....“The whole idea of a corporate bond market is to diversify risks from the banking system. But, in India, we make banks investors in corporate bonds perhaps to the same extent in which they have their loan exposures,” ........
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, May 13, 2014
RBI says corporates should voluntarily access bond market
The Reserve Bank of India (RBI) believes that corporates should voluntarily access the bond market for meeting their financial needs as this would lead to development of the market. “The corporates should voluntarily accessing the bond market for part of their own financial needs,” said Chandan Sinha, Executive Director, RBI at an event organised by Confederation of Indian Industry......
The phenomenon called ‘female financial paradox’
Women are a growing economic force and expected to add about $6 trillion in earned income globally over next five years according to the research by the Boston Consulting Group. Yet many women lag behind men when it comes to using those assets to plan and build financial security. This phenomenon is termed as “the female financial paradox”........
Rana Kapoor should not be allowed another term as YES Bank CEO: Madhu Kapur tells RBI
..."...you are requested to give no approval to the appointment of any person as chairman and managing director of the bank unless it is jointly recommended by Rana Kapoor and us (successors of late Ashok Kapur) as per the Articles of Association," said a letter dated May 9, addressed to the RBI deputy governor. The letter was jointly signed by Madhu Kapur, her daughter Shagun Kapur Gogia and son Gaurav Kapur.
ATM frauds on rise, Police nab two youth from Mango
....Another police officer added that it was indeed a pity that the leading banks, instead of being a role model to other banks in the district, was careless in adhering to security norms laid down by the RBI. It was only after the heist, the bank was now contemplating to put security systems in some places.......
PF denial costs bank 3 lakh
.....In his appeal, the complainant said that he was an employee of the bank and his services were terminated. His provident fund as far as his contribution was concerned was given by the bank, but it was delayed. The officials refused to disburse the contribution of the bank towards his provident fund. Unnikrishnan filed a complaint for interest on the amount which was given late by the bank. .........
Now, get info on farm tech
In a bid to create awareness on farming techniques and to increase productivity, the Karimnagar District Cooperative Central Bank (DCCB) on Sunday launched Farmers Development Centre, a first-of-its-kind initiative in the country. The FDC, launched in association with Nabard and e-fresh portal, would enlighten farmers about the latest farming technology and methods for increasing yield..........
Monday, May 12, 2014
Governor’s freedom
Read - Mint
I am the boss, fire me if you want: Raghuram Rajan
......“I determine the monetary policy. I say what it is. The government can fire me, but the government doesn’t set the monetary policy. So, in that sense, am I independent! Well, I am happy to talk to the government. I am happy to listen to the government but ultimately the interest rate that is set is set by me,” ........
Raghuram Rajan stresses independence from govt
...........“The key question is what kind of equation do you have with the government? I determine monetary policy, I say what it is,” ............
Why a Raghuram Rajan-Modi team can be good news for India
One is amused and yet troubled by the recent media discussion on the non-issue of whether Raghuram Rajan will continue as RBI Governor in case a Narendra Modi government takes over. This is a non-issue because whether we look at the matter from Modi's point of view or Rajan's. Their staying together is such an obvious win-win outcome that it is a no-brainer. Indeed,the two are made for each other and the country badly needs both of them.
Read more at: Read......
A Modi Victory may Not be Music to Rajan’s Ears
....Surging inflows could create twin problems for Rajan – appreciation of the Indian rupee which could erode the country’s competitiveness in international markets and a slowing down of exports. If he buys up the dollar flows, he would release rupees into the system and that could aggravate an already elevated inflation. So, damned if he does, and damned if he doesn’t. However, some experts said this wouldn’t be a problem but an opportunity.......
Rajan has failed, will have to go, says Swamy
...... “If Rajan gets one more term you can safely say bye to all investment and therefore high growth in this country … he’s from [University of] Chicago so he is not fit for this country … there they believe that more free market the better but in India market failures take place and you’ve got to correct for that.” “We need to immediately drop interest rates … doesn’t mean that we do it in one go … there can be a road map but businesses must know that cost of capital will come down.”.......
