WASHINGTON: The US business body has welcomed the new RBI rules governing access for foreign banks operating in India, describing the move as a positive step and called for opening up of other areas in particular the insurance sector. ..............
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 9, 2013
Reaction Is Cautiously Positive to India’s Bank Rules
..........“We are positively inclined toward growing our presence in India under the new regulations, though the size and manner of expansion are details that are yet to be determined,” said Sanjiv Bhasin, chief executive of the Indian arm of DBS, a Singaporean bank. “At this time, any sizable global banking institution cannot ignore markets like India, China and Indonesia. It is question of the priorities of each respective bank and when it is a suitable to enter the market for that institution.”..........
Fewer, Bigger Banks Needed
This
refers to ‘Public Sector Banks Need Urgent and Bold Reform’ (ET, Nov
8). Consolidation in the PSB space requires political will, which is
missing. Agreed, even the smallest PSB now has total business of around .
2 lakh crore and a fairly large network, and merger with other banks
is not an easy proposition. But for a sound and vibrant banking system,
we need to have fewer strong banks instead of many smaller banks. A
beginning can be made by merging identified small banks with their
bigger cousins so the merged entity gains reach to acquire pan-India
presence.
- SRINIVASAN UMASHANKAR, Nagpur (ET)
- SRINIVASAN UMASHANKAR, Nagpur (ET)
RBI's foreign bank norms signal prospect of more reforms: Fitch
........"As such, the recent rules are a good beginning - but insufficient, by themselves, to shake up the domestic banking landscape. But what it potentially signals is that further banking reforms - currently being considered - are not too far off," ..........
Reduce regulatory burden to attract investors to India - Naina Lal Kidwai
.......Despite important economic reforms since 1991, regulatory burden on Indian businesses is real and these issues need to be resolved to realise our growth potential. The report of the Committee for Reforming the Regulatory Environment for Doing Business in India (or the Damodaran Committee report) agreed that there were hurdles and said: “The seemingly mindless explosion of regulations, impacting seriously on management time and cost has created a negative perception of the regulatory environment in which business is conducted”............
RBI permits third party payments for export, import transactions
.............Among the key conditions RBI said that for export transaction firm irrevocable order backed by a tripartite agreement should be in place while for import transactions firm irrevocable purchase order / tripartite agreement should be in place.......
IIMA’s biz summit to host Vinod Rai, C Rangarajan
.......The duo are slated to speak at the session titled "The Global Turmoil and India Story", which attempts to reflect upon the turbulent times that have beset the country and the resulting uncertainty in corporate decision making, at IIMA.....
Bonds to the rescue?
......What are these bonds? Has this idea come up from the Reserve Bank of India’s restrictions on bank finance to the sector like the 80:20 order? Again, are these bonds mooted on the Singapore pattern? The last 2-3 Central budgets have been earmarking substantial allocations for roads, highways, airports and ports based on the policy of encouraging infrastructure development, which is fundamental to overall economic development. However, because of budgetary constraints and the growing current account deficit (CAD) as also ......
Allow municipal bonds to be traded: Assocham to RBI
.......In a note submitted to the Reserve Bank of India (RBI), the chamber has stated that as pace of urbanisation gathers momentum and new cities are created as a consequence of industrial corridors, need for creating such municipal bond market will be of necessity...........
AMBEA concerns
......In a statement, the association said if the government does not initiate necessary steps at the earliest then it is likely that the Reserve Bank of India (RBI) may cancel the license of the bank whose normal functioning has been paralyzed due to the absence of CEO......
Govt drawing new roadmap for boosting services exports
..........On data collection, Kher said, the Kolkata-based DGCI&S will be the anchor and will be responsible for capturing data from three sources -- the RBI, the survey based exercise which Central Statistical Organisation and DGCI&S would do together and all other methods of collecting data......................
DCC bank polls: Congress wants nominations rejected
.........“An inquiry by the Joint Registrar of Cooperative Societies had proved that the bank had violated several provisions of the Act. It had introduced a one-time settlement scheme for loans without the permission of either the National Bank for Agriculture and Rural Development (NABARD) or the Reserve Bank of India. The bank had waived the principal amount of loans of several defaulters in violation of guidelines. It was also found that the bank had repeatedly advanced loans to Naranja Sahakari Sakkare Karkhane, which was a regular defaulter,” Mr. Ali said.....
Vighney, Nikhat take the honours
Hyderabad : P. Vighney Reddy of Reserve Bank of India and Nikhat Banu of Gujarati Seva Mandal won the men’s and women’s singles titles in the Swami Vivekananda 150th birth anniversary State-ranking table tennis tournament here. Vighney defeated Somnath Ghosh (SCR) 11-7, 11-5, 11-4, 11-4 in the men’s final, while Nikhat overcame A. Sreeja (GTTA) 11-5, 11-6, 11-9, 11-9, 11-7 in the women’s final.
