VITALINFO: December 2012

Monday, December 31, 2012

Subir Gokarn in race with World Bank's chief economist Kalpana Kochhar for deputy governor post of RBI

Subir Gokarn in race with World Bank's chief economist Kalpana Kochhar for deputy governor post of RBI

Subir Gokarn, the incumbent, and Kalpana Kochhar, the World Bank's chief economist for South Asia, are being considered for the post of Deputy Governor of the Reserve Bank of India. A committee headed by RBI Governor Duvvuri Subbarao and including DK Mittal, secretary in the department of financial services, has shortlisted Gokarn and Kochhar, said two government officials with knowledge of the matter...............

Read - ET

RBI set to get a new dy governor

The Reserve Bank of India (RBI) is set to get a new Deputy Governor, with the government deciding against giving any further extension to Subir Gokarn. The finance ministry had earlier extended Gokarn’s tenure till December 31, after his three-year term expired in November. Gokarn, in charge of the monetary policy department, was appointed in November 2009. “An order naming a new deputy governor was expected anytime now, maybe on Monday itself,” a source said. Among the names doing the rounds in the finance ministry are Kalpana Kochhar, chief economist for South Asia with the World Bank, and economist Urjit R Patel. However, no confirmation was available on the names................

Executive retirement

To coincide with International Secretary's Day, and keeping in view the fast changing environment in the Bank, the Private Secretaries had organised a PS MEET during December 1 – 2, 2007 at CAB, Pune wherein PSs from all Centres were invited. The theme of the MEET was "Quest for Self Excellence". A website (http://mangesh.tarambale.googlepages.com/home) dedicated to the PS Fraternity was launched at the hands of Shri V.K.Sharma, Executive Director as seen above. Shri Sharma is retiring today i.e. 31st December 2012. RBI PS Fraternity and VITALINFO wish him a very happy n healthy Re-Tyred life ahead.

'Grace'ful boss I ever had..............

Retiring from the Reserve Bank is in itself a great pride but when it comes to Madam Grace Koshie, the Bank will be losing one of its best yet again, to retirement. Madam Grace Koshie, is retiring today, i.e. on 31st December 2012 after holding a very responsible position as Secretary & Chief General Manager of Reserve Bank of India. It was an honor and a pleasure working with her, as her Private Secretary, for over 5 years. Qualities that she displayed are far beyond words. Her soft spoken words, making us to understand and work to perfection are her hall mark qualities. Working under & alongside her, for the last years of my tenure with the bank was a great and satisfying learning experience. I enjoyed a lot of freedom but at the same time learnt the disciplined way of functioning as a responsible Private Secretary under her guidance. No harsh words were ever expressed nor an environment of unhappiness I faced during my tenure as a Private Secretary to Grace Koshie, though she was responsible for handling the most challenging portfolio of directly reporting to the top management in conducting crucial Board Meetings and Top Management Committee Meetings and to coordinate very important meetings between the RBI and other Government organisations including foreign delegations. By virtue of my being Private Secretary to Grace Koshie, I learnt many techniques in handling sensitive situations and was always guided by her ever loving approach. I had never seen Madam Grace Koshie to express or display an upset mood in spite of mounting official pressures. She is, in short a lovable lady with high degree of sincerity and a great guiding lamp to all those who worked under her. This I am confidently speaking taking the advantage of my age – where I am older to her. Efficiency and Effectiveness are the qualities which require grooming and those who worked under Grace Koshie would have been brought up and nurtured with love and affection to earn these qualities so easily with her grace and humane approach. It was an honor to work with Grace and I wish and pray to God that he may bestow his limitless grace to her and her family and may she enjoy a peaceful and healthy retired life.

- Mrs. Rita Fernandes (9833363073)

Will miss you dear..........

Dorothy (centre - brown kurtha) with colleagues

Ever smiling and young at heart Smt. Dorothy Noronha, Private Secretary to Deputy Governor (Dr.K.C.Chakrabarty) is retiring today, i.e. 31st December 2012. VITALINFO and RBI PS Fraternity wish her a very happy n healthy Re-Tyred life ahead.....................

