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.
Friday, October 25, 2013
The Five Pillars of Raghuram Rajan
How the RBI can be made more accountable – Part 2
Anil Kumar Yadav cracks UGC-NET in record 4 subjects
......One of the notable features of June 2013 UGC-NET results is that Anil Kumar Yadav, an alumni of Sikkim Government College, Tadong and presently Deputy General Manager with Reserve Bank of India (RBI), Gangtok Office, has cracked this tough national level test in record four subjects till date. Till now he has cleared the UGC-NET in Economics, Management, Commerce and Labour Welfare/ Personnel Management/Industrial Relations/ Labour and Social Welfare/Human Resource Management. It may also be mentioned that he has achieved the distinction of having Masters Degrees in 11 disciplines including Sociology, Management (MBA), Mass Communication, Psychology, Financial Management, Environment & Development, M.Com (BIM), Economics, Master of Mass Communication & Journalism (MCJ), M.Com (IBO) and International Relations...........
ICICI Bank organises Coin Exchange Mela at Chandigarh
..........The Coin Mela was inaugurated by Mr. Sanjay Bhatia, Deputy General Manager, Reserve Bank of India (Chandigarh). Mr. P.K.Lamba, Treasurer of Reserve Bank of India (Chandigarh) also graced the occasion. The Coin Mela is organised to offer a free facility of exchanging currency notes with coins to the general public. ...........
TOWN HALL MEET ON MICRO, SMALL AND MEDIUM ENTERPRISES (MSME)
Srinagar, Oct 24: Reserve Bank of India organised its first Town Hall meet on MSME sector today on October 24, 2013 at Srinagar in Conference Hall of Jammu and Kashmir Bank Ltd. K. K. Saraf, Regional Director, Reserve Bank of India, Jammu and Kashmir, chaired the meeting. Besides A. K. Mattu, General Manager and Ramesh Chand, DGM-in-charge, RBI, Srinagar, Parvez Ahmed, Executive President, Jammu and Kashmir Bank, Convener, SLBC, representative from SIDBI, senior Bankers from major banks viz: Jammu and Kashmir Bank Ltd, State Bank of India, Punjab National Bank, HDFC Bank and representatives from Kashmir Chamber of Commerce and Industries (KCCI) and Federation of Chambers of Industries, Kashmir (FCIK) and some entrepreneurs from Kashmir, participated in the meeting. ......
GNLU to train RBI law officers
AHMEDABAD: In a first of its kind training to be held at GNLU, a two-day intensive workshop for 45 law officers of Reserve Bank of India will be organized to impart advanced knowledge of specific laws, legal procedures and policies. The training will focus on Companies Act-2013,.............
RBI chastises bank officials
RBI Regional Director Uma Shankar on Wednesday chastised bank officials for poor attendance at district-level bankers’ committee meetings in the State. Speaking at the State-level Bankers’ Committee meeting here, she said:.........
RBI team to visit Ambur on October 30th
A team of senior officials from the Reserve Bank of India would be visiting Ambur on October 30, to interact with entrepreneurs and obtain feedback on problems if any, in availing loans from nationalised banks. This was informed by M V Swamynatthan, district president of the Vellore District Micro and Small Entrepreneurs Association (VDMSEA)...........
Create National Cooperative Bank - Yerram Raju
My View on "Finding the Next Amul Success Story in Banking":
The author is right in arguing for a robust cooperative banking structure at the grassroots to achieve financial inclusion. But NABARD whose former chairman's views the author quoted has been responsible in a large measure for the current status of the structure - for, it's supervision during the last thirty years has brought down its contribution to farm credit from 62% in 1982 to 12% in 2012 and it failed even to transform the single entry bookkeeping to state of art accountancy consistent with the rest of the financial entities. It has transformed even the RRB structure in a manner that reduced their numbers and spread due to its inability to supervise. The RBI would do well to take back the supervision function and regulatory function from NABARD and create an umbrella institution like the National Cooperative Bank to deal with both the rural and urban cooperative banks or in the alternate create a subsidiary of NABARD as a dedicated arm to deal with the Cooperative banking with specific mandates for performance and regular review.
