The stress in our domestic markets may prevail for sometime as the Reserve Bank of India (RBI) raised concerns that the global environment has turned hostile and our main markets are not recovering. “The global market environment has turned hostile and our main markets are not recovering as fast as it was initially thought, so, exports are suffering,” said Subir Gokarn, Deputy Governor, RBI, at an event on Monday......
The very purpose of VITALINFO is to provide a platform for wider dissemination of updated information related to and happening of events in and around RBI.
Tuesday, December 4, 2012
Is a foreign governor better for RBI?
........On balance, it may be argued that while the British case has a greater probability of succeeding, the same may not hold true for emerging markets, including India. Governors of RBI have generally had some exposure to working in the government, which is helpful as they are practical and know how policies function. Working of the two arms becomes easier when there is understanding. Having a very independent governor can be an issue, especially if there is intransigence in aligning with other government policies. One must remember that the monetary arm of the government, the central bank, cannot work in isolation as its job is to harmonise the financial sector with the requirements of the real sector, where growth takes place. The situation is akin to a corporate where all departments have to work together in harmony, and a person who is home-grown would have an advantage.........
Vital support..........
I am short of words to express my sincere feelings for the support I am getting from my family in the journey of VITALINFO..........
Soft spoken gentleman no more........
With abundant grief, I am sharing with you the news relating to the sad and sudden demise of our friend Shri K.Ravindran [retd. from C O, DAPM, Mumbai] at his native place in Thrissur, Kerala on 1st Dec.2012, due to massive cardiac arrest. He served in Economic Dept. as EA, before promotion as AM [merit] and worked in Chennai office from 1985 & later went back to Mumbai to work in CPC, DA, DAPM -vigilance, etc. A soft spoken gentleman, he was of great help to all who approached him, especially when he was in CO [DA-vig.]. May his departed soul rest in Heavenly Peace!
- As reported by Subramanian Ramachandran
Supervisory college for SBI, ICICI Bank
India’s banking regulator is introducing the supervisory college concept for two of the country’s largest domestic banks that have a worldwide presence. The objective is to keep these lenders abreast of the latest worldwide regulatory rules and evaluate their worthiness for global operations. As part of this process, the Reserve Bank of India (RBI) met State Bank of India (SBI) officials along with regulators from the UK, the US, Europe and a few other countries on Monday, said two persons familiar with the development. They declined to be named as RBI is yet to formally announce this exercise...........
RBI may not cut rates unless inflation falls
RBI has become more mindful of growth risks and it is unlikely to shift from its anti-inflationary stance till inflation peaks out, says a Kotak Economic Research Report.........
Why more banks?
.....We already have umpteen number of banks, both in the government sector and private, and a careful study of the functioning of these banks would reveal inadequacy in expected achievements despite absolute freedom given to them by both the finance ministry and RBI...........
Should FEMA be amended?
....In a parallel development, no sooner had the DIPP Press Notes 4 to 8 been released, a Delhi Lawyer lodged a PIL in the Indian Supreme Court challenging these Press Notes as being ultra vires in overreaching the RBI, as the relevant provisions of ( FEMA) had not been amended. The court was apprised by the attorney general that on the next working day itself, RBI had issued a notification pursuant to DIPP’s action, permitting deletion of the item of multibrand retail from Schedule ‘A’ of FEMA and providing for amendments to provide for the sectoral holding......
State proposes to impose ban on money circulation schemes
....“No individual or company or firm or business association, in any form, shall run a scheme that induces enrolment of new members by offering benefits or commission, by whatever name called, to upline members in the pyramid out of the action or performance like sale or purported sale of goods or services by the downline members,” it says. Nodal police authority will be submitting periodical information to the Reserve Bank of India about the money circulation schemes. A competent authority, which would be declared by the State government, would be responsible for taking all actions, including winding up entities indulging in money circulation scheme.......
Sign of Ageing
The
Supreme Court has rightly taken note of dishonour of cheques due to
mismatch of the drawer’s signature with specimen signature available
with the bank. Signature variation with mala fide intention must be
viewed seriously and the drawer of such cheques should be punished.
However, in most cases, the signature may vary due to ageing of the
account holder. In such cases, the bank must issue a notice to the
customer or, if notice to individual customers is not possible, issue a
paper notification and advertise in the media with standing instructions
to customers to change their signatures in bank records once every 2-3
years. Clearance of cheques issued by account holders who do not comply
with the requirement may be put on hold till they change signature in
bank records.
ET
ET
Gold: Why central banks aren’t taking their own advice
......At a function organised by the National Institute of Public Finance and Policy in Delhi, while C Rangarajan, currently Chairman of the PM’s Economic Advisory Council, was mildly critical of efforts to drive gold imports underground by taxing it heavily, another former Governor, YV Reddy, came out more strongly on the side of gold. Rubbishing arguments that tried to paint gold as an unnecessary indulgence, Reddy asked rhetorically: “If Mercedes Benz and after-shave lotion can be imported, why not gold? It is both an investment and consumption good. Many people seem to mistake that it is only a hedge against inflation. There is a demand for it. It is being imported.” While Reddy went on to add needlessly, “If you can, try to stop it”, Rangarajan underscored the point that any such effort was bound to fail and only invite more smuggling........
