D K Mittal on RBI central board

The government has nominated department of financial services Secretary D K Mittal on the board of directors of the Reserve Bank of India (RBI), taking the number of government nominees on the board to two. Department of economic affairs Secretary R Gopalan is already on the board. The move to have a second nominee is expected to improve coordination between government and regulator. The nomination of Mittal, a 1977-batch Indian Administrative Services officer from the Uttar Pradesh cadre, comes with immediate effect. In August last year, he had taken charge as secretary to the department of financial services after a six-month stint in the ministry of corporate affairs. A finance ministry official said on Wednesday the appointment of Mittal was by name. This meant he would continue to be a director on the board of RBI even if he moved to some other department, the official said. Speculation had been rife about Mittal being a contender to head the commerce department, after the appointment of commerce secretary Rahul Khullar as ambassador to Belgium. The commerce department was where Mittal spent the crucial years of his career — and played a vital role in propelling special economic zones and pushing India’s agenda in the Doha talks. Earlier, there was provision for only one government nominee on the board of directors of RBI under clause (d) of sub-section (1) of Section 8 of the RBI Act. Then, in December last year, the winter session of Parliament saw the Act getting amended to make provision for two government officials. The government has amended its laws to have a bigger say in the decision making of the RBI, by having two members on the central bank’s board as compared to one now. Mittal will be the 18th director on RBI board. The move had not gone well with the RBI, with some of its executives complaining that the amendment, done at the last minute, was not on the agenda earlier. The central board of RBI is appointed by the government for a period of four years to govern the affairs of the central bank. It comprises RBI governor and a maximum of four deputy governors as official directors and 10 directors from various fields and two government officials nominated by the government besides four directors from local boards as non-official directors.

BS

Sharp shots

Reserve Bank of India Deputy Governor K C Chakrabarty is known for his plain speaking and humour but bankers do not always appreciate his remarks. At a function in Mumbai organised by a small and medium enterprises (SMEs) chamber to felicitate bankers for their support to the sector, Chakrabarty said data showed that over 90 per cent of SME entrepreneurs are either self-financed or not financed. “For what are we giving these awards then?” he asked bluntly, going on to suggest ways banks could increase credit flows to the sector. Approached for his reaction to the Deputy Governor's remarks, a senior banker said with some heavy irony, “Once in a while you need entertainment.”  

BS

Reserve Bank of India financial outreach camp at Changki village

Reserve Bank of India (RBI) organized a financial outreach camp at Changki village. The camp was attended by V.S Das, the Executive Director of Reserve Bank of India (RBI). This programme is third of its kind in the state after Khonoma village in the year 2009 and in Chumukedima in the year 2011. RBI according to a press communiqué, stated that since the Platinum celebration in 2009-10, the RBI had organized outreach camps in 218 villages across the country so far. V.S Das, Executive Director of RBI in his maiden visit to Nagaland declared Changki village to be a model village in Nagaland in order to fulfill their vision of bringing all the mass to avail the opportunity of the merits of Banking. He also urge the present banking officials to encourage the system of keeping banking correspondents so that the banks can reach the doorsteps of every costumers and also to know about their grievances and mode of services first hand from the costumers. He also said RBI will have their respective offices in every state of the North East unlike now, since it is only situated in Guwahati for the whole North east and he hoped that the RBI will have an office in Nagaland shortly. RBI Executive Director also focused on the importance of financial literacy and financial education for achieving financial inclusion by sharing his knowledge to the students and the gathered villagers. He also stated that the purpose of such camp is to bring awareness among the people regarding banking facilities available and to bring them under the fold of mainstream banking. Financial Outreach Camp was also attended by officials from banking sector like regional director of North east, Guwahati, banking ombudsman for North East, chief general manager, State Bank Of India, NE circle, general manager, NABARD, general manager, SIDBI and also Lithrongla.G. Chishi, deputy commissioner, Mokokchung. 

Nagaland Post

Liquidity deficit not yet down to RBI's comfort level, says Gokarn

The Reserve Bank Deputy Governor, Dr Subir Gokarn, said on Wednesday the CRR (cash reserve ratio) cut and OMOs (open market operations) have not got the liquidity deficit down to comfort levels and there can be more buyback of government bonds or OMOs by the central bank. Though the CRR cut and repeated OMOs have had the desired impact and eased pressure on liquidity, the deficit is yet to reach the RBI's comfort level, Dr Gokarn told newspersons here. “The combined impact of the CRR cut and the cumulative impact of OMOs is starting to bring the liquidity pressure down,” he said. Banks, which were borrowing up to Rs 1,50,000 crore from the overnight window, are now doing up to Rs 1,00,000 crore, which is above the RBI's stated comfort level of a deficit of around Rs 60,000-65,000 crore in the system, he said. On its strategy vis-à-vis liquidity injection, he said, “we have not put a stop on OMOs by any means, they are still on the table but they are and will remain as a response to liquidity conditions.” The RBI keeps an eye on the overnight borrowings and the call rates before doing OMOs, he said. Call rates, which are hovering about 0.25 per cent above the repo rate, have come down to “reasonable” levels, he said. To ease the liquidity pressures, the RBI has so far bought government bonds of over Rs 70,000 crore through OMOs and cut the CRR, or the percentage of deposits banks have to park with it, by 0.50 percentage points, which infused a further Rs 32,000 crore into the system.  When asked about the possibility of a further cut in CRR, Dr Gokarn said CRR cut is much wider in nature as it is guided by both liquidity and monetary policy aspects unlike OMOs which are directed at liquidity easing only. Dr Gokarn also dismissed the notion that OMOs are done with a view to managing the yields on securities, saying it is liquidity management alone which prompts an OMO.

