Activists approach RBI against HSBC on black money, hawala allegations

Two activists from Lucknow have urged the RBI Governor to enquire into the allegations and cancel the licence of HSBC, if found true. 

Lucknow-based activists Amitabh Thakur and Dr Nutan Thakur have approached the Reserve Bank of India (RBI) with regard to allegations of facilitating deposit of black money in Switzerland and hawala transactions by Hong Kong and Shanghai Banking Corporation (HSBC). The activists said that they wrote to RBI Governor D Subbarao after HSBC denied all the allegations in reply to their earlier complaint to the central bank..........

Read - Moneylife

Draft 12th Plan document springs few surprises

...........In a dubious reprieve to States, the Plan panel goes on to state “the commercial banks will have to bear part of the burden by restructuring the loans and the RBI may have to allow some regulatory forbearance relieving the banks of treating the restructured loans as non-performing assets (NPAs) and making suitable provisions for them”. This is nothing but robbing Peter to pay Paul.........

Read - HBL

"AP, WB behind all-India GDP Growth"

..........While the RBI study said that revenue surplus would “enable a reduction in the GFD-GDP ratio” and that 26 of the 28 states met the ratio set by the thirteenth finance commission, ASSOCHAM believed that the tendency would be for these surpluses to be squandered in popularity contests. ............

Read........

Battles over lines of control

........The relationship between the finance ministry and the banking regulator, the Reserve Bank of India (RBI), has probably been as bitter and strained as the one between the government and CAG. Unlike CAG, RBI is not a constitutional body but it enjoys a special position among all financial sector regulators and, apart from regulating banks, it is also the monetary policy authority. Yet, the finance ministry’s treatment of RBI has often given the impression that the former has little respect for the latter’s independent status. It began with the idea of setting up a new body called the Financial Stability and Development Council, which was to be chaired by the finance minister, and the RBI Governor was to head only one of the council’s sub-committees. The RBI management made no secret of its disapproval of the idea but this made no impact on the government and the new arrangement has been put in place...........

Read - BS

RBI proposal may put 70% NBFCs out of business; over 9,000 companies may lose licences

.....More than two-thirds of non-banking finance companies (NBFCs) face closure if the Usha Thorat panel recommendation on minimum asset size is implemented by the Reserve Bank of India, shutting a vital source of funding in many parts of the country. Nearly 9,000 companies lending to borrowers in small towns and villages that lack banking facilities could be in danger of losing their licences as their asset size is less than Rs 25 crore.......

Read - ET

NBFCs partner India's growth story

...In all fairness, the NBFC sector was not in regulatory shadows as RBI has, over the years, tweaked and implemented a differentiated regulatory regime for deposit accepting, systemically important, and other non-bank institutions. A few famous failures of deposit-accepting institutions in the 1990s led to legal and regulatory measures to curb and regulate the activities of looselyregulated institutions that garnered substantial deposits from areas where banking could not, and indeed would not, reach. New generation private sector banks and newly-energised and technology-powered public sector banks helped by filling in the gap and the situation was quickly contained. Regulatory focus then shifted to the non-deposit accepting NBFCs and attendant issues relating to classification, public funds and core investment companies. Once the framework for such lenders was put in place with a bank-like prudential and capital regime, it gave the market the confidence required for growth.........

Read - ET

Digital financial inclusion in India – Current status and the way forward

......In view of the widely prevalent economic disparities, financial inclusion becomes imperative to  usher-in inclusive growth. The agenda of inclusive growth is reflected in the policies and regulations that the policymaking and regulating institutions, like Government of India and RBI have been working upon in last ten years. Measures  have been taken to include the financially  neglected rural areas by relaxing the KYC norms  and the use of banking correspondents aggressively. RBI has been proactive  in including the cashdriven, under banked, semi-urban and urban population for their digital financial inclusion. They’ve done so by increasing the number of ATMs by 25% each year for last couple of years, reducing their transaction costs for electronic payments by having banks reduce the MDR for debit cards and NPCI -driven IMPS and Rupay card thus, enabling low cost digital transactions...........

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Commemorative Coin

The President, Shri Pranab Mukherjee releasing the Commemorative Coins at the Special Convocation of Banaras Hindu University to Mark the Concluding Ceremony of Birth Centenary of Mahamana Pandit Madan Mohan Malavia, at Varanasi, Uttar Pradesh on December 25, 2012. The President of Nepal, Dr. Ram Baran Yadav is also seen

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Fake notes that fooled currency detector

..........“We were shocked when we learnt that a bank had accepted the counterfeit currency. Initially, we suspected some bank employees. “But when we met local RBI officials with the recovered cash, they told us that 14 out of the 17 security features matched the counterfeit currency. Even they were shocked,” ..........

