Fixed Income: Risks with NBFCs

......More disturbing is RBI’s belief that NBFCs are immortal. They have permitted NBFCs to issue ‘perpetual bonds’ to investors, with a 10-year option that enables NBFCs to repay but prevents the investors from demanding repayment. It is akin to writing off your wealth for a fixed rate of interest. RBI works in favour of NBFCs by just letting them increase the interest rate by a mere one percent at the end of the 10th year......

Read - Moneylife

My View.......

The issues raised deserve wide publicity and debate among people who can throw light on behaviour of interest rates. Less secure the investment you make, chances are you get higher rates of interest in the short term. NBFCs and NBFC-like institutions and even certain individuals have mobilised huge amounts of money in the past and vanished. To protect the interests of small investors, government and banks should come out with investment instruments with reasonable return. Regulators and GOI, as part of efforts to promote financial literacy, should promote awareness about the risk in being lured by advertisements offering ‘higher than possible’ returns on investments.

- M G WARRIER

Court slams PSU banks, says you are in money, not property business

Coming down on a bank for meting out 'unfair deal" to a client by selling his commercial building for Rs 18.7 lakh to recover a loan due of Rs 19,500, Kerala High Court today reminded the nationalised banks that they are only engaged in money lending and should not take up real estate business.......

Read - FE

Sebi seeks ASBA facility at all branches of designated banks

......"Based on the analysis of the current presence of ASBA facility, it is felt that there is substantial scope for increasing the reach of ASBA facility to make the application process more convenient for investors," Sebi said. "Towards this end, consultations were held with Reserve Bank of India, Indian Banks' Association and other market participants, to explore the possibility of providing ASBA facility at all branches of Self Certified Syndicate Banks (SCSBs)," it added.

Read - BS

Earnings ratios are bottoming out: Richard Gibbs

How do you interpret the Reserve Bank of India (RBI)’s recent move?

The decision to leave interest rates unchanged and to cut only the cash reserve ratio by 25 basis points reflects RBI’s concern on persistent inflationary pressures, even against a background of moderating domestic demand growth. We continue to believe the Indian economy faces difficult supply-side conditions. If these persist, ultimately, the economy’s potential growth would be reduced. Needless to say, we continue to anticipate the government would pursue further measures in respect to its ‘reform and development’ drive, as it recognises building the economy’s productive capacity is the best form of stimulus that can be delivered......

Read - BS

3 of 6 banks govt wants to help have scam-tainted past

If the state considers the Rs551-crore bailout package for the six district co-operative banks (DCBs) currently in the red, it would mean flushing taxpayers’ money down the drain. Six DCBs – Nagpur, Osmanabad, Jalna, Dhule-Nandurbar, Buldhana, and Wardha – all controlled by political heavyweights, could lose their banking licence on September 30 as per RBI directives, jeopardising credit line to farmers. The banks have a history of mismanagement and serious financial irregularities......

Read - Hindustan Times

NABARD and RBI - A 30-Year Legacy Being Upturned

The effort to edge out the Reserve Bank of India from the National Bank for Agriculture and Rural Development's shareholding does not bode well for the future of agricultural and rural credit in the country. This is particularly so, if the past experience with the Industrial Development Bank of India and the Unit Trust of India is any guide....

...... The know-all babus of the banking division of the finance ministry, who neither have an understanding of banking and development finance nor the experience, seek to keep out the RBI from NABARD and bring the institution completely under its control. Through this amendment it also seeks to subvert the autonomy of the institution, render the board powerless and emasculate its functioning. The stellar achievements of NABARD in the 30 years of its existence have been principally due to the relative freedom of ­operation permitted by the existing Act, the guidance of its board and the presence and support of the RBI as its stakeholder. All these are being sought to be upturned. An institutional legacy is sought to be obliterated by petty-minded and self-serving bureaucrats for whom “institution building” and “vision” are esoteric concepts. It is therefore in the fitness of the things to ensure that the RBI’s role as a shareholder of NABARD continues in the overall interest of the agricultural and rural finance sector of the country. ­Development practitioners, civil society activists, parliamentarians, public persons and the farmers of the country should raise their voice so that a 30-year legacy of the people is not lost forever.........

