.....Bitcoins suffered a new setback after China’s central bank said Thursday its banks and payment systems are barred from handling the virtual currency. The central bank said bitcoins did not qualify as a currency but private individuals still are allowed to trade them at their own risk. Bitcoins are created, distributed, and authenticated independently of any bank or government. Their relative anonymity holds out the promise of being able to spend money across the Internet without scrutiny.....
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, December 6, 2013
Prediction: Bitcoin is doomed to fail
......Bitcoin exemplifies some of the problems of private money: Its value is uncertain, its legal status is unclear, and it could easily become valueless if users lose faith. Besides, if bitcoin ever really started to take off, governments would either ban it or take over the system. The authorities might be motivated by a genuine concern about the stability of a shadow monetary system or they might act out of self-preservation. Tax evasion would be too easy in a right-money parallel economy.......
French central bank warns of risks
France's central bank, on Thursday, warned against the use of the virtual currency bitcoin, noting that it is not only highly volatile but also unregulated by authorities. Launched in 2009 as the invention of a mysterious computer guru who goes by the pseudonym Satoshi Nakamoto, bitcoins can be exchanged online for real money or used to buy goods and services on the Internet........
Educate on bitcoin
This has reference to the story on bitcoins. It is high time RBI educated the general public on all aspects of this new payment system , which is not in the ambit of any regulatory mechanism, lest they fall a prey and than find that it is too late.
- B K katyal, Ex Chief General Manager
New Cos Act to bring clarity on tax-free salary
.......For companies registered under the Companies Act, 1956 (Cos Act), Section 200 prohibits payment of tax-free remuneration to employees/officers. Despite this prohibition in the Cos Act, the scheme for taxation of perquisites acknowledges tax-free salary payment as a permissible arrangement. Section 10(10CC) of the Income-Tax Act, 1961 (IT Act) overrides Section 200 of the Cos Act and provides the employer an option to pay tax on behalf of employees on non-monetary perquisites and exempts such tax actually paid by the employer in employee’s hands, thus subjecting it only to a single level gross-up..........
RBI is losing $1.2 bn a year on deposit swap window
.....RBI by swapping USD with banks is holding USD 30 billion and earning 3.5% swap rate. RBI requires to invest the 30 billion in USD assets and as the central bank does not take credit risk, it invests USD 15 billion each in three and five year US treasuries that are yielding 0.6% and 1.4% respectively. RBI is earning a total of 4.1% and 4.9% on its USD 15 billion each of three and five year swaps that it carried out with the banks............
Read............
Coimbatore Co-op Bank fined
The Reserve Bank of India has imposed a monetary penalty of Rs 5 lakh on The Coimbatore District Central Co-operative Bank Ltd for non-adherence to Know-Your-Customers norms and Anti Money Laundering guidelines. ...
RBI approach on banks and financial institutions that are too big to fail
.......While cross-jurisdictional activity is considered as a key factor for determining the risks posed by globally systemically important banks, for domestic banks size has been given a higher weightage by RBI. Cross jurisdictional activity has been given a weightage by RBI in sub-indicators and it has replaced level 3 assets by cross jurisdictional factors. RBI prescribes additional capital requirements for too big to fail to banks as follows:............
SBI welcomes RBI move to identify systemically important banks
The SBI today welcomed the Reserve Bank of India’s move to identify domestic systemically important banks (D-SIBs) — large and highly interconnected financial institutions — whose failure can impact the functioning of the financial system and harm the economy. According to P.K. Malhotra, Dy GM (Operations), SBI, the step is likely to make the financial world more secure...........
SBI asks officers to meet loan-seekers only at branch
......According to instructions given to field-level functionaries, an officer should hold meetings with the borrower only in the presence of other officers. One-on-one meetings and meetings at the residence of either the officer or the borrower should be avoided. Further, talks between the bank staff and the borrower, who may come for a loan/enhancement of loan limit/ one-time compromise settlement of a loan that has gone sour, should ideally be video recorded. The emphasis on transparency in officers’ dealings with borrowers comes in the wake of the Central Bureau of Investigation recently registering a case against SBI Deputy Managing Director Shyamal Acharya, Chairman of a New Delhi-based private company and others in an alleged bribery case.......
