My View on "Reserve Bank of India's powers not to be clipped: ..."

It is little discomforting to comment on the personal views of an eminent Justice on an issue which he had opportunity to examine threadbare. But here, one is compelled to clarify certain misconceptions which are being conveyed to the media. One, Reserve Bank of India all along has been functioning within the mandated contours of responsibility and whenever central bank’s autonomy has surfaced as a contentious issue, it has happened when North Block has attempted to manipulate RBI’s perceptions by pre-emptive tactics through media or otherwise. It is public knowledge that GOI-RBI consultations are an ongoing process and these have never been dependent on the incumbent holding the position of RBI Governor. Recent years have seen RBI working with maximum transparency in policy formulation and implementation. Discussion papers on policy issues, draft guidelines on regulatory measures are notified to invite comments of stake-holders. Just as judiciary cannot function the same way as legislatures function, financial sector regulators may not be able to go by ‘majority vote’ on each issue. 

- M.G.Warrier

Co-operative bank crisis may hit vote politics

......In a meeting with the National Bank for Agricultural and Rural Development (Nabard) last week, the government took stock of the situation. "We have told them that it is an issue between the state government and the Bank. We don't have a role in it. The state government also wanted to know whether the bank needs any capital infusion to meet the required 4% capital adequacy norms of the Reserve Bank of India," said S Padmanabhan, Nabard's chief general manager........

Read -TOI

Economists for bank rate cut but agree CAD a larger problem

The Reserve Bank of India brass today met the economists of several banks, as part of the exercise before the annual review, on May 3, of monetary policy. Several, it appears, favoured a rate cut to re-start the investment cycle..........

Read | Business Standard

Economists bat for rate cuts to boost growth

........Economists' views come more or less in contradiction with the bankers' view who wanted the governor to cut CRR and not repo rate saying given the high cost of deposits a repo cut would not help them cut their lending rates.........

Read - Business Today

Inclusive Monetary Fund

........The IMF makes the comment in a conference call in its paper, Jobs and Growth: Analytical and operational considerations for the Fund, released last week. Deputy Director of IMF Kalpana Kochhar discussing the paper said "considering issues of job creation and inclusive growth will become a standard element of the IMF's surveillance".........

Read - IE

Another scandal to ride through

..........Responding to queries, Finance Minister P Chidambaram said, “Inquiries have been put in motion in respect of the names that have been exposed.” Such pronouncements were made by government spokesmen after information about secret bank accounts of Indians in Switzerland and Liechtenstein came to light but they did not lead to any action. Opening offshore accounts is not a crime but their structures are designed to conceal actual ownership and they are often used for illegal purposes like tax evasion. Interestingly, almost all the Indian accounts uncovered by ICIJ were opened during the economic boom of the last decade.........

Read - The Gulf Today

Raiffeisen Bank International CEO Herbert Stepic returns 2 million euro in pay

..."The amount to be repaid was set at 2 million euros, and I complied with that decision with conviction and transferred the amount to RBI," he said. "I consider this step as a moral obligation towards both the organisation, for which I have been working with great commitment for more than 40 years, as well as its staff members," he said, calling the repayment "my personal contribution to the rigorous cost saving measures" at the bank............

Read - ET

RBI to release Rs 10 bank note bearing rupee symbol

.....The note will also bear the signature of RBI Governor Dr D Subbarao and the year of printing '2013' printed on the obverse side, a RBI release said...........

Read - FE

Three independent members quit Sahara boards

Amid a fierce regulatory battle with capital markets watchdog Sebi, diversified conglomerate Sahara group has seen three independent members exiting from the boards of its various companies. Those having relinquished their association with Sahara group include RBI's former Deputy Governor Amitabha Ghosh, retired Supreme Court judge S Mohan and New India Assurance Company's former Chairman AC Mukherjee...........

Read.......

Banks may need more time to replace debit, credit cards

........“Some banks may find it difficult to meet the deadline. The task involved is enormous, banks have to develop a new platform, test it thoroughly, create new chip-based cards and segregate cards that have been used overseas. In some banks, this process has just started and it will be difficult for them to meet the deadline,” ........

Read | Business Standard

BJP may support RBI’s guidelines for new banks

......Party treasurer and member of Rajya Sabha, Piyush Goyal, had demanded that the Centre should not discriminate against certain sectors of the economy. He had urged the Government and the RBI to look at all sectors with an open mind, while objecting to the provision in the draft guidelines that prohibit companies with 10 per cent stake in real estate from starting a bank. “We are happy that the final guidelines do not have such restrictions. You cannot put restrictions artificially,” Goyal told Business Line. He said draft guidelines reminded the era of licence raj........

