...........Rajan drew attention to the Nachiket Mor committee on priority sector lending. “These are necessary changes in the system and should not be seen as tied to the monetary cycles,” he added. Banks have been asking the RBI to bring down pre-emptions such as SLR and do away with CRR or bring it down to below 3 per cent. The RBI governor admitted that the reduction in SLR would not make a significant impact as banks would continue carrying excess SLR for the “foreseeable future”.............
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.
Thursday, August 7, 2014
Not by small banks alone
............In his report on the financial sector in 2008, Rajan said the LABs not only served the un-banked segments in rural/semi-urban areas, but were also profitable. Therefore, the RBI’s latest guidelines on small banks can only be taken as a serious second attempt to establish and popularise the concept. Against this backdrop, the key question is whether small, local banks obviate the need for other kinds of private borrowing and/or lending institutions such as, for example, nonbanking financial companies (NBFCs) focused on the micro/small business segment and low income households?.........
RBI’s STPI Notification Circular A Death Knell For Indian IT Startups and SMEs?
.......Prior to this regulation, the software companies enjoyed a tax holiday schemes so they registered under STPI. But eventually when the tax holiday blanket was ripped off, the normal tax norms applied due to which many new startup tech companies chose not to register with STPI. Now due to this circular, the exporter or the tech companies must get registered with STPI to resume exporting. The circular is sure to cremate the IT startups and Small & Medium Enterprises if the government doesn’t take the hint. The repercussions of this circular have been poorly evaluated by the government. The issues that have propped up since the issuance of the circular are as follows......
Govt explores FMC-Sebi merger in reforms push
................The move shows the Centre's willingness to go ahead with the proposed changes, despite the concerns expressed by the Reserve Bank of India over dilution of its powers, something that was even articulated by central bank governor Raghuram Rajan. “A student can't be deciding what the syllabus is. Similarly , the RBI can't decide what it wants to do, that's a decision that has to be taken by the executive and legislated by Parlia ment,“ said a source familiar with the development.............
Kamalakar condemns RBI Governor Raghuram Rajan for opposing loan waiver by the Telangana Government
......... Telangana Congress spokesperson and former MLC B Kamalakar on Wednesday questioned the authority of RBI Governor Raghuram Rajan to oppose waiver of farm loans by the Telangana Government. Speaking to media persons at Gandhi Bhavan here, Kamalakar claimed that during UPA's rule, the RBI was not given so much of freedom to openly oppose the decisions taken by an elected government. He alleged that the RBI Governor's statement was issued ...........
RBI, Sebi to dry up funds for defaulters
........Rajan's efforts are aimed at preventing large borrowers from gaming the system by playing one lender against the other and by resorting to litigation to frustrate bank attempts at recovery of bad loans. Earlier this year, RBI put in place a system where banks got together to take action against borrowers who defaulted from paying to one lender. “We are working with Sebi in trying to ensure that wilful defaulters are prevented from accessing all kinds of funds and not just banking funds,“ Rajan said,...........
Read - TOI
Lok Sabha passes Sebi Bill to tackle ponzi schemes
..............The new law will empower investigators of Securities and Exchange Board of India (Sebi) to conduct search and seek information from suspected entities, both within and outside the country. However, as a safeguard, any search operation can be conducted only after approval of a designated court in Mumbai, where Sebi headquarters is based..............
Draft norms for small banks fail to cheer urban co-op banks
............any scheduled urban banks are raring to convert themselves into universal commercial banks. In fact, they are awaiting for a word from the banking regulator about the framework for conversion and the road ahead. Large banks such as Saraswat Bank and Shamrao Vithal Cooperative Bank have been preparing themselves for such an eventuality. Recently, Shamrao Vithal changed its logo to position itself as a savvy bank ready for competition. Its board of directors has informally discussed plans to convert to a private commercial bank.............
Syndicate Bank brass in damage control
...........Anjaneya Prasad, the senior-most executive director, had an interaction with regional managers through video conferencing, to convey that business will run as usual. "The message going down the line is, avoid loose talk. Speak to customers based on facts and focus on transacting the business,".......
Modi’s Financial Inclusion Plan
.........The idea offinancial inclusion is not new—it has been the buzzword at the Reserve Bank of India (RBI) since 2005, but without much success. In fact, several thousand new bank accounts, opened under pressure from RBI, remained dormant or did not have a single transaction. Why will it be different this time?
