RBI to hire up to 6 companies to overhaul HR practices

Private firms to help RBI frame, implement and deliver integrated HR solutions in the areas of policies, processes and systems

The Reserve Bank plans to rope in outside consultants to overhaul its human resource practices, a move that would affect its nearly 18,000 employees. The central bank will form a panel of up to six independent professional firms to help RBI in framing, implementing and delivering integrated HR solutions in the areas of HR policies, processes and systems, among others.......... 

Read - TOI

Growth rate slowing down faster than expected: Saugata Bhattacharya, Axis Bank

......in the absence of any other move from the government, the RBI will be relatively reluctant to ease policy further. That said, it might take some measures to try to increase credit to a few sectors. Although it is difficult to predict those sectors, we can expect some sector-specific measures like those taken for exports as part of the previous policy. There will not be an overall easing of policy though.

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RBI chief rues corporate governance deficit in public sector banks. Is there no remedy?

.....There is, therefore, a need for change in the present composition of the boards by splitting the post of chairman and managing director in nationalised banks as well. The RBI should have the unfettered authority to appoint a thorough professional as the non-executive chairman of every PSB. The central bank should, however, ensure that this is not meant to be a back-door entry for politicians to enter the banks, but an opportunity to cleanse the system and create an independent professional board for every bank. This could substantially improve corporate governance at the board level, thus helping to prevent unethical practices and unwarranted interferences in the operations of the PSBs.......

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Markets bet on Subbarao surprise

Reserve Bank of India (RBI) Governor Duvvuri Subbarao has made a series of hawkish statements since the mid-quarter review on June 18, but market participants are still betting on the governor’s inclination to surprise the market. While the overall feeling still is that the central bank will hold the rate during the first quarter review of the monetary policy, scheduled on July 31, many feel there is still the chance of a rate cut...........

Read - BS

Don't put the cart before the horse

.....In cricket, they say you are judged as much by the deliveries you let go as you are by the deliveries you play at. In that spirit, RBI needs to sit this one out. That will add to the pressure on the government to act first. Anything else will be tantamount to putting the cart before the horse.

Read - BS 

One eye on Delhi, one on the skies

.....The implication of all of this, in our view, is that the RBI will remain cautious about cutting rates. Cutting rates at this stage would, at best, tease up demand, but do little to improve the supply side. In turn, this could lift inflation pressures. It may also be worth keeping the powder dry to have firepower in the event global conditions take another leg down.....

Read - Mint

Instead of customers, banks may bear fake notes loss

The common man who unknowingly comes in possession of fake currency is left a harried soul. It's only when fake notes are detected in the money withdrawn from a bank's counter that one gets compensated. But, in cases where a customer fails to detect a fake note at the bank's counter, the bank not only refuses to compensate the fake currency but may also take legal action against such gullible customer. To save customers from the ordeal, the Reserve Bank of India (RBI) has asked banks to put strict provisions in place to check the menace of fake notes. "The recommendations have been made to address the entire gamut of issues concerning the counterfeit currency," said an official of RBI, Mumbai..........

