R. Gandhi to be new RBI deputy governor

R. Gandhi, an executive director at the Reserve Bank of India (RBI), has been named as deputy governor, succeeding Anand Sinha, whose term ended in January. Gandhi’s name was approved by the appointments committee of the cabinet led by Prime Minister Manmohan Singh,...............

Read - Mint

Shri Gandhi will look after the following portfolios: Department of Banking Operations and Development, Department of Non-Banking Supervision, Urban Banks Department, Department of Expenditure and Budgetary Control, Department of Information Technology, Legal Department, Premises Department and Risk Monitoring Department.

Licensing for competition

..........Whether or not this is sufficient to qualify as a “dramatic remaking of the banking landscape”, differentiated licences have clear advantages over a system that favours the creation of new banks every decade or so and which are virtual clones of the existing ones. Such a system imposes undesirable regimentation — for example, non-banking financial companies (NBFCs), which usually have a core expertise in some area..........

Read - HBL

A touch here, a tweak there - A.Seshan

........Neither the policy paper nor the governor’s statement made any reference to the estimates of money supply, credit or deposits in the coming year. I took the view in the past that the RBI should not provide estimates of money supply, with room for 5 per cent inflation after reckoning for GDP growth and income elasticity of..............

Read - HBL

RBI's sensible approach

.......It is not certain how and in what shape the fiscal policy will be under the new government. By keeping policy rates unchanged and not succumbing to the pressures of the market, the RBI governor has played his cards well..........

Read | Business Standard

Inconsistent blueprint?

......... When RBI suggests that it wants to withdraw from the respective boards of PSBs, it assumes that the PSBs' problems would continue and it does not want to become a party. The conflict of interest has come as an easy alibi for the recommendations............

Read | Business Standard

The missing Rupee

.... A software glitch on the central bank's computers possibly since the release made no mistake with the dollar sign. But it can almost be considered a comment on the role foreign currency plays in our financial markets.

Read | Business Standard

G S Sandhu inducted in RBI board

The government has nominated financial services secretary Gurdial Singh Sandhu, in the board of Reserve Bank of India in place of Rajiv Takru, who has now moved to the revenue department.

Business Standard

Welcome move.............

My View on  "Justice delayed is justice denied..............": 

Ref: TOI report on one rank one pension for Justice:

This is a welcome move and should set at rest the impression that ‘social security’ is about protecting the livelihood needs of the poor only. The roots of several corrupt practices can be traced to disparities in compensation structure. The purpose of pension is to ensure the employee who has spent his life serving an organisation/system/service gets a regular income post-retirement to meet the lifestyle needs of himself and his family commensurate with those while in service. Thus protecting the purchase power of the pension amount is also part of the social responsibility of the employer. Several veterans are continuing to ‘serve’ in different capacities post-retirement only to earn their daily bread. 

- M G Warrier, Thiruvananthapuram 

RBI and protecting banking customers

..........These are only illustrative and not exhaustive suggestions for the RBI to ponder over and work out comprehensive consumer protection regulations, which can play an important role in considerably improving the banking system comprising of  responsible, reliable and consumer friendly banking institutions, who can be trusted and relied upon by the billion people for the greater good of our country.

Read - Moneylife

Customers hard hit.............

My View on  "Customers may be spared from keeping minimum balan...": 

Every time when banks tinker with the system of providing services, the hard hit is only the customers. Only a couple of years back, RBI issued guidelines that banks should allow ATMs of other banks to be used by customers without any charge for such use. But, now, this decision has been reversed putting the customers at a loss. Not all banks have their ATMs located in all places. In India, ATM penetration is one of the lowest. Instead of increasing ATM penetration, making the customers to pay for use of ATMs other than those in which they have their accounts is retrograde action. RBI should rather facilitate better banking by making banks to cut costs on areas which are considered unproductive instead of forcing the customers to pay.

Similarly, making too frequent changes and charging customers for services which are basic for banks to provide will be detrimental to the interest of the customers.

