1. The Finance Ministry has recommended to the Commerce and Industry Ministry that the foreign investment cap on credit information companies be placed at 49 per cent.Currently, there is no specific policy on foreign investments in credit information companies.The proposed cap would include FDI and foreign portfolio investment through FIIs.
2. Federal Bank has formulated a new scheme for financing delivery-based futures trade in agricultural commodities. The bank was getting ready to finance delivery-based trade in all agricultural commodities throughout the country in the days to come. Under this scheme, customers can get loan up to 85 per cent of the futures selling price. Besides, the bank will also fund both the initial margin and the daily mark-to-market (MTM).
3. Despite the spread of banking in the modern context, changes in the financial sector and the rising awareness about the credit delivery system among rural household, the number of moneylenders and the quantum lent by them has registered a substantial jump in the last decade.“The dependence on moneylenders has not decreased. It has, on the other hand, increased in several rural regions,” notes an RBI study.Reports from the 11 regional offices of the RBI show that the number of registered moneylenders increased from 12,601 to 19,627 between 1995 and 2006. Anecdotal evidence suggests a corresponding rise in the unregistered moneylenders.
4. Realising that loan disbursed under Indira Awaaz Yojana scheme for rural housing has not been adequate to build a decent housing facility at present, given the rise in the price of construction materials, Indian Overseas Bank has come up with a scheme to extend housing loan facility up to a maximum of Rs 20,000 for such beneficiaries at 4 per cent interest rate.
The beneficiaries, instead of approaching money lenders and paying a higher rate of interest to complete the construction work, should make use of them.
The beneficiaries, instead of approaching money lenders and paying a higher rate of interest to complete the construction work, should make use of them.
5. Barring any objections from the Insurance Regulatory and Development Authority in the next 10 days, National Insurance will launch an insurance product to cover the risk faulty title.
The product was filed for the regulator’s approval about 20 days ago and, under the ‘file-and-use’ policy of IRDA, the insurer may launch the product after 30 days after filing, provided there is no query or objection.The product, common in many countries but launched in India for the first time, will cover risk of faulty or litigated title such as those arising out of suits, disputes of transfer and forgery.
The product was filed for the regulator’s approval about 20 days ago and, under the ‘file-and-use’ policy of IRDA, the insurer may launch the product after 30 days after filing, provided there is no query or objection.The product, common in many countries but launched in India for the first time, will cover risk of faulty or litigated title such as those arising out of suits, disputes of transfer and forgery.
6. Canara Bank will look into the possibility of having tie-ups with renowned institutes for marketing the products created by rural artisans at the artisan training institutes run by the bank.Canara Bank Centenary Rural Development Trust has through its 14 institutes in the country trained more than 50,000 people in traditional arts, rural development activities, and information technology. Of the 14 institutes, training in traditional arts is given at Jogaradoddi and Miyyar in Karnataka and Karaikudi in Tamil Nadu.
7. UCO Bank, which is sitting on an Rs 1,285-crore pile of non-performing assets, will put up about Rs 500 crore of the stressed assets next month for bidding by various asset reconstruction companies (ARCs).Two General Managers and about 300 of the bank’s staff had been put on the task of making recoveries.About Rs 300 crore of the bad loan the bank has on its books today were old agricultural bad loans that have got reclassified as NPAs, after the two-year moratorium from 2004-05. Some NPAs also resulted from fraudulent housing loans. All the other NPAs are fully backed by securities. The bank has 48 accounts of ‘big ticket’ (over Rs 5 crore) NPAs amounting to a little over Rs 500 crore.
8. Reports of phishing targeted at customers of banks appear to be on the rise. Websense Security Labs, in a statement released recently , said it had received reports of such attacks from customers of AXIS Bank. The Lab went on to say that it found a malware in the Web site of Syndicate Bank. A phishing site hosted in Malaysia, targeting AXIS Bank customers, asking the users (through a spoofed email) to renew certain services and claiming that failure to do so would result in suspension or deletion of the account. The e-mail provided a link to a malicious site that attempted to capture the personal and account information.
9. The Technical Group set up by the RBI to ‘Review the Legislation on Money Lending’ has recommended a model legislation on Money Lenders and Accredited Loan Providers (by incorporating the best features of the domestic and International legislation) for adoption, particularly in those States that do not have a comprehensive legislation in place at present.
Stressing the need for examining the relevance of the legislations (passed several decades ago), the Group has recommended some modifications to the existing legislations such as quick, informal and easy dispute resolution mechanism for better enforcement; and legitimising money lending activity in States that have no such provision.It noted with concern the absence of effective enforcement of the legislation in many States.
Stressing the need for examining the relevance of the legislations (passed several decades ago), the Group has recommended some modifications to the existing legislations such as quick, informal and easy dispute resolution mechanism for better enforcement; and legitimising money lending activity in States that have no such provision.It noted with concern the absence of effective enforcement of the legislation in many States.
10. A high-level committee under the chairmanship of former chief economist of the International Monetary Fund (IMF), Prof. Raghuram G. Rajan, to map out a comprehensive agenda for reform of the country’s financial sector has been set by the Planning Commission today.The 12-member committee’s remit include, among others, to identify the emerging challenges in meeting the financing needs of the Indian economy in the coming decade and the real sector reforms that would permit those needs to be more easily met by the financial sector.
It would also examine the performance of various segments of the financial sector and identify changes that would meet the needs of the real sector, identify changes in the regulatory and the supervisory infrastructures that could better allow the financial sector to play its role while ensuring that risks are contained.The terms of reference also covers identifying changes in other areas of the economy including the conduct of monetary and fiscal policy and the operation of the legal system and the educational system that would help the financial sector function more effectively.The committee would submit its report by end-March 2008. Other members of the panel include the Director General of the NCAER, Dr. Suman Berry, Mr. Uday Kotak of Kotak Mahindra Bank, Mr Rajeev Lall of IDFC, Mr Vijay Mahajan, Chairman Basix, Mr Zia Modi, Senior Partner, AZB Partners, Mr. O.P.Bhatt, State Bank of India, Mr K.V.Kamath ICICI Bank, Ms Chitra Ramakrishna, Deputy MD, National Stock Exchange, Mr R. Ravimohan, Crisil, Mr J.R.Varma, Indian Institute of Management, Ahmadabad .
It would also examine the performance of various segments of the financial sector and identify changes that would meet the needs of the real sector, identify changes in the regulatory and the supervisory infrastructures that could better allow the financial sector to play its role while ensuring that risks are contained.The terms of reference also covers identifying changes in other areas of the economy including the conduct of monetary and fiscal policy and the operation of the legal system and the educational system that would help the financial sector function more effectively.The committee would submit its report by end-March 2008. Other members of the panel include the Director General of the NCAER, Dr. Suman Berry, Mr. Uday Kotak of Kotak Mahindra Bank, Mr Rajeev Lall of IDFC, Mr Vijay Mahajan, Chairman Basix, Mr Zia Modi, Senior Partner, AZB Partners, Mr. O.P.Bhatt, State Bank of India, Mr K.V.Kamath ICICI Bank, Ms Chitra Ramakrishna, Deputy MD, National Stock Exchange, Mr R. Ravimohan, Crisil, Mr J.R.Varma, Indian Institute of Management, Ahmadabad .
