.......ICICI Bank, which has the largest share in mobile banking payments, makes periodic offers to its customers to encourage them in using its mobile banking services. The bank has partnered several service providers to offer its customers discounts on their products and services. It has also tied up with different billers to allow its customers in making utility bill payments........
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, April 12, 2013
Cheating case against Ingen
................According to complainant Dr M K Mohammed Basheer, Van Ingen entered into an agreement to sell the entire Katikulam and Alathur estates in Wayanad that comprises 246 acres of coffee estate in 2004, for which he had even taken permission from the Reserve Bank of India (RBI). RBI permission is mandatory for selling immovable property owned in India by foreign nationals...........
Meeting Basel-III norms may affect infra funding, says ICRA
As banks move to meet their capital requirements for the Basel-III norms, they might be left with less money to fund infrastructure expansion in the country, according to a study by credit ratings agency ICRA. Therefore, infrastructure-based non-banking financial companies (NBFCs) might fill in the spots that banks vacate......
Lines of foreign control
.....What the new RBI norms would do, subject to approval from the Cabinet Committee on Economic Affairs, is to define control as the right to appoint a majority of directors on board or to control management and policy decisions, issues that companies typically spell out in their articles of association anyway. That is how, for instance, the Tata group was able to retain management control of what was then called Tisco even though several Birla firms collectively owned a larger stake in it than the Tatas through the eighties. The draft norms, however, would go some way towards clearing up a critical issue,......
Arms Length Pricing – RBI Approvals are deemed irrelevant
.........The RBI is only concerned with the foreign exchange and, therefore, would look into the matter from that point of view. The RBI, at the time of giving such permission would not keep in mind the provisions of the I T Act and that is the function of the income tax authorities ................
PSU banks fret as MF debt assets outpace fixed deposits
........Worried by this development, some bankers of state-run banks have met finance ministry and Reserve Bank of India officials, expressing their concerns over the growing debt asset size of mutual funds, said a person close to the industry who didn't want to be identified. .........
Banks, mutual funds earn abnormally high returns in money markets by breaching RBI rules
.....The trades have taken place as India considers forming a unified regulatory authority that would assume oversight of trading in currency, bond and derivatives markets from the central bank. The proposal does not address regulation of money markets, which is handled by the RBI. It was unclear whether the RBI is aware of the practices. A spokeswoman for the central bank declined to comment after being provided detailed verbal and emailed queries from Reuters...........
The capital inflow problem revisited
..............Corporate debt, which serves as a signal of easy credit policy, is already at alarming levels in many of Asia’s vibrant economies. In the case of China, Hong Kong, Singapore and Taiwan, such borrowing is already over the gross domestic products of their respective nations. India’s corporate debt levels look much more manageable at about half the country’s GDP, something that might be attributed to the Reserve Bank of India’s relatively conservative stance since 2008.............
Sahara victimised for years, but won't give up: Subrata Roy
Subrata Roy, the chief of the Sahara conglomerate, one of India's biggest corporate groups, has said he feels victimised by a chain-reaction of events that began with a political vendetta, followed by regulatory clampdowns by the Reserve Bank of India (RBI) and market regulator Securities and Exchange Board of India (SEBI)............
NHB to seek RBI nod for $ 200 m ECB this fiscal
National Housing Bank (NHB) will soon seek RBI nod to allow the housing finance regulator to raise $ 200 million external commercial borrowing (ECB) under the ‘affordable housing’ window this fiscal. Although NHB had last fiscal received RBI nod for the ECB mop-up, it could not go ahead with the transaction as the approval came in the later part of last fiscal........
KSIDC partners with Islamic fund
......RBI Governor D. Subbarao, during his recent visit to the city to declare Ernakulam as a fully banked district, had responded to the issue, stating that the Banking Regulation Act did not permit Islamic banking in the country. He had also said that alternative modes were available for raising funds. While the RBI is understood to have retained its position so far, the KSIDC has chosen an alternative route to join hands with the Islamic fund managers.......
Manippady demands resignation of Union Minister Rahman Khan over bank scam
.........After investigations pointed out to Mr. Khan’s complicity and that neither the Union Finance Ministry nor the Reserve Bank of India initiated action against him, the Minorities Commission had raised the issue with the Karnataka Lokayukta in December 2012 but there has been no progress since.
