.......... The government has decided to mobilise funds without depending on RBI rules to implement the waiver of farm loans. Another option under consideration by the state government is issue of development bonds. Mobilisation of additional funds to implement waiver of farm loans has become a big problem for the Andhra Pradesh government........
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, July 21, 2014
Infra financing: Barking up the wrong tree
.........So, are good days here for banks and companies setting up infrastructure projects? I’ve a slightly different take on RBI’s two-pronged approach to prop up infrastructure financing and protect banks from asset-liability mismatches. Since there is no cap on maturity of bank loans and no bar on refinancing loans, there is nothing new about the 5:25 model. Banks are always encouraged to resort to take-out financing—a method of providing finance for longer duration projects by sanctioning medium-term loans with an understanding that the loan will be taken out of books of the financing banks after a certain number of years. The take-out financing model has not taken off. So, RBI has tweaked it and................
Differentiating to include
.............The thrust of the RBI's strategy now is to move from mandate to viability, which requires a completely different model to address those three critical factors. De-risking is the key element of the payments banks proposal, while local knowledge is what is supposed to differentiate the small banks. By drawing boundaries on what both types of institutions can do, a separate space is being carved out, which is under no real threat from the bigger players. This also encourages a range of players to try their hand at it. However, it must also be recognised that........
Niche banking
.........The move to licence payments banks is an acknowledgement of the scope for niche banking in India. You don’t need all banks to do the same thing; in fact, technology already permits financial inclusion to be achieved in ways other than through the opening of more brick and mortar branches in remote locations. What matters eventually is that the delivery of financial services is economical — mobile firms charge about 1 per cent against the 5 per cent for sending money through India Post — while ensuring customer protection and no risk to financial stability. The latter concern is largely addressed by the stipulation that depositor monies be invested in government bonds below one-year maturity. The ultimate objective should be to enable every Indian to have a safe and secure bank account. Such .........
Some players likely to stay away from second round of bank licensing
Doubts over financial viability of small and payment banks could keep away some players from the second round of bank licensing. The central bank's proposal to ring-fence new banking entities from any financial or non-financial services of the promoter could also play a spoilsport. The Reserve Bank of India on July 18 kicked off the differentiated banking licence regime by proposing, in its draft guidelines on small banks and payments banks, to allow the ..........
India's youngest bank Bandhan to empower women, rural folk
......Ghosh said RBI Governor Raghuram Rajan wants the new bank (Bandhan) to penetrate poverty-hit rural areas to promote lending and saving among farmers, small businesses and others whom traditional banks have been reluctant to serve. "Bandhan is a third generation bank. Instead of ATM (Automated Teller Machine), our 275,000 human teller machines have been in constant touch with the rural people, specially women." Ghosh said that he had all the time given emphasis on the "practicability of the business, whatever may be the volume of trade.".....
Bandhan gets 25,000 applications for 15 posts in proposed bank
...........On July 2, Bandhan, the microfinance institution, which recently got an in-principal nod from the Reserve Bank of India to start a bank, came up with an advertisement for 15 posts in the proposed bank. In nearly 17 days, the MFI has received more than 25,000 applications for the posts, according to C S Ghosh, chairman and founder, Bandhan. In addition, several top-notch executives of the corporate world expressed interest in joining the bank, informed Ghosh.........
Road map for PSU banks fund-raising by next month
..................Next month, the government will frame a draft Cabinet note on equity dilution in State Bank of India (SBI), the country's largest bank. "We have not yet decided on SBI stake dilution. We are preparing a road map at the moment (for raising capital by public sector banks)," Financial Services Secretary G S Sandhu said at a Canara Bank event here............
Move over, big brother
.............It is too early to say whether these mechanisms will challenge the role of the International Bank for Reconstruction and Development (IBRD) or the World Bank and the International Monetary Fund (IMF), which have been the bedrock of the Bretton Woods system under U.S. hegemony. But they at least serve as a reminder that the era of Western and American dominance of the world is ending, giving way to a more complex and diversified world order: the multiplex world. The move by BRICS, though outwardly economic in nature, has serious geopolitical undertones...............
