CRR: The proxy war between FM and RBI

If the CRR is, god forbid, indeed taken away,

it will be a cardinal sin, the saddest day for the economy

.....Under current rules RBI doesn’t have the power to pay interest on CRR. This power was taken away from the RBI through an amendment to the RBI Act in 2006, an amendment which RBI itself suggested. Old timers say RBI gave up this power, only because as long as it has the option to pay interest, bankers will always lobby for it . In fact, that the CRR is really a battle ground between RBI and finance ministry is best evident from the war between the two institutions when these amendments were passed in 2006.  That Amendment bill brought a bunch of changes. Hitherto the CRR could not be cut below 3 percent, but the law said that RBI may pay interest on CRR above 3 percent, if it wishes. The 2006 amendment removed the 3 percent lower limit. RBI argued CRR could go to zero if the situation warranted, but at all times it won’t pay interest – a clever move that the finance ministry apparently realised only after the amendment was passed......  

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CRR, a tool for rare use: Rangarajan

The country needs to move towards a situation where Cash Reserve Ratio (CRR) level comes down and that it is used as an instrument of “credit control” only in extraordinary conditions, said C. Rangarajan, Chairman, Economic Advisory Council to the Prime Minister, on Thursday. As “Open market operations (OMOs) became increasingly major instrument….The role of CRR, as credit control, will come down,”......

Read - The Hindu

CRR is not beyond debate.....but the last word is RBI’s

Apropos the issue of whether we need the cash reserve ratio (CRR) or not, Deputy Governor K C Chakarbarty needs to rethink his position that regulatory issues need not be subjected to debates. If the Constitution of India can be amended 116 times over 62 years, why can’t we consider changing the regulatory framework?................

......From the Reserve Bank of India’s (RBI’s) perspective, CRR is vital for controlling liquidity in the system. And indeed RBI should have the final say on the issue since CRR is part of the monetary policy, which is the sole preserve of RBI.

Read - BS

Use CRR only as last resort: Rangarajan

Chairman to the Prime Minister's economic council and former RBI Governor, C Rangarajan, said CRR should be used as a tool to control credit only in ‘extraordinary circumstances’ as open market operations become an increasingly major instrument to control liquidity. The argument would be seen as a support for State Bank of India's chairman Pratip Chaudhuri’s call for CRR being abolished for which he was snubbed by KC Chakarbarty, the Deputy Governor of RBI........ 

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Rangarajan says CRR should be reduced

The chairman of Prime Minister’s economic advisory council, C Rangarajan, has added to the debate on banks’ Cash Reserve Ratio (CRR), saying it should be brought down and used only in extraordinary conditions. He said the need for using it reduces with the option of Open Market Operations (OMOs) in place.....

Read - BS

SBI expects 1% reduction in CRR on 17th September

..............Explaining the rationale further, Chaudhuri said the total incremental income to SBI will be only around Rs100 crore in case of a repo cut. "That is why when RBI raised the rates three times, none of the banks moved the rates. So, I will say though repo rates and base rate move in the same direction, the correlation is very weak." The statement comes in the middle of a row he started last week by calling for abolition of the CRR, saying this would release the much needed funds to the system.

Read - Moneylife

‘Stake dilution in public sector banks poses political problem’

....“The other alternative of reducing the share of the government in public sector banks poses difficult political problems,” Dr. Rangarajan said addressing a financial summit here. His comments come within two days of Reserve Bank Governor D. Subbaroa stating that if the government decides to maintain its stake at 57 percent, it will have to pump-in Rs.90,000 crore while if it decides to bring it down to 51 per cent, it would need to infuse Rs.70,000 crore......

Read - The Hindu

RBI advises against gold investment

On a day gold prices touched a new high, the Reserve Bank of India (RBI) urged the public against choosing gold as an asset for savings or investment. "Because interest rates are very low, people are investing in gold. But the poor should never invest in gold for whenever they have purchased gold, it either lands up in the temple or in the hands of the moneylender or, at the most, it may be given away during a daughter's marriage," said K C Chakrabarty, Deputy Governor, RBI....... 

