The Finance Ministry has approved payment of 8.5 per cent rate interest for 2012-13, up from 8.25 per cent in the previous fiscal, benefiting over 5 crore Employees Provident Fund Organisation's (EPFO) subscribers deposits.............
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, May 16, 2013
RBI ordinance against the interests of people: Geelani
........While rejecting the proposal for implementation of SARFAESI ordinance as deemed by RBI Syed Ali Geelani expressed surprise over the assurance endorsed by Omer Abdullah. Syed Ali Geelani added that the proposed move will prove detrimental and will cause unprecedented damage to interests of people of state. Terming the said ordinance against the interests of people of state and deliberate attempt to dilute special status, Syed Ali Geelani opposed the said law and added that it is aimed at to provide one more unconstitutional entry for those outsiders who intend to occupy the estates through illegal, means...........
Subbarao fires up markets
Indian stocks today rose to close at their highest level since January 2011 on hopes of a steeper policy rate cut next month, after Reserve Bank of India Governor D Subbarao said he had taken note of the decline in inflation, reinforcing future rate cut bets................
Why the death of inflation is vastly exaggerated
......While Business Standard quotes Economic Affairs Secretary Arvind Mayaram as saying that the RBI should take the new numbers into consideration for further rate cuts, the Prime Minister’s Economic Advisory Council Chairman C Rangarajan seems to think that we need to watch inflation data for one more month to be sure of the indices’ direction. Rangarajan’s caution is more warranted than early optimism on prices..........
‘Non-core’ solutions
..........Since core inflation is already low and given that there is not much the RBI can do about tomato or onion prices, the risks from this are likely to be minimal. The Government can, likewise, contribute by going in for modest increases in the minimum support prices for crops sown in the ensuing kharif season. That may not be easy in an election year. But if the Government and RBI do their part, and the rain gods cooperate by obliging with a well-distributed monsoon, we will have a more enduring cure to the inflation problem.
Accounting for sustainability
....The Reserve Bank of India, on June 6, 2011, and December 20, 2007, issued separate notifications on ‘Non-Financial Reporting and Risk Management for Financial Institutions in India’ and ‘Corporate Social Responsibility, Sustainable Development and Non-Financial Reporting’. The above notifications introduce the idea of NFR and emphasise it as “basically a system of reporting by organisations on their activities in this context, especially as regards the triple bottom line, that is, the environmental, social and economic accounting”........
Sebi: Reactive or active regulator?
.....The Securities and Exchange Board of India (Sebi), the capital market regulator, has a major role to play in effective enforcement of the rules of the game in the capital markets and some types of deposit-taking. As Sebi celebrates its 25th year, there is much to commend it. But it also needs to look ahead, because the road will continue to be long and treacherous........
Directors of public sector banks: The ground reality
........The discovery that Sunil Gupta, a director on the board of Canara Bank was related to former railway minister Pawan Kumar Bansal, has raised a justifiable furore. He made his entry on the board as a part-time government nominee and then just before the end of his three-year term, was elected as a shareholder director because of his closeness to Mr Bansal, who was then the minister of state for finance. The case clearly calls for a thorough appraisal of the system of appointment of directors on the boards of public sector banks (PSBs). Whether or not Sunil Gupta influenced the bank to get undeserved loans for Bansal’s companies is a separate issue, which is under investigation............
RBI DICTATE ON ‘DOING AWAY WITH INTRODUCTION IN CASE OF NEW ACCOUNTS’ NOTHING BUT MERE PAPER TIGER?
......Now, the moot question is this, if individual branch managers are empowered to make their own rules and defy RBI dictates, then, what is the need to have a regulator like RBI and all those talks about investors’ protection being churned at media interviews?..............
Governor urges envoy to relax IC ban
........Thanking the Indian government and Reserve Bank of India for helping Nepal manage the demand for Indian currency and allowing to invest in Indian securities through Reserve Bank of India, governor Khatiwada apprised the Indian envoy of the problems of migrant Nepali workers in India, who have been facing difficulties in remitting due to lack of identity cards. “They have not been able to remit their earnings easily,” Khatiwada said. On the occasion, they also discussed on cooperation between Nepal Rastra Bank and Reserve Bank of India, demand and supply of Indian currency in Nepal, and payment system between the two neighbours............
