..........Some of the obnoxious features in the RBI Act, which continue to date, were specifically incorporated to control, indeed, humiliate Osborne Smith (the governor and deputy governors can be dismissed without ascribing any reason). The relationship between Governor Osborne Smith and Finance Member James Grigg was tempestuous and between Osborne Smith and his deputy, James Taylor (who succeeded Osborne Smith as governor), was even worse. The first volume of the RBI History is remarkably silent on this episode. Rajul Mathur and A. G. Chandavarkar have undertaken some work on this episode. In 2009, a treasure trove was discovered in terms of the James Taylor Papers which are now in the RBI archives...........
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, November 15, 2013
The next salvo in digital payments
.........RBI proposes to address these problems through an Indian Bill Payments System (IBPS) network—essentially, India's General Interbank Recurring Order (GIRO) network, involving billers, aggregators, customer service points, banks, mobile networks, ATMs, outlets and customers—to facilitate payment instruction from one bank account to another bank account, initiated by the payer.
How does it work?.............
Bank official’s house robbed
Burglars struck at the house of a bank employee, Sujatha, at the Reserve Bank of India (RBI) quarters near Shyamlal building at Begumpet in the city on Wednesday and made away with 20 tolas of gold ornaments and Rs. 1 lakh............
Obituary
Our colleague SHRI ARJAN JHAMNANI passed away on 7th November 2013. He joined the RBI as a Clerk Gr. II in 1971 and rose to the position of Manager (PP) and retired from DICGC in December 2006. During the major part of his career, he worked in different sections / departments of Byculla office. He was known for his hard work and was always prepared to help both his colleagues and senior officers. A very versatile and dynamic person, an all-rounder in every field, be it music, jokes, sher-shayri etc., he was full of zest for life. He devoted time to work for the Gurudwara in Sindhi Colony, Mulund (West), where he lived. He was also the Committee of Member of the Managing Body of the Gurudwara. Although he was down with illness, he had a strong desire to recover and work for the Gurudwara. We have lost a sincere friend and colleague in his passing away. May his soul rest in peace.
- Uma Ramachandran / Naduvilmadam Ganesan
Old pensioners' plight examined
Reproduced below is a write up on 'Old Pensioners Plight examined' appeared in the "LIC PENSIONERS CHRONICLE"......
RBI and banks have different pay scales, percentage of dearness relief etc. Nevertheless, it is worth reading, perusing the write-up as its earnest intent and central focus is not different and in many aspects applies pari passu to RBI and banks pensioners, past, present and future.
Reserve Bank of India : NCFE to conduct National Financial Literacy Assessment Test for School Children
.........The objective of NCFE is to further the cause of financial literacy and inclusion in India in a collaborative manner. The National Financial Literacy Assessment Test (NCFE-NFLAT) is one such step in this direction. By conducting a national level test, NCFE plans to motivate school students (of classes VIII to X) to learn the concepts of finance and also measure their financial awareness so that they acquire the important life skill of managing finances at an early age leading to sound financial decisions later...........
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Need to overhaul business correspondent model of financial inclusion: Canara Bank CMD
......According to Dubey, facilitators of such model are actually not bankers, so they are not devoted to actual implementation of financial inclusion. Dubey pressed for more accountability in the BC model than was permitted by the Reserve Bank of India in 2006 to utilise services of intermediaries in providing banking services. In the BC model of operation, the facilitators involved in ‘cash in-cash out’ transactions at rural places, connecting the last mile to the banking system. “There is need for more accountability of the BC model,” said the CMD of Bangalore-headquartered bank..........
When everything is same, specialists make the difference
....In the decades gone by, a general officer managed all the verticals in his/her branch. Today, banking has become quite sophisticated with banks taking the eRoute (electronic route). Top executives of public sector banks told Business Line that there is a need for increasing the number of marketing officers and law officers in public sector banks. Given that all banks have the same sort of products and technology, it is marketing which is weak in public sector banks..........
PM to inaugurate Mahila Bank on Indira's birthday
Prime Minister Manmohan Singh and UPA Chairperson Sonia Gandhi will inaugurate country's first all-women Bharatiya Mahila Bank in Mumbai on November 19, the birth anniversary of former Prime Minister Indira Gandhi. With the inauguration of the bank, seven branches would become operational across the country, including Kolkata, Chennai, Ahemdabad and Guwahati..........
Time for Indian banks to get truly inclusive
The theme of the 34th Bankers Conference (BANCON) in Mumbai on November 14 and 15 is ‘Bank of the Future – Gearing up to Meet the Emerging Environment.’ Bancon, formerly Bank Economists’ Conference (BECON), has over the last several years been an occasion for top bankers to get together and review the main challenges and opportunities for the banking sector. It has been an occasion to share notes and experiences and rethink strategies for many of them. The banking sector is critical for a well-functioning economy, especially for a country like India that faces challenges.........
