Recently, the Reserve Bank of India (RBI) imposed restrictions on withdrawals from Punjab and Maharashtra Cooperative (PMC) Bank, which triggered a panic among bank customers. It has brought to the fore the issue of riskiness of banks, especially co-operative banks and the need to restore confidence among customers. Cooperative Banking A Co-operative bank is a financial entity… Continue reading Co-operative Banking in India
Tag: RBI
Punjab and Maharashtra Cooperative Bank Ltd (PMC Bank)
Context The Reserve Bank of India has placed Mumbai-based Punjab and Maharashtra Cooperative Bank (PMC Bank) a Leading Cooperative Bank headquartered in Mumbai under directions and has slapped restrictions on its operations RBI imposed curbs on the activities of PMC for a period of six months. Background Founded in 1984, PMC Bank was the youngest bank to… Continue reading Punjab and Maharashtra Cooperative Bank Ltd (PMC Bank)
RBI’s Surplus Fund
Why the RBI transfer funds to the Government? On an average, in the last decade or so, anyway between Rs. 40,000- 60,000 crores have been given away to the government as dividends by the RBI. Dividend is paid to the government as the government is a stakeholder in the RBI. The dividend is paid out… Continue reading RBI’s Surplus Fund
RBI Surplus Transfer to the Government
Context The Central Board of the Reserve Bank of India (RBI) on 26th August decided to transfer a sum of ₹1,76,051 crore to the Government comprising of ₹1,23,414 crore of surplus for the year 2018-19 and ₹52,637 crore of excess provisions identified as per the revised Economic Capital Framework (ECF) adopted at the meeting of the Central Board. The… Continue reading RBI Surplus Transfer to the Government
RBI transfer ‘surplus’ to government
Context Reserve Bank of India (RBI) Board has approved a transfer of Rs 1,76,051 crore to the government, including a surplus or dividend of Rs 1,23,414 crore, and a one-time transfer of excess provisions amounting to Rs 52,637 crore. Bimal Jalan Committee The outflow from the RBI’s reserves was limited to this amount only because… Continue reading RBI transfer ‘surplus’ to government
Central bank and inflation targeting
To maintain a good economic health in any country, it is necessary for both the Central bank and the government to work in tandem. However, in India, this has not been the case. There is a growing distrust between RBI and the Finance Ministry. Few recent developments indicate this: The denial of extension by the… Continue reading Central bank and inflation targeting
Provide loans to women SHGs at 7 per cent: RBI to banks
The Reserve Bank has asked banks to provide loans to women self-help groups (SHGs) at 7% per annum, as per the government’s revised guidelines for 2016-17. All women SHGs are eligible for interest subvention on credit up to Rs 3 lakh at 7% per annum under Deendayal Antyodaya Yojana-National Rural Livelihoods Mission. Details: As per… Continue reading Provide loans to women SHGs at 7 per cent: RBI to banks
The currency question
Livemint The recent agreement between the Government of India and the Reserve Bank of India to make inflation targeting the central bank’s prime focus has long way to go. This move represents an important structural shift in one of the two pillars of conventional macroeconomic policy (the other, of course, being fiscal policy). Background: Since… Continue reading The currency question
P2P lending: towards easy funding
Livemint Issue Analysis of the guidelines issued by the Reserve Bank of India (RBI) on peer-to-peer (P2P) lending. What is P2P lending? To bridge the gap of unavailability of proper formal credit, an aggressive breed of loan providers has emerged in India, called peer-to-peer (P2P) lending. The concept is not new—it is basically an individual,… Continue reading P2P lending: towards easy funding
On-tap bank licences: 5 questions that linger
The Hindu Issue Questions being asked related to ‘on-tap’ bank licenses. Q.1) External committee needed? The RBI had said it would form a standing external advisory committee (SEAC) that will vet the applications after the initial screening is done by central bank staffers. The committee is to have a three-year term and will comprise eminent… Continue reading On-tap bank licences: 5 questions that linger
