Unique ID will be enough to open account

RBI talking to states on financial literacy – V.S.Das, Executive Director

After Karnataka, the Reserve Bank of India (RBI) is in talks with other state governments to include financial literacy in school curriculum. While Karnataka launched chapters on financial literacy in school syllabus in March 2010, Punjab and Haryana have also agreed to do the same. RBI Executive Director V.S.Das today said the central bank was in talks with Uttar Pradesh, Madhya Pradesh and few other states as well to take financial literacy to school children.

Beware of cyber jobs offering easy money

Beware of people offering commissions for monetary transactions from your bank account. They could be acting on behalf of a terrorist organization and using you as a 'money mule'. The Reserve Bank of India (RBI) has alerted banks and customers about transactions through dormant accounts since this could be a case of the account holder being used as a "money mule" for laundering. "Of late, it has been brought to our notice that money mules can be used to launder the proceeds of fraud by criminals who gain illegal access to deposit accounts by recruiting third parties," said an RBI official. "The third parties may be innocent or they could be complicit in the crimes."

‘BANK ACCESS TO ALL VILLAGES IN 5 YRS’

RBIs outreach programme under financial inclusion would be implemented in villages across India and all people would be covered in the next five years, the apex banks Deputy Governor K C Chakraborty said on Monday. "All the banks have been asked to bring the technology to link up the Unique Identification Number (UIDs)”, he said.

Pune shivers at 6.5 degrees Celsius

Monday Was Decade’s Second Coldest Day - The mercury plunged to 6.5 degrees Celsius on Monday, making it the second lowest temperature for the month of December in the last decade. In 2005, the temperature had gone down to 6.3 degrees. The India Meteorological Department (IMD) here said Pune was colder than Delhi (7.5 degrees Celsius) and even Mahabaleshwar (10.4 degrees Celsius). However, Nashik recorded the lowest temperature at 5.9 degrees Celsius.  Pune experienced its lowest temperature ever in 1968, at 3.3 degrees Celsius.  Over the last five days, the minimum temperature in Pune has reduced by more than five degrees Celsius.Monday’s temperature was more than three degrees less than the average minimum temperature for December — 10 degrees Celsius. The minimum temperature is expected to remain around 7 degrees Celsius over the next two days,said said Medha Khole, Director (Weather Forecasting), IMD, Pune.

Dr.D.Subbarao at Bankers’ Club, Kolkata

Indian Bank to open branch in Jaffna

Indian Bank would soon open a branch in Jaffna in northern Sri Lanka, its second in the island nation, a top bank official said today. The Reserve Bank of India and the Central Bank of Sri Lanka had given their approval for opening the overseas branch of the Chennai-headquartered bank, Indian Bank Executive Director Rajeev Rishi told reporters.

Digital inclusion for rural empowerment

India needs to develop its own model of how to utilize information and communication technology (ICT) to benefit the masses, said Sam Pitroda, adviser to the Prime Minister on public information infrastructure and innovations. “We need to create an Indi- an model of information sys- tem suited to our needs,“ Pitroda said at the 7th Man- than Award South Asia 2010, hosted in New Delhi on Saturday. Organized by the Digital Empowerment Foundation (DEF); One 97, a provider of mobile value-added services; Internet Society; and the Indi- an government's department of information technology (DIT), the theme of the awards this year was “empowering rural masses through wireless, 3G and broadband“. Mint is a strategic partner of The Manthan Awards.

Microfinance: The Worst Kept Secret

The Y.H.Malegam Committee is expected to tour Andhra Pradesh in the next one month, while the Andhra Pradesh Government has passed a bill that formalises the Ordinance that it had promulgated to protect borrowers. Close on the heels Dr.Y.V.Reddy forcefully arguing for strict regulation of the sector, another former Governor of the Reserve Bank of India, Dr.C.Rangarajan, has called for a cap on the margins of the microfinance institutions (after similar demands by the AP Government). He has also called for a complete revamp of the business model of the MFIs. Muhammad Yunus has called for a regulatory agency for the Microfinance sector so as to avoid creating a new set of loan sharks in place of the old loan sharks (moneylenders).The AP government has suggested that the margins should not exceed more than 12-13 over and above their cost of funds - a very reasonable margin considering the fact that the banking sector operates on a Net Interest rate margin of about three percent.  All this comes at a time when it is clear that the MFIs were themselves contemplating a change in their business model - one that would have made them no different from the Non-bank Finance Companies (NBFCs). They were contemplating a shift to monthly repayments ("MFIs shift to monthly repayments", Business Standard, 31 August 2010, p.7). There were a number of MFIs that are already gradually shifting as they have reached a critical mass (volume wise) and their growth can now expand only by making every larger loans to credit worthy customers.

