Once a 'green horn', D Subbarao aims to demystify RBI in 2013

Calling himself a "green horn" at the time of joining Reserve Bank as its Governor over four years ago, Duvvuri Subbarao has now set a goal to demystify the 'black box' image of RBI and make it a role model for central banks globally. "For an outsider looking in, the RBI is like a black box. Everyone knows people in there do important things, but cannot figure out the connection between that and their lives". "It is important that we demystify the RBI so that people know enough to demand accountability from us,"..........

Read - IE

Punishing the central bank

.........If even after this weakening of the central bank’s monetary stance, the government is bent on making it reduce the policy rates, the conclusion can only be that it wants to whittle down RBI’s independence. Gokarn’s “ouster” must be seen in this light. As the deputy governor for monetary policy, he was the keystone in formulating RBI’s monetary policy stance. In this, he acted in tandem with Subbarao. By ensuring his exit, the government has sent a clear signal that it will not tolerate a central bank that is independent beyond notional terms.

Read - Mint

Jodi ka mamla................ KBC via RBSC

If you  have seen  yesterday's (4th January) episode of KBC you might have noticed that a young couple from RBI had appeared - Mrs. Nidhi Chaudhry and Mr. Dev Raj. They met at RBSC Chennai during training. As you all know that our Training college at Chennai is also known as Marriage Bureau for DRs and in each batch a few marriages always takes place. Promotees don't have that chance because by the time their number comes for training at  Chennai College they are already married and settled in life. She made it  to the hot seat  but unluckily  could not win any amount. and had to leave empty handed. She had selected a "Padav" at 6th question of Rs.1,60,000/-. She made it to Rs. 80,000/- but was in too much hurry to answer the last question despite having  three lifelines. Anyway our sympathy goes to her and we wish her a better luck next time. If you are interested the question was at which degree temperature in both Centigrade and Fahrenheit is same. The correct answer was - 40 degree and she replied 40 degree. It could not be made out from which office of RBI they had come. Anyway she has already  left RBI as she is selected for I A S   and is presently doing training at Mussorie. However her husband is still working in RBI. If any of our member has seen the programme, he/she may like to add more information. And if you happen to know them please convey our congratulations to them for making it to KBC. You are also free to add your own experiences at RBSC Chennai.

Madan Gauria, Ex-AGM (Moderator - EXRBITES Group)

Instantly comes to mind the persons to whom RBSC made life partners: YSP and Usha Thorat; Nalini and B. Mukherjee and Jerome D'Souza and Gokhale Madam......... - Surendra Khot, Ex-GM

Exhibition on the “Documentary Heritage of Reserve Bank of India”

In order to create awareness about the rich archival documents available in RBI Archives that relate to the history of RBI as well as the country’s financial and economic history, the RBI Archives, Pune organised an exhibition on the “Documentary Heritage of Reserve Bank of India” at the 73^rd Session of the Indian History Congress at the University of Mumbai, Kalina Campus, Mumbai during December 28-30, 2012.  About 50 pages of selected documents from the RBI Archives covering the period from 1935-1999 including photographs of all Governors of RBI were displayed in the Exhibition.

The 73^rd Session of the Indian History Congress was inaugurated by His Excellency Shri K. Sankaranarayanan, Governor of Maharastra on December 28, 2012. Addressing a large gathering of historians the Governor observed that history is the universal teacher of mankind. It is a multi-faceted discipline and its subject matter is all that human beings have said, done and thought.  He further stressed that the rulers must remain alive and sensitive to the basic needs and developmental aspirations of the poor, the downtrodden and the socio-economically backward sections of society. The History Congress was attended by about 2500 delegates from different parts of the country and abroad. 

The RBI Archives exhibition evoked good response and was visited by about 1800 visitors from University, College teachers, academicians and research students from across the country. Some of dignitaries who visited the stall included Professor Irfan Habib, Historian from Aligarh Muslim University, Prof. S.Z.H. Jafri, Professor of History, University of Delhi & Secretary, Indian History Congress, Shri B.M. Mishra, Officer-in Charge, Department of Economic and Policy Research, RBI, Central Office, Smt. Gunjeet Kaur, Director, History Cell, RBI, and Shri R.L. Sharma, Vice Principal, College of Agricultural Banking, Pune.

The officers from RBI Archives, i.e. Dr. R.L. Sahoo, Chief Archivist, Shri Ravi Kiran Pala, Archivist, Dr. Savesh Singh, Assistant Chemist and Smt. D.D. Saraf, Assistant Manager, managed the exhibition stall and distributed exhibition brochures to the visitors. RBI Archives team received guidance from Smt. Meena Hemachandra, Chief General Manager and Principal, CAB in making the exhibition a grand success. 

