............. “We think RBI will support an easing monetary policy bias in the next few months. Consequently, we expect the central bank to cut the repo rate by clips of 25 basis points in the next two policy meetings (May and June),”..........
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, April 16, 2013
New law restricts securitisation in MFI
The microfinance industry saw 13% rise in deals involving sale of portfolio through securitisation and other bilateral transactions last financial year. However, the year-end Budget proposal to tax the special purpose vehicle (SPV) involved in the deals held back a number of deals. In addition, the new Reserve Bank of India (RBI) guidelines on securitisation and direct assignment of loan receivables restricted the number of deals...........
Chidambaram should say in US it’s time to invest in the India story
........ For investors, there is no best time to jump into India. Chidambaram should remind the people he meets about Nathan Rothschild's advice to "Buy when there is blood on the streets."
Bank that encourages women entrepreneurs
........In all probability, the bank would be a pleasant reality given the fact that it will receive an initial capital of Rs 1,000 crore. Given that it would be a PSU bank, it would not need to be issued a special license by the RBI. In fact, we have woken to the reality quite late as our neighbour Pakistan already has one, running successfully for the last fourteen years with 38 branches across the country...............
J&K Bank bags Europe Business Assembly award for best enterprise
Jammu and Kashmir Bank, the only listed company of the state, has bagged the prestigious Best Enterprise award from the Europe Business Assembly (EBA) in London, a bank spokesman said on Monday. The spokesman said that the award has come as a strong international recognition for the bank’s enterprising performance in the field of banking and finance.......
SBI in talks with Vodafone for last-mile link to unbanked
The State Bank of India (SBI) is in talks with Vodafone India to make the UK-based telecom company its last-mile agent offering basic banking facilities to unbanked regions in the country, a person familiar with the discussions said.........
Monday, April 15, 2013
The RBI clutches at straws
By extending priority sector target to foreign banks, RBI has displayed a lack of understanding
.........After nearly five decades of regulation over 50 banks with nearly 100,000 bank branches enforced with penalty and policy coercion (banks that don’t meet targets are not given new branch licences) the status of the priority sector is pathetic. A case in point being the 26 million small enterprises. These contribute 17% of the gross domestic product, 45% of manufactured output and employ 60 million people. Yet, credit availability to these enterprises is meagre. In fact, it is less than 10% of aggregate net bank credit..........
Read - Mint
New banking could use some old time culture - DR. N. A. MUJUMDAR
.....What is required today is the same " small borrower friendly" banking culture, unlike profit- making micro finance institutions ( MFIs). Public sector bankers should go beyond profit- making and try to upgrade the enterprises to which they lend - may be for farm or non- farm enterprises - and catapult the borrower into a higher income trajectory. Mere tokenism of making banking services physically accessible will not do. Profitability and social banking need to be blended. Financial inclusion in a meaningful sense thus warrants the same commitment on the part of the bankers, particularly public sectors bankers, that they displayed during the Lead Bank Programme.......
Over 100 aspirants line up for banking licence, seek clarity
RBI has been flooded with requests for interpretation of its rules for grant of new banking licences and for clarifications on the 'ambiguity' in various areas, as more than 100 entities have evinced initial interest in seeking permission to set up banks. RBI released its guidelines for licensing of new banks in February this year, asking the aspirants to submit their applications by July 1, 2013. Later, the central bank asked all the interested parties to seek any clarifications they might have on the issue by April 10, a deadline that ended last week. Sources close to the development said that more than 100 entities appear to be interested in applying for the licence, going by the quantum of clarifications sought from RBI in this regard...........
An unfair appraisal system
..... Employees cannot be subject to any change in the policy guidelines with retrospective effect; it's against the rules of natural justice......
Birla, Tata review use of parent branding for bank
...........A senior Birla official said they were looking at the option of not using the parent brand, following the interpretation by their lawyers of RBI's guidelines. Hence, they had sought the regulator's clarifications on using the brand name before April 10, when the deadline for seeking clarifications from the regulator on bank applications expired............
