.............Addressing investors at an Citibank event in New York, Rajan said economy has slowed to below 5 per cent from an average of 8 per cent between 2002-2012, mainly on account of domestic factors............
Read - ET....
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.
Tuesday, December 10, 2013
Raghuram Rajan expects a spending squeeze as India aims to cut deficit
..........The Governor reiterated his commitment to the five pillars to improve the financial system. These include clarifying monetary policy framework, strengthening the banking structure through entry of new banks, broadening financial markets, moves towards financial inclusion, and to improve systems to deal with distress faced by financial institutions and corporates. Rajan blamed the financial stimulus for leading to an over-heated economy, high inflation and wage growth and consequently...........
Read - ET.....
Prepared for the taper
......For India, fortunately, the swap agreement that RBI put in place ensured $34 billion more came into the economy and, more importantly, in recent months RBI found a way to remove a very significant part of the demand for dollars—$164 billion in a full year—from oil importing PSUs from the daily market for foreign exchange. While RBI managed to slow down the depreciation of the rupee by selling dollars directly to oil PSUs and then entering into swap agreements—this ensured forex reserves didn’t fall—with them for a date in the future, the markets always felt this would worsen matters when .......
Raghuram Rajan says inflation still major worry for RBI
.........High inflation “is and will remain the key priority of monetary policy” even as there is a need to manage inflation “with an eye on the economy, so that you don’t kill growth”, said Rajan speaking at an interaction with institutional investors in New York, organized by Citigroup, on Friday night. Since he took charge from D. Subbarao on 4 September, Rajan has raised the key rate twice from 7.25% to 7.75%............
The microfinance sentinels
......In 1998, the National Bank for Agriculture and Rural Development (Nabard) set up a task force on Supportive Policy and Regulatory Framework for Microfinance, which found that microfinance institutions (MFIs) were an important vehicles for delivery of credit to the self-employed, particularly women, in rural and semi-urban areas. It suggested setting up a special cell within the Reserve Bank of India (RBI) to liaise with Nabard and MFIs to augment the flow of credit to this sector. The task force recognized the need for a mechanism of...........
RBI told to keep industry and banking separate
.....“Banking being a highly leveraged business involving public money and public welfare, the Committee are of the considered opinion that it will be more in the fitness of things to keep industry and banking separate. The Committee, therefore, desire the Government/Reserve Bank of India to review the licencing guidelines accordingly,” the report tabled in Parliament said...........
RBI’s Raghuram Rajan plans consumer-price linkers to lure savings
.......The new securities will help central bank Governor Raghuram Rajan boost the savings rate from a 2008 low. Better protection against living-cost swings may limit demand for bullion as a store of value in the world’s biggest gold-consuming nation and cut the government’s reliance on import curbs..........
Welcome move
......... The new regulations allow foreign institutional investors to buy and sell these contracts with minimal restrictions. Since the RBI recently permitted foreign investors to hedge their currency risk through exchange traded currency futures, they can now protect themselves against interest rate and currency volatility, reducing the need to rush to the exit door in volatile times. While these changes are welcome,........
We are making a tectonic shift from wholesale banking to retail banking: Arun Kaul
........ RBI's credit policy is largely directed by inflationary expectations. We expect the winter crops to be good because of the good monsoon. We have already seen onion prices coming down and expect vegetable prices to fall further after December. I will like to wait and see what happens in RBI's credit policy in December. But clearly, my view is inflationary pressures will come down going forward and the central bank will take appropriate steps........
Bank unions to go on strike on December 18
...........Bank unions have called a one-day strike on December 18 to protest against the decision of the Reserve Bank of India to accord national treatment to foreign banks. “The United Forum of Bank Unions (UFBU) have given the call for the all-India industry strike,” Canara Bank said in a filing to the BSE...........
Bangkok fast emerging as safe haven for fake Indian currency
....Pakistani nationals based out of Thailand have used this South East Asian country as a safe haven to transport high denomination Indian currency into the country. Mostly, the fake Indian currency is transported via businessmen, tourists and couriers visiting Thailand on leisure or business. These Pakistani operatives having links with terror outfits as well as Inter Services Intelligence (ISI) also orchestrate a well-charted smuggling racket in fake currency into India...........
