.............Various policy measures have helped improve domestic fundamentals, said Deepak Mohanty, executive director of RBI, in a paper presented at the SAARCFINANCE governors’ symposium in Colombo, Sri Lanka on Thursday.SAARC stands for the South Asian Association of Regional Cooperation. Noting that the impact of tapering of the US Federal Reserve’s quantitative easing measures have had limited impact on emerging markets including India, he said emerging markets economies are now better prepared to cope with the...................
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Friday, July 25, 2014
Let's have one-coin-one-shape policy
My View on "Size does matter: Why RBI, govt are looking to re-...":
We have only a few coins in circulation ie one rupee, two rupees, five rupees and ten rupees and unfortunately it is impossible particularly for blind persons to distinguish between one rupee and two rupee coins,Some times even one rupee and five rupee coins also look very similar, It is really not intellible why it is that difficult to produce coins of different denominations which can be distinctly different from one another. When the looks of human beings running into billions and billions are different from each other is it really a task for the Government to have these four denomination of coins to have different looks and designs so that public can feel the difference between each denomination by touch or by look.
- Dr.T.V.Gpoalakrishnan
There are number of coins in single denomination, say Re 1/ or Rs 2/- and not only for the visually challenged persons but also for the old people - including some retired officers from RBI - it is all the more confusing. While the Govt & RBI are concerned about One-rank-One-pay it is high time that the policy of one-coin-one-shape was followed. Also shapes could be different like one anna, two annas, etc. in the 40's and 50's In US the 'quarter' which is in use in large numbers, the size has remained the same for quite sometime.
- M A Srinivasan
I agree with TVG and MAS. Social groups representing the blind had taken up this issue earlier. Last few years, minting of coins was being done, perhaps, with making enough coins in the ‘market’ as the main objecive. Though rockets were being ‘indegenously’ produced, coins –from gold coins for sale to 50 paise coins- were being minted outside India. It is heartening to note that there are some moves to access expertise within the country. We live in eternal fear. If import duty is imposed on a commodity, we fear that commodity will be smuggled to India. If higher quality metal is used in coins, coins will be melted. Does this fear indicate less faith in law enforcement? Now that coins of value below one rupee are not much in use, taking care to make one rupee, two rupees, five rupees and ten rupees coins user-friendly should be easy.
- M.G.Warrier
Bank scam-tainted ex-RBI man faces arrest as SC rejects bail
NAVI MUMBAI: Raigad district police is set to arrest a retired Deputy General Manager of Reserve Bank of India, Abdul Bari Khan, in the Rs 650-crore bank scam of Pen Urban Co-operative Bank. The Supreme Court recently dismissed his anticipatory bail application................
Beware of fake number for ATM hoax!
+919771365967 this is an ATM fake call number claiming to be calling from RBI stating that your ATM card will be blocked for 6 months if you do not give the information he is asking for and the card will be active again after 6 months and this done to check fake ATM cards operation. Do not give your a/c or atm info to any such caller. Spread the word.
Dear all
Today evening I received two calls from No. +917544807990. The person on the other side informed that he was from RBI, Mumbai and wanted to know the details of ATM card/s, I am using, for verification purpose. He could not reply, when asked from which department of RBI he was. He just wanted to know the name/s of the banks and 19 digit number of my ATM cards. When I refused to provide the information and told that he was a fraud, he just disconnected the call. Please be careful, if you get a call from the above number.
- R L Taneja, Ex-Assistant Manager, RBI, New Delhi
Don't act as Big B - M.A.Srinivasan
This idea would answer the criticism that India is being cowed down by World Bank or IMF and is a challenge in some measure to the monopoly of WB, which is obviously 'managed' by a Big Brother. Hence it would be wise for India NOT to act as a Big Brother - but to act as a facilitator. But as a loud thinking, are we going a bit fast or ahead of time - while there are already ADB and BRICS bank independent of WB ?
- M.A.Srinivasan
RBI likely to maintain status quo in Aug policy:SBI chief
........."I think status quo is more likely," she said when asked what her expectation was from RBI policy review. On capital requirement, Bhattacharya said: "There are various scenarios, various requirements...At this point of time when the credit growth is not too much I am not seeing any immediate requirement. But going ahead, of course there will be requirement on the capital front."............
