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.
Saturday, August 30, 2014
Raghuram Rajan: In step
We cannot be seen as a paper tiger: Raghuram Rajan
..................RBI has had cordial relationships with both the governments and sometimes there’s a view in the press that there should be differences. Indeed, there are issues where we are not on the same page, and we try to persuade. Eventually, because decisions have to be made, one side goes along with the other. There are, of course, occasional differences between how the government views something and how RBI views something and those differences in horizon as well as some differences in background will prompt discussions. The classic example is the central bank’s views on growth, inflation and interest rates.................
CBI probes RBI officials named by Nitu Sarkar
.........The CBI lawyer submitted that they have reasons to believe that Sarkar and Sandhir acted as conduits of Saradha boss Sudipta Sen to manage Sebi and RBI. He argued that the duo could keep Sebi at bay for three years after the agency first issued a letter against the Saradha operations in 2010. Bhagat pointed out that Sebi sprung to action in 2013 when the maturity cheques of depositors bounced. CBI officials will scrutinize the probe progress and work on the information stored in Sandhir's laptop and the RBI officers' names before they plan their next course of action, likely next week...........
Reading (Re)quest
Dear Shri Warrier
I am one of the readers of VITALINFO and I also contribute my comments/ opinions on matters related to banking from time to time. I also read with interest your opinions. I would like to read your book. Where can I get a copy? My e mail ID is santhraj@yahoo.com I am an ex-NABARDIAN from Pune. Looking forward to hearing from you.
- S Santhanam, PhD (Eco)
General Manager (Retd), NABARD, Pune
Res: D 9 Amrapalishree CHS Ltd, Near Aga Khan Palace, Yerawada, Pune 411006
Interesting article
As one, who was inside RBI when the Agriculture and Rural Debt Relief Scheme (ARDRS),1990 was introduced and implemented, I am able to appreciate the anxieties and worries expressed by RBI Governor in the context of the present demand for more debt waiver schemes. Major component of banks’ resources is public deposits and government is dependent on taxpayers’ contribution for meeting financial commitments. Mentioned this to highlight that both banks and government have trusteeship responsibilities in regard to the funds they handle. When crops fail or natural calamities wash off assets of entrepreneurs, there has to be a transparent support system which will help those who suffer loss. If nation needs products including agricultural produce growing/manufacturing which is not commercially viable, subsidizing costs of production and marketing them becomes necessary. The present support system which works through subsidies(front-end and back-end), various tax concessions at different levels and write-offs and waivers of debt is neither transparent nor scientific. A review and revision of the entire system, factoring in the following aspects(list not exhaustive) has become overdue: (i) In agricultural sector, there is need for a comprehensive and compulsory crop insurance scheme. Those farmers who do not avail bank credit also should be encouraged to participate. May be an appropriate disincentive scheme denying any government support in case of crop loss may be necessary to ensure 100 per cent participation. Initially, the scheme should get financial support from central and state governments and banks(as a percentage of agricultural credit provided by the bank) (ii) Rationalise subsidies including interest subsidy. At present, at least in some states, interest subsidy is working as a disincentive for improving productivity. (iii) Life insurance and insurance of crops and investments up to a bench mark level compulsory for all bank loans.
- M G Warrier, Mumbai
RBL Bank firms up plan to rapidly expand credit card base
.........."While we had plans to start the credit card business on our own, the acquisition provided an opportunity to accelerate the process. The objective was to take over a running business along with the infrastructure and hence get a head start. We took over a performing book consisting of vintage customers with good spends and risk profile. Now, our aim is to scale this business up significantly in the next two to three years,"....
Wanted: 5,000 independent directors
.........Corporate legal experts point out that several hundred companies need to re-constitute their board over the next two months, in line with requirements of Sebi's listing agreement when it comes to independent directors (IDs), and having woman directors on board. It is estimated corporate India would see an additional need for up to 5,000-odd independent directors by 2019........
Leadership crisis in PSBs—a reform agenda
..........Over a period of time, the process of selection of CMDs and EDs and nominations on the board have come for severe criticism. The selection to these top positions is patchy, ad hoc and nebulous. Selection of EDs and chairmen is undertaken as a routine exercise by the government with ad hoc criteria (changing with every exercise), a routine interview lasting for a few minutes and a highly opaque system of allotment of banks to the selected candidates. The system has perpetuated for too long and has failed to deliver the best in class leaders............
