मी रिझर्व्ह बँकेच्या कॉल सेंटरमधून बोलतोय, तुमचे डेबिट कार्ड तीन तासांत बंद होणार आहे. ते बंद होऊ द्यायचे नसेल, तर आम्हाला आवश्यक माहिती द्या....'...असा कॉल तुम्हाला आला असेल, तर सावध व्हा. हा कॉल फसवा आहे. रिझर्व्ह बँक कोणाकडूनही माहिती मागवत नसल्याने तुम्ही दिलेली माहिती तुम्हालाच नव्या संकटात टाकू शकते आणि त्यातून तुमचेच आर्थिक नुकसान होण्याची शक्यता आहे. गेले काही दिवस अनेक ग्राहकांच्या मोबाइलवर किंवा लँडलाइनवर अशा प्रकारे फोन येत आहेत. कॉल करणारी व्यक्ती आपण रिझर्व्ह बँकेच्या कॉल सेंटरमधून बोलत असल्याचा दावा करते..........
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.
Monday, June 23, 2014
The customer is not always right
........Reserve Bank of India has come out with “Banking Ombudsman Scheme”, which came into force January 01, 2006. The Banking Ombudsman is a quasi judicial authority appointed by the RBI to take care of consumers’ complaints and has the power to summon both the consumer and the bank and resolve the conflict by meditate. The ombudsman for Maharashtra & Goa currently is Mrs Rose Mary Sebastian. Her official address is.............
Indian Bank to employ jail inmates at its Tihar branch
......“We have been associated with Tihar Jail for the past several years and our branch there today has a business of Rs100 crore. A proposal to employ Tihar Jail inmates at non-sensitive positions in the branch has been approved and will soon be implemented,” ..........
SBI offers Chennai Metro touch cards
........Senior level sources said that the proposal was to have a payment card that will have dual functionality. At one level it will work like a regular debit or credit card and at the same time it will incorporate a chip to allow the card to be used to pay for the metro ride. Unlike credit cards which need to be either swiped or dipped into a chip reader, contactless cards can complete a payment almost instantly and ........
How to e-file Income Tax Returns?
Considering the ever increasing usage of internet these days, the Income Tax Department has made the returns filing procedure easier for us taxpayers by enabling us to file returns electronically by visiting https://incometaxindiaefiling.gov.in/. With the huge number of taxpayers, this comes across as a very practical option. Now before getting any further into how the ITR e-filing procedure works, here are a few things you should be aware of............
Perils of uncontrolled plastic money usage
The ‘buy now pay later’ concept has made significant inroads into the Indian consumer psyche. While making purchases with repayment on instalment basis usually forces one to adhere to some kind of fiscal discipline, using plastic money in the form of debit and credit cards is a different thing altogether. Unplanned purchases from either can have far reaching consequences. While debit cards are considered.............
Expert panel to study drawbacks in TDR scheme
The State government has decided to constitute a panel of experts comprising officials of the Reserve Bank of India, and Urban Development and Planning departments to suggest amendments to the Karnataka Town and Country Planning Act to make Transfer of Development Rights (TDR) more transparent and lucrative for landowners in Bangalore and other cities............
Read - The Hindu
Overdraft will attract foreclosure charges
........This latest directive by RBI brings in uniformity, greater transparency and brings new as well as existing borrowers on the same plane. In other words, the pre-payment waiver directive will benefit existing borrowers as well as new borrowers. So you are within your right, if you meet the criteria explained above, to seek nil pre-payment charges with immediate effect, thanks to the regulatory diktat...........
Finance ministry may veto Shome recommendations on revenue boards
................Finance ministry officials also said abolishing the post of revenue secretary is not feasible as he has the broader vision and perspective while framing tax policies. According to officials, changing the target in line with economic growth is not possible as tax collections always come with a lag effect. Besides, they argue,......
Banks occupy moderate news space on TV compared to advertising budgets: Esha Media
........According to a study conducted by Esha Media Research, State Bank of India (SBI) among all the other banks including the regulator –the Reserve Bank of India (RBI) occupied the maximum space on TV of 20.30 hours in the month of May 2014 that was equivalent to spending Rs 32.73 crore on advertising. “In other words, SBI, which has an annual budget of close to Rs 400 crore as per its annual report, got itself covered on the merit of news worth Rs 32.73 crore,”.......
Read........
