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.
Wednesday, April 30, 2014
Dr Duvvuri Subbarao Appointed Distinguished Visiting Fellow at NUS Business School
KCC - Emperor of 'freedom of expression'
My View on "Dr KC Chakrabarty's post retirement cause for bank...":
Very interesting and informative article. The article also takes note of Chakrabarty’s approach towards the challenges now being faced by the financial sector. He was at times, according to his own admission, contrarion and never felt bad about being ‘controversial’ while using his ‘freedom of expression’. He will be remembered in RBI circles for his open mind and anxiety to find solutions for problems in his own way. Even his exit made a news, as perhaps, Chakrabarty is the first person in RBI to declare that it is the individual’s option to decide ‘when to stop’.
- M.G.Warrier
RBI to have a 5th dy governor; more executive directors
With new govt, RBI may face growth-inflation dilemma
.........According to him, RBI’s primary job, among others, is to arrest inflation. “RBI can’t do it alone. It has to be a concerted effort, with the government.” On its part, RBI has continued to remain “focused on inflation”. Some members of the RBI technical advisory committee, which met on March 26 and assessed the market situation, have expressed “concerns” on inflation. ............
Conference on Ethics and Corporate Governance
Corporate Governance assumes much significance in today’s corporate world as we see collapse of institutions, systems and procedures due to poor governance. Voluminous work has been done in the area of corporate governance through studies, debates and conferences. The need for such exercises is felt more in the modern world.
Speakers include
Ms. Chitra Ramakrishna, Managing Director & CEO, NSE Ltd.
Shri G. Gopalakrishna, Director, CAFRAL, Former Executive Director, RBI
CS Shri Vikas Y Khare, Vice President, ICSI
Shri B. V. Chaubal, Dy. Managing Director, SBI
Shri M. S. Sahoo, Secretary, ICSI
Shri V. S. Sundaresan, Chief General Manager, SEBI
Shri Sandip Ghose, Director, NISM
Dr. Amitabh De, Director, IIM, Shillong
Shri Amarnath, Chief General Manager, RBI
Shri G. Gopalakrishna, Director, CAFRAL, Former Executive Director, RBI
CS Shri Vikas Y Khare, Vice President, ICSI
Shri B. V. Chaubal, Dy. Managing Director, SBI
Shri M. S. Sahoo, Secretary, ICSI
Shri V. S. Sundaresan, Chief General Manager, SEBI
Shri Sandip Ghose, Director, NISM
Dr. Amitabh De, Director, IIM, Shillong
Shri Amarnath, Chief General Manager, RBI
CAFRAL - Program on Transfer Pricing in Banks
....The objective of the program is to provide conceptual clarity and practical insights on Transfer Pricing methods and its linkage to strategy and risk management......
Launch of Rs 10 plastic currency notes by RBI delayed: report
The Reserve Bank of India's plan to put in circulation Rs.10 plastic currency notes on trial basis will be delayed as the initial bids have failed to qualify the technical criteria and the whole process will start again, according to a functionary of the apex bank. "The selected bidders failed in meeting the technical specifications of the plastic banknotes in Rs. 10 denomination that RBI is proposing to introduce on a trial basis, necessitating undertaking the exercise afresh, thereby delaying the process," the senior RBI functionary said..........
Mere possession of a forged note is not punishable
The problem with having a fake currency note is that not only is it mostly unusable, there is also a threat of punishment. The Reserve Bank of India (RBI) states on its website that even though mere possession of a forged note does not attract punishment, holding a note knowing that it is a fake and then intending to use is it as a genuine note is indeed punishable under section 489C of the Indian Penal Code, 1860 '...........
Electronic Payments in Retail: Are we moving from Cash to Less-‐Cash Society?
....In order to have large-scale proliferation of electronic payments system, the retail payment infrastructure or ecosystem has to be inclusive. There is no business case of dedicated eco system separate for card payments at retail, BCs and other payments system like mobile/DTH recharges/Billpayments carried out at retail. Cash on the other hand needs to be discouraged. Currently cash from ATM is free (5 transactions of upto Rs 10,000 per transactions in a month) and Debit/Credit card use on PoS terminal costs the merchant MDR. It should be reversed to encourage electronic transactions......
IDBI Bank Elevates 6 Officials to EDs
State-run IDBI Bank has elevated six executives of chief general manager (CGM) rank to executive directors, three people with the knowledge of the matter said. These positions had fallen vacant due to retirements, transfers and elevations.
