NABARD celebrates foundation day

Jammu, July 12 : The National Bank for Agriculture and Rural Development (NABARD) celebrated its 32nd foundation day on Friday at its regional office in Jammu.

BG Mukhopadhyay, CGM Nabard, J and K Regional office, informed that the NABARD was set up as an apex development financial institution with a mandate for agriculture and rural development in the country on July 12, 1982. Over the years, NABARD has added numerous other functions viz, credit planning, financing and monitoring of rural infrastructure, refinance to banks, institution building, supervision, watershed and tribal development, consultancy and micro-finance (through its subsidiaries). NABARD is also playing an important role in the ‘Financial Inclusion’ agenda of the government, which is considered necessary to pave way for the electronic benefit transfer of subsidies and other incentives to vast majority of population in the country.

T Haq Director, council for social development, said the state was lagging behind in many important socio-economic parameters such as the NSDP per capita, employment rate, agriculture productivity, irrigation and roads. He established the need for inclusive growth under State’s GSDP was 21 per cent as against the all-India average of 14 per cent, thereby indicating the importance of the sectors to economy of the state. Asgar Hussain Samoon, Secretary and Commissioner, Agriculture Production Department, was the guest of honour on the occasion. He appreciated NABARD’s concern for promoting agriculture and allied sectors in the state and profusely thanked the chief guest for his valuable inputs, which would be to facilitate development of future strategies and actionable points for all stake holders. Other invitees included representatives from RBI, SBI, PNB, EDB, JKGB, Cooperative Bank and NGOs.

The Tribune, Chandigarh

Badal asks Nabard to dole cheaper loans

Punjab Chief Minister Parkash Singh Badal on Friday asked the National Bank for Agriculture and Rural Development (Nabard) to provide finance to the allied farming sector at interest on a par with agriculture. This would be to give impetus to agriculture diversification program. He also demanded a rate cut on refinance from 4.5 per cent to 2.5 per cent. On the 32nd foundation day of Nabard here, Badal said Nabard had been providing refinance at 2.5 per cent, now increased to 4.5 per cent.............

Read | Business Standard

Retirement Savings: How to grow and protect your nest egg

..... “Retirement planning is very complicated because there are too many unknowns, many of which need to be assumed.” The significant and most important factor that would influence how much you are able to accumulate is where you invest. Out of the various factors that one can control and which one cannot, controlling how much you can save and where you invest can significantly influence your corpus..........

Read - Moneylife

India Gold shortage: Hoax or a pending nightmare?

The campaign measures are laudable if they are being executed in the right spirit. But gold physical prices at lows due to the recent price declines, the sellers of bullion and coins may have been experiencing relative losses in sales, one may get sceptical. This factor may also be forcing them to initiate a campaign advocating crunch on sales..........

Read........

Axis Bank launches its first overseas subsidiary

.......Axis Bank UK Ltd, which got a licence from the UK regulators on 19 April, has set up a branch in King Street in London, through which it will accept deposits and make advances and investments, the bank said in an emailed statement. “The bank would participate in corporate banking, retail banking and leverage business opportunities available in the UK and the rest of European Economic Area (EEA) through its London branch,”...........

Read - Mint

Srei Infra hopes to roll out ATMs on trial basis by Dec

.....Srei had received in-principal approvals from the apex bank for setting up such ATMs in December 2012. As a pre-requisite to getting the final nod, Srei had to receive clearance from the Foreign Investment Promotion Board (FIPB) as the company has foreign investments. The RBI had, in June 2012, permitted non-bank entities with net worth over Rs 100 crore to own and operate ATMs, particularly in Tier III-VI towns............

Read - HBL

Karur Vysya makes remittance easier

..... This offers the remitter the facility to instantly credit funds into the beneficiary’s account in any bank in India. Both the beneficiary and remitter receive free mobile and email alerts instantaneously.........

Read - HBL

Vijaya Bank launches Rupay branded Debit Cards

......Vijaya Bank has launched its Rupay branded Debit Cards which is an Indigenous payment and Settlement system developed by National Payments Corporation of India. Vijaya Bank’s CMD H S Upendra Kamath presided with A P Hota, CEO, NPCI, being the chief guest.

Read - FPJ

Yes Bank sees corporate rivalry behind family feud

.....Yes Bank management is reportedly considering two options right now. They may approach the Reserve Bank of India (RBI) trying to convince the central bank of a possible corporate hand. Alternatively, they would knock the door of competition commission of India (CCI).............

Read..........