RBI Claims It Reaches Indian Villages for Financial Literacy
......Some of the popular comic books brought out by the department of communication are Money Kumar, Raju and the Money Tree and some films which very simply impart messages on financial education to children. The department of communication also hosts groups of school children and explains the working of RBI to them and imparts simple financial concepts to them...........
Appoint young guards at ATMs, banks told
.........As a first step , banks have been asked to place 24-hour security in place. As most ATM centres are guarded by elderly men, banks are specifically advised to appoint youngsters in their place. Burglary alarms/smoke detectors and infrared sensors for cash chests should also be put in place........
After ATM security headaches, banks face uproar for chargeback problems
After security concerns at ATMs, the Reserve Bank of India has now flagged the problem with charge-backs, that is, money debited from accounts without cash dispensation at the time of withdrawal. Delays in returning money for disputed transactions have also come under RBI’s scanner. The numbers of complaints about chargeback at Automated Teller Machine (ATM) are substantial - about 3,000 a day (that is 90,00 per month)– according to National Payments Corporation of India (NPCI) managing director and chief executive said A P Hota.........
Read | Business Standard
RBI has second thoughts on Indian Tier 1 structures
...The RBI has told Bank of India not to include a “temporary writedown and write-up” feature on a planned issue of Additional Tier 1 capital securities, sources said. The bank is the only Asian regulator to have explicitly allowed the reinstatement of capital securities but its recent move adds to confusion surrounding its position, potentially complicating efforts to bring the first deals to market.............
Enlarging India’s capital choice options
........The Reserve Bank of India (RBI) has had some success in the past acting counter-cyclically against lending in the housing market, and that is probably a prerequisite for removing investment restrictions. That said, the cyclical forces in the mortgage market were not so powerful and pervasive in India as in other countries that have been less successful at taming the boom-bust cycle so there is no room for RBI to rest on its laurels...........
RBI's operational guidance on novation to deepen derivatives market
..........As per the conditions laid down by RBI the transferor bank can novate a derivative contract only after the contract has been held by transferor in its books for a minimum period of six months for contracts with original maturity of up to one year, and nine months for contracts with original maturity of more than one year. But RBI said that this condition would not apply in cases where transferor bank is...........
Govt has not banned banks from selling gold coins: FinMin
............"The government has not banned banks from selling gold coins. However, RBI has prohibited import of gold in form of coins and medallions," Minister of State for Finance Namo Narain Meena said in a written reply to Lok Sabha last Friday. Seeking to reduce the import of gold, the Reserve Bank on August 14 had prohibited inward shipment of gold coins, medallions and dores without licence........
Burying all talk of a new normal
...........So instead of supporting the RBI in its feeble and belated attempt to rein in demand through raising interest rates, the Finance Minister, both the incumbent FM and his predecessor kept urging lower interest rates. The net result: inflation and worse, inflationary expectations, have got deeply entrenched. The latest household survey of the RBI shows .........
Read - ET
Govt okays SBI plan to raise Rs 9,576 crore via QIP in FY14
.........Raising of the capital would be subject to requisite approvals from the shareholders and the Reserve Bank of India, the bank said. The government will infuse Rs 2,000 crore in SBI this year and towards this it will issue preferential shares worth the same quantum to the government.........
Bank loans to SMEs and the reality
......In order to gauge this preference of banks conversations with a small business enterprise, often referred to as micro, small and medium enterprises (MSMEs) says it all. For a micro and small business, to get loan from a bank is nightmare. This has been happening in spite of dedicated MSME branches set up by various banks and MSME lending being a part of priority sector lending. RBI data in this regard is an eye opener. More than 92% MSMEs run their business on self-finance and have no source of institutional finance......
SBFCs can play much bigger role in financial inclusion: Sinha
Small Business Financing Companies (SBFCs) can play a much bigger role in financial inclusion in India provided they are treated differently in terms of opportunity and regulatory environment. For that, there is an immediate need for formation of an independent regulator to formulate framework for sustainable and better functioning of Small Business Financing Companies (SBFCs) that has been doing a wonderful work for promoting growth of small business in India, senior Bharatiya Janata Party (BJP) leaderYashwant Sinha said.........
