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.
Monday, May 27, 2013
Frontline Managers Conference
Social costs of financial exclusion - Dr.N.A.Mujumdar
.........If only the commission had cared to look at India's own empirical experience, it would not have been misled. Perhaps the commission was too obsessed with " international best practices." The evolution of the Indian financial system is unique in a number of ways. The founding fathers of the Reserve Bank of India ( RBI) built into its statutes the responsibility of promoting agricultural credit. This was unusual for a country which was still a British Colony. Nationalisation of major commercial banks in 1969, the phenomenal branch expansion programme, unprecedented in the history of world banking and fixing credit targets with a view to ensuring wider disbursal of credit - these were indeed bold steps at that point of time in financial history - much before financial inclusion became internationally fashionable.............
Which way is public policy headed? - Dr.Deepali Pant Joshi
..........In recent times, however, the financial sector has, of its own accord, assumed overweening importance. This has resulted in chronic ‘financialisation’, a situation where all value that is exchanged, whether tangible, intangible, present or future promises, is reduced to a financial instrument or a derivative of a financial instrument with hectic trading allowed...............
Reserve Bank sets tone for innovative, inclusive dev
....... Financial Literacy Material is also getting added emphasis to link the financially excluded segment with the banking system. This is aimed at promoting massive awareness about financial products. A model for conduct of literacy camps has been designed by RBI to be followed by banks. Detailed operational modalities are also being put in place for effective financial access to the excluded. Consistency in the financial literacy material has been planned for reaching the target audience in a simple and lucid manner. Financial literacy material, a Financial Literacy Guide, a Financial Diary and a set of 16 Financial Literacy Posters as a standard curriculum in literacy camps prepared by regulator will be an innovative step in devising suitable communication channels so that the messages reach the target audience effectively............
Promoting financial literacy in villages
....A National Bank for Agriculture and Rural Development (NABARD)-sponsored financial literacy project in the rural areas of Jalore and Sirohi districts in Rajasthan is expected to benefit about 25,000 villagers by the end of this month by creating awareness of basic concepts of savings, deposits, loans and insurance. The NABARD has taken the initiative launched through a private agency, Fino Pay Tech, with the objective of promoting financial literacy leading to greater financial inclusion and empowerment which has been identified as a priority by the Reserve Bank of India............
Sangam University BBA MBA Students Attend Financial Literacy initiative
Under the Financial Literacy initiative, a batch of 40 MBA / BBA students of Sangam University, Bhilwara along with their three faculty members visited Reserve Bank of India RBI Jaipur Office on May 16, 2013. The trip was aimed at getting better insight regarding functions and working of Reserve Bank of India. Dr. Sathyan David, Regional Director inaugurated the special session which was arranged for the Sangam students in the Lecture Hall of RBI Jaipur. Highlighting about history of money, evolution of central banking and the role of Central Bank in economies of countries, Dr Sathyan advised the students to read a variety of journals and books, so that they may keep themselves abreast with the latest developments around the world. Two short films on the History of RBI were also shown to the students..............
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Banks need to come clean on notes
..........In its latest directive, the RBI bemoans that “certain branches of banks continue to follow old practices like stapling, writing number of note pieces in loose packets on watermark window of notes disfiguring the watermark impression and rendering it difficult for easy recognition.” It has also asked them to sort out the notes into bundles that are “issuable” and “non-issuable”. Only clean notes should be given to the public, it says..................
Obituary
I am sorry to advise you of the sad demise of Shri Madhav.D.Shinde, in Mumbai on May 13, 2013. He was 86 years old and had served in DESACS for a number of years as AGM. He eventually joined NABARD, from where he retired. May his soul rest in peace.
- P.P.Ramachandran (via e-mail)
Most companies view office romance as personal turf
.........Even in transferable jobs, relationships have flourished. The Reserve Bank of India (RBI), for one, has seen several such instances and has even helped couples get posted in the same city for their convenience. It has been observed when people spend time together at the workplace, they are likely to get into personal relationships...............
Slips with holograms to replace coins on Kolkata buses
Kolkata,
May 25 (IANS) The familiar scenes of commuters arguing with conductors
in Kolkata buses over short change may soon be a thing of past as the bus operators have now hit upon the idea of handing out coupons, or "due slips" with holograms, in lieu of change. Faced with an acute shortage of coins,
operators on select routes would give these slips to the passengers.
These will contain the amount of change to be refunded, the bus number,
as well as the routes on which they can be availed............