RBI cautions public against investing in illegal schemes

Villagers perform a dance while welcoming RBI Governor in Khurda village

............"The important thing is that village people must understand what is legal and what is illegal, what is regulated and what is not regulated. Where should they go for advise. All this is something that they must understand," RBI Governor D Subbarao while talking to reporters at an outreach programme in Khurda village................

Read | Business Standard

Welcome to bank licensing Derby - S.S.Tarapore

..........Given the impending change of guard at the RBI, it would not be desirable to constitute the Committee before early September 2013. In any case, the internal scrutiny will go on until October 2013. Furthermore, discussion with other regulators and agencies concerned would take some time. It would be desirable to have the external committee headed by a former Governor with members having experience in central banking, commercial banking, administration, legal and economics. The Committee should have the opportunity to examine each of the applications before them. It will take at least till March 2014 for the External Committee to tender its advice and the RBI top management to complete its assessment. Political economy compulsions would warrant that in the best interests of transparency of operations, final decisions are taken after due deliberation, say, in June-July 2014....................

Read - HBL

Notes for Our Next Guv

...............You may even earn kudos from people who perceive that you stick to your guns (even if they aren't loaded), never fished for another term (even if it wasn't on offer) and cussedly take on politicians — a clan whose credibility has hit a new low. Such are the times we live in. Duvvuri Subbarao fitted into these times, as Wodehouse would have said, like a map on the wall................

Read - ET

Obituary

I am sorry to inform about the sad demise of ex-RBI colleague  Mr. M. Y. Rizvi (64) Retd. Assistant Manager, Foreign Exchange Department, Mumbai on 9th July 2013 after a long illness. May his soul rest in peace. 

- A U Shaikh

Venkit's exit - a personal loss..........

Governor Dr. Bimal Jalan presented a memento to Shri Venkitachalam at a farewell function when he was deputed to IMF, Washington as Administrative Assistant to Dr.Y.V.Reddy, Executive Director, IMF (File Photo)

I was extremely sorry to hear about the sad demise of Shri S.K.Venkitachalam.He was immaculate in his work , totally reliable and dedicated to his work. He was a man of great patience and remained unruffled even when faced with difficult situations. I will greatly miss him. 

- S.S.Tarapore

If I remember right, Mr.Venkit was also PS to Mr.SS Tarapore when he was Deputy Governor. While he was always a good friend of mine, I had an opportunity of working closely with him in the IMF. While he was brought to IMF by Dr YV Reddy, after one year Dr Reddy came back to RBI as Governor. Knowing his nature and sincere work, Dr.Reddy's successor Mr.Misra continued to keep him as his administrative assistant. He retired from RBI while he was still working in IMF. Till his last days he was keeping good health. As per his wishes, he was cremated without any formal rituals. I was told that he conveyed to his family members that they should not weep  that he lived his full life and he had done every thing to his satisfaction and death to him is as normal as to everybody else. To me, it is a personal loss of a lovely friend. May his soul rest in peace. 
- K Kanagasabapathy

Very sad to hear the news of Venkat's sad demise. No words can mitigate the sorrow which the family is undergoing today but we can all pray to God that he gives them strength to bear this great loss. Venkat was a friend and an excellent PS and a good soul , we will all miss him. 
- Sandip Ghose

I just read the obituary on Mr S. K. Venkitachalam the former PPS of the Governor’s secretariat. I am really at a loss, literally, because he has been one of the persons in the Bank I have always remembered with a lot of respect. I got acquainted with him only over the interview interaction at the time of selecting him for the post of PPS. Till then I had only heard of him as a very reliable and efficient officer in the Secretarial cadre. I personally owe him gratitude as I later learnt that he had taken up an issue  with his boss while in ACD to get justice for me who at that time was a very new direct recruit in my first posting in the Bank. He had personally never discussed it with me. I had heard about it from a third person. I was very happy to hear about his posting in Washington as I felt that his efficiency and sound character were being validated and recognised. Though I have not been in touch with him it always gave me a warm feeling to think about him. I will continue to feel that but also sorry that he has passed on from amongst us in this world. But I am sure he has moved on to a better place. My condolences to his family who must be feeling the loss of such a good human being so much more deeply. 
- Kamala Rajan

I was deeply saddened by the death of Shri S.Venkitachalamji. I remember his helpful  advice to me while working with him.I want to offer my deepest condolences. 
- M.N.Sawardekar

Compliance course to be started

.....Reserve Bank of India Deputy Governor K.C. Chakrabarty will launch this course in Mumbai in the presence of S.N. Ananthasubramanian, ICSI President and R. Bhaskaran, CEO, IIBF...........