Thursday, April 11, 2013
The quest for an optimal central bank
 |
| A monetary policy committee that issues binding recommendations will erode RBI’s independence |
.............In our quest for designing an optimal central bank, we, therefore, need to ask whether we would like RBI to be another division in the central government subject to all possible interventions, or we would like it to be closer to other constitutional bodies such as the Election Commission of India or the higher judiciary that tend to work under the guidelines of the Constitution and not necessarily those of an incumbent government. A possible solution is to design a framework in which RBI will work under explicitly-stated medium- to longer-term economic objectives that are amenable to changes by Parliament and not by the government of the day.
New banking licences may give rise to crony capitalism, say MPs
.........The members wanted to know how the RBI proposes to prevent diversion of funds by industrial houses owning banks to their own companies and prevent crony capitalism, citing example of coal and telecom sectors. Some members cautioned the RBI against adopting auction route for grant of bank licences, arguing that it could encourage industrial houses with doubtful credentials to obtain licence.......
Licence to bank
............Given the state of financial inclusion in the country, there surely is more scope for newer entrants into banking; they should be given the opportunity as long as they satisfy entry criteria and the business is run on prudential norms. It is high time the RBI is allowed to complete the process of scrutinising applications and issue licences without further ado.
The Financial Sector Legislative Reforms Commission: Financial Liberalisation, Law and Market Architecture
......Still, the Commission’s report will not be without controversy. Perhaps the most significant effect of the FSLRC’s recommendations, if implemented in toto, would be to limit the role of the central bank. The RBI has been both lauded and pilloried for taking a cautious approach to financial liberalization. The FSLRC would create a separate agency responsible for managing public debt, removing these functions from the RBI. The FSLRC would also hand control over critical policy matters such as the objectives of monetary policy and the administration of at least inbound capital flows to the political branch of Government, the Central Government. Indian economic policy has been characterized by a high-pitched, if largely internal to the system, turf warfare between the Central Government, specifically the Ministry of Finance, and the RBI, over the pace of financial liberalization..............
Where do we go.. if failure to Reform the Regulators themselves.. ?
Swedish Magnus Lind, an internationally reputed scholar & closely connected
with me- in international fora-, is the Chair & Founder of the Global
Treasury Peer Network as also the central banking policy expert. A great &
credible commentator, who writes as under :
"
Evidence worldwide shows that catastrophes like the collapse of Lehman
Brothers, the explosion of the Deepwater Horizon oil rig in the Gulf
of Mexico, the meltdowns at the Fukushima Daiichi nuclear plant in Japan, and
the fatal grounding of the cruise ship Costa Concordia in Italy come
not from a lack of laws and regulations, but from deliberate non-enforcement of
the laws and regulations that already exist. Parties that are deemed
“too big to fail” (or “too big to jail”) feel free to continue with illegal
practices up until the point that a disaster occurs. The root cause the
regulators’ nonfeasance is clearly “regulatory capture”: the regulators are
protecting the industry instead of policing it. The response to this
by lawmakers has been not to fire or jail inefficient regulators, but to add
new and more onerous regulations.
Other
examples include the ECB being managed by governors having had the bank
supervisory responsibilities in the home countries at time of the crisis and
now they are supposed to become the bank supervisor of the whole of the EU.
What ensures they will succeed this time? Yet another example is the
constant meat scandals, beef lasagne contains horse meat instead. Why did all
the food supervisors not discover it a long time ago? Since many more examples
of meet fraud have surfaced. It’s quite clear that supervisors were sleeping
on the post.
Does
hiring more regulators and supervisors really add any value? How come they are
not being scrutinized for their failures? Maybe it’s because they are civil
servants and don’t have any personal responsibility? Political governance
does not at all reach the same standards as corporate governance. Far from.
Effectively any political administration can bankrupt any country and live
happily ever after. There is no transparency where the tax payers’ money is
spent. There is no percussion for financial crime in the political
world. Genocide is the only thing an administration should avoid. That may
lead to a conviction in The Hague. But impoverish a whole nation and putting
the global financial system at risk is ok. The Basel framework encourages
speculation in sovereign risk! We should acknowledge the largest financial
crashes are caused by political failure. But, the Govts. & Regulators are keen to spread the notion that politics is
low risk. "
Although
my colleague, Magnus Lind has been forthright and highly critical of Law
Enforcement agencies and Regulators of mainly G 7, the more Advanced Nations, I
do believe that the quality and role
definitions as also the performances of Law Enforcement Agencies and Regulatory
Bodies in all other geo-political jurisdictions, should not be measured with
the same set of yardsticks and parameters but aligned suitably to meet with domestic
ground realities. However, none of them can escape their mandated
responsibilities.. !!
