...... The
late RK Hazari was an illustrious Deputy Governor of your institution.
Hazari produced a brilliant report in the 1960s which showed how
cleverly our business houses used the permit-license raj to enrich
themselves and hold back economic growth of the country as a whole. The
control of banks and insurance companies by the honourable business
houses was in fact cited frequently those days as having baneful
economic consequences............
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.
Friday, July 5, 2013
One regulator, two voices
One department of the RBI says there is no forex exposure to be hedged, another penalises companies for not doing so
...One department of the RBI has proposed that non-bank finance companies (NBFCs) progressively reduce the period for classifying loans into the non-performing category (NPA). From the present 180/360 days, the period is to be brought down to 120 days and then 90 days. That will bring in regulatory parity with the banking sector, the RBI says.But is a narrow focus on reducing perceived “regulatory arbitrage” blurring other policy objectives? One wonders if this is an appropriate time for making the borrowing environment even tougher for those “financially excluded” segments catered to by the NBFC sector. As it is, the economy is quite weak and lenders (NBFCs included) will be circumspect in expanding their loan book..............
RBI clamps on rupee speculation overseas
........However, even before the slide began, RBI had issued a circular on April 25 specifying that foreign entities/structures with equity participation of Indian firms offering financial products linked to the rupee (such as non-deliverable trades involving foreign currency, rupee exchange rates, stock indices linked to the Indian market, etc) will have to take its approval. Their activities, if without the central bank’s approval, would be treated as violation of the Foreign Exchange Management Act (Fema), the circular clarified...............
Life after 60
.........In the absence of substantive reforms before the general elections of 2014, economists said the currency will remain under pressure. Part of the reason is that going by the real-effective exchange rate, which measures a currency’s export competitiveness against a basket of other major currencies, the rupee, despite its depreciation, is in the “neutral” territory, while .........
RBI conscious of need to be supportive of economic growth: Subbarao
....."We don't have an exchange rate target. We don't have exchange rate plan. We try to manage volatility in the currency movement, volatility very broadly defined, and we use also the instruments at our command. I have nothing more to say on that,"............
FM Lifts Bulk Deposit Cap on State Banks
Finance
minister P Chidambaram has instructed his ministry to lift the cap of
15% on bulk deposits for PSU banks, a move that would help them raise
more deposits, but may at the same time, increase their cost of funds.
When Chidambaram raised the issue of slow deposit growth at a meeting
with bank chiefs on Wednesday, some bankers said that the 15% cap has
been a stumbling block......
Read - ET Mumbai Edition page 12
Read - ET Mumbai Edition page 12
Rising NPAs in education loans worry bankers
CHENNAI: Bankers can expect to breathe easy on account of delinquencies in education loans. The government has proposed to set up a credit guarantee fund to address educational loan defaults. "The insurance scheme for educational loan is pending with the government. If it comes into force, banks would be more proactive about lending to meritorious students at the branch level," Dr K C Chakrabarty, Deputy Governor, RBI, said..........
Govt banks writing off more loans than they recover
Public sector banks are writing off more loans than they recover, despite repeated advisories from the finance ministry. In the fourth quarter of the last financial year, of the 26 state-run lenders, as many as 17 banks had written off more loans than they recovered. The write-off by these 17 banks in the January-March quarter of 2012-13 was higher than the write-off by all the 26 public sector banks in 2011-12................
HFCs set to tap ECB market after RBI reviews guidelines
Housing Finance Companies (HFCs) are all set to raise money through external commercial borrowings (ECBs) for affordable housing projects. RBI last week had revised the norms for raising ECBs for HFCs. “We have received application from HDFC” said R V Verma, chairman, National Housing Bank (NHB)...........
Liquidation of Charminar Bank in final stages
.......With a strong dose of help from the DICGC, by 2004 the bank paid off 80,000 of the total 1,02,000 depositors whose deposits did not exceed Rs 1 lakh. By 2007, it returned deposits to another 22,053 depositors. Later it scheduled eight installments for those depositors who had put Rs 10 lakh or more and cleared six of them until March last year. In fact, the bank had to give away the last of the installment in September 2012 to the last set of 136 depositors......
