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Thursday, June 26, 2014
Why Rajan is Wrong?
One regulator too many?
..........At another place, points out Rajan, the FSLRC suggests a strengthened Financial Sector Development Council as a venue for inter-regulatory functioning. Would not this serve to conserve and strengthen the synergies that the FSLRC at other places thinks a spanking new behemoth, the UFA, would? The arguments that Rajan puts forth raises another crucial question: Unless an existing system is shown to have broken or turned dysfunctional is it necessary to replace it? The FSLRC does not sound convincing in its implicit view, that extant institutions are inefficient and need to be re-organised to prevent systemic risks and market failures. What matters is not whether a country has a single or multiple regulators. Both structural arrangements failed to prevent the financial crisis of ......
BALANCED RESPONSE
The article “One regulator too many?” by Ashoak Upadhyay (June 25) is a balanced analysis of Raghuram Rajan’s observations on positions taken by the FSLRC. Initially, the media had sensationalised the views expressed by the governor who had said the FSLRC had wandered beyond its brief by trying to superimpose a tribunal on the RBI and that he was not comfortable with reinventing regulatory architecture in the banking sector. Those who are still in doubt may visit www.rbi.org.in and read the governor's speech once again.
- MG Warrier
Make capital out of Capital Market - Dr.T.V.Gopalakrishnan
..........It is the best opportune moment for the new government to come out with some innovative ideas and facilities to enhance, convert and divert the household savings into investments in capital market. The investments in shares through IPOs have turned out to be a very bad experience for retailers during the last decade because of high and greedy pricing of the issues and they have burnt their fingers forcing them to go out of the market and seeking greener pastures elsewhere. Persisting high inflation has added .........
Does India Really Need a Women-centric Bank?
........... The four key elements of empowerment according to the World Bank are access to information, inclusion and participation, accountability, and local organizational capacity. While economic factors do certainly play a role in improving a women's financial position, the context within which empowerment occurs is also important for understanding whether a particular intervention has been effective. When it comes to financial transactions, strong patriarchal norms may reduce the role of women to a mere conduit for accessing loans and banking services, rather than effecting any real change in the prevailing social structure. A woman's "emancipation" may remain contingent..........
IndusInd Bank unveils its third Currency Chest at Guindy, Chennai
IndusInd Bank has unveiled its third Currency Chest at Guindy, Chennai. Mr. K. Neethiragavan, General Manager, Reserve Bank of India inaugurated the Currency Chest in the presence of Mr. Paul Abraham, Chief Operating Officer, IndusInd Bank Ltd and other senior officials of the Bank...........
Tired with blind game...............
My View on "Thrust of trust by (re)tirees - R.Sridharan":
"Many knocks at the doors of justice have gone futile but we hope the day is not going to be far away when one knock will be heard by the policy makers and the doors of justice will open shortly."
...Doors of justice are wide open. People are 'acting' blind...Passing the buck and shifting the blame...It is in this context, I said, and I repeat, history will find it hard to pardon the 'individuals' responsible...
- M.G.Warrier
Ex-RBI Woman Staffer Found Killed in Triplicane Residence
CHENNAI: In a shocking incident, a 55-year-old woman, a former RBI staff, was found dead with mouth being gagged and another piece of cloth around the neck at her bedroom in Triplicane, here on Tuesday afternoon. About 60 sovereigns of gold jewellery, some of them worn by the deceased, and `3 lakh cash were reportedly stolen from her second floor residence on Devaraj Mudali Street. The CCTV grab from the building, which also ................
Security guards observe fast
Security guards posted at automated teller machines, banks, commercial and private establishments observed fast here on Tuesday urging the State Government to give solatium of Rs 5 lakh to the kin of security guards who were recently killed while discharging duties and also demanded better social security to them...........
Twenty Years Ago Today - Widen operations, private banks told
Competition improves productivity and efficiency in most areas, and that was one reason why it was decided to allow new banks in the private sector, said Dr. C. Rangarajan, Governor of the Reserve Bank of India (RBI). “An efficient financial sector is a pre-requisite for economic growth,” he pointed out and also urged the new private sector banks, though opting to go with fewer branches, to ensure that their impact was felt over a wide area.
