.............Given that certain regulators have more regulatory freedom than others, there has been a void in fixing proper accountability of these agencies. Many former regulators and experts believe accountability through the line ministry is not good enough. Former RBI governor D Subbarao told Governance Now that making the central bank directly accountable to parliament is important. In fact, prior to his retirement in September last year, he had said that while the RBI Act does not lay down any formal framework to ensure accountability, it does follow “certain good practices (which) have evolved over the years”. Subbarao’s list of good practices included explaining the monetary policy rationale, post-policy conferences for media interaction, and appearing before the parliamentary standing committee on finance, among others. But he maintained that these weren’t enough to ensure complete accountability.................
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.
Thursday, June 12, 2014
Economic challenges for the new Govt. - Charan Singh
..........The monetary policy in the country plays a very important role in preserving the value of the currency. The RBI follows a multiple-indicator approach............
How Raghuram Rajan Helped Me Have Better Biryani
.............Thanks to the new rules, I can concentrate on making people around me "moneywise". Wondering what’s the connection? A month ago, I had promised my cook that I would help her open a savings bank account and a Public Provident Pund (PPF) account so that she could earn better returns on her savings. A happy cook is the most valuable asset for any work from home mom you see! Armed with her documents such as voter ID, Aadhaar card et al, I visited the bank close to my house. "Sorry madam, her bank account can’t be opened until there is a proof of current address," said the bank manager, thereby destroying my hopes of having a happy cook. Being a migrant worker from a village in Maharashtra, she doesn't have a registered house agreement or lease agreement as valid proof. Now thanks to the RBI, I will have a cook with better savings, and a husband with better meals! Thank you, Mr Rajan!
Expanding Access to Finance for Small Businesses in India: A Critique of the Mor Committee’s Approach
The first blog in this series highlighted the context of the Mor Committee’s recommendations and the significant gap between the supply of and demand for credit for small businesses. The second blog in the series examined the role of the banks, development finance institutions and non bank financial institutions (NBFCs) to examine why they have been so backward in coming forward to meet this gap. This concluding blog looks at the ways of measuring access to finance for small businesses.............
Read - MicroSave
Read - MicroSave
NBI to host NCIA
KATHMANDU: National Banking Institute (NBI) is organising a one-day National Conference of Internal Auditors (NCIA), in Kathmandu, on June 20. The conference will primarily focus on risk-based audit in Nepal’s banking and financial sectors. Theresa Karunakaran, General Manager of Department of Banking Supervision at Reserve Bank of India (RBI), will be the international resource person for the event, as per the press release. Karunakaran has given trainings to large number of employees of RBI and National Institute of Bank Management and has represented RBI in various international seminars related to internal auditing.
RBI reviews UCBs performance in J&K
The 15th meeting of the State Level Task Force on Urban Cooperative Banks (TAFCUB) was held at RBI, Srinagar under the Chairmanship of K K Saraf Regional Director for J&K Reserve Bank of India. The meeting was attended by Kamla Devi, Special Secretary, Cooperative Department, J&K Government, Anjana Tikoo, Additional Registrar, Co-operative Societies, Subhash Gupta, Chief Executive, National Federation of Co-operative Urban Banks, New Delhi, A.K. Mattu, General Manger, Reserve Bank of India, Jammu, P.N.Das, RBI, Central Office, Mumbai and CEOs of Urban Co-operative Banks operating in the state of Jammu and Kashmir. The meeting reviewed the performance of the Urban Co-operative Banks (UCBs) in the state of Jammu and Kashmir. The latest policy developments in the area of Urban Banking Sector and their specific issues were discussed in the meeting..........
Read..........
Read..........
WRDS Best Paper Awarded for Research on Historic Bank Failure and Implications for Current Bank Policy
PHILADELPHIA--(Business Wire)--Wharton Research Data Services (WRDS), the leading data research platform and business intelligence tool for corporate, academic and government institutions worldwide, is proud to announce the winners of the Wharton-WRDS Best Paper Award in Empirical Finance. The 2014 Best Paper Award winners, Raghuram G. Rajan, Governor of the Reserve Bank of India and Distinguished Service Professor of Finance at the Booth School of Business at the University of Chicago, and Rodney Ramcharan, Chief of Financial Studies at the US Federal Reserve Board, explored bank failures during the agricultural collapse of the 1920s, leading up to the Great Depression. The award for their paper, Financing Capacity and Fire Sales: Evidence from Bank Failures, will be presented to the researchers on June 17 at the upcoming Western Finance Association (WFA) conference.
CAFRAL - Conference on Derivative Markets – Issues and Challenges
.......The objective of the program is to deliberate on the strategies, challenges and issues before the banks for developing and deepening the Derivatives Markets in India, given the dynamic nature of our exposure to international and domestic financial markets..............
Change in Directorate
.........The Government of India, Ministry of Finance, Department of Financial Services, vide its notification dated June 10, 2014, has nominated Shri G. Sreekumar CGM, DGBA Department of Government and Bank Accounts, Reserve Bank of India, Mumbai, on the Board of Bank of Maharashtra with immediate effect ..............