RBI striving for ‘paperless banking’, says official

Reserve Bank of India General Manager P. Satyanarayana Prasad on Friday said the country’s apex bank was striving to make the concept of paperless banking a reality in the country. Addressing a gathering of students from the department of management studies of the college here, he said the RBI was striving hard to take all the public sector banks along with it in a direction towards electronic mode of transactions..........

Read - The Hindu

MBA students should develop pragmatic thinking to deal with change

.....MBA students should develop pragmatic thinking, inquisitive nature and mentally gear up to accept change and become real business managers, said P Satyanarayana Prasad, General Manager and Joint Legal Advisor of RBI in Mumbai.......

High drama outside Lokayukta office

..........The Commission, under Section 8 (2) and Section 10 of Karnataka State Minorities Commission Act of 1994, “conducted a study and found that, though the misappropriation of funds was clearly established, no action was taken so far against the culprits by the Cooperation Department and the police and also the concerned authorities of the Reserve Bank of India”. The commission claimed that after an inquiry, it was found that the balance sheet of the bank in 2008 showed that there was a misappropriation of over Rs. 3,500 crore by ‘benami’ sanctions to firms owned by relatives of ex-presidents and ex-directors of the board. The commission has listed Jyothiprakash Mirji, Commissioner of Police, Bangalore city; G.V. Krishna Rao, Principal Secretary, Co-operation; S.G. Hegde, Registrar of Co-operative Societies; Karibasappa, Director of Co-operative Audit in Karnataka; Uma Shankar Regional Officer (RBI); Abdul Sattar, Circle Inspector, Commercial Street Police Station; and Asadullah Khan, Chief Executive officer, Amanath Co-operative Bank as the other accused..........

Read - The Hindu

Pulling The Plug

Pulling The Plug

It’s the sort of downsizing that is bound to raise alarms, and has. In August 2011, a working group on issues involving regulating non-bank finance companies (NBFC) headed by former RBI Deputy Governor Usha Thorat recommended that the RBI should regulate only those NBFCs with an asset book of Rs 25 crore and above. The panel also wanted stricter provisioning and capital adequacy norms, some of which the RBI has put in place.............

A Bank for the Buck

This is the story of the birth and growth of India’s most valued Bank – HDFC Bank Ltd – against the backdrop of the new bank movement in India that started in 1994 when the Reserve Bank of India opened up the sector to introduce competition and to force banks to be efficient and more productive

Read - FPJ

KCCI flays RBI move

......... “Hereby, the RBI has decided to withdraw an important service. It is opposed to the earlier decision to install coin vending machines at public places,” he said. “The shortage of coins is being felt acutely in all sectors of trade and commerce,” Marzook said. He also said that the KCCI had already sent a letter to the RBI’s regional office here urging the officials to review the decision ......

RBI staff strike on Jan. 1

..........At a press conference here on Saturday, vice-president of the Hyderabad unit of All-India Reserve Bank Officers’ Association B. Lohi Das said the 15 counters here would be closed on Tuesday. Closure of the counters would inconvenience the general public apart from rendering as surplus about 1000-plus staff manning 200 counters all over the country, he stated. RBI Employees Association secretary G. Kranti said currently, about 90 per cent of exchange of notes across India was done through the RBI, with the rest being handled by commercial banks. “All transactions at the RBI, including clearing services, would come to halt on Tuesday because of the strike in which 700 employees and officers in Hyderabad would take part,” he declared. Chief secretary, Reserve Bank Workers Union, G. Jagadish, claimed that the RBI’s justification to close the counters citing global practice as the reason was ‘incorrect’.

Read - The Hindu

If 2 large borrower banks go under, 9 other banks would fail

.....“An analysis of the components contributing to banking stability show that tight liquidity, deteriorating asset quality and reducing soundness are the major contributors to the decline in stability of the banking system,” ......

Banking the unbanked: Pvt banks join the rush

It was merely an obligation in the past, but financial inclusion has now turned into a big business opportunity for private banks............

2012: The year that wasn’t for banking industry

The high point of 2012 was Indian central bank’s resounding victory over inflation. After a three-year dogged fight, the Reserve Bank of India (RBI) was finally able to bottle the inflation genie that was hurting growth in Asia’s third largest economy, paving the way for an expansive monetary policy. The wholesale price inflation dropped to a decade low and retail inflation, though relatively high, slipped considerably. Most importantly, the so-called core inflation or the non-food, non-oil, manufacturing inflation dipped dramatically in mid-year and to the surprise of all of us, the final figures of inflation have always been lower than the provisional estimates. A confident RBI went for a deep rate cut..........

