His track record in his two months in office suggests a reluctance to embrace the monetarism for which the University of Chicago economics department has been known, while he has embraced limited financial deregulation. Along the way, he has avoided any signs of doctrine, preferring to see the results of each move before acting again. “I’m willing to be persuaded by the data,” he said in an interview at the central bank, in a wood-paneled reception room with one wall lined with the portraits of his predecessors............
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Friday, November 8, 2013
Balancing Act for India’s Top Banker
Portrait of the real Rajan
My View on "How RBI Governor Raghuram Rajan has quietly assert...":
The cover story “His Own Man” together with the excerpts from the October 29 interview given by RBI Governor Dr Raghuram Rajan (Business Today, November 24) has crisply and clearly portraited the real Rajan whom different people are perceiving differently, depending on their ‘constituency’ interests. It is comforting to find that Rajan is as forthright in expressing his views post- September 4, as he was when he wrote his book Fault Lines. Putting it differently, those who have read Fault Lines will not be shocked by his approach to issues as expressed in his responses after he took over as RBI Governor. In August this year writing for The Global ANALYST, I had made the following comments about Rajan:
“The FM who put his Secretary Dr D Subbarao as the Governor of RBI hoping to have a submissive Governor found a different person in Subbarao soon after he started functioning from Mint Road. In that context, perhaps, the FM is going to be ‘second time’ unlucky…”
We are lucky to have institutions like RBI which have grown with work ethics and skills that match with the best in the world. For allowing this to happen, we must thank our political leadership which put national interests above anything else, whenever issue at stake was country’s prestige.
- M G Warrier, Mumbai
FinMin brings back lateral transfer of CMDs in govt banks
The finance ministry has shortlisted the names of executive directors who are likely to head public sector banks in 2014-15. Six public sector banks will see their chairmen and managing directors retiring in 2014-15, which are Bank of Baroda, Indian overseas bank, Canara Bank, Oriental Bank of Commerce, Vijaya Bank and United Bank of India. The selection panel comprising Anand Sinha, deputy governor, Reserve Bank of India and Rajiv Takru, secretary, financial services in the ministry of finance, among others, interviewed 19 executive directors last week...........
Head and heart nicely captured..............
My View on Salaam to Salim's HR vision
 |
| File photo - Fare-thee-well - Shri Salim Gangadharan |
Beena has captured the qualities of head and
heart possessed by Salim excellently well in this short note. Myself having
been a miser all through in appreciating others, when looking forward to the
wrong side of seventy, feel that many of us are ‘lavish’ in criticism and do
not speak out when we observe good qualities in our bosses and colleagues.
Though I had no occasion to work with Salim, he is a good friend and I have
enough reason to endorse Beena’s comments, as I have been in touch with him
since a long time and if he is retiring as RD, Thiruvananthapuram earning the love
and affection of the entire RBI Family (including retirees and family
pensioners), that itself is proof for his friendly and affectionate
relationship with colleagues and management skills. I wish him the very best in
his second half of life.
- M G Warrier,Mumbai
I am proud that Salim is a great friend of
mine. Salim is very different from many others I have met and interacted. He is
rational and very social as his name itself indicates. A real HR development
executive. I am proud that we were together as Faculty Members in BTC along
with Jayaram, Mahapatra(s), Vijay Bhaskar. We introduced the concept of more
than two FMs handling a training session jointly. It was a hit and a golden
time for all of us and also all the participants of various programmes. He was
an expert on bank supervision, an expert in forex, a democratic leader et all -
in fact an all rounder. I wish him my best wishes for an active life.
– P.Aravindan
Salim a true friend and a learned
guide. Thank you P.Aravind for reminding about BTC.
- Jay
Salim Sir, I would also like to wish you a
happy retired life. I, however, wish to add, that the years of retirement can
and should mean a world of new opportunities. The world is still your oyster,
you are not the guy, who will, post retirement, retire to a cloister as your
body, mind and spirit are still full of sap and moisture.