Filing tax returns? Give more details this year
.....Many employees get house rent allowance (HRA), leave travel assistance (LTA) and travel allowance as part of their salaries. These allowances are exempt if certain conditions are met. Till now, the taxman had no issues if you mentioned a consolidated figure in your return, but now he wants to know how much you received under different heads. “You will have to separately mention the figures for, say, HRA and LTA,”......
Read - ET
Currencies, Counterfeits and Confidence
..........By that norm India is still far from facing problems. The RBI’s currency department, through the bank’s spokesperson, says firmly: “The security features in genuine Indian banknotes have not been breached.” A directive to withdraw by March 2014 (later extended to January 2015) all pre-2005 notes stirred rumours it was meant to tackle counterfeiting, but the RBI says it was simply a regular process: “Earlier we withdrew older series banknotes in a passive manner where the banks were instructed not to re-issue such notes and send back those notes to RBI for disposal,” says the spokesperson. In the past few years banks were told to do this for all notes of 100 and above printed prior to 2005. “In the current withdrawal plan we have involved the public also,” says the spokesperson. ...........
Read - ET
Know a forgery to catch one
.......Fake notes have no value. When you give them to the bank, they get impounded and you get nothing in return. So before accepting notes, especially high value ones, verify their genuineness by checking at least three or four features. The website www.paisaboltahai.rbi.org.in has all the details about identifying fake notes of various denominations............
The rupee, the dollar and election results
.....Its precipitous fall at one stage, in September, amidst mounting current account deficit (CAD) threatened macro-economic stability. As is well known, the deft measures undertaken by the government and the Reserve Bank of India (RBI) helped in stabilising the rupee. The regaining of overseas investors’ confidence is material to any discussion on the financial markets. More visible than any other financial market, the stock market has been reflecting the overseas investors’ confidence......
NPA also refers to non performing administration: K C Chakrabarty
........“The issue of NPAs is due to Non Performing Administration. Discipline is required for everybody, even bankers and borrowers also. If we don’t resolve the issue of NPA quickly then it will be a big problem. Action should be taken against borrowers who do not cooperate”.........
QNB Group: India’s economy is on the mend
.......The centerpiece of policy actions was the tightening of monetary policy since last July, with the Reserve Bank of India (RBI) draining liquidity from the banking system, limiting access to borrowing from its discount windows and hiking short-term interest rates. In addition, limits on foreign investments and external commercial borrowing in foreign currency were eased in order to allow more capital inflows. Moreover,..............
Banking Law and Practice in India
.........he Reserve Bank’s efforts to trigger the country’s growth has necessitated rewriting, enlarging, amending, substituting several new facts and chapters to update the original book to keep pace with the needs of the emerging economy. Electronic Banking, Cyber crimes have led to amendments in the Indian Evidence Act and Srinivasan has added a new Chapter on “ Bankers’ Book Evidence Act.” The new Sarfaesi Act, the Recovery of Debts to Banks and Financial Institutions Act, 1993 have been dealt with at considerable length and the readers provided with up- to- date case- laws and interpretations furnished of these dynamic subjects.........
Read - Book Review by P.P.Ramachandran
Banks feel RBI's move won't boost business
......."We don't have the culture, the environment that RBI wants to inculcate in children. Parents nowhere will want to relinquish the control they have over their child's expenses. The current joint account products more than suffice this requirement. Moreover, the situation in developed countries, where children leave home at a very young age and need their own account, isn't the same here as most minors stay with their parents till at least they're 18," ........
RBI directive makes street kids happy
........Thirteen-year-old Raghav said: “Opening a bank account will help me save around Rs.100 daily. I earn Rs.300 by picking bottles and rags at stations, but I am forced to spend the money every day since there is no place to keep it safe. My money often gets snatched by my peers or the police.”...........
