Tuesday, November 26, 2013

RBI frowns on US dollar arbitrage deals by large companies

.While RBI's directives had reduced such trades by FIIs, there was very little the regulator could do when similar transactions were made by Indian companies that have sizeable exports, imports and foreign loans that can be shown as a genuine underlying basis for forward transactions (in the NDF market, participants do not need any such underlying basis for trades). Instead of raising the issue with companies, over which the central bank has no direct jurisdiction, senior RBI officials verbally ............ 



Read - ET.........

Chidambaram has a dual personality when it comes to inflation

..To conclude, this is the real reason behind the high inflation of the last five years. The RBI cannot do anything about it. And as far as Chidambaram is concerned, the least he can do is stick to offering one reason for inflation.


‘We Expect RBI to Hike Repo Rate Twice More: Richard Iley

......I think the total policy under Rajan regime is going to be tighter than what we saw under Subbarao regime. There has been a subtle evolution in the reaction function of the RBI under the new leadership. The central bank is now giving a lot of weight to retail price developments. RBI in last five years has been rather numb nuts over the issue of food inflation. RBI has set monetary policy stance largely according to core-WPI developments. There has been a lack of...........

Indians cut back on overseas investments

.....It is a trend that should make RBI Governor Raghuram Rajan happy. Indians are cutting back on their investments and remittances overseas. According to RBI data, Indians sent a mere $75 million (Rs 470 crore today) abroad in August for investing in shares, property and education and as gifts for relatives living overseas. This is a third lower than the average monthly outflow of $115 million between April and July. Money sent abroad has fallen after five years of sustained increase...........

Police orders closure of over 1,000 ATMs in Bangalore

Bangalore Police has ordered the shutdown of 1,037 ATM centres in Bangalore. Following the brutal attack of a woman customer inside an ATM in Bangalore last week, the State Government had ordered banks to post security personnel and install CCTV cameras (both inside and outside) all ATM sites. The police had set November 24, 4 p.m. as the deadline for banks to meet the security norms...........

White label ATMs take banking to masses

......Since banks treat ATMs as a cornerstone of their alternate channel strategy, WLAs are intended to serve as an important medium of banking for consumers. WLAs have proved to be a useful addition to the existing banking network and is addressing the underpenetrated semi urban and rural market which till date had minimal or negligible access to ATMs, while providing more options for the masses in urban locations. With the expansion of the White Label ATM (WLA) network, customers can have access to basic banking facilities located closer to their home or place of work............

Ensure safety of ATM users: women’s panel

The government should draw up scientific guidelines for selecting locations for Automatic Teller Machines (ATMs) and bring out a legislation in this regard, State Women’s Commission Chairperson K.C. Rosakkutty has said. The commission would write to the Union Finance Minister and the Governor of Reserve Bank of India on the issue, she said. The Chief Minister would be requested to discuss the issue at the State-level meetings of banks.................

Banks rushing to beef up security

.....According to an official of a leading private bank, which has a number of unmanned off-site ATMs, banks should not be made liable for the entire security. “There is a cost angle to it, as each ATM will need three guards. If we are doing everything, then what are the police for? The cost will ultimately be passed on to customers,” he said............

Cash in on credit card reward points!

.......Different banks have different terms and conditions with respect to the use of points. Previously, credit card companies sent catalogues of items that one could purchase to redeem their points. The products on the catalogue were mostly overpriced and did not offer too much choice, making it quite unpopular among customers. Now, however, the scene has changed and customers are offered more options and better ways to redeem their points. However, some banks ...........

SEBI show-cause notice to HSBC

...........HSBC, which has now earned notoriety globally, has chosen to ignore Ms Krishnamoorthi’s complaints from the very beginning and continues to maintain a surprising silence. But the situation this time is very interesting. Although the Reserve Bank of India (RBI) is HSBC’s primary regulator, there is no turf battle involved. On the contrary, RBI will most probably weigh in on behalf of the customer for several reasons...........

