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Tuesday, June 3, 2014
RBI governor Raghuram Rajan meets Narendra Modi
RBI CGM resigns for being superseded
S Ganesh, Principal Chief General Manager (CGM) of Reserve Bank of India (RBI), who was in charge of expenditure and budgetary control, has resigned in protest as he was superseded for the selection of the executive director’s post. RBI has accepted his resignation and has relieved Ganesh from his duties........
PMO to have a fresh look at RBI dy governor's appointment
...........According to sources, while the finance ministry of the previous United Progressive Alliance government had recommended its choice to the appointment committee of the cabinet (ACC consists of several ministry's and departments including PMO), but the PMO had left the decision to the new government. Sources indicate the files will be referred to the PMO once again............
Bankers Salary Reduced, Hope from New Govt for Pending Wage Revision
.........It is unimaginable that salary for any regular worker can be reduced, without any fault on their part. But it is the hard reality for bank employees, who will be receiving a salary decreased by 2.40% from May 2014. Dearness allowance (DA) for bankers is dependent on the Consumer Price Index (CPI). A continuous decline in CPI during January, February and March 2014, led to decrease in DA by 16 slabs i.e. 2.40% of basic salary. The Dearness allowance of bank employees is link with index, so if index increases it increase and whenever index decreases DA of bank employees decreases. Bankers are hopeful that the new Govt under the aegis of Prime Minister Sri Narendra Modi would act swiftly to implement the long pending salary revision due since November 2012. It is memorable that........
Settle Urjit report first
It is just as well that the largely media-created hype over likely strained relations between RBI and government have been put to rest by finance minister Arun Jaitley and RBI Governor Raghuram Rajan’s co-ordinated statements on growth and inflation. But that still doesn’t leave us any the wiser over what RBI policy will be over the year. Certainly there will be ........
Modi Govt to have distinct mark on RBI credit policy review: ASSOCHAM poll
......As many as 76 per cent of the respondents in the 125-sized sample survey of the CEOs and economists said the RBI Governor is walking a tight rope as he knows the mind of the new Government which has been projected as pro-growth. On the other hand, he would have also been sounded by the new establishment about the people's expectations from the new government to hold the price line, especially of the essential commodities. Significantly, an overwhelming majority of the respondents felt that the RBI Governor's own expectations from the new Government ..........
Rajan, Modi & the supply side conundrum
With a new, development-focused government in place, the interaction between the government and the Reserve Bank of India (RBI) was expected to become a matter of debate. Some analysts have gone to the extent of doubting the RBI governor's ability to continue in the new dispensation. The impression that is sought to be created is that while the government will be focused on growth, an inflation-focused RBI may dilute the impact of government measures. Even the most cursory analysis suggests otherwise..........
Growth should be given priority over inflation: Bimal Jalan
..................I cannot comment on the RBI credit policy. This time around, we have twin problem as you know and you must have discussed it in a great length, inflation and growth but given the present environment -- speaking as an observer over the scene -- I would say that I would give weight to growth just now because the atmosphere is good. If growth takes place then supply will increase, manufacturing production will increase and I think that would have positive impact on our inflationary environment. So as an observer of the scene,..................
Raghuram Rajan is unduly worried about QE. Will he rethink the policy this time?
............The RBI is clearly not willing to loosen policy as yet on misgivings about the effects of withdrawal of stimulus by the Fed and other central banks. Is the RBI misplaced in this belief and is it effectively postponing policy easing to stimulate domestic economic growth? India’s GDP grew 4.7% in fiscal 2013-14, up from 4.5 percent seen in fiscal 2012-13 but still close to decade-low growth rates. Demand drivers are absent as seen from negative growth in industrial production, manufacturing and consumer durables in the last fiscal. The new government at the centre led by Narendra Modi would want to put the economy back on track. However, it should address..........
Growing NPAs in banks - efficacy of ratings accountability and transparency of credit rating agencies - R.Gandhi
Speech by Mr R Gandhi, Deputy Governor of the Reserve Bank of India, at the Conference conducted by ASSOCHAM (Associated Chambers of Commerce and Industry of India), New Delhi, 31 May 2014
...Growing NPAs is the biggest challenge for the banking industry. A slowing economy is bound to see an increase in NPAs. Notwithstanding the economic weakness, the NPAs of banks have registered increases since FY 2012 which is a cause of concern for us. The NPA increases have been more pronounced in case of the public sector banks. There are various factors affecting the asset quality of SCBs adversely, such as the current slowdown- global and domestic, persistent policy logjams, delayed clearances of various projects, aggressive expansion by corporate during the high growth phase etc. However, it is the shortcomings in the credit appraisal, disbursal and recovery mechanism of the banks, besides the economic slowdown that can in large part be held responsible for their high levels of NPAs. Lack of .........
EFFECTIVE BANK AUDIT - Emerging Challenges : M.G.Warrier
.....Performance audit is a concept introduced as part of commercial audit carried out by the then Indian Audit and Accounts Department in the late 60s. The purpose was to go beyond mere checking of accounts and ensuring that each item of expenditure.............
