.........Financial stability is the foundation on which central banking is based. With non-performing assets of banks on the rise at present in India and with uncertainties about the durability of the economic revival of industrialized economies, it is important that RBI makes it a point to provide the rationale for moving towards inflation targeting at this juncture. RBI should also provide an idea about the nature and quantum of its accountability for....................
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.
Thursday, April 24, 2014
Well prepared for a ‘consensus’ approach
My View on "RBI Guv Could Be at the Centre of New Order":
This discussion serves one-perhaps only one- purpose. It gives an opportunity to those who are not generally RBI-watchers and to those who are really serious about understanding the ‘equation’ between RBI Governor and the finance ministry to ponder deeper. Suffice to say that the debate may not affect the continuity at Mint Road or more specifically the broad policy perspectives of RBI. In retrospect- as one who had argued that, in the circumstances that prevailed in July 2013, it was in the fitness of things to allow another year’s extension for Dr Subbarao- it seems the decision to shift Dr Raghuram Rajan in August-September 2013 to Mint Road was right and has served the purpose of having at least one person at the top who can take charge of the leadership in the Indian Economy when most others were unsure about their own survival. Dr Rajan who has been doing his homework for the position that was waiting for him, is by now well prepared to ensure a ‘consensus’ approach in policy matters where he has a say. This is evident first from the chapter “Afterword: What Lies Ahead for India” he added to his book Fault Lines during the early years of this decade read together with his recent speeches and observations.
- M.G.Warrier
Conference of Risk Officers
 |
Conference for Risk Officers
|
North Zone ROs at New Delhi (Feb.
18-19)
West Zone ROs at Ahmedabad (March 18-19)
East Zone ROs at Kolkata (March
24-25)
South Zone ROs at Bangalore (March 27-28)
CoDs at Belapur, Navi Mumbai (April 21-22)
ED (PVB) stressed the need for continuous efforts on part of all the
CoDs/ROs and TEs for fostering risk management culture in the Bank. ED mentioned
the background and genesis of RMD in the Bank and the importance given to ERM
framework globally in other Central Banks particularly in the aftermath of the global-financial
crisis. ED emphasized that each and every employee of the Bank should try to identify
and mitigate the risks in his day to day working in the Bank. He emphasized the
need for being particularly sensitive to aspects which had any implications for
Reputation Risk. He also stressed the need for effective communication on risk
related matters at every level of hierarchy which will help in developing a
risk culture in the Bank. ED urged the Risk Officers to identify the unique
risks faced by their respective Departments/Offices.
CGM, RMD (Shri M. Rajeshwar Rao) in his address outlined the ERM
framework of the Bank and the major developments in this area since the
inception of the department. He also delineated the roles and responsibilities
of all stakeholders, including Risk Officers especially with regard to
preparation of Risk Registers.
Sessions on Risk Assessment Methodology for Operational Risks, Framework
for Incident reporting and preparation of Risk Registers were conducted during
the conferences. The discussions were followed by hands on sessions on the applications
developed for preparing Incident reporting and Risk Registers. The participants
were also familiarized about the rationale and methodology for generating heat
maps based on risk registers. All the sessions were interactive and participants actively shared
their views on risk management and expressed their willingness and confidence
in taking the process of risk management forward in the Bank.
The witticisms of K.C. Chakrabarty
When K.C. Chakrabarty moved from the chairmanship of Punjab National Bank (PNB) to the deputy governor’s position at Reserve Bank of India (RBI), the fraternity of bank analysts was deeply disappointed. We just wondered who in the sector will entertain us. After all, there are few bankers who are great entertainers. And a banking regulator by definition will be even less of an entertainer. But Chakrabarty did not fail us. His indomitable spirit sustained the rough and tumble of central banking, and...............
Interesting situation
My View on "Discrimination amongst retirees neither just nor e...":
1. A very interesting situation has arisen in RBI Pension updation field. Pension in RBI came into force w.e.f.01 November 1990 under RBI Pension regulation, 1990. This RBI Pension Regulation is being replaced for new entrants and shall cease to be from 1 January 2012 for NPS. That means the present pension regulations will be implementable to employees who worked in RBI during these 22 years. As the New pension Scheme (NPS) is started in RBI from 01 January 2012 on wards.I do not know whether the RBI Pension Regulation, 1990 Chapter 1. Reg. 1. (2) has been amended by the Bank for it's discontinuing to new entrants.Or, a new RBI Pension Regulation has been incorporated with parliament approval for new entrants w.e.f. 01 January 2012, the RBI Legal department will be the best to know this.
