Reserve Bank to bring Visa, Mastercard under purview
Mumbai: Global payment systems like MasterCard International and Visa International will have to share information sought by the Reserve Bank of India once the Draft Payment and Settlement System Bill is approved by the Parliament.

Currently, RBI has to make a "request" for information from the global payment settlement companies.

The Draft Payment and Settlement System Bill plans to bring all payment systems, including those owned by non-banking companies, under the RBI's regulatory framework.
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Bond market to be opened to more units
Mumbai: The Reserve Bank of India (RBI) has thrown open the trading screen to various market participants including retirement funds, insurance companies and various other institutions.

These entities can now place orders on the screen through banks and bond houses who are direct members of the face order-matching system. Such trades will settle through the demat account that the bond buyers maintain with the bank and the latter's current account.

The move is expected to give all market participants real-time online access to the bond market, enabling them to place bids at their preferred rates directly without intervention from brokers.

The entities to benefit are deposit-taking non-bank finance companies (NBFCs), provident funds, pension funds, mutual funds, insurance companies, cooperative banks, regional rural banks (RRBs) and trusts. For years, the bond market was an opaque market where traders cut deals over the telephone. This began to change after July 2005 when the RBI introduced the screen-based trading.

The bulk of the trade has now shifted from the age-old telephonic market to the screen, and several brokers have shut down.
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Seven PSU FIs show interest in managing pension funds
New Delhi: Seven public sector financial institutions have submitted bids to the Pension Fund Regulatory and Development Authority (PFRDA) to manage pension funds under the new pension scheme (NPS). The institutions submitting bids are Life Insurance Corporation, State Bank of India, UTI Asset Management, Canara Bank, State Trading Corporation of India, Punjab National Bank and IDBI Capital.

The PFRDA had called for expression of interest from public sector companies to take up the role of pension fund managers (PFMs) on May 11 this year. The interim regulator said that they plan to appoint two to three PFMs to manage the new pension funds of all Central and State Government employees (barring the armed forces) recruited after January 1, 2004.

About five-lakh Central and State Government employees are estimated to have joined the scheme since it came into being on January 1, 2004, leading to an accumulation of around Rs1,700 crore pension fund corpus.

Under the NPS, employees have to contribute 10 per cent of their basic salary and dearness allowance, with a matching contribution from their employer. This contributory system is in contrast to the earlier system, in which employees used to get defined returns.

Only the left-ruled states - West Bengal, Tripura and Kerala - have not switched over to the system. The Northeast States though not having joined in are said to be willing once the PFMs are appointed and the framework is ready.
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Forex reserves decline by $9 million
Mumbai: India's foreign exchange reserves fell by $9 million to $203.98 billion for the week ended May 18, mainly due to a drop in foreign currency assets. Forex reserves had fallen by $18 million to $203.99 billion in the previous week.

According to RBI's Weekly Statistical Supplement, foreign currency assets fell by $8 million to $196.485 billion.

Dealers said the fall in forex reserves might have been due to a slight revaluation effect. The euro had fallen from $1.35 to $1.348 and the yen had weakened to 121.30 yen from 120.31 yen, during the week. Gold reserves and SDRs remained unchanged at $7.036 billion and $1 million, respectively. The country's reserve position in the IMF dropped $1 million to $460 million.
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