The executives promoted include............
Read - ET
The executives promoted include............
Read - ET
SBI signs up Reliance Money Infra as business correspondent
..........State Bank of India has signed up Reliance Money Infrastructure (RMIL), an Anil Ambani Group company, in a ‘business correspondent’ deal to source a range of banking services. The deal was concluded on February 25 but has been made effective with retrospective effect from October 5, 2013.............
RBI might not push bond index plan
............ RBI could be waiting for better macroeconomic stability domestically and a little more resilience in the financial markets before taking a step like this. This is because such a step might lead to more volatile bond flows into the country. RBI might not want this volatility as of now,” said Suyash Choudhary, head, fixed income, IDFC Mutual Fund.................
Deserving the honour
......The choice of Bandhan and IDFC by the RBI as the first two to be granted bank licences among the 26 which had applied, has surprised many. Among those still waiting are biggies such as the Aditya Birla Group, the Reliance ADA Group, the Bajaj Group, the Shriram Group, L&T Finance, Indiabulls and LIC Housing. Why these two? "A question the regulator had been grappling with was how to avoid creating replicas of existing private sector banks," says a person who has been close to the process. In the last two decades, the RBI has cautiously allowed a dozen new banks to emerge, but of the seven which have survived - and whose share of deposits and lending in the entire banking sector is around 15 per cent - most are indeed clones of the banks which already existed, offering the same services. Given their background, Bandhan and IDFC are expected to be different.......
When The Going Gets Tough, State-run Banks Get Going
.........To be sure, lenders selling pledged properties, or stocks are not new. But the fact that they are doing for some high-fliers and that they have got a strong backing from the RBI to do so is what is differentiating the current events from the past. Another stick that banks can now beat the erring promoters with is the power to throw out the management and bring in professionals to run troubled companies. Many of them are sceptical of this approach succeeding.............
Read - ET
Canara Bank to raise over Rs 500 cr via QIP route
....The bank had on Monday announced that it would consider rasing funds through the qualified institutional placement (QIP) route or through preferential allotment during the current financial year. The bank's board had also constituted a committee of directors to work on the modalities of the two options.....
When Gold Standard Had No Taker
When the British attempted an economic unification of this porous nation, they hit upon the idea of a single currency in a substantial part of the country which had territories under the British as well as princely states. The debate was to have a gold standard, or silver standard. If it were early 21st century, gold would have been a clear winner. But in 1835, it was not so because price of gold was falling rapidly due to discovery of new mines................
Tuesday, April 29, 2014
Dr KC Chakrabarty's post retirement cause for banking
.....Such is the multifaceted personality of Dr Chakrabarty, who never shirked his responsibility to the banking public, though there were several obstacles in his path to achieve his objectives. Now that he has laid down his office, here is wishing him all the best in the future. He had said in one of his speeches thus: “I see the tectonic shifts occurring in the banking space ahead. I cannot afford to rest. As they say, age wrinkles the body, quitting wrinkles the soul. So I can go on and on …..”
Rajan’s Job Safe If Modi Wins India Election, BJP Treasurer Says
..“Just because he’s been appointed by someone else doesn’t mean we have an agenda to remove him,” Goyal, a lawmaker who is on the standing committee on finance, said in New Delhi yesterday, referring to Rajan. “No government can dictate to the central bank. It’s an autonomous body and he holds a constitutional position. We don’t have any likes or dislikes.”.....
Fair & Stable Financial Services
.......The same is true of insurance where, too, the regulator does not seem to understand that keeping the faith of consumers must be a priority. As far as the Reserve Bank of India (RBI) is concerned, there is now an inclination to work at a comprehensive consumerprotection framework, but RBI still has no formal engagement with consumers. The top brass at the banking regulator believes that ........
RBI directs RTGS participants to use correct transaction code
..........."It has been brought to our notice that some of the RTGS participants are initiating Own Account Transfers (OAT) from RTGS settlement account to their current account maintained with RBI using the customer transaction code, using the TTC value '1000' allotted for customer transactions instead of '1800' allotted for OAT. "The usage of wrong TTC value for transaction in RTGS leads to unintended consequences," RBI said in a notification..............
