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.
Thursday, November 28, 2013
VITALINFO - Service beyond compare - G.Padmanabhan, Executive Director
Dear Mangesh
Thanks for the mail. These days whether we read
newspapers or not, VITALINFO is a must. The service you are doing to all
members is just beyond compare. Please continue to be inspired. Best regards
- G.Padmanabhan, Executive Director, RBI
If I had my life to live again.......................I would 'Re'serve VITALINFO
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| Entering into 4th year |
RBI holds ‘coin mela’ to ease shortage of change
....Sanjay Bhatia, Deputy General Manager of RBI (Chandigarh), said, "To overcome the shortage of the currency notes, especially in the markets, we have introduced this process. Increase in circulation of coins will help prevent counterfeiting of currency. We are working to expand this process in the whole city and then to Mohali and Panchkula."
Reserve Bank of India cautions on deposits with dubious NBFCs
Fearing many innocent investors being lured by fancy interest rates offering by NBFCs, Reserve Bank of India executives yesterday at public information campaign at Jaisingpur in Kangra, cautioned the people from falling into such a trap. Kuldeep Singh Bhati, Assistant General Manager, Reserve Bank of India (RBI) advised people to resist from depositing their hard earned cash in category-B firms which carry a dubious track record. Sharing views of the RBI he said that public should hold more caution when dealing with non banking financial companies.............
NABARD holds financial literacy workshop at Kulgam
...........Agriculture and allied sectors assumes a significant role in economic role especially in rural areas for which every effort needs to be made by all stake holders, saying that NABARD has got a mandate to provide financial assistance under new financial inclusion under RBI guidelines Additional Deputy Commissioner added. During the work shop, initiation of developmental activities and the benefits of financial literacy and its impact on economic activities was stressed by the speakers. The utility of financial literacy and its benefits to the common masses were explained in simple and colloquial language to the audience. Concepts of working of SHG’s, JLG’s, access to credit card facilities and banking insurance were also discussed............
Valuation Risks Need Recognition and Mitigation - Yerram Raju
........Trend and Progress of Banking 2013 indicated that INR 16000cr are NPAs in realty sector. But mind you these are reported NPAs. Many may be hiding. Concealed risks are more than the revealed risks and these could arise from faulty valuation of the properties and could also be collusive faulty valuation reports..............
RBI Pension History: Research/publication
An open letter from M G Warrier
TO WHOMSOEVER IT MAY CONCERN
Greetings
The first casualty of lack of transparent communication is truth. It cannot be different, even if the institution is as big as RBI and the Governor is a person of impeccable integrity. Dr Subbarao’s efforts to resolve the long pending issue of pension revision got stifled by a hostile finance ministry. Hostility of a ministry should not be allowed to cause hurdles in the management of HR beyond an acceptable level of tolerance. I am not privy to the goings on in regard to pension revision at this point of time. I now propose to put together a paper on the basis of available information on the evolution of pension scheme in RBI since 1980s to the current period. I invite anyone who may have documents relevant for the study, which they consider, can be made available for research/publication, to share them with me. There is a belief that lower level officials in finance ministry are being used to pressurise RBI to agree with the line of thinking in the ministry using pension revision as a bait. One such issue is notification of RBI(Staff) Regulations, 1948. I am copying below excerpts from a note recorded by me on related issues sometime back. Kindly feel free to share your views.
- M G Warrier
Take up Arms to end Inflation
This
refers to ‘Move Over, Rajan’ (ET, Nov 27). Our Delhi leaders either do
not have the will to tackle inflation or cross-currents are working
against their strategies to contain it. Even the RBI during Subbarao’s
time advised the government to improve the supply chain to contain food
inflation. But why has the RBI been overusing policy rates without using
other weapons in its armoury? What happened to the selective credit
control measures? These measures adopted in the 1970s did have a
sobering effect on inflation.
- K V RAO, Bangalore (ET)
- K V RAO, Bangalore (ET)
Rajan, FM Working As A Team: Ram Charan
Management Guru Ram Charan says that RBI Governor Raghuram Rajan is the first cause for optimism on India. “I appreciate Rajan's approach to problems,”......
Watch the video...........
Watch the video...........
The last chance
..........India therefore has an ample and growing cushion to absorb the rise in imports that precedes the revival of growth. There is, therefore, no downside to lowering the interest rate now. All that Raghuram Rajan has to do is abandon the belief that raising interest rates is the cure for all types of inflation; recognise that India is suffering from endemic cost push inflation born of supply shortages, and that the only cure for these shortages is economic growth.