First level screening of bank licence applications on Dec 16
.......It is expected to complete the entire process in three months, following which licences would be awarded. RBI Governor Raghuram Rajan had earlier set January deadline for awarding of licences, but it may take a little longer as the central bank is still collating information on all the applicants. “Due diligence work is being done by the RBI. By mid-December we will get proper status of all applications. It will give us some idea about who are fit and proper. At that stage we would know where we are and first level screening would be conducted,” said a person close to the development. ........
RBI may term 7 banks systemically important
........According to sources, the RBI is expected to consider business size as the primary criteria for identifying systemically important banks. Besides size, a bank’s interconnectedness, substitutability and complexity in operations are the other factors that will be considered for identifying a systemically important bank. While no Indian bank may qualify as a globally-systemically important bank under the Basel framework, the growing size of Indian banks requires RBI to term some of them as significant domestic players, sources said..............
Living with volatility: India, China's bold monetary experiment
SINGAPORE (Reuters) - The bold monetary experiment that the Indian and Chinese central banks engaged in this year might one day be hailed as a success. So far, the result has been unprecedented market volatility and little else. Both central banks targeted interbank rates to control the supply of money, aiming for a more surgical monetary tool than orthodox bank reserves or policy interest rates..........
Stirred and shaken
.......Given the advanced hour, however, no one was in the office to sustain injuries but it is worth wondering whether the incident is a reflection of the state of the economy, since no damage was reported elsewhere.
Why Rajan is Right on the Economy
Reserve
Bank of India Governor Raghuram Rajan has correctly predicted a current
account deficit (CAD) that will be sharply lower than the
near-$88-billion figure for last year. Rajan figures that the deficit
could be as low as $56 billion, well under 3% of the GDP and certainly
much lower than the 4.8% of GDP figure last year, the highest in
history. For five months in a row,.............
If only Raghuram Rajan could control onion prices too
..........If India has to get back to high economic growth, inflation needs to be reined in. As Rajan wrote in the 2008 Report of the Committee on Financial Sector Reforms “The RBI can best serve the cause of growth by focusing on controlling inflation.” The trouble is that there is not much that the RBI can do about it right now.
RBI’s Rajan Tries Damage Control
......Less than three months into his job, Reserve Bank of India Governor Raghuram Rajan is getting tested on a key part of his job: managing communication and the fallout from loose talk in Delhi...........
.......Later that day, RBI deputy governor Urjit Patel, who rarely gives interviews to media, gave an exclusive interview to a local TV channel in Mumbai. In an answer to a question about India’s trade data, Mr. Patel set about giving a detailed answer about how there were several pieces of economic data that bode well for the rupee...............
Rupee fundamentals
The Reserve Bank of India (RBI) Governor Raghuram Rajan has done well to pour cold water on renewed attempts by currency speculators to ‘short’ the rupee. Since falling to an all-time low of 68.36 to the dollar on August 28, the rupee had recovered to 61.41 by October-end before the fresh bout of weakening this month. On Wednesday, it threatened to breach the 64 mark, only to retreat after Rajan’s statement, effectively rubbishing the two main reasons that were bandied about for the rupee’s latest slide...........
Rajan's breathing exercise fails to pacify the rupee
..........But then there was a wake-up call in the form of WPI inflation numbers which touched a 8 month high of 7 per cent. Rhythmic breathing session got over, rupee jumped to touch a high of 63.28 and is presently trading at 63.21 against the dollar. Irrespective of the rupee movement, Rajan needs to be complemented for making a statement in order to pacify the markets and explain the facts of the case............
RBI may remain hawkish to tame inflationary expectations
.............For a change, the market isn’t clamouring for a rate cut. On the contrary, a 25-basis point rate hike is not only being factored in by the market but also welcomed, as such a move would help anchor inflationary expectations and nudge the government to address supply-side issues affecting prices. For a change, the market will welcome any action taken by either the government or the Reserve Bank of India (RBI) to counter runaway prices.............
Will inflation spike force Raghuram Rajan to hike rates in Dec?
.....Many analysts expect the Reserve Bank of India to raise its policy rate at least by a quarter of a percentage point to 8% by March next year. Can that happen in December? In his address to the media on Wednesday, RBI governor Rajan somehow gave the impression that he is not in a hurry to hike the policy rate. Since he took over in September, he has raised the rate twice—by a quarter percentage point each to 7.75%. In his address to the media on Wednesday, Rajan pointed out that even though consumer price inflation has risen, core consumer inflation has actually dropped.....
Sharp Inflation Revision Poses Challenge for Indian Policymakers
......For instance, India first reported 8.5% growth in gross domestic product in the year ended March 31, 2011. More than a year later it was revised to 9.3%, indicating that the economic recovery from the global financial crisis was much stronger than authorities had realized. Former Reserve Bank of India Governor D. Subbarao highlighted the challenges a few days before his tenure at the central bank ended in August. Speaking at an event at Prime Minister Manmohan Singh’s residence, Mr. Subbarao said that in hindsight he believes the central bank’s monetary tightening in 2010 and 2011 should have started sooner and been faster and stronger..........