SBI planning automated system to cut zero balance account cost
........Malhotra said a lot of initiatives are being taken to bring down costs. “We are trying to put in automated technology platform with focus on financial inclusion accounts mobilised by business correspondents ... We are trying to take out the manual intervention to slash cost.” The bank’s CASA ratio is under pressure since the last three quarters of the current fiscal. CASA ratio in September quarter was 43.58 per cent against 44.95 per cent in the same quarter FY 2013........
Unique Identification Authority of India issues 51 crore Aadhaar numbers
.....Enrolment for Aadhaar is entirely voluntary and the Aadhaar number is already used as a Proof of Identify or Proof of Address or both by several programmes and schemes run by Central and State Governments. A number of regulatory authorities such as Reserve Bank of India (RBI), Insurance Regulatory and Development Authority (IRDA), Securities and Exchange Board of India (SEBI) and Pension Fund Regulatory and Development Authority (PFRDA) have declared Aadhaar number as a valid ‘know your customer’ (KYC) and ‘electronically know your customer’ (eKYC) for purposes under their respective domains. This has led to
Hit by the gold bug
.....Data released by Reserve Bank of India last week show gold imports have dropped sharply, after the government imposed strict measures to break the growing gold obsession. It’s likely smugglers have replaced official importers to meet demand, even as there are some complaints about old-style harassment by customs officials at airports. It’s the same old story: economic incentives overpower controls........
Ratnakar Bank launches financial literacy programme in Ahmedabad
.....In addition to provision of banking services through the business correspondent model, the bank has engaged Swadhaar FinAccess, to implement financial literacy programme in the same geographies. As part of the arrangement, Swadhaar FinAccess (SFA) will deliver a classroom based financial literacy course for women from low income communities........
Crop loan interest subvention scheme notified
....The benefits of interest subvention will also be available to small and marginal farmers having Kisan Credit Card for a period of up to six months post-harvest on the same rate as crop loans, against a negotiable warehouse receipt for keeping their produce, the RBI notification said.
Brace for bumpy ride in emerging markets
....But while the Reserve Bank of India can relax - a touch - right now, the big question is just how many other emerging market currencies will now enjoy similar calm? For as investors look back over the events of 2013, it is clear that one of the most bruising developments in the global financial system was a dramatic return of emerging market volatility........
'Regulator should derecognise banks as corporate agents'
Banks should be allowed only as insurance brokers and not as agents of insurers in order to protect customer's interest, said a top official of Reliance Life Insurance Company. "The IRDA (Insurance Regulatory and Development Authority) should derecognise banks as corporate agents. Banks are to be allowed only as insurance brokers and not as agents," Anup Rau, chief executive officer told reporters here Thursday. The IRDA and the Reserve Bank of India have come out with guidelines for banks to act as brokers of insurance companies...........
Finance Ministry gives roadmap to regulators on global best practices
........Officials said, the proposal has been sent to the Reserve Bank of India (IRDA), Securities and Exchange board of India (SEBI), Insurance regulatory and Development Authority (IRDA) and Pension Fund regulatory and Development Authority (PFRDA) and Forward Markets Commission (FMC). The ministry has urged these proposals to be vetted by the individual board of the respective regulators and be implemented at the earliest, said official sources.........
Winsome becomes a headache for banks & investors
....Cases such as these that are giving bankers sleepless nights. Statistics by the Reserve Bank of India show government banks added Rs 4,94,836 crore to their bad loans or non-performing assets (NPAs) in banking parlance between 2007 and 2013. During the period, they reduced non-performing assets to the extent of Rs 3,50,332 crore. This was mainly because loans worth Rs 1,41,295 crore were written off, another Rs 90,887 crore were upgraded to repaying loans and Rs 1,18,149 crore was recovered.....
Thursday, December 5, 2013
Mobile Payments Gain Traction Among India’s Poor
........“India is probably the most exciting market for mobile money in the world,” said Michael Joseph, the man credited with the success of M-Pesa in Kenya. Now in London, he heads mobile money programs globally for Vodafone. “When India takes off,” he said, “it will eclipse anything we’ve done in Kenya.” Indian regulators concur. “We have not set a target, but it is going to happen,” said the Reserve Bank’s Deputy Governor, Harun R. Khan, who oversees the nation’s payment systems. “I’m optimistic about its future.”.........
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