In
this context, we do come across in our country, Bharat, time and again in
periodic succession disturbing instances of failure to detect, arrest or
prevent some major scams- economic or pure financial crimes due to lack of
oversight by the Govt machinery and or Regulators concerned. In majority of
frauds and scams of mind-boggling proportions, they are assigned and labelled
conveniently 'Systemic'. Frequent occurrences cannot go under the umbrage as
purely systemic ones. Then, what name one would categorise & assign to rare
earthquakes, flash floods, tsunamis, inter-galactical flares (solar ones are
common & routine..!), 9/11, 26/11 terrorist attacks, etc. Super-systemic..
? We will be fooling ourselves but end up in ceaseless miseries. We are already
in. not out of such disaters.
TRAI
failed .. 2G surfaced, Let us leave out the past ones like Harshad Mehtha
centered scam. or many other similar ones. Recent cases of MF sector crisis,
Drought relief and loan waiver scam, KYC related huge 'cash depositing’ scam
are not to be swept under the carpet easily. Compliance and internal control
failures were wide spread and not to be treated as a summer temporary skin
eruption in a finger. Such trends have been rampant, given the nature of Indian
polity, loose morals followed by a large segment of the society and tax
evaders. I dont slap my criticism on just present day rulers or regulators. All
those involved in the past two to three decades and all governing political
parties in the Centre or in the States as also Regulatory failures have to be
reckoned on this score. I agree that the Regulators in India, especially RBI,
and to a lesser extent, SEBI or infant IRDA (who have little or insignificant
presence) have acquitted themselves with great aplomb and accomplishments and especially
in the recent past, despite the onslaught of global crisis. The crisis, which
broke out in US financial sector, took multi-dimensions, has battered and
ruined many other jurisdictions beyond repairs since 2007. In all fairness, G 7
nations are the cause for global ruins. Regulatory nexus or failures are
empirically established and codified now. They are in the public domain.
RBI
singularly has come in for unbiased praise and is 'talked about' or cited as
the merited example. Globally, wherever I visited and participated in
international conferences, and other meets or as part of business promotion or
academic related visits, good words of praise coming from the region's highest
quarters, were ringing as sweet melody to my ears as Ex-RBI man. But, I do hear
not comforting feedback from the captains of industry & commerce or the
unwary common public at large across the length and the breadth of this
sprawling nation that, despite technological advances and modernisation of
Indian banking, customer service is far from satisfactory in many respects.
They do say, RBI is sitting in the ivory tower and their supervisory
oversight is 'Global' at just Macro levels and totally out-dated. They neither
have the time, machinery or resources to look into nano events at retail
ordinary customer points. RBI has steadily over the decades, withdrawn itself
from micro inspections but graduated to Inspection more of very large branches
and corporate Office. Ordinary common public have nothing to do with large
branches and corporate office.
RBI
inspection reports still seem to reflect the much abused phrase, " leave much
scope for improvement", whatever worth it has, when taken to the
Members of the Supervisory Board. Frankly speaking, the eyes and ears of RBI
have to be sharply fine-tuned. CAMELS and GOATS are good carriage medium but modern
'Risky' environs under globalisation and the instant impacts of technologically
& digitally connected coupling and decoupling of Markets beset with
dangerous covert weaknesses, call for radical and more innovative departures.
Training
of human resources 'leaves great scope for improvement'. Routine pep up inputs
are just not enough to face massive tsunami like disasters. RBi needs to relook
inwardly at the highest levels on its oversight functions. Regulations are not
enough. Compliance and in right spirits in banks, are required to be dug out carefully
with eagle’s eyes. One major area of concern, Corporate Governance, especially
in private sector banks, which is highly opaque but critically talked about
within well-informed circles, has not been seemingly 'adequately addressed'.
Red signals are visible and aired in the public media and by whistle-blowers.
