Eminent International Monetary Fund (IMF) economist Siddharth Tiwari, with about 25 years of experience at the multilateral agency, is likely to succeed Raghuram Rajan as the next chief economic advisor (CEA) in the finance ministry. Tiwari, an Indian national, is the director of strategy, policy, and review at the IMF and has got vast experience of Asia & the Pacific, as well as Africa and Europe. Though there is no official confirmation, officials said he was being considered after some other candidates did not show much interest, fearing a political change after next year’s elections, while some names were struck down by the finance minister............
The very purpose of VITALINFO is to provide a platform for wider dissemination of updated information related to and happening of events in and around RBI.
Friday, November 8, 2013
How much India should care for S&P’s views
...................But a low rating for the country sounds warning signal to the investor that the country is at risk. Now, given that the government and the RBI are doing their best to encourage borrowers to tap the euro markets for funds to shore up our forex reserves, a downgrade would men bad news for these companies as enhanced perceived risk will automatically push up the cost of borrowing. Also, when there was a currency crisis a couple of months back, the concept of a sovereign bond was also spoken of, in which case the rating would matter. ...........
A slick ahead
............RBI’s dilemma is that it cannot meet such massive requirements of these firms from its dollar kitty. Sooner or later, these firms have to return to the market or some demand management has to be effected. The onus of doing that, however, lies with the Union government.
Read - Mint
Read - Mint
India Post to set up ATMs at 4 branches in Chennai
CHENNAI: India Post may be fighting to remain relevant in a digital world, but don't write a requiem for it just yet. After emerging as a contender for a banking licence when the Reserve Bank of India issued final guidelines for new permits earlier this year, India Post drew up a plan it is now ready to implement. India Post, Chennai city, will offer core banking solutions in four head post offices in the region as part of a pilot project. As part of its trial run before making a full-fledged foray into banking, India Post will also set up ATMs at the head post offices in Mylapore, T Nagar and Tambaram and on Anna Salai. .............
Public Sector Banks Need Urgent and Bold Reform
.......For the first time, in case of SBI, Indian government has adopted the
idea of fixed tenure for CEO. This has to be embraced more broadly.
Finally, openness to lateral induction of talent at all levels and HR
processes and policies aligned to the private sector. Government HR
policies on recruitment, promotion and performance management are not
suited to create a high-performance
culture required to compete with the private sector. Those who argue
the public sector will stay dominant in Indian banking take heart from
the fact that it still controls 73% market share in assets after almost
two decades of competition from the private sector. To their dismay,
that number is lower in...........
How banks can use HUL’s sachet strategy to crack rural market
.......Recently the Reserve Bank of India appointed a technical committee, comprising senior executives predominantly from the banking and mobile sectors, to examine the feasibility of implementing an SMS-based funds transfer service using an app that can support any type of mobile handset, including feature phones. The technical committee will also consider the advantages/challenges of having a single app across all handsets in an SMS encrypted environment. It will submit its report by the end of this year. This new initiative is a welcome move as it will help promote mobile-based fund transfers even in rural areas..........
Read..........
Dipan Mehta positive on banking space
........."The private sector banks came out with very decent set of numbers for the September quarter despite various challenges which were there in the quarter with all the various measures which the Reserve Bank of India (RBI) took to curtail currency volatility. There was a spike in the debt markets also and wholesale debt funding costs also went up. Despite all these issues by and large private sector banks continued their secular growth as we have seen.".........
The more the merrier
.......It has been a long-standing position of the central bank that the wholly owned subsidiary mode is preferable, since it induces the foreign bank to maintain a domestic balance sheet and, importantly, a governance framework. In the absence of clear incentives for subsidiaries, foreign banks logically prefer the branch mode; but now, those who see India as a long-term growth opportunity have the basis for deciding between the two modes. The two main operational advantages that a wholly owned subsidiary will now have are the......