Read - TOI

Discontinue circulation of higher-denomination notes

Deputy Governor of Reserve Bank of India (RBI) KC Chakravarty has rightly advised people from investing in gold,in favour of larger national interest where bulk of gold is purchased for jewellery, religious-offerings and investment with hardly a minute share for any industrial or medicinal use. RBI top-official also warned of possibility of some sudden and sharp decline in gold-prices which may even cause bankruptcy to large and small investors. Theoretically the advice is perfectly right in larger national interest. But practically no one will follow the advice. It is for RBI to take some concrete steps to bring down sharply gold-prices so that people may follow advice of RBI Deputy Governor like by banning forward trading of the yellow metal. India is biggest consumer of gold either as investment or otherwise. As such, gold-demand in India determines rise and fall of international prices of gold. It was wrong that Indian government succumbed to political and other pressures while Indian Finance Minister had to take back measures from the Union Budget for 2012-13 which could effectively check use of black money in purchase of jewellery. Idea of re-introducing maximum 14-carat gold for jewellery can be re-introduced with 10-percent excise-duty on jewellery. Since most investment in gold is made out of black money.Sincere steps should be taken to transform currency-circulation in banking transactions so that surplus currency may be ordinary ‘paper’ for all practical purposes. India should follow sensible advanced countries by discontinuing circulation of higher-denomination notes of rupees five hundred and above because such currency is used as black money to buy gold. All sale-purchases exceeding say Rs 20000, even though payment may be made in parts, must be through banks. In case of cash-payments, currency-tax @ 30-percent may be imposed. All expenses exceeding Rs 1000 must be allowed when made through cheques/ drafts. Payments of essential services like water, telephone, electricity and municipal taxes for bills exceeding Rs 1000 must be by cheques/ drafts only. Drafts/ Pay-Orders/ Traveller-cheques must carry names and address/ account-numbers of purchasers with reduced validity-period of say 45 days to check their misuse as ‘benami’ drafts for carriers of black money.

- Madhu Agrawal (The Sentinel - Assam)

Mobile banking has failed to take off in India: RBI

.........The Reserve Bank of India (RBI) Deputy Governor H R Khan has hinted that mobile banking has failed take-off in India and hence has called upon banks and mobile companies to work together for the benefit of their customers. At a seminar in Bhubaneswar, Khan said that the growth rate in the value and the volume of mobile based transaction is much lower compared to the number of bank accounts and number of mobile subscribers.............

Read - ET

Global convergence of banking regulations and its impact on the Indian banking system - G Padmanabhan

Address by Mr G Padmanabhan, Executive Director of the Reserve Bank of India, at the Bankers Club, Raipur, 13 July 2012

.....The need for convergence in banking regulation stems from the fact that while banking has become global, banking regulation is national. Therefore, addressing the issue of regulatory arbitrage is at the centre-stage of policy concern. The international standard setters have been attempting to achieve convergence by issuing broad principles that should inform national regulatory frameworks, which are peer reviewed under the aegis of the Financial Stability Board and the Basel Committee on Banking Supervision for ensuring cross-border harmonization. While formulating national regulatory policies, national authorities are expected to exercise constrained discretion on certain aspects.......

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Enhancing visibility

RBI Governor D. Subbarao recently exhorted banks to “reoccupy the last mile” in lending to small borrowers, which is now occupied by the micro-finance institutions (MFIs). What is IOB’s performance in this area?

IOB has always been a front-runner in extending micro-credit. More than 1,300 business correspondents (BCs) have been engaged by the bank. Training is being imparted to them to carry out their duties effectively. About 738 BCs have been trained until now through 36 programmes.........

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A fading growth story

.......There is growing recognition that many countries, including India, will find it difficult to fly as high as they did during the boom years. Reserve Bank of India governor D. Subbarao has already said that the rate at which the Indian economy can grow without generating high inflation is now around 1.5 percentage points lower than the potential in the years immediately preceding the global crisis..........

Read - Mint

HC intervention helps Ashok Amritraj get back FDs

......Amritraj said he was made to run from pillar to post when he approached the bank through Abid for the amount due to him on maturity of the FDs. He sent two letters to the bank and, after receiving no response, issued a notice dated August 31. Despite a communication from RBI through the office of Banking Ombudsman, no step was taken by the bank to make the payment, he said........

Read - BS 

Public banks profit to fall 18%: StanChart

The new corporate debt recast (CDR) norms issued by the Reserve Bank last week will have a massive impact on the profitability of public sector banks to the tune of 18 per cent, says a report by Standard Chartered Securities. However, the report says, the impact on private sector banks will be minimal, up to 2 per cent in profit terms.........