External interference apart and the lacking sharp supervisory tools
as also the right fearless attitudes to swift cheese from the chalk, appear to
be the hurdles to detect 'conflict of interest and nexus' syndromes. The tip of
the iceburg is visible but collapse may not be far off, if stringent steps in
supervisory frameworks are not addressed with focus & attention required
thereof.
Everyone knows the squares, angles, corners and invisible needles,.. !!
Camels
& Goats are also fodders for gullible & crooks..
chameaux
et les chèvres sont fourrage pour les crédules
I
have activated the sirens.. Is any one in the right quarters listening..
May be, but
the train has to be sighted.. Sometimes will..
With
Love, only Love and Love ever
German
‘Prof.Subramanian, the Global Consultant’ Subbu
Retd. RBI Senior Executive - (+91 9845809857)
FSLRC recommendations on RBI: Stop, look and proceed ! - M.G.Warrier
...............Perhaps, the purpose would be served better, if the RBI is allowed to function with its present mandates, a coordination committee sorts out issues among the remaining regulators and if the government’s aim is to reduce the number of regulators, merge with RBI, and the agencies outside RBI one by one, as work stabilizes. The twin goals of one Unified Financial Agency and managing the man-power-related issued mentioned here would be better achieved this way............
Banking sector challenged by ‘new abnormal’
.....Why, despite times being far worse than 2008-09, is the RBI least inclined to grant concessions on draconian measures such as restructuring guidelines, non-banking financial company (NBFC) capital requirements, securitization rules and the Basel III global banking norms requirements? The subtext, not explicitly articulated, is that it realizes that waiting for the cycle to turn will be futile, and the system better learn to strengthen itself regardless of prevailing circumstances................
RBI nod may be must for NBFCs takeover
The takeover of shell non-banking finance companies (NBFCs) will have to pass through a new and high obstacle as the Reserve Bank of India moves to implement a plan to empower itself to approve the acquisition and transfer of licence of such companies to new buyers. The plan follows allegations of misuse of licence by the acquirers and flipping of licences by many defunct NBFCs...........
FinMin sub-committee to discuss inflation-linked bond
...“The meeting will discuss, among other things, the inflation indexed bonds with a view to give investors option to hedge their investments against inflation,” a Finance Ministry official said. At the meeting of the FSDC sub-committee the views of other sector regulators would also be taken into account for formulating the inflation indexed bonds, which was proposed in 2013-14 Budget...........
Two con artists arrested
..........."The culprits convinced Sankaraiah to deposit Rs 42 lakhs and even executed a bond and issued post-dated cheques to the tune of Rs 3 crore. Once, they even took him to Delhi on the pretext of depositing the amount in RBI to get foreign funds,'' .................
Does your credit card have extra safety features?
........Banks should also move towards real-time fraud monitoring system at the earliest, the RBI circular said. Nayak says that Visa already has such a system in place, but that has not yet been used by many banks here. “This is a risk management facility that has real-time fraud monitoring. We have data of customers and their spending habits. With this we would be able to detect fraud.” It may work better if banks also implement the other safety features that RBI has mandated, such as dynamic PIN, having real-time fraud monitoring systems in place and allowing customers to block their cards via SMS.
It’s too soon to celebrate a ‘turnaround’ in the economy
...........It’s true, of course, in a broad sense that the economy is close to bottoming out, and the consensus view is that a mild recovery could take effect from the June quarter. The RBI appears to be taking its foot off the brake pedal, instilling hopes that the interest rate environment will turn a bit more benign. And with Finance Minister P Chidambaram’s smoke-and-mirrors budget momentarily lifting the cloud of a sovereign rating downgrade, portfolio inflows have kept pace in sufficient quantities to finance the extraordinarily high current account deficit. And, yet, the very real prospects of a misdiagnosis of the underlying ailment – and a blase complacence that is never far from the surface – put this economic recovery at risk..........
Read........