- Yerram Raju
Reforms cannot wait
My View on "Finding the Next Amul Success Story in Banking":
As public sector banks including State Bank of India and its associates, old private sector banks, new private sector banks, RRBs and cooperative banks have different approaches to resource mobilization, lending and profitability, varying capabilities in terms of outreach and expertise and different mandates from the stake-holders, each category of these institutions will have to be given resource mobilization and credit delivery tasks factoring in these structural and policy aspects.
The reorganization of the banking system may be further delayed for political reasons. As essential reforms cannot wait for a change in the political weather, in the medium term, GOI and RBI may consider the following steps:
• Redefine sub-sectors in the priority sector reckoning the changes that have taken place during the last two decades and realign the targets for sub-sectors. Beyond inclusion of a few additional activities as eligible for classification under priority sector or raising certain ceilings to factor in inflation impact, nothing much has happened in the recent past from this perspective.
• Ask banks to ensure that their rural, semi-urban, urban and metro branches realign their credit portfolios to meet local credit needs
• Instead of prescribing straight-jacket targets for lending to sub-sectors like agriculture, make necessary policy changes which will reflect the availability of expertise and outreach of each category of banks. E.g. If a bank has more branches in urban areas and cities and are able to lend more to microfinance, allow a set-off their disbursal to microfinance over and above a bench-mark against their target for lending to agriculture.
• Route all concessions and subsidies in interest rates through the banking channel and make the lending banker responsible to ensure that the ultimate borrower is charged a minimum interest of, say the rates paid on savings bank deposits by the bank.
(Excerpted from my article “Surmounting the Unsurmountable” published in The Global ANALYST, December 2013 which can be accessed from theglobalanalyst.co )
- M G Warrier, Mumbai
Financial sector regulators to finalize action plan for FSLRC
......“As regards to legislative recommendations, it was decided to analyse the public comments and feedback to further fine-tune the draft Indian financial code. It was also decided that action should be taken for finalizing the road map for creation of new institutions such as Resolution Corporation, Public Debt Management Agency, Financial Sector Appellate Tribunal and Financial Data Management Centre,” the finance ministry said in a statement.........
RBI guv Raghuram Rajan meets FM ahead of second quarter policy review
Ahead of second quarter monetary policy review, Reserve Bank Governor Raghuram Rajan today met Finance Minister P Chidambaram and discussed macroeconomic situation. "I discussed whole set of issues with the Finance Minister including state of economy," Rajan told reporters after the meeting here.........
FSDC meet: India to reach out to sovereign wealth funds
.....The FSDC meeting was attended by RBI Governor Raghuram Rajan, Sebi Chairman UK Sinha, PFRDA Chairman Yogesh Agarwal, Irda Chairman TS Vijayan and all Secretaries of the finance ministry. FMC Chairman Ramesh Abhishek was also present since the commodities’ regulator has now come under the ambit of the finance ministry. Just before the FSDC meeting, all its members, including the finance minister, gave a farewell to former RBI Governor D Subbarao at Delhi’s Gymkhana Club. The FSDC also discussed the possibility of implementation of recommendations of Financial Sector Legislative Reforms Commission (FSLRC). It was decided that all regulators would finalise an action plan for implementation of all FSLRC principles relating to regulatory governance, transparency and improved operational efficiency that do not require legislative action........
A global conference on Financial Inclusion & Payment Systems
Financial Inclusion and Payment Systems Conference will be a landmark event, scheduled to take place on 24-25 October, 2013. With a broader approach and explicitly defined sessions and the top participants, the Global FIPS Conference will be a unique opportunity to engage with a broad range of players in financial inclusion and payment systems space. The Conference will witness a collaborative environment among the top stakeholders, where the relevant issues will be addressed, and the road map to achieve 100 % Financial Inclusion will be put. FIPS 2013 will take into account the very essence of inclusive growth, thereby highlighting on the achievements, shortcomings and challenges on our way to overcome..............
