....In the appeal circulated through the Uttarakhand government's directorate of information and public relations, the RBI has asked the people not to get trapped in such offers and said the best way to avoid such offers is to ignore such e-mails or telephone calls received from unknown persons. ....
The very purpose of VITALINFO is to provide a platform for wider dissemination of updated information related to and happening of events in and around RBI.
Friday, June 22, 2012
Gold Financiers’ Growth Stalls as Rules Tighten: Corporate India
..........The Reserve Bank set up a panel headed by K.U.B. Rao to analyze the implication of gold imports for financial stability, price trends and the role of non-bank finance companies in influencing rates. The panel is expected to submit its report by the end of July, the central bank said. “All the uncertainty and speculations on whether there will be more regulations will be over in the next two months after the RBI comes out with its report on gold,” ...........
Gold loan companies insist on efficient KYC practices after RBI missive
Strict 'Know Your Customer' (KYC) norms, prescribed by RBI, are compelling gold loan companies to put in place better customer identification practices. Now, the companies are asking customers to produce Aadhar cards for identification purpose. Leading player Muthoot Finance has already implemented it and other major companies are expected to follow suit..............
Thursday, June 21, 2012
RBI awarded for its precautionary approach to the regulation of derivatives market
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| Shri G Padmanabhan, Executive Director and Smt. Shyamala Gopinath, Former Deputy Governor, Reserve Bank of India receiving the Dufrenoy Award for Responsible Innovation 2012. The award was conferred on the Reserve Bank of India for Responsible Financial Innovation on June 18, 2012 in Paris |
.....The conference was attended by professionals from financial services industry, regulatory bodies, policy institutions and media. Smt. Shyamala Gopinath, former Deputy Governor, Reserve Bank of India was invited to speak at this conference. She spoke on the RBI’s approach to innovation, specifically to regulating OTC derivatives. The Reserve Bank was nominated by the Observatory on the basis of the speech delivered by Smt. Gopinath.........
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....The award has been given for RBI's precautionary approach to the regulation of derivatives market, the central bank said in a statement. RBI has been recognised and appreciated "for the very reason it was criticised not so long ago," RBI executive director G Padmanabhan said in his acceptance speech.....
Subbarao for FM?
At the Annual General Meeting of Indian Merchants Chamber (IMC), the new president of the association, Niranjan Hiranandani, said a post was going to fall vacant in the finance ministry and it could well be filled by the current Reserve Bank of India Governor D Subbarao. He said people at IMC would be pleased to see a knowledgeable person like him in North Block. The governor had just made an elaborate presentation in defence of the central bank's decision to not to succumb to industry's demand for rate cuts in the mid-quarter policy. Although he took all policy-related questions head on, he chose not to comment on this one and managed to keep smiling as he listened.
BS
‘Tough surroundings made me learn survival tactics’
Although Narendra Jadhav failed only once in his life, that too in a unit test in standard VII, he faced some tough time during his school days. In his life story narrated to Arun Shevate, which has been documented in Napas Mulanchi Gosht, a book which tells inspiring stories,.................
Government knows better banking than RBI
.....Both RBI and NABARD would need to spend more sleepless nights to make the bankers and the SHGs to sleep well when they implement the CC limit facility to SHGs. Otherwise, the CC limit facility will turn out to be a Cash and Carry facility with more NPAs at bank level and more suicides at SHG level. Earlier, the regulators step in better for the banks and the SHGs...........
Mid-quarter reviews of RBI to stay
The Reserve Bank of India (RBI) will continue with its mid-quarter review of the annual monetary policy for at least a year, it was decided after reviewing the performance of the review. The reviews were introduced by RBI Governor D Subbarao in September 2010, to take the surprise element out of the off-cycle actions. The effectiveness of this exercise was to be reviewed after two years. “Mid-quarter reviews are intended to communicate our assessment of economic conditions more frequently,” Subbarao had said in July 2010. Mid quarter reviews had attracted criticism from central bank watchers on the ground that it creates more pressure on the central bank for meeting expectations.
BS
Finalise roadmap for services to villages by Aug, RBI to banks
......."The finalised roadmap with details of allocated villages to various banks should be submitted to the respective Regional Office of Reserve Bank of India as per format given latest by August 31, 2012," the RBI said in a notification to banks.............
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FinMin appoints 7 new executive directors for PSU banks
The long wait came to an end for the short-staffed public sector banks. The ministry of finance, department of financial services, on Monday appointed seven general managers (GMs) in one-go for the post of executive directors (EDs) to fill up the vacancies across banks. There are total 17 such posts lying vacant with the banks.........
Committee calls for providing connectivity to Indian airports
.....In a report released this week, the committee headed by former Reserve Bank of India deputy governor Rakesh Mohan said that road development agencies of the Centre and states as well as the railways should work together to provide connectivity to airports.......
Giving the Mahatma company
........ RTI activist Manoranjan Roy tried to find out how and when the Mahatma became the mainstay of our currency but the RBI said that there was no document recording the change. The question to be asked is: Do we really need a face on our currency? So far, all the coins have the emblem of the Ashoka Pillar, which stands for peace and non-violence. This is featured in currency notes as well. Currently, the only personality gracing our currency notes is Mahatma Gandhi. These are the symbols that an average Indian is able to identify with. The very idea of having a new face on our currency throws it open to misuse by the ruling party to glorify their leader(s) according to political requirements...........