ADC asks banks to bring rural areas under Banking Ambit
.............Mr Malik enjoined upon all banks and Govt. Depts. to make an earnest endeavor to improve their efficiency so that the common man who is centre of activities of all the concern is benefitted under various Govt sponsored schemes. The meeting was attended by AGM, RBI, Dinesh Gupta , Director RSETI, K S Bhadwal and other senior officers of Banks and Govt Departments.
MP receives SKOCH Financial Inclusion and Deepening Award
.............The State has written a new chapter of progress through inclusive growth in rural areas. Special attention has been paid to availability of banking services in remote rural area. Economic uplift can be ensured only through financial inclusion, it said. According to the statement, ultra small banks are being opened in the radius of every five kms in rural areas of the state.........
Rule shift sought as microfinance institutions told to eye housing, education loans
........RBI’s efforts come against the backdrop of a sharp decline in poverty levels and a perceived increase in the aspirational level of low-income earners, now seeking to build a better life for themselves and their families. Between 2004-05 and 2011-12, a net of 137 million people, or 15% of the population, lifted themselves out of poverty, the Planning Commission estimated last year, bringing down the national poverty rate to 22%. MFIs, which source funds from commercial banks and offer small loans to low-income borrowers, typically at 24-36%, say RBI’s idea will be difficult to implement within the existing regulatory framework, which restricts not only the amount that can be loaned, but also the kind of lending.................
MFIs showing signs of maturity
...........Indeed, MFin has been acting as a de facto SRO for its members and the RBI recognition merely represents a shift from de facto to a de jure positionm but the task ahead is arduous. In India, often an SRO overlooks its real objectives and tries to play the role of a lobby group. MFin should refrain from doing so as the biggest challenge before it is put its house in order. Nobody else but the MFI industry is to be blamed for the crisis that followed the promulgation of the Andhra law as many companies deviated from the primary job of giving small loans to poor................
Banks’ Top Brass Needs to Develop Customer-Friendly Sense & IBA Needs to Work Towards Their Objectives
.........Whenever, RBI comes with dictates like stopping usurious charges for maintaining minimum balances or banning the pre-payment penalty on loans or credit card late fee payments, it is actually a castigation on banks in general and IBA in particular. Does IBA not feel that such immoral charges actually damage the good public image of banking as a service industry? If it feels so, then what action it has taken to stop banks from charging fees which have to be banned by RBI ? If they feel that banks were right, then why IBA has not the guts to protest against RBI dictates. I am of the firm view, RBI must censure IBA for being mute spectator to such fleecing of customers by banks...........
Depositors are vital too
..............However, no nominee of the depositors, who provide core funds for the banking system, is appointed to the boards. Perhaps this is why bad debts are increasing since every stakeholder, except the depositor, has a say in the formulation of bank policies. The Banking Regulations Act should provide for nominations from this vital segment also, ............
Banks put Rs 21k-cr NPAs on block in 3 months
...........Possibly, this is after many years that NPA sale is being contemplated in the very first quarter of a financial year. Banks typically sell bad loans in the last quarter. However, since all banks rush to sell in the fourth quarter and are keen to complete the deals by March 31, there are chances they do not get the right price. Selling at the beginning of a year increases the possibility of fetching a good price........
Minimising role of politicians turned around state’s top cooperative bank: minister
.............“After objections from the Reserve Bank of India (RBI) over MSCB’s functioning, we dismissed the existing board of directors and appointed IAS officers as administrators. We followed guidelines that no loans should be given to relatives or family members of the board’s directors and that individuals taking loans should have repaying capacity of thrice the loan amount.” “We cannot overlook the fact that money in these banks belongs to depositors,................
Sane advice
RBI’s advisory to the state governments that mass loan waiver schemes would adversely affect the financial health of the banks and ultimately such decisions would lead to financial instability is not only a sane advice. It also reveals AP Chief Minister N. Chandrababu Naidu’s hollow mind as he thinks that the RBI works as per directions of the Centre, and his brinkmanship. Of late, it has become a habit with the political parties to promise the moon to the electorate giving little thought to the financial burden and how to bear it. The election laws must direct political parties to explain how such promises would be fulfilled without troubling public sector banks, or the RBI must debar banks from granting loans based on such reckless promises. Loan waiver discriminates those repaying loans promptly against the wilful or otherwise defaulters and encourages every one not to repay loans. This will be a sad state of affairs.