Spreading banking
...The combination of a much lower transaction cost and the opportunity to greatly enhance banking reach has resulted in an increasing number of banks offering mobile banking services. This, in turn, coupled with the growing ubiquity of mobile phones has resulted in a very rapid growth in the number and value of mobile banking transactions taking place. According to RBI data released last week, the number of banking transactions doubled to 5.6 million between January 2012 and January 2013, while the value of these transactions more than trebled to R625 crore in January 2013 from R191 crore in January 2012. Now, the advantage of mobile banking for the banks is clear.............
Waiting at the bottom of a pyramid
.........More than seven years after the term was popularised by CK Prahalad, ‘bottom of the pyramid’ remains an exciting challenge and much like El Dorado continues to attract gold diggers, many of whom will vouch that it is more a myth than a reality. The industry, however, continues to view this opportunity with some suspicion but the government, perhaps out of political compulsions, continues to roll out schemes pushing money into rural India for the benefit of more than 700 million Indians. Under immense pressure from the Reserve Bank of India, banks have allocated significant resources and introduced the business correspondent model, which met with limited success......
SBH opens regional office
The State Bank of Hyderabad (SBH), which became the first associate bank to cross Rs two lakh crore business in the last fiscal, unveiled its Regional Office (RO) here on Friday stressing its commitment to the eastern region States, particularly Odisha.......
“RBI may go for two rate cuts by September”
......Core
inflation is down and headline WPI (Wholesale Price Index) is somewhat
comfortable. It is likely that the RBI will take advantage of this to
push through two more rate cuts. We are certainly expecting one in May
and, perhaps, one more in the first half of the financial year. After
that, the base effect starts to work against inflation. Besides, the
diesel price hikes will have considerable second round impact across
sectors. In September, the inflation cycle reaches the bottom and will
pick up again thereafter. Hence, the central bank may decide to go easy
on rate cuts in the second half of the financial year...........
Ideas can not only ‘change your life’, but can destabilise financial sector!
An All Women’s Bank from FM, another NRK(Non-Resident Keralites) Bank from Government of Kerala, probably an ‘All Kids’ Bank’ from someone else…what next? This is what RBI Governor told ‘Weekly’ in Mauritius:
“You need to improve your domestic savings in order to reduce dependence on foreign savings. You need to generate domestic savings. For that you need to have a competitive and efficient banking sector which can give a higher rate of return to the savers but at the same time give competitive rates of interest to the borrowers. That means that the net interest margins of the banks must be small. In other words, banks must be more effi cient in financial intermediation. If you accept that improving domestic savings is a challenge, the remedy lies in the banking sector becoming more efficient.” Are these ‘ideas’ in conformity with Governor’s view?
- M.G.Warrier
Look beyond the gloss
...........Banks offer many ‘special’ privileges on special women’s accounts, right from lower minimum balance and extension of withdrawal limits, to free accident cover and concessional locker rates. For instance ICICI Bank’s Advantage woman savings account offers a zero balance facility and an air accident insurance of Rs. 50,000. The women’s savings account offered by HDFC offers accidental death cover of Rs 10 lakh, and accidental hospitalisation cover of Rs 1 lakh.........
A tale of two economic downturns
Now that most people believe the economy is at or near the bottom during the current cycle, it would be interesting to compare a few current economic indicators to where they were at the bottom of the previous cycle in the early 2000s, after the end of the technology boom. But isn’t the current downturn, coming as it does after a global financial crisis, much worse than the slowdown after the tech wreck? ..........
Cut the rates, never mind the spreads
..........With the pace of growth of deposits now having slowed to decade-lows, some banks have been compelled to up rates to be able to hold on to customers. So, at a time when banks should have been able to lower loan rates—in response to the signalling from the Reserve Bank of India (RBI)—they’re not doing so. In a sluggish economic environment, loan growth too has decelerated—though it continues to outpace the increase in deposits—and it might have helped if banks had been able to stimulate some demand............
Mismatch in maturity profiles of banks’ assets & liabilities - K.Sivaraman, Former Regional Director
......It would have been more interesting if the Report had provided the share of ultra short-term, wholesale and high-cost deposits. One guess is that the share of such deposits could be anywhere between 15 and 20 per cent of the total deposits. The other issue is whether strict compliance with KYC norms has been achieved in obtaining such deposits. This assumes importance in the context of the reports of alleged money laundering and role, if any, played by banks in this regard.......
