Policy paralysis at Reserve Bank of India?

There are critical issues on which the RBI and govt differ but should it take three years to sort them out?

........The RBI first released a discussion paper in August 2010 and a year later, in August 2011, it issued the draft guidelines on new bank licensing, seeking public comments. Since then, it has been in discussion with the finance ministry to prepare the final guidelines. With general elections a year away, more delay in finalizing the guidelines diminishes the chances of issuing any licence this year. One wonders who is suffering from policy paralysis—the RBI or the finance ministry?..........

Read - Mint

The Policy Muddles at Mint Street

The RBI (Reserve Bank of India) has been the master of all weather and seasons concerning India’s financial sector. It holds the pulse of the national economy with tempestuous effects. But even with all its prominence, the RBI has seldom crossed the contoured spirits which obfuscate the existing macroeconomic scenario. The scrimmages from its side are causing the fixture of topsy-turvy status in the policy domain, finally making the broad brush more frequent than the desirable spunky actions.............

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Growing disconnect

.....The divide between the financial sector and the real economy has widened recently. Many would argue that the rise of the financial services sector, as indeed many other services, is part of a global trend which has seen the eclipse of manufacturing in the developed countries. In India too, the services sector has bloomed and contributes to a larger share of the GDP than the industrial sector. While the above could be elaborated, the key issue in India now is simply this. How does one explain the obvious disconnect between the stock markets and the economy?.........

Read - The Hindu

Time for a national policy agenda - Subir Gokarn

....The investment-to-GDP ratio was relatively stable around 27 per cent in the few years before that period, but accelerated sharply to cross 30 per cent, peaking at 38 per cent, as I indicated earlier, in 2007-08. Now, there is a complex story behind this transformation, which only a much longer piece would do justice to. But there is one very important dimension to it, which is what I want to focus on here...........

Read - Business Standard

Dailyzine to Digest................. A journey of VITALINFO.......

                                                                                                                                                                  

is grateful for your feedback...........

Follow Up – Women thieves, who had stolen Rs 8.25 lakhs valuables, nabbbed within few hours

........On Saturday morning, Pushpa Deshmukh (66), wife of Babanrao, a retired Assistant General Manager of RBI, lodged a complaint about her gold valuables worth Rs 8.25 lakhs stolen from her Surendra Nagar residence. She claimed that on Thursday afternoon, two women had come to her house claiming that they will help to make an aadhar card........

Read – Nagpur Today

RBI chief D Subbarao visits villages in Odisha's Bhadrak district

Reserve Bank of India (RBI) Governor D Subbarao visited Geltua and Jalanga villages in Bhadrak to assess the development in there. During his visit to these two villages, he  interacted with the members of the Self Help Groups (SHGs) and Farmers Clubs of Geltua village and also............

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Bhadrak villagers air problems to RBI guv

.....After the Governor spoke about the benefits of the model village scheme, the villagers chose to air their grievances. "I had opened a no-frill account and subsequently deposited Rs 165. But, when I failed to deposit more money within six months, my account showed zero balance. On inquiry, the bank officials told me that my inability to deposit a minimum amount has resulted in zero balance,".............

Read - TOI

The coming revolt of financial savings - S.S.Tarapore

......The government should take serious note of the decline in household savings in financial assets from 12.9 per cent in 2009- 10 to 10.0 per cent in 2010- 11 and further to 7.8 per cent in 2011- 12 (RBI Annual Report for 2011- 12). This should be a strong signal to the government to reverse its wonton policy of hurting financial savings. If the government persists in pursuing this disastrous path, there will be a faster decline in household sector savings in financial assets and a move to gold and other financial assets.......

Read - FPJ

Financial services firms must be kept out of banking sector: J Hari Narayan, Irda chief

.....The move to issue new bank licences has prompted conflicting reactions. While the idea of conglomerates floating banks has been welcomed as they have the financial muscle, there is also the fear that they could manipulate it to further their business interests and compromise depositors' interest. "Insurance and banking must be boring businesses and real jazz must be in investment, mutual fund and venture capital funds,"........

Read - ET

India’s economic struggles captured

.........Authored by Bimal Jalan, one of India’s well-known economist and former governor of RBI who has held several top positions in the ministries of finance and industry, it is an essential read for anyone seriously interested in the history and future of India’s development as a nation. The author provides a virtual tour of the manner in which despite numerous destabilising elements and political and economic struggles India has managed to secure a place in the global map...............

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Not enough guards in currency for cash transfer

One lakh and counting... That’s the number of automated teller machines (ATMs) in India, both onsite (on bank premises) and offsite. And a whopping Rs15,000 crore is transported by road every day. But if cash management companies are to be believed, there just aren’t enough armed people to escort the cash load to and from these ATMs................

