.....India’s economic growth crashed to a four-year-low of 4.4% during April-June this year from 4.8% in the previous quarter, proving fears of a widespread slowdown as factories are producing less, companies are offering fewer jobs and prices continue to remain high. The estimates of India’s gross domestic product (GDP) — the broadest measure of value of all goods and services produced in the country — demonstrate a deeply hurt economy hit by a toxic mix of a free-falling rupee, dipping investment, high borrowing costs and rising prices. From a foreign investors’ darling to an economy characterised by policy flip-flops, the Indian economy’s turnabout has been as rapid as the heady 9%-plus growth it had once clocked during 2004-2008. Many analysts reckon it could get worse.............
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, November 2, 2013
Bittersweet news on interest rates
........Should it be considered as good news on lending rates? No, not yet. Borrowers will have to wait for the banks to size the situation — whether it is conducive to pass on the reduction. As of now the home loan rates have neither been increased nor decreased and remain at last month’s level. The festive offers continue, which should be a good opportunity for home loan seekers to enjoy the benefits such as lowered interest rates and reduction in processing fee. Since the RBI is concerned that deposit mobilisation is not happening aggressively banks will have to borrow from other sources to meet the credit demand...........
Step taken by RBI to help combat inflation: Chidambaram
.........He said that export figures have been good for the last few months and the recent steps taken by the Reserve Bank will help in combating inflation. Momentum in export growth will continue in remaining part of current fiscal, Chidambaram said............
Chidambaram defends Rajan’s rate hikes
........Rajan has hiked the repo rate twice by 25 basis points each since he took over as RBI Governor. But, unlike in the tenure of the previous Governor, D. Subbarao, this time neither the Finance Minister nor his Ministry reacted on the day the policy was revised. However on Friday, Chidambaram broke his silence and said that the monetary policy had to be understood in the context in which it had been presented..........
Supreme Court upholds U K Sinha's appointment as SEBI chief
The Supreme Court on Friday upheld the appointment of U K Sinha as SEBI chairman, saying it was done by the government fairly and in accordance with the procedure of the law. A bench of justices S S Nijjar and P C Ghose dismissed a PIL challenging the appointment of Sinha, observing that the petition was not maintainable on various grounds but it had decided to hear it as the appointment to a very senior position was challenged..........
Friday, November 1, 2013
Duvvuri Subbarao: On India, technology and the importance of authority
Inflation tilts the balance - Dr.S.S.Tarapore
........While the Urjit Patel Committee will no doubt throw fresh light on strengthening the monetary policy framework, it would be useful if it were to give attention to the business cycle and the imperative need to take policy action before the upper turning point of the cycle is reached. In India, unfortunately, action is invariably taken after the upper turning point is reached, and if, corrective measures are delayed, the downturn gets aggravated. Again,...........
How the RBI can be made more accountable—Part 3
......... In other words, unless the RBI becomes the change that it wants to see on the ground in the financial sector, I am afraid that there will be very little action on the ground in terms of accountability! So, what needs to be done to help move the RBI to a more accountable entity, from a long term perspective? We discuss this briefly in this final article in the series on RBI’s accountability!..........
Exclusive Interview: Raghuram Rajan - Good thing about democracy is that it pushes the system to find solutions
.......I don’t take credit for markets movement. What we have to focus on is a stable macro economic environment. We have to bring inflation down. That is the best way we can help growth. We can help growth in other ways. Let us try and increase the reach of the financial sector to every village. We can give people good instrument for saving like inflation indexed bonds. ...........
Dearness Allowance Increase for Bankers from November 2013 to January 2014
............Based on the above calculations the new DA will be @ 96.15%, for the months of November, 2013 to January 2014. [The DA for August 2013 to October 2013 was 88.95%] i.e increase of 7.20 %. (increase of 48 slabs) We give below the DA for November, 2013 onwards vis a vis.............
Read..............
Read..............
Financial Inclusion Makes 2.5 Lakh Villages Bankable
....“In
India, we believe that financial inclusion has the potential to bring
in the unbanked masses into the formal banking system, which could lead
to increased savings, eventually leading to economic growth,” RBI
executive director G Padmanabhan said last week in Paris during a panel
discussion at the Joint European Central Bank and Banque de France
Conference. ...............
Evaluation desirable..........
