|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| www.prmia.org | A Higher Standard For Risk Professionals |
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, July 6, 2012
Risk Management - The New Accelerator
Master Class On External Commercial Borrowings (ECB’s) and Trade Credits
......To encourage better usage of these financial funding tools and also to update and inform Corporates various rules, regulations and risk management issues related to the ECBs and Trade Credits, ASSOCHAM in association with JIMS Rohini, New Delhi is conducting one day Master Class on “External Commercial Borrowings and Trade Credits” on 9.30 A.M, Thursday, 19th July 2012, ASSOCHAM House, 47 Prithviraj Road, New Delhi. The program will have a key note address by Sr. Official, Foreign Exchange Dept., Reserve Bank of India, New Delhi followed by technical session by eminent speakers drawn from banking sector ......
The future of urban co-operative banks in Ahmednagar district
To foretell what would be the fate of urban co-operative banks (UCBs) in the next 25 years is like predicting whether there would be timely and sufficient rainfall in Ahmednagar district. It is very difficult to talk about the future of any banking institutions. I have seen an unparalleled change in banking industry over the last 25 years. Acceptance of deposits, lending and investment in government securities as dictated by Reserve Bank of India still continues to be hardcore of banking but money transfers in no time and similar services based on computer systems and internet services through service delivery channels and payment gateways has acquired a tremendous significance..........
Thursday, July 5, 2012
Wishes pour in as rosaiah turns 79
 |
| RBI Governor D. Subbarao greets Governor K. Rosaiah at Raj Bhavan in Chennai on Wednesday |
‘Banks must look at last mile in micro finance’
 |
| Financial inclusion is a necessity, a pre-requisite for growth |
Read - The Hindu
Subbarao says banks treating no-frills a/cs as nuisance
Reserve Bank of India Governor D Subbarao on Wednesday expressed disappointment that frontline branch mangers treated low-income household customers as an intrusion into their time and business, and were treating “no frills” accounts as a nuisance. “The general impression I got is that frontline branch managers treat ‘no frills’ accounts as a ‘nuisance’ and low income households as an intrusion into their time and their business. This is disappointing to say the least,”.............
India Struggles to Cushion Rupee's Fall
For almost a year, India's central bank has spent billions of dollars to support the beleaguered rupee. And yet the currency is Asia's worst-performing against the U.S. dollar over the past year. The fruitless efforts by the Reserve Bank of India shows how central banks, especially in emerging markets, often are powerless to manage pressures on their currencies if international market forces are ranged against them..............
SC restrains RBI on approval to foreign law firms
....The court said "it is clarified that the Reserve Bank of India shall not grant any permission to the foreign law firms to open liaison offices in India under Section 29 of the Foreign Exchange Regulation Act, 1973". The expression "to practice the profession of law" under Section 29 of the Advocates Act, 1961 covered "the persons practicing litigious matters as well as non-litigious matters other than contemplated in para 63(ii) of the impugned order...", the court said........
Disappointing to see banks with low customer footfalls: Subbarao
Guv says banks should look at financial inclusion as an opportunity to build fortune at the bottom of the pyramid
The Reserve Bank of India (RBI’s) Governor Duvvuri Subbarao today said that there is a disappointingly large number of cases of bank branches with low customer footfalls. The Business Correspondent (BCs) will drift off after a few months and ‘no frills accounts’ which remain largely inoperative. In his oration speech as part of Indian Overseas Bank’s Platinum Jubilee celebrations at Chennai on Wednesday Duvvuri Subbarao, Governor, Reserve Bank of India said that banks should look upon financial inclusion not as an obligation but as an opportunity to build fortune at the bottom of the pyramid.............
Read.........
Have banks misled investors by inaccurate reporting of NPAs?
.....Dr Chakrabarty could not have been unaware of the practices of reporting of NPAs in PSBs as he was the CMD of two public sector banks- Indian bank, one time a weak PSB, and Punjab National bank-prior to his becoming the deputy governor. Generally speaking, banks in the past endevoured to show diminished figure of NPAs, in such of those loans where the departure from the strict criteria of identification of NPA, was 'minor' which the statutory auditor accepted as reasonable.....
TN's diversification model to help address risks: Gokarn
Tamil Nadu has managed to show resilience during the bad times mainly due its diversification, which can be a good example on how diversification is a best way for lesser risk, says Reserve Bank of India (RBI's) Deputy Governor Subir Gokarn..............
RBI will focus on progress of south west monsoon: Subir Gokharn
CHENNAI: The Reserve Bank of India would pay more attention to the progress of the south west monsoon as it goes into its "policy date", RBI Deputy Governor Subir Gokharn said .........
