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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.
Wednesday, July 3, 2013
India needs more housing products for youngsters, elderly
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Debit card skimming: Do deals on Mt Everest, but you're good as weakest link, says RBI
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| ..........."Technology has enabled an interlinked world and payment infrastructure. While this is welcome, being able to initiate payment transaction even from top of Mt Everest, please also remember that you are as good as the weakest link,"................ |
Lax security authentication led to card-skimming frauds: RBI
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| (left) Uday Kotak, Executive Vice Chairman & Managing Director, Kotak Mahindra Bank Ltd, G. Padmanabhan, Executive Director, RBI, Kiran Shetty, Regional Vice President & Managing Director, Western Union Budiness-India and Hikmet Ersek, President, Chief Executive Officer and Director, Western Union Company at a press conference the launch "Domestic Money Transfer (DMT)" Services in Mumbai on Tuesday. |
‘Aadhaar, chip & pin need to coexist’ - A.P.Hota
......Our
main achievement is that we are “cardifying” customers of those banks
who have never seen a card. Until Rupay came hardly 50-60 banks were
issuing cards. Now the number of banks issuing cards is 106. We plan to
reach out to 500 to 600 banks in a year for issuance of cards. Out of 58
rural banks, 50 have started issuing Rupay cards which can be used in any ATM or for retail payments and ecommerce................
Indian banks not yet ready to issue EMV standard cards
................The success of the migration exercise is exemplified by the case of Malaysia, which fully converted to EMV chip ATM cards by end-2005. Card fraud was reduced by 85 per cent from $5.9 million in 2003 to $0.3m in that year alone. Lee adds that the RBI has been working toward putting in place a system to make both credit card and debit card transactions safer. With its latest directive for banks and financial institutions to migrate to the EMV technology by June 30, 2013, RBI is pushing banks to implement safety measures and eliminate cases of fraud, thereby ensuring secure transactions.
Transparent, honest, friendly, committed "Priestly" Joseph.........
I have had occasion to know F.R.Joseph
inside the office when we worked in Chennai office around the same period and
outside the office when both of us were deputed to attend an OECD conference in
Washington. The person in the office and outside is the same, very transparent,
honest, friendly, committed and very humane. Interacting with him is so easy as
there are no artificial barriers or ego hassles. Once Mr. S.A.Hussain told me
jokingly that his initials stand for ‘Father’ as in the case of a priest. I
found it very easy to believe that, as the ideal qualities that one associates
with the priestly class is very much present in Mr. Joseph! Mr. Joseph has not
grown old with his years when one sees his interaction with the youngsters in
the RBI staff blog. He is as youthful as anybody else in the way he thinks and
speaks and relates to the young people in the Bank. There is a sense of joy
which emanates from him when one interacts with him despite his very sober
appearance. RBI will miss him but it is good to know that we can reach out to
him any time we need his help and he will be there to help. I wish him a very
fulfilling innings ahead in whatever he chooses to do as I know it will
definitely be something good.
- Kamala Rajan, Chief General Manager, UBD
Devotion and Involvement.......... thy name is VITALINFO Dailyzine................
Dear Mangesh,
I was not in town for quite some time. Hence when a topic came up of institutionalisation of VITALINFO, I could not offer my comments immediately. VITALINFO is just like a child for you. You brought this up somewhere about three years back with the same devotion a parent brings up his child and it is well established now. Serving and the retired RBItes eagerly await everyday the appearance of VITALINFO on their comps just like waiting and getting the printed copy of the newspaper. VITALINFO has become a habit like having a cup of tea in the morning You must have it. For this only one person who is responsible is Shri Mangesh. Hats off to him for the devotion and involvement in bringing out the issues of VITALINFO day in and day out. As Shri Mangesh has brought out this VITALINFO from nowhere and made it a big success, I feel it should continue to be under his leadership as long as Shri Mangesh likes it. No need of tinkering with it. As long as Shri Mangesh likes to have it under his care, let it be with him. A personal word from me; I know Shri Mangesh from the day he reported for duty in Finance and Accounts Department of ARDC in the year 1980. Shri Mangesh continues to be humble devoted and highly involved. I wish Shri Mangesh all the best and so also to VITALINFO.
