.......If this complexity of inflation is appreciated adequately, it becomes clear that lending rate to corporate sector is not central to policy. Recently, Dr. Rajan has said that industry is obsessed with the lending rate – a theme I have been expounding for a long time. Even in terms of job creation we have to depend on sectors other than industry -- agriculture and allied activities and informal sector. In this context Governor Rajan has appropriately stressed the objective. “ Expanding access to finance to small and medium enterprises, the unorganised sector, the poor and remote and under served areas of the country through measures to foster financial inclusion”. Dr Rajan has also explained how bad governance has contributed to slowdown of the economy.........
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, November 11, 2013
Seeing green shoots in the economy
......Along with the measures taken by the Reserve Bank of India (RBI), the intractable problem of inflation will also be solved. Mr. Chidambaram’s support of recent RBI measures, which pushed up interest rate signals, ‘has to be viewed a big positive for the economy’. It suggests a co-ordinated, even complementary approach with the central bank to tackle macro-economic problems. It would be welcome indeed if henceforth the Finance Minister does not publicly disagree with the RBI over interest rate hikes, as was the case during the tenure of the previous Governor...............
Public sector banks lagging in risk appraisal skills
Defying the glass ceiling
They are sixteen years apart and come from completely different sectors. But Roopa Kudva (50) and Avani Davda (34) have an important connection. They have both risen to the very top in their professions. Ms Kudva is the MD and CEO of India’s largest credit rating agency CRISIL and Ms Davda the CEO of Tata Starbucks. They are among the select group of women (most of them from the banking sector) who have defied the glass ceiling. While more women have entered the corporate boardrooms, the overall scenario in India remains pretty grim...........
Read - The Hindu
Also read...........
Also read...........
........It all started in 1996 with Tarjani Vakil becoming Chairperson of Exim Bank. In 2000, Ranjna Kumar became Chief Managing Director of Indian Bank. Later she was made head of National Bank for Agriculture and Rural Development (NABARD) in 2003. According to estimates approximately 10 per cent of the Indian companies are headed by females. But around half of them are in banking sector. This change has been more predominant in last one decade. Swati Piramal, Director ICICI Bank, says that success of women in banking industry is obvious. According to her, women are more organized, spend money more cautiously, and prove to be better team leaders and team players in challenging times. According to Shubhlaxmi Panse, Managing Director Allahabad Bank, women are excellent in multi-tasking and work calmly under pressure................
A History of UNDP
Since it was formed in 1945 the United Nations has rendered signal service in the sphere of social and economic development through its agencies. Paramount has been the role of the UNDP. Several Indians have served in the UNDP with distinction — like Dr I. G. Patel, the only Asian Director of the London School of Economics............
Read - FPJ Book Review by P.P.Ramachandran
Testing times for job seekers, on road and question paper
THIRUVANANTHAPURAM: 'Who is the Governor of Reserve Bank of India?', thus read a question in the general knowledge section. But, nearly 2.15 lakh odd candidates, who appeared for the lower division clerk (LDC) test conducted by the public service commission (PSC) on Saturday, couldn't find the name of Raghuram Rajan in the set of four options mentioned. "Three questions in mathematics question paper did not have any options listed. The options for question on RBI Governor comprised D Subbarao, R N Malhotra, Bimal Jalan and P Chidambaram, but not Raghuram Rajan...........
RBI cautions public against fake e-mails promising gains
..........The bank has run awareness campaigns about fake e-mails on a regular basis through its website and other media, an RBI spokesperson said, responding to a query on e-mails, purportedly from Governor Rajan, promising high returns or jackpot wins. Rajan took over as the 23rd Governor of the RBI on September 4, replacing D Subbarao. A few months ago, there was a scam involving the impersonation of former RBI Governor Subbarao. E-mails purportedly sent by the RBI offering to transfer USD 12 million to the receiver's personal account were in circulation...................
World citizens
This refers to Kanika Datta's column "Natural-born biases" (SWOT, November 7). The issue of citizenship was first raised in Parliament and the "gossip" was enjoyed later by some idle mailers. The clarification provided by Raghuram Rajan should have ended the speculation. We are forgetting that such uninformed allegations will affect the prestige..........
Finance Ministry's offer to strengthen RBI
My View on "Finmin wants RBI as sole regulator for MFIs":
It is a matter of comfort that when briefed properly Finance Ministry views issues with an open mind and shows signs of a pragmatic approach in solving problems. Certain ‘subjects’ in the concurrent list, at least to the extent they relate to financial sector and economic development need a review. MFIs and cooperative banks and several other players in the financial sector try to get the best of both the worlds and get out of standard regulatory norms applicable to the business they do. The present thinking that Reserve Bank should have regulatory responsibility on all financial institutions augurs well for better management of the financial institutions. At a time when we are talking about BCs reaching out to villages not covered by banks, RBI’s outreach cannot be flagged as an issue for moving away from regulatory responsibility. Though protected with the bureaucratic insulation that it ‘cannot be a pre-condition’, Finance Ministry has offered to strengthen RBI for improving its capacity.
- M G Warrier, Mumbai
NABARD could have done wonders, but......