Read - TOI

GMLA not applicable to NBFCs under RBI Act: HC

.....According to section 5(2) of the GMLA all NBFCs registered under RBI Act and operating in Gujarat come under purview of the GMLA They will have to report to the Registrar General of Money Lenders. The Court held that this was in direct interference with the institutions which are registered under the RBI Act. The state law was encroaching upon the RBI Act which is a central act. The section 5(2) of the GMLA is against the Constitution of India as it seek to have control over all NBFCs already registered under the RBI Act. "The GMLA will not be applicable to all NBFCs registered under RBI Act," the court held.......

Read - BS

LIC's 11% SBI stake makes RBI see red

.....The Reserve Bank of India (RBI) has conveyed its discomfort to the bank’s management, according to a top SBI official. “These are two big institutions. RBI is not comfortable with two large institutions having a cosy relationship,” the official said. A top RBI official also confirmed the development. “Any institution that wants to have more than five per cent stake in a bank needs to have our prior approval, even if the stake is acquired from the secondary market,” the RBI official said. “We don’t want the banking sector to have too much capital from volatile sources,” he added.......

Read - BS

'Banks should give replacement before leaving a consortium'

...The panel was also formed to increase the information sharing process within banks in the consortium because the finance ministry is of the view that despite the Reserve Bank of India (RBI)’s repeated requests, there is an asymmetry in information among banks and the companies have been taking advantage of it............

Read - BS

Manage your credit well to curb NPAs: RBI to banks

.............“Overall improvement in the risk management systems, upgrading technological platforms and building up of specialised skills in the banking system are the challenges which will distinguish the more successful ones from the others. It is important that competitive pressures are not allowed to override basic prudence,”............ 

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Sinha backs call for higher NPA provisioning

Reserve Bank of India (RBI) Deputy Governor Anand Sinha has backed the Mahapatra committee’s recommendation of higher provisioning for restructured assets. Banks, however, had opposed the proposal, saying this would lead to a sharp rise in bad assets.........   

Read - BS

RBI: Do not differentiate between depositors

The Reserve Bank of India (RBI) has told banks not to differentiate between high-value depositors and small depositors. “There can be reasonable difference (in the interest rates), but it shouldn’t be large,” said Deputy Governor K C Chakrabarty...........

Read - BS

RBI Deputy Guv for Less Disparity in Deposit Rates

...."We at RBI would want banks to offer more or less similar rates to all depositors, although a reasonable difference is fine," the senior most Deputy Governor told a gathering at the MR Pai memorial award function (the award was given to women's self-help group Sewa). The late MR Pai was a crusader for the rights of bank depositors.....

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ECB action could help trim CAD: Chakrabarty

...."Yes, the bond-buying programme announced by ECB today could increase the fund flows into our economy. If it happens, which is likely, then it can help bring down our high current account deficit (CAD). From that point, the move is good for us but it also can increase commodity prices," ......

Read - Business Today

Revised guidelines on priority sector lending – rationale and logic - K C Chakrabarty

.......The priority that senior management of banks accord to priority sector would determine the success of our efforts in this area. Without this commitment, it would not be possible to accomplish this task. Let me assure you that the top management at the Reserve Bank is fully committed to this goal, as is evident from the amount of time we spend on this subject at our meetings and outreach visits and the number of enabling policy initiatives that we have taken in this regard. Financial inclusion and priority sector credit are closely interconnected subjects as financial inclusion is the process and priority sector loans are the business effect/ end product of the same in the books of the banks. If we are doing financial inclusion, then these targets are achievable, if not, then these are not. The new guidelines, then, is the new mantra...........

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National Housing Bank to introduce guidelines for non-banking housing finance cos.: Chairman

......``Besides, the lending sector cannot lend beyond a certain point due to capital constraints and with securitisation they would be enabled to continue to lend and can come over all constraints if they are able to securitise,`` said Verma while releasing an ASSOCHAM study titled `Securitisation: The Emerging Funding Vehicle` along with A.K. Choudhary, General Manager, Department of Banking Operations and Development (DBOD), Reserve Bank of India; S.C. Aggarwal, chairman, ASSOCHAM Capital Market Committee........

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PERFORMANCE OF THE INDIAN RUPEE

..........In terms of managing the currency, the Reserve Bank of India (RBI) has been unique in that it has been following a flexible exchange rate policy in the last couple of years (except for the heavy intervention in the three months to January 2012). The current stance is significantly different from the rigid stance of the pre-1991 period. This flexible stance led to a significant ................ 

