........When Chidambaram returned to the Finance Ministry from another corner in the North Block -- Home Ministry -- only a little over a year was left of Subbarao's extended five-year tenure. Subbarao's predecessor Y V Reddy also had skirmishes with the North Block on the issue of autonomy and fiscal consolidation. However, the finance minister showed his disappointment with monetary stance taken by Subbarao when the former had already announced a five-year fiscal consolidation road map. Rajan is still in the honeymoon period. Criticizing the governor from the beginning itself would take sting out of the criticism, analysts say. Moreover, taking on Rajan is not the same as opposing Subbarao's policy since the former is renowned world over for his commentaries on the financial world..........
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.
Tuesday, October 15, 2013
India Needs More Banks, Foreign or Not
RBI governor Raghuram Rajan’s promise of easier entry of foreign
banks into India is welcome. This would raise competition and efficiency and
bring in technology and expertise to foster financial inclusion. Much of rural
India lies outside the reach of banking, because of the high cost of
traditional banking. True, foreign banks also operate largely in urban areas:
of the 333 foreign bank branches, 331 are in urban areas, of which only 44 are
in under-banked districts..............
Read - ET
Bigger play for foreign banks easier said than done?
Could Raghuram Rajan’s announcement on letting foreign banks enter India in a bigger way, be easier said than done? At a time when there is literally no good news coming out of India, and the government is in no position to undertake big reforms in a pre-election year, the RBI seems to be initiating these bold moves in a bid to attract more capital into the country..........
AIBEA opposes banking reforms
The All India Bank Employees Association on Monday said that it will launch an agitation if the Reserve Bank of India proceeds with any proposal allowing takeover of Indian banks by foreign banks. “We strongly oppose the RBI Governor’s proposals aimed at takeover of our banks by foreign banks. These are against our country’s interest,” C.H. Venkatachalam, General Secretary of the association, said............
BJP demands debate on banking reforms
.........The BJP on Monday said Rajan’s statement went against the statements made by the Centre that the policy of “nationalisation” of banks would not be reversed. It said such a policy decision with far-reaching implications should not have been announced on foreign soil without any discussions in India.........
BRAKES ON BANKING BY POST OFFICES
.......... The finance ministry objected on the ground that the Indian Posts has been incurring huge losses over the last 11 years that will not enthuse the RBI to give it a licence to start the bank. Its loss in 2011- 12 alone was Rs 6346 crore. The Finance Ministry also cited a poor financial track records of the postal department that does not give it credibility to start the banking operations..........
Lighter moment.............
Raghuram Rajan, Governor of Reserve Bank of India and his wife Radhika enjoy a lighter moment with Arundhati Bhattacharya (right), Chairperson, State Bank of India, during a reception on the sidelines of the World Bank-IMF Autumn Summit 2013 in Washington DC on Sunday.
Kotak Mahindra Bank to move into Bandra Kurla Complex
Kotak Mahindra Bank Managing Director Uday Kotak along with the bank’s operating management committee, including C. Jayaram and Dipak Gupta, are soon to get a swank new office address at Bandra Kurla Complex in Mumbai. After playing host to the who’s who of Mumbai’s banking corporates, including ICICI Bank, Bank of Baroda, Bank of India, IDFC, Standard Chartered, HSBC, Deutsche Bank and Citibank, the complex is now set to welcome the latest entrant after a four-year wait...........
IBA and UFBU Again Ditch Bankers - October 2013 Round too Fails
...Union leaders need to realize that they already have lost the crucial time for wage revisions and bankers are fast losing faith in them. This round of talks was held exactly after two months and now the salary revision has already become due for almost an year. Every passing week, weakens the strength of unions to negotiate..........
Wage Revision Talk : Bank Employees resentment on delaying tendency of Govt
Wage revision talk was held in cordial environment but govt representative IBA’s unconfirmed assurance was hurdle in reaching on any conclusion. The UFBU has shown their concerned and dissatisfaction on undue delay and demonstrations throughout the country in all State capitals and other Major Centres on 22nd October 2013 demanding expeditious wage settlement...........
Clarify this............
My View on "UFBU CIRCULAR - Another Failure Stares Top Union ...":
With reference to the comment “UFBU demanded that the cost on superannuation and welfare measures should not be included in the cost of wage revision.” will someone clarify whether the issue “the changes in wage structure for employees covered by NPS” covered in the current negotiations. This category of employees should get the loss on account of non-availability of defined benefit pension scheme factored in in their remuneration package as in the case of employees in organisations where there is no pension scheme.
- M.G.Warrier
“If all you have is a hammer, everything looks like a nail!
My View on "I am not superman, says RBI Governor on euphoria s...":
The ‘euphoria’ surrounding Dr Raghuram Rajan is multi-dimensional. His educational background, career progression so far and the young age at which he has become RBI Governor may have helped him get initial attention. But what make the common man and stakeholders look forward to his next move or read more meaning into his observations are the abundance of common sense in his approach and willingness to listen. Dr Rajan’s present position will give strength to his observations and arguments which were all along been the result of deep study and analysis. Damodaran observed in his recent report on ‘Reforming the Regulatory Environment for Doing Business in India’ that “If all you have is a hammer, everything looks like a nail! Such are the concerns relating to raising economic growth that everything in the business environment seems to be a candidate for reforms.” No wonder, in such a chaotic phase of development, when someone who can understand India-specific development issues from an international perspective and speak a language which will be clear to economists, politicians and common man in the same measure, India will pamper and support him and look forward to his next move. People will easily expand his observation “I think, with the financial sector reforms, coupled with the real sector reforms, growth turnaround should be on its way” to mean much more than an expression of faith.