- P S Rao (psrao.99@rediffmail.com) - Pune-based development professional who has worked with the RBI and NABARD

Click to read more..........

Microfinance: The sole tool for Rural Economic Independence

......As the Banks and Financial Institutions don’t have a direct say in the rural market, the funds are first given to the mentioned organizations which then direct the fund to the respective class based on a mutual perspective. The assets based lending is done by the Banks and financial institutions to cater to the needs based on a specified set of directives. Such directives are issued by the regulators like RBI and the Finance Ministry and some refinement is also done by the respective fund providers.......

Read.....

RBI stonewalls RTI activists on derivatives fraud

The Reserve Bank of India, having first refused to furnish information under the Right to Information Act about the Rs 32,000-crore derivatives fraud despite a Central Information Commission order, is now refusing to reveal expenditure it incurred in challenging the CIC decision in the Delhi high court............

Read - DNA

Eye view on “Foreign Exchange for you”

Workshop-cum-Interface on 

“Foreign Exchange for you” 

organised  by the RBI Jaipur

21 September 2012

CRR cut to pare reliance on bulk deposits: Mallya

Chennai : The cut in cash reserve ratio (CRR) could reduce the need of the banks to go in for large bulk deposits at high rates, Bank of Baroda Chairman and Managing Director M. D. Mallya said here on Monday.......

Read - The Hindu

CRR is an effective tool to cut interest rates: SBI chief

......“We have been consistently of the view that the correlation of the CRR and the bank lending rate is very strong, and if the objective is to reduce the bank lending rate, then CRR cut is possibly the most effective instrument for this purpose,......

Read - The Hindu

Chidu winks, Subbu smiles: Odds on rate cut improve

Are North Block and Mint Street back to bhai-bhai terms? Will we see a rate cut on 30 October? 

The short answer: the chances are 60:40 in favour of a cut, since the finance ministry and the Reserve Bank of India (RBI) are back on talking terms......

Read.......

RBI slaps Rs 5 lakh penalty on coop bank in north Gujarat

......The RBI had issued a show cause notice to the Talod Nagarik Sahakari Bank in response to which the bank had submitted a written reply. "After considering the facts of the case, the bank’s reply and also personal submissions in the matter, RBI came to the conclusion that the violation was substantiated and warranted imposition of penalty," the banking regulator stated.......

Read - BS

Anytime-anywhere banking, courtesy RBI

......The National Payments Corporation of India (NPCI), the organisation set up by the RBI for all retail payments, has now launched the inter-bank mobile payment service for all merchants. This will allow customers to pay their bills for as little as 25 paise for each transaction. NPCI says, mobile phones will be the next walking talking bank. AP Hota, MD and CEO of National Payments Corporation of India said, "Real time money transfer is almost like RTGS for common man. It operates 24*7 and is operational on holidays."......

Read.........

SBI, ICICI lead the pack as m-banking gains currency

......Indeed, there is no comparison between m-banking and the use of credit and debit cards, but experts say the potential of the handheld device in the banking space is significant even as RBI is cautiously moving ahead.......

Read - Mint

Savings rate strategically kept to handle pressure from post office saving: Pratip Chaudhuri

Addressing the media, Pratip Chaudhuri, Chairman State Bank of India (SBI) on Monday termed the RBI's move to cut CRR in its monetary policy review as significant.......

Read - ET

National Housing Bank may cut home loan rate

...... "More than our cost of funds, it is a conscious decision to signal a lower interest rates, which will also result in higher demand and more growth for the industry," NHB chairman and managing director R V Verma told TOI over the phone. Although the housing finance institution's signaling may not have the same impact as RBI, it still holds sway over HFCs, especially.....

