India's finance minister may fall back on a tried-and-tested accounting gimmick to create the illusion he is hitting his fiscal targets. Though Palaniappan Chidambaram's ploy won't fool savvy investors, it is nonetheless politically convenient. It will shift the deficit burden by one year, by which time it may have become another government's headache............
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.
Saturday, October 26, 2013
Slipping on onion prices
.......High onion prices were a prime factor in pushing food inflation to 18.4 per cent in September, and going by current indications, the picture may not be very different when the October data come in. The Reserve Bank of India will be watching the trends closely. Given the inflation scenario, it is quite likely that the central bank will be forced to hike rates again, which is not good news for borrowers and the larger economy.
RBI appoints special auditor for First Leasing; firm's MD allowed to quit
The Reserve Bank of India (RBI) has appointed an auditor for a special audit of the book of accounts and transactions of First Leasing Company of India, from the year ended March 31, 2010. A C Muthiah, the chairman of First Leasing, also said its board of directors had accepted last week's resignation of Farouk Irani as managing director (MD), though this would not absolve him of accountability to the company, stakeholders and statutory authorites........
‘Slowdown hurts banking sector’
MANGALORE, OCT. 25:
The asset quality of the banking sector is under stress mainly on account of subdued economy and negative sentiments of investors, according to P. Jayarama Bhat, Managing Director of Karnataka Bank Ltd. Addressing the regional heads’ conference of the bank in Mangalore on Friday, he said there was untapped potential in retail segment – especially in MSME (micro, small and medium enterprises), forex, agri and housing sectors. These sectors will drive growth in the ensuing quarters............
Pvt banks take upfront MTM hit
......This is despite the one-time option provided by the Reserve Bank of India (RBI) to amortise these over three to seven quarters. Banks and analysts said not doing so was in tune with prudent accounting practices. The losses ranged from Rs 18 crore to Rs 289 crore...........
FREEBIE FESTIVAL
.....The other reason behind the freebies is the RBI’s clamp-down on schemes such as the 20:80 payment scheme. Builders are working hard to find alternative ways to attract buyers. One of these is to monetise the waiting period. Chennai-based XS Real, for instance, is offering a ‘No pre-EMI until possession deal’. Vikas Ramanathan, Manager - Sales, explains, “We have had a lot of enquiries and closed six deals in one day. Since the RBI has abolished the 20:80 scheme, we are offering a No Pre-EMI scheme. Here, upon an upfront payment by the customer we offer cheque payments to him or her for the EMIs until the property is handed over.”.........
ICICI Bank: Strong loan growth aids profitability
.......Most private sector banks have dealt well with the problem of rising bad loans. ICICI Bank has also maintained its slippages within guided levels. A small negative has been the lower provisioning coverage and the marginal rise in restructured loans. While the RBI had allowed banks to apportion their mark-to-market losses on their bond portfolio over three quarters, most private sector banks have turned down the offer......
Banks jittery as telecom regulator gets tough on unregistered telemarketers
.......The Telecom Regulatory Authority of India (TRAI) is understood to have notified all service providers to disconnect the telecom lines of about half a dozen entities, mainly banks, as complaints pertaining to non-compliant telemarketing calls were being received from customers. According to TRAI guidelines, financial institutions (banks, insurers and non-banking finance companies), builders and other entities could face the prospect of disconnection of all their telecom resources if they are found to be engaged in telemarketing through unregistered telemarketers.............
Friday, October 25, 2013
The Five Pillars of Raghuram Rajan
How the RBI can be made more accountable – Part 2
Anil Kumar Yadav cracks UGC-NET in record 4 subjects
......One of the notable features of June 2013 UGC-NET results is that Anil Kumar Yadav, an alumni of Sikkim Government College, Tadong and presently Deputy General Manager with Reserve Bank of India (RBI), Gangtok Office, has cracked this tough national level test in record four subjects till date. Till now he has cleared the UGC-NET in Economics, Management, Commerce and Labour Welfare/ Personnel Management/Industrial Relations/ Labour and Social Welfare/Human Resource Management. It may also be mentioned that he has achieved the distinction of having Masters Degrees in 11 disciplines including Sociology, Management (MBA), Mass Communication, Psychology, Financial Management, Environment & Development, M.Com (BIM), Economics, Master of Mass Communication & Journalism (MCJ), M.Com (IBO) and International Relations...........