Read - DNA

Call to increase retirement age of bank employees to 65

...........The retirement age for bank employees should be increased to 65 for better utilisation of the services of seniors, said INTUC national president G. Sanjeeva Reddy. Many officers were joining private financial institutions after their superannuation and extending quality services. The Public Sector Units were unable to make use of their services fully as they were retiring by 60, he opined...........

Read - The Hindu

UFBU chalks out programmes for stir

.........A press release issued by UFBU district committee here informed that the committee chalked out programmes including branch visits, area wise conventions, street corner meetings and a centralised rally and a convention here on February 16 to mobilise support for the two-day strike..........

Read - The Hindu

Corporate banks lack social responsibility: Vayalar Ravi

...........“Through the Banking Amendment Bill, corporate houses want to take control of the Indian economy. They do not have any social responsibility and the move to allow corporates to start banks is not good for the country. Banks play a crucial role in bettering the economy,” he said. The minister opined that the policies initiated by Jawaharlal Nehru and Indira Gandhi should be protected. The minister added that the Reserve Bank of India should realise the importance of cooperative banks in the country........

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Bank unions should work together with managements: RBI Deputy Governor K C Chakrabarty

"We need strong and responsible trade unions in the banking system so that trade union and managements can fight market forces and help in making services available to all. Banking services should be available at everyone's doorsteps,........

Read - ET

18 EDs in race for CMD posts in 9 banks

As many as eighteen executive directors of various public sector banks are in the fray for the post of Chairman and Managing Director (CMD) in about nine banks.........

Read - HBL

Non-performing assets in Indian banks

...........The change in the policy of choosing auditors by public sector banks from the empanelled list of audit firms, deviating from the erstwhile practice of appointing bank auditors by a committee consisting of members of the banking division of the Ministry of Finance, RBI and CAG is intended for ensuring level playing field among all Indian banks in respect of appointment of the auditors. In the present scenario, it has become all the more important for RBI’s mandatory inspection to act as an effective deterrent for banks not to resort to non-adherence to applicable prudential norms and less provisioning for NPAs.

Read - BS

Development in the future tense

...................The attitude of the Reserve Bank of India (RBI) and of the corporate world is as though Assam never existed all these years and is some kind of a contemporary discovery. On a recent visit to Assam, RBI Governor D. Subba Rao spoke of the need to raise credit to micro, small and medium enterprises (MSME) and agricultural sectors and for the “deepening” of financial inclusion in Assam. It passes our understanding why this awareness has come about only now after all these years. Likewise, the RBI seems to have discovered only now that the credit–deposit ratio is very low in Assam at around 47 per cent, way below the national average of around 77 per cent. All these years banks have consistently hinted at poor recovery rates in Assam compared to some of the more advanced States of India in order to rationalize this discrimination. Instead of waking up to this gross discrimination only now, the RBI and other banks operating in Assam would have done much better by realizing that this was a problem of money management rather than anything else more serious. .................................

Read - The Sentinel, Assam

A study on Cooperative Banks in India with special reference to Lending Practices

...............At present there are several cooperative banks which are performing multipurpose functions of financial, administrative, supervisory and development in nature of expansion and development of cooperative credit system. In brief, the cooperative banks have to act as a friend, philosopher and guide to entire cooperative structure. The study is based on some successful co-op banks in Delhi (India). The study of the bank‟s performance along with the lending practices provided to the customers is herewith undertaken.................

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Participatory-banking for equality before law in India

The secular system adopted by the Reserve Bank of India (RBI) for banking and financial services in India is conflicting with the fundamental right to freedom of religion. RBI being a secular institution may not adopt any religious model of banking, but it is equally important that RBI should not make any law conflicting with any religion including Islam. So far the Government of India (GoI) and RBI have been reluctant to allow financial inclusion of Indian Muslims by resolving this specific conflict of secular banking system with Islamic laws.........

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There is a Need to Revise Definition of NPA - Some Practical Suggestions

Banks are passing through a difficult phase.  Year 2012 has been a tough year and 2013 will also be tougher.    The major problem being faced by almost all banks, specially the PS Banks is the problem relating to NPA.   Most of the banks have huge hidden NPAs.  Therefore, there is a need for re-look at the present definition of NPAs.......

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Finance Ministry in talks with RBI for allowing PSUs to issue rupee bonds

The finance ministry is holding discussions with Reserve Bank of India on a potential sovereign bond issue, in a major review of its policy on direct overseas borrowing. The ministry is also simultaneously examining the possibility of state-owned entities, which have the backing of the sovereign, raising funds through rupee-denominated debt overseas,............

