Adviser's analysis ........... Let's institutionalise VITALINFO Dailyzine..........

Mangesh first in the morning !

Readers of VITALINFO will agree if I say that reading Mangesh Tarambale’s newsletter comes first in our morning activities before breakfast. It has simplified my browsing of the Internet. I visit the websites of eight financial dailies and five broadsheets (general newspapers) every morning. It used to take considerable time in searching for news/reports/articles of interest to me. I still see those websites. But my visits have become much shorter saving time since VITALINFO has already done the selection for me.

Mangesh’s work is a one-man effort. All of us, the beneficiaries of his work, wish him many more years of productive life and service to the RBI community and beyond. But we are all mortals. Since the newsletter has stabilized itself with a large number of readers there is a case for giving some thought to its institutionalisation to secure its future. I am sure there will be some organization, Internet-based or otherwise, that may like to take over the work under the continued ownership and honorary editorship of Mangesh. In that case he will have some supporting staff. The organisation taking over will naturally expect some quid-pro-quo for the arrangement. It can be allowed to use the newsletter for advertisements in an unobtrusive way. The readers can ignore the ads as they do in their Internet visits. Since the RBI is broad-minded enough to allow staff members to participate in many social and cultural activities in an honorary capacity it may not object to the proposal. As an alternative, RBI itself might think of taking over the newsletter under the editorship of Mangesh (on a part-time basis) as a public service of its Department of Communication. The additional cost to the Bank will be small but it will generate tremendous  goodwill among a larger readership not only in India but abroad too, especially among the NRIs. There is a precedent to this suggestion. When I was In Freetown as  Adviser to the Bank of Sierra Leone on an assignment from the IMF I used to get a faxed newsletter from the Fund's headquarters every day that had extracts from various newspapers around the world.

A. Seshan

June 26,2013

__________________________________
A. Seshan, Economic Consultant,
{Former Officer-in-Charge, Department of
Economic Analysis and Policy, 
Reserve Bank of India, and 
(IMF) Adviser to National Bank of Kyrgyzstan and 
Bank of Sierra Leone}
9 Shiv Mahal,
206 Sion Road, Sion,
Mumbai 400022 (India)
Tel: 91 - 22 - 24075087 
E-mail: anseshan@gmail.com
           

RBI Imphal Branch still a distant dream

Imphal, June 25 2013: With the State Government failing to provide the required land area to Reserve Bank of India (RBI), the proposal of opening an Imphal Branch of RBI has remained deferred every now and then, and as such, the prospect of having a branch of RBI in Imphal Branch is still a distant dream. An official of RBI, who does not want to be identified, informed Hueiyen Lanpao that at least 5 acres of land is required for setting up a branch office of RBI in Imphal. The area should not only be safe from the security point of view, but not be too far away from the city. The official further informed that RBI is all set to open its branch in Imphal, but the problem is with the Government of Manipur which has failed to provide the required land.................................

Read..............

CANARA BANK’S RURAL OUTREACH PROGRAMME AND BRANCH INAUGURATION ON JUNE 28

Mysore, June 26 - The inauguration of Canara Bank branch and an ATM along with Rural Outreach programme will be held at Gungralchatra in Yelwal Hobli here on June 28 at 9.05 am in the presence of R.K. Dubey, Chairman and Managing Director of Canara Bank.

Deputy Governor of RBI Dr. K. C. Chakrabarty will inaugurate the branch. Dr. Urjit R. Patel, Deputy Governor of RBI and MLA G.T. Devegowda will be the chief guests............

Read..............

‘Know your customer’ norms for banks discussed at meeting with industrialists

The Reserve Bank of India (RBI) is trying to have a relook at the ‘Know Your Customer’ (KYC) norms so that it does not discourage customers, mainly the common man, from opening bank accounts. Executive Director of the RBI B. Mahapatra held an interactive meeting here on Friday with representatives of industries, non-governmental organisations and also with bank customers to get their feedback on KYC norms...........

Read - The Hindu

Financial inclusion: Still a long way to go

“Perhaps we should have finance ministers representing different districts to improve the banking coverage in the country” was finance minister P. Chidambaram’s tongue-in-cheek remark about the poor state of financial inclusion in India while releasing the Crisil Inclusix on Tuesday..................