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High Mark fallout: Vepa Kamesam resigns from the Board

.....Vepa Kamesam, one of the most high profile directors has resigned from the High Mark Board. However, it is not clear as to what would happen to the 1.63 lakh shares that Mr Kamesam was allotted. Mr Kamesam, a former Deputy Governor of the Reserve Bank of India (RBI) was one of the four directors who, along with Prof Anil Pandya, chairman and founder-director of High Mark, bagged 70% of the employee stock ownership plan (ESOP). Mr Kamesam was allotted 1.63 lakh shares in the credit bureau as ESOPs........

Read - Moneylife

Obituary

Mr. K. Kanniappan, Retd. Dy. Manager (NABARD), RBI, Chennai passed away on 25.12.2012. Phone: 044-2628 2892 / Mobile: 94444-45799 / 98841-81124

Banks to have one branch per 1,000 people for direct cash transfer

.....“It shall be the endeavour to ensure that there is at least one bank branch / BCA in every gram panchayat(s). Since the population of gram panchayat varies across the states, banks need to ensure that about 1,000 to 1,500 households are available in the sub-service area of BCA,” the finance ministry said in a circular to public sector banks and regional rural banks...........

Read - BS

SREI to install 25,000 ATMs in rural India

....The final plan will be subject to RBI approval. These CSCs are being set up under the government’s plans to bridge digital divide between rural and urban areas,.....

Read - BS

PSBs might miss the CTS deadline

..........According to Hota, most banks started their procurement procedure after the government directive for the CTS rollout had come. It will take minimum 10-15 weeks to deliver the equipment and there are only a limited number of vendors offering such equipment. “These factors are delaying implementation of CTS and we are trying to meet the deadline,” said Hota. While banks are supposed to complete issuing new format cheques to customers by March 2013, the deadline for complete migration to CTS 2010 is December 2013.

Read - BS

C Rangarajan to inaugurate banking expo

Former Governor of Reserve Bank of India and chairman of the Prime Minister's Economic Advisory Council, C Rangarajan, will inaugurate IBEX INDIA 2013, India's only trade exhibition and conference for banking  technologies at the Bandra-Kurla Complex, Mumbai on January 17. The exhibition will be open till January 19 2013. Rangarajan will also deliver the keynote address on January 17 on "Delivering Technologies for Innovative Banking", which has been structured to discuss a spectrum of issues across all banking functions that are of relevance to the Indian banking sector........

Read - TOI

Read - Programme schedule

Banking on competition

...... In fact, the competition energised public sector banks to get their act together and advance in terms of technology and staff upgradation, designing and delivery of new products and services. It is in this context that the entry of more new banks – as a consequence of the latest amendments in the banking laws – will add to the competition and improve overall banking in the country............

Read - BS

Breaking the bank

........RBI might want to relook the loan classification rules to make them tighter and ensure adequate provisioning. As it is, agencies like Moody’s are convinced that the asset quality of Indian banks is set to worsen and more important, that the provisions for such potential slippages are inadequate. However, it is in the prevention that the solution lies; banks need to arm themselves with better credit appraisal skills and ..........

Read - FE

Amended legislation paves way for new banks in the next year

.....The development injected new life into the sector which has been struggling to cope with rising bad debts and pressure on the bottom line in the wake of global slowdown that also affected the performance of the Indian corporate sector.........

Read - FE

Of debt and distress

.....Although RBI has realised that banks are not setting aside enough capital to take care of potentially toxic assets and the fact that promoters have got away with too small a sacrifice in the restructuring packages—the observations of a panel set up by it suggest this—there has been little action on this front so far. In any case, tougher norms will help only in the future; for now, the damage has been done...........

Read - FE

HSBC denies hawala charges

......HSBC has also been accused of running illegal banking operations through its Dubai and Geneva arms. RBI had given HSBC a month to respond. Mr Thakur said he was dissatisfied with HSBC’s response and would petition the RBI again. “The core issues raised in the complaint initially are still completely untouched and unanswered,” said Mr Thakur. The police are now seeking the intervention of the RBI governor for a threadbare probe into the bank’s dealings in India.

Read - The Hindu

Seizing the India opportunity

.....Only 40 per cent of India's 1.2-billion people have bank accounts. Of India's 600,000 villages, only 30,000 have direct access to banks. Penetration of other financial services products such as life insurance, mutual funds, brokerage accounts, and so on, will show even lower penetration levels compared to many other markets.......

