For the small customers opening bank accounts and carrying out transactions like currency exchange is still a difficult task. Even the Reserve Bank of India expressed discontentment over the issue.
In an annual general meeting of Indian Banks Association’s, RBI Deputy Governor Usha Thorat said still many of the branches are not using a simple form of Know-Your-Customer guidelines for opening accounts. Customers are still finding difficulty to go to a branch for foreign exchange transactions.
Thorat added soon RBI will be issuing further instructions for "operationalising" the farm loan waiver scheme. On rising bad debts in the farm loan sector, she said, "We have data on NPAs in all sectors."
Two – three days back SBI had rolled back ban on new farm equipment financing following pressure from the government and industry bodies. "SBI has clarified the scheme," the RBI deputy governor said at the event.
Tuesday, May 27, 2008
Friday, May 16, 2008
RBI ask coop banks to abolish cash withdrawal charges
The Reserve Bank of India on Wednesday issued a notification to the cooperative Banks in which it said the banks will not charge more than Rs 20 for withdrawal of cash by ATM card holders of any banks from their vending machines.
The notification also stated that like other banks, the cooperative banks too will be required to stop taking the cash withdrawal charges from ATMs with effect from April 1, 2009.
Besides cash withdrawal charges for balance enquiry or using any other facility also the cooperative banks have been forbidden from charging any fee with immediate effect.
Earlier the RBI in its notification has already removed all charges from using the ATMs of commercial banks, and the charges on cash withdrawal will be removed with from April 1, 2009.
Therefore this means that from April 1, next year an ATM card holder will be able to withdraw cash from ATM maintained by any bank, including cooperative banks, without payment of any fee.
However, the notification authorized the banks to decide themselves the service charges for withdrawal of cash from ATMs through credit cards and ATMs located abroad.
The notification also stated that like other banks, the cooperative banks too will be required to stop taking the cash withdrawal charges from ATMs with effect from April 1, 2009.
Besides cash withdrawal charges for balance enquiry or using any other facility also the cooperative banks have been forbidden from charging any fee with immediate effect.
Earlier the RBI in its notification has already removed all charges from using the ATMs of commercial banks, and the charges on cash withdrawal will be removed with from April 1, 2009.
Therefore this means that from April 1, next year an ATM card holder will be able to withdraw cash from ATM maintained by any bank, including cooperative banks, without payment of any fee.
However, the notification authorized the banks to decide themselves the service charges for withdrawal of cash from ATMs through credit cards and ATMs located abroad.
Wednesday, May 14, 2008
RBI working group supports no-frills accounts for farmers
The Radhakrishna experts group, in its report, had made wide-ranging recommendations to tackle the issue of agricultural indebtedness. The recommendations included immediate credit-related measures, reforms in financial and institutional architecture, risk mitigation measures, among others.
After the submission of the report the RBI’s internal working group was set up under the chairmanship of Mr V.S. Das, executive director of the RBI, to study the recommendations made by Radhakrishna experts group, has supported the committee’s suggestion to banks that they should open "no-frills" accounts in the name of small farmers to lend minor amounts as well as term loans.
The RBI internal group’s suggestion has come soon after the UPA government in the Budget announced a Rs 60,000-crore loan waiver package to debt-ridden farmers. However the experts group had included in its suggestions such a loan waiver package.
Professing for financial inclusion, the Radhakrishna experts group in its report has pragmatic that institutional credit should be extended to those excluded farmer households who do not have access to any source of credit. This should involve all institutions — scheduled commercial banks, regional rural banks and cooperatives and through them, agencies like business facilitators and business correspondents.
According to the experts group and agreed to by the RBI study, the first phase of this program, should focus on universal establishment of "no-frills" bank accounts.
In many cases, bank accounts should be accompanied by a small overdraft low-value general purpose credit card for small amount for first time entrants in banking system. Insurance policies are also part of the program in some districts.
"Routing of all payments to such households through the bank accounts, especially National Rural Employment Guarantee Scheme (NREGS), pension payments and other relief and social security payments will go further in capturing all cash flows in such bank accounts and encourage larger extension of credit to poor rural households," the RBI working group report said.
After the submission of the report the RBI’s internal working group was set up under the chairmanship of Mr V.S. Das, executive director of the RBI, to study the recommendations made by Radhakrishna experts group, has supported the committee’s suggestion to banks that they should open "no-frills" accounts in the name of small farmers to lend minor amounts as well as term loans.
The RBI internal group’s suggestion has come soon after the UPA government in the Budget announced a Rs 60,000-crore loan waiver package to debt-ridden farmers. However the experts group had included in its suggestions such a loan waiver package.
Professing for financial inclusion, the Radhakrishna experts group in its report has pragmatic that institutional credit should be extended to those excluded farmer households who do not have access to any source of credit. This should involve all institutions — scheduled commercial banks, regional rural banks and cooperatives and through them, agencies like business facilitators and business correspondents.
