have a validity for three months from the date they've been drawn. Those having cheques and other monetary instruments with six-month validity before April 1 will have to remit them before this date, when the expiry of the validity will be reduced to three months. After April 1, these instruments will be valid subject to their adherence to the new 3-month rule.

TOI

Small savings set to fetch higher returns

There is finally some good news for individuals in a season of duty hikes and provident fund rate cut. The government is raising interest rate on small savings schemes such as National Savings Certificate (NSC) and post office deposits by 20-50 basis points…………….

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SBI 'banking' on alternative channels

….“Following the recent slowdown in the world and domestic economy, the MSME sector has been affected and the need of hour is to diversify their product line and markets,”…….

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'No immediate steps for rupee convertibility on capital account'

...............“On internationalisation of the rupee, I don’t really see it at this point of time an explicit, strategic objective.... I think the focus, at least in the short- to medium-term policy on capital account management, is gradual liberalisation, though with cognisance and action to mitigate the risks.”................. 

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RBI rejects Dhanlaxmi Bank's priority sector waiver request

The Reserve Bank of India (RBI) has turned down Dhanlaxmi Bank's plea for a one-time waiver of priority sector lending target as tight liquidity forces it to rework its balance sheet, said two people familiar with the development………

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RBI extends deadline for micro-lenders' provisioning

 .... “Taking into account the difficulties faced by the MFI sector and the representation received from these, it has been decided to defer the implementation of asset classification and provisioning norms for NBFC-MFIs to April 1, 2013,” the Reserve Bank of India (RBI) said……..

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Pressure mounts on RBI to cut key rates

A few banks may even move ahead and cut loan rates before RBI announces its monetary policy on 17 April. Pressure is mounting on the Reserve Bank of India (RBI) to cut its key policy rates even as it keenly watches the inflation trajectory in Asia’s third largest economy. On Monday, at the central board meeting of RBI in Delhi, finance secretary R.S. Gujral hinted that the government wants the central bank to lower its policy rates......

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PSBs to miss farm lending target?

.......According to guidelines issued by the Reserve Bank of India on lending to the priority sector, banks are required to achieve a target of 18% of the total credit towards agriculture. The finance ministry has also asked banks to show specific reasons for not being able to achieve the set targets.......

Read - Hindustan Times

RBI: Budget proposals will check inflation

MUMBAI: The Reserve Bank of India on Tuesday supported Finance Minister Pranab Mukherjee's budget proposals and said it would help in moderating inflation that is hovering at 6- 7%. " Food prices are going to play a role as we have some stabilisation and even softening, either because of monsoon in the short term or because of initiatives of the government made quite explicit in the budget that would also help to contain inflation...," RBI Deputy Governor Subir Gokarn said. Asked if the RBI has enough monetary headroom in the light of hardening global crude oil prices, he said, " space is the question of how prices itself evolves. I think its not a meaningful thing in terms of global crisis in which commodity prices remains so firmly and so rigid." 

FPJ

Amid year-end rush, banks scramble for bulk deposits

.........The cash crunch is partly due to market borrowings by the Union government and the RBI interventions in the foreign exchange markets since December to contain the rupee volatility.

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Panel to advise sector-specific cure for NPAs

..... The committee will have representation from the finance ministry, the Reserve Bank of India and some banks. The government has already indicated that containing bad assets will be an important parameter while evaluating the performance of the top brass in state-run banks.........

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Disclosing FII, NRI investments is must, says RBI

...... The Reserve Bank of India has said that companies will have to mandatorily informed the central bank when FII/NRI/PIO investments in them reach sectoral cap or statutory limit…..

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Global financial crisis impacted India significantly: RBI

........ "The global financial crisis impacted India significantly, notwithstanding the sound banking system, negligible exposure of banks to sub-prime assets and relatively well-functioning financial markets," RBI Deputy Governor Anand Sinha said……..

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Ethos of our economy

Regardless of our attaining a seven per cent GDP growth rate in the current year, the stark fact is that the innards of the Indian economy aren't working in the way they should. This is precisely what the central message of The Economic Survey for the current financial year projects, something which cannot make anyone with the nation's well-being in mind, happy...............