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India's banks face tough period

I

ndia's struggling banking sector will face a period of lower profitability as it seeks to raise at least Rs 5,00,000 crore (USD 90bn) in extra capital to meet the new Basel III international banking standards, the head of the nation's central bank has warned........... 

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Indian Banks Have Catalyzed Growth: Now They Have to Grow

....."If the economy grows 8%, 9% or 6.5%, the banking sector will grow at at least two-and-a-half times the rate of India’s GDP growth. The sector could grow 16%-to-24% per annum year-on-year for the next decade. That means by 2020, we as a sector can be five times what we are today. So the growth opportunity is huge.".........

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1/3rd of new ATMs should be visually-challenged friendly: RBI

...."It has been brought to our notice...that visually challenged persons are facing problems in availing banking facilities like internet banking... Banks are, therefore, advised to strictly adhere to instructions... and extend all banking facilities to persons with blindness, low-vision and other disabilities.," ......

Read - Hindustan Times

Fraudulent debit card transactions on the rise in AP

Fraudulent Internet debit card transactions are on the rise in the state and form the second highest among the complaints being received by the Banking Ombudsman after the disputed ATM transactions. In this case, the additional security feature — an instant password sent to customer’s mobile phone at the time of every transaction — provided by the banks to check such instances has also become the target of the fraudsters, according to M Sebastian, Banking Ombudsman of Andhra Pradesh...........

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Also read..........

Credit card usage 30 times that of debit card payments annually: RBI

Indians use a credit card for an average payment amount of about Rs 55,000 in a year — which is nearly 30 times the money spent through debit cards. However, the number of debit cards in the country is more than 15 times than that of credit cards, shows an analysis of data available with Reserve Bank of India............

Read - HBL

No debit cards please, we're Indians

Indians use a credit card for an average payment amount of about Rs.55,000 in a year — which is nearly 30 times the money spent through debit cards. However, the number of debit cards in the country is more than 15 times than that of credit cards, shows an analysis of data available with Reserve Bank of India........ 

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Swiping with value additions

ON THE CARDS

Visa offering packaged security solutions to banks for cards issued on their platform   National Payments Corporation of India lowers charges to make inroads in the market share of international payment gateways   Against established international players like Visa and Mastercard, NPCI has two strengths to play at — cost effectiveness and rural reach   NPCI offers services at flat 40% discount   NPCI, promoted by banks, also plans to launch an international debit card on similar terms in June 2013

Read - BS

How to beat a cheque-stealer

How can you beat the crook who stole your cheque from the bank’s drop box? Easy. Write down the account number of the person after his name in the column ‘Pay’ on the cheque leaf. The Banking Ombudsman (Delhi, J&K and some parts of UP and Haryana), M. Rajeshwar Rao, toldBusiness Line: “People, while depositing, do write the name, account number and phone number on the reverse of the cheque. However, when the cheque is sent for clearance, normally the front portion is photocopied or scanned and sent. If details are ok and there is no alteration, the cheque is cleared.....

Read - HBL

World Bank appoints Kaushik Basu as chief economist

...."Having worked in ministry of finance, in addition to his impressive academic achievements, Kaushik is uniquely suited to help us offer evidence-based solutions and advice to client countries and provide innovative excellence in leading our development research,” ...... 

Read - BS

Short-Term Sacrifice for Long-Term Growth - Duvvuri Subbarao

NEW YORK, August 29, 2012 — Dr. Duvvuri Subbarao, Governor of the Reserve Bank of India, defends his monetary policy and offers his reasons why potential investors should be optimistic about the Indian economy.......

RBI rules out allowing mobile wallet facility by mobile operators

.....RBI Deputy Governor HR Khan on Wednesday ruled out allowing mobile network operators (MNOs) from offering cash-out or mobile wallet facility unless they convert their services as banking business correspondents, reports PTI.  "We don't want to permit cash-out facility by the mobile network operators. We are very clear that they should not bypass the banking regulations. However, mobile wallet facility can be given to them if they work as business correspondents of banks," Khan told reporters, at the second day of the FICCI-IBA banking summit.....

