Sunday, July 3, 2011

NAGPUR: Unions in Reserve Bank of India (RBI) are opposing the move to statutorise RBI staff regulations 1948, which means it will be converted into an Act of Parliament bringing the apex bank's employees under direct control of the government. A proposal mooted a couple of years ago is likely to be decided in the RBI board meeting scheduled to be held on July 7. Unions say it would take away the bank's autonomy with likely impact on its policy-making freedom. Even though RBI's Governor and Deputy Governors are government appointees, officers upto the level of Executive Director come from the ranks. If brought under the government, there are chances that the senior officers may not be able to function independently indirectly having an impact on the policy-making, said a union representative. As the RBI board would meet on July 7, unions will also hold a joint conference at Chennai to decide the further course of action on the same day. It may be followed by a series of strikes, said secretary of All India Reserve Bank Employees Association (AIRBEA), Bidyut Chakraborty. Unions have been opposing satutorisation of RBI Staff Regulations ever since the proposal was mooted, he added. They have also opposed creation of a separate Debt Management Office for managing government's public borrowings. Unions claim that the governor has also supported them on this issue. RBI unions have also demanded parity with central government employees in the payment of family pension. This is paid to the dependent spouse after an employee's death. "The number of family pension beneficiaries runs into a few thousands in the RBI. If compared to the sixth pay commission scales applicable to central government employees, dependents of RBI employees continue to get a pittance," said Chakraborty. The unions' say RBI has a corpus of Rs 5,000 crore as collections towards provident fund. A part of it can be diverted for pension payment. "If the central government, which does not have a specific provision for meeting its pension liability, has increased the pay out, why should RBI, sitting on a huge corpus, not do so," asked Chakraborty. The central government has increased family pension to 30% of the deceased employees' last drawn pay. At RBI, the dependents of senior officers get a maximum pension of Rs 7688 a month which is Rs 23,604 in the case of central government. The minimum monthly family pension for a RBI officers' dependent is Rs 5533 which is Rs 16,599 in the central government. It is worse for the Class IV workers where the family pension does not exceed Rs 3715 a month while their counterpart in central government get a maximum pension of Rs 11,145 per month, he said. Chakraborty said the union has demanded a second option for pension too. There are around 2,000 RBI employees who did not go in for pension option the first time and many of them want to change their decision, added Chakraborty.

TOI

SBI celebrates 57 Foundation Day

Dr.Amarendra Sahoo, Regional Director, RBI, Lucknow

LUCKNOW: The State Bank of India (SBI) celebrated its 57th Foundation Day on Friday. At the bank's local head office, 21 new branches (5 in metro, 3 in urban, 5 in semi-urban and 8 in rural centres),101 new ATMs , 400 green channel counters were inaugurated by UP chief secretary Anoop Mishra in the presence of RBI's Regional Director Amrendra Sahoo, Chief General Manager of SBI Abhay K Singh, chief secretary (institutional finance) Yogesh Kumar, director (institutional finance) S S Yadav and additional director (institutional finance) Rakesh Krishna. Speaking on the occasion, Mishra said that SBI is the foremost bank of India and by the launch of these new initiatives, the bank will be able to serve the customers in a better way. Abhay Singh said that customer care remains the topmost priority of SBI. He added that the bank in Uttar Pradesh is serving people through a network of more than 1,600 branches, 1,500 ATMs, and hundreds of villages are being covered through business correspondents and business facilitators. On this occasion, Madan Mohan Shukla, member, local board, SBI, R K Agrawal, general manger, NW-I, and H N Das, general manger, NW-II were also present on the occasion.

