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| (from left) Shikha Sharma, Managing Director and CEO, Axis Bank, Chanda Kochhar, MD and CEO, ICICI Bank, K.R. Kamath, Chairman, IBA, and Pratip Chaudhuri, Chairman, SBI, at a press conference on Monetary Policy in Mumbai on Tuesday |
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.
Wednesday, October 31, 2012
CRR cut will not have much effect on lending rates, feel bankers
RBI to consider more CRR cuts if cash deficit persistent
T
he Reserve Bank of India will consider easing banks' cash reserve ratio (CRR) further if liquidity deficit persists for more than a few weeks at a stretch, Deputy Governor Subir Gokarn said on Tuesday.....
RBI's forecasts, initiatives depend on govt policy: Gokarn
The underlying structural factor that has been pushing the RBI to increasingly use the CRR this year is the persistently increasing wedge between deposit and credit growth
Read.......
Read.......
Will inflation rise or fall? Even RBI doesn't have a clue
...........As RBI has rightly pointed out, there are far too many factors at play simultaneously that goes into shaping inflation. That being the case, the central bank can be forgiven for being as clueless about it as the man on the street is............
RBI takes baby steps to reduce frauds, fix rates
..........one strong proposal, though still at a pilot project level, is double authentication of card transactions through Aadhaar. It means that, along with swiping the card, the Aadhaar biometric authentication – either through an Iris scan (scanning of eyes) or a fingerprint – will also be required for both at ATMs and PoS terminals. So, stolen cards will be useless as transactions won’t be possible without a fingerprint or Iris scan. The pilot project will start in Delhi from November 15...............
Interview with RBI Governor D. Subbarao
RBI governor D. Subbarao says that while growth remains an important concern for RBI, it needs to be balanced with the fight against inflation
RBI Governor Subbarao's full speech on interest rate cut
.....over the past few quarters, monetary policy had to focus on inflation, even as growth risks have increased. As recent policy initiatives by the Government start yielding results in terms of revitalising activity, they will open up space for monetary policy to work in concert to stimulate growth. However, in doing so, it is important not to lose sight of the primary objective of managing inflation and inflation expectations. This policy review is set in the context of the above global and domestic concerns. It should be read and understood together with the detailed review in Macroeconomic and Monetary Developments released yesterday by the Reserve Bank.......
Vijay Cooperative Bank penalised for violation of RBI norms
Ahmedabad: Reserve Bank has imposed Rs 5 lakh penalty on city-based Vijay Cooperative Bank for violation of KYC norms and other guidelines......
RBI may Grant New Licences to UCBs
.........Urban co-op banks came under the regulatory glare of RBI post the Madhavpura Co-operative Bank debacle resulting from misuse of funds and run on deposits that affected the credibility of the co-operative banking system. But, after 2002, the RBI started playing a bigger role in regulating UCBs by signing a memorandum of understanding with various state governments.
Read.........
RBI permits UCBs to undertake forward contracts in corp debt
....."It has been decided to include scheduled UCBs with strong financials and sound risk management practices as eligible participants to undertake repo transactions in corporate bonds," RBI said in a notification. .......
Partial fix for NPAs
....Given this, RBI has done the right thing by telling banks to put in place a mechanism to evaluate the risks from unhedged positions and to report this regularly to RBI, apart from pricing this in while extending credit to them. In the case of restructured loans, RBI has advanced some of the recommendations of the Mahapatra committee that was to review this. While the draft guidelines will be issued by the end of January 2013, RBI has said that provisioning on restructured standard accounts is to be hiked from 2% right now to 2.75%. While that’s a good step, it may not be enough—indeed, the RBI working group had suggested a figure of 5%. More important, if regulatory forbearance is being abused—based on Chakrabarty’s data—RBI needs to come out with some norms, including personal guarantees of promoters. Hopefully, we’ll see this in the January guidelines.......
'NPAs are not alarming as our banking system is robust’
What was the thinking behind the CRR cut?
