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, September 25, 2013
Only 40,000 villages in India have bank branches: K C Chakrabarty
Managing the Liquidity Issue - A SESHAN
The results of the latest auction of gilts reveal the problem of
liquidity in the market. One does not understand why the auction was conducted
when government deposits in RBI should be large due to the advance tax
payments. Surprisingly, deposits of the Centre with the RBI, as on September
13, 2013, were at the stipulated minimum of . 1 billion. RBI has the procedure
to invest government surplus deposits in gilts in its portfolio. Government
should follow the principle of just-in-time inventory management pioneered by
the Japanese industry. Unlike in the case of industry, where there is a lead
time before getting the materials, the government can get immediate money from
the RBI by accessing the ways and means advances facility in case of necessity.
RBI should lower the marginal standing facility rate by 25 basis points
and roll back the increase in repo rates. It should also raise the monetary
ceiling on repos by 25 basis points. As the RBI governor pointed out, the CRR
maintenance requirement does not really ‘bite’. Then why is it prescribed? It
could be withdrawn. The kharif marketing season is starting and there will be
credit demand for the movement of the bumper crops. This is the time to effect
some relaxation in policy measures.
ET
North East MSME Conclave held in Guwahati
..........The MSMEs provide employment to about 60 million persons through 26 million enterprises. The geographic distribution of the MSMEs is also more even. Thus, MSMEs are important for the national objectives of growth with equity and inclusion. “Bankers and Entrepreneurs should behave like brother with respect of MSME Sectors,” said Mr.D.Sethy General Manager – Rural Planning & Credit Dept., Reserve Bank of India..................
Fresh ideas must be allowed
It was so good to read an article from Renu Kohli, a former RBI official from 1984 batch. Really good. I think a new Price Index for urban and rural population needs to be evolved to serve as an inflation anchor.It must take into consideration the changing consumption pattern to capture inflation at retail level.Since the younger generation is fond of gizmos, branded clothing,freaking out at restros etc; for urban population, this must also be factored. RBI's intellectual reserves need to be strengthened by introducing lateral entry at the level of CGM/ED also.In fact, in this competitive world, the concept of all posts to be manned by cadre officials only must go. The fresh ideas must be allowed to come by enabling talented people to walk in/walk out of RBI at periodic intervals with shorter tenures of 3 to 5 years. Renu Kohli will fit the bill to be ED.
- Sitendra Kumar
VITALINFO made it possible - Prakash Bakshi, Chairman, Nabard
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Dear Mr Mangesh,
Its not 24x7 news channels, nor the e-papers
available on the net that led to anyone not reading newspapers. But your early
morning VITALINFO certainly achieved that near impossible, and I don't think I
have touched a newspaper for the past few years now for reading any news
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PSU bank employees unions call off Sep 25 strike
Banks will function normally as a section of public sector bank employees who had threatened to go on strike on Wednesday have deferred it following assurance from the government that there is no plan for merger of banks at present. Following conciliatory meeting before Chief Labour Commissioner, where officials of Finance Ministry and Indian Banks' Association (IBA) were present, it was decided to defer the strike, All India Bank Employees Association (AIBEA) General Secretary, C H Venkatachalam said..........
Arundhati Gets Shortlisted For State Bank Chairman’s Post
State
Bank of India, the country's largest bank, may soon get its first woman
chairman with Arundhati Bhattacharya having been shortlisted for the
post, according to two senior government officials. Currently one of the
bank’s four managing directors, Bhattacharya’s name will soon be
forwarded to the Appointments Committee of the Cabinet (ACC)..........
Read - ET
Read - ET
Chaudhuri Leaves Poor Investors, Rich Legacy
..........“I
want my legacy to be such that (nasty provisioning) should not come
back again. We should correctly and rightly anticipate and not push
things under the carpet,” says Chaudhuri. “Investors understand that
there are good years and not so good years, and that could be due to a
variety of reasons. But this company is at least disclosing correctly
what it is doing.”...........
