....The newly launched online trading platform is an additional facility to the existing system for trading by GAHs through primary dealers. RBI further said that the access to the module will be subject to controls by the respective primary dealers.......
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.
Monday, July 2, 2012
Rural scheme wages go online in Ganjam
,,,,The wages would be directly transferred to their account through the Regional Electronic Clearing Services (RECS), provided by the Reserve Bank of India (RBI), without intimating the district authorities. The block authorities are only to intimate the amount to be given to the beneficiary, he added. "It will help in quick payment of the wages to the beneficiaries and also to arrest the corruption on payment of the amount," the officer said.....
Finance ministry, Sebi likely to recast regulations to allow companies to use ‘call & put options’ in M&A
......Ministry officials will soon meet with Sebi and the Reserve Bank of India to work out details of the new rules, including incorporating safeguards to check speculation, a finance ministry official told ET. "The norms need to be revised in line with today's economic realities and changes in the capital market," the official said.........
A very curious slowdown
The RBI data on the industry wise deployment of credit show that between 23 March 2012 and 18 May 2012 loan outstandings to the coal, petroleum and natural gas industries went down from Rs. 70,060 crore to Rs. 62,770 crore.........
Rupee volatility is here to stay: Rashesh Shah, Edelweiss Group
The rupee has lost almost a fourth of its value against the dollar in last one year. This fall has created a chorus of demands from industry as well as sections of the political establishment that the Reserve Bank of India (RBI) should step in and use its foreign exchange reserves to stabilise the value of the rupee. The RBI, on the other hand, has been categorical that it will only step in to curtail the volatility and not to support the value of rupee at some pre-determined price............
Ill blow the trade winds
....In sharp focus is the fact that the widest ever CAD has kept India’s BoP in negative territory for the second quarter in a row, forcing the RBI to dip into its foreign exchange reserves. Once again, the BoP data highlights the huge risks in depending on volatile portfolio capital flows. A related development contributing to the economy’s vulnerability is the high level of external debt, especially of the short-term variety. Key vulnerability indicators like the debt-GDP ratio and debt-service ratio deteriorated during last year. However, despite being aware of the serious pitfalls, the government and the RBI have shown a penchant for short-termism.......
Sunday, July 1, 2012
Celebrations mark SBI's Bank Day in Lucknow
.....State Bank of India celebrated its Bank Day on Saturday. On this occasion, SBI (main branch) organised a self-help group awareness camp and a mela at Moti Mahal which was inaugurated by Rabi Mishra, Regional Director (Uttar Pradesh and Uttarakhand), Reserve Bank of India in the presence of N Krishnan, chief general manager, NABARD and K Ramachandran, chief general manager, SBI, Lucknow Circle. In the evening, as a part of the celebrations, a melange of cultural events were organised by the Bank with the active participation of the staff members.....
Cops still clueless on Silsako wetland money source
....We had sent some of samples collected from the wetland to RBI, which confirmed that the notes were real. But we have no lead in the case so far," said an official from the district SP office. "The area is quite huge and surrounded by hotels, illegal settlements and education institutes. It is hard to find out the source of the money," added the official. He added that at least Rs 1.5 lakh was fished out that day........
Staff protests RBI call to close coin counters
.....After RBI’s announcement, four recognised associations of the bank representing officers and employees had requested the bank to desist from closing the RBI counters as they served larger public interest. Protesting the decision taken by the RBI management, the members of the associations all over India staged demonstration in front of the offices on Thursday.......
‘Friends’ lends a helping hand
......“Most of the support for the organisation is from the RBI Staff Quarters, Besant Nagar. We collect old clothes and give it to people who need them,” said Bhavana, Organising Secretary, adding, “We are thankful to Rammohan and Usha, staff of RBI, for their support.”..........
Micro Finance in India
....The bill, introduced in May 2012, will aim to help the RBI set performance benchmarks for different sectors. These standards will be regarding justifiable means for recovering loan and other operational methods of the MFIs. The RBI is also supposed to establish a microfinance fund that will be used for providing them loans, seed capital, and grants. This fund will also be used to provide training to professionals who are working in this sector.........
Insuring stress
Given how sharply the economy has slowed, it’s not surprising the quality of banks’ balance sheets is worsening. RBI says as much in its latest Financial Stability Report (FSR), citing a stress test that reveals a deterioration in their capital position..............
Rebrand Or Perish
20 Leaders of IIT KGP IN The Glorious 60 years
....The book has a foreword by Dr Duvvuri Subbarao, Governor, RBI, and an introduction by Dr Damodar Acharya, Director, IIT Kharagpur. The book, published by Random House India and priced at Rs 150, makes for inspirational read for IITians......
Read.......
Read.......
Allahabad Bank awarded RBI Rajbhasa shield
Allahabad Bank has been honoured with 3 prizes by Reserve Bank of India for 2010-11 for outstanding implementation of official language policy of the bank. J P Dua, chairman & managing director of the bank received the prizes from the RBI Governor Dr D Subbarao in Mumbai on Friday.