ICICI Bank organises Coin Exchange Mela at Chandigarh
..........The Coin Mela was inaugurated by Mr. Sanjay Bhatia, Deputy General Manager, Reserve Bank of India (Chandigarh). Mr. P.K.Lamba, Treasurer of Reserve Bank of India (Chandigarh) also graced the occasion. The Coin Mela is organised to offer a free facility of exchanging currency notes with coins to the general public. ...........
TOWN HALL MEET ON MICRO, SMALL AND MEDIUM ENTERPRISES (MSME)
Srinagar, Oct 24: Reserve Bank of India organised its first Town Hall meet on MSME sector today on October 24, 2013 at Srinagar in Conference Hall of Jammu and Kashmir Bank Ltd. K. K. Saraf, Regional Director, Reserve Bank of India, Jammu and Kashmir, chaired the meeting. Besides A. K. Mattu, General Manager and Ramesh Chand, DGM-in-charge, RBI, Srinagar, Parvez Ahmed, Executive President, Jammu and Kashmir Bank, Convener, SLBC, representative from SIDBI, senior Bankers from major banks viz: Jammu and Kashmir Bank Ltd, State Bank of India, Punjab National Bank, HDFC Bank and representatives from Kashmir Chamber of Commerce and Industries (KCCI) and Federation of Chambers of Industries, Kashmir (FCIK) and some entrepreneurs from Kashmir, participated in the meeting. ......
GNLU to train RBI law officers
AHMEDABAD: In a first of its kind training to be held at GNLU, a two-day intensive workshop for 45 law officers of Reserve Bank of India will be organized to impart advanced knowledge of specific laws, legal procedures and policies. The training will focus on Companies Act-2013,.............
RBI chastises bank officials
RBI Regional Director Uma Shankar on Wednesday chastised bank officials for poor attendance at district-level bankers’ committee meetings in the State. Speaking at the State-level Bankers’ Committee meeting here, she said:.........
RBI team to visit Ambur on October 30th
A team of senior officials from the Reserve Bank of India would be visiting Ambur on October 30, to interact with entrepreneurs and obtain feedback on problems if any, in availing loans from nationalised banks. This was informed by M V Swamynatthan, district president of the Vellore District Micro and Small Entrepreneurs Association (VDMSEA)...........
Create National Cooperative Bank - Yerram Raju
My View on "Finding the Next Amul Success Story in Banking":
The author is right in arguing for a robust cooperative banking structure at the grassroots to achieve financial inclusion. But NABARD whose former chairman's views the author quoted has been responsible in a large measure for the current status of the structure - for, it's supervision during the last thirty years has brought down its contribution to farm credit from 62% in 1982 to 12% in 2012 and it failed even to transform the single entry bookkeeping to state of art accountancy consistent with the rest of the financial entities. It has transformed even the RRB structure in a manner that reduced their numbers and spread due to its inability to supervise. The RBI would do well to take back the supervision function and regulatory function from NABARD and create an umbrella institution like the National Cooperative Bank to deal with both the rural and urban cooperative banks or in the alternate create a subsidiary of NABARD as a dedicated arm to deal with the Cooperative banking with specific mandates for performance and regular review.
- Yerram Raju
Reforms cannot wait
My View on "Finding the Next Amul Success Story in Banking":
As public sector banks including State Bank of India and its associates, old private sector banks, new private sector banks, RRBs and cooperative banks have different approaches to resource mobilization, lending and profitability, varying capabilities in terms of outreach and expertise and different mandates from the stake-holders, each category of these institutions will have to be given resource mobilization and credit delivery tasks factoring in these structural and policy aspects.
