VITALINFO: 06/10/13

Monday, June 10, 2013

RBI, Sebi Oppose FSLRC’s Suggestions to Amend Laws

India’s lead financial regulators — the Reserve Bank of India (RBI) and the Securities and Exchange Board of India (Sebi) — have opposed some of the key recommendations of a commission constituted by the government to amend financial sector laws, saying they are illconceived and could undermine the authority of regulators.............

Read - ET

Interaction programme about formulation of monetary policy

........The programme was graced by Dr O.K.Medhi, Gauhati University Vice Chancellor, supported by Professor Archana Sharma, Head of the Economics Department, G.U. The team from the central office for this programme was headed by Deepak Mohanty, Executive Director supported Dr BK Bhoi, Adviser Monetary Policy Department and Sangeeta Das, Director, Department of Communication, RBI. PK Jena, Regional Director, RBI Guwahati was an integral part of the team..............

Economic crisis will be over once I retire, jokes RBI chief

When will India see an end to the economic crisis? As this poser was put to RBI Governor D Subba Rao on Friday, he quipped, “The moment I’m out of the RBI.” Addressing an alumni gathering of the Institute of Public Enterprise, Hyderabad, the man steering the country’s top bank joked that the crisis came to India the moment he was made the RBI chief..............

Read - Mirror

RBI to come out with paper on banking structure: D Subbarao

......My take on that will be told very clearly when the RBI comes out with the paper. It's a paper about the banking structure for India. We are going to bring it out in the next one month where we will address these issues or at least define the issues for discussion," ............

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‘It’s the right time for a discussion paper on the banking sector’

........At no other point has the banking industry been so concerned about the future: entry of corporates, subsidiarisation of foreign banks. Then there is the FSLRC proposal on ownership neutrality, which can bring about a paradigm shift. The discussion paper has an ambitious agenda and presents a timely opportunity for existing and aspiring players to formulate strategy..........

Read - IE

Banking licences: Question of earnestness

Now that the Reserve Bank of India (RBI) issued clarifications on new bank licences — in response to the 443-odd questions it received from 34 potential applicants — one thing has emerged very clear that the banking regulator will not make any relaxations with regard to cash reserve ratio (CRR) and statutory liquidity ratio (SLR)..................

My View on "Who Would Audit the Central Bank?":..............

Old timers would vouch for the above comments of Shri AC.RBI traditionally had been "Reserve" Kanjoos and would think hundred times the repercussions of its decision to extend some financial benefit to its staff. In the past whenever employees association would ask for some facility on the line of GOI employees, the Bank would say it was not available in the Banking Industry and when some facility from the Banking Industry was asked for, the Bank would plead that GOI would not approve. That showed that how sensitive the Bank was to any extra expenditure howsoever justified that might be.That is to say that despite sitting on the mountains of money, the Bank has been very cautious in its expenditure.
There had been attempts in the past advocating to bring RBI within the purview of CAG Audit (during 1992 securities scam also). But the Government of day did not find favour with such moves and wanted RBI to have its own autonomy.
Things appear to have changed now. With Governor,RBI not yielding to MOF, the whole machinery seems to have become hostile to RBI and somehow want to force RBI in submissiveness. Report of the FSLRC is another attempt in this direction. When RBI the central bank of our country is made to forego its independence, that will be black day in our history. May good sense prevail upon them who are out to destroy RBI, an outstanding institution nurtured over years.

- Manohar Mahajan

Don’t bank on it

.........While an independent perspective is generally a good thing, it is difficult to see how this bunch of wise men and women will do much better than the galaxy of independent directors that have adorned the boards of both PSU and private firms while contributing little.......

Read - FE

Is India under-banked?

..........In any case, as is well known, bank promoters have a free ‘put’ option. If a bank succeeds, glory to them; if it fails, the RBI is there to pick up the pieces. So mis-governance is cost and punishment free. Who wouldn’t jump at the opportunity?..........

Tough norms leave NBFCs’ banking hopes in a muddle

............"We don't want to lose our customer base. We think RBI should allow us to operate like this if the true vision is financial inclusion."............

Read - ET

New banks not a good idea to bet on

The Reserve Bank of India’s (RBI) move to issue new bank licences, paving the way to better efficiencies, product innovations and more banking inclusion, promises a lot of business prospects, but bank licensing as an investment theme may not be a very exciting idea for equity investors, at least in the near term.................

RBI issues new coins, notes

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The Reserve Bank of India here has announced issue of new coins of Rs. 5 denomination to commemorate the occasion of the Shri Mata Vaishno Devi Shrine Board’s silver jubilee and of banknotes of Rs. 10 denomination in the Mahatma Gandhi Series-2005 with the Rupee symbol....

Read | The Hindu

Of bankers and bureaucrats

........Earlier, his predecessor, D.K. Mittal, had made a virtue of issuing detailed directions to state-owned banks on operational matters such as capping bulk deposits at 10% of the total deposits. So specific were the letters that even the Reserve Bank of India (RBI) was, for a change, offended and decided to speak out. There are two issues involved here. First, such interventions are a clear violation of the basic principle of corporate governance: the separation of ownership and management. Even if the government of India, represented by the finance ministry is the largest shareholder, it cannot get into the operational management of banks. What is being done through these periodic outbursts is to muscle in and micromanage public sector banks. Not only does this violate corporate governance, it weakens the authority of RBI as the regulator...........

