Govt asks IDBI Bank, UBI to plan merger

After years of debate, the government has set the ball rolling on merger of public sector banks, asking IDBI Bank and United Bank of India to prepare a consolidation plan. This is, however, expected to be preceded by State Bank of India taking its subsidiary State Bank of Patiala into its fold..........

Read - TOI

State Bank of Patiala launches CSR initiative for girl child

...................S.A. Ramesh Rangan, Managing Director announced that the Bank will contribute a fixed amount for each opening of new saving, current account and transactions put through electronic or alternative modes of transactions towards fulfilling its social obligations as a responsible corporate citizen. The Bank will contribute Rs 50 each for every current account opened, Rs five for each new savings account and 10 paisa for each transaction on the alternative delivery platform like internet banking, mobile banking, ATM transactions and point of sale. Similarly Rs two each would go to this corpus for every new user of internet and mobile banking. Rangan made this announcement while inaugurating 25 branches in one go through video conferencing .............

Read - FE

Payment banks to be new revenue stream for telcos

............“The move will boost mobile banking services and financial inclusion. 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,”.......

Read | Business Standard

Profitability of PSBs under stress

State-run banks' profitability in the first three months of this financial year have remained under stress. A rise in bad loans, higher provisioning and loss on sale of investments have dragged down their earnings growth. ........

Read | Business Standard

RBI’s questions on farm loans worry state

.............The government will inform the RBI that the farmers have already started cultivation and they need money to continue their agriculture operations. Meanwhile, the RBI is posing questions to its Hyderabad branch to send details with regard to waiver of crop loans. A few days ago RBI had asked its Hyderabad branch to send mandal-wise crop yield in Andhra Pradesh. Now, the RBI has asked the Hyderabad branch to send mandal-wise loan disbursement to the farmers with their account numbers and quantum of loan they have taken, including from co-operative and rural banks.........

Read - Deccan Chronicle

RBI slaps total of ₹1.5-cr penalty on 12 banks in Deccan Chronicle Holdings case

...........“After considering the facts of each case and the individual bank’s reply, as also, the personal submissions etc., by some of the banks before its Committee of Executive Directors, the Reserve Bank came to the conclusion that some of the violations were substantiated and warranted imposition of monetary penalty,”.......

Read - HBL

Govt & banks not doing enough to recover NPAs: Employees’ body

..........."There are no serious efforts to recover the banks' money with the defaulting big corporates. Their assets should be confiscated." "Our data also suggest that R50,000-crore NPAs are related to big borrowers who have borrowed over R10 crore and above. Why are the banks silent over this? This is public money," ...............

Read - FE

The banking safe zone

..................These are some practices that can escape the scrutiny of the Reserve Bank of India. To make sure that banks are really in the safe zone, it would be ideal to factor in the assessment to be given by the banking codes and institutions such as the Insurance Regulatory and Development Authority, Securities and Exchange Board of India and so on.

Red | Business Standard

Small banks may play a bigger role

..........The removal of geographical restrictions will make these banks profitable. Otherwise, making these banks profitable, while restricting its operation to some districts, would be highly challenging in the initial years thus making it quite difficult for the promoter to dilute his stake to 40% within three years and further down to 26% within 12 years as stipulated by RBI's guidelines. Critics argue that...........

The Sunday Guardian

Small banks: lessons from local area banks

...............There are four LABs in the country. They have been performing satisfactorily on most banking parameters, and have achieved deeper penetration without posing systemic risk. Two LABs failed in their early days but that instance was handled effectively. RBI would greatly benefit by reviewing its handling of LABs. Three major aspects need attention: ownership, capital and stability; systemic issues and concentration risks; operational issues of business model, freedom and autonomy...........

Read - Mint

Do we need more banks to push financial inclusion?

................"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, acceptance of demand deposits and remittances of funds," ............

Read - DNA

Differentiated banks: has their time come?

.............There can be no two opinions on the value of these differentiated banks to the Indian financial system. But the key question is how many serious promoters will finally emerge? The business model of Payments Banks may not be attractive enough. These banks can accept current and savings bank deposits but cannot undertake lending activities. After meeting the reserve requirements (CRR and SLR) like any commercial bank, they will have to invest in government securities. The returns in terms of the spread income may not be attractive enough. Although the guidelines do not say so,......

Read - The Hindu

RBI order on 'Small Bank' not ideal for present needs: Samit Ghosh

..............."The solution lies in promoting specialised banks for financial inclusion which can provide directly - savings, loans and remittances, and as third party service provider (insurance and pension). (It is) similar to the 'Small Bank' recommended by the RBI recently but without any geographical restrictions. The restriction should be on occupations such as workers, micro-entrepreneurs and marginal farmers,....