Read - Indian Express

Banking at doorsteps

 

The report, ‘‘Most villagers willing to pay a fee for banking at their doorsteps’’ (Business Line, July 24) brings out the mindset of the present consumer community in India. People want services at their convenience at nominal costs. While the Government and the RBI boast of inclusive banking, there are areas when there is no real access to banks. The lack of transport restricts a vast majority of villagers to move to the banks. People in the rural areas should be assured of the ATM services within a distance of 2-3 km from where they live. A part of the profits earned by the banks should be earmarked for rendering these services to the rural people. The introduction of ‘banking correspondent’ is a good idea to help the people, but security and integrity concerns should not be overlooked.

- C. P. Velayudhan Nair (HBL)

RBI studies cheap and quick remittance mode

Sending money home for millions of migrant labourers may become a lot cheaper and faster if the recommendations of an IIT panel are adopted by RBI and public sector banks. The IIT study has shown how existing infrastructure could be used for instant transfer of small amounts at a reasonable cost.........

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Loan pricing by banks comes under RBI lens

Just two years after its launch, the base rate — the benchmark reference rate for all bank loans — has come under the Reserve Bank of India’s scanner as the regulator feels the methodology of rate fixation has hindered the transmission of monetary policy measures................

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A zero current account deficit for India?

........Talking about a new growth strategy, former RBI Governor Y.V. Reddy suggests the country should aim at a zero current account deficit in the medium-term. India is far too vulnerable to oil price and capital account shocks, the combined effect of which is to double the deficit, he says........

Read - Mint

NBFCs pare fund raising efforts

.....Any slowdown in growth first impacts freight movement and sales of heavy trucks are therefore considered an economic bellwether. In March, RBI mandated stringent norms for NBFCs raising funds for gold loans. This included the loan-to-value (LTV) being reduced to 60% from 75%, which came into effect immediately. This meant that borrowers will have to give more jewellery as collateral for the same loan amount. The LTV cap may result in slower growth for gold loan companies. .......

Read - Mint

Microlenders struggle for survival despite debt recast

.....these firms can survive only if banks convert their loans to equity and RBI relaxes norms related to provisions to cover bad loans in Andhra Pradesh. While a relaxation from the apex bank is widely expected, commercial banks are reluctant to convert their loans to equity or offer fresh funds fearing they will have to take a further hit on their exposure. RBI norms say MFIs need to make 100% provision on non-performing assets (NPAs) from 1 April 2013.......

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Read - Mint

RBI refuses to give priority lending tag to refinancing of HFC loans by banks

The Reserve Bank of India and the government may be on a collision course yet again, this time on the treatment of banks' refinancing of specialist mortgage lenders as priority sector lending. In the latest set of priority sector rules issued last week, the central bank has ignored the indirect priority sector lending clause for refinancing of housing finance companies' loans by banks, reversing its own circular three weeks ago...........

Read - ET

RBI rules out equal treatment for NBFCs with banks

The Reserve Bank of India (RBI) has declined to raise a cap of 60% of the value of ornaments that gold loan companies are allowed to lend to customers or bring commercial banks under the ambit of the ceiling, thus maintaining the edge of banks, which can lend more for the same pledged worth........

Read - Mint

Wrong solution

The RBI Deputy Governor K.C. Chakrabarty’s solution to ease the current account situation is pretty naive (RBI asks people to shed craze for yellow metal, July 23). If the gods can be pleased with a 2-carat ornament, why not present gold-plated jewellery? Isn’t it naive to ask a religious person who wears a 22-carat gold ornament to offer a 2-carat gold ornament to the gods? To ease the current account deficit, the government must look at ways to boost exports and provide incentives for the same, instead of cutting down gold consumption.

- Ramesh Thuravil, Hyderabad (Deccan Chronicle)

IDBI Mutual Fund launches gold fund

......Under the scheme, investors would not hold gold physically and the asset management company (AMC) would keep the equivalent amount of imported gold in its vault with Bank of Nova Scotia. "Gold is a great investment asset. We see investment in gold as a component of prudent diversification to hedge against uncertainties, inflation and for long-term benefits,".......

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