- Ganti Mahapatruni Rama Rao, Visakhapatnam
Nabard CGM opposes loan waiver scheme
National Bank for Agriculture and Rural Development (Nabard) Chief General Manager Jiji Mammen has expressed strong reservations against waiver of agriculture loans. Mr. Mammen, who was in West Godavari district on Friday and Saturday for a visit, said, “loan waivers across the board will vitiate credit discipline and adversely impact the financial health of banking sector”.........
Govt banks: Higher NPAs may pinch brass' pocket
.............SoI discussions have been concluded with the top management of most of banks and the finance ministry will start sending the letters assigning the targets by the end of this month. The evaluation would be done by the remuneration committee, consisting of the government nominee director, the RBI nominee director and two other directors. The Khandelwal committee on human resource issues in these banks had suggested moving away from the practice of providing uniform financial incentives, arguing each bank had its own unique characteristics and business profile. It stressed the need to give higher weightage to qualitative issues such as change in ..........
Funding worry may keep govt away from NAMCO proposal
..........NAMCO, mooted by Ficci and supported by many bankers, is meant to takeover, recover and rehabilitate the banking system’s stressed assets – non-performing assets (NPA) and restructured assets — in the infrastructure sector. “This proposal will not pass muster with the government. Clearing it may attract criticism and give the government a bad name. Anyway, we have forwarded it to the Reserve Bank of India (RBI) for its comments,” a finance ministry official told FE.......
RBI appoints administrator at Kapol Bank
The Reserve Bank of India has appointed an administrator to run Mumbai-based urban cooperative lender, Kapol Cooperative Bank. This follows ..........
Sebi Getting Flooded With Anonymous, Pseudonymous Complaints: Report
..........Consequently, Sebi has decided to prepare detailed notes on each such complaint and apprise its board, which includes nominees from the government and the Reserve Bank of India (RBI) as also some public interest directors besides its own whole time members. he decision has been taken "in view of the repeated nature of complaints and as a matter of good governance and transparency", ....................
Punjab National Bank Drops Plan to Enter Canadian Market
.......We have been pursuing this for 4-5 years but it did not reach a logical conclusion. So, we decided not to go forward with it," K R Kamath, chairman and managing director of the state-run lender, told PTI. The bank had plans to open a subsidiary in Canada with a capital of Rs 100 crore to serve Indian diaspora as well as to finance bilateral trade and investments...........
J&K Bank opens 2 Business Units, convenes DLRC
......Meanwhile, the bank convened a District Level Review Committee meeting of district Pulwama under Chairmanship of Additional DDC Muneer Ahmad. All the district level officers, bank officials and representatives from RBI and NABARD participated in the meeting. The meeting discussed the achievements under District Credit Plan 2013-14 for the quarter ending March, 2014. ............
Saturday, June 21, 2014
Bank's Board is not above board
.......Board is not above Board is a fact known to both the Government and the RBI. The tax payers and depositors have no say in the appointment of Board of directors and they generally bear the brunt. Board of directors and indisciplined borrwers enjoy merrily. The game goes on.
FinMin mulls fixed 5-year term for PSB chiefs
..........The Union finance ministry is considering a proposal to provide a fixed tenure of five years to heads of public sector banks (PSBs). The aim is more operational stability and accountability. It is also considering changes in the appointment procedure of wholetime directors and revising the criteria for selection of non-official directors on PSB boards..............
Needed, more deliberation
...............Over a year ago, the then Governor, D. Subbarao, sought to protect the RBI’s turf. It is now Raghuram Rajan’s turn to shift the spotlight to what he considers to be ill-conceived recommendations. For instance, the enhanced role being given to ill-equipped and inexperienced appellate tribunals will undermine the role of regulators and paralyse the system. Underlying Governor Rajan’s strong words is the belief that an overhaul of the financial architecture as suggested by the Srikrishna Commission will have to be preceded by more deliberations, a point of view that will be appreciated by Finance Minister Arun Jaitley..........
Counterfeit currency note problem not serious in Madhya Pradesh: RBI
BHOPAL: Problem of counterfeit notes is moderate in Madhya Pradesh compared to other states, going by Reserve Bank of India. But the apex financial institution also pointed out that people are by and large unaware of features that distinguish real currency notes from the fake ones. For every 10 lakh notes, only six counterfeit notes are detected on an average. "We have received only one complaint about a fake currency note delivered from an ATM machine in the past one year," a RBI official said........
