Public banks profit to fall 18%: StanChart

The new corporate debt recast (CDR) norms issued by the Reserve Bank last week will have a massive impact on the profitability of public sector banks to the tune of 18 per cent, says a report by Standard Chartered Securities. However, the report says, the impact on private sector banks will be minimal, up to 2 per cent in profit terms.........

Read - Indian Express

Banking at doorsteps

 

The report, ‘‘Most villagers willing to pay a fee for banking at their doorsteps’’ (Business Line, July 24) brings out the mindset of the present consumer community in India. People want services at their convenience at nominal costs. While the Government and the RBI boast of inclusive banking, there are areas when there is no real access to banks. The lack of transport restricts a vast majority of villagers to move to the banks. People in the rural areas should be assured of the ATM services within a distance of 2-3 km from where they live. A part of the profits earned by the banks should be earmarked for rendering these services to the rural people. The introduction of ‘banking correspondent’ is a good idea to help the people, but security and integrity concerns should not be overlooked.

- C. P. Velayudhan Nair (HBL)

RBI studies cheap and quick remittance mode

Sending money home for millions of migrant labourers may become a lot cheaper and faster if the recommendations of an IIT panel are adopted by RBI and public sector banks. The IIT study has shown how existing infrastructure could be used for instant transfer of small amounts at a reasonable cost.........

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Loan pricing by banks comes under RBI lens

Just two years after its launch, the base rate — the benchmark reference rate for all bank loans — has come under the Reserve Bank of India’s scanner as the regulator feels the methodology of rate fixation has hindered the transmission of monetary policy measures................

Read - BS

A zero current account deficit for India?

........Talking about a new growth strategy, former RBI Governor Y.V. Reddy suggests the country should aim at a zero current account deficit in the medium-term. India is far too vulnerable to oil price and capital account shocks, the combined effect of which is to double the deficit, he says........

Read - Mint

NBFCs pare fund raising efforts

.....Any slowdown in growth first impacts freight movement and sales of heavy trucks are therefore considered an economic bellwether. In March, RBI mandated stringent norms for NBFCs raising funds for gold loans. This included the loan-to-value (LTV) being reduced to 60% from 75%, which came into effect immediately. This meant that borrowers will have to give more jewellery as collateral for the same loan amount. The LTV cap may result in slower growth for gold loan companies. .......

Read - Mint

Microlenders struggle for survival despite debt recast

.....these firms can survive only if banks convert their loans to equity and RBI relaxes norms related to provisions to cover bad loans in Andhra Pradesh. While a relaxation from the apex bank is widely expected, commercial banks are reluctant to convert their loans to equity or offer fresh funds fearing they will have to take a further hit on their exposure. RBI norms say MFIs need to make 100% provision on non-performing assets (NPAs) from 1 April 2013.......

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Read - Mint

RBI refuses to give priority lending tag to refinancing of HFC loans by banks

The Reserve Bank of India and the government may be on a collision course yet again, this time on the treatment of banks' refinancing of specialist mortgage lenders as priority sector lending. In the latest set of priority sector rules issued last week, the central bank has ignored the indirect priority sector lending clause for refinancing of housing finance companies' loans by banks, reversing its own circular three weeks ago...........

Read - ET

RBI rules out equal treatment for NBFCs with banks

The Reserve Bank of India (RBI) has declined to raise a cap of 60% of the value of ornaments that gold loan companies are allowed to lend to customers or bring commercial banks under the ambit of the ceiling, thus maintaining the edge of banks, which can lend more for the same pledged worth........

Read - Mint

Wrong solution

The RBI Deputy Governor K.C. Chakrabarty’s solution to ease the current account situation is pretty naive (RBI asks people to shed craze for yellow metal, July 23). If the gods can be pleased with a 2-carat ornament, why not present gold-plated jewellery? Isn’t it naive to ask a religious person who wears a 22-carat gold ornament to offer a 2-carat gold ornament to the gods? To ease the current account deficit, the government must look at ways to boost exports and provide incentives for the same, instead of cutting down gold consumption.