Two policy statements, common messages

Two important policy statements — the mid-year economic analysis of the economy and the Reserve Bank of India’s mid-quarter monetary policy review — were unveiled in quick succession two weeks ago. The mid-year analysis or review laid before Parliament on December 17 is a scorecard on the economy submitted by the finance ministry. It is largely the work of the new Chief Economic Advisor, Raghuram Rajan......

Read - The Hindu

Will 2013 prove lucky?

..........While the year 2012 will get into the pages of history the New Year 2013 begins with plenty of hopes and expectations. Ironically most of us expect the interest rates to be high so that we can earn extra on our fixed deposit investments, but those who have taken loans expect the interest rates to be low so that they can save on their monthly outflow.................

Read - The Hindu

The growth drivers

.....The role of RBI Governor D Subbarao assumes significance now in issuing final guidelines on fresh banking licences which would help increase the saving rate in the economy, again required for economic growth. The issue facing policy makers is sliding growth and high inflation. It is here that Subbarao’s skills would be assessed in 2013-14. Though he did not budge even before North Block on rate cuts in much of 2012, he would have to ensure that growth is not curtailed further by the sole focus on inflation which many say could be tackled by supply side measures rather than tightening noose on money supply............

Ex-banking liquidity skews RBI’s fight

Liquidity outside the banking system remains positive even as it’s negative inside. So the Reserve Bank of India (RBI) will have to reassess its bond purchase programmes and cash reserve ratio (CRR) cuts – those are not remedies for temporary maladies. So the one wish for 2013 at Mint Road will be the right tools to tame the beast............

Firms gear up to start new banks

.............Mint has done a SWOT analysis of 15 companies that have shown interest to start a bank once the central bank finalizes the rules. If one goes by the recent comments of the RBI top brass, the central bank is extremely reluctant to allow corporate house to float banks, given a choice. “We are painfully aware of the pitfalls, but we will make sure that regulations are not subverted,” Deputy Governor Anand Sinha said in October in Pune at a seminar. The government has addressed the regulator’s concerns by amending the banking law and empowering RBI to supersede a bank board that is not delivering and the right to inspect group companies of the promoter of a new bank. The Indian central bank can dismiss a board and appoint an administrator to run a bank for up to one year. Following the nationalization of 14 larger banks in 1969 and six in 1980, RBI has so far given licences to only 12 banks in two phases, including conversion of a cooperative bank into a commercial bank.............

Get into action on financial inclusion: RBI

Despite the efforts undertaken by the government and the Reserve Bank of India (RBI), a large number of people are still outside the ambit of banking services, the central bank said today, adding banks should get down to action on financial inclusion rather than doing “lip service” on the matter..........

RBI to take a new supervisory role on pricing: Chakrabarty

.......... “all we are asking is whether you are doing the right thing and examine that. Look at risk based pricing, if you (Banks) charge too much interest rate, good customer will not come. When the prices are too high, entire society is blaming RBI only and I am not happy about that. If price become exploratory, then we will intervene as we did in microfinance,” ........

Go beyond lip service when it comes to financial inclusion: RBI to banks

The banking regulator Reserve of Bank of India (RBI) today asked the banks not to do lip service, but get into actual action on the financial inclusion initiative. Speaking on the sidelines of a book launch, organised by Indian Overseas Bank at Chennai today, K C Chakraborty, Deputy Governor, RBI said that despite several steps having been taken by the government and RBI, the extent in the Indian financial systems continues to be unacceptably high................

RBI to call for bank licence this week

The Reserve Bank of India is expected to come out with the final guidelines inviting applications to set up new banks, this week. RBI is working on the document, said a senior source involved in the process.........

Read - IE

‘New banking licence doesn’t mean big money’

The RBI had a word of caution on Sunday for those eagerly awaiting the new banking licence. “If you are looking for raking in big moolah, better reconsider it, since banking is not meant to make big profits,” RBI deputy chief KC Chakrabarty said. He said people feel if banks generate profit, they are efficient. But if the banks make too much profit, economy will become insufficient. If banks make too much money, then customers are losing money. “So, banks making too much money is very danger.”.............

