......Depending on the structure and needs of the economy, the country’s banking system should be dynamic and competitive, to cater to the diverse needs of the economy. It may be recalled that the doctrine of ‘ too big to fail’ banks dominated the American financial scenario at one point of time. Banks were encouraged to grow to unwieldy sizes. The global financial crisis of 2008 exploded the myth. Giants like Bear Sterns, Lehman Brothers and the AIG, fell like a pack of cards. Have we learnt any lessons from this crisis? Apparently not..........
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, January 6, 2014
Nationality details of RBI governor cannot be given: Cab Secy
.........The reply was sent to activist Subhash Agrawal in response to his RTI application seeking to know whether Rajan has American nationality at present or at some time earlier along with relevant details. He also sought complete information on nationality of Rajan from his birth till date mentioning dates of change of his nationality and whether rules permit a person with nationality other than Indian to become RBI Governor.........
RBI Deputy Guv Sinha may Stay On as OSD to Help with New Bank Licences
.........However, since Sinha will be appointed as consultant to RBI after his current term ends, the government can go ahead with appointment of a new deputy governor to replace him. The appointments committee had last week interviewed RBI’s Executive Directors and potential candidates – G Gopalakrishna, R Gandhi, P Vijaya Bhaskar, Deepak Mohanti and B Mahapatra..............
Read - ET
RBI’s strange ways
.....These are neither attractive nor acceptable to the middle class and lower middle class, which include retired persons and pensioners, as they involve cumbersome procedures, offer unattractive rate of return, do not................
VITALINFO - Past perfect, future????
I got relieved from CAB on January 3, 2014 for being transferred to Mumbai. A warm farewell was given by CAB staff.
New Year resolutions never made
Following are the New Year resolutions never made by commercial bankers, regulators and other finance professionals in 2014:....
Is It Complete Breakdown of Co-ordination between IBA and UFBU or Match Fixing Between Two ?
....Thus, we can conclude that there is complete breakdown of co-ordination between IBA and UFBU and the strike, which is likely to be held on 20th and 21st January, will not have any impact on IBA and bankers are likely to merely lose their wages for two days as UFBU's main agenda is to meet the demands of Left Parties i.e. oppose the bank reforms. As in the past, Unions will continue to make fool of their cadre and without much results to their credit and keep IBA land GoI is good humour................
Bank employees to go on 2-day strike from January 20: UFBU
........UFBU national convener M V Murali on Sunday said the Centre and the Indian Banks Association have failed to settle the 14-month long pending demand of 32 per cent wage revision for about a million strong staff in the banking sector. He also urged the government to immediately halt the ongoing reforms in the banking sector, as it would pave way for the entry of a large number of foreign banks..............
WHAT IS THE LIKELY DEARNESS ALLOWANCE INCREASE?
........The exact increase for DA cannot be given at this stage as GOI has yet to announce the CPI for the month of December 2013. However, based on the CPI already announced for the month of October 2013 and November, 2013, we are doing this guess work. The CPI announced and projected so far are as follows:-..............
Desirable for RBI itself to make an internal assessment
My View on "4 Factors That Will Decide Raghuram Rajan's Report...":
The draft Indian Financial Code written by the Financial Sector Legislative Reforms Commission(FSLRC) which defined the objectives of the Reserve Bank of India(RBI) asunder, practically ignored the evolution of RBI and the present Indian context of financial sector regulatory environment:
(a) formulate and implement monetary policy; and
(b) carry on other activities of a central bank, including –
(i) to issue currency of India;
(ii) to transact certain business of the Central Government and the State
Government, as contained in section 348 and section 349 respec- 10
tively; and
(iii) to act as banker to banking service providers.
The FSLRC would have perceived things differently, if it had recalled the preamble of the RBI Act, 1934 which read asunder:
“…And whereas in the present disorganization of the monetary systems of the world it is not possible to determine what will be suitable as a permanent basis for the Indian monetary system;
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: -”
Beyond some cut and paste, because of changes in the institutional structure in the financial sector or external policy compulsions, the RBI Act has not yet been subjected to the comprehensive review, envisaged in its preamble. Still, it may not be administratively expedient or even desirable to dismantle or truncate RBI as proposed by FSLRC now. Efforts should be made to improve the existing structure and mandate.
As legislative procedure and government action in the present scenario would be slow, it would be desirable for RBI itself to make an internal assessment of its responsibilities in regard to monetary policy vis a vis various other additional responsibilities such as developmental role, institution-building and management of public debt thrust on it by history.
- M G Warrier, Thiruvananthapuram
My View on "IBA Protests RBI’s Diktat on Policy Sales":
Fools tread in where angels fear to tread as the saying goes. Banks are struggling to train their system driven staff in banking domain. Now they should train their staff in insurance products too and get into broking business. It is time that the Finance Ministry that makes furious sounds gets off the hook of banking as recommended by Narasimham Committee - 1 and allow them to do their banking business with responsibility and accountability.
