“The crisis of confidence” brought about by the collapse of Ahmedabad-based Madhavpura Mercantile Co-operative Bank (MMCB) is a chapter in history feels N S Vishwanathan, the Executive Director of Reserve Bank of India (RBI) who on Saturday pointed out that the urban co-operative banking sector in the country was currently in a growth-mode. “The failure of the Madhavpura Mercantile Co-operative Bank, had a deep impact on the sector. Everyone knows, it was a case of bad governance. The bank’s failure had..........
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Monday, June 9, 2014
Fewer UCBs good for co-operative banking: RBI official
.... The CBRDE was inaugurated by chief minister Anandiben Patel who said that co-operative sector giants should protect the trust of depositors at any cost and simplify the procedure of obtaining loans and insurances. "CBRDE will function as a banker for its member banks and act as a hub for training for banking personnel. It will also provide consultancy services in various areas, undertake research and also provide IT services," said V S Das, former ED, RBI. Das, who was Regional Director of the RBI in Gujarat From 2000 to 2003, will be consultant of CBRDE. Gujarat is the first state to set up such an umbrella organization for co-operative banks....
New apex body to help co-op banks upgrade tech
AHMEDABAD: Gujarat Urban Co-operative Banks Federation (GUCBF) and Gujarat State Co-op Bank Ltd (GSCB) will form an umbrella organization that will help co-operative banks in technological upgrading, capacity building, research and in increasing financial literacy. The yet to be named organization is being set up on the recommendation of the RBI. .......
The task ahead of Reserve Bank
Finance Minister reaches out to RBI Governor
The clear chemistry between Finance Minister Arun Jaitley and RBI Governor Raghuram Rajan has put to rest fears of a confrontation between the BJP-led government and the head of the central bank. The tone and tenor set in by the latest monetary policy brings in relief that India's central bank and Finance Ministry will be working in tandem to fight inflation and promote growth...........
Arun Jaitley underlines need to lower cost of business to revive growth
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| Union finance minister Arun Jaitley with Reserve Bank of India Governor Raghuram Rajan at a meeting at the central bank headquarters in Mumbai on Saturday |
Functioning of the Reserve Bank of India - A.Chandramouliswaran
Central Government, under the dynamic leadership of Shri Mody, is taking many steps to improve Governance. Reserve Bank of India cannot afford to lag behind especially since it had a record of much better standards of governance and efficiency.
It needs hardly any emphasis that the rules/regulations issued by the Bank to the entities regulated by it would serve their purpose only if they are implemented by the latter. It has been my experience ( now that I have been on the other side of the fence for a pretty long time) and also the experience of many others that banks do not follow the instructions issued by the RBI in a wide range of areas starting from payment of Savings Bank interest for delay in credit of cheques deposited into the account, clear description of the transactions in the Passbook/Statement., maintenance of minimum balance in a Savings Bank account, prompt payment to beneficiaries of inward remittances from abroad and payment of interest for delays in such payments, observance of regulations relating to foreign exchange remittances for residents for various personal purposes, remittances to non-residents from balances in their accounts, issue of Foreign Inward remittance Certificates (FIRC) and hundred other areas. With large scale delegation of powers to authorised dealers in the area of foreign exchange remittances, the intention of the Reserve Bank of India for good customer service is totally frustrated by the ignorance and carelessness of the branches of authorised dealers. I am aware of the difficulties in tackling this task. But then, if this is not tackled by suitable internal and external audits, including that of RBI, good and efficient customer service would not be achieved notwithstanding appointment of any number of Customer Service Groups/ Committees.