Eleven held for Internet banking fraud
...........Investigations were taken up after two complaints were received in May. The first complaint was filed by a Reserve Bank of India manager who alleged that the central banking institution’s name was being used in fake e-mails and phone calls. ..........
It's never too early to learn about money management
.... "Today, it is important to expose children to banking because we have moved towards non-currency-based monetary transaction and electronic currency." It could be for this very reason the Reserve Bank of India (RBI) has said children above 10 years can open and operate savings bank accounts independently.......
FinMin for tightening banks' exposure limits
.....According to the Reserve Bank of India (RBI)'s current prudential credit norms, a bank can't give loans in excess of 15 per cent of capital funds to a single borrower. The cap is 40 per cent for the borrower group. The government is discussing with RBI and public sector banks (PSBs) on whether to lower the cap for small banks, as well as others not performing well due to high levels of stressed assets......
Bharatiya Mahila Bank says no need to raise capital at present
...Finance Minister P Chidambaram had recently said the government would offer all financial assistance to the bank if required. "The year has just started and as of now we don't need (funds). As we grow, we will certainly raise funds," the bank's chairperson and managing director Usha Ananthasubramanian said.......
Yes Bank-L&T Finance deal: is it for real?
....Even though Gandhi has said RBI would have no objection if an unsuccessful banking applicant wants to buy a substantial stake in a bank, a question remains. How would an entity which was not considered fit and proper to set up a bank be allowed to acquire a bank? Besides, RBI has strong reservations about a non-banking finance company (NBFC) taking over a bank. There have been cases though where banks and financial institutions have taken over NBFCs. .............
Raghuram Rajan seen hamstrung by inflation on weak monsoon
India’s prediction for a below-average monsoon this year is fuelling concern that inflation will quicken, limiting room for Reserve Bank of India (RBI) governor Raghuram Rajan to cut interest rates to revive the economy............
Open letter to the next PM: Banking sector faces a challenging task
.......Financial Sector Legislative Reforms Commission calls for a unified regulator for the financial services sector which will regulate insurance, capital market, pension funds and commodities derivatives market (the RBI should continue to exist outside the unified regulator although with modified functions of setting monetary policy, regulating banks and payment systems). Although a move to a single regulator may be premature in India's context, the new government within the present framework can improve coordination and clearly delineate responsibilities among existing regulatory agencies..............
Governor’s assurance to APCOB
Governor E.S.L. Narasimhan on Friday agreed to issue a letter of recommendation to NABARD ( National Bank for Agriculture and Rural Development) and the Reserve Bank of India to provide uninterrupted re-finance support to APCOB (AP Cooperative Bank Ltd) during the interregnum period of the State’s bifurcation process........
Kashmir business community flays nationalized banks for conservative lending
..Chairman, Kashmir Economic Alliance, Muhammad Yaseen Khan blamed the negligent approach of state government and RBI which according to him has given a “free hand to public sector banks in Kashmir to ensure flight of capital to outside places.” “It is a grave issue which needs to be dealt with strictly. Business community must wake up as these banks are taking the local people for a ride, by accumulating huge deposits in the state but adopting measly approach while lending,” Khan said. He adds that banks are a business houses which work by the principle of give and take. “But here banks like SBI and PNB are just taking the deposits of business community and when any young entrepreneurs or businessman approaches them for advances, they show rigid approach thus discouraging new start-ups,”.....
SC questions regulators' role in Saradha scam
........The Court order, which came on Friday, said: "Investigation conducted so far puts a question mark on the role of regulatory authorities like Sebi, Registrar of Companies and RBI, within whose respective jurisdictions and areas of operations the scam not only took birth but flourished unhindered."............