Volatility Is A Word
The Reserve Bank gives its Governor the best statistics possible in the country; he should invest in better macroeconomic theorists to interpret them
The economy continues to generate unfavourable news. It has been so prolific in bad news that just reporting it can be mistaken for being alarmist. However, the governor of the Reserve Bank took a recent opportunity to ask whether 2012 is going to be a repeat of 1991. A large payments deficit had coincided with a large fiscal deficit in 1991; the same combination is to be seen in 2012. We are happy that he has taken the initiative to ask the question. His answer is predictable: that it is not. And the reasons he gives are good, fair and dubious. He is right that the share of services in national income has gone up. But to argue then that services are more stable and will give stability to income variations is wrong........
Urban Co-op Banks resist RBI’s stringent norms
The cooperative banking scene has witnessed a steep decline in financial standards and it explains the RBI laying down stringent rules for checking a bank’s financial health. However, the evolution of the strict norms by the RBI has ruffled the cooperative banking sector’s feathers..........
Read...........
Read...........
Majority of SMEs call RBI decision of not easing monetary policy ‘unjustified’: Survey
whopping 93% of industries in the SME sector opine that the Reserve Bank of India's (RBI) decision to keep the interest rate unchanged was completely out of line, according to a quick poll conducted by the apex industry body ASSOCHAM...........
Urban Co-op Banks resist RBI’s stringent norms
The cooperative banking scene has witnessed a steep decline in financial standards and it explains the RBI laying down stringent rules for checking a bank’s financial health. However, the evolution of the strict norms by the RBI has ruffled the cooperative banking sector’s feathers............
What’s Your NPA?
Kamlesh Chandra Chakraborty is not one to mince words. On 28 June, the senior-most Deputy Governor of the Reserve Bank of India (RBI) gave bank chiefs an earful on bad loans. “You have misguided your investors for the past five years by not giving your proper NPA (non-performing assets) figures.”.....
Read.........
Read.........
More inter-bank links warrant greater monitoring
.......RBI said the degree of loss to the system due to failure of the ‘most connected’ bank had risen from 12 per cent of capital of the banking system to over 16 per cent in 2011. “Financial stability considerations, therefore, warrant that the risks posed by the increased interconnectedness of the few banks in the inner core to be carefully monitored, through rigorous microprudential supervision of these entities,” said RBI.........
Impact of forex volatility on rupee
....The exchange rate regime in India can also be described as a “bounded float” with the removal of restrictions on many capital account transactions in the past few years. While the RBI does not target the exchange rate, nor has a fixed band for nominal or real exchange rates to guide interventions, the capital account management framework helps in the bounded float.....
Exchange rate: Fixed or floating?
.....The Reserve Bank of India’s selective control in the forex market has been unable to control the free fall in the value of rupee in the recent months. This raises a fundamental question as to whether the RBI should consider alternative exchange rate policy options......
Banks' gold coin imports a concern
.....For banks, selling gold coins was a lucrative proposition, as they earned Rs 100-150 for every gm of gold sold. State Bank of India Chairman Pratip Chaudhuri said, “Banks took to gold coins because customers needed them. Private sector banks were doing brisk business. So, we thought we were losing out on an opportunity and viable business.” He added gold was taking away foreign exchange and some people were possibly holding gold as the nearest proposition to holding dollars.
Read - BS
Read - BS
Saturday, June 30, 2012
Tweak financial regulation - Y.V.Reddy
.........In revisiting the issue of regulation in conjunction with competition and ownership, it is necessary to recognise the lessons from public sector banking in the 1970s and 1980s, particularly in developing and emerging market economies. The problems in the past with public sector banking were on due to financial repression attributable to macroeconomic policies, the lack of appropriate global standards of regulation, the existence of monopoly status, and technological obsolescence, in addition to standards of governance in public systems in general, and public ownership in particular..........
Monetary policy for villages only
India has two economies: One for the urban rich and the other for the rural poor. The RBI should encourage the wealthy to invest in rural India by reducing interest rates there.
Like Mr Kapil Sibal’s policy of ‘one nation, one examination,’ the Reserve Bank of India has a policy of ‘one nation, one interest rate’: it offers the same rate whether it is a rich city such as Mumbai or a poor village in Keonjhar, Odisha. The fact that it has not produced the desired results has made no impact on the central bank. .................
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International Conference on Risk Management and Fraud Detention
.....Mr. Vijaya Bhaskar, ED of RBI explained in detail the regulatory expectations. He said that fraud is an area of concern as it undermines the trust, which is the foundation stone of the banking business. He emphasized that the three lines of defense against Fraud – the employees, the systems and controls and the external agencies like the regulator and law enforcement agencies- should be strengthened. He insisted that for establishing a strong anti fraud culture the first two lines are to be robust. .........
E-payment facility for all MGNREGA beneficiaries by Oct
.....Over six million households registered in the state under MGNREGA will benefit from the facility. The RBI Deputy Governor also rolled out an improved model of electronic receipts of the state government. The new model envisages a mechanism where the agency banks will forward the particulars of electronic receipt transactions on the day following the day of transaction to RBI-Bhubaneswar instead of sending to the cyber treasury. RBI will process the e-receipt files, debit the accounts of banks and credit the account of the state government instantaneously with the amount of e-receipts. The Central bank will also generate e-scrolls and forward the same to the cyber treasury.........