My View on "Financial inclusion is not a new dispensation - Dr...":
The presentation is a status report on Financial Inclusion with a good analysis. However there are a few points that need closer attention;
1. The low per capita credit to Basic Savings Deposit account holders is worthy for a detailed look and this will provide the actual risk under FI that the banks would be willing to take under the score. The penetration is still very low.
2.The Aadhar linkage: Direct Benefit Transfer - it is more on the instruction than implementation. My individual survey indicates that 60 percent of cooking gas subsidy linked to aadhar has not been credited even after two months of delivery of the cylinder in the urban areas due to the NPCL not crediting or delayed crediting of the subsidy to the linked account of the concerned bank; where credited the banks have been taking anywhere between 7 and 15 days for extending credit into the accounts. When this is the scenario of urban clients the rural areas where the clientele are less literate the problems would be much more complex. Further, the Supreme Court has ruled that the linkage cannot be insisted and it does not have legal sanction. Now it is in a limbo. How do NPCL and Banks streamline the whole process and assure proper delivery of the intended DBT? A deeper probe and analysis is required.
3. The FLC programmes require an annual evaluation not as to the number of programmes rolled out but to what extent the trainees have secured the benefit out of these programmes and how it translated to better the FI efforts.
- Yerram Raju
A wider mandate needed
My View on "Bank licence: RBI may miss deadline":
The process for opening some more banks in the private sector was set in motion with the release of a discussion paper on the subject by RBI more than three years back. Like allowing commencement of any other business which is not prohibited by law of the land, ideally, it should have been possible for any individual or organisation to apply for a banking licence and RBI should have been in a position to grant or reject the application based on the need for a bank and the eligibility of the applicant to run a bank. The impression being created is that policy in this regard will be decided by North Block (read Finance Ministry) and Mint Street (RBI) based on their perception of eligibility of applicants for licences, which perception changes on an ongoing basis.
Clarity is only on one point which seems to be the government’s anxiety ‘that some licences are awarded before next year’s Lok Sabha election’; if possible, by the end of the financial year (March 31). On August 27, 2013, Reserve Bank of India has released a Discussion Paper on ‘Banking Structure in India – The Way Forward’. The Discussion paper has identified certain building blocks for the reorientation of the banking structure with a view to addressing various issues such as enhancing competition, financing higher growth, providing specialised services and furthering financial inclusion. It has also emphasized the need to address the concerns arising out of such changes with a view to managing the trade off for ensuring financial stability. It would be in the fitness of things if the Jalan Committee appointed by RBI to vet new bank licence applications is expanded and given a mandate to take into account the issues raised in the RBI Discussion Paper of August 27 and give the committee’s views on the eligible candidates from the 26 applicants conforming to the performance needs envisaged in the Discussion Paper and suggest structural changes in the banking system for further policy initiatives.
- M G Warrier, Mumbai
Only merit matters
In response to a query at a news meet, Raghuram Rajan had to reiterate “I am an Indian citizen” (Business Line, October 30). Merit is the only consideration in such appointments; issues like citizenship should not even be raised. Let us not forget that the first Governor of the then newly-constituted Reserve Bank of India in 1935 was an Australian. Recently, the British Government appointed a Canadian, Mark Carney as Governor of the Bank of England, to succeed the well-known Sir Mervyn King, as the government wanted the kind of experience the former had. Many Indians hold a Green Card to live in the US and gain wider experience and better work ethos.
- K.U.Mada, Mumbai (HBL)
Situations vacant
The economic division of the finance ministry has been headless since September when Raghuram Rajan moved to the Reserve Bank of India as governor, and a replacement looks unlikely anytime soon. Meanwhile, the division has suffered another vacancy..........
MBA arrested for selling 'RBI bonds'
.....In one such case, Kulshreshta promised Sanjita Hadimoni a role in a film, provided she gave him Rs 22 lakh. He told her he would invest the money in bonds. Hadimoni, who is from Dubai, gave him the money and the accused made fake gold bonds and posted it to her. The documents not only contained the name of the woman, but also bore the stamp of the Reserve Bank of India (RBI). When a relative who worked at the RBI told the woman that the documents were fraudulent, she asked for her money back. Kulshreshta allegedly harassed and threatened her. The victim then lodged a complaint at the Dindoshi police station...........