Open question
.........How effective the incentives for subsidiarisation are going to be is an open question. WOS will be treated like domestic banks as far as the RBI's branch guidelines are concerned. However, this will only prove to be tempting if foreign banks aim to expand in the retail segment. Currently, foreign banks like HSBC and Citibank seem more invested in trade and corporate finance. It is unlikely that liberal branch expansion rules will be a game changer for them. Additionally..........
Foreign Banks India Ltd
.....The above carrot-and-stick approach policy makes sense, when major foreign banks are themselves keen on grabbing a bigger slice of the market for financial products in a $2 trillion (and growing) economy. Indian consumers stand to gain from their expanded operations and greater competition. But consumer interest will also be served by ring-fencing or making a clear delineation of their assets and liabilities from those of the foreign parents; especially important in the aftermath of the 2008 global financial crisis........
NO RUSH HOUR SEEN AT MINT STREET
.......“For
banks that have been here for a long time, it would be in a sense
retrospective legislation for us to say now you will have to change the
form,’’ governor Raghuram Rajan had said. “They have come in with some
ground rules and we can’t overnight
change the rules on them. So we have to give them some incentive and
the incentive we are giving them is near national treatment on a
reciprocal basis.’.................
Read - ET
Foreign banks respond with caution to RBI’s proposal for local incorporation
..........The RBI statement on the new norms for foreign banks is silent on the tax or stamp duty implications. However, former RBI governor D. Subbarao in an address to bankers in June had said “major issues with regards to capital gains tax and payment of stamp duty have been resolved”. “There are still some legal issues which we hope to resolve in the next few months,” he had said, without specifying what these issues were............
Bigger play for foreign banks may mean better deal for you and me
..........Allowing foreign banks greater operational ground may both help protect the interests of depositors and fund capital projects in India. It may even bring about cost-effective banking backed by technology, thus increasing banking penetration. While mergers and acquisitions may be some time away, smaller banks like IndusInd Bank, ING Vysya, Yes Bank, Dhanalakshmi Bank, Karnataka Bank and Ratnakar Bank — which are looking for capital to expand their footprint or scouting for investors — will see their valuations rise dramatically........
Foreign lenders wait for better clarity
.....RBI does not have the authority to offer tax incentives to foreign banks for creating subsidiaries. A year ago, the finance ministry had agreed to offer tax neutrality for subsidiarisation of foreign banks, but lenders had also demanded tax deduction for the cost incurred on conversion, as well as relief from payment of stamp duty. So far, there is no clarity on whether the government will agree to these demands........
Madhya Pradesh police bust dabba trading racket
.........“Since they were operating the fake exchange through mobile phones, it has become a multi-locational crime. We are looking to find if there is any violation of the rules on foreign exchange, Sebi rules, RBI rules, tax law and other rules and Acts, besides cyber crime. We will have to also see from where they got the software. So, it has become necessary to seek support of various investigation agencies. The CBI has multi-locational presence and can investigate the case better,”......
First women's bond from World Bank raises USD 165 mn
...........Bonds tied to social or environmental targets are part of a new trend of social finance, as a growing class of investors seek to bridge the gap between philanthropy and pure financial returns. Besides helping businesswomen, women's bonds can help raise awareness about the importance of gender issues in development, said Jingdong Hua, vice president and treasurer at the International Finance Corporation. "The gender issue ... weaves so tightly into every social and development issue we're facing today," he told Reuters...................