The reorganization of the banking system may be further delayed for political reasons. As essential reforms cannot wait for a change in the political weather, in the medium term, GOI and RBI may consider the following steps:
• Redefine sub-sectors in the priority sector reckoning the changes that have taken place during the last two decades and realign the targets for sub-sectors. Beyond inclusion of a few additional activities as eligible for classification under priority sector or raising certain ceilings to factor in inflation impact, nothing much has happened in the recent past from this perspective.
• Ask banks to ensure that their rural, semi-urban, urban and metro branches realign their credit portfolios to meet local credit needs
• Instead of prescribing straight-jacket targets for lending to sub-sectors like agriculture, make necessary policy changes which will reflect the availability of expertise and outreach of each category of banks. E.g. If a bank has more branches in urban areas and cities and are able to lend more to microfinance, allow a set-off their disbursal to microfinance over and above a bench-mark against their target for lending to agriculture.
• Route all concessions and subsidies in interest rates through the banking channel and make the lending banker responsible to ensure that the ultimate borrower is charged a minimum interest of, say the rates paid on savings bank deposits by the bank.
(Excerpted from my article “Surmounting the Unsurmountable” published in The Global ANALYST, December 2013 which can be accessed from theglobalanalyst.co )
- M G Warrier, Mumbai
Financial sector regulators to finalize action plan for FSLRC
......“As regards to legislative recommendations, it was decided to analyse the public comments and feedback to further fine-tune the draft Indian financial code. It was also decided that action should be taken for finalizing the road map for creation of new institutions such as Resolution Corporation, Public Debt Management Agency, Financial Sector Appellate Tribunal and Financial Data Management Centre,” the finance ministry said in a statement.........
RBI guv Raghuram Rajan meets FM ahead of second quarter policy review
Ahead of second quarter monetary policy review, Reserve Bank Governor Raghuram Rajan today met Finance Minister P Chidambaram and discussed macroeconomic situation. "I discussed whole set of issues with the Finance Minister including state of economy," Rajan told reporters after the meeting here.........
FSDC meet: India to reach out to sovereign wealth funds
.....The FSDC meeting was attended by RBI Governor Raghuram Rajan, Sebi Chairman UK Sinha, PFRDA Chairman Yogesh Agarwal, Irda Chairman TS Vijayan and all Secretaries of the finance ministry. FMC Chairman Ramesh Abhishek was also present since the commodities’ regulator has now come under the ambit of the finance ministry. Just before the FSDC meeting, all its members, including the finance minister, gave a farewell to former RBI Governor D Subbarao at Delhi’s Gymkhana Club. The FSDC also discussed the possibility of implementation of recommendations of Financial Sector Legislative Reforms Commission (FSLRC). It was decided that all regulators would finalise an action plan for implementation of all FSLRC principles relating to regulatory governance, transparency and improved operational efficiency that do not require legislative action........
A global conference on Financial Inclusion & Payment Systems
Financial Inclusion and Payment Systems Conference will be a landmark event, scheduled to take place on 24-25 October, 2013. With a broader approach and explicitly defined sessions and the top participants, the Global FIPS Conference will be a unique opportunity to engage with a broad range of players in financial inclusion and payment systems space. The Conference will witness a collaborative environment among the top stakeholders, where the relevant issues will be addressed, and the road map to achieve 100 % Financial Inclusion will be put. FIPS 2013 will take into account the very essence of inclusive growth, thereby highlighting on the achievements, shortcomings and challenges on our way to overcome..............
RBI to permit urban banks to open specialised branches
......These branches should be fully computerized. UCBs need to be Core Banking Solution (CBS) compliant. These branches should be opened within the Area of Operation of the UCB. They should be opened on a cluster approach, where certain number of branches are linked to a specialized branch. The branch should be opened at the place for which authorization has been issued by RBI. The conversion from specialized branch to a normal branch and vice-versa should be carried out only with the prior approval of RBI...........