Read - Mint

Getting Inclusion

...........More important, one reason for poor banking presence has been the fact that, at current income levels, it doesn’t make financial sense for banks to open branches in most areas. The advent of banking correspondents (BCs) and mobile money transfers, the saving grace is, will give big fillip to inclusion. In other words, financial inclusion will take place on its own as long as the institutional space is created to allow private players to offer their services.

Read - FE

RBI Vs Finance Ministry

.....Certain important facets emerge from this instance. First—the fact that probably the Reserve bank of India is the only institution in India that has hitherto not succumbed to the pressure of the ruling class. While there may have been certain aberrations on certain occasion, but in majority of the cases it has remained insulated— something that other organizations like the CBI, SEBI etc despite their being proclaimed as autonomous/statutory bodies have not remained insulated from political influences. In fact, D Subbarao’s predecessor Y V Reddy too refused such a demand coming from the Government to slash interest rates................

Read -The Sentinel, Assam

Technology, Not Coercion, for Banks

........However, the RBI reckons that financial inclusion can be achieved only through expansion of branch networks to rural areas. It says that a new bank must have at least 25% of its branches in rural areas. This is absurd. Established banks have not found it worth their while to open rural branches. Making new banks waste capital is a bad idea. Instead, the RBI must allow innovative forms of banking, especially mobile banking that is well-placed to leverage on the electronic infrastructure being put in place by the unique identity project..............

Read - ET Editorial

Waiting for the banker

..... To sustain the BC model, RBI has advised banks to open ultra-small branches to support a ten-BC-cluster in a four-kilometre radius. But as the RBI is discovering, opening accounts does not ensure automatic financial inclusion. The low number of transactions per account is adversely impacting the viability of financial inclusion efforts and has to be addressed fast before stakeholders lose interest. The push for direct benefit transfers to Aadhar-linked bank accounts will hasten financial inclusion and increase transaction volumes as subsidies, scholarships and welfare payments are disbursed........

Read - DNA Mumbai Edition Page 10

Closing a bank account attracts charges

..............Says A.C. Mahajan, chairman, Banking Codes and Standards Board of India, an autonomous and independent banking watchdog, “We don’t regulate banks charges. But we always tell them that there should be transparency. Banks are supposed to disclose the charges to the customers in the beginning itself. If banks introduce charges without giving notice of at least 30 days to exist, they are excluded from levying the charges.”................

Read - Mint

Short on change

............The Reserve Bank of India (RBI), Bhubaneswar, distributes coins worth Rs 3 lakh on a daily basis through a dedicated counter and two vending machines. But there is a huge gap between demand and supply. The shortage of small change has also led to a spurt in the business of coins in the city. Brokers will give shopkeepers and others in need of small change coins worth Rs 80 and Rs 85 in exchange for Rs 100 notes. The shortage of coins has especially hit small-time vendors......................

Read - The Telegraph

How the coin in your wallet travels from the mint

 The Telegraph

Panel formed to deal with fake currency

GUWAHATI, June 25 – A committee comprising personnel from the BSF, SSB, Reserve Bank of India (RBI) and different branches of the Assam Police has been formed to deal with the problem of fake currency rackets. The committee was formed in a meeting held at the Assam Police headquarters under the chairmanship of Director General of Assam Police, JN Choudhury..............

Read - The Assam Tribune

Meet held on fake note rackets

......At the meeting, Choudhury stressed the need for focussing on three points — the quantum of denomination, specific areas where these illegal activities flourish and amount of fake currency recovered. He called upon the officers to work in tandem for detection of fake currency and for identifying gangs involved. He requested the RBI officials to issue fake currency samples to police so that they could easily differentiate those and the original notes. The special superintendent of police (CID), Debraj Upadhyay, gave a PowerPoint presentation on detection of fake currency in Assam’s districts...........

Read - The Telegraph

SBI Kathua held DLRC/DCC meeting

......The meeting was organised to review the flow of GLC, performance of banks in key areas relating to deposits, advances under priority sector, lending for the quarter ended March 2013 & review under Government Sponsored Programmes etc. The meeting was chaired by Jitendra Kumar Singh, DDC, Kathua and convened by B M Sharma, LDM, SBI, Kathua. DDC Kathua was accompanied by Ajay Jamwal, ADDC, Kathua, Manoj Kapur, CPO, Kathua, Ram Kauwar, LDO, RBI, Aman Kalsotra, AGM(DD), NABARD, Kathua and others.............

