... Considering the growing rate of non-performing assets (NPAs), the Reserve Bank of India (RBI) has instructed banks against disbursing unproductive loans. Primary Cooperative Banks (PCBs) without own funds have to avail themselves of loans from the district cooperative banks for their lending operations. On clearing unproductive loans, the PCBs will have to bear........
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 27, 2014
Banks can wait to trade in commodity futures
........Way back in 2006, the Gupta Committee report released by Reserve Bank of India argued in favour of allowing banks, MFs and FIIs to trade commodity futures. The policymakers kept the recommendation on hold, and for good reasons. India was not ready then for rabid financialisation of commodity markets whose activities touch the lives of almost everyone in some way or the other. This is especially true of sensitive agricultural commodities – food articles – that have a high weightage in consumer price index. The situation is no different even today.............
Frame new policy for coops.: Sudheeran
....The sector needed to be streamlined to arrest unhealthy practices, Mr. Sudheeran said. The government should take steps to see that the NABARD directly disbursed funds to the primary banks, he said. The cooperative institutions should also be freed from the clutches of political parties to ensure transparency in their administration, he said. With the cooperative banking sector facing additional tax burden in the wake of the Reserve Bank of India (RBI) enforcing a fresh tax slab on its business turnover, the government should evolve new policies to streamline the cooperative institutions, he said..........
RBI authorises three more companies to open white label ATMs
Reserve Bank of India (RBI) on Monday authorised three more non-banking finance companies (NBFCs) to open and operate so-called white label automated tellers machines (ATMs) in addition to the four companies allowed earlier.........
Monday, May 26, 2014
Govt, RBI shadow boxing must end - DR R. K. PATTNAIK
.........In essence, the approach of RBI to increase interest rates to control aggregate demand and thereby anchor inflation expectations has been at the center of the discord. There are also media reports that the RBI’s policy stance to control inflation may not be appreciated by the new government and there could be leadership change in the RBI. In this context it may be recalled that the election manifesto of BJP has specific action points on inflation management. The resolutions in the manifesto are well deserved steps in handling the supply side of inflation management. To ensure that inflation management becomes credible and sustainable the NDA government may also consider supporting the demand management policy stance of RBI. In the fitness of things, the new government should listen to the RBI and give its due...........
Read - FPJ
RBI and INFLATION: The Chase Begins…
.........The committee appointed by RBI gave suggestion to solely focus on CPI and not on any other indicator. There are many reasons for choosing the CPI as nominal anchor for monetary policy. One of the reasons is that many countries in the world are now choosing this indicator as the base for their monetary policy but India and China. It is easy to track the CPI and even so called ‘AAM AADMI” can also relate the RBI’s monetary policy decision to increase or decrease the rate w.r.t CPI number. But the larger question is .............
R Gandhi Deputy Governor Reserve Bank of India at FAPCCI
R Gandhi Deputy Governor Reserve Bank of India, Mumbai speaks on ordinary topic relevant to ordinary public. Gandhi says all are primarily public and then refer to FAPCCI. The ideas and impacts of Gandhi explains why they bring certain resolution from Reserve Bank of India. The National Brand and other difficulties are faced by the common public when they first addressed. After finishing them they kindly react to the ideas and they really put them. Gandhi thanks Ayyadevara and Prasad. Gandhi says Know Your Customers is not a reason phenomenon. The concept of Banking Industry is focusing on the essence of them knowing the customer that has been practiced by Bankers from day 1. Banks focus more on Asset not on Liability side as no banker takes risk and parts from the Bank to an unknown person. When a Banker lends money to the party then there is interest list, trade and individual. Know Your Customer assessment is nothing but finding employee the way they can assess of how far the money comes back from creditor’s assessment. This is nothing but Know the Customers Assessment. Gandhi speaks on the safety and soundness of banks.
Where Duvvuri Subbaro grew up
..........According to the family friends of the former chief of the apex bank, his father late Duvvuri Mallikarjuna Rao, who worked as Assistant Public Prosecutor in the city courts, lived in a rented building in the same area before he purchased this house. Later, it was named as ‘Mohan Manjal’ in memory of one of the Duvvuri’s family members. The family of nine members lived in the house until Mr. Subbarao’s father expired. Later, it was sold to a city-based medical practitioner to become a hospital. It became a restaurant after it changed hands again.............
