India is not considering raising the foreign investment limit in government bonds immediately, Reserve Bank of India Deputy Governor H.R. Khan said on Thursday. "Right now there is no such discussion," Khan said, in response to a question on raising the foreign institutional investment (FII) limit in government debt, on the sidelines of a banking seminar......
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.
Friday, June 13, 2014
Closure of public counters in RBI - Mass casual leave
United Forum of Reserve Bank Officers & Employees issues circular dated June 11, 2014........
KYC relaxation a big boost for financial inclusion
....."Currently RBI is relaxing norms to open up the bank accounts and this is the first step in the stage of financial inclusion. Once this is done the second step is going to be to ensure that these accounts remain active and made productive by using other basic and advanced financial services,"....
Non-performing policies?
...........The government and Reserve Bank of India need to consider the various pros and cons of separating NPAs from public sector banks. In the banking business, non-recoveries are a part of the process and the provided remedies are improving loan origination and writing off the unrecovered loans. The NAMC proposal also shows the weakness of the Indian banking policy formulation..........
Inflation eases but monsoon un-eases
...........Since there are upside risks to food inflation and core inflation is already ticking up, it may be a while before the Reserve Bank of India (RBI) cuts interest rates to boost growth.
Bandhan - RBI may rethink
"Prof Yunus quoting examples of Raiffiesen Bank Internationl AG, Societie Agricole SA and others has highlighted the harms of providing general banking licence to MFIs which would make them move away from serving the underserved and unserved. He has rather recommended for special banking licence to MFIs. I have also been voicing similar concerns in my responses to the action of the RBI providing banking licence to Bandhan, the MFI. If Bandhan is going to function as a full fledged commercial bank, then MF portfolio would be just one of the asset side items of the Bandhan Bank. It would just comply with the PSL requirements of RBI. In about a decade, it would also go the Raiffeisein Bank and others. Sure, this may not be the objective of the RBI in having granted banking licence to Bandhan. Hope in the light of the observations of Prof Yunus, at least now, the RBI may rethink on its decision in granting the general banking licence to Bandhan and convert it as a special licence making it to function on the lines of banks like Bancosol, Bolivia, Grameen Bank, Bangladesh etc."
- S.Santhanam
Bharatiya Mahila Bank recruiting for 200 posts of Probationary Officers 2014
Bharatiya Mahila Bank Limited has invited job applications for recruitment to the post of Probationary Officers in Junior Management Grade/Scale I (JM G/S -I). Interested and eligible candidates are required to apply for the job before June 25, 2014..............
Bank of Baroda - Appointment and Cessation of Director
...... the Central Government vide their letter Dated June 10, 2014 has appointed Smt. Surekha Marandi, CGM, RBI, as Director of Bank of Baroda vice Shri. Sudarshan Sen, CGM, RBI, with immediate effect and until further orders........
Soon, you won't need smartphone for mobile money transfers
.........Finance Minister Arun Jaitley might next month launch mobile banking services for people not using smartphones. The move is aimed at pushing financial inclusion in India and bringing down banks' cost of servicing clients. Such a service will also reduce the transaction cost for those bank customers who are forced to visit a branch every time they have to transfer money from an account to another as they do not have smartphones or internet access........
Cyber Security Of Banks In India Needs Strengthening
............RBI has also mandated establishment of Steering Committees on Information Security by Banks in India and appointment of Chief Information Officers (CIOs) for all banks in India. However, banks in India have failed to comply with the directions of RBI so far and even RBI has allowed them to take this liberty. In effect, this means that there is neither a legal framework nor any compulsion to ensure cyber security of banks in India. Naturally..............
mRUPEE partners Infibeam to launch online retail e-commerce
.....This is the first time in the industry that a dual payment gateway has been introduced to give the customer two choices for making payment from an mRUPEE wallet and/or net-banking, debit card and credit card. This service will be available to both B2C and B2B customers. Another first in the industry is that a new retailer-assisted model has been introduced to facilitate those users who are not so technology or internet savvy. This would help the customers to benefit from offers and discounts available to online user community............
Court seeks RBI’s stand on merger of Amanath, Canara banks
The Karnataka High Court on Thursday asked the Reserve Bank of India to clarify its stand on the two conditions imposed by it for the merger of loss-making Amanath Cooperative Bank with the Canara Bank...................