Read - HBL

IDBI Bank’s fee income from govt biz doubles in FY13

......“We are proactively encouraging our customers to pay their taxes through us. This is part of our cross-sell activity. “We want to leverage our technology as much as possible to facilitate e-payments to the Central and State Governments. Even non-IDBI customers can pay their taxes through us.” Government business presents two-fold advantage for banks. While banks earn fee income, the funds collected also improve their overall low-cost CASA (current account, savings account) deposits, albeit only for a day. “Any banking relationship is not just an asset relationship. It has to be seen holistically as asset plus liability plus whatever other cross-sell opportunities that a commercial bank can tap,”.......

Read - HBL

NBFCs under lens for margin funding

.....The real problem arises when stocks actually fall. When prices tank in a short-time, NBFCs which have funded investors are forced to sell to recover the money financed.” “This accentuates the fall in stock prices, resulting in near-collapse of some stock.” These days, margin sales by NBFCs are causing frequent cases of instability in the market. At present, deposit-taking NBFCs are regulated by the Reserve Bank of India (RBI), and as far as the non-deposit taking NBFCs are concerned, it is a grey area,......

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

Foreign banks to slow down in India as RBI imposes stiffer rules on lending to priority sectors

.........The new rules take effect in five years. "The regulations are saying we have to go to 40% in five years, while our balance sheets are doubling. We don't think it is either sensible or achievable," ..........

Read - ET

RBI 'uneasy' at sovereign bond offer to foreign investors

.....“In a recent interaction, the central bank had communicated its discomfort in issuing sovereign bonds. It has been observed in the past that small trigger can create volatility in the bond market,” said a senior from a foreign bank. The Reserve Bank of India manages the government’s borrowing programme, ensuring it is conducted smoothly.......

Read | Business Standard

Indian banks going nowhere: Jefferies

......“Over the next 12 months, we believe the fundamentals of the domestic banking sector are unlikely to change much, with tepid loan and deposit growth, range-bound NIMs and weak asset quality,......

Read..........

Finmin aims to halve net bad loans of PSBs

......."Each bank is in a different situation. Though the guidelines will be issued for all banks, there can be some relaxation on implementation for some banks under exceptional circumstances,".............

Read - ET

Mamata to seek moratorium on interest paid by State Govt

.........“The Centre is taking away Rs 40,000 crore as interest, more than the revenue earned by the State, every year. The Reserve Bank of India is cutting the money unilaterally. We are going to meet Prime Minister and Finance Minister,” .............

Read - HBL

India Mortgage Guarantee Corporation to commence operations soon

India Mortgage Guarantee Corporation, a joint venture between the National Housing Board (NHB), Genworth Financial, Asian Development Bank and the International Finance Corporation is expected to commence operations soon. "We have applied for a license to the Reserve Bank of India which is expected to come in soon," RV Verma, chairman and managing director, National Housing Bank said...........

Read - TOI

Rising NPAs, a major concern for financing infra projects: bankers

.....Growing non-performing assets (NPAs) is a major hurdle for providing more finances to infrastructure projects, bankers told Finance Minister P. Chidambaram here on Monday. “We conveyed to the Finance Minister that due to current dispensation regarding NPAs, there are difficulties in providing more finances,” State Bank of India Chairman Pratip Chaudhuri said, while talking to reporters after a meeting the Finance Minister had with bankers and industrialists here..........

Read - The Hindu

RBI set to comb spike in bad loans

......Even as the finance ministry and RBI have directed banks to migrate to the core banking solution and eliminate manual intervention while detecting NPAs in their books, several banks have been found using manual tools while managing bad assets. Manual intervention implies recording of crucial data manually, which leaves room for data mismatch. Such mismatch results in an incorrect assessments of the NPA problem, bankers said.......

Read - Hindustan Times

SBI wages war on wilful defaulters

.......SBI began compiling the wilful defaulters’ list in 1999. It has 1,124 borrowers on the list, with Rs.7,315 crore of loans. Besides sharing the names of the wilful defaulters with the Reserve Bank of India (RBI) and Credit Information Bureau (India) Ltd (Cibil), SBI also plans to publish the photographs of the promoters of the companies in leading newspapers........