Read - HBL

Banks 10th Bipartite Settlement: UFBU Demands early wage settlement

.........UFBU has noted with serious concern the delay in wage revision negotiations in10^th Bipartite Settlement.  UFBU also concerned about the lack of seriousness on the part of Indian Banks’ Association (IBA) in taking up the issues raised by the Unions in the Common Charter of Demands.........

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

Sycophancy and Opaque Promotion Policies Are Biggest Risk for PS Banks

.......It will not be wrong to say that present high level of NPAs is mainly due to sycophant and dishonest promoted officers who have reached the top of the ladder. Although, at this stage, CMDs, MoF officials, RBI officials are in a  denial mode as they are enjoying the cream,  but they will realise soon when financial crisis over takes these banks. (RBI has started realising the flouting of KYC norms of banks  ONLY after Cobrapost expose !).   At the end of every quarter CMDs of different banks announce that things will improve from next quarter on NPA front, but it is going from BAD to WORSE with each passing quarter.  Our PM, FM and bank CMDs keep on blaming the global scenario (SBI Chiarman is in the habit of putting all blames on RBI Governor and non reduction of CRR / non payment of interest on CRR)  for all the ills of NPAs........

Read......

Vitamin G

..............In other words, there's nothing substantive the government or the Reserve Bank of India (RBI) can do about the rupee. It is currently (July 8) resting on a pivotal support and may take a breather, perhaps even recovering a (very) little bit of ground. But with global markets seemingly stuck in perma-hurricane season, any respite would likely be short-lived. What they can - and should - do is infuse some strong vitamins into the country's economy. Vitamin S (for sentiment) is critical but, with credibility extremely low, stocks are near zero - the good news is that Vitamin S quickly regenerates itself once it finds the right trigger. The only other treatment - the silver bullet - is Vitamin G (for growth). The RBI should immediately cut interest rates by one per cent, with perhaps a booster dose in a few weeks.

Read | Business Standard

Making bankers pay for failed gambles

........Several commissions have gone into the financial crisis and proposed reforms. These relate mostly to issues of capital, scope and size in banking. It has taken a parliamentary commission to look into the inner workings of banks and focus resolutely on the accountability of bankers and bank boards. The Commission’s report goes to show that banking reform is too important to be left to regulators and bankers and that parliament, as the representative of the wider interests of society at large, has a great deal to contribute. The RBI should consider taking many of these proposals on board. Indian banking has been dominated thus far by public sector banks, which are intrinsically risk averse and more amenable to direction by government and the regulator. This has made for a certain stability in Indian banking.............

Read - The Hindu

Bankers demand interest on CRR

Indian Banks Association (IBA) today demanded a cut in cash reserve ratio (CRR) and repo rate in pre monetary policy consultations with Deputy Governors of Reserve Bank of India. K R Kamath, chairman, IBA and chairman and managing director, Punjab National Bank said, “we have requested that if RBI can give some interest on CRR, it will be most welcome.” RBI will announce its first quarter monetary policy review on 30 July...........

Read | Business Standard

Banks seek lower tenure for non-resident deposits

...............“We have requested that if the minimum investment period on FCNR and NRE deposits can be reduced to at least six months, it will help us bring some more dollars into the country,”.......

Read - HBL

Difficult to predict rupee fall reversal: Subbarao

......."The rupee depreciation over the last six weeks has been because of global factors .... It is difficult to say how long that effect will persist because it is factors beyond our control,"............

Read | Business Standard

A rate surprise?

The Reserve Bank of India is to announce its monetary policy on 30 July, a good cue to look at what other central banks in the developing world are up to.........

Read - Mint

RBI's cosmetic measures fail to stem rupee fall

..........What these moves suggests is that RBI is running out of options in controlling the currency. Its tightening of controls are seen as signs of the central bank trying to hold the reigns tightly. An economy that has managed to control its current account deficit by inflow of ‘hot money’ in equity and debt market is now paying the price when the reverse flow has started. .........

Read | Business Standard

The taming of the rupee...

......While the RBI notification states “risk management” as the subject of the regulation, the Sebi circular mentions no reason for carrying out the measures. Apart from these formal notifications, there have been some other eclectic interventions in the markets by RBI. State-run oil companies have been asked to meet their dollar requirements from a single bank (July 9). It seems banks were asked not to make predictions about the rupee in their forecasts to the public. The harsh reality is that these actions will not help stem the fall of the rupee; in all probability, they make things worse................