Economic revival not yet in sight
.....The pressure on the fisc and the worrisome current account deficit are negative factors for potential investors, domestic and foreign. Indeed, the situation is no better than the early ' 90s, when the government was forced to pledge gold with the Bank of England. The cushion of nearly $ 300 billion in forex reserves can evaporate quickly, should the pull- out by the FIIs gather speed. How to make India an attractive destination for foreign investment is the challenge for the economic policy- makers.....
Stable but critical
....... Although it is down slightly compared to last month, inflation is still above 10 per cent. As the Reserve Bank of India has been saying for some time, this significantly limits the monetary policy response to slowing growth. The ball is very much in the government's court, then, and the clock is running down very fast.
Policy makers should react stronger to revive growth
.....S S Tarapore, former deputy governor of Reserve Bank of India warns, "The Exim policy cannot be a substitute for prudent monetary, fiscal and exchange rate policies. In the absence of shock therapy for dealing with inflation and CAD, there would be a major upheaval, as India would eventually face the ignominy of international censure." His prescription is that the RBI should buy when there are capital inflows to prevent an appreciation of the rupee and refrain from selling when there are outflows. "The upshot is that the rupee would depreciate as it indeed should. At the margin, it is preferable to have an undervalued rupee rather than an overvalued rupee", he says. ......
Well-known industrialist R P Goenka passes away in Kolkata
....He was a past president of the Confederation of Asia-Pacific Chambers of Commerce & Industry and former chairman of the Board of Governors of Indian Institute of Technology (IIT), Kharagpur. He had served in the past as a director on the Central Board of the Reserve Bank of India, General Insurance Corporation of India, Steel Authority of India Limited and Industrial Development Bank of India.............
RBI to cancel licences of 26 loss-making cooperative banks
The Reserve Bank of India will shortly cancel licences of 26 loss-making cooperative banks, including 16 in Uttar Pradesh, Deputy Governor K C Chakrabarty today said. A capital of Rs 2,000 crore is required for running 16 cooperatives banks in the state and RBI may not cancel the licenses of these banks if the state government supports them, Chakrabarty told reporters on the sidelines of an event here.............
Coop Bank launches USBs at North Andamans
DIGLIPUR - 12 Apr 2013 : Under Door Step Banking services, the Andaman and Nicobar State Cooperative Bank (ANSCB) launched Ultra Small Branch (USB) at Radhanagar & Kishorinagar on 11th April, 2013 as per the Financial Inclusion Initiative (FII) of RBI...........
‘Constitute special task force to improve working efficiency in minority welfare projects’
......Pitching for the interest free banking, he wrote, “We accept that Interest free banking has yet to prove its safety standards. But that requires involvement of qualified and experienced professionals dealing in risk management of assets. Unprofessional management in a framework with number of regulatory hurdles for interest free banking has caused failures in past." You are supposed to represent the Government view point, but the community holds lot of expectations from you and hope that you would always do justice with the community striving hard to get faith based financial services, he added, urging him to “arrange healthy discussion over the issue between RBI, and financial experts serving the community under adverse regulatory conditions for interest free banking to get best possible way out under present regulatory framework.”.........
RBI mulls easing fund transfer norms for new cos to boost FDI
....The issue was recently discussed at a high level meeting presided over by Department of Economic Affairs Secretary Arvind Mayaram. The meeting was also attended by DIPP Secretary Saurabh Chandra, Chief Economic Advisor Rahguram Rajan and RBI officials. “The RBI’s proposal received in-principle nod at the meeting and it was asked to a draft notifications,” a source said. The proposal, sources said, will facilitate inward remittances to meet pre-incorporation expenses of a company by non-residents...........
Why central banks are a joke; we need more honest money
 |
| ............The media in general treats central bankers with far more respect than they deserve. Even more so in India. The statements of D Subbarao last week on the reasons for price increases in food commodities had “economic innocence” written all over them........ |
Common sense on capital flows
.... Though subject to caveats, the new thinking, which will condition the IMF’s surveillance and reporting efforts, explicitly recognises a few scenarios that call for intervention by individual countries to protect their interests. For emerging markets whose financial institutions and markets are still not fully developed, unbridled capital flows carry greater risks. This is a view that the Indian policy establishment has for long supported. Way back in July 2006, the Tarapore Committee on capital account convertibility prescribed macroeconomic adjustments and market development as essential prerequisites before relaxing capital controls.......
