The dollar drain

....Very clearly the capital inflow surge was forcing the central bank to buy up the surplus foreign exchange in the country, to prevent excessive appreciation of the currency, since that was eroding the competitiveness of India’s exports. The result was that the RBI was burdened with excess foreign reserves, and was therefore finding it difficult to control money supply.....

Read - The Hindu  

RBI for waiving ATM charges for senior citizens, differently-abled

....The Reserve Bank of India wants banks to do senior citizens and physically/visually challenged customers a good turn. The banking regulator wants banks to see if these category of customers can be allowed unlimited number of ATM transactions at any bank ATM. It also wants the annual ATM card fee waived for these customers....

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Most banks to work full day today

After three holidays this week, all public sector and many private banks would function full day tomorrow. Banks usually are open for public dealings between 10 am and 1 pm on Saturdays. However, the Finance Ministry has asked all the public sector banks to function full day this Satuday, official sources said. Country's largest bank SBI has said that all its branches will remain open till 5 pm on Saturday. " In order to facilitate transactions for our customers, it has been decided to keep all branches of our bank open for public transactions up to 5 pm on April 7, 2012," State Bank of India ( SBI) said in a notice. Many private sector lenders, including HDFC Bank and Karur Vysya Bank, have also decided to work full day this Saturday. Banks were closed for public dealing on Monday. They again remained closed on April 5 & 6 on account of Mahavir Jayanti and Good Friday, respectively.

FPJ

CAR head constable injured in freak incident

Bangalore,Apr 6 (PTI) In a freak incident, a Head Constable attached to the City Armed Reserve was today injured when his loaded gun accidentally fired while on duty in front of the Reserve Bank of India here, police said. Venkatesh had slung the gun in "shoulder-arm" position, police said, adding, he sustained minor burns and bruises. He has been admitted to hospital and is stated to be out of danger, police sources said. Venkatesh was recently deputed to RBI.

IBN Live

Axis-Enam passes RBI litmus test; deal to go through after 17-month wait

The Reserve Bank of India, or RBI, has approved Axis Bank's purchase of Enam Securities, ending a 17-month wait and paving the way for the private bank to expand its business to include investment banking and other advisory services…………….

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Netizens like e-banking to online shopping

.... A majority of Indians prefer to use the internet for banking and other financial services than shopping online, shows a new survey..........

Read - Express India

Dr.T.V.Gopalakrishnan's views on "Fiscal indiscipline curbs RBI's options - S S Tarapore"

Feedback / comments on  Fiscal indiscipline curbs RBI's options - S S Tarapore

The article has brought out well about the need for RBI not to fall prey to the pressures of politicians, industrialists, and top Govt officials to reduce the policy rates. The economy is in fact in reverse gear and in case the RBI decides to change the policy rates as wanted by all including the bankers, neither the economic growth nor the price stability can be achieved. It will worsen the situation and damage control will become a difficult task and more than anybody the masses will suffer. The inflation, the ccurrent account deficit, the fiscal deficit, the GDP growth, the severe fall in exchange rate, poor flow of both FDI and FII funds, loss of confidence in attracting foreign funds thanks to retrospective changes proposed in some of policies relating to tax on international investments etc are not favourable for investment and growth in the near future, the Reserve Banks' policy is the only hope left to put the economy on right and growth track. Will RBI heed to the requirement?

- Dr.T.V.Gopalakrishnan

RBI may plan differential rate regime for fiscally weak and strong states

The Reserve Bank of India (RBI) may be contemplating measures to minimise the distortions in borrowing rates of state governments where both fiscally sound and weak ones pay nearly the same rates for their loans, a top central banker said…………….

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Time to look at the common man

..... Once there were signs of the country coming out of recession in 2009-10, the builders again went on developing only luxury homes. Banks went on funding such high-end projects in a big way, even ignoring the RBI's cautions. And HFCs also followed suit in a bid to not lose the market share. Today, if the real estate sector is tottering in high debts, low liquidity and tepid demand, it is because of excessive exposure to high-end projects. The situation has been invited by both the builders and banks and as such both should be equally blamed. The builders should understand that by developing affordable housing projects, which is a long-term viable business preposition, the value earned from focussing on the deserving masses would be more than satisfying.....

Read - The Hindu

Subir Gokarn's view on macro economic concerns

RBI tells mkts to price state bonds on financial health

Mumbai : The Reserve Bank of India (RBI) Deputy Governor Subir Gokarn on Friday said states with weaker finances are able to raise cheaper funds due to the market perception that state debt is sovereign-guaranteed. There was a need to bring about formal institutional fiscal discipline, he said. “State government debt is apparently implicitly guaranteed by the sovereign. So, with or without a formal guarantee the market perceives that state debt has been fully backed,” said Gokarn. Because of this, states with weak fiscal condition don’t pay much premium compared to those with strong fiscal conditions, he added. He was addressing the 14th Annual Money and Finance Conference organised by the Indira Gandhi Institute of Development Research here today……….

