..........Going by the record, the Indian economy is not up to the task. It has not been able to move people out of agriculture fast enough. While the share of agriculture in gross domestic product (GDP) is less than 15 per cent, the share of the labour force still primarily dependent on this sector for its livelihood is above 50 per cent. Even for those who have moved out, the urban job scenario is hardly reassuring...........
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, May 5, 2014
Strengthening MSMEs must to create new jobs - Charan Singh
The Reserve Bank of India governor recently acknowledged that micro, small and medium enterprises (MSMEs) face difficulties in accessing credit and has suggested the use of technology to facilitate such flow of credit. KC Chakrabarty, deputy governor, also observed recently that inadequate flow of credit to MSMEs has been one of the factors constraining growth of the sector. Again, according to recent reports, the Standing Committee of RBI has been working on this problem. MSMEs are an important sector contributing 8% of country’s GDP, ........
I've done more heavy lifting than RBI: Indian Fin Min
......"I've done more heavy lifting in the last 12 months than the RBI [Reserve Bank of India]," Chidambaram told CNBC on the sidelines of the Asian Development Bank's annual meeting in Kazakhstan. Reserve Bank of India Governor Raghuram Rajan has received much acclaim for restoring financial stability and regaining investor confidence following an unprecedented capital flight during the summer of 2013, which was triggered by concerns over the Federal Reserve scaling back its monetary stimulus...........
Should the new government sack Rajan?
......Both BJP and Rajan want inflation to come down and if indeed that’s the case, what’s the problem? Why would BJP-led government—if it assumes power —show the door to Rajan? There’s a catch. BJP is not fond of the idea of tackling inflation through interest hikes, which Rajan has been doing, because the party believes that price rise is an outcome of supply-side issues. If it assumes power, one can presume it will address those issues and since Rajan has gone on record saying that he would not adopt a sledgehammer approach to bring down inflation, it’s safe to presume that both the new government and governor will coexist peacefully..............
Raghuram Rajan should continue as RBI chief, says Yashwant Sinha
............“If it is in my control, I will continue with him. He is a good economist. Till now he has proven himself as a good governor and he should continue,” he said in a television interview. Sinha’s statement comes in the backdrop of speculation that the RBI governor could be changed if the Narendra Modi-led National Democratic Alliance (NDA) comes to power after the general election..............
RaRa needs recognition from PoliDership
My View on "The West Can Learn From India's Central Banker":
There is no denying that the Indian experience, as in several other areas, in central banking also is unique and RBI has been fortunate to have several stalwarts at the top. The present team heading the RBI with Dr Raghuram Rajan as Governor is in position at a time when the country needed such a competent team in position. While the spirit of the suggestion that other countries have much to learn from India is appreciated, our achievements and the efforts being made by people like Dr Rajan to bring India to the centre stage needs much more recognition from within the country, to be more specific, from the political leadership.
- M.G.Warrier
The New Poweratti
........Speculation is rife as to who will be the new poweratti if Narendra Modi comes to power. Jagdish Bhagwati has already said that he will like to be part of Modi's economic think tank. Another expected name is Raghuram Rajan, RBI governor, who, sources say, will be part of Team Modi........
Court stays curbs on foreign travel by bank officers
The Madras High Court has ordered an interim stay on a recent circular that took away leave travel concession facility to bank officers for journeys abroad. “Having regard to the undertaking given by the petitioners and having regard to the rules position, there shall be an order of interim stay until June 12, 2014,” Justice S Nagamuthu observed.............
Obituary
Dr.Meenakshi Tyagarajan passed away on May 2, 2014 at 11/30 p.m in Chennai. She was 88 years old. She had retired from RBI as Adviser in the Economic Department. She was also for some time Head of the Credit Planning Cell. She was associated with several RBI Committees.
She has written the biography of the first twenty five years of the Reserve Bank Staff College entitled "Reserve Bank Staff College--Evolution and Development" released in 1989.
She was the granddaughter of an eminent Tamil novelist Shri Madhaviah. She studied in Bangalore and Madras and obtained her doctorate in Economics from the United States. She worked in economic research and taught at the Annamalai University. Later she joined the Economic Department of RBI and retired in 1983 as Adviser. After her retirement she lived in Chennai. Here she cultivated her interest in literature and carnatic music. She translated into English her grandfather's book "Padmavathi" as also "Pratapa Mudaliar Charitram" by Mayuram Vedanayagam Pillai and one more book on Tamil writers. The translations are highly accomplished. Grace of style and felicity of expression are M T'S forte.
