.......The Nayak panel has said that 'regulatory bias' to nudge payment systems towards banks must be resisted and entities like the National Payments Corporation of India must not end up being a 'monopoly by-design.' On RBI's role, the panel has said that RBI cannot be a payment regulator while running payment systems like real time gross settlement (RTGS) and National Electronic Fund Transfer (NEFT) which must be spun out of the central bank's domain. Moreover, it has suggested amendments to the Payment and Settlement Systems law of 2007 so that the board within RBI for regulation and supervision of payments can also include representatives from technology firms and banks that are familiar with the latest technologies. ........
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, March 19, 2013
Banking loopholes
.....................a cheque book couriered to me was returned undelivered wrongly by the courier company with a remark "consignee shifted". This should have put the bank on guard and it should have taken steps to revisit my KYC and re-verify my address. But that did not happen. The ongoing investigations may as well exonerate the banks of any fault in the present revelations. But the way their systems are organised, it may not be too long before another one puts them in a tight spot.
Private banks may lose premium edge
.......A former banking industry official with three decades of experience suggested that a definite impact could be felt if there are strong indications of misconduct at the banks. “The RBI could pass a lot of strictures which will make it difficult for business development. The focus of the business may shift from growth to an in-house clean-up. This could lead to a corresponding fall in growth,” he said, preferring anonymity due to the sensitive nature of the issue............
This bank has no place for gyan
...........It is the story of HDFC Bank, India’s most valuable bank — how the idea of a bank took shape, how it was staffed, how it took its first steps and how it subsequently rose rapidly over the last two decades to the top of the banking charts. The book has many colourful vignettes that come alive in the engaging style used by Tamal...........
Lessons from Sebi-Sahara
......... As if it hasn’t been audacious enough, the group has, through an advertisement, challenged the regulator to a television debate and complained that the Sebi chief hasn’t given it an audience. Such histrionics should be ignored. Meanwhile, Sebi needs to be further empowered so that it has the right to recover funds, much like the CCI or the Income Tax authorties...........
Gold is not the villain
Gold is not the villain the Indian government portrays it to be. Rather, it's the low public acceptance of the state's right to tax people that pushes Indians towards the perceived safety of the "barbaric metal", as economist John Maynard Keynes called it...............
RBI launches study on banks active in selling gold coins
......"RBI has undertaken a thematic study in respect of banks that are active in selling gold coins or wealth management products to examine whether there are systemic issues and to plug deficiencies and legal loop-holes, if any,"........
Black methods
...........The staff of three top private banks across the country were shown as too willing to accommodate the demand to sanitise black money and to proactively facilitate it. It shows that the practice is not limited to the rare rogue manager but has come to be part of normal banking operations. It is not difficult to infer that other banks may be equally involved, though private banks may be in it to a much greater extent than others...............
India Infoline to apply for banking license
........"As an NBFC one cant grow beyond a point. So the growth path is to
convert into a bank. It will give us access to low cost resources and
improve our ability to tap the tier five and six cities,"......
Insurance sales by banks to come under RBI lens
Reserve Bank of India may review the sales strategy employed by banks to encourage employees sell life insurance policies. Incentives for sales has come centre stage with the Cobrapost sting highlighting how front office staff takes extreme risks to sell a life policy..........
Tax-saving and more
Tax-saving products play an important part in financial planning. While some products deliver fixed returns, equity-linked saving schemes (ELSS) have twin benefits. Besides providing tax-shelter, they offer reasonable returns (of course with risk). Since a major portion of the corpus is invested in equity and equity-related products, there is a risk element...............
Capital raising woes may make small Indian banks takeover targets: S&P
...........Some smaller banks could also become takeover targets, which could result in consolidation of a fragmented sector, said Deepali Seth, S&P’s credit analyst. The biggest challenge for the sector is the state of Indian public finances. “The government’s large fiscal deficit will limit its ability to inject capital into government-owned banks, which currently have less capital adequacy than the private and foreign banks operating in India,”........