Lenders find clothier to the nation doesn't have enought to cover itself
......The move came after Finance Minister P Chidambaram said while many companies were getting sick, their promoters remained rich. Indian banks have written off corporate loans worth Rs 1 lakh crore in the past 13 years, according to the Reserve Bank of India. Kasliwal did not speak to this newspaper when contacted over telephone. His office did not give his email address. A list of prominent defaulters published by the All India Bank Employees Association (AIBEA) last week identified S Kumars Nationwide as one of the top ones. The company owes close to Rs 3,000 crore to government-owned banks, it appears...........
35% tax slab for the rich
NEW DELHI: The new Direct Taxes Code Bill is likely to have a higher tax rate for the rich. The government, it is understood, is introducing a new income tax slab of 35% for annual income of over Rs 10 lakh. “ This is being proposed in lieu of the surcharge. Effectively, there is no change in the tax rate”, the official said.
FPJ
FPJ
BIAN adds first Middle East member
.........Also joining as new members are the Institute for Development and Research in Banking Technology, an R&D operation set up by the Reserve Bank of India, and Achmea, a Netherlands insurance provider. They will work with BIAN’s 42 existing members to build and promote a common enterprise architecture framework designed to resolve universal banking interoperability issues. “It is great to add three more key members to our growing global network........
Monday, December 9, 2013
Best of India is yet to come: Governor Rajan - DR. N. A. MUJUMDAR
......The miasma of suspicion that pervades our society today will ebb. The Reserve Bank of India intends to play its part in making this happen.” Assessments of India’s economy seem to swing between over- exuberance and selfflagellation, with foreign analysts joining Indians. A few years ago, during India’s high growth phase, India could not go wrong. Commentators talked of “ Chindia”, elevating India’s performance to that of its northern neighbour. Today, with India’s slowdown, India can do no right. An unfortunate side- effect of the clean- up of large scale corruption was that bureaucratic decision- making became more risk averse, leading to a policy paralysis. But the reality is different.......
RBI: prudential, not prudent
.......While RBI has been watching from the sidelines, asset quality has graduated from being a bank-specific issue to becoming a banking sector problem. It has gone beyond the stage where a few corporate accounts are posing a problem for individual banks. From a macro and policy perspective, it is now over-leveraged sectors rather than over-leveraged companies that are the problem..........
RBI history - A.Seshan
.......The RBI will be rendering a signal service to the academic community if it can bring out an abridged version of all the four volumes in, say, 400 pages. The price will also be moderate compared with the amount of Rs 2,195 one has to pay for the latest volume alone. The work involved should be simple enough to publish the volume next year marking the 80th anniversary of the passing of the RBI Act (1934) ..........
Larger messages from economic data
...... However, highly susceptible to interest rate changes, manufacturing cannot possibly look to the RBI for an easier stance at least for the next few quarters. This is because inflation remains high. The second point is that the data relating to industry — the IIP numbers especially have often been faulted for their inconsistency. The services sector, normally the star performer, was down in the second quarter, growing by just 5.9 per cent. An important sub-sector — community, social and personal services — slowed significantly to 4.2 per cent from 9.4 per cent in the previous quarter. Considered to be a proxy......
NHB chief may become full-time PFRDA member
The
Pension Fund Regulatory and Development Authority (PFRDA) is all set to
get a new management with former chairman Yogesh Agarwal stepping down.
Agarwal quit after being snubbed by the government which did not
include him in the team that was constituted to search for two full-time
members for the authority. According to sources, R V Verma, chairman,
National Housing Bank, is among the frontrunners to be a full-time
member. But with the government having begun a search for a chief as
well, it is very likely that all the appointments would be announced
simultaneously next
month. The process of filling up the chairman’s position hasn’t yet
taken off given that Agarwal resigned abruptly last month. But the buzz
is that the new appointee may not be from the IAS cadre.
TOI
TOI
Obituary
We are sad to inform that Smt. R.JANAKIRAMAN Wife of Sri R.Janakiraman, Former Dy.Governor, RBI passed away around 1.30 p.m. on 8.12.2013. The last rites will be performed around 9 a.m. on 9.12.2013.
