......LDO,RBI emphasised upon the achievement on the CD ratio of 40 per cent in the district by March 2013, which currently stands at 32.70 per cent. He exolted upon the bankers to come forward in lending in key areas, so as to achieve CD ratio. He also emphasised on the financial inclusion of all unbanked villages in the district.........
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.
Tuesday, January 15, 2013
New banking licences: Finance Ministry raises hope about final guidelines
....The ministry has proposed that the RBI should clearly define 'promoter', besides suggesting an appropriate banking structure in the country with a few national and international level banks at the top, an official familiar with the matter told ET. The ministry has also suggested that the RBI drop the condition that restricts promoters with exposure to stockbroking and real estate from seeking bank licences, added the official, who did not wish to be named. ............
Banking on reform
........When it comes to economic policy, it is better to be safe than sorry because decisions once taken cannot be reversed easily. This is true of the Banking Laws (Amendment) Bill, 2012, which was passed by Parliament on December 20. The amendments to the existing laws will be followed up by the RBI through suitable policies. The reforms will not transform the landscape of banking in India, or fully open up the sector to foreigners and industrial houses, though it will admit a few of the serious ones from among them. But there seems to be a grudging acceptance that the current structure of Indian banking is not helping the expansion of banking services, thereby putting the government’s financial inclusion and growth objectives at risk. ..........
Short Cuts to Success
.............RBI Governor D. Subbarao has defied two successive finance ministers, Pranab Mukherjee and P. Chidambaram, both of whom wanted an interest rate cut in 2012. There are now expectations he may finally relent in January 2013 when RBI announces its next review of monetary policy. The January cut, if it happens, will be a minor one. RBI will have to follow that with several cuts throughout the year if private investment has to be revived.....
Conflicting rationale before Reserve Bank
The consumer and wholesale price inflation numbers for December 2012 gave contrasting pictures, just a fortnight ahead of the Reserve Bank of India (RBI)’s monetary policy review...........
Stable, but for how long?
......Financial inclusion, financial literacy and consumer protection are interconnected threads in the pursuit of financial stability. Given the strong linkage between stability and inclusion, it is only right that the FSR should highlight, for the first time, the several regulatory initiatives taken and the progress achieved so far........
Hopes of rate cut by Reserve Bank of India on a high as inflation hits a three-year low
Headline inflation dropped to its lowest in three years in December, reinforcing expectations that the Reserve Bank of India will cut rates at its policy review on January 29 to boost the economy, which is headed for its worst showing in a decade. The inflation numbers are the latest piece of data providing backing to those, notably the finance ministry, calling for a cut in interest rates after a fall in industrial output in November reported on Friday. ...........
UP eyes 3000 bank branches to better investment scene
..........the government, according to sources, has also decided to suggest to the RBI governor to set up at least 3,000 new branches of banks in the state and also issue the licences for the reopening of the 15 cooperative banks, which have been denied the deposit facility at present.
Read - TOI
Read - TOI
Monday, January 14, 2013
Leaving interest rates alone would be a heroic move - S.S.Tarapore
.....Policy Options Given that the inflation rate is way above the RBI's comfort zone of 4.5- 5.0 per cent, the large fiscal deficit, the large CAD, the overvalued rupee exchange rate, the overextension of credit and the sluggish deposit growth, there is no case for a reduction in the repo rate or the CRR. In fact, the situation calls for tightening of monetary policy to squeeze inflation. The powerful political economy forces of industry and government will not permit the RBI to undertake the policy tightening which is necessary. It would be a heroic act on the part of the RBI to keep the present policy stance unchanged. What is likely to happen is that, in all probability, the RBI would, on January 29,2013, reduce both the repo rate and the CRR, each by 0.25 per cent........
The challenge of gold
.....One promising remedy would be “financialisation” of gold, both the imported component as well as the domestic stock. Banks and institutions need to introduce attractive savings packages based on gold. Simultaneously, alternative avenues for investment should be made to provide a real rate of return that is higher than what obtains now. Only then can domestic consumers be weaned away, at least partially, from their craving for gold......