Banks may need Rs 2.6 lakh cr more capital for Basel III: S&P
....."We estimate Indian banks will require minimum additional capital of about Rs 69,100 crore to meet the Reserve Bank of India's 8 percent requirement for the common equity tier 1 and capital conservation buffer ratio," it said. "The additional requirement would go up to Rs 2.6 lakh crore given a tendency for banks to hold higher-than-minimum capital and the limited market for hybrid instruments in India," the rating agency added.....
Why an SBI PO Job is a Bankable Asset
..........“Job
security is naturally a big factor. Also, despite being a government
organisation, SBI operates in a professional manner. Probationary
officer positions are not just empowered but very well-paid as well,”
added Rao. In the ongoing economic slowdown, with even IIM
placements affected and the finance sector hit hard, jobs in public
sector banks (PSBs), and particularly in SBI, are looking more
attractive than ever before..........
Farmers' loan-waiver plans to be reviewed
PUNE: The regional office of the National Bank for Agriculture and Rural Development (Nabard), on Monday, asked all district central cooperative (DCC) banks in the state to re-audit the proposal documents of beneficiaries of the Rs 52,000 crore agricultural relief and debt waiver scheme of 2008. The decision was taken following directives from the Union finance ministry and the Reserve Bank of India..........
Jamshedpur MP pitches for exclusive bank for tribals
...."I believe that a dedicated bank (with predominantly tribal employees) for people of the tribal community will play a significant role in their speedy growth,.........
Islamic banking could become available in India
.........Earlier, the Reserve Bank of India (RBI) had come out against the introduction of Islamic banking, saying that current legislation did not provide for a twin structure. RBI Governor D. Subbarao told reporters in November that "other options" may be considered to bring Muslims into the banking system. The bank has since rethought its position, according to Khan, the minority affairs minister. "There are a host of mechanisms available for channelising the savings of Muslims. Sharia-based banking is very scientific and the RBI has modified its earlier stand," he told...........
Monday, March 18, 2013
Subbarao to Meet Bankers to Discuss Risk Supervision
MUMBAI: Reserve Bank of India Governor Duvvuri Subbarao will meet select bank chief executives on Thursday to discuss risk-based supervision in banks, with recent sting operations on some private banks providing the backdrop. The Governor will be joined by former Deputy Governor Usha Thorat in Mumbai for a half-day workshop that will explore methods by which banking supervision could be strengthened, said two people familiar with the agenda.......
Remember Caesar's wife
.....As the banking supervisor, the Reserve Bank of India (RBI) needs to look at these claims from the perspective of supervisory efficiency. If, in fact, this was a regular practice by the banks concerned, should it not have come to the notice of the supervisory process? If it did, was this explicitly communicated to the banks that were found to be indulging in this activity? If it didn't, it suggests a lacuna in the supervisory framework......
Rangarajan Sees Elbow Room for RBI Governor
 |
| The former RBI governor’s statement is significant as he had backed the central bank when it refused to cut rates for most of last year, despite pressure from the government. |
Both hands now
........And since much of the RBI’s actions are predicated on the belief the government is serious about fiscal consolidation, the government’s commitment to a Food Security Bill continues to be worrying, more so given the level of provisioning the Budget has done for food subsidies. Which is why a 25 bps rate cut on Tuesday looks more likely than a 50 bps one.
RBI's Sinha to offer L&T top brass governance tips
MUMBAI: Reserve Bank of India (RBI) Deputy Governor Anand Sinha will address the top brass of engineering conglomerate Larsen & Toubro (L&T) on governance issues in banking, cementing the seriousness of the group's desire to own a bank. Sinha will address the executives on "governance in banks and other financial institutions", says the information posted on RBI's website.......
Read - ET
RBI conducts outreach programme in Nagaland
The Reserve Bank of India conducted a Financial Outreach Programme at Mhainamtsi Village in Peren District today. Addressing as the Chief Guest R. Gandhi, Executive Director, Reserve Bank of India said that during the past few years RBI has been consistently making responsibility to visit villages to spread awareness about the importance of financial inclusion and availability of financial services and products...........