CBI to form special investigation team to probe Saradha scam
.....The CBI will form a Special Investigation Team (SIT) to probe the multi-crore Saradha chit fund scam in which investors in West Bengal, Odisha and Assam were allegedly duped of Rs 10,000 crore. The SIT will also examine the role of market regulators like SEBI and the RBI......
Regulators take stock of risks posed by subsidiaries of HDFC Group, ICICI Group and Kotak Group
.....The inter-regulatory forum (IRF) - which has representation from the banking sector regulator Reserve Bank of India (RBI), securities market regulator Sebi as well as regulators of insurance and pension sectors - is in dialogue with all stakeholders to come up with an acceptable assessment of risk being posed by the subsidiaries on the parent groups,
Friday, May 9, 2014
Stop gossiping about RBI Governor's future post 16th May verdict - M.G.Warrier
........Mainstream media, during the last few weeks, starving for controversies, has been generous in dishing out gossips about the continuance of Dr Raghuram Rajan as governor of Reserve Bank of India (RBI), if the dramatis personnae in New Delhi change post-16 May 2014. This writer is not interested in joining issues with those who argue the case on either side mixing politics and economics(or banking?). Still, as one who had defended in the media, the case for an extension of term by one year for Dr Rajan’s predecessor during the first half of 2013, some observations on the subject from this writer may be in order...............
Replacing RBI governor Raghuram Rajan may lead to a sovereign rating downgrade: HDFC Chairman Deepak Parekh
........."The government, whichever it is, if he (finance minister) changes the governor, he will get a bad name. There is a possibility of a downgrade if you change the governor... that you are politicising the position,"
RBI to issue guidelines for 'on-tap' banking licences in FY15: R Gandhi
The Reserve Bank of India is likely to issue guidelines for issuance of "on-tap" bank licences in 2014/15, RBI Deputy R Gandhi said on Thursday, a month after the central bank granted two preliminary licences to set up new banks..........
RBI: Losing licence bid no bar for stake buy in a bank
An entity's failed attempt at getting a bank licence will not have any bearing on its move to pick up a large share- holding in an existing bank, newly- appointed RBI Deputy Governor R Gandhi said. His comments come against the backdrop of reports that L& T Finance is eyeing a significant stake in private sector lender es Bank. " They might be rejected for bank licence, but as a share- holder if they are going to come, we will examine that. It won't be a bar just because its ( banking) licence has been rejected," .......
Pension updation and opening of fresh option - RBIOA
Pl find attached is the exact status of what transpired between the Bank and the
Associations on the issue of Pension...........
Closure of public counters in RBI
.......Unfortunately, in total disregard to that, Bank's offices, under promptings from the Central Office, are each and every day denying entry and refusing service to customers..........
Beware of Lottery spam scam on RBI's name
.......The Reserve Bank of India (RBI) Governor, Dr Raghuram Rajan has already cautioned people about lottery or beneficiary of fund kinkd of emails. This time, it is a 'Lottery Scheme ' email sent using his name in the so-called meeting of 'United Kingdom Lottery Promotion Council' with a 'Senate Tax Committee on Finance', except that both does not exists. Simlar emails used to be sent out in the name of former RBI governor Dr D Subbarao too..........
RBI conducts financial literacy programme for students
With the objective to create banking awareness among the students, the Reserve Bank of India (RBI) Rural Planning and Credit Department Guwahati conducted a one day literacy programme for students today at Bundrock Chapel Hall, Patkai Christian College .......
Obituary
I regret to Inform you that one of our ex colleague Mr. P.M.Hegde, retd. AGM from Bangalore office expired this morning 7.40 AM due to heart attack. Kindly pray for the departed soul.
- William Panakal
Prepayment penalty ban only for individual borrowers, says RBI
............The Reserve Bank of India (RBI) on Wednesday clarified that its directive regarding a ban on prepayment penalty on floating rate loans was applicable only for individual borrowers, indicating it wasn't for corporate clients. “It is advised that banks will not be permitted to charge foreclosure charges/ pre-payment penalties on all floating rate term loans sanctioned to individual borrowers, with immediate effect,” the banking regulator said on Wednesday.........