Read - Early Time Plus Newspaper Jammu Kashmir

RBI asks banks to secure information systems

In the wake of increasing cyber attacks, Reserve Bank of India (RBI) today asked banks to test their information systems (IS) and check their robustness periodically. RBI has also asked the banks to put in place appropriate business continuity plans (BCPs) and test them periodically. These ISs should also be subjected to vulnerability assessment and penetration testing (VAPT).............

Read | Business Standard

Wait longer for safe bank cards

..........Considering that RBI has extended the deadline for new cards, your bank will approach you with the new card before 30 November. Till then you can continue using your existing cards. The move to replace the existing card came in due to a rise in frauds. Remember that a chip-based card is more secure as it is difficult to copy data from it compared with a magnetic-strip card. To ensure that the card reaches you, do update your address with the bank............

Read - Mint

Banks ask users of six ‘skimmed’ ATMs to immediately change PIN

 The cardholders who recently transacted at the six city ATM kiosks targeted in a skimming fraud are being asked to change their PIN as a precaution. The National Payments Corporation of India—which provides the backbone system that networks all ATMs—has given banks the details of the cards that were used in the six ATMs during the period they were compromised. Cardholders have been asked to change their PIN immediately to thwart bids to misuse the stolen data. The PIN is essential for transacting on the web and at ATMs.............. 

Read - TOI Mumbai Edition page 5

Finance Minister launches 'CRISIL Inclusix'

The Finance Minister of India, P. Chidambaram launched CRISIL Inclusix, an index that measures progress in financial inclusion across the country. The index, along with a report on the state of financial inclusion in India, was launched at a function in New Delhi. CRISIL has developed this index as part of its corporate social responsibility agenda, with support from the Reserve Bank of India (RBI) and the Ministry of Finance.............

Read........

Banking Business Stuck in the Slow Lane

....Depositors are not rushing to park their savings with banks because while, on the one hand, returns are lower, on the other hand, higher inflation has left them with lower surplus to save. As a result, growth of investments in government bonds,which is linked to the deposits raised, has also slowed.....

Read - ET Mumbai Edition Page 9

Mumbai investors smartest, Delhi follows

.....Mumbai tops the Financial Intelligence Index, followed by Delhi, Hyderabad, Pune, Bengaluru and Chennai in last. Even though Mumbai ranks first, it reaches a score of only 5.8 on a scale of 1-10 in terms of financial intelligence, showing clear room for improvement,"..........

Read - FE

Trimming bulk deposits proves costly

....."They want to lower their pricing as banks are under pressure for margins as NPAs are rising and no interest is served on those accounts. The environment does not allow for finding yields, so banks are looking for margins by lowering their cost of deposits," ...........

Read - IE

Owned or controlled issue: RBI to soon notify FDI Press notes

.....The notification, which has been pending for the last four years, will be used to ensure that foreign direct investments comply with FDI ceilings and other norms. "The Finance Ministry has sent the press note to the RBI for notification under FEMA. It may happen any time," an official in the Department of Industrial Policy and Promotion (DIPP) said. As per the Press Notes, a company is considered as "controlled" by resident Indian citizens if the power to appoint a majority of the directors on its board is held by Indian companies and citizens.......

Read - ET

Why Sebi’s simpler foreign investment rules will not save rupee

.......The Securities & Exchange Board of India (Sebi) move to simplify norms for foreign investments is a positive step to bring in much-needed clarity in such investments. However, the move, which has its genesis in Finance Minister Palaniappan Chidambaram’s Budget 2013, is hardly expected to make a dramatic impact in terms of bringing in greater foreign portfolio investments and easing the pressure on the rupee................

Read.............

Mahindra Finance example shows pitfalls of becoming a bank

Mahindra and Mahindra Financial Services Ltd’s decision not to apply for a banking licence shows that becoming a bank might not be the bed of roses as it is made out to be. While the Reserve Bank of India rules have a certain logic to them, they perversely lead to a situation where those non-banking finance companies (NBFCs) who should be getting licences (in terms of operating in a similar business and have a track performance to boast about) might opt out of the race.............