Former RBI Governor Dr Subbarao and Chinese Business Tycoon Mr Wang join NUS B school
...Dr Subbarao will be delivering a series of lectures on central banking challenges co-sponsored by the MAS. While three lectures will be held at the NUS B School on May 30, one will be at MAS on June 2, 2014. Speaking on the occasion Prof Bernard Yeung said “We are deeply honoured to welcome Dr Subbarao to NUS Business School, one of Asia’s leading business schools. As former Governor of RBI and Finance Secretary, Dr Subbarao led India through some of the most challenging times in the country’s economic development. I am confident that our faculty members, students and community will benefit immensely from his insights and knowledge. We look forward to his lectures,”....
India Post needs to apply afresh to Reserve Bank of India for bank licence
India Post will have to apply afresh to the Reserve Bank under differential licence guidelines if it wishes to start banking operations. According to sources, aspirants, including the Department of Post, will have to apply once again after guidelines on differential bank licences are issued in the next few months.......
Interference in public banks
.....There are many reasons for this delay - interference from the Central Vigilance Commission (CVC), Right to Information (RTI), and political interference. There is an urgent need to look at these matters, so that the decision-making can become smoother. On the other hand,.............
The importance of being independent - Janmejaya Sinha
........However, the one issue on which I disagree with the committee is the structure of its solution. It is surprising that the committee did not stay with the analogy of Axis Bank, but went on to create what I believe is an unduly complex and unnecessary solution of a bank investment company (BIC) and a bank boards bureau (BBB). Both may lead to the creation of the same problems that the committee seeks to avoid. Why do we want to shift all government holding into a central bank investment committee? Why can't these banks be allowed to operate like other banks? The nomination committee of the board will pick the CEO and compensation will be market-based. When we can allow independent banks with independent boards to run their banks, all we need is that the government stake be brought below 51 per cent. I think it is simpler and more effective, after...............
Nayak panel stirs up a row
......Government interference has meant that policy objectives rather than commercial considerations dictate a PSB’s working. A less charitable way of saying is that it is because of government pressure that several PSBs have lent to unbankable companies. Not all the worryingly high non-performing assets that banks are saddled with are due to government interference but if banks had decided on purely commercial considerations, they would most certainly had been better off.............
Directors - The weakest link?
........the crux of the problem is how directors are appointed or how they manage to get appointed on the boards of banks. There seems to be a lack of basic skills analysis of directors. Are they competent to join the board is a moot question. It is well-known that ................
Prepayment penalty on floating rate loans may come back
........... However, this position could be reversed if the recommendations of the working group set up "to examine the issues related to discrimination in pricing of credit and recommend measures for transparent and appropriate pricing of credit under a floating rate regime" are accepted. Unfortunately, their recommendations, if implemented, are unlikely to result in a fairer regime. In fact the recommendation, if accepted, might lead to a more unfair regime..............
Banks urged to conduct coin melas
....Vice-president of Coimbatore Consumer Cause M. Govinda Rao says that the RBI should ensure that banks organise special camps regularly, even once in three months, to distribute coins. Banks should also ensure that coins are distributed to customers regularly so that there is no shortage in coin availability.
Where will it settle?
......A halt at this level will mean that the rupee could remain in the band between 57 and 70 for a few years as it consolidates. But such a move will keep open the possibility of a move below 70 over the long term. The RBI has also made it clear that it does not want to ward off rupee depreciation. It is only volatile movements, with depreciation happening over a short period, which it wants to avoid. If the rupee gets past the hurdle at 57, the next resistances are at 54 and then 52. We do not envisage a move above 52, even if copious inflows enter the country. ......
Awareness welcome, but Redressal sought for
My View on "Meet to spread awareness of banking ombudsman sche...":
Creating awareness of banking ombudsman scheme is welcome. But, sadly, those who are aware about its existence and waiting for redressal of their grievances is a larger issue as absolutely no response from the ombudsman on complaints already recd by them. One case in point is that a complaint lodged by one of my relatives servant on 20 March 2014 for non receipt of credit of a cheque for Rs.63,723 issued on SBI Ratnagiri branch and deposited in the SBI Andheri West branch. The bank has not credited the amount of the cheque deposited on 13 March 2013. It is more than one year that no action has been taken by the bank despite visits after visits and letters after letters given to them. Ombudsman at Garment House, Mumbai has also not acted upon the complaint so far. Poor gardener continues to suffer.