Banks to ensure minimum remuneration to BCs
............"With no further income coming to them after being paid a one-time remuneration for opening individual accounts, at least 45,000 BCs completely went untraceable by the banks. Unless the job of the BCs are made somewhat viable, the whole plan of taking the banking services to the unbanked areas will not take off," ........
What All Women Need to Know about Money
.................Many women also tend to give up their savings for financial emergencies in the family, which leaves them vulnerable and dependent. In this regard, the condition of working women is no better than homemakers, especially those who opt out of careers due to family responsibilities. Ms Dalal advised how women should start preparing in a manner that sustains them over decades. She enlightened them about insurance, wills and nominations.............
ICICI Bank launches special travel card for student going abroad
.............“The card offers both students and parents a convenient, safe and hassle-free way to manage their education-related expenses abroad. While it helps the students pay for expenses such as application fee, university admission and other course-related fees, hostel fee and day-to-day living expenses, their parents can reload the card from India. Also, the card allows withdrawal from ATMs across the globe in local currency,” ........
Wednesday, August 6, 2014
Why Rajan deserves AAA for a non-event policy - Latha Venkatesh
Interest rates unchanged: Raghuram Rajan vows to fight inflation to the finish
Inflation Warrior Rajan Refuses to Drop Rate Guard
.......The RBI policy is pragmatic given the macro-economic environment, said Chanda Kochhar, managing director and CEO, ICICI Bank. “The monetary policy statement is a reflection of RBI's continued commitment towards containing infla tion,“ she said. “The policy acknowledges the gradual improvement in economic conditions and the government's commitment to fiscal consolidation. The reduction in the statutory liquidity ratio is a welcome step as it would make more lendable resources available for various sectors of the economy .“
Read - ET
Walking together
Jaitley welcomes Rajan statement on rates' easing
Responding to Reserve Bank of India (RBI) governor Raghuram Rajan's statement that the central bank will not keep interest rates high longer than warranted if disinflation persisted, Finance Minister Arun Jaitley said the latter process had already begun. "Going forward, RBI should examine the liquidity situation, inflation and growth in setting policy rates," the finance minister said. In a statement posted on his Facebook page, he said the recent data showed inflation was moderating...........
Governor Rajan maintains wait and watch approach
.............Interestingly, the statement does signal that RBI will be keeping a close watch on the global economic scenario, especially the actions of the US Federal Reserve. With strong GDP numbers and greater employment creation in the US, there is a high probability of the Fed recalibrating its monetary policy. Such a policy move could have implications for global capital flows, especially to emerging markets such as India.
RBI governor Raghuram Rajan adds Rs 40,000 crore to banks lending corpus
Reserve Bank of India governor Raghuram Rajan on Tuesday added nearly Rs 40,000 crore to the banking sectors lendable resources by reducing the statutory liquidity ratio by 50 basis points to 22% even as he kept other key policy rates unchanged....
Inside RBI’s GDP survey
................“The net response on future spending increased and witnessed positive sentiments for the first time in the last four rounds of surveys, as more than one third of respondents reported increase in future spending. During the current round, about 25-30% of respondents felt that it was a good time for making outlays for big-ticket purchases such as house, durable goods and gold. Less than 20% of the respondents felt that it was the right time for purchasing motor vehicle,”............
India no longer a problem economy: Rajan
..............Rajan also said formation of a stable government at the Centre has strengthened the country's position among overseas investors. "Political stability to my mind is worth a tremendous amount, as far as the external situation goes and that is a big change," the Governor said, adding both the government and RBI have together tried and improved the macro fundamentals..........
Hawkish policy
.........The question is whether inflation will remain benign or, as growth picks up, it too will begin rising. Which is why, as RBI puts it, ‘while inflation at around 8 per cent in early 2015 seems likely, it is critical that the disinflationary process is sustained over the medium term’. And, of its 6% CPI target for January 2016, RBI says the risks ‘are still to the upside’. Indeed, which is why RBI Governor said he was trying to lift impediments on the supply side...........
PSU banks' governance needs a re-look, says RBI Governor
...."I would like to suggest to look at the governance of the public sector banks and understand the deficiency there and try and improve it. There are lots of highly qualified and reputable people working in public sector banks," ........
