MLT passed away............

I regret to advise you of the sad demise of Shri.M.L.T.Fernandes, retired Executive Director. He was 77 years old and he passed away in Mumbai on Friday 24th February, 2012. He was affectionately known as TOM and was a very popular Executive of the Bank. Many in our Group would have worked with him.  He was my C G M when I was Head of the U B D in Trivandrum.

May his soul rest in peace.

 
P.P.Ramachandran (via e-mail)

‘RBI outreach programme ensures inclusive growth'

Reserve Bank of India Chief General Manager V. Vasanthan speaking at the valediction of the RBI outreach programme at Elavanur village in Karur district on Saturday

Karur : Reserve Bank of India (RBI) lays stress on inclusive growth wherein all stakeholders have access to proper banking services. Every citizen, especially those in the rural areas, must be a positive stakeholder in the process, said RBI Chief General Manager, V. Vasanthan. At the valediction of the RBI outreach programme conducted at Elavanur village in K. Paramathi union in the district on Saturday, Mr.Vasanthan said the RBI during its platinum jubilee celebrations a couple of years back decided to spread its message of existence directly to the masses, who already were getting the benefits of the banking system through other banks controlled by the RBI. Thus, the outreach programme came about and a total of 76 villages were chosen across the nation in which the RBI officials camped and spread banking awareness.Poverty eradication. Helping eradicate poverty and ushering in economic development through a proper understanding of the needs of the people and creating awareness of the schemes, credit facilities and efficacy of the banking services besides instilling in the people the need to save money for a bright future were the core areas of the programme, Mr.Vasanthan explained. Elavanur in Karur district, Mookaiyur in Ramanathapuram, A. Mathur in Pudukkottai, Thiruvalanthurai in Perambalur, and Manalmedu in Puducherry were chosen as the target villages to implement the programme. While the RBI has already completed its engagements in Elavanur, Mookaiyur and Manalmedu, at A. Mathur and Thiruvalanthurai, the programme has reached the conclusion stage, the senior RBI official indicated. Mr.Vasanthan spoke on the strength of savings and the power of money. Stating that banks provided the right avenue for safe saving, “We have to spread the message of the power of saved money to every household, especially in the rural places. Economic development involving every individual and making available banking services to the poor is the need of the hour and the RBI is precisely doing just that through the outreach programme.'' The RBI wanted to ensure that the fruits of the banking services and monetary policy reached every rural doorstep in time to usher in economic development, he said adding that banks had a pivotal role in ensuring that happened. Making available credit facilities was a priority, he outlined. RBI General Manager M.M. Majhi noted that the thrust of the outreach programme was ensuring success of initiatives such as the financial inclusion scheme and that in turn was to ensure that credit reached the needy. Opening of no frills account benefited all the downtrodden, he explained. Aravakurichi MLA K.C. Palanisamy, Karur Revenue Divisional Officer S. Shanthi, NABARD General Manager, Chennai, Vasudevan, Assistant General Manager A. Parthiban, Pallavan Grama Bank Chairman S. Rangarajan, Chief Regional Manager, Indian Overseas Bank, Dindigul Region, C. Anbu, Director IOB Rural Self Employment Training Institute, K. Chandrasekaran, Lead District Manager Murugesan, and Elavanur Panchayat president Gnanasekaran were present.

HBL 

“Banks have to do a balancing act during debts recovery”

G.S.Hegde, Principal Legal Advisor to Reserve Bank of India speaking at a workshop on SARFAESI in Madurai on Saturday

Two-day workshop on SARFAESI Act inaugurated

Banks have to do a great balancing act when it comes to the subject of debts recovery. They have to ensure that the bank recovers the debts and protects its liquidity and at the same time it should not put the borrower in embarrassing situation said, G.S.Hegde, Principal Legal Advisor to Reserve Bank of India. Delivering the inaugural address at the two-day workshop on SARFAESI Act (The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002,), titled ‘Is SARFAESI a complete code for recovery,' here on Saturday, Mr. Hegde talked about the days of debts recovery prior to the days of Debts Recovery Tribunal Act and the transitions and also cited how the Delhi High Court had mentioned that the DRT Act as unconstitutional. SARFAESI Act allows banks and financial institutions to auction properties (residential and commercial) when borrowers fail to repay their loans. It enables banks to reduce their non-performing assets (NPAs) by adopting measures for recovery or reconstruction. Mr. Hegde mentioned that the banks should have only trained recovery agents and every bank shall have a grievance redressal forum with regard to debt recovery. He also spoke on how important it is to deal with humaneness and cited Justice A.R.Lakshmanan's observations in a case where he says how recovery agents have become modern day Shylocks in his words “A man's self-respect, stature in society are all immaterial to the agent who is only primed at recovery. This is the modernised version of Shylock's pound of flesh.” Speaking earlier, D. Stanley David, presiding officer, DRT, Madurai said that bank officers should not have a closed mind and drive out the borrower but have to help him at the maximum to see whether he could avail loan. A seminar book was released by N. P. Rajan, Deputy General Manager, Indian Bank, Madurai Zone and the first copy was received by K. Lakshmipathikumar, DGM, Canara Bank, Madurai circle. The workshop among others deals with topics on, What is fair valuation of secured interest, Priority of charges, Agricultural Land and The Companies Bill-2011. Pala Ramasamy, Advocate, L. Balaji, Valuer were the convenors of the workshop.

