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.
Friday, February 15, 2013
Need for uniform security standards to check card fraud: H R Khan
Incentivise usage of electronic payment systems before dis-incentivising usage of cheques
......A discussion paper on “Dis-incentivising Issuance and Usage of Cheques” (available for comments up to 28 February 2013), put up by the Reserve Bank of India (RBI) on its website, is a classic example of putting the cart before the horse. Because there are problems galore in the electronic payment system, and even before stabilising this, the RBI wants to dispense with the cheque system. If the same objective of reducing usage of cheques can be achieved by incentivising the usage of electronic payments, why not try this positive method, which has more acceptability and receptivity, instead of going in a negative way for achieving the same results?.........
RBI: Retail payment innovations a challenge
.......“The retail payment systems today are dominated by continuous innovations, aided by breakthroughs in technology. This has brought immense benefits, in terms of new products and delivery channels. At the same time, this has engendered concerns for regulators across the globe,” ..........
My View on "Islamic Banking – Participatory, Equality & Indian law"
Thanks for posting a very impressive and unbiased article on the subject of Islamic Banking. I hope you would be providing more of such material in future.As I have been a PG Diploma holder in Islamic Banking and Finance from an Institute at Hyderabad, I find this article very interesting
- A F Nqaqvi, Banking Obudsman (MP & CG)
RBI, backdoor financier? - A.Seshan
.....For a long time, the Centre had unlimited access to the spigot of money creation by RBI. Its excess borrowings from the central bank were automatically transformed into treasury bills owned by the latter. This arrangement was supposed to be terminated after an agreement between RBI and the Centre under which the Ways and Means Advances System (WAMA) was devised with penalties and .......
Gentle soul no more.........
- Arthur J. Lewis. Secretary,
RBI EMP. LAXMAN CHS.
LTD.
I.C. COLONY, LINK ROAD,
BORIVILI (WEST), MUMBAI-400
103
'Decline in inflation is encouraging'
.....“Inflation is still above the RBI’s comfort level, and it should come down further. The figures reflect that inflation is coming down. This is definitely encouraging,” said Montek Singh Ahluwalia, Planning Commission Deputy Chairman, here on Thursday. Worryingly high inflation has been a cause for the Reserve Bank of India’s reluctance to cut interest rates in order to stimulate investment and spending........
Inflation falls. That’s bad news
......................To be sure, one can expect the RBI Governor Duvvuri Subbarao to cut rates to revive the economy when he reviews monetary policy in mid-March. He may even surprise with a pre-policy cut. “But,” said said an economist with a foreign bank who did not wish to be named, “for rate cuts to have a meaningful impact on the economy, it takes a huge lag of 6 months or more.” It’s not a very comforting picture, in the interim.
RBI allows Apollo Tyres to raise FII investment limit to 40 per cent
......RBI today notified that Apollo Tyres has passed resolutions at the board of director's level and a special resolution by the shareholders, to enhance the limit for purchase of its equity shares and convertible debentures by FII through primary market and stock exchanges, under the Portfolio Investment Scheme up to 40 per cent of paid up capital," the bank said in a release...........
Time to act
....This brings down the curtains on the two illegal companies that raised huge amounts of public deposits without regulatory nod. Sahara was once pulled up in 2008 when the Reserve Bank of India (RBI) ordered it to wind up Sahara India Financial Corporation (SIFC), another company from the Sahara stable. The group subsequently claimed that the RBI killed their financial inclusion-based residual non-banking finance company (RNBFC) activities and gave them seven years to repay depositors, which, according to Sahara, was cleared in four. Interestingly, in June 2011, Sebi ordered its two other companies — SIREC and SHIC — to repay the money raised from fraudulently issued optionally fully convertible debentures. ............