- A well wisher
Dear Salim,
I had missed your date of retirement and then
got busy in our local Durga Puja and Diwali celebrations. At the outset, I take
this opportunity to wish you and your family a very Happy Dusherrra and Diwali
and also wish you a happy, healthy and peaceful re-tyred life (sic) as because
a man of action like you can never sit idle and must be engaging yourself with
some innovative and self-actualisation activity, which would have been
otherwise got suppressed under the weight of routine official duties. Your
qualities of head and heart are well known at least to me who have seen you
since 1980s in Kolkata (the then Calcutta). Let me wish you All Well once again
and please keep in touch in the retired RBI-ites club, so that we can share our
joys and sorrows of living in the days to come.
- Prabal Sen, Kolkata
I had the privilege to be associated with Salim
sir for about 5 years during his stint in FED, CO. He was a natural teacher
which held him in good stead during his faculty stint at BTC. He would always
break down the complex regulatory/prudential/ accounting issues into simple
concept and would moderate his articulation to suit the audience absorptive
capacity. His contributions to every spheres of central banking like banking
regulation and supervision, capital account management, treasury or market
products like currency futures are well documented in the various committees he
headed or was associated with or his lectures as a faculty in BTC. He was a
task master to the core and would optimise the given resources by identifying,
nurturing talents, delegating power and responsibility, encouraging independent
decisions, but at the same time being steadfastly behind his people in every
decision or action. His firm belief at all time was that “One alone cannot
achieve everything, it’s only as a team with people around you, one can achieve
remarkable feats”. He motivated others with his passion for work and there was
no way the team under him would not excel. He had deep rooted compassion for
people which emanated from his belief ‘Do good to others and Good will come
back to you”. Humility wrapped his persona as a second robe and made him
popular figure in RBI, culminating in remarkable tenure as Regional Directors
in Kolkatta and Thiruvanthpuram.
2. As his innings with central bank has come to
end, his next innings on the larger canvas of life beckons him. Wishing him
success and healthy stint in his endeavour to give back to society all that
society has given him over the years.
- Harsh
Photo courtesy : Sajid, Mohammed P, Assistant General Manager, Thiruvanantpuram
Photo courtesy : Sajid, Mohammed P, Assistant General Manager, Thiruvanantpuram
Inauguration of academic block
Mangalore : G. Gopalakrishna, Executive Director, Reserve Bank of India will inaugurate the academic block of Nitte Institute of Banking and Finance, Deralkatte, at 10.30 a. m. on Saturday. The institute, under Nitte University, has been established to promote academic programmes, specialised training in banking operations and provide research and consultancy services to the banking Industry. Chairman and Managing Director of Syndicate Bank Sudhir Kumar Jain and Chairman and Managing Director of Corporation Bank S.R. Bansal would be the guests of honour.
Hindu
Cheque clearance made easy in Bhopal
BHOPAL: Eliminating the need for physical movement of cheques for clearance, new cheque truncation system (CTS-2010) went live in the city on Wednesday. After Mumbai, Bhopal became the second centre in the western region to be introduced to the new way of banking. Reserve Bank of India (RBI) Regional Director J B Bhoria said through CTS-2010, electronic images of cheques carrying key information will be captured and transmitted...........
HDFC Bank launches rural financial literacy initiative in Kerala
......HDFC Bank will conduct financial literacy camps in 39 rural and semi-urban branches across Kerala. As per instructions from the RBI, these branches will serve the Malampuzha block in Palakkad district and the Mathilakam block in Trichur district of Kerala. The camps will enable both adults and school children from 234 Panchayath wards in 26 villages to attain a conceptual understanding of financial products and services. ...........
Is bank liable if client is robbed in branch?
Can a bank be held liable if a customer is robbed inside the bank premises, but before he has deposited cash with the cashier? The National Consumer Disputes Redressal Commission (NCDRC) has delivered conflicting verdicts. In a recent judgment NCDRC ruled that......
RBI signs cooperation pact with central bank of Australia, NZ
MUMBAI: The Reserve Bank has signed cooperation agreement with central banks of Australia and New Zealand for exchange of information. The MoUs provide a formal, yet legally non-binding, channel for information exchange between the supervisors, RBI said in a statement. ..........