Read - TOI

Bank of Baroda to hire 22,000 employees

......According to RBI, the banking sector is expected to grow by 17 percent this year. But Bank of Baroda will out grow the industry's average growth, Mallya said.......

Read.......

Rakesh Mohan tipped to be ED at the IMF

Former Deputy Governor of the Reserve Bank of India, Rakesh Mohan, is tipped to join the International Monetary Fund as Executive Director on the board of the International Monetary Fund. He will get a three-year tenure at the Fund. He will replace Dr Arvind Virmani, whose three-year tenure is coming to an end. As an executive director, Dr Mohan will be representing India along with Bangladesh, Bhutan and Sri Lanka on the 24-member Executive Board of the IMF, which is responsible for conducting the day-to-day business of the multilateral financial institution......

Read - BS

Understanding recent policy initiatives - S.S.Tarapore

......With the Consumer Price Index ( CPI) over 10%, on a year- on- year basis, the need for a cautionary monetary policy by the RBI is understandable. The Mid- Quarter Review of September 17, 2012 has reduced the cash reserve ratio ( CRR) from 4.75% to 4.50%, thereby releasing Rs 17,000 crore of liquidity. The policy move seems to be driven more by monetary- fiscal policy co- ordination rather than any need for enhancing liquidity. The RBI would now be under greater pressure to further liberalise policy at the time of the next review on October 30, 2012. The RBI should not liberalise the monetary policy any further unless there is a visible reduction of the fiscal deficit and a significant and enduring reduction in the CPI inflation rate. The RBI will be in an increasingly difficult bind and resisting political economy pressures would be easier said than done given the RBI- Government power equation......

Read - FPJ

Man stabs dad 15 times over cash for booze

Thirty one year-old Atul Jhemse (centre) confessed to killing his father

A 62-year-old former Reserve Bank of India (RBI) employee was stabbed to death by his son on Friday night for denying him Rs 150 for alcohol. Atul, 31, stabbed his sleeping father Sudhir Jhemse (who retired after working as a RBI clerk in the statistical department) 15 times with a pair of scissors at their residence in Mulund (East). Jhemse has been arrested and remanded in police custody............

Read - Hindustan Times

PNB's Kamath to be chairman of Indian Banks' Association

......The management committee chose Kamath to head the body at its meeting, said a senior IBA official. T M Bhasin, CMD of Indian Bank, is inducted as deputy chairman. The other two deputy chairpersons are Bhaskar Sen, CMD, United Bank of India, and Chanda Kochhar, managing director and chief executive of ICICI Bank......

Read - BS

FDI decision will keep growth story going: RBI officials

Jaipur : ....... The occasion was a  workshop-cum-interface on “Foreign Exchange for you” organised  by the RBI’  Foreign  Exchange Department  here  on Friday. “ Only heavy FDI investment will keep the ‘India growth story’ going,” stated Deepali Pant Joshi, Regional Director, RBI, Jaipur, delivering the keynote address.......

 .......“India is not that vulnerable to economic disturbances as other nations are,” said D.K. Srivastava, Deputy General Manager at RBI Central Office, Mumbai. The day-long event included participation of another DGM from RBI’s Central Office Ajay Vij and other senior officers, besides officers from RBI Foreign Exchange Department, Jaipur, ......

The Hindu : NATIONAL / NEW DELHI : FDI decision will keep growth story going: RBI officials

No change in govt borrowing plan as of now: RBI

Reserve Bank Deputy Governor H R Khan today said there has not been any change in the government borrowing programme for this fiscal as of now.......

Read - Indian Express

Government can help RBI balance objectives

......Monetary policy, till a few days back, was being seen as the sole hope to revive growth in 2013. Of late, the government’s efforts to break the policy stalemate are looking constructive. Such measures, if implemented effectively, can help improve business environment and growth prospects over six-12 months and will eventually offer the RBI better headroom to balance its objectives.