TOI

UP may formulate Action Plan for augmenting CD Ratio

Perturbed over low Credit Deposit Ratio (CDR) in Uttar Pradesh, especially in the Bundelkhand region, the state government may formulate an Action Plan in partnership with commercial banks. This has to be seen in the backdrop of UP seeking private investment to the tune of Rs 2,00,000 crore across sectors to prop up its economy. Although, UP is the second largest economy after Maharashtra, its CDR is around 48 per cent, much lower than the national average of around 70 per cent. The issue of the low CDR in UP was discussed in the recent State Level Bankers’ Committee (SLBC) meeting in Lucknow. “The SLBC decided to double credit flow to the agriculture and Micro, Small and Medium Enterprises (MSME) sectors in UP,” Reserve Bank of India (RBI) Regional Director Amarendra Sahoo told Business Standard. The segments identified for emphasis are minor irrigation and rural road connectivity. He said the Action Plan would be laid down by the government in concert with banks. “The banks have assured to increase credit flow commensurate with the credit absorption capacity created by the state government,” Sahoo added. The government feels the CDR of UP should ideally be 60 per cent. The higher is the CDR, the higher is credit deployment to more credit-users. Low CDR indicates low industrial and commercial activity, especially in eastern and Bundelkhand regions. It also indicates flight of domestic savings to other industrialised and more developed states to spur their development activities. UP is a vast and populous state with rough geographical and climatic conditions in certain pockets. Almost 80 per cent of the population lives in rural areas with low literacy and high poverty. Thus, banks need to intensify their network with a sense of commitment, the government feels. Sahoo, however, denied that there was flight of capital from UP. “In fact, several projects in UP receive funds from banks sanctioned in Delhi and other places.” Earlier, a sub-committee had been formed to prepare a report on UP districts, where CDR was below 40 per cent. In short term, SLBC aims to increase their CDR beyond 40 per cent mark. There are 34 districts in UP, where CDR is below 40. This mainly includes eastern UP districts, such as Balrampur, Gonda, Mirzapur, Sonebhadra, Allahabad, Faizabad, Jhansi, Mau, Varanasi, Basti, Ballia, Deoria, Azamgarh, Jaunpur, Etawah etc. The bankers maintain that credit exposure in UP was low partially because companies headquartered in Delhi, Noida and Mumbai avail of credit facilities there rather than in UP, where they only have their smaller units. Therefore, the credit is showed in the accounts of the parent company based elsewhere. “The CD Ratio in UP has been improving and we are confident that with increased focus on agriculture and MSME sector, it would rise further,” Allahabad Bank general manager R K Jain said.

Institutions vs. Individuals

Good leadership desirable, good institutions necessary

One individual can destroy an entire institution. Individuals are, therefore, key to the success of any institution. Yet, institutional traditions can limit the damage that individuals can do. Preserving traditions is, therefore, the key to the longevity of good institutions. Consider the two institutions in the public eye at the moment. The office of the Comptroller and Auditor General (CAG) of India and the Sri Sathya Sai Central Trust. Has the temptation to seek publicity harmed the institution of the CAG? Perhaps it has. If the CAG had not sought out the media and given public speeches on morality in public life, the role of civil society and such like, it may have helped retain the reputation of the institution as a quiet scrutiniser of governmental spending. With just a couple of misjudgments, caused by the current craze among civil servants to seek personal glory, an individual has hurt the credibility of an institution. Is the CAG an auditor or an activist? The case of the Sri Sathya Sai Central Trust is even more stark. As long as the late Sathya Sai Baba was alive not a finger was pointed at any financial wrongdoing by the very same people who continue to administer the Trust. Surely, Sai Baba alone was not managing the finances and affairs of the huge institution he had created. The very same people who are doing so today were in charge earlier too. The death of the man at the top should not make so much of a difference that a great spiritual and philanthropic institution is suddenly eyed with suspicion. Or is it that as long as Baba was alive no one dared to question his institution’s financial integrity, and now anything goes? At a time when so many national institutions, governmental and non-governmental, are coming under increased scrutiny, the question of the role of individuals in preserving them has become particularly relevant. For example, the opposition political parties have charged Dr Manmohan Singh with weakening the institution of prime minister by accepting the political leadership role of the chairperson of the ruling coalition and intervention in policy making by the National Advisory Council. On the other hand, Union Finance Minister Pranab Mukherjee has been accused of weakening the institutional standing of the Reserve Bank of India, another great national institution, by creating new institutions that blur the ‘first among equals’ status of the governor of the central bank. The challenge before both Prime Minister Singh and RBI Governor Subbarao has been a similar one — of seeking to preserve the standing of the institution they head without projecting their individual personality. This is easier said than done. Some individuals raise the standing of the institution they head, but more often than not the challenge for any individual heading a great institution is to ensure the continued standing of that institution against the envy of individuals who covet their position. In the extant case of the Sri Sathya Sai Baba Central Trust one can only hope that raising questions about the financial dealings of a few individuals will not harm the reputation of the institutions that have been built, since they have done a commendable job, just as the CAG and RBI and all the other institutions where the role of individuals is questioned for one reason or another.