Muthoot Fincorp welcomes RBI directive
.............homas John Muthoot, Chairman and Managing Director, Muthoot Fincorp, said, "We see the RBI guidelines as a very positive move towards introducing basic banking facilities to the unbanked population in India".........
Bank & NBFC of same promoter group can't coexist: RBI
Non-banking finance companies (NBFCs) eager to enter the banking space might have to wait for more time, since the banking regulator will not yet permit co-existence of both banks and NBFCs of the same promoter group. Following the recent issue of draft norms on licencing of small and payment banks, NBFCs were not sure if opening of such an entity would mean they'd have to give up their existing business..............
Dealing with bank failure
............It is doubtful whether higher capital adequacy alone can prevent the recurrence of Black Swan events such as the 2008 global financial crisis. Bank runs have to do with public perceptions regarding safety of deposits, going beyond mere capital provisions. This is not to understate the risk that large PSBs pose. Their proclivity for lending to risky projects stems from a combination of political pressure and the confidence of a government bailout in the event of a crisis. But the way to deal with this is to tighten prudential norms on lending and conduct stricter assessments of non-performing assets (NPAs). The RBI has done well to coerce banks into formulating credit action plans for loans............
Making banks safer
............While this is a measure consistent with the global pattern, the increment being proposed is smaller than that enforced on global systemically important banks (G-SIBS), which is around two per cent. Of course, the context for the two categories is quite different, with failure of the G-SIBs posing a threat to the world's financial system. But, that apart, it must be accepted that the analytical foundations for both the basic capital adequacy norms and the premiums for D-SIBs and G-SIBs are tenuous. Their effectiveness can only be gauged when the system is under stress; if found wanting, they are made more stiff and, once again, only the next crisis will demonstrate ............
Wanted: rules to rein in chit funds
.............M.K. Verma, Regional Director (Bihar and Jharkhand), Reserve Bank of India (RBI), revealed that the committee, which liases with the state government, RBI and other regulators such as Sebi, took this decision at a meeting in Ranchi on Thursday. Speaking to media persons at the RBI office, Verma, who is also coordinator of the committee, rued that although Jharkhand had enacted Protection of Interest of Depositors Act, it was yet to frame rules. Therefore, the committee decided to approach the state government to expedite framing of rules. It also decided to ask the state government to first, create a post of registrar of chit funds and then appoint a competent person for better functioning of the system. “There is a need for designating a competent authority from the government’s side to tackle NBFC-related issues and sharing information with committee members,” he said............
Bill cleared to empower Sebi to deal with Ponzi schemes
..........“I have not formally seen what has been approved by the cabinet or what was the proposal. But if it is on the lines approved in the earlier ordinance, then there are two-three most important things. The first is unauthorised deposit collecting investment schemes, the second relates to the area of Sebi's ability to recover the penalties and the third would pertain to special courts where people can be prosecuted, if they have violated the regulator's norms,”.....
Why RBI’s flip-flop in gold loan regulation is sending confusing signals
.........There are two interesting aspects to the development: For one, there was never such a ceiling applicable on the quantum of loans that gold loan NBFCs, which control half of the market, can give to customers against the pledged gold; secondly, according to bankers, even commercial banks have been giving loans much above Rs 1 lakh all this while, even when the said limit was supposedly in place. That means, for all practical reasons, no one seemed to know or they didn't take the rule very seriously even when it existed. Bankers, for that matter even the RBI, do not seem to be convinced about the central bank’s rationale of setting a limit on the quantum of loans that can be borrowed against gold........
India made a Great move in Payments, Thanks to RBI
...........“Mobile payments could not be expanded, as telcos were unable to offer cash-out transactions. Though RBI’s proposals don’’t allow telecom operators to set up banks to lend, we believe they will allow cash-out transactions, which enable a consumer to withdraw at any location. This can be a game-changer to boost mobile payments and financial inclusion in India as in Africa.”..........
HDFC-HDFC Bank merger: Who benefits?
............Merger talks between the two entities clearly shows how the market works in discounting future events. Even as the managements of HDFC and HDFC Bank have denied any merger talks, analysts have already started discussing on how to play the event. It is as though merger between the two is now only a matter of time and ............
