Bank guarantee issue limits

Banks can now issue guarantees to service importers for an amount of up to $5,00,000 or equivalent, following the move by the Reserve Bank of India to increase the limit. In a notification, the RBI increased the limit for issuing bank guarantees from the earlier $1,00,000 or equivalent. Banks are allowed to issue guarantees in favour of a non-resident service provider, on behalf of a resident customer who is a service import...

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Banks prepared to check fake currency menace: RBI

Banks are fully geared to check the menace caused by fake currency, a senior official of the Reserve Bank of India said. Reserve Bank of India Regional Director J Sadakkadulla said a high-level committee headed by RBI Deputy Governor Usha Thorat had recommended installing of note sorting machines (NSMs) in all bank branches in a phased manner and has asked the banks to give a road map to the RBI to achieve this task. He said the number of fake notes in India was just eight pieces per million which is one of the lowest in the world. "The total circulation of the currency in India is 48 billion pieces and the fake currency merely 0.0008 per cent of that," he added. "The market price of the note-sorting...

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Rising rupee a big worry for exporters

Over 10 per cent rise of rupee against the US dollar has become a "big worry" for exporters at a time when they saw arrest in sharp decline in the country's exports amidst a hope of recovery. The dollar is trading at below Rs 47, weakening by over 10 per cent from Rs 52.17 in the first week of March 2009. "The appreciating rupee will have negative effect on exporters, who are already facing lack of orders," Federation of Indian Export Organisations President A Sakthivel said. He said weak dollar results in falling margins for exporters as their rupee realisations drop, which in turn affects their negotiating power with the global buyers. "Appreciating rupee is a big worry ... we were getting...

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Coming soon: Cheque-reading ATMs

Need cash urgently but have already overdrawn from your account? You have a cheque from a client but it is of little use in the dead of night. Lost or misplaced your debit card and need cash to pay the party organiser for your little one's first birthday celebrations? Help is on way, as a couple of banks in India are testing a technology that facilitates instant cheque encashing at ATMs. Used widely across North America and Europe, cheque truncating machines (CTM)—the contraption that make real-time cheque verification and clearance possible—sit inside special ATMs that the world’s largest makers of these machines, like US-based NCR Corp and Diebold Inc, are now hawking to few banks in India....

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RBI says no to full rupee convertibility

The Reserve Bank of India (RBI) today ruled out full rupee convertibility as of now and said the failure of Bharti-MTN deal cannot hasten it. Asked if complete capital account convertibility is possible, RBI Deputy Governor K C Chakrabarty told reporters here: "As of now, no." "Whether it's desirable or not, that we have to examine and whether we have capability", he said. On whether Bharti-MTN deal failure would quicken the process of complete convertibility, Chakrabarty said: "Nothing will quicken the capital account convertibility." While the rupee is fully convertible on the current account, it is not so in capital account. This means that control exists on converting rupee into other currencies...

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Interest rate hikes expected in coming months: Moody's

Central banks in India, China and South Korea are closely monitoring the emerging inflationary pressures on their economies and hikes in interest rates could be expected across the Asia-Pacific region after Australia raised key interest rates, says Moody's economy.com. Australia is the first G20 country to raise interest rates yesterday, with the country's apex bank declaring recession over. The Reserve Bank of AustraliaAsian central banks have intervened in the currency markets in an attempt to slow the slide of the US dollar. Asian countries are worried about their export industries, which would be hurt by a weaker dollar. Central banks in South Korea, Taiwan, the Philippines and Thailand...

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Bounced cheque: No case if borrower hasn't issued it

While accepting a cheque from someone who owes you money, make sure that he himself — or his authorised representative — has signed it. Otherwise, in case the cheque bounces, you won’t be able to file criminal case against the actual borrower, as per a judgement of the Bombay High Court. Viral Filaments, a Mumbai-based company, borrowed certain amount from one Arvind Degvekar sometime in 1997. When the time to return the money came, the company gave him a cheque. The cheque was issued by one Balram, an associate of Viral Filaments and owner of another firm. It bounced, and even after Degvekar informed Viral Filaments about it, he did not get his money back. Degvekar filed criminal case against...

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RBI says no to full rupee convertibility

The Reserve Bank of India (RBI) today ruled out full rupee convertibility as of now and said the failure of Bharti-MTN deal cannot hasten it. Asked if complete capital account convertibility is possible, RBI Deputy Governor K C Chakrabarty told reporters here: "As of now, no." "Whether it's desirable or not, that we have to examine and whether we have capability", he said. On whether Bharti-MTN deal failure would quicken the process of complete convertibility, Chakrabarty said: "Nothing will quicken the capital account convertibility." While the rupee is fully convertible on the current account, it is not so in capital account. This means that control exists on converting rupee into other currencies...

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Banks step in as dollar tumbles

Asian central banks have intervened in the currency markets in an attempt to slow the slide of the US dollar. Asian countries are worried about their export industries, which would be hurt by a weaker dollar. Central banks in South Korea, Taiwan, the Philippines and Thailand have been buying the US currency, traders said. As signs of economic recovery begin to emerge, traders have switched from the traditionally "safe" US dollar to buying other currencies. A fresh wave of dollar-selling may have led to the banks' intervention. The dollar fell to a 14-month low against a basket of currencies on Thursday. Analysts believe that other countries have also intervened. "It was reported earlier this...

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Divestment road map gets PM, Pranab nod

The disinvestment policy and road map prepared by the disinvestment department, which has already received the stamp of approval from the prime minister and the finance minister, will be discussed by the Cabinet Committee on Economic Affairs. “The note floated by the disinvestment department will now go to the Cabinet Committee on Economic Affairs (CCEA). The committee will discuss it this Thursday or the next at the latest before announcing it,” said an official in the department of disinvestment, who requested anonymity as he was not authorised to speak to the media. Addressing newspersons in Delhi in last month, the finance minister had said he was confident that he would be able to persuade...

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Banks wash their hands of faulty e-mail, mobile alerts

Banks may boast of providing 24X7 services through mobile and internet banking, but they have decided not to take the blame for any delay and errors in the mobile or e-mail alerts sent to their customers. Ever since the Reserve Bank of India issued its operating guidelines regarding mobile banking transactions to the banks last year, almost all the banks in the country have started the service, as part of which customers also get alerts on their mobile phones for all important transactions. Similarly, internet banking is also growing by leaps and bounds as it saves cost for the banks and also gives the customers anytime-banking service without going to the bank branches or even ATMs. However,...

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