........... “Optimism is always good, I would share the optimism. But from time to time, we should do a realty check, whether the optimism is correct................
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.
Thursday, June 13, 2013
Higher provisioning dragged PSBs profitability: Microsec
......On the NBFC front, We believe, the Housing and Automobile finance NBFCs themselves may see revival if interest rates decline further. However, with an expectation of economic recovery is in near term, NBFCs are all set for a strong growth in the coming years. We also expect that new draft guidelines on NBFCs proposed by the Reserve Bank of India (RBI) in December 2012 (based on the Usha Thorat Committee Report) will strengthen the NBFC sector fundamentally in the long-term............
Only 8% of gross bank credit of all scheduled commercial banks go rural areas
........Surprisingly, Maharashtra, which accounts for more than one-fourth of gross credit by banks in the country, has one of the lowest share of rural credit to total credit. The gross bank credit by banks in Maharashtra as on September 2012 was Rs 1,410,952 crore, which is about 29% of India’s gross credit. However, the share of rural credit in the whooping Rs 1,410,952 crore given by banks in the state, was just 2% each at Rs 28,998 crore.........
Wednesday, June 12, 2013
KSK: Gentleman-economist - A.Seshan
News of the death of K S Krishnaswamy, the former Deputy Governor of the Reserve Bank of India (RBI), took my mind back to April 9, 1956 when I joined the central bank's Department of Research and Statistics as an economic assistant. I was posted to be KSK's assistant, who was then a deputy director in the division of rural economics................
RBI Governor is Wrong on Regulating Risk
.........The
global consensus is that microprudential and systemic risk work should
not be within the same organisation. Hence, there are good reasons why
the RBI should not be the primary systemic risk management agency: (a)
RBI would do microprudential regulation
for banking and payments, and (b) RBI is a sectoral regulator for these
two sectors and would generally favour them. Under the FSLRC proposal,
FSDC does no microprudential regulation, and looks at the full financial
system without sectoral biases................
RBI's actions not fine
............with just 1% of the system alerts thrown up in the sample banks RBI inspected getting reported to the tax authorities, there are yawning gaps in RBI’s inspection system. As for the cooperative banks link that RBI found was a systemic risk—“these banks may be an easier conduit for facilitating substantial amounts of cash in entering the banking system”—it remains true there is nothing that specifically bans this, though it is surprising that the private banks allowed such large sums of cash to be deposited without any alerts getting triggered. With the fines now out of the way, hopefully RBI will put in place a more stringent system to ensure such transactions don’t continue to take place. ...........
Lead Bank of Raichur district launches Credit Plan for 2013-14
..............V. Shrinivas, Assistant General Manager, RBI, RCPD Bangalore, congratulated the bank for its achievements in the previous year. “Without cooperation and coordination with the government departments, no bank can achieve much. All banks in the district should continue to maintain good coordination with the government departments,” he said.
RBI Throws Some Light on New Banking Licences
...........Let’s try and extrapolate a few of the key messages here, with the
benefit of the clarity provided by the RBI in its 165-page document;
each question being quoted and bucketed broadly on themes of ownership,
operating model, business transition and others. The answers are
repetitive, but intelligently so. It’s an assertion of the authority of
the central bank to formulate policies and guidelines and not deviate
from the principles post event, the essential function of a
clarificatory note being to clarify and not to introduce policy change.................
RBI norms may hit cooperative banks
...In addition to the deadline for capital adequacy, the RBI had insisted that the cooperative banks should adopt core banking system, be part of the special business process for retail payments set up by the National Payments Corporation of India, and Real Time Gross Settlement system by September 30. Crossing the first hurdle itself would be quite challenging for the cooperatives,...............
India Inc's excessive reliance on forex borrowing risky: RBI
The Reserve Bank of India (RBI) said that excessive reliance on foreign currency funds could pose balance sheet risk for Indian companies when there are fluctuation in the currency markets. "Heightened volatility makes the debt rollovers difficult or at high interest rates," said RBI's deputy governor H R Khan, who was speaking at the Bankers' Club at Thiruvananthapuram yesterday. A copy of Khan's presentation was uploaded in RBI website today.........