‘Banking sector will comeout of problems shortly’
...........The banking industry will be able to overcome the problems of bad loans and credit squeeze and regain its past glory in a short time, Rakesh Bhatia, Managing Director, Catholic Syrian Bank Ltd, has said. He was speaking at a two-day national seminar on ‘Contours of Indian Banking’ organised by the College of Cooperation Banking and Management, Kerala Agriculture University at Thrissur............
Bank on India Post
..........The most important factor for a depositor is trust, which post offices already enjoy, making them a safe investment destination. The only additional thing they need to do is perform the credit function. This can be undertaken by utilising the services of the credit staff of PSU bankers from nearby areas, or by hiring retired bankers for the first five years; by then they can train their own people. As the postman is people-friendly, especially in rural areas, KYC compliance will be not be an issue and chances of fraud and misappropriation will be minimal...........
Banking woes! ombudsman coming incognito
Bankers beware! Representatives from the office of the Banking Ombudsman may soon ‘catch you red-handed’ delivering shoddy service to a hapless customer and initiate penal action. “Incognito visits are expected to address issues of deficient service,” said S. Chattopadhyay, Banking Ombudsman, Reserve Bank of India............
When customer care fails
........In the case of a bank, take your complaint to the banking ombudsman, the point person appointed by the RBI to redress customer complaints regarding deficiency in banking services. The ombudsman caters to specific geographic locations, so approach the one under which your billing address falls. Besides sending a physical complaint via post, you can email the ombudsman directly or fill up the complaint form on the RBI’s Web site. There is no fee for filing a complaint.........
RBI asks RRBs to ensure service providers adhere to regulatory needs
........The central bank also said that RBI and National Bank for Agriculture and Rural Development (NABARD) should have access to all information resources that are consumed by RRBs, though the resources are not physically located in the premises of banks.............
No room for complacency
...........The Reserve Bank of India and policymakers in Delhi have shown more courage and determination over the last few months than earlier, and have taken decisions and gotten things done. We cannot become complacent. They cannot feel that enough has been done, and that the market rise signals that investors have regained confidence in the country. The push to clear projects, allocate resources transparently, rehabilitate unviable infrastructure projects, and to cut the current account are much needed, and more needs to be done............
Reserve Bank of India faces a difficult choice
............In sum, stability in the rupee has given the central bank room to unwind extraordinary liquidity-tightening measures relatively quickly. On the other hand, we expect RBI's surprise September repo rate rise, by and large, to be a one-off, rather than the first of a series of increases. After all, the growth outlook remains depressed and inflation prints may moderate in the coming months,........
Two-part question
The Reserve Bank of India will announce its second-quarter review of monetary policy next Tuesday. This being a half-yearly announcement, it will cover domains other than monetary, so there is much anticipation about the measures that the RBI Governor, Raghuram Rajan, will announce on these. However, when it comes to monetary policy itself, the actions taken in the mid-quarter review of September 20 and a subsequent reduction of the Marginal Standing Facility (MSF) rate on October 7 have given clear indications of the RBI's short-term and medium-term monetary stance...........
Indian Banks Head Out to the Country
......The Reserve Bank of India has made it easier—fewer restrictions and regulations, less paperwork—to open branches in rural areas because it wants to encourage lending to the farmers and small businesses there. While the costs of reaching rural areas can be high, banks say it is worth it as they start long-term relationships with customers who will need an increasing amount of banking services, including, eventually, insurance and mutual funds.........
Pension Deficit
.......Equally true, it is difficult to project future contributions accurately especially if the NPS takes off. Most important, given the structure of India’s population, the EPS can only be in trouble after a few decades when the proportion of those contributing to the fund becomes bigger than those taking out from it. The time to fix the scheme is now, whether that means greater contributions from the government or from the employer—or by curtailing benefits—is a different matter.