Accessing ATMs an uphill task for persons with disabilities in India

........The circular instructed the banks to install speech recognition software and Braille keypads. It also wanted the banks to make arrangements in such a way that the height of the ATM does not create an impediment to people in wheelchair. But many persons with disabilities and senior citizens say this is rarely followed by banks. All India Bank Employees’ Association of India (AIBEA) general secretary C H Venkatachalam said banks are yet to follow the RBI instructions. “It’s unfortunate that most ATMs don’t have facilities for the physically challenged. Many persons with disabilities have their salary accounts in these banks and have to use ATMs,”.........

Now it’s easier for you and me to open a bank a/c, here’s how

Opening a bank account got a little easier with the Reserve Bank of India (RBI) announcing several helpful measures for account holders. Some of these might seem to be procedural in nature, but at the ground level, they can have a severe impact on the entire process. Individuals will find the going to be quicker and process easier to complete as they face up to the situation........

Saturday, December 29, 2012

RBI employees call for nationwide strike on Jan 1

Employees and officers under the banner of 'United Forum of RBI Officers and Employees' have called a nationwide strike on January 1, 2013 to protest against the decision to close currency notes and coins issue counters from that date................

Will 2013 be ‘annus mirabilis’ for banks?

Mumbai: For most part, the year 2012 seemed an annus horribilis (a horrible year) for the banking sector as public sector banks that account for nearly 75% of the sector’s business saw their autonomy and earnings worsen. Starting with “regular missives” from the finance ministry, an unrelenting regulator on interest rates, the year was dominated by past business bets gone bad resulting in mounting restructured assets for the public sector banks (PSB).............

Banking services is a right of every individual: FM. Will RBI enforce this right for the benefit of the banking public?

......This is a wonderful thought coming after 43 years of nationalization of the first set of 14 banks on 19 July 1969. Unfortunately, this right to banking services is not guaranteed under our country’s constitution. But fortunately, there is no need for any amendment to the constitution or any other act, as RBI (Reserve Bank of India) has got the powers to enforce this right under the existing laws though a simple fiat. It is, therefore, for the RBI to implement this right of every citizen to receive a satisfactory banking service by codifying the time norms for banking services and laying down guidelines for their compliance........

Read - Moneylife

SMVSB to mint 2 billion coins for silver jubilee

Jammu: The Vaishnodevi Shrine Board has got a go-ahead from the Centre for the minting of non-circulation commemorative coins and two billion circulation coins of Rs 5 and Rs 10 denomination on the eve of the completion of 25 years by the board............

RBI defers implementation of Basel III norms to April 1

The Reserve Bank of India has rescheduled the date for implementation of Basel III norms to April 1. The earlier deadline was January 1, 2013. This comes as a relief for banks as Basel III norms require the equity capital of a bank to be not less than 5.5 per cent of risk-weighted loans, as per the draft guidelines issued by the RBI.............

Former Canara Bank CMD Raman to join Sebi

Shri S.Raman, former chairman and managing director (CMD) of Canara Bank, on Friday took over as a whole time member of stock market regulator Securities and Exchange Board of India (Sebi) for a tenure of five years.........

Complaint against union minority affairs minister Rahman Khan

BANGALORE: Karnataka State Minorities Commission chairman Anwar Manippady filed a complaint before the Lokayukta alleging that union minority affairs minister K Rahman Khan had misappropriated funds in the Amanath Co-Operative Bank when he (Khan) was the president of the bank. Manippady filed the complaint before Upalokayukta S B Majage. He has also named land developer Ziaulla Sharieff, chairman of Al-Ameen Trust Mumtaz Ahmed Khan, besides some directors and officers of the bank, officials of the cooperation department and local officials of RBI.......

Above normal return from gold not sustainable in long term: RBI

........There has thus been a substitution towards non-financial assets like real estate and gold; the real returns on which have been relatively high, said the report. In addition to the higher real returns on gold and residential housing, other factors could be impacting the fall in financial savings and an increase in physical savings and valuables in household savings, the report said............