RBI to issue Rs 5 coins on Vaishno Devi Shrine Board's 25 yrs
...On the reverse of the coin, "the face of the coin shall bear the picture of Mata Vaishno Devi in the centre with inscription 'Shri Mata Vaishno Devi Shrine Board' in Devnagri script on the upper periphery and Shri Mata Vaishno Devi Shrine Board in English on the lower periphery",..........
Financial Policies
S.S.Tarapore was the distinguished Deputy Governor of RBI and had served there for 35 years. He was seconded to the IMF from 1971- 1979 and was the Chairman of several committees and is presently connected with the Administrative Staff College of India and the Skoch Development Foundation. The book under review – his articles from financial dailies - is a running commentary of India’s recent financial policies and raises issues affecting the policy makers and participants in financial markets. It is divided into a dozen parts with 84 short chapters. The distinguishing quality of the volume is that ...............
RBI Governor to address IPE
.....The Reserve Bank of India Governor D. Subbarao is expected to kick off the golden jubilee year celebrations of the Institute of Public Enterprise (IPE), Hyderabad, with a lecture on June 7........
House panel for multi-disciplinary body to monitor public deposits
.........The body should consist of representatives of the Reserve Bank of India (RBI), the Securities and Exchange Board of India (SEBI), the Ministry of Corporate Affairs and State Governments. This view emerged on Friday in a meeting of the Standing Committee on Finance to discuss the scam involving money pooling schemes, especially the Saradha scam in West Bengal. RBI Governor D. Subbarao and his deputy Anand Sinha made a presentation on various regulatory aspects. SEBI chief U.K. Sinha is slated to submit his views on May 31........
Subbarao agreed with minority of advisors, show minutes
...........The meeting was chaired by Subbarao. The other internal members present were the four deputy governors — Urjit Patel, K C Chakrabarty, Anand Sinha and H R Khan. RBI officers Deepak Mohanty, Michael D Patra, B M Misra, B K Bhoi and Pardeep Maria also attended. External members were Y H Malegam, Indira Rajaraman, Shankar Acharya, Errol D’Souza, Ashima Goyal, Arvind Virmani and Chetan Ghate. Most members felt the global economy was weaker than before. On the domestic front, most felt overall demand was weak..............
Legislating SARFAESI Act
............The other issue that Dr. Drabu has extensively dealt with in his column is the extension of the Reserve Bank of India Act, 1934 to the State. My knowledge and information about it is in my capacity as the former Special Secretary to Government Finance Department where banking was one of the important assignment I handled. On SARFEASI, Dr. Drabu has dangerously concluded his column saying: “If the Government enforces SARFEASI it will only succeed in PSU banks being seen as outposts of financial imperialism. The contention will be that the people of the State have to mortgage their special status to get a commercial loan. It is a choice that no one should not be asked to make.”...........
Read - Greater Kashmir
Banks force customers to take insurance with study loans
.........Banks providing education loans are violating the Reserve Bank of India (RBI) guidelines by forcing their clients to take a life insurance equal to the loan amount to negate the risk involved in the same. The RBI guidelines state that it is not mandatory to get a life insurance along with an education loan; banks may provide life insurance only with the consent of the borrowing party.............
Where were you when chit funds cheated people, panel asks RBI
The parliamentary standing committee on finance on Friday questioned Reserve Bank of India governor D Subbarao on the chit fund fraud. BJP leader Yashwant Sinha, who is the chairman of the committee, is likely to write to finance minister P Chidambaram on the urgent need for the ministry to build a mechanism to curb the chit fund menace........
Who killed Namdeo?
........Farmers are often denied institutional credit. Eighty per cent of them are defaulters, and are not eligible for bank loans. The state has not bothered to approach the Reserve Bank of India (RBI) to seek reconstruction of loans to enable defaulters to repay and seek fresh loans, says Kishore Tiwari of Vidarbha Jan Andolan Samiti. This is despite the RBI's willingness to consider it, he says..........
Why blame the RBI?
........ Being a bankers' bank, regulator and supervisor, no doubt the Reserve Bank of India (RBI) has the moral and physical responsibility to ensure that banks do not err, and indulge in transactions that are against prescribed rules and guidelines. However, one ought to acknowledge that the RBI, with its limited resources of manpower - 17,000-odd staff - cannot be expected to scrutinise millions of transactions involving exotic products carried out by banks and their associate business concerns, having thousands of branches, and whose only philosophy is to make money at any cost...........