A bird in hand is better than two in the bushes
My View on "IDFC to shave off infrastructure loans to meet RBI...":
A bird in hand is better than two in the bushes goes the saying. Here is a real story where IDFC, the only agency to provide funding support for infra projects is killed to create a commercial bank which may focus on all types of financing. It is now planning to sell off Rs.5000 cr of infra project portfolio to comply with the RBI requirements for commercial bank licence. Infra project funding may be or may not be in its portfolio as a commercial bank. It is an irony that the new govt at the Centre under Mr Modi has emphasized the need for funding support for infra projects for speedy growth of economy. At the same time, the only infra dev organisation has been converted /killed to make way for a commercial bank. In hindsight, the RBI may think that their decision to issue banking licence to IDFC may not be met with the objectives of the GoI for infra development in the country. So, RBI/ GoI should rethink and cancel the licence issued to IDFC and strengthen it by infusing more funds for infra dev projects.
- Dr.Santhanam
Bankers Fear CVC More Than NPAs
When BK Batra, deputy managing director of IDBI Bank, was to be promoted
as chairman of a state-run bank, a Central Vigilance Commission note
stalled it. His crime? He did not ensure due diligence on farmers in a loan sanctioned to a company that was in contract farming. Bankers know that nothing can be more flimsy than this because the same
account is just a bad loan for any other bank and no one is affected
since no officer associated with such a loan is due for promotion........
Window Dressing of BS to bring down NPAs in March - Dr.T.V.Gopalakrishnan
.......Generally banks resort to window dressing of balance sheet and Profit and Loss account in March and they arrive at some presentable figures in respect of NPAs, profit, deposits and advances. This is done with the full knowledge of top management of banks and auditors seldom object to it.........
Read.......
No possibility of Nagpur DCCB’s revival: RBI defends its action in HC
.......In the submissions sworn-in by D B V Raju, the Assistant General Manager, Rural Planning and Credit Department, Reserve Bank of India, it has been stated that the impugned order was communicated to the petitioner-bank, as there was no possibility of revival of the bank, as it is in no position to pay its present and future creditors as and when their claims are to accrue and in such a situation allowing the bank to operate would have been detrimental to its present and future depositors and these banks’ applications for licence have to be rejected. Allaying any fears of damage to the interests of depositors of the bank, if order to liquidate the Bank is passed, it has been stated in the RBI’s submissions, that in that eventuality also around 98 per cent depositors' interest is well protected in view of DICGC provisions, which guarantee refund of up to Rs one lakh to every depositor............
RBI approves Kamath’s appointment as ICICI Bank’s non-executive chairman
The Reserve Bank of India (RBI) has approved the appointment of K.V. Kamath as non-executive chairman of ICICI Bank Ltd by three years effective from 1 May until 30 April 2017, the bank said in its annual report. The banking regulator has also approved the re-appointment of managing director and chief executive officer (CEO) Chanda Kochhar and executive director N.S. Kannan for three years starting 1 May 2014 up to 30 April 2017, while executive director K. Ramkumar’s appointment was approved effective 1 February 2014 to 31 January 2017, the bank told its shareholders in the annual report........
Free non-home bank ATM transactions may be cut to two
.....Banks in association with National Payments Corporation of India has sent a proposal to banking regulator to reduce the number of free transaction at non-home branch automated teller machines. Currently, consumers are allowed five free transactions at a non-home bank branch ATM. Banks have also requested the interchange fee--the amount that one bank charges the other bank if a consumer uses the ATM of its non-home bank-- to be revised. Currently, ..........
RBI mulls cap on banks’ group MF sales
RBI is planning to introduce a cap on the percentage of mutual fund products of group asset management companies (AMCs) that banks can sell to investors. The central bank is looking at capping the sale of group MF products/schemes by banks at 25-30%, said sources. An email sent to RBI remained unanswered at the time of going to press. Sources also said .........
Finmin plans to cut govt stake in PSBs to 58%
The finance ministry is drawing up recapitalization plans with government equity in public sector banks set at 58%, even as the draft report of the PJ Nayak committee has recommended cutting the Centre's stake in state-owned banks to under 51%........
Read - TOI
Read - TOI
Don’t let your bank accounts idle away
......Besides this, there are many operational restrictions on dormant accounts. For instance, a dormant account holder will not be able to transact through his ATM, or via internet and phone banking. New cheque books are not issued to dormant accounts. Some banks even have restrictions on customers issuing cheques from a dormant account. An account which has been dormant for a long time could also escape your memory, especially if you have changed addresses. This could deprive you and your legal heirs of the money lying there..........
Armed with RBI Nod, Premji to go Hunting in China & US
........Premji Invest, the eponymous family office of Wipro founder Azim Premji, will now invest directly in technology companies in the United States and China after receiving RBI's approval to do so. The family office, which has a corpus . 10,000 crore, could potentially of over ` set aside nearly a quarter of it for making investments overseas, according to a person familiar with the plans..........
Read - ET
Read - ET
T-Govt. opens RBI account with Rs.1.38 cr.
........The RBI was authorised to open an account in the books of Central Accounts Section, RBI, Nagpur in the name of State Government of Telangana with an amount of Rs. 1.38 crore. The other formalities including documentation and execution of agreement between RBI and the State would be executed by the authorised officials of Government of Telangana in due course.............
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