Microfinance - Book Review by P.P.Ramachandran
..........NGOs are the backbone of financial intermediation for the self- help groups. Even with the strident official backing, their work has become an inalienable and invaluable part. Assisting the credit institutions has been an upsurge in the growth in MF institutions. This growth led the RBI to appoint a Committee headed by Dr. Malegam to recommend appropriate regulations for the sector. The Finance Ministry has formulated a Finance Bill proposing to confer regulatory powers on the RBI. The book under review is a history of the development of MF institutions and is an exhaustive analysis of the literature concerning that. MF is one of the growing tools of development and microcredit has become an integral part of social banking The SHG- BL programme backed by Nabard is the largest MF programme in the world. There are a number of government programmes, which support the poor. The book is a comprehensive survey of the literature on MF movement in India and abroad...........
Ex-RBI staffer fights to save her flat
........Nearly four decades ago, when she was a top official with the Reserve Bank of India, she had invested most of her savings into purchasing the two-bedroom flat, one that she hoped she could retire peacefully into. As luck would have it, she (with the help of her 96-year-old sister Taramati Israni) has been left battling her nephew for her 900-sq-ft home. Her nephew Mukund Bhide came back into her life four years ago and after a while, she made him a joint beneficiary on all her bank accounts so he could do the running around for her. “He swindled me of lakhs of rupees and took away the original share certificate of my house without my knowledge.” .........
Ex-MLA denies scam in Bapunagar bank
...........However, former Rakhial MLA Kanubhai Kotiya, husband of an accused Lilavati Kotiya, refuted the allegations made by the Reserve Bank of India (RBI). “The scam complaint registered against us is false. The whole thing has been misinterpreted by the RBI. As far as fake accounts are concerned, we have not done any such thing,”...........
RBI governor’s assurance to Vijayamma
RBI Governor D. Subba Rao has reportedly assured YSR Congress honorary president Y.S. Vijayamma that the future of the staff working in public counters of RBI regional offices will not be jeopardised by their closure. He was replying to a letter written by Ms. Vijayamma.
RBI plan: Financial literacy for students
....“We are in touch with UP Board officials and they have responded well to our initiative. In some of the books, they have already incorporated some topics like how to detect forged currency notes, etc. We are confident that other concepts would be added soon. It is important to educate young children about banking,” said Hemant Kumar Soni, DGM, rural planning and credit department, RBI while addressing the media..........
RBI watchful of non-compliance by PSU banks
........RBI has come down heavily on banks for not complying with the regulators annual inspection report findings. In a notification released last year the RBI had told banks to take the inspection findings seriously and to comply with them immediately after receiving the report...........
RBI can’t fight inflation on its own
....... With so many factors at work, if RBI goes for a rate cut, which many believe will happen, it is suggested that the government lend adequate support in terms of reducing non-essential imports such as gold, and taking measures to control fiscal deficits. The good news is with direct cash transfer slowly being put in place, it is expected that the government will be able to better utilise its funds, and control the fiscal deficit........
Appointments with a purpose
The newfound enthusiasm surrounding the selection of financial services secretary reaffirms the government's intent to oversee state-run banks
....., the animated discussion that is going on among civil servants over Mittal’s departure and the choice of his successor is unusual. There are several reasons for this. Even though Mittal’s role was not as critical as that of his counterparts in the departments of economic affairs, revenue or even expenditure, and until recently he would not even have an independent office in North Block, the ministry’s headquarters, his job per se was not unimportant. Ask any public sector banker or those working for the Reserve Bank of India and they would tell you how Mittal became an important player in India’s financial sector and how he used the financial services department to keep a tight vigil on the way the state-controlled banks functioned or even were regulated. ......
When and where the roads of Govt and Reserve Bank will meet? - T. V. GOPALAKRISHNAN
.......The economy can perform well only if both the Government and the RBI are on the same road and they take joint efforts mutually respecting each other’s role. Hope the roads they are presently on are not parallel...........
Fiscal situation may worsen: Assocham
.....“The slower pace of GDP growth has affected the manufacturing and trade sectors thereby resulting in lower than estimated excise duty collections. Higher policy rates of RBI, in an effort to contain inflation, has led to an investment downturn,”.......
50 bps rate cut likely in RBI policy review: Credit Suisse
....“Following a break of nine months, we expect the Reserve Bank to cut the repo rate at its January 29 meeting, probably by 50 basis (0.5 per cent) points to 7.5 per cent,” .......