RBI Recruitment 50 Posts of Meritorious Sports persons / Quota 2013
Reserve Bank of India Invites applications from interested Meritorious Sports persons for the following Posts :
RBI should cut interest rates: SBI chairman
 |
| "At present, the CRR is 4 per cent. It should be reduced to 3.5 per cent and the repo rate, which is at 7.75 per cent, should be reduced to 7.25 per cent. This would result in lowering of interest rates on all loans, which would boost the economy," |
Policy pointers
.....The Finance Minister has made it very clear that having budgeted for a reduction in the fiscal deficit, thus delivering on his promise to keep it within reasonable limits, he expects the RBI to ease monetary policy. There need not be a quid pro quo — after all monetary policy has to take note of inflation challenges, but such has been the impact of the budget messages, backed, as usual, by some strong lobbying that the RBI will have to reduce the policy rate by at least 0.25 percentage points.......
RBI credit policy: Will Mint Street and Dalal Street unite to sustain FII flows?
......The expectation is that the reduction in the fiscal deficit creates conditions for the RBI to cut interest rates and that this will revive private investment. However, as the RBI has pointed out repeatedly, high interest rates are not the principal deterrent to investment today. The real weighted average lending rate in 2011-12 of 3.8% was way below the average of 7% in the boom period 2004-08..........
RBI's largesse may spark rally
......If RBI doesn't cut at all, the market will crash. If RBI does cut by a minimum, the market will lose some ground or, may be, remain, unaffected. If RBI does gamble on kick-starting growth and makes a larger cut of 0.5 per cent, there will be a rally. If Subbarao believes a big cut makes sense, he will probably wait for the next policy review, in April, when there are more data. ......
RBI action: Toss-up between pause and 25 bps cut
........Clearly there is space for monetary policy easing, analysts said. Reasons: Fiscal adjustment is underway with significant reduction in deficit with credible measures and assumptions; also borrowing numbers are realistic. Although there is a case for 25 bps cut, analysts are not sure whether the RBI will cut the key repo rate. "We think that it will be a toss-up between a pause and a 25bps cut," said a note from Deutsche Bank...........
Finance Ministry plans 100% e-refunds
......A Permanent Account Number (PAN) linked with the bank account number, just like Aadhar, is integral to the Income Tax department's plans. It wants the central bank to facilitate this ceding so that the scope of the amount being transferred to a wrong account number is eliminated. However, RBI is not comfortable with the idea of making PAN linkage mandatory for electronic transfer of all income tax refunds. .....
Current account deficit solution lies with Reserve Bank of India
........A weaker rupee will not only help exports become competitive but also provide much needed protection to the domestic industries. It will also help shore up customs revenues. Containing inflation may become more difficult but that seems less difficult now than containing the current account deficit. Therefore, the Finance Minister should talk to the Reserve Bank Governor and find ways of tackling the problem of ballooning current account deficit through appropriate foreign exchange management policy rather than look to changes in Foreign Trade Policy.
CAD: The cad behind stunted growth?
.....In fact, we have to realize that compressing the dimensions of CAD is as imperative as financing the CAD. The CAD of 5 per cent of GDP for 2012- 13 stands as a monument to our mismanagement of macroeconomic policy. The credit of spelling out a more appropriate approach to tackle CAD should go to the Reserve Bank of India ( RBI). " With a lower growth, the sustainable level of CAD is now assessed at around 2.5 per cent of GDP. For minimizing the possibility of external shocks further disrupting India's growth sustainability over the next few years, it is important not only to focus on financing of the CAD, but also on compressing the CAD to lower, manageable levels. Otherwise, there are risks to the CAD from both domestic and external events. In the recent period, the CAD has been managed by improving debt inflows.....
My View on "RBI needs to strengthen its balancesheet: Report"
In the context of GOI expectations expressed through showing an expected receipt of Rs44,000 crore as share of profit/dividends from institutions including RBI(Budget 2013-14), this suggestion to take care of RBI's balance sheet strength gains importance. To ensure that temptations of government emanating from external compulsions do not dilute the strength of RBI’s balance sheet, GOI should take measures to augment the share capital of RBI after carrying out appropriate amendments to RBI Act. Till such time RBI should be allowed to retain surplus income by transfer to reserves. Considering the size of its balance sheet and the internal and external pressures on its income generating capabilities, as also the nature of shocks the Bank has to absorb from time to time, the central bank’s reserves need to be augmented on an ongoing basis.
- M.G.Warrier
Why UFBU and IBA Are Silent on Wage Revision ?