I have explained the rationale in the policy document. The monetary situation is determined by two variables – the policy interest rate and the liquidity conditions. We want to keep liquidity comfortable. Comfortable liquidity when interest rates are very high does not happen. Lowering interest rates when liquidity is tight does not happen..................
Read - The Hindu
Frame new law for Islamic banking: RBI
Putting an end to the speculation on allowing Islamic banking in the country, the Reserve Bank of India (RBI) governor, D Subbarao on Tuesday said the current Banking Regulation Act does not permit Islamic banking and that the government will have to bring in a new law if it wants to introduce it in the country..........
Time for more subordinate legislation for the financial sector
...........There have been examples of piecemeal transfer of authority to subordinate legislation in the past. In the last decade, RBI got the power to set statutory liquidity ratio (SLR) and cash reserve ratio (CRR) levels, unencumbered by limits set under laws earlier. Some regulations had moved from the Companies Act to Sebi and the Insurance Act to Insurance Regulatory and Development Authority (Irda). The prohibition on preference share issues by State Bank of India (SBI) was removed and thereafter it needs to follow RBI regulations on preference capital. There was an individual shareholding limit of 200 shares listed SBI associate banks, and that too only in paper certificates form—this was repealed and harmonized with Sebi rules.............
Total4U violated RBI norms: Police tells court
KOCHI: Sabarinath, who duped the public through a Ponzi scheme named Total4U, has been booked for violating the Reserve Bank of India (RBI) regulations, in addition to charges of cheating, police submitted to the Kerala high court on Monday............
RBI directs banks to monitor unhedged FX exposures
The Reserve Bank of India has asked banks to put in place systems to monitor unhedged foreign currency exposures of corporates.............
Read - ET
Read - ET
RBI panel to resolve stress in financial conglomerates
.........This inter-regulatory forum, to be headed by RBI’s Deputy Governor (banking supervision), will institutionalise the framework for supervision of financial conglomerates (FCs). It will also develop framework to monitor and management of systemic risks emanating from their activities. This forum will assist the Financial Stability and Development Council (FSDC) for monitoring the functioning of SIFIs. The forum will be responsible for framing policies for FCs such as identification, group-wide risk management, and corporate governance...........
Banks can't lend to jewellers for purchase of gold: RBI
....."No advances should be granted by banks against gold bullion to dealers or traders in gold if, in their assessment, such advances are likely to be utilised for purposes of financing gold purchase at auctions or speculative holding of stocks and bullion," the RBI said in its half-year review of the monetary policy..........
Thursday, October 25, 2012
Technology in the financial sector - some issues and a few concerns - G Padmanabhan
Bankers’ Club, Thrissur, 22 October 2012
.............The point that I have been trying to make so far is that advancement in information and communication technology has opened vistas in financial sector that could not be imagined a few decades back. Yet, it cannot perhaps be said that all the ways in which we have harnessed the technology has contributed to social utility or made the financial sector more robust and useful.........
Read..........
Inflation — visible and invisible - A.Seshan
......The RBI’s focus should continue to be on inflation, though there is considerable pressure on it from the banking and the corporate sectors, and also the Government, to loosen up policy in the interest of growth. Such liberalisation can be in two ways. One is a further reduction in the banks’ cash reserve ratio (CRR) that will release primary liquidity. The other is a decrease in policy (repo and reverse repo) rates by the RBI. Under the current circumstances, the reduction in policy rates is preferable to that in CRR.......
FINANCIAL LITERACY DRIVE
As part of the drive to initiate financial literacy, RBI in its series of workshops conducted in various schools all across the country, conducted its first workshop in D.A.V East of Loni Road, Delhi on 5th October 2012 for the students of classes X to XII. The workshop was conducted under the resource persons Mr Anupam Sharma, Assistant Manager RBI and Mr Pal, Assistant Manager RBI........
A Phoenix Called Microfinance
.........“We kept requesting RBI to regulate us, bring us formally under your ambit, give us recognition, RBI chose to ignore us deliberately as they felt that we were doing a good job despite the regulation, RBI said do not make us regulate you ,you will lose all this leeway.” Unlike most people who felt that RBI was reactive in its approach, I would assume that RBI did have a Plan – B ready, though I must accept that it took a little long to put it in practice…Since then there have been a slew a measures taken by the RBI as part of course correction for the sector.........