'Deciding on inflation vs growth RBI's prerogative'
Amid the Reserve Bank of India (RBI) maintaining status quo on policy rates and the cash reserve ratio, Economic Affairs Secretary R Gopalan has said it is for RBI to decide between inflation and growth.
“It is a question of making a fine judgement, and RBI is the authority to make that judgement. It has taken a call,” Gopalan said at a press conference..............
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“It is a question of making a fine judgement, and RBI is the authority to make that judgement. It has taken a call,” Gopalan said at a press conference..............
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Basu hears the tiger roar in 7 Race Course Road
.......Though Basu termed the Reserve Bank's decision to keep interest rates unchanged as 'maturity' despite the Finance Minister's hint to focus on growth, he seemed disappointed. A rate cut would have been a signal, he said, that India preferred growth and could live with inflation.......
Hopelessly hopeful
......What were the arguments cited in favour of an interest rate? It had been contended that high interest rates had not been able to control inflationary expectations. Instead, it was argued, the high rates had effectively throttled investments. But RBI governor D. Subbarao countered this perception. “Our assessment of the current growth-inflation dynamic is that there are several factors responsible for the slowdown in activity, particularly in investment, with the role of interest rates being relatively small. Consequently, further reduction in the policy interest rate at this juncture, rather than supporting growth, could exacerbate inflationary pressures,” the RBI stated, adding, “Notwithstanding the moderation in core inflation, the persistence of overall inflation both at the wholesale and retail levels, in the face of significant growth slowdown, points to serious supply bottlenecks and sticky inflation expectations… It is relevant to assess as to what extent high interest rates are affecting economic growth. Estimates suggest that real effective bank lending interest rates, though positive, remain comparatively lower than the levels seen during the high growth phase of 2003-08. This suggests that factors other than interest rates are contributing more significantly to the growth slowdown.” To many, the RBI cocked a snook at the finance minister........
RBI has shocked itself: Surjit Bhalla
Expert Surjit Bhalla says the RBI has shocked itself by not changing policy rate in its recent policy review, saying that it becomes difficult to analyze the central bank if it keeps shifting the goal post. Madan Sabnavis, chief economist, CARE Ratings, says the scenario has been changing rapidly and the RBI has only been following the trend
Replace CAMELS with RBS for risk assessment: Chakrabarty panel
......While the present risk evaluation of commercial banks through the 'CAMELS' system is a point in time assessment, the proposed risk-based supervision system (RBS), if implemented, will take into account both present and future risks, the Committee headed by RBI Deputy Governor KC Chakrabarty said...................
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RBI: over to you, Delhi… seriously
Fiddle away, Delhi, while the Indian economy burns. Just don’t expect the Reserve Bank of India to play fireman anymore...................
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Low inflation vital to secure growth, says RBI
.....Some analysts had commented on the discouraging effect of RBI’s decision on already slowing growth. “That’s one way of interpreting it. But we don’t know the counter factual. We don’t know what would have happened to inflation, to growth if RBI didn’t tighten the policy,” Subbarao said.......
SBI to reduce lending rates to exporters soon
Within days of the Reserve Bank massively increasing the export refinancing limits of banks, State Bank of India today said it will soon bring down interest rates on loans to exporters. "We will surely cut lending rates to exporters following the RBI enhancing export credit refinance limit to 50 percent in the policy review. However, the quantum of the reduction will be decided by our Alco (asset liability committee) meeting, which will be held next Saturday," SBI Chairman Pratip Chaudhuri told PTI over phone from Guwahati............
RBI allows non-bank entities with Rs 100 crore networth to own White Label ATMs
.....The non-bank entities will be allowed to own and operate White Label ATMs and they will provide the banking services to bank customers in India, based on debit cards, credit cards or prepaid cards issued by banks. RBI has however confined their role only to acquisition of transactions of bank customers. "Such non-bank entities should have a minimum net worth of Rs 100 crore as per the latest financial year's audited balance sheet, which is to be maintained at all times," RBI said on Wednesday.......
The myth about low PSU bank pay
.....So should RBI now withdraw its guidelines on private sector bankers’ salaries? No. Should we now be ready to throw the idea of poorly paid PSU bankers out of the window? Well, possibly out of the study table but not the window. Averages are known to hide a lot. This time they have behaved like swimsuits, revealed a lot as well. What’s happening here? The PSU bank workforce is significantly more aged than the private banks. The average age of employees of state-owned banks is around 50, whereas the same for their private counterparts is around 30. However well the private banks may be paying their employees, it is hard to beat the public sector average since the employees are 20 years senior...........
Don't poach loans from rivals, FinMin tells PSU banks
..........Sources from banking circle say the issue of takeover financing was discussed between the finance ministry and bank chiefs in their last meeting in Delhi where DK Mittal, secretary, financial services, asked banks not to indulge in takeover of loan. However, KC Chakrabarty, deputy governor, Reserve Bank of India, felt such a practice cannot be completely discouraged. "At times a customer may be unhappy with the prevailing lender. He should, therefore, have the right to choose a new lender," said Chakrabarty..........