Lure of lucre
...........Seriously underpaying senior management increases the temptation to be corrupt. Singapore's decision to pay its top bureaucracy market-linked salaries explicitly acknowledged this problem. But this is only part of the story. The lack of a proper incentive structure is reinforced by slack governance and political-bureaucratic interference. Nominee directors appointed by the government on bank boards are reputed to use their positions to earn rents. Even if not all of them do this, how can a board, whose members succumb to temptations, scrutinise and judge the chairman and other senior managers? The problem is undoubtedly compounded by the substitutability between political-bureaucratic patronage and hard cash....
Fiscal liberty sans literacy
.........Having said this, one cannot overlook the fact that jumping in at the deep end of the pool is also a way to learn swimming — albeit a dangerous way. One can learn from the SEWA experience. Focus on savings, not credit. Be extremely discerning about when to give credit. Succumbing to the lure of showcase credit figures would be a disaster. Spreading financial awareness is more important than creating infrastructure to impart these services. As such they are mutually exclusive events, but the importance of the former should not be undermined. Involve NGOs to spread awareness. A RuPay debit card, heavy on technology, would be a problem in a rural village than help, without the Do’s and Dont’s clearly hammered.
.......
Supervising myriad small institutions can be a challenge
..........The Reserve Bank of India’s recent strengthened oversight and guidance on impaired assets and restructured loans are steps in the right direction. Moreover, international experience suggests that governance structures in state-owned banks merit special attention, such as by ensuring a healthy complement of independent and professional directors, strong fit-and-proper appointment processes, and by mandating that they be at arms length from political interest which may impact commercial decisions. What is the IMF’s view on the extent of financial inclusion or exclusion in India and do any of the recent policies seem like they could help in that respect?..................
Payments banks and financial inclusion
.............Now, the question arises whether payments banks would have relevance once the existing banks implement Jan Dhan Yojana. The existing banks may argue that there may not be any need for payments banks. However, the arguments in favour of payments banks are many. First, the service availability gap is so large that the niche banks for inclusion and payments services would supplement the efforts of existing banks. They would not necessarily be in competition. Besides,..............
'India needs Financial Conditions Index'
...........The paper titled 'A Financial Condition Index for India' authored by RBI research officer Anand Shankar stated: "Economic agents often alter their expectations about economic activity and hence their behaviour in response to movement in financial variables." Over the decades there have been tremendous developments in financial markets. Newer financial products have been invented, cutting edge technology has been increasingly used in financial markets, transaction costs have fallen, innovations in product design have been implemented and financial markets around the world are more integrated today than ever before..........
Freedom in Inclusion
...........The concept of financial inclusion is not new in India. Over the years, the government has taken concrete steps towards it. The Reserve Bank of India (RBI) set up Khan Commission in 2004 to look into financial inclusion and its recommendations were incorporated into the mid-term review of the policy (2005–06). It urged banks to review their existing practices to align them with the objective of financial inclusion. The RBI also stressed the need of making available a basic banking ‘no frills’ account either with ‘zero’ or very minimum balance as well as charges that would make such accounts accessible to vast section of the population. However, India has failed to achieve a great success. The statistics on financial exclusion in India provide a very depressing scenario. Out of over 6,00,000 rural habitations in the country, only about 30,000 or just 5% have a commercial bank branch. Just about 40% of the population across the country have bank accounts and this ratio is much lower in the north-eastern states. The number of people.........
PM’s Jan Dhan Yojana faces access deficit
..........It was not concerns over the creditworthiness of the poor which were holding banks back from extending credit, Mr. Rangarajan said. “Currently, our banks are meant to be equipped to disburse loans of millions of rupees and also a few thousand rupees. What is needed is a reorganisation of the structure of banks,” he said. There is also a significant gender gap in banking; by 2012, for every 1,000 deposit accounts opened in the name of men, just 394 were opened in the name of women. Chhattisgarh, West Bengal, Madhya Pradesh, Maharashtra and Gujarat were even worse than the national banking sex ratio, while Delhi and the four southern States were better.............
Jan Dhan Yojana: Banks to get ‘handsome’ compensation
........The commission payable to banks (which then pass on the share to BCs) under the Direct Benefit Transfer (DBT) scheme launched under UPA rule is 1% of the total DBT amount transferred. While there was a plan to raise this to 2% of the “actual amount transferred through BCs", under the new PMJDY the commission could be even higher, the sources indicated. Also, they added, the finance ministry would assess the performance of each Public Sector Bank in implementing the PMJDY and consider it as one of the main parameters while capitalising them..........