Madhu Kapoor can challenge Yes Bank AGM resolutions in court: HC
The Bombay high court on Thursday allowed Madhu Kapur, widow of Yes Bank Ltd’s co-founder Ashok Kapur, to challenge in court all the resolutions that are likely to be passed in the annual general meeting (AGM) of the bank on 14 June. The court was hearing a chamber summons filed by Kapur, seeking a stay on several board resolutions that have been proposed to be passed in the AGM......
Thursday, June 12, 2014
Why there's chorus for more accountability for regulators
.............Given that certain regulators have more regulatory freedom than others, there has been a void in fixing proper accountability of these agencies. Many former regulators and experts believe accountability through the line ministry is not good enough. Former RBI governor D Subbarao told Governance Now that making the central bank directly accountable to parliament is important. In fact, prior to his retirement in September last year, he had said that while the RBI Act does not lay down any formal framework to ensure accountability, it does follow “certain good practices (which) have evolved over the years”. Subbarao’s list of good practices included explaining the monetary policy rationale, post-policy conferences for media interaction, and appearing before the parliamentary standing committee on finance, among others. But he maintained that these weren’t enough to ensure complete accountability.................
Economic challenges for the new Govt. - Charan Singh
..........The monetary policy in the country plays a very important role in preserving the value of the currency. The RBI follows a multiple-indicator approach............
How Raghuram Rajan Helped Me Have Better Biryani
.............Thanks to the new rules, I can concentrate on making people around me "moneywise". Wondering what’s the connection? A month ago, I had promised my cook that I would help her open a savings bank account and a Public Provident Pund (PPF) account so that she could earn better returns on her savings. A happy cook is the most valuable asset for any work from home mom you see! Armed with her documents such as voter ID, Aadhaar card et al, I visited the bank close to my house. "Sorry madam, her bank account can’t be opened until there is a proof of current address," said the bank manager, thereby destroying my hopes of having a happy cook. Being a migrant worker from a village in Maharashtra, she doesn't have a registered house agreement or lease agreement as valid proof. Now thanks to the RBI, I will have a cook with better savings, and a husband with better meals! Thank you, Mr Rajan!
Expanding Access to Finance for Small Businesses in India: A Critique of the Mor Committee’s Approach
The first blog in this series highlighted the context of the Mor Committee’s recommendations and the significant gap between the supply of and demand for credit for small businesses. The second blog in the series examined the role of the banks, development finance institutions and non bank financial institutions (NBFCs) to examine why they have been so backward in coming forward to meet this gap. This concluding blog looks at the ways of measuring access to finance for small businesses.............
Read - MicroSave
Read - MicroSave
NBI to host NCIA
KATHMANDU: National Banking Institute (NBI) is organising a one-day National Conference of Internal Auditors (NCIA), in Kathmandu, on June 20. The conference will primarily focus on risk-based audit in Nepal’s banking and financial sectors. Theresa Karunakaran, General Manager of Department of Banking Supervision at Reserve Bank of India (RBI), will be the international resource person for the event, as per the press release. Karunakaran has given trainings to large number of employees of RBI and National Institute of Bank Management and has represented RBI in various international seminars related to internal auditing.
RBI reviews UCBs performance in J&K
The 15th meeting of the State Level Task Force on Urban Cooperative Banks (TAFCUB) was held at RBI, Srinagar under the Chairmanship of K K Saraf Regional Director for J&K Reserve Bank of India. The meeting was attended by Kamla Devi, Special Secretary, Cooperative Department, J&K Government, Anjana Tikoo, Additional Registrar, Co-operative Societies, Subhash Gupta, Chief Executive, National Federation of Co-operative Urban Banks, New Delhi, A.K. Mattu, General Manger, Reserve Bank of India, Jammu, P.N.Das, RBI, Central Office, Mumbai and CEOs of Urban Co-operative Banks operating in the state of Jammu and Kashmir. The meeting reviewed the performance of the Urban Co-operative Banks (UCBs) in the state of Jammu and Kashmir. The latest policy developments in the area of Urban Banking Sector and their specific issues were discussed in the meeting..........
Read..........