Lending to hotels, convention centres can be infra lending: RBI

The Reserve Bank of India (RBI) on Monday said bank lending for construction of hotels with project cost of more than Rs.200 crore and convention centres with project cost of more than Rs.300 crore will fall under the category of infrastructure lending. Other.........

Monday, November 25, 2013

Evolving our own banking culture - DR. N. A. MUJUMDAR

.....Fortunately, Indian public sector bankers are a different lot and have successfully blended profitability with social banking. We have to build on this strength. The main point which this article seeks to drive home is that it is not enough to discuss the banking structure, important though it is. We should evolve the broad contours of the new banking culture. The Reserve Bank of India ( RBI) should appoint a Working Group to have an in- depth study of the wide range of issues and make more specific recommendations on the subject. In the banking crisis, the behaviour of bankers was appalling enough, but regulators, credit rating agencies, auditors – all of them created pressures in the same, wrong direction. The new banking culture should bear this in mind........

RBI and the shifting sands of advice

...........On 30 October, governor D. Subbarao announced no change in the repo rate, but cut the CRR by 25 basis points to 4.25%. That was par for the course—the RBI governor was not bound by the committee’s advice and Subbarao frequently ignored it. Consider now what happened a year later, on 23 October 2013. The economy had sunk even deeper into gloom. Economic growth for the June quarter was a mere 4.4%, one percentage point lower than where it had been in the June 2012 quarter. ...............

A monetarist history lesson for India

..... First, RBI failed to reverse course quickly and withdraw its stimulus after the economy bounced back from the effects of the global financial crisis of 2008. In fact, in his last public appearance before he stepped down as RBI governor, D. Subbarao acknowledged this. He said, “With the benefit of hindsight, I must admit in all honesty that the economy would have been better served if our monetary tightening had started sooner and had been faster and stronger.......

Grace Koshie appointed woman director in Federal Bank


Kochi: Grace Elizabeth Koshie today joined the Board of Federal Bank as the first lady director in the Kerala headquartered lender. The bank becomes one of the few listed companies which have complied with the latest regulatory directions in the Companies Act, 2013, which requires a lady director to be on the Board of Directors. Grace Koshie, a postgraduate Economics graduate specialising in Econometrics and Monetary Economics from Bombay University, joined Reserve Bank of India in 1976...................

Agricultural Banking: Getting the Perspective Right

........ It points to a yawning gap in rural credit between post-nationalisation and post-liberalisation. It aims to familiarise bankers with the emerging needs in the sector, and enable policymakers to..........

Does urban India need a women’s bank?

.............This is strange as professional urban women do not need a bank of their own. Women in rural pockets of India, fraught with casteism and gender discrimination, need this vehicle. As women do not have right to property, they cannot offer collateral while seeking a loan. This is true for all women, but women in cities are more involved in formal economy through jobs and entrepreneurship and they do not need a bank exclusively for themselves........

Needed, a new-age DFI

......Rather than reinventing the wheel, it makes a lot more sense to focus on this layer, especially after the RRBs have been recapitalized by the government and given a new lease of life by RBI through concerted regulatory action. In a similar vein, more than banking innovation, which ideally the market should deliver, the focus of the policymakers should be on institutional innovation in the banking sector. Twenty years ago, the economic policy regime was changed rather dramatically. Since then..........

(Re)Quest for astounding VITALINFO

Dear Shri Mangesh
Many thanks for the wonderful service you are doing. With warm regards
- JRP Ratnarao, Ex Chief General Manager

Thank you for 'VITALINFO' .Please continue to post the same regularly ! With kind regards !
- Suresh Kulkarni

It is just astounding, How you are able to do this great service single handedly day in day out ! No words are adequate to express my appreciation of your exemplary mission !I  Like several RBItes, I start my day with your VITALINFO ! We RBItes  feel always happy to read about RBI  though we have retired some years back ! Thank you , Mangeshji ! 
– Ramesh Wavikar, Ex General Manager