HBL

Gokarn Says Liquidity, Call Rate Decide Open-Market Operations

.... The motivation for open market operations has always been liquidity conditions and not the objective of targeting yields of government bonds......

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RBI wants to head public debt management agency

The Reserve Bank of India (RBI) has agreed with the government’s proposal to have a Public Debt Management Agency, but said it should be allowed to head the same............

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Reserve Bank of India: Journey into History of Bank of the Bankers

......Today, RBI is an institution with a difference which works with the objective of ensuring monetary stability, monetary management, foreign exchange, reserves management, government debt management, financial regulation and supervision. It core duties also entails: currency management and operating the credit system to India’s advantage. In addition, since inception the bank has played an active developmental role, particularly for the agriculture and rural sectors. These are the snap shots from pages of history which I could snatch from the long and distinguished journey of the Bank of the Bankers.

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Agricultural lending: RBI panel for doing away with sub-targets

Reserve Bank of India working group on priority sector lending has recommended doing away with the sub-targets for direct and indirect agricultural advances. Instead, the group, headed by Mr M.V. Nair, Chairman and Managing Director, Union Bank of India, is understood to have pushed for fixing sub-limits only for lending to farmers in the small and marginal category.............

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Online banking remains under threat to MitB and Trojan attacks

....According to Reserve Bank of India, managing security is more challenging in online and phone banking as compared to other delivery channels and online threats in the form of phishing attacks, spyware, viruses, Trojans, key loggers are frequent. “Fraudsters are not only tech savvy but have clear understanding of the systems and procedures obtaining in banks,” said G Padmanabhan, Executive Director of RBI while speaking at a Secure Banking conference last year....

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Ramkinker Baij's works at Santiniketan to be cast in bronze

New Del, Feb 8 (PTI) Works by modern artist Ramkinker Baij, known for his monumental public art sculptures including the iconic 'Yaksha-Yakshini' figures outside the Reserve Bank of India here, is set to receive a fresh lease of life with the Culture Ministry releasing funds for his works to be cast in bronze........

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Companies cooking books to procure higher loans: Taxman to RBI

........ "The investigative wing of the income tax department has urged the RBI to look into this disturbing trend and consider guidelines for increased checks and balances at a recent meeting of the REIC",..........

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Will the return of food inflation stop RBI from cutting rates?

.... Reserve Bank of India Ggovernor D Subbarao has repeatedly said that controlling inflation while keeping an eye on growth remains his priority. Given the decline in WPI in December and expectations of a persistent fall in food food prices — most economists had pencilled in an interest rate cut by the central bank in March or April......

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Bank credit, deposit growth loses steam

Both bank credit and deposit growth have lost steam, as per the latest RBI (Reserve Bank of India) data. Deposits have fallen to Rs 59,31,747.95 crore during the fortnight ended January 27, from Rs 59,61,015.72 crore in the previous fortnight. Bank credit growth has fallen to Rs 44,87,967.68 crore, from Rs 44,89,866.98 crore during the same period...........

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'Deposits taken in good faith'

Under fire from the RBI for allegedly accepting public deposits while coming under the category of a non-deposit taking, on-banking finance company (NBFC), Manappuram Finance did an about-turn on Wednesday by acknowledging that it had indeed accepted deposits from the public............

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Tighter RBI rules make home loans tougher

After a rap by Reserve Bank of India (RBI) to banks last Friday regarding overstating salable value of financed property, industry experts say the residential real estate sector would face further downward pressure, especially in affordable and mid-income housing...........

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Banks seek fig leaf for bad loans

......... Reluctant to have their errors of judgment made public, in December, a dozen banks asked the RBI to relax the rules on declaring bad loans and let these twice restructured loans remain standard. Because such relaxation flouts international prudential and accounting norms, quite sensibly, RBI refused. Moreover, it believes such relaxation won’t solve the industry’s problems.............

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Memo to FM: Ignore critics; this is the time to spend better

The finance minister and the Reserve Bank of India (RBI) governor are definitely the two most powerful names in the world of business as they set the rules of the game. The former was more in the limelight in the past, but ever since the RBI began increasing the frequency of monetary policy statements, the markets watch the governor’s lips more than the FM’s...........

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RBI may cut interest rates by 100 bps this year. Here’s why

.... Prior-Wandesforde sees a continuous downtrend in inflation but says that the RBI is still going to cut rates by 100 basis points this year. He expects agricultural growth estimates to be stronger and that the industrial sector has now bottomed out......

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Meet on Feb 18 to save DCC bank: Bayya Reddy

..... “The Reserve Bank of India has warned that the licence of the DCC Bank will be cancelled and the Bank will also be closed. The conference has been therefore called to prevent this by giving agricultural loans to farmers at 1 per cent rate of interest,”......

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Savings account deregulation – are we done with the debate?

......RBI may not sit quiet if, after several months of deregulation, large banks keep the SA rate unchanged. Given the importance the regulator has attached to monetary policy transmission, this is not an outlandish thought. ..............

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UBI, Global Bank ink pact for remittances

.....As per the agreement, a person of Nepalese origin can remit funds in Indian currency within the limits stipulated by the Reserve Bank of India (RBI) to a beneficiary in Nepal, through any of the designated branches of UBI, after completing necessary KYC (know-your-customer) requirements for both remitter and as well as the beneficiary.........

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Sebi recognizes need for investor awareness

.......... Reserve Bank of India, National Securities Depository Ltd, Ficci, Pension Fund Regulatory and Development Authority, BSE Ltd, National Stock Exchange, and international representatives from at least 45 countries participated in the conference............

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