A new attempt at financial inclusion
.........In draft guidelines released last month, the central bank envisaged a new category of banks to provide limited services such as accepting savings deposits and remittances, particularly in rural areas. These banks have been designed to provide basic banking services like deposits and remittances to people who deal with small amounts. These banks are needed to have a wide network of branches or access points, particularly in remote areas, and have to keep costs low by using technology in order for their services to be accessible to a larger number of people.................
Foreign hand in Indian stocks
...........In light of this FII dominance, the RBI governor is right to worry about the impact of capital outflows. The herd-like behaviour of global capital is well known and anything that triggers a stampede out of India is likely to cause significant market drops. This is demonstrated by the fact that some of the largest falls in stocks have been in the three periods where FIIs became more circumspect in their enthusiasm for Indian stocks. The first was during the global financial crisis in 2008, the second during the acute phase of the European sovereign debt crisis in 2011, and the last was the recent hiccup........
Funds may raise exposure in commercial paper
........."Banks' requirement for short-term CDs may not be much for meeting liquidity requirements as RBI is open to do overnight variable rate repo auctions. The intra-day liquidity requirements can be met through these repo auctions," said Saurabh Jagwani, senior manager, Andhra Bank..........
Friday, August 29, 2014
Rupee lessons
Conference of Chief Compliance Officers
The objective of the conference is to have a dialogue between the Regulator/ Supervisor and Chief Compliance Officers of banks on the key aspects of their role in ensuring compliance, with special emphasis on Risk Based Supervision.....
Date: August 27, 2014
Venue: Conference Hall II, 15th Floor, Reserve Bank of India, Central Office, Mumbai
Time Topic Speaker
9:30 – 9:35 AM Inaugural Address G Gopalakrishna, Director, CAFRAL
9:35 – 10:00 AM Key Note Address - Significance of Compliance, Functions in banks – management perspective - S S Mundra, Deputy Governor, RBI
PENSION UPDATION - RBI AC NO 8 DATED 18.03.2013 CHALLENGED IN DELHI HIGH COURT
One more Writ Petition against RBI AC No. 8 Dated 18.03.2013 amending RBI Pension Regulation 1990, w.e.f. 12.01.2013 and fixing the same date for it's implementation was heard by Delhi High Court today for early hearing as per Delhi High Court rules. Hope for further order details in few days. Notices were received by UOI and RBI and their advocates were present in the court.
- Capt. C B Gupta
Concerns relating to Organisational Restructuring and Lateral Recruitment
..............We look forward for a detailed and meaningful interaction with the Bank on the issues and hope that the Bank won't take any unilateral action in a hurry which may vitiate the environment. The proposed changes shall be having long term impact on the organisation. We also need to have clarity on the human impact issues.........
RBI to hold RBI Quiz at PRSU on September 8
Reserve Bank of India (RBI), Raipur will organize Reserve Bank of India Quiz (RBIQ) at the auditorium of Pt. Ravishankar Shukla University, Raipur on September 8 from 8 am. This quiz will be a part of an All-India Inter School Quiz being conducted in 62 locations across the country and open to school children from Classes IX to XII. Reputed quizmasters from Greycaps Pvt. Ltd. will conduct the quiz. RBIQ aims at creating awareness on financial literacy and .......
Act in 8 weeks: NHRC to heads of RBI, PNB
CHANDIGARH: In the suicide case of Ajay Sehgal, branch manger of Punjab National Bank (PNB), Panchkula, the National Human Rights Commission (NHRC) on Thursday issued notice to the top officials of Reserve Bank of India (RBI) and PNB. The NHRC has directed the secretary, ministry of finance, New Delhi, the governor, Reserve Bank of India, chairman and managing director, Punjab National Bank, and regional chairman, Punjab National Bank, Chandigarh, to "take appropriate action within eight weeks."..........
Modi critic Arvind to become PM’s chief economic advisor
..........Many in the government compare Modi’s choice with that of the late PM Narasimha Rao, who had cherry-picked Manmohan Singh to initiate first generation economic reforms. Subramanian has endorsed Modi’s campaign message that India needed a period of renewed growth, but has emphasised upon policy actions. What had angered the BJP leaders most was that he had questioned India’s decision to block a World Trade Organization deal over provisions that would limit the government’s grain stocks. A senior journalist with BJP leanings had even uploaded links where Subramanian had savaged the Modi government on the WTO, Gujarat model and the Budget..............