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It’s early to act on inflation: RBI

……….. RBI’s stance suggests it will wait for inflation, which has been in the negative territory for eight consecutive weeks since early June, to creep up before embarking on any reversal of its expansionary policies. “However, we are aware that sometime down the line pressure could hit us, and certainly when signs of inflationary pressures show up, we will take action,” he said adding, that the RBI is monitoring the situation…….

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Piling the pressure on D Subbarao to bring down interest rates

……On April 17, it is a given that RBI governor would cut rates. The only issue now is whether there would be a series of interest rate cuts, that has been the cry from industry for long. It looks doubtful given the big inflation variable in the interest rate matrix.

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Farm credit growth declines in Dec quarter

…..The SLBC report also noted that agriculture advances could not meet the targets set by an RBI-appointed Committee. "The performance against benchmark under Agriculture Advances fell short by 1.17 per cent and remained at 16.83 per cent as against the benchmark of 18 per cent," the report stated.……

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Nabard to get Rs 500 crore capital infusion during 2012-13

….As per the RBI's guidelines, the outstanding total resources mobilised at any point of time by a Financial Institution should not exceed 10 times its NOF.  The apex agriculture and rural development bank got a capital support of Rs 1,000 crore during the financial year ended March 2012. At present, the authorised capital of Nabard is Rs 5,000 crore, of which the paid up capital is Rs 3,000 crore……

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States rely more on market borrowing

..... The decline in the share of NSSF is in line with the recommendations of the Shyamala Gopinath committee, which had suggested a reduction in the mandatory share of State governments in the collection of small savings under NSSF from 80 per cent to 50 per cent. The idea is to “equalise the burden shared by the Centre and the States, as the interest rates on borrowings from the NSSF are higher than the market rates.” .......

Read - The Hindu

Govt borrowing creates liquidity stress

.....As liquidity shortage has breached its tolerance, RBI, has reduced CRR on two occasions in the recent past. Notwithstanding the two cumulative reductions, banks on an average borrowed Rs 1.50 lakh crore from the RBI on a daily basis between March 10 and March 31, 2012. What have been the drivers of persistent liquidity shortage in the system in the last six months? ........

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Man of mettle

....Sinha set aside apprehensions of a panel led by former RBI Governor Bimal Jalan, by going ahead and allowing stock exchanges to be listed on rival platforms. This is considered a big reform measure, given the elaborate mechanism he put in place to guard against listing malpractices by the stock exchanges themselves......

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Fiscal indiscipline curbs RBI's options - S S Tarapore

.......The RBI has to face a head-on conflict with all economic agents. Without appreciating the central bank's difficult task, Ministers and top officials have been sabre-rattling that it is time for a reduction in policy interest rates and, more specifically, that such easing is imminent. The RBI's own forward guidance has complicated life for it.........

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Finance ministry advises banks to popularise e-payments to reduce usage of cheques, bank drafts

…….The Reserve Bank of India has also been keen to move away from cheques and drafts. Last week, the central bank had reduced the validity period of cheques, drafts, pay orders or banker's cheques to three months from six months.

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RBI initiates creative pitch

Reserve Bank of India (RBI) looks to empanel advertising agencies in Mumbai. It has invited applications from reputed, INS-accredited advertising agencies for empanelment for a period of three years. The agencies should have the ability and resources to service all 28 regional offices of the RBI and be able to execute routine advertisements as well as multi-media, multi-lingual, pan-India public awareness programmes…………

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Banks with majority foreign stake like ICICI Bank, HDFC Bank not to be considered foreign banks

……….Officials from RBI and departments of industrial policy and promotion, economic affairs and financial services last month had decided to work out a new formulation to ensure that these banks are not constrained by the FDI rules when they pick equity though strategic investments, corporate debt restructuring or treasury operations…….

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M-Banking a powerful financial inclusion tool: K C Chakrabarty

....Way back in 2008 the RBI had recognized the mobile phone’s potential. The first set of guidelines was taken in 2008. The Reserve Bank consciously opted for a bank-led model although their approach remains technology neutral. Mr Chakrabarty said that mobile for banking in financial inclusion cannot become a viable proposition on a standalone basis if the purpose is to achieve meaningful financial inclusion. To make it viable and attract volumes, it has to be provided as a package along with other products and services. This can be achieved only by entities that can provide add-on services like emergency and entrepreneurial credit, saving facilities, other products and services such as insurance, besides remittances.......