Unfair comparison
This refers to “RBI’s ineffective communication” (Business Line, October 23). Unfortunately, the author has relied on the experience of the US and its Federal Reserve to build his case on the performance of India’s central bank on communication. India cannot be compared with the US at this stage. The two countries differ in historical background, governance, population, literacy; their measures even for estimating hunger vary. The same applies to the central banks too. The Fed and the RBI are not comparable. One is not aware whether there are restrictions on the number of speeches by Fed officials. North Block may not be aware either. If they come to know, RBI officials may have to talk less in public. It is true that the frequency of policy reviews by the RBI needs to be reduced, as it takes some time for follow-up measures to have an effect.
- M.G. Warrier, Mumbai (HBL)
Lack of coordination
..........This also explains why blaming RBI for failing to rein in inflation, despite several rate cuts, is unfair. Instead, but for RBI’s firm determination, inflation would have flared up further. Any insistence on the part of the government to coordinate with RBI to promote growth by liberalising interest rates will be counterproductive, unless the former cooperates to check inflation and takes bold steps to enhance growth by other means.
How viable is a common currency for SAARC nations?
.......Those opposing this move argue that it will result in the loss of sovereign control over monetary and exchange rate policies.These policies would then be formulated by some version of a SAARC central bank which would subsume most of the policy-making prerogatives of the present national central banks. Bluntly put, the RBI (along with the finance ministry) would no longer determine India's monetary and exchange rate policies............
आरबीआई को अपना रुख बदलना होगा
.......सुब्बा राव की समस्या यह रही है कि उन्होंने अर्थशास्त्र की शिक्षा अमेरिका में ली और उनके करियर का बड़ा हिस्सा अमेरिका और यूरोप में गुजरा। वह भारतीय अर्थव्यवस्था की बारीकियों से कभी परिचित नहीं दिखे और न ही इसे पूरी तरह समझ पाये। दरअसल भारतीय अर्थव्यवस्था की बनावट कुछ ऐसी है कि इसमें बड़े पैमाने पर काला धन लगा हुआ तो है ही, इसमें नकदी की बड़ी भूमिका है। नकदी यानी कैश के जरिये आज भी अरबों रुपये का कारोबार होता है, खासकर अनाज और फल सब्जियों का।..........
What if Statutory Liquidity Ratio is abolished?
.....While following the debate on CRR abolition, an idea came to ones mind as to what would be the medium- to long-term impact on the banking structure if SLR (Statutory Liquidity Ratio) is abolished........
Time right to cut REPO rate by 100 basis points and CRR by 75 basis points to revive investments and growth
......“RBI should bring down Repo rate from its current level of 8%, by 50 bps immediately and another 50 bps subsequently during the course of the financial year. Simultaneously, Cash Reserve Ratio (CRR) should also be brought down by 75 bps from its current level of 4.5% by the RBI in the second quarter Monetary Policy due to be announced by this month end. This would not only help revive business sentiment and enable companies to raise capital at affordable cost but would also ensure that liquidity in the economy remains adequate”........
RBI may take a calculated risk and ease monetary levers
Going into the half yearly review of the monetary policy for the current fiscal year, the Reserve Bank of India (RBI) is faced with a macroeconomic environment characterized by high and rising benchmark wholesale inflation, stabilizing growth momentum with signs that economic activity has bottomed, a stable-yet-weak currency, easing commodity prices and slowing global growth. While this macroeconomic backdrop has largely been in place over recent policy reviews, there is a key difference this time around..........
Priority’s liquidity, not cuts, says St
Several economists feel rising liquidity adjustment facility (LAF) deficit and tightening credit at banks will likely push the Reserve Bank of India (RBI) to again cut the cash reserve ratio (CRR) at least 25 basis points (bps) to 4.25%, when it reviews its monetary policy on October 30. There are, however, few takers for a rate cut, given the sticky inflation......