Former Bank of Maharashtra chairman Anup Sankar Bhattacharya takes over as director of IBPS
Former Bank of Maharashtra chairman Anup Sankar Bhattacharya has taken over as the director of Institute of Banking Personnel Selection or IBPS, which conducts common admission tests for bank recruitment. Bhattacharya will replace M Balachandran who is resigning today.......
What keeps rupee under pressure
The Reserve Bank of India announced details on balance of payment. Balance of payment is typically the sum of all transactions made between nations for a specific duration.............
Read...........
Read...........
‘India must cut subsidies, push reforms to defend rupee’
......The Indian rupee is likely to slide further and might soon touch 58 to the dollar as regulatory measures by the central bank are unlikely to have any significant impact on the currency, analysts say.
“The monetary policy has its limitations. The RBI intervention won’t do much as the issue is structural,” .........
NBFCs at business concentration risk
.....share of non-banking finance companies in the gold loan business has risen sharply with total asset size increasing to Rs 44,510 crore in 2011- 2012 from just Rs 5,480 crore at the end of March 2009, increasing the concentration risk in the business as the growth is contributed by two main companies, according to the Reserve Bank of India Financial Stability report released on Thursday.........
Price stability and financial stability – an emerging market
 |
| Deepak Mohanty |
Address by Mr Deepak Mohanty, Executive Director of the Reserve Bank of India, in the 2012 Central Bank of Nigeria (CBN) Board Retreat, Cape Town, South Africa, 27 June 2012.
......Drawing from a wider mandate, monetary policy in India has evolved to have multiple objectives of price stability, financial stability and growth. These objectives are not inherently contradictory, rather mutually reinforcing. The Reserve Bank’s approach recognises that price and financial stability are important for sustaining high levels of growth which is the ultimate objective of public policy. The Reserve Bank’s approach to financial stability has been proactive and preventive rather than reactive. Its role as monetary policy authority, well integrated with macroprudential regulation and microprudential supervision, with an implicit mandate for systemic oversight has enabled the Reserve Bank to exploit the synergiesacross various dimensions..........
Banks must behave responsibly, says Chakrabarty
RBI to take best possible steps to check Rupee slide: Chakrabarty
New Delhi: The Reserve Bank on Friday said it will continue to take "best possible" steps to contain the slide of Indian rupee. "Whatever best possible...What Reserve Bank needs to do, Reserve Bank will continue to do that," RBI Deputy Governor K C Chakrabarty said on the sidelines of IIMA's Citi Financial Literacy Symposium here...........
RBI says about 9% of bank branches most reluctant to lend
The reluctance of bank branches to lend to the poor is hampering effective implementation of the Manmohan Singh government's financial inclusion scheme, being promoted as an antidote to the rising income inequality. Reserve Bank of India has found that 9% of the country's 92,690 bank branches are the most reluctant in lending. Their credit-deposit, or CD, ratio is less than 25%. Loan disbursals through these offices fell by 15.4% year-on-year to December 2011 as against a 4% rise in the corresponding period in 2009-10.................
RBI imposes Rs2 lakh penalty on Rajasthan bank for excessive service charges
The action by the apex bank should serve as a pointer to other banks—big and small—that charge excessive service charges
The Reserve Bank of India (RBI) has imposed a monetary penalty of Rs2 lakh on the Bundi Urban Co-operative Bank located at Bundi in Rajasthan. According to a press release, the bank has been penalised for "repeated violations of Reserve Bank of India (RBI) directives relating to donation and levy of service charges on customers". A show-cause notice was sent to the bank, but the central bank found the response unsatisfactory. Levying monetary penalty for violation of RBI guidelines on services charges to customers is the first of its kind by the RBI. The action by the apex bank should serve as a pointer to other banks-big and small-that charge excessive service charges.
Moneylife
Current account deficit swells
.....“The stress witnessed in India’s Balance of Payments (BoP) in the third quarter continued during the fourth quarter of 2011-12 as well due to large increase in imports,” .........
Read - The Hindu
Read - The Hindu
RBI warning as BoP deeper in red
..........Reflecting India’s growing vulnerability on the external sector, all the key parameters of the balance of payments (BoP) are flashing amber.................
Banking on Pranab
........At the moment, it’s a problem of plenty. Omarpur, a small town on the way to Mukherjee’s home in Jangipur, has seen 20 banks spring up in the last couple of years. From private banks like ICICI Bank and Axis Bank to Bangiya Gramin Vikash Bank (a regional rural bank) and state-owned United Bank of India, the people of Omarpur are clearly spoilt for choice. There are too many banks chasing too few customers. Customers are therefore treated like royalty here. So intense is the competition among banks in Omarpur that in the last one year, around four branch managers have sought transfers because they found it impossible to meet the business targets assigned them...................