- N.D.Laxmikantha, General Manager (Retd)
Obituary
I am
sorry to inform you about the sad demise of Shri Deen Dayal Garg last
night at Jaipur. He was my colleague as Faculty Member in CAB, Pune. Before that we
were together in Hyderabad for about 6 years. He
was in-Charge of DEAP in Hyderabad. He was also President of RBI Officers Ameerpet Quarters residents Welfare
Association. As
the Quarters were new he took lot of initiatives in organizing various
activities and facilities for the families and children of
residents. I was closely associated with him in all these activities for
almost 13 years. He was also my neighbor in Parijat Officers
Quarters in Pune. He was a very popular faculty and his lectures were always
enjoyed by the trainees and other faculty members. He
had expressed his desire to donate his body to Mahatma Gandhi Medical College
and Hospital at Jaipur. His
son Sumeet informed me that this has been done as per his wishes. I
pray for the departed SOUL. MAY HIS SOUL REST IN PEACE.
-R.M.Deole, Ex-CGM
Yes, minister !
.............On the central bank front, I have found two key changes reassuring. First, the frequency of communication has reduced. This, I have learnt from experience, helps rather than hurts in times of severe crisis. The more the number of sound bites from policy makers, the greater is the scope for confusion and the consequent volatility in the markets. Second, the bulk of the communication from the central bank on the rupee and markets has been coming from the Governor, and not from his deputies. While the central message has not been any different from the past - that it is somewhat pointless to lean against the hurricane of a pan-emerging market currency sell-off - the fact that it has come from the top boss has made a difference.............
RBI gives in-principle nod for an all-women bank
NEW DELHI, JULY 2: The Reserve Bank of India (RBI) has given its in-principle approval for the Central Government to set up the country’s first all-women bank. The proposed all-women bank will be the first ever commercial bank to be floated by the Central Government. It is expected to have a pan-India presence with six branches to start-with. The headquarters for the all-women bank is likely to come up at New Delhi...............
My View on "Kaun Banega RBI Governor?"
Last year, Dr Subbarao had, in media interactions, indicated that he was not keen to continue beyond September, 2013. But no RBI Governor in the past also has given out his mind about his expectations about further extension of tenure especially after the ‘normal’ 5 years term. Assuming he will not press for being relieved, politically and from a mere expediency angle, certain factors are in favour of giving a one year extension to Dr Subbarao. With 2014 Elections round the corner, experimenting with a new face at Mint Road, howsoever ‘faithful’ to North Block s/he may be, will be a risk GOI should better avoid. For the new incumbent also, it will save a lot of ‘adjustments’, if s/he takes over post-2014 Elections. My plea is in the interest of continuity at the top. RBI has seen the way in which postings of Rakesh Mohan and Gokarn(to name just two) were handled in certain circumstances. Across government, public sector and private sector, it is high time GOI gave serious thought about succession plans at the top. In SBI, out of top 72 executives at the highest level 60 will retire before March 31, 2015, according to one media report. Several institutions are headless wonders. Personally, my view is that, as stated here appointments to posts like Governor, RBI should be for a minimum period of 5 years, with provision for reappointment for a further equal term. Retirement age has become a joke, with average age of ‘decision makers’ crossing 65.
- M.G.Warrier
It is very unlikely that any extension would be granted to Shri Subba Rao. Shri Subba Rao would not also accept it in the unlikely event of such an offer being made to him as he is a man of great principles and integrity and would want people to know that he had seriously meant what he had told the Government that he is not interested in any further extension. He would perhaps go down in the History of RBI as the only Governor who had made his intention of not wanting any further extension clear even at the beginning of the first extension of tenure which made his tenure for 5 years which should have been the tenure even in the first instance.
- A. Chandramouliswaran
Who is a good regulator
....... the term of Reserve Bank of India governor D. Subbarao is coming to an end. Securities and Exchange Board of India’s chairman U.K. Sinha recently won praise for sticking to his stand on minimum public shareholding norms. Here’s a look at the qualities that a regulator should have:..................
26 reasons for the RBI Governor to lose sleep !
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| ..............it might seem easier for a camel to pass through the eye of a needle than to get a bank licence! But, then being Governor, RBI, was never meant to be bed of roses!.............. |
............In theory it is easy to separate wheat from chaff while granting bank licences; in practice it will test the RBI governor's mettle. The life of the Reserve Bank of India (RBI) governor has just got tougher! As if battling currency and economic slowdown woes was not enough, Governor Subbarao now has 26 new reasons to lose sleep! Twenty-six applicants have made a pitch for a private bank licence.................