Updation of pension and fresh option - United Forum's circular
.........The United Forum met new Deputy Governor, in-charge of Administration (Shri R.Gandhi) who was greeted by us; he assured that Bank would do its best to protect the interest of its staff and would not agree to any proposal / suggestion of the Government inimical to staff's interest...........
Size really doesn’t matter
Incidentally Sridhara was questioned by RBI in the context of forging currency notes. He was grilled for three hours in a dark room as they suspected him of forging the Governor's signature. RBI requested him to destroy the paintings but he refused........
RBI constitutes GAG to implement a national GIRO-based Indian Bill Payment System
..........The GAG has observed that bill payments landscape in the country are mostly biller-specific and thus do not provide an environment to customers to make bill payments through an inter operable system in a seamless and efficient manner at many of the agent / customer service points that exist today. These gaps..........
Global Growth Likely To Be Better Than Anticipated, But India Concerns Remain
“Global growth is likely to be better than anticipated, led by advanced economies, especially the US, while growth impulses are still relatively weak in the emerging market economies. In the US, of the two targets indicated by the Federal Reserve – inflation at 2 per cent and unemployment at 6.5 per cent – the unemployment target may be hit earlier, leading to wage pressures, and hence inflation. As a result, the Fed may raise interest rates earlier than is being anticipated. Some Members were of the view that global recovery may be weaker than expected..........
Recent RBI norms could result in a spurt in bad loans: Moody’s
The recent Reserve Bank of India (RBI) guidelines that restrict lending by banks to overseas units of Indian firms can lead to further bad loans, Moody’s Investors Services said on Monday..........
Rate hike cycle has come to an end: Ashima Goyal
Ashima Goyal, an external member of the Reserve bank of India’s technical advisory committee and professor of economics at the Indira Gandhi Institute for Development Research, Mumbai, discusses a range of issues............
BJP wants stronger Rupee, will that be good for the economy?
............Then, is the BJP -- assuming that it leads the next government - on a collision course with RBI? Unlikely. RBI would be happy to buy the inflow of dollars, buoyed by BJP's promises, to build its forex chest - a slice of which can be used when some of the hot money moves out. Naturally, there would be friction if the BJP, simply to prove a political point, deters RBI from buying dollar
Nagpur District Central Cooperative Bank may need Rs 22crore more in revival funds
..........At that time, it had been estimated that NDCCB would need Rs 60 crore for revival. However, a review of the books has shown that at least another Rs 22 crore would be needed. Now, the bank is waiting for the elections to end so that the code of conduct is lifted and a decision can be taken on the package. The last minute change in requirement has led to a fresh audit..........
Kapur successors not promoters: YES Bank
............ “Madhu Kapur being successor of Late Mr. Ashok Kapur, cannot be considered as Indian Partner or India Promoter and, accordingly, cannot inherit the rights under Articles of
Association or the status of Promoter of YES Bank.” ...................YES Bank's stance on Madhu Kapur dims hope for out-of-court settlement
.........."There is no scope for an out-of-court settlement now. Madhu is the legal heir of Ashok Kapur and as per the bank's articles of association inherits the rights of a co-promoter. She should be allowed to nominate directors on YES Bank's board. Unfortunately, the bank is not willing to recognise her rights and settle the dispute. So, she will wait for the court's verdict,"...........
Spadework on for new types of bonds
.............As for Sukuk bonds, popular in the Islamic world, Indian regulators haven’t approved these instruments as unlike the traditional debt products, these do not provide a fixed return. The so-called covered bonds are mortgage securities, backed by the issuing authority. Last year, National Housing Bank had created a working group to look into these. Headed by a Sebi executive director and with representatives from the Reserve Bank and the Union finance ministry, it has already given its report...................
Monday, April 28, 2014
WB discourse on financial inclusion - Dr.N.A.Mujumdar
This article was written by Dr N A Mujumdar before his demise on April 6, 2014
...........Hence financial inclusion is not a mechanical process of multiplying numbers. Creating new bank accounts does not necessarily translate into use and realisation of benefits. Financial inclusion is typically defined as the proportion of individuals and firms that use financial services. But to get the real picture, one has to look beyond mere numbers. The report cites two extreme cases to demonstrate the point. One, the case of the dormant accounts of South Africa referred to above. India has gone through the process, and in fact, the Reserve Bank of India has addressed giving a qualitative content to the concept of financial inclusion..............