Four Nigerians get 3-yr RI for online fraud in unique ruling
............The accused had created email IDs resembling that of prominent organisations like the Reserve Bank of India, Bank of India and Coca Cola, and used to send emails to people informing them that they have won lotteries and if they want to encash it they would have to deposit certain amount in a bank account number provided by them (Nigerians).......
Banking on safety
In the light of volatile fluctuations in the stock market, precious metals, real estate, and so on, small investors have limited investment opportunities, especially in rural India where people do not have adequate knowledge about diversified investment avenues such as mutual funds, corporate deposits and the stock market. Bank deposits are considered the best investment option. Lakhs of senior citizens prefer only bank deposits, which guarantee them assured returns on their investments, to see them through life. Though bank deposits are safe, the returns are not so attractive when compared to other investments such as SIPs, corporate deposits, and so on. TDS deduction on interest will further reduce the returns. On an average, the depositor will get a maximum of only 8 per cent return (after TDS) on bank deposits. Hence, TDS should be discontinued. Alternatively, the present interest limit of Rs 10,000 for TDS should be increased to at least Rs 50,000; the benefit should be extended at least to senior citizens, who depend totally on interest income.
- Udaya Sankar (HBL)
Euphoria of the 5 per cent
.............What difference will the central bank’s estimates of a marginal spike in GDP make to our perception of economic growth? For those who consider India an emerging economy such as South Korea, Japan or even Iceland, perhaps a GDP of 5 per cent would be wonderful. But in order to think this way they would have to also deal in and perpetuate a fiction in which the expansion of one part of the national economy suffices to determine the destiny of the whole..........
Repo as key rate
This is with reference to the editorial “A mixed bag” (Business Line, October 30). All this while, RBI governors prioritised inflation over growth. As a result, the apex bank has been forced to reduce the growth forecast to just 5 per cent for the current fiscal. While the RBI governor’s move to envisage ‘repo’ as the key policy rate is welcome, he needs to cross-check whether this will bring the desired outcome. The RBI has failed to hold back food inflation even after successive rate hikes. This is mainly due to the rise in fuel prices, particularly diesel. This is a peculiar situation that exposes the lack of coordination between the government and the RBI. On the one hand, the government is increasing fuel prices every month and, on the other, the RBI continues to sacrifice growth by putting the blame on inflation. Both these entities should work in tandem to put the slowing economy on track.
- Vivek Mathai George (HBL)
CPI raps Rajan for 'opening up banking sector' remark
..............On Rajan's recent statements about major reforms being in the offing that would allow foreign banks to enter India in a big way and even take over domestic lenders, he said while 80 percent of banking activities were carried out by state-run banks, "foreign banks have never contributed to the development of the Indian economy." "Some of these banks have also been responsible for serious unethical practices," he said and also criticised the government for earlier allowing private sector to open banks.......................
India: Rajan steadies the ship
.........The government has been spending too much, and been too slow to deregulate the economy to encourage investment. Rajan has steadied the ship, but the government must get its act together if the recovery is to last.
Industry is obsessed with interest rates: C Rangarajan
NEW DELHI: Prime Minister Manmohan Singh's economic advisor C Rangarajan hit out at Indian business for its criticism of the central bank's latest monetary policy, saying that industry was obsessed with interest rates and backing governor Raghuram Rajan's push to rein in inflation. He also said that India's growth this year would be...........
Rajan shows no innovation
.....However, governor Rajan’s two policies are in fact too cautious. These do not reflect any proactive approaches that were expected from a person with global exposure and financial elan. Maybe, the fault lies more in expectation than in the execution of a policy in the current situation. But surely this is not the kind of approach that will bring a spring back into the economy.
FOMC meet outcome: Bernake takes over from where Rajan left off
.......However, party for the Indian stock markets, which have already been on an upward spiral since the Reserve Bank of India (RBI) governor Raghuram Rajan reviewed the Monetary Policy on Tuesday, could continue for some more time as a result US Fed’s stance as this would keep the FII flows coming into emerging markets (EMs) like India. For the markets, Ben Bernake has taken over from where Rajan left off..............
Muthoot Finance aims to become financial supermarket
Kerala-based Muthoot Finance, which has applied for banking licence, is aiming for an image makeover to transform itself from being just a gold loan company to a financial supermarket. "Muthoot is the only company from Kerala which has applied for banking licence," Chairman M G George Muthoot told reporters here................