Read - Mint

FSLRC’s monetary policy myopia

FSLRC’s recommendations are a serious blow to the independence of the Reserve Bank of India

.........The Financial Sector Legislative Reforms Commission’s (FSLRC’s) recommendations on monetary policy remind one of Gresham’s law that bad money drives out good money. In this case, the FSLRC, which has the laudable objective of enhancing accountability and independence for the Reserve Bank of India (RBI), has in its recommendations made it extremely difficult for RBI to achieve those objectives.......

Read - Mint

Slimming Package - A regulator for the regulators? Where does that leave RBI?

.....Brewing between Mumbai’s Mint Street (the Reserve Bank headquarters) and Delhi’s North Block (the finance ministry) is a turf war of mammoth importance. That’s not just because this finance ministry has been at odds with the central bank over its decision to keep interest rates high to fight inflation. Earlier battles too have gone down in history. For instance, former RBI governor Y.V. Reddy’s steadfast stance against the finance ministry push on capital account convertibility saved India from a worse fate in the 2008 global financial crisis.......

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

RBI has better credibility than government

.....One problem with the seven-member committee, which will replace the RBI in deciding bank rates, is that it will be the government’s hand-picked body. Five members will be representing the government and the rest the RBI. It will not be difficult for the government to fill it with people who will be at its beck and call. As an institution, the RBI commands considerable respect among the people, certainly more than the government.

Read.........

“A Telephone Call Can Change Things”

........Here we have suggested the monetary policy committee. Please understand the country is being run by politicians -- in a democracy it is the job of the people elected to run the country. Now whether capital inflows should be there or not is a political decision. All we are saying is give the remit to the RBI at the beginning, quantify the objectives and do it in consultation with the RBI if needed. And if in the end, the RBI cannot do it, it has to explain its actions. Today RBI does not tell you how its mid-term policy is decided........

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

A matter of clarity

Exporters seeking to write off unrealised export bills will have to first surrender proportionate export incentives and then approach the banks. The Reserve Bank of India (RBI) has issued revised instructions to this effect through a circular dated March 12, 2013. The circular - A P (DIR series) circular No. 88 - further liberalises certain provisions and gives greater flexibility to exporters.............

Read | Business Standard

New bank licences: RBI Governor to brief panel on April 9

.....Reserve Bank of India Governor D. Subbarao will appear before the Parliamentary Standing Committee on Finance on Tuesday. He is likely to inform the panel about the final guidelines for award of new licences in the banking sector.......

Read - HBL

Finance Ministry relaxes govt banks' staff promotion norms

.............The Reserve Bank of India (RBI) has termed the present decade as retirement decade. In the next ten years, government-run banks have to hire in lakhs to fill up retirements and natural attrition, to keep their branches and other operations running. In addition, with Reserve Bank of India’s is set to allow new banks in the country, the public sector banks is likely to be favourite haunting ground for private sector players........................

Read | Business Standard

Govt may Regulate Incentives to Banking Staff

............RBI has a say on the salaries and bonuses of bank CEOs of private and foreign banks, but does not tinker with staff salaries. It may ban banks from selling third-party products though their branches. If banks do not get their act together, they may even be asked to float a 100 per cent subsidiary to sell financial products, said the RBI official. Staff at private and foreign banks are incentivised to sell insurance products and mutual funds, mobilising deposits and trading in bonds and currencies. 

Read - ET

VITALINFO's systematic coverage - Dr.T.V.Gopalakrishnan

Dear Tarambale,
Thank you very much for picking up one of my comments and highlighting in your blog. I have been forwarding your blog to many of my friends and they have all the  appreciation for your efforts and systematically covering up most of the issues on banking and finance. I have forwarded your blog to Mr TCA Srinivasa Raghavan, who has written in the Hindu regarding the Glimpses of oral History of RBI. He has met you also in CAB when  I brought him to introduce Ms Kamala Rajan, then principal. He was part of our team engaged in the writing of Vol IV of RBI History.

With regards,

Dr.T.V.Gopalakrishnan

Banking on Financial Inclusion

............The RBI also seems to be exploring the possibility of enshrining financial inclusion in the Code of Bank’s Commitments to Customers, according to a recent statement by its Deputy Governor KC Chakrabarty. The voluntary code sets minimum standards of banking practices for banks in their public dealings. However, banks have been tentative about expanding operations to previously-unbanked or under-served rural and semi-urban areas so far, due to the low rates of return on investment in personnel and infrastructure. In response to such fears, the recently-released report of the Financial Sector Legislative Reforms Commission (FSLRC) acknowledges that there may be costs incurred by financial service providers in implementing such directions, and recommends that the Central Government reimburse the cost of granting such access to the financial service providers............

