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 24, 2013
Challenges and concerns of the central bank - opportunities and role for the commercial banks - H.R.Khan
......Given the magnitude of challenges, Reserve Bank attaches a lot of significance to the role of banks. There is also tremendous scope for the banks to convert these challenges into opportunities for their sustainable business growth. Banks will have an important role in providing impetus to the domestic growth drivers and ease supply constraints, particularly with focus on production and productivity enhancement and supply chain management in agriculture so as to promote growth & moderate inflation. By providing boost to..........
J&K Bank organizes sub-committee SLBC meeting for Export Promotion
...........A wide range of issues including setting up of Inland Container Depot (ICD) at Srinagar, Brand certification of Kashmir made products, setting up of Pashmina testing laboratory at Srinagar and providing of liberal finance to the artisans & weavers at concessional rate of interest were discussed in the meeting. The meeting, which was fifth in series, was attended among others by Nayeemullah, President A&AP, J&K Bank, Ravinder Koul, Assistant General Manager Reserve Bank of India,................
E.U.Khan - Decisive guiding force
I knew Shri E U Khan from the nineties when I was posted at Patna and
later when I was transferred to Lucknow Office. Again, when I came to
Mumbai in 2001, he was in Premises Department. We had lots of
interaction at a personal level and I found him to be extremely humble,
supportive, considerate and down-to-earth. His coordination and writing
skills were great to emulate. I join all our friends to offer condolence to his family-members. May his soul rest in peace for ever.
- A.K.Bera
Very sorry to learn of
the passing away of Shri E U Khan our senior colleague. I had the opportunity
of working with him in the early nineties at RBI Lucknow. I learnt a great deal
from him. His humility always set him apart he was soft spoken gentle and very knowledgeable. He unstintingly guided his junior colleagues He always corrected
what he jokingly termed our ECD (now FED) language in the letters we
wrote. I am really sad and Pray to the almighty to grant peace to the departed
soul and comfort and solace to the family. He was a very good human being a
noble soul.
-
I was very sorry to know about rather untimely demise of E U Khan. He was
known to be a decent but decisive officer. He always had practical
approach to problem solving. He had contributed a lot while he was in
charge of the Premise Department. May his noble soul rest in peace !
- Harun R Khan
Remembrance of a visionary............
It is a great loss to all those who know Shri M Ramakrishnayya the man with a vision who shaped NABARD in the first few years. He chaired the Committee set up to review cooperative legislation when N.T. Rama Rao was Chief Minister of Andhra Pradesh and was instrumental in formulating the first liberal Act on Cooperatives - Mutually Aided Coop Societies Act that is now a parallel Act in nine States of the country and on its foundations the 97th Constitution Amendment Act 2011 has been formulated. An ardent believer in the capabilities of Cooperative system as a saviour of the country sans the political seize it currently holds. May his soul rest in peace.
- Yerram Raju
My View on "Spare a thought for the RBI Governor"
This
is with reference to the captioned item in VITALINFO. What is there to
spare when he (RBI GUV) himself nurtures the hope for extension.If
situation has so hopelessly deteriorated, let him come out with his own
version that his hands are tied. The organic links between the Ministry
of Finance and RBI are through the transportation of a person
(Secretary) with a pronounced bias for fiscal policy who has excelled in
unsustainable fiscal deficit ,current account deficit, uncontrolled
profligacy etc; to the position of head of monetary policy with emphasis
on inflation control, benign interest rates, stable exchange rate,
monetary stability etc.These points of conflict are to be minimised in
which the present GUV has failed and it is not likely that Arvind Mayaram who is also in the reckoning would be able to do any better.
The article "Spare a thought for the RBI Governor" overlooks some important facts. The
remark " He has had the misfortune of having to serve under a
government that has been, arguably, the most incompetent and most venal
since independence. His predecessors were not so unlucky" betrays the
fact that it is the same government who appointed him first the Finance
Secretary and then RBI GUV besides giving him an extension. Was this
done without his willingness or co operation or consent. I am sure his
prior consent must have been obtained and there is no doubt that there
were certain moves by him backed by IAS lobby for his candidature when
so many world renowned worthies were
also in the fray for Governorship.Is our present predicament anyway
worse than faced by USA in 1931 (Great Depression), England, Germany,
Japan etc after the end of second world war in 1945,Western Europe when
Marshall Aid was granted and post oil hike global crisis in 1973 when
Bretton Woods agreement was scrapped. In fact ,we are nowhere near 1991
criss when we had to go to IMF for a bailout or in mid sixties when we
we were forced to devalue our currency and beg for food under PL 480.
