..............RBI said the lending activity of insurance companies, mainly life insurance ones, while not very large in comparison to total banking sector lending, is nevertheless significant. The amount was Rs 88,870 crore as at end-March, less than five per cent of the assets under management of insurance companies. A significant portion of these are secured against the surrender values of life insurance policies. “While the risk management framework and exposure limits (single issuer, group, and industry) are in place for insurance companies, there is a need to plug the possibility of any regulatory arbitrage by closely aligning the practices and regulations applicable to lending by insurance companies with those by banks,” said RBI in its report...........
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 27, 2014
NBFCs outside regulatory ambit may pose risk to financial system
...........A Shadow Banking Implementation Group carried out a preliminary study of such institutions and recommended that they be brought under some regulation. It found that there was a high degree of heterogeneity in business models and risk profiles across various non-banking financial entities in the organised as well as the unorganised (informal) sectors. It also identified “exempted” provident funds, unregulated chit funds, co-operative and credit societies and primary agricultural credit societies as groups of institutions that need a greater degree of oversight. “The study stresses on the need .......
RBI advice on bank cash course
...............In his foreword, RBI governor Raghuram Rajan said the financial system remained stable, though public sector banks faced some major challenges, mainly in terms of asset quality and liquidity. Macro stress tests show that the system level capital to risk-weighted assets ratio of banks remains well above the regulatory minimum even under adverse macroeconomic conditions, said the report............
RBI sees better days ahead for economy
................The overall tone of the report reflected optimism generated by the thumping majority scored by the Bharatiya Janata Party in the recently-concluded general elections. "Going forward, with the formation of a stable government, the prospects of recovery appear bright," the RBI said. The central bank drew comfort from reduction in both fiscal and current account deficits and moderation of consumer price index (CPI) -based inflation..................
RBI: Policy coordination needed to reduce global spillover effects
................In the Report, the RBI said that in the absence of global policy coordination, cooperation and global safety nets, EMDEs may have to resort to less than optimal policy options such as strong macro-prudential measures including capital controls and reserve accumulation. “With their enormous clout, countries whose currencies serve as reserve assets can induce negative externalities on EMDEs through changes in their monetary policies,” it said.............
CS emphasizes need to regulate NBFCs, protect investor
........The meeting convened by Reserve Bank of India was attended by Principal Secretary Home, Suresh Kumar, Regional Director RBI, K K Saraf, Secretary Law, Mohammad Ashraf Mir, IGP, Arun Chowdhary, IGP CID, Dr B. Srinivas, General Manager, RBI, Jammu A.K Mattu, Chief Financial Consultant, Ravi Mangotra and representatives from SEBI, NHB, ICAI, and Union Ministry of Corporate Affairs and other senior officers. Chief Secretary while receiving brief on the status of registered Non-Banking Financial Companies in the State emphasized the need for regulation of this sector and priority to protect the interests of the depositors. He called for greater coordination between the Reserve Bank and the other regulatory..........
SLR may be cut further
............."As the liquidity coverage ratio (LCR) requirement increases progressively, RBI may consider it desirable to further reduce the pre-emption of banks' resources through the stipulation of SLR in gradual steps, along with a commensurate decline in the held-to-maturity (HTM) dispensation," ........
Arrangement between banks, asset reconstruction firms needs a relook
.................The RBI noted that as most of the securitisation activity is taking place predominantly with the issuance of security receipts (SRs) rather than cash, there is a concern that banks may tend to use this option to evergreen their balance sheets. SRs may not carry the stigma of NPAs (their value mainly being derived from the collateral and not based on the record of recovery), although the risk of loss of income on the asset still remains, in effect, with the originator (the bank). The central bank said under the current framework, the ‘real’ incremental value addition of ARCs in the process of ‘reconstruction’ of assets,............
Invisible receipts at $232.77 billion in FY14
The country's earnings from invisible receipts, including earnings from export of services like travel, health, etc, stood at USD 232.77 billion in 2013-14, the Reserve Bank of India said Thursday.........
