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.
Tuesday, March 15, 2011
Monday, March 14, 2011
Reserve Bank of India has undertaken quick scrutiny
March 11: Reserve Bank of India has reported that they had recently undertaken quick scrutiny in some banks to examine if the reasons for corruption could be attributed to systemic issues i.e. risk to the system independent of the bribery case and if absence of proper internal controls had provided opportunities for bribery. Further acting upon the press reports that appeared in November, 2010 regarding arrest of CEO, LIC Housing Finance Ltd. and some other persons in connection with allegation of receiving illegal gratification by senior officers of some Public Sector Banks and Financial Institutions for sanctioning loans, RBI undertook scrutiny of borrowal accounts of the groups at Punjab National Bank, Central Bank of India and Bank of India, which were stated to be under scanner of CBI. The outcome of the preliminary scrutiny did not reveal any systemic risk and lacuna in the loan sanctioning system and the relevant internal control system of serious nature requiring immediate specific supervisory or regulatory interventions. This information was given by the Minister of State for Finance, Shri Namo Narain Meena in written reply to a question raised in Lok Sabha today. Press Information Bureau
Chaudhuri May Lead India’s Largest Bank as Rival ICICI Expands
State Bank of India, the nation’s biggest lender, is poised to name 36-year veteran Pratip Chaudhuri as chairman as competition from rivals including ICICI Bank Ltd. intensifies. Deputy Managing Director Chaudhuri, 57, was the only person recommended to a cabinet committee tasked with selecting the head of the state-controlled bank, a finance ministry official said on March 11, declining to be identified before an official announcement. Chaudhuri didn’t return three telephone calls to his office in Mumbai. Chaudhuri’s task of boosting shareholder returns at the 205-year-old lender may be hampered by state control that gives private-sector rivals an edge in mobile and Internet banking. Bloomberg.com
Rate hikes loom despite sub-8% growth concern
Even as it is becoming increasingly possible that the economy may clock sub-8% GDP growth in 2011-12, the Reserve Bank of India (RBI) has little choice but to increase policy rates when it meets later this week. With inflation averaging 8% and expected to come down just a tad lower at 7.8% in February from 8.2% in January, the rise in prices is way above the central bank's revised projection of 7% for March 2011. As such, key policy rates are tipped to be hiked by 25 basis points each taking the repo rate to 6.75% and the reverse repo to 5.75%, in what would be the eighth increase in a year. Earlier this month, China upped its benchmark one-year lending rate to 6.06, the third increase since mid-October after growth accelerated and inflation stayed above 4% for a third month. With crude oil prices have risen nearly 20% in the last three weeks in the wake of the unrest in West Asia, South, Korea, Thailand and Vietnam have all raised borrowing costs this month. Fund managers, however, believe central banks in many of the emerging economies are behind the curve in terms of taming inflation and more than $20 billion has moved out of emerging market funds since the start of the year. According to Bank of America-Merrill Lynch, the central bank could tighten money by 75 basis points through the year. Indeed, while a high base effect will help cushion the wholesale inflation number till July, 2011, average inflation for 2011-12 is likely to be fairly high at 6.57%.Core non-food inflation is tipped to remain sticky at 5%, higher coal prices will add to costs while the government may choose to pass on the higher prices of crude oil through a hike in diesel prices. Monetary transmission couldcontinuetobeasswift as it has been the case in the last couple of months -banks have raised loan rates by at least 50 basis points between early December and now in two tranches. As such, loan rates could climb further. Demand for non-food credit has been growing at just over 20% year-on-year since October, 2010 and given that deposits continue to grow at a far slower pace of 16%, RBI would continue to keep credit growth on a leash so that liquidity remains sufficient. With the gov ernment announcing in its Budget statement that it will borrow a net amount of just R3.4 lakh crore in 201112, the bond markets have rallied smartly; yields on the benchmark bond are ruling at around 8%. However, yields could spike if borrowings overshoot the target. Financial Express
Sunday, March 13, 2011
RBI organises outreach programme in Rajouri
Srinagar, Mar 12: As part of its financial inclusion and awareness programme, the Reserve Bank of India, Jammu organized an outreach programme at village Kangri in Rajouri. Arnab Roy, Regional Director RBI (J&K) on the occasion said the ‘outreach programme’ which started in the bank’s Platinum Jubilee Year (2009-10) was being continued with an aim to deepen the penetration of financial inclusion and expand the coverage of financial services to all sections and all regions of the country. Roy said Kangri village was one of three model villages chosen by RBI for outreach activities in the state for 100 per cent Financial Inclusion during 2010-11. He said the Bank was using Information Communication Technology (ICT) for issuance of smart cards through the Banking Correspondent (BC) model. The village with a population over 2000 souls was earmarked for being provided with banking services by March 2012. “However, the same is being done one year in advance i.e. by March 2011. The main aim is to achieve the objective of financial inclusion and providing doorstep banking services to the rural poor, small and marginal farmers, people of small means, women, etc.” On the occasion Roy distributed smart cards issued by J&K Bank and witnessed the activation/transactions through smart cards not only for the common villagers but also for the NREGA beneficiaries. The villagers, according to a statement issued by the Bank, showed great enthusiasm to get connected to the banks without visiting a ‘brick and mortar’ branch. Greater Kashmir