Provisioning norms for NBFCs will hit profitability: Assocham
......“New NBFCs are likely to be more adversely affected due to the need for additional capital. If the required capital could not be raised with reasonable cost, they may be forced to restrict the scale of operations or shrink their business, and this may pave way for some consolidation too,”..........
Tata Capital says new norms to eat into bottom lines of NBFCs
..........The draft norms, based on the recommendations by the Usha Thorat (Former RBI Deputy Governor) committee and released last month, seek to bring NBFCs at par with commercial banks. Stating that banks operate with benefits like recovering money under the Sarfesi Act and having access to low-cost deposits, he said, "Only on the disadvantages side you are going to bring it (banks and NBFCs) at par, and thus it becomes difficult."..........
Bharat Bank bags 1st prize for best H.R.Project
ET
Shri Ratnakar Deole has wrongly been quoted as Former ED. He retired from Premises Department, Central Office as Chief General Manager.
Banks set to slash rates for MSME loans
.....A senior banker familiar with the issue, who did not want to be named, said, “In cases where over leveraged companies have managed to get a fine rate, RBI is asking banks for an explanation on how they arrived at the rate. RBI is insisting that rating should be directly linked to the price of a loan.” The Reserve Bank of India (RBI) had set up working group last year headed by Deputy Governor Anand Sinha for transparency in pricing of loans, but the committee is yet to submit its report......
Financial holding co to infuse equity into PSBs likely
The finance ministry will soon send a note to the Cabinet for setting up a financial holding company (FHC), which will leverage its capital base to infuse funds into public sector banks, a senior ministry official said. The proposal, based on the recommendations of the Shyamala Gopinath committee, has the backing of the Reserve Bank of India (RBI). The ministry will also send its views on bank licence norms to RBI next week.............
Will Chidambaram become Rahul’s Manmohan Singh?
..........However, it is the constant pressure on the RBI top brass that has thoroughly exposed PC’s undemocratic nature. He is unwilling to share power. Whether it is D Subbarao, or his predecessor Y V Reddy, PC has covertly and overtly sought to erode the autonomy of the central bank by trying to force his will on it, especially in regard to the benchmark policy rate............
UPA's last chance?
...........Banking is a two-way relationship with several changing dimensions. ATMs and hand-machines with banking correspondents cannot substitute for the personal relationship a banker cultivates with his/her clientele over time. But it is quite unlikely that the present political leadership will opt for such a change, since time is running out for them.
‘ Interest- free’ Islamic banking in offing
The minority affairs ministry is working with the Reserve Bank of India to introduce the " interestfree" Islamic banking system, which will enable over 15 crore Muslims to use banking facilities without tinkering with the Islamic code of belief that prohibits them from earning any interest. It may provide " vehicles of financial instruments which can facilitate interest- free financial products, including loans, for the community's benefits," says Minority Affairs Minister K Rehman Khan, who wrote to the Reserve Bank of India Governor D Subbarao last month, to first introduce some financial instruments as a pilot. He had suggested that the RBI set up a committee to examine the possibility of such financial instruments........
R.K.Dubey joins Canara Bank as CMD
R K Dubey has assumed charge as Chairman and Managing Director of Canara Bank, one of the leading public sector banks in India with effect from Jan 11. A professional banker par excellence, Dubey carries with him vast knowledge and multi- dimensional banking experience, spanning over three decades. His key areas of expertise include planning and budgeting, resource mobilization, credit, risk management, HR, IT and marketing. A post graduate in English, Dubey's academic credentials also include LLB, MBA in HR and a Certified Associate of the Indian Institute of Bankers. Born on 10.09.1954, Dubey joined PNB in the year 1977 as a management trainee and moved up to the ranks of a General Manager in 2008 and was appointed as Executive Director of Central Bank of India in 2010.FPJ
Raj Kumar Goyal takes charge as Executive Director of Central Bank
Raj Kumar Goyal has taken charge as Executive Director of Central Bank of India, one of the largest nationalised banks of the country with effect from Jan 11. He replaces Rajeev Kishore Dubey. Goyal was earlier working with Bank of India as General Manager, HRD. He has more than thirty five years of experience in banking having worked extensively in the areas of credit, human resources, general operations and international banking at Bank of India's London Branch.