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

Tension as RBI does a Cyprus on Amanath Cooperative Bank

....Chaos prevailed as hundreds of customers thronged the bank’s head office in Shivajinagar and roughed up the employees to vent their anger. The employees initially tried to pacify them citing a technical snag but the account holders created a ruckus after they came to know about the RBI directive restricting transactions and blocking deposits. The Shivajinagar police rushed to the spot and managed to bring some order. Later, police officials convened a meeting with the senior bank executives and the account holders, who were assured that the matter would be resolved by Monday.......

Read - The Hindu

Customers needn't fear: Amanath Bank

.........."The RCS told us the RBI rider followed the scrutiny of an old balance sheet of the bank which had a huge amount of NPAs (non-performing assets). But the bank has brought down the NPAs phenomenally. The latest balance sheet reflects this. We'll approach the RBI on Monday with the new balance sheet to convince the central bank about the reduction of NPAs in the current financial year,".............

Read - TOI

Despair, denial, drama, divestments = discount sale

The market has taken a leg down post the Union Budget as investors despair about "nothing happening on the ground". Political drama with the DMK withdrawing support to the government and SP raising political rhetoric made investors distrustful about continuation of reforms. As if that wasn't enough, the Reserve Bank of India's (RBI) denial to cut interest rates aggressively, despite, by its own admission, companies losing pricing power and growth plummeting, added to the fire.....

Read | Business Standard

Anatomy of a probe: Too many suspicious bank accounts not reported

........Apart from these, banks have also let themselves be used by India’s cooperative banks for high-value cash transactions. Many such transactions have come to the regulator’s notice. These executives may or may not be aiding and abetting money laundering, as it is still not clear whether the source of money is criminal activities and some of it is aimed at funding terrorist groups. It is also unlikely that the money will flow out of the country. Still, the transactions are very suspicious, and even if they slip through the first line of defence, the front desk of a bank, they must be classified as suspicious accounts and investigated thoroughly. The banks have not done that...........

Read - Mint

Probe initiated against persons named in expose: Chidambaram

............n the sting operations carried out by Cobrapost alleging money laundering by some officials of ICICI Bank, Axis Bank and HDFC Bank, Mr. Chidambaram said the Reserve Bank is seriously looking into the issue and stern action will be taken by the government if any violation of tax law was found. “RBI is seriously looking into the matter,” he said, adding, “my officers have taken a look at ... sting. They have drawn some conclusions, we are looking into it. If violation is found (with regard to tax laws), stern action will be taken”.

Read - The Hindu

3rd International Summit on Skill Development

Welcome Address & Opening Remarks: Mr. Kishor Kher – President  & Trustee, KSWA

Setting the Context:  Dr. Subir Gokarn – Ex- Deputy Governor RBI

Event Date: 

17 April 2013 - 10:00am - 6:00pm

Read.........

CAD: the danger is real

.....Such comforting words notwithstanding, it has to be realised that the CAD is unacceptably high, far higher than what the Reserve Bank of India (RBI) and other official forecasters say it should ideally be in the present circumstances (between 2.5 per cent and 3 per cent of GDP). Besides, the official explanations do not in any way minimise the structural risks arising out of a grim trade scenario and dependence on short-term capital inflows to bridge the deficit......

Read - The Hindu

How the CAD impacts ordinary Indians - S.S.Tarapore

.....To contain the CAD, multi- pronged measures are required: ( a) The RBI should be allowed to sharply reverse monetary policy by increasing interest rates and reserve requirements and curtail RBI accommodation. This will entail increases in interest rates on deposits, lending and securities......

Read - FPJ

New fiscal, new VARIABLES

......ow these policy decisions play out at the micro and macro levels in the realty sector will be seen in the coming months. The RBI will announce its Monetary Policy Statement for 2013-14 in May amid demands for a further reduction in rates. Though the repo rate was cut by 2.5 basis points in March, the banks have not reduced the interest rates on housing loans.......

Read - The Hindu

1991-type economic crisis unlikely: RBI

"..........it's unlikely that we will have a crisis of 1991-type simply because we have moved on. India is a much more liberalised economy, we integrated into the world, our exchange rate is largely market-determined, our financial markets are deeper", Subbarao said in an address, organised by the Federation of Karnataka Chambers of Commerce and Industry............

Read - IE

Rise in rural income fuelling food inflation: RBI Governor D Subbarao

.........Subbarao said here the poor segments of the population are seeing an increase in income, leading to shift in their dietary habits. People are shifting from cereals to protein and eating more of egg, meat, milk, vegetables, pulses and fruits and "that's causing food inflation"..........