Managing money both an art and a science
...........If managing money is so simple, why do people go wrong? It is because of behavioural biases that many investors have. Typically, we like to follow what the latest fad is. For example, as equity investments are generating high double-digit returns now, many are moving their investments to stocks. But keeping all eggs in one basket can be very dangerous for an individual investor. Secondly, ........
The Implications of India’s 2014 Budget for Financial Inclusion
.............These are great steps forward, but from what we have seen so far, minimum capital requirements for these kinds of entities may be too high to allow real experimentation. The government must work hand-in-hand with the RBI to enable a range of actors to work more effectively and flexibly together, encourage the harmonization of the patchwork of standards, and allow for them to leverage each-others’ expertise and infrastructure to deliver innovative and consumer-centric products to the market. To accelerate financial inclusion in India, the government will need to continue to partner with the RBI,.............
Trading by Banks in Currency Derivatives to be as per RBI Norms: Sebi
..........Market regulator Sebi in a circular said that "banks, whether participating in the currency derivatives segment as clients or as stock brokers, shall be guided" by the provisions of RBI. Besides, the regulator said that domestic institutional investors can take position in foreign currency up to $100 million or equivalent per exchange in the currency derivative segment..............
Satyam, Sahara, SEBI
Financial crime doesn’t pay. This is obviously the message the Securities and Exchange Board of India wants to send out through its mammoth disgorgement orders. In the Satyam case, SEBI has directed Ramalinga Raju and four others to deposit with it a sum of ₹2,350 crore with interest for insider trading and unfair manipulation of the company’s financials and stock prices. Prior to this, SEBI had directed Sahara’s Subroto Roy to refund ₹24,000 crore raised through illegal debentures. With monetary penalties and securities market bans failing to deter financial frauds, it may seem in order for SEBI to force big-ticket offenders to disgorge their unlawful gains. But if such refunds are to serve............
What You can Learn from Mallya, Roy and Shah
.......What do you learn from all this? India is changing, even if some find the pace glacial. You can no longer get away with doing what you did in the good old 1980s. Building fountains over garbage dumps has become a lot more difficult. The tips you once picked up from the lives of your flawed icons are useless. You can still manipulate the system, but it’s far more risky............
Read - ET
Banks Initiate Process of Declaring Kingfisher Airlines as Wilful Defaulter
............."Some banks have already started the process," Financial Services Secretary G S Sandhu said when asked whether the banks are going to declare Kingfisher Airlines and its promoter Vijay Mallya as wilful defaulters...................
ICICI Bank launches 'ProCircle' for NRIs
............This programme is designed to cater to the specialised needs of professionals transacting on the Money2India (M2I) platform. It offers its members smooth and quick money transfers with exclusive benefits. ProCircle members are also entitled to preferential rates and a complete waiver on the service charges for every M2I transaction, the bank said in a statement..........
A matter of clicks
Technology has played an important role in streamlining the tax return filing process, which is now almost paperless. A taxpayer is not required to submit any supporting documents, return forms are downloaded from the income-tax web portal with an easy-to-understand procedure for filing returns electronically..........
I-T dept to work on Saturday and Sunday
......"Special arrangements have also been made by way of opening additional receipt counters, wherever required, from July 26 to 28 and July 30 and 31 to facilitate the taxpayers in filing their returns of income conveniently and in a timely manner,...........
Thursday, July 24, 2014
Dr Subbarao a real hero and a role model - Dr.T.V.Gopalakrishnan
Serv(ic)e to 'Re'serve - M.G.Warrier
My View on "Here's Why Subbarao Will Not Take Up a Finance or ...":
This piece has a message much beyond the written words. This should not be taken just as an appreciation of a position on post-retirement life taken by one individual. I, for one, have been pleading for considering candidates in the age group of 45-55 for top level appointments, giving them a tenure of 5 to 15 years at the top-most position/s and the organisation/government taking care of their financial needs to continue a lifestyle commensurate with the positions they held before retirement so that they need not use their ‘service’ before retirement to reserve job opportunities post-retirement.