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RBI rate cut depends on inflation outlook: Gokarn

Ahead of its annual monetary policy, the Reserve Bank on Thursday said cutting policy rate to promote investment depends upon moderation in inflation and fiscal consolidation. "We need to have low inflation, we need to have rising investment ratio, we need to have strong fiscal consolidation and this in turn provides space for monetary policy to actually support investment ..." RBI Deputy Governor Subir Gokarn said..............

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Banks look for more cash reserve ratio cuts

…."A CRR rate cut of at least 50 bps in the upcoming credit policy review will help kick-start the economy and ensure room for manoeuvre through higher liquidity,"……

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Will RBI cut rates?

…..Tight liquidity conditions have resulted in yields on sovereign paper shooting up. All these conditions don’t seem to suggest RBI is going to cut rates meaningfully anytime soon, even as the markets have been factoring it in for a while. Going by recent developments, strategists believe the central bank will step in and buy government securities tactically to comfort the sentiment when the 10-year gilt goes past 8.5 per cent. The clamour to cut rates has almost reached a fever pitch now, as it’s apparent that RBI’s massive tightening has only hurt growth and failed to tackle “imported inflation”……..

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Madhavpura Bank: Finally facing liquidation

.....Interestingly, now that the case has effectively closed the possibility of KP paying any more instalments to MCCB, the RBI has woken up and reportedly threatened to shut down the Bank. A show-cause notice has been issued to the board asking why its licence should not be cancelled....

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Government's heavy-handed regulation of microfinance will kill it and bring back moneylenders

…..Since 2005-06, financial inclusion has been on RBI's agenda. One element of the strategy is through no-frills accounts, diluted know-your-customer (KYC) norms, banking correspondents (BCs) and use of IT. For example, Puducherry, Himachal Pradesh and Kerala have announced 100% financial inclusion in all districts and pan-India, all villages with population of more than 2,000 will be served through bank branches or BCs. But there are several villages with population less than 2,000 and this kind of financial inclusion for 6,00,000 villages isn't going to happen fast. Indeed, there is a patronising angle to microfinance. We don't talk of microfinance when we approach our banks for financial products. But for that, we need to wait for 2020, or later still……..

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Rural credit story far from satisfactory: Yashwant Sinha

Q: Would it be right to say that the RBI and banks have become urban centric, urban oriented and this job is best left to people like Mahajan, state governments and other NGOs or can the RBI and banks - do they have it in their mind space to get into this at all?

Sinha: It should be a well-planned and determined effort on the part of the RBI, the Indian Banks Association and on the part of the banks to do what is expected from them. For the NGOs, to supplement the work that the banks are doing in the rural areas so that the requirements of the rural people is met.

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Sebi mulls new ethics code for brokers, frequent inspections

.....the Sebi also plans to strengthen the concept of beneficial ownership in KYC process in coordination with other financial regulators like RBI and IRDA. Sebi has simplified and strengthened the KYC process, making it uniform for all intermediaries and has also implemented the concept of single KYC so that the investors need not undergo the same process again and again when they approach other intermediaries......

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Banks to work full day this Saturday

In view of three holidays this week, public sector banks have been directed to function full day on Saturday, April 7..............

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RBI imposes restriction on Bhuj co-op bank

One more co-operative bank in the state has found itself in a crisis. The Reserve Bank of India has imposed restrictions on financial transactions of Ahmedabad head-quartered Bhuj Mercantile Co-operative Bank (BMC) on Tuesday. On Saturday, the RBI had dissolved the board of directors of the bank as financial irregularities came to their notice…………..

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Dena Bank conducts 132nd SLBC

Dena Bank organised 132nd State Level Bankers' Committee Meet at Gandhinagar. Dena Bank is the SLBC Convener Bank for Gujarat. Narendra Modi, Chief Minister, Gujarat was the prominent figure present at the meet. Shreya Guha, Director, Dept. of Financial Services, Ministry of Finance; S Sen, Regional Director, RBI; M D Malya, IBA Chairman and CMD, Bank of Baroda; Nupur Mitra, Chairperson SLBC and CMD, Dena Bank; Saurabh Bhai Patel, Minister of State for Finance, Gujarat; A K Joti, Chief Secretary, Government of Gujarat and M M Shrivastava, Addl. Chief Secy, Finance, Government of Gujarat were also present at the meet.

FPJ 

Excise dept asks Maharashtra cops to show cause

......A mini bus belonging to Nasir Junmohd Lakhani, a Mumbai-resident, proceeding to Maharashtra was detained at the Patradevi check post on March 14 by the Goa police for carrying unauthorized liquor. Police said there were 500 bottles of whisky of different brands being transported without the excise department's permission. The police said the detainees were police on escort duty to a Reserve Bank of India cash container bringing cash to banks in Goa. They were returning to Mumbai in the bus hired by the RBI.........