Name of Payee: Mr Sakhram Govind Dalvi.
SB A/C No. 10218281741
Che No. 343791 datd 11 March 2013 for Rs.63,723 drawn on SBI, Ratnagiri branch.
SBI, Andheri should have given immediate credit as it's branches are under CBS and it rather chose to send it to the Ratnagiri branch and reportedly lost in transit.
Whether Ombudsman, Garment House will look into this and redress the grievance of the poor gardner and compensate his loss of interest, time (loss of wages whenever he had to visit the branch for finding the fate of his cheque), mental agony?
- Dr.Santhanam
Portfolio Management
.......The concluding part of the book investigates the link between Leadership and Government Decision. For executive strategy excellent leaders who convert the right strategy into desired results ought to possess a personal style, attitude, personality that makes their strategy a success. Examples are of Ratan Tata, Narayana Murthy, Azim Premji. Successful leaders select their goals, define the steps to achieve them and equip their teams with appropriate motive and skills. The author concludes that for successful execution of programmes and projects we should have higher disciplined teams with innovative leadership and ability to live up to their promises....
Read Book Review by P. P. RAMACHANDRAN
Refinance support for cooperative banks dwindling
The State government’s efforts to get cooperative banks to extend higher volumes of short-term credit to the commoners is likely to prove ineffective given the denial of short-term refinance by the National Bank for Agriculture and Rural Development (NABARD) to the State’s cooperative sector and the State’s own failure to strengthen the Primary Cooperative Banks (PCBs)......
The science of loan recovery
...... Charan Singh has used tractor loans to highlight the problem of recovery of loans in public sector banks (PSBs). But that doesn't explain the whole gamut of the credit appraisal and follow-up mess in PSBs. Issar has mooted the idea of commissioning and rotating retirees, who have had an ace record in realising NPAs, among PSBs . This is not feasible in the current system prevalent in public banks..............
'Internet, mobile banking users are a vulnerable lot'
........ "When RBI started allowing internet banking way back in 2001, it clearly laid the responsibility of data security and educating customers about the dos and don'ts on the banks. It was also advised that all banks offering the service take cyber crime insurance. None of that has happened even today," he informed. He also wondered why and how these things are being allowed by RBI........
बच्चों को एटीएम जारी करने पर आरबीआई को रिमाइंडर
दस साल से ज्यादा के बच्चों के खाते खोलने, उन्हें एटीएम और चेकबुक की सुविधा देने के मामले में बाल आयोग ने आरबीआई के गवर्नर को पुनर्विचार संबंधी रिमाइंडर जारी किया है। बाल आयोग का मानना है कि ऐसा करने से बच्चों के खिलाफ अपराध बढ़ सकते हैं। आरबीआई को रिमाइंडर भेजने का निर्णय बाल आयोग की संयुक्त बेंच में लिया गया। .....
No Kidding With Cash
....RBI spokesperson, Alpana Killawala counters this very belief when she says: “We think a 10-year-old will have a lot of pride in operating his/her account. The child might make mistakes initially, but that’s the way to learn about financial planning and the value of money.” This view is echoed by Deepak Bagla, an investment banker, who is also the father of two minor boys. “An independent account is a transition from the piggy bank at home. I think it’s a great way of inculcating the habit of saving among children. If there are checks and balances, like a cap on the amount that a child can withdraw every week, or in every transaction, parents will feel comfortable enough to go in for it.” It’s ironic though, that Bagla’s own children have never operated their bank accounts......
RBI rule on ATM PIN causing thefts
Reserve Bank of India's directive to debit card holders that they have to provide ATM PINs for every transaction is giving rise to complaints of theft. PINs are being stolen through "shoulder surfing" and hacking. Shoulder surfing refers to using direct observation techniques, such as looking over someone's shoulder, to get information. Hacking refers to the breach of the machines where cards are swiped and PINs fed in.......