Read - HBL

'No relation between RBI's OMO and disinvestment'

The Department of Disinvestment has said that the impression created by the news item "Did RBI's OMO help govt's NMDC selloff?" is not correct. Reserve Bank of India (RBI) is an independent banking regulator who regularly conducts OMOs (Open Market Operations) as a normal tool of monetary policy as per its analytical mechanisms and policy decisions...........

Read - TOI

Karur Vysya Bank open to acquisition, if it’s a right fit

.....“We don’t want to be an acquisition target… Moreover, beyond 5 per cent shareholding Reserve Bank of India's permission is required… The RBI does not encourage unfriendly acquisitions.”......

Read - HBL

RBI's 2012 policy rates: What makes Subbarao click?

Read - ET

Roti, kapda, makaan and bank account

.........This leads us to the question of financial inclusion. With over half the Indian population still excluded from the nation’s formal financial system, the need for several strategic steps is imperative. Numerous steps have been taken in the six years since the government initiated the process of financial inclusion in a big way. The Reserve Bank of India (RBI) has recently mandated Regional Rural Banks (RRBs) to ensure that one-fourth of their proposed expansion is in unbanked parts of India..............

Read - HBL

चिल्लर पर चिकचिक खत्म, अब मत लीजिए खुल्ले के बदले टॉफी!

इंदौर। आरबीआई ने इंदौर की सात बैंकों को करीब 50 लाख के सिक्के भेजकर इन्हें तुरंत जनता तक पहुंचाने के निर्देश दिए हैं। साथ ही यह चेतावनी भी दी है कि यदि कोई बैंक सिक्के बांटने में लापरवाही करता है तो उसके खिलाफ सीधी कार्रवाई की जाएगी। 

चिल्लर के बदले टॉफी नहीं चलेगी 

शहर में चिल्लर के बदले टॉफी-चॉकलेट देने की समस्या पर ‘भास्कर’ ने अभियान चलाया था। आरबीआई के अनुसार इंदौर में स्टेट बैंक ऑफ इंडिया की स्कीम नंबर 54 एबी रोड ब्रांच को 6 लाख, जीपीओ ब्रांच को 5 लाख और वायएन रोड ब्रांच को 7 लाख रुपए के सिक्के भेजे हैं। इसी प्रकार आईसीआईसीआई और एचडीएफसी को दस-दस लाख और बैंक ऑफ महाराष्ट्र बैंक को 3 लाख रुपए के सिक्के बांटने के लिए भेजे गए हैं। भास्कर’ को जानकारी देते हुए आरबीआई भोपाल के मैनेजर राजीव नारंग ने बताया कि समस्या से निपटने के लिए अभी तक आरबीआई ने बैंकों को पूरे प्रदेश में करीब 40 करोड़ रुपए के सिक्के बांटने के लिए भेजे हैं। कोई भी लिंक ब्रांच अपनी करंसी चेस्ट ब्रांच से जरूरत के मुताबिक कभी भी सिक्के की मांग कर सकती है। लगातार जो सिक्के भेजे जा रहे हैं उन्हें बांटने में यदि बैंक पारदर्शिता या उत्साह नहीं दिखाते हैं तो शिकायत मिलने पर कार्रवाई की जाएगी। नौ लाख के सिक्के जिले के ग्रामीण क्षेत्रों की बैंकों को दिए गए हैं। अधिकतर जगह शुरू हुआ वितरण- एसबीआई के डिप्टी जनरल मैनेजर अनुकूल भटनागर के अनुसार जीपीओ, वायएन रोड, स्कीम नंबर 54 ब्रांच में सिक्के बांटना शुरू कर दिए हैं। जरूरतमंद सिक्के ले सकते हैं। आईसीआईसीआई के स्थानीय अधिकारियों के अनुसार मालव परिसर ब्रांच से बैंकिंग समय में सिक्के प्राप्त किए जा सकते हैं। बैंक ऑफ महाराष्ट्र के सीनियर प्लानिंग मैनेजर आरके अठवासिया के अनुसार सभी ब्रांचों में सिक्के भिजवा दिए हैं। ग्राहक किसी भी ब्रांच से सिक्के ले सकते हैं। इसी प्रकार एचडीएफसी की भी विभिन्न ब्रांचों से सिक्के प्राप्त किए जा सकते हैं। ‘आरबीआई ने ग्राहकों से यह भी अपील की है कि वह किसी भी हालत में खुल्ले के बदले जबरन दी जाने वाली वस्तु को स्वीकार न करें क्योंकि बाजार में चिल्लर की कोई कमी नहीं रह गई है।