Time banks tapped capital market for funds
............According to certain rough estimates, Indian banks’ additional capital requirements will be to the tune of ₹4.95 lakh crore over the period of phasing in of the Basel III capital requirements. In its 9th Financial Stability Report, the RBI said the Indian banking system needs to pay urgent and greater attention to the Basel regulations, especially those relating to subjecting banks to market discipline. Swifter progress towards a more robust emphasis on market discipline will result in better pay-offs not only for the Indian banking sector but also for the overall financial system, .............
Nabard hopes for budget largesse to give long-term loans
The National Bank for Agriculture and Rural Development (Nabard) wants the government to announce a Rs.5,000 crore fund in the annual budget on 10 July so that it can facilitate long-term loans to farmers to build drip-irrigation facilities and buy tractors, assets that will boost farm output and stem a sharp decline in capital investment in the sector. The aim is to provide long-term loans at attractive interest rates to farmers for long-term asset creation in agriculture, said Harsh Kumar Bhanwala, chairman of Nabard, a development bank set up by the government to ensure credit flow to agriculture and promote rural development............
Fix Aadhaar, don’t junk it
...........It is important to remember Aadhaar is not just a number, it is an enabler. Thanks to RBI and NPCI, electronic payments infrastructure has expanded and India has platforms now that support real time online authentication and transactions which connect to even banking correspondent agents across rural areas. Linking the Aadhaar authentication platform to the benefits transfer programmes of the government has already yielded good results. A recent randomised control trial of the ...........
Microfinance sector to rebound: CRISIL
....According to CRISIL, the sector will grow at a compounded annual rate of 35% , to reach Rs450 billion by end-March 2016 “supported by stronger building blocks”. In order to to sustain the current pace of growth, micro finance instituitons (MFIs) will have to raise equity; but that will require them to “address challenges associated with low promoter shareholdings and a near-term decline in profitability”, said CRISIL......
Thursday, June 26, 2014
Why Rajan is Wrong?
One regulator too many?
..........At another place, points out Rajan, the FSLRC suggests a strengthened Financial Sector Development Council as a venue for inter-regulatory functioning. Would not this serve to conserve and strengthen the synergies that the FSLRC at other places thinks a spanking new behemoth, the UFA, would? The arguments that Rajan puts forth raises another crucial question: Unless an existing system is shown to have broken or turned dysfunctional is it necessary to replace it? The FSLRC does not sound convincing in its implicit view, that extant institutions are inefficient and need to be re-organised to prevent systemic risks and market failures. What matters is not whether a country has a single or multiple regulators. Both structural arrangements failed to prevent the financial crisis of ......
BALANCED RESPONSE
The article “One regulator too many?” by Ashoak Upadhyay (June 25) is a balanced analysis of Raghuram Rajan’s observations on positions taken by the FSLRC. Initially, the media had sensationalised the views expressed by the governor who had said the FSLRC had wandered beyond its brief by trying to superimpose a tribunal on the RBI and that he was not comfortable with reinventing regulatory architecture in the banking sector. Those who are still in doubt may visit www.rbi.org.in and read the governor's speech once again.
- MG Warrier
Make capital out of Capital Market - Dr.T.V.Gopalakrishnan
..........It is the best opportune moment for the new government to come out with some innovative ideas and facilities to enhance, convert and divert the household savings into investments in capital market. The investments in shares through IPOs have turned out to be a very bad experience for retailers during the last decade because of high and greedy pricing of the issues and they have burnt their fingers forcing them to go out of the market and seeking greener pastures elsewhere. Persisting high inflation has added .........
Does India Really Need a Women-centric Bank?
........... The four key elements of empowerment according to the World Bank are access to information, inclusion and participation, accountability, and local organizational capacity. While economic factors do certainly play a role in improving a women's financial position, the context within which empowerment occurs is also important for understanding whether a particular intervention has been effective. When it comes to financial transactions, strong patriarchal norms may reduce the role of women to a mere conduit for accessing loans and banking services, rather than effecting any real change in the prevailing social structure. A woman's "emancipation" may remain contingent..........
IndusInd Bank unveils its third Currency Chest at Guindy, Chennai
IndusInd Bank has unveiled its third Currency Chest at Guindy, Chennai. Mr. K. Neethiragavan, General Manager, Reserve Bank of India inaugurated the Currency Chest in the presence of Mr. Paul Abraham, Chief Operating Officer, IndusInd Bank Ltd and other senior officials of the Bank...........
