New deposit norms: The new deposit taking norms for non-bank finance companies will be announced later this week, Jalan said. The CM Vasudev task force on NBFCs had eariler recommended delinking of deposit raising from credit rating of the companies. RBI opposed the move in regard to large companies.

Riding piggyback on CAMEL: The Reserve Bank of India has initiated the CAMEL rating for all commerical banks in the country. This rating system will also apply to non-banking finance companies and financial institutions. According to RBI deputy governor SP Talwar, this system will rate the capital adequacy, asset quality, management, earnings and liquidity of the banks and finance companies. While the rating will be applicable to banks and financialinstitutions on an annual basis and to NBFCs on a bi-annual basis. The rating will intially be used only for internal evaluation by the RBI. The ratings will not be made public.

Forex assets: The Reserve Bank will shortly issue guidelines for the maturity pattern of foreign currency assets and liabilities. Guidelines for lending to sensitive sectors by banks will also be issued by the central banks by next week, according to Reserve Bank deputy governor S P Talwar.

V-Sat links: In order to strengthen the management information system (MIS) in banks, the Reserve Bank of India is installing 400 VSAT connections throughout the country, RBI deputy governor S P Talwar said on Monday. The network, which will shortly be in place, will cover inter- and intra-banking operations, he said.

Y2K norms: All banks must comply with the Y2K norms by March 31, 1999 or pay heavy penalty, RBI deputy governor S P Talwar announced at the 21st Bank Economists' Conference. Banks which do not comply byMarch 31, 1999, will be forced to pay heavy penalty. A steering committee set up by the central bank in 1997 is looking into Y2K compliances from the ministries of transport, power and communication.

Talwar advice: Banks will have to look at introduction of VRS, closure of loss-making branches and reduce interest on short term deposits as a result of increased capital requirements and further tightening of prudential norms, SP Talwar aid.

NPA classification: The government has decided that it will back the RBI in keeping NPA norms tight and in line with international pratices. No flexibility (read relaxation) in norms will be allowed and banks cannot use the slowdown in the economy as an excuse to resort to practice of evergreening of assets, CM Vasudev, special sectretary (banking) said.

Towards universal banking: The government told banks to gear up to meet the challenges of universal banking as and when it happens and also to take on the challenges in the areas like Informationtechnology areas and human resources developement.