Bank washes hands of Mamata's savings scheme
......... State-run Allahabad Bank, one of the four 'collecting banks' for the scheme, on Thursday dissociated itself from it saying that the bank was included without consent. While the scheme has already generated a 'lot of interest among people', the bank has declined to be a part of it saying that it needed further clarification from the Reserve Bank of India (RBI).......
Is New RBI Bond as Good as Gold?
.........On Tuesday, the Reserve Bank of India said it will issue the instruments, which will have a ten-year tenure, starting November or December. The rate of interest on the bonds will be a fixed rate plus inflation. Although world over such bonds have been used as a way to attract small investor savings, India is only now issuing them. Mr. Rajan’s Diwali gift is more than a kind gesture. It is squarely aimed at weaning Indian investors from buying gold, which is traditionally viewed as a safe hedge against inflation........
His dream a joke, sadhu now says give me 10 hrs, I will give you gold
.........Speaking at his ashram in Buxar, Sarkar said he knew the "exact location" of the gold. Demanding that the Army be roped in for the excavation, Sarkar said he could deliver the treasure within 10 hours. However, he said, the government would have to accept his terms — deposit 80 per cent of the gold in the Reserve Bank of India and use the remaining 20 per cent for the development of the region...........
Thursday, October 31, 2013
Now growth must walk alone - Renu Kohli
......At first glance, it is hard to quarrel with this policy configuration. After all, the external financial shock hit so badly precisely because of imbalances caused by past monetary-fiscal laxities; adjustment means tightening these. There’s little to squabble about fiscal belt-tightening; this was long overdue, so seeing it firmly in the saddle now vis-Ã -vis budgeted targets is a positive development. The problem is with inflation and monetary policy: Which inflation? How much must interest rates rise to contain food price-triggered inflation expectations and bring back savers from gold?..........
Financial inclusion is not a new dispensation - Dr.Deepali Pant Joshi
Speech by Dr Deepali Pant Joshi, Executive Director of the Reserve Bank of India, at the Vth Dun & Bradstreet Conclave on Financial Inclusion, Kolkatta, 28 October 2013
.....Access to finance for those who are getting crowded out of the credit markets is an equally important element. Therefore, the Reserve Bank has reinforced its efforts to improve financial access, especially for small businesses and individual households. The RBI has set up a Committee on Comprehensive Financial Services for Small Businesses and Low Income Households under the Chairmanship of Dr. Nachiket Mor a Director on the RBI Central Board of Directors. The mandate of the Mor Committee is to frame a clear and detailed vision of financial Inclusion and Financial Deepening in India and to lay down a set of design principles that will guide the development of institutional frameworks and regulation for ensuring these outcomes..........
Why India should steer clear of sovereign wealth funds - Charan Singh
The Government of India, according to press reports, is considering approaching sovereign wealth funds (SWFs) to invest in India. This is an interesting idea that needs to be examined closely. In the recent financial crisis, SWFs are known to have played a stabilising role but that has not been their historical image. In fact, the threats posed by the SWFs and their intentions were characterised by the ........
Successful inning coming to an end...........
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| File photo |
- C.B. Paunikar, PS to Regional Director
Rejuvenating VITALINFO............
Dear
Mangesh
Viewing
each edition of your VITALINFO is an eye opener, refreshner and rejuvenating. We are all proud of you and bit jealous of
your CONVICTION, COMMITMENT AND PERSEVERANCE IN KEEPING ALL UPDATES AVAILABLE IN
YOUR SITE. I am shortly coming to Pune and will try my best to meet you in
person to congratulate you. Regards.
- P N Nandakumar
Secretary, Reserve Bank Retired Employees Assn Kochi
HDFC Bank launches rural financial literacy initiative in Chhattisgarh
HDFC Bank Ltd had launched its rural Financial Literacy Initiative in Chhattisgarh under the aegis of the Reserve Bank of India (RBI) at the village of Jamgaon near here. Through this initiative, the bank will conduct a series of two literacy camps in each of its rural branches in Chhattisgarh. This is the first programme to be organised by the bank in the state in the presence of Nirmal Chand, General Manager of the RBI and other senior officials of the bank............
It's raining new notes, coins
.............According to sources, this initiative by RBI is to break the monopoly of money-changers in parts of the city including Manek Chowk, who offer new notes and currencies at a cost. "Many times these money-changers exploit traders and extract unnecessary amounts of new notes", said an official..............