- M.G.Warrier
Size does matter: Why RBI, govt are looking to re-design Re 1, Rs 2 coins
.....“In terms of the Coinage Act, 2011 the design of coins is a subject matter within the purview of the Central Government. This issue has come to our notice and we have taken it up with the Central Government. Both RBI and Central Government are looking into the matter,” RBI said in an email response to a question on the matter......
St. Patrick students enter RBI quiz zonal finals
Kickstarting the country-wide Reserve Bank of India quiz competition, students from Puducherry schools battled it out for a place in the zonal finals of RBIQ on Tuesday. St. Patrick Matriculation Higher Secondary School won the Puducherry round and will now compete in the zonal finals of RBIQ to be held in Chennai on November 7. Defending team, Petit Seminaire Higher Secondary School, was the runners-up. Six teams from a total of 93 reached the quarter final stage, according to a release from the institution. V. Vasanthan, Chief General Manager, RBI, Chennai, said the quiz was aimed at building a connect between the institution and the students . Lloyd Saldhana from Greycaps was the quiz master.
The Hindu
RBI school quiz
Pune : The Reserve Bank of India (RBI) will conduct an all-India inter-school quiz to create awareness and interest about the history and role of the central bank, other banking institutions, economics and current affairs. The Pune edition of the quiz will be held on August 11 between 9 am and 12.30 pm at the MES auditorium of the Maharashtra Education Society. It will be conducted by Lloyd Saldanha. Students from class IX to XII are eligible to participate and can register at http://www.cab.org.in
TOI
TOI
Need to review banking structure
My View on "Tweaking guidelines won’t do; RBI needs to re-thin...":
A well argued article. When the 'experiments' of RRBs and LABs happened, life was not this fast and 'globalisation' was yet to happen. Need of the hour is a review of the entire institutional structure in banking keeping in view the interests of all stakeholders. Only RBI can do this. Vested interests are diverting central bank's attention to less important aspects of banking. RBI has a history of institution building to meet needs of the time. SBI, UTI, IDBI, SIDBI, NABARD, Exim Bank, RRBs and the failed LABs are some examples to recall. Now, the role and structure of existing institutions need to be redefined and new institutions introduced to meet the needs of changing times. There are no 'business models' to copy. FSLRC which should have had a look at the position strayed away into unexpected pastures.
I am sure this article will explore possibilities of an overhaul of the institutional structure providing financial services in India (including banks) when it appears in ET.
- M G Warrier, Mumbai
Money or no Money, Modi's SAARC bank is good idea
.........Sure, a poor SAARC bank cannot compete with the World Bank, the new BRICS initiative or even the Asian Development Bank. But the thought behind the process seems to be refreshing: to have a multilateral lending agency for the region, which will not impose conditions or seek structural changes in governance to create business opportunities for donor nations. The SAARC bank will not work if it is modelled on existing behemoths that feed huge bureaucracies in world capitals. Also, New Delhi shouldn't try to play the big brother and curtail voting rights or choices of the smaller stakeholders. Anyway, the SAARC bank cannot be a runaway success as.......
Can India Achieve Financial Inclusion within the Next Few Years?
........The Finance Minister also put his weight behind the recent financial sector reform design of the Reserve Bank of India (RBI). Connecting every Indian family with the formal financial system within a year is a steep aspiration. And while it might take it little longer, a recent visit to India convinced me that over the past few months, the pieces have come together for India to make huge progress...............
Big Daddy banks will need to bulk up capital
...........A holistic consideration of all the criteria would throw up, as likely candidates for the systemically important tag, the following: State Bank of India, Punjab National Bank, Bank of Baroda, ICICI Bank and HDFC Bank. Foreign banks may not meet the size criterion but the RBI is likely to consider a few of them as systemically important, given their exposure to the derivatives market and specialised services. Citibank and Standard Chartered Bank may fit the bill here. These likely ‘too-big-to-fail’ banks will be required to set aside more capital........
Shield for big banks on way
..........The RBI will follow a two-step process to identify such banks. In the first step, the sample of banks to be assessed for their systemic importance will be decided. This will be followed by a detailed study to fix their scores and rank. Though smaller banks are likely to be excluded, the central bank has said that it will consider a few large foreign banks despite their relatively smaller balance sheet size..........