RBI Approves Proposed Dividend of Dhanlaxmi Bank Ltd

Dhanlaxmi Bank Ltd, Thrissur, Kerala based private bank has informed BSE that Reserve Bank of India (RBI) has conveyed their approval for declaring dividend at the rate of 5% i.e. Re. 0.50/- per share on the face value of Rs. 10/- for the year 2010-2011. On 3rd June, 2011, Dhanlaxmi Bank has announced an increase in interest rates on select term deposits by up to 50 basis points from June 6, 2011. The Bank’s total revenue of Q4 has grown by 29.66 % to reach to Rs. 249.47 cr. in March, 2011 from Rs. 192.4 cr. in December, 2010. In same period net profit of bank has increased to Rs 7.26 cr. from Rs. 1.62 cr. in March, 2010. The bank’s annual total revenue has reached to Rs 534.37 cr. for the FY 2009-10 and at the same time net profit increased to Rs. 23.30 crore. The Bank’s CAR has risen to 13.39 %, while its NPM touch to 2.91 %. Foreign institutional investors (FII) are holding 32.66 % in the company in while domestic institutional investors (DII) are holding 6.47%, and 60.87% share holds by others in Dena Bank.

http://goindocal.com/

Parekh hopes RBI will take a break from rate hike spree

HDFC Chairman Deepak Parekh has said he hopes the RBI would maintain status quo on rates during its monetary policy review scheduled for later this month to maintain a balance between growth and inflation. "I don't think the Reserve Bank will look at another interest rate hike because we need to have a balance between growth and inflation," he told reporters on the sidelines of an event here last night. "I hope we get a breather before the next round of hike in interest rate...I hope the Governor of RBI does not do anything (hike rates) in July." Since March 2010, the central bank has upped its key rates ten times, with the latest being on June 16, when it hiked short-term lending and borrowing rates by 25 basis points each to 7.5 and 6.5 per cent, respectively. One could draw comfort from the declining trend in food inflation, the top financial sector expert said, adding this would help RBI to keep the key interest rates unchanged. "I think inflation is settling down. The numbers that have come out on food inflation is certainly down, which is very hopeful." After a month-long uptrend, food inflation plunged to a one-and-a-half month low of 7.78 per cent for the week ended June 18, down from 9.13 per cent in the previous week, as vegetables and pulses became cheaper. On HDFC Bank increasing its interest rates, Parekh said it was not on the cards at the moment. On the e-auction of land, Parekh said, "the 'Land Acquisition Bill, 2007' is still pending before Parliament. I hope that in the monsoon session it is taken up because it has been in waiting for the last 3-4 years." It may be recalled that Parekh had said in his annual letter to the shareholders on compulsory implementation of e-auction for land transactions and a special 'Settlement Commission' for now scrapped Urban Land Ceiling & Regulation Act (ULCRA) related-cases. "These baby steps will go a long way in alleviating the housing problems in India," the finance sector veteran had said in the letter.

