Goodbye To Diplomacy

A Reserve Banker in retirement has given an unusually frank and alarming picture of policy errors and their dire consequences. But his main point is cloaked in government-speak

There was a time when Rakesh Mohan held interesting views and expressed them in a forthright manner. That got him into some trouble. His short stint in the finance ministry was not a success. But eventually, the masters of bureaucracy found a way of taming him: they made him Deputy Governor of the Reserve Bank. He was in charge of monetary policy, but also spent much time chairing meetings, posing with visiting functionaries and giving sermons to bank trainees. It was difficult to be rash in the funereal environment of the Reserve Bank; but just in case he might break out, Mohan was given a strong staff of a secretary and two research assistants to keep him on the straight and narrow path. The precautions worked; it is difficult to think of a memorable speech from Mohan in his deputy gubernatorial role........

Read - Businessworld

‘Be helpful and courteous to others’

.......“Keeping your ears open is the best way to gain knowledge. We should always be helpful and courteous to others,” he said. Five toppers in Standard X CBSE Board Examinations at the RBI Staff Quarters School, Besant Nagar, — Sahla Fathima Thalappil, B.Aparna, P. Nishitha, A.R. Aiswarya and Yasmin Aphrose — were honoured on the occasion. K. Krishnamurthy, secretary, RBI Residents Welfare Association delivered the vote of thanks.

Read - The Hindu

My View on ‘Govt and banks — a con game at some level’

One wishes, those responsible for policy formulation in Delhi listen to the sane and balanced observations loaded with common sense the veteran central banker Dr Y V Reddy has made in this interview. Reinforcing his own views drawing from the experiences of I G Patel, he has conveyed the message that solutions to India’s economic problems need to be country-specific.  Having accepted the model of ‘mixed economy’, India had gone a long way developing several industries and institutions in public sector by the time the private-sector-oriented reforms were introduced in 1991. It was a genuine slip that policy-makers at the helm failed to take advantage of the opportunity to smoothly blend the initiatives in public and private sectors in the initial stages. An impression was given that private sector was to compete with public sector and not to complement its efforts. In the process, private sector managed to corner areas where quick results were possible and left all ‘dirty’ work for public sector. We have come a long way without looking back and the present pulls and pushes do not allow us to sit back and think dispassionately. In such situations, listening to veterans like Dr Reddy will do well. We have to concede that whether in public sector or in private sector, for ensuring overall progress, the country’s resources have to be managed judiciously and that is the context in which Dr Reddy bats for ‘adequate regulatory mechanisms’.

- M G Warrier, Mumbai

My View on "If I was RBI Governor, I would cut rates: Kaushik ...":

Luckily for the economy he was not. The whole problem in the economy is with the Government and it has miserably failed to contain inflation, fiscal deficit, current account deficit, subsdies, corruption, black money, and mal administration in the area of production,procurement,storage,transportation and marketing of particularly food products. It is easy to blame RBI as it does not enjoy full autonomy to give it back in the same tone. Had he been RBI Governor he also would have faced the same embarassment as the presnt Governor is facing beacuse of Government's apathy, mismanagement and interference where it is not expected or required.

- Dr. T.V. Gopalakrishnan

Economy leaps, but the old limp - K Kanagasabapathy

................The legislation is pending for several years. Within the organised government sector itself, and between private and public sectors and between small and medium and large sectors, no uniformity of approach in policy is lacking. For example, the Reserve Bank of India, an organisation attempting to protect people from the evil of inflation, is struggling to gain parity in pension matters vis-à-vis its owner, the Government. The plight of the organised sector is bad enough; there is no need to talk about the plight of the old in the unorganised sector and in rural areas................

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The article has captured well the plight of old people in this growing economy. Old aged people get ignored economically, socially and emotionally has been well brought out. Even in the organised sector the retired people suffer for want of adequate compensation and they are unable to make both ends meet,leave alone taking care of health and living with dignity. The live example is the retired employees of the Reserve Bank of India itself which knows the pain that inflation can inflict on the poor masses. The RBI has ignored and deserted its own retired officials at the dictates of the Government although they are entitled to enjoy the retirement benefits on par with central government officials. Seeing the plight of RBI own retired employees who suffer from all imaginable problems which include lack of pension and health care benefits,how the nation can take care of growing number of old people in the economy is a million dollar question? Ignore them is the best policy of the Govt.

-  Dr.T.V.Gopalakrishnan

RBI pensioners are a true example of Macbeth's plight--"Cribbed,Cabined and Confined". Their just demands are cruelly denied at the behest of a recalcitrant Government--of which RBI has become a true--"H M V "-- HIS MASTER'S VOICE. Thus, pensioners are languishing for denial of their Pension Updation. In a letter to the Governor I had given a list of 50 members of the staff who have died --in the last one year--denied their enhanced pension. The Bank has got us embroiled in a Court case and it a painful sight to witness eighty-year old pensioners trekking at this age to the Mumbai High Court.The Governor wailed two days ago that he pays his barber Rs 150 for a haircut. He is not aware that the pensioners of RBI go the roadside barber for a Rs 15 haircut.Their pitiable Pension does not permit a higher payment. If you have tears, said Mark Antony, in a diffrent context, prepare to shed them now. Shed your tears for the RBI Pensioners--who have given their "Blood, Toil,Tears and Sweat" to this magnificent institution.

