........The Reserve Bank of India (RBI) is expected to closely examine why banks are failing to meet priority sector lending targets and the limits set for agricultural advances and weaker sections of society. The end use of agricultural credit contracted under the interest subvention scheme will be under the regulator’s scrutiny, so that agricultural advances at special rates of interest are directed at agriculture and not diverted for other purposes. A senior RBI official told Financial Chronicle that the end use of all bank credit should be examined to find out if promoters are diverting money. “But in agriculture, it is more important as government gives a subvention......
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Monday, July 23, 2012
Witnesses take the stand in Paazee scam case
COIMBATORE: The trial of the multi-crore financial fraud involving Paazee Forex Trading Firm began at The Tamil Nadu Protection of Interests of Depositors (TNPID) court here on Friday. Two officials from the Reserve Bank of India (RBI) appeared for cross examination to verify whether the tainted firm had sought permission from RBI as per the required norms. The firm's three directors were produced before the court. Shanthini Moolchand, Deputy General Manager of RBI, Mumbai, was prosecution witness number one who appeared before the court and Public Prosecutor (PP) S Natarajan cross examined her. She had explained that non-banking financial institutions needed permission from RBI, but Paazee forex trading firm failed to do so...........
Last link with the erstwhile ACD of RBI lost.......
Finest gentleman
One of our dearest senior colleague Shri Sharad D.Rajhansa left for heavenly abode on Tuesday, 17th July 2012 at Mumbai. All of those who worked with him at Jaipur, Chandigarh and Mumbai Head Office of NABARD will always remember him as a finest gentleman. He was known as clear headed executive ready to help and guide colleagues. His contribution to ACD (PCD/POD) would always be remembered. Shri Rajhansa retired as Executive Director, NABARD.
- RAMESH WADHWA, Ex-DGM, NABARD
Ever smiling......
Shri Rajhansa joined RBI in 1963-64 as Rural Credit Officer in Agricultural Credit Department of RBI. Known as a very good human being, always smiling and ever willing to help anybody, Shri Rajhans was highly respected personality. He joined NABARD thereafter. He was dear to everyone who worked with him or was associated with him. Irrespective of their position, he would guide and help. He was always found smiling and even in most difficult and adverse situations he would keep his calm and solve the issues to the satisfaction of one and all. I have never seen him loosing temper.
- Subhash C. Wadhwa, Ex-NABARD
Last link with the erstwhile ACD of RBI lost.......
It was indeed a great shock to me to know the passing away of Shri. S.D. Rajhansa. He was more than a friend philosopher and guide to all of us. With his passing away, and with stalwarts like Shri. H.C.Agarwal, Shri. R. Sundarvardan and Shri. G.P.Bhave, also no more, NABARD has lost the last link with the erstwhile ACD of RBI. Not only his knowledge of the subject was vast, he was always patient and willing to share it with newcomers like us. He was equally famous for his fabulous handwriting, and clear and unambiguous orders. Shri. P.R.Nayak, the then Chairman regularly used to mark cases of almost all departments to him for expert guidance. At one stage, I had heard Shri. P.R.Nayak say, "Let us show this to Mr. Rajhansa. If he agrees I will agree with the proposal"
- Deepak Gore
Guiding force.......
Rajhansa Sir was one of the few knowledgeable and yet receptive, erudite and yet straightforward, strong willed and yet humble persons I have come across in life, and had the fortune of working with him. I am deliberately writing "working with him" because no one ever worked above or below him - he was the real team man. He was a no-nonsense man and yet had no ego. He had the courage and conviction to stand up for his well analysed thoughts, and yet had the heart and mind to accept opposite views, and then equally stand-up with all the courage and conviction for the new idea. And because of these qualities, he was a guru to many young entrants like me. Rajahansa Sir will always be with me as a guiding force because he gave me the conviction that one need not be afraid when one is truthful in his approach.
- Prakash Bakshi, Chairman, NABARD
Milestone......
