Well Spoken, Guv

In the Indian context where regulators are appointed by the government, it is not often that regulators speak their mind. Especially if it is to tell their political bosses off ! The Reserve Bank of India (RBI) Governor's show of spunk in telling the finance ministry not to micromanage banks must, therefore, be applauded. The RBI, unlike many other central banks, is not autonomous in law. Over a period of time, thanks to a succession of competent governors, it has won a certain degree of de-facto independence for itself. Nonetheless, governors, with some exceptions, have been wary of calling a spade a spade........ 

Read - ET

The 'Vivekananda formula'

.... There was a time when even the Reserve Bank of India (RBI) had an informal quota for an IAS officer nominee for the post of a deputy governor. That practice has been discontinued in the last couple of decades. And this perhaps could happen also because the central bank paid more attention to build a strong cadre of its own officials. As a result, today RBI has its own cadre of officers who have been nurtured to grow within the organisation, reducing its dependence on outside talent for filling key vacancies........

Read - BS

RBI website displays nothing

Browse the RBI website and look for the email IDs of its several departments. You will find none displayed. Try communicating online. The website's " contact us" slot does not accept most of the punctuation marks, in the text printed. And when the message is submitted, you are failed repeatedly, because of some " error occurred", and are asked to " try again," till you throw up your hands. Evidently, RBI's public service seems to lie in discouraging the public from contacting it. Why is it so? It is the culture of our government departments, organisations, and undertakings.

 

- V V Vijayan, Chembur (FPJ)

'Days of big bang reforms are over'

C Rangarajan, chairman of the Prime Minister's Economic Advisory Council, has been a dependable aide of Manmohan Singh for several years. He was RBI Governor when Singh announced two rounds of rupee depreciation in July 1991. Now, with the PM taking charge of the finance ministry, Rangarajan is once again busy devising the revival of Asia's third largest economy. He sounds optimistic about growth prospects this year and says the government is taking steps to revive investor sentiment and growth...........

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Loan rangers should be cautious

According to the RBI’s Master Circular, the consumer has to get all information regarding the loan in writing and in a local language. This information should include the terms and conditions governing the loan

..... I would suggest that you go through the “Master Circular on fair practices code” released by the Reserve Bank of India in the first week of July. It will help you understand and protect your rights better and also deal better with those giving you those loans. The Master Circular, which is a compilation of all the instructions issued by the regulator (RBI) to non-banking financial companies till date (June 30, 2012), tells you what your entitlements are vis-à-vis the loan agreement.......

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आरबीआई के डिप्टी गवर्नर सहित 17 को राहत नहीं

जयपुर. हाईकोर्ट ने आरबीआई के डिप्टी गवर्नर एच.आर. खान, राजस्थान बैंक के चेयरमैन रहे पीके तायल व एमडी डॉ. के.एम. भट्टाचार्य सहित राजस्थान बैंक के निदेशकों को राहत से इनकार कर दिया। हाईकोर्ट ने इनके खिलाफ अधीनस्थ कोर्ट की कार्रवाई को चुनौती देने वाली याचिकाओं व रोक लगाने के प्रार्थना पत्रों को निरस्त कर दिया। अधीनस्थ अदालत को निर्देश दिया कि वह प्रार्थियों की आपत्तियां सुनने के बाद मामले में आगामी कार्रवाई करे। न्यायाधीश महेशचन्द्र शर्मा ने यह आदेश एच.आर. खान व राजस्थान बैंक की याचिकाओं पर दिया।...............

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TOO FEW WOMEN AT TOP OF PSU BANKS?

......India’s government-owned banks have something to cheer about. For the first time, the public sector banks, which account for about 70% of the banking assets in the country, will have three women chief executive officers (CEOs). In its 43-year history, the state-run banking industry has had only 43 women chiefs.........

Read - Mint 

Licence To Bank

......Some aspirants (RBI has not named them) have pleaded that “the requirement of the bank having 25 per cent of branches in unbanked rural centres is too onerous; therefore, the requirement could be revised to 15 per cent to ensure a level playing field between existing and new banks”. In June, Deputy Governor K.C. Chakrabarty had noted that banks should “be actively encouraged to set targets for themselves to capture untapped business in rural areas covering approximately two-thirds of the country’s population” in its 600,000 villages. Many suggestions come from big industrial houses — (and nowhere in the draft guidelines did the RBI even refer to them!) — and non-banking finance companies with interests in real estate. Even the idea of a wholly-owned non-operative holding company (NOHC) has been sought to be diluted. The objective of the NOHC was to fence regulated financial services from other activities of the promoter group — commercial, industrial and financial activities not regulated by financial sector regulators. The chorus is that the requirement that the NOHC be wholly owned by promoters be “revisited, and diversified shareholding at the NOHC-level be permitted”....... 