सिक्के नहीं मिलें तो यहां करें शिकायत 

रीजनल डायरेक्टर मप्र रिजर्व बैंक ऑफ इंडिया होशंगाबाद रोड 

पो.बॉ. 32, भोपाल- 462011, फोन नंबर- 0755-2552242, 2553179  

फैक्स-0755- 2578299, ईमेल- rdbhopal@rbi.org.in

Kochi to reel under coin shortage

.....If the coin counter at RBI is closed, bus services, supermarkets, retailers and hotels and restaurants will be badly hit as most of them depend on the RBI counter for coins and currency of small denominations. “Private bus services will be the worst hit as only very few passengers tender the exact change. The RBI  should withdraw the decision”, said Private Bus Operators Association president M.B. Sathyan. The RBI Kochi office, with five public counters, has been dispensing coins of Rs 1, Rs 2, Rs 5 and Rs 10 to the public. “Due to shortage, distribution of Rs 5 coins has been restricted now. All other denominations are available every day.....

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ATMs run out of cash, tourists left in the lurch

.......Anantakrishna, a tourist from Mysore, appeared upset about the “casual behaviour” of some of the bank authorities. He said that a group of tourists from Mysore had come to Karwar and were planning to proceed to Goa to celebrate Christmas and the New Year. But they were stranded in Karwar as the ATMs had gone dry. “Banks must take extra precaution to keep the ATMs in order when the tourist density is high,”.........

Read - The Hindu

KVG Bank opens 25 ultra-small branches

Karnataka Vikas Grameena Bank (KVG Bank), Dharward-based regional rural bank (RRB) sponsored by Syndicate Bank, has opened 25 ultra-small branches in a single day under the Financial Inclusion (FI) programme in north Karnataka...........

Read - HBL

Banks to be told to cut exposure to big firms

.....The Reserve Bank of India (RBI) is working on “restricting cash credit and working capital” lending by banks to the top listed companies to 90 per cent of the current levels, an official source told The Indian Express. For the 10 per cent companies will have to issue bonds that banks will initially subscribe to..........

Read - IE

Who is more worried - RBI or license hopefuls?

..........Given the strict guidelines, reporting requirements and regulations in present times, it would be the banking license hopefuls that would be more worried, as compared to the RBI. But at the end of the day, we believe that these developments would only make the really serious hopefuls of attaining such licenses as opposed to those players who just think of this opportunity being a chance of value unlocking.

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New banks

...... I disagree that the passing of the Banking Laws (Amendment) Bill in the Lok Sabha would herald a new era in the Indian banking system. The government’s recent step will cause much harm to public sector banks. It may be recalled that.........

Read - BS

Both Finmin and RBI want banks to shed their non-core business

.......As the collapse of Lehman Bros, an investment bank has shown, non-bank businesses can also become large enough and inter-connected enough with the banking business as to have adverse systemic consequences in case of failure. This is the reason why the RBI, in its draft guidelines for new bank licences, has urged a different organisational structure for banks. Under the proposed structure, rather than banks spawning subsidiaries for related activities, these activities would be done by subsidiaries of a holding company that would also have a subsidiary banking company. Now for once the finance ministry and the RBI would seem to be on the same page.

Read - ET

Core banking

With reference to “Exit non-core biz to help conserve capital, FinMin tells banks’, (Business Line, December 24), it is heartening that, even though belated, the Ministry has called upon PSBs to concentrate on core banking businesses and come out of non-core functions. Of late, banks are engaged in ventures such as mutual funds, insurance, investment, equity broking, pension fund management, and so on, in partnership with private and foreign companies. Bank customers are often lured into these schemes, without being educated about the risks involved. Cash incentives, foreign tours, promotions and pressure from higher-ups force bank officials to sell the non-bank products to the customers. In many cases, customers have lost money. Banks reputation is at risk. Conserving capital without allowing leakage through these non-core banking operations will benefit the PSBs and its customers.

- K. S. Krishna, Kochi (HBL)

Smaller private banks in fight for survival

....India’s smaller private banks face a dual threat—competition and consolidation. This became a little more real earlier this month, when Parliament amended a law that will allow the central bank to supersede bank boards. The Reserve Bank of India (RBI) had wanted this safeguard before issuing new bank permits. While that—new bank licences—is still some way away, the smaller private banks know they need to grow to a more respectable size, and even the central bank has said so.........

Read - Mint

Banking bill: A test case for consolidation

.......The bill has dropped a controversial clause which would have allowed banks to enter into forward trading, but paves the way for a greater banking presence in the rural areas. More banks in rural India will also mean more job creation, the government says. The bill will also sooner or later pave the way for consolidation in the banking space with the entry of some large players, a fear which has drawn opposition and ire from bank unions in equal measure. According to Venkatachalam, India needs expansion of its banking sector, not consolidation.