Address:
960, Lakshmanaswamy Road, West K.K.Nagar, Chennai. Phone Contact No. 9962585896 (Sri Narasimhan, Brother of Sri R.J) Land line no. 23666955
We pray for the soul to be rest in peace and Convey our heartfelt condolences to the family members.
- B.Chandraiah, Moderator
- B.Chandraiah, Moderator
RBICHENNAIFRIENDS (Yahoo group)
__._,_.___
Rupee finds place in Pakistan state bank museum, thanks to Indian journalists
......According to the SBP, the Reserve bank of India had ignored their request, when they asked them to send some Indian rupees. While taking the round of the museum, the 14 visiting Indian journalists found that currencies of different countries were kept except that of India. Some of the members questioned the museum director Dr Asma Ibrahim, and inquired why the Indian rupee notes and coins were not displayed............
Awaiting ‘one rank one pension’
Narendra Modi, the prime ministerial candidate of the BJP, while addressing a rally at New Delhi, in which a few bigwigs from defence pensioners were present on the dais, had announced that he would certainly fulfill their ‘One Rank One Pension’ demand of pensioners were the BJP to come to power in 2014. Naturally, he was greeted with wild and resounding applause! It would be wrong to entreat my fellow pensioners (they are citizens first, pensioners latter) to hold any brief for the BJP or the Congress or any other party. About 30 lakh GoI pensioners are waiting for more than 10 years for a miracle to happen, to get OROP. About two lakh LIC, RBI and bank pensioners are fighting legal battles in various high courts and in the Supreme Court. All the court judgments delivered during the last 10 years, without exception, are in favour of the pensioners, but the GoI and the managements are playing with the psyche of pensioners, (majority in their 70s/80s) to get court cases adjourned unabated on one or the other pretext, on frivolous/flimsy grounds.It is high time the government at the centre concedes this genuine demand of the beleaguered class of citizens, the pensioners.
- P B Niralay (FPJ)
- P B Niralay (FPJ)
A Frisky Proposition
Bank employees dub it as the big corporate fraud. Economists and some political leaders blame it on the downturn since 2008. Many of the corporates themselves prefer to switch the conversation to massive loan bailouts to farmers. But Reserve Bank of India deputy governor K.C. Chakraborty was clear as day during his presentation before a bankers’ conclave last month. “The existing levels of non-performing assets (NPAs) are manageable, but if corrective actions to arrest NPAs are not initiated, the stability of the financial system will be at great risk.”.......
Tight monetary policies in Pakistan, India fail to arrest inflation: experts
...........Ashraf said the ineffective monetary policies of both RBI and SBP are a cue to the respective central banks to go back to drawing boards and re-examine monetary policy settings. He said cost push inflation in Pakistan would persist until the cost of doing business remains high. High interest rates will not address the issue, he added.Similarly, he said, in India it will be impossible for the banks to respond to tight monetary stance of the RBI as there is more credit available than credit-takers.
SBI chairperson inaugurates 27 'all woman' branches of the lender
.......Ms Bhattacharya addressed the staff in Chandigarh and gave her roadmap for activities to be pursued to take the bank to greater heights and set new benchmarks to be achieved in near future.
Read.............
Read.............
Logistical challenges for banks implementing TCF
..........."While the intent and basic structure for TCF is in place in India for banking products, it is now being considered to extend TCF structure to third-party products like mutual funds, capital markets and insurance products sold by banks," RBI said. The Banking Codes and Standards Board of India and the Banking Ombudsman Scheme are examples. But how feasible is it to extend the same to third-party products, which are not regulated by RBI? RBI itself says successful implementation will require a change in mindset in firms' leadership and that TCF measures were used to influence performance appraisal and incentive structures..........
PSU banks: who will stem the rot?
........At a recent bankers’ meeting, Rajan hinted at bank chairmen with limited tenure dealing with stressed assets by evergreening them and leaving to their successor to deal with it, while Chakrabarty was blunt in saying that wrong appraisals were leading to diversions, over-leverage, fraud and non-performing assets (NPAs), and “they are all inter-related”. Evergreening refers to the practice of giving fresh loans to pay off the old loan of the same bank or other banks. Chakrabarty, who was a commercial banker and chairman of Punjab National Bank before moving to RBI, has tracked the growth and development of bad assets in the Indian banking system in the past two decades through a brilliant PowerPoint presentation that he had made at the bankers’ meeting.........
