..........Take the Rs 1,000 notes. The redesigned bill was introduced in October 2000. Ever since, the two authorized mints — Bharatiya Reserve Bank Note Mudran Private Limited, Bangalore, and Currency Note Press, Nashik — have printed a total of 4,452.3 million Rs 1,000 bills. But RBI records show that it has received 4,462 million notes, an excess of 9.7 million notes. That means the RBI has received Rs 970 crore more than what was actually printed...............
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, August 5, 2013
Changing the Industrial Geography in Asia
........The book under review is the final volume in a series on East Asia’s prospects that has been cosponsored by the Government of Japan and with the support of the World Bank. The focus of this volume is on China and India — the prime movers who will play a dominant role in the coming decade. The changes in industrial geography as also trade – patterns since the mid-1990s have been spectacular. The analysis in this volume is based on the thermodynamics of industrialization with special emphasis on trade, foreign direct investment and building up of technological capabilities..............
Read - FPJ - Book Review by P. P. RAMACHANDRAN
IN LIGHTER VEIN...............
My View on "RBI Governor resigns"
IN LIGHTER VEIN…As one who has been supporting an extension for Dr Subbarao as Governor beyond September 5, 2013, this is good news for me. As an insider, he would have been at best considered for a one year extension. Now that the ‘RBI employee tag’ is removed, he becomes eligible for being considered for a fresh tenure of minimum 5 years from September 5 as I heard he has already expressed his willingness to continue as ‘caretaker’ till that date. As the selectors are all above 65, getting over the age-hurdle will not be a problem. Meanwhile let us share one full pack of CHARMINAR, if (Statutory Warning: smoking charminar is injurious to health of those who do not smoke) it is still available in the market !
- M.G.Warrier
The impact of Subbarao's resignation on the banking sector should be considered by Central Board of Directors in its meeting to be held on August 8, 2013 over Hyderabadi Biryani. Will the signature dish from Andhra still be called Hyderabadi Biryani or renamed? What will the Biryani from Seemandhra or Rayalaseema be called? On the Charminar at Hyderabad, one Minar should exclusively belong to Seemandhra and Rayalseema each and two may be appropriated by Telangana as a memento. Hope Subbarao must have used his powers to unilaterally issue orders on PENSION UPDATION before tendering his resignation.
- Sitendra Kumar
The next RBI governor
..............In India, there is no debate on the candidates’ academic or policy credentials. The government wants it that way. It is not the actual framing and conduct of monetary policy that matters most: a potential Governor’s most important qualification today is........
Next RBI Governor - He K(h)an make it...........
My View on Next RBI Governor - Why not insider?
I wholeheartedly endorse the views expressed by Mr. Unny. At this time of crisis the need of the hour is an insider to guide the RBI on the path. The Govt. Has experimented with foreigners, ICS, IAS, Economists et al. Some fared extremely, some so so while some failed to make a mark. So why not give an insider a chance? Of the present DGs the name that comes to my mind is that of Mr. Khan. He has the necessary academic qualifications and rich experience the bank. He would be an blend of youth and experience as well as pragmatism. The above views are of course without disparagement to the three Deputy Governors.
- B. Kamath, Retd. CGM
Sign of winds of change.............
Now that DMD's post for NABARD has been advertised for which, inter alia, eligibility is as follows;
CGM of NABARD, SIDBI, IDBI = Joint Secretary of Govt of India = GM of nationalized banks. RBI is nowhere. Does It means CGMs of RPCD lack the requisite worth? A few days back Chairman's post of NABARD was advertised. Earlier,
CGM, HRDD, RBI used to be the Secretary of Search Committee for
selection of CMD of NABARD. Now what happened? RBI is completely out of
picture. When
Subbarao became GUV 5 years back, simultaneously, Chairman of IRDA
(Hariharan IAS), NABARD (Sarangi IAS), SEBI etc etc were appointed by
administrative fiat. All
regulators were brought under IAS domination. Now IRDA has been given to
Shri Vijayan, LIC man and NABARD is set to get a specialist. SEBI is
under a long back retired IAS. Even for RBI, non IAS are in race. Sign of winds of change clearly showing dissatisfaction with IAS.
- Sitendra Kumar
Janki Ballabh resigns from UTI
..........A source said Ballabh's move might be part of a restructuring exercise to fill the non-executive chairman's post. Earlier, Ballabh was chairman, State Bank of India. He had also held the posts of vigilance commissioner in the Central Vigilance Commission and chairman of the Reserve Bank of India's services board and its advisory board on banking, commercial and financial frauds..................