RBI working on bankruptcy exit system
........“We have a tendency in India that we do not like failures. We think everybody should pass and have distinction. We do not have a culture to accept failures. How to create that? There is a thinking in Reserve Bank, we have been thinking how to create a system so that people should voluntarily withdraw from an unattractive business,” RBI Executive Director B. Mahapatra said in his address on “Managing Stressed Assets” organised by Assocham..........
Fear of gold
.............What’s also worth keeping in mind is that while household physical savings rose from 10.8% of GDP in FY08 to 14.8% in FY13, this was exceeded by the 6.1 percentage point fall in government and corporate savings. In other words, blaming just households is unfair. Equally important, as long as global gold prices were rising, to a peak of $1,744 per troy ounce in the December 2012 quarter, imports kept surging even though import duties were hiked. It is when the global growth picture started improving that gold prices began falling........
Playing His Master’s Voice does not work with Modi
...........However, drawing a similarity between Narendra Modi and Sonia Gandhi on the issue of their ‘common passion’ for gold was possibly the most stupid thing, which both the Reserve Bank Governor Raghuram Rajan and Commerce Secretary Rajeev Kher learnt within weeks after Modi became the PM. Of the two bureaucrats, Rajan was cleverer. On May 20, RBI issued a new guideline for gold import that allowed few select trading houses, in addition to already permitted banks, to procure the precious metal to ‘boost exports.’ RBI’s export-linkage clause, the biggest irritant before gold merchants outside the higher import duty, remained untouched. While Modi was probably happy with Rajan’s half-action that gave an impression of easing import norms in keeping with the new PM’s wishes to please the country’s largest bullion trading and jewelry export community,...........
HPSCB launches RuPay KCC Debit Card
Chief Minister Virbhadra Singh today launched the ATM RuPay KCC Debit Card of Himachal Pradesh State Co-operative Bank (HPSCB) for its customers and the Bank has become the first Co-operative Bank in the country to do so. After launching the ATM card the Chief Minister said that the customers of the State have confidence and faith in the bank and more such branches require to be opened in the far-flung and remote areas of the State to benefit the people living therein........
RBI cancels registration certificate of Dectsche Securities
............."RBI cancels Certificate of Registration of Deutsche Securities India Pvt Ltd (DSIPL)," RBI said in a release. RBI said it cancelled the certificate of registration of the non-banking financial company (NBFCs) for carrying on the business of non-banking financial institution. "Following cancellation of registration certificate, the company cannot transact the business of non-banking financial institution," it added.
YES Bank wanted to remove Kapur as promoter: Counsel
........The counsel said RBI, in a reply to Rana Kapoor, managing director and chief executive officer of YES Bank, in January 2013, had said the regulator would agree to change Kapur's promoter status if two conditions were met. The first condition was that Kapur's shareholding should be brought down to less than five per cent before March 31, 2014; and Kapoor should also bring down his shareholding to less than 10 per cent in the same time period. However...........
Private banks gear up to issue infra bonds
............"In accordance with the recent RBI guidelines on issue of long-term bonds by banks - financing of infrastructure and affordable housing - the board of YES Bank has approved raising Rs 3,000 crore of long-term bonds, and the bank now intends to seek shareholder approval for the same,"............
Wednesday, July 23, 2014
Here's Why Subbarao Will Not Take Up a Finance or Govt Job
TN files highest number of maintainable complaints with Banking Ombudsman
Tamil Nadu has seen the highest number of maintainable complaints filed with the Banking Ombudsman during the year 2013-14, with almost 76% of the complaints filed were maintainable, says U Chiranjeevi, Banking Omudsman, Reserve Bank of India (RBI), Chennai. The area has seen an increase of 21% in terms of complaints against Banks with the Office of the Banking Ombudsman during the year 2013-14, he said. The highest number of complaints were against State Bank of India (SBI) and its associate banks during the period,...........
Politics & economics inter twined
...........Today we have the Board for Financial Supervision and the Board for Payment and Settlement Systems. The Financial Stability Unit conducts macro- prudential surveillance for financial system on an on- going basis.The RBI has evolved as one of the most respected institutions in India with the active support of the Government.This is a very useful and thought- provoking book with articles of a high calibre by outstanding experts in several fields. Space constraint has restricted us from covering all contributors.
