Good Samaritan with head and heart

A warm farewell was given to Dr.Sandip Ghose on 28th March 2013 in the Banking Hall of RBI, Main Building, Mumbai. A large no. of RBItes and Ex-RBItes had gathered on the occasion.  While the speakers expressed with emotion, Dr.Sandip went with wet eyes down memory lane.............. 

................In the annals of the Reserve Bank your name should be written in golden letters for playing a positive and courageous role as Head of Human Resources Department. What has placed you above others are your qualities of head and heart and your easy accessibility despite tremendous work pressures.  Your capacity for giving a patient hearing to whosoever approached you with a problem and your genuine desire to help, and your boundless energy and rare communication skills serve you very well. No wonder, whosoever came in contact with you, discovered a Good Samaritan...............

Shri Vijay Malekar, Manager, HRMD compered the farewell function. Click to Read..........

Kabhi Alwida Na Kehna...........

Chalte Chalte Mere Ye Geet Yaad Rakhna
Kabhi Alwida Na Kehna
Rote Hanste Bas Yoon Hi Tum Gungunate Rehna
Kabhi Alwida Na Kehna

Pyar Karte Karte Hum Tum Kahin Kho Jaayenge
In Hi Baharon Ke Aanchal Mein Thak Ke So Jaayenge
Sapnon Ko Phir Bhi Tum Yoon Hi Sajaate Rehna
Kabhi Alwida Na Kehna...

Beech Raah Mein Dilbar Bichhad Jayen Kahin Hum Agar
Aur Sooni Si Lage Tumhe Jeevan Ki Yeh Dagar
Hum Laut Aayenge Tum Yoon Hi Bulate Rehna
Kabhi Alwida Na Kehna.....................

Reviewing the RBI Act - A.Seshan

...... A vital matter affecting everyone in the country - the "tolerable inflation rate" - was never discussed in Parliament. When I first made the suggestion for a new RBI Act about 15 years ago, I felt that the late N A Palkhivala would be an ideal chairman for the review committee. The government should find someone of his stature to head the proposed commission.

Read | Business Standard

FSLRC report: Will financial sector really benefit from it? - Dr. Subir Gokarn

........The objective of distributing responsibility for making the monetary policy decision is legitimate. I don’t have any problems with the objective which is to take the onus of the judgement away from one individual and spread it across a structure a formal collective process. How it has to be structured is a question that raises several questions. So, who are these people? Will they be employees of the RBI or employees of the government?  What does that mean for their loyalties? Are they independent even though they have contractual arrangements with either RBI or the finance ministry or some other entity? These are the sort of nitty grities that can make or break this arrangement because ultimately, this arrangement depends entirely on the perception of autonomy and independence. If that committee is not perceived to be autonomous or independent, the entire credibility of monetary policy becomes suspect...........

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My View on "Govt Sins come back to haunt us"

......The rupee has already depreciated by more than 20 % in the last couple of years and further devaluation if any will only boomerang.Time for RBI and the GOVT to shed their ego and act jointly on a war footing before the situation worsens further...........

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My View on "The FSLRC Report is flawed in its approach"

....The very fact that four members have dissented and expressed their own views, is an indication that the recommendations if implemented will not help to bring efficiency and soundness to the financial system which has been well nurtured and made to resist to yield to any temptations unworthy of, by the Reserve Bank and other regulators..........

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Freedom for the RBI

.......One way to look at these recommendations — apart from the one on entrusting public debt management and bond auctions, now handled by the RBI, to a separate agency — is that they undermine the idea of an independent central bank. In the context of the recent not-so-veiled differences between the Finance Ministry (which constituted the FSLRC) and the RBI over the issue of rate cuts, it is even quite natural to voice such suspicions. But that amounts to a very mechanical reading and naïve understanding of central bank autonomy.......

Read - HBL

Regulators exist only to protect consumers: B N Srikrishna

.....The time frame depends on how the government wants to go about it. We have shown the path forward and the time frame depends on whether the government traverses the path walking, running, by bullock cart or by a Ferrari. That the situation was not hunky dory is seen from the fact that the government thought it fit to appoint a high-powered commission, with such a wide remit.........