Read - FE

Small steps

........... The rupee’s vulnerability to a range of market and generic fiscal imbalances need tougher policy measures. Currency and markets cannot be kept buoyant solely on RBI and SEBI support.

Read - Deccan Herald

The rupee tempest scuttles fiscal math

It was going well for the government to keep the fiscal math in order. Inflation levels were easing to less than 5 per cent and tax collections were expected to rise. But the near 12 per cent depreciation in rupee against the dollar since the end of April has spoiled the party..........

Read - FE

Another sorry quarter for public sector banks

.......As has been the norm in the past few quarters, public sector banks, struggling with their legacy non-performing assets, burdened under political compulsions to lend to the priority sector and pressured by the diktats of the finance ministry to cut lending rates, are left holding the wooden spoon...........

Read - Mint

Food Bill — not what the stomach ordered - Charan Singh

.........So, there may be a need to evaluate the segments of the incremental population to be covered by the Food Security Bill and undertake a survey of tax payers whose money will be used for providing such food security. This exercise is feasible given the Internet penetration, and support of on-line voting services available with most media channels. Once the mood of the general public is gauged, such schemes in a democracy can be justified and successfully pursued........

Read - HBL

Are Banks Responsive to Credit Demand Shocks in Rural Economies?

......... Undoubtedly, poor rainfall causes idiosyncratic shocks to income and consumption of the households in the rural sector of India and in other emerging economies, which in turn creates shocks to credit demand. It results in a high cost of credit and pervasive rural indebtedness, notes Rakesh Mohan, an erstwhile Deputy Governor of the Reserve Bank of India (RBI), in an RBI paper in 2006. His observation suggests lack of responsiveness of the commercial banking system to credit demand shocks. However, it is a commonsense observation based perhaps on his experience, but not on an empirical analysis of extensive rainfall and farm credit data. From time to time, the financial press and other media outlets in India have also reported isolated instances of the effect of poor rainfall on bank credit availability. But so far there has been no systematic study................

Read..........

No room for rate cut on Jul 30 due to Re plunge: Crisil

The rupee depreciation is likely to hurt the inflation fight and restrict the Reserve Bank from cutting its policy rates at the forthcoming monetary policy review by month end, says ratings agency Crisil. "If the rupee averages at 58 to the dollar this fiscal, average headline inflation could rise to 6% compared to our baseline call of 5.3%. This leaves little room for monetary easing despite the sharp slowdown in GDP growth," Crisil said in a report today..............

Read | Business Standard

Dealers can exploit holes in trading curbs

The Reserve Bank of India (RBI) and Sebi's moves to curb speculation in the currency derivatives market have left several loopholes that traders can still exploit, raising demands for further checks. To begin with, exchanges are interpreting the rules differently even when the norms are applicable................

Read - TOI

RBI may revise WPI inflation estimate upwards: Economists

..........But according to economists the RBI's projection for WPI may be revised upwards soon. “Upward revision of WPI numbers from RBI is on cards. Whether they will do it immediately or after monsoon assessment, that depends,” said Rupa Rege Nitsure, chief economist, Bank of Baroda. Nitsure's projection for WPI inflation for 2013-14 is a tad above 6%. Earlier she was expecting it to be 5.3%............

Read | Business Standard

RBI may ask banks to classify floating provisions as NDTL

.....Sources from the banking circle said that RBI is likely to ask banks to treat floating provisions as a part of net demand and time liability - on which banks are mandated to maintain cash reserve ratio and statutory liquidity ratio.............

Read - ET

NBFCs want status quo over private placement norms

........NBFCs are lobbying with RBI to lift maximum investor cap as well as minimum investment amount.   They say if someone has done something wrong, why should someone who is doing business genuinely should suffer? The reference was towards Sahara Group and Saradha Group. While Sahara has been ordered to refund the depositors money, Saradha investors’ money is as good as lost and there is bleak possibility of recovery...............

Read | Business Standard

Rajan may meet global banks on possible foreign debt sale

The government plans to meet as many as eight banks as it weighs selling debt abroad to raise dollars and help steady the rupee, according to finance ministry officials. The meeting, which could be held as soon as Friday, is a brainstorming session to assess the feasibility of such sales, the officials said, asking not to be identified as the move is confidential...........

Read | Business Standard

Why you shouldn’t position portfolios based on central bank policies

................RBI has time and again acted against market expectations. India’s central bank has either raised rates sharply or cut rates sharply even as markets were expecting moderation. RBI’s focus has shifted continuously with the Rupee (INR) being the primary focus now while growth and inflation have taken a back seat. The INR trading at all time lows has prompted the RBI to curb speculation and put on hold monetary easing that is necessary for the country’s growth. RBI’s focus could change suddenly if the threat to growth is high. Bond markets in India have always lost when trying to double guess RBI’s policy moves.............

