Sebi, govt may trash Jalan report

Govt Fears That Panel’s Suggestions May Hit Competition, Fund Raising - The Securities and Exchange Board of India and the government are expected to reject some of the contentious recommendations of the Bimal Jalan committee on the grounds that they could restrict competition and also affect companies that depend on the securities market for fund-raising.  Amid hectic lobbying by various stakeholders –– including exchanges depositories and clearing houses ––sources involved with regulatory decision-making said that several players have voiced their concerns over the inability to list exchanges, something that the committee, which also had representatives from the finance ministry and Sebi, has recommended.

MFIN CEO to meet RBI to discuss lending issues today

Microfinance Institutions Network (MFIN) CEO Alok Prasad will meet the Reserve Bank of India officials and the Malegam Committee today to discuss the bank lending issues. MFIN wants resumption of bank lending to MFIs, which were badly hit due to the freeze on lending. Banks have stopped lending to all MFIs across India.

Anand Sinha as Deputy Governor - Final decision soon

With a bit delay the proposal to elevate RBI’s executive director Anand Sinha as one of the Deputy Governors of the central bank has started moving ahead for the final decision. Finance ministry sources said Sinha’s name after being accorded vigilance clearance had now been sent to appointment committee on Cabinet (ACC) for its approval. “After ACC’s approval, it will go to Prime minister office PMO for the final nod,’’ said a senior official. Though Sinha was selected to succeed Usha Thorat who retired as a Deputy Governor, RBI almost one and half month back, the concerned file hadn’t moved fast because of some technical reasons giving rise to speculation whether Sinha still remained in the race. However, the finance ministry while clarifying that Sinha’s appointment letter will soon be issued, said the ministry is yet to initiate step to find a successor to another Deputy Governor Shyamala Gopinath, who will be retiring in June 2011.

Banks plan consortium loans to MFIs

Worried over microfinance institutions’ future profitability, banks want to diversify their risks by lending to the sector in a consortium.  Leading bankers are meeting Reserve Bank of India Deputy Governor Shyamala Gopinath on Wednesday to make a case for consortium lending.  Banks have discussed the proposal informally with the finance ministry. “Several issues, including debt restructuring of microfinance institutions, are to be discussed,” said a senior finance ministry official involved in the discussions. “RBI has so far supported the stance on consortium lending.”

No threat to asset quality of banks: Rangarajan

There is no threat to the asset quality of Indian banks in the immediate future due to huge exposure to crisis-hit sectors such as microfinance, aviation, real estate and telecom, Chairman of Economic Advisory Council to the Prime Minister, C Rangarajan said on Tuesday.  He said presently the asset quality is well within limits and under norms set by the RBI.

Jalan panel report sparks off hectic lobbying

Stakeholders’ meeting sees sharp exchanges over proposal to disallow the public listing of exchanges. Vicious lobbying, including open letters, advertisements and personal attacks, is underway among different stakeholders in the capital market over the recommendations of the Bimal Jalan committee on ownership and governance of market institutions such as stock exchanges. The Confederation of Indian Industry (CII), an industry lobby, on Tuesday organized a meeting between former Reserve Bank of India (RBI) governor Jalan, two of his committee members, and stakeholders in the capital market to exchange views. The only stakeholder not represented was the retail investor. The meeting was marked by some sharp exchanges between stakeholders and committee members over a recommendation to disallow the public listing of exchanges, a personal attack by one of the stakeholders on Jalan, which resulted in an intervention from the moderator with a request to restrict conversation to issues and not personalities and veiled suggestions that the report did not reflect the majority view of the 29 stakeholders who deposed before it. The committee was constituted by the Securities and Exchange Board of India (Sebi) to review the ownership structure and governance of market infrastructure institutions (MIIs) such as stock exchanges.

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. .