Tech Key to Financial Inclusion
.......Technological innovations like integrated machine that has functionality of cash withdrawal and deposit; facility of scanning documents to facilitate new account opening and loan disbursal; and biometric identification of users, voice commands and narration for all facilities in multi-language format could help increase banking penetration. Centralised online loan application processing will not only help in more efficient appraisal and disbursal but also impart cost efficiency and consistency. It will also shift the onus and risk of loan sanction to the central/regional authority from local managers............
Inflation expectations
..............Inflation expectations can simply be defined as economic agents’ perception about future inflation. Central banks intend to achieve low and stable inflation where inflation expectation is well anchored. “…a steady and low inflation combined with well-anchored inflation expectations helps the monetary authority in achieving the other objectives of monetary policy, such as economic growth and financial stability,” said Deepak Mohanty, Executive Director, Reserve Bank of India (RBI), in a speech on the subject in November 2012..........
Bracing for change | PSU bank reforms: The elephant in the room
............But not all of the troubles being faced by these banks can be passed off as second round impacts of the economic slowdown. The genesis of some of these issues goes back years, if not decades. Other issues link back to the broader problem of corruption and lack of governance. To understand what went wrong, we need to think back a decade to 2003-04 when infrastructure lending started in earnest..................
The new themes evolving in the banking system
..............There is also a new theme which is being proposed which would introduce a new order of banking. We are now emphasizing separating the ownership of the banking system from the management. This is a very commendable initiative but its ramifications have to be well evaluated. If we accept the premise that public sector banking enjoys the confidence of the deposit holders arising out of the implicit sovereign guarantee, then its withdrawal would have larger implications in the deposit base of the entities. It would certainly bring about a very level playing field for private sector banking but will have its own cost and consequences............
Will changing banking structures do any good?
..........“I feel cooperative banks should actively be involved in financial inclusion because they have an existing presence in rural areas. If we can address whatever their shortcomings are, we should move to upgrade them and they can be a major source of financial inclusion,” says Aditya Puri, managing director of HDFC Bank Ltd. To be sure, RBI in its annual report said that it will try and bring changes to the existing cooperative bank structure by allowing mergers and takeovers of assets and liabilities of negative-net worth banks without the acquiring bank having to bear the burden of the loss. “At present, conversion of a UCB (urban cooperative bank) into a commercial bank is not permitted. The Reserve Bank plans to engage with the government of India for enabling legal changes to help large and willing multi-state urban cooperative banks to convert themselves into commercial banks,”..........
Postal network to widen reach
.....................India has around 150 million postal savings accounts, which are being seen as the potential customers of the Jan Dhan scheme. The postal department, which has been pushed into oblivion in the last two decades by private courier companies and the spread of Internet, is suffering an annual loss of over Rs 6,000 crore. However, post office savings schemes and money order windows remain popular. Rural post offices, which account for nearly 90 per cent of the network, cover a large part of the country where bank branches are absent. “As financial inclusion, which means bringing payment and lending windows to rural India where banks have been hesitant to penetrate, will remain an important objective for any government, the idea of Post Bank remains one, which has to be used effectively,” officials said..............
RBI eases norms, 1 photo ID proof to open bank account
Reserve Bank of India has, as part of Prime Minister Narendra Modi's push for financial inclusion, relaxed 'know your customer' (KYC) norms to open new bank accounts. RBI said there would be no need for applicants to submit separate documents for address and identity proof to open a savings account. The central bank has directed banks to accept a single document, like a driving licence, which contains the applicant's photograph and address to open an account. ..........
Modi wants to take RuPay cards to global level
"... We are all aware globally about the popular Visa Card. Should we not also aspire that our 'RuPay' card becomes acceptable all over the world? Should it not also have the same credibility? After today's event, it looks like there is full possibility," .................
Read - Deccan Chronicle
Read - Deccan Chronicle
Bank on accounts
........n a recent speech on financial inclusion, the RBI governor observed that there has to be five features in banking services if financial inclusion is to be achieved. He emphasised that the financial products offered by banks should be suitable for the people concerned, such as, a safe and reliable way of saving, a quick and hassle-free service when quick loans are needed and similar attributes. Governor Rajan had also indicated that the place for offering such service should be near at hand. That means, the bank branches would have to be opened in unbanked and remote areas. Above all, for financial inclusion to be successful, it must be profitable for banks, Rajan emphasised. Going by the plans of the government, the services under universal banking access programme will be extended by using the prevailing practices of business correspondents (BCs) who virtually operate as single-person bank branches now. For the current programme, many more BCs would have to be appointed. Along with that brick and mortar branches are also to be opened........