Tired with blind game...............
My View on "Thrust of trust by (re)tirees - R.Sridharan":
"Many knocks at the doors of justice have gone futile but we hope the day is not going to be far away when one knock will be heard by the policy makers and the doors of justice will open shortly."
...Doors of justice are wide open. People are 'acting' blind...Passing the buck and shifting the blame...It is in this context, I said, and I repeat, history will find it hard to pardon the 'individuals' responsible...
- M.G.Warrier
Ex-RBI Woman Staffer Found Killed in Triplicane Residence
CHENNAI: In a shocking incident, a 55-year-old woman, a former RBI staff, was found dead with mouth being gagged and another piece of cloth around the neck at her bedroom in Triplicane, here on Tuesday afternoon. About 60 sovereigns of gold jewellery, some of them worn by the deceased, and `3 lakh cash were reportedly stolen from her second floor residence on Devaraj Mudali Street. The CCTV grab from the building, which also ................
Security guards observe fast
Security guards posted at automated teller machines, banks, commercial and private establishments observed fast here on Tuesday urging the State Government to give solatium of Rs 5 lakh to the kin of security guards who were recently killed while discharging duties and also demanded better social security to them...........
Twenty Years Ago Today - Widen operations, private banks told
Competition improves productivity and efficiency in most areas, and that was one reason why it was decided to allow new banks in the private sector, said Dr. C. Rangarajan, Governor of the Reserve Bank of India (RBI). “An efficient financial sector is a pre-requisite for economic growth,” he pointed out and also urged the new private sector banks, though opting to go with fewer branches, to ensure that their impact was felt over a wide area.
Government to set credit guarantee fund to boost low cost homes
...........The finance ministry is discussing with RBI the contours of the fund that will be set up under the ambit of the Deposit Insurance and Credit Guarantee Corporation (DICGC), a finance ministry official said. "We are looking to amend the DICGC Act.
School Uniforms, Mobiles in New CPI, Food Weightage Cut
School uniforms, pyjamas, kurtas, skirts, mobile phones these are set to be among 50 new items in India's revised Consumer Price Index (CPI) as the government seeks to put together a measure of retail inflation that better reflects changing consumption patterns. One of the effects of this could be a lowering of the inflation number because of the lesser importance given to food items in a revised price gauge. The Consumer Price Index is a critical determinant of the Reserve Bank of India's monetary policy ..................
Read - ET
Read - ET
Interest on claims in DEAF only from date of a/c transfer: RBI
...................."The interest payable, if any, from the Fund on a claim shall accrue only from the date on which the balance in an account was transferred to the Fund till the date of payment to the customer/depositor," RBI said in a clarification today. Further, RBI said that interest, if any, would be payable only on interest bearing deposits. And no interest shall be payable in cases of amounts refunded from the Fund where no interest was payable by the bank to its customer..........
RBI NBFC norms will enhance financial inclusion: Shriram
.............NBFCs always have played a role in the niche segment where banks have not reached. So the banks have to accept or change the credit policies as per the niche customer’s requirement. So we need to see that how it will go on and then only we will be able to make a comment.
Cyber crime acquires a new angle
...........So far, the crime has been mostly related to e-mail abuse and online job and lottery fraud. But, a recent crime committed by three employees of an outsourcing company associated with a major private bank had given it a new dimension. The accused were charged with duping a person by promising him to get back the amount he had lost in a discontinued life insurance policy with the private bank. They allegedly convinced the person to remit..........
Some relief for credit card customers
If your credit card payment is delayed, now you will get some more time to pay it before the bank charges the late payment fee. The Reserve Bank of India has asked banks to relax the rules with regard to late payment fees. But this will only provide some relief since you still have to pay the interest rate which can work out to quite a bit............
ICICI Bank launches co-branded card with Delhi Metro
............Explaining features of the card, he said, the unique auto top-up facility on the card automatically recharges the amount on the transit chip when the balance drops below a certain specified threshold limit. The auto top-up is triggered at the start of the customer's journey when the transit chip makes contact with the Delhi Metro servers at the entry gate,..........
