Recommendation of Reserve Bank of India’s technical committee to include export credit under the priority sector lending portfolio of all commercial banks is a boon for the predominant Small and Medium Enterprises (SMEs) in export hubs like Tirupur as the move will increase flow of finance...........
The very purpose of VITALINFO is to provide a platform for wider dissemination of updated information related to and happening of events in and around RBI.
Friday, May 17, 2013
HC has wide powers to issue writs against cooperative banks
........The full bench comprising Chief Justice A M Khanwilkar, Justice R B Misra and Justice D D Sud on a question as to whether the Kangra Central Co-operative Bank and other cooperative banks are within the meaning of Article 12 of the Constitution of India, observed that in exercise of powers under Article 226 of the Constitution of India, writs or orders can be issued even against any person or authority, if facts and situation of the case so warrant..............
Banks are not providing collateral free loans to MSME sector’
.........Speaking at the 124th State Level Bankers Committee (Haryana) meeting, MSME-DI Director Vijay Kumar said, "Banks in Haryana are violating the RBI guidelines by not providing collateral free loans to MSME in the state...it is very discouraging." As per RBI guidelines, loans up to Rs 10 lakh to MSME units must be disbursed collateral free. It was pointed out in the meeting that 66 per cent of new MSME units were disbursed loans up to Rs 10 lakh while rest of them were denied loan.............
Financial exclusion
“Reforms’ unintended fallout” (Business Line, May 15) is inspiring enough to make one surf through the RBI working paper referred to by the writer. Financial exclusion is a fallout of liberalisation policies pursued for more than two decades by our original reformers......
Read - HBLFinancial Inclusion: Obligation or Opportunity
................The ultimate aim of financial inclusion shall be complete only when underprivileged are converted into micro-entrepreneurs across the country. Financial Inclusion shall always remain a journey and never a destination. RBI aspires to achieve 100% financial inclusion in India. But the duty lies not only with the government and regulators but also with the service providers and end-customers by exploring the paradigms of opportunities.
Why growth has stalled – and it’s not what the FM is telling u
........The solution is to create a separate body to develop a robust non-banking financial sector and free it from the RBI as well as the bureaucratic clutches of state governments. The RBI’s hands are full and so there is no point in complaining that it is not alert about the crores coming from non-bank sources – leading to dubious use and abuse. The developmental authority for the non-bank sector should primarily focus on helping partnership and proprietorship firms in the economy through appropriate credit mechanisms and non-strangulating regulations............
In 6 years, PM has become 8 years older
.........In his affidavit filed along with nomination papers as a Rajya Sabha candidate from Assam on Wednesday, the Prime Minister has stated that he is aged 82. However, in his affidavit as a Rajya Sabha candidate filed in 2007, Dr. Singh mentioned his age to be 74...........
The autonomy politics
........Last week, RBI governor D Subbarao, visited Kashmir. He made an important statement at Srinagar. D Subbarao said that Omar Abdullah has assured him that state government will enact SARFAESI Act in the assembly or extend it through an ordinance shortly. The act if extended or enforced, according to experts will have serious impact on state’s autonomy as it will dilute Article 370.............
Read..........
Axis Bank MD & CEO gets salary hike
.......her salary will stand revised from Rs 1.78 crore per annum to Rs 1.96 crore, while HRA will go up from Rs 59.52 lakh per annum to Rs 65.47 lakh. Leave fare concession will increase from Rs 11.15 lakh per annum to Rs 12.26 lakh. Utility bills entitlement will be Rs 3.30 lakh per annum...............
Salaried gets relief for now
...........The other point is that there has been a hue and cry over the salary class being penalised with higher taxes or increased compliance, which is probably why that has led to the salaried class being left out, feel tax experts. An easier way would have been probably to attach an annexure and ask to declare all assets all taxpayers have, opine experts...........
Swiss bank ATM in parliament compound! No wonder they are happy
In a move that practically guarantees civility in parliament and an unprecedented cooperation between the government and the opposition in the last year of the UPA II, a high level committee chaired by the finance minister has given clearance for the setting up of a Swiss bank ATM inside the parliament compound exclusively for the legislators of the lower and the upper houses. In a hush-hush ceremony, the prime minister inaugurated the single ATM and dedicated it to the nation........
PMC Bank Deploys Array's Application Delivery Controller
........."Array Networks solution has enabled our customers with high speed connectivity for internet and mobile banking transactions. The performance of the internet banking servers was noticeable. Array has helped us to enhance the business continuity for Internet & Mobile banking applications and we are able to meet the RBI compliance because of the Array Networks ADC solution.".........