Banks are skating on thin ice
.....Rising NPAs, along with the other systemic deteriorations, will bring down the capital adequacy, exacerbate the need for capital and impair the capacity and confidence to lend. As capital adequacy of banks declines, capital requirements will be higher, in addition to the need for regulatory compliance. This will impair lending growth causing a further weakening of an already anemic macro growth. RBI may like to hide all this under the garb of an adequate overall sector-wide capital adequacy ratio of 14%. This is neither correct nor sustainable. The average figure is very misleading here. Indeed, it has no meaning because......
Subbarao will keep a sharp eye on Chidambaram's budget
Reserve Bank of India (RBI) Governor Duvvuri Subbarao has all along talked about the need for a sustained decline in inflation and a faster and more credible road-map for fiscal consolidation, especially of the fiscal and current account deficits. That was the prerequisite to slash interest rates. ....................................
Infuse more capital, allow inflation-linked bonds
....Suggestions made by an RBI group on gold-backed financial products, which could include allowing banks to offer gold deposits in demat form and developing the gold loan market, could be the way forward. Introduction of inflation-linked bonds can also help in curtailing the gold demand. Considering that the investment needs of the economy are large in comparison to the existing financing capacity of the banking and non-banking sectors, combined with greater capital requirements for banks under Basel III norms, there is a need for more capital into the banking system. ......
Libor fallout: RBI takes a re-look at Mibor
..............The issue was also discussed at a seminar organised by the Fixed Income Money Market and Derivatives Association of India (Fimmda) and the Primary Dealers Association of India in the first week of February in Sri Lankan capital of Colombo. RBI should probably take up a role in fixing the Mibor so that a Libor fixing scandal like situation can be avoided with the Mibor,”..........
Financial inclusion stumbles on 'last-mile' gap
......Initially, the BC model was rolled out bilaterally, with banks appointing their BCs all over the country, under contractual terms. The BCs made all point-of-service investments, in kiosks and human interfaces, and had autonomy in selecting the technology platforms. Over time, this resulted in a diversity of captive networks, which remained largely non-interoperable and disconnected, thus preventing any benefits of pooling and scale. A fundamental challenge of the BC model has been the watered-down service menu: no passbook facilities, no provisions for joint account opening, minimum age for account holders, which created the impression of a discounted second-grade service compared to the real bank interface. BC staffers also tend to be paid less than bank employees, which results in low quality and high staff turnover........
Why the rupee remains a concern
....This exchange rate policy is advisable in ideal conditions, but the present conditions are a lot different from those that find mention in the textbooks. The exchange rate policy, therefore, needs a critical examination. Writing in The Hindu Business Line on 24 January, former Deputy Governor of RBI S.S.Tarapore noted: “With the inflation rate persistently above that in major industrial countries, the rupee is clearly overvalued. Adjusting for inflation rate differentials the present nominal dollar-rupee rate............
My View on "Chidu-nomics - the threat within":
Those who are in charge of policy formulation for financial sector will do well to keep in the back of their mind the following observation made by Sukhmoy Chakravarty in 1986: “In a mixed developing economy, there is considerable scope for direct controls for matters which pertain to basic necessities of life. But equally clearly there are major areas of economic life where a variety of indirect methods of regulation may be usefully deployed. I believe that monetary policy is only one amongst these methods of regulations. It is somewhat simple minded and may therefore be misleading to expect a solution to India’s most pressing problems of growth and poverty from any monetary policy, howsoever judiciously devised. But it is even more dangerous to indulge in the feeling that ‘easy credit, low interest rate’ policy contains the major answer to India’s pressing problems of growth, poverty and self-reliance.”(Excerpted from Sir Purushotamdas Thakurdas Memorial Lecture,1986) Sixteen years have not in any way reduced the relevance of the above statement.