No choice
My View on "Many PSB heads welcome Nayak panel report but with...":
Shri Chaudhry is perhaps not aware how the Board members are selected. Most of board members are appointed by MoF who are political appointees. As regards CMD and EDs , it is like our election system where voters have no choice. RBI cannot do much as MOF chooses candidates who are put through interview. Sh Chaudhry may be aware in a few cases RBI Governor put his foot down in appointment of SBI chairman and ultimately RBI prevailed . I agree with him but generally RBI has to go with names proposed by govt.
- Ravi Sharma
आरबीआय निरीक्षकाचा अटकपूर्व जामीन अर्ज उच्च न्यायालयाने फेटाळला
मुंबई - पेण अर्बन सहकारी बॅंकेचे लेखा परीक्षण रिझर्व्ह बॅंकेच्या वतीने करणाऱ्या आरबीआय निरीक्षक अब्दुल बरी खान (ए. बी. खान) यांचा अटकपूर्व जामीन अर्ज मुंबी उच्च न्यायालयाने फेटाळला आहे. आरबीआयच्या या निरीक्षकाने जाणूनबुजून पेण अर्बन बॅंकेत होणारा आर्थिक गैरव्यवहार नजरेआड केल्याचे सकृतदर्शनी दिसत असल्याचे न्यायालयाने यावेळी सांगितले आहे. अब्दुल बरी खान यांच्यातर्फे ऍड. अमीन सोलकर यांनी, सरकारतर्फे ऍड. घरत यांनी तर या अटकपूर्व जामीन याचिकेला विरोध करत हस्तक्षेप याचिका दाखल करणाऱ्या ठेवीदारांच्या वतीने ऍड. मंदार कुलकणी आणि श्रीराम कुलकर्णी यांनी युक्तिवाद केले. ........
RBI Pilot scheme to allow withdrawals from semi-closed mobile wallets
..............Semi-closed mobile wallets, which were once hailed as weapons of financial inclusion as they do not require the user to have a bank account, have one noticeable drawback: a user can add cash but can’t draw it out. The Reserve Bank has a long-held the view that letting telecom operators to offer cash-out facilities for their mobile wallet users would allow the companies to bypass the banking system..........
Rupee has been a very strange player
.........Obviously now the conjection in the market, I do not have any first hand information, only second hand information is that RBI has been a big buyer both in the spot in the forward markets. It has absorbed more than Rs 14,000 crores in the last three days. RBI was going to take action. Raghuram Rajan has said that he does not like global monetary policy changes and that India has to react and obviously, he has set up a team to say "Do not let this affect us" but the rupee has been a very very str ..
Muhammad Yunus backs MFIs for special banking licence
.......... At present, Reserve Bank of India (RBI) regulations do not allow MFIs to collect deposits from the public. Yunus, however, welcomed RBI’s decision to give a licence to microlender Bandhan Financial Services Pvt. Ltd to start a new bank. But he expressed reservation on the wisdom of giving a full banking licence to microlenders. “If you give the full banking licence then you will be tempted to move into other direction. So, you give a limited banking licence allowing taking deposits only for the purpose of lending money to poor,” Yunus said..........
RBI guidelines would constrain growth of banks with weaker franchises
.........."The guidelines will push banks towards more stable sources of funding and in turn towards lesser wholesale funding and greater granularity in deposits. Banks with weaker liability franchises will have to accelerate their liability franchise build-up. The guidelines will likely avoid build-up of systemic risk by limiting the ability of banks to grow on back of wholesale funding,"...........
Lost Aadhar
My View on "Aadhaar enrollment agencies protest, stop work":
It is impossible to retrieve your aadhaar card number if you happen to loose. In a number of cases the aadhaar cards got misplaced courtesy postal authorities and it has not been possible to generate duplicate with the same parameters. What is usefulness of the system if you cannot regenerate the profile or number of a member. I think. It is putting the crores of rupees into drain.
- Ravi Sharma
Police on alert after spurt in fake note seizures
............“We are investigating these instances, but the truth is that tracing the source of these fake notes is difficult. In most cases, persons caught with the notes turn out to be just carriers, with the notes having been passed on to them through at least four agents. The investigation sometimes hits a dead end when we find that the original source is from outside the country,” ........
Higher excess SLR to help banks meet LCR norms
........"While the mandated is to keep SLR at 22.5%, most banks have been operating at a higher level of 28-29%. And these banks will stand to gain as they can either liquidate it or lend it to RBI on the repo window and meet the new liquidity requirements as and when the need arises." However, it is because of the low credit demand that banks have been parking additional money in SLR. But when........
