IMF race throws up two local names

New Delhi, April 20: Official circles are speculating on the Indian government nominating either Planning Commission deputy chairman Montek Singh Ahluwalia or Reserve Bank Governor Duvvuri Subbarao to the post of the managing director of the International Monetary Fund (IMF). The IMF’s current head, France’s Dominique Strauss Kahn, is scheduled to step down. Traditionally, an European holds the top position at the IMF while an American gets the top job at the World Bank. However, with India and China’s clout increasing in the two global multilateral institutions, the two nations are expected to play a bigger role in deciding on the top job. Officials said if China agreed to an Indian being made the IMF chief, India could nominate either of the economic mandarins to the top job. In case, China has its own ideas, India may go with South Africa’s former finance minister Trevor Manuel. The European-US lobby may put up its own candidate in Turkey’s Kemal Dervis, a former UNDP chief. Ahluwalia had a stint with the IMF as its first director of Independent Evaluation Office. Sources said if Ahluwalia was nominated for the IMF slot, it would also be a signal that Prime Minister Manmohan Singh felt he couldn’t be given the finance minister’s job. With three years left for the UPA to compete its term, sources said the government might not wish to put a technocrat in the finance minister’s job. The buzz over Ahluwalia and Subbarao grows at a time the full Planning Commission is meeting tomorrow. The Prime Minister wants to accelerate economic growth to 10 per cent during the Twelfth Five Year Plan, which starts next year, while Yojana Bhawan feels a 9-9.5 per cent expansion of the economy will be a good enough target.

RTI reveals RBI apathy over National Litigation Policy

RAJKOT: The National Litigation Policy (NLP) aimed at reducing the cases pending in various courts in India is nine months old, but the Reserve Bank of India (RBI) which is supposed to implement the pro-citizen policy in the banking sector is unaware of it. The Department of Banking Operations and Development in the RBI's central office in Mumbai has told a Right to Information (RTI) activist that it does not have any information on how the RBI is implementing the NLP. The RTI activist J P Shah from Junagadh filed an RTI application in December 2010 seeking information on the date of receipt of NLP by the RBI, steps initiated by it for compliance of the policy, feedback given to the government and copies of feedback from the SBI, Syndicate Bank, Dena Bank, Corporation Bank and the Punjab National Bank. Central Public Information Officer B Mahapatra of the RBI wrote back to Shah on January 31 saying that the information sought by him was not available with the Department of Banking Operations and Development.  The NLP is aimed at decongesting courts and reducing litigation cost and time. Under the policy, effective from July 1, 2010, banks have to form committees to review all cases before filing a lawsuit so that petty cases do not clog the courts and waste the time and money of the bank and the customer. Not satisfied with the reply, Shah went in appeal. V S Das, Executive Director of RBI and appellate authority, ruled on March 28 that "the CPIO is duty bound to provide only that information which the public authority holds". Das has directed Mahapatra to forward Shah's query to the RBI's legal department as well as the secretary's department "to explore the availability of the information sought with those departments and furnish an appropriate response to the appellant". "How can you expect proper implementation of an important policy under such circumstances?" asks Shah. The RBI is the regulatory body of banks in the country and, thus, is the implementing agency of central government policies such as the NLP. "It is shocking that an important wing of the RBI has no copy of a pro-people policy, especially because banks are one of the big litigants against the public. Some banks compel customers to move courts even for petty issues such as an unwritten policy or they file cases in courts at the drop of the hat and waste public money to harass the public," says Shah, a retired bank manager. The NLP is based on the recognition that government and its various agencies are the pre-dominant litigants in courts and tribunals in the country. It aims to transform government into an efficient and responsible litigant. It is the responsibility of the government to protect the rights of citizens, to respect fundamental rights and those in charge of the conduct of government litigation should never forget this basic principle, said Shah.   Shah has now written to the Union law minister, finance minister and RBI Governor to ensure effective implementation of the NLP by the banking sector.

Crucial meeting of revamped SEBI board next week to reconsider NSDL case

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Question mark over BoP position

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Banks asked to submit status report of credit opportunities for women

Lead District Manager Samba, R.K.Mehta along with Chief Manager Administration SBI Jammu R.C. Sharma carried out an extensive tour of various Bank branches in twin districts of Samba and Kathua. It was necessitated keeping in view the annual Banking statistics ending March 2011 and its early collection district-wise for the further submission to Reserve Bank Of India and the convener SLBC Srinagar for meaningful and timely organizing State and District level Banker review meetings. Speaking on the occasion, Sharma exhorted all the Branch heads to immediately provide him the status report of credit opportunities available to women in Jammu and Kashmir for prompt submission to RBI Jammu. It was revealed by various managers that the submission of the data to respective LDMs is primarily delayed due to statuary audits and Panchayat elections, however they assured early submission. LDM Mehta reiterated the instructions of Mubarak Singh, Deputy Coommissioner Samba and asked the Bankers to report correct developmental data for meaningful discussion in ensuing DLRC meet of the District.