Should India float international bonds?
............The immediate need is to strengthen the reserves and arrest the depreciation of the rupee through the inflow of capital. There have been talks about floating a sovereign bond in international markets. If the purpose is to augment the reserves, whatever resources the country raises will be added to RBI's kitty. It will be invested in low-yielding treasuries of foreign governments and deposits of international institutions. The net outgo due to the difference between interest paid and investment income will be a drain on the forex resources. There are legal problems in floating bonds in the US limited to non-resident Indians (NRIs). And that is the country where there are a large number of high net-worth NRI professionals looking for good yields. At his post-policy meeting with the press, the RBI governor mentioned his reservations about floating a sovereign bond..............
Winning back credibility
..............All sorts of theories are going around as to why the markets tanked. The ‘dovish’ tone of the policy is interpreted as a sign of weakness, leading to a sell off. On the other side, there is disappointment that the RBI has done nothing to stimulate growth even though it lowered its growth forecast. The RBI should strive to regain credibility to win the battle for a stable rupee.
Tail wagging the dog
..............The Reserve Bank of India (RBI) fought the currency shock with an interest rate shock. While this textbook response may work when financial markets are efficient it is not the case in India today. As such there is a risk that the negative effect of RBI’s measures on financial market stability and economic growth may far outweigh the beneficial effects, if any, on currency stabilization. Indeed, the debt and money markets have already been thrust into the whirlpool...................
Wanted: United show by RBI, government on rupee
...........Both Subbarao and Chidambaram are saying the same thing but there is a nuanced difference between what they meant. While Subbarao said nobody has approached him to stay back (meaning, had he been approached, he might have said yes), Chidarmabarm said the governor did not want to be considered for another extension (meaning, had Subbarao wanted, the government could have given him). For the record, Subbarao—whose term ends on 4 September—had got a two-year extension in 2011....................
Diagnosing the depreciating rupee
..........Clearly, whatever channel of influence we look at, the overriding cause of rupee depreciation is sheer economic mismanagement. Unfortunately, the RBI is fighting a lone battle. As a result, it hasmoved away from managing the volatility of the rupee to targeting a specific level. While doing so, it is constrained by the impossible trinity (trilemma or impossible trinity says we cannot meet all the three objectives of free capital flow, fixed exchange rate and independent monetary policy). One is, therefore, not surprised by the zeal with which the RBI is targeting liquidity...................
Rupee problems cannot be solved overnight: Raghuram Rajan
CHENNAI, AUG. 3:
The depreciation of the rupee “is something that has been building over a period, and solutions cannot happen overnight,” observed Raghuram Rajan, Chief Economic Advisor to the Union Finance Ministry. The initiatives taken by the Government and the Reserve Bank of India to stem the fall of the rupee would yield results, but would take a while, he said, delivering the fourth Kuruvila Jacob Oration here on Saturday.......
Watch the dollar like a hawk
............Guesswork suggests RBI finds a band of approximately 59-60.25 acceptable. Foreign institutional investors (FIIs), which use highly sophisticated algorithms, would have a better idea of the exact levels. Anyhow, there seems a trigger point where RBI will intervene. If there is indeed such a pattern of RBI action and the FIIs have deciphered it, they could also start acting upon the 'RBI put'. FIIs have actually been net equity buyers in the past two sessions, albeit in small quantities..............
RBI curbs on gold import opposed
........Explaining the association’s views on the RBI order, its president B. Girirajan made it clear on Friday the main objection was to the RBI directive that 20 per cent of gold imported by banks and other recognised agencies should be kept in customs bonded warehouses and 75 per cent in bonded warehouses should be exported as gold jewellery............
Banks use social media to woo youth
...........New-age/Gen-Y customers are more inclined to trust the advice of friends and acquaintances on financial products and services for decision-making. And, they are embracing social networking, social bookmarking and social shopping more than ever as a medium to gather this information, share experiences and make decisions, according to study by the Institute for Development and Research in Banking Technology (IDRBT), an arm of Reserve Bank of India..............
Fake RBI officers dupe man of Rs 7.5 lakh
In another incident of online lottery fraud, a woman and her aides claiming to be officers from Reserve Bank of India (RBI) duped a man of Rs 7.5 lakh. Ankush Mahadev Borude (42) of Charholi in Haveli taluka, lodged filed a complaint at Vishrantwadi station after realising he had been cheated. Police booked one woman named Neha and her unidentified aides and charged them with cheating and forgery and under sections of the Information Technology Act.........