Bankers Fall in Love With Sound of Music
.....Most of them have been born into middle-class families which nurtured values like simple living, academic excellence and encouraged children to dabble in fine arts. They have managed to retain the values even after making very successful careers in fields dubbed as dry as finance, which is all about pragmatic decisionmaking with little room for other interests. But these people have found time outside their core profession to seriously pursue their hobbies, which for them have also acted as a stress buster while cutting deals and managing balance sheets and bottom lines............
Read - ET
AIRBREA - Resolution on Increase in Ex-gratia for Pre1986 Retirees
........... The meeting expresses its gratitude
to these elders as a result of whose struggle post- 1 January 1986 retirees are
getting the present pension benefit. While making the most sincere request to
the Respected Governor to enhance the present meager ex-gratia plus Medical
Allowance being paid to them, the CEC makes the following observations:.............
Read..........
Chidambaram favours pruning of PlanCom
.............Describing it as his “personal view” and not that of the party, Chidambaram said, “My personal view is that the Planning Commission should be a much more limited body, tasked with drawing up plans. At the moment, it is too big, flabby and unwieldy.”............
'No fresh funds for state-run banks in budget'
..........The Reserve Bank of India-appointed P J Nayak Committee had called for lowering the government's stake in public sector banks to 51 per cent to meet their capital requirements under Basel III norms and suggested setting up a holding company for all public sector banks. According the proposal, the proposed holding company would hold the government's stake in all state-run banks and raise capital through debt and equity on their behalf............
Why the mobile phone is the next battleground for hackers and payment companies
........Mobile payment companies need to mitigate this vulnerability by implementing inactivity timeouts, auto locking after a particular number of incorrect entries to automatically re-locking the secure element. Dual approvals for high ticket transactions as well as enrolling customers for predefined alerts would be beneficial in mitigation of mobile payment frauds.......
Most govt banks lose the plot on Casa
............The move is aimed at making the banking sector more prepared for any liquidity disruptions in the short run. Understandably, banks with lower exposure to high-cost bulk deposits and higher share of current and savings account deposits will find it easier to meet the norms. Banks having excess government bonds ..........
Banks in Tamil Nadu report 119% credit-deposit ratio
............ Total credit of the banks in Tamil Nadu registered a year-on-year increase of 13.50% by March 2014 and touched Rs 6,05,563.11 crore. The State Level Bankers' Committee of Tamil Nadu today convened its 138th SLBC Meeting to review the banking industry performance in the State. The share of Priority Sector Advances stands at 45.54% as against the national average of 40%. The percentage of Agricultural advances........
Getting financial inclusion back on track
.............Banks will need partnerships to roll out a nationwide retail payments infrastructure, with a clear blueprint of the architecture, licensing (payment institutions), and the commercial model (who pays how much to deposit/withdraw cash). It is useful to reiterate the fundamentals: while banking is an anchor economic sector with fiduciary liability, payments are essentially technology-based systems and processes. The nature of risk and mitigation differs much between..................
Financial Inclusion To Boost Markets
.........However, lack of formal banking prevents large sections of the population from being part of the capital market even indirectly . The National Pension System, which manages retirement savings of people and offers superior returns, is the ideal route for the poor to indirectly invest in stocks. But for the populace at large to start saving in such collective saving pools, they first need to have a bank account.
Read - ET
A long battle against inflation
..............The optimism was also based on hopes that consumer price inflation is on the downward glide path charted by the Reserve Bank of India. The credit default swaps market is also hinting at rising bond yields. The main concerns are well-known:..........
Will linking Aadhaar, India Post revolutionise banking?
Recently Bindu Ananth participated in a panel discussion as part of Network 18′s “Change India: Experiments with Big Ideas” TV series. The discussion revolved around the idea of setting up of a new payments bank, and how linking Aadhaar and India Post could revolutionise Indian Banking.
Watch the full panel discussion - Watch the video
Aadhaar=/citizen card
.........While a citizen card is a good thing, Aadhaar is quite distinct from the home ministry’s National Population Register (NPR) which is where the citizen card would emerge from. Ideally, they should have been part of the same project but they were separated for reasons of speed—right now, for every three Aadhaar numbers, NPR has issued just one. While it is still not clear the NPR’s detailed surveys of an area and its residents before doing biometrics will actually weed out non-citizens—it would be a good idea to see how it works .............