Read | Business Standard

RBI against panel proposal to form super-regulator for financial firms

......"At present, the jurisdiction of Reserve Bank extends over critical economic pricing variables like money market interest rates, medium to long-term interest rates and exchange rates. These rates have a bearing on monetary policy function. Since the Commission proposes to continue monetary policy with Reserve Bank, it is necessary that the regulatory jurisdiction over these (G-Sec, Bond and forex) markets continues with Reserve Bank.".......

Read | Business Standard

India’s new monetary politics

...................It is well accepted that the conduct of monetary policy has to be handed to technocrats who take a longer view, rather than politicians with incentives to think for the short term. It is precisely such operational independence that provides a buffer against what economists call the time-inconsistency problem, which in practical terms often means increasing tolerance for inflation in pursuit of growth. Such inflationary bias will be minimized only when there is minimal government leverage over monetary policy................

Read - Mint

FSLRC and consumer protection

Consumers are blindsided. You could say the same about FSLRC members

.......My conclusion is that the FSLRC is clueless as to why caveat emptor actually does not work. A dead giveaway is its principle that consumer protection should "promote, and not hamper, innovation". The FSLRC talks glowingly of preserving financial innovation without explaining as to what really defines "innovation" and in whose interest? ........

Read | Business Standard

Do away with special laws for SBI, LIC: FSLRC

.....Besides SBI and LIC, the other financial institutions which are governed by special laws include associate banks of SBI, EXIM Bank, National Housing Bank, NABARD, SIDBI and General Insurance Corporation. "The undertakings of all statutory institutions should be transferred to ordinary companies incorporated under the Companies Act, 1956 and their regulatory treatment should be identical as that applicable to all other financial companies," the FSLRC report said......

Read | Business Standard

RBI asks fin regulators to keep close watch on product design

....."Financial sector regulators/supervisors and consumer protection bodies need to keep a close watch on product design and financial innovation in order to ensure that these are oriented towards consumer needs and expectations," Chakrabarty said recently in an event on Financial Consumer Protection. He said financial service providers should treat their customers fairly to protect them from vulnerabilities.........

Read | Business Standard

Paying for past sins?

......But we must accept that fiscal policy is being forced to be, undesirably, pro-cyclical and is accentuating the slowdown. So let's not blame our woes on "global factors". Even as the Reserve Bank of India (RBI) is being goaded to cut rates to boost growth, fiscal tightness is impinging on that very growth impulse. In an ideal world, one would expect fiscal and monetary policy to be counter-cyclical and pull in the same direction. Instead, they have been horribly out of sync post-Lehman........

Read | Business Standard

1991 reloaded

.....But governors of central banks have to be more circumspect. That is probably why Governor Subbarao spoke very guardedly about the green shoots during his I G Patel Memorial Lecture at London School of Economics. This is what he said: “…There is nothing inevitable about the India growth story. We can accelerate growth and improve welfare only if we effectively implement wide ranging economic and governance reforms. Slipping up on this will amount to a costly and potentially irreversible squandering away of opportunities.”........

Read - The Hindu

Obituary

Shri B.E.Akali (also known as Shri Rohra) passed away on 22nd March 2013 in Mumbai. He was 84 years old. He had worked in several departments of the Bank. 

Smt.Shirin Phiroze Sahiyar died on March 29th March 2013 in Mumbai. She was a victim to cancer. She was 75 years old and retired as  Steno from the DEAP. She was very popular and leaves a large circle of friends.

- P.P.Ramachandran (via e-mail)

VITAL(INFO) inclusion ...............

Dear Tarambale,

This is to request you to include me in your mailing list for VITALINFO. In fact so long as I was in CAB I was getting it from you and got lot of valuable information. After my retirement it was stopped and I was thinking retired officers are not eligible to get it but very recently I have been informed that you have not prohibited retirees from getting this VITALINFO compiled by you. so I have made this request N HOPE to be included in your mailing list at the earliest.

With regards and thanks

K C Misra

Retd GM, CAB, RBI, Pune

Building BRICS without straw

.......... In a post-crisis world buffeted by financial instability and weak growth in major advanced economies, BRICS have a historic opportunity to enhance their position in global institutions of governance, and to be a stabilising force through demand rebalancing to weather global economic and financial turbulence. The benefits of cooperation are therefore immense for BRICS as well as for the global economy, but the challenges en route are daunting.