Clarification should end speculation
My View on "I have never applied for citizenship of another co...":
This issue was first raised in ‘public’ by a politician and the ‘gossip’ was enjoyed by some idle mailers. Hopefully, this clarification coming from Rajan will end the speculation. We are forgetting that such uninformed allegations will affect the prestige of Indians as a community. World citizens like Dr Rajan may take it in their stride and take time to explain the real position. But this has an impact on the Indians whom we call ‘NRIs’ who are holding high positions abroad to the mason or tailor from Kerala or Bihar who has just landed in UAE for employment.
- M.G.Warrier
Instant rapport
..................At the Reserve Bank of India too, women have been in leading roles—Shyamala Gopinath, K.J. Udeshi and Usha Thorat have been Deputy Governors. But what makes Arundhati Bhattacharya’s appointment unique is the fact that she heads a 206-year-old institution which is on the cusp of a major overhauling as banking practices are churning not only in India, but globally. As the head of the country’s largest banking organisation—SBI along with its subsidiaries controls more than one fifth of all banking assets in India—she has to strike a balance between the government’s larger vision for the economy and the bank’s vision for its own growth, simultaneously ensuring that the employees remain happy and contented and become a partner in the growth process...............
For bogus charge of fake currency, 2 ITBP men slap Rs. 30-lakh defamation case on top UT officials
..........The branch manager found 91 currency notes of 1,000 each to be fake, and called the police who arrested the two men. The police even procured four-day remand for further interrogation, but when the notes were got checked by the Reserve Bank of India two days later, it was found that "all the suspected forged notes.. [are] genuine". Based on the report, judicial magistrate Aashish Saldi, on May 20, discharged both personnel. They have now said the UT police did nothing to investigate. They said that the truth had come out only after intervention of ITBP officials, who sought the help of the RBI.
Urban cooperative banks misused for money laundering
.............The matter of misuse of UCBs, over which there is dual control by central or state governments through multi-state cooperative societies or state cooperative societies, was discussed during a a recent meeting of Economic Intelligence Council (EIC), chaired by Finance Minister P Chidambaram. The meeting, which was attended by senior officials of Central Economic Intelligence Bureau (CEIB), Reserve Bank of India (RBI) and Finance Ministry, stressed for devising ways to check money laundering through these banks.............
Hapless depositors of urban co-operative banks
..........First, and foremost, there is an urgent need to force the liquidators to do their primary job of submitting the claim to DICGC, get the amount due and disburse the same to the depositors of failed banks without any further delay. If the liquidators are not amenable to the directions they should be replaced without any fear or favour and steps should be taken to appoint liquidators who comply with the orders of the authorities concerned. The DICGC should not only pay the amount of insured deposits against such a claim, but also pay interest at the bank rate on these deposits over and above the insured deposit amount, as the delay is only due to the failure of the government appointed liquidators.........
Bank licence: RBI may miss deadline
...........“I hope to announce the licences within, or soon after, the term of Deputy Governor Anand Sinha, who has been shepherding the process. His term expires in January 2014,” Rajan had said on September 4, the day he took charge of the central bank. The applications have come from a wide range, from conglomerates to micro lenders. RBI has deployed additional hands to screen these. Apart from officials of its department of banking operations and development, which drafted the licence norms, around 20 others are learnt to be involved..............
Foreign banks wait for norms on fully-owned subsidiaries
...........“There was nothing new said yesterday (Tuesday). Earlier, RBI had already clarified subsidiarisation wouldn’t be made mandatory. The promise of near-national treatment has also been made in the past. We will need to see the final guidelines to decide if subsidiarisation makes sense,” .............
Sleep was hard to come by when rupee was plummeting: Raghuram Rajan to NDTV
Reserve Bank of India (RBI) Governor Raghuram Rajan has said that tough measures like raising rates are needed to tackle inflation in India. In an exclusive interview to NDTV's Prannoy Roy, Dr Rajan's message to India Inc is: Bear with us. If we don't fix inflation now, the problem will get worse..........
Rajan may ask govt to help with infra exposure of PSBs
..........RBI has reason to be worried as the government plans to hold at least two major auctions within this fiscal for telecom spectrum and coal blocks. But a clutch of leading public sector banks have informed the RBI they will not be able to lend to companies for these auctions since their infra lending has peaked............