Read - HBL

Banks want NPA norms to be relaxed for housing project loans

......To add to the woes of real estate developers, Reserve Bank of India guidelines does not allow banks to take out that exposure from the NBFC if the project has not been commenced. Now, bankers have requested the finance ministry to take up the matter with the banking regulator so that favourable polices could be framed to boost bank loans to real estate projects.......

Read - BS

Ministry freezes plan to spin off DMO from RBI

In yet another example of the growing convergence of views between North Block and Mint Road, the finance ministry has decided to freeze the long-pending proposal to have a separate debt management office (DMO). Sources familiar with the developments said following Finance Minister P Chidambaram’s reinduction as the finance minister, the Reserve Bank of India (RBI) wrote to the ministry, reiterating its objection to the proposal and its concerns over a separate DMO. The central bank’s views also had board approval.......

Read - BS

Separating India's twin deficits

......The difficulty of controlling inflation with supply-side measures means monetary policy will have to remain hawkish and contain aggregate demand. The RBI recently said it would “reinforce” the government’s pro-growth policies. That has given rise to expectations that more rate cuts are on their way to supplement a half-percentage-point reduction in April. This is not the time to allow such expectations to take hold. Rate reductions should be part of next year’s policy agenda when the government has demonstrated the success of its resolve to stop the fiscal haemorrhage and after inflation has lost its sting.......

Read - BS

Why banks aren’t cutting loan rates

......Why aren’t the banks lowering their low rates? They cannot do so because their bad assets are growing and they need to set aside more money to take care of that. Besides, they are also setting aside money for the statutory dues of their employees, such as pension and gratuity, which they had not done before. The impact of the combined provision on their balance sheets is quite big. On top of that, if they want to cut their loan rates, their interest income will go down, and that will affect their profitability......

Read - Mint

CRR still serves a purpose

The debate will continue......

......It fulfils an important regulatory function in countries such as India where the Open Market Operations (OMO) that central banks use to check liquidity face some structural rigidities. Central banks rely on CRRs to check inflation by varying money supply. An increase in CRR lowers the multiplier, and, hence, the growth of money supply. The opposite result happens when the CRR is lowered. Banks ought to view the zero interest on CRR balances as a fee paid to the RBI for its supervisory function. Banks alone can mobilise low-cost savings and current account deposits. Mutual funds, NBFCs and insurance companies do not have access to such funds. So, banks are not disadvantageously placed in having to meet CRR obligations......

Read - The Hindu

An artificial paradise

Data on rural wages in different states and occupations released by the Reserve Bank of India (RBI) last week throws interesting light on India’s rural economy. When read together with data on consumption released by the National Sample Survey Office (NSSO) early last month, they confirm many of the trends that have been written about in past years.......

Read - Mint

Efforts for total financial inclusion

Efforts are on to make Ernakulam the first district in the country to achieve meaningful financial inclusion as per RBI norms. RBI Governor D. Subbarao will declare the achievement at a function to be held in the district on November 22, the lead district bank Manager K.R. Jayaprakash, told The Hindu.......

Read - The Hindu

Reforms, RBI give some help to your finances

......With the recent cut in CRR by RBI, there is a strong possibility of banks reducing their lending rates; implying lower EMIs for new borrowers and also for existing ones. Over the last couple of weeks, some banks have already taken the lead to reduce rates – both on loans as well as on deposits. Although the reduction in EMI will be welcome for borrowers, the same may get offset by the lower yield on bank deposits......

Read - BS

Presence of women staff more in South-based banks

......According to Usha Ananthasubramanian, Executive Director of Punjab National Bank, South India has been a forerunner in women’s education. This could be a reason for more women here taking up employment, such as bank jobs, than their counterparts in some of the northern States......

Read - HBL

Window-dressing of deposits by banks: Some truths

......The phenomenon of window-dressing continues despite the RBI’s warnings and suasion. The RBI’s concern is evident from its Business Season Credit Policy, 1995. To quote, “Banks have been repeatedly warned to eschew window-dressing and it is unfortunate that despite strong suasion this warning has been ignored. Banks are cautioned once again against the recurrence of such a phenomenon and I am constrained to say that we may have to evolve certain arrangements, including punitive action, to prevent the recurrence of such a phenomenon.” (Paragraph 5 of the RBI Governor’s letter to SCBs on September 29, 1995 detailing the Busy Season Credit Policy......