According to the experts group and agreed to by the RBI study, the first phase of this program, should focus on universal establishment of "no-frills" bank accounts.
In many cases, bank accounts should be accompanied by a small overdraft low-value general purpose credit card for small amount for first time entrants in banking system. Insurance policies are also part of the program in some districts.
"Routing of all payments to such households through the bank accounts, especially National Rural Employment Guarantee Scheme (NREGS), pension payments and other relief and social security payments will go further in capturing all cash flows in such bank accounts and encourage larger extension of credit to poor rural households," the RBI working group report said.
Friday, May 9, 2008
RBI directive against using garlands of currency fall on deaf ears
The Reserve Bank of India (RBI) has been making efforts to keep currency notes clean. In view of this the apex bank has issued directives to the banks not to staple notes.
Alpana Killawala, chief general manager of the public relations division of RBI said, "Whatever we do, we do through the banks. One of the challenges that we had was to do away with stapled notes, a habit that often results in the note getting torn. After issuing a directive to banks, they have done away with the stapling of bundles of currency notes."
Earlier RBI had issued directive that people should discourage using garlands made of currency notes- a common feature in north Indian weddings which seems to be falling on deaf ears.
Alpana Killawala told IANS on phone from Mumbai, "We issued a directive last year that currency notes should not be used in making garlands, which defaces the notes and shortens their life."
She said, "It's part of our continuing efforts of clean notes policy. But no one seems to be paying heed as most weddings, especially in north India, keep using such garlands. We can't take any action against the public. We can only sensitize them".
According to Alok Aggarwal, a sales executive in Delhi for people this directive does not mean anything. He said, "The tradition of making the bridegroom wear the garland of currency notes is a symbol of shagun (good luck).
"In most cases, this garland is then carefully stacked away. So where is the question of misusing the notes?" he asked.
Due to increasing demand for such garlands they are not only used in weddings but also during religious festivities, graduation ceremonies and anniversaries, they are easily available in the market.
"Currency note garlands are always in demand, especially during the wedding season. Some want garlands made of two-rupee notes, some want of 100-rupee notes," says Mohan Lal, a shopkeeper in central Delhi.
Meanwhile RBI is making efforts to inculcate "good habits" among the people - so as to encourage good quality notes.
Killawala said, "We have also asked them to tell people not to give stapled notes when they deposit such notes to the bank. Further, we made a movie in 2006 on the same subject which was telecast on Doordarshan."
The RBI even organized camps to educate people on how to handle currency notes.
"Our latest initiative is making a short film on the dos and don'ts of handling bank notes. People have to be discouraged from scribbling on notes and folding them. The movie will be ready for telecasting in another couple of months," she said.
"The trend of note garlands is mainly north India centric. Therefore, we will have to devise a program specifically for that area," she added.
Alpana Killawala, chief general manager of the public relations division of RBI said, "Whatever we do, we do through the banks. One of the challenges that we had was to do away with stapled notes, a habit that often results in the note getting torn. After issuing a directive to banks, they have done away with the stapling of bundles of currency notes."
Earlier RBI had issued directive that people should discourage using garlands made of currency notes- a common feature in north Indian weddings which seems to be falling on deaf ears.
Alpana Killawala told IANS on phone from Mumbai, "We issued a directive last year that currency notes should not be used in making garlands, which defaces the notes and shortens their life."
She said, "It's part of our continuing efforts of clean notes policy. But no one seems to be paying heed as most weddings, especially in north India, keep using such garlands. We can't take any action against the public. We can only sensitize them".
According to Alok Aggarwal, a sales executive in Delhi for people this directive does not mean anything. He said, "The tradition of making the bridegroom wear the garland of currency notes is a symbol of shagun (good luck).
"In most cases, this garland is then carefully stacked away. So where is the question of misusing the notes?" he asked.
Due to increasing demand for such garlands they are not only used in weddings but also during religious festivities, graduation ceremonies and anniversaries, they are easily available in the market.
"Currency note garlands are always in demand, especially during the wedding season. Some want garlands made of two-rupee notes, some want of 100-rupee notes," says Mohan Lal, a shopkeeper in central Delhi.
Meanwhile RBI is making efforts to inculcate "good habits" among the people - so as to encourage good quality notes.
Killawala said, "We have also asked them to tell people not to give stapled notes when they deposit such notes to the bank. Further, we made a movie in 2006 on the same subject which was telecast on Doordarshan."
The RBI even organized camps to educate people on how to handle currency notes.
"Our latest initiative is making a short film on the dos and don'ts of handling bank notes. People have to be discouraged from scribbling on notes and folding them. The movie will be ready for telecasting in another couple of months," she said.
"The trend of note garlands is mainly north India centric. Therefore, we will have to devise a program specifically for that area," she added.
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