IBA awards HDFC Bank in technology innovation
.....The 6 winners were announced from a total of 88 nominations across 33 banks (20 PSU, 10 Private and 3 Cooperative). HDFC Bank was awarded in the category of ‘Most Innovative use of Technology’. Usha Thorat, Former Deputy Governor, RBI & Director, CAFRAL chaired the Jury that included MV Nair, Former Chairman & MD, Union Bank of India, MD Mallya...........
Banks violate RBI norms to deny zero-balance A/Cs
Banks have been found to use the Reserve Bank of India's norms as an excuse to avoid opening zero-balance accounts. In a sting operation conducted by a web portal, an IIT Mumbai professor sought to open a basic bank account in 19 banks without address or identity proof. In all the 19 branches, the professor was shooed away although RBI regulations require banks to open a 'small account' without address or identity proof. The professor's sting operation seeks to expose how banks use the pretext of 'know your customer' guidelines to turn away business that is unprofitable. Incidentally, these are the same banks which fell victim to a sting operation by a web portal which exposed their willingness to violate the 'know your customer' guidelines to grab business.........
Tough to change RBI's banking licenses norms now
....I would not know why Tata Sons have decided to withdraw but by and large you did get a sense when the clarifications were rendered to the guidelines. The guidelines, and then the clarification suggested that conversion of non-banking financial companies (NBFC), particularly large-sized NBFCs would be very difficult to meet with within the guidelines which were offered in June 2013. In keeping with that you are getting a sense that perhaps some of the NBFCs may have failed, they are better off continuing as NBFCs rather than converting as a bank, so that could be one reason............
Tata says bye to banking
....The Reserve Bank of India (RBI), in a press statement issued on Wednesday, said it had accepted the request for withdrawal of the application. RBI said the company had indicated its current financial services operating model best supported the needs of the Tata group’s domestic and foreign strategy and provided adequate operating flexibility to its companies, while securing the interests of the group’s diverse stakeholder base.......
Rajan’s ‘on-tap’ bank licensing likely putting aspirants on wait-&-watch mode
..........."We could have wholesale banks, we could have mobile (phone) companies doing some banking activities, within certain constraints. We could have small banks, which we currently don't allow, and we could allow co-operative banks." "I see over the next few years a dramatic remaking of the banking landscape. Both from the... new banks which are going to come on board and the foreign banks which are going to be allowed to expand more freely. It will be a multiplier in terms of competition," ...
Banking ombudsman to hear complaints
..........the Lead District Manager, R. Rajagopal, said the banking ombudsman would be holding a sitting at the Tirupur South Rotary Club Hall here on November 29 between 2 p.m. and 5 p.m. “Apart from looking into the grievances, made on the grounds as notified under the Banking Ombudsman Scheme, 2006, the official will also be creating awareness on the salient features of the scheme among the industry associations, NGOs, consumer societies and common people,”...............
How to make public sector banks perform again
.............The experience of managers who have spent time with both public sector and private banks is instructive. Soumen Basu, former executive chairman for India of the global human resources consultancy Manpower Inc who has served on both sides of the fence, debunks the myth that "salary" is an issue with public-sector bank managers. What is an issue is expectations - what is expected of managers and what they expect from the organisation in return. In the private sector, there is "recognition and reward". In the public sector, there is little reward for good work and poor backup for the odd initiative gone awry. What is needed is a professional human resources setup that identifies performers and future leaders through the risk-reward process...........
Fraud at public sector banks - A rampant occurrence?
.........A speech for instance, by Dr. K C Chakrabarty, Deputy Governor of the Reserve Bank of India at a seminar organized by the Centre for Integrity, Governance and Training on Vigilance Administration on November 11th was largely overlooked by the media. But in the light of the CBI investigation into the activities of Acharya & Co, the contents of that speech become glaring for the startling facts they reveal about the extent of corruption and fraud at India’s public sector banks..........
SBI's Dy MD Shyamal Acharya cash-for-loan scam probe report soon
........Takru, who is on the board of the bank as government nominee, also said it is wrong to blame the high bad assets in state-run banks to corrupt and lax practices in the loan appraisal process and ruled out changing the existing laws and procedures of working of banks. "What has happened is most unfortunate. SBI has come out with their own internal committee and we expect the report of the committee by weekend," he told reporters after a meeting at the Reserve Bank of India (RBI)...............
