.........The RBI’s KUB Rao Working Group had recommended that a Bullion Corporation should be set up to mobilise domestic idle gold hoards. The Report was ostensibly under examination in the government and the RBI. Some press reports indicated that the Bullion Corporation was being set up. The August 31, 2013, press release by the RBI is rather baffling. It is one thing if the authorities felt that the announcement was premature and quite another if the very idea has been killed. If it is the latter, it would be a setback to rectification of the large CAD. A similar proposal was scuttled 21 years ago. If we do not learn from the mistakes of the past, we will be punished by the future. One hopes the KUB Rao Report will be seriously examined by Governor Rajan.............
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, September 9, 2013
Rajan’s dad proud, but says task before Governor is a challenge
........In a conversation with this writer at his sprawling old bungalow in the Indira Nagar enclave of Adyar in Chennai, Govindarajan, a sprightly octogenarian, says all those singing hosannas now can very well sing a different tune. “This is probably the honeymoon period when everybody goes gaga; we have to see.” But the retired diplomat has full faith in the capabilities of his third child. “Lifting someone too high… the drop can also be sharp. But, he’s got a sound head and won’t be carried away; he knows what he’s capable of and he’s already said that he doesn’t have a magic wand.”...............Barons of Banking
A new book relooks at the history of Indian banking up to the 1990s through the careers of six personalities..........
Read - Mint
Move On Governor, It’s Time to be a Grandpa
...........For
now, Subbarao plans to catch up on reading, travelling and learning
salsa. Urmila has left him back in Mumbai to do all the packing before
they relocate to hometown Hyderabad by mid-September. Urmila is now in
the US with her children celebrating a baby shower; the family awaits
Subba who is due to be a grandfather by the year-end.
Obituary
I regret to inform that Mr.M.S.Aradhey, who retired as GM
in-charge, Byculla Office expired on September 7, 2013 at Thane. He was suffering
from Blood Cancer. May his soul rest in peace.
- R M Joshi
Aradhey was Grade I in New Loan Section of PDO, when I reported on the first day to my second job in RBI, I reported to Shri R. Janakiraman, AO, PDO, then. Aradhey was simple and always smiling bespectacled handsome person. Shri K V Deshpande and Aradhey were initiators for me to learn about PDO. I respected and loved them very much. At this age loss of Aradhey is great loss to society of good people.
- K.S.Iyer
Aradhey was Grade I in New Loan Section of PDO, when I reported on the first day to my second job in RBI, I reported to Shri R. Janakiraman, AO, PDO, then. Aradhey was simple and always smiling bespectacled handsome person. Shri K V Deshpande and Aradhey were initiators for me to learn about PDO. I respected and loved them very much. At this age loss of Aradhey is great loss to society of good people.
- K.S.Iyer
Public sector - Act V? - Subir Gokarn
............There are many other sectors in which these questions about the relevant roles of the public and private sectors are becoming important. We have to find an answer to them, which will, at least for a while, be consistent with the development challenges that we currently face. As a start, let me propose that the theme for Act V be "Renewal".
The vanishing cadres
........Note that the difference between Rajan the CEA and Rajan the RBI governor is not a comment on his ability to make a difference. More appropriately, it is a comment on the roles that the government assigns to its CEA and to the RBI Governor. The CEA is an advisor and more like a backroom boy, who does an important job for the finance ministry or the minister, but is usually not seen as taking decisions. In the past, there have been exceptions, where CEAs have played a more active and well-publicised role in policy-making. But in the last few years, CEAs have usually taken the backseat. In sharp contrast, the RBI governor is the head of an autonomous organisation that has to take decisions to impart stability to the economy and markets. By the very nature of the job, the RBI governor has to take charge of the situation and has to be seen to be doing things............
Handle gold from a banking angle
My View on "Concern over RBI's reported move to take over temp...":
It is unfortunate that legislators raise ‘doubts’ about tracking domestic gold stock without doing their own home work. It is in the national interest to have a fair idea of country’s domestic resources including gold, wherever they are located. MPs were vociferous about ‘funds abroad’. Is it not fair for the GOI/RBI have an idea about the domestic stock of gold?
Time is opportune for authorities to think in terms of dedicated professional institutions at regional/state level which will handle gold from a banking angle with an apex body equipped with linkages for import and export of gold and gold products with borrowing and lending capabilities. A ‘Gold Regulatory Authority’ with legislative mandate, should keep a record of gold stock with individuals and organisations, beyond a pre-decided threshold level. There should be arrangements for reporting use, further accumulation and disposal of such stocks.