All-women co-op bank opens first branch in Pune
Established
in 1997 in Mhaswad village of Mann taluka in Satara, the bank is
opening its first branch in Pune at Dhayari on May 27.
........“One of our main aims in coming to Pune is to get a bigger market for the rural women. It will be a challenge because the dynamics of urban and semi-urban areas are different from that of rural areas. Economic activities pursued by women in cities are different. The Pune branch of the bank will help Mann Deshi scale and expand its operations.”............
Read - TOI
CENTRAL BANK OF INDIA’S “FIRST WOMEN’S BRANCH” IN MADHYA PRADESH INAUGURATED
On the inaugural function Shri M V Tanksale, Chairman & Managing Director, Central Bank of India handing over a cheque of loan amount to the woman beneficiary. Shri P R Ravimohan, Regional Director, RBI, Dr. Rajendra Singh, Chief General Manager of NABARD and Shri Umesh Singh, Field General Manager, Central Bank of India, Bhopal Zonal Office were also present on the occasion............
HC notice to Centre, RBI and Amanath bank
The Karnataka High Court on Thursday ordered issue of notices to the Union government, the Reserve Bank of India and the Amanath Bank on a batch of petitions filed by bank’s depositors seeking permission to withdraw their money.............
NDCC bank board dissolved superseded, administrator appointed
.........While the state government stated that it had sought permission from the Reserve Bank of India (RBI) for appointing an administrator, the office of the commissioner for cooperation and registration of cooperative societies stated that the report filed by NABARD pointed out serious discrepancies in the working of the bank.........
FM tells banks to gear up for a growing economy
The economy will revive this fiscal, and will grow by one percentage point more than last fiscal, Finance Minister P. Chidambaram said here on Saturday. “In the next year, I expect it to grow by another one per cent (percentage point) more,” Mr. Chidambaram said while inaugurating the new building of Canara Bank................
From financing to funding
..........In addition to this, it is not too well kept a secret that banks are refinancing and restructuring loans. These are currently being done to “evergreen” accounts. As such, much of this is being done in partial or complete violation of the regulatory guidelines. This makes the banking sector very weak and vulnerable. The need is to refinance and restructure in line with the economic cycle and in a constructive manner. In this context, it might be worthwhile for RBI to relook at some of its more stringent and mechanical prudential norms. And instead of focusing too much on interest rate, focus on relaxing some prudential norms but tighten the provisioning policy. Instead, RBI relaxed the provisioning norms..............
Something to cheer about
.........The expected cuts in interest rates as well as the cash reserve ratio (the proportion of deposits that banks have to park with RBI) may finally nudge commercial banks to reduce lending rates, thus, encouraging borrowers to engage in commercial activity (for individuals, this could mean buying a house or car; for businesses, this would mean investing in expansion or buyouts). There are political and policy signals as well. At long last,..........
No tax exemption for inflation-indexed bonds: RBI
........."The new instruments to be issued down the line when perhaps CPI index stabilises, we may move over (to consumer price inflation). But currently, the choice is for WPI inflation for the current series which is going to be issued (on June 4)," Reserve Bank Executive Director R Gandhi said. Gandhi, who oversees the internal debt management department, was speaking during a specially-arranged conference call with market participants to clear doubts surrounding inflation index bonds (IIBs), the first tranche of which is to be issued on June 4. ................
The story behind the bond rally
Bond dealers in Mumbai, India’s financial capital, have started enjoying their Friday evenings once again. Despite a record highRs.5.79 trillion gross government borrowing programme for the current fiscal, bond yields are dropping and wholesale price inflation is declining every month to levels below what analysts expect.............
RBI will take some time to act against banks flouting KYC norms
The Reserve Bank of India may take some time to act against banks violating the know-your-customer (KYC) norms, according to Rajiv Takru, Secretary, Department of Financial Services. “We should not expect any action from the RBI in the next week or 10 days. The Board of Financial Supervision in the RBI has to follow a certain process,” ............
Cash-rich PSUs may team up to launch new-generation bank
With the Reserve Bank of India (RBI) expected to issue banking licences to a host of prospective companies, a fresh licence may be given to a consortium of cash-rich public sector enterprises (PSUs). “The finance ministry is keen that one new bank licence be given in the public sector space to a consortium of say three-four cash-rich PSUs,” a top government official, who did not wish to be identified, told HT...........