Read - FPJ (Book Review by P.P.Ramachandran)
Budget creates confusion about retirement products
...............While there is a mention of ‘Uniform tax treatment for pension fund and mutual fund linked retirement plans’, no one is clear about what he really meant. Put it down to shoddy work by the officials in the finance ministry, who as usual have no truck with the savers and their issues...........
RBI quiz contest
The Reserve Bank of India, Kochi, as part of its initiative in promoting financial literacy, will organise a quiz competition for school students of Ernakulam, Alappuzha, Thrissur and Idukki districts on August 6......
On pensions, it is rank injustice
............“OROP implies that uniform pension be paid to Armed Forces personnel retiring in the same rank with the same length of service, irrespective of their date of retirement, and any future enhancement in the rates of pension to be automatically passed on to past pensioners. This implies bridging the gap between the rate of pensions of the current pensioners and the past pensioners and also future enhancements in the rate of pension to be automatically passed on to the past pensioners.”.........
TReDS to facilitate financing of trade receivables of MSMEs: RBI
........... In its draft guideline on TReDS, RBI said that this will from corporate buyers through multiple financiers. The TReDS will facilitate the discounting of both invoices as well as bills of exchange. Further, as the underlying entities are the same (MSMEs and corporate buyers) the TReDS could deal with both receivables factoring as well as reverse factoring so that higher transaction volumes come into the system and facilitate in better pricing............
Reforms on loan waiver needed
My View on "Contingent liabilities of states a cause for conce...":
The suggestions are worthy of immediate attention by the GoI. It is also desirable to consider either a separate legislation or as part of the overall legislative reform of financial sector, that all the State Governments be barred from either announcing or implementing the write-off of loans issued by the banks for any category. Even Government of India shall indulge in this compulsive act only under extraordinary circumstances of severe natural calamities affecting various parts of the country from out of a separate Calamity Relief Fund to be set up with participation from the State Governments, NABARD, commercial banks and Insurance Companies. What is uninsurable alone should qualify for such waiver that should be approved by the Parliament. Several State Governments in their annual Budgets should clearly spell out specifically such write-off amounts issued under a guarantee mechanism or public borrowing facility.
- Dr.Yerram Raju
FinMin wants banks to be exempt from CSR spend
............ationalised banks are incorporated under the Nationalised Bank Act. Though it is not clear if public-sector banks also need to spend on CSR activities - Reserve Bank of India laws allow them to make donations - the finance ministry wants all banks to be exempted from the stipulation for now. If the corporate affairs ministry agrees to the request, it will be a big relief for banks, particularly the public-sector ones. The move comes at a time when the government is constrained in infusing capital.............
NRI woman gypped of Rs.4.97L by cyber crook
.......The caller claimed to be a bank official and told the victim that she hadn’t been operating her bank account regularly and that the bank was contemplating closing her account if she didn’t want to operate it. “The woman said she would not want to get her account deactivated, after which the caller asked for her net-banking details for verification. The unsuspecting woman then gave her net-banking details to the caller, believing him to be a bank official. After the phone call, the woman received an alert from the bank, informing her of a transfer of Rs4.97 lakh from her account,”..........
Seven reasons why TDS provisions are draconian & flawed
The citizens of this country are punished due to some draconian provisions in the Income Tax (I-T) Act, Rules and notifications. They could even be taken for a ride about the constitutional legality of tax deducted at source (TDS). Harassment because of TDSprovisions began under the Congress-led government but nobody has bothered to listen to the woes of lakhs of taxpayers. Here are some thoughts on behalf of tortured taxpayers, for consideration by a government that has promised Achche Din for all of us............
Infra bond norms a plus for Indian banks: Moodys
..............The new regulations are also expected to foster an improvement of banks' competitive positioning vis-Ã -vis housing finance and infrastructure finance companies. Moody's said banks' lower cost of funding allows them to be much more competitive on pricing. This is especially relevant for basic mortgages, where price competition is already intense, forcing housing finance companies to operate with thin margins..........