Questions remain on viability of proposed payments banks
...While most agree there is space for such banks in India, the restrictions and conditions proposed have raised questions on whether the model would be a viable business proposition. Payments banks are a new category of banks envisaged to provide limited services such as accepting savings deposits and remittances, particularly in rural areas. One key concern will be profitability. This is because payments banks will not be allowed to lend, effectively cutting off interest income—the main income source for a bank—although remittance services are permitted and could become the main income stream. Again,...............
BRICS Bank: Taking shape despite the fluidity around
..........So what actually will it be? The beginning of the end of western control over global financial systems, or an idea that will collapse as its members start to fight amongst themselves? I’m biased, of course. Like the Chinese ambassador to India, and Raghuram Rajan, I believe that developed countries still owe a debt to emerging nations for the aftermath of the 2008 financial crisis, which they’ve refused to pay. I can still be objective though. .......
Bharatiya Mahila Bank races past Rs 1 crore deposits in just seven months
........Interestingly, all the loans have been taken by women but in case of account holders, women make 98% of the total as men also have opened accounts in the state's only women's bank. The officials believe that the interesting loan schemes including loans for opening beauty parlour and kitchen modernization along with traditional house, car and education loans and lower interest rates on loans are the reason for the banks increasing popularity among women............
Set to grow faster, but won't sacrifice profitability: ICICI Bank
.............Kochhar, who implemented her famous '4C-strategy' at the bank soon after taking charge as Managing Director and CEO of India's biggest private sector bank in 2009, also said that this strategy has worked well and a foundation has been put in place now for the bank to grow at a faster pace than industry. However, this growth won't be at the cost of profitability or by getting into a high-risk business model, Kochhar told............
Banker Who Believes Client is Always King
.........But the grueling experience taught him to be calm and to be in control of his emotions, virtues that have rewarded him well during a career working in every department of the banking business and building relationships with clients. Mehra’s IIM batch incidentally was a year senior to that of Raghuram Rajan, now the Reserve Bank of India Governor..............
HDFC, HDFC Bank merger buzz restarts
The buzz over a possible merger between HDFC and HDFC Bank,which was talked about a decade ago in the aftermath of the ICICI-ICICIBank merger, has once again resumed. All the pieces appear to be falling into place with the RBI classifying low value home loans as infrastructure lending, which is exempt from reserve requirements such as CRR and SLR. HDFC has been disbursing loans efficiently and maintaining growth despite its size, and its sheer scale now makes it a strategically important institution. There is also a thinking that such a big organization should now be regulated as a bank. Should a merger happen, the new entity will be the second most valuable company in India after ONGC, considering that the combined value of the two institutions at current market prices is well over Rs 3.5 lakh crore.
HDFC Securities launches 'e-Will' writing service
.............There has been tremendous response to this product and a large number of customers across the country are getting themselves registered because of convience factor everyday, he said. To begin with, he said, 'Do it Yourself Will Service' would be available to customers of HDFC Bank having customer base of 2.8 crore. HDFC Securities has 20 lakh users. However, this service would be extended to non-HDFC Bank customers later ..........
SBI asked to pay Rs. 8 lakh in damages
..........The district consumer disputes redressal forum (DCDRF)–North has directed State Bank of India (SBI) and its insurance company to pay a compensation of Rs. 8.68 lakh for pre-closing the insurance policies of a consumer without prior information.......
Saturday, July 19, 2014
Need reforms but with foundations intact - M.G.Warrier
My View on "Can the government and the RBI work together?":
- M.G.Warrier
After 20 Months UFBU Still Struggling To Come to Consensus Among Themselves
........Thus, in nut shell we can say the meeting expressed unhappiness for the delay, and decided to request for another meeting with FM and shot a letter to IBA wherein it did not fit it even necessary to mention about meeting with FM. They will now try to come to a consensus for approaching IBA with that view..........
RBI asks banks not to charge usurious interest rates on loans
........“It is not proposed to issue any guidelines to the banks to offer loans to borrowers at uniform rate of interest in view of variation in their costs, business models, margins etc,” finance minister Arun Jaitley said in a reply to Lok Sabha. “Reserve Bank of India has advised boards of banks to lay out appropriate internal principles and procedures so that usurious interest (including processing and other charges) are not levied by them on loans and advances,” he said....................