Establishment of ‘Gold Corporations’ with state participation could also be debated. Such an institution can act as a depository where the pride gold possession of individuals and institutions now in bank lockers and the pledged gold can find a safe shelter, provided the purity could be ensured and the ‘Corporation’ is able to find resources and skill to deal in gold and money with the customers’ confidence. States like Kerala have successfully intervened in other similar sectors like chits/kuris and lotteries, which were also areas of exploitation by vested interests, whereby players in private sector had to fall in line and function with discipline and self-regulation.
The policy should look at a strategy that will encourage transparency in transactions, elimination of wastages, standardization of valuation norms and facilities for gradually converting even the existing stock of gold with individuals and institutions to conform to internationally acceptable standards.
- M.G.Warrier
Govt may start gold deposits to channel savings
.......While the Reserve Bank of India is already in the midst of issuing inflation-indexed bonds for retail investors, other options on the table could include a gold deposit scheme. "The idea is to not only fill the immediate investment gap for gold but also to provide long term options to investors that are attractive," said another official close to the development...........
Shocking: Ahmedabad emerging as gold smuggling hub
Ahmedabad: About 100 kg of gold is being smuggled into Ahmedabad every day to match the unabated demands of the Indian consumers. In rupee terms, 100 kg of gold (as on September 7) costs about Rs. 31.10 crore, which effectively means Gujarat is consuming about Rs. 930 crore worth of smuggled gold every month. Stringent import duties levied by Reserve Bank of India (RBI) had curtailed gold imports at the city airport to a mere 174 kg but in the process, has spurred smuggling of the yellow metal. ...........
A debate on evolving banking structure
..................On government ownership, there is very little new that the RBI discussion paper has to say. Government can issue shares with non-voting rights to retain control while simultaneously enabling public sector banks to raise capital. By many viewpoints, the role of government in any future banking set-up will be the most important factor impinging on the general level of competitiveness and financial stability.
Facing stiff challenge
......Co-operative banks, according to Amonkar, are constrained by bottlenecks in parameters. They cannot deal in forex and therefore lose out on profit income. They also have limited capital and cannot open ATMs and have to tie-up with commercial banks for CBS, RTGS and NEFT services. Another barrier to growth is restrains on opening new branches as a result of which scope of operations is limited. ............
RBI's notification on 20:80 schemes aim at consumer awareness
CHENNAI: The Reserve Bank of India's notification advising banks against upfront disbursal of loans without considering the stage of construction has been issued in order to prevent indiscriminate lending under such schemes by banks. "The increasing popularity of the 20:80 scheme during the past one year has prompted RBI to sound out an advisory to banks," ratings agency CRISIL said in a recent report...............
Need Money? Don’t Go to the Bank
.....There
are new emerging payment systems and we are trying to become a
less-cash society, even if we cannot be a cashless one.” He speaks about
interesting possibilities like cash at POS where people can withdraw
cash from retailers. With M Pesa for instance one can even pay for
sweets at Shrinathji and Birdy’s. That is the kind of sweet ending Raghuram Rajan would surely like.
Man adds woman on social network, dupes her of Rs7L
...........“Later, Philip called her again and told her that because of so much luggage, he has to pay Reserve Bank of India (RBI) taxes. He texted her an account number, saying it belongs to one Sanjay Gupta, a fund officer in the RBI,” added Pachurkar. “Some days later, Philip messaged her again with another account number, this time belonging to ‘RBI officer’ Sabina Mishra, and asked her to transfer money again. Within 18 days, Philip convinced the victim to transfer Rs 7,09,700,” said the officer.......
‘Fake SBI officials’ dupe school principal
..........When contacted, one SBI officer told Nagaland Post that it was the “carelessness and ignorance” on the part of the customers that they were falling prey to the fraudsters. He said that according to the Reserve Bank of India (RBI) guidelines and Know Your Customers (KYC) norms, no RBI or respective bank officers have the right to ask its customers their ATM secret pin code and ID and password in internet banking. Those asking for ATM secret code, ID or password were fraudsters, he added. He said that SBI would be putting banners and posters in all the ATMs and bank branches. .................
Banks told to file FIRs against wilful defaulters
......“Public sector banks have been told to show zero tolerance towards wilful defaulters and lodge FIRs against them. Taking over the company management from such defaulters is also a must. Not just the banking system, but society is paying a heavy price due to such defaulters," financial services secretary Rajiv Takru told FE. Banks are already submitting to the RBI on a quarterly basis a list of those who deliberately default (cases of over Rs 25 lakh where suits have not been filed but were classified as doubtful/loss accounts). In addition, the RBI and CIBIL have a database of suit-filed accounts, including wilful defaulters of over Rs 25 lakh.........