Panel to plug regulatory gaps in shadow banking

............. “There is little regulatory oversight over the large quantum of funds handled by post offices, employees’ provident funds or government pension schemes.” However, analysts say using the term ‘shadow banking’ for government NBFCs, post offices and pension and provident fund schemes is not fair. Though they don’t have regulatory oversight, they have government oversight and are subject to the Comptroller and Auditor General’s scrutiny. Post offices, pension and provident fund schemes are directly owned by the government..........

RBI’s January rate cut under cloud

A rate cut which looked imminent in January has now been called into question with the Reserve Bank of India (RBI) saying that it is worried that savers are shifting to non-financial assets like gold and real estate because of very low real returns on financial assets. .......

Third Quarter Review of Monetary Policy 2012-13

Dr. D. Subbarao, Governor, Reserve Bank of India will announce the Third Quarter Review of Monetary Policy 2012-13 on Tuesday, January 29, 2013 in a meeting with the chief executives of major scheduled commercial banks at 11.00 a.m. on Tuesday, January 29, 2013 at the Central Office, Reserve Bank of India, Mumbai.

TOI

Reversal in monetary policy only when inflation is down: PMEAC

VISAKHAPATNAM: The signal for reversal of monetary policy stand by the Reserve bank will come only when inflation shows definite signs of decline, Prime Minister's Economic Advisory Council Chairman C Rangarajan said today. He also said that high inflation over the last couple of years was due to supply side constrains but that did not mean that monetary policy had no role to play in such condition. Rangarajan was delivering the P R Brahmananda Memorial Lecture on 'Dynamics of Inflation' at a conference by the Indian Economic Association. .....

RBI report voices concerns over banks’ asset quality

dia’s financial system remains stable, but the deteriorating asset quality of banks will pose a challenge in a smooth transition towards new international capital adequacy norms that kick in from April, the Reserve Bank of India (RBI) said in its report on financial stability released on Friday. “Indian banks will face challenges as they migrate to Basel III, given the declining asset quality and regulatory changes necessitating additional provisioning,” the report warned............

Falling growth, inflation pose risk to stability

..........In the foreword to the report, RBI Governor Subbarao said in recent quarters, growth had moderated due to the global economic situation and domestic policy uncertainties. “Growth...needs to accelerate if the momentum of poverty reduction, employment generation, and pay-off from the demographic dividend is to be accelerated,” he said..............

Financial stability at risk on falling growth, high inflation

"... lower growth, elevated inflation, high fiscal and current account deficits remain potential risks to financial stability,"............

Risk to banking sector increasing, says RBI

.......The Reserve Bank of India (RBI), on Friday, said that the risks to banking sector had been increasing in recent years with a continued deterioration in the stability of the banking sector since 2010. It also said that the aggregate risks remained at an elevated level during 2012. “An analysis of the components contributing to banking stability show that tight liquidity, deteriorating asset quality and reducing soundness are the major contributors to the decline in stability of the banking system,” .......

Read - The Hindu

Rising losses from bank frauds is matter of worry: RBI

........Losses incurred by banks in India due to frauds have been on rise in recent quarters. Along with it, several high profile cases of frauds in banks globally, have focused attention on the importance of operational risk capital, RBI said in Financial Stability Report............

Independent audit by CAs not binding on coops: Special Officer

..........Referring to the complications being faced by primary agricultural cooperatives in bearing the audit cost, he said the new amendment will clear the confusions. Asked whether such societies could opt for independent audit by chartered accountants as required by the Banking Regulation Act and accepted by the Reserve Bank of India (RBI), he said as per the Central Act, the State Government can have the option of either independent audit by chartered accountants or statutory audit by cooperative auditors. He, however, said that the RBI would have to comply with the provisions of the amendment Act and there would not be a situation forcing the societies to go for both audit...........

CARD bank employees demand merger with OSCB

The employees' association of the ailing Cooperative Agricultural and Rural Development (CARD) banks, set up for providing agricultural loans to the farmers, has demanded their merger with the Odisha State Cooperative Bank. For the well being of the employees of the CARD banks, the state government should initiate measures for merger with the OSCB, said Hrushikesh Mishra, general secretary of All Odisha CARD Bank Employees' Association...........

Friday, December 28, 2012

Heartiest congratulations...........