Pre-paid card issuers await NDA's Aadhaar stand
.....However, there is a catch: Instead of a `swipe and sign' authentication, RBI wants prepaid card transactions to be verified using Aadhaar-based biometric authentication. The card issuers feel that this requirement is more to salvage Aadhaar rather than tackle money laundering since the withdrawal limit is only Rs 5,000. Rather than make huge investments on biometric readers, most prepaid card issuers are now waiting for the new government's response to Aadhaar.........
Read - TOI
RBI may hike individuals' spending limit overseas
...." The RBI may eventually reverse all measure taken to contain CAD and currency fluctuation in July- August last year," a Finance Ministry official told PTI. The central bank could raise the limit sometime this year based on its assessment of the external sector, the official said. As part of restrictions imposed in August last year to contain burgeoning current account deficit (CAD), the Reserve Bank had lowered the outward remittance limit to USD 75,000 in a financial year for any permitted current or capital account transaction or a combination of both...............
SBI sells non-performing assets worth ₹3,590 cr to ARCs
...SBI Chairperson Arundhati Bhattacharya said that the NPAs could fetch good value as they were secured by pledged primary assets, guarantees and collaterals. This was the first attempt by the nation’s largest bank to sell off NPAs. Bhattacharya said the bank is rolling out a new internal architecture for risk reduction. The technology-driven system will be under a “risk officer” and encompass all trading functions, early review of quality of loan assets, a scoring model and physical inspection by controllers to branches. SBI is also setting up ......
Meerut jewellers hail RBI move
The recent move by the Reserve Bank of India (RBI) to allow gold imports by private trading houses has brought smiles on the faces of Meerut jewellers. For the city, with 35,000 gold artisans who generate business worth Rs 10 crore daily, the step is being seen as the first one aimed at liberalizing the gold market. ........
Right step
The Reserve Bank of India (RBI) took the right step by liberalising import of gold by star and premium trading houses and jewellery exporters and allowing banks to provide loans to domestic jewellery manufacturers. A number of restrictions had been placed in the last few months by both the RBI and the government to reduce the inflow of gold into the country as..........
IDBI Bank to add 600 branches, 700 ATMs this fiscal
..In 2013-14, the public sector bank had added nearly 400 branches, taking the overall size of the network as at end-March to 1,400 branches, he said. IDBI Bank, which is completing 10 years of existence as a commercial bank this year, will look to add another 700 automated teller machines during this fiscal, Batra told Business Line here on Friday.......
A full plate for Modi
......If inflation was the textbook definition of “too much money chasing too few goods,” it would have been arrested by now as a result of the tight money policy followed by the Reserve Bank of India. Unfortunately, inflation, especially food inflation, is largely a problem on the supply side, an irony if you consider that state granaries are overflowing. There has been little focus in managing the agricultural supply chain over the last few years, whether it is in checking the growth of middlemen or in investing in cold chains to help preserve fruits and vegetables. A large part of this falls under .............
Relevant ideas on ministry merging
.............Calibrating exchange rates to help exporters and domestic industry maintain their competitiveness and interest rates to help keep the borrowing rates low are in the realm of the Reserve Bank of India (RBI). The finance ministry interacts with RBI more regularly than the commerce ministry. So, if the subject of foreign trade also falls within the domain of the former ministry, the chances of more coordinated efforts to make exports competitive can be better achieved................
Modi Effect: India's Forex Reserves Up $11 Billion Since April
.......The rupee has appreciated around 3 per cent in the last fortnight, riding high on expectations of a slew of reforms from the incoming government, to end at 58.52 against the dollar on May 23. Some analysts feel the RBI's likely intervention so far to minimise volatility on account of sudden inflows from FIIs also helped in building the country's reserves.......
Banking on Modi, foreign investors to pour $60 bn: Assocham
...However, the emerging situation will pose a new challenge to the Reserve Bank to deal as it will have to balance the rupee rate and inflation from the increased liquidity into the system. The new Finance Minister and the RBI, thus, will have to be on the same page in dealing with this scenario which will see strengthening of Rupee and a further improvement on the current account balance, Assocham said.....