Read..........
WRDS Best Paper Awarded for Research on Historic Bank Failure and Implications for Current Bank Policy
PHILADELPHIA--(Business Wire)--Wharton Research Data Services (WRDS), the leading data research platform and business intelligence tool for corporate, academic and government institutions worldwide, is proud to announce the winners of the Wharton-WRDS Best Paper Award in Empirical Finance. The 2014 Best Paper Award winners, Raghuram G. Rajan, Governor of the Reserve Bank of India and Distinguished Service Professor of Finance at the Booth School of Business at the University of Chicago, and Rodney Ramcharan, Chief of Financial Studies at the US Federal Reserve Board, explored bank failures during the agricultural collapse of the 1920s, leading up to the Great Depression. The award for their paper, Financing Capacity and Fire Sales: Evidence from Bank Failures, will be presented to the researchers on June 17 at the upcoming Western Finance Association (WFA) conference.
CAFRAL - Conference on Derivative Markets – Issues and Challenges
.......The objective of the program is to deliberate on the strategies, challenges and issues before the banks for developing and deepening the Derivatives Markets in India, given the dynamic nature of our exposure to international and domestic financial markets..............
Change in Directorate
.........The Government of India, Ministry of Finance, Department of Financial Services, vide its notification dated June 10, 2014, has nominated Shri G. Sreekumar CGM, DGBA Department of Government and Bank Accounts, Reserve Bank of India, Mumbai, on the Board of Bank of Maharashtra with immediate effect ..............
No choice
My View on "Many PSB heads welcome Nayak panel report but with...":
Shri Chaudhry is perhaps not aware how the Board members are selected. Most of board members are appointed by MoF who are political appointees. As regards CMD and EDs , it is like our election system where voters have no choice. RBI cannot do much as MOF chooses candidates who are put through interview. Sh Chaudhry may be aware in a few cases RBI Governor put his foot down in appointment of SBI chairman and ultimately RBI prevailed . I agree with him but generally RBI has to go with names proposed by govt.
- Ravi Sharma
आरबीआय निरीक्षकाचा अटकपूर्व जामीन अर्ज उच्च न्यायालयाने फेटाळला
मुंबई - पेण अर्बन सहकारी बॅंकेचे लेखा परीक्षण रिझर्व्ह बॅंकेच्या वतीने करणाऱ्या आरबीआय निरीक्षक अब्दुल बरी खान (ए. बी. खान) यांचा अटकपूर्व जामीन अर्ज मुंबी उच्च न्यायालयाने फेटाळला आहे. आरबीआयच्या या निरीक्षकाने जाणूनबुजून पेण अर्बन बॅंकेत होणारा आर्थिक गैरव्यवहार नजरेआड केल्याचे सकृतदर्शनी दिसत असल्याचे न्यायालयाने यावेळी सांगितले आहे. अब्दुल बरी खान यांच्यातर्फे ऍड. अमीन सोलकर यांनी, सरकारतर्फे ऍड. घरत यांनी तर या अटकपूर्व जामीन याचिकेला विरोध करत हस्तक्षेप याचिका दाखल करणाऱ्या ठेवीदारांच्या वतीने ऍड. मंदार कुलकणी आणि श्रीराम कुलकर्णी यांनी युक्तिवाद केले. ........
RBI Pilot scheme to allow withdrawals from semi-closed mobile wallets
..............Semi-closed mobile wallets, which were once hailed as weapons of financial inclusion as they do not require the user to have a bank account, have one noticeable drawback: a user can add cash but can’t draw it out. The Reserve Bank has a long-held the view that letting telecom operators to offer cash-out facilities for their mobile wallet users would allow the companies to bypass the banking system..........
Rupee has been a very strange player
.........Obviously now the conjection in the market, I do not have any first hand information, only second hand information is that RBI has been a big buyer both in the spot in the forward markets. It has absorbed more than Rs 14,000 crores in the last three days. RBI was going to take action. Raghuram Rajan has said that he does not like global monetary policy changes and that India has to react and obviously, he has set up a team to say "Do not let this affect us" but the rupee has been a very very str ..
