........Of late, there is a clear recognition of the magnitude and dimensions of the inadequacies in credit flow to weaker sections and sectors with low individual credit needs at higher levels in GOI and RBI. Perhaps, rural credit is the most talked about and studied subject in our country since late 1950’s and from the establishment of SBI to the current efforts to develop MFIs, there have been a number of fresh initiatives to support rural development. Last July, while speaking on ‘Challenge of financial inclusion’ RBI Governor Duvvuri Subbarao referred to the magnitude and dimensions of the inadequacies in credit flow to weaker sections and sectors with low individual credit needs. Such recognition of the need for action, at the highest level, is comforting. ..............
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.
Saturday, December 15, 2012
Bitter medicine needed to get back to high growth path: Chidambaram
...........“Some bitter medicine has to be taken this year. We have to take some bitter medicine. There is no other way...this bitter medicine is good medicine. It will restore the health of the economy and next year we can look forward to much higher growth,” ..........
Moderation in inflation a very good signal: Montek
...........“I don’t regard seven plus per cent inflation as comfort zone. But the important thing is that if you think it is heading down, then may be the time has come to recognise that inflation is clearly softening and growth is weak and I am sure that RBI knows what to do,”........
Will the RBI cut rates?
.....The RBI’s first duty is to keep inflation down. So, it will not take any action that will serve to increase it. This means that it will not lower interest rates by any significant amount because lower rates will mean higher borrowings and greater spending. The problem, however, is that inflation is still running at a very high level. More money to spend will mean an immediate upward pressure on inflation because supply takes time to catch up. On balance, therefore, it is reasonable to expect the RBI not to cut rates in December........
Counterfeit notes may impact inflation, says RBI
....."The Reserve Bank of India has informed that the presence of large number of counterfeit notes may impact inflation and can be used for anti-national activities," said Minister of State for Finance Namo Narain Meena in a written reply in the Lok Sabha. He, however, said no estimates of counterfeit currency in circulation was available........
New rules to rein in money chains
The State government is all set to bring in fresh rules to rein in money-chain companies and multi-layered marketing firms in the wake of mounting cases of ‘ponzi’ schemes being operated in the State. The new rules, Money Circulation Scheme (Banning) Rules, 2012, are being framed under the Prize Chits and Money Circulation Schemes (Banning) Act, 1978, in exercise of the powers under sub-section (1) of Section 13 of the Act and in consultation with the Reserve Bank of India (RBI), official sources told The Hindu on Friday......
Banks tap Wolters Kluwer for RBI complaince
.....With our solution, customers are assured of the end-to-end workflow of regulatory reporting," said Shawn Paul, regional director - Asia-Pacific and Japan (APJ), at Wolters Kluwer Financial Services. "RBI has notched up the pressure on banking institutions in order to secure complete Automated Data Flow compliance by March 2013. Therefore firms in India are requiring a provider with strong local expertise of the requirements in order to start producing the reports by the end of 2012.".......
Door-step banking a boon for NREGA workers
....Tripura is the only state where more than 90 per cent of the population are covered by the Aadhar scheme. The Tripura government first introduced Aadhar-enabled payment system in old age pension on October 18, 2012 at Borakha village in West Tripura district. Dinesh Mushahary, chairman of the Tripura Gramin Bank, said that Tripura was one among a few states taking banking facilities to the doorsteps of the masses..........
Is Aadhaar being used as a political tool by the UPA government?
......According to Dr KC Chakrabarty, Deputy Governor Reserve Bank of India (RBI), only 40% Indians have bank accounts. HR Khan, also Deputy Governor of RBI, had said that as of June 2012 around 1.88 lakh villages in India were connected to banking system. This also means, residents from about 5.12 lakh villages (if the Aadhaar linked DCT is really meant for such financially excluded regions), are still out of the banking system. In other words, to make the DCT a success, the UPA government need to bring people from these villages into banking system first........
Bounced cheques: SC offers a new interpretation
The apex court has taken a strict view of cases where cheques are dishonoured
In a recent judgement on cheque bounce issues, the Supreme Court, while taking into consideration genuine cases, has suggested to follow the principle of the Laxmi Dyechem Vs State of Gujarat & Others, on a case to case basis as it is also necessary to properly judge the intention of the accused to avoid wrongful conviction.......
Read - Moneylife
RBI received large number of credit card complaints against SBI, ICICI Bank in FY12: Government
........During 2011-12, Reserve Bank of India (RBI) has received 5,198 complaints against State Bank of India (SBI), followed by ICICI Bank (1,211) and HDFC Bank (1,153), Finance Minister P Chidambaram said in a written reply to the Lok Sabha. The Minister said that complaints have been received from customers on issues, including those on undue penal charges, late payment charges, issue of unsolicited cards and harassing telephone calls among others..........