After ATM heist‚ India's IT sector again in soup
A breach of security at two payment card processing companies in India that led to heists at cash machines around the world has reopened questions on the risks of outsourcing sensitive financial services to the Asian nation............
Edelweiss plans to enter banking, awaits RBI clarifications on norms
......Edelweiss Financial Services, already into stockbroking, mutual fund and insurance, intends to enter banking. It is waiting now for clarifications from the Reserve Bank of India (RBI) on its guidelines on new bank licences. The guidelines were out in February. Following queries from prospective applicants, the central bank is expected now to issue clarifications............
Bank Licenses Another cash cow
.........The desire to improve financial inclusion is only a sugar quote and if the Govt and RBI are serious on Financial Inclusion the existing banks themselves can be made to achieve that. Unfortunately, our masses are illiterate and they can be easily fooled by some cheap gimmicks...............
Goodbye to gold
..........This after gold delivered far better returns than equities in recent years. Meanwhile, the Reserve Bank of India said on Wednesday that it will launch the first tranche of inflation-indexed bonds on 4 June.........
Gold price crashes 2nd time this year
In anticipation of aggressive rate cuts by the RBI next month and waning investor interest in gold, the markets reaped the rewards of higher investor flows on Wednesday. Gold price also witnessed second biggest fall this year..........
Gold demand may come down, says Rangarajan
.....“Some action has been taken by RBI in terms of controlling gold demand. To supplement these actions, as inflation comes down and returns on financial products become more attractive, it will be possible to contain gold demand,”..........
Sharma wanted to make it big
............JVG’s troubles started in June 1997 after the SEBI asked JVG Finance to refund the Rs.45 crore it had raised from a public issue in March 1997. A day after the issue had opened, Reserve Bank of India issued a show-cause notice asking why JVG Finance should not be barred from accepting deposits as the group companies had already exceeded their deposit limits.
Chidambaram to woo investors in UK, France and Qatar
..........Chidambaram’s meetings in Qatar will include CEOs of leading companies, banks and Pension Funds there. He will leave for India on May 19. The Finance Minister will be accompanied by Department of Economic Affairs Additional Secretary Shaktikanta Das and RBI Deputy Governor Anand Sinha, among others. Chidambaram earlier held similar investor meets in Hong Kong, Singapore, Europe, Japan, Germany, Frankfurt, Canada and the United States to attract foreign investment into India...........
Investors eye small, old southern private banks
A few small old private banks are witnessing a flurry of activity in their ownership structure even as the Reserve Bank of India (RBI) is readying to permit a new set of private sector banks into the country’s Rs.75 trillion banking sector. While some of these investments are part of routine financial transactions, certain investments could be part of a larger strategy by financial institutions for possible take-over of smaller banks to gain entry to the banking sector, analysts said. Also, companies that win banking licences will benefit from the branch network of such banks, they said............
Bank takes over Deccan Chronicle press
......Earlier this year, the bank served a demand notice on DCHL, asking it to wipe out the entire liability within two months. The bank also served a possession notice under the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act 2002. Accordingly, it pasted a notice at the Kondapur press, indicating a “symbolic taking over” of over 9,800 square yards of land.......
Takru, bankers discuss stalled Maheshwar hydel project
..........This was the first time the finance ministry had called a meeting to review lenders' exposure to a particular project. Asked about this, Kumar said, "The ministry is interested in the bank (as) banks are owned by the ministry...In this project, PSBs and other public sector bodies have sunk in a lot of money and they are owned by the government...............
Perils of an ad hoc forex policy
..............The RBI’s forex market intervention practices, and their impact on the rupee’s exchange rate movements and the corporate sector’s financial fortunes, have therefore had a checkered history. What is striking, even despite this, is the fact that the RBI is still not anchoring its forex market policy to some larger economic objective or target. In the light of such a stance, one cannot really disagree with the Financial Sector Legislative Reforms Commission report’s call for setting the RBI clearly defined and measurable economic objectives, and holding it accountable for that.