- M.G.Warrier
Budget 2013: UPA's fiscal mismanagement has weakened India's economy
.....The political difficulty in rolling back what was meant to be temporary spending to boost a troubled economy made it a long-term challenge to manage the deficit. Former RBI governor Y.V. Reddy highlights the distinction between the structural and cyclical aspects of the fiscal deficit. In his book Economic Policies and India's Reform Agenda, he suggests the stimulus package has become a structural problem. "There is, perhaps, a structural deterioration in the fiscal situation," he writes. "The nature of stimulus has been such that the consumption expenditure and the committed expenditure have increased." In a recent interview with Business Today, he emphasised that a stimulus was something that would be withdrawn. He said: "You have to make a distinction between stimulus [and structural issues] - something you can do now and remove in normal circumstances.".....
Call to approve microfinance institutions bill at the earliest
.......The RBI has left it to the discretion of bankers to fix interest rates, but was keen to ensure that customers' interests were not compromised, said R Sandeep, DGM (rural planning & credit), RBI. Women, who availed loans from micro finance institutions, shared their success stories during the convention.
RBI makes gold deposit scheme more attractive
....It further said the banks would not be required to obtain prior approval of RBI for introducing the scheme. However, they would be required to inform the details of the scheme, including name of branches operating the scheme, to the central bank.......
Will rise in 2013: World Gold Council
......On the report by the committee appointed by RBI to check gold consumption, Mr. Grubb said, “The report is a sober assessment of the Indian gold market. It has recognized gold as an essential asset in the Indian context and the issue is of how to mobilize idle reserves and put it to use. There have been three hikes in import duty and I do not foresee any more action.”.....
RBI tweaks gold deposit scheme provisions
....According to the estimates of K U B Rao Committee, about 20,000 tonnes of gold is lying idle with people. The central bank wants to channelise the idle gold for productive purposes and also check unbridled gold imports. From now on, banks will not need to obtain prior approval from RBI to introduce the scheme. However, they would be required to inform the central bank of details such as the names of the branches that operate the scheme......
RBI cancels licence of Abhinav Sahakari Bank
The Reserve Bank of India (RBI) in an order dated February 1, 2013 has cancelled the licence of Abhinav Sahakari Bank Ltd in Rahuri, Ahmednagar, Maharashtra .................
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Finmin clamps down on Irda
.....Even the Reserve Bank of India had expressed concerns about banks’ role in distributing insurance products under the proposed framework. “The new person who assumes office will have to be responsible for the newly implemented norms and it is fair enough to allow him to review the impact on all stakeholders,” said an industry source. It’s also believed that the post of member actuary at Irda will be filled after the new chairman assumes office. Currently, Purnima Gupta (Appointed actuary at Reliance Life) and Meena Kumari (deputy director – actuarial, Irda) are in the reckoning for the actuary job.........
A higher exemption limit is the need of the hour
......With a constant decline in the percentage of individual savings, it’s expected that there would be an increase in the exemption limit available under section 80C to `3 lakh from the current limit of `1 lakh, to boost savings. This can be done by introducing a separate limit of `2 lakh for specified long-term investments such as life insurance and annuity, investments in Rajiv Gandhi Equity Savings Scheme and employee contribution to New Pension Scheme, within the ambit of section 80C.......
CM seeks banks help for state glagship projects
......Although the ratio of priority sector advances to total advances in Mizoram as of March 2012 was well above the stipulated 40 percent, percentage of agriculture advances was much below the RBI mandated target of 18 percent, the CM pointed out. He requested the banks to take proactive steps in devising ingenious ways and adopting innovative strategies to step up the credit flow to priority sector, especially to agriculture sector in the state. The focus of this year's state credit seminar was on "development of rural infrastructure for accelerating inclusive growth." .......
SBI opens e-corners in Kolkata
State Bank of India, Kolkata Circle on Thursday opened five e-corners in various parts of the city. The e-corners will have various facilities including ATM, cash deposit machines, self service kiosk (for passbook printing, fund transfer, NEFT, account statement, cheque book request, bill payments etc) and coin vending machine, said a bank statement..........