The regulatory mess of commodities trading
...............Comparing trading of commodities and bonds and the role played by incumbent regulators FMC and RBI, respectively, Dr Rajan said, the FSLRC also seems to be inconsistent in its emphasis on synergies and regulatory uniformity. "For instance," he said, "in forward trading where a real commodity is delivered, regulatory oversight over the real markets for the commodity where price is discovered, as well as over warehouses where the commodity is delivered, may be important sources of regulatory synergy. Should the FMC be subsumed under the Unified Financial Agency or would it be better ...............
Bombay HC directs YES Bank to hand over all documents to Madhu Kapur
The Bombay High Court on Friday directed YES Bank to hand over all the documents pertaining to the bank's communication with the Reserve Bank of India (RBI) and Securities and Exchange Board of India (Sebi) on challenging Madhu Kapur's promoter status to Kapur's counsel by Friday evening..........
Canara Bank to beef up asset quality
..........“We have been very proactive on the recovery front. We have three general managers for recoveries and monitoring the accounts. The RBI has come out with new guidelines for monitoring the accounts. While we already had the system in place, we have now a structured way of doing it. With improvements in sentiments, we don’t expect any major slippages in first quarter,”.........
Friday, June 20, 2014
Empowering public sector bank boards
...........When a board is thrust on a PSB without any consultation with the chairman, the composition of such a board may well follow the given legislative structure, but the probability of that board having an optimal composition, with interests of the directors aligned to that of the bank, would be very low. On top of it, if as the Nayak Committee Report observes "some non-official directors are of poor quality or get on to the board with parallel agendas (as is now commonly alleged) the chairman then begins to view sections of the board as unhelpful to the interests of the bank". The ecology of the board room can then no longer remain pure.........
IBA perverse logic on so called CAPACITY TO PAY is preposterous
The stand of IBA is preposterous. Even with 25% increase we will be lagging behind the government employees if one realistically evaluates their projection in wake of announcement of 7th Pay Commission in the anvil. My argument is backed by Justice Kantilal Desai in his Award popularly known as Desai Award where in para 5.137 he has made pellucid the following........
Induct market experts in key ministries: Marti Subrahmanyam
............“My impression is that our central bank and key economic ministries have very few experts on international markets, with hands-on experience, in key positions. Such experience will include research, trading and management in such markets. Most of our bureaucrats do not have much of an idea about what is happening in international markets, at any level of detail, unlike other emerging market countries I can think of, including Brazil, Turkey and China, which have such experts in key decision-making positions. The only notable exception in our context is the RBI Governor, Raghuram Rajan,”...........
‘Devil’s Advocate’
My View on "Regulating the regulators":
In print media, The Hindu group of newspapers has been consistently playing the role of ‘Devil’s Advocate’ without waiting for a congenial time to speak out. The Hindu Business Line through its editorial ‘Regulating the regulators’(June 19) has proved this once again. It was this paper which published the first ever serious indictment of the Financial Sector Legislative Reforms Commission on May 3, 2013. I am referring to S S Tarapore’s article ‘A Plot to Destroy RBI’. The article concluded with the following observations:
“Devil in the detail
The Commission recommends the setting up of a statutory Monetary Policy Committee (MPC) to take executive decisions on monetary policy with each member having a vote and the Chairperson having a veto, which must be explained with a public statement. The devil is in the detail.
There would be only two RBI members and five external members appointed by the Government. The Ministry of Finance nominee would be a non-voting member on the MPC but would articulate the Government viewpoint.
With Big Brother watching over their shoulder, brave would be the external member who would deviate from the Government line. The RBI would be better off with the present arrangement.
The leitmotif of the FSLRC is to charge the gate of the temple of money with iconoclastic fervour. One prays that in this internecine battle, the RBI’s Pretorian Guards fight off the charge of the Commissioners.
One must remember that countries that destroy their central banks destroy themselves.”
- M.G.Warrier
RBI FIGHTS BACK
With reference to the editorial “Regulating the regulators” (June 19), it must be pointed out that the first serious indictment of the FSLRC was made in this paper by SS Tarapore in his article “A plot to destroy RBI” (May 3, 2013). As rightly pointed out in the editorial, it is quite possible that the RBI Governor’s observations may get entangled in criticism in the context of the timing, and the seriousness with which they have been made can get diluted. But, for those who have been following the matter, Rajan’s statements do not come as a surprise. It is a relief that there is some strong leadership in the financial sector.
Not much research is needed to conclude that the finance ministry and FSLRC, in a hurry to resolve certain minor issues, ignored the evolution of the role of the RBI and the care with which the bank has nurtured the financial sector.