Read -| Businessworld

Banks told to hold exclusive board meetings on policy, strategy issues every quarter

.....The reform measures come in the backdrop of the Reserve Bank of India recently asking the Government to show ‘exemplary behaviour of corporate governance and exercise its ownership rights through the board’......

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Gold: A protection from inappropriate policies - S.S.Tarapore

........ On interest rate increases and tightening of liquidity, India Inc. has been forcefully lobbying for easing of monetary policy and it would be creditable if the RBI can resist these pressures. While earnest attempts are being made to undertake a fiscal correction, political economy considerations appear to thwart effective action.........

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Banks can’t freeze accounts if Know Your Customer papers not submitted

.......The court also noted that the Reserve Bank of India also specifically provides for opening of accounts by low income group people who are unable to provide KYC documents. Banks are required to open accounts for such persons on the basis of an introduction from an account holder who has complied with all the KYC procedures and whose account is with the bank for at least six months with satisfactory transactions. The low income group account holders, whose accounts are opened in this manner, have a restriction that the total balance in their accounts cannot exceed Rs 50,000, and the total credit deposits cannot exceed Rs1 lakh per year. The court observed that in the present case, the account had been opened long back, yet the account had been illegally frozen. The court warned that if a bank freezes an account for non-compliance of KYC documents, appropriate action could be initiated against it either by the Reserve Bank or the Banking Ombudsman, so are required to safeguard the interests of all account holders......

Read - TOI

HC notice to Centre over NPA defination in SRFAESI Act

...."The section 2 (O) of the Securitisation Act 2002,is unconstitutional as it is arbitrary and unreasonable. It refers to RBI guidelines, which has a definition which is completely in contrast to the one stated in the Act," the petition read. "The section relies on what is sub standard, loss making and doubtful account to understand the term NPA, while the RBI guideline relies on NPA to explain what is Sub Standard, loss making and doubtful account. Thus the whole definition is arbitrary and unreasonable," it added. The petitioner further said, "The definition as stated in section 2 (O) empowers the bank to declare any account as NPA as per its whims and fancies. The delegation of power on the bank to declare a account NPA as per the definition which relies on RBI Guidelines which are ambiguous and contradictory to the definition stated in Securitization Act. Thus the section 2 (O) is required to be declared unconstitutional.".....

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NPAs in farm credit

This is regarding the observation of the RBI Governor about rising NPAs in the farm credit portfolio (Business Line, July 13). He has rightly observed that the unrealistic targets by the government on farm credit have led to manipulation of statistics by banks and multi-fold increase in NPAs...........

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Risks to financial stability rising - T. V. Gopalakrishnan

.....The risk to financial stability is a fact and the concern of the RBI is real. The volatility in various markets is only a reflection of the failure of the economy which is not in the hands of the RBI alone. The fall in deposit rates, increase in non-performing loans, and the contagion risk due to interconnectedness between banks and other institutions have to be seen in the context of the weakening fundamentals of the economy. A close observation of the financial system gives one the impression that the RBI is gradually losing its grip on the financial system, excluding, to some extent, on the banking system. Insurance companies, mutual funds, and joint stock companies which carry out various types of monetary transactions have implications on the capital, money and forex markets........

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Has Nabard crippled Cooperative banks?

........Dr.D.Subba Rao,Governor, Reserve Bank of India said “I am delighted to be a part of NABARD’s celebrations of its completion of thirty years. This is a special occasion for NABARD, of course; but also a special occasion for the Reserve Bank, for NABARD was incubated in the Reserve Bank before it rolled out as an independent development financial institution in 1982.The bondage between our two institutions has not only remained strong but is getting stronger. We share a common goal – of furthering……………………” What about bondage between them and rural cooperatives? Let us initiate appropriate preventive steps so as to ensure that the above stronger bondage between RBI and NABARD does not drastically and adversely affect the functioning of Rural cooperative credit delivery system......