A strong US dollar is good for India
.......Improving fiscal health and expectations of lower CAD is not feeding into INR strength. The broad USD sentiment is affecting the INR but going forward the currency will start seeing strength on the back of improved macro economic fundamentals. The USD strength is helping Indian asset classes and as the currency continues to gain traction with the...........
Wednesday, May 15, 2013
RBI eases overseas borrowing rules in housing, aviation sector
Keep that genie in the bottle
..........The larger question, however, is on what it would take to keep the inflation genie firmly bottled up. There are a few signals that the government would do well to keep a constant vigil on. Economists have rightly underlined the role of global commodity costs in India’s domestic prices. The value of the rupee, among other things, provides an early peek into future price movements....................
Subbarao’s RBI to ’Take Note’ as Inflation Eases to 41-Month Low
....“We certainly will take note of the softening of inflation and the external payments situation in the next mid-quarter policy statement on June 17,” ...........
Easing inflation - a mirage
.....What is more important is that the fast pace of easing may actually be a mirage given that the final inflation number generally tends to be revised upward. There was a sharp upward revision (by 0.44 per cent) in the February inflation data.....
Inflation back in RBI's 'comfort zone'
...............Meanwhile, RBI Governor D Subbarao, when asked about potential interest rate cuts in light of falling inflation, was quoted by Reuters as saying that they would be taken into account and in future central bankers "will take note of softening inflation". Subbarao had earlier said that he was "very happy" about the fall.
Finance Ministry sees room for easing of rate by RBI to push growth
Encouraged by the declining trend in inflation, the Finance Ministry today made a case for further rate cut by the Reserve Bank to boost sagging growth. "I think we need to look at statement made by RBI Governor during the last policy review where he had stated that RBI is closely monitoring inflation figures and if there is dramatic change in inflation figures then RBI will take that in to consideration during its next review," ................
With sticky inflation, RBI has to go carefully: Ashima Goyal
.............RBI has to go carefully because inflation has been sticky for so long. It is necessary to anchor inflation expectations. It is not so much about creating an output gap, already so large. In terms of declining WPI and core inflation, RBI has room for rate cuts. There is no excess demand but because of CPI and inflationary expectations, RBI has to be cautious.............
Behind the curve
.....While RBI is, at a macro level, right when it talks of demand-supply imbalances, the larger point is that the slowing of the Indian economy over so many quarters made it obvious it was just a matter of time before WPI began following suit. Indeed, with services GDP also slowing, even CPI will start slowing at a faster pace in the months ahead. Even when RBI’s policy came out on May 3, it was not quite clear what the central bank’s concerns were since, apart from depressed local conditions, there was little in the global economy to suggest any sudden reversal of commodity prices either. Hopefully, RBI will get enough time to study inflation trends and ...............
Systemic moral hazard
.................It's high time the regulators looked into this systemic moral hazard that is plaguing the Indian financial services industry through such predatory practices.
The key lies in reducing inflationary expectations
....In their paper, “Inflation threshold in India: An empirical investigation”, published by RBI, authors Deepak Mohanty, A.B. Chakraborty, Abhiman Das and Joice John concluded: “For WPI-inflation up to 5.5%, there is positive impact on growth, which is statistically significant. The relationship reverses when WPI inflation is beyond 5.5% and inflation effect on growth turns negative. This study provides evidence of a shift in regime indicating possible adverse impact of inflation on growth beyond 5.5% WPI inflation.”..........
Worse than sleeping at the wheel
.......... They recommend expensive muscle enhancers instead of multi-vitamin to economically weaker patients suffering from poor nutrition, not very different from selling sector funds to fisherfolk who come looking for a bank deposit. What would you say if the regulatory authority that oversees hospitals said this: “If there was negligence in the medical care, we are responsible, but correct drugs are the responsibility of the drug makers – it is not our problem. Go to the drug regulator.” Well, Reserve Bank of India (RBI) Deputy Governor K.C. Chakrabarty seems to be saying exactly this..........