Gold loan business model worries RBI
RBI on Thursday expressed concerns that the business model of gold loan companies is driven by borrowings, of which, bank finance forms the major component and is increasing at a fast rate. Any adverse development in recovery by these NBFCs or an adverse movement in gold prices may have a spill-over impact on the asset quality of the banks, the central bank said in its financial stability report.
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So much of glitter
The spirited advice by a Reserve Bank of India official that Indians — especially the poor — must keep away from investing in gold because such investments are speculative, is unlikely to be heeded by many. This recent suggestion has been made by Reserve Bank of India Deputy Governor KC Chakrabarty obviously because huge amounts of gold imports are adding to the country’s current account deficit and dragging the value of the rupee down. Mr Chakrabarty’s concern is understandable..............
KYC: An effective tool to fight money laundering
Money laundering poses a serious threat to the health of India’s financial sector. It is the process by which criminals conceal the origin and ownership of the proceeds of crime by legitimising illegally obtained money, channelising surreptitiously through legitimate business channels and integrating those to the financial system through ways like bank deposits, investments or transfer. Financial institutions like banks, insurance companies and stock markets are most vulnerable to such intrusion and therefore, the need to protect these institutions from the debilitating effect of laundered money. This is intended to be achieved by implementation of Know Your Customers (KYC) policy and Customer Due Diligence (CDD) guidelines across the financial sector...........
“Expedite smart cards scheme”
.... A.J. George, Assistant General Manager of Reserve Bank of India (RBI), reviewed the banking indicators of the district. While expressing broad satisfaction, he pointed out with concern that advances to minorities was only 2 per cent instead of the mandated 10 per cent. He urged bankers to focus on this section and also improved their reporting.......
SEBI’s ED Usha Narayanan demits office
......She also served in IOSCO’s inspection committee, RBI’s conflict of interest committee and the Government of India committee on ADR/GDR/FCCB policy......
RBI's diktat capping debit card charges could spur usage
Come July 1, and you could see retailers across the country urging you to use your debit cards instead of credit cards. The reason? The recent directive from RBI asking banks to charge a maximum of 0.75-1% (of amount swiped) on debit card transactions at point-of-sale (POS) terminals. The objective is to make it cheaper for retailers to operate the POS infrastructure and thereby encourage use of debit cards over credit cards.............
With fees halved, kirana shops may accept debit cards
......However, there is some confusion on who will reduce charges as the MDR is shared by the card issuing bank, Visa and MasterCard and the bank that has installed the point of sales terminal (acquiring bank). At present, the onus of recovering MDR is on the accquiring bank although most of it goes to the issuing bank. Card companies are seeking clarity from RBI on the extent of reduction by each player.......
Friday, June 29, 2012
D Subbarao dampens fiscal stimulus hopes
Read..........
....and he is now Dr.Sandip Ghose.........
VITALINFO extends Heartiest Congratulations to Ghose as he will now be known as Dr. Sandip Ghose........ Watch this space to read more tomorrow...........................
RBI is right, critics be damned : S S Tarapore
......In an unusually hard-hitting speech, at the Indian Merchants’ Chamber on June 19, 2012, Governor Dr D. Subbarao stressed that there was nothing inevitable about the India growth story and that achieving growth was a shared responsibility of the government, the RBI and economy managers. He emphasised that the blame game cannot go on; it was not good for anyone, particularly the majority of the population. The poor are vulnerable to inflation as it is a regressive tax which hurts the poor the most; their voice, silent as it is, must be heard. Governor Subbarao comes out fighting from his corner, and this speech will go down in the annals of RBI history as one of the most powerful and frank speeches by an RBI Governor. The matter will not end here, and the RBI should be ready for a battle of attrition. The RBI can take solace in the fact that it is doing the right thing, if it comes in for bitter attack; and conversely, doing the wrong thing, if praise is heaped on it........
RBI sounds a cautious note on algo trading
.......This is the first time a financial market regulator has revealed figures regarding the use of HFT or algo trading technology, which have been under a cloud globally. RBI has stressed the need to balance technological advancements with a pragmatic approach. “This assumes even more significance for India, as efforts are being made to increase retail participation in Indian securities markets to change the markets’ largely institutional character,” RBI said...............
RBI caps merchant discount rates for debit card transactions
.....The RBI said the cap on MDR would encourage all merchants to deploy card acceptance infrastructure and also facilitate acceptance of small value transactions. A lower MDR, with the expected increase in transaction volume on account of network effects, would result in a reasonable ROI for acquiring banks. Till now, the MDR for debit and credit cards was the same in India. Given the different nature of the two products, there is no rationale for having a similar MDR for debit and credit cards, the RBI release said.
No cheques: Govt, RBI want to checkmate paper money
.....Well, the good news is that the finance ministry wants to end our love affair with paper money. It has decreed that at least state-run banks must completely stop using cheques for the following purposes: payments to customers, staff, and vendors and suppliers. Moreover, “disbursement of loans and payments towards investments should be made only through the electronic mode,” reports The Economic Times. Simultaneously, the Reserve Bank of India (RBI) has put out a vision document whose goal is to reduce the use of paper money. Its vision is not to move to a cash-less society, but a “less-cash society”. (If you have trouble falling asleep, you can read the whole bally document here.) So, don’t fret too much of your bank suddenly raises charges on issuing cheque-books. They will justify it in the name of the RBI’s less-cash vision. Any excuse to charge you more. But it’s in a good cause.