Mrs Usha thorat desires that you include CALP2013 (28 members) as your email address group in the mailing list of VITALINFO.
- Chalapathy, V, General Manager, CAFRAL

Dear Sir
Kindly include my email id for receiving VITALINFO. The information is very useful and I shall be glad to have it on a regular basis. With Regards,
- A.G.Ray, General Manager, RPCD, Mumbai

Dear Sir
Please add my email id to the list of officers to whom you send the daily VITALINFO. I am presently working in Issue Dept. Chennai Office. Thanks and Regards 
- Nalini Madhavan, AGM Issue Dept. RBI Chennai 

Bank pensioners warn of stir

.......Mr. Jain called for uniform medical scheme for retired bank employees. AIBRF further demanded family pension of bank retirees at a par with RBI and the government sector. The organisation also demanded that the benefits that the sixth Pay Commission extended to past retirees in the government sector be given to bank retirees as well.

ReTyred Assistance in issuing life certificates

...... had arranged in Thane (East as well as West) for getting the life certificates signed and despatched to the pension cell, BKC, Mumbai. This was arranged on Saturday 16th .......

Read.......

Shortage of coins hits Barak Valley

.....Meanwhile, when asked about the shortage of coins in the city and in the valley as a whole, Ravi Kumar, Assistant General Manager of United Bank of India’s Silchar branch said “we cannot provide coins unless we get coins from the Reserve Bank of India. Further, Kumar said that camps were organised in 2012 to distribute coins and also the UBI had distributed coins during the KVIC Khadi Mela earlier this year. Moreover, as lead bank in the valley, UBI had informed the RBI of the coin crunch in the Valley, but no response has come so far.........

Coins now become a rare commodity

....Intriguingly, banks in the district are not keen on stocking coins while enterprising beggars are fishing in troubled waters and collecting a sum of Rs 15 for Rs 100. To address the shortage, coin-dispensing ATMs should be set up in Mahbubnagar as is the case in Hyderabad, said one J Sriramulu of Kothur. RBI is to be blamed for the shortage of coins, said one bank manager on the condition of anonymity. Since the intrinsic value of coins is more than their face value, RBI has reduced production of coins of small denominations, he said........

Fraudsters misuse RBI’s name

Fraudsters are sending out chain mails in the name of Reserve Bank of India to internet users, offering them lottery winnings, funds from abroad and tax refunds. RBI's chief general manager Alpana Killawala confirmed that the bank has been receiving several complaints from people who have deposited some money in the hope of receiving some windfall gain, only to be duped...............

Now, you can withdraw money from the neighbourhood grocery

....“There are more benefits. As most traders have higher cash-flows, they showed preference to dispense some cash back into the system, reducing the need to deposit it back in banks,’’ the SBI official said. From a bank’s perspective, this will reduce pressure on ATMs as people withdrawing smaller amounts might now prefer to do it from a next door grocery rather than going to ATM. This would mean that frequency of replenishing ATMs with cash might come down for banks. The idea of opening up PoS terminals for cash withdrawal was floated by the Reserve Bank of India a couple of years ago...........

RBI employee met with ATM mishap

One of our colleague Mr.R.Seetharaman at RBI Chennai was robbed day before yesterday. The incident is described in the subsequent lines. You are requested to spread a word about this to your friends and other colleagues. It might save someone.

Our friend was walking towards Parry’s corner through RBI Subway and suddenly he heard a screeching sound behind him. As he turned around he found two young bikers fallen on the road, trying to pick their bike up. These youth immediately turned aggressive and started shouting at him and started blaming him for their accidental fall. They accused our friend of jaywalking which resulted in this accident and their getting injured. Our Friend tried to defend himself saying that he has not done anything wrong rather it is the bikers fault. Finally, the bikers told him that he is of their fathers age and they don’t want anything from him only he should get them vaccinated with Tetanus injections. Rather they told that they don’t need money from our friend for these injections, our Friend should just come along with the youths and get these vaccines injected and pay the doctor himself.

