RBI to convene meet on microfinance institutions issue

The Reserve Bank of India (RBI) will convene a meeting of banks to gauge their stand in relation to microfinance institutions (MFIs) in the interim period between the submission of the Malegam committee report and its study by the bank. RBI Governor Duvvuri Subbarao told mediapersons here Thursday that the meeting might be held in the next two weeks though the final decision is yet to be taken.

Banking licence norms by Jan

RBI will be ready with its draft guidelines on new banking licences by January, governor D Subbarao said on Thursday. It will put a gist of feedback received on the new licence issue in its website shortly. The RBI central board has on Thursday discussed issues like initial capital for new banks and their likely business model, and how would the promoters capital be diluted after initial years. We received a broad spectrum of feedback and there is no clear-cut opinion one way or the other, Mr Subbarao said

RBI wants ideas on savings rate freeing

Reserve Bank of India governor D Subbarao today said the central bank was unsure about the impact if savings rates were deregulated and if it would make interest rates unstable. We will bring out a discussion paper soon on the (subject) and want banks to give suggestions on it,” he said. The central bank’s mid-term policy review had said the discussion paper would delineate the pros and cons of deregulating the savings deposit rates, which had remained unchanged at 3.5 per cent per annum since March 1, 2003. “There is a chance that once it comes, banks will abandon low-income household services. If interest rates go down, it will affect small savers and if it goes up, it may impact the costs of banks. We are not clear about its outcome,” Subbarao said. Adding: “If we talk about the positives, it may give additional flexibility for banks; they can come up with innovative products. Moreover, if interest rates go up, it will attract more savings and the apex bank will have a better idea of monetary policy transmission.”

INFLATION STILL ABOVE RBI’s COMFORT ZONE: SUBBARAO

Reserve Bank of India (RBI) Governor Duvvuri Subbarao today said inflation was still above the central bank’s tolerance level and it would revisit the gross domestic product (GDP) growth numbers in its quarterly policy in January.  RBI had earlier projected that the economy would grow 8.5 per cent in the financial year ending March 2011. “Inflation is coming down, but is still above RBI’s tolerance level. On the other hand, the growth is encouraging. RBI will revisit the growth numbers in its third quarter review,” Subbarao told reporters after a meeting with West Bengal Chief Minister Buddhadeb Bhattacharjee

Inflation expected to reduce

The central bank’s deputy governor, Subir Gokarn, today said inflation was expected to reduce in the coming months. And, that liquidity was a concern. “Though a crisis still prevails internationally, in the domestic front things are hopeful, as the GDP and IIP numbers were good in the second quarter. The most important thing is that overall inflation is showing signs of decline. Though some food items are still under pressure, even food inflation is expected to be down,” he said.

Microsoft introduces tracking protection on Internet Explorer

As the debate continues about a potential privacy system that would allow con- sumers to opt out of having their data collected online, Mi- crosoft Corp. on Tuesday an nounced a feature for the new- est version of Internet Explorer that would permit users to stop certain websites from tracking them. The feature, which will exist in Internet Explorer 9, avail- able next year, will let users limit the ability of third-party companies to track them on- line. The announcement comes less than a week after the Federal Trade Commission (FTC) advocated a “do not track“ mechanism that could be built into a browser and alert websites that a user did not want to be monitored.

Diesel, petrol price hike looming

With inflation worries easing, the minsterial panel on fuels could raise diesel prices by Rs 1-2 a litre next week in a bid to reduce losses of state-run oilmarketers and boost investor confidence ahead of a follow-on public offer from market leader IndianOil.

RBI to issue coins to commemorate Mother Teresa

The Reserve Bank of India (RBI) today said it would issue new Rs5 coins to commemorate the birth centenary of Nobel laureate Mother Teresa. "The Reserve Bank of India will shortly put into circulation coins of Rs5 with the theme, Birth Centenary of Mother Teresa," RBI said in a statement. The coins commemorating the founder of the Missionaries of Charity would be circular in shape and have a diameter of 23 millimeter, it added. Mother Teresa was born as Agnes Gonxha Bojaxhiu on August 26, 1910, in present-day Skopje in the Republic of Macedonia. Besides, the existing Rs5 coins will continue to be in circulation.

A question of control

This refers to the report “Govt tightens grip on RBI” (December 7). There is nothing unusual or objectionable if, in a democracy, the legislature wishes to have a say in policies that are implemented through various arms of the government. In this context, the government’s concern on the contours of the Reserve Bank of India’s (RBI) staff management is understandable. At the same time, this makes glaringly obvious the anxiety of a government that is losing its grip on governance and is, therefore, attempting to showcase some instances of making its boys obey.