I would next come to the functioning of the RBI. In our times decades ago, the officials could perhaps be accused of an attitudinal problem in that generally they were perhaps negative in their approach and strained every nerve to find an argument to say "No" to the request!! This was perhaps conditioned by the atmosphere prevailing then. In recent periods, it has been my experience that while the officials are helpful and have a positive and helpful attitude, they are not always found to be thorough with the rules/regulations and the latter ingredient is also a prerequisite for efficient and good customer service. The policy of the RBI relating to placement of officials and the relaxed and liberal approach to the level of efficiency including the speed of disposal expected of them in practice may have take some some blame for this situation. Responses to clarifications sought on the instructions issued by the RBI and grievances of members of the public are very much delayed. It is high time that time limits for disposal of letters addressed to the Bank are laid down and enforced ruthlessly. As if the delay is not sufficient, the contents of the reply from the RBI are on occasions frustrating when the letter says that "the Bank has carefully considered the request but regrets its inability to be of any assistance in the matter." Such replies are better avoided even in their internal communications to the employees even though they are common and perhaps continue till this day. If my memory serves me right, there were instructions issued much before I retired long long ago that explanatory remarks have to be given for the decision of the RBI in its communication to a member of the public who had approached it for any matter. Unfortunately, these instructions are not being followed even now.
- A.Chandramouliswaran
K C Chakrabarty – An Accidental Banker ? - Lessons for Top Management
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Fin Mkt Watchdogs Ask FM to Raise 80C Volume
............The matter cropped at the Financial Stability and Development Council (FSDC) meeting on Saturday afternoon when Jaitley met heads of all financial services and market regulators. The country's savings have dipped to a nine-year low amid spiraling inflation, drop in profits of businesses and the inclination of household savers to buy more gold and park less money in traditional financial instruments. The savings rate in the economy has slipped from a high of little more than 38 per cent......................................
MP Rajeev Chandrasekhar asks FM to make regulatory bodies accountable
...........Under the existing architecture, the financial sector is regulated by eight agencies, which are Reserve Bank of India (RBI), Securities and Exchange Board of India (SEBI), Insurance Regulatory and Development Authority (IRDA), Pension Fund Regulatory and Development Authority (PFRDA) and Forward Markets Commission (FMC), Securities Appellate Tribunal (SAT), Deposit Insurance and Credit Guarantee Corporation (DICGC), and Financial Sector Development Council (FSDC). However, from the consumers’ perspective, the track record of these regulators is a huge disappointment. In fact, there is hardly an example of an investor or saver receiving satisfactory redressal of his grievances from these regulators........
CAFRAL - Conference on Financial Frauds
....The objective of the conference is to deliberate on the framework for strengthening the mechanism to deal with financial frauds in the financial sector and understanding best practices in banks by inviting the top regulatory authorities from the CVC, RBI, Police Department and eminent legal authorities..........
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THE POSTMAN KNOCKS
As “India Post as banking platform” by Charan Singh rightly concludes (June 6), the post office has touched the life of every Indian, irrespective of age, caste or place. It can be a banking partner for us. Today, more than 50 per cent of Indian adults do not have a bank account and banking as a whole is an ever-growing industry. It has never seen a decline in business volumes. The department of post and telecommunications appears to be precisely qualified to meet the objectives of the licensing policy of the RBI, as P&T has the necessary infrastructure and network to penetrate the rural sector. Hope the new government leverages India Post for banking operations fruitfully, without further loss of time and reaches the heart, hand and mind of the Indian populace.
- RS Raghavan, Bangalore
Consider the RBI policy as an indicator
...........“From a hawkish tone, the policy was more dovish, trying to balance growth while curbing inflation. Steps to increase credit availability by reducing the Statutory Liquidity Ratio (SLR) by 50 basis points to 22.5% starting mid June 2014 should help in increased availability of funds required for growth. However, this is unlikely to result immediately into a reduction in rates in the near term.The thrust still seems to be on curbing inflation despite the need to fuel the ailing economy.”................
India’s economic scenario : Glimmer of hope ?
............Financial inclusion has still to travel miles and miles more to see the smiles! Incidences of regional imbalances have to be done away with over time. No war please. If we want to fight it is best to fight against poverty, unemployment and crimes – looking at the plight of SAARC Nations!!............