The present crisis is mainly the result of lack of decision making by
the Government on various aspects of economic reforms and Subbarao
alongwith another aspirant for Governorship, Arvind Mayaram, are part
and parcel of the same bureaucracy which has stoutly refused to reform
itself and innovate when pathbreaking changes have been made in British
and American bureaucracies.
Why not SPARE A THOUGHT FOR RBI PENSIONERS FOR A CHANGE DEAR SUBBARAO AND ARVIND MAYARAM?
- Sitendra Kumar
The present predicament of RBI, the only institution in India which has a consistent record of performing well for the last 78 years, within the constraints imposed by the whims of New Delhi, could not have been better described than by this observation in this article:
“One should spare a thought for RBI governor D. Subbarao. He has had the misfortune of having to serve under a government that has been, arguably, the most incompetent and most venal since independence. His predecessors were not so unlucky. Hence, to direct one’s ire at RBI is akin to a cop shooting at an easy target because he is afraid to go after the real criminal.”
“One should spare a thought for RBI governor D. Subbarao. He has had the misfortune of having to serve under a government that has been, arguably, the most incompetent and most venal since independence. His predecessors were not so unlucky. Hence, to direct one’s ire at RBI is akin to a cop shooting at an easy target because he is afraid to go after the real criminal.”
If, still RBI remains in one piece, and is able to carry on unperturbed, the credit should be shared by the organisation’s maturity and the deft handling of the situation by Dr D Subbarao. One hopes that, at this juncture, GOI will not destabilise the central bank by bringing some ‘yours obediently’ at the top.
- M.G.Warrier
The article highlights the need for a fresh thinking sans blaming the Governor RBI for all the ills. We seem to be reaching a stage where the headroom for raising public debt will no longer exist. We should not reach the level of Greece in sovereign debt. On the other hand it makes lot of sense to incentivise savings that we systematically put down for the last 15 years and protect the savings against inflation. The CAD can't be contained against the increasing prices of oil at more than $105 a barrel and this constitutes more than 60% of our import bill. Device ways to explore alternate energy sources and hold reins on natural gas - this should be the policy for government if monetarist has to play his role effectively at the current juncture. Keeping the hands and legs tied the Governor cannot be expected to run to save the economy.
- Yerram Raju
The next Governor should be................
The source of pool of former Governors is extremely narrow as all of them were either former IAS or academic turned bureaucrats. None of them were serving Professors (except Dr Rangarajan) engaged in path breaking research, industry or corporate sector unlike in advanced countries. All of them, in varying degrees, made the meeting of Government's demand of public borrowing for unsustainable social sector projects/ uncontrolled expenditure resulting in high fiscal deficit as their first priority and inflation control, risk management systems etc took a backseat. Only Dr Manmohan Singh in 1991 was honest enough to say that "I knew the policies were wrong but as a civil servant I had to follow a particular ideology and I had no choice". Were high SLR/CRR conducive to health banking?
Now why RBI GUV are appointed from those category of people, read only IAS, who are on the verge of retirement? According to Shri M.K.Kaw, former Secretary, Civil Aviation and former Member Fifth Pay Commission, RBI Governorship is a sinecure job. He admitted that as Addl Secretary in MoF he also nursed an ambition to become RBI GUV but somehow tricked to become Member Secretary FPC. Had he known Secretary Revenue was retiring next month, he would not have agreed to become Member Secretary FPC. He retired as Secretary, HRDD.
As far as CCA is concerned, what role Home Minister plays (clearance from vigilance angle).The next Governor should be one who has a sympathetic view on pension for retirees follows from the fact that in case of selection of Army Commanders, one important criterion is whether they are sympathetic to their subordinates mainly Jawans and Junior Officers. When GUV is himself enjoying pension updation, he must be sympathetic to his staff as well. Please remember, the crux of RBI is better than IAS. Only we lack guts borne out of political patronage.
- Sitendra Kumar
Promotion to the position of Governor should be from Dy. Governor from RBI Cadre by seniority like CJI from supreme court judges for keeping real independent and autonomy of RBI and to avoid public opinion that RBI is also a parrot of central government like CBI. Public confidence has to be kept high by adopting selection from RBI Cadre -- Governor > Dy. Governor > Executive Director > Chief General Manager. Central Government to adopt this selection procedure in larger interest of the RBI Image and controversies in selection to this position from outside channels.