Muhammad Yunus backs MFIs for special banking licence
.......... At present, Reserve Bank of India (RBI) regulations do not allow MFIs to collect deposits from the public. Yunus, however, welcomed RBI’s decision to give a licence to microlender Bandhan Financial Services Pvt. Ltd to start a new bank. But he expressed reservation on the wisdom of giving a full banking licence to microlenders. “If you give the full banking licence then you will be tempted to move into other direction. So, you give a limited banking licence allowing taking deposits only for the purpose of lending money to poor,” Yunus said..........
RBI guidelines would constrain growth of banks with weaker franchises
.........."The guidelines will push banks towards more stable sources of funding and in turn towards lesser wholesale funding and greater granularity in deposits. Banks with weaker liability franchises will have to accelerate their liability franchise build-up. The guidelines will likely avoid build-up of systemic risk by limiting the ability of banks to grow on back of wholesale funding,"...........
Lost Aadhar
My View on "Aadhaar enrollment agencies protest, stop work":
It is impossible to retrieve your aadhaar card number if you happen to loose. In a number of cases the aadhaar cards got misplaced courtesy postal authorities and it has not been possible to generate duplicate with the same parameters. What is usefulness of the system if you cannot regenerate the profile or number of a member. I think. It is putting the crores of rupees into drain.
- Ravi Sharma
Police on alert after spurt in fake note seizures
............“We are investigating these instances, but the truth is that tracing the source of these fake notes is difficult. In most cases, persons caught with the notes turn out to be just carriers, with the notes having been passed on to them through at least four agents. The investigation sometimes hits a dead end when we find that the original source is from outside the country,” ........
Higher excess SLR to help banks meet LCR norms
........"While the mandated is to keep SLR at 22.5%, most banks have been operating at a higher level of 28-29%. And these banks will stand to gain as they can either liquidate it or lend it to RBI on the repo window and meet the new liquidity requirements as and when the need arises." However, it is because of the low credit demand that banks have been parking additional money in SLR. But when........
Will Setting Up of National Asset Management Company Solve NPA Problems of Banks in India
........Government announces waiver scheme from time to time for electoral gain. As a result borrowers of the bank willfully default in repayment of bank loan. Quantum of Non Performing Assets known as bad assets in public domain continues to rise year after year in all public sector banks. Then process of compromise and write off starts at bank level and again there is unhealthy transaction of money between bankers and borrowers or between brokers and officers who decides to sanction sacrifice loan amount. Ultimately culture of non-re payment of loan by borrowers back to banks takes the root and bankers have to suffer huge loss due to high provisioning and due to rising NPA. For this purpose.............
PSU banks have to stop becoming piggy-banks for politically friendly businesses
.........."The other big worry is the health of PSU banks – all of which are owned by the taxpayers and public of this country, but seem to have been run like some people’s personal fiefdoms - with the consequence that lakhs of crores of non-performing assets (NPAs) dominate their balance sheets and write off taxpayer equity. Regulatory competence here again needs to be examined which ..........
Banking Reforms – The Right Direction
..........RBI shall confine its role to determine the broad policy framework for various banking functions and shall not poke its nose into the minute details of their implementation. Thus, RBI’s role vis-à-vis other banks will be restricted to 1. Policy maker, 2. Regulator, 3. Bankers’ bank and 4. Lender of the last resort. Currency Issue and Management will be an additional function of the nation’s central bank. RBI must closely monitor banks only in a select, critical areas and stop interfering in other areas of banking. RBI must determine the range of interest rates i.e. the maximum and minimum thresholds only. Individual Banks must be given full freedom to fix their own interest rates and service charges themselves within this range/band in a transparent manner. ......................
Read..........
No Difficulty in Merging With SBI: State Bank of Mysore
Sharad Sharma, managing director of State Bank of Mysore, one of the associate banks of SBI told NDTV that he does not see much procedural difficulty in merging with State Bank of India. If the proposed merger goes through, it will reduce operating overheads of both the banks, he added...........
Sebi seeks MF liquidity window
............Interestingly, the proposal comes at a time when RBI has been giving indications that it plans to shut the repo window for banks as well. RBI had opened a repo window for mutual funds in 2008 and 2013 to help deal with the redemption pressure for liquid schemes. The first was prompted by a severe liquidity crunch on account of the global financial crisis..........
