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General Awareness :: Banking News :: October 19, 2013

Walmart investment probe ‘referred to RBI’ :
An investigation by authorities into whether Walmart Stores Inc violated local investment rules in 2010 has been referred to the Reserve Bank of India. Last year, the RBI asked the Enforcement Directorate of the Finance Ministry to look into whether the world’s largest retailer broke foreign exchange rules when it invested $100 million in an Indian consultancy that also runs super markets, sources told Reuters. Officials said the enforcement directorate has passed along its findings to the central bank.

Tough for global banks to keep precise credit risk data : RBI official :
“The Pillar II Accord of Basel II vests the responsibility of data quality and data management on the financial institutions. Banking business must at all times ensure accuracy of credit risk exposure calculations. This becomes all the more challenging for international banks that have global footprints”, G. Padmanabhan, RBI Executive Director, said. The central bank’s executive director was delivering the inaugural address at the Conference on Data Quality Management organised by the Indian Institute of Banking and Finance. He also said the Institute for Development and Research in Banking Technology (IDRBT) was compiling a handbook, ‘Data Quality in Indian Banking Industry : Issues, Remedies and Impacts’ which would deal with issues relating to data quality and would suggest a new framework for achieving this, as it may prove beneficial for banks.

Financial inclusion can be better achieved through self-help groups : Nabard :
According to a Nabard (National Bank for Agriculture and Rural Development) report, though the SHG-BLP (self-help group-bank linkage programme) is a step towards bringing the ‘unbanked’ poor into the mainstream banking channel, its formal acceptance as a financial inclusion channel by the central bank is still awaited. This observation comes in the backdrop of the Government pushing banks to step up their financial inclusion (FI) drive through intermediaries such as business correspondents (BCs) and business facilitators (BFs) in the last three years. An SHG is a homogeneous group, comprising 15-20 members (mostly women), where members first pool in their savings and give out small loans to needy members. Once the SHG successfully undertakes savings and credit operations from its own resources, it can borrow from a bank (SHG-BLP) to enhance its pool of resources. Nabard said “though several initiatives were taken by the Government, the central bank, Nabard and banks to bring the poor into the fold of formal financial service providers, no serious attempt was made to leverage the SHG-BLP to achieve the financial inclusion goals”. As on March-end 2013, the total number of SHGs linked with banks stood at 73.18 lakh, with savings aggregating Rs 8,217 crore. Further, 44.51 lakh SHGs had loans outstanding aggregating Rs 39,375 crore.

RBI allows urban co-op banks to share IT resources :
The RBI today allowed sharing of information technology resources by urban cooperative banks. The guidelines for sharing of information technology resources by urban cooperative banks will be the same as those that are applicable to commercial banks. The norms for sharing of information technology resources by commercial banks were issued on August 30.

SBI Plans to Add 26,500 ATMs in Five Months :
State Bank of India plans to add 26,500 ATMs over the next five months to take the total count to 65,000. The SBI group — SBI and the associate banks — already runs India’s largest ATM network with 38,779 machines. SBI will, by March 2014, set up 7,800 ATMs under its own brand, while 17,200 will be brown-label ATMs that will be managed by a third-party vendor. SBI has given CMS Info Systems, a Mumbai-based IT solutions provider, the contract to install, manage and service 7,800 ATMs, the executive said. Brown-label ATMs are those for which public sector banks jointly call for competitive bidding to derive benefits of scale and achieve financial inclusion. They are mainly installed in rural and semi-urban areas.

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