The RTI activists' fights
............A veteran of 90 such applications, retired banker Abhay Kolarkar has had better experience with central government agencies. " LIC, RBI and PF departments give quick replies." The information received is useful and clears ambiguity .........
Cobrapost expose: IRDA report likely next week
.....Yesterday, Deputy Governor of RBI, H R Khan had said the central bank is initiating action against ICICI Bank, HDFC Bank and Axis Bank in connection with allegations of money laundering by Cobrapost. “Actions are on the way. Scrutiny has been done, action is being taken both in respect of systemic level and at the individual banks,” he had said when asked if RBI has completed investigations on Cobrapost exposes.......
Be world class, Narayana Murthy tells corporates -
.....Creating more jobs and better income is the way to removing hunger and ill-health from every part of the country. Only true leadership can bring in the change, he said. A.P.Hota, Managing Director, NPCI; Salim Gangadharan, Regional Director, Reserve Bank of India; Shyam Srinivasan, MD, Federal Bank; P.G.Jayakumar, MD, Dhanlaxmi Bank; and C.V.George, president, Bankers’ Club, Kochi, and others spoke.
Finance ministry wants 20% dividend from banks
......"It's absurd to make such demands when banks are not doing well. It would be prudent to retain profits instead of paying steep dividends. Ultimately, the banks have to go back to the government for capital infusion,"........
Read - ET
Sliding rupee and CAD wrecking Indian economy
.....The pressure on rupee continued in 2012-13 because of the ongoing euro-zone crisis. The import cover for forex reserves as a result has declined from 14.4 months in 2007-08 to less than seven months now. It has further hit the rupee. Some estimates say if the situation does not improve it could go to Rs 60 and beyond. The RBI is scared of intervention. It has a cost. It leads to further dwindling of reserves. The liquidity of rupee also increases. It may stoke inflation, which already remains high. It impacts every aspect of the economy.......
FDI inflow
.....But, these figures could be misleading. Most of the businesses and industries operating in various states like Reliance and Tata have their Corporate Offices in Mumbai and the FDI flowing to them is taken as if in Maharashtra. Unless..........
Read - Kashmir Times
Wilful defaulter: Who will bell the cat?
.........According to the Reserve Bank of India, a wilful defaulter is one who has the ability to pay up but doesn’t pay; who diverts funds; or, who has sold the property that was used as a security to obtain the loan. Since money is fungible, it is extremely difficult to establish that a borrower has indeed diverted bank funds. After the collapse of US investment bank Lehman Brothers Holdings Inc. that led to an unprecedented credit crisis globally and sharply eroded value of many companies, quite a few Indian corporations went shopping overseas...........
Finmin asks banks to bring down net NPA to 1% by Mar '14
......Banks are free to choose which ever way they would like to bring down their bad loans. Whether they do it through specialised recovery branch or other method, it is up to the individual banks to decide..........
Banks do one third of entire year's business in March
......According to figures released by Reserve Bank of India on Friday, bank deposits and credit have grown 17.4% and 17% respectively. The surge in deposit and credit growth in March has been so sharp as to enable the banking industry surpass Reserve Bank of India's credit and deposit growth target of 16% and 15%. Incidentally, banks have..........
India Security Press stir at Nashik called off: Union
A 'stop work' agitation at the India Security Press and Currency Note Press units here was called off today following assurance from top officials of the Security Printing and Minting Corporation of India, a union leader said. "SPMCIL Deputy General Manager B J Gupta, New Delhi, and General Manager of India Security Press T R Gauda held meeting with the protesting union leaders and assured them of resolving the issue within a forth-night", said Working President of ISP labour unit Jagdish Godse. ...........
Is the gold boom over?
.....“People may prefer keeping gold in physical against electronic form because RBI (Reserve Bank of India) may come out with some gold deposit schemes. They may want to earn some interest on gold from deposit schemes rather than losing out on the management fees to the fund house as gold prices are falling.”..........
RBI turns its focus to gold loan cos
The crash in gold prices has turned the spotlight on gold
loans companies. The Reserve Bank of India has moved into a high-alert
mode and will call for information from gold loan companies and provide
directions to those with high loan-to-value ratio, sources said...........