Read..........

‘आदर्श ग्राम’ के लिए इंदौर पहुंचेंगे सुब्बाराव

इंदौर, एजेंसी। भारतीय रिजर्व बैंक (आरबीआई) के गवर्नर डी. सुब्बाराव एक दिवसीय दौरे पर 11 जुलाई को इंदौर पहुंचेंगे। आरबीआई के एक अधिकारी ने मंगलवार को बताया कि सुब्बाराव नजदीकी गांव खुर्दा को आदर्श ग्राम घोषित करने के आरबीआई के आयोजित समारोह की अध्यक्षता करेंगे....................

Read.........

Who will give India its next RBI Governor-Montek or Chidambaram?

...........Among Rajan and Mayaram, the former International Monetary Fund Chief Economist is more likely to get a larger support. So it may be a close fight between Chaudhuri and Rajan. However, officials said the possibility of one year extension to Subbarao cannot be ruled out as the government might prefer continuity at RBI in the current economic environment and would also like to leave it to the next government to appoint the new Governor.......................

Read - Business Standard

Venkit - the ever smiling persona no more..............

Shri S.K.Venkitachalam, former Principal Private Secretary to the Governor passed away in the early morning hours on Monday 8^th July 2013 in a hospital after a brief illness.  A person with ever smiling face, Mr.Venkitachalam was known for his soft spoken nature and had the quality of not hurting anyone. Earlier he was in ARC/ACD and then moved on to Economic Department. On his promotion as Gr.A PS, he was posted to erstwhile Credit Planning Cell (presently Monetary Policy Department) and then  transferred to Bhubaneswar. He came back to Central Office as Gr.B and initially posted to Mr.S.n.Bagai, the then Managing Director of New Note Press Project. Venkitachalam was then posted to Secretary’s Department to be the Private Secretary to Dr.Y.V.Reddy when Dr.Reddy was holding the post of Deputy Governor.  He moved on to hold the post of PPS to Governor while Dr.Reddy took over as Governor before he went along with Dr.Reddy to be his Private Secretary at the IMF and he spent about 5 years. Mr.Venkitachalam will be remembered forever for his humility and helping nature. He leaves behind his wife, son, daughter in law and a grandson. RBI PS fraternity will miss Mr.Venkitachalam and as a token of respect, we share the grief of his family members equally and pray for the noble soul rest in peace!

- R.Sridharan

Currency cul-de-sac

The rupee’s continued beating has left Indian authorities, the government as well as the central bank without any clear-cut options for action. Apart from knee-jerk reactions—such as banning banks from proprietary trading in currency futures and ad hoc raising of duties on import of gold—there is little systematic action..........

Read - Mint

Growth woes bigger than INR fall, RBI won't up rates:Gokarn

........current account deficit is the main cause for rupee's depreciation. Fed's move to sqeeze liquidity has also added to the problem. The steps taken by RBI and Sebi will contain rupee movement, but are not a solution to contain CAD..........

Read..........

CPI cites conflict of interest in K M Birla's presence on RBI board

The Communist Party of India (CPI) has vowed to take up the issue of the continuation of Kumar Mangalam Birla on the board of the Reserve Bank of India (RBI), in Parliament saying it was a "conflict of interest" as his group firm is in the race for a new banking licence, but Aditya Birla Nuovo MD Dr Rakesh Jain told Business Standard: "There is absolutely no conflict of interest."..........

Read | Business Standard

Centre-state relations in the world of financial policy

.......Unrealistic? Not at all. With individual states getting involved even in foreign policy matters, which, strictly speaking, are outside their constitutional ambit, can finance be far behind? Or rather, should finance be far behind? The undercurrent of tension involving the yet-to-be-passed Microfinance Bill 2012 exemplifies this: the Bill is effectively set to make RBI the regulator for microfinance and weaken the states’ hold over the sector..........

Read - Mint

A silver lining

..........India will also grow slower than what was earlier expected, by 20 basis points. But the real pressure points are South Africa, Russia and Brazil; their growth forecasts for 2013 have been lowered by 80, 90 and 50 basis points, respectively. The situation is still grim, but are these signs that the worst is over in India?

Read - Mint

Drastic step or careless move?