Six immediate tasks for Narendra Modi
Narendra Modi inherits a weak economy. The easy options are closed to him. A demand stimulus is out of the question right now. The fiscal deficit is so large that the new government cannot crank the public spending lever. Persistently high inflation means that the Reserve Bank of India is in no position to bring down interest rates. The Indian economy thus needs structural reforms if it is to get out of the current quagmire. These reforms will necessarily take time. Meanwhile, here is a list of six policy options Modi could consider pursuing so as to get things moving......
Saturday, May 24, 2014
Judge new govt on fiscal intentions, says Gokarn
.....Talking to The Indian Express, Gokarn said a breakdown of the spending plan will also inform the measures this government plans to undertake to revive investment. “The quality of the fiscal intentions is more important than the numbers, per se,” he said. Gokarn was speaking in the context of the current debate that the government will rework the fiscal math of former finance minister P Chidambaram who had claimed that the deficit had come down to 4.6 per cent of the GDP in the last year of the UPA government......
Time to Fix Ailing Economy - Charan Singh
.........The Indian economy has been ailing from numerous problems for some time now—low economic growth, weakening financial system, volatile capital flows, infrastructure constraints, rising prices, especially consumer price index, rising income inequality, high unemployment rates, energy constraints, stubborn poverty, uncertainty in exchange rates, rising budget deficits and governance deficit to enumerate a few. The challenges are many and.............
India proposes banking overhaul
.......A strong resolution framework could give banks a greater incentive to deal with stressed assets and help address some of those failings. India is keen to implement the resolution regime before the end of 2015, following an internationally accepted timetable. Market participants, however, warn that many hurdles remain to such a move. “India has different regulators and legislations for different types of financial institutions like banks versus co-operative banks versus insurance companies. The resolution regime will require an altogether separate legal framework that overrides existing laws and legal resolution frameworks. This might possibly come only after a parliamentary approval,”............
Keep an eye on customer transactions, banks told
Banks need to regularly monitor customer transactions to mitigate risk of fraud, according to R Gandhi, Deputy Governor, Reserve Bank of India (RBI). Building transaction based customer profiles in line with existing KYC norms would be significant, he said. Gandhi was delivering a lecture on Know Your Customer: A Balance Between Compliance and Convenience at the Federation of Andhra Pradesh Chambers of Commerce and Industry (Fappci) here on Friday.....
CCTV coverage must for cash operations at currency chests: RBI
.......The diktat comes in the wake of one of the central bank’s regional offices reporting that the work of packing soiled notes by a currency chest was undertaken outside the strong room/vault, which resulted in the CCTV failing to capture the operations ...............
Meet to spread awareness of banking ombudsman scheme held
.....B.K.Mishra, the banking ombudsman for Odisha chaired the meeting and elaborated the benefits of banking ombudsman scheme as well as initiatives taken by the RBI to make banking more customer friendly in the country. He said in a State like Odisha awareness abut banking ombudsman needed to be enhanced. Senior vice president, Banking Codes and Standards Board of India (BCSBI), Mumbai also took part in this meeting and through his speech highlighted the features of code of commitment of banks to customers........
Finmin officials propose I-T exemption of Rs. 30K
North Block – the seat of the Union finance ministry – is seeing marathon meetings, wherein top government officials are preparing representations for the new government, key among them being increasing the income tax exemption by Rs 20,000-Rs 30,000, addressing the retrogressive taxation and taking up expenditure reforms. In their efforts, the finance ministry babus are likely to work through the weekend, before the new government under prime minister elect Narendra Modi is sworn in on Monday.............
Not in race of Finance Minister, says Deepak Parekh
...."The people in the government who are running the country, they have to take a view, they have to then decide whom they want to take advice from, do they want advice or they know it, what are the areas they want to pick expertise from, which are the areas they take expertise from,".....
Reserve Bank of India 'cannot reverse' order on district central cooperative banks
...............However, RBI promptly replied that the decision cannot be changed as there was no such provision in the Banking Regulation Act. The state has also filed an appeal before the ministry of finance (MoF) against the RBI decision. To this, the RBI has said that there is a provision to file an appeal if an existing licence is cancelled, but not if an application to get a licence is turned down, said a source..............
