Jewellers' gold loans go cheaper amid competition

Competition among banks to find more customers has brought down the interest rate on loans they give jewellers to buy gold, squeezing profit margins. After market leader Scotiabank reduced rates to attract more borrowers, several leading state-owned banks have been pushed to follow suit. However, Rajan Venkatesh, MD, bullion, ScotiaMocatta, a division of Scotiabank, said the bank had not brought down the interest rate on such loans. Against an outright purchase of gold, jewellers find borrowing gold from banks a better alternative since it enables them to hedge against price fluctuation of the metal.

New rules soon for wealth managers; RBI, Sebi to get more teeth

A new set of rules are underway for an estimated $1-trillion wealth management industry and banking regulator the Reserve Bank of India (RBI) and capital market watchdog the Securities and Exchange Board of India (Sebi) may be made jointly responsible for implementing these regulations and keeping a watch for any violations. Given the size of the industry and therefore a higher risk of large-scale frauds or manipulations, the new rules could comprise of Sebi and RBI being given powers to impose strict penalties, he added.

India emerges as high profit market for foreign banks

Despite the high tax rates wiping out a large part of their gains, India is fast emerging as one of the most profitable markets for foreign banks post the global financial crisis. Compared to other emerging markets, accelerated growth in the domestic economy provided greater business opportunities to foreign banks here, resulting in higher profitability, analysts and bankers said. "Post the financial meltdown, India has emerged as the hottest destination for foreign banks. The incremental returns India offers over the US market have increased from 0.3 per cent in 2006 to 11.4 per cent in 2009," Monish Shah, director, Deloitte, a global audit and consultancy firm, said.

Cheque clearance system to be totally automated by Sept

Addressing the demand from banks for complete automation of the cheque clearing exercise including automation of non-MICR clearing houses, the Reserve Bank of India (RBI) has decided to implement a new express cheque clearing system (ECCS). The package has been developed through an outside vendor, Image InfoSystems, and is now ready for deployment. The roll-out of the ECCS will be completed within a six-month time-frame between April and September. The new initiative is expected to go a long way in modernising and refining the cheque clearing activities in the country, apart from ensuring a smoother and interoperable payment system.

India is top recipient of remittances

India received remittances to the tune of $27 billion in first six months of the current financial year, retaining its top position in the sector. The Overseas Indian Affairs Minister, Mr Vayalar Ravi, said according to a World Bank report India continued to be the largest recipient of the remittances from diaspora in 2010. He said India received a total of $53.9 billion as remittances in the year 2009-10 while in 2008-09, the amount was $46.9 billion. The World Bank had earlier in a report said Indian expatriates are expected to remit about $55 billion into the country this year

CMIE projects GDP to grow 8.8 per cent in FY'12

Indian economy is expected to maintain the eight-plus growth trajectory in FY'12 with its real GDP projected to grow by 8.8 per cent during the fiscal, the Centre for Monitoring Indian Economy (CMIE) said here on Monday. The domestic environment is conducive for growth, private final consumption expenditure is projected to grow by a healthy 7.5 per cent and gross fixed capital formation by 15 per cent, it said. "It is assumed that the south-west monsoon will be normal for the second consecutive year in 2011," CMIE said. On the downside risks, it said that these relate mainly to poor rainfall and to the performance of the global economy. In FY 11, India's economic performance has been robust and real GDP is estimated to have grown by nine per cent, it said

Consumer awareness key to popularising e-payments

There are 22.5 crore debit cards in the country and while nine of ten transactions are done at the ATMs, only one transaction is done directly at the merchant establishment. Now, priority is to make consumers aware of the electronic payment scheme. Uttam Nayak, group country manager (India & South Asia) at Visa, says that channels like internet and mobile will help accelerate cashless payments in the country. The opportunity in India for electronic payments is huge. India's personal consumer expenditure (PCE), or the amount spent on a card on an average is only 3% compared to the global average of 16%.

Survival code for tomorrow's banks

When customers are not going back to the old ways of banking, the only option you have as a bank is to move forward with them; else they will pass right by you, at warp speed, observes Brett King in 'Bank 2.0: How customer behaviour and technology will change the future of financial services' (www.landmarkonthenet.com).A key thought in the book is that the more channels, applications, touch-points, and locations you use for engaging customers, the more you will discover that channel silos are crippling the speed with which you engage and convert sales opportunities. The antidote, as the author prescribes, is to start removing the silos in the interest of revenue; and to create a team that is both an advocate for customers, and a team dedicated to creating the right offer, across the right channels, at the right time.

