Many people send their applications to the Reserve Bank of India related to various complaints but they don’t get any information about the status of their applications. Therefore, to help people in tracking their applications sent to various departments of RBI, it has launched an online application tracking system (ATS).
RBI said in a release, “Applications made to the various departments of the Reserve Bank of India (RBI) can now be tracked online through the application tracking system (ATS). The Reserve Bank launched the ATS on its website for convenience of the public.”
RBI added, but with this tracking system public will not be able to track complaints made under the Banking Ombudsman Scheme or any other complaints.
It said, “Through this facility, the applicant can then submit an online application, attach related documents, view it and track its movement”.
To track their applications, the applicants will have to register on the RBI website and the system will generate a first time login and password which will be sent to the applicants through e-mail.
Friday, June 4, 2010
Thursday, June 3, 2010
RBI cautions public and banks about fake, cheap funds acquired by fraudsters in its name
The Reserve Bank of India (RBI) has cautioned the public and banks that fraudsters, by misusing name of RBI are duping innocent investors by charging money for fake cheap funds. The apex has asked the people and banks not to fall prey to such fictitious offers.
RBI, through circular issued to banks has cautioned banks that in recent times there has been increase in fictitious offers of cheap funds from fraudsters and these offers are being send through letters, e-mails, mobile phones, SMS, etc.
The Reserve Bank while giving details of the modalities of the fraudsters, informed that to target people, fraudsters are using fake letterheads of the RBI for communication which allegedly have signatures of its top executives/senior officials.
A large number of people have become victims of such teasing offers and have lost huge sums of money in the process.
Chief General Manager, RBI Alpana Killawala said, “It was further brought to the Reserve Bank’s notice that fraudsters sought money from gullible people, under different heads, such as, processing fees/transaction fees/tax clearance charges/conversion charges, clearing fees, etc.”
The apex bank has clarified that any person residing in India found collecting and remitting such payments directly or indirectly outside India is liable to be proceeded against with, for breach of the Foreign Exchange Management Act, 1999 apart from being liable for violation of regulations relating to Know Your Customer (KYC) norms and Anti Money Laundering (AML) standards.
To collect transaction charges etc, the fraudsters open multiple accounts in different banks in the name of individuals or proprietary concerns. They convince the victims to deposit certain amount in these accounts. The amounts are withdrawn leaving victims in a dilemma
RBI, through circular issued to banks has cautioned banks that in recent times there has been increase in fictitious offers of cheap funds from fraudsters and these offers are being send through letters, e-mails, mobile phones, SMS, etc.
The Reserve Bank while giving details of the modalities of the fraudsters, informed that to target people, fraudsters are using fake letterheads of the RBI for communication which allegedly have signatures of its top executives/senior officials.
A large number of people have become victims of such teasing offers and have lost huge sums of money in the process.
Chief General Manager, RBI Alpana Killawala said, “It was further brought to the Reserve Bank’s notice that fraudsters sought money from gullible people, under different heads, such as, processing fees/transaction fees/tax clearance charges/conversion charges, clearing fees, etc.”
The apex bank has clarified that any person residing in India found collecting and remitting such payments directly or indirectly outside India is liable to be proceeded against with, for breach of the Foreign Exchange Management Act, 1999 apart from being liable for violation of regulations relating to Know Your Customer (KYC) norms and Anti Money Laundering (AML) standards.
To collect transaction charges etc, the fraudsters open multiple accounts in different banks in the name of individuals or proprietary concerns. They convince the victims to deposit certain amount in these accounts. The amounts are withdrawn leaving victims in a dilemma
Wednesday, June 2, 2010
RBI and finance ministry to scrutinize the corporate bodies before granting banking license
In this fiscal Union Budget finance Minister Pranab Mukherjee had announced that the government intends to give out more banking licenses. This move of govt. was welcomed by many corporate houses who intend to enter into banking especially who are already in finance business. Following this some of the major corporate players have applied for banking licenses.
The finance ministry official told that in order to avoid recently faced situation such as Bank of Rajasthan fiasco, where the Tayal Group held more than 55% stake, which resulted in serious corporate governance issues, the corporate houses who have applied for licenses will come under the scrutiny of both the Reserve Bank of India and the finance ministry so that the entry of players involved in dubious transactions can be restricted.
A finance ministry official privy to the deliberations on the subject said, the books and accounts of all group companies will be scrutinized before they are granted new banking licenses.