SBI shows some promise in bad loans management
.......While the reduction in outstanding bad loans is similar to the trend seen across public sector banks this quarter, the fall in slippages for SBI is encouraging. Details of asset sales and the sectoral break-up of slippages and other numbers would provide more clarity and are awaited. The bank also seems to have delivered on its third promise of focusing on cutting costs.........
CRR a useful tool in RBI's hands: SBI chief
....."In my wisdom, the CRR is an useful monetary tool in RBI's hands and it depends on how it was being used by the regulator," ......
Court dismisses petition challenging SARFAESI Act
........As per the guidelines issued by the Supreme Court of India, when an asset is treated as a NPA by the respective banks, a rigorous recovery machinery is put into action. It is this provision, which adopts the directions or guidelines relating to asset classification issued by the RBI was put to challenge before the court as unconstitutional, said the order issued by the division bench comprising of Justice N Paul Vasantha kumar and Justice M M Sundresh...............
SBI exploring ways to declare Mallya ‘wilful defaulter’
.........The source said that as per RBI guidelines, it would have to be proven that the borrower had diverted funds which he taken from the bank and is not paying up despite having the ability to pay. “If we are sure on these two points, then the bank will declare Mallya a wilful defaulter,” the source said.........
RBI simplifies Documentation for NBFC Registration
.........It is further advised that the Checklists mentioned are indicative and not exhaustive. The Reserve Bank can, if necessary, call for any further documents to satisfy itself on the eligibility for obtaining registration as NBFC. In the event of the Reserve Bank calling for further documents in addition to those mentioned in the checklist, the applicant company must respond within a stipulated time of one month failing which...........
FIEO hails RBI moves to boost exports
....FIEO chief stated that RBI could consider incentivizing those exporters who show a larger commitment to exports as against the stipulated 20 percent by allowing a commensurate increase in the import cap assigned to them. FIEO Chief further stated that given that India is a major consumption centre gold future have seen a jump following the announcement. The announcement of allowing STH /PTH also reflects that resolve of the New Government towards free market economics as against a canalized/restricted regime in order to propel business both within the country and outside, ....
FICCI, IDBI sign pact for cheaper credit to MSMEs I
...The FICCI-CMSME and IDBI partnership will grant best pricing offered at the relevant time by IDBI including concession of 100 bps and charging of processing fee as low as 0.10 per cent to the proposals referred by FICCI-CMSME, the industry chamber said in a statement.......
Friday, May 23, 2014
Rajan predicts ‘revolution’ in banking industry
Rajan,
the RBI governor, delivered an impassioned speech at the Competition Commission
of India on Tuesday, where he laid out the two "grand bargains"
between banks and government that shaped the country's present financial
landscape – and more recent developments that are breaking them down.
Under
the first bargain, he explained, commercial banks received low cost deposits,
access to the RBI's liquidity facilities and "some protection from
competition" in return for financing the government, opening branches in
unbanked areas and making loans to priority sectors (farmers and students, for
instance).
Rajan
said this bargain is "under threat" as banks increasingly face
competition from financial markets and real assets for household savings, while
the government "cannot continue to pre-empt financing at the scale it has
in the past".
The
central bank is "committed" to lifting the barriers of entry facing
new banks. It granted two new commercial bank licences last month and is moving
towards a system where banking licences will be available all year round – or
"on-tap", as Rajan put it.
This
does not mean that every pretender will be handed a licence – Rajan stressed
that only "those who have a proven track record and reasonable
capital" will be approved. There are, however, ‘differentiated' licences
available for smaller institutions and "those who see synergies in doing
only one part of the banking business" such as payments.
"Small
banks tend to be better at catering to local needs, including needs of small
and medium businesses," Rajan explained, while "a payments bank,
which will take deposits and offer payment and remittance services but be
constrained to invest all its funds in safe instruments such as government
securities, could be very synergistic with other existing services."
Not
everyone is convinced of their value. Rajan said some of his colleagues at the
RBI consider payments banks "unviable", while others are concerned
they would "skim the cream of banking business away from regular
commercial banks". Rajan, however, seems ready to take a leap of faith.
