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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.
Thursday, April 18, 2013
Designing an optimal RBI…........
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IMF has scope of improvement for tailoring advice to economies: Subbarao
................“There has been a lot said and written about how the IMF economists must be more open minded, less ideological, be bold enough to question orthodoxies and brave enough to differ from established wisdom. One important condition for this to happen is that IMF economists should talk to people beyond governments and policy institutions,”................
Subbarao criticizes IMF over prediction of financial crisis
...Advice by the Fund should stem from a complete understanding of not only macroeconomic, but also social and political settings of a country. Advice should be founded on hard evidence and driven by facts. Ideology should not play any role in analysis of facts,” Subbarao said at a seminar on strengthening IMF surveillance at the IMF spring meetings seminar in Washington on Tuesday. “The IMF must be open to criticism and advice.”........
Subba attacks obsolete IMF set-up
.........Subbarao trashed most of the principles on which the IMF had stood firm before the crisis and highlighted the new reality. "Pre-crisis, consensus was that every country should move towards a fully free capital account. The only questions were about timing and sequencing. Now we are not so sure. Pre-crisis consensus was that capital controls are bad always and everywhere. Now we are not so sure." ...........
Dividend payout ratio of banks: Is there need for a change?
..........The finance ministry should have consulted the RBI, if at all it was necessary to modify the dividend payout ratio of PSBs for whatever reasons, to avoid the predicament being faced by the public sector banks now ..........
Read - Moneylife
Govt banks may switch from gross salary to CTC for pay hike
As employees of state-owned banks bargain hard for a steep hike in wages, the finance ministry has asked Indian Banks' Association (IBA) to consider moving towards a cost-to-company (CTC) structure in the next pay settlement to reflect their actual remuneration including all perks and incentives. “If public sector banks have to run like a professional company then why not behave like one and move to CTC concept. We have given this suggestion to IBA,” .........
A complete HR overhaul
..... With new technology and competition from foreign and private sector banks, what PSBs need is a major generational leap on the human resources (HR) front. These banks must attract large numbers of young graduates and post-graduates from tier-I and tier-II management colleges through well-structured campus placements. .....
Pay PSU bankers more
..... One practical solution would be to recruit professionals from the private sector to fill in the vacancies. But the remuneration package comes in their way of tapping the pool of talent available.......
Cobrapost Tale has a Sting: RBI
The employees at ICICI Bank, HDFC Bank and Axis Bank may have violated know-your-customer norms and helped clients evade taxes, the Reserve Bank of India’s investigation has found. “Banks opened current account based on power of attorney without KYC,” ET Now reported citing people familiar with the report. “Banks gave cash advances for gold purchases”, which is a violation of norms, it said...............
Read - ET
Read - ET
Cobrapost expose: Banking secretary to meet RBI official
Financial Services Secretary Rajiv Takru is likely to meet senior RBI officials on Thursday to decide about future course of action with regard to the allegation of money laundering by some staff of ICICI Bank, HDFC Bank and Axis Bank...........
Banker to the street: South Africa's FirstRand Bank sets up ATM in Dharavi slum
..........Essentially an investment bank, FirstRand has opened about 13,000 accounts. It has taken the Business Correspondent route rather than opening a branch. The ATM in Dharavi, that opened last month, has recorded about 2,000 transactions a month. In fact, the customer behaviour is an eyeopener in terms of choices. The fact that people are trading and living in a slum does not deter them from aspiring for a better quality of life............
Financial Reform
Much of the research on banking, the financial crisis and regulatory reform takes for granted that banks and the financial system must be as vulnerable to risks as they are, so that the failure of one bank can pull down the entire financial system. Some academic research suggests that this fragility might actually be a necessary by-product of the benefits banks provide to the economy. However, this work is based on assumptions under which fragility is indeed unavoidable, without assessing ..........Read - ET
Watch the video clip about the book
How banks dress books to meet loan, deposit growth targets
The loan growth numbers for most banks in FY13, despite being lower than their initial targets, would not have been as bad as the market was fearing, given the weakness in the economy. But a decent chunk of that growth could well be 'inorganic' in nature. Towards the end of a financial year seasoned bank chairpersons are known to use a few tricks of the trade to achieve RBI projected loan and deposit growth in the last seven days before their book closures. Call it window dressing or whatever, this is the traditional practice..........