Contingent liabilities of states a cause for concern, says RBI paper
...Stating this, a working paper of the Reserve Bank of India titled ``Debt sustainability at the State level in India’’ sounded a warning that the contingent liabilities, primarily in the form of issuance of guarantees by the state governments, remained an area of concern. ``The strong presence of contingent liabilities calls for a holistic assessment of debt position of states by reckoning their off-budget fiscal position, including the impact of operations of state public sector enterprises,’’ it said. Going forward, there could be downside risks in case the slowdown in growth......
67 years since partition, India still owes Pakistan Rs 5.6 billion
................From the first-ever Statement of Affairs that the SBP issued on its second day of existence — July 2, 1948 — to the latest one released on June 27, 2014, the central bank has listed the unsettled claims on the RBI among its “assets” unfailingly for the last 66 years. The SBP’s issue department — which deals with currency and the assets that underlie it — shows the outstanding claims on the RBI under two distinct categories, says the paper............
Sriram, Kannan appointed SBI Managing Directors
...........Both come to SBI from Group associates, where they held senior positions. Sriram, previously Managing Director of State Bank of Bikaner and Jaipur, will be handling international banking, while Kannan, who was MD and CEO, SBI Capital Markets, will be looking after associates and subsidiaries division of the country's top lender, a bank release said..........
Popularising RuPay
..........The State Bank of India, the largest public sector bank has started issuing RuPay card only three months back and has realised the benefits of the same. According to SBI officials, though it has long term agreement with Master and Visa cards, still it would be good for the bank to pay money to them and switch over completely to RuPay. Experts believe that if only SBI adopts RuPay fully, the scheme would be a success. Although for international operations, fee of RuPay is yet to be decided, the NPCI says that it would be better to keep it low to maintain it attractiveness in international business also..........
Sellers of National Pension System need better incentives
......The government must do two things. One, it should make better use of its pension subsidy. The government now offers a subsidy of Rs 1000 to encourage a poor person to join the NPS. A better way would be for the government to use the money to underwrite initial overhead costs in asset management, distribution and central record keeping. The wafer-thin asset management fee should be topped up..........
Milestones set, but road map not clear
.............Dividend contribution from the Reserve Bank of India (RBI) goes up by Rs. 13,000 crore. It must be noted that any outflow from the RBI has an expansionary effect. Taking all these factors into account, it appears that achieving the fiscal deficit of 4.1 per cent is going to be difficult. If the government is serious about adhering to the fiscal deficit target, it must be willing to cut expenditures as revenues fall short of budgeted levels. Pruning of expenditures must be done in such a way that this has the least adverse impact on the economy.........
Finally, small is beautiful in Indian banking
...............Narrow banking—or the model of investing the last penny of deposits in government bonds—ensures safety but it’s difficult to make such a bank profitable unless the employees see this as charity and don’t take a salary. I wonder why would anybody apply for a payments bank licence while such activities can be done through the small banks? Yes, the small banks are being allowed to do everything a commercial bank is expected to do but on a smaller scale................
The changing face of finance
...............This is the classic concept of narrow-banking, where banks only invest in government paper and hence avoid the pitfalls of NPAs or capital adequacy. Being driven by only technology, however, will not be feasible given the state of digital infrastructure and computer literacy in the country............
NBFCs perceive several constraints
........“We have to see what we can do and what we can’t. Prima facie, as compared to an universal banking model, it looks more doable. The lower capital requirement is a positive. However, many NBFCs have an all-India footprint. We have to see in how many districts small banks are allowed to operate. Whether it is 4 or 5 or 15 or 20, or even more? A realistic approach regarding footprint is required,” ........
Biyani may apply for payment bank
.........It would apply, now that supermarket chains have been permitted to float such banks, said an executive within the group. A payment bank is essentially an entity which can accept deposits and facilitate remittances and payments but cannot lend money. “We are applying,” the executive said. “We can easily do money transfers and take deposits. We had this mechanism when we used to run the NBFC (non-banking finance company).” ......
Can we bank on them?
This refers to the report on the RBI issuing guidelines on payment banks and small banks (July 18). The RBI has prescribed a capital adequacy ratio of 15 per cent for payment banks. As the proposed bank can only invest in government securities and no lending is permitted, this clause is unnecessary. Its outside liabilities cannot exceed 20 times of net worth, which takes care of the interest of depositors. As these banks can take only demand deposits, to maintain liquidity, a substantial portion of deposit has to be kept idle. They have to maintain CRR and SLR also. What is left can only go to government securities. One wonders how these banks will be able to pay interest on deposits.