RBI to permit urban banks to open specialised branches
......These branches should be fully computerized. UCBs need to be Core Banking Solution (CBS) compliant. These branches should be opened within the Area of Operation of the UCB. They should be opened on a cluster approach, where certain number of branches are linked to a specialized branch. The branch should be opened at the place for which authorization has been issued by RBI. The conversion from specialized branch to a normal branch and vice-versa should be carried out only with the prior approval of RBI...........
‘Banking sector will comeout of problems shortly’
...........The banking industry will be able to overcome the problems of bad loans and credit squeeze and regain its past glory in a short time, Rakesh Bhatia, Managing Director, Catholic Syrian Bank Ltd, has said. He was speaking at a two-day national seminar on ‘Contours of Indian Banking’ organised by the College of Cooperation Banking and Management, Kerala Agriculture University at Thrissur............
Bank on India Post
..........The most important factor for a depositor is trust, which post offices already enjoy, making them a safe investment destination. The only additional thing they need to do is perform the credit function. This can be undertaken by utilising the services of the credit staff of PSU bankers from nearby areas, or by hiring retired bankers for the first five years; by then they can train their own people. As the postman is people-friendly, especially in rural areas, KYC compliance will be not be an issue and chances of fraud and misappropriation will be minimal...........
Banking woes! ombudsman coming incognito
Bankers beware! Representatives from the office of the Banking Ombudsman may soon ‘catch you red-handed’ delivering shoddy service to a hapless customer and initiate penal action. “Incognito visits are expected to address issues of deficient service,” said S. Chattopadhyay, Banking Ombudsman, Reserve Bank of India............
When customer care fails
........In the case of a bank, take your complaint to the banking ombudsman, the point person appointed by the RBI to redress customer complaints regarding deficiency in banking services. The ombudsman caters to specific geographic locations, so approach the one under which your billing address falls. Besides sending a physical complaint via post, you can email the ombudsman directly or fill up the complaint form on the RBI’s Web site. There is no fee for filing a complaint.........
RBI asks RRBs to ensure service providers adhere to regulatory needs
........The central bank also said that RBI and National Bank for Agriculture and Rural Development (NABARD) should have access to all information resources that are consumed by RRBs, though the resources are not physically located in the premises of banks.............
No room for complacency
...........The Reserve Bank of India and policymakers in Delhi have shown more courage and determination over the last few months than earlier, and have taken decisions and gotten things done. We cannot become complacent. They cannot feel that enough has been done, and that the market rise signals that investors have regained confidence in the country. The push to clear projects, allocate resources transparently, rehabilitate unviable infrastructure projects, and to cut the current account are much needed, and more needs to be done............
Reserve Bank of India faces a difficult choice
............In sum, stability in the rupee has given the central bank room to unwind extraordinary liquidity-tightening measures relatively quickly. On the other hand, we expect RBI's surprise September repo rate rise, by and large, to be a one-off, rather than the first of a series of increases. After all, the growth outlook remains depressed and inflation prints may moderate in the coming months,........
Two-part question
The Reserve Bank of India will announce its second-quarter review of monetary policy next Tuesday. This being a half-yearly announcement, it will cover domains other than monetary, so there is much anticipation about the measures that the RBI Governor, Raghuram Rajan, will announce on these. However, when it comes to monetary policy itself, the actions taken in the mid-quarter review of September 20 and a subsequent reduction of the Marginal Standing Facility (MSF) rate on October 7 have given clear indications of the RBI's short-term and medium-term monetary stance...........
Indian Banks Head Out to the Country
......The Reserve Bank of India has made it easier—fewer restrictions and regulations, less paperwork—to open branches in rural areas because it wants to encourage lending to the farmers and small businesses there. While the costs of reaching rural areas can be high, banks say it is worth it as they start long-term relationships with customers who will need an increasing amount of banking services, including, eventually, insurance and mutual funds.........