Thursday, November 7, 2013
Precautionary Margin Fund - - Dr.T.V.Gopalakrishnan
My View on Borrowers are not criminals
The author being a banker himself should know better how NPAs are formed and get sudsidised by the other stake holders Viz; the depositors, share holders and good borrowers. No doubt economic slow down does affect the borrowers business and all defaulters cannot take shelter under this and avoid payment of bank"s dues. Even the NPAs disclosed by banks do not reflect the correct position and there are different categories of hidden NPAs. The trade off between banks and Auditors do hide actual NPAs and banks have their own ways of hiding and creating NPAs. Unless and until the banks and the potential defaulting borrowers are disciplined, this problem of NPAs would be perennial and innocent depositors and shareholders who include the Government using tax payers money to rescue the banks would be bearing the brunt. The only way to minimise formation of NPAs in banks is to have a self correcting mechanism which can discipline the borrowers and banks simultaneously through creation of a Precautionary Margin Fund which should be sufficient enough to liquidate the NPAs without squeezing the depositors, share holders and bad borrowers. This would act as a deterrent to discipline both the bad borrowers and the banks for their casual and callousness in managing the funds which basically belong to the public. The banks balance sheets would also emerge strong over a period and corporate borrowers in particular would have a better rating in the market. Is there any takers of this solution?
- Dr.T.V.Gopalakrishnan
Natural-born biases
........Would it matter if Mr Rajan had applied for US citizenship or was, in fact, a US citizen? After all, he manifestly spent much of his adult life there and it is his deep knowledge of global financial systems developed there that interested the Indian government for his current role. Plus, he holds a green card. He is technically correct when he says this is just a work permit. But a green card holder has to file tax returns in the US and is eligible for US social security services. In short, he enjoys the benefits of US citizenship without too many of its burdens.................
'Brand VITALINFO' - Part of life.........
Somehow I feel myself as part of
VITALINFO and a word of gratitude to Mangesh may not convey what is in my
heart. As you may have observed by now, I have some ‘pet concerns’ which get
weaved into my comments, irrespective of the subject I am handling. My subjects
of ‘concern’ include social security issues, HR issues across public and
private sectors, gold and other national resources and their management,
functioning of RBI, the back-door introduction of NPS and so on. I am
comfortable with the space I am getting in the media and I am thankful to
VITALINFO and groups like Exrbites and rbichennaifriends who allow me to reach
out to a captive audience. For my selfish interest as explained above, I want
VITALINFO to grow and spread out.
Warm regards
- M G Warrier, Ex-General Manager, Mumbai
Dear Mangesh, I really do miss reading VITALINFO as it is
now such a vital part of life. Regards
- Suma Verma, Chief General
Manager, DEBC
VITALINFO has already become a brand !
– Kaza Sudhakar, PCGM & Chief Vigilance Officer
Dear Mangeshji,
Shri K.K.Vohra, PCGM, IDMD would like to go through the
VITALINFO link daily. Can you arrange for the same?
- Vilas Sawant, PS to PCGM, IDMD
I have seen your VITALINFO through one of my
friend. The same is very useful and very informative. Please add my name in
your mailing list.
– Surinder Kumar, Assistant
Manager, FED, Kochi
Finmin wants RBI as sole regulator for MFIs
..................."We can look at the RBI's wish-list and help in capacity augmentation. But that does not mean that allocation of the function of regulation should be conditional on that wish-list. MFIs are the smallest and weakest link in the chain of financial services and it is not fair to ignore the weakest link by saying one does not have the capacity or reach," a finance ministry official said. He said the RBI already has a pan-India presence, around 18,000 employees and the requisite expertise to effectively regulate the sector. The official added that the plan was to eliminate the multiplicity of regulators and have a uniform law..........
RBI norms unshackle foreign banks
...... RBI
has said that it may force some of the foreign banks to incorporate
locally if it feels that rules in its home country requires the bank to
favour depositors back home over depositors abroad. Foreign banks which
account for 0.25% of banking assets in India may also
be forced to convert into a local entity. Domestic incorporation may
also be made mandatory for banks that do not have adequate disclosure
requirement in their home jurisdiction, or.............
RBI permits foreign banks' subsidiary to acquire pvt banks
.........."Banks with complex structures, banks which do not provide adequate disclosure in their home jurisdiction, banks which are not widely held, banks from jurisdictions having legislation giving a preferential claim to depositors of home country in a winding up proceedings, etc, would be mandated entry into India only in the WOS mode," it said. Foreign banks operating in India before August 2010 have the option to continue their operations in branch model.........