Jan Dhan Yojana: Bankers go the extra mile, many rush to camps to get 'freebies'
..........It’s people like Das and Jana who the banks are targeting as per Modi’s ambitious plan to eradicate financial “untouchability”. Bankers are thus taking pains to make people understand that the scheme is not a loan mela of the 1980s when banks gave loans to farmers which were never returned. Under the Yojna, account holders will also get an overdraft facility of Rs 2,000 initially which can later be extended up to Rs 5,000. But bankers say that they will have to put in a stringent norm in place so that no one misuses the scheme..........
Govt's financial inclusion scheme a hit on Day 1
.............In a country where 40 per cent of the population does not have access to banking services, Thursday's programme would mark the beginning of the end of "financial untouchability" and rid the country of poverty, Modi said. He recalled the bank nationalisation of 1969, aimed at extending the reach of the financial system to the doorsteps of the poor. "But I regret to say after 68 years of Independence, not even 68 per cent of the population is covered by the banking system," ......
Jan Dhan Yojana launched in district
...........Banks such as Canara Bank, State Bank of India, and Kerala Gramin Bank took the lead by opening more than 5,000 accounts under the scheme, he added. District Collector C.A. Latha, district panchayat president Kanathil Jameela, Reserve Bank of India Assistant General Manager P. Ravindran and Deputy General Manager of NABARD Suresh Kumar were present during the district-level launch.
RBI to release annual GDP data Friday
With the Reserve Bank of India (RBI) due to release the GDP (gross domestic product) figures Friday, growth in the current fiscal is expected top 5.5 percent as predicted by the country's central bank. The RBI, in its annual report for 2013-14, had projected the GDP growth for 2014-15 at 5.5 percent, emerging out of the sub-5 percent growth in the preceding two years........
Mumbai EOW uncovers Rs 1,000 crore banking fraud at Dena Bank, IOB, other PSBs
The Mumbai Economic Offences Wing on Thursday said it had busted a largescale banking racket amounting to Rs 1000 crore involving multiple persons who conspired to perpetrate widespread fraud at Dena Bank and Oriental Bank of Commerce, as well as some other banks. The criminal syndicate allegedly also carried out large-scaled Fixed Deposit scams at other public sector banks, including UCO Bank, Syndicate Bank, Bank of Baroda, Vijaya Bank, and Dhanalakshmi Bank. ..........
Bank FD scam gets bigger, 9 FIRs filed
.........Elaborating on the modus operandi, police said the accused approached the trusts and individuals to open FDs with public-sector banks using middlemen. In return, these entities were given a slightly higher rate of interest. Once the FD was opened, the accused gave fake receipts to the entities and used the original ones to open accounts with forged documents.....
Bad loans, ARCs and asset reconstruction
....................Debt restructuring exercises by banks were rendered unsuccessful due to the prolonged industry and economic recession. One can see under-utilization of capacities already created during the high growth phase and a large number of unfinished/under construction projects, be it in core sector infrastructure, hotels or real estate. A large number of metals and mining companies have turned sick due to a “man-made scarcity” of raw materials such as coal and iron ore in a mineral-rich country. So why have effective tools such as CDR or SARFAESI failed in such crucial times?.........
Don’t slam the brakes
..........While the RBI’s general concern for consumer protection may be valid, in this case, by requiring two-factor authentication, the RBI could be accused of standing in the way of financial innovation. It appears to be telling taxi companies: you are competing on a mediocre level-playing field in a regulatory system that disregards innovation. It seems to be telling consumers: you do not have the freedom to make a choice between convenience and safety. The RBI does not allow a consumer the freedom to waive this high-security procedure even for a transaction of Rs 500. The root cause of this is........
Thursday, August 28, 2014
Shri B.Mahapatra - The Quintessential central banker ReTyres - S.Ganeshkumar
RBI PS Fraternity and VITALINFO on behalf of all its readers wish Shri B.Mahapatra a very happy n healthy ReTyred life ahead..............