HBL

TAFCUB colsely monitoring affairs of Urban Co-OP Banks

A State-level Task Force on Co-operative Urban Banks (TAFCUB) working under the direct control of Reserve Bank of India (RBI) was closely monitoring the affairs of the Urban Co-operative Banks, said RBI Regional Director A S Rao here today. Participating as chief guest at the 37th branch opening function of the A P Mahesh Co-operative Urban Bank Limited, a leading Multi State Scheduled Bank at Champapet, near here, Mr Rao said the compliance of regulatory norms and working of Urban Co-operative Banks has improved. The Directors of Urban Banks have also to update their knowledge on the guidelines issued by the Regulatory Authorities for better monitoring the affairs, Mr Rao said and added the unbanked areas still exist in the state and the bank managements should throw light on it, he suggested.

http://news.webindia123.com/news/Articles/India/20120226/1935471.html

Mahesh Cooperative Bank opens 37th branch

Hyderabad, Feb. 26: The AP Mahesh Cooperative Bank opened its 37th branch in Hyderabad today, with plans to open two more in the next few months. Mr Ramesh Kumar Bung, chairman of the bank, said the bank had crossed a business of Rs 1,800 crore, which was the target set for March 31, 2012.  Mr A.S. Rao, Regional Director of RBI, Hyderabad, expressed happiness over the bank's steps to avoid in-house lending, apart from its initiatives to upgrade technology. 

HBL

Governor Subbarao’s trilemma

..... Formalized or not, RBI will likely continue to balance price stability, financial stability, and fiscal sustainability. And this means more of the corridor approach to policy. As long as growth, inflation, bond yields, and the exchange rate remains within RBI’s tolerance levels, policy instruments will all be used simultaneously and adjusted in modest steps to keep the objective variables within limits. But if any of the target variables breaches its benchmark, the policy regime will shift to target the recalcitrant variable. And if that means pushing other variables over the edge then RBI will not hesitate to use unconventional force of its own.

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How much is too much for MFI loan rate?

K.C. Chakrabarty, the senior most Deputy Governor of the Reserve Bank of India (RBI), who oversees rural credit, among other things, says microfinance institutions (MFIs) will be around for next 10 to 15 years till commercial banks are able to reach out to every nook and cranny of the nation, but these institutions will not be able to scale up. Usha Thorat, who used to look after rural credit as RBI deputy governor till she retired in 2010, says the biggest challenge of MFIs in India is to marry scale with responsible lending. Both of them were panelists at Mint’s Clarity Through Debate conclave on microfinance and financial inclusion in Mumbai last week..........

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The awakening of the postal giant - S.S.Tarapore

There is considerable excitement about the possibility of the Postal Department approaching the Reserve Bank of India ( RBI) for a banking licence. The postal system has a wide network of 155,000 offices of which 139,000 are in the rural areas. The scheduled commercial banks have 74,000 branches of which only 22,000 are in the rural areas. The small savings schemes operated by India Post on behalf of government amount to Rs 600,000 crore. Given the sheer size of India Post and the avowed commitment of the government to undertake financial inclusion, the revamping of India Post has some urgency. The assistance of prominent international consultants has already been taken to work out a vision and roadmap for revamping the Indian Postal system to enable it to take its legitimate place in the firmament of the Indian financial system.....................

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Industries sick, industrialists fine

February 26, 2012: It's not uncommon to hear that industries are sick, but there are not many instances of industrialists being affected by this industry sickness. The reason, in a way, could be deduced from the comments of Dr Y. V. Reddy, former RBI Governor, at a meeting recently. Dr Reddy said the Bureau for Industrial and Financial Reconstruction (BIFR) had been manipulated many times. That is the reason, you find more industries sick than industrialists, he remarked.

HBL

7 bank unions call for strike on Feb 28; services may be hit

......The Centre-appointed Khandelwal panel had suggested a slew of measures, including outsourcing more and more non-core activities in a time-bound manner.The panel had also recommended raising the standard of recruitment, including the methodology and content for tests, besides making the testing of computer skills mandatory for both officers and clerks.The Khandelwal committee on human resources (HR) had also suggested that the minimum qualification for clerks and sub-staff should be graduation and class 10, respectively.