- C B Gupta
A world to win over
Exactly a decade ago, Bimal Jalan famously declared in his farewell interview as Governor of the Reserve Bank of India (Financial Express, August 18, 2003): "there is no longer an external constraint to (India's) growth". A decade later, talk of an "external constraint" to growth has resurfaced. To an extent, it is the consequence of the trans-Atlantic financial crisis and the global economic slowdown, but it is also a manifestation of internal problems. Jalan's 2003 declaration was doubly significant............
Twist in RBI's tale
.......there was the issue of communication. Under its current Governor, D Subbarao, the RBI has emphasised clarity and transparency in its communication strategy. But last Monday's announcement did not achieve either of these objectives. On the contrary, its terseness left everybody guessing how the measures were expected to work, and towards what end. Subsequent messages by other government representatives appeared to add to the confusion. For example...............
Policy Sanity for a Recovering World
.......Monetary
policy, says the communiqué, should focus on domestic
inflation-targeting without strangling growth. This is a tough call, as
Reserve Bank Governor Duvvuri
Subbarao knows. When prices are persistently high, he is blamed for
doing too little with interest rates; when rates are hiked, he is
berated for keeping them too high and squeezing growth. In this debate,
it is forgotten that..............
Are India’s policy rates too low?
..........The question of what Governor D. Subbarao should do next is intimately linked to the question of what the “correct” level of interest rates should be in the first place. A tighter monetary policy after a long period of unusually low interest rates has very different implications from a similar action when interest rates are close to their neutral level, where monetary policy is neither tight nor loose. One useful way to estimate the desired level of interest rates is based on two sets of data............
More clarity, no new measures
........With a flurry of measures announced in the last few days, the July monetary policy statement may not have too many new announcements, but markets will be looking for some clarity on the RBI’s overall approach to attaining currency stability. There are several open questions: How far will the RBI let interest rates rise in a slowing economy? If these tightening measures are temporary, then under what conditions will they be reversed? How robust is the relationship among liquidity, interest rates and the currency in the Indian context?...........
Why even the bravest of the brave can’t predict RBI’s next move
The Reserve Bank of India’s 30 July 2013 policy review has gained significance on the back of its actions in the last few days. The central bank has sent confusing signals to the market by first announcing liquidity tightening measures and then taking steps to prevent bond yields from rising...........
Subbarao Tightens Fist, Rate Hike All but Given Next Week
...........“These measures
have had a restraining effect on volatility with a concomitant
stabilising effect on the exchange rate,” RBI said. “Based on a review
of the measures, and an assessment of the liquidity and overall market
conditions, it has been decided to modify the liquidity tightening
measures.” But the measures will also impact the government’s borrowing
costs and strain the already stretched fiscal further. The interest rate
increases this time are not like in 1998 when Governor Bimal Jalan
shocked raising repo, bank rate and CRR..............
Falling rupee: It’s the Government, stupid
The stance that the RBI should take in its July 30 Monetary Policy Review Statement is being hotly debated. Popular opinion seems to be that with the rupee is refusing to be coaxed or coerced into behaving itself, the RBI is left with little option but resort to a tight monetary policy. However, it appears to be a case of missing the woods for the trees. Two specific issues come to mind. First, a the myopic concentration on global factors to the exclusion of the role of the Government. Second, a misplaced focus of relying on on a single instrument — short-term interest rates — to achieve multiple (and mutually conflicting) objectives, namely, growth, price stability and exchange rates. As long as these twin issues remain unresolved, the RBI may well continue with its ‘costly gamble’..........
ANOTHER RE GAMBIT
.......The RBI said its measures over the past two months have had a restraining effect on volatility with a concomitant stabilising effect on the exchange rate. “ Based on a review of the measures, and an assessment of the liquidity and overall market conditions going forward, it has been decided to modify the liquidity tightening measures,” the central bank said in a circular.........
Need to re-define poverty: C Rangarajan
Though Tendulkar methodology is being criticized now, it drew kudos when proportion of the people below poverty line rose to 37.2% for 2004-05 against 27.5%, calculated on the basis of earlier methodology. Can we expect similar raise of poverty numbers after your recommendations come?............