- S Kalyanasundaram, Chennai
The RBI’s guidelines are a welcome step, which is an essential measure towards meeting the objective of financial inclusion. But the guidelines should be more prudent, and let this not be a repeat of the Local Area Banks, a concept that was launched some years ago.
- Lakshminarasimhan
HBL
Profitability of payment banks under question
.........Payment banks are expected to offer only demand deposits - current account and savings deposit products and not fixed deposits. Currently, the cost one-year fixed deposit is typically in the range of nine per cent. Keeping a tab on operational cost is also seen as a challenge. For instance, deposits being covered by the deposit insurance scheme would also hike the running cost for them due to higher premiums...........
Norms on small banks fail to impress micro lenders
........... "While the guidelines are progressive and consistent with the financial inclusion agenda, it is almost impossible for most microfinance companies to meet the norms and convert themselves into small banks. Following the crisis in the sector, barring a few, all microfinance institutions in Andhra Pradesh now have negative net worth,".....................
Tough to bank upon
........... Now the central bank has put out draft guidelines for payments banks—essentially to provide payments, remittance services and deposit products—and small banks that will operate in specific geographies catering to the credit needs of micro and small businesses and small farmers in unbanked and under-banked areas. Neither of the models appears to be a particularly enticing business proposition. ..........
Telcos may be First in Queue for Payment Bank Licence
.........Rajan Mathews, director general of Cellular Operators of Association of India (COAI), the lobby body representing GSM mobile operators, said the RBI move would boost mobile banking services and financial inclusion, saying the “biggest deterrent to expansion of mobile payments“ so far has been their inability to offer cash-out transactions. “Though RBI's proposals don't allow telcos setting up banks to lend, we believe they will allow cash-out transactions, which I reckon can be a game-changer to boost mobile payments and financial in clusion in India as in Africa,“ he said. The cash-out facility, Mathews said, would enable a person who has deposited money with a mobile company to withdraw it at any location he wishes............
As RBI opens floodgates, be ready for an Airtel Bank, or a Railway Bank
..........Assuming the promoters of Airtel pass the RBI’s fit-and-proper text for starting a payment bank, it could attract a substantial chunk of the dormant savings account balances from traditional banks – the low-cost CASA (current account, savings account) money that is just lying around, earning banks a huge margin. Most banks pay nothing on current accounts and just 4 percent on savings accounts. An Airtel Bank, if it comes to be, would have other advantages. It would need a starting capital of only around Rs 100 crore, and would need nothing more than an internet presence to start and run banking activities. The RBI guidelines specifically allow for internet-based banks........
Welcome Shift to Differentiated Banking
......... A banking licence will allow a telecom company to realise in full the phone's ability to function as a portable electronic vault that can be charged remotely and run down to make all kinds of payments. The only trouble with harnessing technology for remote area banking is the vulnerability of electronic networks to hacking. The RBI will have to draw up effective, stringent cyber security standards and..........
Local and Rural Banks a Failure
Apropos `Even a Telco may get a Banking Licence...' (ET, Jul 18), it is necessary for the RBI to examine why local area banks (LABs) and regional rural banks (RRBs) failed to boost financial inclusion. Deposit customers and borrowers found it more convenient to transact with scheduled banks in larger rural and semi-urban centres compared to LABs and RRBs, resulting in their operations becoming unviable. Extending banking services through business correspondents and post offices appears to be a better option. Mobile phone service providers can be used to speed up remittances.
- S SOLOMON RAJ MumbaiET
What BRICS bank presidency means for India
............The BRICS-promoted bank, with a subscribed capital of $50 billion, divided equally between the five nations and another $100 billion as currency reserves pool, addresses two major aspects of any growing economy: one, the need for funds for getting on to the map of the developed economy from a developing one, and, second, protecting each others’ currency caused by outflows of foreign exchange........
State at loggerheads with Center over RBI circular
.......... "We have heard that Acche Din Aa Gaye Hai, but this circular does not show that Acche Din Aaye Hai. Nabard officials should understand this circular and oppose it since the very existence of Nabard is based on the strength of the farmer who is dependent on cooperative sector in the state.".....
Amanath Bank: withdrawal limit stays, says court
............Justice Ram Mohan Reddy, who heard the submissions, has asked Canara Bank to go through the details of loans and value of the mortgaged assets with ACB to verify whether it is feasible to allow depositors to withdraw more money from their accounts during Ramadan. The next hearing is on July 21........