Read - HBL

Maharashtra is No. 1 in bank heists in country

......"Police and banks haven't fully availed of scientific developments in security. Once UID and CCTV projects are completed it may be easier to track criminals. Innovations like ATM-type cash chests within banks, linking alarms with other security establishments and police networks, placing sensors in a couple of cash bundles etc can go a long way in curbing bank heists."......

Read - TOI

19% rise in circulation of counterfeit notes: RBI

......Kolkarkar had submitted RTI queries with the RBI demanding number of fake notes recovered under RBI's Nagpur region (Nagpur, Vidarbha and Marathwada). In its reply, the RBI said the number of counterfeit notes detected by banks increased to 5.21 lakh pieces in 2011-12 from 4.35 lakh in the previous year, an increase of approximately 19%. The data shows that maximum counterfeit notes were detected for Rs 500 denomination followed by Rs 100.......

Read - TOI

State Bank of India, Bank of India allowed to operate in Pakistan

......India and Pakistan have agreed to allow two banks each from both the countries to set up branches across the border, governor of the State Bank of Pakistan, Yaseen Anwar said today. "We have held discussions with the Reserve Bank of India and both sides have agreed to issue a full banking licence to two banks of each country,".....

Read - TOI

Customers confused when it comes to new bank accounts

......However, the phenomenon gained real momentum when the Reserve Bank of India (RBI) deregulated interest rates on savings accounts. For the ease of operations and uniformity, RBI further issued guidelines and categorised savings accounts as Basic Savings Bank Deposit Account and value added savings bank deposit account. Whether you simply call it sheer business or the target set by the Government - to have at least one bank account every household - there is a paradigm shift towards the way banks have treated savings bank accounts.......

Read - The Pioneer

Hundreds suffer as ICICI bungles

......Even the Prevention of Money Laundering Act, 2002, says banks have to keep multiple hard and soft copies in a manner as may be specified by the Reserve Bank of India. But ICICI did no such thing. Apart from closing and suspending accounts, the bank lost three-in-one online trading account opening forms of 440,000 customers and account opening forms of 55,000 NRIs, according to information obtained under the Right to Information Act (RTI).......

Read - DNA

Bank ATMs stop sucking in cash after RBI direction

Next time you go to an ATM to withdraw cash, don't worry about the banknotes getting sucked back by the machine if not collected immediately, as RBI has asked all banks to immobilise the 'cash retraction facility'. At the same time, customers will have to be extra careful in collecting the cash dispensed by the ATM, as they cannot later claim the money from the bank, which was the case when this 'cash retraction facility' was in place at the ATMs.......

Read - BS

Nabard wastes Rs. 22 crore, government ignorant

......A Right to information Act (RTI) query in June 2012 revealed that the BCG was given Rs13.2 crore for the process, but the company did not produce any report. In fact, DNA found that Rs13 crore was the initial amount and an additional Rs9 crore was given to BCG later. Dr Bakshi was primarily instrumental in getting the BCG involved. “In exchange of Rs22 crore, Nabard did not get anything. The consultants should come out with reports that become the framework of restructuring,” said Dr KG Karmakar, former Managing Director of Nabard. He had opposed the selection of BCG when he was at the helm of affairs. ......

Read - DNA

Get the rupee off this roller-coaster

......In his recent address to the annual forex assembly of the Forex Association of India, G. Padmanabhan, Executive Director, Reserve Bank of India talked about the inadequate response of companies to forex fluctuation, misuse of hedging facilities by companies and banks and the growing clout of currency futures segment. Mr Padmanabhan reiterated the central bank’s view that a volatile rupee is the ‘new normal’ and corporate India has to learn to live with it. But most companies have not made optimal use of the hedging instruments available......