SAIL bags Randstad Award-2011 for HR practices & Employer branding

Maharatna Steel Authority of India Limited (SAIL) has won the prestigious Randstad Award for 2011 under ‘Manufacturing Industries’ category. Shri B. B. Singh, Director (Personnel) received the award from Dr. Bimal Jalan, Ex-Governor, RBI in an award function held at Hotel Taj Palace, New Delhi on 29th June 2011. The Randstad Awards were instituted in 2000, by Randstad globally to encourage best practices and to build ‘Employer Brand’. Ma Foi Randstad is a part of Randstad, world’s second largest HR services company. Randstad awards in India are being given for the first time to the “Most Attractive Employer” brand based on a research done to gauge the ‘Employer’s image’ among the potential workforce and the working public through extensive online research. The employers are evaluated on 17 different factors. These include job security, salary, working atmosphere, job content, work-life balance, future prospects, values, training and management.

Property prices dip in Bangalore, 7 other cities

Property prices in eight major cities of the country, including Bangalore, have slumped up to 15 per cent in the first three months of 2011, according to the latest data of the National Housing Bank. The reason is attributed to slowdown in property demand for houses owing to high property prices and rising interest rates. According to the National Housing Bank (NHB), during January-March 2011, housing prices have declined in eight major cities by up to 15 per cent. “But prices in six cities, including Delhi, have gone up marginally,” R V Verma, NHB Chairman and Managing Director, said. The prices of residential properties have fallen maximum in Kochi by 14.92 per cent in January-March compared to the previous quarter. Bangalore with 12.87 per cent stood second, followed by Faridabad (6.37 per cent), Hyderabad (4.6 per cent), Surat (3.76) per cent, Bhopal (3.55 per cent) and Jaipur at 2.63 per cent. Kolkata has shown a marginal decline. Notably, RBI had raised the repo and reverse repo rate for 10 times since March 2010 to control inflation. However, the prices have increased in six cities, including Delhi. In Pune, prices of residential properties went up by 5.02 per cent, followed by Lucknow (3.09 per cent) and Delhi (2.64 per cent). Marginal price rise was seen in Ahmedabad, Chennai and Mumbai. Speaking about the plans of NHB for 2011-12, Verma said the bank, which is owned by the Reserve Bank of India would raise Rs 11,000 crore during the fiscal to fund housing activities compared to Rs 9,000 crore in 2010-11.

Deccan Herald

'Monetary policy adjustment can not curb rise in food prices' - Atul Joshi, MD & CEO, Fitch Ratings India

Monetary policies are not capable of addressing food price inflation. It basically addresses manufactured products inflation. What is worrying the RBI and the government is increase in non-food manufactured prices, which increased............

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Withdrawal of 25 paise coin hurts religious sentiments

Rohtak: The religious sentiments of the people in Rohtak got hurt, after the central government issued a notification stating that from June 30, 2011, the 25 paise metal coin would no longer be used as legal tender. Preisets expressed disappointment as they offered the coins to the deities. The different communities in the country had tremendous faith on these metal coins and were in a habit of using Rs. 1.25 on every auspicious occasion. According to the Reserve Bank of India (RBI), June 30th was the last day when the 25 paise coin was permissible in circulation

http://www.indiablooms.com/BusinessVideoDetails/businessVideoDetails020711b.php

Inflation woes: From 4.9% to 8.1% in no time to adjust for the common man

There was an element of surprise in the manner in which inflation panned out during the year, given that each of Reserve Bank of India's (RBI) year-end inflation projections missed the mark. Even though the central bank revised its March 2011 inflation target upwards from.......

Non-official director for Dena Bank

The Central Government, after consultations with Reserve Bank of India, has nominated J. Balasubramanian as part-time non-official director under Chartered Accountant category on the board of Dena Bank for three years with effect from the date of notification (June 30) of his appointment or until further orders, whichever is earlier, according to a release. Mr. Balasubramanian is a practising Chartered Accountant.

The Hindu

Rest in peace 25 paise

One popular joke online plays on the fact that one 25 paise coin was worth four aanas. “The government said we can’t handle one Anna (Hazare) what will we do with four,”........

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Is India going off track or staying on course?

The RBI's strategy: Raise interest rates to mop up money, slow the economy and lower inflation. It's working — partially. But inflation is at its highest in 16 years. This is also undermining....

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