Read - ET

6% growth not enough given India's poverty level: Subbarao

......"For a country, which by whatever estimates, has at least 300 million people below poverty line, a six per cent growth is just not enough."..........

Read | Business Standard

Slipping up on reforms front will prove costly, says Subbarao

..........The Government has raised customs duty to restrain gold imports. He pointed out that India can accelerate growth and improve welfare only if we effectively implement wide ranging economic and governance reforms. Subbarao said “slipping up on this will amount to a costly and potentially irreversible squandering away of opportunities. The Government has to take the lead in the process of economic revival. As the central bank and as the regulator of large segments of the financial sector, the RBI too has an important role to play.”........

Read - HBL

P Chidambaram for reviewing FDI ceiling in different sectors

......Presently two committees -- one under Department of Economic Affairs Secretary Arvind Mayaram and the other formed by RBI -- are looking into different aspects of the foreign investment. He said RBI was likely to come out with its paper on FDI in two weeks time. "We will take it forward as soon as we have RBI paper and the committee's report. I don't think either the PM or I have any pre-conceived opinion on a particular cap", he said........

Read - IE

Consolidate to be competitive

......Ultimately, we need to ensure that our products are competitive in order to increase the market share of our exports and to curb imports. Rising domestic inflation has made India a high-cost economy even as weaknesses in our infrastructure remain a constraint on our competitiveness. The RBI’s indices of real effective exchange rate indicate that the rupee has appreciated on an inflation-adjusted basis against a basket of currencies. This needs to be corrected through some moderation in inflation................

Read - Hindustan Times

A tough job on hand for central banker

.....As analysts across the globe break their heads over the fall-out of BOJ action on other economies, nearer home, it is bound to have demonstration effect. For rate cut protagonists in India, BOJ has given them fresh fodder to take on the Reserve Bank of India (RBI) which has come under intense criticism from across the canvass for its strident stance. With the apex bank slated to announce its annual monetary policy on May 3, pro-rate cut voices are bound to reach a crescendo......

Read - The Hindu

Economic stress and political outcomes - Dr.Subir Gokarn

.........The Indian experience suggests that while crisis can lead to reform, it is not very clear that this is the result of a decisive political mandate. In fact, the other two instances that I referred to suggest that incumbents are not necessarily rewarded for what may be perceived as good economic performance during their terms. This may imply, purely from the perspective of symmetry, that they are not penalised for adverse economic conditions during their term........

Read | Business Standard

Soon, trade in G-sec, corp bond on bourses

........: “Once the debt exchanges are launched, the rates will be visible and the securities will be visible. Now, market participants do not know which securities are on sale and what rates are being quoted. We will certainly be a member of the exchange. To start with, RBI allows banks to undertake only proprietary trade, but soon business is likely to happen on behalf of clients too.” ........

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

FD rates will dip from May, IDBI chief says

IDBI Bank has made a successful transformation from a staid development financial institution to a full-fledged commercial bank. The financial conglomerate has emerged as one of the largest tax collectors for the government. While business has been hit by the economic slowdown, IDBI Bank CMD R M Malla tells TOI in an interview that he is spotting green shoots and rates will fall from next month. Excerpts: ............

Read - TOI

Facebook won’t Remain a Closed Book for Sebi

Capital market regulator Sebi could issue guidelines to companies on use of Twitter, Facebook and other social media for disseminating information to clients and shareholders, following the lead of its American counterpart, the Securities Exchange Commission (SEC). Further, the Indian regulator will soon hire staff to sift through social media sites and blogs to unearth tips that could impact stock price before they have been disclosed through official channels........

Read - ET

Court makes life less taxing

..........The Court has directed that the Department must take suitable remedial steps to avoid unnecessary burden or harassment caused to tax payers. The claim for TDS should not be rejected on the ground that the amounts do not tally with the Form 26AS. It should fix a time limit within which the unmatched challans shall be verified and corrected. The taxpayers as deductees, should not be made to suffer because of faults made by the deductors, as it causes unwarranted harassment and inconvenience to tax payers. Once the payment for the TDS is received by the Department, credit should be given to the tax payer.......

Read | Business Standard

Now, get Aadhaar to obtain PAN

.........“Once Aadhaar is accepted as a valid proof for obtaining PAN, the I-T Department would be able to weed out the menace of faking, forging or duplication of PAN cards. The amalgamation of the databases is in full swing and the ministry would soon notify the rules,” ..............