‘Need to develop a fixed rate housing loan product of longer maturity’
RBI: Corp sales growth at lowest level post crisis
......Interestingly, the net profit of companies rose 23 per cent in Q3, on the back of similar growth in the previous quarter. During the third quarter of 2011-12, the net profit of these companies dipped 31.3 per cent. "Year-on-year growth rates of Ebitda (operating earnings) and net profits remained positive for a consecutive quarter, although they were lower than the previous quarter," RBI said..............
Banks step up vigil on gold loans
.............The finance ministry has also swung into action following the fall in gold prices. In an interview to Bloomberg, Rajiv Takru, secretary for financial services, said banks would review loans backed by gold and call for more collateral as the price of the metal falls. The central bank moved immediately to call on banks to review lending when gold prices began falling, Takru said.
Tumbling global gold price eats into RBI’s forex reserves
...........The value of RBI’s gold reserves—557.75 tonnes—declined from $34.08 billion (around Rs.1.84 trillion today) in September 2011, when the international gold price peaked at $1,900.23 per ounce (28.35 gram), to $24.17 billion early this week, when the yellow metal tumbled to its 26-month low of $1,347.95 per ounce. Economists and analysts are playing down the impact of this on the Indian central bank’s reserves as the decline in value is notional................
Gold loses its glitter
.....The RBI’s decision to strengthen the official yellow metal reserves to 560 tonnes had come amid growing interest of central banks across the world in diversifying their holdings to assets other than the dollar. China, too, has increased its gold holdings from 600 tonnes to 1,050 tonnes in the last few years. The reason: gold in the vault puts money a little further out of circulation because it is slightly more cumbersome to liquidate than, say, the euro........
Gold prices fall: Lock in your money in fixed deposits now
............"Banks may cut 25 basis points in the interest rates payable on short term fixed deposits that mature in less than one year and 50 basis points in interest rates payable on long term fixed deposits with maturities between one to three years,"...........
Time to know our onions
............The cheer could travel to the average consumer, if the RBI, sprinkles water on these little green shoots by slashing interest rates next month. The RBI uses monetary tools to stymie demand and cool prices. Rising inflation — which had forced the central bank to keep interest rates high — has hurt consumption demand, a strong edifice of the India growth story........
Maha Coop Act referred to joint select committee
....Maharashtra government will promulgate fresh ordinance on April 21 to amend the Maharashtra Co-operative Societies Act, 1960, which envisages transparency and professionalism in the functioning of cooperative societies. It also aims to bring in democratic control in cooperative societies in the state..........
SEBI opens office in Lucknow
............“The Board has established its local office at Lucknow under the administrative control of its Northern Regional Office at New Delhi,” the regulator said in its notification issued today. The new office would cater to regulatory aspects of investor protection, financial as well as investor education and such other functions as may be assigned from time to time............
SBI cries foul as cash lured by funds slow savings
......India’s biggest lender State Bank of India (SBI) says unequal rules are allowing money-market funds to lure savers away, extending the slowest growth in nation’s bank deposits in a decade and frustrating policy efforts to lower funding costs. “The biggest challenge for the banking system is to fend off competition from non-banks such as mutual funds, debt funds, liquid mutual funds and tax-free bond funds, who are all having an unfair advantage,” ..........
Nabard lending crosses Rs1 trillion in FY13
....Nabard’s lending grew 32% from Rs 81,000 crore in the previous year mainly due to increased support to cooperative banks and regional rural banks...........
Read - Mint
Read - Mint
Centre opposes PIL against SEBI chief
.....The Centre, on Wednesday, opposed in the Supreme Court a plea seeking removal of SEBI Chairman U. K. Sinha on grounds of alleged irregularities in his appointment, saying the charges against him were false as he recently acted against corporates, including Sahara......
Wednesday, April 17, 2013
Union Bank new office in Varanasi
Bank On The Right Bank
When starting your entrepreneurial career, it matters who you choose to associate with. Your choice of partnership at this stage could make or break your start-up. So, take a step back and think as many times as it takes before you partner with someone. Even that reputed bank. A bank, which carries out your daily transactions and lends you money from time to time to fund your business activities must be chosen after considering a variety of factors. Here’s what a first-time entrepreneur should look for in a bank while opening an account for business purposes............