Dr.Tapan Kumar Pradhan - A relentless crusader
.........Dr Pradhan has been a relentless crusader for bringing transparency in public institutions. By the innovative use of the Right to Information he has exposed gross irregularities in public affairs. In 2009, he made a petition to the Central Information Commission of India to bring about transparency in the Performance Appraisal System in RBI. Dr Pradhan was the first person in RBI and the second public sector employee overall in India to obtain his PAR report through RTI Act. Following his petition, Reserve Bank of India was forced to disclose the PAR reports to all employees. In the words of Smt Usha Thorat, the ex-Deputy Governor of RBI, Dr Pradhan makes "creative use of the RTI Act to redress individual grievances". Dr Pradhan has also used the RTI Act to expose massive irregularities in the Indian Railways, Central Board of Direct Taxes, Air India and the urban development authorities in Indian cities..................
Co-operative societies now come under RTI Act
....Cooperative societies normally include co-operative banks, credit societies, sugar factories, handloom-power loom factories, distilleries, milk producing societies, water supply societies and so on. Henceforth, all such institutions will have to appoint Public Information Officers, Appellate Authorities and comply with all the provisions of the RTI Act. This is the most revolutionary event in the history of our country in the recent past..........
Take note, ATMs that can spot a fake are now here
Automatic teller machines, or ATMs, that can tell fake from real are here. Manufactures such as NCR Corporation and Diebold Systems are helping banks roll out new machines that not only deposit and dispense cash but can also detect counterfeit notes. State Bank of India, ICICI Bank and Axis Bank have already started installing these ATMs, also known as cash recycling machines. At present, these are being used as cash-deposit machines in which a customer can drop loose cash.....
Talking ATM to open in Bhubaneswar today
........On Friday, Sarkar along with RBI's Deputy Governor H R Khan is scheduled to inaugurate a regional office of the bank in Sambalpur. "After the inauguration, Sarkar will join Khan in a meeting of local bank heads and customers on Electronic Banking Awareness Training Programme,"......
RBI may extend licence period of firms authorised to operate ATMs
.....“We had called the operators to discuss their issues. The RBI may look into their demands for increasing the tenure of their licence,” the RBI official said on the condition of anonymity. Many company representatives have been requesting the RBI to extend the validity of the licences, two sources who were present at the meeting told Business Line. Under the RBI guidelines, the authorisation for setting up a WLA operation would be initially valid for a period of one year.......
FDI, FII rules are fine, but not enforcement
....However, a perusal of the IMF Balance of Payment Manual Version 6 and the RBI’s Balance of Payment Manual 2010 reveals that India adheres to the international best practice while defining both FDI and FII. As the RBI Manual itself points out, “With regard to FDI, while as per the international definition, for an investment to qualify as FDI the foreign investor needs to have a 10 per cent or higher stake in a given company, in India this has not been strictly adhered to.”.....
Nearing a Minsky moment
........Late last year, the Reserve Bank of India Governor gave a speech on the topic of G-20 and India. He argued that “the post-crisis debate on global imbalances has three interrelated facets. The first is the role of exchange rates in global rebalancing... Global rebalancing will require deficit economies to save more and consume less. They (deficit economies) need to depend for growth more on external demand which calls for a real depreciation of their currencies…” He then went on to argue that “export competitiveness…should come from improved productivity rather than an artificially calibrated exchange rate”. Howsoever laudable the objective, the fact is that ............
How India can get onto a 12% sustainable growth trajectory
.....A tiny fraction of this capital found its way into India and created a record setting growth of 9% for four years! This could have easily been 12% or more (as in China) but the Reserve Bank of India chose to curtail growth by raising interest rates to control food prices (a completely uncorrelated event) and thereby destroyed the prevailing positive Capital Asset Pricing Model, creating the current crises........
India sceptics are wrong, growth can return soon
...........This is why I have always argued that India's current woes do not reflect its long-term growth prospects. Instead, they are to be attributed to two short term factors: monetary squeeze by the Reserve Bank of India (RBI) and a virtual blockade of economic activity through wholesale denials of or indefinite delays in government clearances............
‘The economy has begun to turn around’
.....It is food inflation that has not come down. A lot of people say that food inflation is not something that can be tackled by keeping tight monetary policy. My own judgment is that the economy has begun to turn around and we have unutilised growth capacity. The RBI’s earlier view was that if you don’t have fiscal space please don’t rely on monetary policy. Now the dispute is only speed and pace. Some people think there should be more monetary loosening, while others think it should be a more careful process. In my view it’s not the monetary side that is the most crucial........
