Reserve Bank of India, Chennai intends to hold exhibitions on Foreign Exchange Management Act (FEMA) at five locations in Tamil Nadu viz. Chennai, Tiruchirapalli, Madurai, Tuticorin and Coimbatore. The thrust of the exhibitions will be to promote awareness on Rules and Regulations governing the forex business in India and foreign exchange facilities available for residents and non-residents under FEMA. Target audience includes customers of commercial banks, exporters, importers, NRIs, Chartered Accountants, college students and corporates. Each exhibition will be organized over two days and will comprise of auditorium events and display stalls.
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Monday, April 4, 2011
Regional Rural banks revamp in line with Chakrabarty report
Recapitalisation to be combined with new monitoring structure, with performance time lines. Almost half of the 82 regional rural banks (RRBs) in the country would be recapitalised, with the infusion of Rs 2,200 crore in two stages by the end of 2011-12, and the authorised capital of all 82 banks would be increased to Rs 500 crore from the present level of Rs 5 crore. Besides, the performance of RRBs would be monitored by state level committees headed by finance secretaries of state governments with officers from the National Bank for Agriculture & Rural Development (Nabard), sponsor banks and the Reserve Bank of India. This is to be done half-yearly, instead of the yearly one by the Union finance ministry. This follows acceptance by the central government of a slew of recommendations from a committee headed by K C Chakrabarty, Deputy Governor of the RBI, for RRBs to achieve a capital to risk-weighted assets ratio (CRAR) for RRBs of at least nine per cent by March 31, 2012. The report was given a year before. A Nabard official, who did not want to be named, told Business Standard: “Chairmen of all RRBs have been asked to initiate necessary action in respect of action points pertaining to their bank. The committee had assessed the capital requirement for all the 82 RRBs to enable these to have a CRAR of at least seven per cent as on March 31, 2011, and at least nine per cent from March 31, 2012, onwards.” Adding: “The committee had included provisions required for arrears of wages due to revision of pay scales, gratuity and leave encashment, and had recommended that depreciation on SLR (statutory liquidity ratio) investments by marking to market (writing down assets to reflect current value) as applicable to commercial banks may be made effective by RBI from April 1, 2013, onwards. Accordingly, the recapitalisation requirement would be Rs 2,200 crore for 40 of the 82 RRBs. This amount will be released in two installments, comprising Rs 1,337.50 crore in 2010-11 and Rs 862.50 crore in 2011-12.” Further, a memorandum of understanding would be signed with Nabard by each RRB, as also with the state government concerned and the sponsor bank, on the roles of various stakeholders and the performance benchmarks to be achieved, with schedule. On an increase in the authorised capital to Rs 500 crore, the committee had observed that the accumulated losses of RRBs as on March 31, 2009, were about Rs 2,300 crore. The RRBs carry, at the same time, share capital deposits aggregating Rs 3,900 crore. As a one-time measure, therefore, the committee had recommended that RRBs be permitted to write off the accumulated losses as on March 31, 2010, against the share capital deposits. Any balance left as share capital deposit may then be appropriated as paid-up share capital. “However, as the RRBs would continue to need higher capital in view of their expanding business, the committee had recommended that their authorised share capital be increased to at least Rs 500 crore. Necessary amendments will be made to the RRBs Act to facilitate it,” the official informed.
IBA appoints new member
The managing committee of Indian Banks’ Association (IBA) has appointed A. S. Bhattacharya, CMD of Bank of Maharashtra, a premier nationalized Bank as Member.
Govt yet to finalise on names to fill top slots in SBI
The government is yet to finalise a successor to State Bank of India (SBI) Chairman O P Bhatt, who retired on March 31 and fill up other senior-level management vacancies. Pending appointment of new chief of the SBI, the government has given additional charge of Chairman to R Sridharan, who is currently the Managing Director of the bank until further orders. Besides, vacancy of Chairman, three positions of the Managing Directors are to be filled in the bank which alone commands about 25% market share. The government has also not found replacement for S K Bhattacharya, who retired as Managing Director last year. Although the process for appointment of successor of Bhatt and other top executive began in December last year, no formal announcement has been made for filling up vacancy arising out of superannuation or otherwise. The SBI board comprises of an executive chairman and two managing directors. With amendments in the SBI Act, it made provision to appoint two more managing director by the Government of India, which holds about 59 per cent stake in the bank. Currently, country's largest insurer Life Insurance Corporation has three managing director besides the executive Chairman. Sridharan, the senior most executive of the bank, would manage the affairs of the bank. His term is coming to an end in June this year. Pratip Chaudhuri, currently the Deputy Managing Director and Group Executive international banking of State Bank of India, is understood to be leading the race for the chief of SBI. Besides, Hemant G Contractor, Chief Finance Officer and Diwakar Gupta Deputy Managing Director and Group Executive (rural business and national banking) is also believed to be in the reckoning for the job. The name would be finally cleared by Appointment Committee of the Cabinet (ACC) headed by the Prime Minister Manmohan Singh. The other members include Home Minister P Chidambaram and Finance Minister Pranab Mukherjee. Chaudhuri joined SBI as Probationary Officer in 1974. He took over charge as DMD (international banking) in April, 2009. The search panel to appoint the next SBI chairman, headed by Reserve Bank of India governor D Subbarao, had interviewed 4-5 candidates in December, 2010.
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