FPJ
Demand for SBI module office in Gulbarga gains momentum
.....The establishment of the module office would lead to the opening of new branches and increase the bank’s commercial activities. Although Gulbarga district had been sanctioned 9 licenses by RBI to open new branches in different parts of the district, only two new branches will be opened. The remaining licenses are being shifted to other districts. If SBI’s module office had been set up here, all nine branches would have opened in Gulbarga district, the source said........
Friday, January 11, 2013
Underlying reasons for gold rush - S.S.Tarapore
Banking Ombudsman Scheme may be widened
........Another likely revision, which has also been proposed by the Damodaran Committee on customer service, is to ask banks to strengthen their internal Ombudsman schemes so that the RBI's Banking Ombudsman can function as the Appellate Authority, says an official of the Indian Banks' Association. Currently, the Deputy Governor of RBI is the Appellate Authority.......................
Food court to add spice to Chennai book fair
....It will not be all books
at the fair. The RBI will put up a stall to create awareness about
banking facilities and to sensitise people about fake currency notes. An
ATM by Union Bank will also be set up at the venue. School education
minister N R Sivapathi will inaugurate the book fair ...........
RBI to hold coin melas
The Reserve Bank of India has launched camps with various banks to meet the increasing demand for coins this Pongal. On Friday, coin melas will be organised at Indian Bank, Purasawalkam and at Canara Bank in Koyambedu, a press release said.
M D Mallya BS Banker of the Year
M D Mallya, who retired from Bank of Baroda (BoB) as chairman in November last year, is the Business Standard Banker of the Year 2011-12. He was chosen by a four-member jury, headed by former Sebi chairman M Damodaran.................
SBI chief bats for rate cut
State Bank Group chairman Pratip Chaudhuri has argued for a 50-100 basis point reduction in cash reserve ratio (CRR) and a 50 basis-point cut in repo rates, saying that these would do enormous good to the economy, at a time when credit absorption was flagging due to high interest rates..................
Kill cash
..........A payments company like Visa, MasterCard or RuPay, an RBI initiative, can take care of settling payments. Scale will bring down their fees. And for every crore rupees worth of tiny transactions they settle, they can be paid something from the government so that they have an incentive to make a good job of settling small payments in remote areas. The banks are the agencies to deploy the swipe machines. They can split their incentive from the Centre with the payment companies..................
Credit cards linked to fixed deposits are good for customers and even better for banks
........After the credit crisis in 2008, banks hit the break on credit card issuances that hit a high of 27 million cardholders in 2007- 2008 - defaults hit a high of 20- 22% and banks like ICICI, one of the most aggressive issuer of cards in India, had to clean up their portfolio. By F12, the same had come down to 17 million as per RBI data. The secured card is usually the first card that one takes in the US, a developed market for credit cards, to start building one's credit history. Indian banks are now pitching the same to clients with low CIBIL scores, over- the- counter, or on email. Various banks, like SBI and DCB, have trained scouts on market visits and ICICI began offering instant FD- linked cards to net banking customers only recently..............
Reserve Bank of India sees stress on state finances from 2017-18
..........India's central bank raised concerns over states governments' debt repayment capacity from fiscal year 2017/18 because of higher market borrowings and the recently announced bailout scheme for state-owned power companies. "The increase in market borrowings of state governments since 2008-09 could lead to large repayment obligations from 2017-18 onwards," the Reserve Bank of India said in its annual publication on state finances, 'State Finances: A Study of Budgets of 2012-13', released on its website...............
Encourage NBFCs to continue and build on their business models: G S Sundararajan
........RBI wants to convert existing NBFCs into banks…
If we want to continue to achieve financial inclusion, we should realise some NBFCs like us and banks are in mutually exclusive customer segments. Hence, if we want NBFCs to get into banking space, then they should be encouraged to continue with their business models and, at the same time, expand on their additional products to the existing customer base after conversion.
What if RBI insists?
In the current scenario, there are some businesses which we can do as a bank. So, there is a choice, which we will have to exercise. As long as we are able to convince the regulator that there will be no regulatory arbitrage, I am sure they will support us in furthering financial Inclusion...................
RBI floats draft norms on capital needs for counterparty risk
In order to enhance risk management system of banks, the Reserve Bank of India (RBI) has proposed tweaking norms for capital adequacy with regard to their exposure in derivative instruments. Under the new framework, banks’ exposure to central counterparty (CCP), a clearing house, arising from OTC derivatives, exchange traded derivatives and Securities Financing Transactions (SFTs) will be subjected to capital requirements for counterparty credit risk, the RBI said in a draft guidelines........