Read - ET
RBI to rap auditors for lapses by banks, NBFCs
....."The RBI Act empowers the RBI to take action against the auditors who have misreported or not reported or not told the RBI about violations," a source said. The top management of RBI, particularly Deputy Governor K. C. Chakrabarty, has been critical of how management changes at state- owned banks have led to sharp decline in profits and jump in non- performing assets. This has generally happened as the tenure of top management has gotten shorter in public sector banks, and both the outgoing and incoming chief executives are under pressure to show higher profits during their tenure........
RBI extends date of discussion paper on Banking Structure in India
The last date for receipt of comments on the issues raised in the Discussion Paper on ‘Banking Structure in India – The Way Forward’ has been extended from September 30, 2013 to October 31, 2013. The comments may be forwarded to the Principal Chief General Manager, Department of Banking Operations and Development, Reserve Bank of India,.............
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Default and be merry
The new RBI Governor Raghuram Rajan has mentioned that “we (RBI) will take a close look at corporate distress and bank NPAs to … accelerate the process of resolution”. The truth is that this is a messy affair. Regarding NPAs (non-performing assets) it is no secret that sovereigns in India (both Central and State) rarely, if ever, honour their financial guarantee obligations to banks and others.........
COULD VIKRAM PANDIT’S HOME-COMING BE FOR REAL?
Former
Citigroup head Vikram Pandit is rumoured to be heading home next year
as a full-fledged banker again. Pandit’s inclusion in the RBI panel on
Comprehensive Financial Services for Small Businesses and Low-income
Households is adding fuel to the talk. He will head an NBFC promoted by J
M Financial and will join next February and spearhead its banking
foray. But some believe he may just be flying in and out of India and
not relocate to Mumbai, though he has booked a posh home in BKC.
ET
ET
The essence of Inclusion
...Financial inclusion, full or otherwise, necessarily demands an effective enabling environment where access to financial services can be adorned with unflinchingly reliability, better proximity and fast and cost effective service. Banks in India have managed to provide this environment with reasonable success but the challenges in this area yet outweigh the accomplishments. Why? ..............
Read...........
GDP growth rates
This refers to the report "FM in war of words with BJP leaders over growth rate" (September 24). The problem can be sorted out if the correct procedure is followed. There are three measures of central tendency, viz...............
RBI may cut MSF by another 75bps in next 3 months: HSBC
..........I would also expect the RBI to raise repo rate atleast once, further by 25 bps. So you would have reduced the spread between the MSF rate and the repo rate by 100 bps and you can say that the monetary policy framework has been re-normalised at around the conditions it would normally set in. In terms of making the repo rate then the operational rate, you will most likely have to make some adjustments to liquidity, make available to help facilitate that. So, those are the broad trends I would expect over the next couple of months..............
Dire outlook: BSE Sensex set to crash, BofA blames RBI Governor Raghuram Rajan
........The Sensex had surged 685 points to close at an almost three-year high of 20,646.64 on the eve of the RBI policy review. The index gained 9 per cent between Raghuram Rajan's takeover and the policy review. The report noted that "as markets are already close to our upper limit of the 'range' we believe the risk reward is not favourable."..........
Is WPI Inflation overstated and CPI understated?
Even as the Reserve Bank of India (RBI) has preferred tight monetary stance to arrest inflation, a confusing trend has emerged in the rate of price rise in recent months. This may throw up an interesting debate on whether RBI's monetary tools are apt to control inflation in such a complex scenario..........
Repo rate hike cannot act as an effective measure in taming inflation
.............The flaw in the RBI policy can also be analysed by looking at the most core concept of inflation, which is food inflation. Food inflation is a predominantly supply side issue. We need good crop harvests to control food inflation and repo rate hike cannot be effective here............
Can Raghuram Rajan Reverse the Indian Economy’s Decline?
