......The miasma of suspicion that pervades our society today will ebb. The Reserve Bank of India intends to play its part in making this happen.” Assessments of India’s economy seem to swing between over- exuberance and selfflagellation, with foreign analysts joining Indians. A few years ago, during India’s high growth phase, India could not go wrong. Commentators talked of “ Chindia”, elevating India’s performance to that of its northern neighbour. Today, with India’s slowdown, India can do no right. An unfortunate side- effect of the clean- up of large scale corruption was that bureaucratic decision- making became more risk averse, leading to a policy paralysis. But the reality is different.......
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, December 9, 2013
RBI: prudential, not prudent
.......While RBI has been watching from the sidelines, asset quality has graduated from being a bank-specific issue to becoming a banking sector problem. It has gone beyond the stage where a few corporate accounts are posing a problem for individual banks. From a macro and policy perspective, it is now over-leveraged sectors rather than over-leveraged companies that are the problem..........
RBI history - A.Seshan
.......The RBI will be rendering a signal service to the academic community if it can bring out an abridged version of all the four volumes in, say, 400 pages. The price will also be moderate compared with the amount of Rs 2,195 one has to pay for the latest volume alone. The work involved should be simple enough to publish the volume next year marking the 80th anniversary of the passing of the RBI Act (1934) ..........
Larger messages from economic data
...... However, highly susceptible to interest rate changes, manufacturing cannot possibly look to the RBI for an easier stance at least for the next few quarters. This is because inflation remains high. The second point is that the data relating to industry — the IIP numbers especially have often been faulted for their inconsistency. The services sector, normally the star performer, was down in the second quarter, growing by just 5.9 per cent. An important sub-sector — community, social and personal services — slowed significantly to 4.2 per cent from 9.4 per cent in the previous quarter. Considered to be a proxy......
NHB chief may become full-time PFRDA member
The
Pension Fund Regulatory and Development Authority (PFRDA) is all set to
get a new management with former chairman Yogesh Agarwal stepping down.
Agarwal quit after being snubbed by the government which did not
include him in the team that was constituted to search for two full-time
members for the authority. According to sources, R V Verma, chairman,
National Housing Bank, is among the frontrunners to be a full-time
member. But with the government having begun a search for a chief as
well, it is very likely that all the appointments would be announced
simultaneously next
month. The process of filling up the chairman’s position hasn’t yet
taken off given that Agarwal resigned abruptly last month. But the buzz
is that the new appointee may not be from the IAS cadre.
TOI
TOI
Obituary
We are sad to inform that Smt. R.JANAKIRAMAN Wife of Sri R.Janakiraman, Former Dy.Governor, RBI passed away around 1.30 p.m. on 8.12.2013. The last rites will be performed around 9 a.m. on 9.12.2013.
Address:
960, Lakshmanaswamy Road, West K.K.Nagar, Chennai. Phone Contact No. 9962585896 (Sri Narasimhan, Brother of Sri R.J) Land line no. 23666955
We pray for the soul to be rest in peace and Convey our heartfelt condolences to the family members.
- B.Chandraiah, Moderator
- B.Chandraiah, Moderator
RBICHENNAIFRIENDS (Yahoo group)
__._,_.___
Rupee finds place in Pakistan state bank museum, thanks to Indian journalists
......According to the SBP, the Reserve bank of India had ignored their request, when they asked them to send some Indian rupees. While taking the round of the museum, the 14 visiting Indian journalists found that currencies of different countries were kept except that of India. Some of the members questioned the museum director Dr Asma Ibrahim, and inquired why the Indian rupee notes and coins were not displayed............