Check your cheque
.....While the Reserve Bank of India (RBI) deadline does not mean that after this date cheques will be dishonoured, customers must replace their old cheques, says A P Hota, managing director and CEO, National Payments Corporation of India (NPCI). “Old cheque leaves will not start bouncing after January 1, 2013. This is an indicative deadline for banks not to issue old cheques and to ask customers to replace the old cheques. The RBI has not indicated to banks not to honour old cheques,” he says. Most banks don't charge any fees for replacing old cheques but some might charge a nominal fee.......
Valuing Bank Stocks
.....A bank is not at all like other industries in respect of ownership. In fact, being an owner of a bank is very demanding and legally complex. Firstly, the Reserve Bank of India (RBI) puts a limit on the ownership in a bank. The main promoter cannot have a clear majority. The day-to-day functioning, the deployment of the bank’s assets, etc, are all subjected to guidelines laid down by law.......
Read - Moneylife
Banking on faith
Banking is a business transaction between bankers and consumers. Thus, any negligence on the part of banks would amount to deficiency in service under the Consumer Protection Act 1986. It is unfortunate that many a time people encounter various problems with banks and find it difficult to get it resolved because of the unfriendly approach of these banks...............
PSBs have no need to fear consolidation, nor should they consolidate out of fear
The debate on bank mergers is back on the table. The finance ministry is reportedly nudging public sector banks
(PSBs) to consider mergers to ensure a strong banking sector, driven,
perhaps, by the finance minister's preference for large banks. However, it would be naive to expect mergers to solve the woes of PSBs,
especially the most pressing issue of lack of capital to comply with the
higher capital requirements mandated under Basel III........
You can bank on this career
According to a study presented to the Planning Commission, the banking sector has the potential to account for as much as 7.7 per cent of the Gross Domestic Product of India. With the expansion plans of public sector banks, the retirement of a large number of people in middle-level management and the introduction of new services such as bancassurance, the banking sector in India will require an addition of more than 7.5 lakh skilled people in the next five years. This has given a fillip to the aspirations of graduates across the country who are prioritising their career choices............
Pratip Chaudhuri - SBI's conscience keeper?
.....The sweet lime soda and asparagus soup arrive, giving us an opportunity to ask him about his own fair share of disagreements with the Reserve Bank of India (RBI). But Chaudhuri laughs them off and says his comments about the abolition of cash reserve ratio ( CRR) had nothing to do with SBI. He just wanted to initiate a discussion on a topic that affects all banks. He is glad RBI recognised the problem and has been reducing CRR gradually......
DK Mittal gets additional charge of disinvestment department from government
The government on Monday gave financial services secretary D.K.Mittal additional charge of the disinvestment department, a move that may shore up floundering disinvestment programme.....
Govt to finalise Rs 15,000 cr fund infusion in PSBs this week
.....Asked about holding company structure, Mittal said the Reserve Bank of India has given its feedback and the Finance Ministry is analysing it. "RBI has broadly agreed on this... However, there is a need to look at regulatory platform because it would be such a large conglomerate (holding company) and how to be regulated. What kind of capital adequacy it should have," he said. "Broadly, they (RBI) said we support this view...The government is yet to take a view on (holding company structure for the public sector banks)," he said. The 2012-13 Union Budget had proposed setting up of a financial holding company that would help raise resources to meet capital needs of state-owned banks......
Sahara & the art of eating Dosa
........ But, did you ask what about the Dosa? My grandmother once told me a story about a king who wanted to capture his lost kingdom. He repeatedly attacked the capital and failed each time. When he was tired and was about to give up, he overheard a conversation between a mother and his kid, who was trying to eat the dosa from the middle and getting his fingers burnt. Mother scolded the son: “Don’t be like our stupid king and go for the centre, which is the hottest. Start from the edges, where it is a lot cooler.” The king sprang up, marshalled his forces, attacked the fringes, gained strength and confidence and eventually won back the kingdom. People dealing with Sahara should first learn eating the dosa.
State Bank of India may use POS terminals for utility bill payments
The State Bank of India is evaluating the prospects of utilising the point of sale (POS) terminals installed at merchant establishments to accept remittances towards utility bills........
IIM Kashipur holds finance summit on economic reforms
.....Dr V Ranganathan, mentor – faculty at IIM Kashipur, RBI Chair Professor on infrastructure and member of the Telecom Regulatory Authority of India, said making economic reforms are not enough, reforms in governance and attitude is the need of hour. Increasing the efficiency & response should be given more attention and reforms should not be limited only to papers but rather be implemented properly.
Read.......
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