Modi's reforms 'may lift millions out of poverty
.........In a DW interview, Charan Singh, economist and Reserve Bank of India Chair Professor of Economics at the Bangalore-based Indian Institute of Management, says that if properly implemented, the reforms are set to increase economic growth to an annual rate of eight percent or more, potentially lifting millions of people out of poverty.
DW: What are the strong points of Narendra Modi's economic program?
Charan Singh: This is an ideal resolution made by a government which was brought to power with a thumping majority. The recently elected PM - who has been credited with driving Gujarat's economic growth as chief minister - is a man of experience. His no-nonsense attitude to reforms and governance is known to all.............
ICICI Bank Issues Pink Slips to 1,200
...................... “Once in three years, it is the bank's strategy to look at the larger space and see if there is a need to merge or split jobs,“ said Ramkumar. “That leads to some redundancies.“ Although ICICI Bank is known for its toughness when it comes to eliminating inefficiencies, it did not cut jobs during the economic slowdown in 2012-13 and in 2008-09. It also exempts staff on maternity leave, and those whose children are taking tenth, or 12th class board examination. However, job cuts at ICICI Bank may be good news for rivals .........
Read - ET
IOB to open second branch in Bangkok in early July: Narendra
.....This state-owned bank also plans to soon launch a qualified institutional placement (QIP) issue to mop up between Rs 1,000 and Rs 1,200 crore, he said. The second Bangkok branch will become a reality more than six months after the Reserve Bank of India's approval for the same...........
Jaitley’s thank you note to middle class?
.........Though Jaitley has also ruled out any mega dole outs to individual tax payers such as exempting income up to Rs5 lakh, there is a high likelihood of increasing the exemption limit, according to senior ministry officials. These and other initial indications from the finance ministry give enough indications that Jaitley’s will be a budget tailor-made for the middle classes. What is not clear yet is whether welfare measures initiated by the UPA government will be cut down because it would mean that the budget will be fattening the wallets of the middle class while depriving the poor of the little dole they get from the government.......
Enjoy today, but not at the cost of your tomorrow
.........Moreover, this irrational spending behaviour seeds misunderstanding about money’s acquisition, accumulation and use in the minds of our children. They are nudged towards believing that money comes easy and can, therefore, be spent easily. Since many of our expenses revolve around children, it’s critical that they understand the dynamics of money early in life.........
RBI: Every 3rd new ATM be disabled friendly, talking with Braille keypads
..........In a notification issued on Wednesday, RBI advised banks to provide ramps in all existing and future ATMs, and make at least one third of new ATMs installed as talking ATMs with Braille keypads. It was also advised to ensure that at least one talking ATM with Braille keypad is generally available in each locality for catering to the needs of visually impaired persons." In effect, Urban cooperative banks (UCBs) are now advised to take appropriate steps to provide ramps at the entrance of the bank branches so that persons with disabilities/wheel chair users can enter bank branches and conduct business without difficulty............
Wednesday, June 11, 2014
RBI must not be a puppet of international powers
RBI : Gandhi says urban co-op bks’ issues stem from faulty governance
.....“Many of the problems faced by the UCBs (urban co-operative banks) are due to governance issues and lack of professionalism,” Gandhi said at the ‘Conference of Urban Co-operative Banks’ held in Ahmedabad on Jun 8. A copy of his speech was posted on the RBI website today. Gandhi also pointed out that the functioning of urban co-operative banks was skewed towards creditors and that depositors had very little say in how their funds were managed. Creditors have a larger say in governance while depositors have very little stake and there is a need to empower them appropriately, Gandhi said. In his address, Gandhi also touched upon the need to evaluate the present regulatory framework for the transition of urban co-operative banks to full fledged commercial banks. “It is important to mention here that once co-operative banks reach a certain threshold level, they are also expected to follow a regimen like large banks and standardised global practices, which may not be possible within the existing legal structure of co-operative banks,” Gandhi said...........
'Existing legal framework for urban co-op banks needs to be revisited'
..........Addressing the Conference of Urban Co-operative Banks (UCBs) in Ahmedabad, R Gandhi, Deputy Governor, RBI, said “…once cooperative banks reach a certain threshold level, they are also expected to follow a regimen like large banks and standardised global practices, which may not be possible within the existing legal structure of cooperative banks. “Thus, before we move forward, the existing legal and regulatory framework needs to be revisited to enable smooth transition..........