Pranab launches RuPay, India’s own card payment network
......The new payment network developed by the National Payments Corporation of India (NPCI), a not-for-profit company envisioned by the Reserve Bank of India (RBI) and created by the banking industry, covers all the automated teller machines (ATMs) and most of the retail and e-commerce platforms. RuPay is the coinage of two terms Rupee and Payment.........
Govt banks lure customers away from private lenders
The perception that customers prefer private lenders topublic sector banks (PSBs) for retail loans might not be prevalent any more, if a recent survey by Nielsen is to be believed...........
No external debt crisis, please
...........What could be worrying the RBI is the rush of money streaming into short term debt instruments — such as 91-day treasury bills issued by the government or commercial paper floated by companies. Such a deluge could be facilitated both by the interest rate differential between western markets and India, as well as the stronger rupee vis-à-vis the dollar........
Syndicate Bank moves to catch 'em young
.............“We have already started working on designing a new product for minors. This new guideline from the RBI will help us in achieving our goal of increasing our CASA levels which has dipped to 29.90 per cent in FY14. We will launch the product very soon,”...........
Parents Beware! Operating Bank A/c’s Now Child’s Play
Letting your minor daughter operate her savings bank account may be a great way to teach her about money matters, say financial experts. A day after the Reserve Bank of India (RBI) allowed children over 10 years to open and operate their bank accounts independently, experts feel that it could also make life easy for many parents, especially in big cities, where children get a tidy sum as monthly allowance and spend it both online and offline. .........
Read - ET
Read - ET
'Minor' Major step.........
My View on "RBI lets 10-year-olds sign cheques, do net-banking...":
The First Positive Step from RBI, in the real sense, to teach children practically about banking and financial literacy and promote financial inclusion and inclusive growth. A step to empower children and create a Responsible and Young India. Three years before, my minor daughters opened SB accounts in their individual names, with SBI, but SBI did not provide ATM Card or Cheque facilities. I hope, now they will provide.
- L M Ganesan, MOF, CAB, Pune
Savings accounts for minors to promote financial inclusion
............The central bank has said its latest step will promote financial inclusion and bring uniformity among banks in opening and operating minors' accounts. But should one worry about safety?.....
SBI to launch children's savings a/c in 3 months
...........“We do open accounts for children, but we have restrictions on overdrafts. This is because if there is overdraft, we won’t be able to realise it. However, there is no restriction on deposits. We are going to launch a special scheme for children in the next three months,” SBI Chairman Arundhati Bhattacharya told reporters.....
FinMin nixes India Post's plan to set up a bank
......As suggested by the Bimal Jalan-headed screening committee, the issue came up for discussion at a recent meeting of the finance ministry and RBI, a ministry official said. The ministry said India Post was not ready for a banking foray....
How mis-reporting by banks can hurt your credit rating
When a customer was refused home loan by a government bank due to a negative rating assigned by the Credit Information Bureau (India) Ltd (Cibil), little did he realise his callousness in ignoring a ‘free’ credit card he had never applied for nor used earned him a spot in the defaulter list. A good 30 days were spent in reversing the negative rating, but by then he had lost the opportunity of buying the apartment he and his family had set their eyes on............
RBI brings MSME stakeholders together
........Second of its kind held in the North East, ‘Town Hall meetings’ have been formulated by the RBI to bring all stakeholders of the MSME sector together to meet, listen to each other, understand problems and find solutions to them, explained Regional Director, RBI Guwahati, S.S. Barik in his keynote address. Nagaland has potential, he said, but the push needed for the industries/MSME sector to grow is missing. “That is why the RBI is emphasizing on MSME as it promotes distributive growth,” Barik informed..........