The RBI Staff Regulations, 1948 and HR management of the central bank have stood the test of time and never been a cause of problems for the Centre. RBI’s central boards and governors have been consistently showing the maturity to consult the central government on important matters and, by and large, all finance ministers including the present prime minister have respected the RBI’s autonomy. The current impasse appears to be the result of some misunderstandings at lower levels. The earlier the issues are settled amicably before they affect individual egos, the better.

MG Warrier, Mumbai

First among equals

Reserve Bank of India employee representatives have objected to the finance ministry’s reported move to keep North Block informed of the salary structure and perks. However, a section of the market feels that the central bank should not be granted preferential treatment when other financial sector regulators such as the watchdog for the capital markets, insurance and pension are adopting the same practices. 

It’s fight to the finish for SBI top job

Lobbying is in full swing for the top job at the country’s largest bank, the State Bank of India , with its chairman OP Bhatt set to complete his term early next year. Some of the potential candidates, who also include CEOs of large state-owned banks, are ensuring that there are no problems on the vigilance front, which will help expedite the process.

Microfinance institutions under stress, not threat: RBI

Microfinance institutions (MFI) are an integral part of financial inclusion in India but are currently under some stress, Reserve Bank of India Deputy Governor Subir Gokarn said on Tuesday. "The MFI industry might be under little stress as the banks are finding it difficult to lend to them at this moment. But the system as a whole is not under threat," Gokarn told reporters on the sidelines of an outreach programme on the outskirts of Kolkata.

Govt tightens grip on RBI

Board meet to give govt final say on central bank’s staff-related matters.

The government is likely to have a final say on issues such as salary, service conditions, promotions and incentives of the Reserve Bank of India’s employees. These are, till now, under RBI’s own purview.  The government has been pressing RBI for three years to make its staff regulations statutory under Section 58 of the RBI Act, 1934, and bring it under the subordinate legislation of Parliament. According to sources, a resolution to this effect is expected to be approved at the board meeting scheduled this Thursday in Kolkata. RBI had so far been resisting the move. Recently, the government asked RBI to take its approval before finalising pay raises for the central bank’s employees. The regulator resisted and a compromise was agreed, under which RBI would ‘brief’ finance ministry officials about pay revisions before implementing these. However, the central bank insisted it would not seek government approval. “RBI is an autonomous body. If it gives in to the government demand to make staff regulation statutory, then all decisions on central bank employees, like service conditions and benefits, which are now taken by RBI will need government’s approval,” said Samir Ghosh, general secretary, All India Reserve Bank Employees’ Association. Ghosh has written letters to RBI Governor D Subbarao and other central board members, requesting they not sacrifice independence on staff matters. “The central government is very much insistent in this regard and desires to get it approved in the board meeting of the bank at the earliest. This, we apprehend, will further dilute the independent functioning of RBI and make it a subservient institution to the finance ministry,” Ghosh wrote to one of the board members. During the year, there were at least two instances when certain actions of the government had prompted Subbarao to highlight the importance of RBI’s autonomy. The first was over the ministry’s decision to refer all regulatory disputes on hybrid financial products to a committee headed by the finance minister. RBI also expressed its concern about the proposed Financial Stability and Development Council, on the reasoning that financial stability should be the exclusive mandate of the central bank.

RBI ASKS BANKS TO OPEN RESOURCE CENTRES FOR FINANCIAL INCLUSION

The Reserve Bank of India (RBI) has urged commercial banks to open financial inclusion resource centres throughout the country. These would work as a store-house of all relevant information pertaining to financial inclusion. “Though RBI is doing its bit by opening financial inclusion resource centres, it’s not enough. So, commercial banks should also open such centres as this is a good development and commercial proposition,” RBI Governor D Subbarao said on the sidelines of the launch of a financial inclusion resource centre here today.  The central bank, which has opened such centres in Pune and Chandigarh, was planning to open two more, one each in Kolkata and Mumbai, he added. RBI is pushing banks to provide basic banking services in villages with a population of 2,000 and above by 2012 and those with a population of less than 2,000 over the next three to five years.

“Both banks and state governments are majority stakeholders in the financial inclusion process. While this will ensure better governance in states due to better transparency, banks will get low-cost deposits to protect themselves from asset-liability mismatches,” he said.  He, however, added the financial inclusion process was slow in many regions and should be expedited.  Earlier, banks had submitted their financial inclusion plans to the regulator, according to which around 200,000 business correspondents and customer service points would start work over next two-and a-half years. Also, 4,000 branches in unbanked villages and 100 million no-frills accounts would be opened. Recently, RBI made a policy change by allowing for profit organisations to act as business correspondents to speed up financial inclusion. “Commercial banks should see financial inclusion as an opportunity rather than an obligation,” Subbarao said. He said technology should be used to meet financial inclusion targets.