Read - Moneylife

RBI cold to mobile wallet

HUMBS DOWN TO VIRTUAL MONEY

RBI Deputy Governor says mobile phone operators can’t be allowed to provide a cash-out facility from virtual wallets to customers, as it would amount to ‘bypass banking’ Airtel launched m-wallet services to enable a customer in making utility payments and transfer money from one user to another Current norms allow mobile transactions if it is attached to a specific use, such as paying electricity bills or shopping at retail establishment Central bank does not allow encashment of the balance available in mobile wallets Security, privacy and acceptability are other obstacles in the way of moving towards mobile payments Bankers feel the regulator may consider allowing issuance of mobile wallets by business correspondents without the need of a Know Your Customer exercise

Read - BS 

‘Mahesh Bank Teachers’ Awards

........Shri M.Sebastian, Chief General Manager & Banking Ombudsman, RBI, Hyderabad has emphasized the need of financial literacy to the student in addition to the text book education, which is very important in the human life. The World is behind financial education and RBI emphasizes the literacy on financial system.   Sebastian felt that financial literacy should not be confined to the financial institutions but also to extend to the teaching community since teachers have greatest influence on the minds of students. Teachers play a major role in shaping the young India and good facilitator to the student as well,  Sebastian avered. He complimented the entire team of Mahesh Bank for instituting Mahesh Bank Teachers’ Award and said that this event should continue as an annual feature henceforth. Sebastian conveyed greetings to the teaching community on the Teachers Day......... 

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Essay Competition on topics of agriculture & rural development

College of Agricultural Banking (CAB), RBI, Pune Announces Essay Competition on topics of agriculture & rural development..... 

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3rd Annual get-together of EXRBITES

As you know our Group EXRBITES was founded on 24th September, 2009 and has completed 3 successful years. The credit for which goes to all the members. Today we can say proudly that EXRBITES has come a long way.  While on our first annual day we were only 60 with 22 from Chandigarh, today we are 301 from all over India and abroad, with 54 from Chandigarh alone. Like earlier two years we propose to celebrate our Third Annual day  also in a grand manner.  To celebrate the event in a befitting manner we propose to arrange a contributory lunch-on family get-together in Hotel Shiraaz II, SCO 15, Sector 5, Behind K C Theatre, Panchkula between 11 am to 4 pm on Sunday, 30th September, 2012. The contribution for the same will be Rs. 250/- per head. Those who are interested may please convey their acceptance and number of persons to the undersigned by phone/SMS or email as early as possible but in any case not later than 23rd September, 2012. You are welcome to bring your friends if you think that they can be our prospective members. Please feel free to send your suggestions to make the programme a success.  

with regards, 

Madan Gauria

Moderator

Exrbites

Tel: 0172-2666780,  09569172198,  09915106631

email: madan.gauria@yahoo.com

Serving or retired.... doesn't matter.................

 Click to know and join the EXRBITES Group...... 

Dearth of coins: Fact or fallacy?

....The RBI has identified “distribution” and “delivery” as the constraints leading to shortage of coins and currency notes across markets in the country. “We have identified that distribution is an issue in this respect even as the last mile delivery has also been a problem,” the RBI Deputy Governor said. Distribution of coins and currency notes across six lakh villages in the country is not an easy task and it depends on the network available. “Even banks do not have such a network”, the RBI official said......

Read - The Shillong Times

SLBC panel identifies steps to boost CD ratio in Karnataka

......The sub-committee in its recommendation to the SLBC has suggested that lending to agriculture allied activities like dairy, poultry, horticulture (fruits and vegetables) should be given priority. The other recommendations are credit flow to Micro, Small and Medium Enterprises (MSME) units through adoption of clusters identified by United Nations Industrial Development Organization (UNIDO) in the state should be accelerated. Housing sector also offers scope for higher credit dispensation.....

Read - HBL

Missing the punchline

On Tuesday, reporters raced each other out of a banking summit in Mumbai to file their stories  without waiting for the punchline. The unlikely humourist was D. Subbarao, governor of the RBI, a rather humourless institution. But when the economy is a black joke — black as coal, in fact — he can perhaps be excused his attempt to lighten up........