Why a rate cut by the RBI will help in growth revival
On the eve of the mid-year review of monetary and credit policy, the Reserve Bank of India (RBI) once again finds itself in an unenviable situation. Signs of growth weakness are everywhere, but signs of inflation abatement are not as widespread. Hence, it has to tread narrowly in that policy alley, without disturbing optimistic developments on both sides...........
A prescription for fiscal health
............Only if all this is done, the RBI can discharge its role in bank rate adjustments to facilitate growth without inflation.
The hot money debate
.......There are several complications to this argument, and Reserve Bank of India Governor D Subbarao has made his questions about it apparent in recent communications. RBI has been doubtful about doing anything more with the exchange rate than managing its volatility. There is certainly disagreement on whether it is more effective to stimulate growth through exports or through rate cuts. More importantly, the point is whether a real depreciation in the currency should be used to allow nominal depreciation or to build up foreign exchange reserves. If New Delhi intends to finance the current account deficit through FII funds, then the size of India’s reserves becomes vitally important............
DGST eyes tax on 1.19 lakh cr worth of foreign remittances
.....The RBI is believed to have given the DGST access to information about foreign remittances for 37 purposes such as communication, construction, insurance, financial, postal, courier, satellite services etc. A comprehensive list has now been shared with the DGST for every transaction in these categories. Every time a foreign remittance is made through a financial channel, banks seek details of the currency, country and purpose and forward it to the RBI......
Fake notes worth `1.75 lakh seized in Dehradun
..........the last major seizure of FICN in the State was made by the Haridwar police from Kankhal area about four years ago and counterfeit currency with face value of more than Rs 80,000 was recovered. Those fake currency notes even had “RBI” and “Bharat” printed on the security thread, the two features which are generally absent in counterfeits. “In that case, however, the fake notes had been printed in Bihar and were to be circulated in Uttarakhand and other parts of the country,”............
6 co-op banks may be forced shut despite Cong-NCP push
.....“We are in touch with RBI authorities after this letter, and have pointed out that the issue had been flagged at the highest level and the Centre is considering an extension, as well as a package. It’s not the question of just six banks of Maharashtra; there are 20 banks in the country that may be shut down and hence we are hoping for some way out,” said a bureaucrat on condition of anonymity. However, the RBI has already given these banks two extensions, and the Centre has not yet assured any help to the state government.......
Bond scheme: Effective way to put gold to productive use
.......The gold collected by the government should be deposited with the RBI in exchange for rupees. RBI should be willing to do this as it does not amount to monetising the government's borrowing. In RBI's balance sheet on the asset side, gold will go up, which will be offset by an increase in rupee liabilities. Thinking of it in another way, this would be akin to RBI purchasing foreign currency and releasing corresponding rupee liquidity in the market. The transaction between the government and RBI can be reversed when the gold bond matures. An important point to take note of is that the gold price and exchange rate risk is borne by the saver............
Read - ET
Vyavasayik Evam Audyogik Sahakari Bank penalized
The Reserve Bank of India has imposed a monetary penalty on the Vyavasayik Evam Audyogik Sahakari Bank Maryadit, Morena (Madhya Pradesh) for violations of banking regulation act. The Bank was penalized for violation of the directives/instructions/guidelines of the Reserve Bank of India on credit exposure ceiling, maximum limit on unsecured advances, Know Your Customer (KYC) / Anti Money Laundering(AML) and submission of compliance to RBI’s inspection report.......
Bank can freeze account into which it mistakenly credited money: High Court
When a bank inadvertently omits to upload the stop payment instruction issued by its account holder and the cheque is thus credited to the account of the payee despite such instruction, the bank is well within its rights to freeze the account of the payee till he returns the money with interest......
Read - HBLBanks push credit cards, unsecured loans to outside clients
| CAUTIOUS MOVE |
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Read - BS
Wednesday, October 24, 2012
Social banking: New kid on the block?