Read - Deccan Herald

Documents in hand for hassle-free filing

....With the tax department focusing more on all investments made and the expenditure incurred by taxpayers, it is essential to maintain proper documentation for all financial transactions. Though the tax return forms are annexure-less, the tax department may seek supporting documents at a later stage........

Read - HBL

New financial code to be Ponzi-killer

.....Many of these are Ponzi schemes, which work on the principle of paying off old investors from the money brought in by new ones, without any real economic activity. Several such schemes, including those based on plantations, emus and Nidhi companies have imploded in the past, leading to serious losses to investors. A Ponzi typically unravels when the flow of new money is cut off. The new code proposes to end this menace.......

Read | Business Standard

Demand for office space to reach 30 mn sq ft this year: DTZ

The demand for office space is likely to increase to 30.5 million sq ft this year, global real estate advisor DTZ said. "Fears of downside risks for the global economy have started to fade, which combined with local economic policy amendments including the opening of 51 percent FDI in multi- brand retail, climb-down of repo rates by the Reserve Bank of India (RBI) and stronger economic outlook, have resulted in improved market sentiment,"..........

Read..........

SBH to open 50 branches

The State Bank of Hyderabad has decided to open 50 branches and 15 ultra small branches in Visakhapatnam zone, comprising six coastal districts, during 2013-14. The new branches include a specialised personal banking branch in the city at Pandurangapuram and an exclusive branch for gold loans. For the gold loan branch, the bank is awaiting clearance from the RBI.................

Read - The Hindu

BRICs must realign their economies

.....In many ways, Brazil’s economic imbalance is similar to that of India’s. Both countries need to rebalance their economies from consumption to investment. The Reserve Bank of India has been struggling to combat inflation, despite high policy rates.  Although India’s investment rate is relatively higher at 35 per cent of GDP, growth in private corporate investment has fallen sharply over the past few quarters due to lack of policy reforms, supply-side bottlenecks and high interest rates........

Read- HBL

Diageo won’t rejig USL brass for 12 months

......The Reserve Bank of India (RBI) cleared Diageo's 27.4% stake buy in USL more than a week ago following earlier clearances from Competition Commission of India and market regulator SEBI. Integrating a strong USL executive team, which manages a local business larger than Diageo's global volume, and managing a portfolio of mass brands in a regulated industry are key challenges in the $2.1-billion takeover deal. ........

Read - TOI

Srei, Vakrangee Software get approval to set up ATMs

.....The RBI’s licence would allow Srei to set up 9,000 ATMs in rural pockets of the country, said Rajiv Aggarwal, Chief Executive Officer of Bharat Technical Solutions, a group company. Aggarwal says that Srei is well placed to roll out the service, thanks to the network of over 7,000 common service centres (which facilitate the delivery of e-governance services) established by one of its subsidiaries in rural parts of the country. Similarly, Vakrangee has been given the approval to set up a minimum of 5,000 ATMs per year........

Read - HBL

Indian Bank bags excellence award

Chennai-headquartered Indian Bank has been conferred with the National Excellence Award in Micro Enterprises lending by the Union Ministry of Micro, Small and Medium Enterprises for 2012........

Read - HBL

Bank told to pay consumer 1.15L for lost cheque

The Maharshtra State Consumer Disputes Redressal Commission has directed Dena Bank to pay Rs 1.15 lakh compensation to a Borivli man, Lalit Bothra, for losing his cheque and trying to absolve itself of blame. “Bothra was fighting out of his own pocket while the bank used public fund and harassed him,” the panel said, while directing the bank to pay an additional compensation of Rs 5,000..........

Read - TOI

PSBs under lens for offshore cash transfers

......Public sector banks including Bank of Baroda may come under the scanner of the Reserve Bank of India (RBI) and the finance ministry in the wake of a recent report by CNN-IBN and Firstpost.com suggesting violation of know your customer  (KYC) norms by BoB while dealing with offshore cash transfers. BoB is said to have been involved in transferring Dawood Ibrahim's funds as well. The RBI is likely to seek a report from banks on the issue........

Read - Hindustan Times

FM to meet bankers today

Finance Minister P Chidambaram is scheduled to meet select bankers in Mumbai today (Monday) to impress upon them to step up lending to productive sectors including infrastructure projects to boost economic growth.............

Read - Deccan Herald

SBI to expand branch network in AP

The State Bank of India is planning to expand its branch network in Andhra Pradeh by 80-100 during the current financial year in addition to the existing 1,326 in the State, according to Rakesh Sharma, Chief General Manager.........

