Speeding up the process

RBI Governor D Subbarao inaugurates the ‘Electronic Clearing Service’ of State Bank of India as Deputy Governors Subir Gokarn and Shyamala Gopinath look on, at the SBI branch in Agartala on Thursday

New financial reporting format to enable data sharing among company watchdogs

NEW DELHI: The government hopes to improve surveillance of companies through the introduction of a new financial reporting format that will make data accessible to all regulators. The new reporting tool, mandatory for large companies from July, will help the government prevent financial frauds like the Satyam scam, as filings made by a company before its primary regulator will be available to other regulators electronically as and when required. This will also reduce compliance burden for corporates, as they will no longer have to file data separately to multiple agencies. The format, known as eXtensible business reporting language or XBRL, is being developed by regulators such as the Securities Exchange Board of India (SEBI), ministry of corporate affairs, and the Reserve Bank of India (RBI).  Companies are required to periodically furnish financial statements and information to regulators such as the RBI, SEBI, stock exchanges, registrar of companies and banks. While the regulator governing any company is responsible for keeping all information regarding its functioning, other regulators too require the information for issues falling in their domain. "With the growing Indian economy, regulators, investors and analysts demand corporates to be financially transparent. This call for financial transparency has been heightened in recent times by certain corporate crises that affect the very fabric of the economy," said RPN Singh, minister of state for corporate affairs, in an internal communique on the ministry's adoption of XBRL as a reporting tool.  With XBRL, the government hopes to prevent another Satyam-like corporate scam, where the outsourcer was able to cover financial manipulation for nearly seven years because of lack of co-ordination between various regulators and financial institutions before which the company filed its data.  "There was no cross-validation of data which the company filed before regulators, like the exchanges, banks and tax agencies," said a corporate affairs ministry official who was involved in the investigation of the fraud at the erstwhile Satyam Computer Services , now taken over by Tech Mahindra. "As XBRL is embraced widely, financial statements prepared in this format can be submitted uniformly and at one place to various regulators, external auditors and financial institutions," the minister said.  Although companies will incur a one-time cost for the switch in the reporting system, and may have to spend some more for sharing regulatory information with other agencies, experts say the new system will reduce compliance cost.  "The overall cost for companies (on adoption of XBRL) will be reduced by 50 to 60% in the long run," said Rakesh Rathi, national head of audit and assurance at BDO India, a consulting entity.  According to reports, SEBI is currently developing SUPER-D ("SEBI Unified Platform for Electronic Reporting - Dissemination"), a platform that will enable it to receive financial and business information in XBRL format. Other agencies too are tweaking their systems to facilitate use of XBRL.  Corporates too are convinced about the workability of the new reporting tool. "The proposal is feasible and practical as well. A technical platform with standardised format would enable companies to load information and data, which then could be used as a base for filing as per the requirement of various regulators and for different purposes," said Ashok Haldia, director at PTC India Financial Services Ltd. Besides saving time, effort and money, XBRL would help bring in consistency and uniformity in data provided by companies, Haldia added.  All India-listed companies and their subsidiaries, having paid up capital of Rs 5 crore or above, or with a turnover of Rs 100 crore or above, will have to file their financial statements in XBRL format from year 2010-11. The first phase of the transition has, however, excluded banking companies, insurance firms, power companies and non-banking financial companies. Many countries and their financial regulators have approved or are in the process of implementing requirements around XBRL as the electronic financial reporting standard. These include the US, Japan, UK, Australia and China among the major economies.

Search on for new co-op bank administrator

MUMBAI: A fortnight after chief minister Prithviraj Chavan appointed veteran bureaucrats Sudhirkumar Goyal and Sudhir Shrivastava as administrators on the NCP-controlled Maharashtra State Cooperative Bank (MSCB), a search has been launched for a new administrator as it was found that the duo was unable to devote time for management of the bank.  "Goyal and Shrivastava are able administrators, but they were unable to devote adequate time for management of the bank. Under such circumstances, it was felt that we should have new administrators, preferably a retired bureaucrat with a background of finance, planning or cooperation," a senior minister said. A week after their appointment as administrators, both informed the state government that in view of their prior assignments in Mantralaya, it may not be possible for them to attend the bank on a daily basis. "They have informed they will attend the bank only on Saturday. We felt that the presence of the administrator in the bank on a daily basis is essential," otherwise the entire administration will come to a grinding halt,"the minister said. Following a report by the National Bank for Agriculture and rural Development , the RBI on May 5 asked the state government to dissolve the entire board of directors and appoint administrators. Accordingly, the CM had dissolved the board and appointed Goyal and Shrivastava as administrators. Chavan's decision had sparked off a row in political circles, particularly in the NCP, which condemned the decision on the ground that it was taken in a hurry and without consulting the coalition partner. When asked if the appointment of administrators could be revoked, the minister said since action has been taken under the provisions of the Banking Regulation Act, there was no scope for the state government to make a review. "The only option is to challenge the decision before the HC, but we don't think that the bank will make such a move, since it will further widen the gap between the Congress and the NCP," he said.  The minister said no compromise formula has been reached between the Congress and the NCP, since the latter has taken the view that the 'law will take its own course'. "We are not knocking at the doors of the CM. Since Chavan has dissolved the bank on the advice of the RBI, it was for him to take a decision. Our view is clear, Chavan should have informed deputy CM Ajit Pawar before taking such a big decision," he said.