SEBI has gone beyond SC order, says Sahara Boss Roy
...............Playing a victim, Subrata Roy minced no words in criticizing the market regulator in an exclusive interview to CNBC-TV18 where he claimed that SEBI was making up stories without checking facts. He even went on to say that SEBI had gone beyond Supreme Court's order and was breaking all rules and law.............
Amanath Bank promises restoring transactions, but critics cry foul
... "The board of management has submitted a memorandum to the registrar of Co-operative Societies requesting him to impress upon the RBI in lifting its ban. The registrar have acknowledged the concern of the bank and has also recommended RBI to lift its directions,"...............
Wednesday, April 10, 2013
Fencing in the RBI
Commission and omission
...........as argued by the dissent note of PJ Nayak, two decades of empowerment of financial regulators is sought to be reversed with this report. The hideous governmental regulation through the controller of capital issues caused untold misery in the capital markets. Substantial powers are sought to be taken from RBI and other regulators and given to the finance ministry. These include such important areas as crisis management and monitoring systematically important institutions. A task globally given to a central bank and a task the finance ministry would have no apparatus to deal with.................
Read - FE
RBI to clear the air on who controls an Indian entity
In a move that could enable implementation of the controversial foreign direct investment (FDI) policy of 2009, the Reserve Bank of India (RBI) is set to clear the ambiguity over who controls an Indian entity with foreign investment — the foreign or domestic partner. RBI has forwarded draft norms, to be issued under the Foreign Exchange Management Act (Fema), to the finance ministry, seeking to bring the definition of control in sync with that in the Companies Bill, 2012 (yet to become an Act, as the Rajya Sabha has yet to pass it).........
Drop plan on new banks, Finance panel tells RBI chief
......Questioning what they called the “subjective nature” of the RBI’s final guidelines, many members reportedly told the RBI Governor that the guidelines could open an avenue for corruption. Sources in the panel told Business Line, on conditions of anonymity, that the members feared the guidelines would result in corruption and urged the RBI to drop the move. Though some MPs supported the RBI’s plan, they argued that the final guidelines will not encourage any one to start a bank.......
RBI rejects suggestion of auctioning bank licenses: Sources
......In its new banking licenses norms, RBI had indicated that external committee would be in charge of examining the bank license applicants. However sources today said that there were doubts over these, as conflict of interest was feared in external committee and hence the task of vetting applications may be done internally by RBI.......
Money laundering case: RBI assures House panel of action
........"The committee has asked the RBI Governor to take stern action against banks and bank officials who indulged in money laundering and the RBI governor has assured strictest possible action against them,..........
Regulatory Issues Not that easy to Solve - Dr.T.V.Gopalakrishnan
..............The FSLRCS recommendations, however, need to be publicly and thoroughly debated as there are lot of conflicting regulatory interests which can precipitate and take advantage of regulatory gaps.The gaps can result in some catastrophe.
Updation on "Pension Updation............."
“… It is learnt from reliable sources that the Governor who is keen to find a solution to the issue had a one-to-one meeting with the Honourable Finance Minister, Shri Chidambaram recently and convinced him that the additional expenditure on account of pension updation in RBI would not have an impact on its income and would be met out of the pension funds lying with the Bank.........
My View on "Raje demands apology from RBI Governor on food inflation "
I don't see any wrong in RBI Governor's statement. He didn't blame the poor, but is saying people are getting out of poverty, and thus now able to get healthier food habits 'FOR BETTER'. It doesn't mean that all the poor in the country are doing something wrong by having access to better and enough food. Fuel and power costs are not the only reasons for inflation. and inflation in fuel and power is also linked by more demand. He has also maintained for long that government is not doing enough on policy front to increase production to cope up with rising demand. Please do not jump to conclusions just by half of the sentence, and get to understand the full story. when there are 100 people trying to buy 50 available breads than 70 people, price is bound to rise. Solution as he long maintained is to increase production, as the demand is rising. Media should be more responsible to not to give audience to such nonsense as uttered by Mrs Raje, whose only motive is to hunt anyone who points a finger to the system by twisting their statements. Subbarao has done great service to the nation by keeping inflation where it is despite of government pressure. Or else this would have been more than double what it is now.