Read - Mint

Bank licence norms clear and not discriminatory towards large companies: Birla

A day after applying for a bank licence, Aditya Birla Group chairman Kumar Mangalam Birla on Wednesday said the new bank licence norms announced by the Reserve Bank are not discriminatory towards large corporate houses. “The banking licence guidelines are very clear. They are not discriminatory towards large corporate houses,” Aditya Birla Group chairman Kumar Mangalam Birla told reporters on the sidelines of a conference organised by industry body FICCI...........

Read - The Hindu

Reliance Capital to apply for banking licence

Reliance Capital of the Anil Ambani group announced on Wednesday that it will be submitting an application for a banking licence with the Reserve Bank of India. Sumitomo Mitsui Trust Bank and Nippon Life Insurance, two leading financial institutions from Japan propose to take between 4-5 per cent stake each in the proposed new bank subject to necessary regulatory approvals, the company informed the stock exchanges............

Read - The Hindu

Magma Fincorp to apply for banking license

........The 25-year-old finance company had launched a general Insurance company in 2012 and launched its housing finance business with takeover of mortgage business of GE earlier this year. The group feels that its progression towards becoming a bank is a natural extension with which it shall be able to expand its existing successful model for inclusive financial services multiple times across India. Magma said in a release that while it applies for a banking license, its focus remains firmly on the existing business, and upon receipt of licence, all the customers of Magma will have access to a full range of banking services very quickly including deposits, remittances etc., so a lot of inclusion will occur by way of additional services to the existing customer base even without Magma expanding its asset base...........

Read - Mint

Bandhan, Janalakshmi to Seek Banking Licence...

......Unlike a few large non-banking financial companies (NBFCs), microfinance companies can continue with their existing business while foraying into banking. NBFCs such as Shriram Capital are looking for an exemption from the Reserve Bank of India to continue with their niche business of financing used trucks to get into banking. Microfinance companies will be better positioned to meet the priority sector norms..........

Read - ET Mumbai Edition Page 12

Indian Billionaires Line Up To Start New Banks

.........No surprise then that some of the country’s leading industrialists are eager to get a piece of the action in what remains a lucrative business in an under banked country; close to half of the population has no access to banking services. (Hence the lust for gold; but that’s a different story.) ...........

Read - Forbes

India is screwed, no matter what RBI does on rupee

........The question being asked is could the RBI have continued to sell dollars and help stem the fall? As on June 14, 2013, India had foreign exchange reserves of $290.66 billion. This is tenth largest in the world. So it seems that the RBI has enough dollars that it can sell to halt the rupee’s fall against the dollar. But things are not as simple as that........

Read.........

As RBI checks on forex positions, dealers shrug for now

....Dealers aware of the contacts said the RBI has not been asking anyone to curb their positions, unlike in December 2011 when the central bank mandated lenders to reduce their intraday net open positions by 50-75 percent as part of measures to prop up a slumping rupee. .............

Read - ET

Global factors will continue to impact rupee: Jamal Mecklai

....... Why are we talking about the 60 levels. The crisis,if you call it, was triggered by global events. Today's movement was really local because other currencies did not fall, equities did not fall etc. The real issue is we don't know how much longer the global situation is going to put pressure on the rupee. If employment figures are very good for the US, and there is a lot of nervousness in the global market, anything can happen to the rupee...........

Read........

Rupee fall to help economy find better equilibrium: Expert

...."India has got caught in a low growth and high cost environment and that has to be broken out of and one of the ways of doing that is to let the currency depreciate. So, we are actually getting to a situation where the economy will likely find the better equilibrium now," ............

Read..........

Tottering rupee slips to 60 as RBI refuses to lend a helping hand

MUMBAI: The Reserve Bank of India's refusal to defend the rupee at 60 - a psychologically important level for many - led to panic in the foreign exchange market on Wednesday afternoon. Banks rushed to buy dollars after having shorted the US currency on the bet the RBI would continue selling dollars. "The RBI was there (selling dollars) at 59.90 and there was some intervention in the morning... But no one thought it would let the rupee slip below 60," said a dealer...........

Read - ET

Why RBI has failed to defend the Indian rupee

...................The rupee is the worst performing currency in Asia and the second worst in emerging markets after South African Rand. Analysts told NDTV that the RBI does not have the fire power to defend the rupee. The RBI is seen lacking fire power because it does not have reserves and there is "short rupee" in the system.....................

Read........