Banks not to give back swallowed ATM cards
If the ATM from which you try to take out cash swallows your card, you had better try to get a new one. For it is as good as ‘digested’. The RBI, which had allowed people to use their debit cards in the ATM of any bank, has quietly brought in a regulation which stipulates that banks need not return the debit/credit cards which their machines have swallowed. “This regulation came in recently,” an RBI official told this correspondent. “It was brought in the interest of customer safety. As you know, these days, ATM related fraudulent activities are on the rise.” The official, however, agreed that the new norms were putting customers into lots of hardships. “I know a person who came to Kochi from Coimbatore and who tried to withdraw some money using his personalised Canara Bank debit card,” he said. “But it was swallowed and he got the shock of his life when the bank refused to give him back the card.” “You can imagine his condition….stranded in a strange place without any money”, the official said. Mr C.K.Venkiteswaran, the Deputy General Manager of the Canara Bank, Coimbatore Circle, said his bank was only following the RBI norms. “We’ve been strictly advised not to return the swallowed cards unless it belongs to the base branch and used in the ATM attached to it,” he said. Stating that the RBI norm was applicable to all banks, Mr Venkiteswaran said the swallowed cards retrieved from the ATMs were destroyed immediately. However, he agreed the new norms could pose real trouble to the customers. “We’re bringing this issue to the notice of our higher officials,” he said. “Let’s see what can be done.” Asian Age
Kerala becomes the first state in the Country to implement speed clearing
Thiruvananthapuram, Saturday, March 12, 2011: Kerala has become the first State in the Country to implement speed clearing across the State, a system which helps customers to present cheques payable anywhere in India to any Clearing House in Kerala for payment. The Reserve Bank of India has introduced ‘Speed Clearing’ system in all Clearing Houses across Kerala, a release said. The system is faster and cheaper as against seven or more working days taken in the earlier system of outstation cheque collection, the release said. The only pre-condition was the bank/branch on which the cheque is drawn should be ‘Core Banking’ enabled. Speed clearing treats an outstation cheque as a local cheque. Saving Bank Account customers will not be charged for getting their cheques amount up to Rs one lakh passed through ‘Speed Clearing.’ Service charges to be levied for collection of other cheques under Speed Clearing are left to the discretion of individual banks subject to their policy, it said. Asianet India
FM priority to financial inclusion
New Delhi, March 12: Finance minister Pranab Mukherjee today said financial inclusion was the biggest challenge in India and urged banks to reach out to areas with a population of over 2,000 by March 2012. “Financial inclusion is an important priority of the government as only 38 per cent of the banks are in rural areas and only 40 per cent of the country’s population have bank accounts,” the finance minister said at an industry event. To address this need, Mukherjee said, “I had in 2010-11 directed all banks to provide appropriate banking facilities to habitations having population in excess of 2,000 by March 2012 using various models and technologies, including branchless banking through business correspondents.” There are around 73,000 such areas that have more than 2,000 people. While banks will cover 20,000 villages this year, the remaining 53,000 will be covered in 2011-12. Earlier, RBI Governor D. Subbarao had said aspirants for new banking licences would need to show their commitment towards financial inclusion. The RBI has asked existing commercial banks, including foreign lenders, to come out with their financial inclusion plans. ICICI Bank managing director and CEO Chanda Kochhar had also underlined that rural markets will be the future growth engine. “Rural India is going to be the market of tomorrow. Therefore, it is important for us to find business models for the rural population,” Kochhar had told reporters earlier this month. The Telegraph
Saturday, March 12, 2011
British Trade Minister to visit India
London, Mar 12 (PTI) To strenghthen trade and investment relationship between both the countries, Britain''s Minister of State for Trade and Investment Lord Stephen Green will be visiting India on a five-day tour from March 14.The Minister will call on the Governor of the Reserve Bank of India D.Subbarao and meet a range of business leaders such as Mahindra Group chief Anand Mahindra, Tata group chairman Ratan Tata and ICICI Bank chief executive Chanda Kochhar.