CAFRAL invites applications for "Head of Research"

CAFRAL is an independent, non-profit institution set up by the Reserve Bank of India (RBI) to serve as a global centre for policy research and learning in banking and finance. Ms. Usha Thorat, former Deputy Governor, RBI, heads the institution, which is in Mumbai. CAFRAL is expected to be a vibrant centre of research, having strong connections with the policy making and financial community, facilitating ample access to institutional knowledge, to datasets and to real world impact. Special efforts will be undertaken to connect the research group at CAFRAL into research networks in India and abroad. CAFRAL invites applications from India and abroad for the position of “ HEAD OF RESEARCH ”

A. Description

The Head of Research will lead and anchor the research activities of CAFRAL and ensure that it attains the highest standards and impact. He/she will help develop a strong body of research and a vibrant research team and realise collaborative links with other institutions in conjunction with the Director. The candidate will be expected to (a) identify areas for research (b) build and nurture a research team, (c) ensure high qualitatyive research output (d) disseminate research findings (e) engage with policy makers, industry and other research institutions. This will be a full-time contractual appointment for minimum period of two years. Researchers with an outstanding track record in banking and finance are invited to apply. Institutions such as multilateral organisations, national regulators, central banks, commercial banks and financial institutions may also send their nominations for this position.

B. Qualifications Required

The candidate should have strong academic credentials including publications in reputed international journals. Experience and involvement in public policy or in the industry will be an added qualification. Leadership experience including building and managing a research team and a network is highly desirable.

C. Compensation

The candidate should have strong academic credentials including publications in reputed international journals. Experience and involvement in public policy or in the industry will be an added qualification. Leadership experience including building and managing a research team and a network is highly desirable.

D. .How to Apply

Interested candidates may send in their resumes by e-mail to director.cafral@rbi.org.in. The resumes should reach us by June 30, 2011. We will get in touch with candidates found suitable based on their resumes.

Bank staff threaten to strike work

Bank employees and officers union threatened to go on all- India strike on July 7 to protest against proposed banking sector reforms and other wage related issues. The strike is against the anti- employees policies of the government, including the banking sector reforms, said United Forum of Bank Unions (UFBU) convener C H Vekatachalam. UFBU is an umbrella organisation of 5 workman unions and 4 officers unions of public sector and private sector banks in the country. " The strike will be participated by 10 lakh bank employees and officers working in public sector banks, private banks, foreign banks, Co- operative banks and regional rural banks," he claimed.  The other issues are privatisation of banking and outsourcing of bank jobs and attempts to impose anti-employee recommendations of Khandelwal Committee, he said.

Students see RBI's functioning

KANPUR: Under its financial literacy programme, a group of students from a school in Cantt visited the Reserve Bank of India office here on 3^rd May 2011.   RBI Regional Director for UP and Uttarakhand Bazil Shaikh gave an overview of the functions of the bank. Other officials informed the students about currency management and foreign exchange management.  Students were apprised about Young Scholar Award Scheme and Summer Placement Scheme of RBI. Short films about the working of RBI were also shown to the students. The students had the opportunity to visit the exchange hall and see the exchange counters and coin vending machines.  The financial literacy campaign was organised by the RBI for different target groups like students, women, rural populace and senior citizens to give information about general banking and RBI.

RBI ups priority cap on housing loan

MUMBAI: The RBI on Friday raised the maximum limit of housing loans that will qualify as a priority sector loan from Rs 20 lakh to Rs 25 lakh. RBI said all loans sanctioned on April 1, 2011 or later will qualify under the enhanced limit.  Under the changed rules, loans up to Rs 25 lakh, irrespective of location, to individuals for purchase and construction of dwelling unit per family, excluding loans granted by banks to their own employees, will be eligible for classification under priority sector.