View from a central banker - A.Seshan

.......The author takes a balanced view: he gives the RBI credit where it's due and criticises the central bank where necessary. In general, I am on the same page as Mr Tarapore when he discusses monetary and fiscal policies and calls for tightening in the context of rising prices. His criticism of the extensive liberalisation of policies in the light of the 2008 crisis is justified. I called that response a panicky overreaction to the crisis and expected the chickens to come home to roost - and they did. However, his suggestion to abolish the foreign currency-denominated FCNR (B) deposits, although in a different context, is shocking - especially in the current state of steep currency depreciation..................

Read | Business Standard

All India RBI Inter School Quiz held

While inaugurating the quiz programme in the presence of a large number of participants mainly teachers, parents and students of various schools, PK Jena, Regional Director of RBI Guwahati, explained that the purpose of conducting the quiz programme is to create an awareness and interest among the students about the history and the role of Reserve bank, banking and finance, other banking institutions, economics, current affairs, personalities and events that have contributed to the growth and progress of India over the years.............

Read...........

VITALINFO - Day-to-day 'companion'......................

Dear Mangesh

I was away to my native place for a few days and due to lack of access to financial newspapers there, was worried that I may lose track of developments in the banking and financial world.  Since I carried my laptop with me, your VITALINFO was my day-to-day 'companion'.  The 'digest' of vital news items collated by you as bees collect honey, was a source of 'tonic' for me and my so-called handicap turned out to be a boon.  Executive Director Dr. Deepali Pant Joshi's appreciation is so timely and appropriate - and I do know that this must be a source of strength for you to recharge your batteries with renewed energy and vitality- but no praise is too high for your Herculean efforts. So, Ruk jana nahi ......  Congrats!

With affection and regards,

- S.M.Khot, Ex-General Manager 

You are doing a great job single handedly ! Kudos to you and you deserve all the possible appreciation you can get. I appreciate the fact that Deepali recognized your commitment and dedication too. Congratulations ! 

- Smt Harmesh Khanna, Ex-General Manager

Dear Mangesh

Congratulations on the prestigious certificate awarded to u by our ED, Ms. Deepali Pant Joshi for your VITALINFO which briefs each and every citizen in the country from all walks of life with the latest information pertaining not only to banking industry but also other areas as well. It also speaks about the single handed effort put in for enriching our knowledge day in and day out.  Keep the VITALINFO going ahead winning more and more laurels.

Regards 

- Lalitha Viswanathan, Private Secretary

Financial exclusion

The government and the Reserve Bank of India are trying hard to make financial inclusion a reality but their best efforts are tangled in red tape. Recently, a young man from a scheduled tribe visited a public sector bank in Kota,..........

Read | Business Standard

Fire over a smoke

The financial fraud by his company and subsequent arrest might have tainted his image, but Saradha Group promoter Sudipta Sen appears unwilling to change some aspects of his lifestyle even in judicial custody.........

Read | Business Standard

Govt approves prosecution of Apex Bank chief, nine others

..........Notwithstanding the fact that a case was already registered against her, five officials of the bank entered into an understating with her and settled the issue in return for Rs 53 lakh. According to the SPE officials, legal advisors submitted a false legal opinion to the bank paving the way for clearing obstacles in the settlement. Reserve Bank of India (RBI) and state government rules forbids any such settlement on defaulted loans, said the SPE officer who investigated the case............

Read - TOI

Study glare on Bengal's Ponzi reach

KOLKATA: It's no coincidence that Ponzi scamsters made merry in Bengal. A research report published by research and analysis company Crisil has pointed out that Bengal ranks much lower than the national average in "financial inclusion". In other words, the average citizen's access to institutional banking systems is very low in the state. The report, prepared with the Union finance ministry and the Reserve Bank of India, shows that in 2011, Bengal's average score was 28.8 against the national average of 40.1..........

Read - TOI

Chit funds scam: SC to hear plea for CBI probe

......The petitioner said the Securities and Exchange Board of India and the Reserve Bank of India were unable to control the chit funds and the Saradha Chit Fund scam was a serious threat to the economy. Due to lack of coordination among different agencies, the State government was unable to stop the illegal activities of the chit funds under the Chit Fund Act. The individual investors had no remedy and the State agencies were not performing their duties to protect the small investors. Hence the present writ petition...........

Read - The Hindu

VPS Advisory promises 20% assured return. Is SEBI on vigil?

