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Tuesday, May 27, 2014
India needs Many More Raghuram Rajans
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Raghuram Rajan loses his 'comfort' factor
....."The RBI is an autonomous body with full freedom to set interest rates in consultation with the government," say experts. But not much is not about the new economist who will be part of the Modi's team in the Planning Commission and Economic Advisory committees. Two names often doing the rounds are economists Jagdish Bhagwati and Arvind Panagariya , who have hailed the Gujarat model in the past. In fact , there was no dearth of advice for Subbarao during his stressful years in the RBI. Economists like C Rangarajan , Montek Singh Ahluwalia and Kaushik Basu publicly aired their views on the inflation and interest rates. That upset Subbarao. Rajan is no novice. He understands the mandate of the RBI and also the......
Is there any professionalism in Banks Boards? - Dr.T.V.Gopalakrishnan
.......When many of the Board members introduce NPAs in banks how can they discuss about the recoveries seriously. Their interests are also on tours, enjoying VIP status, hospitality and Gifts. When no accountability is fixed at Board level and when strict procedures are not adhered to for appointment of Board Members, how can there be professional approach in running the banks? ..........
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Replacing the old guard
.......Recently, PSBs were stuck in infrastructure finances, whereas private banks exited such projects well in time. In the current situation, where most of the old employees carrying the legacies of the pre-1991 era are retiring and being replaced by young tech-savvy executives, it is the right time for the government to take a call on reducing its stake in PSBs below 51 per cent since resistance from employee unions is bound to be lower. These newly-recruited PSB employees, who are all under the new pension scheme, are more interested in higher salaries and perks rather than secure jobs. ..........
How is the risk perception of customers linked to KYC: RBI
..............RBI deputy governor R Gandhi said that KYC was always there in banking! The focus, earlier, was more on the asset side and not on the liability side as no banker could risk parting with his funds to an unknown person.Speaking at the Federation of Andhra Pradesh Chambers of Commerce and Industry, Hyderabad, on Friday, Gandhi said, “The thorough appraisal process to screen the potential borrowers is a good example of KYC process.” The theme of the session was, "KYC: Compliance vs Convenience". Below are the excerpts of R Gandhi's speech:............
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Read the full speech.............
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Read the full speech.............
Man who could have been king
......In 2006, the then RBI governor YV Reddy had warned about the possibility of an overheating economy, but others including many in the government at the time, did not agree. He was famously quoted as saying, “I cannot certainly see the god, but see the devil.” In other words, he may not have had the solutions, but he certainly saw the danger signals. Subsequently, Reddy said at a book release function last year that India should not attempt double-digit growth like China, which was an exception. “One swallow does not mean summer,” Reddy said, emphasising no country in the world, including .............
Reserve Bank of India cautions public against fake website
It has come to the notice of the Reserve Bank of India today that a fake website has been created at http://www.rbi-inonline.org/savings.html by some unknown persons offering various banking facilities and asking members of public to apply on-line for opening "RBI Savings Account".....
The fake website was brought to the notice on 26-5-2014 - Read.........
RBITES - Change in name - Exchange of views
Dear Colleagues,
We had started the group of RBIOA so that we can interact with each other on a mail other than our corporate mail. But somehow it could not be clicked in a large way as every member of the RBIOA had easy access to corporate mail and could interact with more no. of members as all the members are available there. Then it was becoming difficult for me also to handle on day to day basis because of time constraint. Now, it has been decided to change the name of group to RBITES and Shri Madan Gauria, ex-AGM of our bank has been entrusted to liaison with all the members on behalf of the RBITES. Shri Gauria was an excellent officer of the Bank while during service and is also excellent co-ordinator for all of us. He really devotes a lot of time towards this and keeps apprised of the latest happening in the Bank and around.
So he will be the co-ordinator for the new Group - RBITES. You are all requested to switch over to the new group. You may also advise your other colleagues to be a part of it. Website of the group, which is open to all serving employees of RBI, can be accessed by clicking at following link or by pasting it in your browser:
( R N Vatsa)
General Secretary
Reserve Bank of India Officers' Association
Mumbai
Restaurants fume over lack of Rs five coins
......The Indian Hotel and Restaurant Association (AHAR) has written to the Reserve Bank of India (RBI) about the increased shortage of coins in the market. AHAR has written that the RBI's plan to channelise the distribution of these coins only through bank branches is not working in the industry's favour, sources said. "The problem is that banks are not keen on providing this se rvice. We have been frequently turned away from banks, which claim that coins are not available. The RBI should implement such policies only after assuring that banks will make coins available for everyone. .............