Read - Indian Express

Money supply

With reference to the article, “RBI allows too much money supply” (Business Line, September 5) it should be noted that at times of unyielding inflation, money supply in the system should be such as to enable people to buy essentials of daily needs without difficulty. The present availability of money is quite reasonable in relation to the prevailing inflationary situation and commodity prices. The substantial fall in savings deposits in banks in recent time would vouch for the above fact. The lack of enough cash in hands when commodity prices rule high would cause immense hardship to the common man.

- T.R.Anandan, Coimbatore (HBL)

RuPay cards to be acceptable at all PoS terminals by January

......"The RuPay will be acceptable in all PoS terminals from January, which is at present accepted in 48,000 merchant terminals," AP Hota, managing director and chief executive of NPCI told reporters on the sidelines of a banking summit organised by FICCI and IBA......

Read - Moneylife

For Bankers, work-from-home benefit staff & boost profits

In an age when the working class spends at least a couple of hours a day commuting either on busy roads or in overloaded trains and metros, flexiplace working is considered progressive HR. Now, a clutch of foreign banks operating in India has realised that allowing people to work from home is not just employee-friendly but employer-friendly too........

Read - ET

Self-service — add it to the banking lexicon

This comes as a whiff of fresh air, for sure. Banks are encouraging customers to take up the concept of self-service in India in a big way. Though at an early stage, the technology is being used to reduce customer traffic at bank branches and let employees focus more on serious banking services...........

Read - DNA

ICICI working on technology to offer transaction services through Facebook

ICICI Bank will soon add another digital platform for dispensing its banking transaction services —  Facebook. The country’s largest private sector lender was the first bank in India to use the social media site to provide services such as account enquiry and cheque book request. Now it is preparing to take this initiative one step forward by offering transaction services to its Facebook customers. This is part of its efforts to provide its customers next gen banking solutions in line with its Khayaal Aapka (your care) philosophy..............

Read - HBL

Across the board

Foreign institutional investors (FIIs) have been worried about the rising debt levels of India’s large business groups for some time. But their latest concerns focus on the presence of the chief of a major infrastructure group on the board of the Reserve Bank of India (RBI), which regulates the banking sector. He was inducted last September for a four-year period......... 

Read - BS

Debate on CRR

A formal debate on whether or not to continue with CRR would be most welcome. CRR is an important monetary tool in the hands of the RBI to control liquidity in the system, both in terms of maintaining a reasonable level of inflation and having conducive interest rates for the growth of the economy. From the bankers’ view point, CRR is presently not fetching any value and their concerns are understandable as income, profit and resources are all now under serious strain.

- S Umashankar, Nagpur (HBL)

RBI needs CRR

This refers to your edit “Debating cash reserve ratio” (September 4). At a time when the Reserve Bank of India (RBI) has been fighting a persistently stubborn bout of inflation in the country, the debate on the relevance of the cash reserve ratio (CRR) is unfortunate. RBI has kept multiple tools of credit control to address multiple objectives and the CRR has been used to manage structural changes in liquidity. Although liquidity can be managed through open market operations, the inadequate size and lack of depth in the Indian bond market limit the potency of that tool. Even if the banking regulator agrees to do away with the CRR, the funds that are released to the banking system cannot supplement the liquidity position of banks. Perhaps one way to pacify banks is to reintroduce interest payable on such deposits held as CRR with the central bank.

 - K V Rao Bangalore (BS)

CRR cut will enable bank to reduce base rate: SBI chief

State Bank of India Chairman Pratip Chaudhuri again made a strong pitch for a reduction in banks’ Cash Reserve Ratio (CRR) at the Reserve Bank’s mid-quarter review of monetary policy scheduled September 7.................... 

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The hidden truth to PSB profitability

........What makes the situation worrisome for state-owned banks is the inadequate provisioning for these bad loans. In 2009, the Reserve Bank of India (RBI) had made it mandatory for banks to put aside Rs 70 for every Rs 100 that had become an NPL. Last April, the central bank unexpectedly relaxed the norms on this provisioning coverage ratio (PCR), under which banks were not required to maintain a PCR of 70 per cent for bad loans after September 2010.............. 

