The Foreign Investment Promotion Board (FIPB) could seek the Reserve Bank of India’s views on Hindustan Coca-Cola Beverages’ (HCCB’s) proposal for delayed redemption of preference shares in favour of its holding company, Hindustan Coca-Cola Holding (HCCH). HCCH is the Indian arm of the US beverages major Coca-Cola. “It is a FEMA issue and thus the RBI has to give a view on it,”...........
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.
Wednesday, January 16, 2013
Sebi for allowing ETFs to park 20% gold holdings with banks
......"Sebi has suggested this as one of the options to curb gold imports and channelise investment of retail investors from physical gold to gold-linked instruments," a senior government official said on condition of anonymity. In a draft report on gold imports released on January 2, the RBI had also suggested that ETFs be allowed to invest their gold holdings in gold certificates with banks. .............
Delhi mulls further curbs on gold imports to cut current account deficit
......Recently, the Reserve Bank of India executive Director Deepak Mohanty urged investors to shift from physical gold as a hedge against rising prices to financial products like inflation-linked bonds. While the CAD was indeed worrying, Chidambaram said it was within India’s capacity to underscore the crucial importance of FDI and FII.............
NABARD asks OSCB to set up FLCs in state
With an aim of educating rural people about banking systems in the state, NABARD has approached the Odisha State Co-operative Bank (OSCB) to play a major role in establishing Financial Literacy Centres (FLCs) because Co-operative Banks have wide grassroots presence in the state. Meanwhile, NABARD authorities have asked the OSCB to allow each District Cooperative Bank to start FLC at least in one block as part of the endeavour to educate rural masses on banking system...........
Read........
Read........
Tuesday, January 15, 2013
Urjit Patel takes over as RBI Deputy Governor
Urjit Patel takes charge as RBI Deputy Governor, to head monetary policy division
A revolution on the cards
....The Reserve Bank of India, apprehensive about Visa and MasterCard monopolising the payment market, wants fair competition. “The need for RuPay is on account of the high cost borne by Indian banks for affiliation with international card associations in the absence of a domestic price setter,” said RBI Deputy Governor H.R. Khan. “Also, the connection with international card associations results in routing even purely domestic transactions through a switch located outside the country.” In the case of a Visa card transaction, the data is sent to a processing centre in the US or Singapore, which, in turn, sends it to the card-issuing bank in India. With 90 per cent of transactions being domestic, all data on Indian spending first goes to the US. If the banks start accepting RuPay cards, NPCI could act as a switch for transactions. RBI feels that a vast segment of the population has been left untouched by the growth in the electronic payment market, despite the three-decade-old presence of international card networks in India. ......
Bankers want RBI to allow interest on current accounts
Banks will ask the Reserve Bank of India to allow them to pay interest on current account deposits at tomorrow’s meeting, in the run up to the central bank’s monetary policy review. Currently, banks don’t give interest on current accounts. Doing so, bankers believe, will encourage cash to flow into the system which otherwise stays with the establishments. Current accounts are now 9.85 per cent of total deposits with banks...........
Progress of banks reviewed
......LDO,RBI emphasised upon the achievement on the CD ratio of 40 per cent in the district by March 2013, which currently stands at 32.70 per cent. He exolted upon the bankers to come forward in lending in key areas, so as to achieve CD ratio. He also emphasised on the financial inclusion of all unbanked villages in the district.........
New banking licences: Finance Ministry raises hope about final guidelines
....The ministry has proposed that the RBI should clearly define 'promoter', besides suggesting an appropriate banking structure in the country with a few national and international level banks at the top, an official familiar with the matter told ET. The ministry has also suggested that the RBI drop the condition that restricts promoters with exposure to stockbroking and real estate from seeking bank licences, added the official, who did not wish to be named. ............
Banking on reform
........When it comes to economic policy, it is better to be safe than sorry because decisions once taken cannot be reversed easily. This is true of the Banking Laws (Amendment) Bill, 2012, which was passed by Parliament on December 20. The amendments to the existing laws will be followed up by the RBI through suitable policies. The reforms will not transform the landscape of banking in India, or fully open up the sector to foreigners and industrial houses, though it will admit a few of the serious ones from among them. But there seems to be a grudging acceptance that the current structure of Indian banking is not helping the expansion of banking services, thereby putting the government’s financial inclusion and growth objectives at risk. ..........