Thursday, February 14, 2013
Kudos to Mr Subbarao
India’s inflation puzzle
...........A couple of weeks ago, Deepak Mohanty, and Executive Director of RBI, gave a speech in which he tackled India’s inflation puzzle. I will outline what he said, and then assess the arguments. Mr Mohanty first pointed out that India’s recent inflation surge and its persistence did not line up well with either its own history or what has been happening contemporaneously in the rest of the world.............
RBI sets up panel to study exporters’ concerns
Committee will be chaired by RBI Executive Director G. Padmanabhan
The Reserve Bank of India (RBI) on Wednesday set up a technical committee to study issues related to difficulties being faced by exporters with regard to the availability of credit and transaction costs, among other areas..........
Long bankers' queue for Lakshmi Vilas Bank CEO
.......The applicants include senior executives from the State Bank of India, a former official of the Reserve Bank of India, and business heads of ICICI Bank, HDFC Bank, Axis Bank, Citibank and Hongkong and Shanghai Banking Corp. The CEO’s post in the Tamil Nadu-based private bank has been vacant after P R Somasundaram resigned from the position late November last year. He had left the bank due to “personal reasons”.......
Islamic Banking – Participatory, Equality & Indian law
.....Had RBI as financial engineer studied financial products used under Islamic banking system, might have developed new secular financial products with equally attractive and acceptable to Indian Muslims as well. But the internal working group of RBI constituted for this purpose sensed mysticism in Islamic banking with inextricable influence of religious doctrines, and delineated the principles and entire gamut of financial products used in Islamic banking for better understanding. So the report presented by that working groups mostly dealt about legal hurdles disallowing Islamic theology in present banking system; and did not focus on evaluating the scope of alternative financial products potential for financial inclusion.........
Banks pump back counterfeit notes to skirt trouble
......A police officer said certain banks were indirectly aiding counterfeiters by pumping the fake notes they catch into ATMs. “They have nothing to gain by alerting the police about the counterfeits. We have information that at least some banks put fake notes into their ATMs. From there some unsuspecting man on the street gets it,” ............
Tortoise treatment
Co-operative banks account for a minuscule proportion of the country’s total banking business and nothing reflects this more than the slower-than-tortoise pace at which the Reserve Bank of India (RBI) sends them orders............
The RBI tightens up
.............. In the short run, the end of regulatory forbearance may lead to an even larger gap between the valuations of private sector banks and those of PSBs. But it is the only road to a healthy recapitalisation of the banking sector.
India Inc and the Big Bank theories
The Reserve Bank of India (RBI) appeared un-consulted when Pranab Mukherjee, the then finance minister, invited new players to set up banks in his Budget speech in February 2010. It surprised many in the central bank because consolidation in the banking sector was the most debated topic in those days. Now, three years on, it is more or less certain that a new set...........
Financial markets can expand only if we tackle financial inclusion first
....."Though Financial Inclusion has remained a national agenda for a fairly long time, as reflected in initiatives such as the co-operative movement, bank nationalization, lead bank scheme, setting up of RRBs, etc., the progress has been nothing to write home about. Why has this been the state of affairs in our country where banking, in some formal way, has been in existence for more than 200 years; where we have several banks which have been in existence for more than 100 years,".........
This chart shows how FM stole his own thunder before Budget
.............“Focus will now be on Stability, Credibility on fiscal consolidation and Reform intent in order to reposition India as an attractive investment destination,” the report says. But as the RBI’s recent monetary policy shows, the real challenges lie ahead. The current account deficit is likely to get worse in the third quarter, and if the fourth quarter does not show significant improvement, the RBI will again have to be cautious on rate cuts............
PSU banks likely to get Rs 20,000 cr fund infusion in next fiscal
.....The RBI has extended the rollout date for Basel III by three months to April, 1, 2013. During the current fiscal, the centre has approved infusion of Rs 12,517 crore in around 10 state- owned banks. It had infused about Rs 20,117 crore in public sector banks during 2010- 11, and Rs 12,000 crore in 2011- 12..........