Read - HBL

Banks capable of tiding over NPAs mount, says RBI deputy governor Anand Sinha

MUMBAI: Reserve Bank Deputy Governor Anand Sinha today said banks' asset quality has deteriorated in recent times due to the gloomy economic conditions but noted that there is enough capital with the lenders to take care of the situation. "Yes, there is pressure on asset quality and at the same time we have enough capital to sustain that," he told reporters on the sidelines of an Economic Times event here.......

Read - ET

Dynamic provisioning can contribute to financial stability: RBI

......“While there is no guarantee that dynamic provisions will be enough to cope with all the credit losses of a downturn and therefore may not tame credit cycles by itself, the time has come for forward looking provisions which when properly calibrated can act as a dependable macro-prudential policy instrument, to hedge against risks in banks’ balance sheets thereby enhancing the resilience of both individual banks as well as banking system as a whole.”......

Read - BS

Demystifying banking jargon

In its efforts to keep inflation under check and spur economic growth, the RBI has a quiver full of arrows that it uses to control the flow of money into the economy.......

Read.......

Economy, banking system and borrowers

......With the inflation levels not relenting at all, the expectation on rate cut seems increasingly a pipedream. But the good news is that the indication of such cuts to be announced by RBI in its October 2012 credit policy seems to be positive. New home loan seekers and existing borrowers can expect some cheer in the coming weeks.......

Read - The Hindu

Government to handle selection of auditors for public sector banks

......The finance ministry is expected to issue a directive on the issue soon. "We are in consultation with key players. We expect to issue the directives in the next few days," the official said. The issue of public sector banks selecting auditors on their own had earlier been flagged by the Institute of Chartered Accountants of India (ICAI), which said the appointments should be done by an independent regulator, such as the Reserve Bank of India.......

Read - TOI

Faulty water purifier rectified

......G. Valliswar, editor of the State-owned magazine Andhra Pradesh and one of the schoolmates of the RBI Governor, took up the issue with the MA and UD Commissioner. The students could drink potable water again.

Read - The Hindu

Around 300 students from Jharkhand to take part in RBI quiz

About 300 students from 50 schools of Ranchi, Bokaro, Jamshedpur and Dhanbad would represent Jharkhand in the RBI quiz by Reserve Bank of India......

Read - The Pioneer

ATM robbers from Mohali

THIRUVANTHAPURAM: The recent series of ATM robberies in Kollam and Thiruvananthapuram districts caught even the Reserve Bank of India (RBI) off guard as robbers capitalised on a very weak computing system deployed by banks in their ATMs. ......

Read - TOI

RBI notifies government’s decision on FDI

The Reserve Bank of India (RBI) on Friday notified the government’s decision to allow FDI in multi-brand retail, civil aviation, broadcasting and power exchanges.........

Read - Mint

Gold loans won’t lose their shine despite RBI imposing strict lending rules

......After the Reserve Bank's new rule, NBFCs changed the way gold is valued to include making charges and also tax. This is how it used to work: if the gold content in a piece of jewellery is valued at Rs 100, a loan of Rs 70 was typically possible. Now, to the Rs 100 are added making charges (say, about Rs 10) and the VAT (12%). So, the loan is given on the replacement cost of the jewellery — Rs 123 (Rs 100 + Rs 10 + Rs 13). And 60% of Rs 123 is greater than 70% of Rs 100; so the new norm doesn't look bad......

Read - ET

Fraud-hit emu farming industry flies North

......“Either RBI (Reserve Bank of India) or Sebi (Securities and Exchange Board of India) should be responsible for this. Often they take the cover that it was never brought to their notice. It is all over the newspapers. What more notice do you want?” said R Balakrishnan, a former financial services professional and an independent adviser based in Chennai.......

Read - BS

Peerless Group gets RBI nod to enter consumer loan business

KOLKATA: The Peerless Group has received a new lease of life as the Reserve Bank of India has allowed the group to foray into consumer loan business.  Peerless General Finance and Investment Company (PGFI), once a household name for poor depositors in the eastern and the southern markets, ran into a difficult phase with declining earnings after being forced to phase out its deposit-taking business.......

