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Wednesday, July 2, 2014
Review the RBI - A.Seshan
Do not destabilise Reserve Bank of India - M.G.Warrier
...........Not much research is needed to conclude that the Finance Ministry and FSLRC, in a hurry to resolve certain minor issues, ignored the evolution of the role of RBI and the care with which RBI has nurtured the financial sector. The Federal Reserve (in the US) and RBI function in two different worlds. To say that the time is not right for dismantling or truncating the RBI, which is doing creditably well as has been admitted in several international forums, would be stating the obvious.............
Oily water - Dr.T.V.Gopalakrishnan
My View on Oil and water - Dr.Subir Gokarn
.......... With the liberalisation, some of the regulatory measures have been removed but banks' involvement in financing such activities are not ruled out as RBI does not micro manage things under liberalised environment. A strict vigilance if kept on these activities and the government can act on black money and initiate other administrative and economic measures,inflation impact because of monsoon shortage if any can be minimised...............
Raghuram Rajan finds ally in Dutch Queen
........The Dutch Queen will be visiting RBI in Mumbai on July 2nd in her capacity as the United Nations secretary general's Special Advocate (UNSGSA) for inclusive finance for development. She will hold a joint press conference with the RBI governor. She has been designated into this role since September 2009 by the UN secretary general to raise awareness of inclusion to achieve the final goal of poverty alleviation.....
FINDING A REPLACEMENT FOR CHAKRABARTY
Everyone knows it is difficult to fill in the position of KC Chakrabarty, the former deputy governor of the Reserve Bank of India. Has it become so difficult that the government is yet to find a replacement for KC? The mild mannered SS Mundra of Bank of Baroda was supposed to succeed. But there are no signs of the government approving it yet. Are they still debating, or is it that the wheels are moving slowly?
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The poor little rich man
........This is where Mr Bandyopadhyay's book is useful in understanding the Sahara finance model, beyond the immediate context as well. He dwells in considerable detail on the birth of firms such as Peerless, the precursor to Sahara. Both mobilised funds from depositors as "para-banking" entities or residuary non-bank finance companies (RNBFCs), which were later banned. Actually, almost all of Sahara's arms or their methods of raising funds from depositors have been banned over the years, starting with Mr Roy's "prize chit schemes" in 1978. In Mr Roy's own words, he has faced six bans for raising money. The new model, incidentally, is "co-operatives"...........
Celebration to mark the 90th Anniversary of RBIEA, Chennai
The Ninetieth Anniversary of Reserve Bank of India Employees' Association, Chennai was celebrated on 30th June 2014 on the beautifully decorated dais at the Banking Hall of RBI. Com.A.Govindasamy, President of RBIEA, Chennai presided over the function. Sri R.Gandhi, Dy.Governor was the Chief Guest. Sri T.K.Rangarajan, M.P. from Tamilnadu graced the function. Com.Samir Ghosh, Gen.Secretary of AIRBEA and Dr.Sadakathulla, Regional Director of Tamilnadu and Pondichery were the other dignitaries who adorned the dais. Past office bearers, committee members and activists attended the function in good number. The members of the executive committee of the Forum of Retired employees of RBI were present in full strength. The meeting commenced with a patriotic glorifying the labour movement. Com. B.Christy Kennedy, present Secretary of RBIEA extended a warm welcome to the dignitaries and other invitees.
In the Presidential address Com.A.Govindasamy said that the city of Chennai had the cherished history of pioneering many struggles and movements. He said RBIEA is one of the most militant organisations in the Trade Union. He informed that the Currency Employee's Union was formed in the year 1923 which was later transformed to RBI employees' Association after the enactment of RBI Act 1935. He gave a detailed account of the odds and onslaughts the Association had faced from the Government and the Management in the past. He recalled the services rendered by the illustrious leaders of the movement which was responsible for many achievements. Com.A.G. made a special mention about the leadership provided by Comrades Ashis Sen, Samir Ghosh, K.T.Sule, T.K.Ghosh, Ajit Subedar, Valanju, Biren Sen and Naresh Das from the All India. Locally he praised the role played by of Comrades V.G.Row, R.Parthasarathy, A.Natarajan and W.R.Varadarajan in leading various struggles and strengthening the organisation.