- M.G.Warrier
Reorganising bank selection advisory panel is a good governance imperative for the RBI!
........Therefore, as noted earlier, the banking selection advisory panel would surely have to dispassionately and objectively analyse the capacity and weaknesses in the existing RBI supervision process, with regard to financial conglomerates in order to make a proper judgement on whether (or not) RBI’s strategy of ring-fencing banking entities of large industrial business groups, can be achieved in real time. This needs to be noted with great care!.......
Is RBI More Pro-customer?
.....All these examples raise an obvious question: If RBI is so willing to bat for the consumer, why do we still have so many customer complaints? This happens for two reasons. Like other regulators, RBI also has no direct interaction with consumers. It only reacts when the number of consumer complaints to the banking ombudsmen, or through media reports, is large enough to draw the attention of its top brass. ...........
Towards inflation targeting
The Reserve Bank of India's (RBI's) in-house rule for setting interest rates is a secret sauce in desperate need of a new recipe. The ingredients for the rate-setting formula are not known. But a Breakingviews examination of India's call-money rates, inflation and gross domestic product (GDP) over the past 13 years shows that the central bank has historically placed a rather low emphasis on taming inflation, while fretting more about output slumps and currency swings.............
Tears from onions
.........These patterns exacerbate the dilemma that the RBI will have to resolve. Given that it hiked the repo rate in September, it is very unlikely to reverse course so soon. At best, it can use the relatively muted core inflation reading to justify status quo on the repo rate, while continuing to roll back on the marginal standing facility (MSF) rate, thereby effecting some short-term loosening. On the other hand, with RBI Governor Raghuram Rajan's perceived preference for the CPI as the policy benchmark, the patterns from that index suggest that ...........
Onion prices push up inflation RBI’s rate cut hope fades, Rajan running out of options
As expected, inflation hit a seven month- high of 6.46 in September. This may make it difficult for the Reserve Bank to cut key interest rate on October 29 to spur industrial growth. Newly appointed RBI Governor, Raghuram Rajan had last month hiked interest rates to control the economy. While he did try and inject some liquidity into the system by lowering the Marginal Standing Facility for banks twice since he took over, his hands are clearly tied on the repo rate front. This time, with food inflation creating serious problems, the RBI will be hard press to ease repo rate...............
Have onions tied Superman’s hands?
......However, Rajan has also said that the focus of the central bank would remain on growth too, with the emphasis shifting depending on the situation. All in all, there has not been a significant change in the RBI’s stance on growth - inflation dynamics after D.Subbarao vacated the governor’s office...........
India must focus on growth as markets stabilize: Chanda Kochhar
........“The steps taken by the Reserve Bank of India (RBI), including those to roll back some of the previous liquidity tightening and measures to lure inflows from overseas Indians have had a cooling effect,” she said in an interview in Washington D.C. “The economic slowdown is weighing on banks’ asset quality though it isn’t bad enough to create a big kind of havoc,” she said. “Finally what we need to focus on is growth in the country,” she said. “It’s the investment story that has fallen off currently. What we really need is a much more conducive environment.”...........
The Game’s Bond, Gold Bond
..... Once
the scheme stabilises, expect steady inflows to counter the redemption
outflows. Should there be a serious mismatch, inflows can be stimulated
by recalibrating interest rates. Finally, Reserve Bank of India itself
sits on over 550 tonnes of gold that could be used for redemptions in
the worst-case scenario.
Centre returns moneylending Bill 7th time
...... The government is understood to have asked the state to reconsider the Bill because it overlapped with several provisions of various central laws including the Reserve Bank of India Act, Companies Act and Banking Regulation Act.........
Alarming slide in Re’s value
........... The remedial steps need to be taken at the earliest with the intervention of the central bank in the country. This has been long ignored by the RBI during the past few years as a result of which the Rupee slide against US dollar has continued. Since money flow in the market is continuing at a high speed that is a new phenomenon in........
Bank ATM goof-ups and how to handle them
......If you thought this is an imaginary situation, it is not. This happened for real and is cited in an RBI document. The acquiring bank (other bank) approached the banking ombudsman (BO), and informed them that the disputed amount was remitted to the issuing bank (own bank) through NEFT. The BO advised the issuing bank to credit the amount into the customer’s account, along with a penalty of Rs 100 per day for delay, as per the apex bank’s rules. On further investigation, the BO found that............
Low pay forcing techies to seek alternative careers
......There are lakhs of technical graduates who have joined or are trying to find jobs as police constables, bank clerks/officers and civil servants. According to bankers, all new recruitments are dominated by the B.Techs. The data speaks for itself: State Bank of India, the top recruiter among banks, recently hired 1,500 probationary officers. “About 80-85 per cent of them are graduate engineers,’’ said C.R. Sasikumar, Chief General Manager, SBI........
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