Regards,

P.P.Ramachandran

Curb offering gold to God, or as dowry: RBI’s Chakrabarty

........“Gold has no intrinsic value and yet the demand for it keeps rising. We must remember that offering gold as dowry or to God must be reduced. Indians must offer 2 karat gold instead of 24 karat for religious purposes,” Dr Chakrabarty said at a regional banking summit. Emphasising the need for a social revolution in India, the Deputy Governor said “the culture of wearing gold ornaments was when we were a rich country but now that we are poor, we cannot continue the same.” He observed that the yellow metal cannot fetch returns without selling it. Usually, selling gold is the last resort for Indians.........

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Chakrabarty defends higher priority sector target for foreign banks

Mumbai: Defending the decision to put foreign lenders with a substantial presence at par with their domestic counterparts on priority sector lending, Reserve Bank Deputy Governor KC Chakrabarty Saturday said the MNC banks must play their role in the nation's development. "You must participate in the development process of the country if you want to think big," Chakrabarty told reporters on the sidelines of an ICAI event here....................

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We look into all aspects of entities regulated by us: RBI

The Reserve Bank today said it is looking into all aspects of the entities it regulates, a comment that comes in the wake of HSBC being pulled up by the US Senate for failing to prevent money laundering activities. In response to a query on the money laundering issues involving HSBC, Reserve Bank of India Deputy Governor K C Chakrabarty said that as a regulator, RBI looks into all the aspects of the entities it regulates...........

Read - ET

Meeting RBI panel recommendations won’t be a challenge: S.L. Bansal

S.L. Bansal, CMD, Oriental Bank of Commerce, speaks to NDTV Profit on the RBI panel’s recommendations on the new potential regulations for restructures loans.....

RBI's additional provisioning norm quite steep, says BoB

Q: The Mahapatra Committee on corporate debt restructuring, the working group has put out its report and one of the recommendations is that the provisioning for standard assets after they are restructured should be 5% up from the current 2% in two stages, 3.5% in the first year and 5% in the second year. What would be your reactions to this? Would it be a lot of pain?

 

A: It looks to be quite steep at a time when there is a lot of restructuring happening in the present economic scenario amidst the slowdown that has happened in various sectors and the policy logjam or whatever is happening. So 5% will be quite a burden when there is a lot of pressure on profits and the capability of the banker. But from the RBI's angle, they perhaps feel that the present economic slowdown and the likelihood of the account slipping into NPAs at some point of time maybe a required cushion to be built into the restructured accounts, into the asset. But we must not ........

 

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Corporates, small units may flock to banks to restructure loans

......Once the RBI disallows regulatory forbearance, banks may balk at restructuring loans as they will not have the benefit of relaxed asset classification and provisioning norms, say bankers. The RBI working group, which is working at aligning prudential guidelines on restructuring of loans in India with international prudential measures, has said that in view of the current domestic and global economic situation, the RBI may get banks to adopt the global best practices on loan restructuring after two years.......

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Now, forgers shift focus to Rs 1,000 notes

Counterfeiters are increasingly pushing fake notes of higher denominations into the market, with a 54% rise in detection of fake Rs 1,000 notes in the banking sector, the Reserve Bank of India (RBI) has said. The total value of fake currency seized by banks in 2011-12 amounted to Rs 24.7 crore...........

Read - TOI

Indian national held with banned Indian notes

BHADRAPUR: An Indian national has been arrested for carrying banned Indian currency notes. Police held the Indian national for carrying 540 notes of Rs 500 denominations. Use of Indian currency notes of Rs 1,000 and Rs 500 is banned in Nepal. Rama Kolti of Siligudhi, India, was arrested from Bhadrapur Aiport while he was all set to fly to Kathmandu on Thursday. He has been sent to Kathmandu for necessary actions, said police.

The Himalayan Times

India’S Journey on the Road to Financial Inclusion - Alxa Robert

.....A recent directive from Reserve Bank of India has acknowledged the need of stepping up opening of branches in rural areas so as to improve banking penetration and financial inclusion. Banks have been advised as part of risk management to adopt ICT solutions including biometric identification of the customer. The domestic Scheduled Commercial Banks (SCBs) have been directed to allocate at least 25 percent of the total number of branches to be opened during a year to unbanked rural centres (Tier 5 & Tier 6 centres). When it comes to insurance, we have financial exclusion on an even larger scale. Less than 20 percent of the population has any kind of life insurance...........

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Women engaged in MFI biz have higher income: Study

Kochi : .........The main aim of the study was to understand the key issues in micro-finance through various models, among others, SCMS Group Director Radha Thevannor said, while releasing the study here. "Women households engaged in micro enterprise activities were found to have higher income in India and Ghana on account of certain favourable policy directions from government agencies like RBI and organised institutions like SEWA and Kudumbasree," T Arun, Director, Institute of Global Finance and Development, Lancashire Business School told reporters..........

Read - Manorama

When to prepay home loan

....With the Reserve Bank of India changing the loan-to-value ratio from to 80 per cent, buyers have to cough up at least 20 per cent of the property price. In addition, the apex bank has also said that banks should not include registration and stamp duty fees in the loan-to-value, thereby increasing the demand for cash substantially. And then, there is the loan repayment aspect as well which one has to provide for a number of years..........

Read - BS