‘I do not go to an ATM’
Mumbai, June 28: The RBI Deputy Governor, Dr K.C. Chakrabarty, brought the house down saying that he never used ATMs after hearing the number of complaints made by customers. While the ATM machine was one of the greatest innovations in the last 50 years in terms of technology products, it did have drawbacks. “It facilitates faster dispensation of cash provided the transaction is successful. Though there have been 98 per cent successful ATM transactions, there have been no failed transactions at a branch. So where is the evolution?” he exclaimed. “The problem faced by the aam aadmi today is ‘terrorisation of ATMs’. Some (ATM machines) will swallow your cards, some require only swiping; some require keys and some do not, some provide cash on the tray while some do not, and some do not return money…,” he quipped.
HBL
Banks must ensure better IT solutions for customers: RBI
The Reserve Bank of India Deputy Governor K C Chakrabarty told banks on Thursday that their “Focus of all innovation should be on the customer” and it should never be driven only by internal processes, systems or employees but customer satisfaction..........
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Read.......
RBI Deputy Governor K C Chakrabarty differs with FinMin, opposes free e-fund transfer
MUMBAI: Within a fortnight of the Finance Ministry asking banks to make electronic fund transfers free of cost, RBI Deputy Governor K C Chakrabarty today said the banking regulator is firmly of the view that the plan should not be implemented as it is commercially unviable. "We firmly believe that anything that is free of charges can never be scaled up, it cannot be made robust unless there is commercial viability...I don't think anybody will be able to provide this service free of cost; this is just not possible," ...................
Banks misguiding investors on NPAs, says Chakrabarty
Mumbai, Jun 28: Mr K C Chakrabarty, Deputy Governor, Reserve Bank of India, on Thursday lambasted lenders for attributing their sudden fall in profits to migration to system recognised NPA generation saying this is tantamount to misguiding investors. “You have misguided your investors for the past five years by not giving your proper NPA (non—performing assets) figures,” he told a banking technology summit organised by the industry body CII here..............
Measuring sentiment
Like love, “sentiment” is an intangible and can’t really be measured. Its impact, however, is profound; when aroused, sentiment can completely overturn your life or, more prosaically, financial markets. While measuring sentiment accurately is, by definition, impossible, I like to put on my Don Quixote hat from time to time and tilt at such lovely curiosities. I’ve been doing that with the sentiment for the rupee and my ramblings may, perhaps, throw some light (or more confusion) on the subject.........
Looking Ahead: Staff crunch ahead, NIBM readies PG course via video-conferencing
.....The move is aimed at countering the likely shortfall of staff in the banking industry in the next few years as several officers holding top management positions in banks are retiring. Major private and government-run banks will be connected to training sessions that NIBM will run during a year long e-post graduate programme in banking and finance (PGPBF). The decision on launching the video-conferencing facility will be taken at the board meeting of NIBM likely to be held in July in Mumbai under the chairmanship of Reserve Bank of India (RBI) Governor D Subbarao. .......
To check speculation, RBI seeks curbs on currency futures
.....RBI is learnt to have raised the issue during a meeting of the sub-committee which is chaired by the central bank governor. In recent weeks, RBI has sought to clamp down on activities that could impact currency fluctuations and the proposal is also in that direction. The rupee has depreciated over 20% over the past 12 months and closed at 56.80 against the dollar, compared to Wednesday's close of 57.16......
RBI Executive Director weighs financial stability objective
.....Deepak Mohanty, an Executive Director at the Reserve Bank of India, delivered a speech on June 27 in which he discussed the importance of financial stability as an element of central bank mandates, but argued that price stability should remain the first priority. Speaking at a Central Bank of Nigeria board retreat in Cape Town, Mohanty said that the recent crisis has underlined the importance of central banks' financial stability role. However, "the challenge for a central bank is to achieve multiple objectives without losing credibility as a monetary authority solely responsible for price stability," he said..................
Concerns over asset quality of banks remain elevated: RBI
.... “Insurance companies and mutual funds are the major lenders in the Indian financial system with banks, especially public sector banks, being the major borrowers.” Banks, on the other hand, were considerably reliant on borrowings from these entities. As borrowings from mutual funds were largely short-term, the RBI said, “they could engender greater liquidity risks for the banking system.”...............
Reserve Bank Says India Is Facing Inflation, Growth Risk
............“Threats to stability are posed by the global sovereign debt problem and risk aversion, domestic fiscal position, widening current-account deficit and structural aspects of food inflation,”................
Read...........
Read...........
Bank deposit and lending patterns continue to favour big cities
......Recent Reserve Bank of India data on deposits show that wealth is getting concentrated in the bigger cities and towns. At the end of December 2011, the top 100 Indian cities accounted for 69.4% of aggregate bank deposits............