Developers’ Response Is Positive But Cautious
The breather for capital starved housing sector has come in, in the form of Reserve Bank of India’s decision to ease External Commercial Borrowing norms for housing. Developers across India are indeed happy with the development. According to Rohit Poddar, Managing Director, Poddar Developer, this is a positive development which will enable Companies in the affordable housing sector to raise cheaper debt by 3%-4% p.a. “It will be important to ensure that the policy is non-cumber some to execute as many of the developers in the affordable housing sector are from the SME Sector,” he said.........
Corporate group-run banks: why now?
..... it is unclear why lending would be enhanced if companies use retained earnings or access funds from capital markets to sponsor new banks. If the argument is that Indian firms are in a better position than banks to assess local risks, corporate capital could instead be invested directly in fresh projects. Further, if the new corporate group-owned banks are expected to boost lending by unlocking additional savings because they can convince depositors of their ability to assume longer-term project risks, they could do the same as companies..........
In black and white
.........In February, the RBI issued guidelines for issuing a fresh round of banking licences. These guidelines allow big corporate houses, existing non-banking financial companies, Indian-owned private sector companies and public sector companies to apply for licences. With so many new entrants, the importance of due diligence by the regulatory authorities cannot be overemphasised. The purpose of banking as an instrument of financial inclusion and access to financial services will be wholly defeated if policy decisions and loopholes in law promote the illegal hoarding of wealth..............
Exposure at Rs 7,000 cr, banks rush to UAE over Winsome Diamonds claims
A team of bankers is visiting Dubai to find out the reasons for loan repayment default by Mumbai-based Winsome Diamonds and Jewellery after the company claimed that it could not clear dues as its Gulf customers failed to pay instalments.............
Interest in inflation
...........The problem, however, is that the bonds are being indexed to wholesale and not consumer price inflation. Since households are only bothered about the latter – currently ruling almost twice that of the former – IIBs hardly offer an alternative to gold or real estate as a hedge against inflation. Nor has the Government proposed any Section 80 deductions or other tax sops for investment in these bonds. ..........
Inflation Indexed Bonds – solution or false hope?
...........To top it RBI and the government have gone to town claiming that IIBs are a natural hedge against inflation and could help to curb gold purchase in the country. It needed to be remembers that majority of gold purchased is in jewellery form. Much of it is bought for status collection and only few venture to buy it for investment purposes and majority of the investment............
Why inflation bonds are the best thing Chidu ever did for savers
........Warts and all, IIBs are the best thing P Chidambaram has ever done for savers. So go for it – now or later. You are unlikely to regret it. But watch for an update just before the launch. We will tell you if there is a thorn embedded in the fine print.
May Gold Bless You !
.............Yellow metal is stealing headlines worldwide for the last few days. The precious metal regarded as the best bet against the inflation for not too long back is facing serious heat at the moment. A fall of around 10% in the last week spells doomsday for the gold investors. The brunt has been faced mostly by the aggressive investors who offered a sizable chunk (50%-60%) of their investment portfolio to gold. Also, gold is the only hedge against the rising inflation especially in the Indian context where Index inflation Bonds (IIB’s) are still a distant reality...........
Gold Funds may be Hit by RBI Curbs on Imports
Gold
exchange traded funds (ETF), among the hottest financial products in
recent times, may face a curious problem because of a recent RBI
circular which bars the import of gold on a consignment basis for
domestic use. Authorised participants (APs) who create and redeem
units backed by gold, and fund houses said this could crimp liquidity in
the product and prevent growth of assets under management in quantity
terms unless RBI clears the air on the issue.............
Read - ET
Read - ET
Looking beyond gold
......... The consequences of the steep gold import bill on the trade balance and hence on the current account deficit is well known and does not bear repetition. The Finance Ministry and Reserve Bank of India are only too aware of the problem but appear to have run out of meaningful options to curb the apparently insatiable demand for gold...........
Cobrapost fallout: Govt, RBI looking at hiking penalty amount
.........."The maximum penalty under the law is Rs 1 crore now and that is very less. There is active discussion now on increasing limit of penalty. So that is something which is under consideration," Rajiv Takru, secretary, department of financial services told reporters today. “As a matter of fact, this (hike of penalty) was discussed at the RBI board and a point was made that the penalty amount is probably less," he added.................
Banks Feel the Sting, Ask Staff to Go Slow with Cover Drive
ICICI
Bank and HDFC Bank, the lenders found to have violated basic
Know-Your-Customer (KYC) norms, have ordered their staff to go slow on
sale of insurance products that are seen as the main means used by
customers to avoid taxes and legitimise ill-gotten wealth. These banks
have verbally requested staff in many of their branches not to pursue
sale of insurance voluntarily till the dust settles on the cobrapost.com sting operations, said three people familiar with the instructions...................
Another Bengal scheme in Sebi net
.............The regulator said that while details of the amount that Basil raised were available from the documents submitted to the RoC, there is no information available about the number and identity of the subscribers to the issue. Sebi has directed Basil not to collect any money from investors, refrain from disposing of properties or assets of the company and diverting any funds.