Sri R.Gandhi, Dy.Governor in his address congratulated the Association on the occasion of its 90th Anniversary. He mentioned that the Trade unions' role will go a long way in making the management to make a true assessment of their functioning. He mentioned the efforts taken by RBI in creating public awareness for the functions discharged by RBI. He informed that RBI has recently constituted various committees to formulate innovative ideas to promote employees welfare. He appealed that the Unions should strive their best both for the employees' benefits as well as the institutional growth.
Com.Samir Ghosh appreciated Sri Raghuram Rajan, the Governor and Sri R.Gandhi, the Dy.Governor for their positive outlook and understanding of the employees' problem in the proper perspective. He said that under their leadership the RBI employees are sure to get their major problems resolved. He appreciated the role played by the leaders and membership at Chennai in implementing the calls and in building up a strong organisation. He gave a vivid picture of the employees' flight in the earlier years of the Association's formation and how various leaders toiled to strengthen the association inch by inch to its present level. He requested Sri T.K.Rangarajan, M.P. to voice the grievances of RBItes in the floor of the Parliament.
Dr.Sadakathulla the Regional Director of RBI made a mention about the various welfare measures the Bank is implementing. He assured his support to the cause of the retirees in all matters. He also announced of his plans to accede to the request of the Forum of retired employees to provide a room in the Bank's Annexe building for their secretarial functioning. He also appreciated the services of the "RBI Chennai Friends" Group to the past and present employees of RBI at Chennai.
Sri T.K.Rangarajan, M.P. while addressing the gathering mentioned about the good rapport he and his senior Sri Umanath maintained with the leaders of RBIEA, Chennai in the past. He assured his continued support both inside and outside the Parliament. While computing statistics and drawing various policies RBI should take into account the interest of the base level workers. He pointed out that although there is considerable improvement in the industrial output the number of workers in small entrepreneurs and small and medium scale industries has come down drastically to an alarming level during the past twenty years. He said if the same trend continues the country may have to face disastrous results. He wanted RBI to guide the Government in the right direction.
Past leaders of RBIEA, Chennai viz.Comrades A. Natarajan, S.Jayaraman, T.V.Subramanian, R.Chandrasekaran, R.Sivanesan, N.V.Padmanabhan, K.Ramasubramanian and S.Ramabadrdan were invited to the dais and were honoured with shawls and mementos. Sri R.Sivanesan and N.V.Padmanabhan could not attend the function as they were out of station.
In addition, many retirees who were actively associated with RBIEA in the past graced the occasion. R.V.Raman, M.Pugazhendi, T.K.Chandrasekar Nair, R.Rajagopalan, Sri A.Manoharan, A.Sivasubramanian, R.Chakrapani, G.S.N.Prasad, G.Mohandas, N.Janardhanan, G.Devarajan, S.Radhakrishnan, M.Hariharan, S.Venugopalan, S.Thiagarajan, G.S.Shunmugam, Sarada Maheswar, S.Vaijayanthi, Juliet Ashok Raj are a few to mention.
Bharatha Natyam was performed by two young comrades Sujitha and Vidya as a part of entertainment.
One of the highlights of the function was the beautiful display of old photographs depicting various events in the past. Light refreshments were served to all the members who attended the function. Sri A.P. Mathivanan compered the programme in an impressive manner and also proposed vote of thanks. The successfully organised function has thus come to a close.
- B.Chandraiah
Dear FM, Please Help Us Seniors
Uncontrolled, all-round inflation has hit senior citizens the most. Hence, the finance minister is requested to gift senior citizens income-tax exemption up to `. 5 lakh a year. Secondly, the cost of anti-asthma inhalers has increased unbearably in the last three years. The price of such inhalers should be reduced to half in the Budget. Finally , the medical insurance companies have doubled their premium recoverable from senior citizens in the current year as if all citizens are going to be hospitalised simultaneously as soon as they turn 60. This should be stopped with retrospective effect.
- HANSRAJ BHAT Mumbai
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- HANSRAJ BHAT Mumbai
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WHAT IS THE LIKELY DEARNESS ALLOWANCE INCREASE FOR BANK OFFICERS AND WORKMEN FROM August 2014 to October, 2014
.........Although, in the month of May 2014, the DA has decreased by 2.55%, yet now in August, 2014, there will be again increase and DA is likely to cross 100% barrier. There has been sharp increase in CPI in the month of April and May 2014. The trends of previous years indicate that in June, the inflation usually marginally increases. Assuming that............
