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Wednesday, May 21, 2014
RBI plans radical overhaul of customer protection norms
RBI to austere customer care; says banks must shape up
.......Banks may soon have to pull up their socks if they want to avoid being named and shamed. Starting next year, the Banking Code and Standard Board of India (BCSBI), a watchdog set up by the RBI will publicly declare the names of all those banks that failed to adhere to the customer service rules prescribed by them. BCSBI says it has already started grading banks based on the quality of their services and hopes that this will force banks to behave better. AC Mahajan, Chairman, BCSBI says, “Governing council decided monitoring codes for so many years then why not start rating banks.
RBI GOVERNOR IN MODI ERA - TO BE OR NOT TO BE...................
.............RBI is accountable to the Finance Ministry and not the
Parliament but at the same time, RBI Governors have been strong enough,
independent enough to never allow the Finance Ministry to dictate what should
go into its monetary policies. Rajan’s predecessor, Subbarao was extremely
independent, even to the extent where he and Chidambaram could not see
eye-to-eye as he refused to toe the line set by the Finance Ministry. Rajan is
also unlikely to dance to the tunes of the new Govt and his steadfast focus on
keeping a tight leash on inflation will continue..............
FM choice, Rajan retention & reforms to drive mkt mood :DBS
......"The triggers for further equity action will be the new government's reform agenda. In the immediate term, selection of the finance minister and decision to retain the RBI chief are likely to provide a boost to sentiment and keep the rupee supported," ........
The fifth 'C' gets going at ICICI Bank
...........The CEO says she has no problems if people refer to her as a boring banker because of the bank's obsession with caution, as the so-called boring part of any banking business gives the core operating revenues. "The extra cream and cherries will depend on how the environment moves. In the banking business, you have to take risks, but the risk should be understood, quantified and priced in. It is risk management and not risk avoidance," Kochhar says. The move has paid off well in the current business environment as even though non-performing assets, or NPAs, and restructured assets have gone up requiring higher provisions, the bank has been able to increase its net interest margins, giving it the ability to absorb the extra risk.............
Obituary
Shri GUL BUTANI (70), our colleague from Economic Department expired on May 19, 2014 at USA. He was a brilliant officer and a wonderful associate while in the Bank. May his soul rest in peace.
- PM PRITHIANI
RBI to take over management of Telangana’s public debt from 2 June
.........."Under the agreement, which shall be effective from 2 June, 2014, the Reserve Bank of India shall carry on the general banking business of the Government of Telangana, manage its rupee public debt and act as the sole agent for investment of Government’s funds," RBI said in a release today...........
Inflation control tops RBI agenda for new govt
............While some of the recommendations of the panel have already been implemented, the government’s comfort is required for pushing through some of the other key suggestions, such as setting up a five-member monetary policy committee (MPC) with a majority of the members representing RBI. The finance ministry under P Chidambaram had raised its reservations on the issue and made a detailed presentation to the Prime Minister’s Office (PMO). Since no conclusion was reached during the previous government’s tenure, sources indicated Rajan would engage with the new government on this issue...........
New govt must get stalled projects off the ground on priority: bankers
.......Bankers want the government to push economic development on a priority basis. Pressing issues such as policy stability and simplification of business regulations should be carried out seamlessly, they said. For the last two years, India has seen sub-five per cent annual growth; for this year, most growth estimates stand at 5.5 per cent......
RBI introduces common registration form for various NBFCs
.........."Now, there will be a common application form for Non- Banking Financial Companies (NBFCs), Non-Banking Financial Company-Micro Finance Institutions (NBFC-MFIs), NBFC-Factors and Infrastructure Development Finance- Non-Banking Financial Companies (IDF-NBFCs),"...........
NBFCs should follow fair practice code: Ramesh Chennitala
Home Minister Ramesh Chennithala on Tuesday urged non-banking financial companies (NBFCs) to follow the Fair Practice Code stipulated by the Reserve Bank of India (RBI) last year. They would face action if they failed to comply with the code, he said..............
RBI to have regular process of bank licences: Rajan
Reserve Bank of India Governor Raghuram Rajan Tuesday said the central bank would soon announce a regular process of granting bank licences, ending the current system of giving it in tranches. "The Reserve Bank of India is committed to freeing entry in banking," Rajan said at an event organised by the Competition Commission of India.............
RBI chief floats policy balloons
..........PSBs, said Rajan, were in a worse position than their private counterparts in attracting human resources. In the past, he said, PSBs had the best talent; today, past hiring freezes had decimated their middle-management ranks, with private banks having also poached talented personnel. He advised state-owned banks to recruit laterally. "But, to do so, they need to be able to promise employees responsibility, as well as the freedom of action."...........
RBI says introduction of payments banks can reduce SLR ratio
......A payments bank, which will take deposits and offer payment and remittance services, will be constrained to invest all its funds in safe instruments such as government securities, Rajan said. The RBI governor said the proposed Post Bank could start as a payments bank, making use of post office outlets to raise deposits and make payments. The Department of Posts had applied for a banking licence in the last round. At that time RBI said it would consider the application of Department of Posts separately in consultation with the government. Rajan said a commercial bank could convert itself into a payments bank by maintaining 100% SLR margins, indicating that regulations will not favour a payments bank unduly..........