Is pvt banks' golden era over?
...........Saurabh Mukherjea of Ambit believes the golden era for private sector banks could end when RBI opens the doors to at least seven (probably up to 10) new banks. The driving force behind this theory is that currently, the cost of current accounts and savings account (Casa) is artificially depressed, the fundamental reason behind the 20 per cent return on equity (RoE) posted by top private sector banks............
Allowing bank mergers would boost local consolidation
.......The government has often voiced the need for consolidation to create stronger and bigger banks but has maintained that it will not force state-run lenders into any mergers. Any such move would have to be initiated by the banks themselves and the government will act as a facilitator, the finance ministry has maintained. India has 26 state-run banks, 1,545 urban cooperative banks and 64 regional rural banks. It has 24 private sector banks, a number that's expected to rise once new licences are issued. RBI is currently evaluating applications. ..........
Issue TDS certificates on time: RBI tells banks
.........."The matter has been examined and with a view to protect interest of the depositors and for rendering better customer service, banks are advised to provide to their customers from whose income tax has been deducted at source, TDS Certificate in Form 16A,"................
RBI not to include export credit in priority sector list
........The recommendation on including exports in the priority sector list was made by a RBI appointed panel under G Padmanabhan. The central bank has communicated its views to the commerce ministry, saying that if export credit is included in the priority sector list, then it could crowd out loans under this window to sectors like agriculture and micro, small and medium enterprises (MSMEs). Hence, RBI is not in favour of including export credit in the priority sector list,..............
Where are the green shoots Mr Chidambaram?
.......The Reserve Bank of India(RBI) has taken steps to defend the value of the rupee successfully. But a major reason behind the recovery of the rupee against the dollar is the fact that the Federal Reserve of United States has decided to continue printing dollars for the time being. The day that decision is reversed rupee will start coming under pressure again. Hence, Chidambaram’s optimism needs to be taken with this factor in mind............
Read.....................
Fake Indian currency has Pak mint signature
........ Most of the pivotal parameters of the paper like GSM ( paper density measured in grammes per square meter), Wax Pick Quotient and Poly Vinyl Alcohol and PH Valus were found matching with the legal tender of Pakistan," the NIA revealed in its submission. The standing committee was told that the Reserve Bank of India has introduced nine security features on the bank notes to prevent duplication, but many of these features have been found imprinted on the fake currency notes that is possible only in a government mint. The latest security feature not yet found duplicated is the optically variable ink used in printing the Rs 1000 and Rs 500 notes with revised colour scheme in vogue since 2000, in which the value of the notes is printed in optically variable ink. The colour of these numericals ......
An obstinate bank branch and why regulatory silos hurt
.......... Let’s look at what went wrong with the bank’s response. The bank in question is one of India’s largest foreign banks and the branch in question is situated in the heart of New Delhi—not a small co-operative bank in the boondocks somewhere, so the argument that the bank branch had never heard of such a request is a bit hard to digest. Two, if the person is actually an account holder, how is it that the bank refused to validate this fact? It was only after SK complained to the Reserve Bank of India (RBI; the country’s banking regulator) that things started to move............
NGOs under lens for terror funds
........The Reserve Bank of India (RBI) had also issued a number of circulars to keep tab on money transactions by NGOs, a home ministry official said..........
RBI asks finance cos to migrate to accepting only CTS-2010 cheques
......Reserve Bank of India (RBI) has asked non banking finance companies to migrate towards accepting cheques which are compliant with Cheque Truncation System 2010 standards...............
CM invites Bengal's masses to keep money with govt
............"UBI has agreed to accept deposits under the Safe Savings Scheme. An agreement has also been signed between WBIDFC and UBI in this respect. The other three banks have sought clarification from the Reserve Bank of India (RBI) before they decide to participate in this scheme. We are hopeful that they will also agree," .............