CBI files case against Dena bank manager
...............According to the CBI, Mr. Barot allegedly approached seven corporate firms posing as a representative of the bank. Claiming that they would get returns at a high interest rate, he allegedly convinced them to put huge sums of money with the bank as fixed deposits. “He represented himself as a financial advisor of the corporates and ‘facilitated’ the bank in mobilising term deposits to the tune of Rs. 256.49 crore from them. Against the deposits, the accused got sanctioned a total loan of Rs. 220 crore from the bank in conspiracy with the former Bank Manager and got the amount diverted to himself,” ...........
Friday, July 18, 2014
India under Narendra Modi, Raghuram Rajan may be best emerging market turnaround story: Nomura
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| File Photo |
Japanese brokerage Nomura today said India may become the biggest turnaround story among emerging markets in five years, given the decisive mandate received by the pro-growth Narendra Modi government and the Reserve Bank of India's (RBI) actions. "The landslide election victory by Prime Minister Narendra Modi, combined with Governor Raghuram Rajan at the helm of RBI, is a potential game changer for India," it said.............
Can the government and the RBI work together?
...............However, one thing is very sure. RBI and the Government may not have a smooth sailing in a lot of areas. How soon and effectively they sort out the differences for better financial framework will decide the pace of economic recovery of the nation. And in our opinion, it is not going to happen any time soon. Given the messy legacy and sticky issues in the economy, a stable recovery is likely to take at least two three years. In the meantime, investors would do well to use bottom up stock picking approach. A bet on the broad macro economy may lead to burnt fingers. How do you think the equation between the RBI and the Government will impact the recovery process? Do share your views.............
Reserve Bank of India, Monetary Authority of Hong Kong ink MoU for information exchange
...."The RBI today signed a Memorandum of Understanding (MoU) for supervisory cooperation and exchange of supervisory information with the Monetary Authority, Hong Kong," RBI said in a notification. The MoU with Monetary Authority, Hong Kong, was signed by Arthur Yuen, Deputy Chief Executive, Banking, the Monetary Authority, Hong Kong and Harun R Khan, Deputy Governor, RBI. The signing ceremony was held at the Monetary Authority office in Hong Kong.
NABARD emerging as economic growth engine
.......K. K. Saraf, Regional Director, Reserve Bank of India, in his key note address congratulated all the NABARD for its efforts in the development of agriculture and rural development in the state especially, the role played under micro finance, financial inclusion and covering of farmers under Kisan Credit Card scheme. The role played by NABARD for inclusive growth through watershed, financial inclusion, SHG-Bank linkage, village development, credit planning and other related activities was highly appreciable............
Read - Rising Kashmir
'Nabard’s growth has few parallels among peers'
..........Nirmal Chand, Regional Director, Reserve Bank of India, Thiruvananthapuram, credited Nabard with success in piloting the core banking solution in cooperatives sector and driving financial inclusion. But its capabilities would be tested while seeking to ensure raised level of capital adequacy in the sector as mandated by the Reserve Bank. According to Chand, Union Budget 2014-15 sets great store by the Nabard’s proven credentials in executing major tasks in enabling the rural and agricultural sectors.............
Honour for Veena maestro D. Balakrishna
Srikrishna erred - Dr.T.V.Gopalakrishnan
My View on "Time will tell who behaved like 'NAWABs":
Justice Srikrishna should have come out in the report how to improve the legal system of the country instead of taking away the powers of a very well functioning institution with all limitations. RBI has earned a name and has got recognition from all over the world. Once the limited autonomy it enjoys is taken away, the mess that the financial system particularly the banking system and the chaos that the economy may face are something unimaginable especially when the legal system in the country cannot provide any sort of relief. Time the legal system is revamped first before venturing into changes elsewhere.
- Dr.T.V.Gopalakrishnan
Mysterious Money Trail
.............Y.V. Reddy and V. Leeladhar ran the crusade for the RBI and K.M. Abraham and C.B. Bhave for Sebi. It sounds spooky when it is revealed that there were 93 lakh deposit holders who did not claim their money and that there are no records on Rs 40,000 crore of funds. Such money, according to the regulator, should have been transferred to the government fund if this was the case. Has the mystery been solved? You never can tell............