Government mulls interest-free banking incentive to woo Muslim voters
........It is learnt that a recent exchange of letters between minority affairs minister K Rehman Khan and RBI Governor D Subbarao in December has given a new push to the issue, hanging fire for want of requisite changes in the existing banking laws. The RBI has been insisting that to make it possible, an amendment is required in the Banking Companies Regulation Act, 1949. This was conveyed to the finance ministry recently after Khan raised the issue with the RBI governor through a letter, dated December 5, 2012.......
Dump gold abroad
.........Even if two per cent of the gold holdings with the public can be garnered through an attractive scheme for exporting, the government will be able to influence the international prices. A gold bond scheme that offers the lowest of the market value of gold or an inflation-adjusted assured return can easily attract the public, and accumulating gold stock for export will not be difficult.
How to stop the gold rush
.......RBI talks of gold deposits, accumulation and pension schemes. Will
people really come forward and deposit their gold and take it back
after say 5 or 10 years? If it is held for security or vanity, then this
will not happen. Also, most gold held by households could be in the
form of jewellery and not coins especially in rural areas, which makes
such a scheme a non-starter as the individual would expect the same to
be returned at the end of the tenure. If the idea is to churn this gold
for meeting further demand, then the scheme may not work. ................
'Both farmers and bankers culpable’
..............Official sources said that it is imperative on the part of supervisory bodies such as the RBI to make sure that the crops and area mentioned in the loan applications are genuine, and loan is used for the stated purpose.
CBI inquiry sought over misuse of interest subvention scheme
........Sources in the NABARD point out that the Reserve Bank of India is already seized of the issue. In its circular dated November 9,2012, the RBI said “the government of India, through its budget announcement for 2006-07, introduced an interest subvention scheme with a view to ensure (sic) availability of short-term crop loans up to Rs.3lakh to farmers at a reduced rate of seven per cent per annum. This scheme has continued ever since with minor variations. Currently, with three per cent additional subvention for timely repayment, the effective cost of short-term crop loan comes to four per cent for farmers.”.........
Delhi-NCR: The crown and the jewel
................But the RBI instructing scheduled banks to not allow a rollover of loans given to real estate developers into next financial year will mean that developers will see an urgency to dispose of their unsold inventory to raise funds to pay back their loans. This holds the potential for a major correction in residential prices in the NCR region................
Thursday, January 10, 2013
G-secs need more retail investors, says RBI’s Khan
..... “On the face of it, it looks very odd that the Government promotes instruments of corporates and gives tax concession but does not extend the same treatment to its own instrument.” “This is being looked at from the Government side,” ........
RBI to mull slashing held-to-maturity limit for banks
The Reserve Bank of India (RBI) is considering a proposal to bring down the held-to-maturity limit in debt for banks in a non-disruptive manner, Deputy Governor H.R. Khan said on the sidelines of an event on Wednesday. "We are working on that," Khan said, adding a decision was not finalised...........
Syndicate Bank new branch at Nagaram
HYDERABAD, JAN. 9:
Syndicate Bank has opened a new branch at Nagaram, Keesara Road here. A.S. Rao, Regional Director, Reserve Bank of India, Hyderabad had inaugurated the branch in the presence of M. Anjaneya Prasad, Executive Director, Syndicate Bank.........
Do central banks deserve greater independence?
........Although there is some truth in what Stiglitz believes especially on the accountability front, the scenario is a bit different in India. For starters, the RBI's efforts to have a regulatory check over Indian banks certainly ensured that the Indian banking system was not affected as much as their Western counterparts. Secondly, if the argument is for RBI to have lesser autonomy, then one has to assume that the government is clean and responsible...........
North Block vs Mint Road
.........A closer look at the larger agenda in the Centre’s hand, the major part of which it expects to execute in 2013, will reveal that the abnormalities covered in this article are just symptoms of a chronic malice that is troubling governance at the top. Still, how, where and when the undeclared war that North Block is fighting with Mint Road, in an effort to clip dissent ends, will be decisive in the development of Indian economy..............
'Change' required............
