..........The track record of banks controlled by big business has been patchy and it is the cosy relationship between banks and their owners that was one of the main reasons cited for bank nationalisation in 1969. As in many countries, the regulation of financial conglomerates is becoming a big problem in India. It would be prudent for the RBI to frame the rules as tightly as it can to weed out undesirable applicants .Thereafter, it is a question of exercising its regulatory powers judiciously without fear or favour.
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.
Monday, December 24, 2012
Strong bond market needed
The Reserve Bank of India (RBI) Deputy Governor Subir Gokarn on Saturday stressed the need for developing a vibrant corporate bond market, which is essential for financing infrastructure projects in the country and asked various regulators to work in tandem to develop this market. The need for developing an efficient corporate bond market is “driven by infrastructure financing,” said Mr. Gokarn while inaugurating an international conference on bond markets organised by the Bombay Stock Exchange (BSE) ..............
Read - The Hindu
Performance of banking sector: 2011- 12
.....Overall, in addition the strengthening their capital base, banks would need to focus on strengthening their credit appraisal and post- sanction loan monitoring system to minimize NPAs, make financial inclusion more meaningful and revisit lending to priority sectors.
Islamic finance: a perspective from India
Even as the Reserve Bank of India (RBI) is driving financial inclusion through a combination of conventional and non-conventional approaches, it’s time to take a fresh look at Islamic finance to expedite finance inclusion, especially within the 170 million Indian Muslim community. A banking professional with a three-year stint at global banks initially in the US and then at Islamic banks in Kuwait for about five years, Saif Ahmed, who is currently Managing Partner at Infinity Consultants, Bangalore, told Deccan Herald that though Islamic banking in India was ruled out by the RBI Governor D Subbarao last month, there is scope for Islamic finance in many other ways...........
Friday, December 21, 2012
‘No bias, fit and proper persons will get bank licences’
.........“RBI is the licensing authority. The Government has no role to play in granting bank licences. Let there be no misunderstanding. The Government has no bias in favour or against anyone getting a banking licence, provided fit and proper conditions are met,”..........
....“I agree that there are some problems in giving more powers to RBI. But I think RBI is best placed to continue being the regulator for banks at this stage”.......
Parliament has opened doors for inclusive banking, RBI must move now
...........The RBI must allow each mobile company to form joint ventures with every existing bank, so that a farmer with a phone is able to use it as a machine for storing value, receiving funds and making payments. A few baby steps have already been taken in these directions: it is possible for a bank account holder to transfer money to mobile phone balances, for example. But more need to be done. Outdated legislation and the RBI's conservatism held back many reforms on the ground, but now that legislators have done their bit, it is up to the mandarins at Mint Street to shed their acute conservatism and bat for maximum financial inclusion.
New banking bill faces key challenges
..............The Reserve Bank of India has the power to grant new licences, but is expected to move slowly given the regulatory risk posed by the entry of financial firms with no banking experience. Despite earning new regulatory powers in the banking bill passed on Thursday, analysts say the RBI could issue only three to four licences in the next 12-15 months, denting expectations for a flood of new lenders in the sector.
Can RBI keep the lid on inflation? - A.Seshan
.......The question is whether the central bank can put the inflation genie back into the bottle, after having unleashed it in the wake of the Lehman crisis. Clearly, the expansionary policies of the government and RBI in 2008-09 were a panicky overreaction to the international financial crisis and unwarranted by domestic circumstances..........
The author is an economic consultant, former officer-in-charge, Department of Economic Analysis and Policy, Reserve Bank of India, and Adviser to National Bank of Kyrgyzstan and Bank of Sierra Leone
Politics, laws weigh on Islamic finance in India
.....Nisar at TASIS said that one possibility, which would not require amendments to the banking act, would be for the RBI to issue an order allowing non-bank financial companies to operate under a participatory model. Under this model, NBFCs would not charge interest but instead pay depositors with the proceeds of investment funds. However, RBI officials told Reuters they did not think this would be feasible. Rules for NBFCs are the same as for banks with regard to interest rates, they said.......
Co-operative credit societies will have to seek banking license from RBI
...........While those co-operative credit societies with reserves and paid-up capital of over Rs 1 lakh have to register with RBI, most of these societies operated with a lower capital to avoid regulatory overview. Following the amendment in the Banking Regulations Act, the RBI will issue details guideline regarding the capital requirements that would apply for cooperative credit societies. As per the amendment in the Act, these societies will have to comply to the norms specified by the RBI within one year of it being notified. Alternatively, they will be forced to suspend banking operations. ...............