Heartiest congratulations from VITALINFO on being selected for promotion to Gr.F

Grade 'E' to ‘F’ Panel Year 2013

Shri P.C. Sahoo

Smt. Madhavi Sharma

Shri P. Vijaykumar

Smt. Parvathy Sundaram

Shri R.L. Das

Shri B.K. Mishra

Shri Arun Pasricha

Shri Shekar Bhatnagar

Shri B.B. Sangma

Shri E.E. Karthak

Shri M.K. Verma

Shri A.B. Balwatkar

Shri P. Shyam Sunder

For safeguards in bank licensing - S.S.Tarapore

....The RBI has had enough time to mull over the guidelines and should be in position to issue the final guidelines before the Budget of February 2013, and the actual process of receiving applications could start from April 1, 2013. By April 1, 2013, the RBI should set up a High Powered Bank Licencing Screening Committee. Ideally, the Screening Committee should be a Panel of former Governors who would bring to the Table rich experience of dealing with an ordeal by fire. Such a Screening Committee would be better able to handle the political economy stresses and strains.......

Is Chidambaram's plan to create big banks feasible?

...........The two biggest challenges it can face in its endeavour are technology and human resources management. Bank employees and their unions fear there might be cultural issues when two banks are brought together and overlapping branches would have to be closed down, leading to large-scale job losses. Employees of small banks fear they might not be treated favourably under the new management and could be asked to take transfers or forgo promotions. Though salaries and perks among state-run banks have seen some harmonisation over the past few years, some variations can still be found among different banks. Finding the right job for top management of small banks in the merged entity is also an issue. “Consolidation will affect the nation, customers as well as bank employees. They are talking about benefit of scale but two plus two is not four always...............

Gaming the system

............... Among the important lessons to be learnt by regulators from this episode is that any loophole that allows a group like Sahara to shop around for a favourable regulator needs to be plugged. Secondly, regulators like the RBI and SEBI need to exchange information with one another. With all that, it will still require a lot of political will to check the Sahara Pariwar and its imitators.

Read - The Hindu

RBI may release final guidelines in January

PAVING THE WAY

After issuing the final norms, RBI is expected to set up an external committee to screen applications of prospective entrants
It might take six to 12 months for the banking regulator to complete the screening process and issue the first set of licences
RBI is expected to give one-year time to the entity, after awarding the licence, to open the first branch

Dishonouring a cancelled draft is no crime

....A demand draft, unlike a cheque, is issued by a bank for consideration already received and hence cannot possibly be dishonoured on the ground of lack of funds; but a bank cannot be compelled to honour the draft in the face of a cancellation instruction by the person who got it issued from the bank.....

Opening of bank account made easy

The Reserve Bank of India (RBI) has said in a recent communication that banks should not insist on introduction from an existing customer for opening of bank account. This move will make opening of accounts easy for customers as they do not have to look out for someone having an account in the bank already to introduce them, says J. Vanangamudi, the district Lead Bank Manager..........

Read - The Hindu

Financially Inclusive Society: The key is “Adoption“

......Be it proliferation of ATMs or Cash Transfers, the policy framework of the Government or RBI is to encourage electronic payment systems and to move towards a less cash/cash less society. However, what it translates on the ground is that it only encourages people to use cash for all their payment needs. The larger point here is: what will ensure that people use less of cash and more of electronic payment systems (not just cards but wallets, Mobile/NFC-enabled payment systems) for their payment needs. ............

AP microfinance crisis helped Bandhan grow by over 50%

.....You are planning to apply for a banking licence. How do you see this adding to your business?

There are four dimensions to financial inclusion — savings, credit, insurance and remittance. Currently, through Bandhan we are catering only to the credit side. A banking licence will help us address the other three areas.................

RBI norms may dent NBFC profit, says Icra

The proposed guidelines by the Reserve Bank of India (RBI) for non-banking finance companies (NBFCs) are likely to impact the profitability of these entities by 15-20 basis points (0.15-0.20 per cent) in the medium-term, according to a research report by rating agency Icra...........

Bankers asked to step up lending

Collector C. Sudharsan Reddy urged bankers to step up lending targets to the priority sector. Addressing a meeting of bankers here, on Thursday, he said pending loans during the rabi season could be cleared immediately. He was particular about extending financial support to the beneficiaries covered by SC Corporation, BC Corporation, Minority Corporation and Self-Help Groups......

