Do Raghuram Rajan’s Five Pillars Stand Up?

These are not pillars, actually. They are more like a new foundation, and I hope we address them soon

......It would indeed be great to have a central bank that addresses all these five pillars appropriately. In the bargain, we must not overlook one thing that excited us about Dr Rajan's initial speech - of making the rupee more international, of settling trade with rupees and of opening our markets to such trade. Additionally, the RBI isn't the correct institution to do all that it's doing right now - for instance, the fact that it is the merchant banker for government debt and is also a regulator of the bond market, and a buyer of this debt, is a conflict. This can only be resolved by putting a debt management office owned by the government, not the RBI.........

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Puzzle of high CPI inflation

...The model is very parsimonious; no fuel prices here, no rupee value, no fiscal deficit, no money supply, no repo rate, no RBI, no purchase of gold, and no current account deficit. Yet, this model explains Indian inflation very well. ..............

Read - FE

Have huge respect for RBI, says economist Andrew Spenc

.............“High inflation in India is a hard problem.I have huge respect for RBI. I think RBI will take steps to bring inflation down to its comfort level,” Spence, who is recipient of the 2001 Nobel Prize for economics, said at an event here while replying to a question on high inflation in India............ 

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Legally, lawfully, legitimately and rightfully due - Letter to Governor by Talekar

This much awaited letter to the Governor by Shri M.B.Talekar  is omnipotent to take our case of updation of pension anywhere, including Supreme Court, to seek justice. Kindly read thoroughly and see how our case is justified and strong. This letter's careful reading would show there are many avenues to resolve our issue. Our struggle would not go in vain as we are on right side. What needed is confidence and your involvement. Let us take it as our mission. 

- L R Parab

Read - ReTyred Express

Powering women

....Women are important economic agents and it is necessary to bring them into the banking mainstream for social and financial reasons. Most women who undertake financial activities have to depend on money-lenders who charge high interest rates. Public sector banks have a lending target of 5 per cent to women entrepreneurs but no bank has met it. Reliable credit facilities on fair terms will help them to strengthen their financial activities and become more productive participants in the economy...........

Read - Deccan Herald

RBI to sell Rs 1,000 cr inflation indexed bonds on Nov 26

....The RBI would allot up to 20 per cent of the notified amount of the bonds to eligible individuals and institutions as per the scheme for non-competitive bidding facility. This is the second round of inflation bonds, after the maiden offering in June. The bids for the auction should be submitted in electronic format on RBI's core banking solution on November 26, the release said...........

Read - IE

Saving rupee: India to lobby for rupee payments with major trading partners

.....“There is a broad agreement between the commerce and finance ministries and the Reserve Bank of India to push currency swap agreements, particularly with the countries with which India runs a large trade deficit,” a senior trade ministry official with the direct knowledge of the issue, told Reuters..............

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National Australia Bank plans to expand Indian operations

After establishing its base in Mumbai in early 2012, National Australia Bank (NAB) is now looking to spread its wings in the country. It wants to open a second branch in Delhi for which it will approach the Reserve Bank of India. It also intends to enter the remittance segment to tap NRIs in Australia and New Zealand.........

Read | Business Standard

Cooperative bank tries to regain lost classification

Defaulters on loan repayment have dealt a heavy blow to the reputation of Ernakulam District Cooperative Bank. With non-performing assets touching Rs. 400 crore, RBI has lowered the bank’s classification from A to B. The bank incurred a loss of Rs. 25 crore as on March 31, 2012. The non-performing assets have exceeded the prescribed limit set by RBI, leading to the lowering of the bank’s classification. RBI had imposed a penalty of Rs. 5 lakh on the bank last year for sanctioning unsecured loans......

Read - The Hindu

Bank unions to observe one-day strike on Dec 19

..........A decision to this effect was taken at a meeting held here recently, UFBU said in a statement on Friday. “The United Forum of Bank Unions deliberated at length about the anti-people policies of the government, especially with regard to the banking reforms, which are bound not only to hit the common people but also the resources of the country,” it said.......

Read | Business Standard

IDFC, LIC Housing Fin may make the grade for new bank licences: Goldman Sachs

......Among the 26 aspirants for new banking licences, IDFC and LIC Housing comply with some of the main requirements like a successful business track record for more than 10 years, diversified shareholding with public holding in excess of 51% in their respective companies, a steady earnings stream, more than 50% independent directors, and already regulated by the RBI and National Housing Bank (NHB) -which put them in the central bank's comfort zone.............. 

Read - ET

Reinvent state-owned banks

A former Deputy Governor of the Reserve Bank of India once compared the chiefs of public and private banks thus: "A PSU bank chairman will walk into my office with an ingratiating smile, a slight crouch to show submission, and mouth gushing compliments about, say, a speech I have delivered somewhere, calling me 'sir' several times. A private bank chief will walk in, greet me as xxxx [his first name], and proceed to discuss issues as an equal." It was a telling story about attitudes and mental frameworks that, inevitably,.........

Read | Business Standard

Clear & present danger: Bad loans

....Indian banks will have to scale up in business to meet the needs of a growing economy and also meet regulatory standards, the apex bank noted. On its part, the central bank would ensure bank credit flow to productive sectors and it believes banks' investment in government securities must reduce from the current mandated 23% under the Statutory Liquidity Ratio. “It is necessary to reduce banks’ requirements of investing in government securities in a calibrated way,” the RBI said...........