Huge Challenges Await the New RBI Governor - M.G.Warrier
....................To conclude, I must say, the appointment of Dr. Rajan has raised huge expectations. Can the new RBI governor help the economy, besieged by a plethora of challenges including a weakening currency, burgeoning deficits, sluggish growth, runaway inflation, rising interest costs, etc., regain momentum? Well, only time will tell.
‘The World is Watching Rajan’
.......I
expect he will try to break the back of India’s inflation, establishing
the Reserve Bank of India as a more independent and credible central
bank, and trying to end the rapid decline of the rupee through sharp
interest rate hikes.
The question is whether he has the resolve and political skill to pull
those things off, and for a central bank without a strong tradition of
political independence, that will be no easy task.........
Read - ET
Messiah on Mint Street
........The
level of hype which marked his entry into Mint Street has never been
seen earlier. But Rajan does have the potential to emerge as a fine and
successful governor, with some luck and given his intellectual ability.
But as Rangarajan who headed the committee which chose Rajan as chief
economic adviser says, when an academic takes on an executive position,
he has to find answers immediately. According to the former RBI
governor, an academic who takes on an executive assignment will have to
apply his knowledge and find solutions swiftly as there is no luxury of
time in the real world unlike in academia. So what will count is
delivery not intellectual heft...........
Read - ET
Banking on Mr Rajan
..........Everyone you speak to — from bankers, entrepreneurs and executives to investors — hopes Rajan will usher in a pro-growth shift in India’s monetary policy. Will he do that? Everyone will be keenly waiting for his mid-quarter credit policy, scheduled for September 20, just a fortnight after he took charge. Rajan faces what economists call a central banker’s trilemma. He has to arrest the rupee’s slide, cool inflation and create conditions that will boost growth. Most central bankers have to deal with one or two of these challenges at a time. Attempting all three simultaneously is a Herculean task..............
Raghuram Rajan in no hurry to reverse measures
.....In sum, managing inflation expectations will remain RBI’s priority and the high interest rate regime at the shorter end may continue for the time being. Those who are expecting Rajan to reverse the August policy measures may have to wait for months before they are done.
New India central bank chief may face short honeymoon
NEW DELHI, September 8- The euphoria which greeted new central bank governor Raghuram Rajan has been unprecedented in India’s normally sober financial world but the honeymoon may be shortlived. Analysts say it is a mistake to believe the suave star economist, whose first day on the job last week one financial daily likened to the “central banking equivalent of a blockbuster movie opening,” is a miracle man who can rescue India’s ailing economy.............
Raghuram and Asaram: the future of India has arrived
Two important events stand out in the last week. And surprisingly, in both the events the lead actors have the name of the most favorite Indian God ‘Ram’ as part of their names–- Asaram and Raghuram Rajan. These two individuals, though totally unconnected to each other have one thing in common -- they are prime symbols (of course in their respective fields of expertise) of the pathetic state of affairs the country is witnessing. The society and the economy both seem to be crumbling and Ram as usual is omnipresent.............
Indian economy needs the FM and the new RBI Guv Raghuram Rajan to match their steps
.........The sudden spurt in optimism over Rajan's arrival at Mint Street is reminiscent of India's cricket great Sachin Tendulkar stepping out on the ground with his team in dire straits. Like Tendulkar, the new RBI chief also will have to carry the burden of expectations from a large Indian population. While Tendulkar is nearing the end of a highly successful career, Rajan is just beginning his arduous innings at RBI..........
Mystery of the mangled rupee
...... “You know what all this reminds me of? It reminds me of the movie The Murder on Orient Express. The story was about a murder where everybody seemed to have an alibi. Ultimately, it turned out that every suspect had struck a blow against the victim, with no one knowing who struck first. The detective decided not to prosecute anyone.” “I think that is what we must do about the rupee. Thankfully, it still seems to have some life left in it. Let’s stop arguing and see what we can all do to revive it”.............
Is Raghuram the Rupee Whisperer?
It’s
a sign of the world economy that these days central bankers are bigger
superstars than, well, superstars and prime ministers. But it’s an
occupational hazard for superstars that it takes just one stumble for
the fickle public to swing from exuberant “likes” to utter dislike. RBI
Governor Raghuram Rajan could take a lesson or two from Mark Carney, the
BoE’s Canadian rockstar governor. His arrival was greeted with the kind
of euphoria that usually only teen idols can generate............
Read - ET
Will Raghuram succeed where Manmohan failed?
.........So in this bleak landscape will the new Governor of the Reserve Bank be able to make a difference? Will he be able to take measures that will strengthen the Rupee and encourage investment? Will he be able to restore some of the optimism that was such a characteristic of the Indian economy for more than 20 years? The truth is that nobody knows. The truth is that times are so hard at the moment that the future looks bleak despite one of the most celebrated economists in the world taking charge at the RBI.