Read - HBL

A week of confused policymaking

......The RBI's mid-quarter review of monetary policy did not surprise by its preference for the status quo on the repo rates. Operating within the narrow objectives of price stability, its actions were predictable, if disappointing, for those in the organised economy who hold rising interest rates responsible for a decline in investor sentiments. So do some policymakers. But what cannot be forgotten is that a tight money policy has checked one of the drivers of growth, real-estate, from overheating the economy. For the RBI, inflation still haunts the economy, a view that other policy players share reluctantly, eager as they are to show that their fiscal and legislative initiatives have worked to pull back its relentless climb.......

Read - HBL

Yesterday, today and a little bit of tomorrow

Review of Bimal Jalan's book Emerging India: Economic Politics & Reforms

……….Part three covers quite extensively the banking space, which starts with a recollection of the Asian crisis and how we managed it through some conservative policies followed by the Reserve Bank of India (RBI). Though he sounds self-laudatory on occasion, he highlights some of the concerns at that time that are, quite ironically, also the issues that germinated the recent financial crisis — risk management, transparency, regulation and supervision, capital requirements and, most importantly, ethics. In a way, the RBI did display foresight in attempting to strengthen these inherent processes. The discussion on the virtues of a flexible exchange rate regime and caution against capital account convertibility, which distinguished India from the other Asian nations, has also been covered here……………..

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The facts, gentlemen

While cautioning economists and asking them to look at the facts instead of just going by economic theories at the IMF-Icrier “China and India—Sustaining High Quality Growth” conference in the capital, former RBI Governor YV Reddy had an interesting story. As a young man, he went to an astrologer who told him he had no hope of getting employment as he was uneducated, but he needn’t panic as, later in life, his father would bail him out. The 20-something Reddy told the astrologer he was wrong since, not only was Reddy quite educated, his father was long dead. This got the astrologer quite worried and he examined Reddy’s palm again and again, then said that since astrology never lies, it was obvious the palm wasn’t Reddy’s! 

FE

Bending, not bowing

The annual chat between the FM and the RBI Board of Governors has an equally significant lunch that follows it. But on Monday, as the policy mavens and a distinguished janata waited, the lunch time had to be repeatedly postponed. The reason was that the FM was busy in Parliament with the motion of thanks to the President. The delay, we were told, had nothing to do with the FM’s team’s disappointment with the delay in the rate cuts.

FE

Single-point ‘know-your-customer’ to ease form-filling headaches

......At present, each sectoral regulator — the Securities and Exchange Board of India (Sebi), Insurance Regulatory and Development Authority (IRDA), the Reserve Bank of India (RBI), Pension Funds Regulatory and Development Authority (PFRDA) and the Forward Markets Commission has different KYC requirements.........

Read - Hindustan Times

The Good, the bad and the ugly

There was volatility and uncertainty due to major events on the domestic front. We had the IIP numbers, inflation for the month of February, the Railway Budget, Economic survey, RBI credit policy meet and the Union Budget. Due importance was given to the RBI policy and Union Budget...........

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RBI can't ignore impact on current a/c deficit: Reddy

Former RBI Governor YV Reddy says that monetary policy cannot ignore impact on aggregate demand and current account deficit. He said that the policy has to take care of inflation as well. "Now, if you don't impose excise duty then you'll have more fiscal deficit, which is also going to add to inflation. There are different ways and the underlying inflationary pressure, you don't increase the diesel price, then it may not show up. But, it'll have to show up somewhere else because somebody else will have to pay for it. So in the ultimate analysis, if painful actions have to be taken, by postponing painful actions, you are adding to under lying inflationary pressure which doesn't show up. My own sense is that the underlying inflationary pressure in India now is a lot more than what many people appreciate," he explains.

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Cases on fake currency notes reported from banks

.... “Some of the co-operative banks and small private banks do not have the facilities to detect fake currency notes. We are planning to make it compulsory at all the banks so that counterfeit currency notes cases can be detected easily,” said RBI officials.......

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Banking hours to be extended on March 30, 31 – RBI

MUMBAI (Reuters) - All regional offices of the Reserve Bank of India and branches of agency banks will extend banking hours on March 30 and 31 to facilitate receipt of government revenue even at late hours, the central bank said on Monday. The RBI will communicate details of a special clearing on March 31 to the banks separately, the RBI said. 

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Annual Statistics Conference 2012 of the Reserve Bank of India

Opening Remarks by Shri Deepak Mohanty, Executive Director on March 17, 2012 at Chandigarh

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RBI asks banks to update al-Qaida list

...... "State and Central co-operative banks and regional rural banks are required to update the list of individuals/entities as circulated by the Reserve Bank and before opening any new account, it should be ensured that the name/s of the proposed customer does not appear in the list,"........