IDFC will offer quality banking at low cost, says CEO Limaye
.............The infrastructure finance company is following a multi-pronged strategy including setting up an experienced leadership team and building a flexible technological architecture to keep up with rapidly evolving technology. Being one of only two companies to receive in-principle approval from the Reserve Bank of India (RBI) to set up a bank, Limaye feels that the firm is in a “sweet spot” because there won’t be much competition in hiring..................
YES BANK's prepaid card wins award
......YES BANK won these recognitions for introducing innovative Payment programs that present effective and convenient solutions to its valued customers. These are “ Best Co- Brand Program”, “ Best Commercial Card Program” and “ Best Prepaid Card Program”............
Read - FPJ
Bank of Baroda to set up Baroda Bhawan at cost of Rs 75 crore
..........BoB's chairman and managing director S S Mundra, who is tipped to become new deputy governor of the Reserve Bank of India (RBI), laid foundation stone of Baroda Bhawan at the Gulistan bungalow premises on Tuesday. The new nine-storey headquarters of BoB will come up on 1,24,000 square feet land. Gulistan Bungalow, the heritage building, will however stand tall.............
Dena Bank targets Rs 500 cr SME lending in UP
..........The Bank has planned to establish specialised NRI Branches, Retail Processing Hubs and SME Processing Centre across India for faster transactions and loan approvals. “We are focussing on small advances to the agricultural and SME segments for increasing our lending portfolio and credit ratio,” ...........
Banks Find a Way to Trace Out Loan Defaulters On the Run
...........“Now, credit bureaus can identify a chronic defaulter even if he changes his location,“ said a senior private-sector banker. “If the defaulter uses the same name and identity proof like his PAN number, the system will identify the fraudster.“ Credit Information Bureau (India) has a tool called CIBIL Locate Plus, which “offers timely, comprehensive and most updated contact details of the customers to the credit grantors,“.......
Farmers, Fishers and Bankers............
"If a banker wants to enforce its right to recover the dues from a defaulter, he/she would give his/her own interpretation of the definition of 'wilful defaulter' and if not interested to do so, he will go to the any length to interpret it otherwise also. It is the second option the banker has chosen to interpret when it comes to Mr Mallaya of KFA. The world knows the KFA has stripped its assets (air craft seats were removed, air crafts were grounded and made unworthy of flying, inflated the share prices and got the bank loans converted as equities at a much higher price (about Rs.65 or so per share), offered lower than required collaterals (i think IDBI bank's part of loan was under collateralised) etc.
Farmers committed suicides and no banker came forward to defend any farmer. Now when it comes to Mr Mallya, the whole banking fraternity is joining hands to take up his cause. At this rate, it may not be far off that the loan to KFA will be written off in the immediate future and bankers will give suitable explanations also. A forest has been destroyed in writing about the KFA affairs and the way bankers were handling its account. Even as per RBI guidelines on wilful defaulters, KFA is a wilful defaulter under (a) which reads as follows: "Default in repayment obligations by the unit to the lender even when it has the capacity to honour the said obligations." The KFA had sufficient resources during the initial years of its operations and even then none of the banks took measures to recover their dues. Instead they proceeded to convert the loans into equities. Instead of converting the loans into equities, bankers should have directed KFA to sell their shares in the market and repay their loans. Instead they resorted to conversion of loans into equities. It is now languishing at Rs 3 a share. Why did not they not insist on repayment of loan when KFA's resources were available with it.
But, RBI has been silent on it.RBI should conduct special investigation and see if there were any connivance/ collusion between KFA and the bank officials, examine thoroughly the banks' board decisions on continuously extending loans to KFA despite its failure to repay its dues."
- S.Santhanam
Tougher law likely to tackle wilful loan defaulters
To tackle the menace of wilful defaulters, the Reserve Bank of India is believed to be drafting a legislation which, if enacted by Parliament, could make it easier for banks to recover loans. Currently, banks have two main channels — Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act and Debt Recovery Tribunals — for recovering loans. However, .............
Naidu takes cyclone route to ease loan waiver burden
.....According to sources, RBI officials expressed concern that crop loan waiver might dampen the credit culture but assured to look into the AP government's plea to reschedule the farm loans on a merit basis. "RBI has virtually agreed to issue instructions to banks in the state to allow rescheduling of farm loans in more than 581 mandals," claimed a senior official in the AP government. But there is a factor that can go against AP. Normally, a mandal should be declared as drought-hit or cyclone-hit within 90 days of the same crop season. Naidu, however, declared 581 of the 655 mandals in AP as either drought or cyclone hit only last week. Now, he has urged the RBI to consider the delayed declaration as valid on the grounds that united AP was pre-occupied with bifurcation and elections...