Read - BS

‘Investors should put money in fixed income avenues’

......“As a result, inflation is likely to rise in the coming months. So we are not hoping for the RBI to announce any cut in repo rates in 2012. There are possibilities of a 25 basis-point cut between January and March of 2013. At present, RBI is not decreasing the rate as inflation will not come down with that, and it might increase further. On the contrary, growth will be hampered. So they will continue the current rate levels till end of 2012,” ........ 

Read - DNA

RBI has no FDI data of Wal-Mart's Rs 455 crore in Bharti unit

US retail giant Wal-Mart Stores Inc has invested Rs 455.8 crore in a subsidiary of Bharti Ventures in 2010 via its Mauritius arm but the RBI has no FDI data of the same, Parliament was informed today........

Read - ET

The usurers in AP are back in business

Two years after Andhra Pradesh cracked down on micro-lenders with a stringent new law, the usurers are back in force and poor borrowers are in danger of sliding into their clutches......

Read - Mint

Aphro Trust scam: Cops issue alert for kingpin

CHENNAI: A look-out circular has been issued against I P Yesudoss, managing director of Aphro Trust. The trust had, in violation of RBI guidelines, allegedly collected money from several people after promising to secure loans for them............

Read - TOI

Deveshwar appointed on RBI board

New Delhi, Sep 4 (IANS) The government has appointed ITC chairman Y.C. Deveshwar as a director on the central board of directors of the Reserve Bank of India. A notification to this effect was issued by Vijay Malhotra, undersecretary in the finance ministry. Deveshwar's appointment will be for a period of four years.

Profile........

Yahoo News

‘Language plays important role in financial inclusion’

.....Meena Hemachandra, Principal of College of Agricultural Banking, said that banking is a business related to all people, and requested all to use Hindi extensively. They should not be overly mindful of the fact that they are unable to find the exact words to use......

Read - HBL

Basel III to benefit Indian banking system: Subbarao

.........“The moral hazard relating to too-big-to-fail institutions which encourages risky behaviour by larger banks has been a huge issue on the post-crisis reform agenda,”......

Read - The Hindu

RBI allows too much money supply - A.Seshan

........Carrying the imprimatur of the Central Board of Directors, the Annual Report of the Reserve Bank of India (RBI) is perhaps its most authentic statement on the state of the economy and the possible solutions to the various problems faced in almost every sector........

Read - HBL

RBI expresses helplessness on shortage of coins of rupees one and five

Have you been blaming the Reserve Bank of India (RBI) for the changes in currency and the fact that the Rs2 coin looks like the Re 1 coin, the 50 paise coin like the demonetised 25 paise coin, etc.? RTI (Right to Information) activist Subhash Agarwal has discovered that the blame lies with the finance ministry, Government of India...........

Read - Moneylife

Govt mints more two rupee coins in 2011-12

......The RBI has replied that the production of these coins was also increasing and their availability would improve. It has, however, declined to say anything on the design of the one rupee coin which the activist has found to be very similar to the 10 paise coin. Instead it has directed him to take up the matter with the Government of India since the design is done by them.

Read - HBL

Engine trouble in India

....“The persistence of inflation at a high average rate of 9% during 2011-12 further atrophied financial saving, as households attempted to stave off the downward pressure on their real consumption,” said RBI in its annual report, and added: “The trend of falling savings rate, particularly that of public sector savings, needs to be reversed for adequate resources to be available to support a high-growth trajectory during the 12th Plan”........

Read - Mint

Two-speed economy

.....The lack of growth in industry is also seen in the credit numbers for banks. The latest Reserve Bank of India data shows that growth in bank credit to all types of industry—micro and small, medium, and large—has been zero this fiscal. Between 23 March and 27 July, there has been absolutely no growth in bank credit to industry.........

Read - Mint

Subbarao adds levity to CRR debate

.....The first condition being, the members of the committee -- the SBI Chairman and Deputy Governor of RBI be locked up in a room till they come to an amicable solution. Second, the findings of the committee should not be made public until his own term expires as the Governor...... 

Read - HBL

Humour in reserve

....The impish humour of Y.V. Reddy was always liable to break out unexpectedly. On Tuesday, his successor cracked what seemed liked a funny one, but was probably also meant as a message. ......