Bank recovers Rs 12 crore from defaulters, issues notices to 218
NASHIK: The Ganesh Sahakari Bank, which had attracted the ire of Reserve Bank of India (RBI) for its rising non-performing assets ( NPA), has recovered nearly Rs 12 crore from its defaulters and issued notices to 218 of them, even as the restriction of six months imposed on the bank has now been extended till March 2014.......
How banks can improve product distribution
The
RBI is trying to put in place a regulatory mechanism for third-party
product (TPP) distribution by banks. There is considerable ire directed
at banks for ruthlessly pursuing profits by distributing insurance and
mutual fund products while short-changing their customers’ interest.
There have been calls in the media to ban banks from distributing
third-party products. However, killing a low-cost distribution channel
would hurt the investor interest even more. How does TPP work and what
needs to change?.........
Read - TOI
Read - TOI
Will new IIBs match PPF, tax-free bonds?
............Experts also believe that CPI-linked bonds will not be able to wean people off gold. For, the product will face stiff operational challenges. If banks are not offered adequate incentives, it is likely that the CPI-linked IIBs may well go the National Pension System or NPS way, a failure. Other procedural hassles like the need to open a bond ledger account and pay fine for early redemptions, could work against CPI-linked IIBs.
Indian banks make most of RBI’s FCNR deposit scheme
.......The scheme was announced by the RBI in September to attract foreign fund flow in a bid to stabilise the rupee which had slipped below 68 against the dollar. The scheme closed on November 30. Bankers say that around one third of the total $34 billion came as deposits while the remaining came as overseas borrowings by the banks...........
HDFC Bank tops chart in FCNR(B) deposit mop-up
HDFC Bank has garnered the maximum amount of funds via the concessional swap window for FCNR(B) deposits. The window, made available by the Reserve Bank of India (RBI) to banks in order to attract dollar inflows to stabilise the rupee, was open from September 4 to November 30............
Dena Bank to open office in London this month
State-owned Dena Bank plans to open its first overseas office in London by the end of this month. "We have got approval from RBI and government for opening a representative office in London. The UK regulatory authority has also given informal permission," Dena Bank executive director Ashok Dutt told PTI. It will be inaugurated by end of this month, he said, adding the bank intends to make it a full service branch in another one year. The bank also intends to open branches in Hong Kong, Nairobi and Johannesburg..........
The death of services
.....In October, new RBI Governor Raghuram Rajan said in Washington, "We need to change the perception about India. Yes, there are inflation problems, financial-sector turmoil and slower-than desired growth. these are issues we need to deal with, but these are not crisis issues." Unfortunately, India has got bogged down with these very issues, the general sentiment refusing to turn around...........
Black gold and yellow metal
..........It cannot be mere coincidence that the Reserve Bank of India (RBI) released the balance of payments for the second quarter of 2013-14 (a month ahead of schedule) at around the same time that it ended the dollar swap facility with oil marketing companies (OMCs). The bet seems to be that the depreciation pressures that the revived demand in the open market from these dollar guzzlers (OMCs pick up $800 million from the market on average every day) would be offset by the positive sentiment that evidence of a more manageable current account balance would foster. This is keeping with the new avatar of the RBI where it is managing the exchange rate more actively essentially by communicating with the markets a lot more than under the previous regime. That leaves us with ............
The dilemma of gold
......If gold was really a hedge against inflation you will hang on to it. The gold will stay with you since inflation has also come to stay. Our misgivings about further value erosion that the rupee may suffer will turn you into an eternal consumer. Scientifically it has been proved that there is no correlation between gold and inflation. Idle Asset Gold loses all its charm when you realise that it does not give any current yield. The primary role of...........
Bitcoin bubble
..........And ironically, a Bitcoin billionaire could starve to death, because you can't buy food with it. But as commerce migrates online and sunders ties with banknotes and the paper trail, digital currencies will become mainstream. Bitcoin is only the first mover in a sunrise sector built on new ways of calibrating scarcity and value, the basis of all currencies. But......