New-Gen Urban Cooperative Banks—Some Musings
.............Since the theme of the Seminar is “Next-Gen Co-operative Banks” let me now briefly dwell on the subject. To begin with let us analyse some of the best global practices in cooperative banking and their implications for next- gen cooperative banks in India, before moving forward to what is our expectation from these banks. The co-operative banking sector contributes significantly to the growth, stability and competitiveness of the European banking industry at a local and regional level. Ordinary citizens can become members / owners of co-operative banks with relatively small investments. As a result, they have a direct say in the business and are involved in the governance, strategy and risk management processes. The core business.............
Scholarship in memory of late Dr.Meenakshi Tyagarajan
At every birthday of mine, from age 8 until the age of 18, she
always gave me the gift of reading, by buying me the most thought-provoking
books. She would send me additional reading material through my mom, regularly
from the British Council library. Stern, but, compassionate. Brilliant and
seemingly irreverent, and yet, simple. While someone recommended that I read
'The Complete Works of Shakespeare' as a 15 year-old, she recommended that I
read Charles Lamb's abridged version first. When I had begun reading
Irving Wallace, she had suggested that I also read Edgar Wallace. She always
advised that I read good literature. I consider Dr. Meenakshi Tyagarajan to be
the biggest reason for my modest command of the queen's language today.
- Shivkumar Raman
Two Scholarships have been endowed for the Two Best Girl
Students in the field of Economics in the name of Dr.Meenakshi Tyagarajan
Amount--- Rs. 20,000/-
College--S I E S College--Sion, Mumbai
Donor---Shri.Shivkumar Raman*
* Shivkumar is the son of Smt. Mythreyi and Shri.P.Raman.
Mythreyi was the longest associated friend of Meenakshi--over 50 years. And
Shivkumar lovingly recalls the influence of Meenakshi on him and his
intellectual development.
- P.P.Ramachandran
ICICI Bank organised Coin Exchange Melas across 17 branches in Uttar Pradesh
......Mr Jogi Meghanath, General Manager, Issue Department, RBI Lucknow inaugurated the event. These melas were organised to offer free facilities of exchanging currency notes with coins or currency notes to the general public. They are much-awaited events that receive an overwhelming response from people from all walks of life.................
Banking Behemoth: SBI to Merge 5 Arms with Itself
State Bank of India, the nation's biggest lender, will kick off consolidation in the banking industry by combining five associate banks as it prepares to fund the econo my that is on the cusp of a strong a two decades ago. growth like China two decades ago. The combination of the associates will enhance the asset base of SBI to Rs. 21.9 lakh crore, and add 5,658 branches to its 15,143 branches. The combined market share will rise to 24%, from 19%, making it a formidable force. “The timing is very conducive now,“ SBI Chairman Arundhati Bhattacharya told............
Read - ET
Read - ET
India Not The Next China, But Getting There
.......“Among the top 10 banks in the world, three of them are Chinese. Why did that happen? Because the Chinese economy grew and, therefore, the banks had to grow in order to provide credit,” she said. “Things will happen in India if the Indian economy grows. India will need bigger banks. To build bigger banks organically is difficult. So, to do it in an inorganic way by clubbing some of the banks will be the best route,.........
Coordination mechanism by RBI : Better organisation - Better Idea
My View on t "Better regulatory coordination vital":
Last couple of years have seen a welcome rise in the awareness level about the role of regulation and regulators in governance and management of resources in general. Perhaps, CAG Vinod Rai’s 2G report made the beginning of a new phase in the financial history of India. Still, we have seen regulators remaining silent spectators, when their sacred ‘space’ was being encroached by political masters through ‘executive’ actions, which on several occasions did not stand scrutiny, or had to be rushed through back-door maneuverings in legislatures. AADHAAR, National Pension System, coal mines allocation, oil pricing…the list can go on and on, if examples are needed.
As M Damodaran put it, when regulated entities-these include government and public sector-‘move from one unregulated jurisdiction to another’ or find out means to circumvent need for legislative changes, the burden of the regulators increase. In such situations, coordination and fast sharing of information among regulators become crucial.
