Money & Banking
RBI cautions banks charging high prices

While profit margins are important for sustaining banking operations, the cost of operational inefficiencies of banks should not be passed on to customers by way of higher service charges and fees said the RBI's deputy governor


Chennai: Cautioning banks charging high prices on products offered to customers, Reserve Bank of India (RBI)'s deputy governor KC Chakrabarty said a new set of guidelines would be announced during the coming Ombudsman Conference in Mumbai, reports PTI.

 

"I am telling you that if you believe that the pricing has become exploratory then we will intervene. We have intervened in the case of micro-finance institutions. What I am saying is that discriminatory pricing (on products offered to customers) should not be there. Pricing should be non-discriminatory," Chakrabarty told reporters.

 

During the Ombudsman Conference, to be chaired by RBI Governor D Subbarao, on 4th January, new guidelines would be announced. "Some new guidelines will come on how it (RBI) can be more stringent in pricing the products to customers of banks", he said.

 

"(Banks) you have to understand the customer needs and be reasonable to customers," he said, adding, "do not do lip service."

 

Observing that banks charge high interest rates for offering educational loans compared to home loans, he said "I am only raising a question why it cannot be reduced."

 

Earlier, after releasing a book 'Indian Banking Reforms and After', written by banker Dharmalingam Venugopal, also Indian Overseas Bank employee, Chakrabarty said banks need to ensure that they maintain high level of productivity and efficiency in their operations.

 

"While profit margins are important for sustaining banking operations, the cost of operational inefficiencies of banks should not be passed on to customers by way of higher service charges and fees," he warned.

 

On restructuring of loans by banks offered to individuals and enterprises, he said an element of discrimination was practiced by the banks in restructuring of loans.

 

"Analysis of available data indicates that the larger borrowers have invariably received benefit of restructuring of their loans, while the restructuring in case of SMEs has remained low. I believe with a timely intervention and support from the banks, this sector would have definitely shown much lower levels of impaired assets than it does", he said.

 

Stating that business operations of banks should be "customer-centric" in nature, Chakrabarty said, "this should be reflected in all aspects of banking operations including creation of customised products and services".

 

To a query on the Union Government's proposal to roll out cash-transfer scheme from 1 January 2013, he said, "we were asking (banks) to do it for more than two years. Now, it has encouraged the government to come out with this particular scheme".

 

"Now everybody has a bank account and if the money is credited into the account, it can stop the leakages. It will also make the financial inclusion more effective. I am telling them (banks) for the last three years as part of their normal business, but now they (banks) are forced to do." he said.

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COMMENTS

Vaidya Dattatraya Vasudeo

4 years ago

Is any one aware if Banks are supposed to charge for CTS2010 cheques or give them as replacement for old cheque folios surrendered.

Vaibhav Dhoka

4 years ago

Banks levy exorbitant charges and bank literacy is low in our country and this is used by bankers to loot customers.Three days back I wrote how Bank of Maharashtra levy charges in this column.It can be verified from their website,by giving example.

2012: When TV found a hero in common man

With shows like 'Satyamev Jayate', 'Kaun Banega Crorepati', Balika Vadhu' on board, it seemed in 2012 Indian TV has gone back to its roots of the 80's and 90's where shows like 'Hum Log' and 'Krishi Darshan' majorly talked about various aspects of human life

Small screen this year was dominated by the common man with shows like Aamir Khan's 'Satyamev Jayate' and Amitabh Bachchan's 'Kaun Banega Crorepati' (KBC) aiming at connecting with the masses by highlighting their problems, reports PTI.

 

'Satyamev Jayate' was a major turning point as the show brought to the fore various issues like female foeticide, child sex abuse, untouchability and the trappings of a big fat wedding plaguing India.

 

The compassionate host brought in real life instances and people across the country to share their sufferings on the public platform. His 14 episode series created a mass awareness and sensitised people. After a positive response, Aamir is now gearing up for a second season to the show.

 

Bachchan's 'KBC 6' also followed the same path as it gave a chance to the people from troubled backgrounds to come out and win money through the game.

 

Sonali Mukherjee, a victim of acid attack, had come on the show with actress Lara Dutta. She narrated the horrific incident that happened to her in 2003. At the end, the girl left with a hefty sum of Rs25 lakh from the show.

 

The sixth season of superstar Salman Khan-hosted 'Bigg Boss' saw a commoner - Hyderabad based martial artist Kashif Qureshi - in the house alongside 12 celebrity contestants.

 

With these shows on board, it seemed Indian TV has gone back to its roots of the 80's and 90's where shows like 'Hum Log' and 'Krishi Darshan' majorly talked about various aspects of human life.

 

Even long-running daily soap 'Balika Vadhu' is another show which showcased social stigmas of the society.

 

The show has always highlighted the issue of child marriage but their recent episodes also talked about widow remarriage. The show saw protagonist Anandi (played by Pratyusha Banerjee) getting married in a mass wedding ceremony which also included many other widows of the village tying the knot on the same day.

 

The small screen proved to be an important platform for luring people into the movie halls as well, with many A-listers using TV shows to for their movie promotions.

 

Salman took full advantage of his show by promoting his and brother Arbaaz Khan's "Dabangg 2". Right from launching the movie's first look to disclosing Kareena Kapoor's item number, the actor revealed every information about his last release on the show.

 

The show also witnesses his actor friend Ajay Devgn and Sonakshi Sinha's "Son of Sardar" promotions and also Anil Kapoor starrer "Race 2".