Read - The Hindu

RBI firm, talks tough on Nabard warehousing refinance

The Reserve Bank of India has asked the National Bank for Agricultural and Rural Development (Nabard) to come clean on its controversial warehousing refinance scheme. In a communication last week, the RBI has talked tough, asking Nabard to comply with regulatory directions in this regard......

Activists approach RBI against HSBC on black money, hawala allegations

Two activists from Lucknow have urged the RBI Governor to enquire into the allegations and cancel the licence of HSBC, if found true.

Lucknow-based activists Amitabh Thakur and Dr Nutan Thakur have approached the Reserve Bank of India (RBI) with regard to allegations of facilitating deposit of black money in Switzerland and hawala transactions by Hong Kong and Shanghai Banking Corporation (HSBC). The activists said that they wrote to RBI Governor D Subbarao after HSBC denied all the allegations in reply to their earlier complaint to the central bank..........

Read - Moneylife

Draft 12th Plan document springs few surprises

...........In a dubious reprieve to States, the Plan panel goes on to state “the commercial banks will have to bear part of the burden by restructuring the loans and the RBI may have to allow some regulatory forbearance relieving the banks of treating the restructured loans as non-performing assets (NPAs) and making suitable provisions for them”. This is nothing but robbing Peter to pay Paul.........

"AP, WB behind all-India GDP Growth"

..........While the RBI study said that revenue surplus would “enable a reduction in the GFD-GDP ratio” and that 26 of the 28 states met the ratio set by the thirteenth finance commission, ASSOCHAM believed that the tendency would be for these surpluses to be squandered in popularity contests. ............

Thursday, December 27, 2012

Battles over lines of control

........The relationship between the finance ministry and the banking regulator, the Reserve Bank of India (RBI), has probably been as bitter and strained as the one between the government and CAG. Unlike CAG, RBI is not a constitutional body but it enjoys a special position among all financial sector regulators and, apart from regulating banks, it is also the monetary policy authority. Yet, the finance ministry’s treatment of RBI has often given the impression that the former has little respect for the latter’s independent status. It began with the idea of setting up a new body called the Financial Stability and Development Council, which was to be chaired by the finance minister, and the RBI Governor was to head only one of the council’s sub-committees. The RBI management made no secret of its disapproval of the idea but this made no impact on the government and the new arrangement has been put in place...........

RBI proposal may put 70% NBFCs out of business; over 9,000 companies may lose licences

RBI proposal may put 70% NBFCs out of business; over 9,000 companies may lose licences

.....More than two-thirds of non-banking finance companies (NBFCs) face closure if the Usha Thorat panel recommendation on minimum asset size is implemented by the Reserve Bank of India, shutting a vital source of funding in many parts of the country. Nearly 9,000 companies lending to borrowers in small towns and villages that lack banking facilities could be in danger of losing their licences as their asset size is less than Rs 25 crore.......

NBFCs partner India's growth story

...In all fairness, the NBFC sector was not in regulatory shadows as RBI has, over the years, tweaked and implemented a differentiated regulatory regime for deposit accepting, systemically important, and other non-bank institutions. A few famous failures of deposit-accepting institutions in the 1990s led to legal and regulatory measures to curb and regulate the activities of looselyregulated institutions that garnered substantial deposits from areas where banking could not, and indeed would not, reach. New generation private sector banks and newly-energised and technology-powered public sector banks helped by filling in the gap and the situation was quickly contained. Regulatory focus then shifted to the non-deposit accepting NBFCs and attendant issues relating to classification, public funds and core investment companies. Once the framework for such lenders was put in place with a bank-like prudential and capital regime, it gave the market the confidence required for growth.........

Digital financial inclusion in India – Current status and the way forward

......In view of the widely prevalent economic disparities, financial inclusion becomes imperative to usher-in inclusive growth. The agenda of inclusive growth is reflected in the policies and regulations that the policymaking and regulating institutions, like Government of India and RBI have been working upon in last ten years. Measures have been taken to include the financially neglected rural areas by relaxing the KYC norms and the use of banking correspondents aggressively. RBI has been proactive in including the cashdriven, under banked, semi-urban and urban population for their digital financial inclusion. They’ve done so by increasing the number of ATMs by 25% each year for last couple of years, reducing their transaction costs for electronic payments by having banks reduce the MDR for debit cards and NPCI -driven IMPS and Rupay card thus, enabling low cost digital transactions...........