Kotak ‘positive’ On NBFCs after RBI released draft guidelines
......Kotak Institutional Equities (Kotak) has voiced positive sentiments on Non-Banking Financial Companies (NBFCs) on the back of the recently announced draft guidelines issued by the banking regulator, the Reserve Bank of India (RBI). The report released on 13 December 2012 stated, “We are positive on the business of asset-finance NBFCs even as the recent rally caps upside.” In other words, it is positive on the sector even though the market has discounted the upside movement because it believe the guidelines will make NBFC fundamentally stronger over the long-term........
Friday, December 14, 2012
Cartelising savings bank rate? - S.S.Tarapore
Whether or not the Competition Commission has issued a notice to banks, the issue of savings banks rates should act as a wake-up call for the RBI
.....In an ideal situation, the industry regulator (RBI) should first intervene and only if the issue is unresolved, the Competition Commission should intervene. In the present situation, the RBI is aware of the ground realities. If it felt that there were signs of cartelisation, it should have used strong moral suasion to ensure that banks do not cartelise. Its silence could indicate that the RBI does not see this as a case of cartelisation. It is not clear whether the CCI has issued a notice to banks. Even in the absence of a formal notice by the CCI, this should be a wake-up call to the RBI and alarm bells should be ringing for banks........
A growing distance
The distance between North Block and Mint Road has been growing for quite some time. The latest evidence of tension is the finance ministry’s decision to introduce a clause in the Banking Amendment Bill allowing banks to trade in commodity futures, despite the central bank’s reservations on the issue. The ministry has argued that this will enable banks to hedge exposure to agricultural lending arising out of price fluctuations. While it is the ministry’s prerogative to submit to Parliament the laws under which regulators like the Reserve Bank of India (RBI) will have to work, it is possible that it has not listened closely enough to the regulator’s arguments, as a major stakeholder.........
No tangible development in RBI-adopted Bhadrak village
The Reserve Bank of India (RBI) Platinum Jubilee outreach activities seem to have remained ineffective in Bhadrak district. The tribal-dominated village Jalanga was selected by the RBI to be adopted under Samagra Gramin Vikas Yojna. The UCO Bank had adopted it. However, given the ground realities, the mission of adopting the village is yet to be achieved. The RBI in a response to one RTI application filed by rights activist Radhakanta Tripathy stated five villages namely Jalanga, Chandipur, Pokatunga, Chhatabara and Bhedabahal from Odisha had been adopted under the SamagraGramin Vikas Yojna, among the 115 villages adopted under the scheme across the country.........
Financial inclusion in J&K our target: RBI
Srinagar, Dec 12:Interactive meet organized by the Reserve Bank of India in association with J&K Bank concluded today. Speaking on the occasion, Regional Director (Jammu), RBI, K.K.Saraf expressed that financial literacy and financial inclusion are their focused targets in J&K. He said that in anticipation of increase in volume of foreign exchange business due to revival of tourism and handicraft sectors in J&K, need was felt to hold a session on FEMA, 1999 for general awareness of bankers and customers. Chief General Manager RBI Mumbai Rashmi Fauzdar, Executive President, J&K Bank, Parvez Ahmad, Presidents J&K Bank Shafat Ahmad, Nayeemullah, Vice President.P.K. Tickoo, DGM FED RBI Jammu A.K Mattu and DGM FED RBI Mumbai P K Kar were also present on the occasion..........
Supervision beyond borders
...........It is true that complexity faced by supervisory colleges at the global level, along with the diversity of regulatory approaches only amplifies the challenges of effective cooperation and coordination. Nevertheless, supervisory colleges offer the right model for supervision and regulation of internationally active banking groups. Therefore, colleges established by the RBI will go a long way in achieving supervisory efficiency and effectiveness by building and nurturing relationships among supervisors beyond formal rules, regulations and geographical borders.
ICICI Bank opens 101 gramin branches across six states
......"Financial inclusion is the bedrock on which the edifice for an inclusive social and economic ecosystem can be built. While the task of bringing the 1.2 billion population within the fold of banking is indeed daunting, it is as much an opportunity for the banks. I feel that brick and mortar branches, as delivery point for banking services, would continue to play a critical role for at least next 20 years," KC Chakrabarty, Deputy Governor of the Reserve Bank of India (RBI) said while inaugurating one of the bank's gramin branches at Khatwa, a village in Rajasthan........
Industry must educate masses on economic reforms: HR Khan
......."There is a huge need for communication (as to) why reforms are necessary. It is not only to attract foreign investors...it is in the interest of the country," he said. "There is a vested interest in the country against business. They think business is a crime. (They say) any reforms and people will suffer. But nobody explains, starting from the top political leadership to the captains of the industry, academia. Nobody goes and talks to the general people,".......