'10 Lakh Jobs Could Have Been Possible, But for Loans'
Had it not been for the huge interest being paid to the Centre on loans taken by the erstwhile Left Front government, large-scale employment would have been possible in West Bengal, Chief Minister Mamata Banerjee said today. "While in 2011-12, the Centre and the Reserve Bank of India took away Rs 21,000 toward debt servicing, in 2012-13 they took Rs 25,000 crore out of Rs 32,000 crore that we earned," she said. "I am told that this fiscal they will take Rs 28,000 crore,"................
Subservience of big banks to corporate defaulters
.........Banks found an easy way to hide bad loans. Instead of writing off loans or forcing anyone to pay up, they offered an ingeniously named scheme: Corporate debt restructuring. Those who could not pay were given a moratorium, maybe a year or two, on payments, after which they could repay at lower interest rates. A part of the loan became equity, meaning banks became shareholders in these failing companies..............
Trai fixes ceiling tariff at Rs 1.50 for USSD-based mobile banking services
........According to a Trai statement, USSD is a ubiquitous, inexpensive, secure and convenient channel for mobile banking. “The framework is to encourage financial inclusion. We want mobile banking to be extended to the un-banked people, especially in the rural areas,” said Trai chairman Rahul Khullar..............
For fourth auction in a row, IIBs find no retail interest
...... “Since the RBI mentioned that there would be a CPI-linked instrument, most people are waiting for that. From just an optical basis, the 3% differential between the CPI and WPI is making people wait for the CPI-linked instruments,” said Ananth Narayan G, co-head, wholesale banking, and head of global markets at Standard Chartered Bank. RBI Governor Raghuram Rajan, after taking over in September, had announced that retail inflation-linked savings certificates would be issued soon. Separately, Deputy Governor HR Khan indicated on Monday that IIBs for retail investors would be issued in December............
Card swipe machines may raise banks' costs
........According to the head of the cards and direct banking business of a private bank, this would result in an additional feature of validation at POS machines using the Unique Identification Authority of India (UIDAI) number. “This has come as a surprise to us because RBI had not discussed this with banks so far. Now, POS terminals will have to be changed to accept biometric validation,” the official said, on the condition of anonymity........
Is the bank ATM a public good?
..........The subtext, sometimes articulated, is that since 60% of the adult population does not have a bank account, an ATM is essentially an elitist construct, not worthy of being within the protective cover of the general law and order setup. The Reserve Bank of India’s (RBI’s) obscure diktat to banks to provide adequate security to ATMs and the Karnataka government’s summary closure of ATMs because of non-compliance with the security-guard requirement are emblematic of this muddled thinking. What everyone conveniently forgets is that an ATM is not tied to the mother bank—the free usage of another bank’s ATM (up to a fairly liberal limit) has made the ATM a near-public place...........
The Header over the Bar
This
refers to ‘Aadhaar Link Mandatory for Card Deals Now’ (ET, Nov 27). On
the basis of recommendations of a working group that had examined the
issues including those relating to security features in the card payment
system, RBI has advised banks that (a) in respect of cards, not
specifically mandated by the RBI to adopt EMV norms, banks may take a decision whether they should adopt Aadhaar as additional factor of authentication or move to EMV chip and PIN
technology for securing the present card payment infrastructure, and
(b) the card infrastructure has to be enabled for both EMV chip, PIN and
Aadhaar (biometric validation) acceptance. As banks have an option to
decide, the headline is misleading.
- M G WARRIER (ET)
- M G WARRIER (ET)
Now Aadhaar link mandatory for card transactions at merchant locations
.....Aadhaar is currently used by banks to establish identity while opening bank accounts, which can then be used to make sure that subsidy payments are routed directly to beneficiaries. RBI had directed banks to issue chip-based cards by November 30 to tackle rising fraud.....................
India’s top eight retail chains report rising card payments in big cities
Plastic is overtaking cash in India's modern retail stores; in many instances, in fact, it has already done so. This should bring cheer to the Reserve Bank of India and the government because it means controlling fake currency and black money becomes easier...............
Read - ET........
Kisan Credit Card to be converted into smart card
..........“All KCCs will be converted to ATM cards by March 2014. Beneficiaries registered for mobile banking would also be able to pay through their mobile too. In the new smart card system, new KCC money could be withdrawn from any ATM or even swiped with a fertiliser, pesticide or tractor dealer, just like a regular debit or credit card,”........
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