Read | Business Standard

Have money, have bank

..............While small banks will provide a bevy of basic banking products, such as deposit taking and lending, but in a limited area of operation, payments banks will provide acceptance of demand deposits and remittances of funds but will not be allowed to undertake lending activities, the RBI’s draft norms say. “While the initiative of the RBI to come up with multiple models of banking is laudable, one hopes that this round of broad-basing banking system will and push the dream of financial inclusion deeper inside India. Needless to add, previous attempts to increase banking penetration in the last 5 years to achieve this objective has been dismal,” ...........

Read | The Indian Express

SBI, PNB, BoB & BoI preparing blueprint to identify takeover targets

....................The top managements of the four banks are in the process of preparing a blueprint that would explain the rationale for absorbing one or two entities, said the people cited above, none of whom wanted to be named. Employees at these state-run banks are engaged in the exercise after finance minister Arun Jaitley gave the lenders the go-ahead to decide how they would strategise to remain relevant in the emerging economic scenario........... 

Read - ET

What ails foreign banks in India?

............With inflation moving south and economy showing faint signs of recovery, it will be interesting to watch how foreign banks play the growth in Asia’s third largest economy. Some of them may end up paying the price for over aggression and reading the tea leaves wrong............

 Read - Mint

Child plans to make bigger comeback

Child plans are making a bigger comeback in the Indian insurance market, with the trend of buying plans for young children and infants emerging. "We believe this trend is emerging because of increased sensitivity of young parents towards the rising cost of education. For example,........

Read | Business Standard

Deutsche Bank, HSBC accused of silver price manipulation

.............."The extreme level of secrecy creates an environment that is ripe for manipulation," according to the complaint. "Defendants have a strong financial incentive to establish positions in both physical silver and silver derivatives prior to the public release of silver fixing results, allowing them to reap large illegitimate profits."....

Read | Business Standard

Canara Bank launches new products

Canara Bank Chairman and Managing Director R K Dubey on Saturday launched a new set of technology-enabled initiatives like mobile-Wallet, easyCash and P-serve which will provide more flexibility to customers for performing banking transaction through technology channels..........

Read - Deccan Herald

Exim Bank wants RBI to hike leverage ratio

.................“We have been requesting RBI to recognise us as a special case of a development finance institution which helps the country’s interests,” he said, adding it has been requesting for the leverage to be increased to 15 times of the NOF. At present, the bank has to depend on government infusion to increase its capacity to lend, he said, adding that it is expecting an infusion of Rs. 1,300 crore this fiscal from the government............

Read - HBL

Systemically Important Financial Institutions

.........With some changes, RBI has adopted the methodology put forward by the Basel Committee. After assessing banks on indicators such as size and interconnectedness, the central bank will give a score for relative systemic importance. Banks with scores above the cut off, which is to be decided, will be termed as D-SIBs. Such banks will..........

Read - Mint

SEBI chief: Lesser dependence on bank funding key to growth

..............The SEBI Chairman said even as made clear by the RBI Governor, if “we want the country to grow at the pace that we all of us aspire to”, then the “dependence upon bank financing has to come down”. When compared with countries of India’s size or which had grown faster than India, it would show that sources of funding other than bank funding were needed. SEBI’s effort was to tell people to how to do it, he added. Sinha, while cautioning industrialists to apply their mind seriously about entering the capital markets to raise resources, said if entrepreneurs were interested in doing so, it was SEBI’s job to provide the necessary advice/clarifications.........

Read - HBL

Pre-paid forex cards: Money changers told to follow strict due diligence

..................The RBI has issued the above mentioned directive as it has come across cases of some authorised dealers/ full-fledged money changers neither exercising due diligence nor adhering to KYC norms while selling prepaid foreign currency cards (issued by a few select banks) to their customers..........

Read - HBL

Demand for RBI action against sugar company fraud

The former Minister and president of Hyderabad Karnataka Horata Samiti Vaijnath Patil has asked the Reserve Bank of India (RBI) to launch an inquiry into the alleged financial irregularities and fraud by Chincholi Sugars and Bio Industries while raising a loan of Rs. 210 crore from four banks. Releasing a copy of the complaint............

Read - The Hindu

RBI's Khan for freedom to banks for financial inclusion goals

............."The problem is that too much of mandating in financial inclusion programme creates its own distraction...Banks need to be given some kind of freedom to determine their own financial inclusion strategies and pursue their commercial activity,"..............