Beyond the politics of the banking law amendment
............... After Independence, the Forward Contracts (Regulation) Act was passed in 1952 to regulate this market and FMC was born. In the mid-1960s, the government banned futures trading of most commodities, believing this fuels inflation. The ban was lifted in 2003, leading to the birth of national electronic commodity exchanges but even a decade after this, FMC continues to remain a wing of the central ministry. In a free-market economy, futures trading is essential as it helps price discovery and price risk management and forward prices signal the imbalance between demand and supply. The entry of banks into this market will add depth to the market and they should be welcomed but not before the FMC becomes an independent, strong regulator. If the government is serious about reforms, it should move aggressively to amend both the banking laws and the securities contract law. Neither will work in isolation.
Bank mergers to be kept out of competition watchdog purview
....Simply put, all mergers in the banking industry will come only under the ambit of RBI. One need not wait for any approval from the Competition Commission in the case of bank mergers if the Bill in the current form is enacted into law........
RBI rejects FinMin proposal for interest on CRR
..........DK Mittal, secretary, department of financial services, wrote to the RBI, proposing payment of interest of CRR as currently, banks are not getting any interest on CRR . “The RBI has said no to the ministry’s proposal on payment of interest on their CRR holdings,” said a source. If the RBI accedes to the government proposal, it will have to shell out close to Rs 19,000-20,000 crore — assuming an interest rate of 7 per cent — every year as interest on CRR. As total deposits of the banks amounted to Rs 64,10,000 crore as of November 2012, banks have kept around Rs 2,72,000 crore with the RBI at the current CRR level of 4.25 per cent. A section of bankers, led by SBI chairman Pratip Chaudhuri, has even demanded total abolition of CRR. The RBI has argued that the annual transfer of surplus to the government will become negative if the central bank pays interest on CRR and subject the central bank to ‘reputational risk’..........
Cheque bouncing
It is unfortunate that the Finance Ministry is mulling over cheque-bounce cases and considering an alternative mechanism before launching prosecution. If the reason for this is due to the large pendency of cases, the remedy is to establish more courts to deal with such cases. Action under Section 138 of the Negotiable Instruments Act has been a real deterrent to persons issuing cheques without any intention to honour them or without adequate balance in their accounts. This action should not be diluted by bringing in a dispute resolution mechanism.
- G.V.Raman, Executive Chairman, Shriram Group Companies (HBL)
Cheque, Mate
The
RBI move to compel banks to issue only CTS 2010-design cheques is
welcome, but it is a pity most banks have failed in the initiative
despite being informed in 2010. With D-Day looming, they have suddenly
woken up and are putting pressure on customers. To avoid hardship to
customers, a stay order has to be brought in suo moto by the apex court
for deferring the rollout of new cheques to January 1, 2014. This will
allow customers one year to be prepared and strict instruction must be
given to banks to stop issuing cheque books from old stock.
- CHANDRASEKARAN T R (ET)
- CHANDRASEKARAN T R (ET)
Transactions using debit, credit cards to be encouraged: FM
Government will encourage net banking and financial transactions using debit and credit cards despite rise in number of cyber frauds as such transactions are recorded and leave an audit trail, Finance Minister P Chidambaram said today. He said during Question Hour in Rajya Sabha that frauds involving net banking and debit/credit cards is a small fraction of the total number of transactions in the country.......
New RBI norms likely to affect NBFCs' return on asset: Crisil
............"We believe that tightening in bad asset recognition norms to 90 days from 180 days and the increased standard provisioning requirement to 0.40% from 0.25% will adversely affect the profitability of NBFCs. As a result, the return on asset is expected to drop by 0.25% over the next two-three years,"............
PLASTIC NOTES OF RS 10 SOON
New Delhi Don’t get scandalised if you get a plastic note of Rs 10 denomination in cities of Jaipur, Shimla, Bhubaneswar, Mysore and Cochin. It is not a counterfeit or fake note but a real money tender printed on polymer substrate to be circulated soon by the Reserve Bank of India in these five cities on a field trial basis. Any currency issued by the RBI is valid across the country, but not in this case, as the trial is limited to five cities......
Expect inflation to moderate in 2-3 months: RBI
The Reserve Bank expects inflation to moderate further in the next 2-3 months that may lead to cut in interest rates by the Central Bank, RBI Deputy Governor K C Chakrabarty said today. "We are trying to bring down inflation ... There is a probability that inflation would come down in the next few months. In the next 2-3 months inflation should come down," he said after inaugurating a rural branch of ICICI Bank here.........
PFC has sought change in RBI draft guidelines on new banks
......as per the draft guidelines published by the RBI, PFC, as a government owned Bank could not seek licence to start a new Bank. The PFC had, however, in its comments to the RBI on the draft guidelines had sought the Apex bank to permit government institutions to have a equity stake in new banks ...........