A very genial, gentle person M T was ever-helpful and she has a wide circle of friends. For me she was a true Guide, Philosopher and Friend. She showered affection on my daughters and grandchildren and talked to me only last Sunday making enquiries of all. Let us pray that her soul rests in peace.
- P.P.Ramachandran
End of glorious innings - DEAPly shocked
- N. Nagarajan
She was the key person in setting up the Organizational Chart, way back in 1979 (established in 1982) when I worked with her in the erstwhile Management Services Division (O & M Division) under the aegis of Dr.Y.B.Damle at EROS Thetatre building. A talented woman and great Indian Economist! May her soul RIP!
- Janaki Ravindran
Later in June 2010, we had, through the courtesy of CGM, Shri Bazil Shaikh, sent a copy of the Bank's book, Mint Road Milestones: RBI At 75, published to commemorate the occasion of the Platinum Jubilee Celebrations of the Bank to Dr. Tyagarajan. I am one of the authors of the book (other two being Bazil Shaikh - the main architect and Ranjeeta Dubey, a great organiser) ; veteran colleague PPR Sir, 'a man for all seasons', had reviewed the book, which appears in his delightful 'A Bunch of Fragrant Roses'.
I feel nothing can be better than to reproduce, by way of Tributes to Dr. Meenakshi Tyagarajan, an extract from a mail sent by her to DG Smt. Usha Thorat, which speaks volumes on the warmth and affectionate and endearing personality of Dr.MeenakshiTyagarajan, besides, of course, her deep attachment to this august institution :
"This must be a surprise to you -and I presume a pleasant one. Difficult to accept, but it is over a quarter century since I left the Bank. I haven't followed the institution's development very closely but I know that it has changed vastly and mainly for the better. And it has given me much pleasure and pride to follow the careers of the 'girls of my time, you and Shyamala'. It is to congratulate you on one of your recent achievements that I am writing this. Through the kindness of Mr..Khot, I received a copy of "Mint Road Milestones" from him. I also learnt that this was entirely your idea and effort, accomplished in an unbelievably short period. I have been dipping into it and reading bits at intervals. It is not the sort of book that one - at least I - can read at one stretch. I have enjoyed, and am still enjoying, the book and feel that it is one of the best publications of the Bank - one truly worthy of the (platinum) occasion. Enormous effort must have gone into the collection of the material, the photographs particularly. That apart, the substantive part, the account of the evolution of the Bank's functions, is very good and highly readable. I feel that in time, you are likely to look back on this publication as a 'milestone' in your career.
I can anticipate your response. - that it was the dedication and hard work of the team behind the volume that was responsible for the success. I agree and offer them my congratulations too. But surely it was your support, guidance and above all, encouragement that ensured the quality of the work. I know enough of conditions not only in the Bank but in any bureaucratic set up to understand this. With my best wishes for similar successes in the future."
May the noble soul of Dr.Meenakshi Tyagarajan rest in peace!
- Surendra Khot
National Payments Corporation of India notifies managerial jobs
National Payments Corporation of India (NPCI), set up by Reserve Bank of India (RBI), requires Managers in Technology / Operations / Business Development / Risk & Audit / Finance & Accounts to fill up the vacant posts..........
It Pays to File Returns Early, But Keep Changes in Mind
.........Salaried employees will start getting their Form 16 from their employers in the next couple of weeks. They should start the process of filing returns right away, say experts. “If you file your returns now rather than waiting till July, the chances of your tax refund, if any, being processed sooner is higher. Also, the e-filing site’s servers tend to be busy towards the end of tax-filing season, which could cause delays,”..........
Read - ET
Get ready for single-window payment for all bills
.........RBI is in the process of setting up an Indian Bill Payment System, a centralised payment gateway to make all kinds of bill payments smooth. The payments process will be instituted through a GIRO (government internal revenue order)-based system, where all the billers such as utility payments, taxes, university fees, examination fees and insurance premiums, among others, come on a common platform that will enable payers to make payments directly to billers........
Soon, banks to set up Lok Adalats for settling cheque bouncing cases
The Law ministry is working on amendments to the Legal Services Authority Act that would allow leading banks to set up permanent Lok Adalats on their premises for settlement of all disputes related to cheque bounce. Retired district judges or additional district judges will be appointed as chairpersons of such Lok Adalats in consultation with the high court concerned and the state government...................