Tight monetary policy needs to continue: Rangarajan

The Reserve Bank of India will need to continue with its monetary tightening policy to bring inflation under control, said Dr C. Rangarajan, Chairman, Prime Minister's Economic Advisory Council. "The inflation rate continues to remain high and, therefore, monetary policy will have to remain tight in order to ensure that the inflation rate is brought down," Dr Rangarajan told reporters on the sidelines of the Skoch summit here on Friday. Dr Rangarajan also added that overall inflation is likely to fall to 7.5 per cent in March from 8.31 per cent in February, and in the next fiscal it could decline to 6 per cent

'Kids' pocket money jumped 200%'

Pocket money of Indian kids has shot up by over 200 per cent over the past decade, according to a new study. The pocket money of kids has jumped by 201 per cent over the past ten years, the New Generations 2011 study by Cartoon Network (CN) channel said. "The average monthly pocket money given to kids in the 7-14 years age group is Rs 280 (up from Rs 258 in year 2009) with girls getting as much as boys. "Around 35 per cent younger children under the age-group of 4-6 years also receive pocket money," it said. Altogether 57 per cent parents give money to their kids, up from 41 per cent in 2009.

Newer approaches towards financial inclusion are needed: Pranab

The Government is trying to address the concerns over banks' high cost of intermediation and limited penetration when it comes to customer segments and geographies, according to the Finance Minister, Mr Pranab Mukherjee. These concerns are being addressed in collaboration with the Reserve Bank of India and with the active participation of the banking and non-banking financial entities. "Newer perspectives and approaches towards financial inclusion are the need of the hour. There is a case for the policymakers and other stakeholders to re-strategise the financial policies that are meant to reach the un-reached and the un-banked sections of our country," Mr Mukherjee said

Indian credit card boom to beat China

MasterCard\'s India-born President and CEO Ajay Banga today said India is a "more exciting" market than China for the credit cards and payment giant and the company is focused on shifting as many consumers in India as possible from cash to the electronic payment system. "India still uses a lot of cash in its economy. All I am interested in is converting utilisation for retail payments from cash to alternative forms," Banga said. The IIM Ahmedabad alumnus said India is undertaking various steps to help drive "electronification" - from the unique identification number scheme to mobile payments.

India in top 10 manufacturing list

India has secured a place among the world's 10 largest manufacturing countries as the share of major industrialised economies in global factory output fell significantly in the last decade, a UNIDO report said. Efficient use of energy, helped by enhanced labour productivity and increase in exports of manufactured goods, helped the country secure its position among the top 10 industrial producers. Even though the country had only 1.8 per cent share in the world manufacturing between 2000 and 2010, India occupies the 9th position among the global leading manufacturing countries.

Booster for home loan segment

Banks will be encouraged to grow their home loan portfolio following liberalisation of the interest rate subvention scheme for housing loans in Budget 2011-12. Another factor that will also give a fillip to the segment is the announcement that home loans up to Rs 25 lakh (as against Rs 20 lakh now) will get the priority sector tag. The Finance Minister announced that the existing scheme of interest subvention of 1 per cent on housing loans would be extended to loans up to Rs 15 lakh from the existing Rs 10 lakh. The price of the house for which the scheme applies has also been relaxed to Rs 25 lakh from Rs 20 lakh. Housing loans up to Rs 25 lakh will be categorised as priority sector as against Rs 20 lakh now.

Budget proposes electronic registry to prevent loan frauds

To prevent frauds in loan cases involving multiple lending from different banks on the same immovable property, the Government has facilitated the setting up of the Central Electronic Registry under the SARFAESI Act, 2002. This Registry will become operational by March 31, 2011, the Finance Minister said, in his Budget Speech. Measures such as the Central Electronic Registry are expected to prevent frauds will help the housing sector.

No filing of tax if salary is only income

Salary earners having an income of less than Rs. 5 lakhs will not have to file tax returns from this year, a finance ministry official said."Salaried people, may be up to Rs. 5 lakh...they need not file the (income tax) return," CBDT chairman Sudhir Chandra told reporters at the customary post-Budget press conference.The exemption from filing tax returns come into effect from the assessment year 2011-12. In case such a salary earner has income from other sources like dividend, interest etc. and does not want to file returns, he will have to disclose such income to his employer for tax deduction, Chandra said.