2. As far as the existing Pensioners under RBI Pension Regulations, 1990; one thing is clear that" Neither the pension can be reduced nor withdrawn by any Government Order without a judicial pronouncement." So, the Pension and DR received is assured for the entire future of the Pensioner. As regards Updation, the Bank to consider how best it can pay pension to the all equally at the same length and scale of pay with out making a different category among the pensioners against the law explained by Hon. Supreme Court in their various judgments chiefly Nakara Case.
3. Therefore, Bank is required to Pay Pension to an equal amount to Pensioners on each pay revisions at the same level ensuring no junior gets more pension at any point of time during the currency of RBI Pension Regulation, 1990 and that is called - - - Pension Updation.
4. It can be very easily be paid either merging all the superannuation elements in Basic Pay or the Grade Pay. Since, RBI Scales and positions are on different pattern, the Grade pay may be considered an additional allowance as paid with salary in Private Sector as a separate nomenclature.
This solution will solve RBI Pension Updation issues without any problem. United Forum may consider it as one of their avenue along with other alternatives also.
- Capt. C B Gupta
When we ask for updation of pension as in the case govt. pensioners, govt. says as updation is given along with wage settlement, once in 10 years only in govt. RBI may similarly extend the benefits,once in 10 years. Of course, in Banking industry wage revision is once in 5 years only.
We may therefore propose wage revision be continued as hitherto before,that is once in 5 years, and the updation given once in 10 years. GOI may also agree. In fact the first pension updation given in 2003 by RBI is on the basis of two 5 year wage settlements of 1992 and 1997 only. RBI may follow the same in future. The serving staff may understand that by the denial of updation to the 10000 pensioners, like us, for the last 10 years, each one of us lost about a lakh of rupees on an average per year, that is total loss is more than 10 lakhs,per pensioner. This non-stop deprivation has to be put an end to, before the aged pensioners bid farewell to this world. The Serving Staff have to give a helping hand, as whatever little loss of new perks of 2007 wage settlement, will be insignificant considering the overall picture, as that loss could also be recouped later by negotiation.
- Sendil
What it takes for a man to plunge into marriage & what of those who don't
Marriage is for the brave. For those with deep conviction. Married men make for better marathon runners at least in Bombay. Marriage is for those who can play the stock market even if Raghuram Rajan is not helming the Reserve Bank of India. Married men are believers and almost always deeply religious and wife fearing. They have .........
RBI panel moots centralised bill payment system
.........The report further said the standard setting role/ function has to be distinct from the operational aspects of the bill payments system. "It is, therefore, recommended that the bill payments system follow a 'tiered structure' - the standard setting functions being carried out by a central body / agency (to be named as Bharat Bill Payment System - BBPS) with actual operations being carried out by multiple entities,".........
Get ready for digital signatures
..........The roll out of digital signatures will also depend on how quickly customers adapt to it. “There is a recommendation to make it easy for customers to get a digital signature. That’s why possibly a period of 18 months is given,” said Deepak Sharma, executive vice-president and head-digital initiatives, Kotak Mahindra Bank Ltd. He added that the move will be good for customers, as they will..........
10-15% cards used only for online transactions: RBI report
..........."Credit cards have a higher share in the discretionary category whereas debit cards dominate in routine expenses like utility payments. About 30% of credit card spends are being done online. At least 10-15% of customers use their cards only online, many from smaller cities," the.........
RBI constrained to withdraw 75% of banknotes each year
........Such massive withdrawal of banknotes from circulation not only means additional cost for printing of fresh notes but also additional requirement of various resources used in production of banknotes. In this context, it becomes imperative that efforts are made to enhance the durability of the banknotes so that not only the wastages are reduced, but also resources are utilized in a sustainable manner, thereby ensuring that the environmental footprint of our currency management operations is minimized. Mechanization of soiled note processing while augmenting capacity has also thrown up new challenges ...........