'Bank mergers lead to too-big-to-fail entities'
..........Are our regulators well positioned to evaluate the consequences to competition in different sub-markets and across regulatory jurisdictions? Is there a role for the Competition Commission of India (CCI) here? Finally, we have seen bank mergers lead to too-big-to-fail entities. What constitutes a merger too far? How do the relative merits of prudential regulation and competition regulation weigh?.................
Compensate bank customers if they fail to get desired service
.......Though most of the public sector banks did come out with time norms for services like encashment of cheques and issue of drafts and displayed them in their notice boards, these norms were never seriously followed.They remained only on paper, as there was no penalty imposed on banks for non-adherence to these time norms. It is possible for the RBI under its existing powers to stipulate penalties for non-delivery of stipulated services by banks and provide for compensation to the banking public for failure of any bank to honour its commitments to its customers. ......
New bank licences | The contenders
The deadline for applying for a banking licence expires on 1 July. At least two dozen companies, both in the private and public sectors, are busy drawing up plans for their entry into banking, being opened up again a decade after the Reserve Bank of India (RBI) allowed the entry of two new banks. India nationalized 14 large banks in 1969 and another six in 1980. RBI has so far given licences to only a dozen private banks in two phases, including the conversion of a cooperative bank into a commercial bank..........
Merging PSBs won’t help
........The merits of consolidation in the banking space have been discussed often but attempts to merge banks have met with little success, partly because employee unions have resisted the idea. Perhaps the Reserve Bank of India (RBI) will give its perspective on the subject in a paper on that it plans to put out soon. There’s little doubt, however, that many of the smaller public sector banks have been stressed over the past year or so...............
Clip Discretionary Wings of PSB Chiefs, Says CBI
.....A
CBI court recently sentenced a former chairman of Indian Bank to one
year rigorous imprisonment by in a cheating case causing loss to the
bank. The banking sector body, Indian Banks Association, has opposed the
move citing that such measures will impact the bank’s competitiveness. “Discretionary
power is a part of the bank’s financial and managerial autonomy. The
IBA has opposed any such measure,” said an IBA official, requesting
anonymity............
Damodaran committee report on biz climate likely next month
.................SBI Chairman Pratip Chaudhuri, NTPC chief Arup Roy Choudhury, BHEL chief Director B P Rao, representatives from Sebi, Reserve Bank of India and the Ministries of Corporate Affairs, Finance, Power, Petroleum, Highways, Commerce and Industry and Urban Development are also part of the panel. Recently, Corporate Affairs Minister Sachin Pilot had said that he has asked the committee for concise, tangible and actionable suggestions...............
Make ‘basic’ banking services free!
.............The RBI should, therefore, now take up the cause of depositors in right earnest not only in the interest of improving the savings rate in the country, but also with a view to restore the trust of the public and get their patronage before grating new banking licenses, as banks have lost the confidence of the general public due to their callous attitude towards the customers and the recent exposures of unhealthy practices in the functioning of commercial banks in our country.
Online fraud: Why should you not blame banks
........From time to time, the Reserve Bank of India has made it clear that it nerve asks personal bank account details. The central bank has of late, embarked on a series of measure to stop this growing menace to fleece bank customers. "We keep requesting CERT-IN to block the ip addresses from which such mails are sent. But the fraudsters use dynamic ip addresses and therefore blocking of ip addresses is not a very effective way to stop such frauds. Banks have also been asked to post a warning on their websites,"............
Are housing finance companies relevant? - NO
.....Of course, there is hardly any difference in the regulatory powers vested in RBI and NHB, which narrows the scope for regulatory arbitrage. With regard to interest rate and prudential regulations when RBI issues some guidelines, the NHB follows suit, or at times takes the lead like in waiver of prepayment penalty on home loans. In this case, the NHB moved first and then the RBI issued its notification asking banks to waive prepayment penalty.............
Are housing finance companies relevant? - YES
.........Despite debate on the differences between banks and HFCs and the need to have a separate regulatory regime for the latter, there is compelling rationale for dedicated housing finance companies.HFCs are governed by the NHB while banks are regulated by the RBI. The NHB is a sub-regulator of the RBI, specifically created for overseeing HFCs. All the regulatory changes seen on home loans have emanated from the NHB and have later been replicated by the RBI............
‘Gujarat’s is an example of balanced growth’
.......Among the other feathers in his cap are being a member of the Reserve Bank of India Western Area Board, a member of the Competition Commission of India, and holding positions on the boards of a number of public and private sector companies. At present, he is Director with Adani Institute of Infrastructure Management and Adani Institute of Medical Sciences.............
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