Current account deficit to be less than $56 billion: Chidambaram
...........“Let me tell you a secret … the current account deficit will be lower than $56 billion that RBI governor said yesterday (Wednesday) … we will fully, securely finance it and will add to our reserves,” Chidambaram said at an event organized by Axis Bank Ltd on Thursday. However, inflation, particularly food-price inflation, remains a problem area. There’s no easy answer to cool retail inflation, said the finance minister, ......
NSEL crisis: Spot exchange acting as NBFC without RBI nod, warned auditor in 2011
........“NSEL was taking higher risk of credit default as it does not hold any security or line. The activity entails funding of the transactions and the provisions of NBFC and the company has not secured any such licence as an NBFC for carrying out such activity and in order to avoid the application pertaining to NBFC, the transaction needs to be restructured in the books of accounts of the company,”..........
Newsmaker: Yogesh Agarwal
.....But what set tongues wagging was that Agarwal had resigned full 20 months before his term ended. This was the first time a regulator was stepping down before the end of his term. Agarwal was appointed PFRDA chairman for five years in June 2010, after he had served as the chairman of IDBI Bank. The regulator had been without a chairman for over six months after Agarwal's predecessor, Dhirendra Swarup, retired in December 2009. Agarwal's views were diametrically opposite to those of Swarup. ......
The Fund to Fall Back On
This
refers to ‘Back to the Beginning’ (ET, Nov 14). The article gives an
agenda for an overhaul of the National Pension System, which can develop
into a social security instrument for India’s workforce. But what is
forgotten is the background in which the original NPS (New Pension
Scheme) came into being in 2004. Its immediate “mandate” was to
eliminate the existing defined-benefit-based pension scheme in
government and the public sector. Central government employees in
service as on December 31, 2003, have a defined-benefit pension scheme. The pension liabilities of central government that were being
met on a “pay as you go” basis were becoming unmanageable. Budget
2003-04 contained a proposal to introduce the new restructured
definedcontribution pension system for new entrants to central service.
The New Pension Scheme for new entrants to central government service
from January 1, 2004, except the armed forces, in the first stage,
replacing the system of defined-benefit pension system was thus
introduced through a notification dated December 22, 2003.
- M G WARRIER, Mumbai (ET)
- M G WARRIER, Mumbai (ET)
No kitchen sinking; SME sector still under duress: SBI boss
.........Bhattacharya said she would not resort to ‘kitchen sinking’, term being described by analysts to purge the book of bad loans at loan. “A few people had even recommended that I go ahead and do this, but I have no intention of doing anything of this sort. We will be doing our best (to improve asset quality) and what is right for the bank, but we will not do anything that takes away all the bad loans in a shot,” she said. It may be recalled that Bhattacharya’s predecessor Pratip Chadhuri had chosen to clean up the books immediately on taking charge in April 2011, leading to a 99 percent drop in quarterly net profit...................
Not getting a bank locker? Secure gold with insurance
When Sudha Sharma was told that she would have to wait for at least a year to get a bank locker, she decided to get an insurance cover for her gold jewellery. As gold prices continue to rise, the demand for insuring the yellow metal is also on a roll. Insurers and jewellers feel that one of the reasons behind this surge is lack of options available to protect the yellow metal. Typically, consumers keep gold safe through bank lockers. However, with increasing waitlists and limited availability of lockers, demand for insuring jewellery is increasing.............
There are two sides of the coin to credit cards
...Credit card debt is the most expensive type of debt. Though tremendously convenient, it is very easy to over-use the credit cards, leading to disastrous consequences. Not only is extremely expensive financially, it also brings down your credit score..............
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We already have a platform ready for banking: George Muthoot
.....We do not need a consultant. We feel we are well suited for transforming Muthoot Finance into a bank. We are the largest in the gold finance business. The next level should be a bank. If it is a bank then the liability options will be much more. My cost of funds can come down.........
New retail gold pricing mechanism
.....At a press conference here on Thursday, M.P. Ahmed, its general secretary, said an unfriendly tax regime and stringent norms of the Reserve Bank of India had created the crisis. “Sales have fallen by 30-40 per cent recently. When other States charge only one per cent sales tax, the Kerala government charges five per cent. Import duty has shot up from one per cent to 10 per cent in a short period. When an average of 60 tonnes of gold used to be imported a month, only 3.38 tonnes was imported in 2013,” he said..........
Short-term fixed deposits shine again
.....So how does the short-term hike in FD rates compare to other avenues like fixed maturity plans (FMPs) or tax-free bonds? For now, the short-term deposit rates are turning more attractive than an FMP of a similar tenure. Rates on FMPs are around 8 per cent, more or less the rates of bank fixed deposits.......
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