Kerala to float NRK bonds for development projects
....Citing the latest study on the Kerala diaspora by the Centre for Development Studies (CDS), Joseph told the assembly that the total money that arrived in the last fiscal in Kerala banks, mostly from Middle-East employed Keralites, was a staggering Rs.50,000 crore. He was replying to a motion moved by treasury bench legislator P.Ubaidullah who sought the immediate attention of the state government to channelise the NRK deposits in Kerala banks for productive purposes. "We also have decided to open an exclusive bank for NRKs and we have now got in touch with the Reserve Bank of India (RBI) for the necessary clearance," added Joseph.......
RBI’s directive on unoperative/unclaimed deposits violated
.........If you thought that the recent Reserve Bank of India’s (RBI) directive to banks would make it easier for customers to retrieve long lost deposits of a deceased kin, think again. Apparently, one such bank has violated RBI’s directive, in spirit and word, one week before RBI’s 30 June 2012 deadline for compliance. This was brought to notice by a Moneylife reader. Karnataka Bank, instead of putting names and addresses of unclaimed deposit holders, has instead put the onus on the users to search for names.........
Union Bank of India starts process to hire 1636 clerks
....One of the leading PSU bank, Union Bank of India has started recruitment process for 1636 vacancies for the post of Single Window Operator 'A'/Clerk..........
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Banks told to release crop loans to farmers on time
.....Expressing dissatisfaction that just 18 per cent of the target had been met in disbursing loans for allied activities in 2011-12, Mr. Jayaram appealed to officials of the Reserve Bank of India (RBI) and the lead banks to initiate action against those banks that did not disburse enough loans for allied activities in the district......
Ensure opening of Aadhaar-enabled accounts: RBI asks RRBs
The Reserve Bank today directed Regional Rural Banks (RRBs) to ensure opening of Aadhaar- enabled banks accounts for beneficiaries of the Mahatma Gandhi National Rural Employment Guarantee Scheme and other social security schemes, for facilitating electronic transfers.............
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SBI chairman visits Shillong
SHILLONG, June 19: Is the change of small coins by traders in the city causing artificial shortages of coins? According to State Bank of India (SBI) officials, the coin vending machine at the SBI, Shillong Main Brach, is mostly used by traders. “We mostly find traders visiting this vending machine,” an SBI official told a group of reporters on Tuesday. According to SBI officials for the year 2011-2012, Rs 50 lakh worth of coins were distributed to customers and for the current year, Rs 4-5 lakh has already been distributed. Meanwhile, SBI officials also stated that they would ask the Reserve Bank of India (RBI) officials to increase supply of coins to the State. Meanwhile, the SBI officials also informed that there are two mobile banks in Meghalaya who visit remote areas of the State for providing banking transaction at the doorstep of people. Earlier, SBI chairman Pradip Chaudhari, as part of the Corporate Social Responsibility (CSR) of the bank, donated an ambulance to the Christian Hospital.
The Sentinel
Deadbeat corporate borrowers? Not in India
Lenders are willing to amend loan terms instead of acknowledging NPAs
.......While restructuring is allowed by the RBI, the murkier "evergreening" of loans is frowned upon. Several bankers said it is widespread, but declined to give details. The practice is said to be particularly common in commercial real estate, where tougher restructuring guidelines require banks to classify a loan as non-performing and set aside more funds as provisions - effectively removing any official middle ground between a performing loan and a default..........
Wednesday, June 20, 2012
KC Chakrabarty: Regulator with a sense of humour
It is not often that a banker who nurtures a dream of becoming a deputy governor of India's central bank is also able to fulfil it. KC Chakrabarty is one such banker. That he had set his sights high at the start of his career was evident when he asked colleagues at Bank of Baroda just what they found so unbelievable about his RBI dream. That was the level of confidence Chakrabarty displayed in his early days at the bank and which is still on display despite a temporary knock over a year ago when he strayed from the line at Mint Street.............
Banks may not have to file FIRs on detecting fake currency
.......The report has recommended that the central bank frame a policy for mandatorily providing note sorting machines (NSMs) at all bank branches with average cash receipt of Rs 25 lakh and above so that the detection of forged notes can be made at the point of entry at each counter. Further, the RBI should incentivise banks to use of NSMs and other fake note detecting devices.
Banks' arms may come under RBI purview
The joint ventures (JVs) and subsidiaries of banks might come under the Reserve Bank of India’s purview if a high-level committee’s recommendations are implemented. At present, the central bank can only monitor banks’ subsidiaries and JVs, but it does not have supervisory power. The committee, chaired by RBI Deputy Governor K C Chakrabarty, said: “Along with focus on supervision of banks on a solo basis, RBI should also focus on consolidated supervision of banking groups.”...........
Top 3 banks reward CEOs with handsome pay hike
...........In January, 2012, the Reserve Bank of India [RBI] had released guidelines on compensation of whole-time directors, CEOs, risk takers and control function employees of foreign and private sector banks. As per those guidelines, private banks need to frame a compensation policy and implement it from 2012-13 financial year. Also, the banks' capital adequacy and cost to income ratios must support the remuneration packages of its senior management employees, the central bank said.