.............Biswa Swarup Misra, an economist and banking expert, blames the stakeholders of RRB for its poor performance. In 2007, Misra presented a paper on the performance of RRBs to the Reserve Bank of India. ‘RRBs could have done better had sponsor banks played a proactive role in guiding them and state governments provided conducive banking environment,’ says Misra.............

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

Put economics before politics: Adi Godrej tells govt on arresting rupee fall

......Seeking greater cooperation between the government and the RBI, Mr. Godrej said that even though the RBI was an independent body, it was imperative that it joins hands with the government when it comes to economic growth. "I know the RBI is an independent agency and not under government control. If we do not have good growth, we will have more problems," Mr. Godrej said.............

Read........

PM backs opening up FDI to boost rupee

.........An uptick in the economy is vital to fund ambitious welfare programmes like food security and to create a feel good ahead of the 2014 elections where voter discontent on job losses and a faltering economy may prove politically costly. Chidambaram spent the better part of Sunday and Monday discussing ways to check the rupee depreciation with the PM, RBI Governor D Subbarao and Planning Commission deputy chairman Montek Singh Ahluwalia.

Read -TOI

Necessary but insufficient

Recent measures by the Reserve Bank of India and the Securities and Exchange Board of India are being seen by observers as an attempt to reverse the inexorable decline of the rupee. Some of them see these measures as too little, too late. Others are more of the view that anything that can be done must be done; this is no time for squeamishness or purism. Admittedly, these moves - essentially attempts to impose limits on potentially speculative positions by banks and other market participants, which could reinforce the downward pressure - do appear to be rather skimpy................

Read | Business Standard

4 Reasons to Let Rupee Be

..........In recent days, we in India are seeing an array of authoritarian responses. Sebi and RBI have clamped down on market activity on the onshore exchange-traded currency derivatives. There are newspaper reports that RBI is interfering with the freedom of speech of employees of banks, trying to persuade participants to not take positions on the rupee, and trying to interfere with onshore/ offshore arbitrage..................

Read - ET

Promoting non-payment

........Thanks to a special dispensation given by the Reserve Bank of India (RBI), approximately Rs 93,000 crore of loans, which should have become NPAs, have remained restructured assets. So, some Rs 18,000 crore of borrowings by Air India and close to Rs 70,000 crore of borrowings of a few state electricity boards (SEBs) have been recast a second time; in addition, RBI allowed banks to restructure around R5,000 crore of unsecured loans to microfinance institutions, not a common practice. Typically, if bankers recast loans a second time, it has to be called an NPA; clearly, if the company hasn’t been able to revive the business the first time, the chances of it being able to do so the next time are relatively slim...........

Read - FE

Ivory Coast (Africa) to cash for silver–coins for marketing in India

It refers to the African country’s Ivory Coast issuing pure silver–coins of 25 gms with picture of Lord Ganesha at the face–value of rupees 8001. Commemorative coins minted at a German mint are to be marketed in India from Ganesh Chaturthi this year. Earlier this year, a private company of India issued high–priced gold–coins with photo of cricket–icon Sachin Tendulkar embossed, priced at rupees 34000 for ten–gms pure–gold coin, at a time when gold–prices are zooming to around rupees 28000 per gms at that time. The Reserve bank of India (RBI) and the Union Finance Ministry should take immediate steps to stop the sale of such profit–making gold–coins. Sale of gold and silver coins marketed by banks, private firms and even government–agencies like MMTC increases tremendously during the festive season. Gold and silver coins issued during the British regime are available in plenty as duplicates because of their popularity as auspicious and gift items even though fabrication of fake gold and silver coins is a crime. The Union government should take steps to counter the menace. The Reserve Bank of India (RBI) can issue official 24–carrat gold in Rs 20000 denominations with weight of 5 gms. To minimise chances of duplication, these coins should be numbered. A guarantee–certificate bearing the number of the coin and security thread should be plastic–sealed with each coin mentioning weight and purity as attractive gift–items. The face value of coins can be increased after the value of gold in coin crosses seventy percent of the prevailing face value of the coin. Only the RBI should be authorised to issue round–shaped gold and silver coins to be easily available through all branches of public–sector banks and post–offices. Likewise pure silver coins of 10 gms can be issued in denomination of Rs 1000. The system will be net revenue earning for the Government because the suggested plastic–packed coins will never come in actual circulation. All these coins should be made conveniently available in plenty at all offices of the RBI and bank–branches throughout the country. These coins can also be issued to commemorate occasions. Once the RBI starts issuing gold and silver coins, sale of gold and silver by private establishments in form of coins can be banned. However, the sale of the metal may be allowed by banks and others in rectangular or square form. 