Banks may get targets to install card terminals
Reserve Bank of India (RBI) is considering setting a target for banks to install point of sales (PoS) terminals for acceptance of card payments. It is also looking at a wider role for non-banks in setting up 'white-label' PoS machines at retail outlets across the country. As against the 1.82 crore credit cards and 29.85 crore debit cards, there are only 6.97 lakh online PoS terminals in the country. Speaking at The Bankers' Club, Thrissur, on Monday, G Padmanabhan, ED, RBI, indicated that banks were taking easy way out by being content with steps initiated by regulator........
Odia man honoured for 'foolproof' payment system
SAMBALPUR: An Odia man was honoured by the Centre for devising an Aadhaar-based system for payments under different welfare schemes. The system is unique as it would do away with repetition of payments because fingerprint authentication of the beneficiary is mandatory. Abhaya Hota of Sambalpur received the award from Prime Minister Manmohan Singh at a function in Rajasthan recently. Hota after a career in the Reserve Bank of India (RBI) became the managing director and chief executive officer of National Payments Corporation of India (NPCI). RBI had set up the NPCI, an umbrella institution, to clear and settle all inter-bank transactions in ATM transactions, mobile payments and card payments................
Read - TOI
Aadhaar to ‘aam aadmi’
.........While the progress in Aadhaar enrolments has been satisfactory, a lot more needs to be done for financial inclusion. One way out is for banks to appoint business correspondents (BC) to reach customers in remote areas where traditional brick-and-mortar operations aren’t feasible. A country-wide network of BCs – each equipped with a hand-held ‘micro-ATM’ device that is Aadhaar-enabled – is a viable option for delivering fertiliser subsidy or MGNREGA wages directly through electronic transfer into the beneficiaries’ accounts. The latter could withdraw that money in cash even from a BC with whom they may not have an account – similar to how one bank’s ATM can also be used by customers of other banks............
Banks reluctant to use Aadhaar numbers to open accounts
RBI note to follow due diligence on customer’s current address behind confusion; UIDAI seeks clarification
...........Indeed, despite RBI’s clarification last September that the number, issued by the Unique Identification Authority of India, or UIDAI, would suffice, banks are still reluctant to accept it. Banks insist on KYC norms being met to open accounts. The opening of Aadhaar-linked bank accounts is the key to moving towards a regime of direct transfer of cash subsidies for everything from cooking gas to kerosene to fertilizer...........
Monetary policy has a role in growth revival
......Over the past year, RBI’s monetary policy stance has become increasingly contingent on fiscal consolidation, even as the debate continues on the respective roles of fiscal, industrial and monetary policies in controlling inflation while sustaining growth. As early as April, RBI emphasized that “persistent demand pressures emerging from inadequate steps to contain subsidies… will reduce whatever space there is (to further reduce policy rates)”. The government’s view, on the other hand, is that “high interest rates hurt everyone”.........
‘Writ under Article 226 lies against negligent nationalised bank’
A bank, a nationalised bank at that, is an instrumentality of the state and hence writ under Article 226 of the Constitution lies against it, said the Madras High Court in Ashok Amritraj vs Reserve Bank of India and others..............
Be cautious of perky UIBs: RBI
JAMMU: Reserve Bank of India has cautioned the people about the various Un-incorporated Bodies (UIBs) that intend to dupe the gullible investors of their hard earned money by luring them through advertisements offering attractive schemes and stupendous returns. In a hand-out issued by the authorities of the Reserve Bank of India, several instances of frivolous and perky Un-incorporated Bodies (UIBs) have been mentioned to make the public aware of such associations and bodies......
With simpler hedging, RBI makes it easy for FIIs to invest
.........In a recent speech, Deputy Governor H.R. Khan said that during the current financial year, after depreciating by more than 10 per cent till June 2012, the rupee started recovering gradually in response to major central banks’ decision to go for further policy easing and the announcements of another round of reform measures by the Government...........
2 days on, University of Hyderabad’s school of economics scouts for funds
.......Observers said that the current impasse might further weaken with some of the brains behind the project leaving the university. "Y V Reddy, economist and former Governor, RBI was a major force behind the inception of a separate school. He has already requested to be relieved of duties as professor par excellence," a source said.