RBI takes banks to laundry over money
The (RBI) Reserve Bank of India has directed banks to do away with stapling of money packets and issue only clean currency notes to the public. "...banks should do away with stapling of any note packet and instead secure note packets with paper bands and should sort notes into re-issuables and non-issuables, and issue only clean notes to public," it said in a notification.........
My View on "Writing Reserve Bank’s obituary....."
The finance ministry and FSLRC, it is by now clear that, in a hurry to resolve minor issues, ignored the evolution of the role of RBI and the care with which RBI has nurtured the financial sector. Various observations since made by present RBI Governor and the dissenting notes appended to the FSLRC Report itself are adequate proof (if proof was necessary!) to show that the report written by the Chairman of the FSLRC to satisfy some mysterious interests did not care to understand the Indian situation or the strength of RBI while doing the ‘cut and paste’ from the abundance of material placed before him. FSLRC depended on the experience of small countries whose history and geography are different or listened to experts from developed countries where central banking needs are totally different from those in India. Suffice to say that time is not right for dismantling or truncating the RBI which is doing creditably well as is being admitted in several international forums.
- M.G.Warrier
This approach of the Govt is typical of its lack of responsibility. A coalition govt that totters on the brink and appeases opposition cares little for the welfare of the country or its institutions. An alcoholic sells all he can lay hands on to buy his next drink. So too, our current govt has little responsibility towards anyone. It has to live till tomorrow and would stop at nothing, with an ever burgeoning rag-bag of corruption it carries on its back.
- Anonymus
My View on "Glare on ex-RBI official's Ponzi links"
How an assistant manager of RBI be accused of shielding Shraddha? This NBFC company is not accepting public deposits and is not under our comprehensive regulatory purview.At the most, it submits a few Qtly, Half Yearly and Annual Returns to us.It's functioning is not transparent and the Asst Manager at th most might have made a wrong noting regarding it's activities. It's Ponzy Schemes should have been investigated by IT Department as several transactions which were suspicious in nature were forwarded by FIU-IND to them.
- Sitendra Kumar, EXRBITES Group
My View on "If bank boards aren't capable, nothing much can be done....."
In the given situation, the Deputy Governor may not have ready answers to all the questions posed. But the positions taken on the following issues are not professional and a layman’s view is not what one expects from the regulator:
• ‘If bank boards are not capable, nothing much can be done: If Dr Chakrabarty is meaning what he says, RBI and GOI should take responsibility and take immediate steps to put in place ‘boards which are capable’.
• ‘Banks might have indulged in “traffic rule violations” but “no accident has taken place”: Cobrapost allegations hover around allegations that bank officials were liberal in offering to violate traffic rules. The position that ‘no accident has taken place’ is a ‘legal denial’. ‘Accidents’ are taking place and it is for the regulator, supervisor and other authorities including Finance Ministry to find out how many of them are ‘caused’ by ‘traffic rule violations’.
• ‘Reputation will be hampered if one or two banks do it. If everyone indulges in this, where is the issue of reputation? My question is why banks should take so much commission in selling insurance/mutual fund products.’ If the regulator starts asking questions like this, where does the customer go when he has a grievance? The position that ‘If everyone indulges in this, where is the question of reputation?’, though goes well with the stand political parties take these days, brings down the image of the institution (RBI) Dr Chakrabarty serves today.
• ‘Restructuring is a perfect commercial phenomenon, practiced across the world. It is like a medicine but it has to be used judiciously. If you don’t use it properly, it will not give you the result. If banks are taking undue advantage, then banks are going to suffer’: Very true. But when banks ‘suffer’, the real loss is passed on to the depositor and the tax-payer. The government and RBI are duty-bound to protect public interest, in such situations.