RBI wants loan rates to be more transparent
“One problem that has persisted even after the introduction of the base rate system relates to the lack of transparency in the customer-specific spread charged to a borrower over the base rate,”........
Current account deficit has put pressure on rupee: RBI
.....“I don’t think the rupee movements are directly correlated with open market operations but are being driven by judgements on liquidity conditions and will continue to be driven by conditions on liquidity – whatever is causing the liquidity stress whether it is foreign exchange markets or something else,”......
RBI says no co-relation between OMOs, rupee
....."I don't think you can directly correlate the rupee movement with the OMOs," Gokarn on sidelines of an industry event in the southern city of Chennai, where the RBI's two-day board meeting began on Wednesday. "OMOs are being driven by judgements about liquidity conditions and they will continue to be driven by judgements about liquidity conditions, whatever is causing liquidity stress, whether it is foreign exchange market or something else.".......
Decision analysis for interest rates
....Several analysts applauded the Reserve Bank of India’s (RBI’s) resisting cutting interest rates despite declining growth. Some quoted monetary theory to justify this; others praised the regulator’s standing-up-to-government stance. Meanwhile, the nation groaned, waiting for relief. Is this just the vaunted animal spirits in reverse, that perceive a half-full glass as half-empty? Or is there substance to the frustration of those who function in the real-world marketplace, who deliver products or services and expect rational solutions?....
Current account deficit a major cause for rupee fall: Gokarn
Discount on debit card-payment acceptance postponed to Sept 1: RBI
The Reserve Bank today said reduction in merchant discount rate (MDR) for purchases made by debit card payment to 0.75-1 per cent, which was to be effective from July 1, will now be applicable from September 1 due to some operational issues.................
Finance ministry pushes for lower third-party ATM fee to increase financial inclusion
The finance ministry will push for lower third-party ATM charges in a bid to increase financial inclusion, risking further unpleasantness between the government and the Reserve Bank of India, which is not enthused by the idea...............
Micro-lending norms to be eased in phases: Subbarao
.....where floating rate loans are concerned, existing customers have been disadvantaged vis-Ã -vis new customers with similar credit ratings, resulting in complaints about discrimination. To address this, the Reserve Bank has constituted a working group under the chairmanship of Deputy Governor, Mr Anand Sinha, to determine the principles that must govern proper, transparent and non-discriminatory pricing of credit. The working group is expected to submit its report by August 2012....
RBI may relax norms to revive microfinance industry
Microfinance institutions (MFIs) in the country can breathe easy as the Reserve Bank of India (RBI) is likely to relax some of the norms pertaining to their net worth, capital adequacy and provisioning needs. The relaxations are expected to help troubled micro-lenders emerge out of the crisis. "The rollout of the new regulatory regime has run into some bottlenecks. Some MFIs are unable to comply with the qualifying asset criterion for registering as NBFC-MFI, and therefore banks are reluctant to make fresh loans to them as such loans do not qualify as priority sector lending," RBI governor D Subbarao said at an event organised by Indian Overseas Bank to celebrate their platinum jubilee here today.............
Finance ministry backtracks on bulk deposit cap diktat banks breathe easier
....“There is no instruction by (the) Reserve Bank of India on the proportion of bulk deposits to total deposits. Banks have their internal policy on these deposits. These are short-term deposits, primarily meant to bridge the asset liability gap in the short run,”.....
RBI should look at Islamic banking afresh: Khurshid
The Law Minister, Mr Salman Khurshid, said on Thursday that he had written to the Planning Commission and the Reserve Bank of India (RBI) on the issue of Islamic banking. He said he was quite hopeful that the RBI would look at the issue afresh and soon come up with its views after deciding on the technical issues..............
Wednesday, July 4, 2012
Of Economics, Policy and Development : An Intellectual Journey by I. G . Patel
Dr. Duvvuri Subbarao , Governor, Reserve Bank of India has kindly consented to release the book, in the presence of Dr Y.V. Reddy and Professor Alaknanda Patel.
Date: Monday 16 July, 2012 at 5.00 pm
Venue: Reserve Bank of India Auditorium, Mumbai
The economist as saviour
Indusind Bank opens it's first Currency Chest
IndusInd Bank opened its first Currency Chest in Mumbai – at the Bank's Thane Branch. Mr. Shekhar Bhatnagar, General Manager, Reserve Bank of India, Belapur inaugurated the Currency Chest in the presence of Mr. Romesh Sobti, MD & CEO, IndusInd Bank Ltd and other senior officials of the Bank...........