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Flawed? It is time we move to a rejigged Mibor

.........The high-decibel controversy over London Interbank Offered Rate (Libor) manipulation is a case in point. As a regulator known for prudence, bordering on what some would call paranoia, the Reserve Bank of India (RBI) has always been taken cues from developments abroad. But in the aftermath of reports that Libor, the benchmark rate that determines the interest rate on financial transactions worth an estimated $360 trillion, globally, there has been an inexplicable silence from the central bank. To be sure, there is not much the RBI can do regarding the alleged misdeeds of British banks in deliberately under-reporting Libor except hope that there is a clean-up, and soon......

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RBI for debt recast of textile units on a case-by-case basis

Rejecting across the board restructuring of loans for the cash-starved textile sector, the Reserve Bank has asked banks to consider debt recast for the industry on a case-by-case basis. Banks have been advised to look at debt recast on a case-by-case basis and special window will be provided for restructuring, official sources said...........

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Reversing growth recession

The economy is in the throes of a crisis, which, though not akin to 1991, has proved to be intractable so far. The series of measures announced by the Reserve Bank of India just before Pranab Mukherjee laid down office as the Finance Minister were aimed at encouraging forex inflows, and thereby reverse the downtrend in the value of the rupee vis-à-vis the dollar and other currencies. Soon enough, it was felt that other measures were needed to revive the economy....................

Read - The Hindu

Flawed suggestions

.........As more recent developments have demonstrated, the worst fears of the RBI and a few others have come true. FII flows can change directions and move out of India and other emerging economies as quickly as they came in. Making available even a small portion of the reserves for ‘noble’ causes such as infrastructure financing, as was done, is inherently bad economics. But then there is no accountability for giving bad advice and implementation. Given the tight current account position recently, the RBI has had to dip into reserves, for two quarters in a row..........

Read - The Hindu

Faint glimmers of hope

.....The Reserve Bank of India’s (RBI) next credit policy review will probably not raise rates. The weak IIP and lower crude prices mitigate against further rate increases. But the central bank might not lower rates by much either, if it does so at all. In any case, a rate cut by RBI will not be enough to put the animal spirits back in the economy. If Dr Singh is going to do this, he will have to take fast and decisive policy action. His political window of opportunity may be quite small.......

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Let’s not go electronic, please

....Aside from all this, for consumers or investors to take to electronic transactions, they must benefit from it. As the RBI Deputy Governor, Dr K. C. Chakraborty, pointed out in a recent speech, a technology-based inclusion model will work in India only if customers see value in the shift.....

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Safety net: debit card PINs surge

Bank customers in India are getting more aware to make their ATM transaction safe by changing their PIN(Personal Identification Number) frequently to ensure their hard earned money is safe. According to the National Payments Corporation of India (NPCI) data, there is a surge of 50% in the number of customers changing their PIN in the last six months. In January, around 98,000 bank customers changed their PIN that increased to 150,000 at the end of June 2012........

Read - Hindustan Times

Richest Pakistani Mian Mohammad Mansha eyes banking foray in India

........"We are very keen on opening branches in India and have applied to our central bank for clearances," Mansha said over the phone. "As soon as the State Bank of Pakistan okays our application, it would refer it to the Reserve Bank of India for approval."........

Read - ET

Mobile banking transactions rise five-fold in Jan-May

............The RBI has identified mobile banking as a key tool to achieve the goal of financial inclusion. With a large unbanked population spread across the country, a brick-and-mortar approach to providing banking services is not feasible. In this regard, offering banking services through mobiles — with 929 million subscribers — is seen as a viable option for coverage of the entire population under the banking system.

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CPMG office team defeats RBI team in inaugural match of SBI football tournament

Bhopal : The Chief Post Masters General (CPMG) office team defeated the RBI in the inaugural match of the SBI football tournament by 3-0 on Saturday. The State Bank of India (SBI) is always ready for development of its players and whatever efforts are required in this field will be made by the bank said deputy managing director SK Mishra during the inauguration programme.........

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Is Citi planning Facebook banking?

Global banking giant Citi has turned to the social media to gauge the public mood on offering banking transactions through Facebook -- a service already being offered by Indian banking giant ICICI Bank.

US-based Citigroup attracted the attention of hundreds of people within minutes of it posting messages on social networking platforms Twitter and Facebook last night about banking services on Facebook............

Read - BS

Puri says SB rates to remain at 4%; no impact so far on mop-up

Terming as "insignificant" for his bank the impact of the Reserve Bank decision to deregulate savings accounts rates last year, HDFC Bank managing director and chief executive Aditya Puri has said depositors should be content with 4 percent the majority of banks are offering them................

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