- M G Warrier, Thiruvananthapuram
Banks Board should be made accountable - Dr.T.V.Gopalakrishnan
........The findings of RBI indicate that banks do not have any corporate Governance system in vogue and the boards do not care to adhere to the minimum ethics expected of them in carrying out operations. Unless and until the banks particularly the new generation banks are disciplined, the banking system can take the RBI and the Govt for a ride and the economy will get into serious problems.
Cobrapost | RBI issues showcause notices
The Reserve Bank of India (RBI) has sent show cause notices to three private banks--HDFC Bank, Axis Bank and ICICI Bank—in the Cobrapost sting operation case. A confidential report prepared by the central bank on the allegations of money laundering by these bank employees in the Cobrapost expose showed violations of regulatory norms............
Investigative website Cobrapost demands resignation of top RBI officials
....."The satraps running the banking regulator viz Governor D Subbarao and Deputy Governor K C Chakrabarty need to resign on moral grounds. For a full month after the report was prepared they gave statements to national media that there were "no transactions" when the report prepared by their own officers would have told them to the contrary," ...........
Cobrapost impact: bank audits set to get tougher
The Reserve Bank of India (RBI) and the government could look at reinstating audit system even in “smaller” branches with advances below Rs. 20 crore following rampant violation of know your customer (KYC) norms by banks revealed by investigative website Cobrapost.............
Cobrapost: What worries & why incentive culture be revised?
.....Of late, the FinMin is believed to have written to RBI asking the reason for not taking action so far. "RBI will not spare anybody if proved guilty," a senior RBI official told moneycontrol.com on condition of anonymity. "However, it will not act on other's diktat. It will take its own decision based on its internal scrutiny and investigation. Banks have committed some procedural mistakes. It is very difficult to identify the element of criminality. It is the incentive culture, which lures bank managers to go any extent. Incentives, be it in private or public sector banks, should not be given for deposit collections only but for managing non performing assets and expanding credit as well," he said.......
Banks yet to raise credit flow in northeast: Tripura minister
.........."RBI Governor D. Subbarao during his recent visit to Tripura had asked the banks to introduce bankable schemes and open financial literacy and credit counselling centres in the northeast to improve the credit flows to the region. But the banks are yet to take suitable steps in this regard,"..............
IBM to help Indian Co-operative Banks enhance customer services
.......India is home to a large number of urban and rural co-operative banks. These banks are facing challenges in many aspects and are trying to transform themselves in a complex business environment. For example, regulatory requirements are not only leading to data proliferation but the banks also need more secure management of data. With the growth of mobile computing and Internet services, customers are becoming increasingly technology savvy and looking for improved and expanded service options...........
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Gold buying muted after RBI measure
Gold buying in India, the world's biggest buyer of the metal, came to a halt on Tuesday, a day after the central bank restricted gold imports on consignment basis and jewellery sellers saw a sharp rise in festival sales. Yesterday, the Reserve Bank of India (RBI) banned gold imports through consignment, and traders awaited for more clarity from the central bank...........
Gold duty may go up; banks slow coin sales
.......For nearly a week now, domestic banks have cut down on orders for gold coins to international bullion banks. Traders from the physical market said banks had stopped placing fresh orders for Swiss coins after the Reserve Bank of India (RBI) restricted imports on a consignment basis. The RBI notified the change in policy on Monday after making the announcement in its annual policy statement on May 3,2013.” Even as they are looking to get rid of the backlog of gold coins they hold, banks have more or less stopped placing fresh orders,” said a trader...........
Govt, RBI are again getting it all wrong on Gold
.........All this takes gumption and a farsighted vision of what gold can really do for the economy. Instead, GoI and RBI are treating us like addicts. They are hoping that giving us the cold turkey will set things right. But you can never fight human nature. Clampdown on gold will be like the prohibition on liquor in Gujarat. Consumers and smugglers will have the last laugh.
Results can wait: SBI chief wants to be with Sonia
.......Sure, bank chairmen do make it a point to turn up for ribbon cutting ceremonies by politicians at branch openings, etc. But Chaudhuri apparently went one further. The Expressreport says that the bank actually cancelled a board meeting scheduled for 15 May – about which the stock exchanges had already been notified – because Chaudhuri had to show up in Rae Bareli for Sonia’s inauguration of 12 branches of the bank...........