File complaint after paying credit card dues : Banking Ombudsman
Credit card users should pay their bills first and then lodge the complaint in case of a dispute with the card provider, said Banking Ombudsman (New Delhi) M Rajeshwar Rao. This will protect them from the risk of paying more in case the decision is in favour of the card provider, according to Rao. Customers should read terms and condition carefully so that disputes can be avoided, he said. It is advisable, in case of credit card disputes, to pay the dues and subsequently file complaint against the credit card company, he added.........
Read...........
Read...........
May we finally have some clarity please, Mr Prime Minister?
....If finance ministry officials were quoted as saying the interest rates need to be brought down, the central bank did quite something else, holding on to rates at its last mid-quarter policy review. This was also preceded by a strange event of two RBI Deputy Governors even giving contrasting signals on the direction interest rates should take. Not great news for a business community starved of growth momentum.........
Read...........
Read...........
Slumdog City Retail Banking to Boom With Wireless: Tech
....For a start, the Reserve Bank of India requires wireless companies or “non-banks” to partner with banks to offer mobile banking services, leading to tight controls on business. One reason is that only banks are permitted in India to accept deposits for maturity of less than one year. “Going for a bank-led model was a conscious decision,” Alpana Killawala, spokeswoman at the central bank, wrote in an e-mailed response to questions from Bloomberg News. The regulator is also concerned about “customer service issues”associated with the telecommunications company-led model, such as insufficiency of funds at the paying outlet, she wrote. ....
Gujarat's urban co-op banks fight Madhavpura's ghosts
...... senior RBI official associated with regulation of UCBs said the prudential norms to regulate these banks were very much in place then. But the apex bank was much liberal. There was a sharp rise in the deposit bases of UCBs and many banks were unable to manage the sudden growth. Some crooks took the advantage of gaps. Taking a leaf from that episode, RBI put freeze on any expansion in activities by UCBs, till they brought their houses in order. It banned opening of new branches. The dual control (UCBs come under the regulatory oversight of RBI and the registrar of cooperative societies) has always hampered effective regulation. RBI formed state-specific task forces to deal issues of UCBs. It identified weak but viable banks and firmed up their revival plans. If that failed, road was open for merger with stronger UCBs. In extreme cases, it could go for liquidation.......
Allow co-operative banks to be listed: Greater Bank CEO
To ensure that they survive and thrive, the top 50 urban co-operative banks (UCBs) should be allowed to be listed on stock exchanges, said a senior co-operative banker........
Read............
Read............
URBAN CO- OPERATIVE BANKS NEED THEIR SHARE OF RECOGNITION
....in fact UCBs need to be given some kind of support, relaxations. Facilities available to commercial banks such as refinance facility, interest subsidies on various loans such as housing, educational, SME etc. need to be given to UCBs also. Instead they are made to follow international prudential norms, fulfil the various ideal parameters without considering their size, category, area of operation and in case of failing to comply these norms, various restrictions are imposed by RBI on their branch opening, dividend distribution, lending operations. Various such issues affecting UCBs are forwarded to RBI from time to time for taking policy decisions. However slow moving approach adopted by RBI for resolving these issues act as a hindrance in the growth and development of UCBs.......
Banking must go hi- tech to address socio- financial inclusion
......Urban co- operative banks can play a pivotal role in the " real last mile socio- financial inclusion". They can bridge the gap of the staggering geographical disparity, socio- economic categories and the pervasive divides such as physical inaccessibility, cost of access, lack of awareness and trust deficit. Co- operative banks are better equipped to address these issues, given their widespread reach, lower operating costs, flexibility, and deep- rooted connections with the local communities, which, in turn, inspire trust.
With an effective technological application and modernization approach, urban co- operative banks can expand their reach even further; improve operational efficiency and address customer needs more effectively.....
Read.............
With an effective technological application and modernization approach, urban co- operative banks can expand their reach even further; improve operational efficiency and address customer needs more effectively.....
Read.............
Fallout of a Crisis: The Future of Microfinance in India After Andhra Pradesh
....Janalakshmi, an MFI headquartered in Bangalore, is using a biometric scanner in the field where a thumb print verifies loan collections and disbursements in order to reduce an agent’s time with each client and reduce fraud risk. The use of innovative technology also extends to customer-facing applications. Moving microfinance into a cashless process has benefits for every player in the value chain as it reduces human resource labor, creates electronic records and transaction information in real-time and is ultimately more convenient for the client. The use of mobile technology ......