Read - TOI
We are not a bailout agency, says LIC
......Last fiscal, LIC had helped in recapitalisation of a slew of public sector banks, which was of big help to the lenders given the weak government finances, but which made Reserve Bank of India uncomfortable and it conveyed its displeasure to the banks boards............
RBI to issue Rs 100 note with rupee symbol
......These bank notes will bear the rupee symbol on the observe and the reverse with inset letter E in both the numbering panels, bearing the signature of governor D Subbarao, RBI said in a notification...........
Poor are honest borrowers: Chidambaram
Finance Minister P Chidambaram today asked banks and financial institutions not to hesitate in giving loans to the poor, saying they are honest borrowers and do not default on payment.........
Tuesday, October 23, 2012
RBI may treat part of SLR as liquidity under Basel III: Anand Sinha
MUMBAI: RBI Deputy Governor Anand Sinha today said the central bank is looking at a move under which a part of banks' statutory liquidity ratio (SLR) holdings can be treated in a way that it complies with liquidity norms under the Basel III capital requirements. "We are thinking on to how to work out a scheme under which a part of the SLR is treated as Basel III liquidity requirement," Sinha said at an event organised here by Care Ratings.........
In spirit and letterhead
Inflation and interest rates are not the only issues exercising the Reserve Bank of India (RBI) these days. The incidence of fraudsters invoking the central bank has become frequent, too. So much so, in addition to running the standard warning scrolls on its website, RBI recently added a footnote to its official leatherhead. Written in English and Hindi, it says, “RBI never sends mails, SMSes or makes calls asking for personal information like bank account details, passwords, etc. It never keeps or offers funds to anyone. Please do not respond in any manner to such offers.”
BS
RBI’s ineffective communication
........Fed officials made all of 48 speeches in 2011, and have made 33 speeches so far in 2012. In contrast, the top brass of RBI officials delivered 70 speeches in 2011, and already another 70 so far in 2012. The RBI seems to be inspired by the Bank of England where the number of speeches in a year matches that of the RBI. There is, however, a difference. In the case of the RBI, the burden of communication (read speeches) is largely shared by the ‘big five’ (the Governor and Deputy Governors), and in rare instances by a few Executive Directors. In the case of Bank of England, apart from the Governor and directors, 10 Executive Directors and 10 members each from the monetary policy and financial policy committees share the burden..........
FINANCIAL LITERACY
The Department of Management Studies, Francis Xavier Engineering College, Palayamkottai, in collaboration with Reserve Bank of India and Indian Overseas Bank organized a Financial Literacy Programme recently. The purpose of this programme is to enable students understand RBI’s functions and role and its different schemes. RBI officials M.A. Khan and R. Sankara Subramanian were the resource persons, who spoke on the security features of currency and gave tips on identifying counterfeit notes. Samraj, Senior Manager, IOB was present. Dr. Jesiah Selvam, Dean, felicitated the resource persons.
The Hindu
Banking sector reforms is the need of the hour - M.G.Warrier
..........It has to be said to the credit of RBI that the central bank effectively brought to the fore the real issues and concerns of all stakeholders in the financial sector, about new banking licenses. In the present scenario, the central bank should take initiative to reopen the banking reforms agenda which was kept in the backburner after allowing some banks in the private sector during the introductory years of financial sector reforms..........Time For Action From RBI
..........Beside this, concerns related to India’s economic growth would also coax the RBI to play the role of a facilitator by cutting interest rates. Today, economic slowdown is a reality. This is reflected in the 5.5% economic growth in current financial year. India grew at 7% and more in last six out of eight years. The estimates of future economic growth are further adding to worries of policy makers............
Why RBI, FM are having tough time seeing eye-to-eye
......Government is keen to have accommodative monetary policy and strong rupee exchange rate to spur growth, control inflation and attract foreign investments. The other stake holders of the system are in wait to get resolution to these conflicts between FM and RBI as both walking in the same direction is essential to get the Indian economy out of its woes and remove the fear of sovereign rating downgrade. There is no alternate option at this stage and the best (and only) option would be for RBI to address issues related to growth while FM work overtime to address issues related to twin deficits and inflation. There is immediate need for role-change to walk in the same direction!........