'Need to educate public about perils of investing in gold'
Reserve Bank Deputy Governor KC Chakrabarty today said educating the common man about the speculative nature of gold investments is the key to bring down the high import of the precious metal which is straining current account and pulling down the rupee. "What will bring down gold imports is creating awareness in the society that gold is not a proper investment for the poor. It is a speculative investment. We need to change our culture," .....
Lowering capital controls can sometimes be a bad idea
.....Indian industry is operating near full capacity, going by capacity utilization and inventory data published by the Reserve Bank of India, but the situation described by the World Bank is closer to what we saw in 2008, when the Reserve Bank of India led by Y.V. Reddy went against the prevailing global consensus and argued for a policy to control capital inflows that threatened to worsen overheated in the Indian economy.......
India downgrade could hit banks' overseas funding: RBI
....The ability of Indian banks and corporates to borrow overseas could be hit if the country's sovereign rating is downgraded, the Reserve Bank of India said on Thursday, after recent cuts to the country's outlook by Fitch and Standard & Poor's. "A change in the current external rating of the country could have 'cliff effects', impacting both, the availability and the cost of foreign currency borrowing for Indian banks and firms," the RBI said in a report on financial stability...........
RBI vs the govt: who will blink first?
......We seem to be moving towards stagflation, with growth at 5.3 percent and inflation (WPI) at more than 7 percent. In fact, CPI inflation for May came in at 10.36 percent, justifying the RBI’s latest stance. Even if the RBI had cut rates, there is doubt as to what extent banks would have followed it. Expectations of money printing abroad may have given the RBI some room to continue its crusade against inflation and resist pressure to cut rates immediately to ease liquidity. Also, as rightly mentioned by it, there is a risk of commodity prices rising and thus adding to inflationary pressures, if developed markets start printing money once again. The point is, how long would it wait for Quantitative Easing (QE) abroad, before finally succumbing to the pressure and cut rates? A game of brinksmanship seems to be going on in between the RBI and the government. Let’s see who blinks first.
Despite risks, India's financial system robust: RBI
.............."The financial system of the country remains robust despite increase in risks to stability primarily due to global risks and domestic macroeconomic conditions,"..............
Read...........
Read...........
No direct risk to Indian banks from Eurozone: RBI
....The RBI felt the muted economic activity and difficulties abroad may lead to further deterioration in asset quality for banks but the situation is not alarming. The Basel-III capital adequacy norms to be implemented in phases by FY18, which aim at fortifying the capital bases of banks, may not hurt so much given our banks' strong capital adequacies but will throw up challenges,
PM takes charge of Finance — and how!
What a stunning difference taking over Finance Ministry has made to the persona of Dr Manmohan Singh! Seemingly clueless, listless and rudderless as Prime Minister, he has suddenly begun exhibiting verve and vigour, and morphed, in a manner of speaking, into a mouse that roars! He thumps the table and orders the mandarins of the Ministry, and the presiding deities of the Reserve Bank of India, Dr D. Subbarao; the Planning Commission, Dr Montek Singh Ahluwalia; and the Prime Minister’s Economic Advisory Council, Dr C. Rangarajan; to get cracking with the task of pulling the country out of the economic morass into which it has fallen.................
IndusInd Bank gets its first currency chest
.....Earlier, banks had to report the balances in the chest to the RBI at the close of each day. However, today typically the chests are linked up to the RBI that all transactions could be monitored by RBI real time...............
ATM operators struggle to pass on higher capital costs
............The operators of automated teller machines (ATMs) in India are unsuccessfully trying to convince ATM makers to charge per transaction as an increasing number of banks are outsourcing the entire process from purchasing to managing the machines...............
More inter-bank links warrant greater monitoring
....The Reserve Bank of India (RBI) on Thursday said “interconnectedness” among banks had risen in the last financial year and needed rigorous monitoring. “An analysis of the network of the Indian banking system reveals that the systemic importance of the ‘most connected’ banks has increased, warranting a closer monitoring of the banks,” said RBI in its fifth Financial Stability Report, released on Thursday......
Banks' gold coin imports a concern
...at a banking seminar on Thursday, RBI Deputy Governor K C Chakrabarty said investments in gold should be discouraged in the current scenario, and people should consider the change in their income levels before buying gold.....................
Elevated inflation, fiscal, current account deficits are serious concerns: RBI Governor
The Reserve Bank of India on Thursday expressed concern over the rapid rise in gold loan companies and that such firms, which are highly dependent on banks, could pose a risk to banks. In its Financial Stability Report released Thursday, the central bank also said it was worried about the placement of non-convertible debentures by gold loan companies. It also raised concers over high inflation and large fiscal and current account deficits..................
Foreign banks face Bharat challenges
......................And then, RBI released a ‘Discussion paper on the presence of foreign banks in India’ in early 2011. Apart from a more assured point of view regarding local incorporation for systemically important foreign banks, the Discussion paper does little to shake up the game for existing foreign banks. It does, however, change the rules of entry for new entrants by defining categories of banks that may not be eligible for the branch mode of presence.................