Read - ET

Can you really Bank on them?

......To a Right to Information (RTI) query, RBI has confirmed that 36 banks operating in Kerala have reported banking frauds of over Rs 260 crore......

Read - TOI

Loan-some blues

......Should existing customers switch loans now? While the rate cuts sound attractive, do the maths to figure out how exactly a 0.25 percentage point cut affects your loan. Remember, banks have not reduced base lending rates; they have simply selectively cut rates on some loans.......

Read - The Hindu

RBI voices concerns on separation of DMO from Central Bank

The Reserve Bank of India (RBI) has once again voiced concerns on separation of Debt Management Office (DMO) from Central Bank. “Separation of debt management from Central Bank needs to be revisited in the wake of global financial crises,” said H R Khan, Deputy Governor, RBI at a conference in Doha recently.......

Read - BS

RBI vs RBI

......In any case, RBI Deputy Governor KC Chakrabarty has been chiding banks because they’re not lowering loan rates and holding them responsible for ineffective monetary transmission. Well, this time around, banks are being compelled to cut rates to drum up business, even though RBI hasn’t touched the policy rate. Unless loan growth picks up dramatically in the remaining months of the year, banks should not be short of liquidity and so loan rates could trend down. The big challenge for banks, however, remains deposits, which are growing slowly because of which banks may not be able to cut rates beyond a point. The irony, of course, is that while RBI is against rate cuts in the face of stubborn inflation, its CRR cut is what made the rate cuts possible.

Read - FE Editorial

FM to RBI: more bank licences, please

......A senior RBI official told HT that framing the guidelines is taking more time than expected due to the extensive nature of the suggestions received by the central bank. “We need to study every minute details before finalising the guidelines,” the official said.

Read - Hindustan Times

Finally, Govt bites reforms bullet - S S Tarapore

......The RBI’s Mid-Quarter Review on September 17, 2012, correctly emphasises that in the recent period, growth risks have increased while inflation risks remain. The reduction of the cash reserve ratio (CRR) from 4.75 per cent to 4.50 per cent, releasing Rs 17,000 crore, appears to be in the nature of support to the government’s recent measures, rather than responding to any need for increased liquidity......

Read........

Need to initiate policies that enhance domestic capacities: Subir Gokarn, Deputy Governor, RBI

NEW DELHI: RBI Deputy Governor Subir Gokarn said that India needs to initiate policies that enhance domestic capacities in order to offset the world pressure. He was speaking at a session on Macro-economic Issues and Challenges to India's growth, organised by the PHD Chamber of Commerce and Industry in New Delhi.......

Read - ET

Champagne and vada pao - again?

......Thus, the threat of 55 to the dollar (or worse) remains in place, so short dollar exposures should be prudent, particularly as premiums have started to ease a bit. A little hesitantly, I would forecast a range of 52.50 to 55 for the rest of this year. In any event, the RBI should be looking at loosening some of the constraints it put on the market to contain volatility. Not only would the increased volatility drive more companies to hedge on both sides of the book, but more deregulation would also be of a piece with the new Reforms 2.0 agenda.......

Read - BS

Selection of CMDs and EDs in Public Sectors Banks Are Nothing More Than Farce

......As I was searching for something on banking, I came across a write up of 2005 in Rediff under the heading "Farce of Bank CMD Selection" (the original articles appears to have been published in Business Standard).   As I read the article, I felt that nothing has changed in last 7 years.  ......

Read........

RBI to issue Rs 100 banknotes with inset letter 'G' soon

......"The Reserve Bank of India will shortly issue Rs 100 denomination banknotes with inset letter 'G', in both the numbering panels, in the Mahatma Gandhi Series-2005 , bearing the signature of D Subbarao, governor, RBI, and the year of printing 2012 printed on the reverse of the banknote," RBI said in a notification today.......