Customers should demand good services from banks - RBI Deputy Governor
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| .................."If banks do not provide proper service, then it is wrong to blame the RBI. Customers should either demand proper services from the bank or leave the bank,"................. |
Will this 79-year old’s protest move the government and the RBI to stop mis-selling by banks?
.......I wrote to the RBI Governor Dr Subbarao, SEBI chairman UK Sinha, RBI Deputy Governor Dr KC Chakrabarty and the revenue secretary Sumit Bose about Mr Sharma’s case on 12thApril. As usual, they have maintained a complete silence. To us, the deliberate cheating of senior citizens and women—who are the biggest targets for banksters—is a bigger problem the same bankers laying out a red carpet for those with political black money to be laundered.............
Hurdles to new financial code
........ So what does the FSLRC Report say that is so upsetting and why is it upsetting to so many people? In its essence, the report says that the regulatory structure for the Indian financial system is old, based as it is on some laws which are more than 140 years old. Old itself is not the problem; the issue is a piece-meal approach to financial sector regulation that has resulted in a ground-level mess with multiple regulators and large regulatory cracks...........
Interview with Justice Srikrishna, Chairman, FSLRC
.....The burden of financial inclusion cannot always be thrown on the regulated entities. If financial inclusion means development of the regulated entities to expand the scope of their activities so as to benefit larger numbers, that is legitimate scope of the regulator and can be done by the regulators. If financial inclusion is intended to achieve a social purpose that is not the legitimate scope of the regulator, then it becomes a part of the government’s policy and the government is obligated to compensate the regulated entities which have to carry the additional cost of such financial inclusion.............
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Rural Bank Norms May Stump New Aspirants
A large number of non-banking finance companies have less then 10% presence in rural areas, data shows. The statistics portend trouble for companies eager to get licence for banking..........
An unusual commission
.....This brings me to the division of work between Reserve Bank and the finance ministry. Before the 1991 reforms, the situation was simple. Government made policy in so many fields with so many instruments that their coordination could only be done in Delhi. No one ever thought of independence of the central bank. Governor of Reserve Bank was just one cog in the machinery of controls. When the reforms came, the lightning liberalization was done in Delhi. There was no question of Reserve Bank being part of it: the external economic situation was dire, and Reserve Bank was left alone to tackle it with the extremely intrusive instruments it used. Reserve Bank officials were in love with their controls; they liked to think that they were the only patriots at a time when those in Delhi had sold out to the International Monetary Fund and the World Bank........
Financial inclusion
.....The present licensing policy for opening branches is that individual banks can open any number of branches in rural, semi-urban and unbanked centres. The RBI permits opening branches in urban and metro centres based on the bank’s performance on opening branches at other centres. Will the corporates applying for new bank licence open branches in unbanked areas before leaping to lucrative markets?.............
Bad loans
This is with reference to the article “Economy is not the villain” (Business Line,April 12). It has been assertively pointed out that poor credit appraisal and improper monitoring of the loan operations are the main reasons for the bad loans in banks. Nevertheless, the slow down in the economy cannot be pointed out as the major reasons for bad loans. If it is so, private banks must also show increasing NPAs. The best way to monitor loans and prevent bad loans is to appoint a RBI nominee in the board of corporates with above Rs 100 crore borrowing from banks.
- N. R. Nagarajan (HBL)
RBI to introduce Rs 10 polymer notes on trial basis
MANGALORE: The Reserve Bank of India (RBI) will execute a union government's mandate to introduce plastic/polymer currency note of Rs 10 on a field trial basis in five cities in India. Depending on the success of the move and how these notes work, the RBI will then decide on the next denomination of such notes that have to be brought out, KC Chakrabarty, Deputy Governor, RBI said. "It will not be tomorrow. There is a process involved," he said............
On the cusp of change
Lower inflation will not only boost the case for a rate cut by the Reserve Bank of India (RBI), it will also have other salutary effects. One of the reasons for lower inflation is softer international commodity prices, including much lower crude oil prices. This will help lower fuel subsidies and help narrow the fiscal deficit. ............