Small rate cuts do not help you save much
..But how much of a difference would this make to equated monthly instalment (EMI) or the total interest payout for the entire tenor? Numbers show that it doesn’t make a huge difference if the loan amount is less. For higher loan amounts, the saving is a little higher.........
Banking Taken a Hit? Yes. Is It Cause for Alarm? No
.....Today, it is a classic scenario where you have declining industrial production, you have declining top line inflation, you have declining core inflation, you have high consumer inflation no doubt, which is a supply side issue, and you have some shortage of money supply. In this situation, dynamic growth seems to get a little heavier. And that is what we are saying, our recommendation is a tough one, it is for the Reserve Bank to decide but we would like to see maybe a 50 basis point cut in the repo rate and a 75 to 100 basis point cut in cash reserve ratio. It would not only change the sentiment, it will bring down interest rates, and will give a fillip to consumer demand. ........
Lot for the financial sector happening on the sidelines of RBI guidelines
Lot for the financial sector has been happening on the sidelines in the form of the RBI guidelines that keep on coming from time to time whether it is for the NBFCs, for microfinance and gold loan companies.....
Fake notes via Bengal 'the best'
.....Experts are worried because producers of the fake notes routed through Bengal have managed to replicate all 12 "overt" security features of genuine notes with a scary degree of accuracy. "The paper and ink used are of a very high quality too, making it tough even for experts to detect the fakes," an RBI official who did not want to be named said on Wednesday........
‘Pakistan Security Press ink used for fake notes’
The High Court was informed on Tuesday that ink from Pakistan Security Press is being used for printing fake currency notes in the state. State Public Prosecutor S Dorairaj submitted before Justice K N Keshavanarayana that Sampangiramanagar police recovered fake currency notes to the tune of `30 lakh and.....
Overseas exchanges a fertile ground for fake note circulation
......Though the Reserve Bank of India insists that the currency notes of denomination of 100 and above, circulated by banks, must go through mandatory sorting by machine, the guideline is not adhered to by several banks. RBI has devised a system whereby the currency notes could be checked at the branches or at the currency chest, a regional currency management set-up, operated at a particular office where currency notes are received from various branches. Even if one branch fails to identify fake currency, the machine at the currency chest can detect it.......
Curbing gold imports won’thelp trim trade gap: Sharma
Increasing the import duty on gold alone will not help bridge the trade deficit, Commerce Minister Anand Sharma said on Wednesday, even as the Finance Ministry and the Reserve Bank of India have been taking steps to discourage imports of the precious metal..........
घर की तिजोरी में रखे ‘सोने’ पर RBI की पैनी नजर
........इसके तहत घरों मे बिना इस्तेमाल के पडे सोने को आय के स्रोत मे बदलने के लिए एक स्वर्ण बैंक के गठन की योजना भी बनायी जा रही है। उसने सरकार को भेजे सुझाव में बैंको को उनके द्वारा बेचे गए सोने के सिक्कों की वापस खरीद का अधिकार दिए जाने की बात भी कही है। आरबीआई ने सोने से जुडे चार प्रकार के उत्पादो को बाजार मे लाने का सुझाव दिया है। इनमे गोल्ड डिपाजिट स्कीम, गोल्ड लिंक्ड एकाउंट, गोल्ड एक्यूमलेशन प्लान और गोल्ड पेशन प्लान शामिल है। हालांकि ऐसी किसी भी योजना मे निवेशको को बैकों में रखे जाने वाला उनका सोना वापिस नहीं मिलने वाला है। ...........
Is my credit card safe?
.........On 8 February, Reserve Bank of India (RBI) Deputy Governor Anand Sinha told news agency Press Trust of India in Mumbai that instances of credit card fraud being reported were “of high magnitude”. “We have to be alert,” he added. Various explanations have been proffered for the increase in instances of card fraud, including the fact that most overseas websites do not insist on either CVV or the additional “Secure” layer. “In India, while all domestic transactions are authenticated through the Secure protocol, as per an RBI mandate, many international merchants do not use the Secure protocol for ‘card not present’ transactions,” said an HSBC spokesperson. None of these explanations is entirely satisfactory and experts say the current situation reflects the inability of card issuers, banks, the regulator, and merchants to deal with card fraud. No one is safe...............