Doc with ‘60 looks’ has bank in a tizzy
Looks clearly are everything, as this 38-year-old doctor from South Mumbai found out recently. A plastic surgery along with a drastic weight loss programme proved costly for Dr Srihari Patil (name changed) when a private bank froze his account after collecting 60 CCTV shots of ‘different-looking men’ withdrawing money from the same account...............
Aug deadline for rural banking plan
The Reserve Bank on tuesday asked banks to finalise the road map for providing banking services to villages with less than 2,000 population by August. “The finalised road map with details of allocated villages to various banks should be submitted to the respective Regional Office of Reserve Bank of India as per format given latest by August 31, 2012,” the RBI said in a notification to banks. This will help the government to transfer the benefits directly into the account of the beneficiary. It would also save the government administrative cost presently incurred in cash disbursements of social benefits.
BS
Inclusion goes urban
......While everyone talks about financial inclusion in rural and semi-urban areas through rapid expansion of bank branches, urban inclusion is rarely looked upon. However, now with the urgent need to grow their business and gaining a considerable customer base, banks are finally shifting their focus to this segment through various means.......
India is on a good wicket, never mind the Fitch bitch
......The Reserve Bank is one of the few central banks in the world that has maneuverability on interest rates. The repo rate is at 8 percent levels while rates of US, UK and ECB are at 0.5-1 percent levels. The RBI is, however, fighting an economy that has been through high inflation and a government that is still not committed to fiscal reforms and is not likely to cut rates to extremes to improve growth. However, there is comfort that there is room for rates to be cut, leading to positive expectations down the line......
Hats off to RBI
Contrary to predictions made by interested quarters, the Reserve Bank of India has sent a strong message that it is a tough monetary regulator. It has not changed the policy rates for valid reasons. The corporate world, advocating reduction in interest rates, cannot expect to drive the central bank as per its desire. The RBI indirectly blames the Government — by saying its decision to cut rates in April was based on the premise that the process of fiscal consolidation would get under way, along with other supply-side initiatives. It also conveys that the government has not implemented oil sector decontrol and reforms, with “the consequent subsidy burden on the Government crowding out public investment at a time when reviving investment, both public and private is a critical imperative”. We have to see whether the Government gets the message and addresses these issues. The RBI is clear that it will not relent. Its priority is management of liquidity and it will use Open Market Operations to this end. Hats off to the RBI.
- S. Kalyanasundaram Chennai (HBL)
Monetary policy: ‘A prudently taken conscious decision’
....“The RBI’s monetary policy action of keeping the policy rates and CRR unchanged is a very prudently taken conscious decision if one sees it against the persisting or rather increasing retail inflation,’’......
RBI chief says govt must cut spending
........The Indian government must reduce spending and not just raise taxes for fiscal consolidation, the Reserve Bank of India's Governor Duvvuri Subbarao said on Tuesday, a day after the central bank kept interest rates steady............
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RBI Governor Duvvuri Subbarao may yet turn out to be right
Need to revive investments to spur growth: Subbarao
.....“You do not know the counter to that had the RBI not adjusted policy rates.” “If the (current) interest rates have stifled growth, how are the real interest rates in the pre-crisis levels higher than the rates today and the real average weighted lending rates lower than that in the pre-crisis levels?”.........
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..............
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India's potential growth rate has come down: RBI
Reserve Bank of India ( RBI) Governor D. Subbarao said India's potential of maintaining a high economic growth has come down. RBI's comment came in the backdrop of a sharp drop in the economic growth, especially in industrial production.....
Can't tame inflation without sacrificing some growth: RBI
RBI Governor D Subbarao is sticking to his guns, a day after the bold status quo credit policy. The RBI Governor said that it was inevitable that some growth would have to be sacrificed to rein in inflation. Interestingly, the Governor has said there's no room for a blame game.............
Watch the video...........
Watch the video...........
RBI governor calls government's bluff on Re, inflation
A day after India Inc expressed disappointment at the central bank's decision to hold interest rates, RBI governor D Subbarao on Tuesday called for an end to the blame game between the three critical players of the economy-business, the central bank and the government-and underlined the need for them to work together. To deflect the constant demands made on the RBI to address growth issues by cutting rates, the governor instead lobbed the ball back to the government, urging the Centre to reduce fiscal deficit by cutting expenses and bring about reforms in domestic taxation and the foreign investment regime..................
Cut unproductive expenditure: RBI to government
........Will the government be able to deliver on the 5.1 percent of GDP...and even if they deliver, what will be the quality of adjustment? how much by taxing, how much by expenditure compression? The government must also reduce expenditure, not raise taxes alone in order to make fiscal consolidation sustainable," ........
RBI lets everybody down
...........The dharma of the central bank in a developing economy is to worry about both growth and inflation; in a developed economy about both jobs and inflation. Much of the continuing misery in the world today stems from ignoring half the mandate.
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RBI does not allow itself to be browbeaten by short-term interests
RBI governor D Subbarao has stood firm in the face of incessant demands not only from vested interests in industry but, more importantly, from his de-facto bosses in the finance ministry, and restored faith in an essential prerequisite of a vibrant democracy: independent institutions.............
