Regulations
RBI asks banks to modify FD form on pre-mature fund withdrawal

Banks will now have to incorporate a clause in the FD form to give option of premature withdrawal by survivor in case of death of the other joint account holder

 
Mumbai: The Reserve Bank of India (RBI) has asked banks to modify fixed deposit (FD) account opening forms to allow pre-mature withdrawal of FD on death of one of the joint account holders without any penalty, reports PTI.
 
Under the modified norms, it would be easier for the surviving joint account holders of FD with 'either or survivor' or 'former or survivor' mandate to go in for pre-mature withdrawal of fixed deposit in the event of death of the other.
 
As per the notification of the RBI, banks will have to incorporate a clause in the FD form to give option of premature withdrawal by survivor in case of death of the other joint account holder.
 
The RBI has issued the notification following complaints that several banks have not fully complied with its earlier circular of allowing premature withdrawal of FD by surviving joint account holder.
 
"The joint deposit holders may be permitted to give the mandate either at the time of placing fixed deposit or anytime subsequently during the term/tenure of the deposit.
 
"If such a mandate is obtained, banks can allow pre-mature withdrawal of term/fixed deposits by the surviving depositor without seeking the concurrence of the legal heirs of the deceased joint deposit holder," RBI said.
 
It further clarified that "such premature withdrawal would not attract any penal charge".
 

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India’s forex reserves down to 7-month import cover

India's foreign reserves came down to $294.4 billion at March 2012 from $311.5 billion at September 2011 end mainly due to RBI's intervention in the domestic foreign exchange market and effect of revaluation

 
Mumbai: India's foreign exchange reserves came down to $294.5 billion as on March 2012, enough to cover imports of seven months, as against eight-and-half months about six months ago, reports PTI.
 
The reserves -- a parameter to gauge a country's ability to absorb external shocks -- came down to $294.4 billion at end-March from $311.5 billion at September 2011 end mainly due to "intervention in the domestic foreign exchange market and effect of revaluation," a RBI report said.
 
"At the end of March 2012, the import cover declined to 7.1 months from 8.5 months at end-September 2011," said RBI's 'Half Yearly Report on Management of Foreign Exchange Reserves: October 2011 March 2012'.
 
India's import bill was $37.9 billion in July 2012.
 
Import cover refers to the number of months of imports that could be paid for from the foreign exchange reserves -- an important parameter in gauging a nation's ability to absorb external shocks.
 
With the changing profile of capital flows, traditional approach of assessing reserve adequacy in terms of import cover has been broadened to include a number of parameters, the RBI said.
 
As per the report, the ratio of short-term debt to the foreign exchange reserves which was 23.0% at end-September increased to 26.6% at end-March 2012.
 
Also, the ratio of volatile capital flows (defined to include cumulative portfolio inflows and short-term debt) to the reserves increased from 68.3% as on end-September 2011 to 79.9% as at end-March 2012.
 
RBI further said the rate of earnings on foreign currency assets and gold decreased from 2.09% in July 2009-June 2010 to 1.74% in July 2010-June 2011, "reflecting the generally low global interest rate environment".
 
As at end-March 2012, the RBI said out of the total foreign currency assets of $260.1 billion, $140.3 billion was invested in securities and $114.3 billion was deposited with other central banks, BIS and the IMF.
 
The rest ($5.5 billion) comprised deposits with foreign commercial banks and funds placed with the External Asset Managers.
 
The report also said the RBI held 557.75 tonnes of gold forming about 9.2% of the total foreign exchange reserves in value terms as on March 2012.
 
Of these, 265.49 tonnes are held abroad in deposits/safe custody with the Bank of England and the Bank for International Settlements.
 
The foreign exchange reserves consists of major currencies such as US dollar, Euro, Pound Sterling and Japanese Yen.
 

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Sutlej Jal Vidyut to execute two 1,170-MW projects in Bhutan

State-run Sutlej Jal Vidyut will execute two hydro power projects, 600 MW Kholongchu HEP and 570 MW Wangchu HEP, in Bhutan in collaboration with Druk Green Power Corp

 
Shimla: State-owned Sutlej Jal Vidyut Nigam (SJVN) said it will execute two hydro power projects, namely 600 MW Kholongchu HEP and 570 MW Wangchu HEP in Bhutan in joint venture with Druk Green Power Corporation of Bhutan, reports PTI.
 
The DPR (Detailed Project Report) of these projects have already been completed and submitted to the Central Electricity Authority for approval, SJVN Chairman and Managing Director RP Singh said.
 
Singh said SJVN had also submitted the pre-feasibility report for three projects in Arunachal Pradesh, namely 60 MW Rangarandi Stage-II, 378 MW Kameng-I and 80 MW Doimukh Projects in a record time of six months, to the government of Arunachal Pradesh.
 
The survey and investigation works on the Si-River basin in Arunachal Pradesh is in progress, he added.
 
During the current financial year, SJVN's Nathpa Jakhari Hydro Power Station achieved a Plant Availability Factor of 108 per cent as compared to 103 per cent during corresponding period of last year.
 
The plant targets to generate 7,000 million units of electricity and is close to achieving the target during the year.
 
He said with the final breakthrough in the HRT, the 412 MW Rampur HE Project is heading for completion and commissioning in September, 2013.
 
Company's diversification plans into Wind power are being realised with the 50 MW capacity plant scheduled to be completed during 2013, Singh added.
 

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