RBI forms panel to implement new bill payment system
.............. The Reserve Bank of India has constituted a GIRO Advisory Group (GAG) to implement a national Indian Bill Payment System so that households will be able to use bank accounts to pay school fees, utilities, medical bills and make remittances electronically. The terms of reference of GAG, which is headed by Prof. Umesh Bellur, Professor, Indian Institute of Technology, Bombay, include suggesting the nature of organisation to undertake the GIRO-based bill payments and framing guidelines for setting up and operating the GIRO-based bill payments.............
Now, just Aadhaar number enough to open an account in Axis Bank
Mumbai: Axis Bank Ltd on Thursday became the first bank to allow customers to open an account with just their Aadhaar number. The Reserve Bank of India (RBI) on 2 September allowed paperless electronic authentication—or electronic know-your-customer (e-KYC)—provided by the Unique Identification Authority of India (UIDAI) as “officially valid.”..............
RBI asks RRBs to ensure service providers adhere to regulatory needs
......“Regional Rural Banks may necessarily enter into agreement with the service provider that the infrastructure and applications are made available for audit / inspection by the regulators of the country,” said RBI. The central bank also said that RBI and National Bank for Agriculture and Rural Development (NABARD) should have access to all information resources that are consumed by RRBs, though the resources are not physically located in the premises of banks........
Here's an index to judge real estate sentiments
.......The National Housing Board’s RESIDEX and RBI’s Housing Price Index (HPI) are currently the only available indexes tracking the Indian Real Estate Markets. There is, however, no credible and impassionate tracking of the sentiment of residential real estate players in India currently and IIMB-CRERI aims to fill this gap.............
Tightening reversal unlikely to spur growth or lower rates
............RBI is focused on lowering rates by looking at the WPI, though what has hit savings is a very high CPI. As a result, the central bank has not been able to trigger a revival in investments despite rate cuts. For four years, real interest rates have remained negative for savers. Low real rates are good for growth but not when real rates are depressed due to high inflation. ..........
What's cooking in inflation numbers?
........So, what's the linkage between inflation numbers and optimism? India's rural population is now more fashionable and is willing to sacrifice consumption of consumer durables/non-durables (as reflected in the declining share of household requisites) to maintain such a lifestyle. If this is true, then obviously, there is a definite reason to celebrate with strong agricultural growth propelling rural demand this fiscal. However, the bad news is that such behaviour may also explain in part why India's core inflation is not declining fast enough and may not do so, however hard we may try.......
Fighting inflation: then and now
...... it would be risky for RBI to base its monetary response upon the new CPI, whose linkages with other macroeconomic variables are not yet understood and when growth was as weak as 4.1% two quarters ago. The vast difference in the two inflation indicators vis-Ã -vis the wider economic conditions suggest caution at this point. Understandably, the central bank is chary and anxious to restore its inflation fighting credentials; it would rather err on the side of over-tightening than be lax second time round. History suggests that this time it is different.
This Diwali, PC must see the big picture
....... The reason for this is that the different circulars issued by the RBI, the customs department and the director-general of foreign trade, which comes under the commerce ministry, are confusing. Consignments, therefore, are not being cleared fast enough by customs. If the bullion industry has a case, then the finance minister can look into it. Mr Chidambaram will have to find a way out of this impasse of lowering interest rates. His other saviour could be RBI governor Raghuram Rajan, who on October 29 will announce the credit policy.
Thursday, October 24, 2013
RBI policy review: Black-and-white approach, not 3D
..........In recent years, RBI has found itself juggling an increasingly complex reaction function. Rajan’s predecessor famously noted that the central bank was trying to conduct monetary policy across three dimensions—inflation control, mitigation of balance of payments risks, and the interplay with fiscal policy. But the D. Subbarao-led RBI, by trying to do too much, failed to varying degrees across each of these three dimensions. Monetary policy was set tight enough to push gross domestic product (GDP) growth below trend and exert a degree of control over wholesale price inflation, but not tight enough to rein in consumer price inflation. The game of cat and mouse with North Block, which houses the finance ministry, has helped encourage some fiscal discipline, but not enough...........