Will Setting Up of National Asset Management Company Solve NPA Problems of Banks in India
........Government announces waiver scheme from time to time for electoral gain. As a result borrowers of the bank willfully default in repayment of bank loan. Quantum of Non Performing Assets known as bad assets in public domain continues to rise year after year in all public sector banks. Then process of compromise and write off starts at bank level and again there is unhealthy transaction of money between bankers and borrowers or between brokers and officers who decides to sanction sacrifice loan amount. Ultimately culture of non-re payment of loan by borrowers back to banks takes the root and bankers have to suffer huge loss due to high provisioning and due to rising NPA. For this purpose.............
PSU banks have to stop becoming piggy-banks for politically friendly businesses
.........."The other big worry is the health of PSU banks – all of which are owned by the taxpayers and public of this country, but seem to have been run like some people’s personal fiefdoms - with the consequence that lakhs of crores of non-performing assets (NPAs) dominate their balance sheets and write off taxpayer equity. Regulatory competence here again needs to be examined which ..........
Banking Reforms – The Right Direction
..........RBI shall confine its role to determine the broad policy framework for various banking functions and shall not poke its nose into the minute details of their implementation. Thus, RBI’s role vis-à-vis other banks will be restricted to 1. Policy maker, 2. Regulator, 3. Bankers’ bank and 4. Lender of the last resort. Currency Issue and Management will be an additional function of the nation’s central bank. RBI must closely monitor banks only in a select, critical areas and stop interfering in other areas of banking. RBI must determine the range of interest rates i.e. the maximum and minimum thresholds only. Individual Banks must be given full freedom to fix their own interest rates and service charges themselves within this range/band in a transparent manner. ......................
Read..........
No Difficulty in Merging With SBI: State Bank of Mysore
Sharad Sharma, managing director of State Bank of Mysore, one of the associate banks of SBI told NDTV that he does not see much procedural difficulty in merging with State Bank of India. If the proposed merger goes through, it will reduce operating overheads of both the banks, he added...........
Sebi seeks MF liquidity window
............Interestingly, the proposal comes at a time when RBI has been giving indications that it plans to shut the repo window for banks as well. RBI had opened a repo window for mutual funds in 2008 and 2013 to help deal with the redemption pressure for liquid schemes. The first was prompted by a severe liquidity crunch on account of the global financial crisis..........
Modi's reforms 'may lift millions out of poverty
.........In a DW interview, Charan Singh, economist and Reserve Bank of India Chair Professor of Economics at the Bangalore-based Indian Institute of Management, says that if properly implemented, the reforms are set to increase economic growth to an annual rate of eight percent or more, potentially lifting millions of people out of poverty.
DW: What are the strong points of Narendra Modi's economic program?
Charan Singh: This is an ideal resolution made by a government which was brought to power with a thumping majority. The recently elected PM - who has been credited with driving Gujarat's economic growth as chief minister - is a man of experience. His no-nonsense attitude to reforms and governance is known to all.............
ICICI Bank Issues Pink Slips to 1,200
...................... “Once in three years, it is the bank's strategy to look at the larger space and see if there is a need to merge or split jobs,“ said Ramkumar. “That leads to some redundancies.“ Although ICICI Bank is known for its toughness when it comes to eliminating inefficiencies, it did not cut jobs during the economic slowdown in 2012-13 and in 2008-09. It also exempts staff on maternity leave, and those whose children are taking tenth, or 12th class board examination. However, job cuts at ICICI Bank may be good news for rivals .........
Read - ET
IOB to open second branch in Bangkok in early July: Narendra
.....This state-owned bank also plans to soon launch a qualified institutional placement (QIP) issue to mop up between Rs 1,000 and Rs 1,200 crore, he said. The second Bangkok branch will become a reality more than six months after the Reserve Bank of India's approval for the same...........
Jaitley’s thank you note to middle class?
.........Though Jaitley has also ruled out any mega dole outs to individual tax payers such as exempting income up to Rs5 lakh, there is a high likelihood of increasing the exemption limit, according to senior ministry officials. These and other initial indications from the finance ministry give enough indications that Jaitley’s will be a budget tailor-made for the middle classes. What is not clear yet is whether welfare measures initiated by the UPA government will be cut down because it would mean that the budget will be fattening the wallets of the middle class while depriving the poor of the little dole they get from the government.......
Enjoy today, but not at the cost of your tomorrow
.........Moreover, this irrational spending behaviour seeds misunderstanding about money’s acquisition, accumulation and use in the minds of our children. They are nudged towards believing that money comes easy and can, therefore, be spent easily. Since many of our expenses revolve around children, it’s critical that they understand the dynamics of money early in life.........
RBI: Every 3rd new ATM be disabled friendly, talking with Braille keypads
..........In a notification issued on Wednesday, RBI advised banks to provide ramps in all existing and future ATMs, and make at least one third of new ATMs installed as talking ATMs with Braille keypads. It was also advised to ensure that at least one talking ATM with Braille keypad is generally available in each locality for catering to the needs of visually impaired persons." In effect, Urban cooperative banks (UCBs) are now advised to take appropriate steps to provide ramps at the entrance of the bank branches so that persons with disabilities/wheel chair users can enter bank branches and conduct business without difficulty............
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