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SFIO recommends body to curb fraudulent chit funds, MLMs

.....In India, money circulation plans are banned under the Prize Chits and Money Circulation Schemes (Banning) Act, 1978. However, the Act is governed not by the Centre but by the state governments. Some states such as Rajasthan and Tripura are yet to even notify it. Also, penalties can only be meted out by the state police, which hinders in effective implementation of curbs. The ministry of corporate affairs is currently working with the Reserve Bank of India to strengthen the rules governing MLM firms.......

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Regulators need better data to deal with global crisis: RBI

The Reserve Bank has made a case for improving the quality of data to proactively deal with any possible crisis at the global level. "Regulators require better data at both the national and international level to ensure that they can recognise and address the build up of risks in a timely manner," RBI Deputy Governor K C Chakrabarty said at an international seminar …….

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FDI may be allowed in more NBFC activities

The Government may consider widening the list of Non- Banking Financial Companies (NBFCs) activities that can get foreign direct investment. The Reserve Bank of India has endorsed such a move..........

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RBI objects to rise in power subsidies to farmers in state

GANDHINAGAR: The Reserve Bank of India in its latest report, 'State Finances: A Study of Budgets of 2011-12', has identified Gujarat as one of the states where power sector reforms, despite being initiated early, have failed to create the "desired impact" on the financial position of the state power utilities (SPUs)………..

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Montek: RBI Has More Flexibility to Act

SINGAPORE - The Reserve Bank of India has more flexibility to take action in support of the economy after the government's promises to rein in its fiscal deficit, the deputy chairman of India's Planning Commission said Wednesday. "It is clear that if the fiscal deficit is brought under control, which is what the government says it's going to do, and it looks as if inflation is sort of under control, it gives the RBI flexibility," Montek Singh Ahluwalia told reporters in Singapore…………

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Output falls, heat to keep food inflation simmering

....Food inflation is problematic for the RBI, which can do little about it. Surging food prices were a key driver of headline inflation that only began to ease significantly towards the end of 2011 as food prices fell, in part due to the base effect from surging prices a year earlier.....

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RBI asks Kotak Mah Bank's promoters to cut stake to 10%

…..Every year RBI gives a regulatory exemption to promoters of Kotak Mahindra Bank when it comes to shareholding in the bank, but CNBC-TV18 learns from sources that RBI is putting some pressure on promoters to bring down their stake from their current 45% to 10% by 2016. This is in line with the existing bank license guidelines, which say that no entity can hold more than 10% in a private sector bank……….

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"Conversion into LLP should be tax neutral"

…..Considering the concerns of RBI to regulate LLPs having objectives of carrying on non-banking financial activities, LLPs should be included in the definition of non-banking financial companies under section 45-1 of the RBI Act…….

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Banks clock a third of FY12 credit growth in Feb & Mar

….As on March 23, annual credit growth stood at 16.98 per cent, above the central bank's revised projection of 16 per cent. RBI had scaled down the year-end credit growth projection twice…….

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Banks divided: some want more cash, others low rates

.....While some banks, including the State Bank of India (SBI), asked for a cut in CRR, others sought a reduction in repo rate so that the cost of credit comes down. Yet another group wanted RBI to cut both CRR and repo rate. The issue about how banks indulge in window dressing at the end of a financial year also came up for discussion. “There should be a cap at which banks can be allowed to grow in March,” said a bank official, who attended the meeting........

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Bankers expect RBI to cut CRR

...."We require (during the year) both, interest rates to go down and liquidity to improve further. And clearly if reduction in interest rate has to be passed on to the customers, then in my view, both the cuts are required (CRR and repo rate),"...........

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CENTRAL BANKER TURNS AUTHOR

In the good old days before smoking wasn't banned in RBI offices, one can recall Amalendu Ghosh, browsing through bank inspection files amid wafts of smoke. Ghosh, a no-nonsense central banker who had to keep a close eye on regulations, sharp practices of banks, their nexus with rogue brokers and pitfalls in the lending business, has authored “Managing Risks in Commercial & Retail Banking”. It is a book that captures his years of understanding of risks that banks grapple with, the ways to measure them and the lessons learnt from crises that have repeatedly brought the world market to its knees.

ET

Sebi rolls out voluntary retirement scheme

...... The move from the market regulator comes despite an optional VRS scheme launched by the Reserve Bank of India (RBI) failed to yield desired results in 2003-04. According to central banking sources, RBI’s VRS in 2003-04 and 2005-06 had left the organisation badly crippled in terms of staff strength, with a large number of officers quitting while staffers whom the apex bank wanted to go, hardly responded.......

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RBI governor latest victim of scam e-mail

.....Are you among the many who have the privilege of receiving an email from D Subbarao, Governor of the Reserve Bank of India (RBI)? And if you have, have you been stumped at him offering you a life-changing deal and Rs5.8 crore to booty, so long as you keep the deal a secret.........

