This is no way to manage public debt - S.S.Tarapore

................It would be hara kiri to hastily set up an independent PDMA, say, by an ordinance, without a significant and enduring reduction of the fiscal deficit. The PDMA should be set up only when the government is able to undertake its borrowing without statutory prescriptions, as there could be a constant blame-game between the RBI and the PDMA.................

Read - HBL

'Banking connectivity surges with BC model'

Banking connectivity has jumped from about 67,000 villages in March 2010 to 211,000 villages in December 2012. The country has about 600,000 villages. The rise was largely achieved through business correspondents (BCs) and other alternative channels, not so much through the branch model, Reserve Bank of India data showed. The data was shared by Deepali Pant Joshi, Executive Director, RBI, in a presentation at the International Summit on Skill Development in New Delhi yesterday........

Read | Business Standard

A journey through the Golden Quadrilateral to India’s heart

When this couple decided to pack their bags and set off on a long road trip, friends and relatives alike tried to dissuade them from undertaking the arduous journey across the country. Today, Ajit Lakshmiratan, a retired Reserve Bank of India officer, and his wife, Ramola Lakshmiratan, are thrilled to have stuck to their instincts to go ahead with the journey — covering the Golden Quadrilateral............

Read - The Hindu

Quantitative capital controls more effective in short term:RBI

........"Our experience has been that while quantity controls are more effective in the short-term, they can also be distorting, inefficient and inequitable,"............

Read - ET

Moody Institution

Subbarao has a point when he says IMF did a poor job of predicting the crisis or in offering solutions

.......The biggest blow to the IMF’s credibility, of course, came from its research head Olivier Blanchard releasing a detailed working paper in January saying the IMF had got the ‘fiscal multipliers’—the impact of reducing fiscal deficits on economic growth—horribly wrong. The research paper said the under-estimation during the early part of the European crisis may have been three times...........

Read - FE

RBI views forex market intervention as real danger

........According to Subbarao, the lower your reserves dip, the more vulnerable you become. “And the vulnerability can become quite serious if your reserves go below the level markets perceive as necessary to regain market access,” he said.........

Read | Business Standard

RBI looking at banking regulations, not black money: Takru

.....We are not talking here about black money because neither the RBI nor the ministry is the competent authority perhaps to decide whether money is black or white. Money has no colour; as far as we are concerned, money is money. Now, what the Reserve Bank of India is looking at is the banking regulations and how the banks have behaved and how the individuals who are working in the banks have behaved when it comes to following processes..............

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

Cobrapost fallout: RBI extends investigation to 34 banks

.....“RBI has questioned how non-sales staffs, involved on operational matters like a person who is in the teller counter, can have a target. Lure of achieving target leads to not doing the basic duty,” said a senior banker. RBI is likely to issue norms banning sales incentives to operational staff of the banks. Similarly, target on selling gold coins by operational staff will also be abolished. However, violation of anti money-laundering norms has not been found. “Money laundering has a criminal connotation. It was not found in the initial investigation that bank employees are indulging in such activities,” said banking industry sources.......

Read | Business Standard

RBI to come up with new model to curb tax evasion

The Reserve Bank Of India has decided to come up with a new model to curb tax evasion, post Cobrapost revelations, reports Siddharth Zarabi of CNBC-TV18 quoting sources. On Wednesday, reacting to RBI’s probe report on Cobrapost sting, banking secretary Rajiv Takru had noted that audit report pointed towards some severe Know Your Customer (KYC) violations and there were evidence to suggest that the banks were advising clients to evade taxes.................

Read.........

RBI money-laundering probe shows cooperative banks as the key facilitator of shady deals

...........The reason cooperative banks have repeatedly been at the centre of scams is the shady system of dual regulation, under which both Registrar of Cooperative Societies (RoCS) and the RBI are supposed to be regulating them. RoCS officials say that the RBI does not look closely at these banks, while the RBI says it waits for government recommendations to act as the State's Cooperatives Department has its auditors on the boards of the banks. The primary reason for this poor scrutiny is that most cooperative banks are set up and controlled by powerful politicians................

Read - Moneylife

Alert: Banks ask for resubmission of KYC documents

.......Here’s a sample of the email sent by a private sector bank:

This is with reference to the RBI Guidelines for Re-submission of KYC documents for your ABC Bank Account. We request you to kindly submit the following documents at your home branch or any of your nearby ABC branch..............

Read........

My View on "Who will step into Subba Rao's shoes?"

We are familiar with Raghuram Rajan, the chief economic advisor to Finance Minister P Chidambaram , his exposure to international economic problems, his academic credentials and track record which makes him eminently suitable to be GOV.What is the track record of Arvind Mayaram, Secretary, Department of Economic Affairs (DEA). All his life stayed in Rajasthan working in districts, administrative divisions etc.For a short tenure he came to MoF.How does he compare himself with GOVs of Central Banks of advanced countries.Put under the lens his expertise in Monetary Policy, Risk Management,Bank Supervisory expertise, role in implementing Basel Committee recommendations on the website and let the experts choose the next GOV. Why can't any RBI Dy GOV can become a GOV who has deep Central Banking expertise?Why only IAS types? What genetical complex RBI community is having? 