'Treating deposits under RIDF as part of priority sector lending may affect new securitisation issuances'
..................Securitization market was primarily driven by direct assignments or direct sale of loans till FY12. But, after the introduction of new RBI Guidelines in FY13 which stipulated that no credit enhancement may be provided for direct assignment transactions, the market started moving towards special purpose vehicles or SPV/ Pass Through certificates or PTC route as investors were more comfortable................
IFMR launches debt fund for MFIs
...................The fund will subscribe to the debentures of microfinance institutions, providing them medium-term debt. Registered under the alternative investment fund II category specified by the Securities and Exchange Board of India (Sebi), the fund will be looking at an investment period of five-six years. “Microfinance institutions have access to short-term funds from banks and slightly longer-term private equity. We, however, aim to provide medium-term debt to the institutions, which is not readily available................
Read more at: Mint
I-T department asked to redress taxpayers grievances fast
..........“Pending grievances shall be reviewed and authorities concerned reminded for redressal on weekly basis and special focus shall be on grievances pending for more than one year and every effort shall be made to redress such grievances on priority basis,” ..........
Wednesday, June 25, 2014
A good piece worth reading - Dr. A Vasudevan
My view on RBI under Rajan can show regulators the way - SUCHETA DALAL
This is a good piece worth reading by every banker and surely by RBI officers in active service. I have one small suggestion to make. There could be implementation committees in each bank and in RBI and these committees could meet once a week in their own organizations providing inputs to either ED or DG in charge of operations about the implementation problems and successes and also suggest areas of inter-organizational coordination. I am not sure whether Ms Dalal would like to reflect over this idea (which in fact is in operation in the Central Bank of Nigeria) and if possible give some orientation to it to suit Indian circumstances.
Message for RBI - Dr.T.V.Gopalakrishnan
A very well brought out message to RBI. The role of Ombudsman and BCSBI need to be examined in detail and there is ample scope for some synergies to be evolved.The Customer Service Department can play a key role in ensuring that banks are able to render complaints free service and like capital adequacy ratio, banks should be rated for their Customer Servive efficiency.The functioning of Local Boards of RBI also needs a thorugh review as it can do a lot in coordinating and guiding the banks, NBFCs, NABARD, Cooperative Banks and RRBs in their efforts to achieve Financial inclusion, improved credit to agricultural and rural segment and complaint free services. Local Boards can also be made for effective in Coordinating the actvities of NABARD,, State level Agencies in enhancing agriculttural production, storage, transportation and Distribution to better the supply position of food items to bring down inflation.
Thrust of trust by (re)tirees - R.Sridharan
A sympathetic view is needed by Government
Laying
tracks for an institution and building it to a well established organization is
a very tedious job and Reserve Bank is not an exception to this law. From
day one of the commencement of this great institution, people started building
this institution to a global level should not be left in the soil to
be swallowed without any trace nor should be forgotten by the history. At
least those who are presently breathing still after attaining their old age with
an expectation that a day will dawn for them in getting their dues by way of at
least updation of their pension should not be deceived. Rumours going around
that the updation will take place at any time used to serve these pensioners as
a ray of hope but alas nothing has taken place in reality. The demand for
updation is
a legitimate right of a Government employee or the Reserve Bank employee where
the Government in general and Finance Ministry in particular should try
to assess
the genuineness of the demand and sort out this long pending issue. Holding the
power and turning a blind eye towards genuine demands is not
a good governance and it should be ensured that the human rights should be
protected in its own legitimate way. Even by granting the updation, I feel Government
is not going to be at a great loss but earn the goodwill of Reserve Bank
employees who are at the intellectual platform in contributing their
mite to the nation building. At least now the new Government has been formed
with a motto of good governance and ethical approach, we feel that
good days will be returned to this country and all grievances of all the
citizens will be resolved to reflect the Government’s noble policies to
stamp the
belief of the people in the Government’s functioning. Will the Finance Ministry
at least now look into the Reserve Bank retirees appeal in a positive manner
and solve this long pending
issue at the earliest?