HSBC: How Simple Became Complicated, and costly
HSBC takes its name from its roots as the Hongkong and Shanghai Banking Corporation, but there has long been a joke inside and outside the firm that the name stands for "How Simple Became Complicated".............
NBFCs well placed to comply with RBI’s latest norms
Mumbai: Most non-banking finance companies (NBFCs) are well placed to adjust to an increase in provisioning requirements, higher capital adequacy ratio and tighter norms on bad loan classification, analysts said, even as rating agency Crisil Ltd said the new norms, when implemented, will impact NBFCs’ profitability. The Reserve Bank of India (RBI) draft guidelines, released on Wednesday, propose to raise tier I capital or the core capital for all NBFCs. The guidelines propose to give NBFCs two years to arrange for the required capital..........
Making NBFCs safer
RBI’s draft norms for NBFCs may come across as softer than those proposed by the Usha Thorat Committee last year, but it’s clear the regulator wants a tighter grip on these intermediaries. The general idea seems to be to keep a closer watch on the larger players, especially those that are mobilising money from the public, and not worry too much about the smaller lot. As the regulator points out, since many of the companies are highly leveraged—they borrow a fair amount from the banks—their well-being is important for the health of the financial system. The fact that they’re offering more ‘complex’ products also seems to be a matter of concern for RBI...........
ICICI, IDBI hit dirt tracks for growth
.....Private banks such as ICICI Bank have been gradually pushing their rural initiatives for want of customers and cost-effectiveness of the rural branches. Even the public sector banks, which are pioneers in rural banking, have been slow as the unbanked areas are too remote without a link of a road and other infrastructure facilities. To counter these problems, RBI allows banks to have business correspondents in rural areas. A business correspondent can be any resident of the village or neighbouring village, a company having operations in these locations. Only NBFCs are barred from being business correspondents......
Taking steps to deal with fake notes: Chidambaram
.....The finance minister said steps have been taken to prevent entry and circulation of fake currency. Improving security features of bank notes and preventing entry of fake currency are ways to deal with the problem, he said. The National Investigation Agency (NIA) is the nodal agency to deal with the problem of the counterfeit notes and steps are also being taken to install note sorting machines at bank branches, he said. Chidambaram informed the House that with a view to increasing the life of bank notes, particularly in lower dominations, the RBI in consultation with government has been considering various options including printing of polymer bank notes. He said a decision had accordingly been taken to introduce one billion pieces of Rs. 10 bank notes on polymer in a field trial basis in five cities.........
It's time to get an Aadhaar card
.....But its utility, at present, is limited to know-your-customer (KYC) norms. So, you can open a bank account easily but for any other financial transaction, you will still have to go through the KYC rigmarole and produce multiple documents. For instance, if you want a home loan, you will still have to produce other documents, such as utility bill or ration card as proof of residence. Even in the case of other financial products like insurance or mutual funds, while Aadhaar may be accepted as KYC proof, it is not sufficient for making transactions. And, many telecom companies do not accept it if you want to purchase a SIM.......
Next Aadhaar in financial inclusion: Saral prepaid card
Delhi government on Wednesday launched the ‘Saral Money Prepaid card’ to provide banking services to those people who are unable to open a bank account due to lack of supporting documents for their ‘know your customer’ (KYC) verification. Saral has been launched by five of India’s prominent banks namely Axis Bank, HDFC Bank, ICICI Bank, Indian Overseas Bank and State Bank of India in collaboration with the payment gateway provider, Visa and Aadhar. To open a bank account with the above five banks and to get a Saral Money Prepaid card, a person will now just have to produce the Aadhar card to fulfil the KYC norms. The limit of such accounts will be Rs 50,000 and the customer will be able to do cashless transactions with the help of the Saral card at the many authorised places in the city...........
Illegal investment schemes spread as regulators play a waiting game
Local police and state government more effective than central regulators such as RBI, Sebi
....However, in the books of the companies fictitious entries have been made and in the name of sale and purchase by way of sham transactions and the companies have been receiving deposits from the citizens with a promise to give regular interest or returns on the deposits.” In doing so, the companies have not taken any permission from the Reserve Bank of India and also no registration is made under the provisions of the Companies Act and the Banking Regulation Act, 1949, the order said. Thus with absolute lack of know your customer and other prudential norms, there is no control over what kind of money comes into these schemes making them fertile breeding ground for political and unaccounted sums of money.....
Anchoring inflationary expectations
..........Supply shocks, not excess demand, have powered inflation in India in recent times, so the Reserve Bank of India (RBI), even while reducing demand, has aimed it more at anchoring inflationary expectations. But exactly how this works in the Indian context is not clear. A widely shared perspective, though, is that the RBI reducing its policy rates even marginally would amount to giving up the fight against inflation. But then, growth is also included among the RBI’s objectives. Therefore, giving some weight to growth shouldn’t really imply it is giving up on inflation........