Save your credit, debit cards from that wicked swipe
............ You visit a hotel. After you order the bill, you give your card to the waiter to be swiped while you are still at your table. Someone can swipe the card to make payments in swipe machine, which is also a secret skimming machine. The card’s details are stored in the machine. These details are provided to the fraudsters. They then create a duplicate data and transfer the details into the card with the help of a cloning machine........................
Bank of India outsources customer relationship management to Essar Group's Aegis
Public sector lender Bank of India on Wednesday entered into a 5-year partnership with Essar Group's outsourcing firm Aegis for its customer relationship management (CRM). Ageis has set up a 250-seater delivery centre at its Navi Mumbai centre, which will provide support and manage BoI's end-to-end customer management, including multi-channel customer on-boarding and service operations, data management and collections, the companies said here. ‘Entering into an alliance with Aegis will enable our 65 million customers avail services without having to visit or contact branches’, said Chairperson and Managing Director Vijayalakshmi Iyer...........
J&K Bank reappoints Ahmed as Chairman & CEO
.........The Reserve Bank of India conveyed its approval to the reappointment of Mushtaq Ahmad as Chairman and CEO of the bank for a period of three years with effect from expiry of his present term on October 6, 2013, the bank has informed the Bombay Stock Exchange.........
Wednesday, November 6, 2013
Rajan’s Fiscal Message: Tighten, With Care
.......Although
Reserve Bank of India Governor Raghuram Rajan did not directly comment
on the government’s fiscal numbers, or the quality of it, there was a
hidden message on curbing payments to vendors. The RBI’s ‘Macroeconomic
and Monetary Developments’ report shows professionals have upped their
fiscal deficit target to 5% from 4.8%............
QE tapering will not be disruptive, but gradual: Subir Gokarn
........... I have always been of the view that you cannot look at reserve accumulation as a policy in isolation. It is part of a larger macro stability agenda. The role of exchange rate in that overall strategy is very important. Typically reserve accumulation is an expansionary stance because you are pumping in domestic liquidity when you buy dollars. If you are in an anti-inflationary stance, which is what the Reserve Bank is in, the accumulation of reserves is inconsistent of that stance. It is not that it cannot be done, but it has to be carefully thought through both in terms of.......
What drives private banks’ interest in rural areas? - Renu Kohli
The coincidence of the drive for “financial inclusion” and rural India’s brisk growth offer interesting insights into the finance-growth nexus. The rapid increase of rural incomes and consumption with a shift in expenditure patterns has altered the business perceptions of private banks about this segment of the economy. Rural businesses do not seem so risky any more. Their untapped potential is a growth driver for many private banks..........
Bring the Fund down to earth - Charan Singh
......Given that the global economy is still in a precarious position, the IMF's limited resources have to be utilised effectively. In this context, since most country data is available on the internet and video conferencing is always an option, the IMF could consider effective alternatives to substantial travel expenditure. Actually, to inspire confidence, it could benefit from a larger presence in the region under scrutiny. At present, the IMF, unlike the World Bank, mainly operates from its Washington DC headquarters and its staff pays brief visits to collect interview-based information from officials in a country. These short visits may not realistically capture the ground realities, which reflects in the superficiality of the recommendations. To effectively understand the local economy, more IMF economists could be either located in or closer to the countries they advise. ........
How RBI Governor Raghuram Rajan has quietly asserted his autonomy
........Expectations are high that Rajan will bridge the chasm between North Block, the seat of the finance ministry in New Delhi, and Mint Road, which houses the RBI in Mumbai. Rajan dismisses these chasm theories. He says the fact that Subbarao disagreed with his political masters shows the autonomy the central bank enjoys. Does that mean the RBI never listens to the finance ministry? "Of course not. You listen and accommodate [the government's views] where necessary. Where you think you are on a different path, you try and distance yourself or you try and convince the other," he says........
Is the economy ready for a turnaround?
