UK Sinha to succeed Bhave at SEBI

Senior bureaucrat and chairman of UTI Asset Management Co. Ltd U.K. Sinha will become the next chairman of the Securities and Exchange Board of India (Sebi). A Central government panel headed by cabinet secretary K.M. Chandrasekhar has chosen Sinha from a list of candidates including senior bankers and bureaucrats, according to three persons familiar with the development. A formal announcement by the government is expected in January. Sinha, who will assume office in the third week of February, declined comment.

Banking on a new era for micro lending

CHANDRA Shekhar Ghosh, the founder-chairman of Bandhan Financial Services, is waging a lone battle against the entry of private equity funds in the country’s microfinance sector. He has so far managed to keep the nineyear-old Bandhan, now the country’s fourth-largest microfinance institution by assets, free from the grips of private equity players despite the pressure of having to mobilise resources to fund its growth. Foreign private equities come in droves to encash the prospect of the booming local MFI sector. Many feel it becomes difficult for MFIs to keep the all-inclusive interest rates below 24% a year, once private money spinners fund them for returns as high as 25-30%. Even RBI is uncomfortable with private equities ruling the roost, but then for most large MFIs, it was rather easier to get private money from abroad than arranging funds from government agencies like SIDBI.

Now, village gets mobile banking service

Mobile banking services which was being concentrated in the urban areas of Karnataka till now, is being extended to rural areas also, taking rural masses towards economic empowerment.  For the first time in the state, the Reserve Bank of India has extended its mobile banking services to Harwada village in Ankola taluk through the Syndicate Bank. Harwada is mainly dominated by the fishermen community and all its 1,200 families residing in this village can avail the banking service. With this facility, the villagers of Harwada have become customers of Syndicate Bank, said bank officials.

RBI may get to oversee banks’ related outfits

THE government plans to empower the Reserve Bank of India (RBI) to allow it to inspect related arms of banks such as mutual funds and insurance companies to ensure their operations do not pose any systemic risk to the lenders.   The finance ministry plans to incorporate new provisions in amendments to a banking legislation to allow the central bank greater regulatory oversight over associate enterprises of banking companies such as mutual funds, insurance and factoring operations, said a senior official in the ministry.  The ministry plans to seek the approval of the cabinet this month for changes which will be part of the Banking Laws Bill. The official said the proposal seeking to provide more powers of oversight to RBI was taken after an assessment of emerging global regulations, especially in response to the crisis in the global financial markets that involved some systemically important financial institutions, the official said.

Search panel conducts interviews for Sebi chief

A government search panel today held interviews for the post of the Securities and Exchange Board of India (Sebi) chairman, which will fall vacant on February 17 after incumbent C B Bhave’s term ends. Association of Mutual Funds in India’s (Amfi’s) Chairman U K Sinha and Corporate Affairs Secretary R Badyopadhyay are considered front-runners for the post.  The search panel expressed hope that the new chairman would be appointed before the post fell vacant. “The post would fall vacant on February 17, 2011. We would have the successor before that,” said Finance Secretary Ashok Chawla, a part of the panel. Other people in the race include Additional Secretary, Department of Disinvestment, S Pradhan, Madhya Pradesh Principal Secretary G P Singhal and two State Bank of India (SBI) Managing Directors, S K Bhattacharya and RSridharan. Of those selected for the final interview, at least two — SBI Chairman O P Bhatt and Reserve Bank of India (RBI) Deputy Governor K C Chakrabarty — expressed their unwillingness for the position, sources said. The panel headed by Cabinet Secretary K M Chandrasekhar includes Financial Services Secretary R Gopalan and Department of Personnel Secretary Shantanu Consul.

Safeguard regulatory autonomy, Bhave says

RBI road map for rural banking

RBI Deputy Governor Subir Gokarn at Parakuchi village in Kamrup district on Sunday.