I request the Reserve Bank of India to issue sufficient change to banks. There is heavy shortage in the market and if we need change, we have to pay extra Rs.10 for every Rs.100 worth coins. We are unable to get change even in the banks. Therefore, I request the RBI officials to issue sufficient change to local banks for the account holders at least so that we can draw the small coins.
S. Padmavathi, Viveknagar, Chikkadapally ( Hindu)
VTA demands gradual implementation of cheque truncation system
.....The VTA has dispatched a memorandum to union finance minister P Chidambaram and RBI governor Duvvuri Subbarao appealing to them that such move should be made applicable gradually to avoid needless legal litigations and erroneously breach of trust within the parties..........
Read - TOI
Need For Strengthening NBFCs
....Sinha was speaking at a discussion on “RBI’s Draft Guidelines based on Usha Thorat Committee Report on Issues and Concerns in the NBFC Sector organised by the Indian Merchants’ Chamber. Speaking at the discussion, Guest of Honour Ms Usha Thorat said: “Because of the diversity of NBFC sector, which operates in different verticals, the draft affects various NBFCs in different ways vis-à-vis the banking sector.” .......
Financial inclusion: Bogged down by faulty execution
It had the trappings of a blockbuster reform, but lost its way in policy tinkering and bad execution. This is how one could sum up the financial inclusion efforts of the Union Government and the public sector banks, especially in North India, in recent years. Misguided policy interventions and hiccups in financial inclusion architecture design at the Finance Ministry level implied that little gains could be achieved in the areas of ATM rollout by public sector banks or business correspondents (BCs).........
Takru named financial services secretary
Rajiv Takru will be the financial services secretary from next month, replacing D K Mittal, who retires on January 31, an official announcement said on Wednesday. Ravi Mathur was appointed as disinvestment secretary. At present, Mittal is holding the additional charge of the divestment department after Haleem Khan retired in November last year. Their names have been approved by the Appointments Committee of the Cabinet, an official statement said.............
The great Indian liquidity saga
....................If the market believes that the RBI is administering the wrong medicine for the wrong reasons, inflation may not come down in the near term and the external value of the Indian rupee may suffer further damage. The fight against inflation will become longer and harder to win, in our opinion. Maybe the RBI should not believe in too many impossible things before breakfast.
Read...........
भारतीय रिज़र्व बैंक - कानूनी अधिकारियों की भर्ती
भारतीय रिजर्व बैंक में कानूनी अधिकारियों की बी ग्रेड डाक के तहत खाली पोस्टों के लिए इच्छुक उम्मीदवारों से ऑनलाइन आवेदन लिए जा रहें है, आवेदन की अंतिम तारीख 29 जनवरी 2013 |.......................
Read.........
Read.........
RBI clips Merchant co-op bank, Dhule
Reserve Bank of India has issued certain Directions to Merchants Co-operative Bank located in Dhule. The directions have many clauses and ask the urban cooperative bank to adhere to them strictly. RBI says the bank shall not, without prior approval in writing from Reserve Bank of India, grant or renew any loans and advances, make any investment, incur any liability including borrowal of funds and acceptance of fresh deposits......
Will the “Direct Cash Transfer” scheme benefit the common man?
..........In the effort to improve financial inclusion the existing infrastructure outside the commercial banks also should be put into use. Cooperatives have played a significant role not only in providing agricultural and rural credit, but in ensuring other linkages like inputs for farming and marketing avenues for products. As they were mainly operating in rural and semi-urban areas, it took longer time for this sector to access modern skills and technology. NABARD was established in 1982 with the specific mandate of supporting cooperatives and rural sector in general. Initial enthusiasm of NABARD faded away in the absence of legislative and administrative support from central and state governments and the institution had to satisfy itself by continuing to be an appendage of RBI doing some ‘safe’ business through established and credit-worthy cooperative banks and commercial banks...........
Smaller companies bearing brunt of economic slowdown: RBI data
.........Smaller companies are mainly bearing the brunt of economic slowdown, having recorded overall losses in the first half of the current fiscal, a RBI data revealed today. On the other hand, larger corporates have performed better during the April-September 2012-13 period which witnessed moderation in economic growth to 5.4 per cent from 7.3 per cent in the year ago period........
Government will ensure common man benefits from banking: Chidambaram
....."There is no doubt that efforts are being made on a large scale to ensure that benefits of banking facilities are made available to the people", he said. The Finance Minister was speaking on the occasion of inaugurating headquarters of Central Madhya Pradesh Rural Bank. He said the processes for disbursing loans in education, home and agriculture sectors have been simplified so that anyone can avail these credit facilities...........