......RBI's twin moves of increasing the LAF repo rate by 25 basis points and decreasing the MSF rate by an equal amount was widely expected, after the Macroeconomic Review put out by the RBI a day before, said the Federation of Indian Export Organisations (FIEO). Industry body CII welcomed the 25 bps reduction in MSF rate as it would help banks to reduce short term interest rates and enhance their lending operations during the busy season especially at a time when there is a significant reduction in the flow of funds to productive sectors of the economy. However, the commensurate rise in repo rate has come as a disappointment to industry especially..........
What if Dr Subbarao wakes up from sleep post-RBI retirement?
Let us for a moment assume (can’t help not assuming given am an economics student), Dr Subbarao just slept post his RBI retirement. The doctors advised him to make up for many lost hours of sleep as RBI head. And let’s further assume he wakes up due to noise of crackers in his neighborhood. On waking up he immediately tunes to the Indian economy.........
The men we could bank on
...........As a director of the RBI’s central board Purshotamdas was a philosopher and guide of the bank from the start, and his advice was heeded by all governors. One of his most important contributions concerns his role in canvassing along with BM Birla, C D Deshmukh’s elevation for the top job at the RBI. Deshmukh became the first Indian governor of the RBI after Taylor’s demise, a promotion he owed both to Purshotamdas and the impartial attitude the then Secretary of State, LS Amery, displayed...............
Salaam to Salim's HR vision
Shri
Salim Gangadharan, Regional Director, Reserve Bank of India, Kerala retired from the Bank's service as at the c.o.b. on 31st October 2013, bringing to end an illustrious career of over 36 years. I had
the fortune of being his Private Secretary in FED during 2008 - 2011 till he took over as Regional Director, Kolkata. Salim Sir, a thorough gentleman is
bestowed with both intellect and compassion in abundant measures. He used to be very
approachable, down to earth and helpful in nature. It was a great learning
experience working with him. In fact, the guidance and motivation given to me
from time to time made me more confident and helped me to excel in my work. His
radiant ever smiling face was infectious which made me as well as the other
staff at ease during our interaction with him. For him 'Reserve Bank' is not
the top management or the various cadres but all the people –‘RBItes’ who made
RBI. “Human resource is the greatest asset of the organization” he used to
say and left no stone unturned in optimally utilising these resources for the
benefit of the organisation. He believed in sincerity, honesty and hard work
and he himself has set an example with his passion for work. As his innings with RBI has come to an
end, I wish him happy, peaceful and a healthy retired life ahead.
- Beena Nair, PS, DEBC
Pensioners Meet at CAB Pune
.......While welcoming the retirees O-in-C Shri Panigrahi mentioned that such meetings are opportunity to the administration of the College to interact with the senior retired colleagues and to invitee suggestions from them for improving the customers’ service. A lecture cum presentation from Dr. H.S.Deshmukh a renowned Uro-surgeon was also arranged .........
Read - ReTyred Express
Read - ReTyred Express
Short term problems are easier to solve - Letter to Governor by P.R.R.Nayar
....That age is one of the decisive determinants for
monetary relief – need for financial security increasing with each passing day
– is clear from the Government’s benign treatment of its “very senior" pensioners. A similar approach is both logical and
possible in the RBI too even as things stand..........
SCORING WITH CRICKET
What
do bankers turn to if they have to make a succinct point? Cricket. RBI
Governor Raghuram Rajan said the diverse analyst assessments of the
Indian economy are akin to the oft-shifting stance of the fans towards
the cricket team. Indian cricket fans are manic-depressive, he said in
Boston. They elevate players to god-like status when the team performs
well, ignoring weaknesses; but when it loses... every weakness is
dissected. Last week, Bank of Baroda chairperson SS Mundra, commenting
on its Q2 performance, said the bank had tried to play with a straight
bat on a bouncy wicket, as he tried to explain the difficult market
conditions.