.....In the earlier such e-mails, the fraudsters have impeccably cloned RBI's website and had asked for bank details. But this time they have directly targeted its governor, by creating an e-mail id in his name-drsubbarao@hotmail.co.in and dr.subbarao01@rediffmail.com.............

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New regional director for RBI

Thiruvananthapuram, April 3: Mr Salim Gangadharan has taken over as Regional Director of RBI, Kerala and Lakshadweep. Mr Gangadharan joined the Reserve Bank in 1981 in the middle management cadre, an official spokesman said here on Tuesday. He has had long stints with various operational department of the apex bank, particularly in bank supervision, financial markets and foreign exchange. Mr Gangadharan was deputed to Central Bank of Oman for a period of five years. He has also been part of several internal working groups in RBI. A native of Kollam, he has until now been regional director for West Bengal and Sikkim. 

HBL

RBI initiates inquiry into 21 banks' operations from residential plots in Nodia

........ RBI's inquiry follows a spate of applications filed under the Right to Information Act by RTI activist and armed forces veteran Lokesh Batra. After the Supreme Court order, Batra filed applications to seek information on what steps the banks would take to ensure the safety of belongings of customers in lockers. RBI was forced to convene meetings and instructed banks to ensure that customers were routinely informed through emails, SMS and notices at branches regarding the alternate arrangements made for the conduct of smooth banking functions, including locker operations.......

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Provide new interest rates on PPF: RBI orders banks

The Reserve Bank of India (RBI) today directed the banks to provide the higher interest rates on Public Provident Fund (PPF) and senior citizens savings scheme (SCSS) from April 1 as announced by the government........

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MP gets R 9,500 cr to fasten wheat procurement

Bhopal: The process of wheat procurement in the state is set to get accelerated with the Reserve Bank of India (RBI) releasing its first installment of Rs 9,500 crore to Madhya Pradesh............

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Slowdown fuels clamour for RBI rate cut

Fearing a further slowdown in the manufacturing sector and prospects of subdued growth, India Inc in its pre-monetary policy consultations with the Reserve Bank on Tuesday pressed for reduction in interest rate by at least half a per cent. Raising concerns of slowing investment, industry body Assocham demanded that the RBI in its annual monetary policy on April 17 should cut benchmark interest rates by 0.5 per cent. The meeting, chaired by Reserve Bank Deputy Governor Subir Gokarn , was attended by representatives of different industry chambers, including Ficci and experts.......

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MFIs appeal to recast residual loans of Rs 2,000 cr in AP

Micro finance companies have appealed to the Reserve Bank to ask banks to restructure the residual portfolio of around Rs 2,000 crore of loans extended in Andhra Pradesh, a top official from MFI industry said today......

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NBFCs seek different capital adequacy norms

.... Earlier, the RBI panel headed by former deputy governor Usha Thorat had recommended that NBFCs should have tier-I capital adequacy ratio of 12 percent against 7.5 percent now. It had also prescribed that only NBFCs with asset book of Rs 50 crore and above should be registered with the regulator. "......

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If FM gives tax sops to foreign banks; will RBI play ball?

......On the stamp duty, which is a state issue, it will be covered under the Banking Amendment Bill since that has an over-arching affect on the states it will help to exempt foreign banks from stamp duty when they are transferring real estate to their subsidiaries. So, in order to give a fillip to foreign banks in the country, the government is considering both these steps but it remains to be seen if the Reserve Bank of India (RBI) is supportive because ultimately they will have to give their approval to this....

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RBI seeks gold import data from EOUs, SEZs

The Reserve Bank of India wants granular data on import of gold by export oriented units, units in special economic zones/export promotion zones, and nominated agencies/banks.This move comes in the wake of an almost 50 per cent growth in imports of gold and precious metals being the primary drivers of the current account deficit........

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Calcutta Business School inks MoU with Institution of Valuers

.....The Reserve Bank of India’s (RBI) concern over the rising non-performing (NPAs) assets mortgaged as securities has mandated that a valuation exercise be carried out every three years. This has led to an increase in demand for professional valuers......

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D.Subbarao speech at 37th IIMB Convocation.

Beeline of top headhunters taps IIM-Ranchi talent

.....Saurabh Pratap Singh, who will join RBI, said he had received multiple offers. “But RBI is considered the bank of banks, where I can learn the finer nuances of finance in a much better way. I am looking forward to a posting either in Chennai or Mumbai,” Saurabh said over phone from his native Balia in Uttar Pradesh......

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RBI Gov to meet UCBs, rural cooperatives, MFIs ahead of policy

..... Ahead of the policy, Subbarao will also meet urban cooperative banks (UCBs), rural cooperatives and microfinance institutions (MFIs). In the meeting, the central bank will decide on any further rate cuts to boost slowing economy........