RBI in its own way is accommodating quantitative easing policies through OMOs
....However, the RBI in its own way is accommodating such policies through its purchases of government bonds. This brings us to the point that inflation in India comes from the non-tradable rather than the tradable sectors. CPI inflation running at 10.36% not converging to WPI at 7.55% captures this idea. Inflation in the non-tradable sector is in th remit of RBI monetary policy and probably has its roots in RBI's QE policy........
Read............
Read............
India’s Unbanked Poor
...........However, despite the policy initiatives and efforts of non-governmental institutions, significant proportion of the nation, primarily those who dwell in rural areas, continue to be outside the coverage of the formal banking system. RBI’s own reports suggest that almost 40 percent of Indians lack access to even the most basic kind of financial services.................
Not by ‘animal spirits’ alone
....Not much, other than asking the RBI to reduce interest rates in the hope that will appease organised economy stakeholders. Right now the RBI is not willing to play the appeasement game. Its interest rate policy has not caused the slowdown as much as stakeholders, partly blindsided by New Delhi policymakers, would like to believe. In an inflationary situation, caused by global circumstances and policy ineptitude, the RBI stands out as an exemplary model for commitment to its mandate, more so under circumstances of flippancy and weary helplessness in New Delhi......
Ganeshaspeaks: No major overhauls for Indian banking sector
.....What lies ahead for Banking sector in India and the Indian stock markets? Taking into account the base period (01-01-2002) and the date of launching (23-06-2003) of Bank Nifty, Ganesha has prepared the Horoscope of the Indian banking sector. Looking at the planetary positions in the chart, Ganesha predicts the possible implications of the RBI's current monetary policy, particularly regarding to the repo rate and CRR........
Tripura mulls against Non-Banking Institutions
.....The existing laws are not sufficient to stop such illegal financial business of the NBFCs unless Ministry of Finance, Reserve Bank of India (RBI), Insurance Regulatory Development Authority (IRDA) or Securities and Exchange Board of India (SEBI) do not make coordinated effort,” .....
Interest rate hurting; RBI should cut rate gradually: Kamath
High interest rate is hurting the common man and RBI should cut interest rate gradually to spur economic growth, ICICI Bank Chairman K V Kamath has said. "I would think that we cannot dismantle rate which is very high. We have to do it gradually ... To kick-start demand at the hands of retails individual that's where large part of growth would come from," ..............
Assocham wants RBI to cut policy rates by 100 bps
.....Assocham representatives met the RBI Governor, Dr D Subbarao, on Tuesday to put forth their suggestions to reduce both the repo rate (the interest rate at which banks borrow funds from RBI) and the cash reserve ratio (the slice of deposits that banks park with the RBI) by 100 bps to support credit growth and investments. .....
Sebi probe widens to Fema breach
....The new findings broaden the scope of the violations and raise questions over breaches of the Foreign Exchange Management Act (Fema), which deals with laws relating to foreign exchange to facilitate external trade and payments and promote the orderly development and maintenance of the foreign exchange market in India. If indeed this happens, the Reserve Bank of India may step in as Fema violations are investigated by the banking regulator. .....
Exchange rate factors in high current account deficit: Dhawal Dalal
....In our view, RBI will continue to watch economic indicators to determine the trajectory of inflation and steps taken by the government to control fiscal deficit before deciding on rate cuts. Currently, the CPI (inflation), a measure of consumer prices, is approximately (at) 10 per cent. If we have a poor monsoon this year, it could result in higher food prices, translating into higher inflation. Hence, most market participants don’t expect RBI to cut rates in July at this point. As far as other central banks are concerned, monetary policies continue to observe deteriorating growth in their respective economies and are repositioning themselves for a loose monetary policy.......
Financial system risk rising: RBI
......“The problem in Europe is a bad news for the Indian banking system only to the extent that the European banks will not subscribe to bond issuances of Indian banks,” said Raman of Canara Bank. “They are major buyers of our bonds and the shrinkage in their balance sheet spells trouble for our overseas funding requirement.” The RBI report said any change in India’s external rating could have “cliff effects”, impacting both the availability and the cost of foreign currency borrowing for Indian banks and firms. The effect will not have any impact on domestic credit availability even as specialized types of financing such as structured long-term finance, project finance and trade finance could be impacted, the central bank said.
Read..........
Read..........
