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Thursday, April 10, 2014
RBI's Deputy Governor R Gandhi: A 'simple man' well-qualified for new job
RBI appointment referred to EC for approval
The Election Commission will have a say in deciding a replacement for incumbent RBI Deputy Governor KC Chakrabarty, who had sought early retirement from the central bank. Although a search panel headed by RBI Governor Raghuram Rajan had zeroed in on a banker to take charge of this prestigious position, the Central Government, it is understood, wants to play it safe...........
RBI - fighting a lone battle
My View on "The RBI gets it right":
While I disagree with many of the words used in the conclusion which reads “The mandarins who run the Union finance ministry come from the top of the civil service examination merit list; those who run the postal department come from far below. How can a Brahmin find so much merit in an OBC?”, it is tough to find reasons to contest the grounds for making such an observation. Last few years have seen the central bank (Reserve Bank of India) as an institution fighting a lone battle to perform its mandated role as efficiently as it would have enjoyed doing. Most of the Governors and Deputy Governors who were in position during the last decade and a half, did understand the role expectations from RBI once they started operating from Mint Street. But the hostility of lower rung finance ministry officials for extraneous reasons made their life difficult. This resulted in the evolution of three power centres, namely RBI, its Governor and the finance ministry taking different positions on important policy issues. It is comforting to find that Dr Raghuram Rajan has been able to assert leadership and coordinate among these three divergent pulls and pushes. His willingness to unlearn what is not relevant to the Indian context and to prepare RBI to meet the new challenges by making the priorities clear to his deputies inside RBI and giving expression to his expectations from GOI in no uncertain words gives one hope about RBI getting back on the right track quickly.
- M G Warrier, Thiruvananthapuram
Changing perceptions
The rupee’s recent appreciation to below 60 a dollar — it is hovering around those levels — is a significant development and not just because of its breaching a psychologically important mark. At one level, its recent strength would appear to mirror the changing perceptions of investors, especially from............
Suitable choice
My View on "GS Sandhu - Making a propitious start":
It is a good development that a person with mild manners and belief in taking people along has been appointed in this position. Equally important is the aspect that he holds a doctorate in banking and hence should be a suitable choice for the post. In the past, some persons who have no background even in Finance not to speak of banking were appointed to this Ministry. IAS officers who were working, say, in the Water resources Ministry and with out much background in Finance are appointed to this Ministry as they are supposed to be all knowing!!It is also good that at present no IAS officer is a part of the top management( Governor/Dy Governors)of the RBI and I wish this position continues. In fact, I had expressed a view long ago in an article in the 'Business Standard' that there should be no quota for appointment to the post of Dy.Governor, i.e one/two from the RBI, one from the Banking Industry and one either from the IAS/an Economist. Highly competent persons should be appointed and in the process, if some section is not represented, it should not matter.
- A.Chandramouliswaran
Dr.N.A. Mujumdar - Prayer meet
Dr. Narasinh Annaji Mujumdar (former Principal Adviser, Reserve Bank of India) passed away on April 6, 2014. He was a selfless, caring, loving person, and a source of inspiration to many. His strong spirit will always remain with us. Fondly remembered by his wife, Shashikala Mujumdar his son, Sudesh Mujumdar; his daughter, Mamata Patwardhan and her husband, Shailesh Patwardhan; his grandchildren, Sharvari, Medha, and Jayant, the entire Patwardhan & Mujumdar families; and his Friends and Colleagues.
Prayer meet on Friday 18th April from 5pm to 7pm at Sri Admar Mutt Temple, 115 H, Near Fire Station, S V Road, Andheri West, Mumbai - 58.
Thank you for your condolences & support magmata@hotmail.com
Revisit inclusion
...... Of course, there is a large gap between the banks and the people with potential to seek financial inclusion. Just because of making villagers to have an access to a bank account inclusion wouldn’t be completed. A micro study on the income and savings of the account holder must be made to stimulate him to deposit savings and to seek small finance from banks to augment his earning capacity in small business ventures...........
Pension updation and opening of fresh option - RBIOA circular
.....First of all it would be in fitness of things if the facts are placed before you so that an informed decision can be taken by each one of you..............
CEO salaries in public sector banks
........To most observers it would appear that the government is unnecessarily penny pinching when it comes to CEO pay. Their reasoning is that salary hikes are being blocked by the bureaucracy who does not want psu employees to get more than babus of an equivalent rank in the government. Former RBI governor D Subbarao too supported psu chiefs on this issue pointing out that if psu banks had to compete with private sector lenders there should be a level playing field in salaries. So why is there such an inverse wage structure in public sector banks?................