There
is a thrust of trust by all the Reserve Bank retirees in the present
Government’s approach to the country’s development. Many
knocks at the doors of justice have gone futile but we hope the day is not
going to be far away when one knock will be heard by the policy
makers and the doors of justice will open shortly.
- R.Sridharan
Former
Principal Private Secretary to the Governor
On a Tight Leash, PSU Banks Face Bankruptcy of Talent
..........It is not the only bank that's staring at a human resources crisis. Almost all state-run banks are in a state where if the current practice of joint wage negotiations and prohibition of lateral hiring are not abandoned, they will end up handing over their entire future growth to private sector peers on a platter. State Bank of India, the biggest, will see as many as 35,000 to 40,000 of its staffers retire in the next four years. These are not people who could be replaced by hiring freshers from colleges, but they need to be replaced by skilled people at the middle management level. The squeeze on hiring in the past is coming back to haunt state-run banks..........
Read - ET
SBI business per employee surges on large-scale hiring
.............The large-scale recruitment of Generation Next employees in the Officers and Assistant grade over the last three to four years has brought about a far-reaching attitudinal change among staff in their customer interface and services across the branches, the bank said............
RBI Recruitment of Meritorious Sportspersons
The Reserve Bank of India invites applications from eligible Sportspersons for the posts of ‘Assistant’/ ‘Office Attendant’ in various offices of the Bank. Selection for the post will be through selection trial and Interview. The office-wise break-up of the posts is available on the Bank’s website. Candidates between 18 and 26 years of age and possessing necessary educational and sports qualifications are eligible to apply........
NABARD organises school level awareness programme
........DDM, NABARD stressed that the objective of the programme is to generate awareness among the school children about Financial Literacy who in turn can percolate the message to the society. Further the programme also aimed at creating a small force of learned, educated and aware young citizens who are the future of this country. If children are made aware about financial literacy by way of various financial products, small savings, learning to invest, etc, they can plan their savings and invest them in a proper manner from an early age which can help them in future..............
Slice of History - Financial Inclusion: It All Started in the 60s
..........That focus eventually culminated in nationalisation but not before RBI literally forced the commercial banks to expand to poorly-served areas.The first salvo in this direction was publicly fired by governor LK Jha in his address to Bombay bankers in 1967, where he went to the extent of suggesting `slowing down of branch expansion in urban areas'. The bankers privately told the governor that they would welcome this so long as their competitors as well as foreign banks were also kept in check. However, foreign banks, as Jha observed, were `obliged to confine themselves to port towns only' in order to make profits. A week later, .........
Anand’s book on economy released
Stray Thoughts On Political Economy, a book written by MANSAS chairman P. Anand Gajapathi Raju, has discussed the policies of Government and RBI and it should help the policy makers in reducing the gaps in economy, according to Vizianagaram Collector Kanti Lal Dande. He was speaking at a function organised at the M.V.G.R. College of Engineering,............
Banks to secure ATMs by live CCTV monitoring
.......Leading banks that have initiated the process include State Bank of India, HDFC Bank, Punjab National Bank, and Union Bank of India. The Reserve Bank of India has also encouraged banks to put in place surveillance systems. While the RBI has not insisted on guards at every ATM, it has advised banks to try and have guards at all ATMs. Banks, however, say that...........
RBI lets NBFCs work as banking correspondents
...........As of now, banks appoint individuals, small grocery stores and private enterprises as BCs. Early this year, an RBI committee headed by Nachiket Mor had recommended that the scope of BCs be expanded and suggested the possible inclusion of new entities as BCs. As per the new rules, even microfinance institutions operating as NBFCs (NBFC-MFIs) can operate as BCs. The central bank also issued rules for appointing non-deposit taking NBFCs (NBFC-ND) as their BCs. Banks and NBFCs operating as their agents, should ensure that “there is no co-mingling of bank funds and those of the NBFC-ND appointed as BC,” the RBI said..................
Uday Kotak urges India to privatise state banks
............“My view is we have got to get bolder . . . if you want to fix banking, you have to fix the state sector, because it controls three quarters of the industry,” he said. “If you can bite the bullet and go below 51 per cent, that is the best way.”..........