He Trumped Anil Ambani in India's Race to Change Banking
.........Bandhan slowly became India's largest microfinancier, focusing on the northeast and then expanding across the country. "I'm not an economist, I'm not a banker - I learn from my customers," he said. Mr Ghosh recruited poor people to run his branches, declaring only they "understood poverty" and could identify the needy. As Bandhan becomes a bank, Mr Ghosh said some staff will need training to deal with more sophisticated financial products. Just three-fifths of his employees reached the final grade in school.........
Wednesday, May 7, 2014
New Paradigms in RBI Thinking
Some things are said, some are implied. The RBI may not have hiked the repo rate in April, but there is now a clear and implicit shift in RBI thinking. Though such a shift is based on sound rationale, it does have the wherewithal to change the interest rate structure more frequently.
What is this perceived change in RBI thinking?........
Read - ET
What is this perceived change in RBI thinking?........
Read - ET
Attitudinal change on M&As need of the hour for RBI
When Reserve Bank of India Deputy Governor KC Chakrabarty said the central bank should end 'regulation by discretion', the plain-speaking banker was not letting out a state secret. He was stating what was common knowledge, but something that is hardly discussed. The Reserve Bank of India, though, remains probably the only vital institution in the country without taint, and the need for attitudinal change to regulation — especially to takeovers and amalgamations of companies in the financial...........
RBI has scotched speculation in the currency market but dangers lurk
........ Contributing to the recent phase of rupee stability in the last couple of months were measures which the Reserve Bank of India (RBI) had taken, particularly in terms of weeding out unnecessary speculative demand for the US dollar, thereby creating a buffer. In addition, a good amount of foreign portfolio flows were coming into India. Of course, an underlining factor playing an important role in the currency market is the hope of a stable government coming to power. While in equity markets this desire is being reflected in movement of indices, with a majority of players being physically demonstrative about it, this is not the case with currency market stakeholders. They are........
India's growth rate will pick up soon: RBI Governor Rajan
........Rajan also reiterated his view on the growth rate being inextricably linked with curbing inflation. "I have always stressed that stimulating growth and controlling inflation are not opposed to each other. Inflation is what is standing in the way of India's growth," he added. Rajan was addressing student members of the Oxford Union Society (OUS) on his way to Switzerland,........
Do not feel sad for regulators
My View on "RBI's soft approach - A Chandramouliswaran":
RBI does have muscle power those officers who have inspected the group will bear a testimony to this. We must say hats off to Supreme Court judges who had courage to take action against the group chairman for failure to comply. The group had even taken the Honorable Supreme court for ride for two years. The group have the backing of political class as also legal support from top lawyers of the country. The group had also tried to browbeat judges, We are proud of judiciary. Please do not feel sad for regulators as they do not have powers to act beyond a limit. The officers of SEBI should be complimented for courage to confront the group.
- Ravi Sharma
Raghuram Rajan signed Rs 1000 banknotes to come up shortly
........"The RBI will shortly issue Rs 1000 denomination Banknotes incorporating rupee symbol on the obverse and reverse, with inset letter 'L' in both the numbering panels, in the Mahatma Gandhi Series-2005 bearing the signature of Raghuram G Rajan, Governor,".........
No penalty if minimum balance not kept in dormant bank account
......“It is advised that henceforth banks are not permitted to levy penal charges for non—maintenance of minimum balances in any inoperative account,” RBI said in a notification. Several banks, including the State Bank of India, do not levy any charge if the minimum balance is not maintained in an inoperative savings account............
Interest earned on tax refund is taxable
............The interest amount that is paid back is considered “income from other sources”. So, while filing returns for the financial year (FY) in which the refund was given, the interest will be taxable as per the tax slab rate of the person. Say, in the financial year ending March 2013, excess tax was paid and the refund was made in the financial year ending March 2014. While filing returns for FY14, the person will have pay tax on the interest income.............