RBI should leave rates alone
..........At this stage, intellectual honesty demands a confession. I listened to Y.V. Reddy’s wonderful lecture at the India Policy Forum of the National Council of Applied Economic Research. He mentioned that support given to the poor is called subsidy while it is called an incentive if given to the rich. It is a fact that most of us instinctively turn to reduction in and elimination of subsidies as solutions to the problem of high fiscal deficits. Seldom have we turned our attention to the efficacy of tax incentives given to the rich...........
Read - Mint
RBI to form quarterly policies; Interest rates main focus
..............If RBI goes easy on the monetary and interest rates, than perhaps the economy will see new funds floating about, and growth reviving again. But with the intellectual lockjam between the government and RBI, and the autonomous status being a crucial card, the situation will remain tense till October 30 when the policies come out.
Read - Daily Bhaskar
Tying up the inflation conundrum
..........The Reserve Bank of India (RBI) officially tries to maintain inflation at around 4% in the medium term, while maintaining growth prospects and allowing the currency to float as per the market and trying to reduce the volatility in currency price. It’s an admirable, if somewhat convoluted, set of macroeconomic stability goals. But the actual performance of India’s inflation seems to fly in the face of what its central bank is trying to do. We have consistently overshot 4%, and not just in the last couple of years. At least since 2005, inflation—
'Space for better monetary easing seems limited'
............The stickiness in headline and core inflation may prompt the Reserve Bank of India to maintain the policy rate in the upcoming policy review. However, in light of the seasonal pick-up in credit demand, RBI might consider reducing the CRR by 25-50 bps to support activity. With headline inflation expected to average 7.5-7.7 per cent in the current year, the space available for further monetary easing is likely to be limited to around 50 bps over the remainder of 2012-13.
The role of banks in project financing in India
......In India, local banks, both public sector and private sector, have been the only players in infra project financing (PF), with very little participation from international financial institutions (IFIs). This situation is not sustainable - with increasing demand for funds, and Indian banks reaching their prudential exposure limits, there is an urgent need for new instruments and new players in the financing market.......
Read........
Non-bank entities can set up ‘White Label’ ATMs
......Such non-bank entities should have a minimum net worth of Rs 100 crore as per the latest financial year’s audited balance sheet, which is to be maintained at all times, RBI said. In effect, non-bank entities will provide the banking services to bank customers in India, based on the cards (debit/credit or prepaid) issued by banks. Their role would be confined to acquisition of transactions of all banks’ customers and so they would need to establish technical connectivity with the existing authorised shared ATM Network Operators or Card Payment Network Operators, said an RBI release............
Mining crisis: Goa Chamber urges RBI to restructure business loans
Panaji: The Goa Chamber of Commerce and Industry (GCCI) is in talks with the Reserve Bank of India (RBI) urging restructuring of loans of businessmen from the state who hadborrowed money to buy trucks and barges, to ferry ore, reports PTI.......
Punjab National Bank to hire about 8,000 people
Tiruchirapalli: Punjab National Bank (PNB) today said it will hire about 6,000 to 8,000 personnel each year for the next few years and open 500 branches across the country in the current year. "We will be recruiting 6,000-8,000 personnel each year for the next few years," the bank's Executive Director S R Bansal told reporters here.....
De-jargoned | Securitization
.......
According to the Reserve Bank of India (RBI), the securitization market is primarily intended to re-arrange and diversify the credit risk away from the loan originators to a number of investors who can bear it, thus giving some financial stability and an additional source of funding. The main reason for undertaking securitization is liquidity.........
A plethora of courses related to banking
.....The banks fix an appropriate cut-off score based on the number of vacancies and applications received. If you manage to secure the cut-off score or more, you will be called for the subsequent rounds of recruitment process of the specific bank. Some banks like RBI and SBI conduct their own competitive examinations.......