RBI Panel for Indices on Labour, Wage to Improve Policymaking
.........The panel, headed by RBI Executive Director Deepak Mohanty, said, "With increasing integration with the global economy and the growing complexity of the economic structure, information needs have increased considerably and data gaps are being experienced in various domains of central banking." The Committee on Data and Information Management was set up by the RBI to address the concerns and to place the information management on ............
RBI clarifies on TDS on remittances to non-residents
The Reserve Bank of India (RBI) on Monday said it has reviewed the policy relating to issue of instructions under Foreign Exchange Management Act, 1999 (FEMA) and clarified that it has decided against issuing any instructions in regard to deduction of tax at source.....
India looking at ways to monetise its citizens' gold
With India's gold imports having pressured its current account deficit (CAD), two large Indian public sector banks have suggested that there is a greater need to make use of gold available in the country, and that the precious metal should be made more liquid. A government official has seconded the move, laying bare some aspects of the government's intention to monetise the gold stores held in most households across the country...............
Old for New in Nagpur: RBI to Start a Gold Rush
Old isn't always gold — at least, not for the Reserve Bank of India (RBI). There is a plan to swap some of the old gold lying in RBI's Nagpur vault since pre-Independence times — and whose quality is not exactly top grade — with purer gold. The country's monetary authority has sounded out large lenders and international bullion banks to strike 'location swap' deals. While the..................
ICICI Bank Organises Coin Exchange Mela in Indore, Madhya Pradesh
Indore: ICICI Bank, India’s largest private sector bank, today organized a Coin Exchange Mela at its Ratlam Kothi branch in Indore, Madhya Pradesh under the guidance of the Reserve Bank of India. The mela was organised to offer free facilities of exchanging currency notes with coins to the general public. This is a much-awaited event that receives an overwhelming response from people from all walks of life............
RBL Bank expands and rebrands as IPO draws closer
.............The bank is targeting a growth of 40-50% in advances and deposits in the next two years. In the year ended 31 March, its net loans grew 54% while deposits rose 39%. Historically, most RBL’s branches were located in Maharashtra and Karnataka, earning it the label of a regional lender. Now, it is working to shed that image, hiring McCann Worldgroup to help with a rebranding. “McCann has helped us in changing our brand name and logo to RBL Bank to compliment the personality of a modern bank that we have been building over the past four years,” Ahuja said...............
Experienced Finance Hands on State Bank of India Board
For a long time, the State Bank of India board had industrialists representing shareholders on it. But with the change of government, even this tradition seems to be changing. Some experienced finance hands are on board to guide it -MD Mallya, former CMD of Bank of Baroda and Bank of Maharashtra, and Sunil Mehta, who had represented AIG in the country. As the SBI prepares to take advantage of a likely recovery in the economy, the wisdom of the wizards should help it avoid bumps.
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Finance ministry looking at public banks' consolidation
........"There has been some discussion, but the ministry wants to tread cautiously because of complex issues such as what will happen to the shareholding pattern and employees after the merger of two banks," said a finance ministry official who did not wish to be identified. It might start by merging the State Bank of India (SBI)'s five subsidiaries - State Bank of Hyderabad, State Bank of Mysore, State Bank of Bikaner & Jaipur, State Bank of Patiala and State Bank of Travancore - into the parent. "I think this government is as keen on the consolidation as the previous government was, but the problem is ground realities........
AIBEA opposes PJ Nayak panel proposals
The Government should decline to accept the adverse recommendations of PJ Nayak Committee which was set up by the Reserve Bank of India, says the All India Bank Employees’ Association (AIBEA). AIBEA is the largest trade union body representing about half-a-million bank employees. In its pre-budget memorandum to the Union Finance Minister, it has also demanded that the Government holding in the public sector banks should not be reduced below 51 per cent, and that the governance board of PSBs should be enlarged, and strengthened throught the appointment of professional persons from various fields of interest........
Mobile money and digitized payments have few takers
..............The Digitized Government Payments Study is a qualitative study with government-payment beneficiaries across four districts in Maharashtra conducted during the 13-23 December 2013 period, focusing on the potential for digital government payments to expand financial inclusion.................
Will the Reserve Bank Lift The Veil On Corporate Treasuries?