.........The company claims it has a technique of making 20% profit consistently. The marketing mailer, full of grammatical mistakes, even mentioned that it never makes a loss. It said, “Overall at any worst case we make profit and come out.” For this, you will need to open a trading and demat account through them or give your demat account, along with the username and password! ...........

Read - Moneylife

Honest Bankers in Cobrapost May Soften RBI Rap

.........So far, RBI has fined three private banks for various irregularities detected during its inspection. We learn that as many as 15 show-cause notices have been issued by the regulator. But, now, the banks can use these honest bankers to forcefully argue that they do not encourage employees to break the rules, much less launder black money. In effect, banks would expect everyone to believe that the willingness to launder black money is not a reflection of institutional tolerance (or encouragement) but an employee fraud................

Read - Moneylife

My View on "FM to meet bank Chiefs on 3rd July" - Dr.T.V.Gopalakrishnan

..........The banks failed to cooperate with RBI is a fact and this has affected the economy in different ways. Savings in banks have come down, savings have been diverted to other assets, NPAs have increased,  productive loans have fallen down and all stakeholders who include the GOVT, the economy, the depositors and borrowers have suffered in the process. The FM will do well if he can make the bankers to work in the interest of the economy.............

Read............

Muthoot Finance is qualified to become a bank: MD

.......“I see no reason why we should not enter the banking arena. We feel we are the most suited and qualified to become a bank,”........

Read - HBL

Birla, Dhoot join banking bandwagon

.............Aditya Birla Nuvo today said its board of directors had approved a proposal to apply for one of the new bank licences. It is the holding company of Aditya Birla Financial Services, the group’s non-banking financial company (NBFC). Another large industry house, Videocon Industries, gave its application for a bank licence today. Venugopal Dhoot, chairman, said: “Videocon is a mass brand, with strong rural identification. Therefore, it will have great visibility (as a bank).” Unlike most of the new banking aspirants, Videocon is not present in the financial services sector................

Read | Business Standard

Spice to Seek Banking Licence, in Talks to Rope in S’pore Investor

The BK Modi-promoted Spice Group will apply for a banking licence in India and is in talks with an unnamed bank in Singapore to offer a stake in the venture if it manages to get an approval from the central bank, the chairman of the group has said. Spice Group, which is headquartered in Singapore, has already brought on board former Sebi chief DR Mehta and former senior executives of Citibank and HDFC Bank to prepare a blue print for its banking foray, using Spice’s existing telecom and retail business, said Modi, who is chairman of the group................

Read - ET page 5

South tops in bank access; Maha, Guj below national avg

........A new index on financial inclusion released by ratings and analytics firm Crisil on Tuesday showed that Puducherry topped the list, followed by Chandigarh and Kerala. Most of the top slots went to smaller states and Union Territories with Goa and Delhi at number four and five..............

Read - TOI Mumbai Edition Page 1

RBI tightens gold lending norms for regional rural banks

MUMBAI: The Reserve Bank of India tightened restrictions on gold lending on Tuesday for regional rural banks (RRBs) and said the curbs extend also to units of gold exchange traded funds (ETF) and units of gold mutual funds, to tame demand for the yellow metal and rein-in a record high current account gap........

Read - ET 

NHB to lower risk weight for housing finance companies within a week

.......NHB said it would follow Reserve Bank of India's decision to reduce risk weight on banks' home loan over Rs 20 lakh. This is expected to have a softening impact on housing loans rates. "We will issue a notice in a week," NHB chairman and managing director RV Verma told ET........

Read - ET

Orchid starts debt restructuring process

CHENNAI: Orchid Chemicals is seeking recourse with its lenders and consequently has made a reference to the corporate debt restricting (CDR) cell, a body constituted by RBI to ensure restructuring debt of an organization............

Read - TOI

Deadline for FCCB buyback, prepayment extended till Dec

The Reserve Bank of India has extended the deadline for buyback and prepayment of foreign currency convertible debentures (FCCBs) under the approval route till December this year. The decision to continue with the scheme was taken in the light of developments in the global financial markets and review of the scheme, RBI said in a communication to commercial banks....

Read | Business Standard

Rs 1,000-cr inflation-indexed bonds auction sails through

..........The RBI received 81 competitive bids worth Rs 2,388 crore from wholesale investors, of which 42 bids (Rs 997.70 crore) were accepted as compared to 167 competitive bids worth Rs 4,616 crore in the first auction with 26 bids being accepted (Rs 985.94 crore). The cut-off yield for the first auction, conducted on June 4, was fixed at 1.44 per cent. However, the response from retail investors remained subdued with two bids worth Rs 2.30 crore...........