Pension Deficit
.......Equally true, it is difficult to project future contributions accurately especially if the NPS takes off. Most important, given the structure of India’s population, the EPS can only be in trouble after a few decades when the proportion of those contributing to the fund becomes bigger than those taking out from it. The time to fix the scheme is now, whether that means greater contributions from the government or from the employer—or by curtailing benefits—is a different matter.
RBI forms panel to implement new bill payment system
.............. The Reserve Bank of India has constituted a GIRO Advisory Group (GAG) to implement a national Indian Bill Payment System so that households will be able to use bank accounts to pay school fees, utilities, medical bills and make remittances electronically. The terms of reference of GAG, which is headed by Prof. Umesh Bellur, Professor, Indian Institute of Technology, Bombay, include suggesting the nature of organisation to undertake the GIRO-based bill payments and framing guidelines for setting up and operating the GIRO-based bill payments.............
Now, just Aadhaar number enough to open an account in Axis Bank
Mumbai: Axis Bank Ltd on Thursday became the first bank to allow customers to open an account with just their Aadhaar number. The Reserve Bank of India (RBI) on 2 September allowed paperless electronic authentication—or electronic know-your-customer (e-KYC)—provided by the Unique Identification Authority of India (UIDAI) as “officially valid.”..............
RBI asks RRBs to ensure service providers adhere to regulatory needs
......“Regional Rural Banks may necessarily enter into agreement with the service provider that the infrastructure and applications are made available for audit / inspection by the regulators of the country,” said RBI. The central bank also said that RBI and National Bank for Agriculture and Rural Development (NABARD) should have access to all information resources that are consumed by RRBs, though the resources are not physically located in the premises of banks........
Here's an index to judge real estate sentiments
.......The National Housing Board’s RESIDEX and RBI’s Housing Price Index (HPI) are currently the only available indexes tracking the Indian Real Estate Markets. There is, however, no credible and impassionate tracking of the sentiment of residential real estate players in India currently and IIMB-CRERI aims to fill this gap.............
Tightening reversal unlikely to spur growth or lower rates
............RBI is focused on lowering rates by looking at the WPI, though what has hit savings is a very high CPI. As a result, the central bank has not been able to trigger a revival in investments despite rate cuts. For four years, real interest rates have remained negative for savers. Low real rates are good for growth but not when real rates are depressed due to high inflation. ..........
What's cooking in inflation numbers?
........So, what's the linkage between inflation numbers and optimism? India's rural population is now more fashionable and is willing to sacrifice consumption of consumer durables/non-durables (as reflected in the declining share of household requisites) to maintain such a lifestyle. If this is true, then obviously, there is a definite reason to celebrate with strong agricultural growth propelling rural demand this fiscal. However, the bad news is that such behaviour may also explain in part why India's core inflation is not declining fast enough and may not do so, however hard we may try.......
Fighting inflation: then and now
...... it would be risky for RBI to base its monetary response upon the new CPI, whose linkages with other macroeconomic variables are not yet understood and when growth was as weak as 4.1% two quarters ago. The vast difference in the two inflation indicators vis-Ã -vis the wider economic conditions suggest caution at this point. Understandably, the central bank is chary and anxious to restore its inflation fighting credentials; it would rather err on the side of over-tightening than be lax second time round. History suggests that this time it is different.
This Diwali, PC must see the big picture
....... The reason for this is that the different circulars issued by the RBI, the customs department and the director-general of foreign trade, which comes under the commerce ministry, are confusing. Consignments, therefore, are not being cleared fast enough by customs. If the bullion industry has a case, then the finance minister can look into it. Mr Chidambaram will have to find a way out of this impasse of lowering interest rates. His other saviour could be RBI governor Raghuram Rajan, who on October 29 will announce the credit policy.
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