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Nabard seeks Rs 5,000 cr from Centre

........ The thrust of the financial inclusion programme is on electronic platform-based transactions. Nabard has begun work on establishing core banking solutions at more than 400 state and district central cooperative banks. It has roped in WIPRO and Tata Consultancy Services for rolling out CBS at its branches. The next phase would involve bringing about 53,000 primary agriculture credit societies on to this platform. Bakshi said this may help these to function as business correspondents in the future.

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Financial sector reforms a continuous process: YV Reddy

New Delhi : Financial sector reforms are a continuous process and fixed reforms agenda does not help in fast changing economic scenario, former RBI governor YV Reddy today said. "The financial sector reforms agenda has to serve the purpose of overall economic growth. That is one lesson from the global economic crisis," Reddy told reporters on the sidelines of conference on 'China and India: Sustaining High Quality Growth' here. Financial sector reforms should subserve the real economy, he said, adding that the world is changing fast and so are the macroeconomic conditions. Therefore, you should not have fixed reforms agenda and say some committee gave a report therefore we should do it. "Reform is a continuous process and it should be continuously evaluated, with the objective of improving the real economy," Reddy said. The conference was co-organised by the International Monetary Fund (IMF). Speaking on the occasion, IMF's Asia Pacific Department Director Anoop Singh said that India and China would lead the global economic growth in the coming years. 

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RBI allows foreign VCs to invest in equities via third parties

In its bid to deepen the equity and debt markets by attracting overseas funds, the Reserve Bank today allowed foreign venture capital investors to invest in securities through private arrangements or purchase from a third party....................

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RBI to FM

.....The problem is with the fiscal math for 2012-13 that the ministry is asking the rest of the world to believe in. Judging by the statement issued after the meeting, the RBI Governor has concerns on the fiscal consolidation.........

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Unions divided over allowing biz correspondents to serve other bank customers

Move to allow business correspondent of one bank to serve customers of others has evoked mixed response from unions. While one bank union opposed it, another said that it does not have any problem if the business correspondent (BC) restricts itself to basic services. In a circular dated March 2, the RBI decided to permit interoperability of business correspondents (BCs) at the sub-agent or at retail outlet level, provided the technology available with the bank, which has appointed the BC, supports it............

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Subbarao Boosts RBI Transparency as India Bond Buying Climbs

The Reserve Bank of India’s tomes on interest-rate policy made Subir Gokarn despair when he was a Standard & Poor’s economist. Now a Deputy Governor, he’s part of the biggest communication overhaul in the bank’s 77-year history. “That really wasn’t the best way to do it,” Gokarn, 52, who joined the RBI in 2009, said in an interview in Mumbai last month. “Keep it short, keep it straightforward, so it takes five, 10 minutes to read and most people read it.”.............

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Budget points to lack of fiscal discipline

The critical policy week for the Indian economy — which included the Budget and RBI monetary review — proved to be a damp squib. The Budget did not take any credible steps on fiscal tightening, nor did the RBI reduce interest rates. However, RBI did effect a cut in the cash reserve ratio the week before..............

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Budget 2012: Fire fighting FM says interest rates may come down soon

The finance minister Pranab Mukherjee today held discussions with the board of the RBI. The finance ministry has indicated that it expects the central bank to reverse policy rates and help improve overall sentiment. Post the meeting, Mukherjee said that he would give due consideration to issues raised by the RBI board. Mukherjee also added that all efforts will be taken by the government to find a collective solution for problems facing the Indian economy...........

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Panel discuss oversight body for improved financial regulation

A panel of sectoral regulators headed by RBI Governor D Subbarao today discussed setting up an inter-regulatory body to improve supervision on the financial sector. The sub-committee of the Financial Stability Development Council (FSDC) also reviewed the development in the global economic and financial sector scenario, focusing on issues relating to potential systemic risks for India. "The Sub-Committee deliberated on a proposal for setting up an inter-regulatory forum for improved co-operation for effective supervision of Financial Conglomerates," the Reserve Bank said after the meeting..........