That seventies feeling
It is no secret that the Indian economy has been in a fair bit of trouble in recent quarters. The latest economic review published by the Reserve Bank of India (RBI) in October shows why there is no easy way out of the current muddle............
No, this isn’t a pre-NaMo bull run
.......The planned reduction in the quantum of asset purchase by the US Federal Reserve has been postponed for a few months, at least. This has resulted in resumption of foreign portfolio inflows which has pushed stock prices and has also provided the much needed stability to the currency market. The Reserve Bank of India is also doing its bit in the meantime to shore up its firepower by bumping up the foreign exchange reserve. However, there is another argument that is beginning to gain ground. It is now being said that the stock markets have started factoring in a change of guard in New Delhi...........
IMF economist Siddharth Tiwari likely be next CEA
Eminent International Monetary Fund (IMF) economist Siddharth Tiwari, with about 25 years of experience at the multilateral agency, is likely to succeed Raghuram Rajan as the next chief economic advisor (CEA) in the finance ministry. Tiwari, an Indian national, is the director of strategy, policy, and review at the IMF and has got vast experience of Asia & the Pacific, as well as Africa and Europe. Though there is no official confirmation, officials said he was being considered after some other candidates did not show much interest, fearing a political change after next year’s elections, while some names were struck down by the finance minister............
How much India should care for S&P’s views
...................But a low rating for the country sounds warning signal to the investor that the country is at risk. Now, given that the government and the RBI are doing their best to encourage borrowers to tap the euro markets for funds to shore up our forex reserves, a downgrade would men bad news for these companies as enhanced perceived risk will automatically push up the cost of borrowing. Also, when there was a currency crisis a couple of months back, the concept of a sovereign bond was also spoken of, in which case the rating would matter. ...........
A slick ahead
............RBI’s dilemma is that it cannot meet such massive requirements of these firms from its dollar kitty. Sooner or later, these firms have to return to the market or some demand management has to be effected. The onus of doing that, however, lies with the Union government.
Read - Mint
Read - Mint
India Post to set up ATMs at 4 branches in Chennai
CHENNAI: India Post may be fighting to remain relevant in a digital world, but don't write a requiem for it just yet. After emerging as a contender for a banking licence when the Reserve Bank of India issued final guidelines for new permits earlier this year, India Post drew up a plan it is now ready to implement. India Post, Chennai city, will offer core banking solutions in four head post offices in the region as part of a pilot project. As part of its trial run before making a full-fledged foray into banking, India Post will also set up ATMs at the head post offices in Mylapore, T Nagar and Tambaram and on Anna Salai. .............
Public Sector Banks Need Urgent and Bold Reform
.......For the first time, in case of SBI, Indian government has adopted the
idea of fixed tenure for CEO. This has to be embraced more broadly.
Finally, openness to lateral induction of talent at all levels and HR
processes and policies aligned to the private sector. Government HR
policies on recruitment, promotion and performance management are not
suited to create a high-performance
culture required to compete with the private sector. Those who argue
the public sector will stay dominant in Indian banking take heart from
the fact that it still controls 73% market share in assets after almost
two decades of competition from the private sector. To their dismay,
that number is lower in...........
How banks can use HUL’s sachet strategy to crack rural market
.......Recently the Reserve Bank of India appointed a technical committee, comprising senior executives predominantly from the banking and mobile sectors, to examine the feasibility of implementing an SMS-based funds transfer service using an app that can support any type of mobile handset, including feature phones. The technical committee will also consider the advantages/challenges of having a single app across all handsets in an SMS encrypted environment. It will submit its report by the end of this year. This new initiative is a welcome move as it will help promote mobile-based fund transfers even in rural areas..........
Read..........
Dipan Mehta positive on banking space
........."The private sector banks came out with very decent set of numbers for the September quarter despite various challenges which were there in the quarter with all the various measures which the Reserve Bank of India (RBI) took to curtail currency volatility. There was a spike in the debt markets also and wholesale debt funding costs also went up. Despite all these issues by and large private sector banks continued their secular growth as we have seen.".........