- Ramesh Thuravil, Hyderabad (Deccan Chronicle)

IDBI Mutual Fund launches gold fund

......Under the scheme, investors would not hold gold physically and the asset management company (AMC) would keep the equivalent amount of imported gold in its vault with Bank of Nova Scotia. "Gold is a great investment asset. We see investment in gold as a component of prudent diversification to hedge against uncertainties, inflation and for long-term benefits,".......

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The pensiveness of a lonely economist - T. C. A Srinivasa-Raghavan

....Economists are not generally given to speaking of each other in deeply reverential tones and Indian economists even less so than others, at least about fellow Indians. But as with all such rules of mean behaviour, there is one exception: I.G. Patel.........

Read - The Hindu

The finance ministry’s writ

In the recent times there has been much talk about the Union finance ministry trying to micromanage the affairs of the public sector banks. D. Subbarao, and Y. V. Reddy, the current and past governors of the Reserve Bank of India (RBI), have argued for the majority owner—the Government of India (GOI)—to exercise its control over the banks through the board process rather than through notifications. In this context it is useful to understand the constitution of the public sector bank boards to look at this dynamic......

Read - Mint

RBI’s monetary policy strategy meeting on Tuesday

.....“We will urge the RBI to revisit this issue (interest rates) to ensure that capital is available to the industry .. given the slowdown, there is every justification to ensure that Indian industry remains competitive and manufacturing grows,”....

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Udupi: Quarterly Meeting of District Level Review Committee for Banking Held

.....A Vijaya Kumar, lead district officer, RBI, Bangalore informed the latest instructions/guidelines issued by RBI on various issues related to banking activities. While reviewing the performance of banks in the district, he emphasized the need to achieve various mandatory targets by all the banks........

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RBI to issue Rs 5, 10 coins to commemorate 60 years of Parliament

NEW DELHI: To commemorate the ocassion of 60 years of Indian Parliament, the Reserve Bank will introduce Rs 5 and 10 denomination coins having the image of the Parliament House..........

Read - ET

What about polymer rupee notes?

.....What is important, however, is the tragic admission by Reserve Bank of India (RBI) that there is a 95% increase in counterfeit notes in the country over the past five years, most of which, regrettably, have come via Pakistan, and smuggled through the land borders of Nepal, Bangladesh and of course Pakistan. The smuggled counterfeit currency notes are of higher denominations, mostly in Rs500 and Rs1,000.
If polymer bank notes are introduced in India, this will eliminate the backlog of unusable worn out bank notes and combat counterfeiting menace.....

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Common interview likely for posts in state-run banks

.....“We are talking with banks for a centralized system for interviews. Candidates will have to attend one common interview, which will be conducted by bank officers with the help of outside experts,” .....

Read - Mint

Get together of RBI Retirees at Bangalore

Some of our enterprising retiree friends have been arranging half yearly Get-together of RBI retirees from Bangalore since 2010. Fourth such function was arranged on 7th July, 2012 in the Community centre of Jayanagar Colony, Bangalore. In the latest meet, which was the fourth, the organizers decided to add another novel idea of "FELICITATION" to the participants who had completed 80 years. Seven such participants were FELICITATED with a shawl and idols of Lord Krishna and Ganesha. The meet is generally a GET TOGETHER with coffee, tea, biscuits followed by a lunch on cost sharing basis. In between, the participants share their experiences and if time permits also play a game of "Housie". The number of participants which was about 90-95 in the beginning has increased to about 130 in the latest meet. The group of organizers comprises six members, including a lady member, and the captain of the team is Sh. S.Venkat Subba Rao Retired General Manager from Bangalore. 

- Madan Gauria / D.Kasturi

Those who are interested can have a glimpse of the photos taken during the function by clicking at " View Album" below:

Click to view album........

Uttar Pradesh government planning to inject life into ailing cooperative banks

.....the state government would inject Rs 373 crore to brush up the functioning and meet the overhead cost of these banks as per the estimates made by the joint task force comprising officials from the RBI, NABARD and the registrar cooperative. As against the promised central assistance, Rs 629 crore had already been received and efforts made for the release of the remaining Rs 916 crore.......

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