Reuters poll: RBI to hold rates on December 18
.......Respondents were almost evenly divided on expectations for a cut in CRR, a tool the Reserve Bank of India has been using to ease a cash crunch and prod banks to loosen lending rates. At 4.25 percent, CRR is at its lowest since 1976. Of the 33 respondents, 16 expect a CRR cut on Tuesday of either 25 or 50 basis points, while most also expect a further CRR cut in the March quarter. While expectations are near-unanimous for an interest rate cut in the March quarter, 20 of 36 respondents expect 50 basis points of cuts, which is deeper than the 25 basis point expected in the October pre-policy poll. The RBI is expected to review monetary policy in January and again in March...........
Private finance firms thrive under regulators' nose
BHUBANESWAR: Rule: Every non-banking financial company (NBFC) must obtain permission from the Reserve Bank of India (RBI) to provide financial services to people. Reality: Many of the financial management firms, including chit fund companies, are operating in Bhubaneswar and other parts of the state in contravention of RBI guidelines..........
Banks to remain stressed next year too: Fitch
........"There is a risk that our initial gross NPA ratio forecast of 3.75 per cent could rise to 4.2 per cent this fiscal due to a more protracted downturn, the impact of which should be felt over the next three-four quarters," Fitch said in a report. "The stress is not yet completely visible in the reported NPAs, but is clear in the performing restructured loans,"..........
Is FM right in allowing banks to trade in commodity futures?
...... while allowing banks to speculate will certainly add more depth to the market, it must not be forgotten that Indian banks do not have the product and market knowledge to trade in derivatives. Secondly, Indian banks lack market knowledge and expertise to benefit from trading in commodity futures and the RBI too has warned banks about risky trading instruments..........
Banks lost Rs 4,448 crore to fraud in 2011-12
....Citing RBI, the statement said, major frauds included misuse of loans sanctioned for purposes other than those for which these are sanctioned, lack of proper due diligence by the banks and direct sales agents (DSA), fake title deeds submitted as collateral security and disposal of assets created by loans without the knowledge of the bank. In some cases, “ the banks had not carried out the pre sanction inspection of property for the acquisition of which the loan was being sanctioned to ascertain if the unit/ property really existed.”..................
Thursday, December 13, 2012
Scam mail comes with RBI boss' picture
RBI governor, Dr D. Subbarao, is the latest ‘medium’ and ‘victim’ in a major online scam where the gullible gets hooked by an offer of $500,000. The mail, clearly meant to cheat the recipient by using the photograph of the RBI governor to make it look authentic, claims that Dr Subbarao has asked to release all unclaimed fund after a meeting with UN secretary general Ban Ki-moon and senate committee on finance, RBI, on November 18 this year............
Know your documents
A rare error in a Reserve Bank of India (RBI) notification has caused minor confusion among bankers. In order to relax Know Your Customer norms for opening bank accounts, an RBI-issued notification had said a customer need not furnish a separate proof of address if the identity document carries the same address. Giving examples of such documents, RBI listed driving licence and passport. It also added PAN (permanent account number) card to this list. Now, it’s well-known that a PAN card carries only an individual’s permanent account number, name, father or husband’s name, date of birth and a photograph, but never the address.
BS
5 banks launch Aadhaar-linked bank account
Five banks, including SBI, ICICI Bank and Axis Bank, today launched Saral Money bank account product which allows customers to open an account using Aadhaar card as address as well as identity proof. The RBI has recently directed banks to accept Aadhaar letter as the proof of both identity and address if the address provided by the account holder is the same as that on the Aadhaar card. “Through a product like Aadhaar-enabled KYC (Know Your Customer), we are bringing down the cost of account and that makes a product lot more attractive. And it will definitely further the cause of financial inclusion,” Axis Bank Managing Director and CEO Shikha Sharma said during the launch of Saral Money’, which is jointly launched by Axis Bank, ICICI Bank, HDFC Bank, SBI and Indian Overseas Bank.......
Financial Inclusion for Muslims in India: How Can Islamic Finance Help?
.............Among other interesting insights that were made in the webinar, with a recording now available at http://www.ethicainstitute.com/achieving_financial_inclusion_for_indian_muslims.aspx, was the notion that India represents the "last frontier" for Islamic finance, which is the largest global alternative financial system and is now present in many Muslim minority countries across the world. A comparative analysis of how different governments in such countries have facilitated Islamic finance was also made during the webinar that included countries such as France, Ireland, Luxembourg, USA, Canada, UK, Hong Kong, Singapore, Australia, Thailand, Kenya, Sri Lanka and South Africa. This analysis becomes all the more relevant in light of the landmark statement made last month by the Reserve Bank of India (RBI) Governor D. Subbarao that sought an amendment to the current banking laws in order to introduce Islamic banking in India. So what is it that is required to kick start Islamic banking and finance in India?...........