It is now almost two weeks since the scheduled meeting between IBA and UFBU to discuss 10th BPS issues, was postponed. It seems none of the parties are keen to fix even the next date for discussions........
Read..........
Read..........
Debit card for cash, credit card for shopping
.....Such a high level of proportion of debit card-based cash withdrawals from ATMs suggests the cards industry is predominantly made up of bank accountholders taking cash out their savings and deposit accounts and then utilising it. It also indicates the level of savings-based cash coming into the economy from ATMs. Credit card-based ATM withdrawals, which would indicate borrowing-based cash coming out of ATMs, are, however, far smaller in value, compared with debit card withdrawals.......
Vijaya Bank gesture to women
BANGALORE, MAR 14:
Vijaya Bank has announced that it will start three all women branches in Delhi, Mumbai, Bangalore. Also for women entrepreneurs, the bank is offering 25 basis point interest concessions in the MSME advance and additionally, 25 per cent of CGTMSE fees in respect of women entrepreneurs will be borne by the bank............
Pvt banks may be brought under financial inclusion
...............RBI has urged the controlling heads of banks to bestow their personal attention for allocation of villages as well as provision of banking services in these villages. They have also been asked to ensure that fresh opening of adequate number of brick and mortar branches in these un-banked villages are factored in their annual branch expansion plan submitted by the bank's head office to RBI..................
RBI says would take action against HSBC based on findings in AFI report
......Replying to a Right to Information (RTI) application filed by Indian Police Service (IPS) officer Amitabh Thakur and social activist Dr Nutan Thakur, the central bank said the matter was examined during its AFI of HSBC. The RBI, however, has refused to share the findings of the AFI report. It said, “The matter was examined during AFI of the bank, however, the findings of the same are received by us in a fiduciary capacity and the disclosure of the same may prejudicially affect the economic interest of the bank (HSBC). Hence the same is exempted from the disclosure in terms of Section 8(1)(d) and (e) of the RTI Act, 2005.”......
Subsidiary route: HSBC says ready to follow RBI norms
......"We will move whichever way the RBI requires us to do," HSBC India Country head Naina Lal Kidwai told PTI on the sidelines of an event here, when asked if the bank will be fine with going the subsidiary way. The comments come in the wake of recent reports that RBI had firmed up its mind on the way forward for foreign banks and would be insisting on them to operate as subsidiaries.........
'Rural wage hike pushing inflation, posing challenge for RBI'
................."Near 20 per cent annual increase in the wage inflation in rural areas is building up price pressures on food articles like cereals, rice and wheat, and is posing a big challenge for the Reserve Bank which is being called upon to cut the policy interest rates on Tuesday," industry body Assocham said.................
The real money laundering
............ If a regulator has to make an affidavit in the Supreme Court that it cannot find thousands of reported investors in two of such schemes — a total absence of KYC norms — how far is that from money laundering? We are not talking chicken feed here. The Cobra Post sting did not put even one rupee in the banking system; the other one has put in Rs 17,400 crore.
Read - IE
SBI officers under lens in fake currency case
.....Three officers of the Dalmianagar branch of State Bank of India (SBI) in Rohtas district have come under the scanner following a complaint lodged by the Reserve Bank of India (RBI) accusing them of depositing fake currency notes. Ram Jatan Paswan, the manager of RBI, Patna, lodged a complaint with Dalmianagar police outpost in Rohtas district on Saturday, alleging that the officials of the bank concerned sent seven fake currency notes to the RBI in Patna last January.........
The govt must bring money launderers into the tax net without further delay
......The banking regulator, RBI, too needs to take stock after ensuring financial inclusion of the poor is not affected. A handful of officials from the banks in question and their group insurance companies who were encouraging money laundering are certainly not the only exceptions in the country. Today, many banks are smart users of banking technology and can easily intercept potential cases of KYC mutilation by any of their branches. We do not know how robust their IT systems are, but we do know that there are far too many other banks in the country where even the IT systems do not exist to detect branch-level offences. RBI, the finance ministry and even the insurance watchdog need to get doubly serious........