'RBI could have leveraged abating inflation to cut rates'
.........."At a time when industrial growth continues to be sluggish, CPI-based inflation is moderating and above all, inflation risks are gradually abating due to improvement in monsoon conditions, the RBI could have taken this opportunity to effect a cut in interest rates," .............
RBI monetary policy: Save now to spend later
..........“Though a straightforward rate cut is unlikely for the next quarter or so, RBI is taking long-term measures for improving the credit market. When rate cuts do happen eventually, all these factors will come into play and are likely to initiate a new cycle in interest rates,”.......
Monetary policy review: RBI switches to a neutral stance
..............On balance, the stance on the policy has turned neutral, with risks to inflation increasing since the June policy. This neutral stance can persist, as long as uncertainty around various inflationary pressures remains. A key operational issue which needs to be addressed going forward, is the heightened volatility in the overnight rates in the inter-bank market, within the repo and marginal standing facility rates corridor. RBI aims to develop ..................
RBI signal in policy review: Forget rate cut this year
.......... “The idea behind the SLR cut is, if the government finances are improving and the government is on a fiscal-consolidation path, we can afford to liberate more access to government financing and make it possible for the private and public-sector firms to get access to that financing,” .......
RBI shifts inflation goalpost to Jan 2016
Reserve Bank of India (RBI) governor Raghuram Rajan has managed to divide economists yet again. While nobody was expecting RBI to cut rates on Tuesday, the stance was expected to be more accommodative. RBI's 'balanced' commentary has left enough room for interpretation. The two key takeaways from the current policy statement would be: ..........
Policy rate cuts—What, how?
...........One could argue that RBI would resist using monetary accommodation and deploy credit availability and liquidity-supportive measures till the medium-term inflation target is achieved. While RBI has been adopting this strategy since April 2014, frictional stress in money markets persists and credit offtake remains lacklustre despite initial signs of a turnaround in the economy. It’s not surprising that .............
Steady as she goes: Sonal Varma
............In this backdrop, the forward guidance suggests that while RBI is relatively confident of meeting the eight per cent inflation target by January 2015, it sees upside risks to the six per cent CPI target by January 2016 i.e. it is in no rush to cut rates.........
As RBI Fights it, MPs Unaware of Inflation
Here's a lesson in economics. Lalita-ji goes to the local mandi with Rs. 80 in her purse. What can she get? 1 kg of tomatoes. Jaya-ji goes to the canteen where she works, also with Rs. 80 in her purse. What can she get? A bowl of tomato soup with a slice of bread (Rs 8), fried fish and chips (Rs 25), a chicken sandwich (Rs 6), fresh fruit juice (Rs 14), fruit salad with cream (Rs 14), pudding (Rs. 12) and still have one rupee left over, which could presumably be used to tip the server. Welcome to the land where time seems to have stood still, at least as far as inflation is concerned -the Houses of Parliament...........
Read - ET
Read - ET
Banking on facts
.......The bank nationalisation of 1969 was an overnight decision of a single individual (incidentally, a non-expert on the subject) against the expert advice of the then Reserve Bank of India Governor L K Jha, and that too without any rationale. The only reason for the decision, narrated to a friend years later by the august personality who took it was: "They (my political adversaries) drove me to the wall and left me with no other option," (vide RBI History Vol 3 p.53).
RBI’s Own ‘Financial Inclusion’
While RBI is gearing up to play a key role in the grand plan to bring 150 million households into the formal financial system, RBI employees have obtained a nice fat ‘financial inclusion’ of their own.............
Grievance about Grievance Mechanism - A.Chandramouliswaran
I have read with interest Dr TVG's experience with ICICI bank published in 'MoneyLife' and reproduced in VITALINFO. A good number of people have been having such grievances with these banks for a long time and there seems to be no solution in the Indian banking machinery. I share his view that the knowledge of the officials at the operational level (including the Branch Manager) of these high tech banks leaves scope for substantial improvement. They probably do not need this knowledge as they have practically no authority and are worse than post offices. All that they do is to pass on every request received from their customers to their superiors at the controlling/head offices and act as per the instructions received from them. The top officials of these banks before they moved to these banks used to complain about over centralisation in the RBI !! I also agree with TVG that while the Grievance Mechanism has been put in place, it does not really solve your grievances ! I have even experienced that the staff entrusted with dealing with the grievances (I have a suspicion that this work has been outsourced !) do not understand the issues raised and send you irrelevant responses. The tragedy is that when the matter is taken up either with the Ombudsman or with the Customer Service Department at the central office of RBI, the grievance does not get redressed. Some junior officials at the RBI deal with these references in a casual and routine manner. Incidentally, my high tech bank, to my good luck, has no issues in sending me the OTP to my registered email address and to my registered mobile number. I received the OTP thru SMS to my mobile even though I have not opted for International roaming as I am also presently in USA.