Our Friend proposed to take them to Apollo hospital but the youth countered saying why waste time unnecessary and that they knew a doctor near the corner who will do the same. Then they requested our friend to sit with him on the bike. Our Friend complied and he was made to sit in between.

The moment these guys started the bike. Two more bikes with two ruffian looking youth came on each side of the bike. The youth sitting behind our friend told him that these guys are thieves and he has a knife pointing on his back , if he will make even a little bit of noise they will stab him. They further told him that they intend not doing any harm to him and just want some money and asked our friend to hand over his wallet. They further took our Friend to an isolated ATM without a guard and asked him to withdraw money and give it to them. None of these six ruffians entered the ATM so that their pictures cannot be taken  by the ATM camera. Finally when our colleague handed over the money these guys fled away.

A similar incident happened two days back at a Bangalore ATM where a middle aged lady was robbed and assaulted inside an ATM.

You may note and also advice all  your near and dear ones
a) Not to carry ATM cards in their person when not required.
b) Carry ATMs cards only when they intend to withdraw money from ATM. Further use ATMs which are inside official premises like Bank or other safe locations where Guards are normally present. Withdraw money during peak hours when people are around.
c) Use net-banking as much as possible. Keep one main account and other subsidiary account from which to withdraw cash. Transfer money from Main account to subsidiary account as and when required.
d) Ladies can wear bare minimum jewellery while coming to office and go in groups after office hours or raise an alarm if suspicious people approach them
e) Generally to avoid walking alone after sunset in sub-ways and lonely/dark patches.  
- Venugopal M.K / Chandraiah B


I contacted Mr.Seetharaman of Chennai office.  He said that he was completely cornered by the gang of goondas, who took him to one of the side streets in Broadway. Initially, it happened not at Subway near Chennai office but near Broadway Bus Stand atound 6.30 PM. Although there were only two goondas intially, they were joined by a gang and in all 6 to 8 people were there, who threatened him and forced him to withdraw money from ATM and decamped with the booty. Seetharaman was saying he was simply taken aback and got so much scared that he did not know how much money he withdrew from the ATM. I think ATM for withdrawals, there is a limit. So they made to him withdraw repeatedly, Seetharaman mentioned that he came to know only from the printout from the ATM later on that in all a total sum of Rs.80,000 was withdrawn. Perhaps, they must have been monitoring Seetharaman's earlier visits to the ATM and a lot of planning has gone into this episode.
When I asked him as to why he did not lodge complaint with the Police Authorities, Seetharaman said that he was so scared of their threat not to go to Police. He also did not note the numbers of the bikes. When I asked as to why there was no public on the road, he said that by 6.30 PM, the office rush was over and there were only few people waling along and only vehicles were moving. Moreover the gang took Seetharaman to a secluded place in one of the side streets without much public movement. Seetharaman still seemed so scared about the threat and he thanked God that he was not subjected to any physical harm. This happened on Tuesday last evening, On that same day, the Bangalore ATM attach took place.

The episode looks very much movie type. I wish Amma's government takes deterrent action against such waylaid robbery. Seetharaman's mobile number is 9444327774. He added that the gang took away his mobile also. Later Seetharaman took duplicate SIM card by deactivating the old one. 
- S. Srinivasan, Cochin

RBI subway had been a place of insecurity even earlier when there were no ATMs.Many ladies have lost their chains and bangles.A thief who missed a green necklace threatened a lady to wear the necklace on some other day and relieved of her of the jewel.For fear of life, that lady also handed over the necklace to him. Not only RBI subway, all the subways  come under the same category.For fear of thieves passengers cross railway lines and get involved in accidents. 
- Vathsala Jayaraman

A danger at any time - A.Seshan

....... Common sense would suggest that since ATMs carry cash they will always be the target of criminals. As a result of credit cards, debit cards, online banking and ATMs most of the transactions are taking place away from branches, saving costs for banks. But bank charges have been going up. Banks can certainly afford to allot security staff at ATMs. If they are still avaricious then they can charge a flat rate of Rs 5 on each ATM transaction. Also,............