Customer service is far from satisfactory. I have a couple of instances where customers are made to run to pillar to post to get redressal of their genuine grievances. But, nothing has happened. In one instance, a poor customer (a gardener by profession) of SBI, Andheri(W) branch depsited a govt cheque of Rs.63,723/- on 11 March 2013 is yet to get credit of the amount to his SB A/c. 10218281741. Despite repeated visits and letters no action is taken. Complaint to the Banks Ombudsman is also lodged. Such is the plight of poor customers. Who is going to make good the loss to this poor customer (loss of interest, travel cost, wage lost etc)? Huge NPAs where defaulters are not considered as willful (Kingfisher airlines)have eroded the profit of the banks forcing the government to recapitalise them which is ultimately your money and my money. RBI should address these issues and make the banks accountable for poor services rendered by them. Will RBI intervene and redress this sample case mentioned by me in this message? 

- Santhanam

RBI FORMATION DAY celebrated by RBICHENNAIFRIENDS Group

RBI FORMATION DAY

Celebrated at Marina Beach, Chennai on 1st April 2014 by

RBI Chennai Friends

Dear Friends,

You are aware that RBICHENNAIFRIENDS Group invited its members to assemble at Marina Beach at 5.30 p.m. on 1st April 2014 to celebrate  RBI Formation Day. We are extremely happy that more than 50 members turned out at very short notice. The cool and gentle evening breeze with the backdrop of roaring waves of the sea set the most conducive ambiance for the members to meet  and share their fond memories about the great institution they served. Members at large appreciated the proposal to organise such an event to show our gratitude to the great institution. 

Shri S.Venugopalan in his introductory speech praised the efforts of the moderator to convert his suggestion to a reality and shaping it to an impressive show. He said that completion of 80 years of age in the life of every Indian calls for a big celebration and in a similar way we should take today's event as a lead for planning the 80th Birthday of the Bank next year as a mega event. 

Shri Kurien Chacko entertained the gathering by narrating an incident that happened at the youth hostel recently and tactfully converted it into a brain teasing puzzle. Sri T.V.Mukundan's  Tamil Translation  of Chacko,s  narration made the memebrs roar with  laughter. 

Sri T.V.Subramanian had a great praise for the RBI. He said that most of the members present at the event belong to the batch of members who retired from the Bank between 1986 and 2004 who should consider themselves as a lucky lot. He said they could enjoy the benefits of many awards, settlements of wage revisions, perks and other facilities and more importantly the pension scheme. He added that the pension scheme enjoyed by us is not made available to the pre-86 retirees as well as post 2004 recruits. He wanted the moderator to forward a report and the photos of this get together to the Governor and  to ensure that the proposed 80th Birthday of RBI should be celebrated in a grand way involving the Bank's executives at the top most level. 

Shri Mushtaq Ahmed endorsed the views of Sri TVS about the greatness of the institution. He mentioned that we should feel happy as the prolonged struggle of the employees for restoration of Pension updation is coming to a close. He said that Updation of Pension has become certain and only the modalities of fixing formulae for the Basic Pension etc. is under negotiation by the United Forum. 

Shri S.M.Sendil draw a reference to the olden days of Sri Ashis Sen etc. where the service conditions were very poor. He said staff use to leave office only around 8.30 p.m and getting permission to leave office half an hour early for some valid reason was a herculean task. He praised the role of the Association which alone was responsible for bringing vast change in the system to a comfortable level. Sri Sendil also rightly stated that we should develop the feeling of contentment with whatever we are paid according to our times without making comparison with others. 

Shri V.Subramanian (Aranthai manian) recalled the day he joined the Bank after resigning his job from Lucas TVS for a salary difference of Rs.50 per month but got very much dejected when he was posted to claims section and asked to fill up Money Order forms.  He informed that he could realise later the great role of RBI in managing the monetary policy and currency management and that sending money thro' money order also was a part of the job. He said that he still cherish the days when he was actively associated with the Recreation Club and successfully organised a Chess tournament between the Indian Grandmaster Sri Viswanathan Anand and  32 Club members at a time. 

Smt.Uma Rajaram, a serving employee said that she came to RBI Chennai on a  transfer from Hyderabad office. She said she was overwhelmed by  the support and affection shown by Chennai colleagues. She felt sad that the warmth, love and bonding is missing in  the present set of  colleagues. 

Shri S.Sankaranarayanan appreciated the activities of the group and said that it was the Chennai group which has first posted a message in the Facebook  about the celebration of RBI formation day. 

Although Sri G.S.Shunmugam could not get his chance to address the gathering he was found cutting many jokes with the members there in groups. 