A rate cut by RBI is ‘not a done deal’, says Nomura
.......“We think monetary policy decisions based on WPI inflation (ignoring elevated core CPI inflation and supply constraints) will be erroneous. Monetary and fiscal policy should move hand in glove,”.............
NHGs falling prey to lure of ‘easy money’
..........Private moneylenders in the district are trying to interfere in the working of the NHGs by offering ‘easy money’ despite the existence of systematic banking programmes. The District Kudumbashree Mission has conceded that there are attempts by private moneylenders to provide loans to NHG members, overriding the rules and regulations stipulated by the state government and the RBI..............
‘Ignore messages offering money’
In response to complaints from customers that they get SMS saying they won large sum of money claiming to be from RBI, Deputy Governor K.C. Chakrabarty asked them to ignore such messages. He said that the RBI did not deal with individuals but was regulating the banks. “It is not a law enforcement agency,”......
AMC, Repalle hit by financial scam
......While the junior accountant has been arrested by the police, secretary of the AMC, Rajani, has been suspended by the Commissioner of Marketing after a report by the Joint Director, Vigilance, Marketing Department nailed the negligence of the AMC staff. The culpability of bank officials was also being investigated since the money was credited to the personal account of the junior accountant. “We have completed our inquiry which established the illegal diversion of AMC funds and on the basis of our report, and the police have taken action and arrested the accused. We will be writing to the Reserve Bank of India to take further action,” said Joint Director, Vigilance, Marketing Department, Lakshmanudu..........
“The day FI becomes their need, things will change”
....It is the beginning but banking culture is developing. And for this I give credit to the ‘ultra small branch’ model and fully support it. Though RBI says that unless it (USB) is manned by a bank employee it cannot be called a branch, the government says within the 5 km radius some structure should be available so that between the base branch and that place, the customer should have some place to visit............
The RBI view of India's macro challenges
.......The RBI acted fast post the crisis to reverse accommodative monetary policies, raising the policy rate 13 times by a cumulative 375 basis points, from 4.75% to 8.5%. Wage inflation has responded slowly but it has responded, falling from 10.9% in April 2010 to 6.6% by January 2013. Inevitably the RBI has taken some stick for tightening monetary policy, and has been blamed for "choking off growth", but Subbarao says that the bank will be sticking to its guns...........
Banking: Best Foot Forward
.........A lot of this has been made possible by a very balanced approach to regulation by the Indian regulator, the Reserve Bank of India (RBI). The fact is that it plays 3 roles—one is of an economic advisor to the government, monetary policy maker, and the regulator of banking—only adds to its effectiveness.......
House panel seeks details of tax revenue foregone, bank bad loans
.....Noting that every public sector bank had two to three per cent non-performing assets (NPAs), the committee also demanded that the Reserve Bank of India and the Finance Ministry set up a group to study the issue. “We have asked the RBI and the Ministry that this group can submit a report on each NPA worth more than Rs 1 crore. This exercise should be done within three months,” a member of the panel said. A report with this recommendation will be submitted to Parliament during the second lap of the Budget session, slated to begin on April 22........
CII roots for reforms
.......“The RBI needs to work in tandem with the government to boost growth by easing interest rates by at least 100 basis points in the current fiscal. Early implementation of GST will help in adding 1-1.5 per cent to GDP,” ..........
Nagpur's coop banks now in better financial health
...... The regulator Reserve Bank of India (RBI) only considers the gross NPA as the yardstick of bank's financial health. However, the banks prefer to clean their balance sheet as far as net NPAs are concerned. For bringing net NPA to nil, the bad loans have to be brought down to minimal levels too. This requires diligent banking, say cooperative banking experts. According to RBI norms the gross-NPAs should not go beyond 10%............
Revision in wholesale inflation may worry Reserve Bank
......The March WPI figure is below the Reserve Bank of India's (RBI) projection. In the third-quarter review of the monetary policy held on January 29, RBI had said, "Keeping in view the expected moderation in non-food manufactured products, inflation, domestic supply-demand balances and global trends in commodity prices, we revised downwards the baseline WPI inflation projection for March 2013 from 7.5 per cent to 6.8 per cent.".........