Leave RBI alone
Former RBI deputy governor K.C. Chakrabarty’s statement that it should be made accountable to Parliament as it is created by the legislature, and has “more autonomy and less accountability”, is surprising even though coming from someone as outspoken as Mr Chakrabarty. He admits the RBI’s current accountablity to Parliament is through the finance ministry, but obviously feels this is not direct enough as he suggests a debate on it. That could be fraught with danger........
RBI is now govt’s ATM
...............But the main point is RBI is making a lot of money. And at the end of the year, much of its profit is paid as dividend to its master. Which is the Government of India. Last August, it paid a dividend of Rs 33,000 crore to GOI, equal to half of the 3G bonanza, and twice of its previous year. At this rate it is proving to be a reliable ATM for the government. Is that a healthy relationship?.......
Not an easy task, but good in national interest
My View on "RBI’s Accountability to Parliament – A. Seshan":
RBI Accountability to Parliament - through Government (Executive) or directly placing it's Annual Reports to Lok Sabha (Speaker) and Rajya Sabha (Chairman) i.e. Legislature under Constitution of India will need revisit to RBI Act and political consensus for amendments. In the power corridors, day to day actions and precedents matter. Bureaucracy is live to coerce standards vis a viz statements > the authority flow from political authority through them.
As Protocol Officer, I have closely watched the placement of Governor / Dy. Governors / Central Board Directors status in public domain. Arms twisting methods were made from Finance Ministry and RBI side both. Governor forwarding letter addressed to Finance Secretary on the front page of RBI Annual Reports was talked like a report from a chairman of public sector undertaking to controlling officer >> his superior. There were many instances where either one of them was made to wait for the other in his office for few minutes to express superiority though both belonged to bureaucracy cadre. we as a common man understand this body language.
I have watched many such occasions even during prior appointment meetings. I attended a Finance Secretary for prefixed meeting with Governor where FS was asked to make wait for 5 minutes in conference room before taking him to governor's chamber (normally FS was directly taken to Gov chamber)as per rule. When Chief Economic Adviser who was waiting in conf room saw FS he was too surprised and raised eye brows. after 5 minutes Gov comes to conf room and takes FS with him to his chamber by putting his arm on his shoulders. Big men have big behaviors and style of working.
In such a scenario, RBI accountability to parliament will not be a easy task in politico - bureaucratic nixed setup. There could be many more such day to day encounters. But, I will be happy , if it is done in national interest.
- Chandrabhan Gupta
Counterfeit 5 and 10 rupee notes are in circulation!
........ When she walked into a bank to verify the same, she was shocked to confirm it was indeed a fake currency note and also to hear bank officials admitting that it was common these days to get Fake Indian Currency Notes (FICNs) in denominations of Rs 5, Rs 20, Rs 50, and Rs 100! All those who think that fake currencies in wide circulation are restricted to higher denominations of Rs 500 and Rs 1,000 can disabuse themselves..........
Ignorant courts
My View on "High Court notice to Reserve Bank of India on reli...":
It is a pity that High Courts are ignorant about bank notes and coins. While the former are issued by the RBI, the latter are minted by the GOI and supplied to the RBI for distribution.
- Kishore
Updation should be at par GOI
This is in continuation of my mail to you a couple of days ago. If we are required to fall in line with the regulations of the Government in relation to Pension Updation (revision), we should also be entitled to the benefit of the regulations granting higher percentage of pay as basic pension when the pensioner attains the age of 80 years and above. We should also have the benefit of the merger of a certain percentage of DA with 'Pay' once DA comes to 100 % of the 'Pay' as is available in the Government. In other words, we should have all the benefits available to the pensioners of the Government.
- A.Chandramouliswaran
Booby trap
My View on "'Pay revision' and 'Pension updation' two sides of...":
By dangling a carrot of 'updation' and re-opening of pension option to the existing employees, the Govt. of Inida is very cleverly and motivatedly trying to break the unity of RBI employees-past & present. All of us should be wary of the hideous motives of GOI/Min. of Finance and should not get into the booby trap.
- Anonymous*
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Let's continue our mission with new Govt. also..................