The more the merrier
.......It has been a long-standing position of the central bank that the wholly owned subsidiary mode is preferable, since it induces the foreign bank to maintain a domestic balance sheet and, importantly, a governance framework. In the absence of clear incentives for subsidiaries, foreign banks logically prefer the branch mode; but now, those who see India as a long-term growth opportunity have the basis for deciding between the two modes. The two main operational advantages that a wholly owned subsidiary will now have are the......
Open question
.........How effective the incentives for subsidiarisation are going to be is an open question. WOS will be treated like domestic banks as far as the RBI's branch guidelines are concerned. However, this will only prove to be tempting if foreign banks aim to expand in the retail segment. Currently, foreign banks like HSBC and Citibank seem more invested in trade and corporate finance. It is unlikely that liberal branch expansion rules will be a game changer for them. Additionally..........
Foreign Banks India Ltd
.....The above carrot-and-stick approach policy makes sense, when major foreign banks are themselves keen on grabbing a bigger slice of the market for financial products in a $2 trillion (and growing) economy. Indian consumers stand to gain from their expanded operations and greater competition. But consumer interest will also be served by ring-fencing or making a clear delineation of their assets and liabilities from those of the foreign parents; especially important in the aftermath of the 2008 global financial crisis........
NO RUSH HOUR SEEN AT MINT STREET
.......“For
banks that have been here for a long time, it would be in a sense
retrospective legislation for us to say now you will have to change the
form,’’ governor Raghuram Rajan had said. “They have come in with some
ground rules and we can’t overnight
change the rules on them. So we have to give them some incentive and
the incentive we are giving them is near national treatment on a
reciprocal basis.’.................
Read - ET
Foreign banks respond with caution to RBI’s proposal for local incorporation
..........The RBI statement on the new norms for foreign banks is silent on the tax or stamp duty implications. However, former RBI governor D. Subbarao in an address to bankers in June had said “major issues with regards to capital gains tax and payment of stamp duty have been resolved”. “There are still some legal issues which we hope to resolve in the next few months,” he had said, without specifying what these issues were............
Bigger play for foreign banks may mean better deal for you and me
..........Allowing foreign banks greater operational ground may both help protect the interests of depositors and fund capital projects in India. It may even bring about cost-effective banking backed by technology, thus increasing banking penetration. While mergers and acquisitions may be some time away, smaller banks like IndusInd Bank, ING Vysya, Yes Bank, Dhanalakshmi Bank, Karnataka Bank and Ratnakar Bank — which are looking for capital to expand their footprint or scouting for investors — will see their valuations rise dramatically........
Foreign lenders wait for better clarity
.....RBI does not have the authority to offer tax incentives to foreign banks for creating subsidiaries. A year ago, the finance ministry had agreed to offer tax neutrality for subsidiarisation of foreign banks, but lenders had also demanded tax deduction for the cost incurred on conversion, as well as relief from payment of stamp duty. So far, there is no clarity on whether the government will agree to these demands........
Madhya Pradesh police bust dabba trading racket
.........“Since they were operating the fake exchange through mobile phones, it has become a multi-locational crime. We are looking to find if there is any violation of the rules on foreign exchange, Sebi rules, RBI rules, tax law and other rules and Acts, besides cyber crime. We will have to also see from where they got the software. So, it has become necessary to seek support of various investigation agencies. The CBI has multi-locational presence and can investigate the case better,”......
First women's bond from World Bank raises USD 165 mn
...........Bonds tied to social or environmental targets are part of a new trend of social finance, as a growing class of investors seek to bridge the gap between philanthropy and pure financial returns. Besides helping businesswomen, women's bonds can help raise awareness about the importance of gender issues in development, said Jingdong Hua, vice president and treasurer at the International Finance Corporation. "The gender issue ... weaves so tightly into every social and development issue we're facing today," he told Reuters...................
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