Dr Reddy’s prescription

..........At this stage, when policymakers across the globe are trying hard to find answers to possibly the most difficult questions of recent times, Y.V. Reddy, former Governor of Reserve Bank of India (RBI) and the chairman of the 14th Finance Commission, has put forward his assessment and policy prescription in his new book Economic Policies and India’s Reform Agenda: New Thinking, which could be a useful guide for economic management in an otherwise complex world. ..........

Read - Mint

It takes a lot to win an FE Best Banks Award

Competition for the coveted FE Best Banks Awards seems to get keener with each passing year. Contenders need to be not just profitable, cost-efficient and demonstrate their ability to grow, they must have clean balance sheets. Invariably, the winners are those who also happen to be tech-savvy, customer-friendly and innovative. This time around, HDFC Bank has been ranked number one in the new private sector bank category with Kotak Mahindra Bank making it to the second spot. Bank of Baroda has been judged the best PSU bank. ...........

Read - IE

OTM - The trainer, now no more.........

Shri O.T.M.Nambiar passed away on 18th February in Neeleshwaram, Kasargod. He was 92 years old and was not well for some time. He leaves behind his wife and 2 sons. A large number of RBI Officials were trained by Shri. Nambiar as he was a Faculty member for a long time. He worked as Currency Officer in Bombay and retired as Manager in F Grade and was later on deputation with the Indian Bank.

May his soul rest in peace.

-  P.P.Ramachandran, Ex-DGM, DBOD, Mumbai

Extremely sad to learn the demise of OTM. He was in the then Madras office as Manager (Regional Director now). A man of high understanding, had both head and heart for the institution. He was liked by one and all in the centre.

- S.R.Badrinarayanan, Ex-Manager, RPCD, Chennai

I am deeply shocked about the sad demise Sri Nambiar. I had worked under him in Hyderabad office when he was the Manager. I felt he was very soft spoken and deeply religious.

-  C.S.Murthy, Ex CGM-in-Charge, RPCD, RBI, CO Mumbai

SC seeks details of banks’ loan waivers

The Reserve Bank of India (RBI) is expected to provide by Friday details of loans waived off by banks or allowed one-time settlements above Rs 10 crore by them, following a Supreme Court direction to this effect last month. Such information, collected by RBI on the basis of annual financial inspections, is to be furnished in a sealed cover as the central bank is reluctant to put it in the public domain.........

Read - IE

Bank credit up 16.36%, deposits increase 13.2%

As of February 8, bank credit had increased 16.36 per cent year-on-year. For this financial year, the Reserve Bank of India (RBI) had estimated it to grow 16 per cent. According to RBI data, advances by commercial banks rose Rs 7,17,180 crore year-on-year to Rs 50,99,909 crore. Bankers said by March-end, growth might stand at about 16 per cent or lower, owing to the tepid demand for loans.........

Read | Business Standard

Banks step up efforts to prevent credit card frauds

......American Express is introducing a new solution, ‘ezeClick’, for its customers in India to ensure their card data is not shared with merchants while making online transactions. Currently, an individual has to share information such as card number, expiry date and card verification value during online credit card transactions...........

Read | Business Standard

Virtual cards can keep you safe from credit card frauds

.......Virtual cards are issued by a few banks and individuals can get more than one card at a time. These can be obtained by registering with the bank that has issued you a credit card. You need to do a one-time registration after which you will get a 16-digit number along with a CVV2 number (this is different from the CVV number mentioned at the back of your credit card). This is the number that you would need to key in when doing an online transaction............

Read - Mint

Improve Currency Mgmt Ops: Finmin to Banks

....."We have asked banks to undertake a review of the bin occupancy in each of their currency chests and put in place an effective management information system for cash management," said a finance ministry official, who did not wish to be named. The committee has suggested that bin occupancy in rural areas should be limited to 40% of the VHL. Bankers feel that RBI should issue consolidated guidelines over currency management operations that should cover security issues and provide incentives to efficient banks. "Security is a big issue for us. Besides, the rates of incentives were also fixed long ago and have not been revised," said a senior official with SBI, the country's biggest lender. The committee also recommended that the Reserve Bank of India should initiate discussions with the states for providing a dedicated force for guarding banks' currency chests.......... 