Rajan, Subbarao unite to help FM sail through crisis
........This is for the first time that both the incumbent and the former Governor would attend the FSDC meeting. The last FSDC meeting in July was attended by both Rajan and Subbarao, but that was in their capacity as Chief Economic Advisor and RBI Governor, respectively. “Dr Subbarao has also been called for the meeting. It will be a kind of farewell to him from the Finance Minister,” a finance ministry official, who did not wish to be identified, told Business Standard...............
Need to rebalance RBI’s interest structure
.........It is believed that the economy is susceptible to a rundown when short rates exceed long rates. A further slowdown, in any case, needs to be prevented and is quite feasible since the compelling conditions that necessitated an interest hike have been contained. There is now enough room for the RBI to restore balance...........
Why govt funds for Sanskriti School? HC
The Delhi High Court today expressed its displeasure over the city's reputed Sanskriti School, run by the wives of senior central officers, for receiving government funds, saying "you cannot create a separate island for children of these bureaucrats". "What is the necessity for various state governments and ministries, including the Defence Ministry and Reserve Bank of India, to fund the school run by the officers' wives"? the bench headed by Chief Justice N V Ramana said. ...........
Retd bankers want say in talks with IBA
.......However, as the UFBU comprises only the serving bank officials, several vital concerns of the retired officials remain unaddressed. Though the issues concerning the retirees are also taken up at the meetings between representatives of bank officials and managements, the focus remains on the matters pertaining to the serving officials due to lack of representation of retired members. Hence, even as the salaries of the serving officials have increased by more than 200 per cent as a result of three wage settlements since 1995, the pension of the officials who retired prior to 2002 is yet to be revised.........
State Bank of India Transfers 70 Executives
.........Change
of portfolios and transfer orders have been issued for six deputy
managing directors, 16 chief general managers and 46 general managers.
SBI executives expect more transfers as Bhattacharya gets her core team
ready for the next three years. Bhattacharya was appointed chairperson
of the country’s biggest bank earlier this month. SBI insiders say
this is one of the biggest reallocation in recent times, which should
also be viewed in light of promotions ordered in August and September.......
Prakash Bakshi, former NABARD chairman, to talk on ‘Emerging Opportunities For Enterprises In India’s Agri & Food Industry’
.......The summit will cover topics such as: Future outlook for India’s food & agri businesses; what opportunities and challenges are lying ahead in the agri sector; what are the emerging private equity and M&A opportunities in agri & food industry; and how to build effective agri infrastructure & supply chain logistics. It will also cover primary processing—food commodities, grains, dairy & poultry; processed foods, food service and retail...........
A matter of image
.............The report says that Rajan's international image is responsible for a better relationship with the finance ministry. This is not true for his political masters. The current finance minister has the intelligence to project the Reserve Bank of India's independence on trivial issues (read policy rate changes). During the elections, the RBI will be pushed to the sidelines. Rajan is aware of this.........
Stemming inflation and sequencing the exit
.........The RBI is likely to increase its March-end inflation forecast but at the same time trim down the GDP growth forecast. The classic monetary policy dilemma is back but we think that on balance the RBI is likely to hike the repo rate by 25bps in the October policy to stress on its anti-inflationary stance.........
Have we turned the corner?
In August, India’s economy was headed for a macro-economic crisis, its currency was in a free fall. Since the new Governor of the RBI took over, he has talked the economy back to a position where everyone is happy. What can be a better sign of normalcy than the Deputy Chairman of the Planning Commission having gone back to what he is best at: namely, telling us that, yes, inflation is high but it will come down next month? So what caused the near crisis? And have the causes gone away?...........
Sensex inches away from 21,000: Is it seeing a villain in Raghuram Rajan?