For now RBI is done with rate hike: Rajan
.......A better way of describing what the RBI is doing on interest rates is that " when there is lot of uncertainty you may move a little less than what everybody thinks may be necessary... and also because there are forces that you can't quite estimate which may come in and help or hinder your effort," Rajan said..............
RBI’s heady cocktail
.......... In this way, the RBI expects to address inflation as well as back growth. While growth may be supported by credit-financed personal expenditures, it is unclear why the demand this generates would not add to inflationary pressures just because the repo rate is being hiked. Reading between the lines the argument seems to be that this would result in the higher repo rate “anchoring inflation expectations”, whatever that nebulous phrase may imply.
A mass of jumbled signals
...........If growth were indeed slowing, so would salary and wage increases, leading to tapering of disposable income; and concerns of potential job loss leading to reduction in discretionary spending and propensity to spend, which is at odds with observed segmental inflation. If households were spending more on food, fuel and transport, given a presumed lack of income growth, should not discretionary spends, and hence pricing power, come down? So, the obvious question is: has growth really slowed as the data seems to suggest? Or is there some other source of income which is not getting captured in the data? For RBI, this quandary must be clear and present.............
RBI policy does not help industry: BCIC
............While appreciating that RBI has limited room to manoeuvre given persistently high inflation, BCIC pointed out that GDP will be significantly lower if industrial and service sectors continued to languish at current levels.............
We are in a better position to face tapering: Rajan
......Rajan said the RBI and the government have spent a fair amount of time trying to narrow the Current Account Deficit (CAD). As far as CAD is concerned, he believed, India will be in a comfortable position. “As of yesterday the Foreign Currency Non-Resident Account (Banks) deposits plus capital raising by the banks has reached $ 12 billion.......
RBI Governor Rajan: India isn't in danger of crisis
............Quite unusually for a central banker, Mr Rajan also revealed that although he tries not to comment on the appropriate level of the rupee as he "knows when it has gone too far". In his opinion, 68 rupees per US dollar that was hit at the end of August was "too weak", while 50 is probably "too strong" relative to the fundamentals of the economy. In terms of getting the balance right between fighting inflation and supporting economic growth, Mr Rajan describes the process as "muddling through"...........
RBI rate hike: When Mauni baba takes onus for economy woes
........“Yes, the three Rs were so humble and docile while they were in Delhi,” said Chidu. “Wonder what happened to them as soon as they landed in Mumbai.” “Next time we will appoint my man Monty to the post,” said Mauni baba. “At least he will listen to me and stay silent.” “Yes sir. That sounds like a great idea,” remarked Chidu. “Madam will also like it.” “Also, we should move the Reserve Bank to Delhi, then it will be easier to keep the governors under control.”..........
Back to the government
.........The RBI knows that monetary policy cannot affect food inflation directly, but argues it can influence the consequent build-up of inflationary expectations. This mechanism is much debated among economists, but given the fact that the RBI has now come down clearly on one side of the argument, the government must accept that the ball is in its court; everything depends on its ability to control food inflation...........
Back to a business-as-usual mode: Sunil Kaushal
........The fact that the market reaction to the monetary policy was 'according to expectations' was a compliment to the way RBI managed expectations. However, the governor would have his hands full with the challenges on inflation and,.....
Now NBFCs 'name and shame' guarantors for loan defaulters
Joining banks in naming and shaming wilful loan defaulters, non-banking finance companies (NBFCs) have also begun publishing photographs of such borrowers and their guarantors in newspapers. Tata Capital Financial Services Ltd, an NBFC entity from salt-to-software conglomerate Tata group, today published pictures of two persons in connection with default in repayment schedule of Rs 15 crore loan granted to Jalandhar- based Sameet Motors Private Ltd......
SBI board approval for Rs 2k cr capital infusion
.......The SBI board at its meeting held on Wednesday decided to go ahead with the funds infusion, which will be done by way of preferential allotment of equity shares in favour of the government, SBI informed BSE on Wednesday.........
Syndicate Bank to pay interest on monthly basis
HYDERABAD, OCT. 30:
Syndicate Bank has decided to exercise the option of paying interest on a monthly basis from next month, a change from the existing system of quarterly basis. Reserve Bank of India, in its monetary policy on Tuesday, had decided to give banks the option to paying interest on savings deposits and term deposits at intervals shorter than the existing quarterly intervals, since all banks are on core banking platforms..............