Issues in PSU banks
........They not only lost manpower, but their technology was not developed to compete with fast and aggressive new banks. PSBs today do not attract the best of human resources from the market because of several inhibiting factors, such as poor salary structure............
Private banks better placed than public lenders
......Private sector banks are likely to have performed better than their public sector rivals in the fourth quarter of 2012-13 due to better asset quality, higher net interest margins and strong loan growth. One analyst report said January-March private bank profit would rise more than 20% and that of government-run lenders would drop close to 7% from the year-ago period.......
When Budget says don’t buy gold, why are banks selling yellow metal?
..........Replying to this, K.C. Chakrabarty, Deputy Governor of Reserve Bank of India, said that if a bank is selling gold, RBI will not come in its way. Banning a particular activity is a policy level decision. Stating that the issue is under examination, Chakrabarty said: “Personally I am in favour of your opinion.”.................
Fall in gold prices can impact asset quality of banks and NBFCs : India Ratings
....India Ratings said that the impact of falling gold prices could be felt across the industry, the gold loan NBFCs is more vulnerable than banks’, despite similar LTVs at the time of disbursal. Among the banks, south India based private sector banks are likely to be more impacted, primarily due to the higher proportion of gold loans in their books said Prakash Agarwal, associate director (Banks) of India Ratings in a note. He further said that agency is reviewing the gold loan portfolios of rated banks and NBFCs to evaluate the impact fall in gold prices on profitability......
Gold loan firm Manappuram Finance can't collect money for chit funds
.........The Reserve Bank of India had opposed the move by the management to utilise the branches of Manappuram for its group business, culminating in exchange of communication between the management and the banking regulator over the past few months........
Gold's Plunge Is Happy News for India's Brides and Economists
......Consumers aren’t the only people in India happy to see a bear market for gold. The country’s economic gurus, too, are no doubt relieved by the 19 percent fall in gold prices since the beginning of 2013. The high cost of gold has been a significant burden for the already struggling Indian economy............
Will go full throttle to recover dues from Kingfisher airline: Pratip Chaudhuri, SBI Chief
........."We have given instructions to recover and enforce all the securities. Our intention is to sell everything...all means of recovery (will be employed)...nothing would escape. Till such time as we will get back our dues in full, we will press our full recourse on all the securities that we possess,"....
BANK IN BHEL
The State Bank of Hyderabad, BHEL Ramachandrapuram, is rendering services since 30 years in the area. Since it is the only branch, the bank is unable to ensure personalised service to customers. Moreover, there is no other public sector bank like Andhra Bank or SBI. The bank ATMs also don’t work properly. No one is responding even after lodging a complaint. We request the RBI to establish another public sector bank in BHEL to meet customer needs.
- S. Viswanadham, Chikkadapally (HBL)
SBI mulls merging one of its associate banks this year
...."Now that the capital conditions are favourable for merger, we will think about it," Chaudhuri told reporters. However, he did not indicate any timeline. "For us, all five fingers are the same," he said when asked which of the remaining five associates would be considered first for merger.........
SBI loan growth in fiscal 2013 at 21%: Pratip Chaudhuri
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| .........“Only thing that impacts base rate is a cut in cash reserve ratio (CRR). If there is a one percentage point cut in CRR, I can assure you at least 20 basis points (bps) cut in our base rate,”......... |
Tuesday, April 16, 2013
Sullivan Memorial gears up for summer
.......It is also proposed to present the Nilgiri Conservation Award to K. C. Chakrabarty, Deputy Governor of RBI and M. Narendra, Chairman and Managing Director of Indian Overseas Bank for the innovative and successful financial inclusion plan for the primitive tribes of Nilgiris.
RBI meet in Mangalore
.....A press release said here that RBI will conduct a ‘town hall meet’ for the benefit of customers of various banks at the auditorium of the corporate office of Corporation Bank in Mangalore at 11.30 am on April 16. K.C. Chakrabarty, Deputy Governor of RBI, will be present.......
A missed opportunity?
It is well known that the public sector banks are going to see the full impact of a demographic transition over the next few years. With recruitment numbers having dropped off sharply since the liberalisation process got under way in 1991, large-scale retirements of people hired during the 1970s and 1980s will leave large gaps in the organisational structures of these banks. Now, one way of looking at this is that it presents a significant opportunity to restructure these entities ..........
