RBI directs RRBs and Cooperative Banks to revamp their savings bank accounts

The banking regulator RBI last week asked all the cooperative banks and regional rural banks (RRB) to waive off the minimum balance requirement on all their savings account and in-effect convert them to 'basic saving accounts'.

"The existing basic banking 'no-frills' accounts should be converted to Basic Savings Bank Deposit Account," read the RBI notifications to the banks. It further added that a single customer can only have one such account and will have to close any savings bank account within a month.

Basic savings account would come with services like deposit and withdrawal of cash at branch and ATM and also credit of money through e-payment modes. The account would be entitled to a maximum of four withdrawals per month including ATM transactions.

RBI had introduced 'no-frills' savings accounts in 2005 to promote financial inclusion and provide banking services to the poor and financially excluded. Such accounts were slated to be maintained with very low or zero minimum balance.

RBI website to make people aware of counterfiet currency

No one understands the problem of fake currency unless they themselves face the unfortunate instance of getting a fake currency note in their hands. RBI website: www.paisaboltahai.rbi.org.in is the regulator's attempt to  educate people how to detect fake currency notes.

The website provides visual aids with information on genuine currency notes of all denominations ranging from Rs. 10 to Rs. 1,000. The website has a tagline "Pehchano Paise Ki Boli, Kyunki Paisa Bolta Hai".

Users can downloand the posters from the website and use it for reference at later point of time. The website also has a video giving information on fake currency notes, which too can be downloaded.

There is also an information on number of fake currency notes in circulation and detected. As on March 31,2011 there were 64,577 million bank notes in circulation, out of which 6.74 notes per million were fake.

According to the RBI governor D. Subbarao, tackling fake notes is a high priority for the regulator and police and RBI are taking strict measures to deal with the problem. Educating the people to differentiate between fake and genuine is important he further added.

RBI points out loopholes in governance of Laxmi Vilas Bank; asked to work on it

The Laxmi Vilas Bank has been directed by the RBI to fill in the loopholes in its corporate governance and business practices. The regulator had earlier pointed out the fallacies in the way the bank monitors its accounts and also that the promoters were increasing their shareholding in the bank, which was against the regulator's guidelines.

RBI report pointed out that bank was not adhering to know your customers (KYC) and anti-money laundering (AML) guidelines which can result in high exposure to operational risk, and asked the banks to resolve the issue by earlieast possible.

The regulator further added that out of 1,814 accounts classified as sub standard on March 30,2010 remained as such after one year of being recognized. RBI also pointed out that bank had a poor asset liability management, as it had not classified 171 loan accounts which were non-operational for three years as nonperforming assets (NPA).

In addition to it the promoter's holding in the bank rose to 11.47% against RBI's guidelines which allow a maximum of 10%.  RBI also added that the bank leased one of the premises to one of the director without following the proper procedure.