New thinking by an old hand

............As in the past when he was with the Reserve Bank of India (RBI), he continued to look upon his role as one in search of issues (the more complex the better!) and to suggest solutions. He combines a breadth of vision with an intensity of gaze which is rare among monetarists! He relates monetary issues to the larger fiscal and developmental and weaves them organically.................

Read - The Hindu

RBI's powers not to be clipped: FSLRC

.........Autonomy and accountability are two sides of a coin and need to be balanced.........

..............."How can the finance ministry get more powers? There will be more autonomy for the RBI. Today, it depends on the personality of the Governor. Some Governors may be pliable, while some may be tough. The appointment of Governor also needs to be streamlined. The FM can't say you do this and the RBI can't say 'I got a call from the FM, so I'm doing it. Everything has to be in public domain." "The RBI is very much under the control of the government of India. The Centre can issue a policy directive, a policy directive is what the Centre says it is... All that won't be possible now as everything has to be put in the public domain as per our proposal. ................

Read - IE

RBI offers its officers flexible work timings

Aligns HR Policy With Global Practice To Improve Employees’ Work-Life Balance 

.......... “The RBI felt the need to adopt a flexi-time approach to align its HR practices with the best in the country and in the world, and to supplement its efforts at being a knowledge institution,” said Alpana Killawala, Chief General Manager, Department of Communication, RBI. “More importantly, as younger people join the stream of our officers, we want them to balance their home and work lives,” Killawala said.  While the project is a pilot that the policy maker with 18,000-strong workforce has started from January 2, 2013, it clearly indicates the growing importance of maintaining a work-life balance in the public sector as well........ 

Read - TOI

Reserve Bank Officers' Co-op. Credit Society Ltd goes digital

Visit the site.................

Information sent by Sh A R A L Shaikh and Madan Gauria, (EXRBITES Group) 

Big guns like Montek, CII & Asshocham, NCAER ignore FSLRC!

The FSLRC headed by Justice B N Srikrishna, invited about 27 persons and organisations for interactions. However, industry bodies like CII and Assocham, Planning Commission's deputy chairman Montek Singh Ahluwalia and RBI's former Governor Dr Y V Reddy did not bother to engage in the interactions................

Read - Moneylife

The biased work of FSLRC

..........For a commission that wanted to put in place a legislative framework for the financial sector that endures for a considerable length of time, it is unfortunate that it chose to recommend that the finance minister be appointed the chairperson of the Financial Stability and Development Council (FSDC). It did this, instead of recommending a more transparent and meritocratic process of the government recommending nominees chosen through a public and transparent process, subject to the confirmation of Parliament. .............

Read - Mint

RBI cannot resolve all national problems through monetary policy: Sanjeev Sanyal

................If it has to choose between growth and inflation, the central bank should try to first curtail inflation. There is enough evidence from economic history that a central bank's first mandate is inflation control as it can be very difficult once inflationary expectations get anchored at the wrong level. This is particularly true when the constraint to growth is not demand but supply side issues. It is not the central bank's job to revive growth if there are supply side constraints and the economy has an inflation problem. Broader economic measures are needed to resolve this situation and RBI cannot resolve all national problems through monetary policy..............

Read | Business Standard

Change of guard in financial sector in

This financial year will see many new personalities taking charge in India's financial sector. There will be new faces at the helm of the banking regulator, the country's largest bank and the largest insurance company. The chairman of the markets regulator will complete his three-year term in February 2014 but there is not much clarity on whether he would get an extension. A look at some challenges for the new leaders............

Read - BS

Impractical recommendations of FSLRC - Manohar Mahajan

I fully endorse the views expressed above.In sixth pay commission report, its author had created hotchpotch by clubbing various grades in paybands which had created a lot of anamolies and played havoc on country's financial health by recommending windfall gains for government employees. Similarly in its report FSLRC has made a number of impractical recommendations, if accepted would create a total mess in the financial sector which hitherto has been well regulated by the present regulators. Failure of FSA both in UK and Japan is well known and there is no point in implementing the same. The mere fact that four members who had hands on experience both in finance and banking have given note of dissent should be enough reason to put the Justice Krishana's FSLRC Report to the cold storage. As rightly felt, the ultimate feeling one gets after reading the report is that the Government of day, particularly FM and cronies in Ministry wanted to put RBI in tight spot by clipping its wings and Justice Krishana appears to have done their bidding by making such bizzare suggestion and reinventing the wheel. Given the short time available to the present set up in the Government as elections appear round t he cornor, the Government should of its own not take up the report for its implementation and leave it for the next Government. Any action in haste would spell disaster for the financial sector and Governement of the day should refrain from it. 

- Manohar Mahajan

Re-visiting the trouble - T.C.A. SRINIVASA-RAGHAVAN

.....The slow reforms of the mid-1980s in the financial sector happened because the so-called ‘Hindu’ rate of growth forced them on the government. As S S Tarapore, former deputy governor of the RBI, once put it, there were over 200 rates of interest in the economy. Simply reducing the rates at the short end was a major reform..........

Read - The Hindu

Counterfeit currency menace

Despite remedial steps by the Reserve Bank of India (RBI) during the past few years, circulation of counterfeit Indian currency notes of higher denomination appears to have once again assumed alarming proportion particularly in Jammu and Kashmir. The reports of seizure of fake currency notes from traders in Jammu region last year appears to be just a tip of the iceberg of the problem that is afflicting the state.........