FM takes on Subbarao again
India's aspiring banking moguls fail to impress: Andy Mukherjee
.........The Reserve Bank will have to debate the wisdom of letting these shadow lenders have access to low-cost retail deposits. Some of them have concentrated risk exposure to one business or asset class - such as trucking, or gold. As deposit-taking institutions, they might pose a risk to the system. The central bank has imposed strict conditions to ensure the new lenders are safe. They will have to park 4 percent of any deposits they attract with the RBI as cash, and invest another 23 percent in government bonds. This will limit their ability to finance lots of new loans. However, it also means.............
Bank licences: If some of these guys can run a bank, so can I
........Why should broking houses like JM Financial or a Tourism Finance Corporation or an infra company like SREI Infra want to start a bank? Why should India Post, which runs a fairly inefficient postal service and a shoddy postal savings scheme, think it can run a bank? The RBI has been busy trying to circumscribe gold loan companies from expanding their operations, but that hasn’t stopped Muthoot Finance from throwing its hat into the ring. Maybe, just maybe, the Muthoots of the world want to become banks merely because the RBI is not so nice to gold loan companies............
Why haven’t more companies sought bank licences?
Monday, the last day for the submission of applications for bank licences on Monday, saw a rush, not the anticipated stampede. Two decades ago, in 1993, when the Reserve Bank of India (RBI) opened doors to new banks for the first time, there were 113 applications. A decade later, in 2003, when applications for licences were sought a second time, there were around 100 applicants. This time, there are just 26. This, after it was reported that just about everyone was keen to enter the sector—banking, after all, is a lucrative business as it gives one access to cheap deposits. And 50% of India’s adult population does not have access to formal banking services. What’s wrong with the Indian market?.............
With only 26 banking aspirants, RBI's job is half done
........One reason could be the stringent norms put in by the central bank for issuing licence, both in terms of monetary requirement and compliance. Even Chidambaram has said that the only criteria for licence would be clearing the eligibility criteria. If everyone is eligible, all would get a licence. And it is widely believed that since the RBI gave enough time for the applicants to meet the criteria and submit their proposals, most would have ensured that they meet the eligibility criteria atleast on objective grounds. That leaves RBI to reject their application only on grounds of subjectivity............
Big boys come out to play as battle for banks begins
.........The country today has 26 public sector banks, 22 private sector banks, 41 foreign banks and 56 regional rural banks, but more than half the population doesn’t have access to banking services. That’s where the central bank’s financial inclusion agenda comes in. The RBI has mandated that a fourth of a new bank’s branches must be set up in unbanked regions. More than the R500 crore of minimum capital — not a large amount these days — the bigger entry barrier will be the RBI’s “fit and proper criteria” and passing muster will not be easy.........
No ceiling on number of new bank licences: Chidambaram
............."If there are very few eligible applicants, then the number of banks that will get licences will also be few. I don't think that the Governor has any ceiling in mind,"..................
Adding 'spice' to the banking licence
On June 21 when the Reserve Bank of India (RBI) said incomplete applications or those received after July 1 would not be considered for new bank licences, a new company got registered itself under the Companies Act and exactly 10 days later it was in the queue at the central bank headquarters for a bank licence. Noida-based Smart Global Ventures Pvt Ltd, which applied for a banking licence along with 25 other aspirants on Monday, is a new firm owned by the Spice group. S Mobility, which was formerly known as Spice Mobility, got it registered with the Registrar of Companies on June 21.....................
Read | Business Standard
India Post needs to become corporate for banking foray
.........The application by the Indian Postal department, which is a division of the ministry of communication and information technology, has raised some curiosity in the Reserve Bank of India (RBI). This was because RBI’s new bank licence norms – that was released in February this year – talked about new bank licence in the ‘private’ sector. Since India Post is a part of the ministry, it cannot be considered as a private sector entity..............
We plan to have around 70% of branches in rural areas: Hemant Kanoria
........We are planning to have around 68-70% of our branches in the rural areas. We will convert some of our centres in a slow and systematic manner or add a branch near the centre and so the progress will be slow initially. We are planning to have a larger rural presence and then have some urban presence rather than the other way round..........
No cap prescribed for bank licences: Takru
.............At this stage, anybody who has applied would be considered a serious applicant. Now, the RBI will go through the process of identifying those who meet the criteria out of the 26 who have applied. After that we would know who all have been shortlisted. Then we move on to the next phase where they have to make priorities. So it is only at that stage that a final comment can be passed...............