Compromise on Basel-III norms is a reminder of power of global banks
....The LCR aims to prevent a repeat of the kind of distress we saw in the aftermath of the collapse of Lehman Brothers, by making banks hold an adequate stock of unencumbered, high-quality liquid assets that can be readily converted into cash to meet sudden liquidity needs to ride out a 30-calendar-day liquidity stress scenario. It is somewhat akin to our statutory liquidity ratio (SLR) for which we were often derided in the past. It must be clarified, however, that SLR in the Indian context is also a way of ensuring a ready source of funds to meet the government's seemingly insatiable appetite. ..............
A banking masterclass
The Reserve Bank of India’s lecture series held in memory of its first governor, C.D. Deshmukh, provides its distinguished speakers a platform for sharing perspectives on banking in the context of the larger world of economic thought and behaviour. Never has this seemed more necessary than this year when the Nobel Laureate Joseph Stiglitz was invited to deliver what he titled most appositely: “Revolution in Monetary Policy: Lessons in the wake of the global financial crisis.” Revolution, at first glance, seems an odd phrase to use for a talk before India’s central bankers and invited participants from its financial hub. But at the end of the talk it was clear that the term had to be used in a more complex way than it has been used traditionally............
Banking grows as India logs in
The number of India’s 246 million households with access to banking has grown between 2001 and 2011, but 40 per cent still remain unbanked. And despite the recent rise of e-commerce and social media, merely 3 per cent of households have an internet-connected compute..........
Search engine exposes breach of security at bank
In what appears to be a breach of security, an Internet search for a lawyer’s phone number led a Mumbai-based researcher to a large trove of data (http://knowledge.bankofindia.com:8080) that looks like a directory comprising scores of folders stored on the Bank of India portal. Each folder comprised documents that indexed data, which included user IDs, names, date of birth, email IDs, passwords, details of branch and head offices. One of the many folders accessed by The Hindu listed details of what appeared to be data pertaining to more than 42,000 users..........
Banking Bill: A game-changer for the industry
............The Bill is likely to be a game changer for the Indian banking industry, with renewed strength in driving financial inclusion, increased competition and the likely emergence of global Indian banks. PSBs will also need to use this time to transform their operations to improve their efficiency and customer connect. The timing of the Bill’s passage is apt and is likely to catalyse wholesome growth of the banking industry in its next phase of evolution.
Gold comfort
T here is arguably no single item that has wrecked the country’s balance of payments more in recent times than gold. Since the global economic crisis of 2008-09, India’s gold imports have zoomed from under $21 billion to over $56 billion in 2011-12, accounting for over 70 per cent of its current account deficit increase during this period. No wonder, it has prompted the Government and the Reserve Bank of India (RBI) to resorted to a slew of desperate measures to “moderate the demand” for the yellow metal...........
'India should look at Interest Free Banking system as a humantarian concept, and not a religious concept'
.......The difference between interest free banking system and Islamic banking systems are: Islamic banking system will not allow investment in liquor, gambling or any other unethical business, whereas the non Islamic bank allows all kind of quick money making ventures. Not only Muslims but all other religious groups also can make use of this interest free banking systems under the RBI’s strict controls and regulations...............
Wednesday, January 9, 2013
Silencing the RBI
How can the central bank governor deliver appropriate monetary policy when he can't even get the deputy he wants
Employees demand RBI offices in all Northeastern states
The United Forum of Reserve Bank of India officers and employees has demanded that full-fledged offices of the apex bank should be opened in all the states of the north eastern region. The forum of employees has also demanded to extend the outreach programme of the bank in unbanked areas of the region and work for financial inclusion which is of utmost a necessity in a region where banking penetration is dismally low. According to the employees association, the progress of opening up offices in the region is very slow and existing small offices are for a namesake only and hardly serve any purpose when it comes to banking activities.............
Dy RBI Guv Takes Commercial Banks’ CEOs to Task
KC
Chakrabarty, Deputy Governor of RBI, gave a dressing down to CEOs of
commercial banks at a recent meeting on customer service. For instance,
he asked banks to justify the charges they impose on customers to avail
service from non-home branches. “When you are advertising — One nation.