Read - Mint

CRR row: RBI Governor doesn't see an end !

Reserve Bank of India Governor Duvvuri Subbarao on Tuesday played down the cash reserve ratio controversy between his senior most deputy and the nation's largest bank SBI, saying that he is not too sure whether the two will sink their differences before he demits office............ 

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CRR row: RBI guv glues sparring aides in panel

Readl - Hindustan Times

No easing, just teasing, from India's central bank chief

He often opts for the unexpected when it comes to monetary policy reviews, recently disappointing those looking for a cut in interest rates, and on Tuesday he cracked a joke that took a bunch of news-hungry reporters and market players for a ride. Before beginning his speech at one of the country's largest and most prestigious banking events, the Reserve Bank of India chief said in a serious tone that he had something to announce.........

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Bank stocks jump at Subbarao’s CRR joke

....After his speech, a reporter asked Subbarao if his comment was just a joke. He smiled, and said: “What do you think?” While the reporter took time to comprehend, the market didn’t wait. BSE Ltd’s Bankex, the index of 14 lenders, rose to erase losses. The gauge later dropped after the central bank said the comment was light-hearted and that no such panel exists......

Read - Mint

Subbarao's laughter therapy on CRR row

....There was pin-drop silence as the audience, comprising top bankers, didn’t know how to react. They were only too aware of the recent public spat between the RBI Deputy Governor and the SBI Chairman on the latter’s argument that CRR should be abolished. News hungry reporters rushed outside to flash the “story” to their respective websites, agencies and on television. Some even went to the extent of flashing “news” about a possible end to CRR that sowed confusion in the bond market....... 

Read - BS

A Reserve Ratio Evokes Unreserved Laughter

.....Subbarao, better known for his handling of interest rates, showed that he can also handle an unseemly public disagreement over divergent interests in an equally deft manner....... 

Read - ET 

Not Just CRR, Debate Other Policy Tools Too

The discussion on CRR should not just be restricted to the cash reserve requirement, but should also extend to other directed investments such as government bond holdings and lending. It will be delusory to maintain status quo on the ground that they saved India from the 2008 crisis,..........

Read - ET

Mint poll | No RBI rate cut seen; loan charges may drop

Read - Mint

Expect RBI to cut CRR by 100 bps: Pratip Chaudhuri

SBI Chairman Pratip Chaudhuri on Tuesday said he expects the RBI to the cut cash reserve ratio (CRR) by 100 basis points at the September 17 policy meet..........

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RBI may not touch CRR as of now: Shubhada Rao, Yes Bank

.... think that the RBI has a whole set of measures to alleviate liquidity problems. While at this point in time liquidity remains extremely comfortable, the scenario would change post the advance tax payments around September 15. The question would then arise that is it a structural liquidity issue or a temporary pressure on liquidity. Our sense is the RBI has kept its options open as far as......

Read - ET

Assocham wants interest free CRR to stay

.....“The case for continuation of CRR interest free is very valid as well as indispensable. It has worked well and perhaps is not an issue that needs any revisit,”.......

Read - HBL

My View on "EMPEROR, LOOK AT YOUR OWN CLOTHES"

This is not for the first time such a demand of putting RBI under CAG scrutiny has been raised in the press/media. It was demanded in post 1992- securities scam also when all and sundry wanted RBI under the audit purview of CAG. But the combined wisdom of the Government of the day and the RBI Management had preferred to keep RBI, the Central Bank of the Country, as it was and independent of any interference by any constitutional instrumentality much less the CAG. In writer's own admission that " RBI as an institution is known for its impeccable integrity and intellectual honesty " then why it should be brought under the CAG like any other Govt. Department. Central Banking is a specialization and is not every body's cup of tea. CAG's hands are already full and some its recent reports- supposed to be disputable as mentioned by none other than the country's Prime Minister who is known for his impeccable character world over, are not beyond further scrutiny by an independent authority- may be the Public Accounts Committee of the Parliament. Therefore, let the CAG first grapple with the jobs on hand and not add further to its and country's woes by expanding its area of operations. If RBI toay, tomorrow it could be SEBI and so on... Then who will scrutinise CAG's functioning?  With the changing times, the need of the hour should be to make RBI- a constitutional body on the lines of CVC and CAG itself with fixed tenure for the Governor like the Fedreserve. This will be in the best natioanal interest and Mr. TB should strive for it with all the force at his command.