ATM attacks


It's any time money not just for depositors but also for thieves

If India puts not just a man on the moon but also the first ATM, the next day's headlines could announce that the money withdrawn by the country's first lunar bank customer was swiped seconds later by an anonymous compatriot who had managed to get there on his own steam.........

Read - TOI

Police shut down 1,037 ATM kiosks

.As the 4 pm deadline expired, a reality check revealed that most ATM kiosks were still unguarded. The crackdown began around 7 pm, with local police inspectors put in charge of shutting down all non-complying ATM kiosks in their jurisdiction. By late night, at least 1,037 ATM kiosks were shut down across the City.......

Security gaps in transporting cash between banks in Kerala

........ the issue of security measures while transporting money between bank branches has also come into focus. Despite the strict norms by the RBI, there has been laxity on the part of  some banks in adopting security measures putting at risk the safety of the bank personnel who do the job of transporting money............

Number of NBFCs declines, but assets rise marginally

......Though the number of NBFCs in business declined, these companies increased their total assets and net owned funds marginally. During 2012-13, the consolidated balance sheet of NBFCs-D expanded marginally by 2.2%. On the liability side, borrowings from banks declined though they were still the biggest source of funding for NBFCs-D followed by debentures and public deposits. “Among NBFCs-D, while the balance sheet of asset finance companies grew, that of loan companies shrunk,” the report noted...........

Poor credit appraisal responsible for rising bank loan frauds: K C Chakrabarty

......Frauds pertaining to loans make the majority of diversion of funds (64%), following are technology related frauds and finally KYC (know your customer) frauds. Examinations have revealed that the number of large value fraud cases — involving large sums of Rs 50 crore and above — has grown 15-times. Chakrabarty has founded appraisal standards for bigger loans sloppy...........

Banks reduce dependence on short-term deposits

Indian banks have often been pulled up by the RBI for borrowing short-term money for long-term lending purposes — known as asset-liability mismatch in banking parlance. While the problem persists, banks’ dependence on deposits with maturities of one year and below has come down significantly from a year ago, notes the RBI’s report on Trends and Progress in Banking...............

United Bank participates in Financial Outreach programme


PIL alleges Rs1,500 crore irregularities in co-op bank

......Another allegation is that MDCCB kept Rs 1,000 crore with Madhya Pradesh State Industrial Corporation as fixed deposits but it failed to get the principal amount back and waived Rs 150 crore as interest without the permission of the Reserve Bank of India and the National Bank for Rural Development (NABARD). Representations to RBI and NABARD did not get any response and ............

Investing in Public Sector Banks Is Now Riskier Than Private Sector Banks: RBI Annual Data

Public Sector banks have  traditionally been considered as a safer option by investors and depositors  as compared to private sector banks.  This assumption is not based on P&L statements,  but on a perception that in case something goes wrong, government will be there to bail them out. However, looking closely at the RBI annual data  for all major banks in India, which has recently been released, gives a totally different story...........

Read.....

AIBEA opposes RBI move to grant new bank licenses to private entities

.....Mr. Venkatachalam criticised as “retrograde” the RBI guidelines over foreign banks. “RBI in its guidelines allowed foreign banks to take over our domestic banks even they do just over 3 per cent business in India. This should be withdrawn...We need further expansion of banks and strengthening of PSUs,” he added........

Sure failure

.....The committee is headed by a former governor of the RBI known for his socialist and conservative leanings. So it is likely to choose the most boring names out of the list that confronts it. If everyone that has hitherto been shortlisted is given a licence, the number of banks could almost double; the actual increase is likely to be smaller. Licences are only the first step; the new banks will then have to find properties that can attract customers, staff that can be trusted with money, and depositors who are prepared to move from the banks they are familiar with. All this is going to take time; so it is unlikely that the banking structure of India will change much in the next decade. Whatever competition emerges will be muted...........