- A.Chandramouliswaran
Obituary
I deeply regret to advise you of the demise of Shri.S.Rama Iyer in Andheri, Mumbai on August 4, 2014. He was 91 years old and had served in the Bank for almost 40 years. He was a Comptist in the Exchange Control Department. He is survived by his wife, two sons and a daughter. The elder son and daughter are working in RBI, Mumbai. Rama Iyer was a dedicated, humble man and deeply religious. We pray that his soul rests in peace.
- P.P.Ramachandran
RBI inter-school quiz
..........SS Barik, Regional Director, RBI, Guwahati will be the chief guest of the quiz competition. Pradeep Atmaram, GreyCaps India Pvt Ltd will also attend the programme as the quiz master.......
Students invited for quiz competition on RBI's role, banking
....................."The Reserve Bank of India, New Delhi Office invites students in IX, X, XI and XII of all the schools including government schools, private schools and public schools, to participate in RBIQ 2014, an all-India Inter-School Quiz," RBI said in a release. .........
Income tax: Don’t panic if your return is under taxman's scrutiny
...........An individual need not panic if his case is up for scrutiny and must reply to all queries raised either through a letter or by appearing in person. The tax official can demand salary certificate or Form 16, which gives details of gross salary paid and taxes deducted, rent receipts and rent agreement with the landlord, if any rent exemption is claimed, and bank statements. The TDS certificate in Form 16A must be preserved and produced before the income-tax official. The income-tax department can send the notice within a year from the end of the month in which the assessee filed the return. The notice has a predefined format with the taxpayer’s name, address, Permanent Account Number and the year for which it has been issued,........
Banking Revamp Bill Won't Burn a Hole
............As the late I G Patel mentions in his memoirs, Indira Gandhi summoned him and said, “For political reasons, it has been decided to nationalise the banks. You have to prepare within 24 hours the Bill, a note for the Cabinet and a speech for me to make to the nation on the radio tomorrow evening. Can you do it and make sure there is no leak?“
Read - ET
Waking up to the BRICS
...........Then, there are other questions that will need to be answered in the days ahead. If China is unable to dominate this institution, will it prefer to prioritise investments through its (proposed) Asian Infrastructure Investment Bank? How soon can the central banks of the member countries devise arrangements to act as depository institutions for the NDB? And, how will the NDB raise funds in different countries? What will be the currency or currencies of choice? All important posers which can be addressed if the resolve is unerring...............
`Not even grads, but on bank boards'
You might expect renowned financial or business experts to sit on the boards of banks, but that isn't always true in the case of state-run banks. Petrol pump owners, a Doordarshan anchor, the head of a ladies club, trustees of religious boards and a clutch of small-time politicians are some of the independent directors on boards of public sector banks. The presence of this motley bunch seems to have driven the government to initiate a clean-up............
Read - TOI
Read - TOI
Will India Inc actually bring women on board?
India can become an inspiration for other developing countries if it is able to demonstrate an actual change in the women representation on corporate boards, mandated by the new Companies Act, as well as influence their presence in senior leadership. Amongst the developing economies, where India is the first country with such an Act, China led with an 8% representation of women on boards. Brazil followed close with 6%, and India was at 5% as of 2012. However, these numbers are far lower than the developed countries...........
Read - TOI
Read - TOI
Syndicate Bank case doesn't reflect entire PSB system: Rajan
.................."I think the balance has to be maintained, and we have to be careful that while we do a thorough investigation and culprits are brought to book, it doesn't become a witch-hunt which then stalls the entire credit process. So, we have to be careful and I think that the investigative agencies will do their job appropriately,"...............
Syndicate Bank fiasco: Caution note for PSBs
..........“When the government gets complaints against CMDs of PSBs and confronts them on it, their standard response is that the decision was taken by the credit approval committee. It can’t be collective responsibility. Head of the committee has to be accountable,” the official added. A former RBI governor, however, said the problem cannot be fixed unless the government stops interfering in the functioning of state-owned banks.........