Fake notes: RBI warns paper, ink suppliers
..............Calling for cross-border cooperation in regulating suppliers, RBI has warned that it would have to go in for higher indigenization if vendors do not adopt 'know your customer' norms while selling. RBI's tough talk will have an impact in the global market as India is the largest producer of currency notes. With 7,647 crore notes printed every year, India generates more than double the notes printed in US and...............
High Court notice to Reserve Bank of India on religious coins
........The plea said that such coins is like indulging into anti secular actions. “These symbols undermine the secular character, a basic feature of the constitution,” said the advocate appearing for petitioner. In 2010, the plea said the RBI brought into circulation a five rupee coin in celebration of 1,000 years of Brihadeeswara temple in Thanjavur, with its image embossed on it. In 2013, it issued another five rupee coin with the figure of Shri Mata Vaishno Devi Shrine Board embossed on it................
RBI restrictions hit gold flow to Bangalore
................The acute non-availability of gold in the City and other regions is due to RBI restrictions that allow only 40 per cent of the gold imported in the previous year and the extent of gold India usually trades in. India usually consumes 900 tonnes of gold a year, which is 75 tonnes a day. Now, the country is getting less than 300 tonnes. When there is shortage of gold supply,....................
Finmin to Seek 7,000 Crore more for Bank Capitalisation
..........“The initial demand made was for around . 22,000 crore (for all financial institutions), which was pared down by the Planning Commission,” said the official, who is from the finance ministry. According to the official, the ministry will seek the extra amount because of the huge requirement of capital under Basel-III rules. According to the Reserve Bank of India, state-run banks will need about . 4.15 lakh crore – . 1.40-1.50 lakh crore of equity and . 2.65-2.75 lakh crore in nonequity capital – to meet higher capital requirements under Basel III. The RBI has already postponed the local deadline............
Set to enter big league, Bandhan to bank on core competence
.........“Our customers, who are mostly women, are very happy and excited that we bagged a banking licence. They are saying that after we launch the operations, they can come to our branches and avail full-fledged banking services. It means a lot to them,” says Tapas Paul, branch manager at Bandhan’s Nuntia branch in Bagnan..............
How RBI blocked evergreening of overseas loans
...The Reserve Bank of India has been goading banks for faster dfacetection and resolution of bad assets. Now, the regulator seems to have shifted its focus to the overseas subsidiaries and branches of Indian banks that have been evergreening loan accounts to prevent them from turning bad. Once a loan turns bad, a bank needs to set aside money to provide for such a bad loan and this hits its profitability. Evergreening refers to the practice of giving a fresh loan to repay an old loan....
RBI prescribes uniform accounting norms for asset reconstruction firms
...........Referring to booking income, the RBI said yields should be recognised only after fully redeeming the entire principal amount of security receipts and instruments issued to investors. Management fees may be recognised on an accrual basis.........
Public sector banks’ NPAs
..............The banking regulator has recently recognized that every new bank cannot be a universal bank. As for the existing ones, this emphasizes the need for staff specializing in different kinds of businesses. This is all the more necessary when risk management and capital ratios are increasingly being based on models in quantitative finance. Is there a blind reliance on accepting the output of the black box as gospel truth?...............
The messy path to deleveraging
............Rajan recognizes the centrality of trust in this process. “Public confidence in banks and the perception about the legitimacy of things like recapitalizing banks has a lot to do with whether you think the money has gone in the right direction,” said Rajan in his first interview to Mint after taking charge as central bank governor...............
Govt Asks RBI for Ways and Means Advances
The State government is in touch with the Reserve Bank of India (RBI) for securing ‘Ways and Means Advances’ for both Telangana and Residuary Andhra Pradesh states right from the day one of the formation of the two states. This is because the new states should not face any cash crunch for normal administrative works. ‘’The Ways and Means Advances issue is under the consideration of the RBI,” said sources in the finance department. However.........
Would RBI say YES to L&T Finance Plans?
YES Bank and L&T Finance Holdings are independently testing the regulatory waters on what the Reserve Bank of India’s stance could be on a possible merger or a stake purchase by one of the two in the other, said two people familiar with the development. YES Bank chairman MR Srinivasan, who used to be with the central bank, met some officials of the banking regulator to try and get............
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