Next month RBI will be making public a discussion paper on the norms for issuing new banking licenses to private companies and non-banking finance companies. An anonymous official told, “The banking regulator and the ministry have agreed that there should be a scrutiny of the accounts of those seeking licenses to assertion whether the promoters have defaulted on any loans.”
Few of the leading business groups such as ADAG, IndiaBulls and Tatas have shown keen interest in entering into banking business.
Mr Mukherjee had said, “We need to ensure that the banking system grows in size and sophistication to meet the needs of a modern economy. Besides, there is a need to extend the geographic coverage of banks and improve access to banking services.”
The RBI has already started scrutiny of the books of accounts of the Tayal group and has requested the finance ministry to instruct public sector banks not to issue any fresh loan to the group. An RBI official said, “We had requested the finance ministry to restrict all north-based public sector banks from giving loans to the group till the scrutiny is over.”
The finance ministry will be taking help from other government regulatory bodies before issuing license to the corporate houses to make sure that debt or other financial dealings of license seekers do not have any repercussion on the banking entity. At present RBI has the discretionary power to decide whether a company belongs to the particular promoter group.
As per the existing regulations, the initial minimum paid-up capital for a new bank must be Rs 200 crore and the promoter’s contribution should be at least 40% of the paid-up capital of the bank at any point of time.
According to current law an individual company or its subsidiaries can own a maximum of 10% stake in the proposed new bank.
The finance ministry official told that in order to avoid recently faced situation such as Bank of Rajasthan fiasco, where the Tayal Group held more than 55% stake, which resulted in serious corporate governance issues, the corporate houses who have applied for licenses will come under the scrutiny of both the Reserve Bank of India and the finance ministry so that the entry of players involved in dubious transactions can be restricted.
A finance ministry official privy to the deliberations on the subject said, the books and accounts of all group companies will be scrutinized before they are granted new banking licenses.
Next month RBI will be making public a discussion paper on the norms for issuing new banking licenses to private companies and non-banking finance companies. An anonymous official told, “The banking regulator and the ministry have agreed that there should be a scrutiny of the accounts of those seeking licenses to assertion whether the promoters have defaulted on any loans.”
Few of the leading business groups such as ADAG, IndiaBulls and Tatas have shown keen interest in entering into banking business.
Mr Mukherjee had said, “We need to ensure that the banking system grows in size and sophistication to meet the needs of a modern economy. Besides, there is a need to extend the geographic coverage of banks and improve access to banking services.”
The RBI has already started scrutiny of the books of accounts of the Tayal group and has requested the finance ministry to instruct public sector banks not to issue any fresh loan to the group. An RBI official said, “We had requested the finance ministry to restrict all north-based public sector banks from giving loans to the group till the scrutiny is over.”
The finance ministry will be taking help from other government regulatory bodies before issuing license to the corporate houses to make sure that debt or other financial dealings of license seekers do not have any repercussion on the banking entity. At present RBI has the discretionary power to decide whether a company belongs to the particular promoter group.
As per the existing regulations, the initial minimum paid-up capital for a new bank must be Rs 200 crore and the promoter’s contribution should be at least 40% of the paid-up capital of the bank at any point of time.
According to current law an individual company or its subsidiaries can own a maximum of 10% stake in the proposed new bank.
Friday, May 28, 2010
States cash surplus on rise; RBI ask states to manage cash balances efficiently
The state cash surplus with RBI has risen to about Rs 75000 crore, thus the central bank has asked state governments to manage their cash balances more effectively and should issue a quarterly indicative borrowing calendar which will help them in managing their borrowing better, bank said in a statement.
The statement put on website stated a meeting was held between senior officials of the central bank and state finance ministries for annual discussion.
A state secretary who had attended the meeting told, "There was an appreciation for a little bit of lower borrowing than the ceiling given to states. RBI wants the states to reduce their borrowing to the extent of their cash balances"
The states have also been asked to manage their spending pattern in such a way so that their cash levels don’t rise, he added, on condition on anonymity.
In a statement the central bank said, "The deliberations in the conference primarily focused on issues relating to surplus cash balances of the state governments, projections on market borrowings of the state governments and issuance of quarterly indicative calendars for borrowing by the states".
The central bank is already under the pressure of federal government’s recorded Rs 4.57 trillion borrowing targeted for this fiscal, and it is also concerned about the state’s borrowing which amounts to Rs 6.3 trillion this year, the state official informed.
The central bank official pointed out in case corporate credit picks up, also loan given to 3G, it would be difficult for the market to take up the entire government borrowing, he added.
The meeting was attended by Sudha Pillai, a member of the plan panel, Ashok Chawla, finance secretary, Sumit Bose, secretary for asset sales, Shyamala Gopinath, deputy governor and other state finance secretaries.