ET
ET
Wrong signals
My View on "Top 30 NPAs form one-third of total bad loans":
The following issues need study in a wider context:
i) To the FM’s embarassment, October review revealed that one-third of all NPAs of PSBs were contributed by top 30 NPA accounts in each bank. There is still no indication that any action is under way, beyond 'monitoring'.
ii) While much ado is there about base rates, deregulation of savings bank interest rates did not add to the interest income of real SB account holders.
iii) The Net Interest Margins enjoyed by banks in India are among the highest in the world.
iv) The theory that ‘interest cost is not the major ingredient in project cost’ is interpreted to mean that small borrowers can afford to pay higher rates of interest.
v) Big depositors get preferential rates of interest and big borrowers get attractive terms for borrowing including special attention when their loans become NPAs.
vi) The impact of changes in base rates on ground level interest rates(both deposit and credit) administered by banks during the last 3 years needs a closer examination.
vii) The finance ministry’s recent linking of interest rates on festival season consumption loans to release of additional share capital to PSBs (Secretary Rajiv Takru made an open statement on the issue during 3rd week of October) has sent wrong signals to stakeholders in the banking sector.
- M G Warrier, Mumbai
FAIR-WEATHER FRIENDS
When
Duvvuri Subbarao described foreign banks as “fair-weather friends”, it
was not clear what was the trigger. Nearly two years later, his
successor Raghuram Rajan has provided the answer. During the peak of the
credit crisis, the CEO of a foreign bank from New York called up its
India head to transfer all funds to headquarters. Thankfully, when the
local head consulted the RBI, he was told not to do so. They may just
remain fair-weather friends.
ET
ET
Countdown begins for new bank licenses
........ However, we are to recall that, the Raghuram Rajan Committee, in 2008 pointed out that "the Indian banking sector is fragmented and there are too many small uncompetitive players in the system". This thought will take us to look at the prospect of RBI giving "conditional" licenses in 2014 to some of the applicants; in fact, we feel that this may be done in a phased manner! We do not know what the applicants have stated in their "Mission Statement"! It is possible that there may be some who may have proposed, (or indicated) their plans to take over or buy out some of the smaller banks in existence; or even have had 'secret' talks for mergers! Who knows, there may be someone, who wants to buy out the several cooperative banks in the country, who are scattered all over the place!.........
Banks set up 24x7 self-service branches
............Customers can do real-time cash deposits, withdraw money, deposit cheques and get instant receipts, transfer funds, open fixed deposits and generate bank statements at these branches. These also offer account-related information through internet banking and video conference............
Banking reforms
......Other weak sectors are non-banking financial companies and co-operative banks. Rajan will need strong political support to bring about the reforms that he wants to. Alongside, we require strong commercial banks to compete with multinational banks for which the amalgamation of PSBs is necessary......
Indian Banks Better than Foreign Peers on Basel
............Though
RBI is yet to provide any guidelines for liquidity risk management, the
guidelines as per the Basel document require banks to maintain greater
liquidity and improve their ability to withstand liquidity stress. We believe
that Indian banks are positioned fairly well to adapt to the new
liquidity requirements, when they become applicable, given that the
banks maintain an aggregate CRR and SLR level of around 30% of their
deposit base..........
Read - ET
RBI and FII debt
The
RBI top brass has been quite curious about why FIIs are still not
buying Indian government debt despite yield difference. Some of those
who met RBI in pre-policy meetings said the answer lies in the
governor's CPI leaning. If CPI is going to be the yardstick for interest
rates, then the central bank may not be done with rate hikes as yet.
Investors would rather wait than invest knowing capital loss is for
sure.
ET
ET
Experts doubt CPI-based Inflation Indexed National Savings Certificates success amid surging prices
.........“RBI Governor Raghuram Rajan has mentioned the need for a product that offers a real rate of return several times. He believes that such a product will divert investments from gold as a medium of saving. If IINSCs don’t succeed, there will be others that will follow suit,”...........