Final GAAR guidelines will remove investor suspicions: C Rangarajan
....The trade-off between growth and inflation is purely a short-term phenomenon. Over the medium term, there is no such trade-off. Over the medium to long term, high growth is possible only in an environment of low inflation. However, even in the short run, the primary responsibility of a central bank is to control inflation. RBI’s ability to adopt an easier stance would be facilitated if headline inflation, particularly non-food manufacturing inflation, begins to show signs of a decline. At the moment, I agree with RBI’s policy. But growth is certainly important. As soon as we get clear signs of a declining trend, action towards an easier monetary policy can be taken.......
Is India moving towards a stagflation-like situation?
.....Stagflation has, historically, been caused by expansionary policies that exacerbate supply shortfalls. But, the grievance has been that the Reserve Bank of India has been choking growth by raising interest rates and that the government has withdrawn the stimulus. If this were so, there is again a strong case for not terming the situation close to stagflation......
NRIs will now have to pay service tax for sending money home
....According to the Reserve Bank of India data there are 30 million NRIs. Currently no other country imposes tax on remittances and India would be one of the first.........
Read.............
Read.............
SBI waives minimum balance for savings accounts
The country's largest lender, State Bank of India (SBI), Tuesday announced that it has done away with the minimum balance requirement for savings accounts for both existing and new customers...........
CAD’s bad, real bad: and external debt is looking worse
......In the context of the Reserve Bank’s moves to further increase external borrowing in order to bring in short-term capital flows into the country and boost the rupee, we are probably building up problems for the future – unless exports can be shored up........
Read.......
Read.......
IDBI Bank concludes first transaction through RBI's web-based NDS OM module
.........IDBI Bank concludes first transaction of its gilt account holders (GAHs) through RBI’s web-based Negotiated Dealing System (NDS) OM module. With this, the bank has become the first Primary Member in the country to enable such deal in the Indian market................
Read.........
Muted response to RBI's government securities trading facility for corporates
....The Reserve Bank of India's web-based platform meant for corporates to trade in government securities got off to a slow start on Monday, with just IDBI Bank letting one of its customers to access the trading platform directly.....
Read - ET
Syndicate Bank brings small enterprises under one roof
....According to the guidelines of Central Government and Reserve Bank of India, the bank has taken steps for increased flow of credit to micro, small and medium enterprises sector....
Nagendra Murthy is new MD of TMB
....The RBI, it is learnt, cleared the air by formally communicating the appointment of Mr Nagendra Murthy as MD of TMB late last week. The board met in Bangalore on Tuesday to stamp its approval.....
Tuesday, July 3, 2012
Can PM Revive the Economy?
.....Perhaps the finance minister believed that RBI would be better counsel. But Governor D. Subbarao seemed reluctant to give his best advice. Mukherjee and Subbarao have a frosty relationship, professionally and personally. Says a senior official, "In the last few months, there has been a complete breakdown in communication between RBI and finance ministry." Mukherjee and Subbarao have consistently disagreed on the correct level of interest rates for over a year. On June 16, just a week before he left office, Mukherjee signalled his desire to see a lower interest rate. "Keeping in view of all current factors, I am confident that the RBI will adjust monetary policy as we are adjusting the fiscal policy," he said at the National Banking and Insurance conference organised by industry body Assocham. Two days later, in his quarterly review of monetary policy, Subbarao, in a direct snub to the finance minister, left interest rates unchanged. He also rubbished Mukherjee's diagnosis and prescriptions for the fiscal deficit........
Comparing Balance Sheets: RBI with Select Central Banks
.....In this report, we compare RBI’s balance sheet with balance sheets of select central banks. The select central banks are Federal Reserve, European Central Bank and Swiss National Bank (SNB). These central banks are selected as they have cornered most of the attention with respect to central bank policies in the recent crisis. For Euroarea region, we analyse combined balance sheet of ECB and seventeen national central banks (NCBs) to provide a more comprehensive picture. This arrangement is called European System of Central Banks (ESCB). As above are developed economy central banks, we also cover Banco Central Do Brasil (BCB) in our analysis. This will help us compare RBI balance sheet with that of a developing economy central bank like BCB.......
RBI questions, but provides no answers
.....But how is one to read the entire report? A financial stability report is to outline the risks involved in the system as well as economy, which it does adequately. But are we to be worried about it? Worried, probably no, but concerned, yes. This holds for the financial system because there are some very disturbing signs on the quality of assets as well as interconnectedness of banks. The ones pertaining to the economy are clearly well known and hence do not really come as a shock. But RBI does not offer any solution for either the economy or the financial system. Therefore, the report tends to read like a note of caution on all aspects, highlighting the risks and the worst-case scenarios for various aspects. Therefore, it reads more like the ‘weaknesses’ and ‘threats’ part of the SWOT analysis, leaving out the strengths and opportunities........