Why bank depositors deserve tax-free interest
.......The worst part of banking is the negative return they provide to the depositors, who in the interest of safety of their hard earned savings place implicit faith in the banks and silently suffer erosion in their savings without realizing the loss they incur year after year. The high rate of inflation and the rising cost of living have created a deep dent on their savings. This is made worse by tax laws, which are regressive on account of the failure of the government to bring inflation under control..........
Ombudsman for ombudsman
My View on "Awareness welcome, but Redressal sought for":
I have also come across a case where the performance of the office of the Ombudsman was, to say the least, pathetic. I only hope that persons who are not wanted in the mainstream or who wish to get posted to places of their domicile are not posted as Ombudsman. I headed an organisation just before retirement where employees in various grades who were inconvenient for various reasons,who are sick (some of them even terminally sick) were posted. As far as the head of this organisation is concerned, we are even now perhaps sticking to this policy with a degree of consistency which one wonders whether to be praised or condemned! It is high time some central audit is done of cases disposed off by the various regional offices of Ombudsman.
- A.Chandramouliswaran
One more held in banking job fraud
The MRA Marg police have arrested one more person in the job racket case wherein the racketeers allegedly claimed to provide jobs to aspirants in reputed Union Bank of India and Reserve Bank of India. The accused have alleged to have duped five people on the pretext of providing them jobs.............
Read - DNA
Read - DNA
Giving your teenager a bank account? Start small
......... If parents are worried about the safety of the deposits in the hands of children, there are safeguards that can be built into the entire process. It would be better to start with small amounts and seeing how they handle them. This would ensure that there is no big loss involved even if there is a goofup or impulsive spending. Let them make their own mistakes.........
Cutting expenditure to aid inflation control
.........While the Reserve Bank of India (RBI) has been fighting its war against inflation by keeping monetary policy on a tight leash, the higher governmental spending on subsidies and administered prices of nearly 30 per cent of agricultural commodities kept on fuelling retail inflation during 2009-2014. Furthermore, the government's higher revenue deficit has raised the cost of credit and crowded out private investment, which, in turn, has worsened............
RBI report on credit information to benefit customers, industry: Experian MD
......."The recommendations around the consumer-centric points are to make things a little more transparent and processes a little easier for the consumer," Jayaraman, also the country manager at Experian India, told Business Today. "Ones that are around the banking side are more focused to try and see if they can bring a greater level of usage and uniformity for the (credit information) bureaus. And, the third is around the bureaus to bring some uniformity in the way they're approaching the market place."..............
Tackling inflation politically
......There are people in the BJP who believe that Raghuram Rajan is choking off investment by using the rate of interest as an anti-inflation weapon. But a central banker has no other weapon; he has to play golf with one club. His predecessor RBI Governor had made it clear that he sees the inflation as a result of excess demand as indicated by the budget deficit. Bring down the deficit, he more or less explicitly said, and I will cut interest rates. The budget deficit has not been brought down whatever P Chidambaram’s window-dressing may say. The incoming FM will have to seize the bull by the horn, reveal the true numbers and make drastic cuts in expenditure for the remainder of FY15...........
RBI to maintain status quo next week: BS Poll
....“Inflation has not gone down due to which there is no reason for RBI start cutting rates. However, the expectation is that inflation will come down. In that case why will RBI hike rates? RBI should be maintaining firepower in a case if inflation starts inching up due to below normal monsoon. An immediate rate hike in that case will not help,”......
All eyes on finance
Though the finance ministry and the central bank have traditionally been on opposite sides of the interest rate debate, there can be little doubt fiscal policy needs to create more space for monetary policy to operate. If government expenditure keeps on rising unchecked, as it did till P Chidambaram returned to North Block, this will fuel inflation. And if corporate investments are to grow as expected, higher fiscal deficits will keep interest rates high............