As bitcoin puzzles regulators, advisory likely to warn of risks: report
........At the same time, the experts are also raising concerns about cyber security issues, given the huge scope of money laundering and other illegal activities through use of an unregulated digital currency concept. "The real fear is that Bitcoin can be used to help money laundering," said V Rajendran, advocate and President, Cyber Society of India. "The concept of a digital currency, unregulated by any monetary authority, is a recipe for disaster. The RBI must step in and regulate this immediately. Lured by so-called appreciation in bitcoin value, people may invest in this and risk losing everything," he added..............
Is 'virtual' the new reality?
.....Bitcoin is a virtual currency, or crypto-currency, used only for online transactions. Though not backed by any central bank, it is traded on a number of exchanges or swapped privately. It is generated by a process called 'mining', for which one requires particular software. Theoretically, it is possible for all computers across the world to run the software and locate bitcoins by solving an algorithm. But it is akin to winning a lottery by solving a puzzle; only some computers can do this because one needs high-end ones with fast processors and uninterrupted power supply, difficult in India. This is what makes bitcoins so valuable, not just in India but worldwide...........
Saturday, December 7, 2013
Rupee to be fairly stable with CAD narrowing: Subir Gokarn
......I really do not have the ability to make a number call. I have not been looking at the numbers that closely, but there are two issues that we have to emphasise on the structural side. One is clearly that the rupee depreciation is helping exports grow and imports are contained. Anything that is imported that has a domestic competitor now and the advantage will now swing to the domestic producer. That is a very positive response to the rupee depreciation. But the other............
Administering FEMA (Foreign Exchange Management Act) - evolving challenges : G.Padmanabhan
Inaugural address by Mr G Padmanabhan, Executive Director of the Reserve Bank of India, at the Authorised Dealers’ Conference, Agra, 30 November 2013
...........In the original FEMA regulations, it was provided that it was in order to issue a partially convertible debenture against foreign direct investment. In 2006–07, when external commercial borrowing was discouraged, companies responded with an obvious dodge: a partially convertible debenture with a nominal part slated to be converted to equity was used to camouflage a commercial borrowing. We responded by excluding a partially convertible debenture from the list of securities that can be issues against FDI and to be treated as a debt. I am afraid the game is not yet over because the vice of treating a partially convertible debenture as debt is that someday, when appropriate incentives are there, it can be used to camouflage an equity investment.......
RBI Executive Director calls for robust market
.....So far, we have responded by restricting the freedom of market participants to enter into derivative transactions with a view to curbing speculation and panic-driven trades. Looking ahead, we shall perhaps have to build a robust market which will provide an ample opportunity for all kinds of trades, even speculative ones, without upsetting the apple cart," said G Padmanabhan, executive director of RBI at the Authorised Dealers' Conference at Agra on November 30. Padmanabhan also believes that there is a need to provide adequate instruments suiting every market participant's hedging strategy. "Hedging is an agent's choice, depending on his risk appetite. The market must provide adequate instruments suiting every market participant's hedging strategy. As of now,......
Planned Retirement vs Panned Retirement: A Perspective
With assured pensions becoming a thing of the past, Retirement Planning has become an imperative for every Indian. A higher cost of living, the advent of aspirational lifestyles, evolving socio-cultural equations and volatile economic dynamics all contribute to necessity of planning for retirement as soon as one starts earning. However, a recent study ............
'Numaish' gets over 4,000 applications
.........Amongst the new attractions this year are displays by the Reserve Bank of India (RBI). In view of increasing cases of fake Indian currency in circulation in Hyderabad, RBI is putting up 30 stalls to educate the public about the differences between genuine and fake currency notes.......
RBI hits the jackpot with dollar deposit scheme
The Reserve Bank of India (RBI)’s out-of-the-box move to woo dollar deposits by protecting banks from currency risks has been a big hit. Banks have managed to mobilise $34 billion in foreign currency deposits since the special swap scheme was flagged off in September. This is much higher than the sums...
RBI seeks intelligence on bank licence applicants
........In almost identical language, the letters from RBI refer to the bank licensing exercise in which Mint Street has laid stress on the "fit and proper" status of the applicants. The letter has asked the agencies to provide details of the status of investigations, if any they have filed against any of the promoters or other members of the concerned groups. So while the CBI will have to give information that Aditya Birla Group chief Kumar Mangalam Birla has been named in an FIR filed by CBI in the allocation of Talabira-II coal block, it is, however, not clear if this will be a reason for the RBI to stall the application from the group............