Executive Director Shri B Mahapatra lays down office today after
selfless service of more than three decades in the Bank. He has great qualities
and is a quintessential central banker. Many of us would remember his clear
lectures when he was in the Bankers' Training College (little wonder since the
first job of Shri Mahapatra was that of a lecturer!) when apart from imparting
knowledge, he was one of the authors of many books aimed at demystifying many
technical topics. Many may not know that his immediate job before RBI was in the
State Bank of India - and Banking operations and development has been his forte
since then and till now. As the Regional Director of Kolkata office, he not only
ushered in many innovative ideas but most importantly, he had the human touch
and one could say that he knew almost the entire RBI, Kolkata family. A thorough
professional, he excelled in clarity of thought and expression (his simple yet
clear explanation about the use of Aadhar card as the document for KYC in a
recent State Finance Secretaries conference won accolades from the Chief
Secretaries gathered at the conference!) and a person who ensured that work was
always done on time, every time. There is comfort for us that he would continue
to be with us for six months more in an advisory role (something that he
excelled in performing in his career!); we wish this connoisseur of cricket a
fantastic second innings in the days to come!
- S.Ganeshkumar, CGM-In-Charge, DGBA
- S.Ganeshkumar, CGM-In-Charge, DGBA
Needed, a Growth Commission - C.Rangarajan
..........If the word “planning” is reminiscent of an earlier period, it may be substituted by “development” or “growth.” The other two functions performed by the Planning Commission now can be delegated to other authorities in the government. The allocation function can go to the Finance Commission and project evaluation can be taken care of by strengthening the Ministries. Thus, a National Development Commission or Growth Commission, which is charged with a mandate to prepare a blueprint with goals and objectives to be achieved over a defined period, may still be the need of the hour.......
BANKING, REFORMS & CORRUPTION
Dear Shri Warrier,
Thanks a lot for sending a copy of your book BANKING, REFORMS & CORRUPTION- DEVELOPMENT ISSUES IN 21st CENTURY INDIA. It goes to your credit that the book has been liberally appreciated by eminent personalities like Sh S S Tarapore and Mrs Usha Thorat. As you have mentioned in the preface, you have really expressed your perceptions, anxieties and aspirations about 21st century India Growth story with focus on resource management in Indian context. It is always easy to criticise or find faults with the existing system. Anyone can do it. But you have gone one step further giving practical solutions to the problems. This is really worth appreciating and people sitting in authority should take note of it. Whether they accept your suggestions or not but they need to be debated. In the form of this book you have brought out a well researched document on the prevailing problems with our financial structure. You have also raised critically important issues in the present context which require immediate attention and are required to be addressed on priority basis especially issues like Human Resource Management in RBI, other banks and Public Sector Undertakings. In the chapter on Gold Management you have rightly pointed out that the time has come for authorities to think of setting up professional and dedicated institutions who can handle the gold from banking angle. Ultimately people invest in gold for the sake of security. If a person can be assured that appreciated value of gold will be taken care of, all the gold with public or lying in lockers will come out.
I am sure in our Group whosoever will get opportunity to lay hands on your book, like me, he/she will read the last chapter first because it deals with pension. That is altogether different thing that it talks of National Pension Scheme. You have also brought out another dimension to the topic of Post Retirement life like old age homes, retirement villages to enable senior citizens to live a dignified life. It has gained all the way more importance in the modern times when families are shrinking and social values are undergoing a sea change.
Wishing you all the best.
With regards
Madan Gauria, EXRBITES
HDFC Bank organizes Secure Banking workshop in Lucknow
LUCKNOW: HDFC Bank launched its secure banking programme at Lucknow in Uttar Pradesh. The initiative is part of HDFC Bank's ongoing endeavor to create customer awareness about safe banking practices. The programme will be rolled out across all 284 branches in Uttar Pradesh to educate customers and create awareness. The initiative was launched by guest of honour, Kshitij Singh, Assistant General Manager, Reserve Bank of India, Lucknow. .........
Failed ATM withdrawals a concern, says banking ombudsman
.............According to N Krishna Mohan, Banking Ombudsman for Andhra Pradesh and Telangana states, the cash that remained undelivered in this manner was often pocketed by those who periodically open the ATM to replenish it with cash. "As the bank does not keep tab of such failed remittances on a real time basis they obviously fail to notice that the cash accumulated in the 'divert tray' was pocked by those who are entrusted with the job of replenishing the ATM with cash. Customers face the prospect of loosing the money as the banks question the customer's claim in the absence of any proof," Krishna Mohan said............