Read - HBL

Recent rulings in personal finance sector which can affect you

A look at recent rulings which can affect you..................

Read - Business Today

Ministry to seek priority sector tag for textiles

The Textile Ministry will approach the Reserve Bank of India and the Finance Ministry to accord priority sector status to the textile industry. Once the demand is met, the industry will be able to avail itself of bank loans at seven per cent compared to 12-14 per cent it pays currently........

Read - HBL

Direct Transfer Scheme to benefit people: Vyas

....Additional Secretary, Financial Services, GOI, Director Financial Services, representatives of RBI, SBI and J&K Bank interacted with State Government functionaries on Direct Benefit Transfer Scheme and resolved that the beneficiaries of six districts chosen under pilot project in the first phase should get the financial assistance direct through various banks via e-banking.................

Read - Kashmir Times

Repo rate cut gloom spurs short-term paper demand

..........The Reserve Bank of India (RBI) will have its first-quarter review of monetary policy next month. Earlier, the Street was expecting it to cut the repo rate (at which RBI lends to banks) at the review. Now, however, many economists believe this is unlikely..............

Read | Business Standard

Will Mr Sinha laugh?

........In 2009, the finance ministry set up a working group headed by then UTI chairman UK Sinha. Its members included finance ministry officials, Sebi and stock exchanges’ representatives, academics, lawyers and consultants. Only RBI was missing from the mix. ..............

Read - FE

Thank you, Mr Bernanke?

..........The sword of Damocles of a run on the rupee hanging over the Indian economy would be no bad thing. Instead of being annoyed with Ben Bernanke for the mayhem inflicted on the Indian economy, the responsible elements within this government should perhaps send a thank-you note to him for helping them stave off the fiscal profligates. Hoover Ben, as opposed to Helicopter-drop Ben, may be just the right person to save this government from its political, populist self.

Read | Business Standard

Short-Term Debt a Recipe for Long-Term Disaster

..........At the height of the 1991 crisis — when India’s foreign exchange reserves could barely cover six weeks of imports — the proportion of short-term debt to foreign exchange reserves was 146.5% and short-term debt to total debt was 10.2%, while the debt service ratio was 35%. In the decade that followed, this was reversed as the government and the RBI put a lid on short-term debt, granting approvals only for trade credit, raising maturities for foreign borrowings by Indian corporates by insisting on minimum tenures and a policy bias in favour of more enduring flows such as direct investments and building up foreign exchange reserves................

Read -ET page 18

How to mind your QE and Re

Meltdown. I wish I was talking about Yoko Ono and Patti Smith at the Southbank, but unfortunately I’m not. By now, you’ve probably seen every kind of analysis about the dollar, the rupee, the RBI and what can be done. So why am I writing about it? Because the root cause of what’s happening is not because Fed chief Ben Bernanke hinted that sooner or later, he’s going to stop pumping money into the global economy................

Read - ET

Debating the Indian rupee

.......The worry over the falling rupee is not difficult to understand. Lower value of rupee straightaway cuts the purchasing power of India as a consumer and raises cost for India as a producer. Large amount of dollar debt on the books of corporate India will affect earnings, as more money in local currency would be required to pay foreign debt. .......

Read.........

Chidamabaram didn’t start the rupee fire, but India is burning because of it

........Chidambaram’s “it is happening around the world” argument can be tackled with a simple analogy. Let’s say one of your neighbours starts a fire by mistake, which eventually spreads to your house. What do you do in such a situation? You try and stop the fire from spreading further, rather than sitting and blaming your neighbour for it or saying that I should not panic because I did not start the fire. Irrespective of where the fire started, the damage is yours, if you do not work towards putting it off.........

Read..........

Falling rupee will lift suburban train commuters’ fortunes, promises MRVC

The Mumbai Railway Vikas Corporation (MRVC) seems to be an unwitting beneficiary of the diving rupee. The railway development body expects to save Rs 180 crore from a World Bank loan that was sanctioned back in 2010 when the rupee was stronger.  MRVC now plans to make use of this windfall to revamp seven major suburban stations. A senior MRVC official told TOI, “Originally, the World Bank had sanctioned a loan of $430million in 2010 when the rupee hovered around Rs 44 per dollar. Subsequently, we managed to curtail our loan exposure to $385million due to better fiscal management and global competitive biddings for the project. The rupee has now touched a low of Rs 59, which has resulted in savings of Rs 180 crore.”  MRVC plans to use the unexpected gain on completely overhauling the city’s major railway stations...........