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RBI governor meets Pranab Mukherjee ahead of annual monetary policy review

Reserve Bank of India (RBI) Governor D. Subbarao met Finance Minister Pranab Mukherjee to discuss the macro-economic situation, two weeks ahead of the monetary policy review. "It was just a routine meeting. Next, week I will come back and brief the finance minister about the macro-economic policy," Subbarao told reporters.............

Read - Business Today

Have no problems with Sebi's decisions: Bimal Jalan

..... Speaking exclusively to CNBC-TV18, ex-RBI Governor Bimal Jalan said he has no problems with Sebi overturning most of his committee recommendations. "Sebi has made the right decision by addressing the conflict of interest issues," he said......

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Don’t look for soft options, says ex-RBI Guv Bimal Jalan

....... Refusing to be drawn into a comment on what the options before RBI Governor Duvvuri Subbarao are or whether Pranab Mukherjee’s Union Budget 2012 has failed in pushing forward some key structural reforms to address the problem of a ballooning fisc, Jalan, however, made it clear that there were no easy decisions to take for either the government or the RBI. Only hard options are left.......

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Bank of Rajasthan: SEBI’s dubious logic

SEBI whole-time member Prashant Saran, a former central banker, let off the group saying that the violation need not be ‘considered grave’ since it did not involve price or volume manipulation to hurt other investors’ interest – even though the bank deliberately flouted RBI norms.......

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Conclave on financial inclusion inaugurated

...... The 4-day Basin Development Week scheduled from 2nd to 5th April 2012 is aimed at getting financial inclusion all over India like RBI, NABARD, SBI (Northeast), International Finance Corporation, APMAS, MCAB, Grameen Sahara and Ujjivan Financial Services among others so that the poorer section of the people can get easy access.......

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SC declines PIL on credit, debit and ATM cards

The Supreme Court today declined to entertain a PIL seeking a direction to the government to make mandatory imprinting of photograph and signature of holders on their credit, debit and ATM cards issued by banks to prevent their misuse. "There are already some guidelines," a bench headed by Chief Justice S H Kapadia said while referring to the instructions by RBI..........

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Refrain on the Street is a 25 bps cut

.... The Street is out with its verdict. It’s expecting a 25 basis points cut in the repo rate — the rate at which banks borrow from the Reserve Bank of India (RBI) — in the April 17 annual monetary policy statement of the central bank......

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RBI relaxes rules for foreign currency accounts

To provide operational flexibility to Indian entities making overseas direct investments, the Reserve Bank of India has liberalised regulations pertaining to foreign currency accounts (FCA). Indian entities can open, hold and maintain FCAs abroad to smoothen the process of making overseas direct investments, subject to certain conditions, the RBI said in a notification........

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Are banks really following banking guidelines in the right spirit?

........ But are banks really following these guidelines in the right spirit? In a recent speech on the customer service at banks, KC Chakrabarty, Deputy Governor, RBI, highlighted some of the issues that banks need to tackle on an urgent basis. Here are some relevant excerpts.......

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'Tell us where to park our car'

.... C.A.Ingole, a member of RBI employee's society at Bharat Nagar, said that to penalize car owners for using the road for parking was not a solution. "Authorities should come up with an alternative and solve parking problems in different areas. Car owners and other four wheelers could be provided open spaces near their homes for parking vehicles in night time by levying some charge. NMC should also provide good public transport so a lot of people will not buy cars," he said.........

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D Sarkar takes over as head of Union Bank of India

 New Delhi: Union Bank of India Monday said D Sarkar has taken over as Chairman and Managing Director (CMD) of the state-owned lender. Sarkar replaces M V Nair, who headed the bank for 6 years. He has taken charge as CMD of the Bank from April 1, Union Bank of India said in a filing on the BSE Monday.  Prior to this, Sarkar was executive director of Kolkata- based Allahabad Bank. He started his career with Bank of Baroda in 1982.

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State Bank of Hyderabad feels young @ 70!

State Bank of Hyderabad is a blend of tradition and modernity in banking. Originally set up in 1942, it was the central bank of the erstwhile Hyderabad state and managed the then currency, Osmania Sikka, and public debt........

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Read "Subsidiaries of the State Bank"

Can Turkey offer lessons to RBI?

“If a country like Turkey with high inflation can reduce interest rates and achieve growth, why cannot we?” asked the aggressive chief financial officer of a mid sized Indian company. I was dumbfounded, as my knowledge about Turkey extended to nothing beyond belly dancers, its currency the Lira and the city of Istanbul. I started mugging up the economics lessons I learnt in my college days; "If the inflation persists, you raise interest rates (make money dearer) and any easing of rates spurs economic growth and also fuels inflation in the longer run.".........

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Banks, NBFCs brace for another deposit rate war

.....The financial services industry may be waiting with bated breath for a possible interest rate cut by the Reserve Bank of India (RBI), when it announces its monetary policy later this month. But, banks and financial institutions appear to be in the mood to extend the deposit rate war further.....