Read.........

Worst probably not over for banks

....Around 17-20 per cent of restructured standard advances have become non-performing assets (NPAs). The Reserve Bank  expects the ratio to increase to 30 per cent in a worst case scenario. 

Read - BS

Game changers in the banking sector

The banking bill and the fast forward for Aadhaar are two forces which will shape the Indian banking industry from the New Year. Each is a game changer. Both of them introduce competition for the sector at a pace that has not happened for a long time..........

Read - FE

Risky futures that banks can do without

...........By and large, Indian banks (public and private) lack the market knowledge and the expertise to benefit from trading in commodity futures. The Reserve Bank of India (RBI) has also expressed concern at the risks posed by domestic banks that lack the expertise and skilled manpower to deal with such risky trading instruments...............

Read - The Hindu

Tax-free bonds are flopping: Rich say ‘no’ to cheap money

Every time Finance Minister P Chidambaram finds himself cursing the Reserve Bank of India (RBI) Governor for not cutting interest rates, he should ask himself whether the latter is more sinned against than sinning..............

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2013: P Chidambaram's year

.....An aside, Mr Minister: it is truly astonishing that at a time of high inflation and barely positive real interest rates all the expectation is for the Reserve Bank of India (RBI) to cut interest rates next month. You, Mr Minister, have of course contributed to this in conveying publicly your desire to see lower interest rates. You feel that you and the government have done your bit for growth and now it is time for the RBI to contribute its share. But the government has not done enough – in fact barely anything – towards reducing the inflationary pressures; nor, indeed, towards addressing the broader macroeconomic balances in the economy.......

Read - BS

Turning realistic on growth rates

.... The real problems lie on the supply side, which can be resolved only with structural reforms. Thankfully, government agencies began coming around to this view. The committee headed by Vijay Kelkar did some welcome plain speaking. “India is on the edge of a fiscal precipice,” it warned in the very first sentence of its report. RBI said the potential growth rate of the Indian economy—or the growth that it can sustain without setting off high inflation—was now down to 7.5%, around one percentage point lower than what it was in the boom. Private sector economists argue that it may have come down even more, a fair assessment since India has signs of excess demand even when growth is around 5.5%.......

Read - Mint

Banking On Growth

.....According to Dun and Bradsheet Inflation continued to remain sticky and much above the RBI’s comfort zone throughout the year. In fact headline inflation as measured by WPI remained above 7.5 per cent from February to October 2012. As a result the RBI has kept the repo rate at an elevated level reducing it by 50 basis points only once during 2012, in April-12 to support growth.............

Read...........

Nationalized Banks vs Public Sector Banks

Recently one of our readers sent me an interesting question : What is is the difference between nationalized banks and public sector banks?  I had to pause for few moments and tried to assimilate so that I can answer the same in few sentences.  Soon I realised that it is not that simple to make this understand to a young student who does not have a background of banking history.   May be even most of the bankers will fumble for words if they are asked this question..........

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Indian Economic Association conference begins tomorrow

Chairman of the Economic Advisory Council to the Prime Minister and former Governor of RBI C. Rangarajan along with other noted economists like Dr. Vijay Kelkar and Prof. C.H. Hanumantha Rao are participating in the 95th annual conference of the Indian Economic Association being organised at the GITAM University here from December 27 to 29.........

Read - The Hindu

Gold comes under attack from govt & RBI, but continues to shine

...........To discourage import of gold, the government doubled import duty, while the Reserve Bank put curbs on banks' investment in gold finance companies. The government raised the import duty on the precious metal to 4% from 2%.............

Read - ET

Empanelment of ED

The Committee of Governor and Deputy Governors has decided to empanel Dr. (Smt.) Deepali Pant Joshi, Regional Director, Jaipur, for promotion to the post of Executive Director in the Bank.

VITALINFO extends heartiest congratulations to Dr.Smt Deepali Pant Joshi.

Here's how Indian bonds market can be revived

F

or a long time there hasn't been too much development in the Indian bond market. In the period between 2005 and 2010, lots of products for the corporate bond market were introduced. Credit default swaps was introduced a year ago, but, barring interest rate swaps nothing much has come of the other products. In an interview to CNBC-TV18, V K Sharma, Executive Director, Reserve Bank of India, Neeraj Gambhir, head of fixed income Nomura and Jayesh Mehta, managing director and country treasurer at Bank of America discussed the issues that are hampering the Indian bond markets.

Below is the edited transcript of their interview with CNBC-TV18...........

Read and also watch the video...........