India and Canada should collaborate on global monetary reform
........In April, RBI Governor Raghuram Rajan joined other emerging-market leaders in a call for better international monetary policy coordination and centralization of liquidity swaps at the IMF. A short-term liquidity facility at the Fund would be cheaper, more widely shared, and easier to monitor than the growing welter of bilateral swaps. It would also make rapid access to liquidity in times of crisis more equitable. But the US shut the idea down, just as it did in 2011. In the face of the US intransigence on both swaps and the reform of voting rights in the IMF, India seems to be throwing in the towel. The Reserve Bank of India (RBI) recently upped its swap line with the Bank of Japan from $15bn to $50bn and India will be part of the $100bn framework of currency swaps announced last week under the BRICS's Contingent Reserve Arrangement (CRA). .............
RBI relaxes norms for loans against gold ornaments
..........."Banks, as per their Board approved policy, may decide upon the ceiling with regard to the quantum of loans that may be granted against the pledge of gold jewellery and ornaments for non-agricultural end uses," RBI said in a notification. The apex bank said it has received representations from banks requesting to increase the prescribed ceiling and to review other conditions applicable for loans against pledge of gold ornaments and jewellery, where both interest and principal are payable at maturity...........
Inflation: the war is still on
...........There will undoubtedly be pressure on the Reserve Bank of India (RBI) to reduce interest rates if inflation continues to decline. Indian companies with too much debt in their balance sheets will likely be at the forefront of these demands. Yet, it should be remembered that India still has very high inflation. A sustainable economic revival is not possible unless inflation is much lower than its current level. RBI governor Raghuram Rajan is absolutely correct when he says that there is no trade-off between inflation and growth at this juncture. (More technically, the sacrifice ratio is zero right now because the function charting inflation and growth is convex rather than a straight line.) It is heartening that finance minister Arun Jaitley has implicitly endorsed this view in his early statements.............
WhatsApp users in the country have started a campaign asking people to boycott onions and tomatoes for a week to 10 days to bring down prices. Tomato prices have doubled to Rs 80/kg after supply in the state went down following a disease in the plants. Even Himachal Pradesh has cut down on supplies, following heavy rains. Onions are currently retailing at Rs 30-40/kg. But it is expected to go up. The campaign is likely to add chillies to its list as prices have soared to Rs 90/kg. Word about the no “onion & tomato” week (from July 22-30) has been spreading like wildfire........
We hope to see some softening in rates by end of calendar year: Shikha Sharma
Shikha Sharma, managing director and chief executive officer of Axis Bank, said that corporate loan demand still remains weak, even though retail demand has held steady. Sharma expects a pick-up in loan offtake by the end of the year and also expects interest rates to start softening slowly. Edited excerpts:
Curb inflation through competition reforms
...............Competition reforms can help growth, improve governance and check unnatural inflation, at least in the medium term. Unnatural inflation mostly occurs when there are supply side constraints, which the Reserve Bank of India has also flagged. These constraints are due to various reasons, including entry barriers or lack of enforcement. Incumbents create artificial entry barriers to curb competition, which goes hand in hand with governance deficit.............
IIT, IIM grads among 27,000 applicants for 15 Bandhan posts
............“We expected this kind of response to our advertisement. One of the criteria for these jobs will be candidates’ willingness to align with the Bandhan philosophy: Working with the poor. We need people from different strata. So, while highly qualified professionals are needed, so are plain graduates,”.............
Banks Preparing for the Future Usher in A Tech-Tonic Change
.....What scores of banks and bank nationalisation could not achieve in the past four decades -financial inclusion -may become a reality considering the way banking is evolving because of technology and smart phones, which are bringing the universe to the palms of people in remote villages. That is good news for both banks and their customers. It improves profitability for the financial intermediary and makes banking hassle-free for customers. They will no longer have to wait in long queues and maintain files of bank documents..........
Ration card's out, bank on Aadhaar
.........In a circular dated July 17 addressed to banks, the RBI said that it has revised its “know your customer“ guidelines with the government's prevention of money laundering norms. One of the changes is that the RBI has now specified “officially valid documents“ to be the Aadhaar card, voter ID card, permanent account number (PAN) card, driving licence, passport, or the NREGA card. The list is identical to the earlier list except for one change. The earlier definition also included “any other document as may be required by the banking company or financial institution or intermediary“. This has now been replaced with “any document notified by the central government“............