Parliament panel opposes bank licences to industrial groups
......The standing committee also questioned the rationale behind the view that more banks will help in achieving greater financial inclusion. It pointed out that as of March 2013, only 17% of the total branches of private sector banks was in rural areas. “Given such a background, the Committee are apprehensive that industrial/business houses may not be geared to achieve the national objectives of financial inclusion, priority sector lending etc,” it said. The committee said the RBI should ensure that for every three branches opened in urban areas, there is one in a rural area.............
Urban bank faces de-licensing threat
The Cuttack Urban Cooperative Bank, which serves the banking needs of over three lakh customers and 65,000 shareholders, is facing the threat of getting its banking licence withdrawn by the Reserve Bank of India (RBI). The threat is apparent for the urban cooperative bank (UCB) is unable to go for core banking solutions (CBS) within the period stipulated as prescribed by the RBI............
Urban co-op banks allowed to act as PAN service agents
The Reserve Bank of India has given permission to financially sound and well managed urban co-operative banks (UCBs) to act as PAN (permanent account number) service agents or PSAs. UCBs can become PSAs by entering into a tie-up with UTI Infrastructure and Technology Services Ltd (UTIITSL), with prior approval from the RBI.........
MCA, RBI to discuss insurance cover for public deposits
The Ministry of Corporate Affairs will hold consultations with the Reserve Bank on the mandatory insurance cover that has been proposed for public deposits garnered by companies. The proposal, being mooted under the new Companies Act, comes against the backdrop of rising incidents of investors getting duped by fraudulent money pooling schemes...........
Private banks increase interest on credit cards
.... “Generally, credit card rates are so high that even a 100-bps increase in the cost of funds does not have any material impact. The interest rates on credit cards depend on risk perception. Given the uncertain economic environment, the risk of default has increased. This prompted some banks to increase their rates,” ...........
'Punching debit card PIN at shops may be risky'
.... "Logically, due to lack of privacy at shops, there is a possibility of misuse of the system. Now, to resolve this alleged lacunae in the customer service, our bank will suggest to our product team that the shops need to provide a secluded place for the ATM card swipe machine which should offer adequate privacy for the customer while punching his/her PIN." The product team will then forward the suggestion to the RBI authorities for corrective measures in the guidelines........
Bad news! Customer may have to pay additional R 6 to feel secure inside an ATM
.....The banks have calculated cost of security enhancement, measures including security guard, camera, and have decided to pass on the burden to customers. The proposal has been laid on the table and is yet to be approved by the central bank...............
OPEN A/C WITH FINGERPRINT
...............The
eKYC procedure will enable a customer to walk in with an Aadhaar number
and open an account by getting his fingerprint scanned. The bank’s
systems will pull all data stored online with the Unique Identification
Authority of India (UIDAI), including name, address, birth date and
photograph. It
will also save a copy of the KYC documents that are stored in UIDAI’s
servers. The bank will then print out an account-opening form with all
the details already filled in from the UIDAI servers...........
Malay Mukherjee set to join IFCI
...Mukherjee who have more than 35 years of experience in banking, joined Indian Bank as a probationary officer in 1976. Apart from working in various branches across several states like Assam, Bihar, west Bengal, Maharashtra and Gujarat, he also have the experience of working in risk management and technology management department. Mukherjee took over as Executive Director of Central Bank of India in November last year and looking after portfolios such as Credit, human resources, , operations, customer services, priority sector, recovery, among others......
SC notice to Centre, RBI over alleged PwC irregularities
....Issuing the notice, also to the RBI among others, an apex court bench of Chief Justice P. Sathasivam and Justice Ranjan Gogoi said the issues raised by the NGO Centre for Public Interest Litigation (CPIL) need to be examined..........
RBI introduces cash settled IRF on 10-year Government of India security
The Reserve Bank of India (RBI), as announced in the Second Quarter Review of Monetary Policy 2013-14, has decided to introduce cash settled Interest Rate Futures (IRF) on 10-year Government of India security. The IRF deriving value from 91-Day Treasury Bills, 2-year, 5-year and 10-year coupon bearing notional Government of India security, and coupon bearing Government of India security are permitted on the recognised stock exchanges............
