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.
Saturday, March 30, 2013
RBI chief Subbarao to attend IMF conference next month
Financial inclusion likely to be part of banking code: Chakrabarty
‘Use e-court fee instead of stamp papers’
The Madras High Court has suggested to the Registry and all civil courts and Motor Accident Claim Tribunals to follow e-court fee payment system instead of judicial stamp papers. Justice R Sudhakar gave the suggestion while passing orders on a civil suit from United India Insurance Company praying for permission to pay the court fee of `48 lakh in the form of RBI challan instead of filing a big bundle of judicial stamp papers..................
AIRREA stir put off
.........."The proposed strike was deferred after conciliation with the government", said Dilip Kumar Mukherjee, secretary general of the association. AIRRBEA had called a strike on March 30 in support of its six point charter of demands. These included implementation of pension scheme for the rural bank employees at par with their counterparts in nationalized banks, amalgamation of all RRBs in the country and formation of the National Rural Bank (NRB) etc........
Modern central banking
Monetary committee needs to be handled carefully
.............Since the MPC in itself is a good idea as it brings a greater number of experts on board, it is important to ensure the baby doesn’t get thrown out with the bathwater. Ways have to be found to ensure the selection process is more independent and transparent, perhaps the number of persons to be appointed solely by the government can be reduced—let’s not forget regulators like the Chief Election Commissioner who have fixed tenures have tended to do a decent job. The onus of making it work lies with the government.
Read - FE Editorial
My View on "FSLRC report: RBI's authority in question"
No point in doing an MRI of FSLRC report or the dissenting notes. Application of ‘collective wisdom’ is conspicuous by absence in the whole affair. Some vested interests are itching for a truncated central bank with diminished role with no say in the non-bank financial sector, the government securities market and the foreign exchange market. Logically implying that RBI would have no say in the management of the exchange rate and thereby in the forex reserves. Add to this the Commission’s view on government debt management. The Commission opts for a separate Debt Management Office (DMO), totally separated from the RBI, which is the dispensation North Block has been trying to push and RBI has been resisting for valid reasons for a long time now. Our finance ministry and FSLRC, ignore the evolution of the role of Reserve Bank of India and the care with which RBI has nurtured the financial sector concurrently successfully safeguarding GOI interests even in several areas which do not come under traditional central banking functions. When found necessary, at the appropriate time, new institutions were built by RBI in association with GOI to transfer responsibilities which either conflicted with its core functions or became unwieldy or unmanageably heavy. Time is not opportune for dismantling or truncating RBI which is doing creditably well as is being admitted in several international forums. Any regulatory changes should be to consolidate and restate the roles so far evolved and should not be a tool for Finance Ministry or any government department to usurp powers or responsibilities now with statutory regulators.
- M.G.Warrier
FSLRC members dissent about regulatory overreach and controls
| ............“The regulations governing capital controls on inward flows should be framed by the Government, in consultation with the RBI. The regulations governing capital controls on outward flows should be framed by the RBI, in consultation with the Government.”........... |
Read - Moneylife
Is a unified financial regulator a good idea? - YES
The Financial Sector Legislative Reforms Commission (FSLRC) is right in opting for a single or super regulator to replace those in equity, commodities, pensions and insurance sectors. The idea is to move from sectoral regulation to a broader framework of rules and principles...........
Is a unified financial regulator a good idea? - NO
.......Before we address the FSLRC’s suggestions for a regulatory model, it might be useful to ask if we would like to replicate the models followed in the West: the conglomerate financial institution, the “too-big, too correlated too interconnected to fail” enterprise that stymied both the UK and US regulators. If we decide to stay with diversified institutions, “with different ownership, incentives and objectives”, as Joseph Stiglitz put it in his recent lecture at the RBI, then, well-trained multiple regulators could be the best bet.