RBI lets 10-year-olds sign cheques, do net-banking
.........IF a 10-year-old signs a bank cheque for you, don’t doubt his bonafides. The Reserve Bank of India broke new ground on Tuesday, allowing minors above 10 years to open and operate savings bank accounts and recurring bank deposits and save in bank fixed deposits independently, without requiring a guardian, which was the practice till now. Such minor bank account holders will be entitled to most of the facilities, including use of ATM, cheque book and internet banking..........
Aadhaar-linked cards put on hold
In a move that will bring relief to banks and credit card issuing companies, the Reserve Bank of India has put on hold an order requiring all future credit card swipe machines and ATMs to be capable of biometric authentication. The central bank has instead decided to launch a pilot project where issuers of prepaid cards are allowed cash withdrawals on the basis of biometric authentication. The move comes on the wake of banks complaining that implementing biometric authentication across all point of sales terminals (credit card swipe machines) was proving to be a challenge.........
Read - TOI
Read - TOI
Heading to an ATM in Mahabaleshwar? Read this first
...........Pune: Did you spend one of your last few weekends at Mahabaleshwar, and made a quick dash to any of the ATMs in the market area for some money? Then here is something you should know. Investigating three cyber thefts, in the area, it has been revealed that all three involved ATMs over the weekend. Further investigations indicate something very shocking - the police suspect that cloning/ skimming devices have been used in these ATMs. ..........
Inspired debate
My View on "Don't malign RBI":
It is true that no body from BJP has asked for the removal of Shri Raghuram Rajan. He is best GUV in living memory. This debate is an inspired one and actively encouraged by IAS lobby as this prestigious post has been bagged by someone who does not belong to their circle. At present I am in Sydney and I have seen reports that Reserve Bank of Australia is mandated to keep inflation level between 2 to 3% which at present is running at 2.9%. The Australian Government is raising resources by other means like newly introduced Debt tax but not by increasing fiscal deficit or public borrowing. we require such independence.
- Sitendra Kumar
Any Takers for Chidambaram’s ‘Heavy Lifting’?
.........So, when a young, good looking, and articulate RBI governor, who is also a reputed economist, gets all the kudos for a stable rupee and dip in inflation, Mr Chidambaram could not resist reminding the world, even from far away Kazakhstan, of all his efforts that went in. Besides taming current account deficit, the currency has been propped up by a large inflow of dollar deposits from NRIs who were offered generous returns. Bankers claim it was not Governor Rajan’s idea, but they who convinced him in allowing the special NRI scheme. Rajan, with his enviable standing, is still in his honeymoon period: he would be praised if things go right, but would escape the blame if things backfire. For instance, any other RBI governor would have been panned for keeping interest rates unchanged when inflation was high and then raising it when inflation had softened. But there will be...........
FM to review banks performance on May 14
............“Besides the routine performance review, the issue of recapitalisation of banks will also be discussed during the quarterly meeting,” said a finance ministry official. The meeting with bankers will be held a day after the Financial Stability Development Council, chaired by Chidambaram, meets on May 13. The FSDC is likely to discuss the economic situation in the backdrop of the ongoing polls............
BANKING BUSINESS
This refers to the article “Don’t expect much from new banks” (May 5). Though the issue of new licences by the RBI may add to the number of banks, it cannot meet the objectives of licensing of more banks, which is to add to the competition and improve financial inclusion. As it is, the geographical spread and concentration of banking is sufficient to make financial inclusion a reality and generate constructive competition. While the PSBs are weak with deteriorating financials, the cooperative banks and regional rural banks are too weak to make their presence felt adequately. They have not been able to fill the gaps in banking needs in their areas of jurisdiction. The private sector banks perhaps are more into businesses other than banking, and they seem to be moving without any proper direction and long-term objectives. It is time the Government and the RBI strengthen the existing set-up before experimenting with new licences.