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Want to borrow money cheap? Play penny stocks

.... The borrower repays the operator through cash in installments within a pre-decided period. For the operator, this system helps boost value of his penny stocks. The lending also fetches him a neat fee without complying with the RBI norms........

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HSBC welcomes M V Nair panel report on higher priority sector lending target

.... "We welcome the report as it calls for a level playing field for all, because the proposed increase is not just for one particular sector but is flexible," HSBC India Country Manager Naina Lal Kidwai........

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'Hopeful of RBI nod for Enam-Axis deal by March'

.....Because of some bad experiences, the Reserve Bank of India does not encourage banks to run stock broking as a department, it prefers the banks to open subsidiaries for that. The RBI's reported discomfort with the deal was about the fact that Axis's brokerage subsidiary Axis Securities and sales would buy Enam, but the bank would be paying for it with its own shares.......

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Allow Kingfisher to fly into the sunset

....There are those who argue that banks should rescue the airline by infusing more funds. Even the Deputy Governor of the Reserve Bank of India, Dr. K.C. Chakraborty, is on record saying that banks are not just commercial but also risk-taking entities. He even said that if banks felt that by giving a little, they could recover their entire money, that's what they will do......

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RBI for only ‘pure’ FDI in realty

....The Reserve Bank of India (RBI), which has taken a firm stand against allowing external commercial borrowings (ECBs) in the real estate sector, now wants to clamp down on overseas investments in the sector through instruments that carry a fixed or variable internal rate of return. The central bank seems to be clear on allowing only pure foreign direct investment (FDI) in real estate where not firms but only specified projects can accept these foreign funds. ........

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Heed the warnings

The Prime Minister's Economic Advisory Council (PMEAC), headed by C. Rangarajan, has just released its Review of the Economy for 2011-12. In many ways, the review flags off the budget season. Its views and analysis are bound to be echoed in the Economic Survey, the Union Budget and the Railway Budget. The Reserve Bank of India has scheduled a policy review in March. While its interest rate policy will remain in focus, the central bank's views on the macroeconomy count far more than they ever used to. In short, there is going to be no dearth of economic information in the coming weeks. The publication of the review is just the beginning...............

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Finmin persuades RBI to agree to SUUTI route for divestment

....However, the Reserve Bank of India (RBI) and some within the government had raised concerns about the high interest liability which comes with such loans. Moreover, the RBI had previously rejected the proposal to reduce the margin requirement from the existing limit of 50%.......

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Among nationalised banks, the small outperform the large in Q3

.......The weak macro conditions have prompted the RBI to lower the credit growth projection for 2011-12 to 16 per cent. In such a scenario, it would help the nationalised banks to adopt a calibrated approach to business growth giving equal emphasis on margins and asset quality.

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Goverment mulls PSU banks to cut loan rates by March

.... Since CRR is the slice of customer deposits that banks have to keep as cash with the RBI, a cut in the ratio following repeated rate hikes was perceived as the onset of a dovish monetary policy. But since no bank has lowered returns on deposits since the RBI action, their cost of fund continues to be high.......

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India outsourced: Manmohanomics 2.0

....... Meanwhile, progressive fiscal mismanagement threatens to usher in a fresh economic crisis. Managing the consequences of this, has once again been outsourced. The Reserve Bank of India is now entrusted with the task of ensuring macroeconomic balance in a circumstance where the union government has abandoned its role in defining and adhering to fiscal policy. So clever has been this manoeuvre that in public perception it is RBI’s failure to keep interest rates down that is being blamed for slowing economic growth—akin to blaming the fireman for causing a flood in the neighbourhood while putting out a fire........

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Relax documentation requirements

..... A recent Reserve Bank of India (RBI) circular granting this relaxation says the exchange being purchased must be for a current account transaction — and not included in the Schedules 1 and 2 of the Foreign Exchange Management (Current Account Transactions) Rules, 2000........

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SBI waives levy on savings bank accounts without minimum balance

....The Reserve Bank had clarified sometime back that it has not stipulated any minimum balance to be maintained in savings accounts. Nor has it stipulated levy of any service charge, if the minimum balance is not maintained in such accounts. Such stipulations are made by individual banks themselves, as per their board-approved policies. ........

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ED urges I-T dept, Reserve Bank to probe Google India’s forex violations

The Enforcement Directorate (ED) has decided to probe Google India further and has suggested that Reserve Bank of India (RBI) and the Income-Tax department investigate the company’s alleged forex violations. ...........

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