ICICI BANK and black Money
..........The Regulators cannot be expected to keep a watch on the individual transactions which is the duty of internal supervisors,accountants and auditors.Financial intelligence Unit can however keep a watch on such high value transactions as banks are expected to report to them...........
Read..........
Read..........
HDFC Bank appoints Deloitte for forensic enquiry
HDFC Bank on Saturday said it has appointed Deloitte Touche Tohmatsu India to conduct an independent forensic enquiry into the allegations that it was one of the three private banks to run a money laundering racket in the country. The private lender has also roped in Amarchand & Mangaldas & Suresh A Shroff & Co to examine if any of its employees violated the bank's code of conduct and ethical standards. The bank's internal department is also probing the matter..........
CobraPost Sting: Don't settle for the small fry, follow money trail
.......If true, the top brass in these banks (not just the officials who presumably are carrying out the mandate of the bank’s top bosses) are as much partners in crime as their customers seeking to launder black money. They have much to answer for. Meanwhile, we need to pause and re-consider: does the country really need to issue more bank licences if this is what some of our most respected banks are doing? What price ‘financial inclusion’?...........
CobraPost Sting : Wake Up Call For RBI and MoF
...... Is it possible that so many officials across India toe the same line without the patronization of top brass? This is not an isolated incident but malpractices are prevalent across country in banks now under scanner. Why ICICI Bank and RBI are shy of taking action against top brass. Delay in action by RBI will mean allowing the corrupt officials to wash out the evidence.............
Banking on unaccounted money in India
.........The scandal, which Cobrapost broke by making one of its scribes pose as a frontman for a politician with two (fictitious) wives who wanted to deposit their surplus cash with the above institutions, has come at a time when the RBI was planning to issue a series of bank licences to private players for the first time in nearly 10 years..........
‘22,000 firms not registered as NBFCs committing financial frauds’
.....“The RBI, as the regulator of NBFCs, should immediately penalise companies that are not registered with them as NBFCs…Unscrupulous companies pose as NBFCs to invest money in MLM schemes with promises of heavy but mathematically improbable returns on investments, particularly when persons originally enrolled in a scheme induce others to join the same scheme. Such schemes bring adverse publicity even for the companies that are engaged in bona fide businesses,” .....
KYC Has Become a Tool for Financial Exclusion
........ Various players in the financial services industry have been crying for a while about how onerous the KYC processes are and how it is keeping away customers. Unfortunately, while that may be true, there’s plenty of anecdotal evidence to suggest that KYC acts as a convenient filter to keep out undesirable customers. Many a time, banks and mutual fund distributors have demanded authentication in excess of what is required............
Read - ET
Comprehensive Suggestions for Restructuring of NMDFC sent to Minority Minister
......... The smaller community based financial institutions and cooperative credit societies who are closer to the community have been suffering due to number of regulatory problems posed by financial regulators like RBI and IRDA because they are not allowed to turn into bank with provision to offer equity deposits and finance. They cannot promote any insurance product without interest. Not any single scheme floated by our Central or State Governments have so far provided financial aid to any community based financial institution or cooperative credit society...........
Fast-track project clearances, banks tell Centre, States
............In its macroeconomic and monetary development document, the Reserve Bank of India has observed that lack of reliable power supply has emerged as a challenge to capacity utilisation by small- and medium-scale industries. The central bank also said that policy uncertainties in areas such as iron ore and coal mining have adversely affected the output of the steel and power industries..........
Tag road loans as secured, RBI told by Finance Ministry
The finance ministry has urged the Reserve Bank of India to consider a change in its stance that treats loans to road projects as unsecured. If the RBI sheds its reluctance to treat highway sector lending as secured loans, credit flows to the fund-starved sector could grow by at least 20%-25%, officials reckon...........
Profitability of Indian banks to dip in FY13: CII Survey
Indian banks are yet to get rid of financial bruises. In 2012-13, their profitability is likely to "decline sharply" due to two reasons: stricter regulatory requirements and stress assets, according to a survey done by Confederation of Indian Industries (CII) taking feedback from 15 lenders including five state-owned, three private sector and seven foreign entities...........