Debate over rate right
.....the Srikrishna committee has wormed in some insidious elements in its recommendation that should set alarm bells ringing. These elements raise questions about the independence of the RBI going forward, and whether or not monetary policy should be conducted at an arm’s length from the government of the day. Neither the federal open market committee of the Federal Reserve nor the monetary policy committee of the Bank of the England — the policy-framing bodies in the two countries — has a representative of the government sitting in on the deliberations........
The FSLRC Report is flawed in its approach
The best thing to do is to moth-ball it!
What is the prognosis for the report of a 10-member Commission, signed only by seven members, four of who append notes of dissent? Not very bright, perhaps! And when the Commission in question is also headed by retired Justice BN Srikrishna whose reports, he rued in an interview to The Economic Times, are either not acted upon (Mumbai riots) or are selectively acted upon (Sixth pay Commission), the future of the report must necessarily be a bit bleak...........
Read - ET
Sting’ in the air
The 2007-08 nightmare of the US financial system collapse and its universal effect on regulators and the central banks will not go away in a hurry, and the RBI is no exception. That the RBI has put in place a number of riders for permitting more private players in Indian banking is understandable. After all, allowing higher foreign stakes in aviation or retail is different from opening up insurance and banking.The RBI has been averse to private bank conglomerates, as it would need to arm itself with greater insight into their workings, which have spread unease across the globe.
R. Narayanan (HBL)
Government’s sins come back to haunt us!
......The RBI puts it well :’To minimize the possibility of external shocks further disrupting India’s growth sustainability over the next few years it is important to not only focus on financing of CAD but also on compressing CAD to lower more manageable levels..........
Read - ET
ICICI Bank shuts door on ex-employees
That’s when the human resource (HR) dropped the bomb. “There is a change in policy. We are not taking back former employees, at all.” The new policy at the largest private-sector lender in the country, with a muster roll of over 58,000 employees (as of March 2012), would apply across the group; so, the old boys could not even join a sister concern, according to officials. .........
Industrial, commercial hot spots top in credit cards sales: Survey
The usage of plastic money (credit cards, debit cards) is catching up in India as industrial hot-spots and tourism destinations report high rates of card usage, says a survey. According to a survey by Retail Management Solutions provider, Ginesys, besides tier I cities, the usage of plastic money is high in industrial hot-spots and tourism destinations...........
Following BRICS bank plan with interest: IMF
.......... “We welcome the announcement of the establishment of a BRICS development bank and stand ready to work closely with the new bank to end poverty and build shared prosperity throughout the developing world,”......
Coming soon: Pre-filled I-T return forms
In a bid to increase tax compliance, the income-tax department is considering providing pre-populated forms for filing returns. A good portion of information, such as data received from employers and third-party sources, may be pre-filled by the tax department in these forms — in line with the global practice...............
Banks can corrupt everything
.........Use “sundry” accounts of the bank, they suggested, to deposit all the illegal cash from where it is to be routed into investment. Either use accounts of other customers, for a fee, to transfer money abroad, or use some shell company and take away a chunk of foreign currency as expenses toward business-cum-leisure trips. They would pamper you, offering you ‘privilege banking’ or ‘priority banking’, pulling out all stops to make the deal happen.
Read - The Goan
A wake up call from Cyprus for “debt-ridden” states like Kerala - M G WARRIER
.......Sometime last year, the RBI Governor who visited Kochi, during his morning walk found daily wage workers from Andhra Pradesh on the street, who told him that they were paid about Rs600 per day and were able to save and send home ‘something’. These commendable achievements are shadowed by near anarchy on the labour front, which has affected industrial progress and political instability.........
Read - Moneylife
Gold Imports Send India's Current Account Deficit To A Record High
............The central bank didn't quantify the increase in gold imports but the government has for sometime blamed them for the rise in the nation's current account deficit................