.......All the major domestic and foreign factors having been taken care of as of now, the only major macro event from where the markets pick their next cue is the RBI’s policy meet on October 29, say analysts. “I’d say that the concerns that most of the emerging markets and CAD-challenged countries like India faced due to the fears of tapering, have receded. This has been the reason why...........
Planning Commission scraps Raghuram Rajan index for Central fund distribution
......."We are considering how to reconcile it (Rajan index) with the different indices we currently use in the Commission," Planning Commission deputy chairman Montek Singh Ahluwalia told The Indian Express. He said the Rajan report has to be placed before the National Development Council, the forum which brings all chief ministers and the Union Cabinet together to decide on plan related issues............
The Next Financial Inclusion Challenge: Private Sector Leadership
......What needs to happen to meaningfully advance financial inclusion for the poor – an end-state in which everyone has access and can use the broad range of financial services they need to improve their lives? World Bank President Kim has identified 2020 as a target for achieving universal access to basic transaction services via mobile money, debit cards or simplified bank accounts. This is an important first step towards that broader range of services.........
Banks complete first phase of financial inclusion
Commercial banks have achieved the target of providing banking outlets to all villages in Karnataka, with a population of over 2,000 people. Till now, the banks have covered 3,395 such embanked villages by providing outlets, of which brick and mortar branches have been opened in 402 villages in the first phase under the financial inclusion scheme........
Moolah Mantra
......... Financial planning has been highlighted in the regulations and the certification there under as eligible category for accreditation. The recently notified Reserve Bank of India guidelines on wealth management in banks are also on the same lines. It is expected that implementation of these guidelines will also expand the career opportunities for financial planner (FP) in the banking sector...........
Will banking dreams of corporates under probe be scuttled?
........With agencies now going after business houses with a vengeance - what many are calling a witch hunt of sorts, even honest bureaucrats are scared stiff to take any decision. So will this growing vigilante atmosphere also make the job of the RBI, which is all set to give out new bank licenses to corporate houses, much tougher than anticipated? .......
SBI to get Rs 2000 cr as part of Rs 14K cr banks fund infusion
The Finance Ministry today decided to pump in Rs 2,000 crore in State Bank of India and Rs 1,800 crore each in IDBI Bank and Central Bank of India as part of the Rs 14,000 crore capital infusion plan for the current fiscal. "SBI is getting Rs 2,000 crore. Bigger banks are getting more," Financial Services Secretary Rajiv Takru said here...........
Soft loans will be hard on the exchequer
........It is notable that this policy announcement was made with the apparent implicit approval of the Reserve Bank of India (RBI) Governor Raghuram Rajan - he was present at the finance ministry meeting that approved the "in-principle" decision to infuse more capital in public sector banks to drive the festive season. This is the same economist who famously warned of the impact of indiscriminate subprime lending in the US, well ahead of the crash of 2008, and who has made inflation control the centre of his last monetary policy.............
India's third biggest gold fund reopens to investors
..............Reliance Gold Savings Fund, which manages about $300 million according to Lipper data, will begin accepting subscriptions from Wednesday after suspending inflows on August 1, according to a notice sent to investors. The government and the central bank launched a series of measures this year to curb the country's appetite for gold as India battled a ballooning trade deficit and a weak currency. Gold is the biggest item on India's import bill after oil......
Financial markets and the real economy
....Overall, it may be premature to believe that the current account deficit could be well below $70 billion (as finance minister P. Chidambaram says) or that the current account deficit is no longer a problem (as RBI governor Raghuram Rajan says). Coming back to the apparent stability of the exchange rate, we should not forget that this is the result primarily of a daily demand of $350-400 million being met outside the market, through the swap facilities made available to the oil importers. We should not forget that............
Teaser home loans make a comeback
Three foreign banks — Citibank, Standard Chartered Bank and HSBC Bank — have launched semi-fixed interest rate home loans, popularly known as teaser loans, to attract customers during the festive reason. To avoid the Reserve Bank of India’s frown, they have made these products transparent. A few years ago many banks had launched teaser loans but subsequently withdrew them. In case of Citibank and HSBC Bank, the new offering is valid on loan bookings till November 30..............