The Hindu
Friday, November 8, 2013
Balancing Act for India’s Top Banker
His track record in his two months in office suggests a reluctance to embrace the monetarism for which the University of Chicago economics department has been known, while he has embraced limited financial deregulation. Along the way, he has avoided any signs of doctrine, preferring to see the results of each move before acting again. “I’m willing to be persuaded by the data,” he said in an interview at the central bank, in a wood-paneled reception room with one wall lined with the portraits of his predecessors............
Portrait of the real Rajan
My View on "How RBI Governor Raghuram Rajan has quietly assert...":
The cover story “His Own Man” together with the excerpts from the October 29 interview given by RBI Governor Dr Raghuram Rajan (Business Today, November 24) has crisply and clearly portraited the real Rajan whom different people are perceiving differently, depending on their ‘constituency’ interests. It is comforting to find that Rajan is as forthright in expressing his views post- September 4, as he was when he wrote his book Fault Lines. Putting it differently, those who have read Fault Lines will not be shocked by his approach to issues as expressed in his responses after he took over as RBI Governor. In August this year writing for The Global ANALYST, I had made the following comments about Rajan:
“The FM who put his Secretary Dr D Subbarao as the Governor of RBI hoping to have a submissive Governor found a different person in Subbarao soon after he started functioning from Mint Road. In that context, perhaps, the FM is going to be ‘second time’ unlucky…”
We are lucky to have institutions like RBI which have grown with work ethics and skills that match with the best in the world. For allowing this to happen, we must thank our political leadership which put national interests above anything else, whenever issue at stake was country’s prestige.
- M G Warrier, Mumbai
FinMin brings back lateral transfer of CMDs in govt banks
The finance ministry has shortlisted the names of executive directors who are likely to head public sector banks in 2014-15. Six public sector banks will see their chairmen and managing directors retiring in 2014-15, which are Bank of Baroda, Indian overseas bank, Canara Bank, Oriental Bank of Commerce, Vijaya Bank and United Bank of India. The selection panel comprising Anand Sinha, deputy governor, Reserve Bank of India and Rajiv Takru, secretary, financial services in the ministry of finance, among others, interviewed 19 executive directors last week...........
Head and heart nicely captured..............
My View on Salaam to Salim's HR vision
 |
| File photo - Fare-thee-well - Shri Salim Gangadharan |
Beena has captured the qualities of head and
heart possessed by Salim excellently well in this short note. Myself having
been a miser all through in appreciating others, when looking forward to the
wrong side of seventy, feel that many of us are ‘lavish’ in criticism and do
not speak out when we observe good qualities in our bosses and colleagues.
Though I had no occasion to work with Salim, he is a good friend and I have
enough reason to endorse Beena’s comments, as I have been in touch with him
since a long time and if he is retiring as RD, Thiruvananthapuram earning the love
and affection of the entire RBI Family (including retirees and family
pensioners), that itself is proof for his friendly and affectionate
relationship with colleagues and management skills. I wish him the very best in
his second half of life.
- M G Warrier,Mumbai
I am proud that Salim is a great friend of
mine. Salim is very different from many others I have met and interacted. He is
rational and very social as his name itself indicates. A real HR development
executive. I am proud that we were together as Faculty Members in BTC along
with Jayaram, Mahapatra(s), Vijay Bhaskar. We introduced the concept of more
than two FMs handling a training session jointly. It was a hit and a golden
time for all of us and also all the participants of various programmes. He was
an expert on bank supervision, an expert in forex, a democratic leader et all -
in fact an all rounder. I wish him my best wishes for an active life.
– P.Aravindan
Salim a true friend and a learned
guide. Thank you P.Aravind for reminding about BTC.
- Jay
Salim Sir, I would also like to wish you a
happy retired life. I, however, wish to add, that the years of retirement can
and should mean a world of new opportunities. The world is still your oyster,
you are not the guy, who will, post retirement, retire to a cloister as your
body, mind and spirit are still full of sap and moisture.
- A well wisher
Dear Salim,
I had missed your date of retirement and then
got busy in our local Durga Puja and Diwali celebrations. At the outset, I take
this opportunity to wish you and your family a very Happy Dusherrra and Diwali
and also wish you a happy, healthy and peaceful re-tyred life (sic) as because
a man of action like you can never sit idle and must be engaging yourself with
some innovative and self-actualisation activity, which would have been
otherwise got suppressed under the weight of routine official duties. Your
qualities of head and heart are well known at least to me who have seen you
since 1980s in Kolkata (the then Calcutta). Let me wish you All Well once again
and please keep in touch in the retired RBI-ites club, so that we can share our
joys and sorrows of living in the days to come.