- Alok - Firstpost
Beyond banking and insurance
........Anand
Sinha, Deputy Governor, Reserve Bank of India said, "Banking has thrown
up a large number of complex issues in the last four to five years. In
India, the financial system is dominated by banks we are trying to
develop the corporate bond market in particular in order to diversify
the funding channels. In the future, the banking system will
remain the predominant funding channel in India. The Indian economy is a
large and growing economy and the financial system is becoming
increasingly open.............
Read - ET
Condemned to repeat the past
......All of the above is relevant to India. The Reserve Bank of India (RBI) will deny it, but its effective rupee management underwent a sea change after the global financial crisis. Gone was the prior aggressive intervention in the currency market to check the pressure on the rupee to appreciate because of destabilising capital inflows. The new mantra was a hands-off policy. This had its merits given the constraint: tight monetary policy, to check inflation. But along the way Indian policy makers forgot whether or not the rupee was misaligned........
NBFCs say RBI likely to leave repo rate unchanged
........NBFCs have requested RBI to have stability in its policy, saying a lot of investors interested in the sector are looking towards a stable regulatory regime. "The RBI should have a stable policy regime for a minimum of one decade. Once that is in, they will invest in a big way. It will help the economy well and also help achieve financial inclusion,"...........
RBI asked to restore priority sector lending tag for bank loans to NBFCs
......The NBFCs have also requested the RBI to put on hold the Usha Thorat committee recommendations on issues and concerns in the NBFC sector, till the economy recovers. Among other things, the draft guidelines of the Committee suggest that NBFCs be brought on par with banks by reducing the period for classifying loans as non-performing from 180 days to 90 days.......
Bank FD investors may exit on falling rates
........bank fixed deposit rates continue to fall, investors might move their funds to dynamic bond funds and fixed deposits of high-rated corporates and non-banking finance companies (NBFCs), financial planners said. According to them, many investors in metros are having a slightly higher risk appetite and invest in these instruments.............
Investing in naïvety
....In 1987, the Supreme Court, in the Reserve Bank of India vs Peerless Co case, asked the government the action that it was taking against the "mushroom growth of finance and investment companies" offering staggeringly high rate of interest, like 30 per cent in six months. Analysing a scheme, the judges said the investor was always on the losing end - "perfect case of heads I win, tails you lose". ........
CPI inflation is key to India’s macro outlook
.....In the past, price levels as measured by WPI and CPI (Industrial Workers) usually tracked similar trends—but over the last three years a huge gap has opened up. To be sure, the Reserve Bank of India (RBI) has always maintained that it looks at all price statistics —including WPI, CPI and GDP deflator—in assessing inflation trends.......
Beware the bond lure
............Worse, if domestic macroeconomic conditions worsen, a "better safe than sorry" attitude on the part of investors can result in a surge of outflows, which will only compound the other problems. These may seem like low-probability outcomes, but the risks should not be underestimated, in terms of either likelihood or, more importantly, impact. Essentially, what the economy needs is not more time being bought through a bond issuance, but some quick and concrete measures to address the serious macroeconomic imbalances. .......
Amanath bank withdrawal cap continues, customers worried
.."It will take at least one more week to get the Reserve Bank of India (RBI) to withdraw its circular restricting the withdrawal to Rs 1000. The depositors have to wait till Monday to get clearance from RBI. Already, bank president Naseer Ahmed has met the Registrar of Co-operative Societies and held a meeting with RBI officials in the city," said a director, who wanted to remain anonymous. He added that the local RBI officials had told the bank authorities to approach RBI headquarters in Mumbai on the issue. ..........
2008 loan-waiver errors: Nabard report by April 20
National Bank for Agriculture and Rural Development's (Nabard) state regional office, which is looking into irregularities pointed out by Comptroller and Auditor General (CAG) in agricultural debt waiver and debt relief scheme in 2008 in the state, is likely to submit its report on April 20. Nabard Chief General Manager M V Ashok said that over 30 lakh bank accounts are being examined through which Rs 5,000 crore was disbursed towards farmers' debt waiver and debt relief scheme.......
An innovative technology platform to provide bank-like service to low-wage workers
What do you get when you put a friendly neighbourhood kirana store, a construction worker and a mobile phone together? As much as this may suggest 'mobile refills', the answer is low-cost banking and financial services that can be accessed in an instant via a mobile phone........
