.............RBI has rejected banking application of the DCCBs on the ground that they don't not have enough capital to cover the risks. Now, even though the state is ready to provide capital, it wants the RBI to first revive the three banks. But capital adequacy is the very condition on which RBI may grant a licence to revive the banks. An official communique from the state's information department says that the funds will be released if the RBI revives the banks' licences............
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, June 11, 2014
HCBL Bank reaches out to micro entrepreneurs
......However, they get a miniscule share of the price paid by consumers, as there is a long chain of middlemen involved. Majority of these artisans are poor and do not have resources to market their products directly. The Bank would allow these artisans to display their finished products in its branches for selling. Last year, HCBL had started opening savings bank (SB) accounts of beggars under financial inclusion and motivating them towards self-employment. So far, the Bank had opened accounts of 150 beggars in Lucknow under the relaxed Know Your Customer (KYC) norms of the Reserve Bank of India (RBI)...........
RBI holds the key to resolving HPL dispute
........Because the polymer producer has been defaulting on its own loan obligations for the past two years, lenders need clearance from the Reserve Bank of India (RBI) to make loans to TCG for its proposed purchase of HPL’s shares. Though TCG is likely going to mortgage other assets as well, RBI’s clearance is mandatory for banks to lend for this purpose, the government official said, adding that TCG has indicated to the state government that it has already approached banks for loans........
Canara Bank expands overseas network to New York
.............With the inauguration of New York branch, the Bank now has presence in 8 countries, namely, UK, USA, Hong Kong, China, Bahrain, South Africa, UAE and Russia. The Bank has plans to open branches/offices in Germany, Dubai, Brazil, Tanzania, Japan, Nigeria and Qatar during the current financial year. Overseas business of the Bank, which is at 5.72% of the total business as at March 2014 is projected to increase to 10% by end of FY15, the Bank said in a statement...........
Needed, a Holistic Approach to Savings
........All savings can then be exempt from tax both at the time of contribution and during the accumulation and growth phase, to be taxed only at maturity, that too if the money is used for consumption. However, if the money is re-invested in another saving instrument, the reinvested amount should, again, be exempt from tax. Moreover, there need be no limit to such tax exempt savings. It makes sense to extend the EET principle to ...........
Banking on following your money’s trail
.........Keeping a track of money spent is certainly not new. So, why are banks now offering their customers such a facility? “Personal financial tracking has become popular globally. On the basis of customer insight, we anticipated demand for such tools in India. With Internet and mobile banking usage rising, we looked at combining customers’ banking attributes with their desire to control finances and manage expenses,” .......
Directed Investment is Need of the Hour, Not Lower Rates
........However, a broad-brush tight monetary policy by itself may have limited efficacy in bringing down inflation in the current Indian context. In a paradoxical way, in fact, it might actually have unintended consequences of achieving just the opposite. India is not yet a borrow-and-spend economy . Only 18.6% of banking loans are towards retail and consumption. That means higher interest rates passes on as a higher input cost, through 81.4% of banking loans that go to producers and intermediaries. High interest rates penalise infrastructure investments that are needed to address the supply side. But, seeking lower rates across the board may be mis placed at this stage..........
Arun Jaitley for hitting ‘undo’ button to revive economy
Hitting out at the last UPA government for the labyrinth the economy has got into, finance minister Arun Jaitley on Tuesday hinted that many of the regime’s policies that stymied economic growth could be reversed. “The UPA left the economy in a bad shape. Things that have been done have to be undone,” he said in the Rajya Sabha in what was seen as an oblique reference to the UPA’s costly welfare schemes that strain government finances and investor-unfriendly policies like retroactive taxation...........
Tuesday, June 10, 2014
Will Rajan Lag Markets In Lower Interest Rates?
In two months before Duvvuri Subbarao took his first baby step of raising key rate by 25 basis points in April 2010 to fight inflationary pressures, yields on benchmark bonds had surged about a hundred basis points. A similar act may be playing out now on the Mint Street, though in the opposite direction. Market is flashing signs of lower interest rates though Reserve Bank of India Governor Raghuram Rajan is showing little signs of easing anytime soon. ........
The power of small - Charan Singh
...........The MSME sector has great potential to help economic recovery and accelerate growth. In view of its significant capacity to create employment, the MSME sector deserves special attention. To incentivise MSMEs, the government could consider tax concessions or even tax holidays, which are offered by many countries. The government could also consider providing subsidies to MSMEs, including interest subsidies. Finally, to tap their employment generation potential, the problems of MSMEs need to be considered in a disaggregated manner. In fact,....................
Better regulatory coordination vital
.............K C Chakrabarty, who recently retired as Deputy Governor of the Reserve Bank of India (RBI), said unless regulatory arbitrage was reduced, there would be a tendency to avail of gaps, adding not being able to address this issue was a collective failure of society. He was speaking at a function organised to release Sahara: The Untold Story, a book by business journalist Tamal Bandyopadhyay.............