Commemorative Coin

The President, Shri Pranab Mukherjee releasing the Commemorative Coins at the Special Convocation of Banaras Hindu University to Mark the Concluding Ceremony of Birth Centenary of Mahamana Pandit Madan Mohan Malavia, at Varanasi, Uttar Pradesh on December 25, 2012. The President of Nepal, Dr. Ram Baran Yadav is also seen

Fake notes that fooled currency detector

..........“We were shocked when we learnt that a bank had accepted the counterfeit currency. Initially, we suspected some bank employees. “But when we met local RBI officials with the recovered cash, they told us that 14 out of the 17 security features matched the counterfeit currency. Even they were shocked,” ..........

High Mark fallout: Vepa Kamesam resigns from the Board

.....Vepa Kamesam, one of the most high profile directors has resigned from the High Mark Board. However, it is not clear as to what would happen to the 1.63 lakh shares that Mr Kamesam was allotted. Mr Kamesam, a former Deputy Governor of the Reserve Bank of India (RBI) was one of the four directors who, along with Prof Anil Pandya, chairman and founder-director of High Mark, bagged 70% of the employee stock ownership plan (ESOP). Mr Kamesam was allotted 1.63 lakh shares in the credit bureau as ESOPs........

Read - Moneylife

Obituary

Mr. K. Kanniappan, Retd. Dy. Manager (NABARD), RBI, Chennai passed away on 25.12.2012. Phone: 044-2628 2892 / Mobile: 94444-45799 / 98841-81124

Banks to have one branch per 1,000 people for direct cash transfer

.....“It shall be the endeavour to ensure that there is at least one bank branch / BCA in every gram panchayat(s). Since the population of gram panchayat varies across the states, banks need to ensure that about 1,000 to 1,500 households are available in the sub-service area of BCA,” the finance ministry said in a circular to public sector banks and regional rural banks...........

SREI to install 25,000 ATMs in rural India

....The final plan will be subject to RBI approval. These CSCs are being set up under the government’s plans to bridge digital divide between rural and urban areas,.....

PSBs might miss the CTS deadline

..........According to Hota, most banks started their procurement procedure after the government directive for the CTS rollout had come. It will take minimum 10-15 weeks to deliver the equipment and there are only a limited number of vendors offering such equipment. “These factors are delaying implementation of CTS and we are trying to meet the deadline,” said Hota. While banks are supposed to complete issuing new format cheques to customers by March 2013, the deadline for complete migration to CTS 2010 is December 2013.

C Rangarajan to inaugurate banking expo

Former Governor of Reserve Bank of India and chairman of the Prime Minister's Economic Advisory Council, C Rangarajan, will inaugurate IBEX INDIA 2013, India's only trade exhibition and conference for banking technologies at the Bandra-Kurla Complex, Mumbai on January 17. The exhibition will be open till January 19 2013. Rangarajan will also deliver the keynote address on January 17 on "Delivering Technologies for Innovative Banking", which has been structured to discuss a spectrum of issues across all banking functions that are of relevance to the Indian banking sector........

Read - Programme schedule

Banking on competition

...... In fact, the competition energised public sector banks to get their act together and advance in terms of technology and staff upgradation, designing and delivery of new products and services. It is in this context that the entry of more new banks – as a consequence of the latest amendments in the banking laws – will add to the competition and improve overall banking in the country............

Breaking the bank

........RBI might want to relook the loan classification rules to make them tighter and ensure adequate provisioning. As it is, agencies like Moody’s are convinced that the asset quality of Indian banks is set to worsen and more important, that the provisions for such potential slippages are inadequate. However, it is in the prevention that the solution lies; banks need to arm themselves with better credit appraisal skills and ..........

Amended legislation paves way for new banks in the next year

.....The development injected new life into the sector which has been struggling to cope with rising bad debts and pressure on the bottom line in the wake of global slowdown that also affected the performance of the Indian corporate sector.........

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