‘Economy of a country depends upon its sources of investment’

Mangaldai (Dec 20): The Banking sector in India has been taking efforts in order to develop the economic structure of the country through various activities. The present economy of the country depends upon its sources of investment. It is an urgent need for the improvement of economic structure in the country by creating awareness about the various policies taken by the banking sector among the masses that the people from every angle will be able to enjoy its benefit. This was said by Executive Director of Reserve Bank of India Deepak K. Mohanty while addressing a public meeting at Pakadali, a remote village at Sipajhar in Assam’s Darrang district on Saturday after inaugurating a Financial Outreach Camp. Speaking on the occasion, Mohanty stated that inflation in India has gradually come down compared to previous years. “The Reserve Bank of India is very concerned over the matter. Some latest policy carried by the RBI will help to decrease the present infiltration in the country,” he hoped........

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Cosmos Bank: RBI body offers excellence award

The Cosmos Co-Operative Bank Ltd. received NFS operational excellence Award from National Payment Corporation of India (NPCI) recently in special function held in Mumbai, for second consecutive year. NFS operational excellence Award was received by Vikrant Ponkshe Chief Executive Officer (CEO) and Joint Managing Director, Cosmos Bank from Mr Vijay Chaugh, Chief General Manager, Department of Payments & Settlement Systems- Reserve Bank of India (RBI)..............

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Banking Bill gives RBI all it wants

......Though it's debatable whether power to supersede bank boards can adequately safeguard against the problems created by banks promoted by those with interests in other industries, the finance ministry has at least shed its reluctance to bulldoze the Reserve Bank of India. The RBI can also take comfort from the ministry's decision to drop the clause allowing banks to trade in commodity futures.........

Read.......

RBI-FinMin panel likely on new bank licences: Sources

.....No date on the committee announcement, but sources say that it will be at least a three-member committee if not more. At this stage, it will basically be a Reserve Bank of India (RBI) and the finance ministry. In some ways one could call it a coordination committee. Deputy Governor of the RBI, the secretary of the department of economic affairs, Arvind Mayaram and the financial services secretary Mr. DK Mittal to be there............

Read..........

New bank licences: Waiting for Godot

.......Armed with the amended banking law, if RBI chooses to release the final guidelines in January, giving a three-month window to the aspirants to apply for licences, and takes another three months to identify the right candidates, the first licences should be handed out before Governor D.Subbaraos term ends in September. RBI should have an open mind to allow as many entities to set up banks as it finds fit and proper. It’s almost three years since the budget announcement—how long should we wait?......

Read - Mint

RBI celebrates golden jubilee in JK

......Sandip Ghose in his remarks said that opening of the RBI office in J&K in 1962 was a significant event in the economic development of this State.........

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Superlative persona

Shri Sandip Ghose has carved a niche for himself in the annals of RBI history. If any single Officer of the Bank who can be credited to have greatly contributed to the culture, values, motivation and morale of the staff members and its customers and thereby the society at large, it is none other than Shri Ghose. I had the privilege of being associated with him for some time and I must unhesitatingly say that he is one of the very few individuals in the Bank with superlative caliber, leadership and vision. Even though he could not become an ED or DG, Shri Ghose has earned a name that exalts him much above the rank. Awards are recognition of one's achievements, but more than that Shri Ghose will be welcomed, received and treated royally by majority of RBIites even after his retirement. Now, that is something many of our senior Officers may not be confident of receiving post-retirement. It is anybody's guess how many senior Officers would receive such a treatment. Though it is too early to wish him a happy retired life I may assure him that he has earned a lot of blessings and prayers from staff members and their families during his service in the Bank. I am sure that those prayers will stand him in good stead in his next innings. May God bless him and his family.

- P.E. Thomas Panicker (via e-mail)

Notes found in debris to be sent to RBI for verification

RAMGARH: Ramgarh district police has decided to send the currency notes found in the debris of a demolished house to Reserve Bank of India (RBI) for verification. The house was demolished by the district administration a couple of weeks ago to clear the land acquired for the construction of a four-lane highway in Ramgarh suburban town.........

Read - TOI

RBI extends deadline to March 13 for NBFCs to migrate to new standard cheques

........"However, it may be noted that the residual Non-CTS-2010 Standard compliant cheques that get presented in the clearing system beyond the extended period, will continue to be accepted for the clearing but will be cleared at less frequent intervals,"..........