Putting the spring back into the economy
............The other crucial thing that the government needs to do in order to sustain growth is to control inflation. Inflation has always been partly demand-driven and partly structural, due to elements like supply bottlenecks. In India, in the last few years, it’s the structural part which is almost always driving inflation, particularly food inflation. While the Reserve Bank of India (RBI) and monetary policy can ensure that inflation does not lead to hyperinflation, unless we solve the problem in the food sector, we will keep on having high inflation rates. Hence, interest rates will not be able to come down, hampering growth.
In order to solve this problem, .............
CM inaugurates Gujfed initiative
This is no secret that Gujarat Urban Co-operative Bank Federation (GUCBF) is ahead of its counter parts operating in other states. Or what else can explain its initiative to form an umbrella organization to promote technological modernization, capacity building, research and financial literacy among cooperative banks on the RBI’s suggestion.
The Centre of Banking Research and Excellence was inaugurated in Ahmadabad at the hands of Gujarat Chief Minister Anandi Ben on Saturday, a proud Gujfed Chief Jyotinder Mehta informed Indian Cooperative.
RBI had set up a Committee five years ago to work out an umbrella organization for the urban cooperative banks. The Committee recommendations were sent to all the state headquarters. Acting on the suggestions, Gujarat Chapter of Nafcub has taken initiative to start the Umbrella Organization aimed at improving the functioning of UCBs.
“And we were lucky to rope in the services of V S Das, the then ED and member of Committee from RBI. After retirement he has agreed to oversee the entire operation” Mr Mehta said to Indian Cooperative.
Sources say the umbrella body would be the first of its kind in the country and offer the cooperative banking sector services like asset liability management, fund management and investment banking.
There are 233 urban co-operative banks and 18 district co-operative banks in Gujarat with over 10 million account holders. Nearly 3 million farmers are linked to different credit societies in Gujarat. The cooperative banks in the state have Rs 40,000 crore in deposits and have doled out Rs 30,000 crore in advances.
“Gujfed has also started what is known as “Sahkar Setu 2014” aimed at envisioning the next generation cooperatives. Next Gen Co-op would be futuristic encompassing the latest technologies”, beaming Mehta added.
PSU babus can't travel `Jaipur to Delhi via Sao Paulo' anymore
.The government has issued a comprehensive set of guidelines for employees of public sector banks, financial and insurance companies and other regulatory bodies, significantly limiting their leave travel concession (LTC) claims. The notification was prompted by the widespread misuse of LTC/LTA facilities by government and public sector employees, exposed by TOI over the last year and now under CBI investigation..........
‘Full financial inclusion a pipe dream’
Six of India’s senior bankers and heads of microfinance institutions (MFIs) gathered at Mint’s first annual South India Banking Conclave to discuss the issue of making financial inclusion sustainable and how to address the challenge of combining profitability with inclusion. The consensus that emerged out of the discussion is that both banks and MFIs are moving in the right direction and it has to be combined with financial literacy but it will take time to cover the entire country..........
Ind-Ra: RBIs Policy Stance Guided by Upside Risks
India Ratings & Research (Ind-Ra) believes the Reserve Bank of India's (RBI) policy stance of maintaining status-quo on policy rates is the right step under the current macroeconomic environment. The agency does not expect any change in the policy rates in the near term. We believe besides looking for a predictable and sustained downward trajectory of inflation, the RBI will watch out for the fiscal stance of the new government before changing the rates...........
WHAT’S SO DOVISH?
Analysts and commentators were quick to dub the latest credit policy statements by RBI governor Raghuram Rajan “dovish”. And how did they come to that conclusion? On the basis of a sentence in the policy which said: “If the economy stays on this course, further policy tightening will not be warranted. On the other hand, if disinflation, adjusting for base effects, is faster than currently anticipated, it will provide headroom for an easing of the policy stance.” Look closely at the statement, it is nothing exceptional. Similar statements were made by Rajan himself earlier and by many other governors. Yet when the mood is different, the same statement acquires a different hue!
PMO to Look into PSU Banks' Bad Loans, Governance Structure
The Prime Minister's Office is keen to champion fast-track reforms in public sector banks to lift the overhang of rising bad loans that make it a challenge to re-start the investment cycle and pose a fiscal headache for the government on account of banks' capital infusion requirements. At the same time, the PMO is looking to overhaul and strengthen government-owned banks' governance structures at the earliest so that the problem of bad loans doesn't return with the next cyclical downturn. The Modi government could take a cue or two from private banks whose management and credit appraisal structures have helped them contain the rising tide of non-performing assets that have accompanied India's slowing economy in recent quarters, ..........
Things not moving..........
My View on "Functioning of the Reserve Bank of India - A.Chand...":
Dear Chandramouliswaran Sir,
I totally agree with your comments.Things are not moving in the required and desired level at commercial banks and RBI. Despite RBI inspections, why NPAs are going up and up in every bank, specially Public Sector Banks.
- William Panakal
Banks may take legal route to end agriculture loan waivers
..........Banks may also insist upon mandatory insurance for all farm loans as a protection against future loan waivers, though this may raise the cost of funds for the agriculture sector as a whole. The Indian Banks' Association, the industry lobby group, has sounded out both the Reserve Bank of India and the Union government about the hazards of a waiver, said two people familiar with the development. They said that no final decision has been taken on the proposed legal action and banks were stil ..
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