- Sitendra Kumar

Recent developments which saw easing out of a Deputy Governor (Subir Gokarn) for no fault of his and compulsions to retain another Deputy Governor for another year calls for a review of the selection and placement procedure at that level. Perhaps the pool from which selection is made and the age profile (raising the upper age limit by 3 to 5 years from the present ‘normal’ at 62 years) need a review. In the circumstances, it would be most appropriate to extend the tenure of Governor Dr Subbarao who is to retire within months, initially by another year at this juncture. This would be a pragmatic political approach also, if one weighs the uncertainties in the horizon. Formulating and implementing succession plans for top government/public sector jobs with professionalism and efficiency in a graceful manner is imperative for allowing the institutions to function with reasonable functional autonomy within the legislative mandates.

- M.G.Warrier

Rajan will be good for the country, Mayaram for the government. In view of the general elections government would like to have someone at the helm of RBI who would play ball with it in vote bank politics. If it is Mayaram, expect a series of rate cuts and lower cash reserve ratios from September, irrespective of the economic situation. From the point of view of the RBI staff, Mayaram's appointment would ensure the continuation of two Deputy Governors' positions for them. If, however, Rajan becomes Governor one of the two DGs' posts will go to an IAS officer at the earliest opportunity. Since the middle of the 1980s the formula for the appointment of four Deputy Governors is: economist -1; commercial banker -1; IAS officer -1; and RBI promotee -1. When the Governor's post goes to an IAS officer, the quota for the service is released for being filled up by an RBI officer. 

- A.Seshan

My View on "Govt banks may switch from gross salary to CTC for pay hike"

Like New Pension Scheme which has dismantled an existing social security system which was available to a small section of government and public sector employees without providing an acceptable transparent substitute, here again, it looks, GOI is planning to stealthily destabilise the wage structure in banking sector. 

There is no denying that ‘Cost to Company’(CTC) is an aspect that should be transparently packaged in any wage policy. But asking one category of employers (public sector banks) with whom GOI has a master-servant relationship to come out with ‘views’ on the concept makes one suspect the motives. 

Public sector, if backed with a level playing field as compared to the private sector, right from the Board Room to the junior-most functionary, will function much more efficiently than many of the private sector organisations in India, which, by and large, concentrate on the creamy layer of industrial and financial sector activities. Let us not forget that the civil services, executives and staff of public/private sector undertakings have to supplement the skills of the increasing number of political masters who were not as fortunate to get trained or groomed. The nation is immensely dependent on them for carrying out the development agenda on hand.

There is a governance and ethical issue hovering around the remuneration structure across government, public and private sectors and the unorganized sector in India. Time for a National Commission on Remuneration Practices has come. The Commission should go into the adequacy of wages, minimum and maximum remuneration across sectors, their relationship to lifestyle needs of employees and paying capacity of employers and the need to factor in social security needs like healthcare and old age needs in wages.

- M.G.Warrier

RBI wins above 40 yrs men’s team championship

JAMMU, Apr 18: : Reserve Bank of India wins men’s team championship of above 40 yrs beating Punjab 3-2 in the 20th J&K Bank National Veteran Table Tennis championship-2013 being played at Sher-E Kashmir Indoor Sports Complex in Srinagar..........

Read - Kashmir Times

Mangelal Sharma gets his Rs 7 lakh back

..........Yesterday, there was another knock on 79-year old Mangelal Sharma’s door. Once again,the visitors were IndusInd Bank officials from his branch. But this time, it was not to mis-sell. The bankers came—at 11.30 in the night—bearing a demand draft of Rs7 lakh covering the amount he was persuaded to withdraw from his fixed deposit and invest in DWS’s mutual fund scheme with a 10-year lock in period.........

Read - Moneylife

Gold plunge: Is RBI a gainer or loser

.“The value of RBI’s gold reserves—557.75 tonnes—declined from $34.08 billion (around Rs.1.84 trillion today) in September 2011, when the international gold price peaked at $1,900.23 per ounce (28.35 gram), to $24.17 billion early this week, when the yellow metal tumbled to its 26-month low of $1,347.95 per ounce.” However, with prices falling, central banks actually have an opportunity to buy into the yellow metal because holding the metal is part of a long-term strategy for diversifying currency reserves.........

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

RBI's gold reserves take a beating

Fall in gold price will likely result in a $1.37-billion dip in value of gold reserves with RBI................

Read..........

Saving economies from economists

.......Economics has become an intellectual casino and does not deserve to be characterised as a ‘science’. A ‘science’ tests theories and experiments to accurately predict outcomes. Think physics, chemistry. Economics hardly qualifies, having got things wrong more often than not. And with disastrous consequences for all........

Read - HBL

Crackdown on 'cheat' schemes

....According to financial experts, these firms had adopted some innovative techniques to raise money to bypass RBI and Sebi, like raising money through private placement of debentures and taking deposits against land. They offered very high returns - 20-30% - drawing lakhs of rural and semi-urban people...........