Read - Mint

Ponzi menace needs better surveillance, not new regulator: RBI

..............“I would say, may be, we should look at the laws once again. What I am saying is that it (amendment to laws) is necessary but not sufficient. Sufficiency conditions will be met by more effective surveillance and enforcement of law and catch unlawful schemes.”

Read - Mint

Daunting task ahead for Sen Commission

.......Mamata’s announcement of a Rs. 500- crore relief fund for the affected and her decision to provide compensation starting from the poorest among them has only complicated matters for the commission. Such measures could run into a legal wrangle as questions have been raised whether the state can provide compensation to those who have invested in companies that do not have clearance from the Securities and Exchange Board of India (Sebi) or the Reserve Bank of India (RBI)..............

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Do the urban poor contribute?

India's urban poverty is over 25 per cent. Rightly, the Reserve Bank of India has asked banks to bring metropolitan areas under the lead bank scheme for the first time since 1969, a move aimed at providing to the urban poor doorstep banking and direct transfer of cash benefits under social welfare programmes. The central bank has admitted that financial exclusion is not merely a rural phenomenon. Since policy makers have always viewed the urban poor as burdens on public services and infrastructure, the apex bank's initiative is a step in the right direction.............

Read | Business Standard

When two cats fight , what happens?

Nobody is bothered about the pensioners. Takru had earlier indicated that 100% DA neutralisation for the pensioners who retired before 2002 could be considered only if the expenditure is met out of load. Now nobody is prepared to share the load for this purpose and this item has to be dealt with separately. Older pensioners condemned to survive on tapering DA. Further, GOI insists that Unions can only talk about Scale 1 to 3 officers only. I feel this is correct. In the previous revision, IBA insisted that terminal end of GMs should be at Rs 54,400 whereas Unions wanted it to be Rs 47,000. Ultimately IBA prevailed over the Unions to let it be Rs 52000 because a certain amount of parity has to be maintained with Govt Officials. If the Unions have their way, they would pull down all senior officers as they wanted the quantum of rise should be precisely to be the same for all grades. GOI does not follow this practice as it accepted a factor of 1.86 for junior officers and maximum of 2.61 for apex officers while merging DA in case of Sixth Pay Commission. Because of their wrangling, we also got a max of Rs 52000 only which was sweetened by Grade Allowance and SCA making us hybrid between IBA pay scales and Sixth Pay Commission pay scales.

It seems Takru would be the sole judge in wrangling between Unions and IBA.

-Sitendra Kumar, EXRBITES Group

Wage Revision Xth BPS : Meeting Dated 7th June is Again Listless

.......... On the issue of demands of IBA, the leaders of UFBU have kept silence and not given any details and it appears that slowly they are moving towards accepting such demands as they have suggested that on these issues can be reverted later on. In the given circumstances I need not give my comments as things are crystal clear ...........

Read more..........

FM GIVES A SLAP ON THE FACE OF CMDs / EDs OF NATIONALISED BANKS WHO TILL YESTERDAY WERE PUNISHING OFFICERS FOR FAILING TO MEET TARGETS FOR SALE OF GOLD COINS

.........Now, I would like to know the views of the CMDs / EDs / GMs of all nationalised banks, who have beenencouraging such sales and even punishing officers who were slow in such sales. Is it not a slap on their face? We are happy that finally. RBI and GoI have fallen in line with our views. I hope CMDs / EDs will shed their narrow mind attitude and will listen to few honest voices around them. They have to start thinking in broader terms in the interest of the nation. This will come only if they are keep away the flatterers. I hope soon RBI and GoI will realise their mistakes on other issues like sale of third party products, cartelization in respect of saving interests etc. ..........

Structural imbalance hinders banks

............"structural imbalances in the Indian banking system's funding structure are diluting monetary policy transmission, crowding out corporates from the money market and discouraging long-term savings in the economy"............

Read | Business Standard

Smart Money where it is headed

........This is reflected in equities taking a backseat in the HNI portfolio for now and safe haven investments such as deposits, gold coins and bars gaining traction in recent times. The measured and predictable pace of the Reserve Bank of India’s interest rate cuts have helped gilt and long term debt mutual funds deliver high returns and HNIs have flocked to them......

Read - HBL

Pace of seeding Aadhaar numbers with bank accounts still a concern

.......Last month, the government had decided to pay a commission of one per cent to banks on the total amount transferred under DBT. The fee is paid to compensate banking correspondents (BCs) who would help implement the scheme. The commission has been envisaged as an interim measure.........

Read - Business Standard

Fund diversion by HML: Government sends letters to Centre, RBI

The State Government, which had initiated proceedings against Harrisons Malayalam Ltd (HML) as per the directive of the Kerala High Court, has sent letters to various Union ministries and the Reserve Bank of India (RBI) against the alleged diversion of funds by the company to Ghana............