There appears to be confusion and loss of perspective while dealing with the issues and we have forgotten that the RBI Management had assured A+ position to the RBI employees right from its inception which has found expression in various settlements reached with the various Associations. To quote from the RBI History: 'As a Central Bank, the Bank had special responsibilities as an employer.....it had to provide sufficient remuneration and incentives to attract personnel of high calibre, with integrity and ability well above the ordinary.....In the tradition of a progressive employer, welfare measures such as passage concessions, medical facilities and provision of housing accommodation were also taken.....he (Governor) and the Directors were prepared always to view the cause of the staff sympathetically ad have already laid down a policy that we should be prepared to give our staff slightly more than what other comparable are prepared to pay, thus giving a lead to a policy of enlightened employment of white collar labour.' Yes, employees of a Central Bank deserved better treatment in the matter of wages and perks and this solemn assurance was upheld on the floor of Parliament. My humble request to Shri L.R.Parab is to lay our hands on the said Statement if necessary under RTI. It was sometime in 1986/87. I had prepared a note on the subject sometime back which seems to have been overlooked for some inexplicable reasons. (I was closely associated with handling of these issues when I was in erstwhile PPD). To be specific, in terms of para. 2(2) of the Staff Regulations, 'Nothing in these Regulations shall operate to override any special agreement entered into by the Bank with any of its employees.' There is legal sanctity behind these Settlements and the Management simply cannot withdraw any of these service conditions unilaterally (at the behest of the Govt). One recalls, the Government had told RBI to withdraw the facility relating to travel abroad on LFC. (This was an extension of the travel to Nepal which was already available to employees hailing from Nepal). In reply, the Govt. were told that the facility cannot be withdrawn unilaterally by the Bank, which will amount to a breach of the Agreement. Later, the Govt. did not pursue the matter and the facility continues to this day. The Governor and the Central Board are new and cannot be expected to be fully aware of the historical perspective and further developments unless properly briefed. The basic issue is, has there been any change in the situation or circumstances when the approval for introduction of the Pension Scheme was accorded by the Government. Govt. officials on the Board may come and may go (or for that matter some top bosses in RBI) but should this relationship between the RBI Management and employees and the basic structure of service conditions including wages/perks and the Management's commitment can be allowed to change in a manner detrimental to the interests of the employees (including retired employees). If the present Govt. has failed us, let us take up the issue with the new Govt who hopefully would restore the autonomy/independence of the credible institutions like RBI as promised by them.
- Surendra Khot
Now, nano ‘fingerprints’ to secure credit cards
Scientists have developed invisible nano ‘fingerprints’ that could be embedded into money, gadgets and credit cards, making it impossible to counterfeit the objects. Unique patterns made from tiny, randomly scattered silver nanowires have been created in an attempt to authenticate goods and tackle the growing problem of counterfeiting. The nanoscale ‘fingerprints’ are made by randomly placing.........
Read - TOI
Read - TOI
Online payments, fund transfers rise in acceptance
.................‘The payment system vision document: 2012-15’ of the Reserve Bank envisages encouraging electronic payment systems for ushering in a less-cash society. Its vision is to ensure payment and settlement systems are safe, efficient, interoperable, authorised, accessible, inclusive and compliant with international standards............
Every problem is an opportunity to innovate
.........Around that time, a committee appointed by the RBI recommended involving women, tribes and youth in an inclusive approach to finance for better rural reach. But putting together a proposal and mobilising about 1100 women to collect a mandatory amount of share capital (`6,00,000) was not easy. “Back then, very few women ventured into this sector; even the RBI was nervous because it had never issued a license for such a bank. I did a lot of homework and asked many questions to ensure there would be no glitches. Despite this..............
FinMin directs banks to deal firmly with fraud, wilful default
..........."Cases of fraud have been detected in many banks. There is no difference in fraud and wilful default as both are intentional in nature," Financial Services Secretary Gurdial Singh Sandhu told PTI. "So banks have been asked to declare such cases as wilful default and appropriate legal action should be initiated by banks," he said..................
Pricing sub-sovereign debt
.......This proposal of pricing state government debt at market-based valuations which RBI is currently contemplating is a natural step ahead of the fixed spread method. RBI’s proposal to price state government debt at market-based valuation will make credit availability pricier for states, even those ones that have a robust economy. Currently, ............
Indian asset manager sees strong investment case for equities and debt
......RBI has given a lot of stability to the rupee. The RBI measures combined with curb on imports have narrowed the current-account deficit. “The country has demonstrated its ability take strong and swift action in the face of a currency slide and capital outflow that has differentiated India from other emerging markets,” said Jagwani..........