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The economy in 2012-13: More than 50 shades of grey

........The Reserve Bank of India (RBI) continued to maintain its stance on interest rates and while it relented in April with a repo cut and followed up subsequently with some cash reserve ratio (CRR) reductions, it continued to focus on inflation. Critics felt that the RBI was not exactly sure on which inflation number to look at. At times it was headline WPI (Wholesale Price Index). It moved to core inflation and food inflation and, in a more recent policy statement, it spoke of CPI (Consumer Price Index) inflation. The clue we got was that all inflation was bad, and they would ‘all’ have to move downwards to placate the RBI..........

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SBI’s gambit

 State Bank of India (SBI) chairman Pratip Chaudhuri has requested the Reserve Bank of India (RBI) to consider lowering the minimum tenure for a fixed deposit to three days from the current seven days. That would give banks a better chance at competing with short-term and ultra short-term debt schemes of mutual funds............

Read - FE

Interest matters

.........The RBI has played its part perfectly by not yielding to the pressure from various quarters for reducing the key interest rates, but has instead reduced the Cash Reserve Ratio (CRR) from six to 4.25 per cent during the year, which has infused over Rs.75,000 crore into the banking system. Most banks have passed on the benefit to the end customer by coming out with a slew of offers including reduced interest rates.........

Read - The Hindu

Caution is still the key

..........The track record of banks controlled by big business has been patchy and it is the cosy relationship between banks and their owners that was one of the main reasons cited for bank nationalisation in 1969. As in many countries, the regulation of financial conglomerates is becoming a big problem in India. It would be prudent for the RBI to frame the rules as tightly as it can to weed out undesirable applicants .Thereafter, it is a question of exercising its regulatory powers judiciously without fear or favour.

Read - The Hindu

Strong bond market needed

The Reserve Bank of India (RBI) Deputy Governor Subir Gokarn on Saturday stressed the need for developing a vibrant corporate bond market, which is essential for financing infrastructure projects in the country and asked various regulators to work in tandem to develop this market. The need for developing an efficient corporate bond market is “driven by infrastructure financing,” said Mr. Gokarn while inaugurating an international conference on bond markets organised by the Bombay Stock Exchange (BSE) ..............


Read - The Hindu

Performance of banking sector: 2011- 12

.....Overall, in addition the strengthening their capital base, banks would need to focus on strengthening their credit appraisal and post- sanction loan monitoring system to minimize NPAs, make financial inclusion more meaningful and revisit lending to priority sectors.

Read - FPJ

Islamic finance: a perspective from India

Even as the Reserve Bank of India (RBI) is driving financial inclusion through a combination of conventional and non-conventional approaches, it’s time to take a fresh look at Islamic finance to expedite finance inclusion, especially within the 170 million Indian Muslim community. A banking professional with a three-year stint at global banks initially in the US and then at Islamic banks in Kuwait for about five years, Saif Ahmed, who is currently Managing Partner at Infinity Consultants, Bangalore, told Deccan Herald that though Islamic banking in India was ruled out by the RBI Governor D Subbarao last month, there is scope for Islamic finance in many other ways...........

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‘No bias, fit and proper persons will get bank licences’

.........“RBI is the licensing authority. The Government has no role to play in granting bank licences. Let there be no misunderstanding. The Government has no bias in favour or against anyone getting a banking licence, provided fit and proper conditions are met,”..........

....“I agree that there are some problems in giving more powers to RBI. But I think RBI is best placed to continue being the regulator for banks at this stage”.......

Read - HBL

Parliament has opened doors for inclusive banking, RBI must move now

...........The RBI must allow each mobile company to form joint ventures with every existing bank, so that a farmer with a phone is able to use it as a machine for storing value, receiving funds and making payments. A few baby steps have already been taken in these directions: it is possible for a bank account holder to transfer money to mobile phone balances, for example. But more need to be done. Outdated legislation and the RBI's conservatism held back many reforms on the ground, but now that legislators have done their bit, it is up to the mandarins at Mint Street to shed their acute conservatism and bat for maximum financial inclusion.

Read - ET

New banking bill faces key challenges

..............The Reserve Bank of India has the power to grant new licences, but is expected to move slowly given the regulatory risk posed by the entry of financial firms with no banking experience. Despite earning new regulatory powers in the banking bill passed on Thursday, analysts say the RBI could issue only three to four licences in the next 12-15 months, denting expectations for a flood of new lenders in the sector.

Read - ET

Can RBI keep the lid on inflation? - A.Seshan

.......The question is whether the central bank can put the inflation genie back into the bottle, after having unleashed it in the wake of the Lehman crisis. Clearly, the expansionary policies of the government and RBI in 2008-09 were a panicky overreaction to the international financial crisis and unwarranted by domestic circumstances..........