Limited benefit of no-interest period in credit cards
Credit card companies, often, dangle offers that seem irresistible. But most probably, they are not as profitable as they seem. The latest one: A no-interest period offer. This offer allows you to carry forward the outstanding amount, for a specific time without paying any interest. This may seem very attractive, as the bank is allowing free revolving credit. But there are a few factors that customers must keep in mind, or else they could end up losing money. ..............
RBI seen to go on forex mop-up drive
........“It is not as if the forex market will wait for the RBI to buy the entire $80 billion. All it is looking for is a confirmation that the RBI has returned to the Jalan-Reddy policy of building forex reserves to guard against contagion,”.......
Economy & Currency Outlook: How much can Delhi do?
......This begs the question of whether rates can be cut if inflation remains high? Of course not. This is why Delhi needs to adopt the Urjit Patel committee's proposed inflation targeting framework to contain inflation expectations. In any case, there has been popular support for an inflation mandate for RBI ever since C Rangarajan's tightening brought inflation down to five per cent annually from eight per cent in the mid-1990s. Yet, given supply shocks, the inflation target itself needs to be sufficiently flexible to work. While ........
Bandhan Financial Services lowers lending rate by 50 bps
......The move may prompt Bandhan's rivals to review their interest rates. "Bandhan may have taken this decision from a forward-looking standpoint as it is now transforming itself into a bank and reconfiguring many aspects of its operations," said Alok Prasad, chief executive officer at Micro Finance Institutions Network (MFIN),
‘Bandhan will show that the poor are also bankable’
.......We will merge the existing microfinance business with the bank. But our thrust area will be medium and small scale sectors. Reaching the un-banked areas would be one of the biggest areas of opportunity. We will target the poor and the segment just above that. We would like to show that the poor can also be bankable. Our entire loan portfolio is directed at priority sectors and our recovery rate is 99.5 percent.......
Bandhan - Arrow out of bow
My View on "Bandhan to start banking operations 600 branches":
Kudos to Bandhan for taking steps to move forward with about 600 rural bank branches. A few but significant challenges for Bandhan MFI becoming Bandhan Bank would be:
Now providing microfinance is the main and only business of Bandhan MFI. But, providing microfinance will become one of the overall business segments of Bandhan Bank to comply with the Priority Sector Lending commitments of the RBI. So, more of those unbanked and underbanked may be forced to go back to informal sector particularly money lenders and big land lords. Financial Inclusion may also be only a show case activity instead of it being its main activity being carried on on a Mission mode.The staff of Bandhan MFI are paid relatively less than those offered for holding similar positions in banks. Once Bandhan Bank starts operating, the existing staff of MFI who would be transferred to Bandhan Bank would have to be paid higher salaries commensurate with that of their counter parts in the banking industry. We have the example of RRBs before us as it started with low cost banking but ended up paying salaries equivalent to the PS Banks and huge capital infusion year after year has become the norm. Bandhan Bank may also face similar situation in future. What could have been done by the RBI is that it would have issued a preferential licence to enable Bandhan MFI to function on the lines of Bancosol of Bolivia or Grameen Bank of Bangladesh so that it may not lose its character as a leading MFI in the country. Now it is like an arrow that has gone out of the bow and RBI will have little control on the formation of Bandhan Bank which would lose its MFI character if not in the short run, but certainly in the long run.
- Santhanam
Don’t expect much from new banks
........When the RBI framed the guidelines for new licences, it seemed to think that corporate houses with their deep pockets could make a big difference to competition. It is evident that the regulator has since become more wary about a host of concerns about their entry. It is not clear where corporate houses now stand. Are they free to apply for licences a little later? Or are they too welcome only under “differentiated licensing”. If the latter, it is doubtful that corporate houses will be interested.........
Spell out action taken in NPA scam: Bombay high court to CBI
...........The petitioner has alleged that RBI and the nationalised banks do not comply with the Banking Regulation Act, 1969, which mandates periodical submission of audit reports to the RBI. The same is not complied with in order to suppress the NPA scenario and shield the culprit beneficiaries working in collusion with the banking authorities, alleges the petition............
Cultivating NPAs
...........As of September 2012, according to an RBI working paper by Shashidhar Lokare, priority sector lending accounted for 31.1% of all gross advances but 41.7% of all NPAs; the figures for the non-priority sector were 68.9% and 58.3%, respectively. It is true that the figures will change once you take into account the relatively higher share of restructured assets for industry, but there can be little doubt priority sector lending is a big source of NPAs. More important, ................
Banks find it easier to offload NPAs after RBI tweaks norm, says HSBC report
.........A sudden rush to sell distressed assets to asset reconstruction companies (ARCs) in Q4 could be attributed to the RBI allowing banks to write back the excess provisions made over the book value when the NPL is sold, says an HSBC report..........