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Goalposts shifted, RBI scores self-goals
......Subbarao’s tenure isn’t much better than Rangarajan’s, and perhaps is much worse. Inflation in 2011 was the same as in 2009, and unlike the prior decade, domestic inflation is about 5 percentage points per year higher than comparator inflation. This persistently and abnormally high inflation has little to do with monetary policy and everything to do with the populist agricultural policies of the kulak-oriented UPA, led by socialist supremo Sonia Gandhi and the National Advisory Council. So one cannot, and should not, blame the RBI for the high food inflation induced by high procurement prices given to the rich kulaks of India (in the UPA’s prose, the aam farmers). But one should blame the RBI for being naively quixotic in its pursuit of reducing administered price inflation by killing the economy.........
RBI warns the government...but disappoints markets
This refers to the edit “Inadequate response” (June 19). It may not be fair to criticise the Reserve Bank of India (RBI) for keeping policy rates steady. It would have been very difficult for it to affect reductions purely on the basis of core inflation figures when the headline inflation, which affects the common man more, is refusing to come down from double-digit numbers. Besides, growth-stimulating investment in the context of high inflation needs well-coordinated fiscal and monetary measures. While reducing policy rates in the last quarter, RBI had cautioned the government about this and expected it to take steps for fiscal consolidation and removal of supply side constraints. But the government affected a half-hearted, inadequate increase in petrol prices, leaving diesel price untouched. How long can RBI carry the burden of managing the balance between growth and inflation with the government showing no political courage to bring down heavy subsidies, liberate restrictions on foreign investments and remove curbs on access to resources like land and minerals. By taking this bold step, RBI has given a sound warning to the new finance minister and the government to discharge their part of responsibility.
- Y G Chouksey Pune
...but disappoints markets
The government’s failure to address supply side constraints is the reason for the high level of inflation. In the absence of a credible policy initiative from the government, the Reserve Bank of India has clearly indicated that monetary policy tools alone will not be sufficient to control inflation and prop up growth. Of course, it is up to the government to initiate policy prescriptions, but RBI could still have cut policy rates by at least 25 basis points to boost market sentiments. Indeed the industry bodies are disappointed.
- Srinivasan Umashankar Nagpur (BS)
Reforms deficit
This refers to the editorial ‘Missing a ‘rate’ trick (Business Line, June 19) During its mid-quarter review, the RBI has done a good job in enhancing the limit of export credit refinance (ECR) from 15 per cent to 50 per cent, which will increase the credit flow to the export sector. It has managed to keep the deposit rate steady which will also help the people, especially senior citizens, to get higher interest against their hard earned money deposited in banks. The RBI asked the central government to control the fiscal deficit, which the government has failed to do. The government has also failed to carry forward economic reforms such as FDI in multi brand retail, decontrol of urea and petro-product prices, pension reforms and the Insurance Bill.
- Jayant Mukherjee Kolkata (HBL)
Can’t outsource to RBI
.....But that said, what are we to make of the policy? Rate cuts cannot, as RBI argues, raise GDP growth if the problems are structural or if there is, to use the common catchall phrase, ‘policy paralysis’. But rate hikes make viable projects unviable by lowering project IRRs and, by the same logic, rate cuts make them viable........
Inflation jinx
The Reserve Bank of India's decision to hold interest rates steady in its midterm policy review has disappointed both industry and markets. A cut in rates, they argue, would boost investments and growth. But the RBI is right in taking a contrarian view...............
Status quo on policy rates, a right move - T. V. Gopalakrishnan
Kudos to the RBI for a bold mid-quarter monetary policy review, defying the expectations of the market and without yielding to the pressures of the Finance Minister to reduce the rates. The Reserve Bank has taken a series of measures in the past few years to contain inflation and provide adequate credit for growth. But, unfortunately, neither growth nor price stability could be achieved to the desired extent..............
RBI decision on rates after taking everything in account: Cong
...... "RBI is an independent regulatory authority. If they have taken a certain decision, they must have taken everything into account...If there is a crisis in the Eurozone, it does have its implications for the Indian economy,"...........
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Banks to open SME branches in industrial areas of Uttarakhand
There is good news for the MSME sector in Uttarakhand. The State Bank of India (SBI), India’s largest bank, will open an MSME branch at the Selaqui industrial area, near here. Besides, a financial institution hub is also on the cards, with the Uttarakhand government stating that it can be set up at the Sahastradhara Information Technology Park, where the Reserve Bank of India, Small Industries Development Bank of India (Sidbi), National Bank for Agriculture and Rural Development (Nabard) and other public sector banks (PSBs) can open their regional offices..........
Despite HC orders, Nagpur District Central Cooperative Bank scam case stuck for 10 yrs
.........Currently Reserve Bank of India (RBI) has issued orders restricting the NDCCB from accepting fresh deposits. A district central cooperative bank (DCCB) is a key source of agriculture finance, the ban on deposits has severely hampered its operations. Incidentally, once again a panel backed by Kedar is in power at NDCCB. The scam has taken its toll the Wardha and Osmanabad district central cooperative banks too. Funds of these banks are alleged to have been remitted to Home Trade through Kedar.
Why get emotional on forex rate?
