Minors over 10 years can operate bank accounts: RBI

Minors can operate bank accounts: RBI

RBI has allowed banks to offer additional facilities as internet banking ,ATM,debit card and cheque book to a minor account holder.

Banks should not allow a minors account to be overdrawn and that these accounts should always remain  in credit.

RBI has given the leeway to banks to fix the minimum age at which they will allow minors to operate saving bank accounts independently .

In a separate notification the RBI said banks cannot slap charges on customers for not maintaining the minimum balance in inoperative saving and current accounts in which no transaction have been made for two years .The central bank had announced this change in its april 1 monetary policy and was made effective . 

Read More

FINANCE MINISTER ASKS PSB CHIEFS TO INCREASE USAGE OF SARFAESI LAW TO RECVOER BAD LOANS:

FINANCE MINISTER ASKS PSB CHIEFS TO INCREASE USAGE OF SARFAESI LAW TO RECVOER BAD LOANS:

The finance ministry has asked public sector banks to increase the usage of Sarfaesi Act provisions to quickly recover bad loans.

it also wants PSBs to adopt the latest sophisticated risk management tools to effectively measure risks in lending and price loans accordingly so that there is an improvement in the asset quality .These were measures suggested by the new Financial Services Secretary Mr.G.S.Sandhu to the PSB Chiefs.

This development comes in the backdrop of rising non -performing assets of PSBs and the difficulties being faced by the government in infusing more capital,owing to fiscal constraints .The ministry has been asking PSBs to strengthen their efforts to recover bad loans.

The Ministry has now said where ever possible the PSBs must exercise their rights under Section 13(4) of the Sarfaesi Act, which empowers the lenders to take possession of the secured assets of the borrower (whose accounts have turned NPA) and sell the assets before their value deteriorates.The section also empowers lenders to takeover the management of the business of the borrower and sell the assets if needed.

The Data for 2012-2013 showed that out of the three methods for NPA recovery Sarfaesi Act debt recovery tribunals and loak adalats Sarfaesi Act route was the most effective .

Read More

MANAGEMENT AND GOVERNANCE ISSUE IN PUBLIC SECTOR BANK

MANAGEMENT AND GOVERNANCE ISSUE IN PUBLIC SECTOR BANK:

Reserve bank of India and government over bad loans at public sector banks have led to a bitter exchange of notes between the banking regulator and the finance ministry that controls state run lenders.

Bad loans at state run banks have gone up at a brisk pace ,unlike their private sector banks. The RBI says this was because of reckless lending to corporate and allegation that has not gone down well with the ministry which says the banks we only following government advice to help boost the economy.


The RBI said the sharp rise in bad loans can not be just because of the downturn in the economy and blamed  what it called sub optimal credit management among public sector banks for the problem.

In its response defending PSU banks the ministry said most private banks had stopped lending post global financial crises in 2008 while PSU banks emerged as the only providers of big ticker loans .

The Central Banks was not convinced .It responded last week maintaining its stand threat PSU banks have week credit  management skills.In response to the ministry defensive letter RBI noted that even if the PSU banks were lending at the instance of the government to boost the economy they should have followed the principles of prudent lending which implied giving loans to credit worthy borrowers against adequate security as collateral.

Read More