My View on "Wage Revision in Banking Sector"
Dear Shri Warrier,
Your article is ahead of its time i.e; not digestible to the intellectually challenged bureaucracy at this point of time. Rationale wage policy still eludes us. It is learnt that Shri Rajiv Takru , Secretary Financial Services, has agreed to the fact that the pensioners who retired before 2002 may be given 100% neutralisation in DA subject to fact that the entire expenditure would be met from the wage load agreed to by IBA and UNIONS. It means existing employees must agree to share the burden of long back retired employees. Will they agree? Our own D.G.(Admin) says that 70% of wage revision should be on fixed criterion and 30% should be a variable component.How is he going to cajole the UNIONS? IBA has postponed the talks which was scheduled to be held on 4 March indefinitely so as to receive necessary guidance from MoF which itself does not know how to proceed.Are wages to be fixed on the basis of views of semi literate leaders of Unions who have their own axe to grind (More LEVY) to delay the agreement or on the basis of an enlightened policy to attract talent to banking sector? Should not this matter engage the attention of FM Shri Chidambram, RBI GOV, Shri Montek Singh, Shri Raghuraman, Chief Economic Advisor etc; who have stake in India's growth where banking is of paramount importance?
- Sitendra Kumar
Women’s bank will remove prejudices: Chidambaram
.........After inaugurating Canara Bank’s new branch at Siravayal, near Karaikudi on Saturday, Mr Chidambaram said the exclusive bank for women would be started this year with six branches. He said the bank for women is being started not because women do not get financial assistance in other banks, but there has been an inadvertent bias and prejudice against women in lending loans. The proposed bank, he said would realise the needs of women and lend financial assistance for self employment, women empowerment and education............
CIC to hear appeal seeking names of SBI’s defaulters
.... In his second appeal with the CIC, the activist has quoted an earlier CIC decision in the case of P P Kaoppr Vs Reserve Bank of India in which then information commissioner Shailesh Gandhi had directed RBI to disclose names of defaulters of PSU banks on the bank's website.
Now, banks harass wives of alcoholic debtors
............Bailancho Saad is in receipt of some complaints about wives having to face harassment from bank officials when alcoholic husbands default on payments. In one such case it had to approach Porvorim police station to stop bank officials from harassing the wife. In view of a rise in such cases, Bailancho Saad wants to approach the Reserve Bank of India (RBI) to have regulations so that there is proper verification before a loan is sanctioned. "We have prepared the draft," said Martins, who says the drinking problem has reached dangerous proportions in the state and yet there is no intervention by the government.
Good response to all-women bank proposal: FM
Union Finance Minister P Chidambaram today said his budget proposal on setting up the country's first all-women bank has received good all-round response. "Though the Reserve Bank Norm says that initial capital of Rs 500 crore is enough to start a bank, the all-women bank would be set up with an initial capital of Rs 1,000 crore,".........
SBI to open 1,200 branches, 8 overseas offices next fiscal
...........Under the bank's domestic expansion plans, about 100 branches would be opened in West Bengal, Uttar Pradesh, TamilNadu, Maharashtra and Andhra Pradesh. Meanwhile, the state-owned bank is in the process of recruiting 1,500 probationary officers to man its increasing operations. The bank has received 17 lakh applications for these posts..........
Saturday, March 16, 2013
‘All subsidies through electronic mode soon’
RBI official calls for night schools for farmers to help them attain financial literacy
Reserve Bank of India Regional Director A.S. Rao on Friday exhorted people of Sivarampuram, a Financial Inclusion (FI) village of the Syndicate Bank's Tallur branch, to prepare themselves for electronic transfer of all subsidies in the future. Reviewing the progress of the RBI's outreach programme in the sleepy village, he said “We are keen on restricting the use of cheques in view of the scope for their misuse and encouraging in their place electronic transactions. With the click of the mouse, all subsidies by the Union and the State governments will be made through electronic mode soon.”...............RBI: wake up, smell the coffee
.....If that is the reality, and it is, and RBI still persists in citing food inflation as a cause for it not cutting rates, then it would be yet another illogical chink in RBI’s armour. And to be consistently inconsistent, it should raise repo rates in its fight against food inflation. And RBI should offer at least an obfuscation as to why its concerted hiking of interest rates has resulted in a zero impact on CPI inflation, and why it expects “this time to be different”...........