Emerging Economies and Capital Flows – the poisoned chalice
......Hence, to expect technocrats and policymakers in emerging economies to get past political obstacles and pursue a rational and painful reform path – especially when times are good – is to demand of them a feat that policymakers in the West had not attempted.Indeed, Raghuram Rajan had referred precisely to these issues in the Andrew Crockett Memorial Lecture he delivered in June 2013.[4] His recent remarks on the collapse of global policy co-ordination, in fact, should be seen in the context of his remarks made then about the large spillover effects from unconventional monetary policies pursued in the West, the unproven efficacy of macroprudential measures, the difficulty of persuading economic participants to practise delayed gratification when times are good..........
A peek into the prime ministers economic vision
...........His speech, after a book launch at 7, Race Course Road, his official residence, underscored the importance of an urban and rural growth agenda, revival of the 'green revolution' in agriculture, a focus on renewable energy, exploiting the 'demographic dividend', making 100 'smart' cities and quick decision-making. Skill, scale and speed are what India needs to compete with China, Modi said..........
Steady and safe
...................The government should accept that instead of intruding on Mr Rajan’s turf. It should concentrate on the many tasks that it has to address on the economic front. The government should acknowledge that there are major supply constraints that are contributing to keeping inflation at a high level. It should start the work, sooner than later, to remove these constraints. The success of such measures will prepare the ground for the RBI to review and alter its position on interest rates. The RBI’s position is thus not unrelated to the overall economic situation that is prevailing in India today, thanks to the ..............
'No' by 'Yes' = long silence
My View on "YES Bank calls Madhu Kapur's allegations baseless,...":
Yes Bank Management's 'No' to Mrs Madhu Kapur's demands and long silence of the regulator, the RBI on the issue surprises the shareholders of the Bank and the people at large about the affairs of the bank. Allegations and counter-allegations are going on for months together and the publlc are entitled to know the correct position particularly with regard to her claim to be a director, her questioning the appointment of Mr Srinivasan with the clearance of RBI etc. Will RBI clarify the position for the good of the banking industry and the depositors, shareholders of the Yes Bank?
- Dr.Santhanam
RBI may let South Korean banks branch out in India
.........In the case of foreign banks, the RBI forwards their applications to an inter-departmental committee consisting of officials from the ministries of finance, home, commerce and external affairs. The banking regulator then takes a final decision on the basis of the panel’s recommendations. The panel, on June 6, gave its nod to Shinhan Bank’s application to open three more branches, as well as to Woori Bank and Industrial Bank of Korea to start one more branch each, the sources said...........
Shortage of Coins, Business Owners are Trying to Gain More from Customers
.......Mahatma Gandhi had something to say about this so many years ago. "You must be the change you want to see in the world". :-) I have this same problem in Mangalore getting change. I haven't seen a 5 Rs currency note in a long time, though Rs 2 coins seem to be very popular here. But it's strange that slightly prosperous roadside Chatwallahs or Chinese Food vendors give me whatever change I need. With already squeezing margins due to rising commodity prices, hotels are feeling the current situation too hot to handle. Besides, small grocery shops and retail establishments are also finding it difficult to procure coins.........
Unethical and Unfortunate
My View on "Banks ask Fin Min to reject AP govts farm loan wai...":
The announcement is unethical. But, is there any provision in the BR Act to write off bank loans by anyone other than the Board of Management of the Bank concerned? Is it a legally tenable move? Just because none of the Chairmen of any PSB has challenged it in the past, the govts also take for granted and issue waiver of loans from time to time.RBI should guide the banks on the legality of this move as it involves the profitability of the banks which in turn adversely affect the depositors' funds with these banks. Unfortunately, there is no word from the RBI in this regard.
- Dr.Santhanam
Write off of loans and offer of freebies - Dr.T.V.Gopalakrishnan
.............This sort of loans write offs in early 1990s and 2010s by the Central government and by Some State governments, Maharashtra ,Haryana etc though were severely objected to openly and privately by the previous successive Governors of the Resereve Bank, politicians however, ignored them and the write off of loans and generation of bad loans in anticipation of possible write off offers from the politicians have become the order of the day. The general discipline expected from borrowers has been on the decline. and..........