Every anna counts
......One day, my uncle proudly displayed his ‘anna’ collection to his father’s friend. But when the friend broke the news that all those coins were worthless, my uncle was shattered; he began crying piteously. All the money he had saved by virtually starving became junk. When I see images on television of wailing people who have lost money at the hands of unscrupulous operators, I am reminded of my broken-hearted uncle, and of the need to exercise care with money..........
Are cryptocurrencies the way of the future?
.....India is a potential hotspot for growth of cryptocurrencies and the community. It seems the cryptocurrencies user community in India has quite a strong base, exceeding 50K in number. But the regulatory body such as RBI seems far from regulating or accepting it. However, this has given an opportunity for the cryptocurrency community in India to expand, develop cryptocurrencies-related businesses in the space, and educate people on the opportunities for economic growth associated with cryptocurrencies.......
NGO demands review of SKDRDP
.........Mr. Nayak said the SKDRDP received a sum of Rs. 2,600 crore at an interest rate of 8.5 per cent from NABARD (National Bank for Agricultural and Rural Development) and other banks while lending the same to self-help groups at a higher rate of 16 per cent. Money charged in excess of 12 per cent interest charged by nationalised banks should be returned the beneficiaries, he said. Dharmadhikari of Sri Kshetra Dharmasthala Veerendra Heggade recently defended the 16 per cent interest. Mr. Heggade said the SKDRDP has been permitted by the Reserve Bank of India to charge interest at 24 per cent........
How pilgrims, and banks, progressed
.........What the Knights Templar got right was creating a monetary authority that people could trust. Essentially, this is what a central bank in a country, like the Reserve Bank of India (RBI), also does. But these days, besides just backing a currency and acting as the government’s official banker, central banks also control the total amount of money that is in circulation in a country. One such target is controlling inflation. One way to easily increase money supply is by just printing new currency notes. But printing notes at will is a risky business and too much too soon can suddenly spike the inflation rate. So central banks choose to control the interest rate instead..........
Taxability of expatriate benefits: Some key issues
...........The ruling upheld that the tax paid by the employer on behalf of the employee constitutes a non-monetary perquisite in the hands of the employee, making it eligible for exemption under Section 10(10CC) of Indian Income Tax Act. As a result, the employer can pay tax on behalf of the employee on non-monetary perquisites with a single gross up instead of multiple gross up. The court further clarified that tax paid by the employer is also excluded from the definition of salary for the purpose of valuing accommodation benefit provided by the employer to the employee...........
Using Mobile Banking for New Microfinance Business Models
........BanKO is starting to blur the lines between microfinance and mobile banking. It is still very early days in our own business and for similar business models in general. But we have already begun to see good results from our work and we have learned a lot along the way. Exciting innovation can happen when elements of these two worlds begin to merge.
Educated persons found lacking financial literacy, often!
............While there are various other aspects of financial literacy, it is important to equip oneself with bare minimum skills and knowledge necessary to become financially literate. Many investors end up losing their hard-earned wealth in the absence of financial literacy, so it is better that one equips oneself with financial literacy.
Commercial paper issuances set to get boost as short-term rates ease
Issuances of Commercial Papers (CP) are set to get a get a boost as the Reserve Bank of India (RBI) has eased the system liquidity further due to which short-term rates are trading between the repo rate and the Marginal Standing Facility (MSF) rate. As per estimates of issue arrangers, CP coupon rates dropped by about 20 basis points since RBI's second quarter review of monetary policy on October 29.........
REAL ESTATE SECTOR AGHAST OVER RBI’S HIKE IN REPO RATE
..........." Considering the overall economic situation and challenges being faced by the industry, we were looking forward to the reduction in repo rates, to ease the burden on the buyers and developers. The continuation of the policy to increase in repo rates in the monetary policy, to control the inflation, will further increase the problems of the developers who are grappling with high interest rates. We were hopeful that besides easing the liquidity, RBI will start addressing the industry concerns for growth and give the necessary impetus.” ...
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