The statement put on website stated a meeting was held between senior officials of the central bank and state finance ministries for annual discussion.
A state secretary who had attended the meeting told, "There was an appreciation for a little bit of lower borrowing than the ceiling given to states. RBI wants the states to reduce their borrowing to the extent of their cash balances"
The states have also been asked to manage their spending pattern in such a way so that their cash levels don’t rise, he added, on condition on anonymity.
In a statement the central bank said, "The deliberations in the conference primarily focused on issues relating to surplus cash balances of the state governments, projections on market borrowings of the state governments and issuance of quarterly indicative calendars for borrowing by the states".
The central bank is already under the pressure of federal government’s recorded Rs 4.57 trillion borrowing targeted for this fiscal, and it is also concerned about the state’s borrowing which amounts to Rs 6.3 trillion this year, the state official informed.
The central bank official pointed out in case corporate credit picks up, also loan given to 3G, it would be difficult for the market to take up the entire government borrowing, he added.
The meeting was attended by Sudha Pillai, a member of the plan panel, Ashok Chawla, finance secretary, Sumit Bose, secretary for asset sales, Shyamala Gopinath, deputy governor and other state finance secretaries.
Tuesday, May 25, 2010
Banks are on aggressive expansion of their branches as RBI eased license norms
After RBI’s announcement that banks will be allowed to open branches in Tier-III to VI cities and they don’t require to take prior permission for the same, the banks are working on double expansion plans of their branches.
In fact there has been substantial rise in the number of bank branches this after RBI’s announcement.
Earlier in December 2009, RBI has allowed domestic scheduled commercial banks (other than regional rural banks) to open branches in Tier-III to Tier-VI centers (with population up to 49,999) without prior permission. As a result the banks planned to open almost double to open almost double the number of branches this year, as compared to last year.
Punjab National Bank is planning to open nearly 550 branches. Bank Chairman and Managing Director KR Kamath told for about 440 branches it will not require to take license as these branches will be opened in areas with a population of less than 50,000. Like wise, UCO bank is planning to open 140 branches this year, but will have to take licenses for only 89. Chairman and Managing Director of the bank SK Goel said, the opening of new branches might raise its market share to at least 3 per cent from the existing 2.6 per cent.
On the other hand State Bank of India (SBI), country’s largest lender has spent around Rs 100 crore to open 286 branches and 2,521 automated teller machines in the fourth quarter of the last financial year. Also, IDBI Bank has plans to open around 300 branches this year, “substantially” higher than what it had done over the past few years, said an executive.
Thus RBI’s liberalized policy has led banks to go for branch expansion plans with a view to gain market share.
However, last year, the smaller banks set off to get more licenses due to consolidation as the government had suggested the merger of smaller banks with bigger in order to make public sector banks more competitive. Although, smaller banks were not ready for the same “There was a threat of amalgamation of banks till last year and smaller banks were in a rush to increase their balance sheet size,” said an executive of a public sector bank.
For the meantime the consolidation plan has been put on hold. It is believed RBI’s change of rule will help them in increasing their balance sheet size. Also, the cost of maintaining rural branches are low therefore banks are free to open branches in rural areas in the vicinity of bigger towns or in an industrial cluster, making it a profitable proposition.
Allahabad Bank is mainly located in eastern India bank, is planning to do aggressive branch expansion in southern and western states. “In some areas, RBI guidelines on opening branches might help, and we will be looking at opportunities in such areas,” said Executive Director D Sarkar. The bank has obtained license for 69 branches, much higher than in the preceding years.
On the other hand Bank of Maharashtra, mainly focused in western India has planned aggressive branch expansion. It has planned to open 75 new branches this year, against 45 last year. Its main focus will in eastern states. “We are now aggressive in expanding branch network to make the bank fairly representative. We are trying to broadbase our customer base to include states in the northeast, Bihar and Jharkhand,” said Executive Director MG Sanghvi.
Last year, in December RBI has also allowed banks to open branches in urban centers of Sikkin and the northeast without prior permission. “In the last one year, more branches have come up, but the definite impact of RBI’s policy will show up this year,” said United Bank of India’s Executive Director SL Bansal.
In fact there has been substantial rise in the number of bank branches this after RBI’s announcement.
Earlier in December 2009, RBI has allowed domestic scheduled commercial banks (other than regional rural banks) to open branches in Tier-III to Tier-VI centers (with population up to 49,999) without prior permission. As a result the banks planned to open almost double to open almost double the number of branches this year, as compared to last year.