Private banks eye a bigger share of agricultural loan business
...."The move will ensure a level playing field among public and private banks. Till now, public sector banks have been enjoying a cost advantage over us. Small and marginal farmers preferred public sector banks because of lower interest rates. The subvention scheme will allow us to compete with them,".....
Public Sector Banks Don’t Want to Play Aadhaar Cards
The
government’s plan to make the Aadhaar number the centrepiece of the
cash-transfer system is now facing opposition from a new quarter: banks.
Several banks, led by State Bank of India, have expressed reservation
against jettisoning their current systems in favour of the platform
created by the Unique Identification Authority of India (UIDAI), which
issues the Aadhaar number and wants to make it the basis to authenticate
an individual’s identity before every transaction in bank accounts into which welfare benefits are deposited..........
Read - ET
Read - ET
Banking agents encourage multiple transactions in bank accounts to earn higher commission
Business correspondents
(BCs) have found an innovative way to milk the government's financial
inclusion agenda by encouraging multiple transactions in bank accounts
to earn higher commission...........
Ponzi schemes: Familiar plots, different players
.....The reason why the schemes still sprout is the absence of clarity on who will police them. The financial sector regulators or Parliament have not drawn up solutions. The latter is worried about encroachments on state powers, so it is most commendable that UK Sinha’s team has taken it upon themselves to bring faith in the regulators and belief in a regulated financial sector.
RBI may suspend licence of Amanath Bank
The fate of thousands of small-time investors and savings bank account holders is uncertain as the Indian banking regulators started tightening its noose around minority cooperative society Amanath Bank. Now, the bank is staring a possible suspension of its licence by Reserve Bank of India (RBI) in the face........
Amanath leaves customers in spot
Bengaluru: Somashekhar, a resident of Shantinagar is worried over his aged father’s lifetime savings deposited at Amanath Bank. With the Reserve Bank of India (RBI) capping the withdrawal limit of accounts at the crisis ridden Amanath Bank at Rs 1,000, thousands of investors and account holders continued to crowd the bank’s branches posing questions on when they will get their money back.............
Abraham to move Lokayukta court in Wakf scam
.....Releasing a list, Abraham said that the total estimate of Karnataka Wakf properties scam is around Rs 2 lakh crore. "Reserve Bank of India has indicted Rehman Khan and others, including his sons, daughters, son-in-law, brothers, wife and relatives of embezzlement to the tune of around Rs 300 crore..........
Saturday, April 13, 2013
Union Bank opens regional office at Sambalpur
Union Bank of India opened its 60th regional office at Sambalpur, its second in Odisha. The regional office was opened by H R Khan, Deputy Governor of Reserve Bank of India (RBI) in the presence of D Sarkar, chairman and managing director of Union Bank. This office will cater to the branches of the public sector bank in 15 districts- ...........
Bank for overseas Keralites mooted
........As per official figures released last year, NRKs sent a staggering total of over Rs500 billion (Dh33.6 billion) to banks in Kerala during the 2011-2012 fiscal year. Most of this was from Malayalees employed in the Middle East. The NRK Affairs Ministry in the state has already announced plans for floating development project bonds for NRKs and is reportedly in contact with the Reserve Bank of India to explore the possibilities of opening an exclusive bank for them.......
All Meghalaya blocks to have banks: Sangma
........"We have taken up the matter with the Ministry of Finance and the Reserve Bank of India and the government had a "robust economic approach" involving effective implementation of developmental programmes through accountability and expansion of resource base,".............
Maharashtra's first all-women post office launched
Mumbai: The state's first Mahila Dak Ghar, a post office entirely operated by women, was inaugurated here on Friday. Located near the collectorate, the Old Customs House, Asiatic Library and the Reserve Bank of India in south Mumbai, the post office will be open from 10 am to 6 pm..........
FSLRC: The cast of 146
There is little experience in India with large complex projects of drafting law. The process adopted by FSLRC had many strengths. In the table below, I have pulled together the names of all 146 persons mentioned in the report..........
RBI penalises JP Morgan Chase for violating risk-managment norms
........The penalty on the bank is for "contraventions of various directions and instructions issued by the Reserve Bank in respect of Risk Management and Inter Bank Dealings and Compliance Functions". These contraventions took place in 2011-2012, it added. "We have noted RBI observations and taken remedial measures," JP Morgan Chase India spokesperson said.........