SBI chairman flags NPA as area of concern
State Bank of India (SBI) Chairman Pratip Chaudhuri today said Non Performing Assets (NPA) remained an area of concern for the Indian banks. He attributed the build up of NPAs in the banking sector to the general slowdown in the domestic economy over the last couple of years, which had seriously impaired the repayment capacity of borrowers...........
Tried to warn against chits: Minister
........"There was an indication of the things to come. It was not unknown. I have done my duty. I tried to make everybody aware. I spoke with Sebi and RBI on the matter in the last two years and they asked me to report the matter to the state government. I have been conducting this awareness campaign for one year," ................
In Villages, Credit is Still All About Moneylenders
...........The
Reserve Bank of India’s argument that new banking licences are needed
to achieve financial inclusion, mainly in rural areas, has new research
supporting it, thanks to banks’ falling share in rural credit. Policy
makers’ push to increase institutional credit to rural areas has had
reasonable progress since independence, but only at a snail’s pace. The
performance of banks, which have been assigned targets by the regulator
to increase their rural credit, has been dismal as their share of total
credit fell to less than a quarter in 2002, from over 29% a decade ago, a
research paper from the Reserve Bank of India’s economists show...............
Moneylenders rule the roost in rural India, says Reserve Bank of India study
....While the paper uses a decade old data from the last round of All-India Debt and Investment Survey, it points out to a persisting problem of banks not being able to cover un-banked areas. In March, Deputy Governor KC Chakrabarty said in a speech that banking has not been made accessible and reliable to people. Indeed, the key reason for informal sources of credit to thrive has been the ease at which loans can be accessed and the absence of a regular repayment............
Sebi starts repayment to investors in Sahara case
......Sebi has already written to Enforcement Directorate, RBI, and other government agencies to look into possible violations of rules by Sahara in this matter, including any money laundering activities through fictitious entities. However, the regulator is going ahead with the process of refunding the money to genuine individual investors, sources said.............
Adnan Sami not likely to get Indian citizenship
.......Sami had allegedly purchased eight immovable properties in Mumbai in blatant violation of FEMA, without Reserve Bank of India (RBI) permission. He also opened a savings bank account without RBI permission. A probe was conducted by the Enforcement Directorate in all these cases. "In view of the specific report of the special branch, it was decided to submit a special report to the Centre. It submitted that his application for citizenship should be rejected and accordingly, it should be communicated to him,''..........
Tuesday, May 14, 2013
Writing Reserve Bank’s obituary - Dr.N.A.Mujumdar
Thankfully We Have RBI Which Is Not Like CBI
............. During my childhood days, whenever I asked my father (an Ex-RBI official) if he is a central government employee, he used to say proudly that RBI is an autonomous body, government can guide but can’t rule it. Now I feel the importance of that autonomous institution, in its recent annual monetary policy review, against much pressure from the industry and government’s wish, it decided to go with its hawkish stance and reduced the interest rate (repo rate) by a quarter percent only and said that there is little room for further policy easing. One will be surprised, why I am supporting that stance if the whole share market, industry and the government was expecting a dovish stand by the RBI............
A.S.Rao, Regional Director on UCBs in Andhra Pradesh
Regional Director of A.P,RBI,Hyderabad A.S.Rao had given a speech in the event of starting a Tirumala Cooperative Bank in mallakpet,Hyderabad on 13th may 2013. He had given the details and up to date status of urban cooperative banks of Andhra Pradesh the urban banks has a better average as compared to national average but the only drawback is capital,capital has not increased it has same value as compared to the previous years.In the end he requested all the members of urban banks to increase their capitalization as soon as possible.....
If bank boards aren't capable, nothing much can be done: K C Chakrabarty
RBI probes Cobrapost report, reveals violations by banks
..........Cobrapost editor Aniruddha Bahal claimed that both banks and the insurance companies flouted the Foreign Exchange Management Act (FEMA) rules, Reserve Bank of India (RBI) guidelines and KYC norms. The website alleged that banks accepted unaccounted cash and invested in insurance products thereby hinting at a two-way street between the two.............