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My View on "SBI wages war against willful defaulters"
Unless and until an inbuilt mechanism is introduced to discipline both borrowers and bankers, the problem of NPAs will continue to haunt the banking system.This is not an insurmountable issue, but authorities, banks and borrowers have an aversion to introduce a lasting solution to contain formation of NPAs.The borrowers and banks enjoy some known and unknown benefits by having NPAs in the books and the authorities keep a blind eye on the problem till it reaches the brink of collapse.The unfortunate part of this is that the depositors, good borrowers, shareholders and general tax paying public bear the brunt and hence defaulters have no concern.They become parasites and enjoy others money merrily.
- Dr.T.V.Gopalakrishnan
Bandhan Microfinance keen on banking foray; securitises Rs 355 cr loans
Micro-credit company Bandhan Microfinance is preparing to apply for banking licence as it meets all the criteria specified in the final guidelines released by the Reserve Bank, a top company official has said. “We are preparing to apply for bank licence as we aim to provide financial services in un-banked and rural areas,” Bandhan Financial Services Chairman and Managing Director Chandra Shekhar Ghosh told PTI here today, adding, the company has adequate capital to set up a bank...........
VCB achieves growth rate of 26.61 per cent, says chairman
Visakhapatnam Co-operative Bank (VCB) has not only retained its status as the biggest cooperative bank in Andhra Pradesh with regard to deposits and advances but also recorded an impressive growth rate of 26.61 per cent in mobilising deposits during just-concluded financial year.........
Markets bet on SBI arms merger plan with change at the top, Pratip Chaudhari's term to end in Sept
Market players are betting big on the merger play between the country's largest lender State Bank of India (SBI) an]d its subsidiaries. SBI chairman Pratip Chaudhari
had put the merger plans on the backburner but investors have started
building position in SBI subsidiaries as Chaudhari's term is coming to
an end in September, said experts............
Tuesday, April 9, 2013
Raje demands apology from RBI Governor
Jaipur: BJP Rajasthan president Vasundhara Raje on Monday demanded apology from RBI Governor D Subbarao for his comment on the rise in food inflation. The RBI Governor by saying that rural people's shift to protein and eating more of egg, milk and fruits is causing food inflation is an insult of the poor, she said. Subbarao should visit Rajasthan to see the ground reality she said. "He should come and see that how tribals are living," ........
Implementation of RBI guidelines key for financial inclusion
Financial inclusion is a journey which the Indian banking industry has started. Like any other journey, this one too is fraught with challenges and limitations, and needs a roadmap to achieve its goal. Deepak Singhal, Regional Director, Reserve Bank of India, discussed this and more in an exclusive interaction with SupportBiz.............
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Dear Sir,
I am so thankful to you for including my email in the mailing list of VITALINFO. I am a Faculty Member in NABARD at Bankers Institute of Rural Developoment, Mangalore. Your efforts are very appreciable and I find the articles and info to be highly valuable for me. Thanks once again.
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Ex-bankers get million-dollar offers
.....“Companies have begun identifying personnel for key roles. Given that hiring is a six-to-nine month process, most institutions have paid headhunters to identify available talent. While the packages offered by the new players might not be drastically different, stock options will make their offers financially attractive,”.......
Retired bankers in demand as India Inc looks for licence
.....It’s not only commercial bankers who are sought. Former central bankers are also in high demand — former central banker A K Khound, who retired from RBI as Chief General Manager of the Banking Operations and Development Department, which drafted the licensing norms, will share his knowledge with Aditya Birla Financial Services.........
Women-only Bank in India: Worth it?
........However, when I went deep into the subject-matter, I realized that the whole exercise might go futile and was not required in the first place. It is basically in rural and semi-urban areas where women need to be drawn to the Banking system. For this, creating an altogether new Bank from scratch may not serve the very purpose. Secondly, there might be security and safety issues in case even guards deployed at branches are females, as such branches can become vulnerable to robberies. Thirdly, women-only Bank might not turn out to be a profitable business proposition as the business prospects from women (most of whom are not earning) shall be limited............
Is the Mahila Bank a good idea?
......Targeting women as primary customers and employees of a bank to be promoted by the government is a rare combination of good economics and good politics. The Government of India is in the business of banking; its pre-eminent position being challenged recently. In the backdrop of the upcoming election and lack of ability to fund welfare programmes, the Mahila Bank announcement creates the feel-good factor, and can yet be a profitable idea.........
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