One wonders why we need the MFI sector when we already have a dynamic NBFC sector, as the MFIs are now seem to be keen on evolving a business model that is akin to the NBFC sector. One wonders why there is a need to subsidise the MFIs when they are no different from NBFCs. Level playing field  and transparency of government actions has been one of the important claims and the supposed underlying logic in the aftermath of liberalisation. If the government can subsidise the MFI sector, then it is high time they do the same to NBFCs. After all, what is the difference between the two: both are keen on overcharging borrowers, even if they it is usurious rates, and NBFCs too are very keen to attract private equity and list shares on the stock exchanges. This probably the reason why former governors of RBI seem to believe there is a need for the MFIs to change their business model.

UNDER PRESSURE - LPG cylinder may leave your wallet lighter by 100

Oil Ministry Weighs Hike Of 50-100 After 66% Rise In International Price Of LPG -  The oil ministry plans to raise cooking gas prices by 50-100 per cylinder as the international price of liquefied petroleum gas has jumped by almost 66% since August. The rise in global prices is hurting state-run oil firms as India imports 3 million tonnes of LPG a year.   The government will, however, take a decision on Wednesday only after weighing the political implications of a hike against the need to shore up the finances of companies such as Indian Oil Corp, which plans to raise 20,000 crore from a public issue in 2011.

Bank of Maharashtra conducted workshop on “Cyber security in banking”

Let the RBI have more disclosure: Satyananda Mishra

In a recent judgement, information commissioner Satyananda Mishra asked the Reserve Bank of India to change its disclosure norms and share with common men at least some information regarding its board meeting proceedings. Mishra who disposes off 250 odd RTI appeal cases every month says that there has been a perceptible change of government departments’ disclosure procedures thanks to the implementation of Right to Information Act. Sunday ET’s Shantanu Nandan Sharma caught up with this former DoPT secretary who is set to take oath as India’s new Chief Information Commissioner on Monday.

IDRBT signs MoU with IIT-Kanpur for research collaboration

There is a need to integrate knowledge, business and technology to benefit the common man, says K C Chakrabarty. Hyderabad: Institute for Development and Research in Banking Technology (IDRBT), a Reserve Bank of India arm, on Friday signed a MoU with IIT, Kanpur for research and academic collaboration. K C Chakrabarty, Deputy Governor RBI and chairman of IDRBT, said there is a need to integrate knowledge, business and technology to benefit the common man. “There is need to exploit banking technology and take it to the people. We alone cannot do it. Institutions have to work together and leverage each other’s expertise to drive the benefits of research, academics and technology to drive critical initiatives like financial inclusion and take it to masses. Therefore the MoU with IIT-Kanpur has tremendous potential and is great beginning for two key institutions to work together in several areas of common interest,” Chakrabarty said. Prof. Sanjay G Dhande, Director IIT-K said there is an urgent requirement to marry the domain expertise in the banking sector with the new technologies and this MoU will provide a framework to forge productive relationship to make this happen. According to the MoU IDRBT and IIT-K will undertake joint projects, create centre of excellence in information security, cyber security and business intelligence, besides many other programmes.

Dams before cash in bank - RBI governor visit earns sops for Doba

Doba (Lohardaga), Dec. 18: What is life like at a water-strapped village, after its 15 minutes of fame? The hitherto nondescript Doba under Kudu block of Lohardaga district, with a population of less than 1,500, was thrust into flashbulbs during Wednesday’s high-profile visit of Reserve Bank of India (RBI) Governor D. Subbarao, who came with a team comprising Chief Secretary A.K. Singh and senior officials of nationalised banks. Not surprisingly, a hasty whitewash preceded the celebrity visit. The administration morphed into Santa and came to this tribal hamlet laden with goodies such as a revamped connecting road, water supply (restored after 20 years) and promise of 25 wells and a series of check dams.  Villager Bandi Oraon applauded the role of RBI and nationalised banks in adopting the village for the ambitious 100 per cent financial inclusion scheme. But he wondered: “How will villagers get money to put in banks, if there’s no water and if MGNREGS schemes pay so little?”  Villagers appealed to the chief secretary during his visit that the government should ensure the construction of a series of check dams by the banks of the Koel river that flows by the picturesque village dotted with sakhua trees. .

'Banks to play bigger role in MSME sector'

The role of banks to nurture the micro, small and medium enterprises (MSME) sector by going beyond just providing finance was underscored at a meeting organised by the Federation of Andhra Pradesh Chambers of Commerce and Industry as part of the nationwide India Corporate Week-2010 celebrations on Saturday.