- M L Mahajan, Ex-GM, HRMD

'Lend directly to borrower in priority sector'

.....“Lending directly to the beneficiary will ensure the management of credit and help banks understand the risks associated with this. While routing money through financial institutions, it’s they who take the risk and not banks,”......

Read - BS 

Banks credit to infrastructure sector won’t be termed as priority lending: Chakrabarty

.....“I have no problem in banks lending to infrastructure companies, but don’t classify that as priority sector lending,”......

Read - HBL

Postal department can't find IIT-K, institute loses licence

A series of mistakes, apparently on the part of the postal department, led to the cancellation of the licence of the Indian Institute of Technology, Kanpur (IIT-K) under the Foreign Contribution Regulation Act (FCRA). The home union ministry took the action after it did not receive a reply to a show cause notice sent to the institute. The registrar of the institute RK Sachan said, "Every year we have to submit the annual statement of funds received from foreign sources to the home ministry and the Reserve Bank of India (RBI). Somehow, the ministry did not get the statement and issued a notice to the institute. The institute did not receive the notice either and hence could not reply to the ministry,"....

Read - Hindustan Times

Retirements will create 1.8 lakh vacancies in public sector banks

....The banking sector is expected to grow at approximately 20 per cent over the next decade and will need major induction of talent, a significant part of which is to replace vacancies arising due to retirements in public sector banks. At the current rate of attrition, the industry will need to hire over four lakh more people......

Read - HBL

Government can dilute stake to help PSBs meet Basel III norms: RBI

....“But will the Government sacrifice its majority shareholding responsibility, rights and obligations or will it amend the statutes such that even if their shareholding comes below 51 per cent, it continues to enjoy the privileges of a majority shareholder.”.....

Read - HBL

Mahesh Coop bank on expansion mode

....The Andhra Pradesh Mahesh Cooperative Urban Bank is expanding its operations to Maharashtra, Rajasthan and Gujarat. “Reserve Bank of India has acceded our request to extend our area of operations to these States,” according to Ramesh Kumar Bung, Chairman of the bank......

Read - HBL

Banks set up play area for kids, conference rooms for HNIs

Now, you don’t have to worry about the kids when you discuss your finances with the relationship manager at your bank branch. Private lenders like Federal Bank and Axis Bank have set up branches that have special areas for children, with books, toys and video games to keep them engaged while their parents are busy doing banking transactions................ 

Read - BS

Government, RBI worried over monitoring of Sahara Credit Society

India's financial regulators and the government are caught in a cleft stick over monitoring and regulation of a credit co-operative society backed by members of the Sahara Group. The entity, over which RBI and Sebi have no oversight powers, has substantial deposits...........

Read - ET

J&K Grameen Bank launches new services

Mumbai, Sept 4 (IBNS): J&K Grameen Bank, with the help of IDBI Intech’s i@Connect software, on Tuesday announced it has launched National Electronic Funds Transfer (NEFT) and Real Time Gross Settlement (RTGS) services. "RBI Circular dated 09th April 2012 (Access criteria for payment systems – sub-membership to centralized payment systems) had mooted this innovative concept of rural banks to become a sub-member to their sponsor bank," said on official spokesperson on Tuesday......

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Economic and financial developments in Uttarakhand - Deepak Mohanty

.....Against this background, let me now turn to the financial inclusion strategy of the Reserve Bank and what are the specific steps taken for Uttarakhand? It is important to bring the poor and under-privileged sections of the society within the banking fold for inclusive growth.  In this context, our recent financial inclusion drive has four key elements......

Read......

EDB holds Kissan mela

Srinagar, Sep 2: E D Bank organized a Kissan Mela at Sugain, a remote village in Khag block of district  Budgam.  Chief Guest Ravinder Koul, AGM Reserve Bank of India on the occasion urged the farmers to come forward to avail KCC from the Bank for development of Agriculture in the area. “The area has a lot of scope and potential for Agri credit absorption,” he said. He suggested productive use of the credit and timely repayment of dues so that Banks can recycle the funds. 

Greater Kashmir