Indian Economy 2013 – 2014 – Forecast & Predictions
.......The external sector will be pressurized during the year and the challenges faced in FY13 such as rising current account deficit will continue to play in the mind of the government and RBI while formulating policies. However, it is expected that there would be some improvement in the CAD and the continued flows of foreign capital will keep the rupee largely stable – assuming that geo-political tensions do not deteriorate and global economic conditions remain where they are, with the recovery process also being cautious.........
A Holistic Approach to Money Management
........Setting aside the obvious point that bank accounts are among the easiest indicators to track, the policy focus on “banking the unbanked” seems to rest on the premise that bank accounts have a special role in financial inclusion. Three important functions ascribed to bank accounts are: a place to save, a money management hub, and a way to establish an ongoing relationship with a formal financial institution (an “on-ramp” to other services). These assumptions appear to underpin much of financial inclusion thinking and policy............
The lending rate dilemma
....The RBI is mulling over the recommendation made by its nominated committee that the first 7-10 years of a home loan tenure carry a fixed interest rate which later may be reset to the floating rates or the then prevailing rates. This recommendation seems worth considering. Floating rates are quite confusing for the common home loan borrower who invariably pays a higher EMI when the rates increase but does not benefit when the rates subside......
Disappointed India Inc seeks cut in interest rates by RBI
.........PHDCCI President Suman Jyoti Khaitan pitched for 100 basis points (1 percent) cut in short-term interest rate by the RBI in its forthcoming credit policy, saying such a step was necessary to improve investor sentiments and promote growth. "Tight monetary stance by RBI has impacted investment sentiments in the economy and inflation still remains in an uncomfortable growth trajectory," ........
Agriculture is a contrasting picture of stagnation and change induced by consumption: report
RBI Governor D Subbarao recently talked of changing consumption pattern in rural areas towards protein diet which has led to higher inflation in these items. In a different context, a CII-Mckinsey report also pointed towards this trend. The third Food and Agriculture Integrated Development Action Report titled: ‘India as an agriculture and high value food powerhouse: A new vision for 2030, prepared jointly by CII and McKinsey and Company, said the story of Indian agriculture in the last more than a decade or so has been changing gears to some extent with a significant alteration in consumption patterns skewed towards high-value food items prompting higher production of these crops and rise in output per agriculture worker...........
Solan, Kullu to be covered under DBT scheme from July
......He expressed satisfaction that the banks in the State had surpassed five National parameters out of six stipulated by Reserve Bank of India and during the year 2012-13, made fresh disbursement to the tune of Rs 6,260 crore to 3.34 lakh new beneficiaries, achieving 93 per cent of target up to December, 2012.......
Gujarat, the gateway to India: fact or farce?
...........Nothwithstanding the government claims, it is an open fact that Gujarat’s FDI numbers have always been the same or lower through the years. Reserve Bank of India’s FDI figures encompassing the decade of 2000 to 2011 reveal that while Gujarat received just about $7.2 billion in FDI, Maharashtra got $45.8 billion and Delhi over $26 billion. Even Karnataka and Tamil Nadu, with a $8.3 billion and $7.3 billion share, got a larger piece of the national FDI pie............
Punching in card PIN can help prevent fraud
.............Although bankers said keying in the PIN would provide additional safety, consumer acceptance would be a critical factor in determining its success. "In many smaller establishments, the consumer may be standing next to or in front of the shopkeeper while keying in the PIN and instead of being a security enhancer, it could actually end up being a hazard," said a banker.
Startup Village incubatee Payd offers low-cost payment system for SMEs
..........In other words, unlike existing payment services, you don’t have to pay a hefty fee for installation. Registration is completely free and businesses can sign up online and immediately start accepting payments, according to Nambiar. The product is currently in beta and awaiting RBI approval. “We will launch a pilot with a few select brands in a few cities as soon as we receive RBI approval,” said Nambiar..................
Friday, April 12, 2013
Inflation-indexed bonds likely in a month: RBI
Inflation indexed bonds: Will it find buyers?