RBI says too early to conclude reversal in asset quality deterioration trend
..............."Recent trends in the asset quality of the banking system have been somewhat disquieting. In 2012-13, the gross non-performing assets of banks increased by 31.8% while restructured standard advances increased by over 40%," HR Khan, deputy governor of RBI, said in his presentation at a function in Thiruvananthapuram on Monday...................
RBI takes steps to bring back export proceeds
...........With an aim to arrest Indian rupee slide by boosting forex inflows, RBI on Tuesday raised the limit for online repatriation of export proceeds by over three-fold to $10,000 and made it mandatory for units in Special Economic Zones to repatriate full value of exports within 12 months. The announcements come at a time the rupee has touched life time low of 58.98 against the US dollar. It has depreciated by 3.5 per cent against dollar in the last two days and by over 8 percent since April 30..............
Read - Business Today
No new steps likely to curb imports: FinMin
.......“Going forward, the government will undertake measures to ensure that CAD is safely financed,” he said. Worried over huge gold demand that is impacting CAD, the government hiked the customs duty to 8 per cent, while RBI has put restrictions on banks to import gold..........
New hot money: Govt is paying a price for its debt fetish
..... The market is used by hedge funds and foreign institutional investors to hedge against currency volatility. For the rupee, the key non-deliverable forwards market functions in Hong Kong, London and Singapore. The RBI has not recognised this market and, according to the ET report, refuses to openly acknowledge the impact of this market on the rupee.......
Revving up the growth engine through financial inclusion - K C Chakrabarty
......While there is greater awareness among policy makers and financial sector participants about the importance of prioritising the goal of universal financial access, there is a need to ensure that progress on the ground is in line with these expectations. The opening of bank accounts is only the first stage and the focus now is not just on improving access but also on better use of the financial infrastructure............
Early monsoon may provide comfort to Reserve Bank
........“For RBI, this year’s monsoons again will be a crucial variable in calibrating monetary policy, as they will have implications for both inflation and growth. Although the central bank’s guidance remains cautious, we believe the flow of macroeconomic data, continued downside surprises in inflation, a more benign current account and weak growth indicators, has created room for larger monetary easing in the coming months,” said Rahul Bajoria and Siddhartha Sanyal of Barclays Capital.............
Gold Fever
India’s mania for the yellow metal is turning us into beggars with the rupee hitting a new low
.....India’s
gold mania – without the give-and-take of gold jewellery no Indian
wedding is considered auspicious – is literally beggaring us. If all the
gold lying idle in the country were to be converted into funds for
industrial and business growth, the flagging economy would revive almost
overnight.............
No lower EMIs?
The fall in the value of the rupee has weakened the chances of your home loan EMIs coming down. How? Because Reserve Bank of India Governor D Subbarao may be unwilling to cut interest rates, as the fall in the rupee will fan inflation by knocking up prices of oil and other imported items...........
Losing its value
............Despite the Clean Note Policy of the Reserve Bank of India (RBI) and the Banking Regulation Act restricting people from any sort of writing on the watermark window of currency notes, many continue to write and disfigure the currency notes because of lack of awareness. Under the RBI guidelines, any sort of writing or inscription on the watermark window of currency notes is a punishable offence under Section 35 A of the Banking Regulation Act 1949; something common citizens seem unaware of. ............
Got fake currency from ATM?
Cases of getting fake currency notes are coming from across the country. This is an alarming situation for the banking system. Getting counterfeit currency notes from ATMs shows the strong flow of fake notes in the economy. This surge finally incurs loss to the common man who brings out money from ATMs. Banks do not take the responsibility of such fake currency dispenses through ATM until concrete evidence is available. Since, it’s very difficult to prove the source of fake notes, so, at last the person gets nothing even after a complaint..................
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