- Prabal Sen, Kolkata
I had the privilege to be associated with Salim
sir for about 5 years during his stint in FED, CO. He was a natural teacher
which held him in good stead during his faculty stint at BTC. He would always
break down the complex regulatory/prudential/ accounting issues into simple
concept and would moderate his articulation to suit the audience absorptive
capacity. His contributions to every spheres of central banking like banking
regulation and supervision, capital account management, treasury or market
products like currency futures are well documented in the various committees he
headed or was associated with or his lectures as a faculty in BTC. He was a
task master to the core and would optimise the given resources by identifying,
nurturing talents, delegating power and responsibility, encouraging independent
decisions, but at the same time being steadfastly behind his people in every
decision or action. His firm belief at all time was that “One alone cannot
achieve everything, it’s only as a team with people around you, one can achieve
remarkable feats”. He motivated others with his passion for work and there was
no way the team under him would not excel. He had deep rooted compassion for
people which emanated from his belief ‘Do good to others and Good will come
back to you”. Humility wrapped his persona as a second robe and made him
popular figure in RBI, culminating in remarkable tenure as Regional Directors
in Kolkatta and Thiruvanthpuram.
2. As his innings with central bank has come to
end, his next innings on the larger canvas of life beckons him. Wishing him
success and healthy stint in his endeavour to give back to society all that
society has given him over the years.
- Harsh
Photo courtesy : Sajid, Mohammed P, Assistant General Manager, Thiruvanantpuram
Photo courtesy : Sajid, Mohammed P, Assistant General Manager, Thiruvanantpuram
Inauguration of academic block
Mangalore : G. Gopalakrishna, Executive Director, Reserve Bank of India will inaugurate the academic block of Nitte Institute of Banking and Finance, Deralkatte, at 10.30 a. m. on Saturday. The institute, under Nitte University, has been established to promote academic programmes, specialised training in banking operations and provide research and consultancy services to the banking Industry. Chairman and Managing Director of Syndicate Bank Sudhir Kumar Jain and Chairman and Managing Director of Corporation Bank S.R. Bansal would be the guests of honour.
Hindu
Cheque clearance made easy in Bhopal
BHOPAL: Eliminating the need for physical movement of cheques for clearance, new cheque truncation system (CTS-2010) went live in the city on Wednesday. After Mumbai, Bhopal became the second centre in the western region to be introduced to the new way of banking. Reserve Bank of India (RBI) Regional Director J B Bhoria said through CTS-2010, electronic images of cheques carrying key information will be captured and transmitted...........
HDFC Bank launches rural financial literacy initiative in Kerala
......HDFC Bank will conduct financial literacy camps in 39 rural and semi-urban branches across Kerala. As per instructions from the RBI, these branches will serve the Malampuzha block in Palakkad district and the Mathilakam block in Trichur district of Kerala. The camps will enable both adults and school children from 234 Panchayath wards in 26 villages to attain a conceptual understanding of financial products and services. ...........
Is bank liable if client is robbed in branch?
Can a bank be held liable if a customer is robbed inside the bank premises, but before he has deposited cash with the cashier? The National Consumer Disputes Redressal Commission (NCDRC) has delivered conflicting verdicts. In a recent judgment NCDRC ruled that......
RBI signs cooperation pact with central bank of Australia, NZ
MUMBAI: The Reserve Bank has signed cooperation agreement with central banks of Australia and New Zealand for exchange of information. The MoUs provide a formal, yet legally non-binding, channel for information exchange between the supervisors, RBI said in a statement. ..........
That seventies feeling
It is no secret that the Indian economy has been in a fair bit of trouble in recent quarters. The latest economic review published by the Reserve Bank of India (RBI) in October shows why there is no easy way out of the current muddle............
No, this isn’t a pre-NaMo bull run
.......The planned reduction in the quantum of asset purchase by the US Federal Reserve has been postponed for a few months, at least. This has resulted in resumption of foreign portfolio inflows which has pushed stock prices and has also provided the much needed stability to the currency market. The Reserve Bank of India is also doing its bit in the meantime to shore up its firepower by bumping up the foreign exchange reserve. However, there is another argument that is beginning to gain ground. It is now being said that the stock markets have started factoring in a change of guard in New Delhi...........
IMF economist Siddharth Tiwari likely be next CEA
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............
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...............
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