MSME Ministry convenes meeting of banks on Monday
...."I have called a meeting of CMDs of various banks, including State Bank of India, United Bank of India and Canara Bank, on Monday to discuss with them the difficulties they are facing in financing to small units," Minister of State (Independent Charge) for Micro, Small and Medium Enterprises K H Muniyappa said on Friday. He added although the RBI has guidelines on providing credit to the sector, it should ask banks to be a little liberal in giving loans to the industry as it is paramount to the growth of any small business........
AIBEA releases name of top 50 loan defaulters
........Releasing the names of the top loan defaulters today, the association said, “Since the RBI or the Government is not publishing the list of loan defaulters, AIBEA will shortly publish a Booklet containing the names of the top 30 defaulters in each Bank... Since bad loans and write off is a loot of public money, we seek the support of the people in our campaign to safeguard the public money in the Banks.”........
Aiyar Questions Waiver of Rs 1 Lakh crore Bad Loans
....“But these are rich firms and the non-performing assets were removed from the books to enable the companies that were not performing to perform,” said Aiyar, adding that the Finance Minister had a lot to explain in Parliament. Aiyar’s remarks come in the wake of Reserve Bank of India (RBI) Deputy Governor K C Chakrabarty stating that banks had written off a whopping Rs 1 lakh crore in the last 13 years. He said the government called this a stimulus to economy. This sort of stimulus is good for the economy, but is providing subsidies to the poor bad for the economy? he wondered.......
No wrongdoing by Acharya, says SBI panel
........Financial Services Secretary Rajiv Takru said in New Delhi that the ministry has received SBI's internal probe report and is looking into it. He also said that he discussed the report with Bhattacharya. "SBI has submitted the internal enquiry report in respect of sanction of a loan by the credit committee headed by Acharya to the department of financial services. The members of the internal enquiry committee have noted that the sanction appears to have been given in the ordinary course of business," the bank said in a statement...........
In a first, MFI customers to be given credit scores
.......While retail customers of banks and NBFCs have been scored for some time now, the concept of a credit bureau is relatively new for the MFI sector. The score is the next step in the evolution of credit information services from a credit bureau since it provides predictive power along with credit attributes in a credit report of a customer, Patel said.......
Sebi issues advisory to general public on complaints
.....Guiding the public, Sebi today said that complaints such as those against unlisted/delisted/wound up/liquidated/sick firms and those cases which are sub-judice, do not fall under its purview. Sebi also said it does not handle complaints that fall under the purview of other regulatory bodies such as RBI, IRDA, PFRDA, CCI as well as those that come function of ministries like the Ministry of Corporate Affairs.......
Details to know about your Form 16A
....The RBI has advised the banks that they should ensure that there is a system in place that has been placed so that the form 16A can be issued in time. The emphasis is on the system so that there is no disruption to the entire process for the individual and that they are able to get the required information on time. The first thing to do for the bank is to ensure that they actually give the Form 16A to the depositor and the other point is that this should be given on time. There are a lot of cases where...........
Kingfisher on ground, banks' money up in the air
....If this year has been marked by acrimony, 2010 was a period of bonhomie between the airline and its lenders. In a controversial decision in November 2010, public sector banks, failing to read the signs of a financially sick airline, restructured Rs 7,650 crore of debt, converting a portion of it into preferential shares. The banks announced a two-year moratorium on the repayment, reduced interest and additional funding. After the restructuring, the airline’s total debt fell to Rs 6,300 crore............
Friday, December 6, 2013
Monetary policy signals fail to transmit - Renu Kohli
.......The question then is upon the RBI’s reading of these trends and whether monetary policy is accordingly synchronized. Are demand conditions misread? When the demand for loans at banks’ prevailing interest rates — the price that equilibrates the demand and supply of credit or loans and deposits — is falling below supply, it is no surprise that the central bank’s signal to raise rates even more is not being picked up by the banks. The cue is for the RBI to go back to the drawing board and reexamine monetary policy settings. Moral suasion cannot do that job.
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