Read - TOI
Financial inclusion again
.........What makes the planned financial inclusion move all the more curious is that the government has publicly stated it plans to work on giving more autonomy to banks. It would be interesting to know how bank boards feel about opening so many new accounts and with the kind of overdraft facilities being talked about.
Indian Banking Comes a Full Circle – No Model Is Right Model
..........How is that in a matter of few months that the regulator buys two different arguments, and grants the opposite wishes? Is the regulator framing policies for the industry, or individual cases determine what the policy is? The irony is that this is not the first time that the Indian financial sector is undergoing gender reassignment, but the second time in less than two decades. In the 90s, .............
45 years of Bank Nationaliastion in India
........On the 45th anniversary All India Bank Officers Confederation celebrated the day and said that with nationalization, the priorities of the banking sector changed from ‘Class Banking’ to ‘Mass Banking’. ’The functioning has progressed from manual operations to sophisticated technology. The social banking in our country has not only passed the test of time but also exceeded the expectations. They withstood the global collapse of many big banks in 2007 and our economy was cushioned from crumbling because of the public sector character of our Banks.................
'Post offices can boost financial inclusion'
.............. “There is a need to create financial identity in rural and semi-urban areas in order to support and strengthen financial inclusion. This can be achieved by promoting financial literacy; and, the post office can easily access this base.” He said the presence of post offices in rural areas is a major asset that can be used to attain financial inclusion. He proposed that the banking system..........
After opening doors to differentiated banks, RBI now reviews Islamic banking norms
The Reserve Bank of India (RBI) has begun the process of reviewing regulations on Islamic banking in India. The central bank has set up an internal committee to examine the matter, according to two persons familiar with the development, who spoke on condition of anonymity. Islamic banking, practiced in some countries, especially in the Middle East, follows Shariah law. The model differs from conventional banking on.....
Policy changes boost confidence in Indian banks
.....Policymakers are stepping up efforts to make lenders more resilient after the Reserve Bank of India warned of increased risks to their stability last month. The return on equity of local banks, a gauge of profitability, fell to 9.6 per cent as of March 31, the lowest since at least 2002, the RBI said in a June 26 report. Earnings shrank as economic growth near a decade-low curbed lending and led to higher provisions for bad loans. Under the new rules for long-term debt offerings, banks may.........
Payments banks for Rs.10 deposit
.............Some people call it an example of genuine liberation and reform, something that has the potential to unlock the value at the bottom of the pyramid. Other RBI watchers are happily stunned at the guidelines—this is as drastic as not launching a Mars rocket, but putting a man there! But the pushback from old banks has begun: the most-repeated argument is that these banks will not be viable, they will fail, the economics doesn’t work. In the candid voice of an old industry veteran in finance: bar one or two, most other existing banks are not really “in the money”. It’s not as if they know how to stay solvent themselves that they can push back on payments banks. In fact, this is a win-all. The new banks will force the old ones to get more efficient and get over lazy banking...................
Small, payments banks in the making
...................“We find it as a progressive move by RBI. With payments banks coming in, you will see innovations and consumers will benefit in terms of every day transactions. Remittance will become simpler and convenient. It will also open doors to sell spot loan products to the unbanked population,”...................
Six mega banks to be under RBI watch
About four to six banks may be designated as domestic systemically important banks (D-SIBs) under various buckets, the RBI said on Tuesday as it unveiled the framework for identifying systemically important banks. D-SIBs will also be subjected to differentiated supervisory requirements and higher intensity of supervision based on the risks they pose to the financial system the RBI said...........
Local area banks hopeful on RBI move
...........There are four LABs in the country which are functioning satisfactorily, said the banking regulator. However these are not considered scheduled banks, a hindrance for them in getting certain benefits. "One of the advantages of getting a scheduled bank status is that smaller loans are covered under the credit guarantee scheme. We, the LABs, are not eligible for this," said T Eswara Chandra Rao, managing director of Coastal Bank, an LAB licenced by RBI in 1999...........
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