A Fixed Deposit For Polls: Mahila Bank
.........The
Bhartiya Mahila Bank will not offer any concessional rates to women,
though. “It is a commercial bank, which will follow the guidelines
stipulated by the Reserve Bank of India,” the
official said. The bank will primarily draw its human resource from
existing employees in public sector banks. “The idea is to empower women
in the country and bring banking services at their doorstep. The bank
will take initiatives to open accounts of women not only through branches but by organising camps all across the country,”..............
Don’t Arm-Twist State-Owned Banks
..........Instead
of pretending that a reduction in lending rates would revive
investment, the government should make its contribution to macroeconomic
stability and speedy project clearance. Tough curbs on the fiscal
deficit will help rein in the current account and excess demand feeding inflation. Proactive supply-side measures are needed to combat food inflation..........
RBI directive on banking charges
Dear Editor,
It refers to welcome directive by Reserve Bank of India (RBI) rightly requiring all the banks to have uniform and transparent system of levying service-charges irrespective of the service being availed from the branch where account exists, or through some other branch of the bank. Department of Financial Services (Banking Division) should take a step further by ensuring common and uniform rates of service-charges and interest-rates at least for all public-sector banks. Banks can compete by better service rather than rates of service charge and interest............
It refers to welcome directive by Reserve Bank of India (RBI) rightly requiring all the banks to have uniform and transparent system of levying service-charges irrespective of the service being availed from the branch where account exists, or through some other branch of the bank. Department of Financial Services (Banking Division) should take a step further by ensuring common and uniform rates of service-charges and interest-rates at least for all public-sector banks. Banks can compete by better service rather than rates of service charge and interest............
Why financial institutions should comply with anti-money laundering laws
......Banking industry that accepts business from high risk customers must have systems, controls and practices to manage that risk. Despite occasional aberrations, India has consistently maintained a robust Anti Money Laundering (AML) system. Historically, the country’s strict foreign exchange laws and transaction reporting requirements, together with the RBI’s Know Your Customer (KYC) policy guidelines make it difficult, though not entirely impossible for criminals to use banks or other financial institutions to launder money...........
Kochi banks top in credit-deposit ratio
KOCHI: Kerala's financial hub Kochi has ranked 20 among the country's top 200 urban centres, based on the total deposits accepted by scheduled commercial banks in these towns. In terms of the loans arranged by the banks in these centres,Kochi has come in at the 14 position.........
Rural banking push
This refers to the editorial “Licence to be cautious” (July 4). If the Reserve Bank of India’s real motive is financial inclusion, then the need for inviting new applicants is irrational. We have an almost saturated banking industry. New allotments would not solve the problem of “financial inclusion” in totality, as new organisations will take time to settle, including facing the greater challenge of rural customers...........
Extend services to rural areas, Joshi tells bankers
........Speaking at the meeting of the District Level Review Committee and the District Consultative Committee of the District Lead Bank, held at the Karnataka Chambers of Commerce and Industry (KCCI) here on Tuesday, Mr. Joshi pointed out that there was little progress on the opening of rural branches in the district. “If rural residents do not get loans in a place near to them, they will approach moneylenders who may fleece them. If we have to free them from the high-interest loans taken from moneylenders, extending banking services to rural areas is essential,” he said.............
.........An RBI official from Bangalore, Vanita Purushottam, pointed out that the bank guarantee scheme for small industrialists had come into effect from May 2013 and asked bankers to extend the facility to rural areas.........
Calculating corporates' unhedged exposure a tall task: SBI
...............The biggest problem here is going to be: how the calculations will be made. The guidelines came out yesterday night and we have not gone through the fine print. There are two or three things, which stand out. Firstly, the entire un-hedged position of the corporate across banks has to be ascertained..............
Product crack: Western Union’s remittance services
..........Till now Western Union could only enable cash-to-cash transaction from the US and the UK. In February, the Reserve Bank of India (RBI) had extended rupee drawing arrangement (RDA)—one of the provisions in that approves receiving money in India through a bank—to all the countries compliant with the financial action task force (FATF). Earlier,................
I-T dept may make d-o-b proof mandatory for PAN card
New Delhi: As part of its drive against fake Permanent Account Number, the Income Tax department is considering making proof of date-of-birth mandatory for issuance of PAN card. "The department might ask for proof of date-of-birth for issuing a PAN card. Ration cards and rent receipts might no longer be accepted as proofs of identity and address for issuance of a PAN card," sources in the finance ministry said..........
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