Government to set credit guarantee fund to boost low cost homes
...........The finance ministry is discussing with RBI the contours of the fund that will be set up under the ambit of the Deposit Insurance and Credit Guarantee Corporation (DICGC), a finance ministry official said. "We are looking to amend the DICGC Act.
School Uniforms, Mobiles in New CPI, Food Weightage Cut
School uniforms, pyjamas, kurtas, skirts, mobile phones these are set to be among 50 new items in India's revised Consumer Price Index (CPI) as the government seeks to put together a measure of retail inflation that better reflects changing consumption patterns. One of the effects of this could be a lowering of the inflation number because of the lesser importance given to food items in a revised price gauge. The Consumer Price Index is a critical determinant of the Reserve Bank of India's monetary policy ..................
Read - ET
Read - ET
Interest on claims in DEAF only from date of a/c transfer: RBI
...................."The interest payable, if any, from the Fund on a claim shall accrue only from the date on which the balance in an account was transferred to the Fund till the date of payment to the customer/depositor," RBI said in a clarification today. Further, RBI said that interest, if any, would be payable only on interest bearing deposits. And no interest shall be payable in cases of amounts refunded from the Fund where no interest was payable by the bank to its customer..........
RBI NBFC norms will enhance financial inclusion: Shriram
.............NBFCs always have played a role in the niche segment where banks have not reached. So the banks have to accept or change the credit policies as per the niche customer’s requirement. So we need to see that how it will go on and then only we will be able to make a comment.
Cyber crime acquires a new angle
...........So far, the crime has been mostly related to e-mail abuse and online job and lottery fraud. But, a recent crime committed by three employees of an outsourcing company associated with a major private bank had given it a new dimension. The accused were charged with duping a person by promising him to get back the amount he had lost in a discontinued life insurance policy with the private bank. They allegedly convinced the person to remit..........
Some relief for credit card customers
If your credit card payment is delayed, now you will get some more time to pay it before the bank charges the late payment fee. The Reserve Bank of India has asked banks to relax the rules with regard to late payment fees. But this will only provide some relief since you still have to pay the interest rate which can work out to quite a bit............
ICICI Bank launches co-branded card with Delhi Metro
............Explaining features of the card, he said, the unique auto top-up facility on the card automatically recharges the amount on the transit chip when the balance drops below a certain specified threshold limit. The auto top-up is triggered at the start of the customer's journey when the transit chip makes contact with the Delhi Metro servers at the entry gate,..........
IDFC will offer quality banking at low cost, says CEO Limaye
.............The infrastructure finance company is following a multi-pronged strategy including setting up an experienced leadership team and building a flexible technological architecture to keep up with rapidly evolving technology. Being one of only two companies to receive in-principle approval from the Reserve Bank of India (RBI) to set up a bank, Limaye feels that the firm is in a “sweet spot” because there won’t be much competition in hiring..................
YES BANK's prepaid card wins award
......YES BANK won these recognitions for introducing innovative Payment programs that present effective and convenient solutions to its valued customers. These are “ Best Co- Brand Program”, “ Best Commercial Card Program” and “ Best Prepaid Card Program”............
Read - FPJ
Bank of Baroda to set up Baroda Bhawan at cost of Rs 75 crore
..........BoB's chairman and managing director S S Mundra, who is tipped to become new deputy governor of the Reserve Bank of India (RBI), laid foundation stone of Baroda Bhawan at the Gulistan bungalow premises on Tuesday. The new nine-storey headquarters of BoB will come up on 1,24,000 square feet land. Gulistan Bungalow, the heritage building, will however stand tall.............
Dena Bank targets Rs 500 cr SME lending in UP
..........The Bank has planned to establish specialised NRI Branches, Retail Processing Hubs and SME Processing Centre across India for faster transactions and loan approvals. “We are focussing on small advances to the agricultural and SME segments for increasing our lending portfolio and credit ratio,” ...........