CBI sets up probe against own officers
Central Bureau of Investigation (CBI) has ordered an internal inquiry against its own officers probing the bribery scandal involving Syndicate Bank chairman and managing director S K Jain. The CBI has initiated the latest inquiry against its sleuths for not arresting Neeraj Singhal, vice chairman and managing director of Bhushan Steel, one of the companies that was trying to settle its outstanding loan with a bribe. CBI team had explicit orders from the agency director Ranjit Sinha to arrest Singhal but they decided to let him go after they reached his bungalow in Delhi last Saturday..........
Syndicate Bank's woes
.............With his arrest and the bribery scandal coming to light, the Manipal-headquartered bank, which prides itself as "Faithful. Friendly" will see its credibility take a beating.
Bihar govt not serious about fake chit fund firms
.....Regional Director, Reserve Bank of India (RBI), Patna region, M K Verma told reporters on Monday that the state was yet to have its own registrar of chits (ROC) and, as a consequence, all the 26 chit fund companies of the state are illegal as of now for no fault of theirs, adding that it was the Chit Funds' Act that made it mandatory for every chit fund company to get the state government approval through the ROC concerned. He said the list of chit fund companies was also given by the RBI to the state government officials concerned......
Tuesday, August 5, 2014
Inside Governor Rajan's mind
..............The RBI could have tightened further and then subsequently eased, but it appears to prefer - correctly, in my view - an extended neutral stance. The recent decline in the benchmark 10-year government yield because of the issuance of a new benchmark shouldn't be taken to contain any signal about the RBI's monetary stance. Unlike the June policy statement, Tuesday's review will also be complemented with a media interview with the RBI Governor Raghuram Rajan and his team, and a conference call with analysts. Consequently...........
Strategic reserves
In his first public statement after he took over as governor of the Reserve Bank of India in September 2013, Raghuram Rajan had said India needs to build a bulletproof national balance sheet if it is to withstand global financial shocks. The central bank has since then added nearly $45 billion to its foreign exchange war chest....................
Raghuram Rajan must prepare ground for a post-taper world
RBI governors have no option but to master the art of tightrope-walking. Regardless of what diehard inflation-targeters may say, the reality is central bankers have to strike a careful balance between price stability and growth while framing monetary policy. In that sense, Raghuram Rajan's position as he contemplates his third bimonthly policy statement tomorrow is no different from US Federal Reserve chairman Janet Yellen's. But there the similarity ends.............
Decoding RBI’s inflation dilemma: India may have to wait longer for a rate cut
.........The RBI, during the regime of Duvvuri Subbarao, has all along maintained that the RBI cannot be an inflation targeting central bank unlike those of countries like New Zealand and Chile. Rajan too has maintained the same stance and has refused to admit that he has embraced an inflation target, but in reality, the central bank has quietly moved to inflation targeting already. That’s where the problem lies............
Will RBI cut rates? It should!
.......But there might be a larger reason for Jaitley sticking to the 4.1% deficit target. It is to convince RBI that there is an additional reason to cut rates on August 5, and reason beyond the sharp and stable decline in inflation rates. So, will RBI oblige? The market certainly does not think so.........
Award for IVDP president
............The Award was conferred on Mr. Francis for his contribution in the field of social service since 1979. It carries a trophy, a citation, and a donation of Rs. 5 lakh to a charitable trust/NGO as per the choice of the awardee. Deputy Governor of Reserve Bank of India S.S. Mundra presented the Award to Mr. Francis........
The Emerging Big Picture
......The volume under review has twenty- one contributors out of which eleven are from the R B I family. Out of sixty articles thirty one are by RBI Executives – past and present. This includes four Governors, two Deputy Governors and this invests the book with special authority and importance. In a learned introduction, Dr. Kapila points out how after half a century of zero growth between 1900 and 1950, India grew at 3.5 per cent in the first decade of planned development. In the past two decades the growth rate doubled to 7 per cent. The peak growth was 9.5 per cent during 2005- 2008. However, it slumped to 6.2 per cent in 2011- 12 and further to 5 per cent in 2012- 2013. This could be the rate for 2013- 14............
Jaitley to address boards of RBI, SEBI on Sunday
.............The customary post-Budget meeting of the Finance Minister with the boards of the two regulators on August 10 is taking place against the backdrop of pick up in economic indicators after India posted sub-five percent growth for two fiscals in a row. The Reserve Bank will announce its third bi-monthly monetary policy tomorrow amid expectations that it may cut rates and take other steps to promote industrial activities. Jaitley was earlier scheduled to address the RBI board on Saturday........