The RBI has a very tough job ahead of it: Dr Pronab Sen, Planning Commission
.........What do you think would be the correct course of action the RBI should take?
The RBI has a very tough job ahead of it. When we talk about rate cuts, it should be seen independently of the larger monetary policy. The fact is we have had two cuts in the CRR. If the investment cycle does not pick up, there is going to be downward pressure on the market interest rates and the RBI cannot allow the policy rates to diverge too much from what is happening in the market. Otherwise, the policy rates tend to lose the relevance. So at some point in time, the RBI is going to simply cut the policy rates to bring it in line and in a sense, restore the quiver of arrows that they have. ..............
NEW FORMAT CHEQUES
RBI has decided to introduce new format cheques for all bank transactions across the country from the year 2013. Following this decision, all the cheques in the old format will be condemned and the cheques in the new format will be invariably in force. However, this proposed move of the RBI is fraught with a hitch in so far as the bank clientele who have issued post-dated cheques to a third party 3 to 6 months in advance so as to redeem the same by the banks in the year 2013 would have to face the problem of their cheques getting bounced when the proposed move would come into force. Hence, it is expedient that the RBI makes certain amendment to their policy of new cheque format and accordingly relax the rule so as to allow the redemption of all post-dated cheques until the end of the current financial year.
Bh Indu Sekhar, Tarnaka (Hindu)
RBI asks banks to consider issuing debit cards with photographs to prevent misuse
..........."With a view to reducing the instances of misuse of lost/stolen cards, banks may consider issuing cards with photographs of the cardholder or any other advanced methods that may evolve from time to time," the RBI said while issuing guidelines for issuance of debit cards. The guidelines were issued after a comprehensive review of existing instructions on issue of debit cards.......
Banks can issue only online debit cards: RBI
Debit cards that do not ask for an authorisation code when used in shops or anywhere else will be discontinued soon. The Reserve Bank of India has asked banks to issue only those debit cards, including co-branded ones, where typing such codes are mandatory, within the next six months.......
Banks can issue online debit cards without RBI nod
......However, bankers should conform to the norms laid down by the RBI while issuing such cards. The RBI has asked banks to follow board-approved policies. Strict compliance with KYC (know your customer) norms, AML (anti-money laundering) standards, CFT (combating of financing of terrorism) and obligation of banks under PMLA (Prevention of Money Laundering Act) is a must, the banking regulator said.......
Sending money from kirana store via SMS
Remitting money from the kirana store in the neighbourhood or allowing cash withdrawal from your bank account through a text message has become possible, with private sector lenders starting to offer these services. YES Bank is partnering retail stores to allow customers in remitting money through these shops. "Curiosity killed the cat. In our case, curiosity gave us a new business strategy," Anand Bajaj, executive vice-president and chief innovation officer at YES Bank, told Business Standard.........
NBFCs may need RBI nod for change in ownership control
N
on Banking Financial Companies (NBFC) would need RBI's prior approval before making changes in their ownership control, a draft guideline of the central bank said. The RBI's draft guidelines based on Usha Thorat Committee report also seek to make mandatory for all deposit-taking NBFCs to obtain credit rating. Appointment of CEOs of NBFCs with asset size of Rs 1,000 crore and above would require the RBI approval, it added.......
The tyranny of KYC norms
It is the season for KYCs. For the uninitiated, that is “know your customer”. Your bank wants to know you. Your gas supplier wants to know you. And, of course, your telephone service provider also wants to know you. Huge caution, though, to those of you who may have a Ghajini-style short-term memory loss; or for those who may be too old, too sick, too busy or just too stressed to remember details. KYC is not just about giving your address, date of birth and other such mundane stuff — but also about remembering the precise details you fill out in the form, and for several years to come!.......
‘We are slowly opening up the bond market for FIIs’
The Reserve Bank of India will allow foreign institutional investors (FIIs) to invest more in government securities and corporate bonds, said Deputy Governor, H. R. Khan. In the works is a proposal to allow FIIs to invest $5 billion each in government securities and corporate bonds without any restriction on residual maturity...........
RBI may allow repo trades through CP, CD
The Reserve Bank of India ( RBI) may soon allow repo trades between market players through Certificate of Deposits (CDs) and Commercial Papers (CPs). “Given that not much of transaction happen and also that there is a demand, we will allow repo in CDs and CPs,” said HR Khan, deputy governor of RBI at CII event on Wednesday. Khan also said that the government is expected to notify on reducing withholding tax on rupee-denominated infrastructure bonds soon. Besides that the RBI was also considering whether foreign investors can be allowed to participate in currency futures trading..........