In the present scenario, in the financial sector, one cannot think of a better organisation other than Reserve bank of India to entrust the responsibility to put in place a coordination mechanism to ensure that all financial transactions higher than a pre-decided bench-mark complies with the regulatory norms of the body responsible to oversee such transactions. Perhaps, the finance minister could discuss this issue during his pre-budget interactions with RBI and other regulators in the financial sector.
- M G Warrier
Slice of History - RBI's Tryst with Partition
............India's central bank was confronted with difficult problems during the period when it was the common central bank for two dominions. However, the RBI incurred the displeasure of the Pakistan authorities who complained that the attitude adopted by India's central bank was `not in keeping with its duty as the banker of the Pakistan government and its currency authority'. The bank ceased to function ...........
Read - ET
Mid-sized firms bear brunt of fund crunch
.............“No one wants to take a hit by lending to companies which do not pay back,” said the official of a large state-run bank. Not wishing to be named, the official added, “But there is no blanket ban on them. When things improve, banks will resume lending.” While the pace of loan growth to micro and small companies and large firms, too, has declined in a slowing economy, that towards the infrastructure sector almost halved in the 12 months ending April, RBI data show. There are around 15 million registered medium-sized companies in India, around 20 million small companies, and about 5 million micro- and tiny enterprises, according to the SME Chamber of India, an industry lobby of small companies........
New law needed
My View on "Write off of loans and offer of freebies - Dr.T.V....":
There must be a new Law against loan write-offs by anybody other than the loan provider. Parliament has more private money lenders whose interests in write-offs would help augment private money lending for farmers. If the governments write off the private money lending for farmers, then all the suicides of farmers would come to a halt. Most farmer-suicides happened in homes that did not have institutional credit. Farmers do not trust the banks as much as the banks do not trust the farmers! Who else except the banks to blame?
- Dr.Yerram Raju
Increase 80C limit, list LIC: Banks tell FM
.........Jaitley was reportedly told that the revenue department loses Rs 31,000 crore every year on Rs 1 lakh deduction, and if the limit was increased to Rs 2 lakh the loss would increase to Rs 62,000, assuming all taxpayers availed the tax benefits. “Every year the finance minister is a mere listener. It was different this year,” said an executive............
Income tax rebates: Salaried can cut their outgo drastically
........Inclusion of registration and stamp duty fees under 80C not only reduces tax liability, but also saves the property buyer from further cash outgo. Also, an individual who has taken a home loan can avail of deduction towards principal repayment in the financial year. This will be above the R1.5-lakh rebate he gets on the interest amount paid towards the housing loan under Section 24. More importantly, even principal payment towards home loans taken from HUDCO qualifies for exemption under 80C. Also, subscription to the home loan account scheme of the National Housing Bank (NHB), or contributions made by an individual to any notified pension fund set up by NHB, also meet the deduction requirements......
Aadhaar enrollment agencies protest, stop work
......The enrollment imbroglio is the latest in a series of shocks for the project in recent weeks, with RBI suspending a plan to mandate Aadhaar-based biometric ATMs and the finance ministry stating that direct benefits transfer (DBT) can work even without Aadhaar. The development is significant amidst uncertainty at the UIDAI headquarters and field offices about the Aadhaar project's future under the new government.........
Read...........
RBI relaxes cap on United Banks loan sanctioning power
United Bank of India (UBI), which scripted a turnaround by returning to profitability in January-March quarter, has been allowed by the Reserve Bank of India (RBI) to consider loan proposals up to Rs 200 crore from 'AAA'-rate companies. The banking regulator had capped the lender's loan sanctioning power to Rs 10 crore following a rise in its bad assets and dip in the capital adequacy ratio...............
RBI introduces liquidity ratios for banks
............“The LCR would be binding on banks from January 1, 2015; with a view to provide a transition time for banks, the LCR requirement would be minimum 60 per cent for the calendar year 2015, i.e. with effect from January 1, 2015 and rise in equal steps to reach 100 per cent on January 1, 2019,” RBI said in a statement on Monday. Banks, however, has been asked to achieve a higher ratio than the minimum prescribed above as an effort towards better liquidity risk management. The move from the Indian banking regulator comes after the Basel Committee on Banking Supervision proposed certain reforms to strengthen capital and liquidity regulations in the aftermath of the global financial crisis of 2008.............