No move yet to get RBI licence for TSB

.....Simplification of banking procedures and revision of interest in 1973 catalysed the growth of the bank. There has been a stable rise in the deposits since then and this has increased the resource position of the government too. The RBI licence will put to rest rumours of the bank becoming extinct and also lend more credibility to its functioning........

Why SBI’s first woman chief is called chairman

 When Arundhati Bhattacharya became the first woman to head the State Bank of India in its 207-year history, there was some dilemma internally on how to address the new chief. Some of the initial communication chose the neutral term ‘chairperson’. But subsequently there were instructions that she was to be referred to as chairman. Some believed these were instructions from the top. But the choice of designation had more to do with legalities. It turns out that the SBI Act of 1956 does not recognize any designation of ‘chairperson’ and the legal eagles in the bank decided the bank’s first woman head should stick to chairman.
TOI

CBI registers Rs 100 crore case against Dy MD of SBI Shyamal Acharya

...CBI sources here said a team of Economic Offences Wing in Mumbai has registered a case against Deputy MD Shyamal Acharya who is also the head of Mid-Corporate wing of the Bank, former Assistant General Manager K K Kumarah and a businessman Piyush Goyal for alleged graft. A senior SBI official said the bank is assessing the situation and will react only after getting complete facts......

Recruitment of Chief Executive Officer (Society/Trust for RSETIs & FLCCs) on Contract basis

Central Bank of India, a leading Public Sector Bank, with Pan India Branch Network of more than 4350 branches, with total business of more than 400000 Crores and driven by talented work force of 40000 + employees, is looking for Retired General Manager of Scheduled Commercial Bank/RBI/NABARD & Other Financial Institution having experience of working in Priority Sector side of banking......... 


Bric and mortar desirable than net



RBI has instructed the banks to upload the list of account holders with unclaimed deposits on banks’ websites with regular updates. Some banks also send periodic reminders to account holders but hardly a few respond. As a very small percentage of people have access to Internet in our country and as the amount involved is huge, much of it belongs to poor, illiterate or less educated, it is suggested that RBI may instruct all banks (public, private sector, co-operative..) to very conspicuously display in each and every bank branch a List of Account Holders With Unclaimed Deposits (in the books of the branch): Name of Account Holder/s ( in full) ; Nature of Account (SB.FD,CD) and the (simple) procedure to claim the amount/ revive-reactivate the ‘dead’ account. (Not to mention amount for reasons obvious).The Notice to be displayed should be in the Regional language and contain a request to all acquaintances/friends/relatives to duly inform their known account holder/s to approach the Manager of the branch to receive/get back the money deposited by them-once upon a time, few /many years back. 

- R.G.Nakhate

Expose defaulters who owe banks over Rs 1 crore, union tells Govt

KOCHI, NOV. 24:  The All-India Bank Employees Association, which will observe December 5 as an ‘All-India Demands Day’ to highlight the threat of bad loans to the banking sector, has urged the Government to publish the names of all loan defaulters who owe banks more than a Rs 1 crore. The association also wants the Government to make wilful default of bank loans a criminal offence, and bring changes in debt recovery laws to speed up recovery of loans............

Your wait for that big I-T refund just got longer

If you are expecting a huge income-tax (I-T) refund, you may have to wait a bit longer than you earlier thought. To limit the government's fiscal deficit for the financial year at 4.8 per cent of gross domestic product (GDP), despite rising subsidies, the finance ministry has decided to go slow on I-T refunds, besides slashing Plan expenditure substantially........

Seer ready to deposit Rs 10 lakh as surety for another gold hunt

KANPUR: The seer who dreamt of a goldtreasure buried on the premises of a fort in Unnao district — and was proved wrong — has offered to dig again on a personal security of Rs 10 lakh and even court arrest if further excavation is also a failure. .........

Saturday, November 23, 2013

Do Raghuram Rajan’s Five Pillars Stand Up?