Losing on licence
Shares of most companies, which applied for banking licence, declined on Tuesday, a day after they submitted the papers to the Reserve Bank of India. Analysts said the recent euphoria in these stocks would fizzle out in the near term, as there is uncertainty about when the licences could be granted..............
Parent branding to have a big role in banking foray
..........Some experts caution that an established brand name could help a company after getting the licence to win new customers, but the regulator might not consider this while taking a call on issuing licences. "While for the layman, branding would appear to make a difference, RBI will examine all prerequisites ranging from the track record, governance record, management, etc before taking a decision. A brand may be strong, but RBI would certainly like to ensure the enterprise has it in it to succeed by meeting all the other commitments," says D R Dogra, chief executive officer and managing director of CARERatings.
Banking on openness
.........The challenges of bank supervision and limited supervisory capacity will need to be overcome. The proposed Indian Financial Code has suggested two new elements that will help improve capacity. One, a banking regulator, whose job is to ensure consumer protection, and a much stronger law to anchor it. Two, the setting up of a resolution corporation whose job will be to help minimise the burden on the taxpayer. The resolution corporation will also, alongside the RBI, supervise all banks. This will mean additional supervisory oversight over the new banks. The RBI needs to give new licences, but the government must ensure that it brings in improved customer protection and a resolution corporation as it does so.
Banking options
.........The RBI has been accused of leniency towards banks and officials perpetrating irregularities. Its response to the recent Cobra Post expose, showing commercial bankers aiding in money laundering, should have been harsher. By penalising three banks a pittance -- between Rs1 crore and Rs5 crore -- and not demanding the heads of senior officials, the RBI has cut a sorry figure. With new players, who bring along the risk of conflict of interest, the RBI must show willingness to flex and use its regulatory muscle.
More bank for the buck
.............RBI’s job in selecting candidates isn’t going to be easy—India Post, for instance, looks well-positioned to deliver on inclusion given its rural reach even though its track record is quite poor on various other parameters. The important thing, however, is that RBI has an impressive list to choose from. Meanwhile, even as new players come into the banking arena, the finance ministry and RBI would do well to facilitate mergers and takeovers; consolidation could bring about greater efficiencies.
Banking licence: Biggies set to gain, small players will lose
The new banking licence will allow large industrial houses like the Tatas and Reliance to gain because it can mitigate the risk of venturing into non-banking areas. However, it will be a death trap for smaller players as they move into areas where money can't be made.............
New Banks: Discourage Any Bet on Rules Change
...........The
Indian ‘License Raj’ landscape has been full of changing goal posts and
favouritism in the name of course correction with changes in rules to
tailor the needs of businesses — be it the US cola companies, which were
permitted with a clause on mandatory public shareholding, or scores of
power companies, which are obliged with changes in tariff structure, or
usage of resources. Twenty six applications to own banks – some
surprising ones and some familiar ones dropping out – raise the question
whether the optimists are hopeful of having their way once the licences
are given, or that the pessimists have thrown in the towel even before
the first ball was bowled...............
RBI may cut CRR, postpone repo rate cut till rupee stabilises
.........."The RBI will understandably want to avoid controversy by cutting rates till the INR stabilises. Yet, we retain our 75 basis points (0.75 percentage points) RBI rate cut call for FY14," the report said, adding in its July 30 meet RBI is likely to skip rate cut to avoid any controversy. "We continue to expect the RBI to cut CRR the mandatory portion of cash banks have to park with RBI --by 25 basis points, on July 30, to revive growth, if INR volatility prevents it from cutting rates," ..................
Nabard’s largesse takes rural poor for ride
..........Investigation reveals that Mr. D. K. Mittal’s brother, Dr. Sanjeev Kumar Mittal is on the Board of Shivalik Bank. During his tenure as DFS Secretary, Nabard, Mr. Mittal permitted Urban Cooperative Banks, which are under the RBI’s supervisory jurisdiction, to promote and finance Joint Liability Groups (JLGs) in rural areas. Shivalik Bank went on to become the lone beneficiary of this concession.................
RBI moves to curb rupee speculators
Concerned about the rupee’s fall to a record low, India’s central bank has discreetly phoned trading desks with unusually explicit messages to cut their speculative positions in the currency, said three senior market participants with direct knowledge of such calls. While the Reserve Bank of India (RBI) regularly monitors positions and flows in the currency market, these people said it was unusual for the central bank to call so often or state so explicitly that banks should cut their intraday net open position limits—or their outstanding positions in futures and forwards markets............
