Tuesday, June 30, 2015

RBI to work on July 1, 2015 to facilitate public transactions

          The Reserve Bank’s accounting year is July to June.

Hence, the Reserve Bank remains closed for public transactions every July 1 on account of its annual closing of accounts

On a review and in order to facilitate the settlement of market transactions, as also, to aid the transactions of the general public, the Reserve Bank of India has decided that it will remain open for public transactions on July 1, 2015..

In view of the annual closing of its books of account, however, on July 1, 2015–

  • ·       services, such as, RTGS/ NEFT, transfer of funds and settlement of securities will be available from 11.00 a.m. onwards;

  • ·       settlement of funds as well as securities for all transactions that settle on T+0 basis will be effected from 11.00 a.m. onwards;

  • ·       settlement of all outstanding transactions under the Reserve Bank’s liquidity adjustment facility(LAF) / marginal standing facility (MSF) due for reversal will take place at 11.00 a.m. on that day; and

  • ·       the morning LAF window will operate between 11.30 a.m. and 12.30 p.m.

IMPS transactions will be on 24*7 without any interruption.

As Reserve Bank of India has informed the above RTGS/NEFT timings on 29th June itself, general public and banking fraternity have had ample time to prepare for the same.

Sunday, June 28, 2015

Mudra Bank ATM Cards-One step forward, two steps backward

          Government of India is making all efforts to migrate cash transactions to Safe eTransactions. The ‘Draft Proposals For Facilitating Electronic Transactions’ invites suggestions from general public to increase the number of Safe eTransactions in our country.

          In this respect, the proposal of Mudra Bank to issue  ATM Cards to enable Loan beneficiaries to withdraw loan amount through cash is a retrograde step.

8        (i)       MUDRA Card
-         Going forward, MUDRA would look at improving the offerings basket by looking at innovative ideas like a pre-loaded MUDRA Card, say with an assessed value.
-         The credit limit available on MUDRA Card could be 20% of the loan limit sanctioned to the enterprise, with a maximum credit limit on the card being 10,000/-. The principal issuer will be MUDRA and credit risk of upto 20% of the card portfolio could also be covered under the Credit Guarantee Scheme of MUDRA. The remaining risk would remain with the MFI partners.
-         The card offering will help provide pre-approved credit line to the members by providing a card that can be utilized to purchase raw materials and components, from registered producers on an online platform.
-         The card could be linked with Pradhan Mantri Jan Dhan Yojana Savings Account of the borrower and the drawals could also be enabled through the Bank’s ATM network for meeting the immediate liquidity problems of the micro enterprise.

Instead only digital modes of transfer should be allowed. All business associates of MUDRA Loan beneficiaries should be encouraged to open Bank Accounts/Post Office Saving Bank Accounts/eWallets.

          This would enable direct credit into the respective accounts and cash transactions can be discouraged.

          As the MUDRA card would be RUPAY enabled, online transactions can also be safely executed.

          In fact the complete loan disbursement has to done in digital mode only, nowhere cheques or cash should be involved.

Friday, June 26, 2015

Indian Banks to stay closed on 2nd and 4th Sat from July 15 2015

 Indian Bank Branches will be closed on all second and fourth Saturdays from July 15th.

This is as per the pact between public sector bank (PSB) employees and officers with the management.

T M Bhasin, chairman of the Indian Banks’ Association (IBA), said the Reserve Bank of India had approved the proposal and a notification would be issued on the change, under the Negotiable Instruments Act.

It will take three to four weeks for the process to get complete. PSB branches will work fulltime on the first and third Saturday of each month, said Bhasin, also chairman and managing director of Indian Bank.

This would unleash a major revolution in the Indian banking sector.

All the stake-holders i.e Bank Staff and Bank customers would need to relook their banking practices.

The transition period would last 12-18 months.

Details of 2nd and 4th Saturdays in the coming month are as under:

Sr No
2nd Saturday
4Th Saturday
July 15
August 15
September 15
October 15
November 15
December 15

Monday, June 22, 2015

RBI imposes INR 20 lacs penalty on The Hubli Urban Co-operative Bank Ltd., Hubli, Karnataka

A hefty fine of INR 20 lacs (Rupees Twenty lakh only) has been imposed   ‘The Hubli Urban Co-operative Bank Ltd., Hubli, Karnataka’, by Reserve Bank of India.
This fine is for violation of Reserve Bank of India’s instructions for irregularities in cheque discounting, overdrawal in OD loan accounts etc.
Cheque discounting : Cheque discounting is a component of Working capital limits.
The Bills limit has to include limits for purchase of third party (outstation) cheques / bank drafts.
Banks must satisfy themselves that the bills limit is not mis-utilised.

Overdrawal in OD loan accounts: A limit is set in the Overdraft accounts as per the assessed credit profile of the customers.  The limit can be breached in exceptional circumstances. Such breaches should be backed with proper approvals. In the instant case, there were frequent breaches of the Overdraft limits.

Read an interesting article - Flower, creeper and food

Saturday, June 20, 2015

RBI imposes penalty on The Junagadh Commercial Co-operative Bank Ltd., Junagadh (Gujarat)

The Reserve Bank of India has imposed a monetary penalty of 5.00 lakh (Rupees Five Lakh only) on The Junagadh Commercial Co-operative Bank Ltd., Junagadh (Gujarat).
          The monetary penalty is for violations of the directives/guidelines of the Reserve Bank on :-
1.     Know Your Customer (KYC) Norms
2.     Anti-Money Laundering (AML) Measures
3.     Combating of Financing of Terrorism (CFT)
4.     Obligations of Banks under Prevention of Money Laundering Act (PMLA), 2002.

The predominant cuisine in Junagadh is vegetarian.  Junagadh might not have any lavish or fine dining restaurants but it does have quiet some options for some lip-smacking street food and good quality Indian and local Gujarati cuisine.  Some Gujarati snacks and sweets that relish are Dhokla, Khandvi, Thepala, Ghevar, Basundi and probably a few more.