RBI rate cut may be further delayed: Citi
.....With the RBI time again indicating that its priority is inflation and the economy may have to sacrifice growth to bring down inflation, it is very unlikely that the central bank will cut its policy rate in the next policy review on 31 July. “With inflation likely to remain sticky and rating actions coupled with the RBI’s latest policy stressing on the need to address supply-side imbalances, this once again put the onus on the govt to create a positive investment environment and implement tax and subsidy reforms,” ....
Another feather in Sandip's hat.........................
Dear Mr. Ghose,
I am pleased to write to you about the Thought Leaders Award scheduled on 30th June from 7:00pm onwards at Taj Lands End (Bandra-Mumbai). The award is to recognise the futurist who is recognized among their peer mentors for innovative ideas and has demonstrated the confidence to promote or share those ideas as actionable, distilled insights.
The awards are a part of the Global Change Management forum scheduled on 29th and 30th June and are hosted by the Thought Leaders International, Asian Confederation of Business, Stars of the Industry Group & World HRD Congress. The Global Change Management and Leadership forum along with the gala award ceremony will bring several Thought Leaders and Change Management Professionals under one roof. The Theme for the forum is “Mastering Change in a Hyperactive Business Environment”.
I am pleased to write to you that the Jury and Council of Board Members would like to confer you with the “Thought Leader Award” (Human Resource). This is in recognition of your remarkable progress in initiating changes in its process-remarkable enough for others in the same industry to follow your example. The Award will consist of a Trophy and a Citation. Request you to please honour us with your presence and receive the award in person. A line of confirmation will be highly appreciated.
Yours Sincerely,
David Paulson Dr. R L Bhatia
Chairman Founder
Awards & Academic Committee World CSR Day
Govt banks ask RBI to consider alternative on raising equity
State-run banks have urged the Reserve Bank of India (RBI) to consider perpetual non-cumulative preference shares (PNCPS) as part of their core Tier-I capital under Basel-III norms. This will ensure government banks do not have to rush for equity capital in the current uncertain macroeconomic environment....................
The problem of the rupee
....the Reserve Bank of India withdrew the 25 paise coin from circulation, acknowledging the plummeting value of India’s currency. Since this demonetization of the 25 paise, the Rupee itself has had a rather close shave, buffeted as it has been by 9% inflation at home and a 23% decline in its value vis-Ã -vis the US Dollar. In the present scenario of universal economic gloom the Rupee suddenly appears unattractive, but it certainly has had its days of glory.............
Breaking the bank
.......The low level of reserves at Indian banks may be encouraging them to fudge the numbers. Most banks reported allowances of less than the RBI’s minimum of 70 per cent of probable losses on total NPAs. At 69 per cent, Indian banks’ average level of reserves of bad loans is far below China’s 252 per cent and Indonesia’s 212 per cent. Setting aside greater provisions will hurt the banks’ bottom lines. But without a bigger buffer, the banks’ bad habits will only worsen.
Traders lean towards RBI benchmark rate
.....The trading community calls this “deals on a fix” or “fixing deals”. Such deals use RBI’s reference rates. RBI calculates reference rates after taking into account rates from several banks at around 12 pm. The rate is declared within the next hour.......
The Microfinance Route to Financial Inclusion
Microfinance has now become a movement that envisions an inclusive world in which low-income households have permanent access to a range of high quality and affordable financial services offered by a range of retail providers of financial services.......
Sidbi to mentor budding small entrepreneurs
......Meanwhile, Sidbi is seeking a Reserve Bank of India licence for the SME Rating Agency of India (SMERA), which has already secured the approval of the Securities and Exchange Board of India (Sebi).
“A RBI licence would facilitate bank financing for MSMEs using the SMERA platform. Sebi approval had only facilitated financing through issuance of bonds,” ........
India gets first mortgage guarantee entity, an NHB joint venture
.....The company will have processes for approving lenders and housing loans for guarantee cover and help in maintaining the asset quality of lending institutions. “Adapting itself to the Indian context with a range of customised products for the lending industry and borrowing community, the company will operate under the regulatory jurisdiction of RBI,” .....
21st-century banking
.....The Reserve Bank of India has, according to reports, turned down the finance ministry’s suggestion that electronic funds transfers, or e-transactions in general, be made free for bank customers. The main reason cited for this is that no product or service should be offered free, as then it would not be commercially viable and so would not be scaled up. This needs to be contested......