SBI withdraws teaser loans

At the end of the day the regulator is right. We cannot afford to be in perpetual conflict with the regulator, hence this decision” PRATIP CHAUDHURI SBI Chairman

Less than a month after State Bank of India's most illustrious Chairman OP Bhatt's tenure ended, India's largest lender announced the withdrawal of SBI Easy Home Loan and SBI Advantage Home Loan, widely called `teaser home loan' schemes, rather abruptly from May 1, 2011.  Clearing establishing the regulatory pressure, which Bhatt resisted, the bank said in a statement that upward pressure in real estate prices, consequent exit of end users and regulatory concerns have led to withdrawal.  The Bank had launched the popular step-up home loan products in August 2009 in the aftermath of the global downturn. Several banks followed suit. But when RBI's tough talk did not yield result, the apex bank increased the provisioning on such loans to 2 per cent.  All, except SBI withdrew the teaser home loan schemes. Chairman OP Bhatt relentlessly pursued with RBI on why the loans were totally transparent and that the selection of the borrower was such that it was given to creditworthy individuals.  In an interview Bhatt had said: “RBI has not understood our product.“  RBI officials on condition of anonymity have told The Pioneer on how the then SBI chairman argued before the RBI officials explaining to them the utility of teaser loans and why it was transparent.  Another RBI official said Bhatt had even questioned RBI on why it didn't object to teaser rate when it was launched, especially when RBI Deputy Governor Shyamala Gopinath was a director on the board of State Bank of India.  “In the last few quarters the status of the residential real estate market has experienced upward pressure on prices across cities and micro markets.  Consequently, the industry has witnessed exit of end users and tapering of investment demand. Taking cognizance of the above and also taking note of regulatory concerns, the Bank has decided to withdraw SBI Easy Home Loan and SBI Advantage Home Loan w.e.f May1, 2011,“ the statement by SBI said.  SBI did not make any provisioning for special home loan scheme till December. However, should the regulator require it to, the bank would have to set aside Rs200-300 crore, Bhatt had said on the final day of his stint on March 31, 2011.  SBI had extended the teaser scheme by one month, till April 30, 2011.

No more teasers

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Norms for hiring CMDs, EDs for PSBs relaxed

Mumbai: There have been relaxations galore for the appointment of CMDs for the seven government-owned banks which will see vacancies during the current fiscal year.  The interviews of 19 executive directors (EDs)working at various public sector banks (PSBs) took place in New Delhi on Wednesday.  However, one of the candidates, P Pradeep Kumar, managing director of State Bank of Travancore, didn’t turn up.  The banks which will have vacancies for the CMDs position during the current fiscal, include Central Bank, Corporation Bank, Dena Bank, Andhra Bank, Bank of Maharashtra, Syndicate Bank and Union Bank.  The interviewers’ panel had financial services secretary Shashikant Sharma, RBI Deputy Governor Anand Sinha, Kolkata IIM’s S Chaudhuri and the former HDFC chairman Jagdish Capoor. Except for Chaudhuri, who has been given an extension, all the remaining members of the panel are first timers.  Going by the normal practice of inviting only those EDs who have completed two years in their current position and having a residual service of two more years, then there were only three such officials namely Mohan Tanksale (Punjab National Bank), BA Prabhakar (Bank of India) and MG Sanghvi (Bank of Maharashtra).  All the three EDs who had appeared for the interview for CMD posts last year had missed the bus last year. Hence, the norm was relaxed to the one year and nine months of the residual services in which seven more EDs became eligible.  But the norms were relaxed further by saying that even those EDs, that have already completed six months in office are also eligible to be considered for the post of CMD. This change in the norms delighted eight more EDs, who have assumed their offices merely six months back.  In another development, four out of seven general managers who had been denied the opportunity on the grounds that they had already appeared for such interviews for three times in past are also likely to be called for the interview for the post of EDs.  The interview for 17 ED posts will begin later this month.  However, there are no relaxation in norms for the appointment of the EDs at various PSBs, which are to be filled up during the current financial year. The existing norms say a candidate needs to have completed of two years as general manager and should have three years of remaining services.  Four of the seven GMs who are likely to appear for the forthcoming interview were denied the opportunity during the last year on the plea that they had already appeared for the interview for three times in past and still couldn’t make it.  The interview of 34 GMs are likely to take place by end of April by the same panel, sources said.

RBI proposes ban on use of CCDs in realty sector

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Banks say no immediate rate hike, will await RBI cue

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RBI will be aggressive on monetary tools to fight

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IBA backs ICICI’s micro loans recast proposal

MUMBAI: The Indian Banks' Association (IBA) has recommended the inclusion of securitised microfinance debt in the proposed recast of thousands of crores of loans under corporate debt restructuring, which is opposed by Axis Bank and SBI, but sought by ICICI Bank. RBI has sought the opinion of banks involved in the restructuring of microfinance loans that are on the verge of default after the sector was plunged into a crisis due to a special law in Andhra Pradesh that promoted voluntary defaults.   "We have asked the Reserve Bank of India to consider select banks' plea to restructure their investments in these securitised papers," said an IBA official, who did not want to be identified. "The banking system has invested in these papers to meet their priority sector requirement.