My View on "Proven failure of NABARD":
NABARD cannot claim to have done full justice to the economy by developing the Agriculture and Rural Sector. This institution could have done wonders to give a boost to the economy by developing agriculture which was once the backbone of the economy. In fact, the contribution of agriculture has steadily declined over a period and NABARD cannot say with conviction that after its coming into being, agriculture and rural segment have seen any concrete development. It may have provided refinance facilities and the numbers would have shown a steep increase, but the objective with which it has been established has not been fulfilled. It could have easily made each and every state to develop agriculture intensively by improving irrigation, mechanisation, productivity through some healthy and constructive competitive practices and showing improved contribution to GDP in terms of agricultural production and enhanced rural sector employment and production. When this institution has failed in its core function, how can it regulate and supervise MFIs which is emerging as a very sensitive segment of the complex Financial System. The author Dr Yerram Raju has put forth well his argument.
- Dr.T.V.Gopalakrishnan
Psychological satisfaction
Dear Sir, Well analysed. The logic is simple,either pay interest at 6.75% by hiking CRR to 4.30% or pay no interest and keep CRR at 4%, only the psychological satisfaction of having received the interest as advocated by former SBI Chief Shri Pratip Chaudhury is fulfilled, RBI monetary policy objectives remaining the same.
- Sitendra Kumar
Whose business is it?
With reference to “A one-point agenda for RBI” (Business Line, November 9), does the author mean that the RBI can and should tackle inflation on its own? There is no doubt that ‘uncertainties, paralyses and constraints’ have a direct and major impact on inflation. That being the case, asking the RBI to deal with inflation, regardless of the other factors is unfair. Why is there instability in the purchasing power of money, why does it vitiate the economic environment, and what can be done to prevent this? There are no simple answers. Inflation is largely a product of fiscal policies; whereas money supply, and liquidity for whatever purpose, is mainly due to monetary policy. Relating inflation to monetary policy means the government and the RBI have to work together. A major problem we have been having of late is not high inflation but the Government’s unwillingness to take responsibility for that and the RBI’s decency in not highlighting this point. And this explains why and where ‘‘deep reform is called for’’. The RBI cannot be made a scapegoat. Players can have their rules and the RBI can let the game be played by them; it can blow the whistle when the rules are breached, and it has linesmen to help enforce them. The quality of the game is the responsibility of the players and too many referees don’t help.
- Devraj (HBL)
Finding the past in the present of Bangalore
.....Elaborating on how the ‘government is the culprit,’ he said Cubbon Park, earlier, was an ‘English parkland’ and not the ‘urban jungle’ it is today. “But the Vidhana Soudha was constructed inside the Cubbon Park, then the Reserve Bank of India. When there is power and money, what will the poor trees do?......
Reprieve, for now
.......A downgrade would have taken India to below investment grade, which would have put off prospective investors and also raised borrowing costs for Indian companies abroad, compounding the existing problems. If this dire scenario did not play out, it is thanks mainly to the measures initiated by the Reserve Bank of India and the government to support the rupee and rein in CAD through a tight squeeze on non-essential imports. A simultaneous pick-up in exports and revival in FII fund flows, following the decision of the U.S. Federal Reserve to continue with its monthly bond-buying programme, certainly helped improve the external environment..........
Seminar on banking vision for sustainable development of SMEs
VADODARA: The Federation of Small Scale Industries (FSSI) and the Federation of Gujarat Industries (FGI) with the support of nationalized banks are jointly organizing a seminar on — Banking Vision for the Sustainable Development of MSMEs'. The seminar will be held on November 12 at FGI Business Centre here where eminent bank executives and Reserve Bank of India's executives will share their thoughts. .............
Indian worries!
......The policies of the Reserve Bank of India (RBI) vis-Ã -vis the Indian rupee, the national currency, has caused an alarming reaction and contributed to the free fall in the value of the currency against the American dollar. This has derailed exports and growth potential of Indian companies. While their prices are becoming more attractive and affordable to their importers, the cost of imported energy and foreign components eroded away any benefits.......
CPI and not WPI
......What is interesting, however, is that inflationary expectations—tracked regularly by RBI—correlate better with the CPI instead of the usual measure of inflation, the wholesale price index, or WPI............
How government selects bank chiefs
...........This, however, doesn’t mean that the government always takes time to act on such critical appointments in the financial sector. Had that been the case, a high-profile panel, led by the Reserve Bank of India Governor Raghuram Rajan, would not have interviewed 19 executive directors of public sector banks on 31 October for six chairmen’s positions that will fall vacant between August 2014 and March 2015...............
E - BAAT programme by RBI and Indian Bank
Electronic Banking Awareness (E-BAAT) programme was held at Hosur jointly by RBI and Indian Bank. V.Vasanthan (CGM and president, Bankers Clearing House, RBI, Chennai) and G.P.Borah, 9GM, Dept. of Payment and Settlements, Regional Office, RBI, Chennai) are seen in the photograph along with GM K Srinivasa Raghavan and AGM/ZM S Selvaraj, Indian Bank.