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

Don't blindly believe preliminary data

......If the picture offered by the private data flow is at variance with the preliminary government statistics, the chances are very high that the private data presents a picture closer to reality. So in those cases, assume the government data is off-kilter........

Read | Business Standard

Get ready to pay more for basic banking

If it was not enough that you paid more for eating out at an air-conditioned restaurant due to the introduction of service tax on them or for choosing your seat in an airline, get ready to pay more for basic banking services too. A quick survey showed Mint Money that at least 13 banks this year so far have either increased or revised their service charges or have started charging fees for services that were earlier free..........

Red - Mint

Is gold losing sheen?

....But for the Indian consumer as well as investor, gold is a complex issue mired in both age old traditions as well as new age investment philosophies. While on the one hand, the recent spike in gold demand is blamed for the burgeoning current account deficit – which is the main cause for fuelling such stringent measures by the government, traditionally gold is considered auspicious and is bought for weddings and special occasions as well as festivals such as Akshaya Tritiya and Dhanteras. Not surprisingly then, India is the world's largest consumer of gold. The question then is that in view of the latest round of government measures has gold lost its sheen?.........

Read - Indian Express

DC debates whether gold imports in India should be restricted or not?

...While Assocham fully shared the concerns of the government and thought that some of the measures taken by the RBI and the finance ministry had become imperative, it underscored the need for a lasting solution, which would come in the form of finding new avenues of saving and investment. It found that the newly-announced inflation indexed bonds would not fit the bill, since the instruments have a long maturity period, while the secondary bond market in the country has not developed for the retail investors............

Read - Deccan Chronicle

Cut costs by banking online

Did you know that approaching a bank branch to get a duplicate account statement can cost you around 100, while the same could be had at half the price through online banking? Similarly, a stop payment request that costs upwards of 50 through traditional banking channels is a free service for those who opt for Net banking. There are many other banking services where you can save money by opting for Net banking (see table). However, most people, especially those who prefer branch banking, don’t even realise they are paying for these services or that their costs are adding up unless they peruse their quarterly bank statements carefully...........

Read - ET

Business confidence falls second straight quarter: FICCI

.........The Reserve Bank of India has cut the repo rate by 0.75 percent this year, while it is scheduled to announce its first mid-quarter monetary policy review on June 17. Moreover, owing to the high current account deficit (CAD) coupled with weak market demand, as well as inadequate infrastructure investments, Indian business felt the worst is not yet over...............

A bank battle

........ The question worth asking is: what will be the implications for the Indian financial sector in case we have variants of the Yes Bank battle in the years ahead?

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Kapoor vs Kapurs in Yes Bank tussle

It’s Kapoor vs Kapur. The result of a keen boardroom tussle on appointment of new directors in Yes Bank will be unveiled on Monday, following a paper ballot during the weekend arising out of a clash between leading stakeholder and CEO Rana Kapoor and the family of the bank’s founder, late Ashok Kapur...............

Click to read Hindustan Times

State govts are responsible for wasting minority development fund: Rehman Khan

Hyderabad: On the dismal performance of the minority affairs ministry in granting loans to minorities, Minister K Rehman Khan today directly attacked the banking sector for not following RBI guidelines of allotting 15% i.e. 1,75,000 crore worth loan to minorities as envisaged in PM’s 15 point programs. The minority affairs minister was addressing the media in Hyderabad...........

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

Rupee going strong for 60

..........The basic problem, however, is more fundamental. Essentially, India has been unable to attract huge volumes of non-volatile non-debt creating flows. While during the last quarter, India rejoiced its ability to finance its humungous current account deficit (CAD) through huge FII inflows, the volatile nature of such flows has come back to haunt us what with FIIs exiting en masse, as economic growth weakens and corporate performance falters.........

Read | Business Standard

Department of Posts to seek Cabinet nod for Rs 1,900 crore funds

.....The RBI has issued comprehensive guidelines for new bank licences. It has fixed July 1 as the last date for filing application by interested entities. The DoP has proposed to start 50 bank branches in the first year and scale it to a total of 150 branched in 5 years. There are around 90,000 bank branches in the country and provision of real-time banking services through postal network is estimated to triple the current banking network........

Click to read - ET

Surat Nagrik Sahkari Bank to be renamed in July

..........The account holders and depositors of Surat Nagrik Sahkari Bank were on the tenterhooks after the bank was placed under directions by the RBI in March. The depositors were allowed to withdraw a sum not exceeding Rs 1,000 from the balance held in every savings banks or current account............

Read - TOI

Bankers suit up for war on debt defaulters

.....In a country where businesses thrive on personal relationships, Indian banks have typically avoided involving the courts or liquidating assets — time-consuming efforts which often yield only minor results. Even the so-called “fast-track courts” for banks, formed in the last decade, can take more than two years to resolve a case. The central bank has called for better management of bad debts, and wants to strengthen oversight by lenders............

Click to read Deccan Herald