Forty-four years after it was conceived by the Gadgil Study Group in October 1969, and its consequent implementation by the Reserve Bank of India (RBI) the same year, the ‘Lead Bank Scheme’ (LBS) will finally be introduced in metropolitan cities, with the intention of addressing a much neglected constituency -- the urban poor. “The scheme emphasises making specific banks in each of the cities key instruments of local development by entrusting them with the responsibility of locating growth centres, assessing deposit potential, identifying credit gaps and evolving a co-ordinated approach to credit deployment, in concert with other banks and credit agencies,” an RBI official said on Saturday........
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, May 6, 2013
Issue unique ID code to customers, RBI to NBFCs
To enable non-banking finance companies (NBFCs) build a centralised know-your-customer (KYC) registry and thereby eliminate the scope for multiple identities, the Reserve Bank of India has proposed that such companies should allot unique identity code for each customer. In a release issued on Friday, it said that the advice follows the proposal made by the Working Group constituted by the Central government. .........
Read - DH
Read - DH
What’s Next, Mr Subbarao?
One of these days, the Reserve Bank of India (RBI) will come out with its history through the eventful days of liberalisation and the decade preceding it. With several protagonists of this fascinating period still around and kicking, chances are the hardbound may read more like an RBI annual report than a Ramchandra Guha. The tome, unfortunately, will not capture the Subbarao era that comes to an end in September — unless New Delhi and the governor have a change of heart. But years later, when a generous historian puts her mind to the subject, when Mr Subbarao's mistakes appear less glaring, she could end up describing the governor as an inflation warrior. No one senses it better than the man himself.............
Rewriting the Indian growth story
........The RBI issued a fairly gloomy forecast in its monetary policy statement last Friday. But it did cut the repurchase rate by 25 basis points. In fact, the central bank started cutting rates as long ago as May 2012. Despite the hawkish language it continues to employ, the actions indicate that it could loosen through this entire fiscal. That has useful implications if it is true........
Why Chidu and Subbu still can't see eye-to-eye
......The policy makes it clear that the distance between North Block and Mint Street is greater than the known distance between Delhi and Mumbai.................
RBI unlikely to cut interest rate on June 17: Experts
...... "Going forward, we expect the RBI to ease by a further 50 bps (0.5 per cent) in FY14", but added that from a timing perspective, "we think the rate cuts could be spread out for the rest of the fiscal year and are data dependent"..............
A policy with many dimensions
............In a statement that is bound to catch popular imagination, the RBI says that both borrowers and lenders have become risk averse, the former because of governance concerns, delays in approvals and tight liquidity and the latter due to rising non-performing assets and heightened risk premia. Finally, the RBI once again renews its call for easing supply side constraints, notably in food and infrastructure without which the effectiveness of monetary policy to contain inflation and anchor inflation expectations will be undermined.
Read - The Hindu
RBI & inflation - A.Seshan
The Reserve Bank of India (RBI) has said it would try to contain the annual inflation rate to five per cent by March 2014, using all the instruments at its command. It's not clear how it can accomplish this. It has itself pointed out on several occasions in the past how it is in a bind in matters of inflation when supportive action from government is required.....
Along predictable lines
........There is simply no getting round the fact that drastic actions by the government, particularly with respect to supply constraints, are now critical to any prospect of a growth revival. The RBI's policy statements have been saying this for several quarters and this one is even more emphatic on the issue. Unfortunately, this imperative is only matched by the dwindling ability of the government to do anything significant............
Why repo rate cuts cut little ice
...................The repo rate, at the end of the day, is only the tip in the iceberg of the financial market. This is not to deny the potent symbolism and signals on the RBI’s ‘policy stance’ that it can convey. But to assume that a rate cut on about Rs 1,00,000 crore (the average sums borrowed daily through the RBI’s repo window) to pass through immediately to the banks’ total loans and advances portfolio aggregating to some Rs 53,00,000 crore is a vaulting expectation, which, to quote Shakespeare, “overleaps itself and falls on the other”.