- Madhu Agrawal  (The Sentinel)

Ease norms to help SMEs, exports: Commerce Ministry to RBI

............In a letter to RBI Governor D Subbarao, Commerce Secretary S R Rao said, "We would ... request that RBI's special export credit refinance to support PCFC (packing credit in foreign currency) (and it) may be enhanced from 50 percent to 100 percent." The scheme, he said, should be liberalised "to the maximum extent possible through greater refinance margins. It should enhance the overall quantum of refinance available and bring in long term stability to this policy, so as to encourage better export finance planning by both the exporters and concerned banks."...............

Read.........

RBI takes the wind out of NBFC’s sails: Imposes restrictions on private placement of debentures

............The guidelines seem to have startled the NBFCs. This is evident from the quantum of queries and clarifications raised by the industry resulting in issue of another notification clarifying some of the provisions of the guidelines by the RBI within five days of the issue of the guidelines..............

Read - Moneylife

Panel to Help Banks Meet Basel Norms

The government has formed a committee with representatives from India’s top insurer and a few state-owned banks to suggest ways of raising long term capital for local lenders to meet new international rules on capital for banks. The mandate of the committee is to recommend steps to raise perpetual or long-dated bonds which do not have any fixed maturity, and will be issued by Indian banks in line with the new Basel rules which kick in from 2014............

Read - ET

More banks opt for forensic audits

Mumbai: Once bitten, twice shy. That precisely explains why banks reeling under the weight of crushing bad loans are increasingly turning to forensic audit of company balance sheets. This is to check any misuse of the loaned amount as they are turning suspicious of the rising near-bankruptcy claims. EY, formerly known as Ernst & Young, said its fraud investigation team has received at least seven such requests from public sector banks in the last one year, much higher by any yardstick...........

Read - DNA

IRDA bancassurance guidelines put on hold: Will the core issues be addressed?

.........RBI's financial stability report’s Chapter III - Financial Sector Regulation and Infrastructure raises several crucial questions on bancassurance model’s use of unfair and restrictive practices. Here are some important points raised in the report – ......

Read - Moneylife

Irda chief doesn't favour banks acting as insurers' agents

...........His comments come in the backdrop of a recent demand by the Insurance Council that banks be allowed to sell the products of at least five insurance companies in place of the one company norm for each of the life and non-life segments. Banks sell insurance products acting as the agents of the respective insurance companies, which is called the bancassurance model............

Read | Business Standard

Here’s why to have a healthy credit utilisation ratio

Today, having a credit card is not a question of luxury. It has somewhat seeped into our system and many a time comes handy in buying things, which are necessary, and in future turn necessary. Interestingly, the recent data presented by the Reserve Bank of India (RBI) provides credence to the increasing perception that the acceptance of credit cards has improved...........

Read........

Faith of Indian mutual funds still intact in debt and gold

.......Bonds have been under pressure as the weak rupee, the narrowing differential with U.S. Treasuries and a high current account deficit are seen preventing the RBI from easing further after cutting rates by 75 basis points this year. However, fund managers say equities in the second half will remain too volatile to perform better than debt, given expectations for weak corporate earnings in an economy that grew at 5 percent in the year ended in March, the lowest in a decade............

Read - IE

UBS India giving pink-slips post-banking exit, 50 to lose jobs

...........On June 21, UBS India had decided to surrender its banking licence to the RBI after sitting over it since 2008, as part of the group's "capital light strategy" and to reposition the balance sheet, with a view to sharpen its focus on the core businesses in equities and corporate client solutions. According to sources, UBS started distributing letters of termination last Friday and is said to be offering a compensation package of one-month's pay for every year of service completed, which is the practice amongst investment bankers in the country. UBS India has just one branch in the country, based in the megapolis.............

Read........

State-run banks asked to submit plans to raise $25 billion

Mumbai: India’s state-run banks must decide this month on ways to raise more than Rs.1.5 trillion ($25 billion) by March 2018 to bolster risk buffers and meet new Basel III capital standards. “Banks have to look at options other than capital infusion by the government to meet the new Basel rules,” Rajiv Takru, secretary, department of financial services, said in an interview on Tuesday in New Delhi..............

Read - Mint

PSU banks vie for financial inclusion in West Bengal

Till recently, financial inclusion was nothing more than an onerous, target-driven corporate social responsibility for banks. But these days, the once-unbanked people are now spoilt for choice with multiple bank accounts, inclusive of zero balance and free debit card facilities, at least in two districts of West Bengal, namely Cooch Behar and Horwah. The direct cash transfer of subsidy has led banks into a slug-fest, for acquiring new rural customers. The stake, Rs 3 lakh crore— the annual subsidy bill of the government --is big enough for banks to set tall targets to tap the smallest clients of the banking industry..............