On September 5, Raghuram Rajan took over as Governor of the Reserve Bank of India (RBI). His predecessor, D. Subbarao, had made several controversial decisions in his five years in charge. His last two months in office were especially difficult. In an effort to control inflation, Subbarao raised interest rates again and again to bring down liquidity — but he failed.........
Fed surprise vs RBI dampener
......However, I'm finding it difficult to term the RBI's move as totally logic-defying. First, at this moment the priority for the country should be to stabilize the rupee, which substantially strengthened recently but is still far from stable. Second, both wholesale and retail inflation are still at high levels despite good monsoon expectations. Third, the monetary and CAD correction steps............
Rating of Banks Downgraded - Banks Continue To Be in Hands of Corrupt Officials
..Is RBI totally unaware of such unhealthy culture? Majority of branches are working under huge mental pressure and hence they cannot safeguard bank's interest. It s absolutely beyond my imagination that officers who are always in fear of action from bosses and who are always threatened of transfer can work wisely and safely. The key target of majority of field functionaries is to please the boss and not to safeguard bank........
Finance ministry clarifies: RBI forex curbs not retrospective
The government on Tuesday clarified that the recent curbs on outward investments by Indian companies will not impact the deals entered by them before August 14, the day the Reserve Bank of India imposed restrictions on overseas investments..........
Global bond index entry on RBI's radar
Last week, Reserve Bank of India Governor Raghuram Rajan said there was talk of bringing India into some global bond indices. For this, he said, discussions with international index agencies and investment banks that created these indices would have to be held. "Sometimes, they require a pace, and we have to examine (that) before we can be comfortable," he said. Here's a brief primer on bonds:.......
RBI has fight on its hands in managing govt’s borrowing
If the results of the latest auction of government bonds are anything to go by, managing the central government’s market borrowing during October-March could pose a challenge to the Reserve Bank of India.......
ATMs WITH BIOMETRIC READERS - round-table discussion
........We need to write to the RBI
that any directive that leads to increased costs to the depositor must be
discussed with us, the largest stakeholders. We invite all concerned NGOs to
join in a round-table discussion on this issue. We would also like to take it
forward with a joint memorandum to be finalised and sent to the RBI on this
issue..........
MP Rajeev Chandrasekhar asks PM, FM to rethink over Aadhaar-linked ATMs
.......Rajeev Chandrasekhar, an independent member of the Rajya Sabha, who is also a member of the Standing Committee on Finance, has requested Prime Minister Manmohan Singh to relook at the Reserve Bank of India (RBI)'s proposal on Aadhaar authenticated biometric automated teller machines (ATMs)..........
ICICI Bank launches new Facebook app Pockets
........."The app will enable young consumers who spend a lot of time on Facebook to carry out a wide set of transactions without having to leave the social media site," said Chanda Kochhar, Managing Director and Chief Executive Officer, ICICI Bank. Kochhar said one-third of the bank's customers are under the age of 30...............
Rise in Internet transactions helping banks reduce costs
......On Tuesday, ICICI introduced a Facebook application that allows customers to transfer funds among other things using the social networking website. The rise of transactions through the Internet should not be seen as being at the cost of bank branches, Kochhar said. “Branches have its own place for customer experience. It is not that non-branch products will replace branches, but in fact it will be complementary to branches, allowing a customer to bank in the car or on the phone,” Kochhar said.............
Banks quiet on festive discounts this year
Mumbai: Around this time every year, bankers are busy planning special discounts on home and car loans in order to attract individual borrowers ahead of the festive season. But not this time. “We are not planning any festive season discounts as of now,” A Krishna Kumar, managing director - national banking, State Bank of India (SBI), said on Tuesday.............
Bank of Baroda to grow by 18 per cent: CMD Mundra
Bank of Baroda, India's second largest lender, is expected to grow in the current year by 17 to 18 per cent as against the industry standard of 14 to 15 per cent, its top official said in New york on Monday. S S Mundra, Chairman and Managing Director of the bank said the growth of banks depends on the GDP growth rate, said at the Bank of Baroda's branch in Park Avenue, Manhattan, New York...........
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