One branch. One account, — then where is the question of charging
customers for updating their passbook at a non-home branch?” When the
bankers said that the charges are to recover the cost, Chakrabarty
quickly replied: “I am not against it. Either do away with the charges
or have a uniform charge for all.”
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How good money goes waste
......RBI has recently decided that foreign banks now will have to graduate to allocating 40% of their funds for priority sector lending. This will mean sequestering another huge set of funding for rural areas. When the rural sector is unable to use with efficiency the available money, it is difficult to picture how the additional funds will be of more use to it and, consequently, for the rest of the economy.......................
Asking for trouble
........Three voices as distinct from each other as these, and yet making the same point, should give the government pause in its relentless drive towards granting banking licences to industrialists. Ever since it was announced in the Budget by then finance minister Pranab Mukherjee in February 2010, the government has pushed hard for it, against an obviously unwilling RBI, the apex regulator for the sector, and in spite of prevailing expert opinion. Banking is not like any other sector — the conflicts of interest that can be set up in it have the potential to destabilise the entire economy and eventually cost taxpayers a fortune...........
RBI banks on private players
........the very basics of economics and policy standards are changing and the RBI may want to look at its own guidelines carefully once more to ensure that no corporate major gets any kind of financial leeway as far as the banking sector is concerned. India has a robust banking sector and no major history of bank failure. The RBI must do everything to ensure that the no one can jeopardise its clean record..............
Rs 25-crore criterion only for deposit-taking NBFCs
......“Ideally, we want all NBFCs to only be financial entities. However, that is not possible. Hence we have to bring in regulations to monitor such NBFCs,” Sinha added. He also said that to ascertain risks of NBFCs better, the RBI has raised the tier-I capital requirement to 12 per cent for certain NBFCs (such as capitive NBFCs, those involved in real estate, commodities and capital markets). For other NBFCs it has been kept at 10 per cent,........
Mr C, don’t mess with gold; it’s HER social security
.......It would be best is to create a regulator for non-bank finance companies, including money lenders, since neither the finance ministry nor RBI has any clue on this sector. If they had any sense, they would be taking a lead in the global gold markets since we buy more than 30 percent of the global output.............
Gold loan firms to roll out CBS for uniform operations
.....A working group set up by the Reserve Bank of India (RBI) under the chairmanship of K U B Rao to look into the issues related to gold import and gold NBFCs said in its draft report: “The practices followed by the NBFCs in gold loan business need to be subjected to scrutiny in order to make this organised financing process free from vagueness, which otherwise leads to exploitation of customers.”............
FINMIN WANTS TO EXTEND INDIAN BANKS’ ASSOCIATION’S UMARJI’S TERM
MR
Umarji, chief legal advisor at IBA, is set to complete his term in
March this year. But finance ministry is keen that Umarji gets an
extension since he is a hands-on person on banking laws. Also, finmin
would want to gain from Umarji’s expertise, given that the government
would like to pass as many reforms before the next election. A former
RBI ED and framed Sarfaesi Act, he also helped RBI in drafting the
recently-amended Banking Regulation Act.
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BANKS GIVE IPADS TO DGM AND ABOVE TO CONNECT WITH GENNEXT
Most
PSBs are becoming tech savvy. Many have started distributing iPads to
senior officials in the hope that they would be better positioned to
relate with young customers. SBI has given iPads to all officers who are
of DGM rank and above, while BoI and IOB have given it to all their GMs
and above. Atleast now PSU bankers have something to look forward to.
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Banks rush for state government securities on signs of cash easing
......The bank official explained that the excess holdings gave additional cushion to raise cash from RBI through the repurchase window. Banks excess holdings of 9 per cent gave them leeway to borrow at least Rs five lakh crore from RBI for meeting their cash conditions. Borrowings from RBI were also seen as a low cost route of funding, since it was not treated as part of the net demand and time liabilities, unlike deposits.......
Goa office of Directorate of Enforcement to be upgraded
.......In the past, following criticism in the State Legislature, the then Congress-led government constituted a committee under the then State Joint Secretary (Debt Management) for examining the cases related to acquisition of immovable property by foreign nationals. The committee took up 480 cases of which after finding prima facie violations, nearly 300 were forwarded to the Directorate of Enforcement for action while some were moved to RBI.
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