Recruitment of ‘Specialist Adviser (Research) in Grade-F’
..........This is a newly created Specialist position for Research purposes. Since this is a leadership position, no further career progression is envisaged in the normal course for the position. Associated benefits are on ‘ín-situ’ basis only..............
Bandhan to hire most staff from rural areas
..............“We work predominantly in the rural areas, so it’s where we would be drawing most of our staff from. Close to 70% of our 57 lakh customers resides there and we wish to continue serving them. The reason is our staff need to have a through understanding of the need, culture and socio-economic environment of the people they would be serving if we wish to meaningfully contribute to our customers. Also, it is difficult to retain staff if we send urban people to work in rural branches thereby creating problem in staff retention while a village folk would be too willing to serve in an urban branch,”........
Bigger or smarter? Why SBI should divest its subsidiaries and not merge them
.........At some point in the future, when policy allows, the SBI should even consider selling its subsidiaries. Even now, it could consider retaining 51 percent and letting a private promoter buy a 10 percent stake and run the show. This way, it would get a bigger value for its stake dilution. Public ownership with privatised management is an idea whose time may have come.
The only argument one can see against SBI selling its subsidiaries is this: it may not want its own former subsidiaries to compete with it. But the point is this: competition is anyway going to grow. So this is not necessarily a great argument. This is the time for all three – the RBI, the government and SBI – to try out new ideas. The old idea of growing big is passé. Big may merely mean fat in future. The thing is to get smarter..........
Reshuffle on Cards for SBI Top Brass
..........State Bank of India is set for a major churn at the top after the government appointed two new managing directors in the bank, opening up the possibility of more down-the-line promotions. But the new government took time to promote B Sriram and VG Kannan as MDs which has delayed the entire process, an SBI official said, refusing to be named.............
The technology that banks use, can land you in trouble - Dr.T.V.Gopalakrishnan
............I think it would be better for the Bank to improve its services for domestic customers first, before it attempts to introduce/ improve its services to customers outside the country. The bank has a system to receive complaints and feedback, and these can be registered at various levels, but the fact remains that the replies are standardised from all levels and the complainants receive the same stereotyped replies. Knowledge of banking is alien to its operational level staff and the human touch and interaction cannot be expected of them......
Five free transactions from third-party ATM likely to come down to two
Saving account holders in the cities might soon have to limit their transaction from third party ATM as the number of free withdrawals is likely to come down to two from five a month, a daily newspaper has reported........
Where are the role models?
........... Does it need to stressed that the top echelons should become role models for the lower hierarchy? The arrest of Syndicate Bank Chairman and Managing Director Sudhir Kumar Jain and his accomplices proves that corruption at higher levels percolates to the lower level, which results in the common man suffering the most. Is it not time these ........
Govt Must Not Name Bank Chiefs
............The government should accept the RBI's suggestion to disassociate itself from the process to name heads of public sector banks, and give the job to an independent panel of experts. Appointments can then be fully delinked from political patron age. Two, the remuneration of public sector bank chiefs should be market linked. Now, their pay is far lower than the private sector, prompting a few to use unscrupulous ways to make money . Also, PSBs cannot attract and retain talent when their competitors pay more. This must change.........
Read - ET
Calling PSU banks to account
................. A scheme is reportedly being prepared, the goal of which will be to ensure that every family in the country has at least two bank accounts and access to a Rs 5,000-overdraft facility. On the face of it, this smacks of the old-style approach of using PSU banks for wider social objectives without regard to profitability. There is no doubt that financial inclusion is an important objective, but to achieve it we must devise strategies that rely less on target-setting and more on facilitating the adoption of technologies and partnerships that can significantly drive down the costs of delivering financial services. Meanwhile, ........
We will release names of bank loan defaulters, says AIBEA
...........Rather than recovering the non-performing assets, the Union Government, and Reserve Bank of India were attempting to cover it up through steps such as adjusting them against profits, and creation of Asset Reconstruction Company, said S. Ganesh, Erode unit general secretary of All India Bank Employees Association here on Saturday....................