Planning for retirement through pension plans?
Among a myriad of financial goals that a person has, retirement perhaps is the most important and long term in nature. No wonder, insurance companies come up with advertisements that harp on how pension plans help create a good retirement kitty. But, even if you start early, pension plans may not give the best returns................
Wednesday, February 13, 2013
Toothless tigers, wounded elephants
......Yet the similes abound. Three months after the Wall Street crisis, The Economist of London was calling India “An Elephant, not a Tiger”. In 2011, hoping to resurrect India in the eyes of investors, RBI Governor D. Subbarao in 2011 spoke of “Rejigging the elephant dance.” Mixing metaphors merrily, the Governor reminded the audience: “But the elephant dance got interrupted by the ‘zoo party’ of the global financial crisis and to get it back on course, we need to rejig the dance.” We now have RBI Deputy Governor K.C. Chakrabarty titling his speech: “Transit Path for Indian Economy: Six Steps for Transforming an Elephant into a Tiger.”........
Bank credit not fundamental right, says RBI deputy guv
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| “You may open bank accounts, you may provide some remittance facilities, you may also provide some emergency overdraft or consumption credit. But, bank credit per se cannot be a fundamental right,” |
Banking as a fundamental right of the people ! - K C Chakrabarty
..............Having said that, I would admit that I have come here with a vested interest. Vested interest in the sense that the subject you have selected for this seminar is very close to my heart; to the hearts of the senior management in the Reserve Bank of India. Also, being in-charge of the administration and human resource in the Reserve Bank of India, which is the regulator of the entire banking system in India, we want a responsible and strong trade union system in the banks because we feel that strong trade unions are a pre-condition for strong managements in the banks. I will come back to this issue a little later. It is, indeed, very heartening to note that the AIBEA has organized this conference on the theme “Meeting the Challenges of the Decade”. In fact, this could very well have been titled “Meeting the Challenges of the Century”. The banking system is unlikely to face the kind of challenges that it has been facing for the last 4–5 years..............
Inclusion drive taking baby steps
........The department of financial services and the Reserve Bank of India count a wider financial reach as one of their top priorities. They have been pushing banks to open more branches in rural India. Other than this, banks have on their hands UPA’s another pet theme – the direct cash transfer project. “All banks have 24 hours in a day and there is some expectation that the RBI has of them, something that the finance ministry has of them, something the cash transfers or Aadhar has of them. They are trying to cope up,”......
Faux Pas in RBI Calendar, 2013
The Bank in its 2013
calendar had wrongly stated that “The Kolkata Town Hall” was built in 1913. The
history of construction of this heritage building dates back to 1813 A.D. Printouts/publications by RBI or on behalf of RBI have high value in the
society and no effort should be spared to make these items error free.
- Kishore Chakraborty, President, All India RBI OERS Pensioners' Forum
What to do when someone palms off a torn note to you
...............The Reserve Bank of India has proper guidelines, namely note refund rules. Banks refund your torn note according to those rules. But, before you show your fist to the banker, keep in mind that getting a refund is not your right. From the RBI’s part, it is just a gracious gesture...............
Cutting bank interest for senior citizens: Can the FM cut the extra 1% given to bank employees?
Senior citizens, who have no voice, are the soft target for the government. However, the government is not bold enough to withdraw the extra interest of 1% given by banks to their present and past employees, as they have the capacity to shut the doors of banks through agitation and strikes........
.................This is the third time in the last six months that the finance ministry has stepped on the toes of the RBI by giving directives to PSBs on issues that is mainly the prerogative of the RBI. While RBI is keeping a steady silence, what is not desirable is dual control of banks, as this will only weaken the powers of the RBI and serve neither the interest of banks nor of the economy..........