‘Expect Baby Steps Towards Softer Rates’
.......The
markets were more optimistic, given that there were many positives such
as falling gold and commodity prices and the slowing growth rate in
India. However, RBI has been a bit more cautious — too cautious some
feel — in its action as well as guidance. Besides, RBI appears to be
much less optimistic on the inflation and current account fronts. So, it
seems to be holding back its policy reserves rather than using these up
in a hurry............
RBI wants to spread the Aadhaar menace to card transactions when bankers are evading KYC norms
........Reserve Bank of India (RBI), the country’s banking regulator, seems to be keen on pressing the ‘unregulated’ and illegitimate (as it is yet to be sanctioned by Parliament), the Aadhaar or unique identification (UID) to authenticate card present transactions and other related issues. This is when bankers are still not strictly complying with the RBI’s know your customer (KYC) norms. Some lenders, especially co-operative banks are even using ‘gold route’ to facilitate money laundering for builders and developers...........
RBI to ask banks to hold Aadhaar 'melas'
....."With a view to facilitate the DBT it is proposed to advise banks to open accounts for all eligible individuals in camp mode with the support of local government authorities." The banks would be asked to seed the existing accounts or the new accounts with Aadhaar numbers and also put in place an effective mechanism to monitor and review the progress in the implementation of DBT.......
Raising capital made easy
If you are not overly scrupulous and are willing to exploit loopholes in the law, here is a ‘business model’ to raise thousands of crores of rupees from retail investors...........
Read - HBL
Curbing bank funds will spike prices,help grey mrkts:Jewellers
The Reserve Bank's decision to restrict bank finance to gold imports meant only for jewellery exports will jeopardise the supply system and increase prices apart from boosting grey market, an industry body has said."The RBI's restriction on the import of gold on consignment basis by banks only to meet the genuine needs of exporters of gold jewellery, will have repercussions on the industry...........
RBI cracks down on banks selling insurance products
............. "It has been observed that in some cases, banks did not have clear segregation of duties of marketing personnel from other branch functions, and bank employees were directly receiving incentives from third parties such as insurance, mutual fund and other entities for selling their products. Such practices may lead to mis-selling and distortion of the staff incentive structure." Experts feel that RBI's step may not have the desired effect............
eMudhra launches security solution for online financial services
........The launch of Trustfactor is in alignment with the RBI's mandate for banks to implement digital signature certificate based authentication for electronic banking, a statement from the company said. The solution is supported by robust technology, domain-experienced implementation and secured processes including verification and issuance of digital signature certificates (DSC). DSC is legally valid under Information Technology Act and recommended by the Reserve Bank of India specifically for high value transactions, the statement said. .........
Dear KC Chakrabarty, here’s the real reason why people invest in Ponzi shemes
.........A Ponzi scheme is a fraudulent investment scheme in which the illusion of high returns is created by taking money being brought in by new investors and passing it on to old investors whose investments are falling due and need to be redeemed. K C Chakrabarty, the Deputy Governor, is the latest individual who has jumped onto the more banks equals fewer Ponzi schemes, bandwagon.........
'RBI was in loop on Saradha, others'
.........Under section 45-IA of the RBI Act, 1934, it is mandatory for NBFCs to obtain a certificate of registration from the central bank and have a minimum net owned funds to be able to commence or carry on business of an NBFC. According to the official, any company failing to do so can be heavily penalised by the RBI.............
Saturday, May 4, 2013
A plot to destroy RBI - S.S.Tarapore
....The Commission envisages a 12-member RBI Board with not more than one half being executive members; this by itself is reasonable but one has to dwell a little further into the Commission's proposal. There is an insidious proposal, in that the post of 'Governor' should be abolished and the head of RBI should be named as 'Chairperson'. The Commission's ready defence would be that, after all, the head of the US Fed is called 'Chairman'; the Commission would conveniently forget that members of the 'US Fed are called Governors and the head is known as Chairman of the Board of Governors. Furthermore, the Deputy Governors are to be brought down a peg and called members and one of the members would be called an 'administrative law member'. The whole ploy seems to be to downgrade the RBI to the level of any other financial regulators. The Commission needs to appreciate that central banks are unique. .............
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