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DBS Bank keen to operate as wholly owned subsidiary in India

....The RBI has said that foreign banks converting into wholly owned subsidiary would be placed in a much better position than the foreign bank branches operating in India but less than that of domestic banks. This would provide very significant incentives for the subsidiary mode of presence for foreign banks in India. ....

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Sebi’s arguments in Tayal case simply don’t wash

..... Reserve Bank of India had asked the promoters of the bank to reduce their stake based on its regulatory requirements. According to the findings of the preliminary investigation, which have now been attested in the recent order as well, the Tayal Group gave the impression that........

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Whither flows bank credit?

While the overall bank lending has slowed in recent times, the Reserve Bank of India’s (RBI’s) data on sectoral deployment of credit has some interesting points when one looks at advances for the three months ended February..............

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FM recipe for Bengal growth

....RBI Deputy Governor Subir Gokarn said the Bengal government needed to formulate policies to harness and build on the potential competitive strengths in some industrial activities. “Bengal is exploring a long-term strategy for industrialisation as the relative growth performance in the last decade was not encouraging,” Gokarn said. ......

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SEBI trashes major recommendations of the Bimal Jalan Committee

....Clearly SEBI has not accepted a large number of suggestions of Bimal Jalan Committee. Mr Jalan, a former RBI Governor, who quit the central bank rather abruptly and was made a Rajya Sabha member in early 2003, was appointed by former SEBI chief CB Bhave to review the issue of ownership and governance of stock exchanges, among other market infrastructure institutions 2010.....

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RuPay: With this RBI initiative, India gets ready for a cashless revolution

The Reserve Bank of India deserves to be commended for the initiative it has taken to launch RuPay, an indigenous, cheaper alternative to the card-based payment systems such as Visa, MasterCard and American Express. It got local banks to promote a not-for-profit National Payments Corporation of India (NPCI), the author of RuPay, which offers the same services offered by Visa and MasterCard, but at a much cheaper cost…

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RBI asks MFIs to use local language for agreement

The Reserve Bank of India wants micro-finance institutions to have their loan agreements cleared by their boards, preferably in the local language. In the revised guidelines on fair practices for the recently-created non-banking finance company-MFI category, it has also asked them to use a standard form of loan agreement to achieve greater transparency...........

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Cheque the writing on the wall

“Can you please send a cheque?” This question could become a joke in a few years. If you doubt it, can you tell when was the last time you received or sent a money order? There may be some who would have received or sent one recently, but the number of people using it seems to be on the decline........

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Govt may amend Act to make Aadhaar data valid ID proof

...... We had included the letter of Aadhaar containing the name, address and number as an official valid document in PMLA. Now we are looking into whether the electronic Aadhaar authentication can also be included as a valid KYC,” said a finance ministry official who did not want to be identified. “In principle, we have no objections to this.” The finance ministry has written to all entities, including the Reserve Bank of India (RBI), the Financial Intelligence Unit and the home ministry for their views on the safety aspects of such a move, he said. ……

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'Banks Can't Freeze Accounts If KYC Papers Not Given'

The Gujarat High Court has ruled that banks cannot freeze accounts nor can they stop issuing cheque book or providing ATM facility where the account holder has not supplied KYC (Know Your Customer) documents...........

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No respite for existing home loans as banks cut rates for new borrowers

When it comes to increasing home loan rates, banks believe in following an across-the-board policy and hike rates for all and sundry. However, in case of reduction, the policy is aimed to benefit only new borrowers as lenders try to grab more market share………….

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NO RATE CUT ‘Go to banking ombudsman’

New Delhi : In a bid to garner a greater share of new home loan borrowers, banks are cutting lending rates for them while maintaining old rates for existing customers. Coming to the lenders’ defence, bankers said that the base rates have not been changed by IDBI Bank and Canara Bank, and the lower rates should be seen as “special offers”. An official in a regulatory agency said that old borrowers could move to new rates by paying a “reasonable” conversion charge, an offer that is available for several banks such as State Bank of India and Housing Finance Companies (HFCs). A top RBI official said, “Banks can’t discriminate between old and new customers”, but advised borrowers to approach the ombudsman with their grievance. The regulator for HFCs such as HDFC and LIC Housing Finance, however,seems to be one up on RBI. “We recently issued a clarificatory circular asking HFCs to migrate all borrowers to a risk profile-based regime by April 30,” NHB chairman R V Verma told TOI. So, irrespective of when you have taken the loan, if your risk profile matches someone’s who borrows from the same HFC today, you are entitled to the same rate. How do you find that out is a different matter, unless the regulator comes up with a risk profiling system and ask lenders to make it public. NHB is not doing so at least now.  “It’s a process that will mature over a period of time. Different HFCs will have their own risk assessment and as the system matures, seasoning of the methodology will happen,” Verma said.