TCPSL plans to rollout value-added products
......Last year, Reserve Bank of India had allowed corporates to set up white label ATMs to increase the penetration of ATMs in several areas of the country. TCPSL, among others, had bagged a licence for the same. "By December, we expect the number of indicash branded white label ATMs to touch 1500 and then we hope to begin rolling out value-added services from these ATMs or its sites," .....
Wednesday, October 30, 2013
Raghuram Rajan: A Volcker at RBI
..........Rajan is also clear that RBI’s job is to tackle inflation and, Volcker-like, break the back of inflationary expectations that have built up over the past few years. His preferred measure of inflation appears to be the Consumer Price index, not only because it is a more comprehensive gauge than the wholesale index, but also because it is the benchmark on which retail inflationary expectations are formed and against which real returns are measured. ...........I have never applied for citizenship of another country: Raghuram Rajan
...........“I have never applied for a citizenship of another country, have never been a citizenship of another country and I have never taken pledge of allegiance to another country… On occasions I have held an Indian diplomatic passport because my father was in the foreign services and when I have travelled on behalf of the Ministry of Finance.”..........
Expert group on new bank licences to hold meeting on Nov 1
A high-level panel chaired by former RBI Governor Bimal Jalan that will scrutinise applications for new bank licences will hold its first meeting on November 1. Other members of the high-level advisory committee (HLAC) are former RBI Deputy Governor Usha Thorat, former Securities and Exchange Board of India Chairman C B Bhave, and Nachiket M Mor, director of the Central Board of Directors of RBI, Governor Raghuram Rajan said. The committee will hold its first meeting on November 1, Rajan said today in the RBI's Second Quarter Review of Monetary............
Bankers ask RBI to avoid regulatory arbitrage in specialised banking licence
..........."In today's meeting, they (RBI) were wanting to hear our views. The biggest issue is that we should not disturb the equation of regulation and create a regulatory arbitrage. When we talk of (specialised) licensing, the biggest thing that needs to be kept in mind is that we do not allow a regulatory arbitrage to get created. That is the point that was really made," Chanda Kochhar, managing director and chief executive officer of the country's largest private lender ICICI Bank, said.........
Red carpet welcome
..........But Raghuram Rajan’s statement that now foreign banks could take-over Indian banks, indicates looming dangers to the Indian banking system. It is an open secret that banks abroad, especially European and American banks are going bankrupt, losing confidence of the people. Our prime minister Manmohan Singh has also been saying very proudly that Indian banking systems is one of the safest banking systems and is insulated from the global financial upheavals. And now the present RBI governor’s endeavor to allow foreign banks to take over Indian banks, may create dangers to the existence of the ‘safe’ Indian banking system. ...........
‘People still unaware of banking Lok Pal’
The banking regulator, Lok Pal of the Reserve Bank of India (RBI) had received over 3,900 complaints, most of them related to ATMs against both private and public sector banks functioning in Punjab, Haryana, Chandigarh and Himachal Pradesh. The banks included SBI, PNB, HDFC, and ICICI in most cases, said Ashok Kumar, AGM, RBI. Bank customers lodged complaints with the RBI Lok Pal, Chandigarh, after erring banks did not take remedial measures. But customers in Himachal had little awareness about the banking Lok Pal as 98 per cent complaints were lodged by customers in Punjab, Chandigarh and three district of Haryana covered under the Lokpal in the region, said the AGM.
These facts came to light here as the RBI Lokpal has staged an exhibition at the Kullu Dasehra ground to create awareness among people of the state. “We have put the exhibition last year here as well to create awareness about the Lok Pal and how to get redressal of complaints against erring banks,” said Ashok, who is handling the exhibition here. He said most complaints related to the ATM withdrawals. The amount was debited from customer’s bank account even when cash was not dispensed by the ATM. In such case, dispute arose when two banks were involved — the account holder bank and the ATM withdrawal bank — he added.
Ashok said bank account holders should know that the Lok Pal entertained complaint against a bank if a customer was account holder of a bank concerned and had apprised the bank about the complaint. A customer could file a complaint with the Lok Pal and await its redressal within one month, he added. He said more than 95 per cent complaints had been redressed by the Lok Pal. “If the Lok Pal does not redress the complaint in time, the customer can lodge an appeal before the RBI Deputy Governor to get justice,” he added. He said, “The RBI imposes fine on erring banks and orders repayment of amount along with the penalty as provided under the provisions of the Lok Pal.”
The Tribune
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