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Farm loan waiver will be implemented: KCR
..........“No work related to the issue has been done yet in the absence of details and the bankers are yet to come up with details of farmers’ outstanding dues. It will take at least 10 to 15 days to finalise the details, get clearance from the finance department and get the RBI approval before it actually come into force”,.......
It’s time to talk about the bad loans scam
........Previous Finance Ministers Pranab Mukherjee and P. Chidambaram perfected the art of ignoring the problem. They stayed silent on the issue and when pressed spoke about bad loans only in vague, inconsonant terms. That fuelled speculation that many bad loans were not just the result of bad business decisions but bad intent — that businessmen in cahoots with politicians, bankers and bureaucrats have been looting public sector banks merrily. After all, the rate of bad debt in government-owned banks is about 5-10 times higher than in private banks. Partly, this is because PSU banks lend more to the weaker priority sector. But it is undeniable that poor management and corruption are also major reasons public sector banks are bleeding.............
FinMin shortlists B Sriram, V G Kannan for MD posts of SBI
The Finance Ministry has shortlisted two senior officials of State Bank of India (SBI) for the post of managing directors of the country's largest bank. B Sriram, managing director of State Bank of Bikaner and Jaipur (SBBJ) and V G Kannan, managing director of SBI Capital Markets Ltd, are contenders for the post of two managing directors of the SBI, sources said. Names of shortlisted candidates have been sent to Finance Minister for his approval,....
Uday Kotak wins EY World Entrepreneur Of The Year Award
...........While accepting the award, Uday Kotak said, "I accept it with all humility on behalf of 1.2 billion Indians." He said, "It is recognition of the skills and dedication of the 25,000 employees of Kotak Mahindra Bank who have worked so hard to build a world class Indian financial services brand." Kotak set up Kotak Capital Management Finance Ltd in 1985. In 2003, it became India's first non-banking finance company to be converted into a bank................
SBI sensitises villagers on financial literacy prog
...........During the programme, the participants were sensitized about the role of bank in financial inclusion, financial planning, financial discipline, use of Information Communication Technology (ICT) to provide banking services in the rural/ unbanked areas, precautions to be taken while operating ATM/ Debit and Credit Cards, fictitious mails/SMSs offering money, chit funds, steps to be followed for resolution of grievance with bank including Banking Ombudsman Scheme 2006 of Reserve Bank of India (RBI) and undertaking Income Generating Activities (IGA) on scientific lines. They were also briefed about the need to develop long term relationship with bank for all round development..........
ICICI Bank overtakes HDFC Bank as top private bank employer
With addition of over 10,000 jobs last fiscal, ICICI Bank has overtaken rival HDFC Bank as the biggest employer in the private banking space with more than 72,000 employees. Incidentally, HDFC Bank saw its employee headcount decline by 900 during the fiscal ended March 31, 2014, while at least five other major private sector banks saw their workforces grow during the year..............
Withdraw amendments to Multi-State Co-op Act: Sahakar Bharati
......microfinance institutions in the country have hardly been regulated, and some of them charge high interest rates. Since there is a need to regulate such institutions, the Government should introduce a strong Bill in this regard, he said. Stressing the need for setting up small local urban cooperative banks across the country, he said no urban cooperative bank has been set up in the country in the past 15 years. The RBI should announce norms for setting up new urban cooperative banks, he said........
SIT on black money decides to solve tax treaties’ secrecy puzzle
......The SIT, sources said, would look into the possibility of requesting competent courts and the relevant authorities in foreign jurisdictions for permission to share with other agencies the data obtained by the Central Board of Direct Taxes (CBDT) and the I-T department. The agencies for which the data access could be requested include Enforcement Directorate (ED), Directorate of Revenue Intelligence (DRI), Reserve Bank of India and CBI, so that suspects in such cases can be probed from various angles and under provisions of criminal laws........
Spot gold premia decline
............Though gold is imported and loaned to jewellers, the pricing is done when jeweller returns the gold to the lending bank. As loan periods usually exceed three months, spot premia are different after a loan period is over; the import duty, too, might be different. A source in the know said, “This is becoming an issue for lending banks, as they are not able to conclude how to price gold when jewellers return the gold taken on loan.”.................
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