Read - FE

Reduced fiscal deficit key to lower lending rate: Montek

.....Seeking to drive home this point to a gathering of industrialists here on Friday, Deputy Chairman of the Planning Commission Montek Singh Ahluwalia said blaming the Reserve Bank of India (RBI) and its interest rate policy was a “slightly over-simplified approach. I am not saying that’s [interest policy] not an important instrument, but availability of medium-term money at reasonable rates cannot be achieved simply by operating on the repo rate in the system. It is actually achieved by reducing the fiscal deficit.”......

Read - The Hindu

Soiled note count nosedives over 5 yrs

......Most banks are supposed to and authorised to accept soiled bank notes in exchange for full value. They are expected to extend this facility even to non-customers, but many banks refuse. “People may be taking better care of the high denomination notes and that could be the reason the number of notes coming for exchange is less,” Roy pointed out. RBI spokesperson Alpana Kilawala,  “I won’t be able to comment now on the reason behind the reduction in the number of soiled notes coming for exchange.”

Read - DNA

28 fake notes detected

.....Banking sources added that the counterfeit notes were detected after the cash from the branch had recently gone to one of the ‘currency chests,’ functioning as an extended ‘arm’ of RBI. It should be noted that about one-and-a-half years back, counterfeit notes were detected in a similar manner from among the remittances received at SBI branches in the district located at Tirupur-Uthukuli road, Dharapuram, and along West Car Street at Avinashi.........

Read - The Hindu

Cosmos Co-op Bank plans 27 new branches

The Cosmos Co-operative Bank, India’s second biggest in its segment after Mumbai-based Saraswat Co-operative Bank, is planning to open 27 new branches in Maharashtra, Gujarat and Andra Pradesh to increase business, a top official said. “We have received permission from the Reserve Bank of India (RBI) to open 18 new branches and upgrade the existing nine extension counters into new branches,” Krishnakumar Goyal, chairman at Cosmos Co-operative Bank told Financial Chronicle. He said the bank will open 14 new branches in Maharashtra, four in Gujarat and two in Andra Pradesh in this financial year 2013-14. The location for seven more branches will be decided later, he said.............

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Banking aspirants line up with clarifications on licence norms

.....The RBI will, however, go by 'fit and proper' criteria, which will include having a past record of sound credentials and integrity and financial soundness with a successful track record of 10 years, while giving licences. Many aspirants are also seeking clarifications on the 'fit and proper' criteria especially on issues that date back to more than a decade........

Read | Business Standard

RBI set to unveil new norms for credit co-ops

.....Credit cooperatives are not part of the payment system but they operate somewhat like banks, accepting deposits. These institutions have been regulated by the registrar for cooperatives. Unlike cooperative banks, they are not part of the payment system and do not issue their own cheque books. However, they maintain accounts with commercial banks and draw cheques on behalf of customers. Recent amendments to the Banking Regulation Act provide the central bank with more powers over the credit societies. New guidelines will subject them to know your customer and anti-money laundering norms similar to banks and also require reporting of suspicious transactions......

Read - TOI

RBI to enforce parity in interest rates for equals

.....RBI insists that banks should treat both new and old customers on par when they decide to reduce interest rates, rather than have promotional offers at reduced rates of interest to attract customers. Though most home loans are on floating interest rates, customers hardly ever get a reduction. Instead, they get their interest rates hiked in response to RBI’s repo rate hike or other policy decisions of the bank.......

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RBI signs MoU with Banque De France and ACP

.....The MOU was signed by Mr. Robert Ophele, Deputy Governor, BdF and Chairman of Board of the ACP and by Shri G. Jaganmohan Rao, Chief General Manager-in-Charge, Department of Banking Supervision, on behalf of RBI. The MoU was signed in the presence of Dr. K.C. Chakrabarty, Deputy Governor, and Mrs. LE Lorier, Deputy Governor, BdF. The function was held at College of Agricultural Banking, Pune. The MoU provides a formal, yet legally non-binding, gateway of information between the supervisors. The MoU provides for sharing of information on health of the supervised entities, cooperation between the supervisors during on-site examinations, coordinated efforts during times of crises, frequent meetings between the supervisors, preserving the confidentiality of information shared.......