Lenders pitch for co to manage bad loans
...............“The prime concern of the banking sector representatives are long-term financing requirement for the infrastructure sector. Given the scale of the infrastructure projects these days, their gestation period is long and to support such projects in the future, the banking sector has asked the government to see that such schemes are formed.”...........
More Indians see inflation stabilizing: RBI survey
................The current survey, pertaining to the March quarter, was released on Tuesday. It found that 51.2% of the respondents expected prices to “increase by more than current rate” in the next three months, that is up to June. RBI said that in comparison, in the quarter ended September 2013, 74.5% of the respondents had been expecting prices to rise at more than the current rate in the next three-month period...........
Many PSB heads welcome Nayak panel report but with caution: BS poll
...............“The Nayak panel should have taken input from RBI before finalising the report. All the board level appointments are made after RBI’s approval of fit & proper. The selection committee for appointment of CMDs and executive directors is headed by RBI governor though he delegates one of the DG for the interviews. So RBI is also responsible for top appointments. RBI cannot wash off its hands if there is lack of governance in public sector bank’s boards,” said Pratip Chaudhuri, former chairman, State Bank of India..............
Same old problem for PSBs
...........The Nayak Committee addresses only the ownership issue, and the control and interference that comes with it. What about the operational issues in PSBs and the stubborn responses of its huge manpower? Poor customer service, lethargic approach to business development, the "clock-watching" approach of the staff and low productivity have all played havoc with the operational efficiency of PSBs............
DCCBs aid: State wants RBI to move first
.............RBI has rejected banking application of the DCCBs on the ground that they don't not have enough capital to cover the risks. Now, even though the state is ready to provide capital, it wants the RBI to first revive the three banks. But capital adequacy is the very condition on which RBI may grant a licence to revive the banks. An official communique from the state's information department says that the funds will be released if the RBI revives the banks' licences............
HCBL Bank reaches out to micro entrepreneurs
......However, they get a miniscule share of the price paid by consumers, as there is a long chain of middlemen involved. Majority of these artisans are poor and do not have resources to market their products directly. The Bank would allow these artisans to display their finished products in its branches for selling. Last year, HCBL had started opening savings bank (SB) accounts of beggars under financial inclusion and motivating them towards self-employment. So far, the Bank had opened accounts of 150 beggars in Lucknow under the relaxed Know Your Customer (KYC) norms of the Reserve Bank of India (RBI)...........
RBI holds the key to resolving HPL dispute
........Because the polymer producer has been defaulting on its own loan obligations for the past two years, lenders need clearance from the Reserve Bank of India (RBI) to make loans to TCG for its proposed purchase of HPL’s shares. Though TCG is likely going to mortgage other assets as well, RBI’s clearance is mandatory for banks to lend for this purpose, the government official said, adding that TCG has indicated to the state government that it has already approached banks for loans........
Canara Bank expands overseas network to New York
.............With the inauguration of New York branch, the Bank now has presence in 8 countries, namely, UK, USA, Hong Kong, China, Bahrain, South Africa, UAE and Russia. The Bank has plans to open branches/offices in Germany, Dubai, Brazil, Tanzania, Japan, Nigeria and Qatar during the current financial year. Overseas business of the Bank, which is at 5.72% of the total business as at March 2014 is projected to increase to 10% by end of FY15, the Bank said in a statement...........
Needed, a Holistic Approach to Savings
........All savings can then be exempt from tax both at the time of contribution and during the accumulation and growth phase, to be taxed only at maturity, that too if the money is used for consumption. However, if the money is re-invested in another saving instrument, the reinvested amount should, again, be exempt from tax. Moreover, there need be no limit to such tax exempt savings. It makes sense to extend the EET principle to ...........
Banking on following your money’s trail
.........Keeping a track of money spent is certainly not new. So, why are banks now offering their customers such a facility? “Personal financial tracking has become popular globally. On the basis of customer insight, we anticipated demand for such tools in India. With Internet and mobile banking usage rising, we looked at combining customers’ banking attributes with their desire to control finances and manage expenses,” .......
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