It would appear that the Commission did not get an opportunity to understand the present relationship between the RBI and the Governent. The regulatory apparatus and legislations in the financial sector are in working condition. Till Rajan’s emergence, the FSLRC’s effort to re-invent the institutional structure of regulatory bodies had pushed regulators and supervisors with the exception of the RBI to a confused state.
Perhaps the purpose would be served better if the RBI is allowed to function with its present mandate and a coordination committee sorts out issues among the remaining regulators. If the Government’s aim is to reduce the number of regulators, a merger of the regulatory agencies outside the RBI could be considered eventually.
- MG Warrier
The proposal by FSLRC to set up a tribunal to review the RBI and the SEBI’s decision is unwelcome and Rajan’s criticism of the proposal is valid. The RBI’s actions on monetary policy are based on well-established systems and practices. And any policy decision can trigger differences of opinion and may also turn out to be wrong in hindsight. But that doesn't make them subject to review by a tribunal. There is no end to regulations and regulators. So, shall we have a regulator to review the decisions of the Supreme Court?
- Sridhar Narasimhan
TWENTY YEARS AGO TODAY - RBI move to monitor customer service
‘The customer is the king.’ Indian banks are slowly becoming aware of the importance of this dictum. To make banks more customer-oriented the Reserve Bank of India, in consultation with Indian Banks Association (IBA) has drawn up a uniform format for evaluation and monitoring of containing 25 core customer service areas. The RBI has advised the banks to undertake periodic evaluation of customer service. Further, IBA has prepared a uniform format of a complaint book which has been so designed that the complainants can be given “acknowledged copy” immediately.
Tigerair, ICICI Bank tie up to offer complimentary Singapore return ticket
.....India’s largest private sector bank, ICICI Bank’s credit, debit and prepaid cardholders will be offered “Pay to go, complimentary return” scheme. “During the offer period, the customers of ICICI Bank can avail the opportunity to pay only for one-way fare to Singapore, where in the return ticket will be complimentary. The customer will have to pay only for airport taxes and other charges on the return fare,” the airline said in a statement.......
Sour grapes, anyone?
..........Indeed, prior to September 2010, when the restrictions on the product came into force, ULIPs were the darling of insurance firms and their agents. So are insurers finally becoming pro-investor? Or, has the realisation dawned after agents have stopped pushing the product due to low commissions?
Rising NPAs
..............With so grave being the consequences of a loan becoming an NPA, a question that naturally arises is: Why do banks sanction such loans which cause such huge losses to the bank? There are several reasons behind this. One is compulsion. In the name of thrust on agriculture, government frames such rules that Banks are forced to give collateral free loans (that have little or no scope of repayment) in the area of agricultural credit— better known as priority sector advances. It goes without saying that ............
Debt waiver promises may soon be history in electoral politics
.............According to highly-placed sources, the RBI is working on the modalities to ensure that no political party makes ‘untenable’ promises on debt-waiver, and the IBA has already moved its pawns in this regard. “The RBI is acting tough on the present developments of debt waiver promised by the new governments in Andhra Pradesh and Telangana through its disinclination to permit issue of fresh government bonds,”.........
Carry up to ₹25,000 while travelling abroad: RBI
...........The RBI said the increase in the amount of Indian currency notes that can be taken out of the country is in view of the evolving economic conditions and with a view to facilitating travel requirements of residents travelling aboard as well as non-residents visiting India.
PSU banks lag peers in code implementation
..............Only five out of the 48 banks got ‘high’ rating; 25 got ‘above average’ rating; 17 got ‘average’ and one was ‘below average.’ The rating model that was used by BCSBI was developed in consultation with credit rating agency Crisil. BCSBI was floated by the Reserve Bank of India in 2006 to ensure that a comprehensive code of conduct for fair treatment of customers was evolved and adhered to...........
Beleaguered DCCBs working to introduce core banking
.........Though officially it cannot carry out banking operations, as RBI has struck down its banking licence application, the cooperative plans to put CBS in place by this month-end. The management hopes that this will help strengthen its case before the court, which is hearing its petition against the RBI order. The next hearing is scheduled on June 20. CBS will ensure anywhere banking, linking all branches of NDCCB. This is also expected to help get back teachers' salary accounts, which have been pulled out of NDCCB this month. One of the reasons for the withdrawal was that NDCCB did not have CBS, said a source here............