Lend a big hand, RBI
There has rarely been a more apposite hour for Duvvuri Subbarao to do more than the due. Rating agency Standard & Poor’s said on Friday it will be difficult for the government to meet revenue projections due to the economic slowdown, which, it said, risks India’s credit rating. Now that’s one more reason why the RBI must change its discourse and plump for growth..........
Subbarao on the Economy, With Interesting Graphs
Some of the best inferences to future macroeconomic policies are hidden inside the speeches made by key RBI personnel. On March 13, just a day prior to the release of the Feb inflation number, RBI Governor D. Subbarao presented at the London School of Economics. Some notes and takeaways.........
Conflicting signals on rate cut: who's saying what
Next week, the entire focus would be on what Reserve Bank of India Governor D Subbarao does in the review meet on Tuesday, March 19. Though there is confusion about the outcome, it appears that a rate cut is imminent.........
Read | Business Standard
RBI needs to strengthen its balancesheet: Report
The Reserve Bank of India (RBI) in its latest currency and finance report raised several issues that directly conflict with the government's position. Firstly, the RBI has argued that it needs to set aside more reserves to strengthen its balance-sheet and support its market intervention. Secondly, it argues that an independent debt management office at the current juncture of high deficit may be a bad idea. The report on currency and finance is basically a report that is brought out by RBI staff belonging to the Department of Economic and Policy Research. So, in that sense it is not a voice of the Reserve Bank of India (RBI) or what RBI stands for..........
Wage Revision in Banking Sector
......The advantages of a delayed settlement for institutions is buying some time to actually make the enhanced payments and for the trade unions, the comfort of collecting a higher amount of levy from the higher amounts of arrears that will be received by employees. The wage settlement for the current period (November 1, 2012 to October 31, 2017) is likely to be different from the above pattern, as Reserve Bank of India (RBI) has stepped in, to ask public sector banks to start make adequate provisioning against liabilities the banks will have to meet on account of wage revision from November 1, 2012 from January-March, 2013 quarter and IBA has almost committed to reach an agreement with unions on wage revision by March 2014. This is a move in the right direction.............
Read..........
Govt to introduce new ITR form this month
The government will introduce new forms for filing of income tax returns for the assessment year 2013- 14 by the end of this month, Minister of State for Finance S. S. Palanimanickam informed the Lok Sabha. He said the new Income Tax Return ( ITR) form would incorporate the changes introduced in the income tax norms.......
Rs 52,000-cr farm loan waiver: Govt, RBI seek report from banks
The Ministry of Finance and Reserve Bank of India have asked banks to submit a report on the Rs 52,000-crore agricultural relief and debt waiver scheme, 2008............
Cobrapost money-laundering sting on HDFC Bank, ICICI Bank, Axis Bank - full report
.......It took a single reporter equipped with a low-end hidden camera, to unearth these endemic money laundering practices in HDFC Bank, ICICI Bank and Axis Bank: by merely posing as a walk-in customer wanting to launder huge sums of cash for a politician. The interactions between officials of the banks and the reporter clearly brings out the connivance of senior management of these banks in facilitating money laundering and other illegal transactions..........
Black money: pvt banks warn staff of zero tolerance
.....Cobrapost had claimed that its undercover investigation revealed that top three private banks offered money laundering as product to their customers and violated several provisions of the Income Tax Act, Foreign Exchange Management Act (FEMA), Prevention of Money Laundering Act and regulations mandated by the Reserve Bank of India (RBI). While bankers claim that employees are advised not to violate norms at periodic intervals, a fresh set of communication mandating strict adherence to compliance were sent after Cobrapost's allegations on Thursday.......
Will take firm action if needed: Govt on Cobrapost expose
.......On the basis of the preliminary information I have, it showed that this sting has been carried out at various locations by the Cobrapost in different parts, I think different states, different branches and so on. It was pretty explicit from what I saw in passing. So, prima-facie appeared little serious. The Reserve Bank of India (RBI) has got into the act immediately, we have got into the act, we are trying to collect more information. The banks have been contacted by my department as well and the RBI has also contacted them. Unfortunately the Governor and the Deputy Governor both were out of the country. I have spoken to the other Deputy Governors, he spoke to the CGM concerned, the executive directors and they are all on the job............
