RBI tightens norms for credit card issuers on minimum dues

RBI tightens norms for credit card issuers on minimum dues

RBI SETS NORMS FOR LATE FEE ON CREDIT CARDS:

RBI has told banks that the can charge late fees only in the next billing cycle following a missed payment. At present  card issuing banks charge a late fee for any payment made after the due date.

The late fee imposed by card issuers ranges between Rs.100 and Rs.700 depending on the outstanding amount above Rs.20000 most banks charges a late fee of between Rs.600 and Rs.700 .Most utility providers like electricity and telecom companies charges  customers if they miss the due date.How ever i the case of credit card payment the issuers charges interest for the delayed payment and in addition to this they charge a late fee payment.

This had led to a lot of heartburn among customers as they ended up paying both late fee and the interest even if they made the payment before the next bill was due.

CEO of SBI confirmed that RBI has asked banks not to impose late charges if the cardholder had paid before the next billing but after the due date .It is possible that the regulator must have felt that since the card holder is not being considered a delinquent until the next bill is unpaid the penalty should not ve charged he added when asked about the rationale .

In December 2013 RBI had directed banks credit card accounts to be treated as delinquent only if the minimum amount due as mentioned in the statement is not paid fully within 90 days from the next statement date .The gap between two statement should not be more than a month.

Some banks took the due date specified in the statement of payment of minimum amount due to determine the overdue status while others used the subsequent billing date to determine the over due status.

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TARGETTING INFLATION-Govt to allow more private banks

TARGETTING INFLATION-Govt to allow more private banks 

The Governor of Reserve Bank of India Mr.Rajan will explain to the new Government the need to keep inflation under control.

Further keeping interest rates relatively high may be un avoidable to achieve that government officials famillar with RBI .RBI which is in the process of formulatingnew guidelines for bank licence was unlikely to allow corporate houses set up new banks in the near future .
RBI will talk to the next government on the inoprtance of inflation control , the inflation targer and the need to stay the course which the central bank is following.

RBI strenghthing its supervisory capabilities before issuing the new licences to the corporates.RBI hold a dialouge with the new government on a number of areas including the need oto present a credible budget.

The economy currently skating along at bottom but growth could pick up by at least one percentage point if measures were taken to unlock projects tied up in red tape.
we could see growth between 5.5% to 6% nudging the latter in the second half of hte current fiscal year. 

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RBI AUDIT 2014- Big Loan Defaulters to Face RBI Audit

RBI AUDIT 2014- Big Loan Defaulters to Face RBI Audit

Reserve Bank of India has taken upon itself the task of investigatinf bank frauds after a series of inquiries by banks themselves i high profile cases such as those involving Deccan chronicle and Kingfisher Airlines yielded very little.

The Board of Financial Supervision chaired by RBI Governor Mr.Rajan, has in fact cleared a proposal that the central bank will conduct an independent forensic audit of corporates declared fraudulent by banks. Independents audit ,however will be restricted to corporates that have borrowed more than Rs. 1000 crore.
The Hyderabad based Decan Chronicle borrowed Rs.4000 crore from a consortium of 18 lenders ,who allege the company misused the banking system by borrowing from  one set of lenders without keeping others.

Banks officials say the central banks move reflects poorly on the banks and reaffirms the fact that banks and some promoters have developed cozy ralationship that has  led to thousands of crores of bad loans.

Independent forensic audit is one of the many steps taken by the RBI to check the rise in stressed assets in the banking system for instance RBI decided to incentivise lenders who take quick action to resolve such cases and penalise those who sit on them. Banker say the findings from forensic audit will enable RBI to devise policies that will help it keep a close watch on the creditor borrower relationship and quickly step in when there is misuse. 

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RBI ALLOWS 5 PRIVATE BANKS TO IMPORT GOLD

TOP 5 BANKS ALLOW TO IMPORT GOLD

The Reserve Bank of India has allowed five domestic private banks to import gold.Sector officials said this could be a significant step towards easing of tough  curbs o the metal imposed last year to cut the country trade deficit.

The central bank allowed imports by  HDFC Bank,Axis Bank, Kotak Mahindra Bank,IndusInd Bank,YES Bank ,officials at the respective banks told Reuters.Two sector sources confirmed the names of the banks.

The Government had enforced an 80/20 rule in July, making it mandatory to export a fifth of all gold imports.Under that ,only six banks and three state run trading agencies that had facilitated export of gold or jewelry in three years were allowed to import. 

The six banks were mostly state run lenders . The central bank has permitted banks though they had not facilitated any exports of metal or jewelry in three years.

RBI ALLOWS 5 PRIVATE BANKS TO IMPORT GOLD List-

1. HDFC Bank

2.Axis Bank

3.Kotak Mahindra Bank

4.IndusInd Bank

5.YES Bank 

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DIFFERENTIATED BANKING LICENCE- RaghuramRajan pitches for differentiated bank licences

RaghuramRajan differentiated bank licences - RaghuramRajan supports for differentiated bank licences

The differentiated banking licence are more appropriate for some private entities aspiring to setup banks in India before granting in principle approvals for banking licence to two companies , Bndhan Financial  Services and IDFC. The banking regulator RBI has assessed various  applications.

RBI felt comfortable  with the Bimal Jalan committee .RBI opened up the possibility that will allow applicants to apply again ,  once they start giving licence on tap , as well as create differentiated banking licence.some of the applicants will be better off applying for differentiated licences rather than full licence as per version of Mr Rajan Governor  RBI.

Reserve Bank of India is going to offer only two New licences after a gap of a decade , due to public governess it considered this the most appropriate stance.

Several large industrial houses  Aditya Birla Group ,Reliance and bajaj Group and finance companies Shri Ram Capital ,L&T finance holding,Muthoot Finance had applied for a banking Licence.

Some of the entities that did not qualify for a full fledged banking licence in this round could re apply in the future.  In a discussion paper on India's Banking structure (released in Aug 2013) the banking regulator has said banks had shown significant progress in financial inclusion and in improving the  quality of risk management but added a lot more needs to be done.Mr Rajan added that RBI opened  up the possibility that will allow applicants to apply again, once they start giving the licence.  

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