Can we have banking without charges & penalties?
.....A few days back, the finance minister in his parting gift to the banking public had asked the banks to provide electronic transfer of funds from one bank to another free of all charges. But as the saying goes in Kannada, "Devaru Kottru Pujari Bida" meaning "God wants to give but the priest is coming in the way", a RBI official has firmly declined to accede to the wishes of the FM as he feels that free electronic fund transfer is not viable for the banks. We can, however, empathize with the RBI official, because the officials of RBI generally do not have the practical experience of retail banking and consequently he may not know the nitty-gritty of branch banking. Banking has undergone a metamorphosis and with the introduction of core banking solutions, technology plays a major role in the functioning of branches, thereby saving substantial cost of operations for the banks. And to consider that it is not economical to offer e-transfer facility free of charges is in variance with reality......
Canara Bank launches technology-enabled Kisan credit card scheme
....The National Payment Corporation of India (NPCI) has developed the debit cards for Kisan credit card borrowers under its brand name of 'RuPay' cards. The credit facility of Kisan Credit Card enabled through debit cards will help farmers not only avail the loan from the bank but also would provide the convenience of drawing cash from ATMs of Canara Bank as well as others.....
Read........
HDFC Bank launches credit card for doctors
Private sector lender HDFC Bank rolled out credit cards for doctors to cater to medical fraternity's specific needs, as part of its plans to launch total one million credit cards in current fiscal to deepen its presence in credit cards space,............
SBI launches Business Debit Card for SME and business customers on foundation day
....The event was attended by its Chairman Shri Pratip Chaudhuri, Dr. Subir Gokarn , Dy .Governor , RBI, Bank's Managing Directors Shri Hemant Contractor and Shri A. Krishnakumar, other Central Board Directors, past Chairmen of the Bank, executives of Public / Private Sector Banks, eminent business persons and staff members along with their families......
........On the occasion, the Bank also launched for its SME and business customers, State Bank Business Debit card, having an array of attractive features including Cash Deposit facility, option of setting up Point of Sale terminals etc.......
Monday, July 2, 2012
Clear skies cloud rate-cut hopes
.....RBI Governor D Subbarao in a seminar organised by the Confederation of Indian Industries on June 19 admitted that monsoon will play a key role in determining the central bank’s actions on interest rates. “When I joined service, I did not worry about monsoons. But when I first went as sub-collector in Andhra Pradesh, there was drought in one of the districts and then I realised how not only economic prospects but also emotional well-being are tied to the monsoons. Then I moved away from the field and stopped chasing monsoons. So, at the end of my career, when I’m at the RBI, I sort of look at monsoons with lot of anxiety, love and lot of expectations. It is very important for us,” he added........
Subbarao stresses on importance of local language
....“Every bank should conduct a Town Hall event in a chosen State entirely in the local language. In this regard, they may coordinate with Reserve Bank’s Customer Service Department and Department of Communication to draw up a programme. This will be our collective effort to reach out to people in their own language,” he said while awarding Rajbhasha shields at Mumbai last week........
Will you miss the finance minister?
.......Mukherjee also made sure that RBI lost its autonomy by empowering the finance ministry to resolve all disputes between regulators. The original idea was to end the turf war between the capital market regulator and the insurance regulator on unit-linked insurance plans; but the finance ministry smartly used that opportunity to set up a statutory joint panel, headed by the finance minister, to resolve any such disputes among any of the financial sector regulators. RBI wanted the government to take a relook at the proposal to set up a statutory panel, but Mukherjee didn’t budge. The decisions of a statutory panel are binding and, to that extent, the finance ministry has become the super regulator, eroding RBI’s autonomy..........
Coordination between RBI, Central Govt need of the hour - T.V. Gopalakrishnan
The preamble of the Reserve Bank of India Act 1934 says ‘Whereas it is expedient to constitute a Reserve Bank of India to regulate the issue of bank notes and keeping of reserves with a view to securing monetary stability in India and generally to operate the currency and credit system of the country to its advantage.’ This gives an impression that the Reserve Bank has complete grip on the economy and the financial system where the Central Government, State governments, various markets, financial and other institutions and varieties of instruments and people interact and carry out transactions involving transformation of information and high technology. But, it has its own limitations and unless and until the Central Government gives full support and functional autonomy in letter and spirit, implementation of the preamble is practically rendered difficult..........