Greed lured even literate investors into emu scam: RBI
Most of the duped investors in the multi-crore emu contract farming scam in the district last year were literates and very knowledgeable and had been lured by 'greed', according to a survey by Reserve Bank of India. The investors had been lured by attractive schemes offered by the emu farms, RBI Chief General Manager V Vasanthan said here today............
State-run banks soft targets for fraud
Nationalised banks account for just 17.5 per cent of the fraud cases that have been registered in India’s banking system in the past four years. But what is alarming is that over 83 per cent of the cumulative losses of Rs 29,910 crore due to such acts occurred at state-run lenders, raising a question over the efficacy of systems in place in the wake of the Cobrapost expose. The data on frauds in the banking system was compiled by RBI based on information filed by the banks................
With few checks, thieves swipe stolen cards without any hassle
..............Despite banks instructing retailers to request customers for identity proof, most commercial establishments give the process the go-by. Owners of shops and restaurants say they usually do not have the time to cross-check if the transaction is kosher. The RBI had directed banks to install card swiping devices that require customers to enter PIN numbers at commercial outlets from July 1, but few establishments offer this additional security feature. The lack of checks has resulted in a spurt in fraudulent card use, say security experts. .........
Resolve your problems with the right RTI application
..............All government institutions fall under the purview of the RTI. Institutions such as the Reserve Bank of India, Securities and Exchange Board of India (Sebi), Insurance Regulatory and Development Authority (Irda) and public sector banks have PIOs. But a private bank or a private company isn't obliged to have a PIO. So, if you have an unresolved complaint against a private sector bank, first file a complaint with the banking ombudsman; then, file an RTI application seeking the status of your complaint. This would ensure you get a response from the ombudsman, who would have to ask the bank for details of the complaint............
CM writes to RBI over loan repayment of mining-affected
.........In a letter sent to RBI Governor D Subbarao on July 26, Parrikar, while highlighting the economic slowdown caused as a result of direct and indirect halt in mining activities, said banks are pressurizing borrowers who are affected by mining to repay their dues. The borrowers had requested the banks to re-phase and restructure the loans last year with the hope that mining would start this year. They approached banks with the same request this year as mining has not resumed. However, Parrikar claimed that this request for another restructuring of their accounts is not being considered by the banks.............
Jaffer Sharief wants CBI probe into Amanath bank scam
...............The bank, mainly a minority institution, has been in dire straits, as RBI directed it to freeze all transactions following blatant violation of the central bank’s guidelines. For the last six months, the bank has been allowing depositors to withdraw only Rs 1,000 per account. It announced recently that depositors’ monies would be returned after Ramzan.............
Govt likely to earmark Rs 1,300 cr for Post Bank of India
........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. The Post Bank of India is proposed to be owned by DoP, but with a completely independent board, governance structure and operations. It will have representation from Finance Ministry, Ministry of Communication & IT, besides independent directors on its board.............
RBI approves reforms in primary co-ops
........In States where the central/ state cooperative banks are fully computerised and on core banking systems, Primary cooperatives will function as their business correspondents. A circular from the head office of National Bank for Agriculture and Rural Development (Nabard) unveiled the reforms to state and central cooperative banks. Jose T. Abraham, President, All-India Nabard Employees Association, said this would mean the death knell for an estimated 93,000 primary cooperatives in the country. Rather than help financial inclusion, the new reform would only drive poor farmers and rural people to local moneylenders for meeting their credit needs, he added. The employees association would resist implementation of these reforms with all strength at its disposal..............
Nabard chief against splitting cooperative banks
 |
| ..............“If we split the bank which is serving entire Andhra Pradesh, we will create one more cooperative bank, one more board and have one more chairman. A good financial institution broken into two will become weak,”................. |
Kerala rejects NABARD fiat
The State government has rejected a directive of the National Bank for Agriculture and Rural Development (NABARD) to primary cooperative banks (PCBs) to stop accepting deposits and transfer their equity, loans, and deposits to district cooperative banks (DCBs) as recommended by the Prakash Bakshi Committee.............
Regional Rural (Gramin) Banks : Going Away From the Objectives?
In yet another attempt to save regional rural banks from collapse, the Government intends to take private parties on board. In this year’s Budget session of Parliament, the Finance Ministry tabled a Bill that allows regional rural banks (RRB), also known as Gramin Banks, to raise capital from private sources. Analysts are skeptical. They say private shareholding may ensure financial stability but would distract RRBs from their objective of strengthening rural economy.................