Read - The Asian Banker

High CAD points at India's waning competitive skill: Gokarn

.........."There is something fundamentally wrong with the competitiveness situation. If the trade gap is close to USD 60 billion, over 12 percent of gross domestic product (GDP), suggesting that we are not able to sell to the rest of the world effectively and we are increasingly dependent on rest of the world for our domestic consumption,"...........

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Ministerial row holds up exports sops

.....After the CAD touched 6.7% of the GDP, the Finance Ministry stated that both the RBI and the government would continue to monitor the CAD and would take additional steps whenever warranted. Highly placed sources in the Commerce and Industry Ministry said that despite assurances to take effective steps by way of various sops, including financial incentives, to the labour-intensive exports sectors, the Finance Ministry is yet to take up “serious discussions” on the exact shape the package of sops will take.......

Read - The Hindu

Finmin Seeks More Proactive Role From Non-Official Directors of PSU Banks

........According to the official, the ministry wants these directors to be familiar with the key operations of the bank, and has said that the performance of public sector banks should be compared with that of their peers on matrices such as risk management, non-performing assets (NPAs) and customer acquisition and diversification........

Read - ET

A Smoother Road for Banks or Borrowers?

........ In fact, the RBI’s March 18 notification is a major departure from its earlier stand on infrastructure lending. The RBI in April 2009 said that the rights, licences, authorisation and the like charged to banks as collateral for projects, including core sector ones, should not be reckoned as tangible security. So what changed? With the RBI’s apparently huge concession to the infrastructure sector becoming a reality now, the question that arises is who in the corridors succeeded in convincing central bank governor Duvvuri Subbarao to ease its earlier stringent norms. Despite being a former Union finance secretary, Subbarao has a reputation of not coming under pressure from anyone including his ex-boss and finance minister P Chidambaram. During the reviews of monetary policies, he had earlier surprised the government when he refused to budge an inch on lowering of interest rates despite North Block openly appealing the central bank to be a party on India’s growth story. Who then had convinced the man on Mint Street?....... 

Read - ET

Fraud costs ICICI Prudential Rs 90 lakh, police probe on

......"... We received several complaints from our customers complaining about the phone calls being received from people posing employees of the company and as officials of IRDA (Insurance Regulatory and Development Authority) making various promises inducing them to do certain acts which were prejudicial for the interests of the customers.........

Read | Business Standard

PNB needs to overhaul branch banking model for rural scale-up

......While the Delhi-based public sector lender's deep branch network could give it an edge, it will need to change its traditional branch banking to apprise risks and monitor activity. This will help in operating cost efficiency, India Ratings said in its rating review........

Read | Business Standard

HDFC Bank to charge customers for InstaAlert SMSes

......"Effective April 1, 2013, customers registered for InstaAlerts through 'SMS' will be charged," the bank said in a notification. However, InstaAlerts delivered through Emails would remain free. Customers registered for InstaAlert service with 'SMS' as the delivery channel will be charged Rs 15 per quarter in case of salary or savings accounts, while the charge would be Rs 25 per quarter for Current Account customers...............

Read - FE

Thane Dist Central Co-op bank duped Rs 1.30 crore

...........As the trio failed to pay loan instalments, the bank on March 28 auctioned the gold deposited with it. During the auction, the bank officials of the bank came to know that the gold deposited with them was fake..........

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MLAs call for action against 'guilty' officials

......"It is apparent that the financial crisis has been caused by some of the members of the board of directors, but no action has been initiated against them. We want to create pressure on the authorities to take action." Bapat also alleged that the Reserve Bank of India (RBI) on February 23 put the bank under moratorium but between February 21 and 23, Rs 4 crore was withdrawn from the Bank. This act is suspicious and should be investigated thoroughly, he said.......

Read - TOI

SBH waives FD pre-closure penalty

...... SBH is also launching a new term deposit scheme from April 1 with a maturity period of seven days to 14 days at 5 per cent interest for single deposit of Rs 25 lakh and above,...

Read - HBL

Passing rate cut benefits: Banks face ALM hurdle

The RBI, over the last 12 months, has reduced interest rates by 75 basis points. The transmission of the cut by the banking system, in terms of lowering consumer level rates on loans, has been limited, largely due to the asset-liability mismatches (ALM) building up in the Indian banking system that has restricted the ability of the banks to transmit monetary easing.............

Read - FE