Read | Business Standard

PSU Bank recap: Rising NPAs defeat the purpose

.................The sharp rise in NPAs is scaring banks from direct lending. No amount of recapitalization will change this scenario, unless the economic scenario improves, which is unlikely to happen soon. Government is only going through the motions of recapitalizing the banks since the guidelines have to be met.

Read | Business Standard

Jewellery makers, exporters to get regular gold supply

SURAT: Despite Reserve Bank of India (RBI) imposing restrictions on banks for importing and supplying gold on consignment basis, the jewellery manufacturers and exporters in Gujarat will get their regular supply of gold. Metals and Mineral Trading Corporation of India (MMTC), an authorized central agency for import of gold, silver, platinum, palladium, rough diamonds and coloured stones, has decided to intervene on the issue of a regular supply of gold to exporters to boost the jewellery exports.................

Read - TOI

Plastic money gains acceptance in rural India

...... "We aim to cover all the locations where we have branches. All our rural and semi-urban branches, barring a few that have started functioning recently, are offering credit cards to the bank's customers,"............

Read | Business Standard

Bank hiring in 2014-15: No advantage for those who have cleared exams

......“Vacancies for 2014-15 are to be filled through subsequent rounds of common exams and interviews. Notification for POs/MTS-III has already been issued. The existing candidates, if qualified under PO-II or the clerical common written exams, will not be considered for recruitment for vacancies under 2014-15. They will have to write the exams again subject to eligibility,’’........

Read - HBL

Maybank commences Mumbai operations

KUALA LUMPUR: Maybank’s overseas unit Bank Internasional Indonesia (BII) on Wednesday commenced its Mumbai branch operations in India to tap the Indian and Asen market. In a statement, Maybank said both the central banks of India and Indonesia namely Reserve Bank of India and Bank Indonesia have approved the operations of  BII Mumbai..........

Read.........

What Makes a Good Bank Board? Lessons from the YES Feud

............So what lessons does the YES Bank feud hold for the new aspirants? “The new players will need to ensure that the highest standards of corporate governance are established,” says Roy. “The separation of professional management from owners and rent-seekers is better envisaged than achieved. At the risk of oversimplification, I would say that the right set of motivations are required to influence people’s behavior so that they act with the best of intentions and participate in decisions objectively.”

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

J&K fails to get any help from PCI on recapitalization of Coop banks

......However, there was no positive response from the Planning Commission, sources said, adding “what to talk of giving any financial assistance the Planning Commission even didn’t give any assurance to help the State in clearing the liabilities”. Stating that State has been caught in a peculiar situation following denial of any relief by the Planning Commission, sources said, “now the Cooperative Department has been left with no other option but to place a proposal before the State Cabinet for sanctioning of at least Rs 100 crore in order to liquidate part of liabilities and meet the condition set by the Reserve Bank of India (RBI)”. Disclosing that RBI has set a deadline of July 15 for liquidation of Rs 100 crore liabilities by the three ailing Cooperative Banks, sources said, “if the Government meets this condition of RBI the latter will consider extension in the time-frame for obtaining license to work as banks”............

Read..........

Consumer forum asks ICICI to pay Rs 28 lakh

The UT States Consumer Disputes Redressal Forum directed the ICICI Bank Ltd to refund to two residents an amount of 26 lakh along with a compensation of Rs 2 lakh for mental agony and physical harassment and cost of litigation to the tune of Rs 25,000...........

Read - IE

Looking at some of the Reserve Bank of India's goals and aspirations : Duvvuri Subbarao

Speaking notes by Dr Duvvuri Subbarao, Governor of the Reserve Bank of India, for the Golden Jubilee Celebration Function of the Reserve Bank Staff College, Chennai, 8 July 2013........

Read.......

LOBBYING OR REPORTING?

 ................“When you are talking to your source, he/she is giving you a point of view from inside, that may or may not end up being correct. In this particular case, there are only three names that are doing the rounds. However, we chose to highlight Chaudhuri because we learnt that he has strong chances of making it as the head of the country’s central bank”. Bhattacharya doesn’t deny the fact that lobbying can happen and names can be thrown up by sources keeping in mind their personal interests. He says, “There are times when some sources plant names just to scuttle someone else’s chances. And if the reporter goes blindly to his source without any understanding of the issue he is reporting on, chances are he could be taken for a ride”........

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