Co-operative banking system in Kerala gets flexible
......Scores of raids have been carried out on illegal money lenders and credit firms by the police, and hundreds have been arrested so far. Home Minister, Ramesh Chennithala, has said the government would wipe out the ‘blade mafia’. He has asked the Reserve Bank of India to strictly enforce its regulatory role over registered NBFCs as many registered NBFCs are also charging high interest rates. Though the interest rates charged by the co-operative societies are low,........
Mid-sized banks may struggle to mobilise retail deposits
......The RBI on Monday released the final Basel III framework on liquidity standards which includes guidelines on LCR, liquidity risk monitoring tools, and LCR disclosure standards. The main objective of LCR is to promote short-term resilience of a bank’s liquidity risk profile by ensuring that it has sufficient high-quality liquid assets to survive a significant stress scenario lasting 30 days. “Obviously, it (LCR implementation) will be a challenge. All banks will have to structurally increase their liquidity base, both on the asset and liability side. “In the short term, banks will maximise their ............
There's no Magic Wand to Curb Food Inflation
.......Inflation cannot be reined in by a well-intentioned finance minister like Arun Jaitley or RBI governor Raghuram Rajan. Of course, prudent fiscal and monetary policies are important. But we have to fix the fundamentals first. If there's a glut in the farm market, especially in perishables, then prices crash. This happens the world over, and even in the West farmers need subsidies. In India, when there's a surplus, farm produce simply rots. There's no seamless supply chain of logistics and cold storage, to carry it from the farm to shop shelves and super-markets. There is little capability to........
Centre cracks the whip on NGOs, direct foreign funding put on hold
.......The MHA has directed the Reserve Bank of India of Indian to put on hold foreign funding to NGOs. Also, NGOs will have to inform the RBI prior about any funding they receive from abroad. The Centre's action came a day after the IB prepared yet another report on NGO Greenpeace, recommending cancellation of permission given to it for collecting funds abroad besides reassessment of its tax compliance..............
HomeMin likely to take over Aadhaar biometric data
............Since the new system is meant to ascertain citizenship of individuals - and not only their identity - verification of data gathered by UIDAI will have to be carried out by sending enumerators to each Aadhaar number holder to match the information against the biometrics collected..........
SBI among 24 PSBs Ineligible for Rs 50,000cr EPFO Investments
........“As per the investment guidelines for provident fund savings, the EPFO can now only invest in term deposits of five public sector banks -Bank of Baroda, Canara Bank, Syndicate Bank, Vijaya Bank and Bank of India,“ said a senior government official. “These five banks are not the biggest, but their bad loans are still below the threshold limits set by the board,“.............
Sebi board approves sharing KYC details with financial regulators
............"Today we have passed a resolution that the regulation will be amended that will permit that other regulated entities, which are regulated by other regulators they will also have access to the data," Sebi Chairman UK Sinha told reporters after the board meeting here. "So this is a move towards aligning one single KYC across the financial market. This is a first move in that direction which will be very very investor friendly," Sinha added............
HDFC’s Deepak Parekh seeks faster clearances, permission for land finance
...................“If regulators feel there is excessive speculation in real estate, it is prudent to prohibit banks and housing finance companies (HFCs) from lending for land transactions. However, when there is no real estate bubble, as is currently the case, then banks and HFCs should be allowed to fund land transactions. This is because in property transactions, land costs comprise almost 70-80% of the total cost,”.................
SKS Microfinance: enough fuel for growth
..............Some of the uncertainties that hung over the microfinance sector have been resolved. The Reserve Bank of India (RBI) is the sole regulator. It has cleaned up industry rules after the Andhra Pradesh crisis of 2010, when microfinance institutions came under the scanner of authorities after reports of suicides due to alleged coercive recovery methods. RBI has introduced new norms. For instance...............
Thursday, June 19, 2014
Basel III blues - V,K.Sharma
.................With no further cost cutting and efficiency gains immediately possible in the banking sector, the need to keep return on assets attractive will result in higher borrowing costs for the real economy, the effect of which would be the same as that of involuntary monetary tightening. It is precisely to mitigate this adverse impact on.............
Over 200 NBFCs may be declared vanishing companies
PATNA: There are more than 200 non-banking financial companies (NBFCs) registered with Reserve Bank of India (RBI) who are facing the threat of being declared vanishing companies, said Regional Director, RBI (Patna) Manoj Kumar Verma on Tuesday. He, however, said 42 NBFCs were in good shape. Elaborating the concept of vanishing companies, Verma said if an NBFC fails to submit its annual records for a few consecutive years, the RBI sends its representative for its physical verification.........