The fourth challenge for the finance minister
.........Nor should the finance minister consider hiving off banking regulation from the remit of RBI. After the 2008 crisis, many Western governments have given their respective central banks more and not less powers over the banking sector. India has no reason to be more loyal to financial deregulation than Anglo-Saxon nations. Hence, the fourth challenge for the new finance minister is to resist the temptation to accumulate more power than what his ministry already has. Thanks to RBI, India has avoided “death by finance”, so far. The new finance minister should ensure that he does nothing to damage that history.
Helping Modi Get His Priorities Right
......Then, there is the inflation bugbear that the RBI has valiantly tried to tame through monetary policy — raising interest rates regularly. Both current RBI governor Raghuram Rajan and his predecessor D. Subbarao have used interest rate hikes to combat inflation — in the process drawing flak for dampening growth. The monetary policy has had some effect on WPI — which has come down over the past two years. Currently, the WPI is just over 5 per cent, a far cry from the 7.5 per cent-plus it was at in November 2013. But the other big inflation problem — food price inflation — has fluctuated between 11 per cent and 8 per cent over the past 18 months despite all efforts.............
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BJP govt inherits historic low CAD, handsome BoP
The BJP-led government may inherit an economy which has logged a decade-low growth rate, but on the external front, there is a gift to the new government from the outgoing UPA regime. As per the data released by the the Reserve Bank of India(RBI) on Monday, the current account deficit (CAD) is merely $1.2 billion, or 0.2 per cent of gross domestic product (GDP) in the January-March quarter............
RBI nod mandatory to takeover, acquire control of NBFCs
....The RBI further said any merger or amalgamation of an NBFC with another entity or any merger or amalgamation of an entity with an NBFC which would result in acquisition/transfer of shareholding in excess of 10 per cent of the paid up capital of the NBFC, would also need its approval.
RBI proposes new bank insolvency law to increase yields
.........Analysts warned that giving depositors the upper hand over other creditors will have serious implications for bondholders, potentially leading to higher wholesale funding costs for the banks. "Now that RBI's stand on depositor preference is very clear, we will have to review our support assumptions on debt instruments once the resolution regime comes into force," said Saswata Guha, a director at Fitch Ratings, India.
No debt recast requests so far in FY15
With the Reserve Bank of India’s (RBI’s) new guidelines on the management of stressed assets in place, banks have not been knocking the door of the Corporate Debt Restructuring (CDR) cell. The cell has not received a single new case for a loan recast from member banks so far this fiscal. The guidelines are aimed at helping banks spot trouble early and take speedy action to prevent assets from turning bad............
Banks unlikely to heed Kerala State directive on loans
... Considering the growing rate of non-performing assets (NPAs), the Reserve Bank of India (RBI) has instructed banks against disbursing unproductive loans. Primary Cooperative Banks (PCBs) without own funds have to avail themselves of loans from the district cooperative banks for their lending operations. On clearing unproductive loans, the PCBs will have to bear........
Banks can wait to trade in commodity futures
........Way back in 2006, the Gupta Committee report released by Reserve Bank of India argued in favour of allowing banks, MFs and FIIs to trade commodity futures. The policymakers kept the recommendation on hold, and for good reasons. India was not ready then for rabid financialisation of commodity markets whose activities touch the lives of almost everyone in some way or the other. This is especially true of sensitive agricultural commodities – food articles – that have a high weightage in consumer price index. The situation is no different even today.............
Frame new policy for coops.: Sudheeran
....The sector needed to be streamlined to arrest unhealthy practices, Mr. Sudheeran said. The government should take steps to see that the NABARD directly disbursed funds to the primary banks, he said. The cooperative institutions should also be freed from the clutches of political parties to ensure transparency in their administration, he said. With the cooperative banking sector facing additional tax burden in the wake of the Reserve Bank of India (RBI) enforcing a fresh tax slab on its business turnover, the government should evolve new policies to streamline the cooperative institutions, he said..........
RBI authorises three more companies to open white label ATMs
Reserve Bank of India (RBI) on Monday authorised three more non-banking finance companies (NBFCs) to open and operate so-called white label automated tellers machines (ATMs) in addition to the four companies allowed earlier.........
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