Awaiting ‘one rank one pension’
Narendra Modi, the prime ministerial candidate of the BJP, while addressing a rally at New Delhi, in which a few bigwigs from defence pensioners were present on the dais, had announced that he would certainly fulfill their ‘One Rank One Pension’ demand of pensioners were the BJP to come to power in 2014. Naturally, he was greeted with wild and resounding applause! It would be wrong to entreat my fellow pensioners (they are citizens first, pensioners latter) to hold any brief for the BJP or the Congress or any other party. About 30 lakh GoI pensioners are waiting for more than 10 years for a miracle to happen, to get OROP. About two lakh LIC, RBI and bank pensioners are fighting legal battles in various high courts and in the Supreme Court. All the court judgments delivered during the last 10 years, without exception, are in favour of the pensioners, but the GoI and the managements are playing with the psyche of pensioners, (majority in their 70s/80s) to get court cases adjourned unabated on one or the other pretext, on frivolous/flimsy grounds.It is high time the government at the centre concedes this genuine demand of the beleaguered class of citizens, the pensioners.
- P B Niralay (FPJ)
- P B Niralay (FPJ)
A Frisky Proposition
Bank employees dub it as the big corporate fraud. Economists and some political leaders blame it on the downturn since 2008. Many of the corporates themselves prefer to switch the conversation to massive loan bailouts to farmers. But Reserve Bank of India deputy governor K.C. Chakraborty was clear as day during his presentation before a bankers’ conclave last month. “The existing levels of non-performing assets (NPAs) are manageable, but if corrective actions to arrest NPAs are not initiated, the stability of the financial system will be at great risk.”.......
Tight monetary policies in Pakistan, India fail to arrest inflation: experts
...........Ashraf said the ineffective monetary policies of both RBI and SBP are a cue to the respective central banks to go back to drawing boards and re-examine monetary policy settings. He said cost push inflation in Pakistan would persist until the cost of doing business remains high. High interest rates will not address the issue, he added.Similarly, he said, in India it will be impossible for the banks to respond to tight monetary stance of the RBI as there is more credit available than credit-takers.
SBI chairperson inaugurates 27 'all woman' branches of the lender
.......Ms Bhattacharya addressed the staff in Chandigarh and gave her roadmap for activities to be pursued to take the bank to greater heights and set new benchmarks to be achieved in near future.
Read.............
Read.............
Logistical challenges for banks implementing TCF
..........."While the intent and basic structure for TCF is in place in India for banking products, it is now being considered to extend TCF structure to third-party products like mutual funds, capital markets and insurance products sold by banks," RBI said. The Banking Codes and Standards Board of India and the Banking Ombudsman Scheme are examples. But how feasible is it to extend the same to third-party products, which are not regulated by RBI? RBI itself says successful implementation will require a change in mindset in firms' leadership and that TCF measures were used to influence performance appraisal and incentive structures..........
PSU banks: who will stem the rot?
........At a recent bankers’ meeting, Rajan hinted at bank chairmen with limited tenure dealing with stressed assets by evergreening them and leaving to their successor to deal with it, while Chakrabarty was blunt in saying that wrong appraisals were leading to diversions, over-leverage, fraud and non-performing assets (NPAs), and “they are all inter-related”. Evergreening refers to the practice of giving fresh loans to pay off the old loan of the same bank or other banks. Chakrabarty, who was a commercial banker and chairman of Punjab National Bank before moving to RBI, has tracked the growth and development of bad assets in the Indian banking system in the past two decades through a brilliant PowerPoint presentation that he had made at the bankers’ meeting.........
Bank recovers Rs 12 crore from defaulters, issues notices to 218
NASHIK: The Ganesh Sahakari Bank, which had attracted the ire of Reserve Bank of India (RBI) for its rising non-performing assets ( NPA), has recovered nearly Rs 12 crore from its defaulters and issued notices to 218 of them, even as the restriction of six months imposed on the bank has now been extended till March 2014.......
How banks can improve product distribution
The
RBI is trying to put in place a regulatory mechanism for third-party
product (TPP) distribution by banks. There is considerable ire directed
at banks for ruthlessly pursuing profits by distributing insurance and
mutual fund products while short-changing their customers’ interest.
There have been calls in the media to ban banks from distributing
third-party products. However, killing a low-cost distribution channel
would hurt the investor interest even more. How does TPP work and what
needs to change?.........
Read - TOI
Read - TOI
Will new IIBs match PPF, tax-free bonds?