Maharashtra will urge Arun Jaitley to withdraw RBI notification
.................... “We have decided to meet Mr Jaitley very soon. It is mandatory for the apex bank (Maharashtra State Cooperative Bank) to maintain a statutory liquidity ratio (SLR) up to 22.5 per cent. The RBI has specified that the apex bank will invest the SLR amount in government securities.” It is feared that the notification will have an adverse impact on liquidity of the apex bank and DC banks, affecting crop loans..........
Over Rs 9,000-crore agri loans to turn NPAs by June end in AP
..................State finance minister Yanamala Ramakrishnudu on Tuesday said they will bring pressure on the Reserve Bank of India (RBI) from the Centre if it did not agree for the reschedulement of crop loans in the state. "It is the responsibility of the banks to reschedule the loans when the farmers are under distress," he said while citing the declaration of almost all areas in the 13 districts as drought or flood hit last year. The authorities of the undivided government wrote a letter to the RBI for a similar relief in March this year but in vain as, ..........
Panel on crop loan waiver meets RBI Governor
Former NABARD chairman P. Kotaiah and other members of a committee constituted by Andhra Pradesh government to work out modalities for crop loan waiver scheme, met Reserve Bank of India Governor Raghuram Rajan to apprise him of the reasons behind the decision and sought RBI’s support. According to sources, they reportedly told Mr. Rajan that farmers in the State were facing problems either due to frequent cyclones or drought. They were likely to face a similar situation in future too because of the .....
Banks seek stringent norms for defaulters
..........Following a sharp rise in NPAs through the past two years, the Reserve Bank of India and the government have taken several steps to tackle the issue. The central bank has unveiled fresh norms to identify stress in the system at an early stage, and promised incentives to banks for doing so. However, if banks fail to act after stress is detected, they will face accelerated provisioning norms.......
Court queries state on DCCB package
......After RBI struck down the three DCCBs' application to carry on banking operations last month, the courts were approached with the state government also being made a respondent. At a hearing held on Tuesday, the court directed the state government to clarify within a week the reason behind putting such a condition in the aid package. The banks were hoping once the package is declared RBI may reverse its decision or at least it may strengthen their case in the court. However, ..........
RBI takes control of Mumbai co-op bank
The Reserve Bank of India has superseded the board of Mumbai-based Kapol Cooperative Bank and placed it under the management of an administrator, effectively taking control of the lender. The RBI has also prevented the bank from allowing any pre-mature withdrawal of fixed deposits.................
Read - TOI
Read - TOI
RBI bans premature withdrawal of fixed deposits from Kapol Bank
..........RBI had appointed an administrator to run Kapol Bank over the week-end following reports of falling financial health including weak capital adequacy and high level of non-performing assets. RBI has also superseded the board of directors as there were concerns over its conduct. As a matter of safety, the banking regulator has curbed premature withdrawal of fixed deposits and loans against deposits, a senior bank official said. .........
‘Naming Vijay Mallya a wilful defaulter tough’
.....As per the Reserve Bank of India norms, a wilful default happens when a company does not repay obligations despite having resources, or has not utilised the loan for other purposes or when there has been siphoning of funds or when the collateral has been sold without the lender’s consent. Strictly following these norms, Mallya cannot be deemed a wilful defaulter as there cannot be any malpractice or fraudulent motive attached to the issues at Kingfisher Airlines.............
UBI to focus on retail loans, expects 30-35% growth in FY15
..........The state-run lender expects 30-35 % growth in its consumer loan portfolio during the current financial year. "Retail loans will continue to remainour focus area, at least for now. It is one of our key strengths. We feel thatthere is lot of potential in the retail segment and we should exploit that opportunity,".......
YES Bank to hand over AGM recording to HC
...............The court also asked Madhu Kapur to furnish documents pertaining to her correspondence with the Reserve Bank of India and the Securities and Exchange Board of India regarding the status of the promoters. The high court also said from now, any correspondence between the regulators and either of the parties regarding Kapur's change in classification status had to be exchanged by both sides. Earlier, YES Bank had written to RBI and Sebi, urging Kapur be declassified as a promoter............