Why ICICI Bank is one of the best companies to work for
.........Even after two years, the company does not sack the underperforming employees but only tells them that they will not be eligible for any increments, new job roles or bonuses, etc. Also, it never displaces pregnant women and people whose children are taking board exams. "If a person 45 years of age or above is asked to go, the person and the spouse continue to get medical support till they are 60," says Ramkumar. That is the reason why even former employees such as B. Shubhendu, who has worked in several multinational as well as Indian banks, still credits his stint at ICICI Bank as one of the most rewarding experience: "If it was not for the low pay slab, I would not have quit. They are caring, but are alert about non-performers,".........
Improve service first to domestic customers
.........KYC and Technology also become more of a handicap than a help for customers to switch banks. Old generation banks under certain compulsions do care old generation people where as new generation banks have been enjoying the unwritten freedom to ignore old generation people. When the domestic customers undergo harassing..........
Read...........
RBI to issue new Rs 20 denomination notes
......."The RBI will shortly issue rupees 20 denomination banknotes incorporating rupee symbol, with inset letter E, in the Mahatma Gandhi Series-2005 bearing the signature of Raghuram G Rajan, Governor," RBI said in a release. ........
Rs 10 coins to be issued by Reserve Bank of India on diamond jubilee of Coir Board
The Reserve Bank will soon put to circulation Rs 10 denominated coins on the occasion of diamond jubilee of Coir Board. "The government has minted the above mentioned coins which the Reserve Bank of India will shortly put into circulation," ...........
RBI quiz for students
................The preliminary and quarter final rounds will be held in Hyderabad on July 25 and in Visakhapatnam it is slated at Mother Teresa Dental Auditorium, GITAM University on July 28. The winning teams from each centre will join the other winners from across South India. While the zonal round is scheduled on November 7 in Chennai, the semi finals and finals will be held in Mumbai in November........
Good news for subscribers, Provident Fund deposits likely to fetch higher rate of returns
.......... “The calculations are yet to be firmed up but efforts are on to ensure that the returns are higher than the 8.75 per cent announced for last fiscal,” said a senior official. But the Employees’ Provident Fund Organisation (EPFO) will have to review its estimates once the higher wage limit is notified........
IBPS PO 4th CWE Exam 2014: Online Apply, Eligibility and Exam date Notification
IBPS has announced 4th CWE, Common Written Examination PO/MT for the recruitment of Probationary Officer/ Management Trainee vacancies in Public Sector Banks and online registration will be started from 22.07.2014 to 11.08.2014 . IBPS has made all preparation for conducting recruitment exam 2014. As sources said approx 35,000 vacancies will be fulfilled from this exam.........
SBI manager out of India, out of pocket!
The Bombay high court has rapped the State Bank of India (SBI) for posting a manager abroad at a promised salary and reducing it later. Calling the bank’s decision “wholly arbitrary”, the court has said that on the basis of salary offers, people make life decisions like shifting with family and selecting educational institutes for children. Ravindra Nath was posted to the SBI’s Johannesburg branch in June 2000 and was offered a salary of $1,965 a month. Four months later, he was informed that it was being reduced to $1,300.........
Read - TOI
Bank staff association plans anti-privatisation stir
.............the P.J. Nayak committee, appointed recently by the Reserve Bank of India, had made a series of recommendations that would further erode the popular banking base of public sector banks. The recommendations include repeal of the Bank Nationalisation Act and bringing banks under the Companies Act. The panel moots creation of a Bank Investment Company that should be given ownership functions of the banks. The government should not appoint directors in the banks. The panel also recommends merger of banks. The new measures being adopted by the government, in pursuance of the policies followed by the previous government, were contrary to the banking system ..........
Is it the end of gold saving schemes?
.........Jewellers are planning to approach the government for an amendment. So will there be a review? “The capital market regulator’s view points are different in terms of risk and mitigation. If the government is looking at reviewing the details in the Act, then may be the product can come back with checks and balances. It could be worked out in a way where companies make a declaration to the government to make sure that the information about the deposits is made available,”..............