........Inflation index bonds will be linked to the wholesale price index (WPI) and indexation will happen every six months. The maturity period is likely to be in the range of 7-15 years.
But, the calculation of coupons needs to be simple to understand and transparent for it to get more retail participation. Also, the distribution mechanism would play a crucial role...........
Cobrapost expose: RBI mulls action against erring banks
Reserve Bank Deputy Governor H R Khan on Thursday said the central bank is initiating action against ICICI Bank, HDFC Bank and Axis Bank in connection with allegations of money laundering by Cobrapost. “Actions are on the way. Scrutiny has been done, actions are being taken both in respect of systemic level and at the individual banks,” he said when asked if RBI has completed investigations on Cobrapost exposes. “I will not be able to tell you the details but actions are being taken. Actions are being initiated both at the system level and the individual bank level,” he said on the sidelines of an event organised by National Housing Bank in New Delhi.............
Bank Licences: RBI should make financial inclusion an opportunity not an obligation - Janmejaya Sinha
 |
| ..........The RBI should allow the recipients of new licences time to comply with the guidelines as it did to the earlier recipients of bank licences. About 18 months after starting operations should be a fair period for such compliance. Overall, I believe the guidelines deserve our praise.......... |
Banks looted to finance terrorism: Security expert
...Based on the concept of crypto currency, Bit coin is an internet-based alternative currency which uses electronic signatures and was developed in 2009. Sivanandhan, who is the Security Adviser for the Central Security Cell of the Reserve Bank of India, said that unfortunately investment in security was still considered a redundant expenditure by banks and financial institutions. He added that banking surveillance was yet to leverage the possibilities of video analytics............
My View on Updation on "Pension Updation............."
The news is welcome. But pensioners and their associations have to be on guard. The Mandarins of the Ministry of Finance (MoF) may yet launch a rearguard battle to dilute the benefits by making the updating of pensions prospective, i.e., from 2012 for which the revision of pay scales is due, rather than retrospective. If the principle is approved, logically the retired staff are entitled to arrears in relation to the past revisions of pensions. Secondly, the RBI should pay interest on the arrears at the Bank Rate. These issues may be taken up, if required, after the approval of the proposal is officially announced and the Bank issues a circular to implement it. Raising them at this stage may only help the MoF to delay the final decision. Unlike on the last occasion legal action may be taken early if the two points are not conceded. Augmenting the “Fighting Fund” with contributions from the pensioners should not be difficult.
- A. Seshan
No doubt this is a good news. We had Rs 7184 crore in Superannuation Fund as on 30 June 2012.Keeping in view the demographic and financial structure of RBI pensioners,if we compute an annual pension of Rs 2 lakh (which is on the higher side) for 10,000 pensioners, the entire expenditure would be Rs 200 crore p.a; whereas the yield on our Superannuation Fund @ GOI Bonds would be Rs 560 crore.Even a minuscule interest component would be sufficient to cover the cost of Pension Updation. Then why should we approach GOI as a SUPPLICANT and give them a written assurance that the cost would be met by our own internal earmarked funds when their legit and otherwise expenditure play havoc with the finances of our country i.e. result in drastic increase in fiscal deficit leading to depreciation in Re, inflation, increase in interest rates etc.Anything which impacts exchange rate, interest rate,inflation, money supply i.e. variables of monetary policy, it is they who should get clearance from us. Seventh Pay Commission announcement would be done by the year end. Prior RBI approval should be obtained for this. Another question, why Pension should be restricted to 50% of last pay. Why can't we be flexible and fix the same at 70%,80% or 100% of last pay when Fifth Pay Commission has opined that RBI can give pension updation depending on its financial strength.We are not a burden on our country in a way Central Bureaucracy is. This type of issues which concern handful of RBI employees where no external financial impact is there, should best be left to RBI.
- Sitendra Kumar
When RBI is mandated to manage the monetary policy and to ensure the onerous task of maintaining the value of the Rupee and in effect to try and achieve 'Growth with Stability', is this glorious institution not capable enough to find solution on its own to a less important problem like 'Updation of Pension' of Retired Employees. I feel wiser counsels should prevail and the GOI should leave the issue to RBI Management to suitably solve the issue without raising unnecessary spoke in the wheel.