............Experts also believe that CPI-linked bonds will not be able to wean people off gold. For, the product will face stiff operational challenges. If banks are not offered adequate incentives, it is likely that the CPI-linked IIBs may well go the National Pension System or NPS way, a failure. Other procedural hassles like the need to open a bond ledger account and pay fine for early redemptions, could work against CPI-linked IIBs.
Indian banks make most of RBI’s FCNR deposit scheme
.......The scheme was announced by the RBI in September to attract foreign fund flow in a bid to stabilise the rupee which had slipped below 68 against the dollar. The scheme closed on November 30. Bankers say that around one third of the total $34 billion came as deposits while the remaining came as overseas borrowings by the banks...........
HDFC Bank tops chart in FCNR(B) deposit mop-up
HDFC Bank has garnered the maximum amount of funds via the concessional swap window for FCNR(B) deposits. The window, made available by the Reserve Bank of India (RBI) to banks in order to attract dollar inflows to stabilise the rupee, was open from September 4 to November 30............
Dena Bank to open office in London this month
State-owned Dena Bank plans to open its first overseas office in London by the end of this month. "We have got approval from RBI and government for opening a representative office in London. The UK regulatory authority has also given informal permission," Dena Bank executive director Ashok Dutt told PTI. It will be inaugurated by end of this month, he said, adding the bank intends to make it a full service branch in another one year. The bank also intends to open branches in Hong Kong, Nairobi and Johannesburg..........
The death of services
.....In October, new RBI Governor Raghuram Rajan said in Washington, "We need to change the perception about India. Yes, there are inflation problems, financial-sector turmoil and slower-than desired growth. these are issues we need to deal with, but these are not crisis issues." Unfortunately, India has got bogged down with these very issues, the general sentiment refusing to turn around...........
Black gold and yellow metal
..........It cannot be mere coincidence that the Reserve Bank of India (RBI) released the balance of payments for the second quarter of 2013-14 (a month ahead of schedule) at around the same time that it ended the dollar swap facility with oil marketing companies (OMCs). The bet seems to be that the depreciation pressures that the revived demand in the open market from these dollar guzzlers (OMCs pick up $800 million from the market on average every day) would be offset by the positive sentiment that evidence of a more manageable current account balance would foster. This is keeping with the new avatar of the RBI where it is managing the exchange rate more actively essentially by communicating with the markets a lot more than under the previous regime. That leaves us with ............
The dilemma of gold
......If gold was really a hedge against inflation you will hang on to it. The gold will stay with you since inflation has also come to stay. Our misgivings about further value erosion that the rupee may suffer will turn you into an eternal consumer. Scientifically it has been proved that there is no correlation between gold and inflation. Idle Asset Gold loses all its charm when you realise that it does not give any current yield. The primary role of...........
Bitcoin bubble
..........And ironically, a Bitcoin billionaire could starve to death, because you can't buy food with it. But as commerce migrates online and sunders ties with banknotes and the paper trail, digital currencies will become mainstream. Bitcoin is only the first mover in a sunrise sector built on new ways of calibrating scarcity and value, the basis of all currencies. But......
As bitcoin puzzles regulators, advisory likely to warn of risks: report
........At the same time, the experts are also raising concerns about cyber security issues, given the huge scope of money laundering and other illegal activities through use of an unregulated digital currency concept. "The real fear is that Bitcoin can be used to help money laundering," said V Rajendran, advocate and President, Cyber Society of India. "The concept of a digital currency, unregulated by any monetary authority, is a recipe for disaster. The RBI must step in and regulate this immediately. Lured by so-called appreciation in bitcoin value, people may invest in this and risk losing everything," he added..............
Is 'virtual' the new reality?
.....Bitcoin is a virtual currency, or crypto-currency, used only for online transactions. Though not backed by any central bank, it is traded on a number of exchanges or swapped privately. It is generated by a process called 'mining', for which one requires particular software. Theoretically, it is possible for all computers across the world to run the software and locate bitcoins by solving an algorithm. But it is akin to winning a lottery by solving a puzzle; only some computers can do this because one needs high-end ones with fast processors and uninterrupted power supply, difficult in India. This is what makes bitcoins so valuable, not just in India but worldwide...........
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