How to deal with corrupt bosses of state-owned banks
............Yes, there are bank chiefs who are dishonest. They give loans to those who don’t deserve them and make money cutting such deals. They make money but their banks pay the price. The Reserve Bank of India (RBI) is well aware of this practice. So is the finance ministry. But they don’t openly talk about it as that may shatter public confidence in our banking system, some 70% of which is accounted for by state-owned banks.......................
Arrested Syndicate Bank MD S K Jain suspended
...........‘‘We have suspended him (S K Jain) and two executive directors (EDs) have been given charge of the bank as an interim arrangement,’’ the secretary told PTI. M Anjaneya Prasad and T K Srivastava are the two EDs of the Bangalore-based bank. Jain, along with seven other accused were remanded in CBI custody for four days as the agency plans to probe various other angles into the case that may emerge from the telephonic transcripts of the official and conduits........
Syndicate Bank fiasco: Jain helped hide Rs 100-cr NPAs
..................CBI has also alleged Jain used to negotiate directly with the companies on the bribe amount and once the deal was struck, he used the hawala channel to receive the money, the sources said. They alleged that once the bribe amount was agreed upon, the company used to pay a hawala operator who forwarded the payment to other businessmen who finally made the payment to brother-in laws of Jain in Mumbai; they too have been arrested.............
Putting the poor on the list
..............Finally, a key part of financial inclusion is financial literacy. There could be regular interactive training workshops organised in post offices on financial products suited to the rural sector. This will make take the process of financial inclusion much further with a focus on financial literacy and a reason to visit post offices on a regular basis......
A Rs 75,000-crore loan mela?
.................Recall that, some 15 crore people will be covered by this massive programme. If each one of them gets a Rs 5,000 overdraft, India needs to find Rs 75,000 crore of new money from somewhere to lend to those among the poorest. The government is using the term "overdraft", and not loan. Banks will hold no security against this overdraft. It is surely unfair to expect those who have never had access to bank accounts to put up assets to borrow money. They may deserve an overdraft. But the question is what kind of behaviour will it encourage among borrowers?..........
More resources for the poor
...........where will all this money come from and what is the possibility of fair distribution of money in an inefficient and corruption-prone public sector? There is a need to rethink this financial inclusion plan. This money should be diverted to plans that can fix the severe problem of poverty in India. Although,....
India Post may apply for payments bank licence
........If post offices are converted into banks, they will have to offer competitive interest rates to depositors. Besides it remains to be seen whether all bank deposits are offered tax treatment, similar to post office savings, once the postal department is given a banking licence. While the RBI did not grant a banking licence to India Post earlier this year, it said that the postal department and the government should look at the issue separately...........
Sebi in Touch With RBI Over Wilful Defaulters' Regulation
....."We are in consultation with the Reserve Bank of India for finalising the wilful defaulter regulations," Securities and Exchange Board of India (Sebi) Chairman U K Sinha told reporters on the sidelines of an event at the BSE here. The banking watchdog has reportedly been mulling a ban on capital raising activities by such entities. RBI is devising ways of sharing real time information on such activities with the capital market regulator................
RBI cautions against two firms claiming to be NBFCs
The Reserve Bank of India (RBI) has cautioned general public from depositing money with two firms claiming to be Non-Banking Financial Company (NBFC) despite not receiving requisite Certificate of Registration (CoR), said deputy general manager, RBI, Ahmedabad, in a public notice issued here. The public notice was issued by deputy general manager, RBI, Ahmedabad, on August 2............
NBFCs Guard Their Golden Turf Despite Tough RBI Code
..........It is reckoned that nearly 65 per cent of household gold holdings in rural markets. The reach by the likes of Muthoot Finance, which has over 4,400 branches across the country, will help them to tap this growing market. “RBI’s view to maintain the loan-to-value for bank’s gold loans for non-agricultural end uses is a fair one and it shows that the regulators want to shape up this emerging sector for long term giving level playing field to all players,” ..........
Telangana officials to thrash out loan issues with RBI
.....However, the RBI has written to government that it will agree only for rescheduling of loans taken during last year (2013-14). They also informed that they will consider rescheduling of loans only in 377 mandals that were declared cyclone and drought-affected in 2013. Hence, the 77 mandals that were recently declared Phailin-affected last month will not meet the criterion and will not be considered eligible................
Friday, August 1, 2014
SS Mundra assumes office as RBI Deputy Governor
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| Subhash Sheoratan Mundra |
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