Guwahati, Dec. 12: The Reserve Bank of India (RBI) has drawn a road map to bring 2,327 villages in Assam with a population of over 2,000 under the banking system. The exercise would be completed by March 2012. RBI deputy governor Subir Gokarn said the RBI was committed to bring banks closer to people and was taking all steps to do the needful. Gokarn’s first visit to Assam brought him to Parakuchi village, 40km from Guwahati, in Kamrup district to inaugurate a financial outreach camp.  On the issue of directing private banks to set up facilities in rural areas, Gokarn said they could not direct the banks as there was always a question of viability. “If it is viable, they will come,” he said

Microfin pioneer Yunus lashes out at Indian outfits

BANGLADESHI microfinance pioneer Muhammad Yunus on Sunday attacked companies for “misusing and abusing” his original concept of helping the poor via small loans, after a backlash against profit-making lenders.   Mr Yunus admitted the reputation of microcredit had been tarnished by Indian commercial companies that charge high interest rates and use heavy-handed tactics to collect repayments.

Bimal Jalan Committee Report on stock exchanges sparks debate

The Bimal Jalan Committee report on stock exchanges is a good report and well-argued though the committee may have erred on the side of caution," Rajesh Chakrabarti, assistant professor ­finance,ISB,observed on Friday . Kicking off a panel discussion on the report held in the city,  Chakrabarti pointed out that the 5% cap, the maximum stake that individuals and corporations can hold in an exchange, was the rule in many countries. He also argued that stability and not mindless competition was more important. Competition, he said, could be sub-optimal and "haven't really done too much on Wall Street". An exchange chief's role was to bring ininvestors to trade at one place and increasing the number of exchanges could lead to greater fragmentation.

May increase rates if inflation doesn’t come within RBI’s comfort zone: Chakrabarty

With inflation still looming large, Reserve Bank of India (RBI) Deputy Governor K C Chakrabarty today hinted the central bank was open to another increase in key policy rates.  During the previous policy review, Governor D Subbarao had indicated the chances of another rate increase were relatively low as inflation was moderate.  “The governor said it might not be necessary. That does not mean if there is a pause you cannot do it (raise rates). If it needs to be done, it can be done; that is his choice,” Chakrabarty said when asked if RBI was open to raising rates despite the pause indication in the November policy.  An accommodative monetary policy was not required at present due to the high growth rate, Chakrabarty said, on the sidelines of a Confederation of Indian Industry event at Kolkata today.

Release the Bhagat Singh coin series, appeals NGO

Chandigarh, Dec 10 – An NGO working to propagate the ideology of freedom fighter Bhagat Singh Friday appealed to Prime Minister Manmohan Singh to release of the currency coins commemorating the martyr. Members of All India Shaheed Bhagat Singh Brigade charged the central government with ‘unnecessarily delaying’ the circulation of these coins that were   minted in the denomination of Rs.100 and Rs. 5. In 2007, the government had announced to issue coins bearing the image of Shaheed-e-azam (great martyr) Bhagat Singh. We have checked with the Reserve Bank of India and found the coins were made in 2008 but till date, the authorities concerned have not given the green signal to bring these out in public,’ organisation chief Yadvinder Singh told reporters

SEBI calls for provisions to protect autonomy

The capital market regulator has sought provisions to ensure the autonomy of regulatory bodies. “It is imperative to make sure there are adequate supportive provisions in the laws and rules to maintain the autonomous character of these institutions,” said C B Bhave, chairman, Securities & Exchange Board of India (Sebi). Bhave’s statement comes close on the heels of a stand-off between the Reserve Bank of India (RBI) and ministry of finance on the issue of autonomy. Early this year, the central bank objected to an ordinance that gave a committee headed by the finance minister overriding powers in the event of inter-regulatory disputes

RBI to convene meet on microfinance institutions issue

The Reserve Bank of India (RBI) will convene a meeting of banks to gauge their stand in relation to microfinance institutions (MFIs) in the interim period between the submission of the Malegam committee report and its study by the bank. RBI Governor Duvvuri Subbarao told mediapersons here Thursday that the meeting might be held in the next two weeks though the final decision is yet to be taken.