Read - TOI

Keep your money safe: Avoid Chain-money schemes

.......The fact is that dubious financial schemes are proliferating so much that the SEBI chairman recently suggested a separate regulator for them. Understand the basics of how to keep your money safe, it is the first step to smart investment, returns come next!...............

Read..........

Indian banks' overseas workforce expands

At a time when foreign banks operating in India are reducing their employee count here, Indian banks have increased their overseas workforce. The number of employees working abroad with Indian banks rose 6.1% in financial year 2011-12, according to the Reserve Bank of India's (RBI) survey on international trade in banking services. The employee count in foreign banks operating in India, however, decreased 2.9% during the financial year..........

Read | Business Standard

Ibibo Group company PayU India launches online payment service PayuPaisa

Online payments company PayU India intends to make buying and selling over the internet more convenient with PayUPaisa, an e-commerce portal that allows sellers to create free websites to market their products without any physical paper work. Sellers have to submit details of their PAN card, bank account and products to be sold to get started..............

Read - ET

Govt tries to breathe life into SEZs

.......There was a promise of more to come with the Reserve Bank of India reviewing the dollar-credit window for exporters...........

Read - TOI

RBI nod for sale of CSB shares to Yusuffali

Catholic Syrian Bank (CSB), on Thursday, said it had got the Reserve Bank of India’s permission to sell 4.99 per cent of its stake to Dubai-based Kerala businessman Yusuffali MA, who runs retail chain Lulu Centre in the Emirates..............

Read - The Hindu

NRIs can get car loans in India, but conditions apply

..........As per the Reserve Bank of India (RBI), repayment can be done only through remittance received from outside India through normal banking channels or through non-resident external/ordinary accounts or out of income earned from a rented property in India. RBI has also allowed resident Indians to repay loans on behalf of their close NRI relatives............

Read - Mint

ICICI Bank to up unsecured lending, says exec director

ICICI Bank will increase its portfolio of unsecured lending, including personal loans and credit cards, with a cautious approach, Rajiv Sabhrawal, the executive director of ICICI Bank said........

Read - IE

‘Customers prefer human contact in banking’

.............Speaking on human touch in banking, Krishnaswamy said the brick and mortar banking kept the bank and its customers connected on a daily basis. He said the concept of ‘know your customer’ was a reality here, and it was not based on documents...........

Read - HBL

Rupee Bank impasse: Appointment of Pune based officer sought

....The depositors have demanded that the OSD should operate from Pune, as it will help fast-track the screening of almost 3,000 pending applications of depositors seeking emergency withdrawals. They also met Cooperative Minister Harshavardhan Patil in Mumbai on Tuesday and expressed concerns over the delay in withdrawals due to applications being routed to RBI headquarters in Mumbai instead of processing them in Pune.  However, the depositors have hailed the role of the RBI-appointed administrator in spearheading the bad loan recovery drive............

Read - Sakal Times

Banks making good progress on farm loan waiver scheme

..........The CAG report, tabled in Parliament last month said loans taken by farmers for non—agricultural purposes and others which did not comply with the eligibility norms got benefited from the scheme and blamed bank officials for the mess. Following the disclosure, the Reserve Bank had swung into action and asked banks to rectify the administrative and accounting lapses by verifying each and every account. It had also thrusted the responsibility to do so individually on the heads of the banks..................

Read - HBL

Foreign banks made Rs 9400 crore through fee income in 2011-12, says RBI

MUMBAI: Foreign bank branches operating in India generated a fee income of Rs. 9400 crore where as Indian bank branches over seas made a fee income of only Rs.6800 crore in 2011-12, according to a survey released by the Reserve Bank of India...........

Read - ET

HSBC says ready to follow RBI norms

....."We will move whichever way the RBI requires us to do," HSBC India Country Head Naina Lal Kidwai told PTI on the sidelines of an event here, when asked if the bank will be fine with going the subsidiary way. The comments come in the wake of recent reports that RBI had firmed up its mind on the way forward for foreign banks and would be insisting on them to operate as subsidiaries..............

Read | Business Standard

ICICI Bank to grow personal loans, credit card business

......Risk of delinquencies since the 2008 economic meltdown has made the bank shrink its unsecured lending portfolio. As per Reserve Bank of India data, credit cards issued by ICICI reduced to 2.84 million in January 2013, from 2.86 million during the same period last year. It stood at 3.19 million as on June 2011........

Read - HBL

Federal Bank launches Rupay debit card

.....Since the Rupay Transaction processing will happen domestically, it would lead to lower transaction cost for Federal Bank compared to international schemes, the Kerala-based bank said in a statement........

Read - HBL

HDFC Bank reaches new milestone

HDFC Bank, the second largest private sector bank has reached a milestone of 200 branches in Andhra Pradesh. The latest one has been set up in Vemulawada, a pilgrim town in Karimnagar district. The bank will focus on opening more branches in the rural parts of Andhra Pradesh..................

Read - HBL