Rajhans with his coveted cool and smile is really a RAJ HANS with high qualities of head and heart which endeared him to all his colleagues. He has exemplary qualities of a thorough gentleman to the core – like a tree fully laden with fruits, ever bending downwards!!! At work, too, as an old guard / stalwart of ACD of RBI, he was clear and strong in his uncompromising views but not grudging the contrary views of junior or senior colleagues!!! His contribution to the policy development and operational manuals in both RBI (ACD) and NABARD will remain as great mile stones.
More and more banks making online transfer free
......recommended that without disturbing the back end, each bank move to a single universal IFSC that is known to all other banks. This would remove the requirement of identifying the bank and branch through an IFSC. This will make online transfers across banks and branches easier for consumers by just identifying the bank name and account number. “Single IFSC code for fund transfers will take some time to happen as at present, not all branches of banks allow electronic fund transfers. Banks are already working on this,”........
Inauguration of Financial Literacy and Credit Counselling Centre
Inauguration of Financial Literacy and Credit Counselling Centre At Hyderabad by A.S.RAO, Regional Director ,RBI, Hyderabad
State Bank Hyderabad (SBH), State Bank of India(SBI ) and their sponsored regional rural banks in AP, jointly sponsored a society named Runa Viveka Aacharana with its Head quarters at State Bank of Hyderabad HO Hyderabad to establish FLCC In Lead Bank districts of SBH and SBI. In terms of RBI Model scheme on FLCCs , Lead Banks have to open FLCCs in District Head quarters to start with and to be covered in mandals /Towns in phases.
ET
Finance ministry must leave banking regulation to Reserve Bank of India
........ Clearly, this does not augur well for the economy. If the household sector saves less, borrowing costs are unlikely to stay low. Cost of capital could actually move up. In an economy faced with flagging growth, prevalence of high borrowing costs is the last thing required. The finance ministry must think again, and leave banking regulation to the banking supervisor.
Micro-management of banks by Govt
“Occasionally, there are concerns over the government exercising its ownership rights not through the established channel which is board mechanism, but outside board (of directors),” so said, according to reports, the Governor of the Reserve Bank of India. He seems to have added that “I don’t think it is a good example of corporate governance”. Strong words those, coming from the Governor, who is generally given to understatement and not critical of government in public. Well deserved too, looking at the large number of circulars — threatening to be an avalanche — emanating from the Department of Financial Services on issues of day-to-day management of banks. By micro-managing public sector banks (PSBs), without being fully equipped to do so, the Government officials could end up harming them, through inappropriate advices as discussed in brief in this article.........
PSU bank boards told to discuss only major issues
........The ministry’s growing interference in the working of public sector banks has invited criticism from RBI with governor D. Subbarao pointing out that the government should exert its ownership rights only through established channels like the boards. “In the next board meeting, we will put up an advisory to our board, following which this structure would be adopted,” said a chairman and managing director of a public sector bank. “Operationally, it will not change things much for us. If RBI has no issues with reporting items not being put up to the boards, then we are open to it.”
Finance Ministry asks banks to prepare capital requirement plan
.........With the implementation of RBI capital regulation norms on Basel-III from January 1, 2013, there is a pressure on banks to have more equity capital. It is, therefore, felt that there is an urgent need to devise a robust strategy or plan for optimal utilisation of capital available with the public sector banks, sources added........
RBI governor D Subbarao to meet experts on July 25 in run-up to monetary policy
....The RBI Technical Advisory Committee (TAC) on Monetary Policy is chaired by Governor D Subbarao while four Deputy Governors act as members to the committee. Besides, it also has two members from the RBI Central Board and five external members. The TAC, at its meeting in Mumbai, would advise the RBI in the light of the macroeconomic and monetary developments, and help RBI in strengthening the process of monetary policy formulation. A day before the TAC meeting, RBI chief would be chairing the monetary policy strategy meeting to firm up the policy view in the light of prevailing macro-economic conditions.........