Short Cuts to Success
.............RBI Governor D. Subbarao has defied two successive finance ministers, Pranab Mukherjee and P. Chidambaram, both of whom wanted an interest rate cut in 2012. There are now expectations he may finally relent in January 2013 when RBI announces its next review of monetary policy. The January cut, if it happens, will be a minor one. RBI will have to follow that with several cuts throughout the year if private investment has to be revived.....
Conflicting rationale before Reserve Bank
The consumer and wholesale price inflation numbers for December 2012 gave contrasting pictures, just a fortnight ahead of the Reserve Bank of India (RBI)’s monetary policy review...........
Stable, but for how long?
......Financial inclusion, financial literacy and consumer protection are interconnected threads in the pursuit of financial stability. Given the strong linkage between stability and inclusion, it is only right that the FSR should highlight, for the first time, the several regulatory initiatives taken and the progress achieved so far........
Hopes of rate cut by Reserve Bank of India on a high as inflation hits a three-year low
Headline inflation dropped to its lowest in three years in December, reinforcing expectations that the Reserve Bank of India will cut rates at its policy review on January 29 to boost the economy, which is headed for its worst showing in a decade. The inflation numbers are the latest piece of data providing backing to those, notably the finance ministry, calling for a cut in interest rates after a fall in industrial output in November reported on Friday. ...........
UP eyes 3000 bank branches to better investment scene
..........the government, according to sources, has also decided to suggest to the RBI governor to set up at least 3,000 new branches of banks in the state and also issue the licences for the reopening of the 15 cooperative banks, which have been denied the deposit facility at present.
Read - TOI
Read - TOI
Monday, January 14, 2013
Leaving interest rates alone would be a heroic move - S.S.Tarapore
.....Policy Options Given that the inflation rate is way above the RBI's comfort zone of 4.5- 5.0 per cent, the large fiscal deficit, the large CAD, the overvalued rupee exchange rate, the overextension of credit and the sluggish deposit growth, there is no case for a reduction in the repo rate or the CRR. In fact, the situation calls for tightening of monetary policy to squeeze inflation. The powerful political economy forces of industry and government will not permit the RBI to undertake the policy tightening which is necessary. It would be a heroic act on the part of the RBI to keep the present policy stance unchanged. What is likely to happen is that, in all probability, the RBI would, on January 29,2013, reduce both the repo rate and the CRR, each by 0.25 per cent........
The challenge of gold
.....One promising remedy would be “financialisation” of gold, both the imported component as well as the domestic stock. Banks and institutions need to introduce attractive savings packages based on gold. Simultaneously, alternative avenues for investment should be made to provide a real rate of return that is higher than what obtains now. Only then can domestic consumers be weaned away, at least partially, from their craving for gold......
Microfinance - Book Review by P.P.Ramachandran
..........NGOs are the backbone of financial intermediation for the self- help groups. Even with the strident official backing, their work has become an inalienable and invaluable part. Assisting the credit institutions has been an upsurge in the growth in MF institutions. This growth led the RBI to appoint a Committee headed by Dr. Malegam to recommend appropriate regulations for the sector. The Finance Ministry has formulated a Finance Bill proposing to confer regulatory powers on the RBI. The book under review is a history of the development of MF institutions and is an exhaustive analysis of the literature concerning that. MF is one of the growing tools of development and microcredit has become an integral part of social banking The SHG- BL programme backed by Nabard is the largest MF programme in the world. There are a number of government programmes, which support the poor. The book is a comprehensive survey of the literature on MF movement in India and abroad...........
Ex-RBI staffer fights to save her flat
........Nearly four decades ago, when she was a top official with the Reserve Bank of India, she had invested most of her savings into purchasing the two-bedroom flat, one that she hoped she could retire peacefully into. As luck would have it, she (with the help of her 96-year-old sister Taramati Israni) has been left battling her nephew for her 900-sq-ft home. Her nephew Mukund Bhide came back into her life four years ago and after a while, she made him a joint beneficiary on all her bank accounts so he could do the running around for her. “He swindled me of lakhs of rupees and took away the original share certificate of my house without my knowledge.” .........
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