Punjab National Bank is planning to open nearly 550 branches. Bank Chairman and Managing Director KR Kamath told for about 440 branches it will not require to take license as these branches will be opened in areas with a population of less than 50,000. Like wise, UCO bank is planning to open 140 branches this year, but will have to take licenses for only 89. Chairman and Managing Director of the bank SK Goel said, the opening of new branches might raise its market share to at least 3 per cent from the existing 2.6 per cent.
On the other hand State Bank of India (SBI), country’s largest lender has spent around Rs 100 crore to open 286 branches and 2,521 automated teller machines in the fourth quarter of the last financial year. Also, IDBI Bank has plans to open around 300 branches this year, “substantially” higher than what it had done over the past few years, said an executive.
Thus RBI’s liberalized policy has led banks to go for branch expansion plans with a view to gain market share.
However, last year, the smaller banks set off to get more licenses due to consolidation as the government had suggested the merger of smaller banks with bigger in order to make public sector banks more competitive. Although, smaller banks were not ready for the same “There was a threat of amalgamation of banks till last year and smaller banks were in a rush to increase their balance sheet size,” said an executive of a public sector bank.
For the meantime the consolidation plan has been put on hold. It is believed RBI’s change of rule will help them in increasing their balance sheet size. Also, the cost of maintaining rural branches are low therefore banks are free to open branches in rural areas in the vicinity of bigger towns or in an industrial cluster, making it a profitable proposition.
Allahabad Bank is mainly located in eastern India bank, is planning to do aggressive branch expansion in southern and western states. “In some areas, RBI guidelines on opening branches might help, and we will be looking at opportunities in such areas,” said Executive Director D Sarkar. The bank has obtained license for 69 branches, much higher than in the preceding years.
On the other hand Bank of Maharashtra, mainly focused in western India has planned aggressive branch expansion. It has planned to open 75 new branches this year, against 45 last year. Its main focus will in eastern states. “We are now aggressive in expanding branch network to make the bank fairly representative. We are trying to broadbase our customer base to include states in the northeast, Bihar and Jharkhand,” said Executive Director MG Sanghvi.
Last year, in December RBI has also allowed banks to open branches in urban centers of Sikkin and the northeast without prior permission. “In the last one year, more branches have come up, but the definite impact of RBI’s policy will show up this year,” said United Bank of India’s Executive Director SL Bansal.
Monday, May 24, 2010
Banks told to speedily address ATM-related complaints
The Reserve Bank of India will be formulating common code for all banks. Therefore banks will have to speedily solve ATM-related complaints. Under this, the banks will have to issue a ticket number within a day of the complaint received and will have to resolve the issue within a week of the filing of the complaint.
The central bank has directed the banking association IBA to draft a common code for ATM related complaints.
An IBA official informed, “The new format is for facilitating the uniform filing of complaints by the customers. Besides, it will also help to a keep a tab on bank’s complaints-resolving capability.”
Banks have also been asked to display the ATM identification number and contact centre number specifically for ATM related issues. The official said, “Banks will soon have to put the information on their websites, where a customer will be able to track his resolution progress.”
While explaining the process, the official said when a customer files a complaint the bank’s branch will have to ensure that it is updated in the complaint management system (CMS) immediately. The official added, “On uploading the details, the issue will be escalated to the current branch, which needs to be resolved within seven working days.”
Under this new system customers will also get the facility to file e-complaints once the banks upload the formats on their website. The official told, “One can use the ATM identification number and file the complaint online.”
The banks appoint officials known as ATM in-charge, who monitor offsite ATMs. Then the concerned official every morning files a report giving details of cash level, down time and the amount withdrawn from each ATM.
According to data provided by finance ministry, in the last three years public sector banks have opened around 30,000 ATMs. Out of this State Bank of India, country’s largest lender opened 13,000 ATMs during this period.
According to some of the banks, by setting the deadline the process will not speed up but might hamper in pledging the process effectively. An executive director of a north-based public sector bank said, “Complaints can be of various types. Some of them may take more than a week.”
The central bank has directed the banking association IBA to draft a common code for ATM related complaints.
An IBA official informed, “The new format is for facilitating the uniform filing of complaints by the customers. Besides, it will also help to a keep a tab on bank’s complaints-resolving capability.”
Banks have also been asked to display the ATM identification number and contact centre number specifically for ATM related issues. The official said, “Banks will soon have to put the information on their websites, where a customer will be able to track his resolution progress.”