My View on "Economy leaps, but the old limp - K Kanagasabapathy"
Kanagasabapathy's article is excellent. He has put the RBI pensioner's case, by just a small and appropriate reference towards the end of his article, in a larger and broader perspective. I used to be critical of the violent agitation of the unions while pressing for resolution of certain issues. Now, when I see the irresponsible stand of the GOI ( the incumbent President cannot also escape his share of the blame), I have gained a different perspective on the Management-Union relationship.
- A. Chandramouliswaran
Raghuram Rajan likely to be next CEA, to join by Dec
.....For Rajan, who earlier worked as chief economist at the International Monetary Fund, the CEA’s job will make him a key member of Manmohan Singh’s team of officers to oversee the management of the economy and economic policies. Rajan’s name had figured a few years earlier as one of the candidates to head the Reserve Bank of India. The government had opted for then finance secretary Duvvuri Subbarao, who completes his extended tenure next year.......
Under- belly of predatory financial system
..... Parenthetically, we should add that Dr Reddy, the then RBI Governor, successfully resisted the pressures to introduce such credit products in India. He was dubbed as a " Conservative". In this global financial crisis, the Indian financial system dominated by the pubic sector and untainted by financial " innovative" products stood rocklike........
Too little and very late
In the six months that elapsed between the Reserve Bank of India (RBI) setting up a working group (WG) on norms for debt restructuring and the submission of its recommendations, the levels of impairment and restructured debt have reached alarming levels............
The price we must pay
....As it turns out, Subbarao, whose KRA is controlling prices, doesn’t know what he doesn’t know about inflation. Then, maybe his boss does? Well, our finance ministry isn’t any wiser on this score. A committee of economists and statisticians has tried to capture prices in over half the economy that escapes our wholesale and retail inflation indices, but it’s diabolically difficult to keep an eye out for every time someone somewhere calls the plumber to fix a leaky tap......
The inflation conundrum
..........The Indian government’s outgoing chief economic adviser Kaushik Basu has said inflation is a “partially-understood discipline”. I bet he is a bit generous in his assessment. The ideal way of putting it could have been inflation in India is a “hardly understood” or a “much misunderstood” discipline. In the past three years, many—including Basu himself and India’s central bank—have gone wrong in their projections of the inflation trajectory. Now, the Reserve Bank of India (RBI) seems to be opening a new front on the inflation debate—what inflation trend should it look for to formulate monetary policy? Wholesale? Retail? Or, the so-called core, or non-food and non-oil, inflation? Which inflation index should RBI target?......
Inflation risks dictate unchanged rates
As the Reserve Bank of India (RBI) limbers up for its next policy review on 31 July, the usual clamour for lower policy rates is making itself heard. The prime rationale for lower policy rates is, of course, the weakness of economic growth, which slipped to a nine-year low of 5.3% in the last quarter of the fiscal ended March...........
High inflation, low growth: Is India stagflating?
.....To be sure, RBI has always maintained that it looks at all the price statistics including WPI, consumer price index (CPI) and GDP deflator. However, for all practical purposes, WPI has drawn more attention since better timeliness and availability of disaggregated data allow deeper analysis of inflation trends, a point that RBI Executive Director Deepak Mohanty had alluded to in a speech in 2010 (Measures of Inflation in India: Issues and Perspectives)..........
ICICI Bank: On-the-go banking
ICICI bank has launched a new version of its mobile banking app — iMobile — which is packed with features designed to make the customers’ lives easier. When people are increasingly choosing to give up the joys of shopping to browse online and order without wasting time, mobile banking that saves people that dreaded trip to the bank can be a welcome relief for users..............
Muthoot Fincorp to revive gold financing scheme
....The gold loan firms are looking forward to some positive developments from the report by KUB Rao committee, which is expected to come by July-end. The committee was constituted to study the business of gold loans and its possible links to gold prices and lending practices.
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