AP banks gearing up to complete rural coverage
.....The committee is now gearing up to open brick-and-mortar branches in all villages with population of over 5,000, as part of the nation-wide initiative unrolled by the Reserve Bank of India. The State requires 208 branches to cover all villages under this category..................
Thursday, June 28, 2012
RBI Q1 review on July 31
The Hindu
Are cooperatives financially included?
It is both strength and opportunity for cooperative banks to further financial inclusion in the country. In one of the recent speeches, Mr Anand Sinha, Deputy Governor of Reserve Bank of India (RBI), said that many artisans, migrant labours, small businessmen, retailers etc in semi-urban and rural areas of a number of un-banked and under-banked districts in the country find it difficult to join the formal financial sector and make use of various opportunities. He had suggested that urban cooperative banks (UCBs) take a lead in bringing them to banking network on social and economic grounds...............
Urban cooperative banks hit by new RBI rules
....."The new parameters are harsh indeed, and likely to hamper smooth functioning of the cooperative sector. The matter has been taken up with the RBI. There are some banks in the region who may not be able to meet the new parameters. What is worse is that the rule has been made applicable in retrospect, from March 2011,".....
RBI draws up plan to usher in less-cash deals
The Reserve Bank of India (RBI), on Wednesday, said that it planned to enhance the availability and acceptability of alternative payment instruments in lieu of cash to move towards less-cash economy and promote ‘mobile wallets’ as a single instrument for carrying out financial transactions. “The level of customer protection available in paper transactions and electronic transactions in India varies. In paper transactions in the case of fraudulent or unauthorised transactions, the responsibility to prove ‘good-faith’ lies with the banks, whereas in electronic transactions, the onus mostly lies with the customers,” said RBI in its ‘Payment System Vision Document 2012-15’, which was released on Wednesday for public discussion. Comments can be sent to the RBI by July 31.............
e-Payment must for public sector banks from July 1
....."The cost of handling a cheque during its life cycle, from printing till storage and destruction, is Rs 25 to Rs 40," said a finance ministry official. "Banks have significantly invested in technology as well as in developing various applications for electronic payment. That should be put to use." The circular said concerted efforts should be made by the banks and their sponsored regional rural banks to popularize e-payments and to bring down the number of transactions through cheques........
In lighter vein................. RBI introduces 1, 50, 100 Crore Rupees currency notes to keep up with inflation in corruption
With persistent double digit inflation, the price of high level corruption has also sky-rocketed, so much so that it has become increasingly cumbersome to conduction high value transactions using wads of Rs.500 and Rs.1000 notes. In order to reduce such dead-weight transaction costs and improve liquidity in the corruption sector, the RBI has decided to introduce currency notes in denominations of 1, 50 and 100 crores into the economy. The FICCE (Federation of Indian Chambers of Corruption in Everything), an apex body that caters to the interests of big players in the black economy has lauded the move.............
Coriander s/o Pulao, Aadhaar No 499118665246
Coriander and an apple, as per the Unique Identification Authority of India (UIDAI), are residents of India as they have been given an Aadhaar number. And this, perhaps, has been the last straw. Expressing shock at this, not to mention there having been several complaints of impersonation, the Union home ministry has asked UIDAI to get an internal as well as external security audit done by a third party to fix the lacunae in the enrolment system and avoid any more goof-ups.......
RBI asks primary dealers to stop short-term debt issues
The Reserve Bank of India (RBI) said standalone primary dealers will not be allowed to raise capital through short-term bonds from July 1, and should instead issue long-tenure debt to strengthen their capital base and align with Basel III norms for banks..............
Banks to hire vendors to run ATMs
To do away with regular complaints about non-delivery of cash from ATMs (automated teller machines), India’s central bank, the Reserve Bank of India, has reportedly asked all bankers to discontinue setting up their own ATMs. By next month bankers will hire vendors to set up ATMs and run them on fee basis. “From next month onwards we will not set up our own ATMs. At present, vendors only maintain ATMs and they take time to respond to bank calls. It creates trouble to customers. Now, the vendors will not only run and maintain the machines but also install and maintain them. They will receive payments against per successful transaction,” a senior banker told Business Standard.
BS
Why getting Raghuram Rajan as PM’s adviser makes no sense
......The wisdom of appointing a man of Rajan’s stature to enhance and influence the government’s economic policymaking is, however, open to question. Not because he doesn’t have ideas to contribute – he does – but because the government is not exactly lacking in ideas to fix the economy. The government’s all-star economic team – from Manmohan Singh himself to Montek Singh Ahluwalia to C Rangarajan to Kaushik Basu to RBI Governor Duvvuri Subbarao – have between themselves analysed the economy threadbare, and can comfortably agree on the broad contours of policy action needed.......
PM wants revival of economy with 'animal spirit'
Signalling his keenness to boost the economy a day after taking charge of the Finance Ministry, Prime Minister Manmohan Singh on Wednesday directed urgent steps for revival of investor spirit and reversal of the climate of pessimism with regeneration of "animal spirit". Taking stock of the country's economy in a series of high level meetings here, he identified tax issues, sluggishness in insurance sector and aspects related to mutual funds as problem areas and pressed for quick corrective steps. The meetings were attended by Planning Commission Deputy Chairman Montek Singh Ahluwalia, PMEAC Chairman C Rangarajan and top Finance Ministry officials. He will meet RBI Governor D Subbarao and Planning Commission members tomorrow as part of his review of affairs concerning the economy.............