Expert panel moots insurance cover to secure investments
........The committee observed that the chit foreman finds it difficult to raise money to honour his commitment to subscribers as RBI has prohibited chit companies from accepting any deposit from the public. Securitization could be a right step to enable the foreman to arrange liquidity, the panel said in its recommendations. “The chit fund association’s request to allow undertaking fee-based activity like selling insurance policies and other financial products seemed fair,”.......
‘Time has not come for CBI probe into Saradha scam’
...... The Bench also ordered that a paper-book (relating to the Saradha case) be prepared by May 23 and directed that anyone intending to implead himself do so by May 23. At least three petitions have so far been filed at the Calcutta High Court demanding a CBI probe into the scam. Other agencies such as the Reserve Bank of India (RBI), Enforcement Directorate (ED), SEBI and CBI have all been a party to the case..........
Amend Act to check chit fund frauds, says Dasgupta
..........Commenting on the chit fund scam in West Bengal, Mr. Gupta regretted that only 15 State governments had so far enacted laws for protecting the interests of depositors, at the instance of the Reserve Bank of India. The existing Act on chit funds covered only prize chits and money circulation schemes but there was no specific reference to the MLMS for goods and services. Such schemes — called pyramid or ponzi — should be regulated to prevent frauds. The Chid Fund Act should be amended to cover the MLMS, he said.............
‘Cheat’ funds thrive on lax rules
.............“Absence of a regulator to monitor the activities in the chit fund sector is a major hazard,” points out P. Rajendran, Managing Director of Kerala State Financial Enterprises.
“The entry and exit load is low in chit fund business, providing ground for fraudulent groups to enter the scene. It is high time that a regulator akin to RBI, TRAI, and IRDA is instituted in the chit fund sector,” he says............
Chit funds: Ministry of corp affairs moots new law
Ministry of corporate affairs has mooted new law to cover chit funds. The ministry has proposed that the issue of chit funds should be examined in light of RBI's definition of financial institutions..............
Fund scams target Indians beyond the reach of banks
........."We trusted them like fools because the return they assured was four times more than a nationalised bank," said Ghosh, who says she lost 100,000 rupees in the collapse of Saradha, believing it to be a government-approved fund............
Vikram Pandit to steer JM Financial bank foray
.........The other point is that there has been a hue and cry over the salary class being penalised with higher taxes or increased compliance, which is probably why that has led to the salaried class being left out, feel tax experts. An easier way would have been probably to attach an annexure and ask to declare all assets all taxpayers have, opine experts...........
Here's why HDFC is in a sweet spot compared to banks
........"HDFC is in an enviable position - funding cost is falling while loan yields are holding up (base rate driven). This is causing spreads to expand while gaining market share. Top line is expected to grow at 20 percent plus over three years, which should help multiples (at long-term average now) expand," the research report said setting a price target from Rs1,010 to Rs1,125 over a period of next one year.........
Thursday, May 16, 2013
RBI to issue inflation-linked bonds
........The central bank said Wednesday it will begin the sale of the inflation-indexed bonds from June 4. In the first tranche, the RBI will issue bonds of Rs.1,000 to Rs.2,000 crore. The bonds are a new type of debt that Finance Minister P Chidambaram had announced in the budget in February...............
Bonds erase gains after hitting Dec 2009 lows
.....The comments came after data on Tuesday showed headline wholesale inflation fell below 5 percent in April, raising expectations the RBI could cut interest rates again at its next policy review on June 17. It has cut policy rates by 75 basis points so far this year. Bond yields have dropped close to 40 basis points since the May 3 policy due to hopes of easing inflation, expectations for continued bond purchases from the RBI and a global market rally.............
Sting in the tale
......The RBI's greatest weakness in this regard is the skill levels of its supervisory staff. The long-standing preference for generalist cadres, which comes with the presumption that anybody can do any job with appropriate training and orientation, must make way for the position that certain functions - such as supervision - require specialised skills developed in the course of acquiring a professional qualification. For supervisors to easily spot violations, they must have skills comparable to the people whom they are supposed to be keeping watch over. Recognition of this lacuna is particularly important at a time when new bank licences are being considered. The new entrants will have to be subject to more intense scrutiny as they put their control systems in place........
Deposit and despair
.....Though Mamata Banerjee claimed that she got to know about the scam only on April 15, Bengali New Year’s day, there is ample proof that the government received alerts from the Reserve Bank of India (RBI), the Securities and Exchange Board of India (SEBI), and the Central government on the need to regulate the activities of various illegal fund-collecting companies, including Saradha..........
Finance Ministry ratifies 8.5% interest on Provident Fund deposits for 2012-13
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.............
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...........
Read...........
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...........
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