MUMBAI: RBI Governor D Subbarao, who addressed businessmen at the Indian Merchant's Chamber on Tuesday, stressed on the need for joint efforts to ensure growth. "I don't think this blame game can go on. All of us...you (businessmen), the RBI and the government have to look for solutions and not give in to a sense of despondency," ................
RBI extends 2 pc interest subsidy scheme for exporters
The Reserve Bank today extended the 2 per cent interest subsidy scheme by another year on rupee export credit to the labour-oriented and small scale sectors to cushion them from slowdown in markets like the US and Europe..................
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35% population of Haryana not covered under financial inclusion
CHANDIGARH: Around 35 % population of Haryana is still to be covered under the financial inclusion plan, said K Sayeed Ali, chief general manager of NABARD's state regional office on Tuesday.........
................Ali referred to Dr. Rangarajan Committee report which had stressed for the need for complete Financial Inclusion by bringing the excluded population who are presently deprived of financial services into the banking net. ....................
District Bank personnel to disburse crop loans for lead bank
MUMBAI: Nationalised Banks can utilise the services of District Co-operative Banks to disburse crop loans, said Harshvardhan Patil, Maharashtra's co-operatives minister. The decision follows notices issued by the Reserve Bank of India to six district Credit Co-operative Banks to stop accepting any more deposits as their performance was not upto the mark. ...........
Cornered non-banking finance companies delve into soul-searching
....."RBI is taking a very critical look at gold loan NBFCs in the last few years by bringing in regulations like the loan-to-value cap of 60% on gold loans. It has also set up the K U B Rao Committee to study various issues in the gold loan business and we expect the committee to file its report in two or three months. When the report comes out, we will incorporate those recommendations into the SRO," ......
RBI advice to assessees
Thiruvananthapuram, June 19: The regional office of the Reserve Bank of India has advised assessees to remit income tax sufficiently in advance of the due date. The appeal is being issued in their own interests so that last-minute rush and related inconvenience may be avoided, an official spokesman said here. It has been observed that the rush for remitting income-tax dues into the Reserve Bank has been far too heavy towards the end of June. It becomes difficult for the bank to cope with the pressure of receipts although additional counters to the maximum extent possible are provided for the purpose.
HL
RBI looking into record high gold imports
The sharp rise in gold imports has drawn the central bank’s attention and it is studying the factors contributing to this. Reserve Bank of India (RBI) Governor D Subbarao on Tuesday said they were looking into the reasons. “We are trying to solve why gold imports were at a record high,” he said..............
Odisha's Urban Co-op Bank set to merge with Cosmos Bank
The Odisha government has given its nod for merger of the loss-making Urban Co-operative Bank with Pune-based Cosmos Co-operative Bank, official sources said. Commenting on this state's Chief Secretary B K Patnaik said, "The merger of the two banks will be completed in three to four months and will help to protect deposits of about 13,000 investors.”...........
Tuesday, June 19, 2012
Lights, camera, action...... but no (rate) cut...............
"Policy" in Media - Click on the following links to read more.................
India Inc disappointed with RBI for not cutting rates
India interest rate unchanged on inflation fears
RBI keeps rates unchanged, disappoints industry & stock market
Economists React: RBI Stands Pat on Rates
RBI stuns, keeps rates steady as growth crumbles
Overall inflation a worry: RBI
RBI policy review brings no smiles for borrowers, key rates unchanged
Bankers miffed, but economists hail RBI stance
Rates lower than in 2003-08, other forces impacting growth: RBI
Chambers disappointed with RBI’s monetary stance
RBI was right in not cutting interest rates: Prashastha Seth, IIFL Wealth
It is too early to feel comfortable about inflation: Gaurav Kapur
RBI to government: We’ve done enough, it’s your turn now
RBI's decision disappoints borrowers
Monetary policy: ‘Growth takes backseat, inflation comes to forefront’
Subbarao’s signal: Done enough, time for govt to act
Salaam, Subbu! The Good Doctor gives us a bitter medicine
Perspective: Has RBI left growth to fend for itself?
Why Subbarao told the finmin to take a walk
RBI is so very wrong
Six reasons why Subbarao kept rates unchanged
RBI won’t play to gallery, keeps key rates unchanged
Anand Sharma wants RBI to rethink on rate issue
RBI not touching interest rates shows 'disconnect' with govt: BJP
Gutsy RBI Holds Rates
RBI's communication flip-flop baffles market
Ambit’s Holland Says Lower Rates Alone Won’t Boost India Growth
RBI Hunkers Down
Decoding RBI's monetary policy: the what and why of it
Rationale for status quo
Inadequate response
A do-nothing RBI policy
Missing a ‘rate’ trick
A difficult policy choice
Monetary policy: Is the transmission mechanism really effective?
.....A leading bank has reduced interest rates by up to 350 basis points for certain categories of borrowers even before the RBI’s mid-quarter policy review. Does this mean that there is no relationship between policy announcements and action by banks?........
Mangled remains of the car.......
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Kiran Sethi's photo was not readily available at the time of uploading this news
Rs 5 lakh cheque that can't be encashed!
A woman who was given a fit for discharge certificate by a mental hospital three years ago after suffering from schizophrenia, has been prevented by her bank from depositing a near-expiry Rs 5 lakh cheque....................