Ghatkopar bank robber left behind Rs 3L in `loose change'
..............The “uniqueness“ of the heist has alarmed the police, who say it bears multiple signs of an insider job. The thief, they point out, gained entry into the bank painlessly by using sets of duplicate keys. Hiding from the CCTV cameras under an umbrella, he opened the strongroom--which is accessed only by the bank manager and cashier--again with duplicate keys. He took a bagful of money out of the branch and returned for another round of stealing. Altogether, he took away Rs 55.4 lakh. There was another Rs 3 lakh in the room, but he did not remove it “because the notes were of the denominations of Rs 5 and Rs 10,”................
RBI launches 8th Round of Survey on Computer Software and Information Technology Enabled Services Exports
The Reserve Bank of India has launched the 8th round of its Survey on Computer Software and Information Technology Enabled Services (ITES) Exports. The reference period for the Survey is 2013-14.............
RBI simplifies ECB norms
...........RBI said the company should meet the conditions like all-in-cost of fresh ECB must be less than that of the all-in-cost of existing ECB. Consent of the existing lender must also be available. Other conditions include the refinancing shall be undertaken before the maturity of the existing ECB and the borrower must neither be in the RBI’s defaulter list and nor .....
Rebooting pension reforms with retirement plans
...........The original design of NPS was visionary—unbundling fund management, centralized record keeping and annuitization, portability across employers, individual accounts, simplified commoditized indexed product options and low costs through competitive bidding. The NPS that has got implemented on the ground is not the first-best solution as was envisaged but a diluted version of the original framework..........
RCom ready with USSD platform for mobile banking
............."Financial inclusion is a national priority and we are proud to launch this platform whichcan offer basic financial services even in areas that are beyond the reach oftraditional banking. Mobile technology has a crucial role to play in servicingthe under-banked and unbanked sections of society, and RCom's endeavor is tobridge this gap with its customised solutions," .........
Jan Dhan Yojana conflicts with RBI’s payment banks, but the system may yet evolve
Every two years, India's financial inclusion drive reformats itself into a brand new, entirely unrecognisable avatar. Till about three years ago, it starred banks, the Reserve Bank of India and banking correspondent companies. Then came DBTs and the finance ministry, with its common banking correspondent (BC) auctions. Also came Aadhaar, opening bank accounts and keen to become sole authenticator for all financial transactions. In 2014, the landscape has changed again........
Top bankers sweat it out in rural India to rope in un-banked homes
.............Bankers have however continued to face the real challenges of the financial inclusion programme. What is more worrying them is that each account also incurs an annual maintenance of about Rs 100. But, in the long run, the huge network of bank accounts is expected to plug the pilferage in the direct benefit transfers and banks hope to earn commissions by running government programmes. If worked well, this is a big advantage because the government and the banks can keep a tab on the beneficiaries of the subsidy schemes, says a banker.........
How Raghuram Rajan changed rupee's fortunes
...............On September 4, at a time when the rupee was the worst performer among Asian currencies, Raghuram Rajan took charge as RBI’s governor. A slew of measures that he announced for attracting inflows helped improve sentiment. With these steps, the rupee’s fortunes also turned. Business Standard looks at the situation a year ago and compares it with now........
RBI adviser says weak monsoon won’t stop India inflation slowing
.........“The policy stance of the RBI, which has the highest benchmark interest rate among Asia’s 10 biggest economies, is mainly aimed at tempering inflation expectations and not to prop up the rupee,” said Virmani. Governor Raghuram Rajan, who raised the repurchase rate three times in the past year to 8%, left borrowing costs unchanged at a 5 August review. “The RBI’s stance is clearly directed at inflation expectations,” said Virmani. “Any RBI action to reduce rupee volatility will occur at the time of instability..............
Is India heading towards more financial sector volatility? - Renu Kohli
.............Fundamental bearings are extremely modest in contrast. Although remarks by officials indicate that April-June quarter GDP growth may be 5.5%. The Reuters poll consensus, data released this Thursday, was 5.3%, an improvement over January-March’s 4.6%. But last year’s low base (4.7%) can’t really be ignored. Neither can the fact that GDP growth is likely to be heavily predicated..........
Does monetary policy really matter?
.............This means that the use of the traditional trade-off between growth and inflation, something which has been spoken of by textbooks and assiduously pursued by monetary authorities, may not really hold. Taking this a step forward, it goes beyond the rational expectations theory which says that monetary policy cannot affect growth, but also contests monetarism by saying that the best it can do is to adapt to inflation, when it cannot control it.
