Economist on India Central Banking: Financial Illiteracy on Display

.....Under the present Governor, Duvvuri Subbarao, a softly spoken figure, it has made a tough series of rate rises in the past two years to try to curb a stubborn spell of inflation (a battle that may not be over). And although the bank finds it hard to tempt star graduates to work in its tower overlooking Mumbai harbour—"if you look at its people and those of the Fed, there's no comparison," laments one bigwig—relative to most Indian state bodies the RBI has more brains, muscle and integrity. It is about the only institution in the country you never hear accused of graft ............

Click to read...................

Fiscal consolidation needed for stimulating growth: RBI

.... "There is an inflexion point beyond which fiscal deficits militate against growth. Government borrowing is not bad per se, but excessive borrowing is. There is therefore a need to cap total public debt as a proportion of GDP,".....

Read...........

Banks employee federations demands 5-day work week

KOLKATA: All-India Bank officers' confederation and All-India State Bank officers' federation have demanded implementation of five-day work week for the banking industry.  "In view of alternate channels available to customers such as ATM, internet banking, mobile banking etc, a 5-day week may be implemented in the banking industry," G D Nadaf, the general secretary of All-India Bank officers' confederation and All-India State Bank officers' federation said here yesterday.  "This saves avoidable cost on water, power, energy, fuel etc, spent for four hours work on Saturday," Nadaf said, adding that 5-day week is in vogue at central government, establishments, Treasury, Forex, IT industries and foreign banks too. He also urged the Centre and the Indian Banking Association for early commencement of the 10th bipartite negotiations, resolution of residual issues and updation of pension in tune with central government pension scheme. He also alleged that bank officers are 'exploited' and forced to work for long hours in the absence of defined working hours.

ET

Tax exemption limit at Rs 2 lakh likely

The government is likely to provide some relief to individual income tax payers in the forthcoming Budget by raising the exemption limit to Rs 2 lakh, as provided in the Direct Taxes Code (DTC), and hiking the slabs for different tax brackets...........

Read.............

Not possible to hit 8.5% growth without inflation: Gokarn

During Edelweiss's seventh annual conference, RBI Deputy Governor Subir Gokarn said that it will be difficult to achieve 8.5% growth again without triggering inflation. "The risk with aspiring to grow is that inflation can catch up with you very quickly," he said. Therefore, he believes that growth has to be discounted somewhat so as to get a better handle on the growth-inflation balance.................

Read......................

Act on inflation, fiscal deficit to keep sovereign rating intact: S&P

.... An S&P report released on Monday upheld India's current rating at BBB- with a stable outlook, but warned that negative factors combined with the government's weak policies "may lead us to a tipping point". "We don't expect to downgrade or revise the outlook on the long-term rating in the near future," the report said. "(But) continuous loose fiscal policy or policy setbacks on the monetary, financial, and economic fronts that lower India's medium-term growth prospects could result in a rating downgrade."......

Read.......

‘Market rally, RBI intervention, strong PMI helped rupee appreciate’

.... Soumyo Datta of Citibank, in an interview to CNBC-TV18 said strong PMI data, a rally in the equity markets and RBI intervention have helped the rupee rally in 2012. “Rs 47.90 per dollar will be the next target for the rupee,” he said......

Read........ 

RBI relaxes cap on banks' forex positions

..........."Some limits based on their (banks') merchant positions have been relaxed. If they have a requirement, they can come and approach us through the Fedai (Foreign Exchange Dealer's Association of India)," RBI Deputy Governor HR Khan told reporters...............

Read............. 

Best Banker Award 2012 to Shri R K Dubey, Executive Director, Central Bank of India

Shri R K Dubey, Executive Director, Central Bank of India has been conferred with the Best Banker Award 2012 by Shri K C Chakrabarty, Dy. Governor, Reserve Bank of India. The Award was presented during SME Banking Conclave 2012 on " Ensuring Growth of SMEs for Better Future", organized by Small & Medium Business Development Chamber of India at Mumbai on 04/02/2012. Shri G N Bajpai, Former Chairman, Securities & Exchange Board of India Shri A Krishna Kumar, Managing Director, State Bank of India and Shri M. Narendra, Chairman & Managing Director, Indian Overseas Bank were also present on the occasion.

http://www.4-traders.com/CENTRAL-BANK-OF-INDIA-9059895/news/CENTRAL-BANK-OF-INDIA-Best-Banker-Award-2012-to-Shri-R-K-Dubey-Executive-Director-Central-Bank-of-In-14005185/

Rates to respond to sustained inflation down move: RBI

..... "Certainly interest rates will respond to sustained movement in inflation downwards and it is on this basis that we have signaled that this cycle has reached its peak,".....

Read............. 

ATM card delivery fraud: ICICI Bank fined

New Delhi: ICICI bank has been directed by a consumer forum to pay Rs 20,000 as compensation to one of its consumers whose ATM card was delivered to a wrong hand, who withdrew money from the account fraudulently........