How UK, US fill up central bank posts

.............Let’s shift focus to India. When former RBI Governor Y.V. Reddy’s five-year term was coming to an end in September 2008, there was intense speculation on his successor and a possible second term. His deputy Rakesh Mohan, who was in the US on an assignment, was called back for an interview but then finance secretary of India D. Subbarao got the job. An upset Mohan, who was in charge of critical monetary policy, stayed put during the global financial crisis in the wake of the collapse of US investment bank Lehman Brothers Holdings Inc. but left in June 2009 before his term ended. His successor Subir Gokarn, chief economist of global rating agency Standard and Poor’s, was identified by a search committee headed by Subbarao. Gokarn’s three-year term ended on 23 November but he continued till 31 December till his successor was identified. Urjit R. Patel, a non-resident senior fellow of the Brookings Institution and an advisor to the Boston Consulting Group, will succeed Gokarn with a two-year term but it may take a while as even after Prime Minister Manmohan Singh signs off the appointment, it takes months to complete formalities for an outsider who is coming to Mint Road. There is nothing new in a Deputy Governor stepping down and his chair remaining empty, even for months. In fact, Gokarn stepped in five and a half months after Mohan had left. Similarly, K.C. Chakrabarty, another Deputy Governor, succeeded his predecessor V. Leeladhar after six-and-a-half months. But the appointment process is not always transparent; often it shows utter disregard for professionalism..........

Continue reading............

Jaipur: Brokers rake in moolah as coins disappear

...........With no RBI vans coming to markets to deliver smaller denominations, the business of small-time brokers is getting bigger and they are charging between 10% and 15% for the change. The situation is so bad that long queues of people waiting to get change from RBI counters have become a common sight. “You go and waste your time in queues or you get it from the broker. We don’t waste time, so we go for the latter,” said another businessman in Chaura Rasta market. As a result, people have become a suffered lot, who on several occasions have to either make a forced buying or forgo a balance of Re1 or Rs2 coin with an assurance from shopkeepers that they will settle it next time. Notably, withdrawing the distribution of notes and coins and plans to let the selected counters of various banks handle this, is part of the RBI’s policy. “RBI officials are unwilling to carry out this responsibility. They think it can be done through authorised brokers and banks,” said a source.................

Read........

Stanchart opens branch in Thiruvananthapuram

THIRUVANANTHAPURAM, JAN. 4: 

Standard Chartered Bank has launched a full-service branch here, making it the third in the State after Kochi and Ernakulam. Salim Gangadharan, RBI Regional Director, was the chief guest at the launch function held here on Friday..............

Read - HBL

Telling inclusion

Even though Financial Services Secretary D K Mittal formally announced Urjit Patel’s name as the successor to Subir Gokarn as Deputy Governor in the Reserve Bank of India (RBI) on Friday, Gokarn’s name continued to appear in the list of top executives’ speaking engagements on the RBI’s website for the week December 31-January 6. This even though his one-month extension ended on December 31.

BS

Bankers draw flak at DLRC meet

.....Reserve Bank of India AGM Ranga Rao said primary aim of the DLRC was to keep the elected representatives posted about the priority sector loans. Responding to the complaint that some bankers were not providing data in time, he said the RBI ensure that bankers sent the necessary data to the lead bank in time.......

Read - The Hindu

SBT to switch over to fully-automated loan processing system by 2014

State Bank of Travancore (SBT) is planning to switch over to a fully-automated loan processing system by 2014. The Reserve Bank of India (RBI) has been emphasising that the banks should look at proper risk management, with the help of information and technology on data analysis and individual credit scoring. The Kerala-based bank said it will kick-start the pilot scheme from June this year.........

Read - BS

RBI Financial Stability report: Lessons in financial planning

.............The Reserve Bank of India ( RBI) has come out with its Financial Stability report. The report talks in details about the risks which the financial system in India and also gives an overview of the way things have been shaping up in the Indian economy in general. However, the most interesting aspect of the report is that it provides a good insight into Indian household’s saving and investment behavior which can be used as a tool by financial planners...........

Read - Moneylife

Managing Risks in Commercial and Retail Banking

Amalendu Ghosh was Chief of the Department of Banking Supervision of RBI, where he served for 36 years. He is an expert in supervision of banks, risk management and was closely connected with the implementation of the new Basel Capital Accord. He has brought out a manual for conduct of bank supervision especially for the switch to risk- based bank supervision system. His rich experience as risk management consultant to two commercial banks has endowed the present volume with extraordinary authenticity and reliability. Ghosh is eminently qualified to write on risk management and the book under review is the quintessence of his experience.............