When CAD is bad, govt should let the rupee drop to 60
....... “The worsening CAD is partly signalling that the rupee is overvalued. But the RBI and everyone else are missing that clue. That is because policymakers further open up the tap to attract more volatile, risk-driven foreign capital to finance a worsening CAD. Indian policymakers are making a simple mistake to think that as long as capital inflows finance a worsening CAD, the rupee is appropriately valued. This is incorrect. ...........
HSBC overhauls incentive structure for its sales staff
........."We now reward based on how many consultations they (staff) have with
the customers. Did your customer increase the value of assets with you?
These are the kind of things based on which we are incentivising."........
Soon, prisons in Maharashtra will have ATMs
The government has decided to install automated teller machines (ATMs) in prisons across the state. Nationalised banks will be awarded contracts for a limited period and provided adequate security by the ministry of home affairs........
Rare coins donated to RBI Museum
The Reserve Bank of India has released an information brochure showcasing a few of the 138 rare antique coins donated from the collection of late M. R. Jambunathan by his daughter Ms Indira Anantharam Iyer........
Fake rupee notes on the rise, in India and abroad
........Also, contrary to the general practice of suspecting Rs 500 notes, you should be wary of Rs 100 notes, the data show. These account for 56 per cent of the counterfeit bank notes detected in India. The Rs 500 denomination notes made up a third of counterfeits detected. Notes of Rs 1,000 denomination accounted for 5.2 per cent, but even fake notes of Rs 10, Rs 20 and Rs 50 denomination have been detected.
FM inaugurates 300 bank branches in UP
Finance Minister P Chidambaram today marked the inauguration of 300 bank branches in Uttar Pradesh, the largest number of bank branches launched in a single day in India. He compared the feat to a “triple century in a cricket match”. The branches, belonging to 30 banks, are spread over 75 districts, primarily in rural areas...............
Securing a loan is a right: Chidambaram
......With obvious reference to commercial banks, he said the attitude towards loans should be changed. “A farmer has a right to an agricultural loan,” he said, adding the youth had a right to loans to start their own enterprises. “If you are qualified and have the ability to repay, you have a right to get a loan,”..........
Committee on FDI, FII definition to meet on April 4
.......“The meeting of committee is scheduled for April 4. The committee will take about two-and-a half months to come out with the report,” a senior finance ministry official said. The DIPP Secretary, an RBI Deputy Governor and a SEBI whole-time member are the other members of the committee. Mr. Mayaram had earlier said that there is a lot of confusion in mind of foreign investors because of distinction between FDI and FII..........
IRDA introduces credit rating norm for selecting foreign reinsurers
......The reinsurance programmes would commence from the beginning of every financial year. The details would have to be submitted to the regulator at least 45 days in advance. One of the objectives of reinsurance programme, according to the regulator, is to maximise retention (the portion of risk which an insurer assumes for its own account)......
Vegetable vendors shy away from Monday 'haat' at Unit-IV
..........With Postal Colony, RBI Colony, AG Colony, Shastri Nagar and Madhu Sudan Nagar near the market, at least 2,500 customers visit the 'haat' daily. But the number of customers is at least five times on Mondays, when 700-800 additional vegetable vendors and farmers from outside join regular retailers and vendors.............
Financial Inclusion of Muslims: Major Roadblocks
.........Indian Muslims (with 13.47% share in national population) just share have just 0.78% and 2.2% share in employment with RBI and SCBs..........
........Section 17 (1) authorizes RBI to accept deposits without interest; and section 45 allows RBI to appoint any bank as its agent to execute the work. Section 6 (1) (b) allows SCBs to work as an agent; section 6 (1) (m) allows banks to acquire and undertake the whole or any part of the business of any person or company, when such business is of a nature enumerated or described in this sub- section; and section 6 (1) (o) carries the provision to include new sort of business for banking companies. Section 19 of BR Act 1949 allows SCBs to open subsidiaries for specific business activities. So RBI on behalf of Government of India and the public can appoint any SCB as its agent to execute Participatory Banking......
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