Read | Business Standard

Ground reality of FinClusion - Dr.T.V.Gopalakrishnan

My View on "Can India Achieve Financial Inclusion within the N...": 

Unless there is a drastic change in the mindset of our banking community and the better off section of the society to come to the rescue of less fortunate and poor segment of the society, Finacial Inclusion can only remain in paper and is tantamount to chasing a mirage. If Millions of bank employees care to bring under banking fold their own servants, baji wallahs, petty service providers like Iron wallhs, carpenters, many can have bank accounts overnight. The ground reality is that our human resources are not mentally attuned to be considerate to our own fellow beings. 

- Dr.T.V.Gopalakrishnan

FinClusion by Aadhar

My View on  "Can India Achieve Financial Inclusion within the N...": 

One year target is asking for too much in too little time. But the financial inclusion could well be achieved by RBI / GoI - by strengthening the Aadhar Cards, Post Office Savings banks and reverting to the British system of Treasuries and Sub-treasuries equipped with hi-tech facilities. Simultaneously, educating and popularising the concept thru print and electronic media and also with the help of retired bankers/central bankers in the locality. Depending on the 'banks' alone would be putting more pressure on them in the present context of work culture and environment. 

- M.A.Srinivasan

Central Bank of Sri Lanka in investment pact with RBI

..........The agreement was signed between RBI Governor Raghuram Rajan and Central Bank of Sri Lanka Governor Ajith Nivard Cabraal on the sidelines of the SAARCFINANCE Governors’ Symposium here, a day ahead of Central Bank Economists’ meeting on the theme ‘Reaping mutual benefits through intra-regional investments of reserves’. Dr. Rajan, who later spoke on capital regulation at the Central Bank, made a case for measured regulation in emerging markets.............

Read - The Hindu

India still faces risk on growth, external front: RBI official

...................Mohanty, who is part of the monetary policy department at RBI, summarised the multi-pronged response by the country on trade, capital flow management, currency intervention and monetary policy fronts. "There is a need to use multiple instruments, including drawdown of foreign exchange reserves, monetary tightening, augmentation of reserves and administrative measures to dampen speculative outflows and encourage inflows to stabilise market conditions," he said. "At the end it is difficult to say what worked and what did not work and how best to sequence these policies; but surely once the pressure abates it is important to reverse extraordinary measures to reinforce market confidence." .........

Read | Business Standard

Sri Lanka, India in mutual forex reserve investment pact

Central Bank of Sri Lanka and the Reserve Bank of India has inked a deal to buy up to 500 million dollars worth of securities in each other's governments, in a bid to diversify reserve assets. "As a result, the CBSL could now access one of the growing securities markets in the world, realising a considerably higher return for the funds invested," Sri Lanka's monetary authority said in a statement. "At the same time, the RBI investments in the Sri Lankan government securities market would lead to greater stability in the Sri Lankan government bond market."................

Read..........

Stable government at centre has mitigated political risk: Deepak Mohanty

.............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...................

Read - Mint

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................

Read - TOI

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.

ITimes

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

My View on  "Money or no Money, Modi's SAARC bank is good idea": 

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."............

Read...........

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".........

Read | Business Standard

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..............

Read | Business Standard

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............

Read - HBL

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 ............

Read | Business Standard

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............

Read - The Telegraph

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,”.....

Read | Business Standard

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........

Read........

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.”..........

Read..........

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 ............

Read | Business Standard

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, ........

Read - FE

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,.............

Read..........

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..............

Read........

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............

Read - HBL

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...................

Read.........

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..........

Read - HBL

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..........

Read - FE

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,...........

Read - Deccan Herald

Dr Subbarao a real hero and a role model - Dr.T.V.Gopalakrishnan

............. He deserved special kudos for his conviction and fight with limited success for RBI's autonomy. He has proved himself a man of great wisdom and by his present approach to decline fabulous job offers he wants to demonstrate that the duties of a public sevant end on attainment of retirement and service to socity starts with the wisdom and experience one acquired as a public Servant. .................

Read........

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......

Read.......

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

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.......

Read - ET

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...............

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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........

Read - HBL

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..........

Read - The Telegraph

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..........

Read - The Hindu

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........

Read - FE

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,...........

Read - The Shillong Times

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........

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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. 

Read - ET

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...........

Read | Business Standard

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,"............

Read | Business Standard

Here's Why Subbarao Will Not Take Up a Finance or Govt Job

...........But Duvvuri Subbarao, the immediate past Governor of the RBI, is steadfast in declining offers from financial services firms, and will not take up anything with the government either. “If I take up anything in financial services, I would be paid disproportionately to what I actually contribute,“ says Subbarao. “I would be paid for my past designations rather than what I do.“ Indeed, Subbarao is leading a different life than many of his peers, though he misses being important these days..........

Read - ET

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,...........

Read | Business Standard