TOI

Know your customer or keep away that customer? -T.V. Gopalakrishnan

.....It is no wonder that financial inclusion does not take off — most people would prefer to remain outside the banking system than comply with the Know Your Customer (KYC) norms of banks as reportedly prescribed by the Reserve Bank of India. My experience with the country's largest bank, the State Bank of India, is something worth recording to bring to the authorities' notice that the KYC procedure should be a simple one to understand your customers and not to keep away or kill your prospective customers...........

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Fake notes entering UP via Nepal

……The Reserve Bank of India (RBI) and other nationalized banks have recently drafted a detailed list of security features on currency notes which can detected by common man and do not require a gadget or an expert to establish if the currency is counterfeit or genuine.

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Raise provisions to keep banking healthy

.... I can’t recall another instance of RBI buying bonds from banks just ahead of the close of a fiscal year and after the completion of the government’s borrowing programme. In……

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Indian Overseas Bank asked to pay Rs 10k as damages to widow

....... "By not following the guidelines of the Reserve Bank of India (RBI), the bank caused hardship to the complainant (Seema), who suffered after the death of her husband and could not pay the school and examination fees of her son. The act of the bank has caused deficiency in service," the forum said…….

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RBI asks cops to probe counterfeit currency

….The Reserve Bank of India has approached Delhi Police to take action against some people who they suspect deposited forged or counterfeit currency notes at banks this month…..

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RBI needs to enable, not disable

RBI must recognize the mandate and the mission of local banks and be more sensitive to the needs of peripheral economies in the country

….Reserve Bank of India (RBI) governor D. Subbarao, during a visit to Jammu recently, seems to have been disturbed by the abysmally low level of credit-deposit ratio—just 35% in 2011—in Jammu and Kashmir (J&K). For a professional, this reflects a rather poor state of banking affairs. But for the local businessmen it is a way of life. A credit-deposit ratio of 35-40% has been an endemic feature of the state for almost as long as one can recall; except for a brief interlude.…..

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‘Next 30 years will be most happening for all banks'

.....Union Bank of India is aiming to become largest public sector bank in domestic operations after State Bank of India by 2020, which is its centenary year, said Mr M. V. Nair, in an interview with Business Line just before he retired on March 31. With this in mind, the bank has started taking steps like wooing the Gen Y customer through its remodelled branches and technology offerings, as also tapping the unbanked population. ..........

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RBI must address the factors responsible for liquidity crunch

….The reduction in CRR was, in fact, at odds with the stated position of the RBI governor and other top officials of the bank who had repeatedly stressed that the battle on the inflation front is far from over. Yes, the RBI had intervened to shore up the exchange rate of the rupee vis-a-vis the dollar in the closing months of the last calendar year. Yes, forex inflows had slowed down impacting that reserve money creation. Yes, broad money growth was lower than in the comparable period last year, but then so was the level of economic activity…..

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MSCB misses deadline for banking licence

The Maharashtra State Cooperative Bank (MSCB), which is under administrator’s rule since May, has missed the March 31 deadline for getting a banking licence from the Reserve Bank of India. The state cooperation department confirmed this development saying that the delay was due to procedural issues. The department said it hoped RBI to issue the licence on Monday or this week, as it has reconfirmed fulfilment of necessary criteria with RBI and Nabard. The banking licence for MSCB was made mandatory according to the Rakesh Mohan Committee report.…..

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Treat education loans as national investment: Coimbatore Collector tells bankers

Mr M. Karunakaran, District Collector of Coimbatore, urged bankers to concentrate on education loans and look at the education loan portfolio as a national investment instead of considering it as an unrewarding advance. He made this remark after unveiling the Annual Credit Plan for 2012-13, which envisages 18 per cent growth over the earlier year's outlay of Rs 5,315 crore......

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FIIs remitting funds abroad may face tax liability

…..As per Reserve Bank of India (RBI) rules, FIIs have to furnish a clearance statement signed by professional accountants to custodian banks for transferring funds overseas. "The dilemma is most accountants will prefer putting in a caveat since there is no full clarity on the tax issue….

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Finances of State power utilities, precarious: RBI

The financial condition of power distribution utilities in the country is precarious, according to a Reserve Bank of India report. The report also expresses concern over the large exposure of public sector banks to these utilities..............

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Regulations around savers, please

….The products and the selling process in both cases are supposedly created and designed with you, the saver, in mind. But are you in the picture at all? Especially after you add a third major player and its regulator to the scene — banks and the Reserve Bank of India (RBI). Anecdotal evidence shows that among the biggest sources of mis-selling are banks — possibly because they enjoy the trust of the savers, have access to their data, and are large impersonal organisations……

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