Father of poverty line takes estimates with a pinch of salt
The Planning Commission has issued poverty estimates based on the Suresh Tendulkar methodology, while admitting it was not taking this seriously. Which is also what quite a few statisticians feel about these estimates, including the man regarded as the father of India’s first official poverty line estimate in recent times, Yoginder Alagh..........
China to join hands with India to bust fake Indian currency notes network
NEW DELHI: In what could be the beginning of cooperation between India and China on the security front vis-a-vis threats from Pakistan, Beijing has expressed concern about their country becoming a route for smuggling of fake Indian currency notes (FICN) and have agreed to crackdown on the network. Chinese financial intelligence agencies have established communication with India's Directorate of Revenue Intelligence (DRI) seeking details of a recent seizure of an FICN consignment smuggled via China. ..........
Saraswat Co-operative looking to acquire Pune-based bank
RBI relaxes KYC norms for updating bank data
Mumbai: Banks will now be required to update know your customers (KYC) data only once in two years for high risk entities, and just once in 10 years for low-risk clients, the Reserve Bank of India (RBI) said on Tuesday. "The issue has been reviewed in the light of practical difficulties/constraints expressed by bankers/customers in obtaining/submitting fresh KYC documents at frequent intervals as the relative documents submitted earlier specially by low-risk customers have remained unchanged in most of the accounts," the apex bank said in a notification.................
Karnataka govt turns down BJP demand for CBI probe into bank scam
.......Cooperation Minister H S Mahadava Prasad said as per RBI report, the irregularities were to the tune of Rs 102 crore in the bank and investigation has been conducted into three cases. “Criminal cases have been filed,” the Minister said, without elaborating. He said the government would take further action once the ongoing process is completed.........
Where are the gold prices headed?
..........“The main aim of RBI, through this recent measure, is to restrict import, limit all gold coin and other transactions through jewellery shops only and prevent banks and non-banking financial companies from entering this arena. The move is likely to generate more interest in refining from scrap gold, which is available in a huge quantity in India,” said C P Krishnan, whole-time director, Geojit Comtrade..................
Credit card payments: Use your face
No more swiping credit cards to make payments! A new technology that allows customers to use their face (facial features) instead of swiping a credit card to purchase goods has been developed by a Finnish company. The technology provided by Uniqul, works by recognising the customer's face and then linking it to the individual's bank account............
The need to contain gold imports and make best use of the domestic gold resources
...............The practical approach to have credibility among stockists of gold who include households, businessmen etc is to have a Gold Bank established by the Government and the Reserve Bank jointly and mobilise the gold against creation of deposits at some rates determined based on market trend.The Gold being used as a medium of exchange should be declared as a criminal offence and Government should be able to track these transactions as is done in the case of Cash Transactions over Rs 10 lakhs as Suspicious transactions...................
Tata goes innovative with non-bank owned ATMs
Studies conducted by the Reserve Bank of India show that on a per capita basis, ATM penetration in India has been low compared to other nations, like the USA, Canada and the like. That is why, one of their primary objectives has been to advance growth and increase ATM access across the country. Keeping in line with RBI’s vision of doing so, Tata Communications Payment Solutions Ltd (TCPSL), a wholly owned subsidiary of Tata Communications Ltd, launched Indicash at Koregaon Park and Magarpatta City, in Pune on Tuesday.............
Andhra Pradesh State Coop Bank gets CCTV surveillance
...........The installation of the surveillance system as per the RBI directive, will help the bank provide protection to customers and cause to have strict observation in the premises of the bank, a press release said. The head office premises has been brought under complete surveillance. In the case of the 37 branches, each will have surveillance with 5-6 cameras..................
Ponzi probe panel to summon Trinamool MP
....The official pointed out that though Ghosh would be summoned, none of the 18.5 lakh complainants have made any allegations against him. The commission will probe the role of the RBI and send summons to Sebi and ROC officials and probe how Ponzi firms could operate despite the presence of such regulatory bodies. It also plans to ascertain the role of the economic offences wing of the finance department that was set up to keep tabs on Ponzi firms.............
Banks turn to correspondents to recover loans
.............Last-mile banking agents, known as business correspondents, on behalf of banks take basic banking facilities to the remotest of areas. They are usually in-charge of collecting deposits and withdrawal. Bankers are also hopeful that handing more lucrative assignments to business correspondents could change the game for them by way of tackling a high rate of attrition. Banks are also asking them to identify potential depositors and collect and process loan applications, thus giving a boost to RBI’s financial inclusion mandate............
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