Read - TOI Mumbai Edition page 2

Getting a PAN set to be tougher as govt plans more stringent verification

.....Finance ministry officials said there were some gaps in the current process and the idea was to make the system foolproof and robust. A notification to this effect could be issued next week and the new rule would come into effect immediately after that. It will apply only to fresh applicants. According to rule 114 of the I-T rules, depository account statement, bank account statement /passbook, ration card, passport, voter identity card, driving licence, property tax assessment order and a certificate signed by an MP or a member of Legislative Assembly or a municipal councillor or a gazetted officer are accepted as proof of identity as well as address............

Read | Business Standard

Central Bank of India picks IBM's analytics solution

.........As a result of IBM's solution for corporate performance management, the Bank is now able to gain better insight into branch and regional office performance, allowing for further flexibility and quicker shifts in strategy to drive improved results while also maintaining regulatory compliance, it added.  With the use of analytics, the Bank has moved away from spreadsheet-based planning to a smarter process that analyzes daily financial data based on actual performance and potential for growth..............

Read - TOI

To curb defaults, Canara Bank offers to reschedule education loans

............‘Nevertheless, we are willing to reach out to all the parents to understand their difficulty in repaying their dues. We are willing to extend the loan tenure and facilitate easy repayment,’ ..........

Read - HBL

SBI to get tough on loan defaulters

......SBI will take physical possession of the assets charged to it by the defaulters to preserve their value and realise the maximum amount from their auction. Earlier, the bank used to just take symbolic possession of a pledged asset by pasting a notice that the property belongs to it. Defaulting borrowers sometimes take advantage of symbolic possession to sell off plant and machinery and other pledged assets..............

Read - HBL

Govt, RBI Doing Everything to Get Hold of Economy: Sinha

..........."Inflation, which is proving to be quite stubborn, growth which has dipped, and current account deficit which has ballooned ... We and the government are doing whatever it takes to get hold on the macro economy,".........

Read............

RBI conducts financial awareness-cum-literacy prog at Aghar Jitto Mela

REASI, June 24: Reserve Bank of India in association with State Bank of India conducted a financial awareness-cum-literacy programme at Aghar Jitto Mela. This programme was focused on creating awareness among the common people about forged currency notes, credit cards, ATM, banking transactions, banking ombudsman scheme, opening of no frill accounts (Basic Saving Bank Deposit Account). A large number of people visited the RBI’s stall and got their various queries answered.........

Read........

RBI’s defence strategy

The RBI’s decision to keep interest rates unchanged in its monetary policy announcements was expected due to the rising value of the US dollar against our currency. However, it would have been great had the RBI gone on the offensive and cut rates to propel growth across all sectors............

Read.............

Financial Inclusion – include Derivatives?

Inclusion has been the most-talked-about term in the last few years. India is talking and RBI is walking the way for financial inclusion among the Indian masses. It has been pondered over by economists and financial experts as to why the Indian rural market should be brought under institutional financing and what the end state should look like. The ultimate aim is to bring everyone under the governance system to enable easy dispatch of welfare packages and bring them out of the unregulated financial system. But what about derivatives inclusion among the masses who are already within the system?..............

Read.......

Weak rupee | RBI reverses decade-old forex relaxation for SEZs

......Though the sudden slide of rupee prompted the regulator to notify the norm on June 11, the new directive would now not only build pressure on SEZ units but also their overseas clients to make faster payments. Significantly, RBI’s June notification lifts a decade long exemption for these units..........

Read | Business Standard

SREI, Edelweiss to seek licence from RBI for setting up bank

Joining the list of banking aspirants, financial services firms SREI Infrastructure Finance and Edelweiss Financial today said they will apply to the Reserve Bank of India (RBI) for seeking bank licences. The board of the company at its meeting today, has decided to submit an application to the RBI for obtaining a banking license, based on the guidelines for licencing of new banks in the private sector dated February 22, 2013, SREI Infrastructure Finance said in a filing on the BSE...........

Read.......