Payments
banks would, he argued, reduce the obligations imposed on commercial banks,
specifically by buying government securities (for liquidity purposes) and
allowing commercial banks to diversify.
Rajan
also called for changes to the role commercial banks play in achieving financial
inclusion. Even if they are forced to extend financial services to remote
areas, he said, banks will not necessarily reach out to the local population.
"The
reality is that if the mandate is unprofitable, banks will find ways to avoid
them," he said. "Not all forms of inclusion can be made profitable,
but we should give banks the freedom to try new approaches, perhaps drawing in
other institutions that can traverse the last mile to the underserved where
necessary."
The
second bargain Rajan outlined was between the public sector banks and the
government. These banks undertook "special services and risks" for
the government, he explained, and received their backing in return.
Public
sector banks tend to fund large, risky infrastructure projects. Rajan warned
this kind of financing is becoming more sophisticated, and public sector banks
may struggle to meet the new challenges as "past hiring freezes have
decimated their middle management" and they are "constrained by
government rules and second-guessed by vigilance authorities".
RBI’s role in Modi government
..While RBI will have a role in context of monetary policy measures, action on part of government will automatically dwarf the role of RBI. The central bank can definitely contribute as many central banks do in context of overall policy framework in the country and should not setting economic policy for growth. In the days to come, the government will decide what kind of role RBI has to play not by changing the governor or its key officials, but by initiating action.
Seven steps to an economic rebalancing
The analogy of what might happen to an aircraft when it suddenly drops from 40,000 feet to 20,000 feet in a matter of seconds is one that lends itself to describing the state of the Indian economy. After smooth sailing at close to nine per cent growth rate it suddenly dropped to less than five per cent in a very short time, leaving behind unemployment, social unrest, banking woes and stuck projects in its wake. The huge task before the Narendra Modi government now will be to quickly revive the economy. In doing so............
Five bank unions to protest Nayak panel report
......"Bank employees will also be asked to give their views on the committee's report in their individual capacity to the Reserve Bank of India (RBI). The RBI has sought public views on the committee's report." Besides AIBEA, the protesting unions are All India Bank Officers' Association (AIBOA), Bank Employees Federation of India (BEFI), Indian National Bank Employees Federation (INBEF) and Indian National Bank Officers Congress (INBOC).........
93rd State Level Bankers’ Committee meet
....... Regional Director RBI (J&K State) K K Saraf, General Manager NABARD Ranbir Singh, Deputy Secretary, DFS (MoF), GoI A K Dogra other senior officers of banks, RBI, NABARD, state government departments and developmental agencies attended the meeting. Abdul Rahim Rather appreciated the banks for improving the credit-deposit (CD) ratio which is above 40 percent in aggregate. “Even as it’s a significant achievement to surpass the CD ratio target, overall progress still remains considerably below the national benchmark of 60 percent, hence banking fraternity need to redouble their efforts to meet the benchmark in the current financial year,” he said...........
Hit by the rupee
.........Going by what some of the BJP’s favourite economists like Arvind Panagariya have said, it might well be in favour of a weak rupee. Panagariya had been sharply critical of Duvvuri Subbarao when he was RBI governor for not buying enough dollars when he had the chance — buying dollars would have increased forex reserves and also kept the rupee weak. There is no robust relationship between......
Ache din for Gold jewellery Industry
...The latest measure from RBI will curb smuggling in the 2nd biggest world gold buyer after china. After the curbs from RBI to control CAD , the move created parallel unofficial channels of entry for gold, and some estimates point at nearly 200 tons of illegal imports in 2013 alone. While the Supplies will improve with this latest directive, the bullion industry is still eyeing further relaxation on the curbs for the industry to come back to normalcy.........
RBI set to restore $ 2-lakh limit for spending abroad
The Reserve Bank of India is likely to again allow individuals to spend $ 200,000 per year abroad, including in real estate, reversing a clampdown imposed in August 2013, that had brought the limit down to $ 75,000. The move is a confidence-booster measure the new government is expected to welcome as a sign that India has successfully navigated the rupee meltdown, which began in May 2013..........
Soaring demand for SBI
Like other government-owned banks, State Bank of India (SBI) may be troubled by non-performing assets, but it remains the first choice among government employees. Till recently,...........