‘Grow exotic strawberries … get your rice from Bangladesh’
...........Uma Shankar, Regional Director, Reserve Bank of India (RBI), said people should be wary of a fake website (https:/www.rbi-inonline.org/savings.html) offering banking facilities and asking people to apply online for opening Reserve Bank of India (RBI) savings accounts. RBI did not offer such services that commercial banks provided, she said. She said it was enough to provide proof of address of either the current or permanent address to open a new bank account, or while updating an existing bank account.............
Aggrieved with banker: RBI ombudsman invites your complaints
................“In order to address these issues, RBI has issued advertisements in various newspapers across the state urging people to come forward and register their complaints with the RBI Ombudsman who will take action as per the Banking Ombudsman Scheme 2006,” he said. Giving details about the scheme, he said Banking Ombudsman Scheme provides an expeditious and inexpensive forum to bank customers to seek resolution of their complaints relating to services rendered by banks. The Banking Ombudsman Scheme was introduced under...............
RBI needs to act tough - A.Chandramouliswaran
My View on "Judicial review of decisions may make RBI ‘paper t...":
With all humility, I have been maintaining for decades that RBI, even with out a judicial review of its decisions as contemplated in the "FSLRC", has been a 'Paper Tiger' which is the main reason for banks not complying, with impunity, with its regulations on various regulatory aspects. Even in recent periods, some of the well known private sector banks were allowed to escape with small amounts of fine for grave irregularities in opening accounts and in rendering help in money laundering operations. RBI should have insisted on some of the senior members of the staff of these banks dismissed by the banks. It is hoped that the present Governor acts tough in these matters in the interest of the financial system.
- A.Chandramouliswaran
Regulating the regulators
..............The timing of Reserve Bank of India Governor Raghuram Rajan’s broadside against the Financial Sector Legislative Reforms Commission’s (FSLRC) report should not detract attention from its content. Yes, his unusually forthright observations have come after a new regime has taken over at the Centre. And, as we know, the FSLRC was constituted by the previous government. That said, there is substance to the disquiet expressed by him over some of the report’s recommendations.................
Say no to super-regulator
........Rajan has rightly pointed out that shifting the regulation of bond trading to the FSLRC-proposed Unified Financial Agency would severely hamper the development of the government bond-market. Already the consolidated surveillance has seen misses in controlling the the financial market. Look at the.......
Better if RBI allowed to function with its present mandate
My View on t "Regulators need flexibility, freedom to regulate -...":
In response to the article ‘A plot to destroy RBI’ (The Hindu Business Line, May 3, 2013), I had commented:
“ Not much research is needed to conclude that finance ministry and FSLRC, in a hurry to resolve certain minor issues, ignored the evolution of the role of RBI and the care with which RBI has nurtured the financial sector. Fed Reserve and RBI function in two different worlds. To say that time is not right for dismantling or truncating the RBI which is doing creditably well as is being admitted in several international forums, would be telling the obvious.
The dissenting notes recorded by 4 out of 7 members who signed the final report are well-argued documents, which inter alia plead the case for maintaining the basic features of RBI and assert the need for allowing the central bank to carry on with its present mandates. One wonders what motivated the FSLRC Chairman to finalize the report ignoring the difference of views expressed especially by K J Udeshi, P J Nayak and Y H Malegam.
It would appear that the Commission did not get opportunity to understand the present relationship between the RBI and GOI. The regulatory apparatus plus legislations in financial sector in India are in working condition. The FSLRC’s effort to re-invent them has pushed the present regulators and supervisors to a confused state, making the possibility of an intelligent debate on the issue remote.
The idea of creating a Unified Financial Agency for all financial regulators except RBI, truncating RBI by separating Public debt Management and keeping the agency doing that work (presumably with the same work force) in RBI premises, later UFA subsuming even RBI, all give a feeling that the FSLRC was not allowed to ‘apply its intelligent mind’ and in the eagerness to satisfy all, and so fast, it has forgotten its own brief. Perhaps, the purpose would be served better, if RBI is allowed to function with its present mandate, a coordination committee sorts out issues among the remaining regulators. If GOI aim is to reduce the number of regulators, after necessary groundwork, merger of the regulatory agencies outside RBI one by one, as work stabilizes could be thought of. The twin goals of one Unified Financial Agency and managing the man-power-related issues that may arise with merger here could be better handled this way.
- M G Warrier, Thiruvananthapuram,
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