ET
Bank of Baroda to ramp up e-lobbies, ATMs this fiscal
The second largest public sector bank, Bank of Baroda, is in the process of expanding alternative delivery channels. The bank will set up more e-lobbies, ATMs and other card-swiping terminals across the country during the current financial year at an investment of Rs 500 crore. It has opened 35 e-lobbies where customers can withdraw and deposit cash or cheque, get the passbook updated and transact business through Net banking.........
India needs greater variety in lending institutions
.............At the same time, banks have failed to shoulder the responsibility of meeting the credit requirements of India's teeming, diverse, dynamic and under-funded unorganised sector. The sector meets 78% of its credit needs from NBFCs, moneylenders and other informal sources. And at an exorbitant cost. The way out is for the RBI to see a segment of NBFCs as the last-mile, low-cost intermediaries who would funnel the banks' own priority sector funds to the small and medium sector. This class of NBFCs should have the ability........
New norms for foreign players not to hit Indian banks: Union Bank
.......The new banking entrants will ensure more competition in the market and ultimately, will provide benefit to the consumers, he explained."The competition will pave way for introduction of more financial products at competitive prices. At the end, it is the consumer who will benefit,".......
PM's council wants govt to cut stake in banks to 51%
The Prime Minister's Economic Advisory Council has recommended phased dilution of government stake in public-sector banks, from 58 per cent to 51 per cent, and introduction of on-tap licensing of new banks. In a note prepared last week, the council, headed by C Rangarajan, said the stake reduction would help raise the additional capital required to implement the Basel III norms, meant to strengthen the banking system...........
New bank licences: Sebi scans listed applicants, group firms
As the Reserve Bank of India (RBI) gears up to issue new bank licences, capital markets regulator Securities Exchanges Board of India (Sebi) has also a job at hand that involves scrutinising all applicants coming under its jurisdiction directly or through group entities. Sebi’s scrutiny follows detailed queries shot off by RBI to various regulators in India and abroad as a part of its due diligence of entities seeking to enter banking arena.........
Foreign banks in India: Vital statistics
........Here is a brief snapshot of foreign banks in India in terms of five key parameters—branch network, capital and reserves, deposits, investments and advances......
Foreign banks get a foot in the door
.......New rules for foreign banks have been under discussion here for years. The abrupt release of the latest regulations after the close of trading on Wednesday represents the most recent in a series of moves to increase competition in financial services by Raghuram Rajan, the prominent economist who became the governor of the Reserve Bank of India, the central bank, on September 4.............
New bank licences: Sebi scans listed applicants, group firms
......According to a senior official, Sebi is looking into the capital market track-record of all the group entities of 26 banking aspirants, some of whom are either listed entities or have presence in Sebi-regulated businesses like mutual funds, brokerage and investment banks.............
Global forex probe: large banks like HSBC, Barclays, Citi under scanner
........Those looking into the matter mainly include Swiss Financial Market Supervisory Authority FINMA, UK’s Financial Conduct Authority (FCA), as also other regulators in Europe and the US, while they are also approaching Indian regulators like Sebi and RBI for the worldwide probe.............
Fresh tremors for the rupee?
.......The Reserve Bank of India (RBI)'s first major (and classical) defence was to raise short-term rates on July 15 when it both capped the amount that could banks could borrow from the repo window and increased the emergency marginal standing facility rate by a hefty three percentage points. In effect, the marginal cost of funds climbed three percentage points and pulled up all short-term rates with it. While the collateral damage of this action was huge,.........
‘No ‘sunset date’ for closing dlr window for oil cos’
............“If you are talking about special window for oil companies, there is no sunset date. No, the RBI will assess that, the first thing is volatility should not come into the market,” ..............
A new gold standard for imports
........The government should get the State Bank of India (SBI) (which is already familiar with the gold deposit scheme successfully targeting temples) to conceive and launch a visible and persuasive gold deposit scheme - with a catchy name and TV advertising - with a one- to three-year tenure for individuals. The government should define an annual cap of 200 tonnes for this scheme, to limit its effect on our current account deficit in the future since we will have to import later to pay these individuals back. As soon as we get.......
Mobile banking gains momentum: monthly deals up 150% in 2013
....Mobile banking is comparatively a new phenomenon in India as it started in 2000 when HDFC Bank became the first bank to launch mobile banking. Initially, banks did not see much transactions but a big shift happened with the advent of smartphones. Though, smartphones are now generating major traffic on mobile banking, banking transactions can also be done on basic phones......
Our confusing tax code
........Many assume paying income tax is the same as Tax Deduction at Source (TDS), says certified financial planner Suresh Sadagopan. "This is because banks do not deduct tax at source if your interest income from fixed deposits is up to or more than Rs 10,000," he says. Therefore, many make small deposit accounts across more than one bank and save on TDS. Instead of one Rs 5-lakh deposit, many make five Rs 1-lakh deposit accounts. Yet, there is an incidence of income tax liability under the head of income from other sources when you take into account all the interest incomes together. When investors put money in tax-saving bank deposits, that have a lock-in of five years, they assume the interest earned on these deposits is also tax-exempt. This is untrue............
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