- Srinivasan, Cochin
Economy is not the villain
.....Looking at the above reasons, it would appear that nothing but ‘economic malfunctioning’ led to higher NPAs. There is little to say on system identification of NPAs. All the other four factors are ‘economic’ factors. So, how valid is the ‘economy downturn’ hypothesis? The RBI Report on Trend and Progress of Banking in India, 2011-12 blamed “the slowdown prevailing in the domestic economy” as the prime cause for increase in NPAs (paragraph 4.29). In general, there are two broad reasons for any economic occurrence: (a) endogenous and (b) exogenous. While endogenous factors are controllable, exogenous ones are not. By holding the economy responsible for higher NPAs, bankers are evading responsibility for the ‘controllable’ (or exogenous) factors. However, there are ways to deal with exogenous factors........
Many slots empty, PSU banks told to ease promotions
..........RBI data shows there are about 4 lakh officers in the 29 PSU banks as on March 31, 2011. Nearly 20 per cent of them are expected to retire by 2015 while the pace of recruitment is far lower. The new rules circulated to banks by the finance ministry say they can lower the minimum experience required for a scale by three months and also relax the minimum marks in the annual performance appraisals..........
Chidambaram to sell India story in Canada, US next week
.....The Minister is likely to spell out steps taken by the government to streamline FII investment in the debt market. Sources said Chidambaram, accompanied by senior Finance Ministry officials and RBI Deputy Governor Urjit Patel, would also seek investments into various sectors, mainly infrastructure for which the government has pegged expenditure at nearly $1 trillion during the 12th Plan (2012-17)........
Bank outlook bleak
.....To be sure, the figures above are a broad brush summary. Private banks, as has been seen in the past several quarters, are likely to post earnings growth of 20% or more. Still, the economic environment being depressed as it is, banks would have depended on factors such as trading gains to shore up their profit........
Reserve Bank of India calls for FDI amendments to stop clandestine flow of cash to tobacco firms
..............RBI in a letter sent to the finance ministry has highlighted the fact that there is a need to check "circumvention of FDI norms by international tobacco companies and their conduits", sources said. The central bank has recommended that the government should incorporate a specific clause to plug this loophole. RBI has cited the example of the lottery business, in which the government has banned FDI and also introduced a specific clause pertaining to marketing as well...........
NABARD - Request for Enhancement/Revision of facilities to Officers at par with that of officers in RBI
Please refer to various provisos of NABARD Act, 1982 and NABARD Staff Rules, 1982 on the captioned subject matter. In terms of the provisos under reference, the practice in vogue since the inception of NABARD and as per the agreed upon and settlement of the issue under reference, we request the improvement/enhancement/revision of the following facilities to Officers of NABARD- .......
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Cooperative societies to promote self-help groups
.....A senior official in NABARD said that only good working/well functioning credit societies in the district would be involved as SHPIs. The designated SHPIs will be given ‘promotional grant assistances’ by NABARD for each of the self help groups that were credit linked with it. “These grants are going to be profits for the societies,” NABARD sources said.......
Nabard starts direct credit line to coop banks
......As on March 31, 2013, five DCCBs have been sanctioned a direct credit line of Rs 181 crore by Nabard. "This is the first time that we have started such a credit line to DCCBs in Uttarakhand," said state Nabard chief general manager, S Selvaraj. Under the programme, Rs 22 crore has been released to the DCCBs of Nainital, Pauri and Udham Singh Nagar......
Kapol Cooperative Bank Files Complaint With Cyber Cell Of Crime Branch
........And the latest victim to this malicious attack is the Kapol Cooperative Bank. Since yesterday morning wild rumours stating that “”RBI cancelled licences of Kapol Bank if any body have money please take it as soon as possible. Please inform if anyone has the account in the bank”…” “Kapol Bank Marve Branch ma bahu moti line lagi che there is a rumour in mkt ke bank uthi gai che plz withdraw a money in Kapol Bank any branch plz passed on message on u r friend relative etc” As the rumour spread like wildfire, worried customers rushed to make inquiries. However, the 75 year old bank which stands on solid financial ground with total business about Rs 1800 cores has refuted any shortcomings and has lodged a complaint with the Cyber Cell of the Mumbai Police..........
Mobile banking transactions double, payments rise threefold
.......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........
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