Money-laundering charge: RBI officers to examine transactions
The Reserve Bank of India plans to send officers from its regional offices to scrutinise transactions at those branches of ICICI Bank, HDFC Bank and Axis Bank where an online magazine captured on camera branch staff allegedly offering to convert clients’ black money into white.............
ICICI suspends 18; Axis removes tainted staff from key roles
"ICICI Bank has suspended 18 employees, pending enquiry," the bank's spokesperson said. The largest private sector lender in the country has also constituted a high-level inquiry committee, to report in two weeks. Axis Bank has removed employees said to have been involved in the racket from operational roles, pending enquiry, and relocated them to the bank's administrative office, sources said..........
Why the Cobra’s sting will not poison any of the banks
If there is one prediction one can make about the CobraPost sting that exposed HDFC Bank, ICICI Bank and Axis Bank managers as being more than willing to help people launder money, it is this: after everything is said and done, more will be said than done. A few low-level bank officials may be hauled over the coals, but the banks themselves will get away scot-free. Consider what the government and the RBI have said so far in what appears to be an open-and-shut case, ............
10 things that the CobraPost sting tells us about banks
.............. what the sting clearly tells us is that everybody who pays income tax in this country is basically an idiot who is being taken for a royal ride. If you have a lot of black money and you are not paying tax on it, chances are somebody out there is waiting for you with a red carpet...........
Money-laundering probe: RBI to see Cobrapost video clips on bank 'frauds'
Intensifying its probe into charges of alleged money-laundering by banks, the Reserve Bank has decided to study video clips that show bank staff encouraging tax evasion and overseas remittances. The investigation will focus on the possible violation of KYC norms even as banks are independently probing any fraud by their staff, said three persons familiar the development............
Is RBI to be Blamed for Money Laundering by ICICI, HDFC and Axis Banks?
.........If the allegations turns out true, the private sector banks would be under the scanner as they could have approached RBI for funds instead of indulging in illegal activities. In the meantime, the RBI should also be blamed as it holds control over all the scheduled banks being the supreme banking authority of the country. It holds the cash reserves of all the scheduled banks; controls the credit operations and banking system through licensing and inspection; and acts as bankers' bank by lending money in times of crisis.........
And thus great institutions are born
........IFMR Trust, which works in other areas of finance as well, has a separate arm for Rural Financial Inclusion. That’s the term that best suits what they do, for they are not a bank, they are not a micro-finance institution, they are not money-lenders in the conventional sense, but they offer several of these products and services to their constituents............
(This link has been sent by Shri Balasubramanian Krishnamurthy for the readers of VITALINFO)
FinMin’s two faces: One unit wants to penalise while the other believes in incentives for the same goal!
........Last month, while speaking at a seminar on “Principles for Financial Market Infrastructures and Innovations in Retail Payment Systems”, Harun R Khan, Deputy Governor, RBI said, “Although, the recent financial crisis did not show any strong evidence of correlation between payment systems and financial stability, going forward, payment systems, both large value and retail, could be the source of instability when the financial transactions moves largely to electronic mode that gives rise to several operational and financial risks.” .......
RBI asks banks to issue debit, credit cards with photo
NEW DELHI: Banks have been advised by Reserve Bank of India (RBI) to consider issuing debit and credit cards with photographs of the cardholders to prevent misuse of stolen cards, the Lok Sabha was informed today.......
APGVB opens 135 ultra small branches
..............“We have set a target of opening another 400 USBs during next fiscal and decided to convert at least 50 USBs into full-pledged brick and mortar branches,”...........
Friday, March 15, 2013
RBI Governor D Subbarao can prove his critics wrong in next policy review
......As he pads up for his last innings at RBI, Subbarao may even come across as a man with greater conviction — like some of his predecessors who reminded you of cricket umpiring legend Dickie Bird, having perfected the art of masking occasional mistakes with confidence and class. He has certainly become wiser: the exit of his imposing deputy — who had to wait till the last moment for a ministry green signal, which never came — was a veiled reminder that someone has to take the blame for failing to heed a blunt message.......
Raghuram Rajan: From financial crisis prophet to next RBI chief?
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