RBI probe upholds Cobrapost charges on 3 private banks
.............The RBI probe supports these charges, of systemic misuse. It has found use of fictitious permanent account numbers issued by the income tax department, use of unknown non-resident ordinary (NRO) accounts, unauthorised gold sale and rampant non-compliance of Know Your Customer (KYC) norms. Apart from irregular staff junkets to bank officials selling insurance...........
Banks suppressing alerts on suspect dealings: RBI probe
....The report comes against a virtual clean chit given by some RBI executives, including Deputy Governor K C Chakraborty. The RBI probe found that there were several instances of cash deposits below Rs 10 lakh to avoid being reported as CTR (cash transaction report), and it found that banks were accepting Rs 50,000 and above without PAN or "there were multiple and large value transactions in Form 60 accounts in some cases"............
RBI doing its bit to ease interest rates, what about banks?
...........Despite the easing of interest rates by RBI, the weighted average lending rates of banks have declined by less than 0.5 percent, according to RBI data. Banks have said they are not in a position to reduce lending rates because of tight liquidity in the system. Also, to reduce lending rates, they should be in a position to cut deposit rates as well, which they may not be able to do at a time when the growth in deposits has been slow..........
Five steps towards better banking
While the Reserve Bank of India has cut interest rates by a meagre 25 basis points in its annual monetary policy review, it has announced some measures, which, if implemented, could translate into a better banking experience for customers. Here's a look at the most important ones........
Write off of bad debts at whose cost-Tax payers and depositors?
.......Both the RBI and Govt also talk and express their concern on the staggering NPAs and loss to the exchequer, but what prevents them to introduce an inbuilt mechanism to bring under control the NPAs and discipline the recalcitrant borrowers is something strange. .............
Financial matters made simple
Canara Bank has come out with a unique comic book to help improve financial literacy.
Available in six languages — Kannada, English, Hindi, Malayalam, Tamil and Telugu — the comic on ‘Money and savings’ was released recently by the bank’s executive director Ashok Kumar Gupta..........
Monetary levers big and small
.....Sadly, unlike a Rube Goldberg cartoon, where the ultimate purpose is something laughably trivial, like activating a napkin to wipe someone's mouth after each spoonful of food, the intent of monetary policy is the deadly serious business of stabilising the economic environment. In the cartoon, we get to observe what the napkin does. In the case of monetary policy, the official data as reported at present simply do not help to assess the speed and extent of transmission to borrowers from the banking system.........
Change in definition of control in FDI policy to be prospective: Sharma
.................The finance ministry and the Reserve Bank of India have sought clarity on the issue and want to align the definition of ‘control’ in the FDI policy with the proposed definition in the new Companies Bill to get more investments into the country. During his Budget speech, the finance minister had clarified he and his team would amend the definition of ‘FDI’ and ‘FII (foreign institutional investment)’ to remove ambiguity and to adhere to the international definition..........
Yellow metal sends red signal
New Delhi, May 13: India’s trade deficit widened alarmingly by more than 70 per cent in April over the previous month as imports of gold and silver jumped two-fold. The drop in gold prices have pushed up demand. The deficit, or the gap between what India exports and imports, ballooned to $17.8 billion from $10.31 billion in March...........
RBI's new headache: India's huge gold shopping spree
.......The Reserve Bank of India (RBI) brought into effect on Monday previously announced restrictions on banks importing gold. A trade ministry official said the April surge had revived discussion in the government of a further duty hike............
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RBI restricts gold import by banks to consignment
.....“To moderate the demand for gold for domestic use, it has been decided to restrict the import of gold on consignment basis by banks, only to meet the genuine needs of gold jewellery exporters. Bulk of the gold imported by nominated banks is on consignment basis, whereby, nominated banks do not have to fund these stocks,”.........