Use of Securitisation Act by cooperative banks challenged in Guj HC
.....He has further claimed that Securitisation Act was not applicable to the cooperative banks formed under the state acts as there is already a mechanism for recovery under those state Act, in this case it is Gujarat Cooperative Societies Act, 1961. Also, the Act was applicable to “a company engaged in banking, and not a cooperative society engaged in banking”,......
RBI move to have more political leaders on currency notes can trigger needless acrimony
The RBI’s move to add Dr BR Ambedkar, Chhattrapati Shivaji Maharaj, Pt Jawaharlal Nehru and Indira Gandhi as faces on currency notes will lead to needless acrimony
According to a report in the Times of India, the Reserve Bank of India (RBI) is working on plans to added leaders such as Dr BR Ambedkar, Chhattrapati Shivaji, Jawaharlal Nehru and Indira Gandhi as faces on currency notes along with Mahatma Gandhi. Is this a good move? Or will it only unleash a storm of jousting and lobbying by politicians about precisely which leader is accorded the honour?
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RBI to RRBs: Stop charging prepayment penalty on home loans
......"It has, therefore, been decided that Regional Rural Banks will not be permitted to charge foreclosure charges or pre-payment penalties on home loans on floating interest rate basis, with immediate effect," RBI said in a notification.........
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Finance ministry, central bank's tense partnership on Pranab's watch
.....Tension between North Block and RBI has been brewing for some time. Central bank officials point to the increasing intervention of the finance ministry in RBI activities in recent times. The government was also seen to be trying to micro-manage banks and issuing guidelines to them, which RBI thought came strictly under its purview. For example, the ministry recently issued norms for consortium lending by public sector banks. RBI has now decided to pursue the matter by writing to the government. A letter has been send to the government, detailing how the finance ministry had encroached upon the regulator's territory......
Will respond quickly to any adverse development due to global turmoil: RBI
"... recognising that the global situation is turbulent, the Reserve Bank stands ready to use all available instruments and measures to respond rapidly and appropriately to any adverse development," Reserve Bank of India (RBI) said in its mid-quarterly review.....
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Hike in export refinance limit to bridge liquidity gap: M&M
The central bank's move to keep rates unchanged disappointed both the equity and bond markets. However, the Reserve Bank has decided to enhance the export credit refinance (ECR) limit to 50% of the outstanding rupee export credit for banks, from 15%. This move will inject Rs 30,000 crore into the system. Welcoming this step, VS Parthasarathy of Mahindra and Mahindra (M&M) highlighted the dual impact of this move. "It gives two impacts, it gives liquidity and secondly it has a basis of getting rates reduced for the exporter or it gives a little bit of cushion for the bank to act the way that they want.".........
Time to redress the governance deficit
......The Government’s massive borrowing programme has not only pre-empted funds available for private players but also, in the process, pushed up the borrowing costs for trade and industry. In such a situation, where the monetary brakes applied by the central bank as many as 13 times did not lead to desirable results with the fiscal mess remaining the Achilles’ heel of the economy. Given the coalition Government’s inability to institute cost recovery in items such as diesel, when the global crude price was on a rollercoaster, price stability is but a lost cause.......
Monday, June 18, 2012
3 RBI officials among four killed in accident
Ambala, Jun 17 (PTI) Three RBI officials were among four killed when a car collided with a truck near Ambala city. The RBI officials from Chandigarh were returning from Jind in Haryana after attending a meeting when their car met with the accident last night at Model Town Crossing, police said. The car driver also died on the spot while another occupant sustained serious injuries and was referred to Medical College at Chandigarh.
The 3 names of the officers have since been confirmed from the PS to RD, RBI, Chandigarh as follows:-
1. Mrs. Kiran Sethi, AM
2. Mr. Balvinder Sandhu, AM
3. Mr. Balbir Singh, AM
RBI Governor Subbarao still has 15 months to go
Y.V. Reddy for FM
- K.Vittal Shetty Bangalore (The Hindu)
What Subbarao says is as important as what he does
One hears that this time around Mr Subbarao and his team have read and reread the policy draft many more times than they usually do, tweaking the language endlessly before giving the final go. Often attacked for doing the right thing at the wrong time, they don't want the world to misinterpret them. Indeed, his choice of words is as crucial as the measures he takes (or doesn't take)..................
Reserve Bank of India Governor Duvvuri Subbarao has a tough decision to make
....Reserve Bank of India Governor Duvvuri Subbarao has a tough decision to make. The rate policy expected today comes as the RBI’s twin responsibilities, growth and inflation, spiral out of control.......
Situations vacant
- M G Warrier, Mumbai (BS)
Monetary policy: The depositors ’ viewpoint - S.S.Tarapore
Ensure one a/c per family, Fin Min to banks
....."During the meeting between Finance Minister (Pranab Mukherjee) and heads of public sector banks on June 12 it was decided to ensure that there is a bank account in every family in the next six months," .....
How much more you have to shell out for banking services
After petrol, the price hike bug has bitten the banks too, with several of them raising their charges in the recent past. Banks have also introduced fees for services which were available for free till now...........