Forex crisis: When will we ever learn?
A non-financial newspaper broke the news. It front-paged a story that foreign debts to be repaid in the next nine months plus deficits on trade account for oil imports will consume most of our reserves. Was it not possible to foresee this? After all, we have always had a Finance Minister, a Finance Ministry with a slew of bureaucrats and advisers, an Economic Advisory Council to the PM, a Planning Commission and the RBI, not to mention the several Government and RBI-funded thinktanks — establishments (with sensor-driven toilets) costing taxpayers hundreds of crores of rupees every year...................
Rupee expectations: a self-fulfilling prophecy of RBI - Renu Kohli
...........This is what forced the central bank to depart from tradition with its quicker data release, not, as some reports suggest, a preference for a positive surprise. A belated attempt to dislodge entrenched expectations about the rupee’s weakness, it remains to be seen if the RBI can now successfully reshape market beliefs about the rupee’s fair value. The story may not yet be over.
Banks to up provisioning for unhedged foreign currency exposures
The Reserve Bank of India on Tuesday introduced incremental provisioning and capital requirements for bank exposures to corporates having unhedged foreign currency exposures. These measures have been introduced as unhedged foreign currency exposure (UFCE) of corporates is a source of risk to them as well as to the financing banks and the financial system. Large unhedged forex exposures have resulted in accounts becoming non-performing in some cases............
Wealth mgmt: Kotak says separation will not solve mis-selling
......"My view is that if you run it properly as a separate division with clearly identified process, it works. And the way we are thinking about is: do whatever is right for the customer and everything else follows,"............
FM might ask banks to review lending rates
As banks choose to hold their lending rates despite rate cuts by the Reserve Bank of India (RBI) in the last few months, Finance Minister P Chidambaram might ask public sector lenders to review their interest rates............
Gold turkey
...........The government has tried many measures to discourage savers from buying gold. A few days back Palaniappan Chidambaram, the finance minister appealed “everyone to resist the temptation." But the answer lies in offering better real returns for savers. With that in mind, in early June, the Reserve Bank of India (RBI), the central bank, which manages the government’s debt auctioned 10 billion rupees ($170m) of 10-year inflation-indexed bonds. It was the first time it had sold such "linkers" in a decade............
RBI diktat hits gold buyers hard
...... "The directive is totally unwarranted. It curtails the freedom of a person. As far as a customer is concerned, it is his or her right to decide whether to pay in cash or use credit card for purchasing gold ornaments," said Kerala Chamber of Commerce and Industry (chairman K N Marzook. While the government was promoting accountability in transactions on the one hand, directives like this would promote the circulation of black money, he said. "There is accountability in transaction if someone uses a credit card," he added..........
Trucks with 200 cr in cash, gems seized on fake currency tip-off
.........While
the Reserve Bank of India has sent officials to the I-T department to
ascertain if the currency notes are genuine, the NIA has denied any
terror links to the cash seized. The NIA reportedly got involved as the
source who provided information on the consignment was an agency
informant.......
Rupee slide: Libraries may axe foreign publications
.........One of the many such cases is the Indian Institute of Management, Bangalore, which is mulling to cut on number of books being ordered from outside the country. "Every year we order about 2000-2500 such books. However, the rupee depreciation is costing us over 10 per cent more for ordering these books. Since we usually order throughout the year, this academic year we may have to reduce the order," said a source at the institute's library on condition of anonymity...........
YES Bank says Shagun lacks proven track record
..........."The committee considered/reviewed the application of Shagun Gogia purely based on merits in the best interest of the bank and not based on any technical or legal aspects involving her nomination," the minutes said. While the committee found Gogia met certain basic eligibility criteria like age and qualification, her experience and track record was not commensurate with the profile of directors of other peer banks..............
PSBs Reward Staff to Recover Loans
....“In
a normal situation, a banker is expected to do recovery of loan, but
these incentives are typically given for old NPAs where special effort
has to be put and which are typically beyond call of duty,”..................
Banks moving in the right direction to cut NPAs: Rajiv Takru
............Of the 26 players who applied for a bank licence on Monday, many don’t seem to meet the conditions prescribed by the Reserve Bank of India (RBI), but Financial Service Secretary Rajiv Takru says they are all eligible at the moment, and it is only after a proper examination and verification of their documents that the RBI would eliminate non-serious players and prioritise the serious ones.......
Read | Business Standard
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