Silencing the RBI

How can the central bank governor deliver appropriate monetary policy when he can't even get the deputy he wants

...............The RBI is not legally independent, but selective independence is often conveyed by the personalities of the governor and his deputy governors. Perhaps Mr Gokarn became the fall guy for resisting calls for interest rate cuts by the government and industry lobby groups, despite uncomfortably high inflationand/or for the handling of the rupee. Under him, monetary policy guidance explicitly – correctly, in my view – identified the pressing need for fiscal correction to regain macro stability and to contain inflation. The irony of his unfair fall is that the government, struggling for credibility and whose actions limited the degree of freedom of the RBI in dealing with massive rupee depreciation and stubbornly high inflation, decided who should pay the price...............

Read - BS

Employees demand RBI offices in all Northeastern states

The United Forum of Reserve Bank of India officers and employees has demanded that full-fledged offices of the apex bank should be opened in all the states of the north eastern region. The forum of employees has also demanded to extend the outreach programme of the bank in unbanked areas of the region and work for financial inclusion which is of utmost a necessity in a region where banking penetration is dismally low. According to the employees association, the progress of opening up offices in the region is very slow and existing small offices are for a namesake only and hardly serve any purpose when it comes to banking activities.............

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Dy RBI Guv Takes Commercial Banks’ CEOs to Task

KC Chakrabarty, Deputy Governor of RBI, gave a dressing down to CEOs of commercial banks at a recent meeting on customer service. For instance, he asked banks to justify the charges they impose on customers to avail service from non-home branches. “When you are advertising — One nation. One branch. One account, — then where is the question of charging customers for updating their passbook at a non-home branch?” When the bankers said that the charges are to recover the cost, Chakrabarty quickly replied: “I am not against it. Either do away with the charges or have a uniform charge for all.”

ET 

Its our daily diet..................

How good money goes waste

......RBI has recently decided that foreign banks now will have to graduate to allocating 40% of their funds for priority sector lending. This will mean sequestering another huge set of funding for rural areas. When the rural sector is unable to use with efficiency the available money, it is difficult to picture how the additional funds will be of more use to it and, consequently, for the rest of the economy.......................

Read - FE

Asking for trouble

........Three voices as distinct from each other as these, and yet making the same point, should give the government pause in its relentless drive towards granting banking licences to industrialists. Ever since it was announced in the Budget by then finance minister Pranab Mukherjee in February 2010, the government has pushed hard for it, against an obviously unwilling RBI, the apex regulator for the sector, and in spite of prevailing expert opinion. Banking is not like any other sector — the conflicts of interest that can be set up in it have the potential to destabilise the entire economy and eventually cost taxpayers a fortune...........

Read - BS

RBI banks on private players

........the very basics of economics and policy standards are changing and the RBI may want to look at its own guidelines carefully once more to ensure that no corporate major gets any kind of financial leeway as far as the banking sector is concerned. India has a robust banking sector and no major history of bank failure. The RBI must do everything to ensure that the no one can jeopardise its clean record..............

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Rs 25-crore criterion only for deposit-taking NBFCs

......“Ideally, we want all NBFCs to only be financial entities. However, that is not possible. Hence we have to bring in regulations to monitor such NBFCs,” Sinha added. He also said that to ascertain risks of NBFCs better, the RBI has raised the tier-I capital requirement to 12 per cent for certain NBFCs (such as capitive NBFCs, those involved in real estate, commodities and capital markets). For other NBFCs it has been kept at 10 per cent,........

Read - HBL

Mr C, don’t mess with gold; it’s HER social security

.......It would be best is to create a regulator for non-bank finance companies, including money lenders, since neither the finance ministry nor RBI has any clue on this sector. If they had any sense, they would be taking a lead in the global gold markets since we buy more than 30 percent of the global output.............

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Gold loan firms to roll out CBS for uniform operations

.....A working group set up by the Reserve Bank of India (RBI) under the chairmanship of K U B Rao to look into the issues related to gold import and gold NBFCs said in its draft report: “The practices followed by the NBFCs in gold loan business need to be subjected to scrutiny in order to make this organised financing process free from vagueness, which otherwise leads to exploitation of customers.”............

Read - BS

SBI not merging its associate banks this fiscal

“We could look at consolidation next financial year. Nothing this quarter,”

Read - HBL

FINMIN WANTS TO EXTEND INDIAN BANKS’ ASSOCIATION’S UMARJI’S TERM

MR Umarji, chief legal advisor at IBA, is set to complete his term in March this year. But finance ministry is keen that Umarji gets an extension since he is a hands-on person on banking laws. Also, finmin would want to gain from Umarji’s expertise, given that the government would like to pass as many reforms before the next election. A former RBI ED and framed Sarfaesi Act, he also helped RBI in drafting the recently-amended Banking Regulation Act.

ET

BANKS GIVE IPADS TO DGM AND ABOVE TO CONNECT WITH GENNEXT

Most PSBs are becoming tech savvy. Many have started distributing iPads to senior officials in the hope that they would be better positioned to relate with young customers. SBI has given iPads to all officers who are of DGM rank and above, while BoI and IOB have given it to all their GMs and above. Atleast now PSU bankers have something to look forward to.

ET 

Banks rush for state government securities on signs of cash easing

......The bank official explained that the excess holdings gave additional cushion to raise cash from RBI through the repurchase window. Banks excess holdings of 9 per cent gave them leeway to borrow at least Rs five lakh crore from RBI for meeting their cash conditions. Borrowings from RBI were also seen as a low cost route of funding, since it was not treated as part of the net demand and time liabilities, unlike deposits.......

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Goa office of Directorate of Enforcement to be upgraded

.......In the past, following criticism in the State Legislature, the then Congress-led government constituted a committee under the then State Joint Secretary (Debt Management) for examining the cases related to acquisition of immovable property by foreign nationals. The committee took up 480 cases of which after finding prima facie violations, nearly 300 were forwarded to the Directorate of Enforcement for action while some were moved to RBI.

Read - The Hindu