Banking licence norms by Jan

RBI will be ready with its draft guidelines on new banking licences by January, governor D Subbarao said on Thursday. It will put a gist of feedback received on the new licence issue in its website shortly. The RBI central board has on Thursday discussed issues like initial capital for new banks and their likely business model, and how would the promoters capital be diluted after initial years. We received a broad spectrum of feedback and there is no clear-cut opinion one way or the other, Mr Subbarao said

RBI wants ideas on savings rate freeing

Reserve Bank of India governor D Subbarao today said the central bank was unsure about the impact if savings rates were deregulated and if it would make interest rates unstable. We will bring out a discussion paper soon on the (subject) and want banks to give suggestions on it,” he said. The central bank’s mid-term policy review had said the discussion paper would delineate the pros and cons of deregulating the savings deposit rates, which had remained unchanged at 3.5 per cent per annum since March 1, 2003. “There is a chance that once it comes, banks will abandon low-income household services. If interest rates go down, it will affect small savers and if it goes up, it may impact the costs of banks. We are not clear about its outcome,” Subbarao said. Adding: “If we talk about the positives, it may give additional flexibility for banks; they can come up with innovative products. Moreover, if interest rates go up, it will attract more savings and the apex bank will have a better idea of monetary policy transmission.”

INFLATION STILL ABOVE RBI’s COMFORT ZONE: SUBBARAO

Reserve Bank of India (RBI) Governor Duvvuri Subbarao today said inflation was still above the central bank’s tolerance level and it would revisit the gross domestic product (GDP) growth numbers in its quarterly policy in January.  RBI had earlier projected that the economy would grow 8.5 per cent in the financial year ending March 2011. “Inflation is coming down, but is still above RBI’s tolerance level. On the other hand, the growth is encouraging. RBI will revisit the growth numbers in its third quarter review,” Subbarao told reporters after a meeting with West Bengal Chief Minister Buddhadeb Bhattacharjee

Inflation expected to reduce

The central bank’s deputy governor, Subir Gokarn, today said inflation was expected to reduce in the coming months. And, that liquidity was a concern. “Though a crisis still prevails internationally, in the domestic front things are hopeful, as the GDP and IIP numbers were good in the second quarter. The most important thing is that overall inflation is showing signs of decline. Though some food items are still under pressure, even food inflation is expected to be down,” he said.

Microsoft introduces tracking protection on Internet Explorer

As the debate continues about a potential privacy system that would allow con- sumers to opt out of having their data collected online, Mi- crosoft Corp. on Tuesday an nounced a feature for the new- est version of Internet Explorer that would permit users to stop certain websites from tracking them. The feature, which will exist in Internet Explorer 9, avail- able next year, will let users limit the ability of third-party companies to track them on- line. The announcement comes less than a week after the Federal Trade Commission (FTC) advocated a “do not track“ mechanism that could be built into a browser and alert websites that a user did not want to be monitored.

Diesel, petrol price hike looming

With inflation worries easing, the minsterial panel on fuels could raise diesel prices by Rs 1-2 a litre next week in a bid to reduce losses of state-run oilmarketers and boost investor confidence ahead of a follow-on public offer from market leader IndianOil.

RBI to issue coins to commemorate Mother Teresa

The Reserve Bank of India (RBI) today said it would issue new Rs5 coins to commemorate the birth centenary of Nobel laureate Mother Teresa. "The Reserve Bank of India will shortly put into circulation coins of Rs5 with the theme, Birth Centenary of Mother Teresa," RBI said in a statement. The coins commemorating the founder of the Missionaries of Charity would be circular in shape and have a diameter of 23 millimeter, it added. Mother Teresa was born as Agnes Gonxha Bojaxhiu on August 26, 1910, in present-day Skopje in the Republic of Macedonia. Besides, the existing Rs5 coins will continue to be in circulation.