Rising dollar, falling rupee, crouching students!
......Since the past few days, the only thing that everyone is talking about is the rising dollar and falling rupee. Moreover, there are numerous articles on how this is affecting the lives of people in India. For students who are studying abroad, for families who want to holiday abroad; the US and the UK seem like a mirage, a shimmering promise of a dream which has now turned dull. Undeniably, the falling value of rupee indicates that to study, holiday, live and work abroad will get expensive but it is not unachievable. Who are the people who plan their annual vacations abroad? Businessmen, industrialists and upper middleclass Indian families, right? Well, these people can still ‘afford’ that trip by just shelling out a few thousand dollars or pounds more..........
The razzle dazzle of the Rajan effect and the ifs of the rupee raga
.........Rajan brings to the table the critical three Cs: Comprehension, Confidence and Clarity. Rajan comes with a reputation for Comprehension of the complexities of global finance. Unlike his predecessor, he has the Confidence of the Prime Minister and more importantly, the Finance Minister. He has also, clearly, prepared for the job while at North Block. His arrival statement had Clarity and a firm grasp of the obvious issues.............
No tweeters, all followers
Predictably, the twitterati led the mass hysteria over Raghuram Rajan taking over as RBI governor. Just about everyone seemed to have a view on the man. His near rockstar appeal was visible on twitter-handle @RaghuramRajan. On the day Rajan took charge, the twitter-id tweeted “@RaghuramRajan hasn’t tweeted yet”. But that obviously was not too much of a bother for his 700-plus followers who had already hitched their wagon to this star. At last count, the score was: 0 tweets, 0 following, 1,152 followers! Could this be a fake id of Rajan created by someone with a sense of humour?
Raghuram Rajan: the challenge facing India's Ben Bernanke
......What's ironic is that Rajan's and Bernanke's fates as economic policy-makers are tied up in other ways, reaching back years. Kurt Vonnegut, in his novel Cat's Cradle, wrote of the fictional religion Bokonism, which required of its adherents only belief. Vonnegut theorized that groups of people – dubbed a "karass" – would end up working toward a common purpose, unknown to themselves or each other, finding their lives intertwined without any knowledge of the goal they were working towards in common. The world's central bankers have become this karass, meeting and separating and meeting again to solve the quandary of economic crises – without knowing, really, what they are doing, or how it will end. The common threads are there. ..........
Can he walk the talk?
.............his will be a continuous battle for Dr. Rajan in the face of constant efforts from North Block to encroach on the RBI’s territory. He’s not the first Governor who will face this problem, and he will not be the last. What is different though is that the pressures are now bigger given the slowdown in the economy. The report of the Financial Stability and Legislative Reforms Commission has put the central bank on the back foot, and Dr. Rajan will find it difficult fending off the government’s yorkers from this position. But yet, he will have no option but to keep defending as his predecessors have done. ..........
Raghuram Rajan may discuss stability issues at Basel Meet
MUMBAI: Raghuram Rajan will meet global central bank chiefs in Basel, Switzerland on Monday, for the first time as the Reserve Bank of India Governor, and probably discuss global financial stability and issues related to banking regulation. ...........
Being erudite is so sexy
..........Also, by not pandering to the cacophony of social media chatter, Rajan has shown that he means business and that’s pretty much what he intends to keep his focus on. It’s not all talk and little work for him. And ladies who love a man in charge are going to dig you for keep the frivolous chat to the minimum. It’s the serious, intelligent image that wins any day..........
Now, over to the politicians
........Rajan is undoubtedly a very smart man. He is youthful by the standards of the Indian policy establishment. He is energetic and he has fresh ideas. But he doesn't possess a wand, which can be waved to magically restore the fiscal balance. In fact, that isn't even his job. The best he can offer is some degree of monetary sanity. It took three years of collective fiscal profligacy and policy mismanagement to cause this crisis. Most of the people responsible are still very much part of the establishment. One man, and one without a fiscal policy mandate at that, cannot reverse that trend. It will require a combined effort from fiscal policy-makers, with the consensus of Parliament to even start putting things right and the damage cannot be mended in a day, or a month, or maybe even a year.........
Move to revamp Bhubaneswar night patrolling
..........."The responsibility of the GOs is to brief the night patrol officers about their tasks. They would also check up if night patrolling is being carried out effectively across the city, including VIP areas like Naveen Niwas, state secretariat, the assembly and Reserve Bank of India, among others," a senior police officer told TOI.............
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