Skimmer walks away with Rs 2.6L from Andheri ATM
In what could be termed as the perfect crime, a man covering his face with a handkerchief and wearing a helmet entered an ATM booth in Andheri (West) and, with the help of a skimmer device, which was already fitted, managed to get card details of 11 customers, withdrawing Rs 2.60 lakh. The accused had also put a sticky CCTV camera to procure the PIN of the cards. The footage of CCTV in the ATM booth and one on the opposite side showed the accused had come on a bike but his licence plate number is not clearly visible in the footage..........
First Data launches its mobile payment solution
..........“Merchants today are looking for a simple and reliable solution from a trusted partner to enable them to grow their business with customers. We are confident that our mPOS solution provides a cost-effective solution for converting on-the-go cash payments to electronic and for small merchants to start accepting cards. With this, First Data will provide all services to merchants through a single window rather than them having to interact with multiple providers.”..............
KC Land & Finance eyeing differentiated bank licence
............ "We are keen to operate on a regional level with a special focus on farmers, NRIs and SMEs. We are from a rural background and have a strong foothold in the rural market. There are certain areas in Punjab where bank branches or business correspondent model is yet to be operational. We will target these areas and bring more people under the banking ambit which can help spur the regional economy."........
RBI sets stiff terms for niche bank licences
The Reserve Bank of India (RBI) on Thursday paved the way for niche banking by issuing draft guidelines for setting up payment banks and small banks. While payment banks will offer remittance services, small banks will offer low-ticket loans and basic banking services within a limited area of operation. After initial screening to ensure eligibility, the central bank will set up an external committee to vet applications, which will be invited after the final norms are issued. Successful applicants will have to start operations within a year of the date of approval............
Small, payment banks a backdoor entry for companies into banking
.........As per the draft guidelines, existing non- bank finance companies, non- bank prepaid instrument issuers, corporate business correspondents, mobile telephone companies, super- market chains, companies, real sector co- operatives, and public sector entities were deemed eligible to apply for a payment bank. "... small local banks can play an important role in the supply of credit to micro and small enterprises, agriculture and banking services in unbanked and under- banked regions in the country, the RBI has decided to allow new " small banks" in the private sector," the RBI said.............
RBI proposes Rs 100 crore minimum capital required for setting up small bank and payment bank
.........The RBI has placed the Draft Guidelines for Licensing of Payments Banks and Draft Guidelines for Licensing of Small Banks for views/comments on the draft guidelines from all interested parties and general public. Both, payments banks and small banks are niche or differentiated banks; with the common objective of furthering financial inclusion. While small banks will provide a whole suite of basic banking products, such as, deposits and supply of credit, but in a limited area of operation, payments banks will provide a limited range of products, such as, .........
The rupee's risky overvaluation
................. A third argument against rupee depreciation is that if the Reserve Bank of India (RBI) mops up incoming foreign exchange, the consequent increase in rupee liquidity would further complicate the tricky task of containing inflation. At the risk of sounding like a stuck record, this article argues that India is taking a risky and sub-optimal approach by allowing the rupee to be overvalued against the dollar........
RBI efforts bear fruit, CDR cases down
..........The amount of loans referred in Q1FY15 stood at R2,720 crore compared to R39,521 crore in the year-ago period. Bankers and CDR cell officials said this fall in referrals is a result of RBI guidelines on early detection of stressed assets where it had directed banks, in December last year, to classify loans on the basis of the number of days interest payments are due. Due to that...........
A prudent gamble?
...............After some apparent reluctance initially, the Reserve Bank of India (RBI) seems to have taken to the idea, extending the broad exemptions to funds raised and lent to low-cost housing projects. The details apart, the main benefit of the exemptions from the banks' point of view is that their cost of funds will decline in the absence of the prudential load, which can then be passed on to borrowers. But it would be naive to think that.........
Financing infrastructure
...........Such mismatch can be avoided if banks are able to access long-term funds at relatively low cost. The RBI’s latest move — which follows Finance Minister Arun Jaitley’s Budget announcement — facilitates both. Banks today are required to keep ₹4 out of every ₹100 mobilised as deposits with the RBI, on which they earn no interest. They also have to compulsorily invest another ₹22.5 in government securities, apart from earmarking 40 per cent of their credit to so-called priority sectors. These pre-emptions...........
Building on BRICS
...........Viewed from this perspective, the new institution's initiatives will only supplement IMF and World Bank, and there is enough unattended space for the new bank. There are limitations in the "already impaired" vision of the rich, and the poor cannot wait on the sidelines for their basic needs to be met.........
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