Shri S.Subramanian (German Subbu) attended the meet late and could not get his chance to address the gathering. At the same time  we should praise him for coming to Chennai from Bangalore to attend the event. 

Snacks and refreshments were served to all the participants. We convey our thanks to S/S. Janardhanan, Devarajan, Venugopalan and Logeswaran who assisted in organising the snacks and refreshments. 

Although we decided not to receive any payment from the members for this event some members have come forward with their voluntary donations. (S/S.T.B.Sathyanarayana, C.Murugan, K.Govindarajan, German Subbu and P.T.Veeraiyan) . We thank all of them for their gesture. The event was concluded around 7.15 p.m.

Yours dearly,

Chandraiah

Forwarded by Madan Gauria

RBI will act on data surprises that are durable: Rajan

........“To the extent that the new government can provide an assurance that the fiscal situation is under control, we can move to bring SLR down, purely as a way of reducing distortions in the system. It is good for the economy if there is a credible, sensible fiscal consolidation path the new government lays out,”...........

Read - Mint

RBI grants in-principle approval to IDFC, Bandhan for new bank licences

........The "in-principle" approval granted will be valid for a period of 18 months during which the applicants have to comply with the requirements under the Guidelines and fulfil the other conditions as may be stipulated by the RBI." 

Read - ET

My View on "EC clears way for RBI to issue new bank licences": 

It is a welcome decision of the EC to allow the RBI to do it normal functioning. But, in issuing licences to two NBFC-MFIs viz., Bandan and Janalakshmi, RBI may well consider if by issuing licences to these two entities, they may lose the character of providing microfinance services to the unreached as they may limit it to the extent of priority sector commitment only. Then these would become another new generation banks with microfinance and financial inclusion becoming show-case activities and not prime activities as hitherto being done by these entities. 

- Santhanam

India Inc surprised by rejection, to reapply

Corporate aspirants for banking licences are disappointed with the Reserve Bank of India (RBI) rejecting their applications. Top executives said they would re-apply for the next round as and when the RBI decides to start the on-tap licensing process............

Read | Business Standard

Twists and turns in the new licence saga

Former Finance Minister (now President) Pranab Mukherjee first proposed the entry of new players in the banking sector during his Union Budget speech for 2010-11. When Mukherjee made the announcement, his speech surprised many in the central bank, as consolidation of existing banks was the most-debated topic in those days.............

Read | Business Standard

We'll build a bank via organic route: Vikram Limaye

.......The RBI nod gives us visibility about the days ahead. There is already a plan in place for activities to be done in the next 18 months. The focus will now shift to execution. It will involve activities such as setting up a holding company and moving some businesses into a distinct corporate body to meet..............

Read | Business Standard

RBI deputy governor clarifies spreading mark-to-market losses lapsed on March 31

Reserve Bank of India Deputy Governor H R Khan clarified that only the time limit for spreading bond losses held under banks' mark-to-market portfolios had lapsed on March 31, and not the waiver on bringing down the ratio of debt under the held-to-maturity segment..........

Read | Business Standard

Policies of new government to influence RBI's stance from June 2014 onwards

..........On balance, while the RBI stayed on hold today as expected, we think the election outcome and the new government's economic policies are likely to have a material influence on the course of RBI policy from June 2014 onwards. While not a structural factor,............ 

Read - ET

RBI To Withdraw All FDI Pricing Guidelines!

......When it came to the pricing of options on compulsorily convertible debentures and preference shares, RBI permitted the use of ‘any internationally accepted pricing methodology’.

Later in January,  G Padmanabhan, ED, RBI indicated to me that things might change!

Here’s an excerpt of that conversation….....

Click to read.............

Strengthen credit appraisal for gold metal loans: RBI to banks

.......“In case GML is given by the nominated bank to its own existing customers, gold metal loans under the scheme may be carved out within the credit limit sanctioned by the bank. In case of new borrowers, the gold metal loan limit may be fixed after carrying out a detailed credit appraisal and due diligence,”...........

Read | Business Standard

Inflation-indexed bonds may get a makeover

...........“When you have capital gains accrued from non-equity funds, you pay tax only after factoring in indexation. Similarly, when RBI says that it is contemplating the benefit of indexation for inflation-indexed bonds, this means that it will factor in the effect of inflation when it comes to calculating the tax on gains,” ..............

Read - Mint