Impressed by dedication of RBItes - Dr.Raghuram Rajan

Our Governor Dr. Raghuram G. Rajan inaugurated the renovated Class IV Union Office in Amar Building, Mumbai at 4.00 p.m. today and while delivering his speech stated that wherever he goes, people say that RBI is a very honest and intelligent organization. He further stated that he is impressed by the dedication to work by all the employees of the Bank. He also observed that in many institutions, although the work culture/ dedication to work deteriorate by passage of time, in RBI, the same are very good even after around 80 years of constitution of RBI. He also acknowledged the fact that the dialogue/ constructive dialogue between the union/ associations with management should continue and with the co-operation of all concerned, RBI can achieve great success. Let us uphold the belief reposed on us by our Governor.

- C. Subash, Secretary, RBIOA

Should RBI prefer CPI over WPI?

.............In this light, the WPI-CPI debate must be more nuanced and cautious than a simple binary choice. It’s also important to not lose sight of its genesis too, one of which is RBI’s failure to bring inflation under control over 2009-11. Something new was needed to cover the loss of credibility and the new CPI happened to come along at the right time. First, there was talk of a ‘new normal’ for inflation, implying a higher target. If I am not mistaken, it was the IMF that first suggested shifting to the CPI for better inflation control; several analysts then took this up............ 

- Renu Kohli

.....For an economy like India, the role of inflation expectations which are driven largely by non-core inflation as expenditure on food and fuel inflation constitutes a significant part (59.2%) of household income cannot be ignored as they have important ramifications for saving-investment behaviour. As such, headline inflation (WPI and CPI) should continue to guide monetary policy in the near term........ 

- Shubhada Rao

Read - FE

Will central banks remain supreme?

.........Over the last few years, the central banks of the largest advanced economies have assumed a quasi-dominant policymaking position. In 2008, they were called upon to fix financial-market dysfunction before it tipped the world into Great Depression II. In the five years since then, they have taken on greater responsibility for delivering a growing list of economic and financial outcomes.........

Read - FE

Cheque clearance in banks to be made easy and fast

.........As a sequel to the decision which has been taken following the direction of the Reserve Bank of India, the Pondicherry Banker’s Clearing House (PBCH), which is functioning from No:15, Rue Suffren, Puducherry, will close its operation on Saturday. The PBCH has so far been receiving post-dated cheques or equated monthly instalment cheques from networking bank branches for processing them. They were personally handed over by staffers of the banks concerned. Hereafter, branches of banks, upon receiving cheques from customers, will scan and forward them to the Cheque Truncation System at Chennai (southern grid) after following all mandatory procedures........

Read - The Hindu

Tendulkar and the taper talk

.............Unless inflation and government expenditure is brought under control, which looks difficult at this stage, Indian markets will remain like a cricket team which scores well only when the conditions are favorable but fails whenever there is even little bit of juice on the wicket. And you don’t need Tendulkar to be telling you that this is not a great sign for a side that aspires to rise and shine.

Read - Mint

Montek Singh Tendulkar?

....... It was unclear, though, whether he was referring to Ahluwalia's longevity in the economic policymaking establishment or his achievements within it.

Read | Business Standard

RBI asks NBFCs to take part in Lok Adalat on Nov 23

..........."RBI has appealed to all Non-Bank Finance Companies (NBFCs) to participate in the Lok Adalat being organised by the National Legal Services Authority (NALSA) on November 23, 2013," the central bank said in a release..........

Read | Business Standard

Bleeding with mounting NPAs

My View on "Calling the bluff": 

If clients like King Fisher Airlines continue to stall the efforts of banks in recovering their dues - recent one is getting a stay on banks from taking over the corporate office of KFA at Mumbai- it is no wonder, the banks will also continue to bleed with mounting NPAs. The RBI never wanted to investigate whether banks had violated basic tenets of banking while sanctioning loans to KFA and such big ticket clients. If media reports are to be believed, most of the banks have extended the loans without adequate collateral security to KFA. Is it not malafide and it is not clear why bank managements have been allowed to go free by the RBI. The sermons of the Deputy Governor Mr Chakrabarty will remain just sermons as he does not want to offer solutions to take action against such bankers who violated basic norms of lending. Again as media reports mention that those senior bankers who secured very low marks in the interview for the post of EDs of PSBs, and when they become CMDs later, what better banking will one have in our country? -

 - S.Santhanam

Rich lists

This refers to the report "Banks wrote off Rs 1 lakh crore in 13 years: Chakrabarty" (November 19). It is heartening to find that a debate on who favours whom has started at the highest level. This is good for the health of the economy...........

Read | Business Standard

RBI must focus on fair deal for savers and desist from OMOs to prevent inflation spiral

Hidden in page 40 of the Macroeconomic and Monetary Developments Q2 review, released by the Reserve Bank of India a day before the policy, is a link to a vital piece of information — the household inflation expectations survey. The RBI publishes three-month and one-year forward inflation expectations each quarter in the survey.......... 

Read - ET........

A(ny) T(ime) M(enace)

Delhi cops write to RBI for safety steps
......The officers discussed various measures to make ATMs safer. One of the suggestions was to install a self-locking mechanism on the rolling shutters of ATM booths so that only the authorized personnel can lower them.......

Read - TOI

Guard must or ATMs will be shut: Top cop

........... "It would add huge financial burden and banking will become costlier. Round-the-clock security would mean having three security guards, each on an eight-hour shift, for every ATM. That defeats the whole purpose of having machines for 24x7 banking,".........