These are not pillars, actually. They are more like a new foundation, and I hope we address them soon
......It would indeed be great to have a central bank that addresses all these five pillars appropriately. In the bargain, we must not overlook one thing that excited us about Dr Rajan's initial speech - of making the rupee more international, of settling trade with rupees and of opening our markets to such trade. Additionally, the RBI isn't the correct institution to do all that it's doing right now - for instance, the fact that it is the merchant banker for government debt and is also a regulator of the bond market, and a buyer of this debt, is a conflict. This can only be resolved by putting a debt management office owned by the government, not the RBI.........

Puzzle of high CPI inflation

...The model is very parsimonious; no fuel prices here, no rupee value, no fiscal deficit, no money supply, no repo rate, no RBI, no purchase of gold, and no current account deficit. Yet, this model explains Indian inflation very well. ..............

Have huge respect for RBI, says economist Andrew Spenc

.............“High inflation in India is a hard problem.I have huge respect for RBI. I think RBI will take steps to bring inflation down to its comfort level,” Spence, who is recipient of the 2001 Nobel Prize for economics, said at an event here while replying to a question on high inflation in India............ 


Legally, lawfully, legitimately and rightfully due - Letter to Governor by Talekar

This much awaited letter to the Governor by Shri M.B.Talekar  is omnipotent to take our case of updation of pension anywhere, including Supreme Court, to seek justice. Kindly read thoroughly and see how our case is justified and strong. This letter's careful reading would show there are many avenues to resolve our issue. Our struggle would not go in vain as we are on right side. What needed is confidence and your involvement. Let us take it as our mission. 
- L R Parab

Powering women

....Women are important economic agents and it is necessary to bring them into the banking mainstream for social and financial reasons. Most women who undertake financial activities have to depend on money-lenders who charge high interest rates. Public sector banks have a lending target of 5 per cent to women entrepreneurs but no bank has met it. Reliable credit facilities on fair terms will help them to strengthen their financial activities and become more productive participants in the economy...........

RBI to sell Rs 1,000 cr inflation indexed bonds on Nov 26

....The RBI would allot up to 20 per cent of the notified amount of the bonds to eligible individuals and institutions as per the scheme for non-competitive bidding facility. This is the second round of inflation bonds, after the maiden offering in June. The bids for the auction should be submitted in electronic format on RBI's core banking solution on November 26, the release said...........

Saving rupee: India to lobby for rupee payments with major trading partners

.....“There is a broad agreement between the commerce and finance ministries and the Reserve Bank of India to push currency swap agreements, particularly with the countries with which India runs a large trade deficit,” a senior trade ministry official with the direct knowledge of the issue, told Reuters..............


National Australia Bank plans to expand Indian operations

After establishing its base in Mumbai in early 2012, National Australia Bank (NAB) is now looking to spread its wings in the country. It wants to open a second branch in Delhi for which it will approach the Reserve Bank of India. It also intends to enter the remittance segment to tap NRIs in Australia and New Zealand.........

Cooperative bank tries to regain lost classification

Defaulters on loan repayment have dealt a heavy blow to the reputation of Ernakulam District Cooperative Bank. With non-performing assets touching Rs. 400 crore, RBI has lowered the bank’s classification from A to B. The bank incurred a loss of Rs. 25 crore as on March 31, 2012. The non-performing assets have exceeded the prescribed limit set by RBI, leading to the lowering of the bank’s classification. RBI had imposed a penalty of Rs. 5 lakh on the bank last year for sanctioning unsecured loans......

Bank unions to observe one-day strike on Dec 19

..........A decision to this effect was taken at a meeting held here recently, UFBU said in a statement on Friday. “The United Forum of Bank Unions deliberated at length about the anti-people policies of the government, especially with regard to the banking reforms, which are bound not only to hit the common people but also the resources of the country,” it said.......