Fake currency to the tune of Rs 87,600 seized this year
New Delhi, Mar 11 (PTI) The government today said fake currency of face value of Rs 87,600 was seized this year till March 4 by various agencies. In 2010, fake currency of face value Rs 10.1 crore was seized by various government agencies against Rs 8.8 crore in 2009, Minister of State for Finance Namo Narain Meena said in a written reply to the Lok Sabha. Replying to another question, Meena said, "Reserve Bank of India has reported that they had recently undertaken quick scrutiny in some banks to examine if the reasons for corruption could be attributed to systemic issue i.e. risk to the system independent of the bribery case and if absence of proper internal controls had provided opportunities for bribery." Further, he said that acting upon the media reports that appeared in November 2010, regarding arrest of LIC Housing Finance CEO and some other persons in connection with allegation of receiving illegal gratification by senior officers of some public sector banks and financial institutions for sanctioning loans, RBI conducted scrutiny. RBI undertook scrutiny of borrowable accounts of the groups of Punjab National Bank, Central Bank of India and Bank of India, which were stated to be under scanner of Central Bureau of Investigation, he said. The outcome of the preliminary scrutiny did not reveal any systemic risk and lacuna in the loan sanctioning system and the relevant internal control system of serious nature requiring immediate supervisory or regulatory interventions, he said.
RBI asks US firm Zoha to close India biz
The Reserve Bank of India (RBI) today asked the US-based money transfer firm Zoha Inc to immediately wind up its operations in India. "The RBI has asked Zoha Inc, USA to wind up their existing services for cross border money transfer to India with immediate effect," the RBI said in a statement. The central bank, which has refused to grant authorisation to Zoha Inc, said the firm should not operate payment system for cross-border in-bound money transfer services in India. The RBI, however, did not give any reason for refusing authorisation to the money transfer firm. The central bank has refused authorisation application of Zoha Inc, exercising the powers conferred on the Reserve Bank under sub-section 3 of Section 7 of the Payment and Settlement Systems Act, 2007, the statement added.
Chaudhuri only nominee for SBI chief: Source
Pratip Chaudhuri, deputy managing director of State Bank of India (SBI), was the only person nominated to become chairman of the nation’s largest lender, a finance ministry official with knowledge of the matter said. His name has been proposed to the appointment committee of the cabinet, which will make a decision in the last week of March, the person said. Om Prakash Bhatt, chairman of SBI, will retire at the end of this month. The search committee that recommended Chaudhuri included RBI governor D Subbarao and former banking secretary R Gopalan, the person said.
Friday, March 11, 2011
RBI in growth-inflation fix
The Reserve Bank of India is facing the challenge of raising policy rates, while at the same time keeping them low, as balancing inflation and growth remains a key concern for the central bank, Governor D Subbarao said on Thursday. "For inflation management, we have to raise policy interest rates. For protecting, promoting and preserving recovery, we need to keep interest rates low, so there is a tension between raising policy interest rate and keeping them low," Mr Subbarao said at the convocation address of the National Institute of Bank Management in Pune. The statement assumes significance as RBI is scheduled to release its mid-quarter monetary policy review on March 17, where it is widely expected to hike interest rates again. "Growth-inflation dynamics - we are struggling with that. We recovered from the crisis sooner than other countries. Inflation also caught up with us sooner than other countries," Mr Subbarao said. The government data released on Thursday shows food inflation for the week to February 26 slowed to a three-month low of 9.52% growth year-on-year due to increased supplies of vegetables. This compares with a 10.39% increase in the previous week. According to RBI estimates, India's economy is likely to grow at 8.5% with an upward bias in the year ending March 31. "There are many arguments for keeping rates low or raising rates and that's what we are struggling with," he said. Reacting to the latest inflation figures, chief economic advisor to the finance ministry Kaushik Basu said India is likely to end the current fiscal with headline inflation close to 7% and the central bank will continue with its policy focus of containing inflation. In January, the central bank in its third quarter monetary policy review had revised inflation target to 7% for the year ending March 2011. India's wholesale price index-based inflation has remained well above RBI's perceived comfort level of 4-5% for more than a year, prompting the central bank to hike its key rates - repo and reverse repo - seven times by 175 basis points since March 2010 to tame soaring prices. "Inflation coming down is good news, but not unexpected. Overall WPI has been higher than anticipated. However, the direction in which the WPI is moving is also the direction in which we would like it to move. I do expect the year to close not below 7%, but very close to 7%," Mr Basu said. "Because it took longer for inflation to come down, it is clear that our efforts, policy initiatives to bring down inflation will continue into a couple of months in the new fiscal year," he added. In India, the popular inflation benchmark is the movement in the WPI. While the overall WPI movement is released at a monthly interval, inflation in primary articles such as food and fuel is released weekly.
Subscribe to:
Posts (Atom)