Read - HBL

Net profit of nationalised banks drops 22% in third quarter of FY13

.....How have the individual banks fared in the challenging macro environment? We attempt to decipher the relative performance of different banks in the nationalised bank category by ranking their performance across five dimensions — business growth, asset quality, efficiency, pricing power and above all profitability.......

Read - HBL

Reserve Bank of India's powers not to be clipped: FSLRC

........"How can the finance ministry get more powers? There will be more autonomy for the RBI. Today, it depends on the personality of the Governor. Some Governors may be pliable, while some may be tough. The appointment of Governor also needs to be streamlined. The FM can't say you do this and the RBI can't say 'I got a call from the FM, so I'm doing it. Everything has to be in public domain." "The RBI is very much under the control of the government of India. The Centre can issue a policy directive, a policy directive is what the Centre says it is... All that won't be possible now as everything has to be put in the public domain as per our proposal. How have we designed it?.........

Read - IE

RBI finds KYC violation in Cobra expose: Sources

The Reserve Bank of India (RBI) found violation of KYC (Know Your Customer) norms by HDFC Bank , ICICI Bank and Axis Bank allegedly involved in a money laundering expose done by Cobrapost.com, CNBC TV18 reported quoting sources................

Read........

How banks and funds are gaming money markets in India

Banks and mutual funds in India are earning abnormally high returns in money markets by breaching central bank rules forbidding forward trades, multiple people involved in the practice said, undermining the effectiveness of monetary policy in the process. The widespread practice, known as “river crossing”, involves three-way trades in certificates of deposit (CDs) between banks and mutual funds and typically takes place at the end of every financial year in March when cash conditions in the banking system are tight........

Read | Business Standard

Cobrapost releases new videos of bank officials aiding money laundering

.............Questioning  RBI Deputy Governor KC Chakrabarty’s clean chit to the banks, Bahal also accused the Reserve Bank of India of turning a blind eye to the issue of money laundering and said the delay in investigations will only allow the banks to “clean up their act.” “The ways the RBI officials have gone overboard in brushing aside the Cobrapost expose raises certain pertinent issues with regard to the functioning of the RBI itself,” ...........

Read.........

Probing money laundering: RBI noose tightens

.....While the market was abuzz with talks about banks being found guilty in the RBI probe, HT could not verify the rumours. The regulator declined to share details about the probe. “The investigation of banks is a supervisory matter and is always dealt with bilaterally with concerned banks by the RBI. We do not share it with media,” said the RBI.......

Read - Hindustan Times

Coin shortage - The need for coin collecting machines - Dr.T.V.Gopalakrishnan

The problem of change for free exchange in transactions is perennial and despite best of efforts from the RBI, no solution is found.One way of solving this issue perhaps is to consider having coin taking/ buying machines in all malls and major hotels where people frequently gather and...............

Read..........

How to swat the NPA bug - R.Kannan, former Principal Advisor, RBI

.....In order to put the banking system on a sound footing, containing the NPAs in general and administering write-offs activity carefully assumes more importance. Hence, the following suggestions are made from the viewpoint of transparency and effective administration........

Read - HBL

Multi-pronged approach needed to address the CAD issue directly

The historically high current account deficit is threatening India’s macroeconomic stability. The former RBI deputy governor feels the import bill needs to be trimmed on a more urgent basis as finding new export markets is going to be a tough job in a short-term. One key step would be to exploit the price elasticity of demand for petroleum products.......

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Widening CAD is becoming cancerous, and no one seems to have a sure-fire answer

..............Is zero per cent CAD possible, as Y V Reddy, the 14th finance commission chairman and former RBI governor, suggested the country should target? Many economists think it’s not practical. They argue that if the rest of the world is willing to give India more money, why not take it, invest and grow faster....................

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The Terror Of Numbers

Management guru Stephen Covey talked about three constants in life: change, choice and principles. You could well apply those to the Reserve Bank of India (RBI). In the mid-quarter review of monetary policy in March, the RBI changed its position on policy interest rates and cut the repo rate by 25 basis points. Choice for the central bank is about trade-offs. In this case, it’s the trade-off between it’s priorities of controlling inflation and managing the current account, and pushing economic growth. In his policy statement, RBI governor Duvvuri Subbarao put it best: low interest rates are a necessary but not sufficient condition for reviving economic growth. There is considerable pressure (and will continue to be) on the RBI to take stronger action to promote growth, now that the government has done its bit. But here is where principles count: giving up inflation control as a priority would be a violation of the RBI’s principles. Here, Subbarao has shown the courage to stand by them.

— Srikanth Srinivas (Business World)

Why now?