Read - ET

Allowing corporates to run banks risky, says former advisor to Government

.......Dr. Virmani’s comments assume significance in the light of the comments from officials of the Reserve Bank expressing their apprehensions about the move, which follows amendments to the Banking Regulation Act in the last session of Parliament. The actual rules under the legislation, determining which entities will be allowed a banking license have not been issued. Significantly, countries such as the United States and South Korea do not allow industrial houses to establish banks. In other countries, such as Australia, U.K. and Canada also enforce restrictions on the extent of foreign ownership and set limits on voting rights. Even the IMF had warned in January that the benefits from allowing such ownership were outweighed by risks..........

Read - The Hindu

Strike hits banking operations

...........All India Bank Employees Association (AIBEA) General Secretary C H Vekatachalam claimed clearing operations, electronic fund transfers, forex transactions and money market operations were completely disrupted across the country. Bank unions are pressing for early wage revision of employees, which they said is due from November 2012. They are also opposing banking sector reforms and any plan for merger of banks..............

Read - The Hindu

Unions say strike successful, around 40 lakh cheques worth Rs 25,000 crore remain unprocessed

....."As per reports reaching us from various states, the strike has been observed very successfully in all banks across the country. Employees and officers from all banks including Reserve Bank of India (RBI), State Bank of India (SBI) and other public sector banks, old generation private banks, foreign banks, regional rural banks, and Cooperative banks participated in the strike.” He said, “About 40 lakh cheques worth about Rs25,000 crore could not be processed today in various clearing houses of National Payment Corporation, RBI and SBI. Clearing operations were totally affected in all the district and town centres also.”.....

Read - Moneylife

10 reasons why workers are on a two-day strike

Below is the 10 points charter of demands of the Central Trade unions:

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

RBI tightens norms for import of precious, semi-precious stone

........"It is clarified that Suppliers' and Buyers' Credit (trade credit) including the usance period of Letters of Credit opened for import of precious stones and semi-precious stones should not exceed 90 days from the date of shipment,"...........

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

Merger Woes

This refers to ‘IDBI’s Worst may be Over, But…’ (ET, Feb 20). There is a reference to the merger of United Western Bank (UWB) with IDBI Bank. The fact is UWB was practically gifted away by the RBI to IDBI. There were better offers from other financial entities, but the RBI, for unknown reasons, favoured IDBI. The valuation method employed by the RBI is still not known after over six years of the merger. Ironically, IDBI had 115 branches when it took over UWB, which then had 230 branches! The smaller customers in the area of operation of the UWB feel alienated after the merger as there has been a change in the culture of the bank that now seems to favour richer customers.


- SHAILESH KOKANE (ET)

Bankrupt rhetoric of inclusion

.....When central bankers, following the C. Rangarajan committee set up soon after the 2006 Budget speech, talk, and they do so ceaselessly, of financial inclusion, it seems as if they have in mind a section of the population from another planet, a people forgotten by the mainstream economy in its rush towards self-fulfilment: Exclusion and inclusion are viewed as binary, mutually opposing modes of existence. Banks, we are told, have to replace the usurer both in the rural and urban areas, the landless and the construction migrant worker have to be financially included as a first step towards social inclusion: Informal mechanisms have to be replaced by formal ones.........

Read - HBL

District consumer forum orders HSBC Bank to pay Rs 25,000 for deficiency in service

.....“We hold opposite party (HSBC Bank) deficient in service in not informing CIBIL of settlement of all outstanding dues of complainant...,” the bench presided by CK Chaturvedi said. It directed the bank to issue a no-dues certificate to Delhi-resident Vinay Chola and to reconsider a fresh card for him. The forum also awarded him compensation of Rs25,000 towards litigation charges and harassment caused to him........

Read - Moneylife

Responding to the global currency war

....Even if it is assumed that India will keep borrowing easy by liberalising the capital account to fund the current account and push currency to higher levels, the idea is being increasingly questioned. As per the former Deputy Governor, RBI S. S. Tarapore, with our inflation rates persistently above that in major industrial countries, the present dollar-rupee rate should be close to Rs 70. Recently, another foreign exchange expert commented that the rupee should be at least Rs. 60. While this debate can go on, considering the present global macroeconomic scenario and the fact that India is a major importer of oil, we cannot afford either huge appreciation or depreciation from the present level........

Read - HBL