 

Filmmaker Karan Johar, dancing diva Madhuri Dixit, singers Asha Bhosle, Runa Laila, Abeeda Parveen; actresses Shilpa Shetty, Mahima Chaudhary, Ayesha Takia, Neha Dhupia, Kirron Kher and Malaika Arora Khan also returned to the small screen for judging dance and song based reality shows.

 

While reality shows were entertaining with their celebrity quotient, soaps like 'Bade Ache Lagte Hain', 'Kya Hua Tera Vaada', 'Parichay' and 'Uttaran' took help of their age old formula of taking a leap to make the story interesting. The jump in time saw new characters joining in and old ones getting a makeover to sustain the curiosity of the audience.

 

Also what made a comeback on small screen was the famous epic drama 'Ramayan', recreated by the late Ramanand Sagar's granddaughter Meenakshi.

 

Other mythological shows that made entry into TV were 'Devon Ke Dev Mahadev', based on Lord Shiva and 'Jai Jag Janani Maa Durga' which chronicles the legend of the powerful Goddess Durga.

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2012: Indian bourses perform better than global peers in tough year

Equity turnover during 2012 at NSE and BSE fell by 1.6% compared with 14.7% fall across global markets and 8% for bourses in Asia Pacific region

Amid turbulent times for the stock markets across the world, the equity turnover fell on Indian bourses as well in 2012, but the fall was meagre at 1.57% when compared to the global average, reports PTI.

 

Globally, the equity turnover fell sharply by 14.7%, while the fall was nearly 8% for the bourses in Asia Pacific region as well.

 

On the other hand, the collective equity trade volume of two Indian bourses, NSE and BSE, fell by 1.57% to 161.74 crore during January-November period of 2012, as per data from the World Federation of Exchanges (WFE).

 

The total number of equity trades on the exchanges across the world was 907 crore for the same period. Indian markets are expected to further improve their tally in 2013, as a new bourse MCX-SX is expected to begin operations as a full-fledged stock exchange.

 

The Asia pacific region registered a decline of nearly 8% to 533.4 crore trades in January-November period of 2012. The global data for December is still awaited as one last trading session would take place tomorrow.

 

Experts said economic uncertainty across the globe, political deadlock in Europe, fiscal cliff debate in the US, policy logjam in India and lack of trading opportunities were main reasons for fall in equity trading in India and rest of the world.

 

Individually, National Stock Exchange (NSE) recorded 129 crore equity trades, showing a marginal improvement of one% compared to 2011, and grabbing the mantle as the top bourse among 51 global peers. NSE was the third largest bourse in the world in 2011.

 

BSE, ranked seventh globally in equity trades, recorded 32.71 crore trades in the period from January to November.

 

"Indian markets turned out to be better performing markets as compared to other emerging markets and government reforms are also bringing faith back in Indian equities markets resulting in higher interest among the traders and investors," Religare Securities EVP and Head Retail Research Rajesh Jain said.

 

Experts believe that NSE and BSE stood their ground among the top global bourses largely owing to heavy investment flows from foreign institutional investors (FIIs).

 

"Our entire policy is pro-FII, whatever volumes we have is basically because the global players are investing...the participation of retail investors and domestic investors is negligible," CNI Research CMD Kishore Ostwal said.

 

On the flip side, the experts say there was lack of confidence within the domestic and the retail investors, as Indian investors had lost confidence in 2011 and were seen looking for opportunities to exit during 2012.

 

"2012 saw the equity markets reviving but the retail investors used the rally in 2012 to exit. Equity funds witnessed outflows of Rs12,702 crore till November this year, the second highest outflows in the category witnessed in the last six years," Jain said.

 

Ostwal also said "the main reason for slow equity trades volume is that even though we have had market touching a new high, the retail investors have not come out and participation by domestic investors is negligible."

 

"Market is all about the confidence of the market participants but if everything goes in opposite direction, say ballooning inflation, shrinking industrial output data, it is sure to dump the confidence," SMC Global Securities Head (Research) Jagannadham Thunuguntla said.

 

"Moreover, in 2012 the market has moved in a band, there were very low% of volatility, say of 3-4% on a monthly basis, which has stolen all the arbitrage opportunities," he added.

 

Experts said retail investors opted to get out of mutual funds as and when they got an opportunity resulting into lower participation and decreased number of trades.

 

On an optimistic note though, the market players said the outlook for the coming year is positive largely owing to expectations of larger inflow from FIIs and India still being a favourable destination for investments.

 

"The coming year appears to be more promising as far as the Indian markets are concerned as fundamentals are expected to improve and we may see an increase in interest in Indian markets from the FIIs as the concerns over the fiscal cliff and growing concerns in Europe may weigh heavily on their minds making India a safer investment option," Jain said.

 

Moreover, the equity trading could also pick up if more measures are taken to boost the markets, including a possible abolition of security transaction tax (STT).

 

"STT alone is a big cost along with other costs like Service Tax, Transaction charges of NSE, Brokerage etc. A trader has to recover all these charges before he can actually make profit from his trade," Jain said.

 

"The combined charges being too high, the trader finds it difficult to make profit from trading. The cost of trading should be reduced for more trading activity," he added.

 

Thunuguntla also said that removal of STT would be a major attraction for further FII inflows.

 

The big-bang reforms introduced by Indian government such as FDI in various sectors and a cautiously improving global economy coupled with overflowing central bank cash, are expected to revive the stock markets in India and the rest of the world as well.

 

"At this juncture, with the improved market sentiments ahead of the year I expect old participants also would return back to their work and new participants would participate aggressively," Thunuguntla said.

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