AP annoyed at closure of bank branches in tribal areas
......Earlier, SLBC president and Andhra Bank CMD B. A. Prabhakar disclosed that many branches had been closed in East Godavari district’s tribal areas like Maredumilli, Y. Ramavaram, Addateegala, Devipatnam, Rayapalli and Gangavaram. After learning about their closure RBI had ordered reopening of these branches at once, he said.
Banks' business growth little changed in June: RBI
India banks' growth in deposits and loans was sluggish in the month to June 15, the Reserve Bank of India said on Wednesday.........
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Will the new RBI guideline bring in more QFI money?
Industry opinion is that this measure is likely to do very little as most investors overseas have better options
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RBI directs Uday Kotak to lower stake in the bank
The Reserve Bank of India has directed Uday Kotak, promoter of Kotak Mahindra Bank to lower his equity stake in the bank from 45.2 per cent to 10 per cent in phased manner. Uday Kotak has been given time till 2018 to bring down his stake to 20 per cent and lower it to 10 per cent in subsequent two years.............
Short measures
The Reserve Bank of India (RBI) has announced certain liberalising measures relating to the capital account. The central bank’s press release does not mention the objective, but one can guess it. If the idea is to improve capital inflows to relieve the downward pressure on the rupee, it is not likely to be realised by raising the ceiling on foreign subscriptions to government securities. They will go into the forex reserves of the RBI, which will give an equivalent credit to the government account in rupees. Thus, the funds will augment the bank’s reserves and not the forex supply in the market. There may not be any addition to net RBI credit to the government. RBI should clarify the accounting procedure for the benefit of analysts. It will, however, mean the monetisation of current fiscal deficit that will have an expansionary effect on money supply. This is worse than what is done now through the buybacks of gilts under open market operations, which imply retrospective monetisation of the past fiscal deficit. The response is not likely to be large since foreign subscribers have to bear heavy hedging costs against the possible depreciation of the rupee at the time of redemption of the securities.
- A Seshan Mumbai (BS)
Right move
This refers to the editorial ‘Balancing act’ (Business Line, June 27). Just after its mid-quarter review, the RBI has sought to upgrade the falling rupee by attracting foreign investments. The introduction of government bonds is a welcome move. Enhancing the limit for foreign institutional investments is a right step to attract dollar inflows. It is also expected that this will attract foreign investments in view of relaxation in rules. It will be easier for new classes of investors to invest in gilts as the RBI’s move also ends entry barriers. It will also be a good chance for Corporate India to go in for ECBs.
- Jayant Mukherjee, Kolkata (HBL)
Stop gold coin sales
This refers to the report “Central Bank likely to impose curbs on gold coin sale” (June 27). The Reserve Bank of India should take serious steps to curtail gold coin sales by not only banks, but other channels also like MMTC, post offices and so on. By doing this, the government will achieve two targets: one, it will be able to gradually wean investors away from such non-productive assets; and, two, it will save considerable amount of foreign exchange that is spent on gold imports.
- V Sridhar Kolkata (BS)
Curb gold; raise duties; borrow more – Are these solutions?
.....the Reserve Bank wants to impose curbs on banks selling gold coins to customers. A report in Business Standard quoted an RBI official as saying: “Banks were allowed to sell gold by importing it to fight the excess dollar flows. By the same logic, the measure should be reversed now as we are at the opposite end of the spectrum. It was a temporary measure, which unfortunately was made permanent by banks.” Temporary measure? Is liberalisation a temporary measure?.......
TJSB Sahakari – 40 and going strong
......The bank has also received permission from the Reserve Bank of India for starting mobile banking services and the bank has completed all the testing to start inter-bank mobile payment system (IMPS). The bank has received approval from the Reserve Bank of India for opening branches in Maharashtra, Goa, Gujarat and Karnataka. During the current financial year, 20 branches would be opened. The business target is the Rs 10,000-crore milestone.
Apna Bank makes big strides
......In recognition of its excellent customer services and overall progress, for the first time in the history of banking, the RBI and the Maharashtra Government have consented merging of Care Co-op. Bank Ltd. In a Non Scheduled Co-operative Bank – Apna Sahakari Bank Ltd. After that another co-operative bank from Western Maharashtra region, The Ashta Urban Co-op. Bank having nine branches, has merged into Apna Bank. Recently, one of the oldest co-op bank from Kolhapur region known as Shree Balbhim Co-op Bank Ltd having 10 branches is also merged into Apna Bank. Apart from this the bank has opened seven more branches during this financial year. Apna Bank having 46 branches and ATM centres at all over Maharashtra as on March 31, has received multi-State permission from the Reserve Bank of India to open the branches at Gujarat, Goa and Karnataka. The bank has been allowed to provide direct RTGS/ NEFT Services by Reserve Bank of India...........
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