RBI policy: Financials in focus
.......If the RBI beats expectations in that it does announce a rate cut along with a CRR cut, the Bank Nifty is likely to jump to a new high — beyond the 13,000 mark. If the RBI offers just a CRR cut, the index is likely to move down slightly but find support at around 12,100. If the RBI hikes rates and doesn't offer a cut, a sharp fall till below the 12,000 level could result. So, the trader is seeing a potential movement of about 500-600 points in either direction.
Inflation will be game-changer
....Inflation is going to be the game changer in times to come, as it would determine the Reserve Bank of India’s (RBI) rate action. ICICI Securities estimates the annual inflation at 7.08 per cent in November, the lowest since December 2009. Despite this, RBI might not start cutting the benchmark rates from December. Other economists like Deepali Bhargava of Espirito Santo, however, believe inflation for November could come in at 7.68 per cent year-on-year. Even if inflation comes in above RBI's comfort level, economists expect the central bank to cut rates only next year..........
Banks should look at quality of data they provide: RBI Regional Director
Banks should address data quality, which is a key for sustainable growth and they should also look at MSME sector for the growth, according to a Reserve Bank of India official. In his keynote address at Credit Information Bureau (India) ltd (CIBIL) seminar on "Increasing credit penetration and improved asset quality" N S Vishwanathan, Regional Director, RBI, said, "When it comes to credit infor about the borrower is the key and how to reduce cost. Quality of information is key in retail segment, which is growing fast. "Data quality is the major issue, while we see quantity, depth, coverage of data are increasing."
IIP Numbers: Green Shoots Or Fluke?
.........The central bank has said any interest rate cut is "highly improbable" at the meeting next week, since it expects price pressures to remain elevated following a hike in the price of heavily subsidised diesel in September. Some economists expect a cut in cash reserve ratios (CRR) for banks, to help liquidity. Any data signals that the economy is past the trough of its slowdown will bolster the RBI's case that taming inflation should take precedence over reviving growth in its rate-setting policy. November wholesale price index data, which the Reserve Bank of India gives more weight to in setting policy than the relatively new consumer price index, is due to be released on Friday. "With inflation likely at 7.8 per cent in November, a rate cut is ruled out in December. I do not expect any CRR cut also as the government is maintaining large cash balances with the RBI," said Sujan Hajra, chief economist with Anand Rathi securities in Mumbai..........
Government aims at complete financial inclusion
.....The government is also giving a push to rural ATMs. State run banks plan to install around 63,000 ATMs. Cash Management firms who manage transfer, transporting and other service related issue of ATMs are also gearing themselves to explore the opportunities. One of the largest firms in the segment SIS Prosegur is already working to create a cash management infrastructure........
Decline in WPI must for RBI to cut rates: C Rangarajan, PMEAC
.The concern about inflation will be a major factor. The CPI number which has been released today is not very satisfactory, but let us wait for the WPI index number. If inflation, according to WPI, shows some decline, then I believe there will be some room for the RBI to rethink, but if it does not, perhaps we will have to wait till January........
IIP surprises: Will Subbu be able to battle inflation in peace now?
Reserve Bank of India (RBI) Governor Duvvuri Subbarao just got a new number to factor in before he unveils his review of the monetary policy on 18 December. Surprising most economists and observers on the upside, the latest Index of Industrial Production (IIP) print for October 2012 came in at a healthy 8.2 percent, much higher than most expectations which were in the region of 4.5 percent..........
Credit tap runs dry for small biz
.....There are hundreds of Periyaswamis, nay lakhs of them, with similar stories playing out in different parts of the country, triggered by the recent moves by the Reserve Bank to encourage banks to lend directly to the Micro, Small and Medium Enterprises (MSME) in the country..........
RBI not ‘taken on record’ Walmart remittance into Bharti firm
The Reserve Bank has “not taken on record” the documents filed for investment of Rs 455 crore by Walmart into Bharti group firm Cedar Support Services and alleged FEMA violation in the matter which was referred to the Enforcement Directorate. “The form FC-GPR filed for issuance of the Compulsorily Convertible Debentures (CCD) has not been taken on record by the RBI to ensure that the CCD are FDI compliant instruments and for the purpose certain information has been called for from the company,” Minister of State for Commerce and Industry S Jagathrakshakan said in a written reply in the Rajya Sabha..........
Minister yet to take action in Samata Bank case
........Samata Bank got into trouble seven years ago due to bad lending practice for which the management is being held responsible. Initially, RBI had issued an order restricting withdrawal amount by each depositor to Rs1,000. RBI action had left the 57,000 odd depositors in lurch. Many of them were pushed into financial distress when their money got stuck up in the bank. The bank's operations was wound up three years ago.........