Read - Hindustan Times

RBI to issue gold sovereign bonds to strengthen rupe

The Reserve Bank of India is planning to set up a panel to suggest a roadmap to tap into India’s gold holdings reports CNBC-TV18‘s  Siddharth Zarabi......

Read.....

Reserve Bank of India : DRG Study: Pricing of Paddy: A Case Study of Andhra Pradesh

The Reserve Bank released today the DRG Study on " Pricing of Paddy: A Case Study of Andhra Pradesh" authored by Dr. Ramana Murthy and Smt. Rekha Misra. From this DRG Study Series No. 38 onwards, Reserve Bank will be only web hosting the DRG Studies and no printed version will be made available......

Read.........

Govt asks banks to promote e-payments, cut cheque transactions

......he Finance Ministry has also asked public sector banks (PSBs) to ensure that all payments and disbursements by the banks, except sundry payments, are made only electronically. "Banks must devise suitable monitoring parameters to judge the effectiveness of the e-payment drive," sources said, adding that the Executive Director dealing with the matter should be assigned the responsibility of supervising e-payment drive in the respective banks.......

Read.......

Attn! Numerical sequences as ATM pin?

If your ATM pin code is your birth date, a year in the 1900s, or an obvious numerical sequence, the chances of thieves cracking your password are way higher, according to a new study.......

Read - Express India

Bank interest rates to fall 50 bps: BofA

......BofA-ML expects the RBI to cut the CRR by a further 0.50 percent in its third quarter policy review on October 30, the note said, adding, the central bank may also infuse an additional liquidity of Rs 1,00,000 crore by March through open market operations (OMOs)......

Read - Express India

Bank deposits outpace credit growth

Deposit accretion in banks continues to outpace loan disbursements this financial year. The trend prompted lending rate and deposit rate cuts by several banks in the period. As the Reserve Bank of India (RBI) data released on Thursday, bank deposits grew Rs 91,853 crore between June 29 and September 7, 2012. Outstanding credit fell by Rs 11,153 crore in the same period. In the first five months of the current financial year, deposits were up by Rs 2 lakh crore, while credit was up Rs 44, 904 crore.......

Read - BS

Hold on to the savings

...... A large number of banks sell gold. While banks have always lent against gold, a few non-banking finance companies, many from Kerala, have cashed in on the demand and exponentially increased their lending. The RBI, concerned with such rapid growth, has clamped down in a few cases. The other big macroeconomic worry arises from the fact that very large gold imports widen the trade imbalance and the current account deficit.......

Read - The Hindu

Banks caught in a cleft

......As if these hurdles don’t make the lives of bankers difficult enough, there is also the regulatory overhang of higher capital needs. As per estimates released by Reserve Bank of India, banks would need about Rs 5 lakh crore to meet new Basel-III-capital norms......

Read - BS

UIDAI Rolls Out API For e-KYC Verification

......As part of the e-KYC process, the resident can authorize UIDAI (through Aadhaar authentication) to provide their basic demographic data for PoI and PoA along with their photograph (digitally signed) to service providers. For the same, UIDAI has released e-KYC API......

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India’s Power List: SBI Head Tops It

Pratip Chaudhuri, the chairman of the State Bank of India, topped the list of Indian executives making headlines over the past month, according to data on regional and global media mentions compiled by Dow Jones Insight......

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State Bank of India ordered to pay Rs 24K with interest

......A redressal forum today directed State Bank of India at Hoshiarpur to pay Rs 24,056 as compensation to one of its account holders along with interest for negligence to prevent unauthorised transactions through his ATM card......

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Tata Capital to bring insurance, AMC firms under its fold

......Since the banking regulator does not allow any financial services entity held by NOHC to engage in activities that can be undertaken by the bank, Tata Capital Housing Finance will be merged with the non-banking company. RBI’s draft norms suggest that the promoters of banks should bring down their shareholding below 40% within two years of the banks being operational. The banks will also have to be listed within this period.......

Read - Mint