Read - Moneylife
Pune CAB's RetireNet......................'
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| 'Stick'ing to the net |
College of Agricultural Banking, Pune is always in the forefront in taking welfare measures for the RBI Retirees. "Interaction with Pensioners" in the month of November is a proud annual event organised by CAB. In last such event on 1st November 2012, Smt Meena Hemchandra, Principal while addressing the retirees gave a pleasant surprise by announcing that CAB would arrange a "Computer Introduction Workshop" for the benefit of retirees. Keeping its words, CAB conducted a one-day "Introductory / Basic Computer Training Class for Retired Staff Members" on 8th February 2013. Eighteen retirees of different ages including ninety year old (in fact young) Shri B.B.Vedak participated enthusiastically. The participants were enthralled at the introduction of the technique to the use of "Internet" for payments of bills, operation of bank accounts, opening of websites with hands-on experience, a new world about which they had only heard. The formidable task of teaching these trainees with ebbing physical and mental abilities was handled with all finesse and patience by the Faculty Members S/Shri Sundar Murthy and Pramod Kumar Patel. All the retirees expressed deep sense of gratitude to the Principal, Faculty Members and the support staff for embarking upon such a novel effort and making excellent arrangements for the same. While thanking the Principal, I look forward to CAB for more such programmes.
- L.V.Kulkarni, Secretary, Reserve Bank Retired Employees' Association, Pune
‘RBI issues revised policy guidelines under micro enterprise’
.....Raghubir Singh, LDO, RBI showed his concern on the financial inclusion programme and emphasized the importance GoI is associating with this programme. He further informed that revised policy guidelines have been issued by RBI under micro-enterprise as defined in the MSMED act. In view of the increase in price index and cost inputs, the limit has been revised, within the overall ceiling of Rs 25 lakh. 40% of the total advances to micro and small enterprise .........
To reduce imports, Security Printing and Minting Corporation of India Ltd, RBI to enhance currency note facility
NASHIK: With an aim to reduce the import of paper for printing currency notes, the Security Printing and Minting Corporation of India Ltd(SPMCIL) is setting up bank note paper manufacturing facilities at Mysore in a joint venture with the Bharatiya Reserve Bank Note Mudran Private Ltd (BRBNMPL), a subsidiary of RBI. The proposed bank note paper unit for manufacturing specially made paper for security printing is expected to start operation by December 2014............
What’s holding us back from using mobile banking?
If data were to be believed, a lot of you would have graduated from using Internet banking to mobile banking already but a lot of us have still not made the leap. Though the number of transactions through mobile banking increased by 64% in the April-December 2012 period, according to data from the Reserve Bank of India (RBI), 67% of overall banking transactions still happens through cash, according to a 2011 Deloitte-Assocham study. So what’s holding us back from using this mode of convenience in a big way?...........
Trade unions call all-India strike for Feb 20, 21
.....The functioning of the power and transport sectors, oil industries, the RBI and other banks, insurance firms, posts and telecommunications, and information technology firms would be affected during the strike by the unions, .......
Goa State Co-op Bank in the dock for ‘fraud’
........It may be recalled that NABARD had over the last five years, written strongly worded letters to the bank for its precarious financial position and for following One Time Settlement Scheme (OTS) that was not in accordance with RBI guidelines.........
Fake notes flood Delhi
..........RBI Governor Dr Duvvuri Subbarao has also expressed his concern over fake currency notes circulating in the country. Speaking in a public outreach programme at Lalpur Karauta village in UP earlier this week he said: "We are facing one more problem and that is of fake currency notes. There are some criminal, unsocial elements who are involved in fraudulent activities. We are also trying to see that the police department is vigilant towards these fraudsters." .................