Read - FE

Meet The Guys Who Really Commit Bank Fraud

.........Chakravarty highlighted the vigilance failure by pointing out the high number of high value advances-related frauds in public sector banks. He then quoted an interesting statistic: “Our analysis suggests that of 719 officers found accountable in 230 large value fraud accounts, 426 officers were up to the rank of Senior Manager, 196 officers were Chief Managers and AGMs, 94 officers were of the rank of DGM, GM and CGM and only 3 officials were from the top management and the board of directors. This statistic highlights, he said and we would principally concur, the skewed nature of the punitive vigilance process and its tendency to focus on the lower level functionaries.........

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Rs 3,652 crore lying idle in bank accounts

....It is not just government banks that have unclaimed deposits. Even private banks have such deposits. ICICI Bank leads the private banks with Rs 100.3 crore lying as unclaimed in all types of deposits followed by Federal Bank with Rs 44.3 crore. In 2012, the Centre proposed to transfer this amount into Depositor Education and Awareness Fund to be used for promotion of the depositors' interest and other purposes as may be specified by the RBI from time to time, but there was a lot of opposition to the plan and it was put on hold.

Read - TOI

RBI asks banks to treat customers fairly

.....The Reserve Bank has also taken a lead in ensuring that bank’s customers in India are treated fairly. Over the years, it has initiated several customer-centric measures and inculcated a culture of treating customers fairly through regulatory and supervisory interventions. The Reserve Bank initiative led to the setting up of the Banking Codes and Standards Board of India (BCSBI), an autonomous and independent body, which has been entrusted with the task of setting codes and standards for banking services in India. The Codes of Commitment are binding on BCSBI members and non-compliance thereof by member banks is a valid ground of complaint under the Banking Ombudsman Scheme(BOS). In a bid to empower consumers and protect their rights, the Reserve Bank has also instituted the Banking Ombudsman Scheme as an apex level, cost free grievance redressal mechanism for deficiencies in services by banks..........

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Red flag over realty exposure of banks

........New private sector banks, along with State Bank of India (SBI) and its associate banks, were the most aggressive in extending loans to sensitive sectors. While the SBI group has seen 25.6 per cent growth in these sectors, for new private banks this was 19.8 per cent. Overall loan growth in the banking system was 13.6 per cent in 2012-13..........

Read | Business Standard

RBI to tighten norms to check mis-selling by banks

....The move comes in the wake of a RBI scrutiny that found many banks not adhering to 'know your customer' (KYC) norms for sale of third-party products. The central bank had also fined many banks for the violation..........

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Steps to sensitise people on chit fund companies

.....Mallick directed all block development officers to organize investor awareness programmes by involving bankers and officers of the RBI to provide information relating to non-banking companies and unincorporated bodies collecting money from public. We have been warning people about the  mushrooming of chit funds and advised the police to take appropriate action against such fraud, said Mallick. ................

Read - The Statesman

Only 5 students are on board UoP MTech aviation course

.....Twelve of the 20 registered candidates have cancelled their admissions to MTech in aviation of University of Pune (UoP) citing inability to pay the hefty fees and fluctuating Euro to Indian rupee. It appears that the much touted course will now take off with merely eight students. University officials admit that one of the other reasons for candidates backing out from the course was the stringent rules of Reserve Bank of India (RBI) regarding education loan. ....

Read - DNA

T. Nagar post office to get 1st postal ATM

......The State’s first ATM for postal savings account holders will be set up at T. Nagar head post office by next month. This pilot initiative is part of the postal department’s project to network post offices with core banking facility on the lines of banks. In the initial phase, four post offices have been chosen to be interconnected for savings bank account operations.........

Read - The Hindu

ATMs in Odisha: Withdraw cash at your risk

.......As many as 70% of the 3136 ATMs in the state do not have security guards. Though RBI often issues standard advisories to banks to adopt safety measures in ATMs, the execution is appalling. "Violation of the safety guidelines has come to our notice at many ATM counters. We will find out whether RBI has the power to take action against the errant banks," said a senior police officer. RBI sought to wash its hands off the responsibility. "It is not the lookout of the RBI to see if banks are taking safety measures in ATMs. We have no power to take action," said an RBI officer.........

Read - TOI

Pune cops to seek RBI guidelines

.........Pol, who was speaking on the sidelines of a meeting convened by the police with security officials of all banks, also said that he will soon be meeting with senior-level managers of banks to take stock of the number of branches and ATMs they have in the city. "The police can only make the banks aware, but the guidelines have to come from the RBI and we will be writing to them urging them to issue the same at the earliest," Pol said............

Read - TOI

Notice issued on plea for security at ATMs

The Madras High Court Bench here has ordered issuance of notice to Union Home Secretary and the RBI among others on a PILseeking posting of security guards, aged not more than 45, in all ATM kiosks in view of robberies, including the recent brutal attack on a woman in Bangalore. Chief Justice Rajesh Kumar Agrawal and Justice M Jeychandran also ordered notice to Reserve Bank of India Governor, Union Finance Secretary and state officials on the petition by law student C Anandraj. The petitioner also sought a direction to install Closed Circuit TV (CCTV) cameras, burglar alarms with sensors linking to the nearest police station and the bank branches.....

Read | Business Standard

LIC stops selling 14 life policies over Irda diktat

......“This is part of our compliance to the new product norms. There is no cause for worry. New products will be launched to substitute them,” said a senior LIC official. He, however, refused to comment on the exact number of plans withdrawn.  Irda had also extended the deadline to phase out group products not complying with the new guidelines from July 1. Later, this deadline was extended to August 1.........

Read | Business Standard