Reserve Bank of India

India to buy $4.3 billion worth of World Bank bonds

India to buy $4.3 billion worth of World Bank bonds The government on Thursday announced it decision to invest $4.3 billion (Rs 27,000 crore) the World Bank's special private placement bonds (SPPBs) so that the country could remain eligible for the global lender's low-cost funding for various domestic infrastructure projects.

The investment will allow India to borrow $4.3 billion from the World Bank, over & above the single borrower limit of $17.5 billion.

Govt. in search of new RBI chief as Subbarao wants to move on

Govt. in search of new RBI chief as Subbarao wants to move onThe government is in search of a successor to Reserve Bank of India (RBI) Governor D. Subbarao as he does not want an extension in his term.

Union Finance Minister P. Chidambaram told reporters that Subbarao had told him that he wanted to move on and would not like to be considered for an extension.

RBI Governor Subbarao gets no offer for tenure extension

D-SubbaraoReserve Bank of India (RBI) Governor D. Subbarao is due to step down in less than seven weeks but the government is still struggling to decide on the next chief for the central bank.

Many analysts are of the view that the government may give an extension to Mr. Subbarao's tenure, but he recently declared that he had not been given any such offer.

Speaking to reporters in Moscow on Saturday, he said, "No offer has been made so far, so there is no question of accepting so far. It is a hypothetical question. As I said before, I must move on."

RBI and Sebi step in to arrest rupee’s decline

RBI and Sebi step in to arrest rupee’s declineThe drastic decline in the value of the Indian rupee over the past few days forced the Reserve Bank of India (RBI) and the Securities & Exchange Board of India (Sebi) step in to help the local currency regain some of the lost strength.

At one point on Monday, the rupee slipped to its record low of 61.21 against the US dollar.

RBI Gov. Subbarao also wants banks to cut rates

RBI Gov. Subbarao also wants banks to cut ratesReserve bank of India (RBI) Governor D Subbarao on Thursday supported Finance Minister P Chidambaram's call to lender to cut interest rates to provide a much-needed boost to economic growth.

Mr. Subbarao said that the RBI was very conscious of the need to be supportive of the country's economic growth.

He noted that the central bank cut repo rate - the rate at which the central bank lends money to banks - several times this year, but many banks did not pass on the cuts to consumers and businesses.

Allowing corporates to apply for bank licences is in national interest: Subbarao

Allowing corporates to apply for bank licences is in national interest: SubbaraoThe decision to allow corporates to apply for new bank licences is in the interest of the country, Reserve Bank of India (RBI) Governor D Subbarao said.

Mr. Subbarao said corporates were allowed to apply for new licences after much debate and deliberation.

Speaking on the topic, he said, "We debated extensively on the matter and the decision to allow corporates to apply for bank licences was done in the national interest."

There should be zero tolerance to any violation of regulatory norms: G Padmanabhan

There should be zero tolerance to any violation of regulatory norms: G PadmanabhanAny violation of regulatory rules in the banking industry will not be tolerated, Reserve Bank of India (RBI) Executive Director G Padmanabhan said.

Speaking at the occasion of the launch of a new domestic money remittance service by Western Union Money Transfer and Kotak Mahindra Bank, Mr. Padmanabhan said that he was quite intolerant to illegal financial activities like money laundering.

RBI proposes separate wealth management unit for banks

RBI proposes separate wealth management unit for banksThe Reserve Bank of India (RBI) on Friday proposed a separate wealth management unit for banks involved in wealth & portfolio management services.

In its annual monetary policy statement, the RBI suggested the banks to carry out all Wealth Management Services (WMS) activities through a separate subsidiary or via a Separately Identifiable Department or Division established for the purpose.

RBI projects banks’ gross NPAs to deteriorate to 3.8%

RBI projects banks’ gross NPAs to deteriorate to 3.8%The Reserve Bank of India (RBI) has raised concerns over deteriorating
banking sector of the country as macroeconomic conditions are still
unfavorable.

In its half-yearly Financial Stability Report, the RBI said that Gross
non-performing assets (NPAs) as a percentage of all scheduled commercial
banks' total assets will jump from 3.4 per cent in March to estimated
3.8 per cent.

The central bank's macro stress tests also indicated that the ration
could worsen to 4.4 per cent under tough conditions by the end of fiscal

Axis, HDFC & ICICI penalized for KYC rule violations

The-reserve-Bank-of-IndiaThe reserve Bank of India (RBI) on Monday slapped three private sector banks, viz. Axis Bank, HDFC Bank and ICICI Bank, with hefty fines for violating know your customer (KYC) rules.

The central bank imposed a fine of Rs 5 crore on Axis Bank, and of Rs 4.5 crore and Rs 1 crore on HDFC Bank and ICICI Bank, respectively.

A statement released by the central bank stated, "After considering the facts of each case ... Reserve Bank came to conclusion that some of the violations were substantiated and warranted imposition of monetary penalty..."

RBI asks investors to be careful before depositing money with NBFCs

RBI asks investors to be careful before depositing money with NBFCsThe Reserve Bank of India (RBI) on Friday advised the public to be very careful before depositing their funds in any scheme run by non-banking finance companies (NBFCs).

