Sensex Erases Gains; IT Stocks Drag

After opening the day on a flat note, the Indian share markets have managed to make marginal gains and are trading above the dotted line. Sectoral indices are trading mixed, with stocks in the FMCG sector leading the gains, while stocks in the IT sector are trading in red.

The BSE Sensex is trading down by 32 points (down 0.1%) and the NSE Nifty is trading down by 19 points (down 0.2%). Meanwhile, the BSE Mid Cap index is trading down by 1.1%, while the BSE Small Cap index is trading down by 0.8%. The rupee is trading at 64.92 to the US$.

In news from the banking sector. The Reserve Bank of India (RBI) announced easing up of the branch authorization policy.

In a bid to take banking services to the remote locations of the country, the Reserve Bank of India has permitted the opening of mini branches or banking outlets across the country for all domestic scheduled commercial banks except Regional Rural Banks without having to take permission from the regulator on a case by case basis.

In a fresh set of guidelines released yesterday the central bank said that banks need to open at least 25% of their banking outlets in a year in unbanked rural centers.

The RBI has clarified that ATM kiosks, cash depositing counters and mobile branches will not be treated as banking outlets. They have to be left open for at least 4 hours per day for 5 days in a week manned either by business correspondents or by bank officials.

Further the RBI also widened the role of bank boards, making them responsible for complying with the new guidelines.

Meanwhile, the RBI urged banks to appoint qualified chiefs to head the critical finance and technology functions. The central bank also came out with minimum qualifications for the chief financial officers (CFOs) and chief technology officers (CTOs).

While these are steps in the right direction for better accountability in the sector, the RBI has a lot to do if it plans to strengthen India’s banking sector, which is reeling under large non-performing assets (NPAs).

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Author: Travis Esquivel

Travis Esquivel is an engineer, passionate soccer player and full-time dad. He enjoys writing about innovation and technology from time to time.

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