While explaining the process, the official said when a customer files a complaint the bank’s branch will have to ensure that it is updated in the complaint management system (CMS) immediately. The official added, “On uploading the details, the issue will be escalated to the current branch, which needs to be resolved within seven working days.”
Under this new system customers will also get the facility to file e-complaints once the banks upload the formats on their website. The official told, “One can use the ATM identification number and file the complaint online.”
The banks appoint officials known as ATM in-charge, who monitor offsite ATMs. Then the concerned official every morning files a report giving details of cash level, down time and the amount withdrawn from each ATM.
According to data provided by finance ministry, in the last three years public sector banks have opened around 30,000 ATMs. Out of this State Bank of India, country’s largest lender opened 13,000 ATMs during this period.
According to some of the banks, by setting the deadline the process will not speed up but might hamper in pledging the process effectively. An executive director of a north-based public sector bank said, “Complaints can be of various types. Some of them may take more than a week.”
Friday, May 21, 2010
Govt. asks RBI to decide ‘Indian-ness’ of private sector banks
The ‘Indian-ness’ of the country’s leading private sector banks will be decided by the Reserve bank of India (RBI). Based on the RBI's decision, the Indian government will figure out a solution for them without relaxing the provisions of the new foreign direct investment policy.
From over a year government has been having discussion on this issue and finally it has asked the apex bank to draft a framework for deciding the ownership and control of such banks.
According to a senior government official the new norms will be drafted on the parameters such as voting rights and the power to appoint directors of the banks.
He said, “We need to recognize that the structure of each bank is different and accordingly redefine the concept of ownership and control for the banking sector.”
However seven private sector lenders will get official pardon from this move of government. The seven private lenders which have been branded as foreign banks under the current norms include- ICICI Bank, HDFC Bank, ING Vysya, Development Credit Bank, Federal Bank, IndusInd Bank and YES Bank.
This issue has been pending for long with its roots in Press Note 2 of 2009, finally it was taken up for discussion at a recent meeting of the finance ministry, departmental of industrial policy and promotion and the RBI.
In Press Note 2 a structure for calculation of total foreign investment in Indian companies is given, which is based on ownership and control of such firms. According to this all types of overseas ownership will be counted as foreign investment.
It also states that any company who owns over 50% overseas investment will be considered foreign owned. As per its definition control is the power to appoint majority of directors on the board of a company.
Most important is that all the downstream investments by a foreign-owned company will be considered as foreign investment and be subject to sectoral caps and restrictions. When these norms were circulated to the banks, the banks took up the issue with the RBI and had sought clarifications on their exact status and investments.
However RBI had also written to the finance ministry and pointed out that ownership and control may not be limited to just equity holding and power to appoint directors.
Although analysts have welcomed the move but have to be done carefully. “There is no straight jacketed approach. The formula would have to be based after a careful review of the interplay of voting rights and economic ownership of banks,” said Nimai Vijay, associate director, PricewaterhouseCoopers.
From over a year government has been having discussion on this issue and finally it has asked the apex bank to draft a framework for deciding the ownership and control of such banks.
According to a senior government official the new norms will be drafted on the parameters such as voting rights and the power to appoint directors of the banks.
He said, “We need to recognize that the structure of each bank is different and accordingly redefine the concept of ownership and control for the banking sector.”
However seven private sector lenders will get official pardon from this move of government. The seven private lenders which have been branded as foreign banks under the current norms include- ICICI Bank, HDFC Bank, ING Vysya, Development Credit Bank, Federal Bank, IndusInd Bank and YES Bank.
This issue has been pending for long with its roots in Press Note 2 of 2009, finally it was taken up for discussion at a recent meeting of the finance ministry, departmental of industrial policy and promotion and the RBI.
In Press Note 2 a structure for calculation of total foreign investment in Indian companies is given, which is based on ownership and control of such firms. According to this all types of overseas ownership will be counted as foreign investment.
It also states that any company who owns over 50% overseas investment will be considered foreign owned. As per its definition control is the power to appoint majority of directors on the board of a company.
Most important is that all the downstream investments by a foreign-owned company will be considered as foreign investment and be subject to sectoral caps and restrictions. When these norms were circulated to the banks, the banks took up the issue with the RBI and had sought clarifications on their exact status and investments.
However RBI had also written to the finance ministry and pointed out that ownership and control may not be limited to just equity holding and power to appoint directors.
Although analysts have welcomed the move but have to be done carefully. “There is no straight jacketed approach. The formula would have to be based after a careful review of the interplay of voting rights and economic ownership of banks,” said Nimai Vijay, associate director, PricewaterhouseCoopers.
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