Read - TOI

Banks' best bet is an armed guard

...... The Reserve Bank of India, the country's apex banking authority, has no written rule asking banks to employ guards to man ATMs. The regulator has only asked banks to beef up security in areas considered 'high-risk'. But in light of the growing number of incidents of urban violence and theft, banks have put in place certain security measures to curb such incidents...........

Read - TOI

Home Minister lauds Jyothi’s courage

State Home Minister K.G. George lauded the courage of Jyothi Uday, the 38-year-old woman who was attacked on Tuesday while she was withdrawing money from an ATM near Corporation Circle. He said that the very fact that she had tried to fight back showed her courage, Mr. George said, wishing her a speedy recovery.........

Read - The Hindu

Secure the ATMs

....What is required therefore is a comprehensive, multi-level security arrangement, one that uses computer technology, surveillance cameras, automatic alarms, guards and police patrols. The Reserve Bank of India must make comprehensive security at ATMs mandatory............

Read - Deccan Herald

Shocker! This R 1000 note is to be sold at R 3.5 lakh online

..........There are many such websites that offer sale and purchase of special currency coins and notes with striking errors. These currency notes and coins have special numbers, errors, misprints, signatures or are vintage coins or notes................

Read - Bhaskar

Bharatiya Mahila Bank: Let this not be another UID or NREG

..........There does appear to be some hurry in inaugurating this enterprise as normally, the website of any new outfit is designed to near completion before it becomes operational. The present website could be an unofficial one. However, in this case, it may be inferred that the actual operations would be only after other prerequisites are in place including a formal website. One may expect business details such as interest rates being charged and products being offered to follow soon............

Read............

Ringing in the new

Challenges that awardees of new banking licences face 

....The new banks cannot survive by being mirror images of existing banks. They have to harness their knowledge based on products they are familiar with. The applicants are a diverse bunch including non-banking financial companies (NBFCs) engaged in asset or commodity-based financing, industrial houses (engineering, infrastructure, telecom, media, technology companies), services companies (transporters, distributors, exporters, importers), all of them scattered across geographies. The successful transition from an NBFC to a bank, for instance, will depend on strong management, as it would be moving into new businesses with uncharted risk areas............

Read - Business Today

India's Best Banks 2013

.......In a recent interview with Business Today, RBI Governor Raghuram Rajan emphasised on speeding up the loan recovery process through debt recovery tribunals and asset reconstruction companies. "Our institutions dealing with distress are under-developed. That will make it hard for banks to take risks if they have no hope for recovery. We have to improve them," he said..........

Read - Business Today

Reciprocity sword hangs over big foreign banks

........The reciprocity principle in the RBI norms on subsidiarisation for foreign banks in the country meant that overseas lenders would be given near-national treatment here only if their home countries allowed Indian lenders to open branches without much restriction, people familiar with the development said. The chief of an Indian private bank said the reciprocity clause should be strictly followed in the interest of fairness. “We face immense hurdles in opening branches abroad, despite giving a lot of elbow room to banks of those countries when they operate in India. A level playing field is a must,” the banker said............

Read | Business Standard

RBI may issue bank licences in phases

The Reserve Bank of India (RBI) is likely to give out the much-awaited bank licenses in a phased manner, with public sector or quasi public sector enterprises getting the nod within January next year, given the fact that their track records are open and in public domain. This would mean a relatively less stringent due diligence process, a source familiar with the development said on the condition of anonymity. RBI may issue the rest of the licenses by the middle of next year...........

Read - HT

Come November - Pensioners' plight - S.Santhanam

An article by Shri S.Santhanam, General Manager (Retd), NABARD

Read............

From a wannabe MF, the NPS should go back to basics

...... The NPS needs to be at par with the other pension products in the market in terms of tax breaks. And the compulsory annuity of 40% of the corpus at retirement needs better options than are available today.

Read - Mint

5 reasons why inflation will moderate

.........In an Op-Ed in The Hindu, IGIDR Professor of Economics Ashima Goyal concurs with this position, saying ‘hopeful signals’ are emerging on the many nominal variables that have persistently contributed to high inflation in the past couple of years. ............

Read | Business Standard

Nitish asks banks to increase CD ratio

......Kumar made the appeal at the State Level Bankers Committee meet here and stressed on increasing the disbursement of education and agriculture loans, which was low in the state. He rued the slow progress in opening of bank branches in the state and said no panchayat should remain without a bank branch.......

Read | Business Standard

RBI steps will lower yields: Finance minster

....."Interest rates in government bonds have risen temporarily, but we hope that some measures the RBI will take, and when the next set of inflation figures come, if food inflation moderates, it's possible that the G-sec rates will go down,"...........

Read - TOI

HC admits winding up plea against UBHL

....UBHL had claimed that the plea of winding up deserves rejection as it had given corporate guarantee only in favour of KF Aero, a special purpose vehicle through which KAL acquired three aircrafts, and assignment of such a guarantee in favour of the bank by KF Aero discharged UBHL from any liability towards the bank. UBHL also claimed that Reserve Bank of India, which permitted it to give corporate guarantee to acquire aircraft, did not permit assignment of such guarantees............

Read - The Hindu

Is it appropriate to mention in commercial communications, “it is computer generated letter / report / statement / advice and therefore does not require any signature”.

.............Most of Foreign banks had since long started issue of term deposit advices with no signature of bank official. It bears the legend above. Some PSU banks too joined the bandwagon. Actually as per RBI directives on deposits banks are required to issue term deposit receipts and not advices and by receipt it is implied that it should be properly signed by competent official of the bank............

Read...........