The author is an economic consultant, former officer-in-charge, Department of Economic Analysis and Policy, Reserve Bank of India, and Adviser to National Bank of Kyrgyzstan and Bank of Sierra Leone

Read - BS

Politics, laws weigh on Islamic finance in India

.....Nisar at TASIS said that one possibility, which would not require amendments to the banking act, would be for the RBI to issue an order allowing non-bank financial companies to operate under a participatory model. Under this model, NBFCs would not charge interest but instead pay depositors with the proceeds of investment funds. However, RBI officials told Reuters they did not think this would be feasible. Rules for NBFCs are the same as for banks with regard to interest rates, they said.......

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Co-operative credit societies will have to seek banking license from RBI

...........While those co-operative credit societies with reserves and paid-up capital of over Rs 1 lakh have to register with RBI, most of these societies operated with a lower capital to avoid regulatory overview. Following the amendment in the Banking Regulations Act, the RBI will issue details guideline regarding the capital requirements that would apply for cooperative credit societies. As per the amendment in the Act, these societies will have to comply to the norms specified by the RBI within one year of it being notified. Alternatively, they will be forced to suspend banking operations. ...............

Read - ET

RBI extends date of chequebook return to April 1

If you are confused by the text messages being sent by your banks reminding you to change your old chequebooks, here is an answer to all queries.............

Read - Hindustan Times

Banks meet 61% credit target in Kannur

........ome banks, however, were criticised for their non-achievement of 40 per cent minimum target in the agricultural sector set by the Reserve Bank of India (RBI). District Collector Rathan Kelkar, who chaired the meeting, urged the banks to be liberal in the disbursal of education and agricultural loans. Syndicate Bank Deputy General Manager V. Ashokan, RBI Assistant General Manager (AGM) K.D. Joseph and Nabard AGM P. Dinesh and Lead Bank Manager V.S. Jayaram spoke.

Read - The Hindu

SBI: Reduce fixed deposit minimum tenure to 3 days

.....Speaking on the issue of interest rates on savings bank deposits, SBI Chairman Pratip Chaudhuri said he had requested the regulator to reduce the tenure of minimum deposit from seven days to three days. “We think a savings bank is not about rate of interests alone. It is about the facilities, the experience and so on. In fact, I am requesting RBI, time and again, that the tenure of minimum deposit be reduced from seven days to three days,” he said........

Read - BS

Union Bank bags Best Bank in Public Sector Technical Award from NPCI

Lalit Sinha, GM, Alternate Channels and Ajit Rath, GM, DIT receiving the award from former RBI E.D. Dr. Burman and A.P. Hota, CEO, NPCI. 

Union Bank of India received the Best Bank in public sector category Award from National Payments Corporation of India (NPCI) for operational excellence in national financial switch. The awards were given by NPCI during their annual NFS User Meet at Mumbai on 13th Dec.2012. These awards are given by NPCI based on excellence in performance in operation of ATMs covering parameters like dispute management, net work uptime, control on transaction declines, DR Drills etc. NPCI evaluates banks based on the performance data available with them. Union Bank of India has 4264 ATMs connected to National Financial Switch of NPCI servicing the customers of 118 member banks.

TOI

Abhyudaya Co-operative Bank penalized by RBI for violating guidelines

...........An investigation carried out in the bank's Vashi branch revealed that the bank failed to comply with the RBI guidelines on KYC/AML process. Penalizing the urban co-operative bank, RBI said, "The bank had also violated instructions by freezing the account and thus tipping off the customer. It had also closed the audit trail by closing the account."..............

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Tough times ahead?

......Making the market regulator responsible for policy lapses is not wise given the backdrop of tough macroeconomic environment coupled with uncertainties looming large. This is not to suggest that the rating agency’s alarm bells on asset quality of banks should be ignored. Both RBI and banks have huge challenges on hand to contain the NPAs to acceptable levels.........

Read - FE

Shadow banking: Silent threat to India’s growth story

.....With non-bank companies accounting for almost 40% of India’s financial system, policy makers are struggling to tame inflation and reverse slowing growth, said Ashima Goyal, a Mumbai-based economics professor and member of the central bank’s technical advisory committee. While the Reserve Bank of India raised interest rates 13 times from mid-March 2010 through April of this year, inflation has remained above 8% for 21 of 26 months, according to data compiled by Bloomberg. Having so much money outside government control “stands in the way of smooth transmission of monetary policy,” Goyal said. “This challenge is at the root of India’s struggle to administer policy that will trigger the kind of growth the world is expecting out of India.”........

Read - DNA

Rocketting financial Inclusion in India

.......Although there is a long road ahead for complete financial inclusion, the business correspondent model has the potential to be the model of socio-economic inclusion for India.....

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