RBI conducts fiscal outreach programme

NORTH GUWAHATI, Dec 6 – As a part of the second phase of the financial outreach programmes, the Reserve Bank of India, Guwahati conducted a financial outreach camp at Sesawng village of Aizawl district in Mizoram recently. The objective of the camp was to create awareness about financial products, schemes and services offered by the financial institutions, banks and government departments. Various financial institutions, including Mizoram Rural Bank, Mizoram Cooperative Apex Bank Ltd., KVIC, DRDA, DIC, NEDFi, NABARD, SIDBI, etc., participated in the camp and put up their respective stalls to disseminate information on their financial products. The Executive Director of RBI, VS Das graced the occasion as the chief guest while other guests included Surekha Marandi, Regional Director of North Eastern States, Vanlalnghaka, Additional Secretary Finance, Banking Ombudsman of North Eastern States and other senior officials. The audience included residents of the village and children from various schools.  Later, a meeting was held where among others, V.S.Das, executive director of the RBI, explained the role of the bank in containing inflation to ensure price stability in the country by promoting sound banking system. The speeches delivered by the appointed bank officials were followed by a question-answer session wherein various queries raised by the audience were answered by the chief guest and other senior bank officials.  A quiz programme on topics relating to RBI and banking was also conducted for school children and prizes were distributed to the winners. Mementos were distributed to the winners. Mementos were distributed to all the participants. The Executive Director, V.S.Das also announced the gift of computers to the Govt. High School and Middle Schools.

Bhave may get 2 year extension as SEBI Chief

Move In Line With Tenure Of Regulator Bosses -

In a surprise move, incumbent Sebi chief C B Bhave is being considered for extension in service by a high-level search panel that was set up to find his successor at the market regulator.

RBI tells public about its activities, schemes

The Reserve Bank of India, Kanpur has set up a financial literacy camp at the ongoing Kanpur Mahotsav at Motijheel Ground with an objective to acquaint common people with its role and functions.  The camp aims to apprise the common masses about various activities and the schemes of RBI, like banking Ombudsman scheme, young scholar scheme, summer placement scheme, non-banking financial companies etc. The camp aims to create public awareness on salient features of a genuine currency note. The public and the visitors to the stall are also being apprised about due diligence to be taken while depositing money with non-banking financial companies. Financial literacy material was also distributed among the public.  In coordination with SBI, Motijheel branch, exchange facility for fresh notes and coins has also been provided to the public.  

V.Kannan - Executive Director of Oriental Bank of Commerce

V.Kannan assumed charge as Executive Director of Oriental Bank of Commerce.  Prior to this, he was General Manager, Bank of Maharashtra, where he started his career in 1976.

Money transfer at your fingertips

The days of writing cheques were long past passe. Till recently, the easiest way to transfer money was through Internet or phone banking. The entire process took another step forward last week--now you can transfer money through your cellphone. The National Payments Cor- poration of India (NPCI) has launched an inter-bank mobile payment service (IMPS), which will enable savings account holders to transfer money to another account within the country using their cellphone.
Is it available to all? To avail the facility, it is man- datory that the bank in which you hold an account and the one in which the beneficiary has an account are linked to the IMPS. Currently, seven banks have gone live with the system-- State Bank of India, ICICI Bank Ltd, Union Bank of India, Bank of India, HDFC Bank Ltd, Axis Bank Ltd and Yes Bank Ltd. Seven more are in the process of going live and several others are in the preliminary phase.

PSB unions call for watchdog

In view of the recent housing loan bribery scam involving top officials from public sector banks (PSBs) and LIC Housing Finance, bank unions have sought the setting up of an independent audit commission for banks. All-India Bank Employees Association (AIBEA), the largest union of bank staff, has demanded that the government constitute an audit commission similar to the Comptroller & Auditor General (CAG) so that greater transparency can be ensured.

Another demand of the staff union is doing away with the methodology by which the central auditor for a PSB is selected. “Previously, Reserve Bank of India appointed the central auditors for the banks to audit their annual accounts,” said Venkatachalam. “Now (for over a year) the PSBs select a panel of auditors and RBI selects one out of it. Since banks can influence an auditor of its choice, we’ve demanded revoking the system”.  Since PSBs are custodians of R35 lakh crore in deposits, they should be accountable to the nation for all their financial activities, the union claimed.