Currency notes get a makeover to check forgery

Security Features Include Invisible Fibre,Colour Shift Ink & Machine-Readable Micro Text

A slew of new security features such as invisible fibre, colour shift ink and machine-readable micro text are on their way to prevent counterfeiting of currency notes.   The move comes amid a sharp surge in recovery of 1,000 counterfeit notes this year.  The government fears that counterfeit currency could be used to fund terror groups.  The security features have been selected by an inter-ministerial committee comprising representatives form RBI, finance ministry, security agencies and ministry of home affairs, a government official told ET.  “The menace of circulation of counterfeit currency in the country has been assuming alarming proportions,” a Parliamentary committee said in a recent report.  The government has now made a global request for qualification from manufacturers to incorporate the new security features in the currency.  Among the measures proposed by the panel are security thread with magnetic properties, variation in colour when viewed from different angles, foil or stripe with magnetic properties and micro text for currency notes.  These features were selected from responses received by the finance ministry to its request for security information in September. According to some estimates, eight in a million notes circulated in the country are fake.  The value of fake currency seized and recovered has increased from 8.39 crore in 2006 to 23 crore in 2008. As on October 31, 21.1 crore worth of fake currency has been found. India produces 18 billion pieces of bank notes of which about 50% is high denomination notes ( 100, 500 and 1,000).  Interestingly, the most popularly faked 500 note seems to be falling out of favour though it still is by far the biggest. The higher denomination 1,000 note seems to be the new favourite. In the first ten months of the current year more 1,000 counterfeits have been seized or recovered against that for entire 2009.  “..RBI should introduce easily recognisable and yet scoring high anticounterfeiting security features in the design of currency notes on the lines of advanced international practices,” the parliamentary committee had said.   The government has also constituted a high-level committee with the Union home secretary as its head to prepare a strategy to combat circulation of fake currency notes in the country. Parallel bodies have also been set up in the states. A directorate of currency has also been created in the finance ministry to coordinate and oversee acquisition and research and development of security features for currency notes. This followed recommendations of an expert panel chaired by Shilabhadra Banerjee, a former secretary to the government.  

Use of corp bond funds for infra push not a viable option: Reddy

Dr.Y.V.Reddy, former governor of Reserve Bank of India (RBI), has rejected the view held by his successor at the central bank that a developed corporate bond market is necessary to fund infrastructure.  Instead, he called for good governance by indicating that public policy should play an active role in funding infrastructure. “Bad governance will feed in itself for bad finance (and misallocation of resources),” he said.   Both Subir Gokarn, Deputy Governor, and Deepak Mohanty, Executive Director, called for a need to develop corporate bond market to help financing of infrastructure at a seminar on ‘Investment and Its Finance’ in Mumbai over the past two days.

Chinese Bank Enters India Market

With a branch planned in Mumbai, Industrial and Commercial Bank of China (ICBC) (601398,1398.HK) may become the first operational Chinese bank in India. The China Banking Regulatory Commission (CBRC) and the Reserve Bank of India (RBI) signed a memorandum in December 16. Ministry of Commerce representative Wu Donghua said many Chinese enterprises in India need capital support, and Chinese branches there address that need. Separately, China Development Bank signed a series of agreements with India telecom operator Reliance Communications, energy company Essar Group and ICICI Bank.

RBI to build strong corp bond market to fund infra

Developing Bond Market Critical To Revving Up Growth Engine, Says Gokarn

Reserve Bank Deputy Governor Subir Gokarn on Thursday said the central bank is focusing on developing a strong corporate bond market to fund infrastructure development that will require an estimated $1 trillion during the 12th Plan period.  “We are focusing on developing long-term corporate bond market to support banks in financing infrastructure projects,” he said. Mr Gokarn was delivering his keynote address at the ASEM (Asian-Europe) Conference organised by the Reserve Bank of India and the European Commission here this morning. “We need a strong corporate bond market as we have to take away the burden on banks from financing long-term funding needs of the infrastructure sector which is targeted at $1 trillion over the 5-year period beginning 2012,” he said.

RBI opts for growth over inflation for now

RBI kept key policy rates unchanged on Thursday, signalling that maintaining growth momentum was a priority while taking steps to infuse close to 50,000 crore of liquidity. This will ease pressure on banks to raise rates both on lending and deposits in the near term.  However, going by the hawkish tone of the mid-term policy review statement, the bond market is now bracing for a rise in interest rates in January when the next review is due. RBI has raised rates six times this year to fight inflation, and has warned that risk to its 5.5% inflation estimate in March is on the upside.   The mid-term review appeared to be more of a fire-fighting measure with attempts to pump money into the banking system, which saw a record deficit of 1.44 lakh crore as reflected in bank borrowings from RBI on Thursday. According to the apex bank, the deficit was making it tough for the banking system to sustain credit delivery.   RBI said although the liquidity crunch has helped achieve its objective by getting banks to raise rates, the shortfall was way outside its comfort zone.