Recommendations to Improve India's Public-Sector Banks' Governance Are Credit Positive
.........Although we do not think it is likely that the government would allow its stake in public-sector banks to fall below 50%, there is a higher probability that the government would implement a watered down version of these recommendations. Even such an outcome would be credit positive for public-sector banks.
Bank licences: RBI may bet big on small NBFCs
............ “A number of eminently practicable suggestions have been made to reform PSBs. We need to examine all these ideas carefully, many of which will help give public sector banks the flexibility to compete in the new environment.” Rajan did not quite agree with outgoing finance minister P Chidambaram's idea of Indian mega banks, which can compete on a global scale. “Rather than focussing on mergers (to form mega banks), it is better to have a good management structure and proper governance in place for all banks.”...........
PSU banks need to free themselves from govt influence: Raghuram Rajan
.............."If public sector banks become competitive, and especially if they do so by distancing themselves from the influence of the government without sacrificing their 'public' character, they will be able to raise money much more easily from the markets. "Indeed, the better performers will be able to raise more, unlike the current situation where the not so good performers have a greater call on the public purse. Competition will improve efficiency,"...........
A Golden Opportunity to Move Forward on the Reforms Path
........So what is it that a new government with the comfort of parliamentary numbers should do? India now has several regulators in the financial sector enjoying varying degrees of autonomy and respect. Over the last decade or so, after transfer of power from the ministry of finance to the new regulators, the government has chipped away at some of the institutions. One of its failures has been the inability to accept and settle professional differences with the regulators as illustrated by the experience of Sebi during CB Bhave and KM Abraham's tenure and at RBI during the tenures of YV Reddy and later D Subbarao. A new finance minister will have to mend ties with some of the regulators, alter the terms of engagement and allow them to grow and respect them without the shadow of a mai-baap relationship, and also ensure accountability .........
Governance reforms in banks: The Nayak Committee Report
..........The Nayak committee needs to be complimented for taking the bull by its horns and addressing the issue of process squarely. While arguing for fundamental changes in the way the public sector banks function, the committee presents a compelling case by examining the performance of these banks in comparison with the private sector counterparts. The committee, starts its report by pressing the alarm bells on the performance of these banks; moves to analyse what cripples them; and then addresses the issue of governance. The of governance of bank boards is not a stand-alone issue that could be tinkered by recommending some changes here and there, but has to be examined comprehensively..............
RBI for 20% credit enhancement by banks to corporate bonds
......The limit on partial credit enhancement will be set at whichever is lower---20 per cent credit enhancement or the funds needed to raise the rating by two notches. Banks should adopt a board-approved policy on partial credit enhancements, covering issues such as assessment of risk and setting limits, RBI said in its draft norms released on Tuesday.............
Catholic Syrian Bank, Ratnakar Bank to hit capital market this year
.........While Catholic Syrian Bank is planning to raise about Rs 300 crore from the fresh share issue, RBL Bank may raise Rs 800 crore from the IPO. The two banks have been advised by Reserve Bank of India over the past few years to gear up for an IPO and now the P J Nayak committee report on governance issue of banks also states that the two banks have to list by December 2014...........
SBI plans to offer 55 lakh shares to staff at a discount
.........India’s largest bank said it proposes to offer the equity shares to its employees at such discount as may be decided by its board. The discount will be based on the average of the weekly high and low of the closing prices of the shares quoted on the NSE during the two weeks preceding the launch date, but at a price not less than ₹1,565 an equity share............
Are there really zero interest EMI schemes? Yes and no
..........In zero EMI schemes offered on credit card outstanding, the interest element was often camouflaged and passed on to the customer in the form of processing fee. After the central bank issued the circular, retailers had indeed reduced the number of such schemes. So, how are some retailers still able to offer such deals?...............
Officials undecided on foreign investment in HDFC Bank
A meeting to take the views of the industry department, finance ministry and the Reserve Bank of India (RBI) on raising the foreign investment limit in HDFC Bank remained inconclusive on Tuesday. Now, Finance Secretary Arvind Mayaram would decide whether another meeting is to be held or the matter would straight go to the Foreign Investment Promotion Board (FIPB), sources said..........
Faulty I-T server logs off taxpayers
..........“It is very unfortunate that server is down at such a crucial time. If there had been any tech ere had been any tech nical fault or delay by the taxpayer, the I-T department would have quickly issued notice. But when the department is itself at fault, nothing can be done,“...........
Read - TOI
Coming Soon: The First Bitcoin Debit Card
Bitcoin users are on the cusp of being able to spend their hard-earned cryptocurrency at any business that accepts debit or credit cards. This new development in payments has been achieved by Palo Alto-based company Xapo, which already provides hot wallet and cold storage services. This summer, Xapo will begin issuing debit card numbers to its users, and for a fee of $15, a physical card to use at brick-and-mortar locations................
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