Rbi News

The RBI on Wednesday said it imposed a fine of about Rs 5.6-lakh on SBI for violation of norms in connection with deficiencies and lapses in the operation and maintenance of the currency chest at the Secunderabad branch of SBI. Last month, RBI had imposed a penalty of Rs 3-crore on SBI for violating 'know your customer' (KYC)/anti-money laundering norms.

Raghuram Rajan on Wednesday took over as the new governor of the Reserve Bank of India. Rajan (50), an economics professor who also served as chief economist at the International Monetary Fund, took charge from D Subbarao. Raghuram Rajan is an outspoken economist who famously predicted the 2008 global financial crisis years in advance, AFP reported.

The Reserve Bank of India has appealed public not to use banknotes for making garlands, worshiping gods or for showering on personalities in social events, etc. as these deface the banknotes and shorten their life and urged the public to contribute to its efforts in pursuing a "clean note policy". In past too, the RBI had made a similar appeal.

With increased security, number of online debit card transactions has increased significantly. Statistics claim it to be 25% of total card payment. 3D-secure connection has resulted in lesser number of frauds and launch of new Visa CodeSecure will give a huge boost to this trend. Also, data says growth in e-commerce in Tier-II cities is much higher than in metros.

Shares in gold-finance companies fell sharply on Tuesday, with Muthoot by 10% and Manappuram Finance by 5%, due to RBI's new gold-loan guidelines. Making charges on jewellery will no more will be allowed to be added for loan-to-value (LTV) calculations, the central bank said. Also, the loans above Rs.1 lakh will have to be disbursed by cheque, the bank added.

RBI has directed banks to close customer accounts using credit/debit card for online forex trading transactions. Failing to do so, RBI may proceed against the defaulting bank. Online trading in foreign exchange is being carried out by some banking customers wherein such schemes remit funds from indian bank accounts using credit cards or other electronic channels to overseas entities.

Raghuram Rajan, India's new RBI governor marked his first policy meeting on Friday with a bold decision to hike interest rate from 7.25 to 7.50%. This resulted in a fall of the stock market by 2.16% afterwards to 20,199.79 points and a fall in rupee to 62.39 against the dollar from previous closes of 61.77.

RBI wants to stop the 0% EMI scheme, as it feels that consumers have been fooled by these schemes into believing that bank funding comes for free. The move has panicked companies as nearly 20-30% sales depend on EMIs. RBI probably examined these schemes after bank-loans for buying consumer-durables recorded 34% jump during July, 2012-13.

In a move to raise funds from abroad by relaxing norms, the RBI said all types of companies can now avail themselves of trade credit facility from overseas for import of capital goods. The credit cannot exceed $20 million upto 5 years. Further, the ab-initio contract period of 15 months for all trade credits has been relaxed to 6 months.

The RBI on Wednesday banned 0%interest-rate scheme for purchase of consumer-goods, a move intended to protect customers but may dampen the festive-spirit as the interest element is often camouflaged and passed on to customers in the form of processing-fee in EMI-schemes offered on credit-card outstandings. The central-bank also said that no additional charges can be levied on payment through debit-cards.

Simplifying the long cumbersome dispute resolution process, RBI said banks not complying with security requirements would have to compensate cardholders in 7-days in case of any fraudulent card transactions, failing to which a penalty of Rs.100/day would be imposed until the date of payment. It also refused to give further extension to banks for upgrading security on credit card swipe-machines.

A number of wealthy Hindu temples in India are resisting RBI's demand to disclose their gold holdings, mistrusting the motives of authorities who're trying to cut down on imports of gold that have left the country's economy bleeding. Temple authorities said they would not allow "anyone to usurp the gold" even as RBI stated that the inquiries are mere data-collection.

To ease liquidity in the market, RBI will conduct open market operations (OMOs) and purchase government securities for as much as Rs. 10,000crore on October 7. It will buy government securities maturing in 2015(bearing interest rate of 7.17%), 2016 (7.59%), 2022 (8.15%) and 2025 (8.2%). The objective of OMOs is to adjust rupee liquidity conditions in the market.

RBI has warned that any political instability after LS poll results (May 2014) would drag the economy further down. "A potential additional source of uncertainty is the coming general elections. A new stable government would be positive for the economy," RBI governor Raghuram Rajan said. The warning comes as some political observers are expecting a hung Parliament post elections.

Reserve Bank of India (RBI) Governor Raghuram Rajan was conferred with the Best Central Bank Governor of the Year Award 2014 by Euromoney magazine in Washington (US) on Oct 10, the RBI said Wednesday. While announcing the award Euromoney said, Rajan’s tough monetary medicine combatted the storm ravaging the deficit-ridden economy in the recent emerging market crisis.