- Yerram Raju
RBI - Too slow to help consumers
.....So how does the new BCSBI code help, especially since it is non-mandatory? This is where the Office of the Banking Ombudsman comes in. A violation of the BCSBI code is a cause for you to complain to the banking ombudsman, governed by rules set by the RBI that are amended from time to time. The banking ombudsman scheme suffered from many limitations. Its ambit did not include internet banking frauds or mis-selling of third-party products - areas in which the customer is most vulnerable and the bank has complete protection from virtually any kind of complaint. The banking ombudsman cannot even decide on complaints involving more than Rs 10 lakh. These - and other - limitations make the scheme a limited forum for customer issues, even as ...........
New channel to reach the doorstep of customers
..........The RBI feels mobile banking has the potential to be one of the key tools for achieving financial inclusion in the country. But low levels of awareness and acceptance and factors such as inability of banks to “seed the mobile number with the account number,” handset compatibility issues, absence of collaboration and revenue-sharing models between banks and mobile network operators, are affecting the growth of this channel.........
RBI norms for foreign banks are a 'valuable step': USIBC
........“By clarifying that a one-size-fits-all model will not be employed, RBI has once again proven its long-standing reputation of being a measured, highly respected institution which takes into consideration all stakeholders including consumers,” USIBC President Ron Somers told...........
Mounting Non Performing Assets - Who's footing the bill? - M.G.Warrier
..........Promising the regulator’s help, ‘with every means at central bank’s disposal’, the governor reminded bankers of their duty to help those with genuine difficulty, while being firm with those who are trying to milk the system. As regards the approach of regulators towards failure on part of the borrowers in repaying loans on due dates, there has been consistency all through. In 1989, the Agricultural Credit Review Committee (ACRC) had made the following observation on ‘overdues’......
Banks seek leeway from RBI
.........According to bankers, their views has been conveyed to RBI through the Indian Banks' Association (IBA). "This move will bring all bankers together at an early stage for the formation of a joint lenders' forum. We will also conduct workshops to take the idea forward. This will ensure smooth implementation of the initiative," said IBA Chief Executive Mohan Tanksale...............
Fake notes eat into trade margins
.......With rising instances of FICNs surfacing at many places, many are bearing the loss themselves with neither the police nor the bankers announcing any standard operative procedures to help them. Recently, the FICN menace hit the consumers of Cell One subscribers, who went to pay their bills at its customer service centre on SP Road in Secunderabad. The centre staff refused to accept currency notes of Rs. 500 and Rs. 1,000 denomination unless the customers agreed to fill in a form giving their details and the numbers of the notes............
Indian digital currency company suspends launch, awaits RBI guidelines
......The Reserve Bank of India had earlier issued a statement in which it had "cautioned the users, holders and traders of Virtual Currencies (VCs), including Bitcoins, about the potential financial, operational, legal, customer protection and security related risks that they are exposing themselves to". Daki has written to the RBI twice, once before the raids and once after, but has not received a response. "We are not going to launch Laxmi Coin unless clear guidelines from RBI (which) are published. Coming to the raid, we see it as very constructive development in multiple ways. First, it shows that digital currency has received much awaited attention from RBI. Today or tomorrow RBI has to add more clarity on the digital currency framework and allowed mode of operation. Second, it's good that RBI is alert enough and .........
Make CPI-linked bonds lot more customer-friendly
............There are very many manifestations of this approach. There is practically no one to lobby for depositors with banks. At the time of credit policy statements of the Reserve Bank of India (RBI), there is always a clamour for lower interest rates on loans but seldom if ever for higher deposit rates. In fact, banks cannot increase deposit rates and simultaneously keep their loan rates low. A fair deal for deposit-holders is not on anyone’s agenda even though in that category are some of the most vulnerable sections such as pensioners..........
IT-enabled services from Vijaya Bank
.......Some of the facilities provided are: the customer can maintain the passbook details of multiple accounts, make personal notes on each passbook entries, maintain personal accounts and tag transactions of passbook to it, record transactions occurring outside the bank in these personal accounts, a mini version of bank’s website with links to main site and inbox facility to receive important messages from the bank with links to get details from bank’s website.
Other facilities..........
FedBook replaces traditional passbook
..........FedBook is the electronic version of a traditional bank pass book, a first-of- its-kind product ever launched by a bank for its customers. FedBook can be carried in one’s mobile or tablet. It helps customers view all transactions in their bank accounts. The application is user-friendly, secure and enables real-time access to transactions on a 24x7 basis, which liberates users from the restrictions of business-hours and bank holidays.......
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