Now, produce a movie with one rupee only
At a time when headline inflation is close to7%, a rupee may not fetch you much but it will certainly give you a chance to co-produce a movie. You can now contribute as less as one rupee and become a co-producer of Kolkata based filmmaker's independent film―Diamonds In The Sky.............
Lending Rates Need to Come Off for a Rebound
......This buttresses our view that growth is unlikely to bottom out unless lending rates come off. It is for this reason we expect the RBI to continue to ease liquidity via open market operations (OMO) or a 25 basis point cash reserve ratio (CRR) cut on March 19. It should also cut policy rates by another 50 basis points by June. This, in turn, should pull down lending rates by an additional 75 basis points by March 2014, atop the 50-75 basis points cut this fiscal. ...........
ICAI, RBI to soon discuss accounting standards for banking cos
Accounting regulator ICAI will soon hold discussions with the Reserve Bank of India (RBI) on implementation of IFRS standards by banking companies. The Institute of Chartered Accountants of India (ICAI) has also submitted a tentative roadmap for IFRS implementation to the Corporate Affairs Ministry...........
Deepening India’s bond markets
.........The Chakravarty committee of 1984 had recommended HTM only to protect banks from large capital losses on their SLR holdings, in the event of interest rates rising with its recommended move to market rates. Today, we are seeing two-way movement of interest rates. Yet, fears about the impact of removing HTM on bank balance sheets and on government borrowings continue to be voiced. The SLR, as the Narasimham Committee had pointed out, is meant only to satisfy a prudential requirement and not a government financing function. The new Basel III regulations will not allow it to be used for both. RBI Executor Director V.K. Sharma recently noted how a large IRS (interest rate swaps) market has developed, which is, however, dominated by foreign banks. They account for 80 per cent of notional principal amount outstanding here, whereas the public sector banks have barely a 2 per cent market share.......
Chidu-nomics - the threat within
......Two stains on his UPA-I years were liberal use of off-Budget special subsidy bonds to make the official fiscal deficit look better than it was and the infamous farm loan waiver. Also, Mr Chidambaram initially resisted the sage advice of the Reserve Bank of India (RBI) to restrict foreign borrowing by Indian companies. In the end, however, the then RBI Governor Y V Reddy got his way and saved India from a financial earthquake that could have dwarfed the 1991 crisis........
Why Chidu and Subbu do not have much control over fiscal defici
.......What this entire story tells us is that the likes of P Chidambaram and D Subbarao have far lesser control over the Indian economy and the fiscal deficit of the government, their attempts to prove otherwise notwithstanding. So as long as the Western world continues to print money, prices of oil and gold will continue to remain high. Hence, Indians will continue to buy gold and the oil bill will continue to remain high.
New Bank Chiefs’ NPA Obsession seen Eroding Profits
...........“Perhaps bank chairmen want to take tough decisions very early in their tenure so that they can show good results progressively,” ..............
Ill-behaved Indian borrowers will now find it tough to hide from authorities
....... Even some young borrowers, such as students, default, in their first relationship with a bank. Today, gross NPAs in education loans are over seven per cent of advances. As that number is rising, banks are going slow on education loans. Former finance minister Pranab Mukherjee had even proposed a credit guarantee fund to compensate the banks, but it never materialised for lack of budgetary allocation. RBI Deputy Governor K.C. Chakrabarty highlighted the problem of student loan defaults during a lecture at the Noida-based JRE School of Management last year. "I suggest school alumni associations should become active in inculcating ethics and values among students," he said........
Sen Likely to Take Over as NSC Chief
.......The appointment comes at a time when the Central Statistics Office is facing criticism from the finance ministry for supposedly underestimating economic (GDP) growth numbers.............
Tuesday, February 12, 2013
People suffering due to high inflation forces RBI governor D Subbarao to hold rates
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| "I have sympathy with that view (that high interest rates was hurting growth). I am not saying that's an invalid criticism. But I just want to say that their voice is heard, but people who are hurt by inflation - the large majority of the poor - their voice is not heard." |
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