Read - Book Review by P.P.Ramachandran

LATE SITTING IN BANKS - A BRIEF ANALYSIS - It Needs To Be Eradicated

.......The anticipated benefits in the above-mentioned area are a mere management ploy to extract more time and energy – without matching qualitative output – from the persons concerned.  By sitting late, neither the persons concerned nor their institution gain anything.  In fact, both tend to lose heavily.  From the employees’ side, they undergo tremendous strain and stress and whatever work they do or pretend to do after regular office hours leads to losing one’s morale and motivation.  From the organizational point of view, on the face of it, it may appear that extra output has been achieved.  But in reality, people’s efficiency gradually comes down during the day and at one point, it tapers off. ......

Read...........

Banking sector jobs set to rise

...Public sector banks (PSBs), which were going slow in their recruitment drive, have once again picked up, after the government’s financial inclusion programmes have gained momentum. There are an estimated 85,000 vacancies in various PSU banks across the country and the government is keen on filling these in this fiscal year itself. The State Bank of India (SBI) alone is expected to recruit nearly 20,000 staff and over 1,200 officers in this fiscal year alone. Other PSBs would also be recruiting 22,000 officer-level employees and 20,000 clerical-level employees............

Read - DH

Less dovish Federal Reserve is good for India: BofA-ML

A less dovish stance by the US Federal Reserve will serve to benefit the Indian economy, says a new report from Bank of America-Merrill Lynch (BofA-ML). A lower quantitative easing (QE) would help enable the Reserve Bank of India in pulling down interest rates, said Indranil Sen Gupta, of BofA-ML..........

Read - ET

Govt to send comments on bank licences to RBI

The government would soon send its comments to the Reserve Bank of India (RBI) on issuing new bank licences, Finance Minister P Chidambaram said today. RBI is preparing final guidelines for issuance of new bank licences after Parliament approved the Banking Laws (Amendment) Bill last month........

Read - BS

Resolve consumer complaints within 45 days: RBI deputy governor KC Chakrabarty

 The Reserve Bank of India is seeking to turn banking services in favour of customers from being loaded in favour of banks as it works to weed out one-sided agreements and ensure that customer complaints are resolved within 45 days, said three people familiar with the thinking. The mercurial RBI Deputy Governor KC Chakrabarty, a former career banker himself, told bank chairmen that the one-sided agreements and discriminatory lending rates for identical collateral, such as home, should end, said those people who did not want to be identified......

Read - ET

Give preference to non-corporate sector for new banking licences: Rangarajan

.......“It is possible for the Reserve Bank to initially start with non-corporate business and find out whether there are suitable applicants and thereafter proceed to look at the other applicants,”..............

Read - BS

New banking licences make no sense: Percy Mistry

.......The problem in India is not that we do not have a sufficient number of banks. It is that 70% of our banking system is state-owned, inefficient, un-inclusive, and provides the means by which too cosy a nexus between the government and the wrong kind of private industrialists. The state-owned banks (SOBs) and insurance companies (SOIs) together provide the institutional mechanism to foster a dangerous and damaging type of crony capitalism regime in India as well as to indulge in electorally driven loan melas and loan write-offs. . That unfortunate nexus is decidedly kleptocratic in nature when it comes to looting the nation’s natural resources (whether spectrum or mineral or land) through the kind of public-private partnership that India does not need............

Read - BS

Closer to the unbanked

..........But a lot more needs to be done in improving corporate governance, customer service, transparency in banking operations and, importantly, freeing public sector banks from political interference and the dual control of the Finance Ministry and the RBI, as sometimes they appear work at cross purposes.

Read - HBL

Why Joseph Stiglitz is wrong on many counts

..........Even as Reserve Bank of India (RBI) Governor Duvvuri Subbarao called for greater central bank independence in the context of expanded mandates “and their more explicit pursuit of real sector targets such as growth and unemployment,” Stiglitz threw cold water on the idea, reports The Times of India. He said the RBI, with more limited autonomy, had fared much better than those with more autonomy, including the US Fed..........

Read...........

Banks to put information of frauds before audit committee: RBI

The Reserve Bank of India has directed banks to place information regarding any frauds before the audit committee of the board of directors every quarter. In a notification on Friday, RBI said an annual review of frauds should also be conducted and placed before the the board of directors...........

Read - Mint

NBFCs knock RBI door to modify draft guidelines

The non-banking finance companies have prepared a presentation containing seven-point changes in the recently released draft guidelines by Usha Thorat committee. Finance Industry Development Council (FIDC), the industry body for NBFCs already met Uma Subramaniam, Chief General Manager (Department of Non-Banking Supervision), RBI to convey their reservation against select norms.............

Read..............

Government still has time for two policy principles

........even in sectors where “independent” regulators are in place, there is absolutely no co-ordination to assist the investor who is regulated and the constituent who is sought to be protected.  Turf wars have been escalated in recent times. The Reserve Bank of India (RBI) has increasingly been seeking to inspect stock brokers on the ground that they are also non-banking financial companies. .............