- TV Gopalakrishnan, Bangalore
Fourfold jump in badloans in public sector banks in 5 years
........Since RBI or the Government is not publishing the list of loan defaulters, AIBEA today is publishing the list containing the names of top 400 defaulters of Public Sector Banks. AIBEA today demanded that Banking system must be subject to the auditing of Comptroller and Auditor General of India. Banks must actually recover bad debts instead of artificially reducing the figures in the books of accounts through Corporate Debt Restructuring, selling of Non Performing Assets to Asset Reconstruction Companies at discounted rates, conversion of debt to equity capital investment by Banks...........
RBI cancels registration of 5 TN-based NBFCs
......The RBI said following cancellation of registration certificate, the companies cannot transact the business of non-banking financial institution. The Reserve Bank can cancel the registration certificate of a non-banking financial company under the powers conferred under the Reserve Bank of India Act, 1934.
RBI restricts functioning of CKP Co-op Bank
...Further, the Mumbai-based bank cannot disburse or agree to disburse any payment whether in discharge of its liabilities and obligations or otherwise, enter into any compromise or arrangement and sell, transfer or otherwise dispose of any of its properties or assets except as notified in the RBI Directions issued on April 30......
ICICI launches two special accounts for NRIs
........"We serve 1.5 million NRIs across spanning over 150 countries and process over 5 million NRI transactions annually. This experience has given us insights into the lifestyle and aspirations of NRIs and our products are designed to meet their needs,".....
Miracle turnaround?
United Bank of India (UBI) has scripted what has to be the most stunning turnaround in recent times; from losses of R1,238 crore in Q3FY14 and R489 crore in Q2FY14, the Kolkata-headquartered bank has reported a profit of R469 crore in Q4FY14. On the face of it, the recovery seems too good to be true. How, for instance, has the bank reduced its gross NPAs by R2,592 crore and upgraded R1,488 crore of NPAs to standard assets in the span of just three months? And if it was that simple to.......
Carrot & stick approach behind UBI's strong NPA recovery
.......The lender appears to have adopted a carrot and stick approach to recover the money it lent. It offered incentives on repayment of dues and agreed on compromised settlements, but also unsettled defaulters with legal notices and placing them in 'wilful defaulters' list.........
Yes Bank Seeks Sebi’s View on Madhu Kapur’s Promoter Status
.......Yes Bank is seeking opinion from the market regulator on whether it should retain Madhu Kapur among the ‘promoter category’ in the shareholder filings since she was not the founder, though the legal heir of the co-founder Ashok Kapur. The move may be part of the bank’s view that Kapur though a substantial shareholder does not inherit the rights provided to her late husband when the bank was founded, said a person familiar with the development. “To ensure compliance with law, the bank is in the process of seeking regulatory clarifications on the matter from the authorities concerned,’’ said a Yes Bank spokesman.........
Tuesday, May 6, 2014
Shooting in the dark
........How critical this revamp is was best brought out by then RBI Governor D Subbarao when he said that the advance estimates of GDP for FY10 were initially 6.8%; this was later changed to 7.7% in the revised estimates in May 2010 and finally to 9.1% in the February 2011—a monetary policy that looked appropriate given the initial GDP would have looked loose given the final GDP numbers. Sadly, some of the biggest problems have been with the IIP, which is most critical for RBI. .........
Financial inclusion : Not a cake walk tour!!
.......Though financial inclusion basically means providing financial services to the vast sections of the population not yet covered by the formal financial system in, yet in the broader sense it means providing access to a bank account backed by deposits insurance, access to affordable credit and the payments system. It is a fact that this aspect of promoting broader access to financial services, despite the emphasis placed on this score, received less attention till recently. ..................
Financial Inclusion in India: An Appraisal
.......RBI has adopted a bank-led model for achieving financial inclusion and removed all regulatory bottlenecks in achieving greater financial inclusion in the country. Further, for achieving the targeted goals, RBI has created a conducive regulatory environment and provided institutional support for banks in accelerating their financial inclusion efforts.........
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