The crux really is that when we have a situation of supply-driven inflation and low-demand led growth, working on the production side and going in for pump-priming a la Keynes could work. At any rate, monetary policy may not really matter.
Reserve Bank of India Gov. Rajan: Inflation on Target
........A former chief economist for the International Monetary Fund who became governor of the Reserve Bank of India last September, Mr. Rajan has previously said he wants to see consumer-price inflation slow to 8% by January and 6% by 2016. "If we look like we're not set to hit it obviously we'll have to tighten," Mr. Rajan said. "If we look like we're going to achieve it well in advance, we have room to be more accommodating." Mr. Rajan, who as governor has final say over interest-rate setting, left the RBI's main policy interest rate unchanged at 8% earlier this month, citing slowing inflation that was still too high for comfort.........
The Raghuram Rajan and Narendra Modi show
........A series of measures initiated by Raghuram Rajan, who took over as governor at the Reserve Bank of India (RBI) on September 4, however, helped arrest the slide of the rupee. Chief among these was the move to remove the dollar purchases of oil marketing companies from the market and to announce that these bills could be settled in rupees if necessary. ............
Banks face new consumer liability issue
........."Banks have been resisting becoming a broker for a long time since their officials would be held responsible for claims, grievances related to mis-selling and others. Now that the banking regulator has talked about liability for sale of third-party products, they would have to look into servicing all needs of customers,"...........
PSBs and private banks
.....comparing PSBs with private banks is like comparing apples and oranges. PSBs were formed with the motive of rescuing an agrarian society from private money lenders and to infuse government help in the form of agriculture subsidies, which has been fulfilled to a large extent. Meanwhile, private banks exist for the benefit of the shareholders by augmenting profit. .....
Banks seeks continuation of reporting on wilful defaulters after asset sale
..........Senior public sector bank executives said there is apprehension about misuse of system by willful defaulters after banks stop reporting on them. Taking benefit of lack of information sharing, they may try to getting fresh finance by floating new ventures. This reporting will help ARCs in recovery of dues out of the financial assets acquired by them and thus redeem Security receipts........
‘RBI not inclined to cover more mandals in farm loan recast’
..........“Whatever could be done, last month we have already given,” K.R. Das, RBI’s regional director for Andhra Pradesh and Telangana said on Wednesday. The central bank had agreed to reschedule crop loans up to a maximum of Rs.1 lakh each taken between April and October 2013 in 120 mandals in Andhra Pradesh and 100 mandals in Telangana, covering a total of seven districts.................
RBI waits for things to settle down in AP
The Reserve Bank of India (RBI) is awaiting identification of the capital city for opening of its office in Andhra Pradesh. Right now, it is not thinking in that direction and moreover there is no request as yet from the Andhra Pradesh authorities. “As of now we are operating from Hyderabad for both the States”, said K.R.Das, Regional Director, (RBI), AP and Telangana. As a practice, the RBI sets up its offices in all State capitals. “We will definitely have our office in Andhra Pradesh also. Let things settle down”, Mr. Das told presspersons here on Wednesday........
Putting the cat out of bag
My View on "RBI for Making Aadhaar Sole Platform for Financial...":
Ms Deepali Pant Joshi, ED, RBI has put the cat out of the bag. According to her "Over 90 per cent of the 4.1 per cent gross NPAs are created by large corporates," "Among the poorer sections, only 4.4 per cent of total NPAs are from the farm sector, while the share of the MSMEs is only 5.2 per cent. So where is the poor retail customers creating bad loans in the system? NPAs are not a creation of the poor but the rich," News that huge share of NPAs is from the corporates is no surprise given that NPAs like that of KFA loans, Bhushan Steels etc., are still not classified as wilful defaults. And RBI has done very little to bring sense to the bankers and it is just watching the actions from the sidelines. If none of their inspection reports of various banks which financed KFA has observed the failure of banks in classifying the KFA loan as a wilful default there is something wrong with the quality of such inspection reports and RBI should revisit those reports and find if there was any action required against the officials who inspected these banks. If the farm loan share is so low in NPA, then why should not RBI allow Andhra Pradesh Govt to waive the farm loans. Every year, every bank writes off huge amount of corporate debts through management decisions. Has any bank at any time waived any farm loan through management decision? The answer is a clear 'NO'. If banks fail to write off farm loans for genuine reasons the governments would be forced to step in. That is what AP govt is trying to do.
- Dr.S.Santhanam
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