Read - ET

INDIA-OECD-WORLD BANK REGIONAL CONFERENCE ON FINANCIAL EDUCATION

Sunday, 3 March 2013
19.30 – 22.00	Pre-event dinner hosted by Dr. K.C. Chakrabarty, Deputy Governor, RBI
DAY 1 – Monday, 4 March 2013
8.30 – 8.50	Registration of Participants
8.50 – 9.00	Welcome Address by Dr. K.C. Chakrabarty, Deputy Governor, RBI
9.00 – 9.10	Opening Remarks by Ambassador Richard Boucher, OECD Deputy Secretary-General
9.10 – 9.20	Opening Remarks by World Bank representative
9.20 – 9.40	Keynote Address by Dr. D. Subbarao, Governor, Reserve Bank of India
9.40 – 9.45	Vote of Thanks by Mr. G. Gopalakrishna, Executive Director, Reserve Bank of India

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Investment savings limit needs to be increased

The wishlist for the personal tax sector, which applies to individual taxpayers, includes increased savings limit for investments up to Rs 3 lakh, separate deduction for education expenses and revival of standard deduction...................

Read - Sunday Guardian

On reducing the old glitter

......Strangely, the report does not refer to an overvalued rupee making imports cheaper. It is worth recalling that at the height of the foreign exchange crisis in 1991, Manmohan Singh liberalised imports, cut import duties and devalued the rupee to launch the reforms process. The present thinking in RBI seems to run counter to that strategy, preferring a strong rupee, higher duties and import restrictions.

Read - BS

Debit cards set to cross 50 crore by 2015

.....However, this does not mean that Indians have yet decided to embrace cashless transactions in a big way, the study added. “The debit cards are largely being used for cash withdrawals and not much at the merchandise stores. The point of sales usage was limited to just about Rs 6909 crore monthly sales in December by the debit card-holders,”...............

Read - Deccan Herald

Multiplicity of frauds keeps banks jittery

.......Most frauds in the Indian banking system occur at the channel partner's end. While banks have to strictly comply with several regulations, there is no mandated regulatory environment for merchants and retail stores where the card is swiped. Their systems are often hacked to steal customer details. Consumers are also ignorant. All these are adding fuel to fire,”.............

Read - BS

Cards and Frauds

There has been a spate of credit card frauds all over the world. Cards are being used in four continents while the holder is blissfully sleeping in another time zone. Why does this happen? Because no one follows instructions. Have you ever seen the salesperson at the desk compare signatures? In any case, it is difficult since the space given for your signature is so small that even a bad forgery can get by. The only solution is to make photo cards mandatory. And the photograph must be at least one-fourth the size of the card to give a proper perspective and opportunity to compare it with the person presenting the card. If even after this there are frauds where the holder is not even present in that town, the merchant and the company shall be liable, not the holder.


- T R RAMASWAMI, (ET)

Confronting cyberthieves

The refusal of the Maharashtra State Banking Ombudsman to intervene in a case of net banking fraud that left a customer poorer by nearly ten lakh rupees is bound to add to the anxiety of consumers who are afraid of falling victim to cybercrime. Much as plastic money and online commerce are convenient, they bring with them the baggage of security concerns. The banking and payment card industries, and enforcement agencies must respond to such incidents with alacrity..........

Read - The Hindu

Have you been duped online?

.........Recently, the Reserve Bank of India (RBI) suggested banks disincentivise usage of cheques. RBI suggested measures such as setting limits, levying charges on issue of cheque books to account holders or levying charges on cheque usage, both by the issuer and beneficiary. However, given that frauds still happen, is this shift feasible or even desirable? More importantly, what are the precautions that customers and banks should take to ensure security?.............

Read - BS

RBI may tighten credit card norms

The Reserve Bank of India (RBI) is likely to come out with new norms to ensure card safety. Bankers say that this is likely after a meeting RBI had with banks on Friday to discuss recent frauds in electronic payments. Bankers told RBI that two forensic investigators have been appointed to identify the source of fraud. The investigation is being done by banks that install card acceptance machines in merchant establishments.............

Read - TOI

Damodaran panel likely to submit report soon on business climate

The Damodaran panel, comprising government officials and corporate honchos, looking into ways to improve the country's overall business climate is likely to finalise its report soon............. 

Read - ET

Exercise caution before you sign up for a bank locker

.......banks don’t have uniform norms for allotment. On paper or on their Web sites, many banks state that the criterion for allotment of lockers is that you should be a savings/current account holder of that bank. In addition, Reserve Bank of India’s ‘Master Circular on Customer Service’ (available on the RBI Web site) allows banks to obtain a fixed deposit which would cover three years’ rent and charges for breaking open in case of an eventuality. But in reality, you may not get a locker even if you fulfil both requirements..........

Read - HBL

Tips to know your financial literacy quotient

Read - Business Today