Read - Kashmir Times

Rural banking in the digital age

..........Financial inclusion could definitely aid to this efforts - hats off to the recent efforts made by the banks and the policy encouragement by RBI. Inclusive growth is the current compulsion of a sound public policy. True, there has been a convergence in the business interest of the banking community in financial inclusion. Financial inclusion is to be treated as a business investment. Banks are to move to the masses as a natural process of financial inclusion. The banks are already in the process of financial inclusion very much - opening and operating rural branches, rural coverage, agri-lending, SHG bank linkages, social onus of banks, etc. in fact, the process has been given the new name ‘financial inclusion’. Still, to bring the farmers under the ambit of financial inclusion the increasing role of commodity exchanges in the matter of providing forward market linkages and price discovery is being largely felt...............

Read - Eastern Mirror

RBI to meet bankers on Thursday for pre-policy discussions

The Reserve Bank of India (RBI) will meet the country's top bankers on Thursday's for pre-policy discussions, in which the latter will seek a deferral of the higher provisioning norms that came into effect today. In addition, the recent RBI norm that increased the threshold level of bulk deposits to Rs 1 crore from Rs 15 lakh is hurting the retail savers and it needs to be reversed, bankers said. RBI governor D Subbarao, along with four deputy governors, will meet the bankers. The central bank's annual monetary policy will be announced on May 3...........

Read | Business Standard

Will the Post Office Bank be a boon or a bane?

..... But considering the intricacies involved in converting the PO into a full service bank that can effectively, efficiently and successfully compete with the centuries old public sector banks and the existing and upcoming high-flying private sector banks, whether it will be boon or a bane for the common people can only be known after it is up and running, as the saying goes, “the proof of pudding is in eating”.

Read - Moneylife

Ponzi scam: Crime branch intimates RBI, collector

......Crime branch which is probing the multi-crore scam has now intimated the Reserve Bank of India along with evidence to prove the financial scam of Abhay Gandhi, who was arrested in 2012. "RBI officials have told us that they shall file a complaint against the company which was being operated by Gandhi. His firm did not procure the license or permission to carry out such financial transactions," said a crime branch official........

Read - TOI

SUCO bank nets Rs. 3.2 crore profit

.....The bank was awaiting clearance from the Reserve Bank of India for the proposed branches at Bangalore, Shimoga, Yadgir, Lingasugur and Raichur (second branch). The bank had also plans to institute three cash awards of Rs. 1 lakh each for innovative farming, adoption of technology in farming and best agricultural and rural reporting.........

Read - The Hindu

RBI redefines core investment firms' rules on entry into insurance

........ “While the eligibility criteria, in general, are similar to that for other NBFCs, no ceiling is being stipulated for CICs in their investment in an insurance joint venture. Further, it is clarified that CICs cannot undertake an insurance agency business,” ...........

Read | Business Standard

Investors dial up mobile payments

..........In a document released last year, the central bank spelt out its vision for an electronic payments system and clarified that it would actively monitor governance of payment solutions companies, previously the responsibility of commercial banks. "RBI is taking a balanced approach to push electronic transactions and addressing key risks to avoid frauds," said Mohit Bhatnagar a managing director at Sequoia Capital, which has also funded Chennai-based Prizm Payments and Zaakpay in Delhi. In the past year, nearly half a dozen payment technology ventures have raised risk capital funding as overall industry sentiment turns positive on a sector where demand is growing fast. ..........

Read - TOI

How banks price loans needs to change, and RBI’s nudge is welcome

..... At a time when banks stare at mounting bad loans, RBI wants to put in place a risk practice of global standard. Gross non-performing assets of public sector banks shot up by Rs 47,000 crore to Rs 1,84,193 crore in December 2012 from Rs 1,37,102 crore in March that year. There cannot be any second opinion on customers with the same risk profile getting similar treatment in loan pricing. But despite several reminders from RBI, most banks have continued to blatantly favour some customers and discriminate against others for reasons never adequately explained because of the opaque way loan pricing is done. In its regular quarterly inspections, RBI has started asking banks to justify the pricing of certain loans......

Read..........

Lenders want higher provision on recast loan to be deferred

The Reserve Bank of India (RBI) will meet the country’s top bankers on 4 April for the pre-policy discussions in which the later will request deferring of the higher provisioning norms that comes to effect from 1 April. RBI Governor D Subbarao, along with four deputy governors, will meet the bankers for the pre-policy interaction. The annual monetary policy review of RBI will be announced on 3 May...........

Read | Business Standard

SBI notice riles farmers

.............When contacted, a State Bank of India official said the letters were issued by the controller of the zonal office of Tiruchi and were well within the guidelines. According to a lead bank official, banks had received guidelines to deal with the mounting NPAs. RBI has allowed for such publication of ‘wilful defaulters’. “However, we only engage recovery agents, and have not used publication of photographs as recovery tactic.”..............

Read - The Hindu

‘Banking sector set to grow by leaps and bounds’

.....Assistant General Manager of NABARD K.I. Shariff said a banking job offered security and opportunity to help the needy people. A career in a bank was more stable than the one in IT industry. He asked the students not to get disheartened by the huge competition saying only a miniscule of the applicants took it seriously. Over 70 per cent of applicants attempted without proper training and skills........

Read - The Hindu

Karnataka Bank eyes 27% business growth

.......Under the financial inclusion initiatives, it has opened 10 financial inclusion branches, 26 ultra small branches, 1 FLCC (financial literacy & credit counselling centre) thus providing banking services to 122 gram panchayats consisting of 591 villages through business correspondents services.......

Read | Business Standard

Mallya sues banks for selling pledged USL shares

............The petition, filed by UB Holding in the High Court, seeks a stay on sale of shares of its subsidiary USL by SBI after the bank sold a portion of UB shares it held as security in the market last week, said an SBI official who wanted not to be named. "We have sold a part of the USL shares. We have also received a legal notice from UB Holding restraining us from doing so. But despite that, we decided to sell them and are likely to sell the remaining shares as well as we are confident of the court ruling in our favour," said a senior SBI official requesting anonymity........

Read - FE