IDFC seeks RBI nod for Rajiv Lall as chief of its proposed bank
.........."Rajiv Lall's name has been proposed for the post of MD & CEO of the bank. The business plans for each business group are being worked out,'' the banker said on condition of anonymity. "The consumer banking unit at the banking entity would be headed by Naval Bir Kumar.'' This team is planning to begin its consumer banking foray by launching home loan products. However, the strategy is still being deliberated and a business decision is yet to be taken.''
State wants RBI to relent on stricken DCCBs
................State cooperatives secretary Rajgopal Deora has sent a letter to RBI saying that even as the state government had prepared a bailout package earlier, it could not be granted due to the election code of conduct coming into force. Now, in principal approval has been granted to the package, on the basis of which RBI may reconsider its decision. The procedure calls for an appeal to be filed before the ministry of finance to overturn RBI's decision. The process has already begun. The state government has also asked RBI to release funds remitted to the Nagpur DCCB specifically for payment of teachers' salary and hailstorm-hit farmers..............
Bank boards as 'NPAs'
...........In general, it seems the questions nobody has asked are: can PSB board members really provide the management with guidance and control as their mandate formally requires? Does the composition of the board matter for the bank's performance during a crisis? Attempts to improve the quality of PSB boards have been made in the past without results. For example, the Ganguly committee on corporate governance in banks had raised some critical issues way back in 2002. Among other things, the committee had suggested that the boards must have eminent people who are capable of providing a necessary oversight coupled with their duties of loyalty to the shareholders and provide the necessary checks and balances. The board should also be empowered to question the management and ...............
Task for Narendra Modi: Finance ministry draws up action plan to fix Rs 2.4 lakh-crore bad loan mess
...The RBI, in its recent guidelines on Joint Lenders’ Forum and Corrective Action Plan, had specified timelines for cases where the lenders have chosen to recover bad loans, in addition to other timelines on restructuring and wilful defaulters. But the delays continue. Former RBI deputy governor K C Chakrabarty had pointed out that an emerging but unwelcome trend in the banking sector was the rise in large value frauds (of above Rs 50 crore) in consortium lending accounts. He said in some cases, there was a lag of over 12-15 months in declaration of the same case as fraud by different banks......
IDBI, SBI group report higher write-offs than recoveries in FY14
....Public sector bank (PSB) executives said the write-off indicates cancellation from an account of a bad debt or worthless asset. The provisions are made for such accounts in line with regulatory norms............
Multiple bank accounts may just be more pain than gain
............."Frauds can occur, at times, in collusion with insiders, as they know that the account holder has either forgotten about the account or has shifted and is not likely to return. So, fraudsters initially with start by making a small withdrawal; keep a watch for some time and thereafter withdraw the entire balance. Despite various systems that are in place, frauds do take place in inoperative or dormant accounts,"
Depositors of Lokseva Co-op Bank in dilemma
.........Kiran Sonawane, RBI-appointed administrator of the Lokseva Bank said the current 12 per cent Non-performing Assets (NPAs) of the bank will be brought down to 10 per cent soon. He said a request will be made to the RBI for increasing the withdrawal amounts for sensitive cases such as student expenses, ailing people and those who need financial support for marriages............
Loan once rejected may always be rejected
..."We have to see some cohesion among PSBs. There will be a joint forum to share information for large cases. If one bank says no to a loan other banks should be aware of it. Then it's up to the bank whether it still wants to extend the loan,".....
Bank to pay for letting client's wife renew FD minus his nod
.........The FDs were renewed by the bank under a new scheme on Kriplani’s name after they matured in 2012, on his wife’s instructions. But Kriplani said the bank can’t do that without his consent. The forum observed, “Merely because Vira Kriplani is the wife of the complainant and she was holding a joint saving account, the defence taken by the bank cannot be accepted............
Read - TOI
Bank slapped with Rs 3 lakh fine for unsolicited calls to custome
Annoying a customer through unsolicited promotional phone calls, text messages and emails has cost HDFC Bank Rs 3 lakh. The State Consumer Disputes Redressal Commission slapped the bank with the fine for "harassing" a senior citizen despite his request to unsubscribe from promotional calls. ............
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