Know Your Bank first
My View on "K(now) Y(our) C(haos)":
KYC has become very handy for banks to Keep YOUR Customers Away. They demand some document which the customer does not have and drive them away from branches. Bank Employees serve themselves. Before going to the bank Know Your Bank first and Know your Compulsions to have an account opened. Employees will ensure that You Are Not a Wanted Customer and they have KYC norms to back their wish. God Save Indian Banks and Financial Inclusion which is never going to be there in the present two or three generations and future generations also as long as Bank employees and authorities do not really have a mind set to view customers as a Business Opportunity. If it is absolutely essential then only go to the Bank. NRI customers are the worst lot as they cannot have regular contacts as the phones are not meant afor any Communication and emails are seldom read and answered.They are lucky in the sense that they do not come in personal Contacts with the employees to incur their displeasure and wrath.
- Dr.T.V.Gopalakrishnan
First thing to do is delink KYC from Money laundering. As former commercial banker I know the moment a branch manager gets a circular combining these two unconnected issues he or she will become rigid in handling a potential customer.Change the nomenclature to make it appeal a simple one. May be it can br christened Client Introduction Form. Allow BM and staff or a customer as eligible introducer .Things are likely to change.
- Santhanam
Postal dept asked to pay Rs 3 lakh for opening joint Public Provident Fund a/c
.....In May 2009, they went to deposit an additional amount into the PPF account but the postal authorities refused to accept it stating that as per the PPF regulations the account cannot be a joint one, they said in the complaint. They were also informed that the account will not carry any interest as it is treated as an invalid account. The authorities also informed them that the balance in the account can be paid only after completion of 15-year period. The Thane District Consumer Redressal Forum, in its order issued last week, took exception to the casual attitude of the postal department in dealing with such operations ...........
Managing NPAs: Cure worse than the Disease
........A former top executive of the RBI who did his Ph.D., on NPA Management has some good suggestion. Sans the statistical models creation of a ‘PRECAUTIONARY MARGIN RESERVE’ (PMR) suggested by him starts with a small levy of 0.10 percent to 0.75 percent on the following mandatory classification of standard advances. ............
Read...........
Read...........
RBI steps in to end 'unfair' scrutiny of PSU bankers
...To overcome this, the RBI proposes to establish a procedure and define what could be mala fide so that it can come under the purview of the vigilance authority. "Every policy is greeted with suspicion and scrutinised for evidence of malfeasance.
ICICI Bank reports deposit of fake currency notes over several years
Country's largest private sector bank ICICI Bank has lodged an FIR in a city police station alleging fake currency notes with a face value Rs 10 crore were deposited in its different branches in the past several years............
Russian bank Vnesheconombank under probe for FEMA violation
..............."We are in discussion with the finance ministry over the issue. The bank's operations have not been suspended," an RBI official said. Under RBI guidelines, the bank can undertake only liaison activities and its role is limited to collecting information about possible market opportunities and providing information about the company and its products to prospective Indian customers. "They cannot earn any income in India," the RBI official said.
Why two licences is all that we could have expected
......Perhaps we need 50 licences, perhaps not, but in any case the above assessment is a patent misreading of ground realities. Banking licences are not a simple regulatory matter decided within the four walls of the Reserve Bank of India (RBI), unlike, say, a circular sent to banks to increase provisions on restructured assets. And RBI knows it acutely. More so the governor, who has had an association with the central government.............
Differentiated Bank Licence Old Wine In New Bottle?
Within two months, three weeks, and five days of the Nachiket Mor panel glorifying IDFC for proving its mettle as a differentiated bank in a shaky Indian banking industry, its chairman Rajiv Lall was told his company has been granted the licence to convert it into a full-fledged commercial bank. Soon after granting the licence to IDFC, and micro-lender Bandhan Financial Services, Reserve Bank of India Governor Raghuram Rajan said the industry is on the cusp of a transformation in the form of differentiated and ‘on-tap’ banking licences. Going by the two signposts of India’s current financial system — Rajan and Mor — the country could soon have, at least theoretically, 10 different types of banks, serving various constituencies — from retail to infrastructure. Does that mean that scores of new banks are a panacea to all the economic ills?.....
Read - ET
Read - ET
Indian Banks won’t be able to Cope with Unexpected Losses, Warns IMF
........In its global Global Financial Stability Report (GFSR) released on Wednesday, the IMF said Indian banks have not set aside enough money from profits to cover bad assets compared with others. “Relative to regional peers, loan loss provisioning appears low in Hungary, India, Indonesia, Malaysia and South Africa, suggesting that any potential credit quality deterioration may need to be absorbed by equity capital,” the report said. While most countries now meet the Basel-III minimum tier-1 capital requirement of 6%, the relative provisioning has created differences in lossabsorbing capacity. .........
UBI wants fetters on lending removed
The United Bank of India (UBI) plans to approach the Reserve Bank of India to allow it to lend more than Rs 10 crore — a cap imposed on it in November by the RBI. According to top officials of the UBI, the bank is expected to make a turnaround after a rigorous recovery drive from January........
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