MP sets example, makes DBT a hit
.......The RBI allows a small bank branch for a population of 2,000 but in bigger states like MP it would translate into villagers having to travel 10 to 20 kms to visit a branch. Banks in states like Orissa and Bihar appointed banking correspondent for villages for last mile banking service but the model failed because of inadequate business and inconsistency in visits of the banking correspondents............
Banks slam brakes on loan disbursals
.......For whatever meagre disbursals are happening right now, banks are insisting on higher premiums over the base rate, making loans far more expensive than they ought to be. The present situation is an exact reversal of the earlier practice when banks were saddled with huge sanctioned loans that were not being availed by borrowers. Bankers say they will not be disbursing the sanctioned limits until there is clarity on where the interest rates are headed........
Understanding the poverty line
........A Committee chaired by one of India’s finest economists, former Chairman of the Prime Minister’s Economic Advisory Council and the National Statistical Commission, the late Suresh Tendulkar, computed poverty lines for 2004-05 at a level that was equivalent, in purchasing power parity (PPP) terms, to one U.S. dollar per person per day, which was the internationally accepted poverty line at that time............
A last chance for economic survival
.......The lower growth resulting from Dreze-Subbarao policies pushes up the fiscal deficit and consequently boosts inflation, thereby resulting in the RBI tightening the spigot even more harshly. In the process, the Central bank dooms hundreds of companies into defaulting on their loans. As a result of Dreze and Subbarao, the Indian banking sector is rapidly becoming as sick as the sector became during 2005-8 in the US and in parts of the EU, with the difference that this country does not have the financial cushion needed to stabilise the banks. Aware of this, speculators are making a killing out of making a safe bet, that the rupee is headed downwards towards 75 to a US dollar and even 90, thereby boosting prices (and monetary tightening) even more.................
Depressed Indian economy - Charan Singh
All-out effort to accelerate growth required
...........Finally, the RBI would help the economy recover by lowering interest rates. The government could consider lower interest rates, at least for loans to the housing sector and infrastructure to spur growth. Finally, to ensure recovery, special concessions could be considered for auto industry as were granted by President Obama in the USA. The need is to revive growth and all-out effort to achieve growth should be made by the policy-makers.
The writer is a Professor of Economics, RBI Chair, IIM, Bangalore. The views expressed are personal.
Bank of Maharashtra to get capital infusion of Rs 2,200 cr
...........“We are likely to get a capital infusion of Rs 2,200 crore from the government of India in September which will raise our core capital adequacy ratio from the present 7.57 per cent to over 8 per cent as required by the Reserve bank of India,” Narendra Singh, chairman and managing director of Bank of Maharashtra, said. However, it’s overall CAR under Basel II norms as of end June was 11.83 per cent, he said..................
Canara Bank considering takeover of Amanath bank
............Asked whether the bank, which has been slapped with a moratorium by the Reserve Bank of India against allowing withdrawals of more than Rs. 1,000 by depositors, would not become a burden, Mr. Dubey said, “Of course, we are aware of the moratorium by the Central bank, but we will also consider other factors, including how many (loan) accounts are secured, before we take a decision on the matter.” He said he was aware the cooperative bank was saddled with “some NPAs”........
What deterred new banking aspirants?
...............Though the licensing tranches started nearly 25 years after bank nationalisation in 1969, one in 11 applicants and one in 50 got RBI banking approvals in 1993 and 2003 respectively. Ten entities were granted approval in 1993, while in 2003, that was whittled down to just two applicants. But this time, the ratio may improve, as the base number is low at just 26 and the government may be keen to enlarge the banking network owing to its financial inclusion commitments.....................
‘We have to grow our business beyond infrastructure’
...............IDFC is one of the several players that have applied to the Reserve Bank of India for a banking licence. “It is a nice, interesting irony and coincidence that my outside-IDFC activities are helping a great deal in fashioning what I believe to be a very differentiated and promising business model for a new bank,” Lall said, during a recent interaction here..............
Move to settle YES Bank case out of court
Kapurs and Kapoors - the families of YES Bank's promoters, the late Ashok Kapur and Rana Kapoor, respectively - might not wait for the courts to solve the dispute over membership on the bank's board. A move is understood to have been initiated for an out-of-court settlement. According to people familiar with the development, a meeting between the families was held on Saturday to discuss whether the case could be settled outside court. Another meeting was scheduled on Sunday evening,..................
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