RBI must force banks to clean up their balancesheet now, not seek postponement

........We believe that shortsightedness on part of some bankers may have led to a situation where they are averse to lower lending rates despite comfortable liquidity in the system. In that case, RBI must ask these banks how far did they lower rates when CRR was reduced on the last two occasions. Back of the envelope calculations suggest that not even 50 per cent of the banks lowered lending rates significantly — a 10 basis point cut in select categories is no reduction. As for deferment of tough provisioning norms, RBI would do well to give the royal ignore to such a demand. ........

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Campus Recruitment by PS Banks Now Unconstitutional

..............Bank management of almost all public sector banks has resorted to campus hiring, not only in scale I but in scale II and scale III too. During last ten years top ranked officers of almost all banks have functioned in an arbitrary manner, recruited persons of their choice, giving favours to kith and kins of high profile persons and denying the talented unemployed youth. Recruitment of persons for some personal gain or to give favour to sons and daughters of known dignitaries has damaged work culture in banks and adversely affected the asset quality of almost all banks................

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RBI to give nod for new bank licenses in Q1CY14: Sources

...........The central bank is expecting about 30 applications for bank licenses. There has been a lot of speculation as to how many licenses the RBI will issue. From discussions between RBI and the Finance Ministry, if a reasonable number of applications come, then the RBI could give the in-principle proposal by the first quarter of CY2014........

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RBI gives 17 licences for White ATMs, Tatas to open soon

The Reserve Bank of India (RBI) has identified 17 non-bank entities out of 19 which applied for setting up White Label ATMs. Two of them including a Tata group company are expected to be operational in next few months. "We had already issued five licences and recently we have given seven more," Vijay Chugh - Chief General Manager (Department of Payment & Settlement Systems), RBI; told reporters speaking on the sidelines of a conference here in Mumbai...........

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Desi card RuPay gets global access

.....According to A P Hota, MD & CEO of NPCI, issuance of RuPay International cards would begin from July 2013 with two banks. NPCI started its services providing cheaper access to third-party ATMs by setting up a network with very low transaction charges with strong support from the Reserve Bank of India. The next stage was to issue RuPay debit cards which would be accepted at merchant establishments across the country. The payments company has already enrolled around 85,000 point of sales terminals where Rupay cards can be accepted.......

Read - TOI

Foreign tourists can use credit cards to get rupees

.....The Reserve Bank of India has decided to let authorised money changers (AMCs) to sell Indian rupees to foreign tourists / visitors against international credit/debit cards. This follows an RBI review of the memorandum of instructions governing money changing activities.....

Read - The Hindu

SOIL appoints Dr. Subhajyoti Ray as Dean

.....Dr. Subhajyoti Ray completed his master's degree from the Indian Statistical Institute and went on to join Reserve Bank of India.  He has been associated with RBI, managing data analysis, data warehousing and research. In 2009, He entered the doctoral program at Indian Institute of Management (IIM), Ahmedabad, focusing his studies on electronic governance.......

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Cosmos Bank: Goyal and Kale elected as Chairman and Vice-chairman

Krishnakumar Goyal and Milind Kale were unanimously elected as Chairman and Vice Chairman of Cosmos Bank respectively, in the Board Meeting held on 2nd April 2013. The tenure of the newly appointed Chairman and Vice Chairman will be upto 31st December 2014..........

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My health records? Sure, put it on FB and the cloud

.........As technology providers like Cisco see it, basic healthcare could be delivered via kiosks-like ATMs. Practically speaking, it is doable. After all, the banking and financial services sector in this country has seen tremendous growth because of such innovation. But the catch is there is no single body like, say, the RBI, Sebi, or Irda, which transformed financial services, in healthcare to bring sweeping changes.........

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Nabard to transform 700 primary co-op societies into multiservice centres

.....The multiservice centre concept involves PACS taking up farm-related businesses like selling fertilisers to supplement their interest income and become financially viable in the process. KR Nair, chief general manager, Nabard -AP regional office, said they had already converted 140 PACs into MSCs in the state.......

Read | Business Standard

For every Rs 10 lent by banks, more than a rupee debt recast

For every Rs 10 lent by the banks in 2012-13, more than a rupee of debt was recast. Between April 2012 and March 2013, loans worth a staggering Rs 76,479 crore were recast by the corporate debt restructuring (CDR) cell, a banker close to the development said. According to the fortnightly data published by Reserve Bank of India (RBI), banks have lent Rs 6,35, 866 crore worth of incremental non-food credit, during the year, up to March 22........

Read - IE