‘Cash’ in on this numismatic’s collection at Pune Heritage Week
.....Tole has collected over 10,000 currency notes and 25,000 coins from 220 countries. He will be displaying them on Thursday at Raja Dinkar Kelkar Museum as part of the ongoing Viraasat Pune Heritage Week organised by Janwani. Tole said he had collected not just coins and currency notes, but also proof sets both from within India and abroad. .......
Fear crashed gold. Now be greedy, not stupid
..........They say three great forces rule the world: stupidity, fear, greed. Gold’s crash was triggered by fear. Now, you would be stupid not to become greedy.
RBI working on improving on housing finance database
........"The Reserve Bank is also developing a housing asset price monitoring system covering such details as LTV ratio, EMI to income ratio and price to income ratio based on housing loan data from select cities collected from select banks and HFCs." Said Deepak Mohanty, Executive Director, RBI at an international seminar orgainsed by the National Housing Bank last week. .......
Private banks don’t help financial inclusion
......That, of course, means that even if profits are positive, they are much lower than what would be earned if financial inclusion was not an objective. To expect private banks to settle for this lower profit margin and rate is to forget the nature of private incentive. It is only by presuming that private operators will not behave like private operators and have changed character since the 1950s and 1960s that the entry of the corporate sector into banking be seen as an instrument to advance financial inclusion........................
All in the bank
..............Suspicion has been raised from time to time that West Bengal is insufficiently served by banks and that it is the fault of the Central government that owns most banks. Now the Reserve Bank of India has published some statistics relating to bank branches which enable one to derive some crude indicators that can throw light upon the question. West Bengal’s population in 2011 was close to 7.5 per cent of India’s in 2011; the proportion is unlikely to have changed much since. Its gross domestic product in 2011-12 was roughly a 15th or 6.7 per cent; the average Bengali is a bit poorer than an average Indian, but not much ..............
ASSOCHAM favours initially ten new banks
.......... “Considering the uncertainties/volatilities associated with current business environment, RBI may consider giving out licences in a staggered manner to few players in a specific time frame. It could be a process, and not an event..........
M&M Financial Services keen to enter banking space
......Mahindra and Mahindra Group believes that it meets most of the criterion set out by the Reserve Bank of India for bagging a banking licence and is quite excited at the opportunity of floating a bank, said a top official. “We believe we qualify on most of the parameters set out in the guidelines like high credentials of the group and well-run financial services business, which has been profitable all through.......
A solo financial regulator
........ In fact, there should be complete cohesiveness between the Reserve Bank of India, the Securities and Exchange Board of India and the Insurance Regulatory Development Authority..............
Rate cut in May for sure, but how much?
........It’s now fairly certain that the Reserve Bank of India (RBI) will go for a policy rate cut in May to prop up slowing economy, even though RBI governor had said in his last policy that the scope for monetary easing is limited. The question is: will D. Subbarao stick to his ‘baby step’ of a 25 bps rate cut or show boldness by combining it with a cut in banks’ cash reserve ratio (CRR)—the portion of deposits that commercial banks need to keep with RBI—by an identical margin?..........
RBI should take a call on rate cuts: FM
Finance Minister P Chidambaram has again made a pitch for lowering interest rates. Speaking to Business Standard here on Monday, he pointed to the latest inflation numbers to make his case. "Both core inflation and WPI inflation have come down for the month of March, CPI is down to 10.4 per cent, so these are indicators. I think the RBI governor will take note of the fact that core inflation, WPI inflation and CPI inflation have all come down and he will take a call.".........
RBI has leeway for a 50bps repo rate cut
..........Markets should not rule out a 50 basis point (bps) repo rate cut that day, though the RBI had sounded caution on further cuts in its March policy review where it cut the repo rate by 25 bps. At that time, the central bank was worried on food inflation, which was trending at 11.38%, leading to higher consumer price inflation and current account deficit (CAD) hitting record high levels. RBI’s concern on inflation and CAD remains, but indications are that both the measures are likely to trend down, going forward............
BS POLL: 25 bps rate cut buzz gains momentum
............. “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),”..........
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...........
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