Amid increasing incidents of sham investment schemes hitting investors, the central bank stressed that investors must carefully evaluate any scheme to avoid falling prey to fraudulent schemes that promise unsustainable returns.

RBI releases new guidelines on provisioning against restructured loans

RBI releases new guidelines on provisioning against restructured loansThe Reserve Bank of India (RBI) has released new prudential guidelines for banks on provisioning against restructured loans.

The new guidelines ask banks to raise capital requirements and force them to seek personal guarantees from controlling stakeholders of firms whose loan terms are eased. Banks in India often seek to restructure loans given to troubled companies instead of putting them under the category of non-performing assets.

RBI restricts banks and NBFCs from lending against gold

RBI restricts banks and NBFCs from lending against goldIn a bid to curb soaring craze for gold, the Reserve bank of India (RBI) has banned banks and non-banking finance companies (NBFCs) from extending loans against units of gold exchange traded funds (ETFs) and gold mutual funds (MFs).

Earlier this month, RBI had directed banks to make sure that the weight of any specifically minted gold coin didn't exceed 50 grams per customer; and the amount of loan against gold weighing up to 50 grams must be within the Board-approved limit.

RBI will likely cut key policy rate by 0.75% till December: Barclays

RBI will likely cut key policy rate by 0.75% till December: BarclaysDeclining rate of inflation will encourage the Reserve Bank of India (RBI) to reduce its key policy rates by 0.75 per cent till December this year as against its earlier estimate of 0.25 per cent, British brokerage firm Barclays predicted.

The rate of inflation has fallen faster over the past few months than many analysts' expectations. As per Barclays' estimates, India's consumer price inflation (CPI) will average less than 9 per cent in FY14, which will be lowest in five years.

Checking money laundering is govt.’s job: Subbarao

Checking money laundering is govt.’s job: SubbaraoIt is the responsibility of the government and tax authorities to check money laundering, the Reserve Bank of India (RBI) said.

RBI Governor D Subbarao said that banks neither the central bank nor individual banks were directly responsible to inquire about the source of income.

Speaking on the topic, Subbarao said, "RBI is not directly involved... Even banks are not directly responsible. They are not expected to inquire about the source of income. It is for government and tax authorities to check money laundering."

CII urges RBI to slash interest rate by 100 bps

Kris-S-GopalakrishnanKris S Gopalakrishnan, the newly-elected president of the Confederation of Indian Industry (CII), has urged the Reserve Bank of India to cut interest rates by one per cent or 100 basis points (bps) in order to boost investment.

Gopalakrishnan said that investments a cut in interest rates would automatically increase investments. He added that that kick starting investments and early implementation of Goods & Services Tax (GST) as well as Direct Tax Code (DTC) were vital for taking economic growth to 8-9 per cent in the coming years.

RBI to take action against banks involved in money laundering

Reserve-Bank-of-IndiaThe Reserve Bank of India (RBI) will take action against ICICI Bank, HDFC Bank and Axis Bank for their involvement in money laundering, Deputy Governor H R Khan has confirmed.

A sting operation by a web portal had exposed willingness of employees of the three private sector banks to be accomplices in money laundering.

Speaking to media persons in Delhi yesterday, Mr. Khan said, "Scrutiny has been done, action is being taken both in respect of systemic level and at the individual banks."

RBI finds ICICI, HDFC and Axis guilty of violating KYC norms: report

Reserve-Bank-of-IndiaThe Reserve Bank of India (RBI) has reportedly found some private lenders guilty of violating know your customer (KYC) norms.

A source from the central bank revealed that the probe found that officials at ICICI Bank, HDFC Bank and Axis Bank violated KYC norms.

Speaking on the condition of anonymity, the source said, "The RBI, in its probe, has found that there have been some instances where bank officials have not done proper KYC for larger transactions."

Bankers request RBI to slash CRR by 50 bps

Bankers request RBI to slash CRR by 50 bpsBankers on Thursday requested the Reserve Bank of India (RBI) to cut cash reserve ratio (CRR) - portion of deposits that banks keep with RBI - by 50 basis points (bps) in its upcoming annual policy review on May
3.

Chiefs of banks said that lower CRR would help them decrease lending rates, which would ease liquidity and boost investment.

S. S. Mundra, chairman & managing director of Bank of Baroda, said that had been seeking for some relief in the form of lower CRR. He added that bankers also sought a review of the increased provisioning requirements.

Banks unlikely to reduce lending rates this month

Banks unlikely to reduce lending rates this monthThe Reserve Bank of India (RBI) on Tuesday cut the repo rate (key lending rate) by 25 basis points from 7.75 per cent to 7.5 per cent, but banks have no plans to reduce rates until April.

Banks say that tight money and their chase for more deposits will not allow them to reduce interest rates until the first month of the next financial year.

Pratip Chaudhuri, chairman of State Bank of India (SBI) - the largest public sector lender of India - said that a decrease in lending rates was not possible this month because the central bank hadn't lowered the CRR.




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