Banks might tighten loans to jewellery sector
.....Bankers and jewellery exporters expect the Reserve Bank of India (RBI) to increase the margins on gold holding, as well the amount of collateral against which the loan is taken. Rajiv Popley, director of jewellery retailer and exporter Popley Group, said banks would highlight gems and jewellery traders and seek more collateral. Earlier, too, banks were wary of lending to diamond traders; now, with RBI considering tightening the norms, it would become very difficult for these traders to avail of loans.......
Thirst for gold defies steps to curb import
.....The government and the RBI have initiated a raft of measures to check gold imports. The government is planning to stop imports from Thailand, from where the yellow metal is imported at concessional duties. At the same time, the RBI has decided that banks can import bullion only against specific orders from jewellery exporters........
RBI's direction for MSMEs welcomed
The Federation of Associations of Small Industries of India (FASII) has welcomed the new guidelines of the ministry of Micro Small and Medium Enterprises (MSME) and Reserve Bank of India (RBI) for disbursement of loan for MSMEs. Badish Jindal, president of FASII, said.........
RBI was net dollar buyer in March
.....“RBI has been active in the foreign exchange market though with smaller transactions,” said a forex trader with a domestic brokerage. The trader added, “Apparently, the RBI is keeping rupee from rising above `53.75 per dollar levels.” The RBI had net bought $275 million in April 2012. .......
RBI yet to order banks to clear dues of armed forces pensioners
.......According to a Right to Information (RTI) petition filed by Commodore Batra, the RBI had on April 22, 2013, issued a strong message to all banks for credit due amount to affected pre-2006 pensioners and family pensioners with eight percent compensation for the delayed period. But according to Commodore Batra, banks and the Ministry of Defence worked to delay payments............
Uproar in Tripura assembly over chit fund issue
...............Later, Nath and Burman alleged that there was a clandestine transaction of money between the ruling CPI-M and Rose Valley and added, the Agartala Municipal Corporation (AMC) also issued trade license to the company. "When RBI and SEBI did not give them license, why the AMC run by the ruling party issued license for them?", he questioned.
Are company FDs as attractive as they look?
..............Unlike bank FDs, company deposits are not secure. Though non-banking finance companies (NBFCs) are regulated by Reserve Bank of India and others by the Registrar of Companies, you still have the risk of losing your money. These deposits are unsecured, which means that if the company is unable to meet its commitment, you stand to lose your principal. However, in case of bank FDs..........
Fine Future scam: EOW to register complaints against 4 banks with RBI
COIMBATORE: Sleuths of Economic Offences Wing (EOW), Coimbatore unit, have decided to lodge complaints with the Reserve Bank of India against four private banks which allegedly helped Fine Future firm, an online multilevel marketing portal, cheat 1.72 lakh investors across the state to the tune of Rs 818crores..........
When Banks aren’t Safe
It is baffling that every year, government banks write off Rs 15,000 crore of bad debts. Public money is squandered in the advances made to persons or institutions lacking creditworthiness and trustworthiness in repayment of loans. Every rupee collected from taxpayers has to be accounted for properly. That is not being done. The continuing loss in public sector banks has been forcing the government to impose more and more taxes on the common man to plug the mounting losses. The government must wake up before the people’s confidence in public sector banks erodes. Banks must obtain sufficient collateral security while making advances to safeguard taxpayers’ money.
- KV SEETHARAMAIAH, Hassan (ET)
- KV SEETHARAMAIAH, Hassan (ET)
Ratnakar Bank forays into Tamil Nadu
............"As part our expansion strategy, we intend to grow our presence across many more centres in Tamil Nadu. Our first branch in Chennai is a state of art lounge branch, using tablets instead of desktops which help increase the mobility of the branch staff to address customer's banking needs in a relaxed environment and provide them with end-to-end service within the branch,".........
SHG products under one brand, logo in the offing
The Tamil Nadu government has lined up several initiatives to encourage more women entrepreneurs in the state, the most significant being increasing lending through co-operatives, launching a new, common brand name and logo for products made by self-help groups (SHGs), and reservation of 30 per cent of plots for women entrepreneurs in upcoming industrial estates...........
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