Odisha forms panel to check financial fraud
.....Lately, there have been rampant incidents of some unscrupulous financial establishments and fly-by-night operators duping people, especially in small towns through chit funds, multi-level marketing schemes and collecting investment schemes. The frequency of such cases of fraudulent deals have been particularly high in Balasore in the state's northern belt where people have been more vulnerable to schemes offered to them in the guise of profitable investment. The finance department has felt that such unscrupulous individuals and entities take advantage of the loopholes in the existing legal provisions and the lack of clarity in roles of different agencies such as Union ministry of corporate affairs, Reserve Bank of India (RBI), Sebi and other agencies of Central and state governments.........
Monday, October 22, 2012
RBI workshops to work on stopping ‘parallel economy’
To deal with the parallel economy, what the fake currency note system is un-popularly known for, the Reserve Bank of India (RBI) is stressing more on customer awareness. The regulator bank apart from publishing advertisements pointing out unique features of Indian currency would also organise workshops to tame the menace.
Directing to hold such an awareness camp in Ranchi, Suma Verma, Chief General Manager, of the RBI instructed General Manager HN Panda about this while adding that the problem can be rectified by working in tandem only..........
'Super regulator not ideal solution for financial sector'
M Damodaran, Former Chairman of SEBI believes there is no final solution to what could be the best structure for a regulatory authority.Damodaran points out that every regulatory organization has over the years developed its own identity and has its own philosophy to regulate that part of the financial world......
Social banking and finance – opportunities in inclusion
Session keynote address by Dr K C Chakrabarty, Deputy Governor of the Reserve Bank of India, at the 2nd FT-YES Bank International Banking Summit, Mumbai, 15 October 2012
........With the introduction of banking technology and the realization that poor are bankable, the coverage of unbanked population into the financial system is expected to improve. Financial inclusion, along with Government’s developmental programmes, is expected to result in overall financial and economic development in the country. As in the case of most developing countries, extending the banking services to unbanked groups is expected to be the key driver for inclusive growth.........
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Forecasts: Love them? Hate them? Use them
Everybody loves a forecast and wants to know where dollar-rupee is headed. This is natural because forex is the business of every importer/exporter. Even the RBI conducts a Survey in which it seeks the views of professional forecasters on various aspects of the economy, including the Rupee. Yet, people tend to have very low respect for forecasters. This is not so much because their forecasts tend to go wrong. What people do not like is the lack of sense of accountability displayed by many forecasters, whether in banks, in companies, or outside. Even G Padmanabhan, Executive Director, RBI, lamented this fact at his recent “Goa to Goa” speech on 23rd August......
Trust completes two-years, spread financial literacy among 2.44-lakh people
MANGALORE: Jnana Jyothi Financial Literacy and Credit Counselling Trust, jointly sponsored by Syndicate Bank and Vijaya Bank, and Set up according to the model scheme of Reserve Bank of India on October 20, 2010 has completed two years of service. The Trust so far has opened 32 centres in 25 lead districts in India, of which 14 centres are in Karnataka, five in Andhra Pradesh, two in Kerala, six centres in Uttar Pradesh and 5 centres in Haryana........
'Choking demand through monetary action suicidal for growth'
The Reserve bank should not always use monetary tools to control inflation as choking demand will be "suicidal" for economic growth, Assocham said Sunday. The chamber said that in a study a majority of 200 participants said that it is wrong on the part of RBI to be obsessed with always using monetary tools to control inflation.......
A problem of coordination?
With the govt failing to rein in the fiscal deficit, RBI may think twice before agreeing with suggestions of a rate cut
Should there be close coordination between the fiscal policy authority, the Union finance ministry in New Delhi, and the monetary policy authority, the Reserve Bank of India (RBI) in Mumbai? Yes, in the normal course, there should be close coordination between the two authorities. This, of course, should be without any one of them undermining the independence of the other. The economy and all economic entities will gain if the finance ministry and RBI were to see eye to eye on what needs to be done to achieve higher growth with low and stable inflation.............
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