IDBI BANK ‘More Branches will Make IDBI More Competitive’
......After I had taken over, we opened 305 branches in a year. And this year, we would open 500 branches. Now, see Union Bank and IDBI Bank would have the same asset size, but they have 5,000 branches and we have just 1,400 branches. So, I am scaling up branch footprint.....
Businessman gets anticipatory bail
........Based on a complaint, the Cyber Crime Cell of CCB investigated the matter. It came to light that the petitioner’s driver purchased a small fraction of shares from the complainant. As a share holder, he obtained a copy of an RBI’s report concerning certain financial aspects of the complainant, doctored it and uploaded it on a website, it was alleged. The IP address of the website was traced to the petitioner............
Private banks shun asset reconstruction firm route to offload bad assets
Even as the public sector banks have made a beeline to dispose of their bad loans to the asset reconstruction companies (ARCs) in the March quarter, private banks are not only unenthused in adopting this route, but have also virtually shunned this.............
Waiting to write ‘history’
..............The latest in the series is an authorisation from the Finance Department to a senior secretary to enter into an agreement with the Reserve Bank of India for opening of the government account in favour of the Governor of Telangana State for carrying on ordinary banking business as well as meeting public debt from June 2 when the State will come into existence.............
Cannot consider Madhu Kapur as co-promoter: Yes Bank board
.....“Madhu Kapur being successor of late Ashok Kapur cannot be considered as Indian partner or Indian promoter and accordingly, cannot inherit the rights under articles of association or the status of promoter of Yes Bank,” the spokesman said. “Since the advocates of Madhu Kapur as start up to any amicable resolution requires the bank to recognize her rights as Indian partner, the board is not in a position to accede to any such request for the reason mentioned above.”..........
The great Indian rate trick
A Reserve Bank of India (RBI) working group’s suggestion to create an Indian Banks Base Rate (IBBR) to which all commercial banks can link their loan rates is yet another shot by the regulator to bring in transparency in loan pricing and ensure better transmission of monetary policy. Reset every month, IBBR will be an average of the prevailing base rates of top 14 public sector banks, seven private banks and three foreign banks. This needs to be done as the existing base rate system has turned into a joke..........
Saturday, April 26, 2014
RBI’s Accountability to Parliament – A. Seshan
Apropos of Deputy Governor (Chakrabarty)'s statement that RBI should be accountable to Parliament I am reminded of the debate we had in the Bank during the time of Dr I G Patel as Governor. A suggestion was then made by the Finance Ministry, at the instance of a Member of Parliament, that the Reserve Bank of India should submit its Annual Report to the Parliament rather than the Ministry of Finance. As a Deputy Director in the then Banking Division of the Department of Economic Analysis and Policy I was asked to handle the matter on a reference from the Secretary’s Department. At this point of time I can only remember a few points I made then. In the first place, I argued that even the so-called independent central banks of the time, with the exception of the Bundesbank, were losing that status. For example, I pointed out the fact that the Federal Reserve was being subjected to public audit and the Chairman of the System needed to appear before the Congressional Committees to justify the central bank’s policy from time to time. The confrontation between President Truman and the US Federal Reserve System on the question of who decided the Treasury Bill rates was resolved on the understanding that the Fed was ‘independent within government’ and there was no absolute independence whatsoever. I proposed that there might not be any objection to the proposal from the Ministry of Finance and the RBI need not feel panicky over the matter. I do not know what the final reply was from RBI to Government. Surprisingly the RBI History has not touched on this episode.
Even now the officials of the Bank appear before Parliamentary Committees like the Estimates Committee to answer questions on the RBI’s policy. I myself was a member of the delegation from the Ministry of Finance that appeared before the Estimates Committee headed by Shri Jaswant Singh to discuss public debt. It was called in the context of my article on the burden of domestic public debt in India that had been published in the Reserve Bank of India Occasional Papers(June 1987) wherein I warned of the possibility of an Internal Debt Trap. It led to an intense public debate in the press and the Parliament with appreciative comments from Shri N A Palkhivala in all the budget speeches he gave in 1988 all over India. There is already accountability of the Bank to Parliament. Whether it can be further enhanced by the Bank being asked to submit its Annual Report to Parliament where it could be discussed like the Economic Survey should be a matter for public debate. There are many other issues like the objectives of monetary policy, autonomy of the Bank, etc., brought up from to time. I have suggested in the past that, instead of dealing with them in an ad hoc and piecemeal manner it will be useful to have a high-power committee on the working of the Reserve Bank of India that will inter aliaprepare a new law to replace the Reserve Bank of India Act 1934 after examining all the issues and keeping in mind trends in central banking in the new century. The thinking on central banking has undergone marked changes ever since the RBI Act was passed. In the last quarter century many central banks of both the developing (eg. The Philippines) and the developed (eg. New Zealand) countries have enacted legislation to replace the existing Acts on the central bank. It is time for the new government in New Delhi to consider the matter on a priority basis.