Banks Find a Way to Trace Out Loan Defaulters On the Run
...........“Now, credit bureaus can identify a chronic defaulter even if he changes his location,“ said a senior private-sector banker. “If the defaulter uses the same name and identity proof like his PAN number, the system will identify the fraudster.“ Credit Information Bureau (India) has a tool called CIBIL Locate Plus, which “offers timely, comprehensive and most updated contact details of the customers to the credit grantors,“.......
Farmers, Fishers and Bankers............
"If a banker wants to enforce its right to recover the dues from a defaulter, he/she would give his/her own interpretation of the definition of 'wilful defaulter' and if not interested to do so, he will go to the any length to interpret it otherwise also. It is the second option the banker has chosen to interpret when it comes to Mr Mallaya of KFA. The world knows the KFA has stripped its assets (air craft seats were removed, air crafts were grounded and made unworthy of flying, inflated the share prices and got the bank loans converted as equities at a much higher price (about Rs.65 or so per share), offered lower than required collaterals (i think IDBI bank's part of loan was under collateralised) etc.
Farmers committed suicides and no banker came forward to defend any farmer. Now when it comes to Mr Mallya, the whole banking fraternity is joining hands to take up his cause. At this rate, it may not be far off that the loan to KFA will be written off in the immediate future and bankers will give suitable explanations also. A forest has been destroyed in writing about the KFA affairs and the way bankers were handling its account. Even as per RBI guidelines on wilful defaulters, KFA is a wilful defaulter under (a) which reads as follows: "Default in repayment obligations by the unit to the lender even when it has the capacity to honour the said obligations." The KFA had sufficient resources during the initial years of its operations and even then none of the banks took measures to recover their dues. Instead they proceeded to convert the loans into equities. Instead of converting the loans into equities, bankers should have directed KFA to sell their shares in the market and repay their loans. Instead they resorted to conversion of loans into equities. It is now languishing at Rs 3 a share. Why did not they not insist on repayment of loan when KFA's resources were available with it.
But, RBI has been silent on it.RBI should conduct special investigation and see if there were any connivance/ collusion between KFA and the bank officials, examine thoroughly the banks' board decisions on continuously extending loans to KFA despite its failure to repay its dues."
- S.Santhanam
Tougher law likely to tackle wilful loan defaulters
To tackle the menace of wilful defaulters, the Reserve Bank of India is believed to be drafting a legislation which, if enacted by Parliament, could make it easier for banks to recover loans. Currently, banks have two main channels — Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act and Debt Recovery Tribunals — for recovering loans. However, .............
Naidu takes cyclone route to ease loan waiver burden
.....According to sources, RBI officials expressed concern that crop loan waiver might dampen the credit culture but assured to look into the AP government's plea to reschedule the farm loans on a merit basis. "RBI has virtually agreed to issue instructions to banks in the state to allow rescheduling of farm loans in more than 581 mandals," claimed a senior official in the AP government. But there is a factor that can go against AP. Normally, a mandal should be declared as drought-hit or cyclone-hit within 90 days of the same crop season. Naidu, however, declared 581 of the 655 mandals in AP as either drought or cyclone hit only last week. Now, he has urged the RBI to consider the delayed declaration as valid on the grounds that united AP was pre-occupied with bifurcation and elections...
'Treating deposits under RIDF as part of priority sector lending may affect new securitisation issuances'
..................Securitization market was primarily driven by direct assignments or direct sale of loans till FY12. But, after the introduction of new RBI Guidelines in FY13 which stipulated that no credit enhancement may be provided for direct assignment transactions, the market started moving towards special purpose vehicles or SPV/ Pass Through certificates or PTC route as investors were more comfortable................
IFMR launches debt fund for MFIs
...................The fund will subscribe to the debentures of microfinance institutions, providing them medium-term debt. Registered under the alternative investment fund II category specified by the Securities and Exchange Board of India (Sebi), the fund will be looking at an investment period of five-six years. “Microfinance institutions have access to short-term funds from banks and slightly longer-term private equity. We, however, aim to provide medium-term debt to the institutions, which is not readily available................
Read more at: Mint
I-T department asked to redress taxpayers grievances fast
..........“Pending grievances shall be reviewed and authorities concerned reminded for redressal on weekly basis and special focus shall be on grievances pending for more than one year and every effort shall be made to redress such grievances on priority basis,” ..........
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