RBI extends date of chequebook return to April 1
If you are confused by the text messages being sent by your banks reminding you to change your old chequebooks, here is an answer to all queries.............
Banks meet 61% credit target in Kannur
........ome banks, however, were criticised for their non-achievement of 40 per cent minimum target in the agricultural sector set by the Reserve Bank of India (RBI). District Collector Rathan Kelkar, who chaired the meeting, urged the banks to be liberal in the disbursal of education and agricultural loans. Syndicate Bank Deputy General Manager V. Ashokan, RBI Assistant General Manager (AGM) K.D. Joseph and Nabard AGM P. Dinesh and Lead Bank Manager V.S. Jayaram spoke.
SBI: Reduce fixed deposit minimum tenure to 3 days
.....Speaking on the issue of interest rates on savings bank deposits, SBI Chairman Pratip Chaudhuri said he had requested the regulator to reduce the tenure of minimum deposit from seven days to three days. “We think a savings bank is not about rate of interests alone. It is about the facilities, the experience and so on. In fact, I am requesting RBI, time and again, that the tenure of minimum deposit be reduced from seven days to three days,” he said........
Union Bank bags Best Bank in Public Sector Technical Award from NPCI
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| Lalit Sinha, GM, Alternate Channels and Ajit Rath, GM, DIT receiving the award from former RBI E.D. Dr. Burman and A.P. Hota, CEO, NPCI. |
Union Bank of India received the Best Bank in public sector category Award from National Payments Corporation of India (NPCI) for operational excellence in national financial switch. The awards were given by NPCI during their annual NFS User Meet at Mumbai on 13th Dec.2012. These awards are given by NPCI based on excellence in performance in operation of ATMs covering parameters like dispute management, net work uptime, control on transaction declines, DR Drills etc. NPCI evaluates banks based on the performance data available with them. Union Bank of India has 4264 ATMs connected to National Financial Switch of NPCI servicing the customers of 118 member banks.
TOI
Abhyudaya Co-operative Bank penalized by RBI for violating guidelines
...........An investigation carried out in the bank's Vashi branch revealed that the bank failed to comply with the RBI guidelines on KYC/AML process. Penalizing the urban co-operative bank, RBI said, "The bank had also violated instructions by freezing the account and thus tipping off the customer. It had also closed the audit trail by closing the account."..............
Tough times ahead?
......Making the market regulator responsible for policy lapses is not wise given the backdrop of tough macroeconomic environment coupled with uncertainties looming large. This is not to suggest that the rating agency’s alarm bells on asset quality of banks should be ignored. Both RBI and banks have huge challenges on hand to contain the NPAs to acceptable levels.........
Shadow banking: Silent threat to India’s growth story
.....With non-bank companies accounting for almost 40% of India’s financial system, policy makers are struggling to tame inflation and reverse slowing growth, said Ashima Goyal, a Mumbai-based economics professor and member of the central bank’s technical advisory committee. While the Reserve Bank of India raised interest rates 13 times from mid-March 2010 through April of this year, inflation has remained above 8% for 21 of 26 months, according to data compiled by Bloomberg. Having so much money outside government control “stands in the way of smooth transmission of monetary policy,” Goyal said. “This challenge is at the root of India’s struggle to administer policy that will trigger the kind of growth the world is expecting out of India.”........
Rocketting financial Inclusion in India
.......Although there is a long road ahead for complete financial inclusion, the business correspondent model has the potential to be the model of socio-economic inclusion for India.....
Parliament gives final approval to Banking Amendment Bill
........Winding up the discussion on the Bill in the House, Mr. Chidambaram said the modified legislation would help create "world size" banks in India. "We need more banks. Yes, we are opening new branches, but that's not enough... We need two to three world size banks," said Mr. Chidambaram, adding that the new regulation would help achieve this objective.........
Bank licences by Dec-end; FinMin, RBI plan guidelines
............The finance ministry is now preparing a letter that will be sent to the RBI on Friday morning regarding the submission of the final guidelines that will be later considered by the finance ministry. Some of the suggestions listed by the finance ministry include the categorisation of banks banks into three groups - local, regional and national banks and international banks.......
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