- A.Seshan, Economic Consultant,
{Former Officer-in-Charge, Department of
Economic Analysis and Policy,
Reserve Bank of India, and
(IMF) Adviser to National Bank of Kyrgyzstan and
Bank of Sierra Leone}
Even now the officials of the Bank appear before Parliamentary Committees like the Estimates Committee to answer questions on the RBI’s policy. I myself was a member of the delegation from the Ministry of Finance that appeared before the Estimates Committee headed by Shri Jaswant Singh to discuss public debt. It was called in the context of my article on the burden of domestic public debt in India that had been published in the Reserve Bank of India Occasional Papers(June 1987) wherein I warned of the possibility of an Internal Debt Trap. It led to an intense public debate in the press and the Parliament with appreciative comments from Shri N A Palkhivala in all the budget speeches he gave in 1988 all over India. There is already accountability of the Bank to Parliament. Whether it can be further enhanced by the Bank being asked to submit its Annual Report to Parliament where it could be discussed like the Economic Survey should be a matter for public debate. There are many other issues like the objectives of monetary policy, autonomy of the Bank, etc., brought up from to time. I have suggested in the past that, instead of dealing with them in an ad hoc and piecemeal manner it will be useful to have a high-power committee on the working of the Reserve Bank of India that will inter aliaprepare a new law to replace the Reserve Bank of India Act 1934 after examining all the issues and keeping in mind trends in central banking in the new century. The thinking on central banking has undergone marked changes ever since the RBI Act was passed. In the last quarter century many central banks of both the developing (eg. The Philippines) and the developed (eg. New Zealand) countries have enacted legislation to replace the existing Acts on the central bank. It is time for the new government in New Delhi to consider the matter on a priority basis.
- A.Seshan, Economic Consultant,
{Former Officer-in-Charge, Department of
Economic Analysis and Policy,
Reserve Bank of India, and
(IMF) Adviser to National Bank of Kyrgyzstan and
Bank of Sierra Leone}
Rajan responded with monetary policy panel on interest rates
........ Reserve Bank of India Governor went along with the unanimous recommendation of the members of its monetary policy panel to maintain status quo on interest rates in the Monetary Policy Statement for 2014-15. The eleven member Technical Advisory Committee (TAC), which is headed by Governor Raghuram Rajan, on monetary policy said upside risks to headline inflation in the near term provide the rationale for a pause............
NABARD retirees tired...........
My View on "Pension updation?? Its Divide & Rule........":
In the case of NABARD pensioners GOI is behaving more heartlessly. Even the revision in family pension allowed to RBI pensioners is not allowed although the requirement of the GOI have been satisfied by the Bank, such as Board approval for statutorization of the Staff Rules which the GOI put as condition precedent. Even the Pension Regulations amendments as required by the GOI which have been approved by the NABARD Board and sent to the GOI and RBI are not approved till now. The plight of the pensioners who had retired prior to 1997 is much more pitiable. God knows when the GOI and its bureaucrats will wake up to the hardships of the pensioners of NABARD and extend relief.
- M V Gupta. Principal Legal Advisor (Retd) NABARD, Mumbai
PR & PU periodicity should be the same
My View on Pension updation?? Its Divide & Rule........
Dear Mangesh,
Pension Upgradation—Issues
Shri B.Kamath, my very good friend, is pained by the delay in giving effect to the approval in principle given by the Ministry on the captioned issue. He is fully justified in his reaction and many of the retired officers share his anguish. As Shri Kamath sees it, the delay is a result of the “Divide and Rule Policy” of the Ministry of Finance. So far as linking the issue of “rationalisation of perks” of the serving employees with the Pension Option and Updation issues, this criticism would be justified. Perquisites of serving employees have nothing to do with the issues under hand and hence Governor, with all the authority under his command, would do well to reject this part of the proposal with the contempt it deserves.