IDFC, LIC Housing Fin may make the grade for new bank licences: Goldman Sachs

......Among the 26 aspirants for new banking licences, IDFC and LIC Housing comply with some of the main requirements like a successful business track record for more than 10 years, diversified shareholding with public holding in excess of 51% in their respective companies, a steady earnings stream, more than 50% independent directors, and already regulated by the RBI and National Housing Bank (NHB) -which put them in the central bank's comfort zone.............. 

Reinvent state-owned banks

A former Deputy Governor of the Reserve Bank of India once compared the chiefs of public and private banks thus: "A PSU bank chairman will walk into my office with an ingratiating smile, a slight crouch to show submission, and mouth gushing compliments about, say, a speech I have delivered somewhere, calling me 'sir' several times. A private bank chief will walk in, greet me as xxxx [his first name], and proceed to discuss issues as an equal." It was a telling story about attitudes and mental frameworks that, inevitably,.........

Clear & present danger: Bad loans

....Indian banks will have to scale up in business to meet the needs of a growing economy and also meet regulatory standards, the apex bank noted. On its part, the central bank would ensure bank credit flow to productive sectors and it believes banks' investment in government securities must reduce from the current mandated 23% under the Statutory Liquidity Ratio. “It is necessary to reduce banks’ requirements of investing in government securities in a calibrated way,” the RBI said...........

Meet The Guys Who Really Commit Bank Fraud

.........Chakravarty highlighted the vigilance failure by pointing out the high number of high value advances-related frauds in public sector banks. He then quoted an interesting statistic: “Our analysis suggests that of 719 officers found accountable in 230 large value fraud accounts, 426 officers were up to the rank of Senior Manager, 196 officers were Chief Managers and AGMs, 94 officers were of the rank of DGM, GM and CGM and only 3 officials were from the top management and the board of directors. This statistic highlights, he said and we would principally concur, the skewed nature of the punitive vigilance process and its tendency to focus on the lower level functionaries.........

Rs 3,652 crore lying idle in bank accounts

....It is not just government banks that have unclaimed deposits. Even private banks have such deposits. ICICI Bank leads the private banks with Rs 100.3 crore lying as unclaimed in all types of deposits followed by Federal Bank with Rs 44.3 crore. In 2012, the Centre proposed to transfer this amount into Depositor Education and Awareness Fund to be used for promotion of the depositors' interest and other purposes as may be specified by the RBI from time to time, but there was a lot of opposition to the plan and it was put on hold.

RBI asks banks to treat customers fairly

.....The Reserve Bank has also taken a lead in ensuring that bank’s customers in India are treated fairly. Over the years, it has initiated several customer-centric measures and inculcated a culture of treating customers fairly through regulatory and supervisory interventions. The Reserve Bank initiative led to the setting up of the Banking Codes and Standards Board of India (BCSBI), an autonomous and independent body, which has been entrusted with the task of setting codes and standards for banking services in India. The Codes of Commitment are binding on BCSBI members and non-compliance thereof by member banks is a valid ground of complaint under the Banking Ombudsman Scheme(BOS). In a bid to empower consumers and protect their rights, the Reserve Bank has also instituted the Banking Ombudsman Scheme as an apex level, cost free grievance redressal mechanism for deficiencies in services by banks..........

Red flag over realty exposure of banks

........New private sector banks, along with State Bank of India (SBI) and its associate banks, were the most aggressive in extending loans to sensitive sectors. While the SBI group has seen 25.6 per cent growth in these sectors, for new private banks this was 19.8 per cent. Overall loan growth in the banking system was 13.6 per cent in 2012-13..........

RBI to tighten norms to check mis-selling by banks

....The move comes in the wake of a RBI scrutiny that found many banks not adhering to 'know your customer' (KYC) norms for sale of third-party products. The central bank had also fined many banks for the violation..........

Steps to sensitise people on chit fund companies

.....Mallick directed all block development officers to organize investor awareness programmes by involving bankers and officers of the RBI to provide information relating to non-banking companies and unincorporated bodies collecting money from public. We have been warning people about the  mushrooming of chit funds and advised the police to take appropriate action against such fraud, said Mallick. ................