Read - BS

Pre-Budget talks: Chidambaram to meet bank chiefs, economists today

.....Indications are that the talks would centre around the Government’s capital infusion in banks, Basel-III capital rules and the issue of deteriorating NPA situation in the banking system. As the pre-Budget talks will happen weeks before the RBI is expected to review monetary policy, the issue of interest rates is likely to come up for discussion.......

Read - HBL

Risk management: Whose money is it anyway?

............Top priority should be given to induct a continuous learning process on risk management for line managers. As stated by RBI Deputy Governor K.C. Chakrabarty, this would be a “retirement decade” for public sector banks, with thousands among the senior workforce set to retire by 2020. Banks need to develop an effective knowledge management framework to help retain the tacit knowledge of the retiring employees. Initiatives such as a “No Transfer” policy up to five years for critical departments such as risk management will help stabilise the function..............

Read- HBL

Customer complaints up marginally in 2011-12: RBI

........The RBI also announced to set up a committee to review and update Banking Ombudsman Scheme, 2006. The committee will be chaired by Suma Verma. The working group has been constituted on the recommendations of Damodaran Committee on customer service.

Read - BS

Mr FM, gold isn’t the problem, the rupee is. Fix that

........The FM believes that India’s foreign exchange reserves would have gone up by $10.5 billion if gold imports were to have halved. The FM also believes that India’s CAD and the  rupee value will improve if gold imports were to be curbed. Unfortunately, even RBI wants gold imports curbed in order to manage the rupee (INR) better. The FM and the RBI could never go more wrong in their understanding of gold. In fact the rise in the price of gold in India is more due to INR depreciation than demand......

Read..........

Appeals against Banking Ombudsman Rise

MUMBAI: Appeals against the decisions of banking ombudsman more than doubled in 2011-12, indicating that the customers as well as banks are losing faith in the scheme promoted by the Reserve Bank of India as an expeditious and inexpensive grievance redressal forum. ...........

Read - ET

Clear norms must to help net banking, says RBI’s Chakrabarty

.................“We have to take measures to initiate the process of evolving best practices in this area that match the international / global standards…..“What we need is the right attitude for customer care. Banks need to invest more time in harnessing the soft skills of their human resources to make them truly humane and humble while dealing with customers,” .................

Red - HBL

Consumer protection and regulators

......... In my view, this is the first time the head of any of the three regulators – Irda, the Securities and Exchange Board of India (Sebi) and the Reserve Bank of India (RBI) – has publicly declared that the regulator’s role is primarily consumer protection. All these years, the three main regulators and also the fourth new one – the Pension Fund Regulatory and Development Authority – have acted as if consumer protection is a minor issue............

Read - BS

Can banks collect dues from defaulters like this?

.......... If the harassment persists, a simple email complaint to the banking ombudsman would solve the issue. RBI’s stringent guidelines include a warning that banks are responsible for the actions of the collection agency. In case of complaints, RBI can also disallow the bank from appointing a recovery agency..............

Read - BS

RBI: Gold-linked products needed to cut imports

.........“Given the insatiable lure for gold in the country, it is imperative that we introduce gold-linked products which result in the existing gold in bank lockers getting converted as financial products rather than unabated import of gold,” said G Padmanabhan, the Executive Director at RBI on Wednesday...................

Read - FE

Gold loans: RBI favours banks over NBFCs

........“Moderation in the operations of gold loan NBFCs may provide increased opportunity to banks to further enhance their share in the gold loan market. For this, banks would have to reorient their business models and customer services to fully tap the business opportunities in the gold loan market, as they may still lack the speed to deliver to borrowers whose needs are catered to by gold loans NBFCs so far,” the paper said..............

Read - BS

Gold is money: Why can’t UPA’s thinktank understand this?

....Currency debasement has been an unwritten policy goal of the Reserve Bank of India and the government and citizens understand that very well. So when Rangarajan says a “certain amount of gold demand is built into the Indian psyche”, the culprit for the same is the RBI. Of course, Rangarajan did mention inflation hedge as one of the reasons why people buy gold. But in the same breath he also mentioned that Indians purchased $66 billion worth of gold last year and this was $20 billion more than in the previous year. That is a wrong way to look at gold – if you accept that gold is an inflation hedge, then one ought to compare quantities imported rather than the dollar value of the same.........

Read..........

Why Govt, RBI want to put a lid on the gold rush

....While Finance Minister P Chidambaram hinted at making gold costlier, the central bank is firmer in its intentions. On January 2, Chidambaram asked the people to moderate gold buying, saying, “… we may be left with no choice but to make it a little more expensive to import gold. This matter is under the Government’s consideration.” Hours later, an RBI working group said fiscal measures to reduce gold imports might be revisited......

Read - HBL