Read..............

Fiscal dominance over monetary policy

..........It was expected that with the abolition of the instrument of ad hoc Treasury Bills and implementation of FRBM Act, there could be relief from fiscal dominance of monetary policy. But recent trends showed contrary evidence. There is an urgent need to free monetary policy from fiscal dominance to ensure price stability, financial stability and sovereign debt sustainability........

Read..............

Debt buyback

The RBI Deputy Governor is reported to have said that “the aggregate objective of OMOs is to put in a certain amount of liquidity into the market and not help the government borrowings… Reality of the situation is OMO is driven by liquidity shortage, not by the government borrowing.” (“RBI hints at more OMOs to tackle liquidity crisis”, Business Line Web site, February 4). In this context I would like to cite the following extract from para 28 of the Annual Policy Statement of the Bank for 2009-10 in relation to buybacks of securities: “Keeping in view the large budgeted government market borrowing in 2009-10 coming on top of a substantial expansion in market borrowing in 2008-09, it was important for the RBI to provide comfort to the market so that the borrowing programme is conducted in a non-disruptive manner. Accordingly, the central bank simultaneously indicated its intention to purchase government securities under open market operations (OMO) for an indicative amount of Rs 80,000 crore during the first half of 2009-10.”

- A. Seshan (HBL)

Cash-deposit ratio of banks still too high

....The Reserve Bank has streamlined the process flow in credit-push systems such as the National Electronic Funds Transfer, Real Time Gross Settlement, Electronic Credit System (credit) and National Electronic Clearing Service systems, and banks are in a position to credit beneficiaries account without any hassles. .......

Read...........

Your rights against a recovery agent

.... “Recovery Agents engaged by Banks” guidelines were issued by RBI on 24 April 2008. As per the annual report on banking ombudsman, 2009-10, as many as 1,609 complaints were received against direct selling agents and recovery agents put together. Here’s a list of what recovery agents can’t do.......

Read............

Behind the fear of debt

....A few days later, the RBI Governor, Dr D. Subbarao, referring to the rise in debt flows, publicly emphasised that India has “a preference for non-debt flows over debt flows”, and “within non-debt flows, more of FDI”.Along with the expression of such fears, the government has been liberalising foreign investment rules to attract equity inflows in lieu of debt. The most recent such policy allows individual investors to invest in equity. ........

Read...........

RBI stops Manappuram from taking deposits

....“RBI looked at our records and found out that it was an error of judgement and asked us to stop accepting deposits. We are in the process of refunding the money to customers,” ......

Read.............

Banks in Noida assure safety of customers' assets

... About 104 Bank branches, which have been operating in Noida from residential areas for decades, have been asked to shift to other locations. The order triggered panic among customers as they are not sure about the safety and security of their bank assets and belongings kept in lockers. The RBI taking cognizance of the complaints had directed the banks to ensure safety of assets of account holder and locker holders.....

Read.........

Dhanalakmi Bank chief Amitabh Chaturvedi resigns

MUMBAI: Amitabh Chaturvedi, MD and CEO of Dhanalakmi Bank has put in his papers, sources close to the development told ET. Mr Chaturvedi joined the bank in October 2008. His resignation comes within months of Reserve Bank of India approving his extension as chief of the bank for three years till October 2014. ET is awaiting a response from the bank on MD resignation. Meanwhile, Amitabh Chaturvedi could not be reached for a comment immediately on his cellphone. "There are chances that the bank will make some announcement to the stock exchange today, if the board accepts his resignation,"" said sources who could not be quoted. "There are differences between Mr Chaturvedi and some board members on issues related to HR and performance of the bank,"" they added. Mr Chaturvedi, a chartered accountant by qualification, spent the initial years of his career with ICICI Bank and subsequently joined Reliance Capital. However he had taken a six-month break before joining old generation private bank - Dhanalakmi Bank.

ET

Mahesh Bank launches RuPay ATM card

Hyderabad, Feb. 5: The increasing use of ATM cards will be cost-effective for banks as well as customers, according to Mr A.P. Hota, Managing Director and Chief Executive Officer of National Payment Corporation of India. Speaking after formally launching ‘Mahesh RuPay ATM card' Mr Hota said Mahesh Bank had taken a lead in the cooperative sector in south India by launching its ATM card. R. Ramesh Kumar Bung, Chairman, Mahesh Bank said his bank's business had crossed Rs 1,775 crore and the branch expansion was being spread to different states. Mr A S Rao, Regional Director, Reserve Bank of India said the number of urban cooperative banks had come down from 115 to 103 in the recent past. ATMs were a versatile instrument and an important delivery channel, he added. The National Payment Corporation of India Ltd has launched the ‘Rupay' ATM card mainly for no frills account holders in collaboration with banks. It is expected to reduce overall transaction costs for banks by introducing competition to international card schemes like Visa and Master.

HBL