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The elusive policy mix

...... One of the reasons for the slow growth witnessed in the past year has been the adverse monetary and fiscal policy mix in the country. If there was one thing that the 2012-13 Budget was expected to redress, it was the adverse policy mix. The Reserve Bank of India (RBI)—both in its third quarter and mid-quarter review of monetary policy—had highlighted the importance of right fiscal conditions in shaping the inflation outlook and, implicitly, the speed of monetary loosening in the months ahead. Has the budget addressed this issue properly?.........

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Weak dollar flows, trade gap add to concern over inflation

 ........ If budget 2012-13 is expected to spur the Reserve Bank of India (RBI) to bring down interest rates, there is little evidence to support that presumption. RBI has already signalled its worries on the government’s gargantuan borrowing requirements that are hardly supportive of an interest rate reduction, as stated in the December mid-quarter monetary policy review..........

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FSDC panel mulls forum for financial conglomerates

......Significantly, the sub-committee, which is headed by RBI governor D Subbarao, also discussed a proposal for setting up an inter-regulatory forum for improved co-operation for effective supervision of financial conglomerates. ........

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Inflation will stabilise: Pranab

New Delhi : ......Interacting with the media after chairing the central board meeting of the Reserve Bank of India (RBI) here, Mr. Mukherjee said: “Couple of months, there will be fluctuations [in inflation] ... So I do hope that after couple of months it will stabilise”.......

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UBI gets nod to open office in Myanmar

United Bank of India, the designated Banker for Indo-Myanmar trade has got the Reserve Bank of India's nod for opening a representative office in Myanmar..........

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MFIs breathe easy with improved fund flow

........The normal situation in non-AP States, and clarity on the regulatory front (except in AP) with creation of Non-Banking Finance Company-MFIs by the Reserve Bank of India, allowing banks to buy loan portfolios from MFIs to meet priority sector obligations, have been driving this funding, say experts........

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Why Sebi should re-open the Jalan committee report

........ it should not be forgotten that one of the main objectives behind the setting up of the committee was to frame clear policy regarding ownership of exchanges. This should be done sooner rather than later, especially given the complications that have arisen because of the lack of clear guidelines. Even so, the regulator has chosen not to frame new rules relating to the ownership and governance of stock exchanges. If the Sebi board had reservations about the recommendations of the Jalan committee, it could adopt the same approach it did with the new takeover code.................

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135 companies participate in IIMK final placements

.................Apart from major Indian and international companies across finance, marketing, operations, consulting, general management, IT and HR sectors, a slew of public sector undertakings figured in the recruitment drive at IIMK. They included ONGC, Power Finance Corporation, Power Grid and Bank of India. The Reserve bank of India and UTI also took part in the process.

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Co-operative banks to be linked to nationalized bank ATMs

Surat : Lakhs of account holders of co-operative banks will soon be able to withdraw money from nationalized banks' 84,000 ATMs across the country. Nearly 60 cooperative banks in the state, including 15 from south Gujarat, have started the process to get connected with the nationalized banks after Reserve Bank of India (RBI) took a decision in this regard recently……….

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Fake Indian currency recovered, three held

…..Four northeastern states – Assam, Meghalaya, Tripura and Mizoram – share a 1,879-km border with Bangladesh, part of which is porous, riverine and unfenced. The area is prone to frequent smuggling of numerous items, infiltration and occasional skirmishes. Fake currency in Rs.500 and Rs.1,000 denomination is mostly in circulation in the northeast region. Nationalised banks and various other financial institutions in northeast India have taken a series of measures, including installation of fake note detection machines, to identify fake currency.

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It's fake money, honey

………"The actual amount of fake currency floating in Gujarat could be much more - at least 10 times the amount recovered from banks," said a police official who is probing the case. The matter is now being investigated by the city police as an RBI directive makes it mandatory for all banks to hand over fake currency notes to the Special Operations Group (SOG) and the crime branch every month.…….

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Meet the right man in wrong job: Kaushik Basu never cut out to be govt economist

…….FMs haven't always had good relationships with CEAs. That's not true of Kaushik Basu and Pranab Mukherjee. However, after Bimal Jalan (CEA stint in early 1980s) I can't think of a single CEA who has had significant impact on policy. Kaushik is no exception. Perhaps times have changed. Perhaps it requires good inter-personal relationships with higher rungs of civil servants (especially North Block and RBI), which "government economists" possess and completely lateral entrants don't. What about the Economic Survey. Few CEAs paid any attention to Survey. (Arvind Virmani was an exception. Rakesh Mohan talked about it, but didn't do much.)……… 

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