Tuesday, June 24, 2014
Obituary
Shri P. D.Gupta, former Chief Officer DBOD is no more. He passed away
this evening, 23-6-2014 around 7.00 pm and his cremation is taking tonight at 11.00 pm at
Chandnwadi.
- G.Gopalakrishna
RBI under Rajan can show regulators the way - SUCHETA DALAL
...........While it is true that this problem won’t be fixed by bundling all financial regulators under one roof, we hope that Dr Rajan will order an internal review to ensure that various consumer-related departments within RBI will act cohesively. It would also be a good idea to implement the Cabinet secretary’s note of 5th June, which asks all financial regulators and banks to cut bureaucracy, scrap redundant rules and regulations, reduce decision-making to four layers and ensure that departments collaborate to improve the speed of decision-making. RBI is known for its slow decisions, mainly because senior officials are forever travelling and there are turf issues between departments. The very existence of large and expensive entities like BCSBI and CAFRAL (Centre for Advanced Financial Research and Learning), which are only seen as sinecures for retired bankers, also need to be re-examined, since they operate like clubs with selective customer interface.........
The fiscal middle distance
..........The Sixth Pay Commission scales were accommodated within the fiscal stimulus sanctioned after the global crash in 2008-09, but the difficulty of applying the brakes on that stimulus is what we are seeing right now. The 13th Finance Commission recommended that Centre and states make annual contributions towards a fund to cover decadal pay scale revisions. There is still time. The Seventh Pay Commission was not due to be appointed until 2016-17, and its report is not due until 2017-18. With the forthcoming Budget, the Centre could make a start on a fund build-up..........
Structure of banking in India – seven principles
The CAFRAL conference on Banking Structure for India[1] has produced several useful insights and generated useful markers for a sound policy on banking structure and regulation. The speech by the Governor to the Competition Commission of India earlier in May set the tone. Then, we have also had the P.J. Nayak Committee report on the state of governance of Indian banks. The CAFRAL conference too has generated ideas on the subject. The decision that faces policymakers is a challenging one. They need to determine certain principles that will help them cut through arguments, counterarguments, and the intellectual clutter surrounding the banking structure. Obviously,.............
Differently treated - M.K.Bandopadhyaya
My View on "Unfortunate to be unresolved":
What would be the use if the upgradation and relative benefits reach the pensioners after they leave this world? Many of our fraternity have already left this world in expectation that they may get something for the last several years with tears in the eye. Our law makers including the former FM did not feel shy to upgrade and enjoy the financial and many other benefits to MPs, the legislatures in many States which also did so all at the cost of we poor Indians, the pensionary benefits and upgradation was approved for the judiciary and all Central Govt.Employees, the Defence Personnel, I fail to understand why we pensioners are being treated differently? I feel some forces are inimical to RBI and all its present and past employees and has/ve some axe to grind. While the immediate preceding and the present Governor had objectively persued our case with the Almighty Finance Ministry headed by PC, this was not so earlier after some good had been done by Dr.Bimal Jalan for pre-1997 retirees. It may not be difficult to identify the personalities behind our pain. Let us hope some bright light may be seen under the present dispensation.
- M.K.Bandopadhyaya
RBI conducts financial Literacy Camp at Sapormeina
.........peaking on the occasion, Assistant General Manager (Rural Planing & Credit Department), RBI Guwahati, M.T. Muanding Guite explained that the main objective of the camp is to create awareness on financial and banking related matters among the students, who will in turn help in spreading financial literacy to the other people who are in the dark regarding the same. He pointed out that though India has achieved Independence in 1947, yet 60 per cent of the country's populations still do not have any bank account due of ignorance about banking and its services provided to the people. The AGM further dwelt on salient features of genuine bank notes and demonstrated how to differentiate genuine bank notes from fakes one...........
Read.........
Now, RBI Sets a Timeline for Itself
.........The central bank’s decision to come up with a timeframe coincides with Prime Minister Narendra Modi’s decision to fix responsibility on bureaucracy and to clear files in a time-bound manner. For decades, writing a letter to the Reserve Bank of India was like sending it into a black hole. Neither did bankers have the temerity to demand a response nor was the RBI obliged to explain its stance. For the first time, RBI officials will have to stick to a timetable. ...........
Read - ET
Subscribe to:
Posts (Atom)