A wish list for the Common Person - S.S.Tarapore
With the change of guard at the Ministry of Finance, every pressure group will have its own wish list. In the din of all this the Common Person's voice will be totally drowned but this voice must be heard and what could be the wish list? First, the Common Person has no defence against inflation. The current inflation rate on a year- on- year basis is 7.8% on the Wholesale Price Index ( WPI) and 10.4% on the Consumer Price Index ( CPI) is clearly outside the RBI's comfort zone of 5% and the long- term cherished goal of a 3% inflation. All wings of policy must work relentlessly towards this objective.......
Centre not doing enough on fake currency: Parrikar
........"Whatever Reserve Bank of India pumps in (genuine currency) is flushed out by Pakistan. There is a massive influx of duplicate notes in the market," Parrikar told an annual general body meeting of Goa Chamber of Commerce and Industry (GCCI) in Panaji Saturday evening.........
Padmanabhaswamy Temple: Expert committee to start temple inventory of vault A
....The RBI is finalizing the design for the strong rooms that will strengthen the vault security. The advanced gemology equipment procured from Germany has also arrived and will be installed at the workstation tomorrow. When asked if the presence of an underground tunnel linking the temple to the sea would change the design of the RBI's vault, Nair said, "The committee fully supports the scientists from the Centre for Earth Science Studies in their study. But no information regarding the presence of a tunnel has been passed on to us."
Challenges and opportunities ahead for banks
......The RBI has come out with the phased roadmap for Basel- III framework implementation for the next five years. The need for risk capital as well as growth capital is likely to lead to higher capital requirement for the sector. ......
My View on "Micro Finance in India"
The need of the hour is GOI and RBI taking note of the changed scenario, post-emergence of commercial MFIs and move fast towards timely regulatory solutions. Although uniform regulations would be ideal, considering the multiplicity of agencies operating in the area, it would be desirable to restate the roles of the existing regulators and supervisors through an appropriate guidance from the central bank, after appropriate consultations, instead of micro-management based on study reports influenced by views of stakeholders many a time limited to narrow constituency interests. This initiative could cover NBFCs, MFIs enjoying bank credit and cooperatives which would leave only a minority of players in the field. Time is running out as delay of roughly six months would mean crossing one recovery-cycle of micro-credit, by which time, beyond financial losses to the lenders, considerable loss of faith in the system can take place. The MFI issue has already grown beyond reasonable proportions and become a Centre-state issue with political implications. Even where legislative support from state or Centre is necessary, the central bank must provide guidance. It will be near impossible for the stakeholders to arrive at a consensus on costs and margins in a lucrative business like this. Some MFIs have taken the controversy as an excuse for moving to other pastures leaving the Self Help Groups (SHGs) and small borrowers in lurch or have shifted their area of operation from one state to the other where state governments accommodate their recalcitrant behavior. Delay in finding a solution will, therefore, mean closure of livelihood occupations for millions of MFI borrowers who depend on short term credit for carrying on with the ventures they have taken up with hope.
- M G Warrier
Bank credit to farm, SME sectors forms over a third of bad loans
medium enterprises (MSMEs) were the main contributors to banks’ bad loans in 2011-12. Agriculture and MSMEs used up only a fifth of bank credit, but they accounted for 36 per cent of banks’ non-performing loans, data from the RBI’s latest Financial Stability Report show.
........
Debt repayments due within a year amount to half of forex reserves
.....A Reserve Bank of India (RBI) press release says: “The ratio of short-term debt by residual maturity to foreign exchange reserves worked out to 50.1% at end-March 2012.” ......
Managing expectations the wrong way
......On June 25, the Reserve Bank of India, in consultation with the government, announced a package of measures aimed at boosting dollar flows into the country. The fact that it has commanded so little attention so far is most certainly because the context in which it was announced, the extraordinary hype before it was made and its inevitable failure to lift the sentiment of the markets have all become prime topics for discussion, completely overshadowing the RBI’s package. A closer look at the extraordinary developments would throw up many useful lessons for policy-makers and lay people alike.....
Heed the BoP warning
......Which is exactly how the warning issued by RBI, however carefully worded, should be interpreted. It is implicitly stating that there is only so much the central bank can do. It has probably reached the limits of its policy capacities. From here on, therefore, the inability of the government to contain the fiscal deficit slippage would exact a severe macroeconomic price from an economy that is already struggling.
Stagflation
.....There is no agreement among commentators if the current situation can be termed as stagflation. The monetary policy dilemma in India is very similar to what a central bank would face during stagflation. If the Reserve Bank of India lowers rates to support growth, it will risk fuelling inflation, and if it raises rates further, it might end up affecting the growth momentum....
Subscribe to:
Posts (Atom)