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Critical risk and issues in regulating bank business correspondents
.....I do however believe that the BC model can perhaps effectively serve the cause of financial inclusion if it is structured appropriately. That said, in my opinion, there are many risks and serious regulatory and supervisory issues that need to be addressed by the RBI for this to become a reality. The key ones are briefly highlighted hereafter.............
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FDI from Pak: RBI to issue notification by month-end
....“Within the next seven to eight days the notification is expected to come. Everybody from the finance ministry to RBI and DIPP has given its in -principle approval. Subsequently, the DIPP will incorporate the changes in the FDI policy,”.....
Bankers indifferent to mild RBI rate cut
......“If the RBI is serious about supporting growth, then policy rates will have to be cut much more for the same level of policy transmission to occur,”.......
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All Eyes on RBI Guv as Rate Cut Expectations Rise
RBI Governor D. Subbarao is expected to go slow on his over two-year-old anti-inflationary posture and go with the common mood by unveiling a softer interest rate regime on Monday, as more and more dark clouds gather over the economy, though the price index still remains above RBI's comfort zone..............
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Interest(ing) action ahead
.....Quite obviously, the Reserve Bank of India, while reviewing the credit policy — the mid-quarter review is scheduled for later on June 18 — would take note of the recent developments affecting the economy. As it happened last week, there were not only planned releases of important statistical data, but some quite strong, unanticipated criticism of the government’s economic management — by global rating agency Standard and Poor’s (S&P). .....
FinMin wants banks to cut rates in sync with RBI's policy action
....According to bankers, the ministry has now said banks should pass on the benefit “entirely” to customers if RBI reduces rates tomorrow. Market participants expect the central bank to cut its key lending rate by 25 bps to boost economic growth. India’s gross domestic product growth rate slowed to a nine-year low of 5.3 per cent in the March quarter. “In the event RBI cuts the CRR (cash reserve ratio, or the portion of cash banks are required to keep with RBI) and the repo rate by 25-50 bps, the finance ministry wants banks to bring down the lending and deposit rates by the same margins,” said a senior public sector bank official on condition of anonymity. He said what had not gone down well with the ministry was the pace of monetary transmission mechanism following RBI’s rate action. Banks were reluctant to cut rates as they say the cost of deposits would not come down in a hurry......
Retail credit boom could hit savings rate: RBI panel
The retail credit boom carries the potential to derail the country's steady savings rate despite a higher economic growth, a high-powered working group, led by RBI Deputy Governor Subir Gokarn, has said.
The group cautioned there will be the downside risk of a stagnant or even lower savings rate due to rising retail credit penetration, which makes consumers to spend in anticipation of future income........
The group cautioned there will be the downside risk of a stagnant or even lower savings rate due to rising retail credit penetration, which makes consumers to spend in anticipation of future income........
Subbarao hemmed in, markets have tailwind
.....However, my sense is the doves will have the last laugh. While the Reserve Bank of India (RBI) governor will not fully abandon a ‘dear money policy’, the tone, guidance and the announcements will be a leap forward to embrace growth.......
Monetary policy: doing nothing is a greater risk
.....Banks’ credit-deposit ratio continues to be high, affecting their ability to lower interest rates. Exports have been falling. The situation in the euro zone remains uncertain. Job losses have started. Given the circumstances, for RBI to do nothing will be a greater risk for the economy than easing policy. The RBI governor has said that some amount of growth must be sacrificed to bring down inflation. The question is, how much growth? If the trend rate of growth is higher than what the latest GDP and IIP figures suggest—and RBI has said it is—then it’s time for monetary stimulus. And since rate cuts won’t work unless there’s adequate liquidity, it’s time to cut CRR.
Will RBI go for a rate cut or will it shock investors with a pause?
....Subbarao's comment last week sums up his predicament. "While Dr Reddy had problems of success, like excess flow of liquidity into the country, I have a problem of problems," he said. YV Reddy, his predecessor, contemplated curbs on dollar inflows while Subbarao is faced with the prospect of luring US dollars into the country. When he announces the mid-quarter macroeconomic review on Monday, the RBI governor will be factoring in a view that was just a murmur a few months ago but is getting louder now - stagflation, a state of low growth and rising prices. India may be the first major economy that may face such a state, economists dread.......
Drastic remedy
This is with reference to the news item “RBI may cut repo rate by 25 bps, keep CRR intact”(Business Line, June 16).The present situation calls for drastic steps by the RBI on June 18. While inflation is on the rise, industry needs some incentive to revive production. It appears that in addition to the repo rate cut, there should also be some cut in the CRR.
- T.R. Anandan Coimbatore (HBL)
Target currency movements, not interest rate, to control inflation: CII
....“India has entered a vicious cycle in which low growth is affecting investor confidence and leading to capital outflows and currency depreciation. This is adding to inflationary pressure forcing the RBI to hold on to higher interest rates than is appropriate for the economy,” ..........
Gold loan firms setting up SRO as RBI tightens screws
............"We feel that RBI has not been comfortable with fast growth of our industry, which led the regulator to tighten norms on banks' exposure to this industry in April and also bring down loan-to-value ratio," Muthoot said. "We want to send out a message to the regulator that we are complying with all its regulations. We are giving them (RBI) time to understand our business model," he said...........
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