Rising NPAs a Worry, But You Can Bet on Select Pvt Banks
..“Private
sector banks are likely to perform better than their public sector
counterparts due to their lower NPAs, aggressive management and ability
to protect margins. Despite their higher valuations, you could buy some of these stocks on dips,”............
No end to banks' woes; NPAs at 4.4% by Mar 2015: S&P
Indian banks will continue to face asset quality troubles till March 2015, and the gross non- performing assets (NPAs) in the system will grow to 4.4% by then, global credit ratings agency S&P said today. "Sluggish economic growth, rising interest rates, and the volatile currency are hurting the country's highly leveraged corporate sector," it said in a note, adding that NPAs will grow to 4.4% by March 2015, from 3.4% in March 2013 due to corporate defaults........
How banks play with our money
..........Don’t believe me? This is what K.C. Chakrabarty, Deputy Governor of the Reserve Bank of India, had to say on the matter in the course of a speech he delivered in Udaipur earlier this month: “Our experience in India demonstrates that the pricing of the products and services — both on the liability as well as on the asset side — are heavily weighed against the retail customers as a group.” Translating for bankerspeak, what the person tasked with overseeing banks is saying is that whether it is relating to deposits (liabilities) collected from retail customers (you and me) or loans (assets) extended to them, the terms of trade are all on the side of the banks. In other words, you are not getting a fair price for your money, and you are not being charged a fair sum for your credit............
Hackers hit bank, steal Rs 16 lakh
MUMBAI: Personal details provided to the bank as part of know-your-customer (KYC) norms are no more secure. In a recent fraud, at least Rs 16.7 lakh was stolen from a Mumbai company’s bank account after fraudsters hacked into the bank’s server and tampered with the information submitted under KYC guidelines.............
Frauds are just a click away...
.......Information Technology Act 2000 mandates a statutory compliance from banks to ensure that the internet banking service offered is safe and secure. The Reserve Bank of India has directed the banks to have a comprehensive internet banking policy to protect the customers against security breaches. Rules regarding IT (Reasonable Security Practices and Procedures and Sensitive Personal Data Information ) u/s 43A, require banks to follow the ISO 27001 security standard for internet banking. The user is expected to keep his login ID and password safe and secure and ensure that no security breach happens due to any negligence. Loss of password by the user is very common as the user falls prey to phishing attacks or.............
Malware in ordinary email can lead to online banking shock
...... Most
financial hack attacks, experts said, start with ‘phishing’, where
fraudsters steal a victim’s personal info by sending out emails that
appear to have originated from legitimate financial institutions. These
emails usually ask the user to update or validate account info after
clicking on a link in the mail. Some phishing emails also come
with an attachment that downloads malware onto computers. The malware
can record keystrokes and steal critical data like logins and passwords
without the user knowing. The information is automatically sent to the
scammer via the internet whenever the malware finds an open internet
connection........
De-jargoned: credit card charges
...............The best thing that you can do before swiping a credit card is read the fine print. Ensure to read your credit card statement every month. Also remember that banks revise charges often, so keep a track of it.
Oracle Helps Banks Deal With Financial Crime And Comply With New Regulations
To help banks mitigate risks while complying with the new Reserve Bank of India guidelines in the present volatile financial market, Oracle today announced the availability of its Financial Crime and Compliance Management (FCCM) solutions in India. Oracle Financial Services Anti Money Laundering and Fraud Analytics provides an end-to-end solution that leverages a robust data model and comprehensive dashboard capabilities to deliver a single transparent, holistic view of all financial crime and compliance related activities across the enterprise. .......
Wednesday, October 23, 2013
The limitations of inflation targeting - Dr. A.Vasudevan
Finding the Next Amul Success Story in Banking
Read - ET
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