Read - FE
Read - FE
Public or Private, Banks May Need Image Makeover
.......Banking may be perceived as staid or conservative, but their imagery shows a vivacity and vibrancy like any other consumer-facing category. And, now with the RBI opening up licences to newer players, it would be interesting to note if the new players follow their sub category codes or will they innovate. With penetration and share fight both being challenges in the category, it will be interesting to see the approaches that will be taken by the new players and how the older players will reposition themselves with a changing competitive landscape...........
RBI panel says don’t force banks to become to insurance brokers
...........The reluctance on the part of the RBI and banks is clearly visible in the latest report being prepared by an RBI panel. The RBI’s working group on bancassurance has suggested that no model should be unilaterally imposed on banks and that the choice of becoming a multiple corporate agent or a broker should be left to the respective banks and their boards. Under the existing regulations, a bank is allowed to distribute policies of one life and one non-life insurer as its corporate agency partner................
SBI's most luxurious bank 'Kohinoor Royale' opens account for minimum Rs 1 crore
........This innovative ‘by invitation’ only Branch of SBBJ, Kohinoor is a very unique concept for getting business of ultra HNIs, an area hitherto virtually untouched by PSU Banks. This is a specialized Branch, where the accounts shall be opened only by invitation. The Bank’s expectation shall be to have a minimum of seven figure business from all customers at this Branch. This outfit is being loosely called a ‘crorepati branch’. The branch has state-of-the-art outfit with royal ambience which is an instant attraction for intended customers. Kohinoor Royale Banking Centre at Jaipur is meant for Kohinoors of modern India. It has a five star ambience with ultra modern facilities. The Branch has a plush lounge named Deewane Khass, which consists of Rajkosh, the locker facility, Shringar, the dressing room, and Darbar, a conference room with video conference facility apart from personal business centers, cafeteria, and most comfortable sitting arrangements. The lounge has both music and TV channels for the entertainment of visiting customers...............
FinMin asks PSU banks to focus on mobilising CASA deposits
..........“Banks have been asked to cut down their reliance on bulk deposits. They need to focus on mobilising low-cost deposits. They should be focusing more on CASA (current account savings account),” Financial Services Secretary Gurdial Singh Sandhu told PTI. They should be aiming at 40 per cent CASA for improving their profitability, he said.......
Indian banks will have to raise Rs 3 lakh crore in external capital: IOB DGM
..........“It will be difficult for the government to find such a large amount to capitalise the public sector banks. The situation of the private sector banks will not be much different, leading to merger and consolidation of the banks,” he opined. RBI’s directive to implement the Basel III norms by 2018 March was also a big challenge, he said..........
JK Bank conducts financial literacy camps
...........In Budgam, the FLCC center Budgam organized a financial literacy camp at Boys Higher Secondary School (Budgam). A large number of students along with the faculty members participated in the camp, wherein the Facilitator FLCC Budgam educated the students about Saving Bank Account Schemes introduced by the Bank which cater to the requirements of student community drawing scholarships from the Government. The District Development Manager, NABARD, also apprised the participants about various income generating schemes under farm sector and self employment activities...............
Government writes to RBI, seeks higher borrowing limit for Exim Bank
.........In a letter to the RBI governor, the commerce secretary has asked for differential treatment from commercial banks and sought a higher borrowing limit for Exim Bank. "If Indian project exports are to compete with China on the basis of co-financing offered by Exim Bank, its leverage ratio may be raised from the present 10 times of NOF to at least 15 times of NOF," the letter said.
No Effect of Nabard's Fund Threat on Govt
The State Government has not shown any interest in completing rural infrastructure projects on time despite warning of the National Bank for Agriculture and Rural Development (Nabard) to shelve sanctioned projects which have remained incomplete beyond the stipulated time. The Nabard had sanctioned 385 projects of the Rural Development department under rural infrastructure development fund (RIDF) in eight tranches. The State Government had made a budgetary provision of `210 crore for these projects in 2013-14.......
Tamil Nadu and Gujarat finances: some pluses and minuses
..........A perusal of the report of the Reserve Bank of India, ‘State Finances: A Study of Budgets of 2013-14,’ published early this year, reveals that in the debt-Gross State Domestic Product (GSDP) ratio and the interest payments-revenue receipts ratio for the fiscal 2011-2012, Tamil Nadu was better placed than Gujarat. Also, be it the State’s Own Revenue......
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