Let us come to the issues of the periodicity of pension updation and reckoning of ‘pay’ for updation (or revision as GOI calls it). The concept of pension updation, if I am correct, was introduced only in the 5th Pay Commission (perhaps improved further in the 6th Pay Commission) and hence, if we demand it, justifiably on the ground that our Scheme is on the lines of the GOI Pension Scheme, then the rules relating to fixation of ‘pay’ have to be on the lines of one prevailing in the GOI. In my view, if we insist that pay revision would have to be as hitherto, viz. once in 5 years, then the updation has also to be along with the pay revision. Otherwise, it would not be possible to ensure that all those who have retired from the same grade draw the same pension regardless of the date of their retirement. Let me give an example. My wife retired in the grade of CGM in July 2004 and she got the benefit of the pay revision with effect from November 2002. (I had retired in October 2000 in a grade higher but my pension is lesser than hers!) If another officer in the same grade as that of my wife had retired, say, after November 2007 with the benefit of pay revision given effect to from November 2007, his/her pension would be higher than the pension of my wife unless pension updation has been done along with pay revision in 2007. I am not sure whether it would be realistic for us to expect that pension updation has to be agreed in our case once in 5 years because our pay revision is once in 5 years.
I would not want any benefit given to the serving employees to be taken away for the sake of retired employees and it is also not my intention to deprive them of any benefits for the sake of expeditious settlement of the pension updation issue. It is for this reason that I have said that the linking of rationalization of perquisites of serving employees with the pension issues has to be rejected. It is only because that pay revision and pension updation cannot, in my opinion, be delinked, we may have to agree that the periodicity of pay revision has also to be the same as that of pension updation.
I would request those who have more knowledge in this area to enlighten the readers of MT’s Newsletter.
- A.Chandramouliswaran
Denying level playing field
My View on "‘RBI should be accountable to Parliament’ - Dr.K.C...":
Preamble of the Reserve Bank of India Act, 1934 had inter alia stated: “…but whereas it is expedient to make temporary provision on the basis of the existing monetary system, and to leave the question of the monetary standard best suited to India to be considered when the international monetary position has become sufficiently clear and stable to make it possible to frame permanent measures;
It is hereby enacted as follows:-“
The opportunity for the review envisaged actually came when GOI appointed the Financial Sector Legislative Reforms Commission (FSLRC) which submitted its report sometime back. The plethora of issues considered by the FSLRC did not allow the Commission to focus on the kind of change envisaged in the preamble of the RBI Act. The ‘cut & paste’ FSLRC report which imported ideas not necessarily suitable in the Indian context, instead of trying to build on the strength of RBI attempted to re-invent a new institutional structure. It is not the lack of RBI’s allegiance to legislative supremacy that is at the root of the present friction between GOI and RBI. The assertion of ‘ownership rights’ by lower level functionaries of GOI over all public sector organisations including statutory bodies like RBI and their interference in the legitimate functioning of institutions even in HR issues deny the top managements of these institutions a level playing field with their counterparts elsewhere.
- M.G.Warrier
Portfolios of EDs
...........Sources in the central bank indicate, both seniority and merit was considered by making the appointments. The central bank has nine executive directors, and one of them S Karuppasamy, retired recently. R Gandhi, who was executive director, has now been promoted to deputy governor. Also, .......
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Shri DK Mohanty
Read - BS
Shri DK Mohanty
1.Department
of Economic & Policy Research
2.
Department of Statistics & Information Management
3.
Monetary Policy Department
4.
Secretary's Department
5.
Financial Stability Unit
Shri
P. Vijaya Bhaskar
1.
Department of Non-Banking Supervision
2.
Financial Markets Department
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Department of Communication
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Risk Monitoring Department
Shri
B. Mahapatra
1.
Department of Banking Operations & Development
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Shri
G. Padmanabhan
1.Department
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Jasbir Singh
Deposit
Insurance and Credit Guarantee Corporation
Dr
(Smt.) Deepali Pant Joshi
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Rural Planning and Credit Department
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Shri
N S Vishwanathan
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Department of Expenditure & Budgetary Control
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Urban Banks Department
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Shri
U S Paliwal
1.Department
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Department
3.Human
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(including
Rajbhasha)
Shri
Chandan Sinha
1.
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Department of Banking Supervision
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