FCI's swap deal with Barclays, Axis went awry as it lost about Rs 34 crore: CAG
......The Reserve Bank of India has already flagged off concerns on the end use of interest rate swaps, as the negative spreads between interest rate swaps and similar tenor government bonds indicate, these instruments are not being used for the intended purpose of hedging. "The situation here in the IRS segment is almost getting to the point where the IRS market is existing almost entirely for its own sake and to the almost complete exclusion of the needs of the real sector, creating a massive "financial sector-real sector imbalance," V.K.Sharma, Executive Director, RBI, had said at a seminar on November 8.........
Banking Bill will not go back to parliamentary committee: Chidambaram
..............The passage of the Bill is critical to the government as it will pave the way for the central bank to issue new banking licenses to the private sector. Late November, Mr Chidambaram had said the RBI should begin issuing new bank licences, and that amendments to the Bill are simply to formalise powers that the central bank is seeking. However, RBI Governor D Subbarao had said it would be not possible without fulfilling the enabling conditions.
Wednesday, December 12, 2012
Building trust in banking
We have just listened to the 12th Nurul Matin Memorial Lecture titled 'Trust in banking' delivered by eminent economist and illustrious former RBI Governor Dr. Y. V. Reddy. We are truly glad and gratified to get Dr. Reddy in the list of luminaries delivering the memorial lecture. At the outset Dr. Reddy very graciously underscored the special relationship he feels with us here at Bangladesh, which I can respond to only by asserting that the feeling is mutual, and that we look up to him as a trusted friend and mentor. The annual Nurul Matin memorial lectures of recent years have delved deep into issues and challenges in upholding of banking ethics, focusing mainly on our own local context. With 'trust in banking' as his lecture theme, Dr. Reddy has chosen to begin from the wider global context, where we saw severe erosion of trust in financial systems and their regulators since the global financial crisis of 2008-2009, particularly in leading advanced Western economies. Trust, according to Professor Reddy, has indeed close affinity with ethics, morals, values, sense of fairness etc which he rightly claims to be country specific and culture specific. As such he brings a lot of fresh air in the discussion on a topic which is not only of immense significance to all of us, but provides......
Brave senior citizen, daughter-in-law nab thief
......According to Satellite police, Jagdish Shah, a retired RBI official, who lives with his family at Roopmadhuri Society in Satellite, was in his drawing room with his wife Ramila, 60, having their morning tea at 7.45 am. Roopal, Shah's daughter-in-law, had gone to drop her daughter at a nearby school. Shah's son has a bedroom on the first floor of the two-storey residence........
RBIQ : Telecast Schedule
The Zonal Finals & National Finals of RBIQ
will be telecast on Zee Business as per the following schedule :
Original Telecast Dates :
· East
Zone Finals : December 15th
· North
Zone Finals : December 22nd
· South
Zone Finals : December 29th
· West
Zone Finals : January 5th
· National
Finals : January 12th
The Telecast Time for all the above-mentioned days (all Saturdays)
will be 8 pm to 9 pm.
Repeat Telecast Dates :
These episodes will also have Repeat Telecasts on the
following day, i.e. Sunday (December 16th, December 23rd,
December 30th, January 6th and January 13th). The
telecast Time for all the Repeat Telecasts will be 11 am to 12 noon.
2. Zee Business is
available on all leading DTH/Cable networks. The Channel Nos. on which Zee
Business is shown on some of these DTH/Cable networks are as under:
· Tata
Sky : 506
· Dish TV
: 590
· Airtel
: 286
· Videocon DTH
: 343
· Hathway
: 906
3. The Promos for these episodes are
scheduled from 6 pm onwards today, i.e. December 11th on Zee Business.
4. You, along with your family
members, may please like to watch these exciting RBIQ
episodes on the above dates
बैंककर्मियो का प्रदर्शन
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| कोलकाता मे वृहस्पतिवार को रिजर्व बैंक के कर्मचारियो ने विभिन्न मांगो को लेकर मूक प्रदर्शन किया। यह प्रदर्शन उस समय किया गया जब रिजर्व बैंक के गवर्नर डी. सुब्बाराव अपने सहयोगी अधिकारियो के साथ शहर मे ही मीटिंग कर रहे थे। |
RBI,JK Bank hold interactive meet on FEMA 1999
Srinagar, Dec 11: In association with J&K Bank, Reserve Bank of India (RBI) today kicked off a two-day interactive meet with bankers on Foreign Exchange Management Act (FEMA)-1999 here at the Bank’s Corporate Headquarters. The meeting was chaired by RBI Regional Director (Jammu), K K Saraf in presence of J&K Bank Executive President Parvez Ahmad, RBI Chief General Manger, (FED) Mumbai Rashmi Fauzdar, J&K Bank Presidents Shafat Ahmad, Nayeemullah,, J&K Bank Vice President P K Tickoo , RBI,DGM FED (Jammu) A K Mattu and RBI DGM FED (Mumbai) P K Kar.........
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