.......“Some of the corporate treasuries are larger than many banks' treasury operations. Their large operations do have an impact in financial markets. Those companies can take large positions domestically as well as through their offshore entities.“ The central bank bore the brunt of that set-up last year when all its measures to arrest speculation on currency by banks did not yield much result...........
Finmin, RBI & Sebi in Talks
......Talks are on between the finance ministry, Securities & Exchange Board of India and Reserve Bank of India over the proposal, said a senior official with knowledge of the plan. The official said such a move makes sense as the overall investment limit for foreign funds in government bonds will not be changed. It will instead allow investors who want the bonds to acquire them while leading to an overall lowering of bond yields and greater liquidity. RBI has been uncomfortable with allowing.............
IIM Ahmedabad raises Rs 16 cr from Corporates, Govt. bodies for research
.........As its fundraising and development efforts gain traction, IIM Ahmedabad, today, made its first announcement relating to support that has been committed by and agreed to with leaders in corporate and Government institutions. Put together, these collaborations will pool in over Rs. 16 crores to fund cutting-edge research and award scholarships to meritorious students. “We have some of the brightest alumni in this country and abroad, who feel strongly a desire to contribute to their Alma Mater. For example, Raghuram Rajan, Governor, RBI; KV Kamath, Chairman, ICICI Bank; Dr. Harsh Kumar Bhanwala, Chairman, NABARD; and KV Srinivasan, CEO, Reliance Capital are all a part of the distinguished IIMA alumni group who came forward to contribute and maintain IIMA as the premier institution for management education and research,” said Prof. Ashish Nanda, Director, IIM Ahmedabad..............
Aiming to trim financial burden, SBI to open 5K new ATMs
Even as the uncertainty over charging users for ATM transactions continues, nation's largest lender State Bank of India today said it will be launching up to 5,000 new ATMs this fiscal. The move is aimed at helping improve the debit cards-to- ATMs ratio for the bank and may also possibly help it save money expended on ATM interchange fees.....
Prod RBI to allow currency swap for JBIC: Tokyo to govt
........This will help JBIC offer long-term low-interest rupee loans for projects not connected with the Delhi-Mumbai Industrial Corridor (DMIC), where it has 26% stake. “There is huge demand for rupee-based loans in India and JBIC can offer dollar or Yen funds through a swap. However, RBI prohibits this. If such transactions are allowed, JBIC would be able to lend at much lower interest rates because of its high credit rating. ADB and IFC are already allowed to do such swaps without limitations,” .................
NBFC-MFIs: average base rate pegged at 10.09%
..........In February, the RBI, in its circular relating to the pricing of credit, said the interest rates charged by an NBFC-MFI to its borrowers will be the lower of: the cost of funds plus margin; or the average base rate of the five largest commercial banks by assets multiplied by 2.75. The average of the base rates of the five largest commercial banks is advised by the Reserve Bank on the last working day of the previous quarter, and the same determines interest rates for the ensuing quarter...........
No magic wand to bring down bad loans: SBI chief
....."We are seeing some lessening of stress but there is no magic wand, we have to work through our way. As the GDP goes up, demand goes up, the capital market will begin to respond, people are able to raise equity, we will see things becoming better.".....
Small borrowers: banks may have to give more loans
...........“We are looking at segregating the housing exposure into categories within the overall housing loan portfolio of banks. Talks are on to give banks specific lending targets for housing loans up to Rs.5 lakh for EWS and LIG,” said G.S. Sandhu, secretary, department of financial services in the finance ministry. Currently, home loans up to Rs.25 lakh in metros and up to Rs.15 lakh in non-metros are classified as priority sector loans by the Reserve Bank of India (RBI); however,...............
No Bank Credit for Hoarders
The Centre has instructed the states to act against grain hoarders. In the distant past, RBI's selective credit control (SCC) operated in sync with the government's stock control stipulations. During the Gulf crisis, it was given up as it was seen as directed credit. However, directed credit still prevails, such as targets for priority sector advances. The SCC was operated with three instruments: minimum margin, level of credit and minimum rate of interest. So, minimum margin alone can ensure that bank credit is not used for hoarding commodities in short supply . The RBI should give the idea some thought.
- A SESHAN Mumbai
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- A SESHAN Mumbai
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Loan disbursal: banks told to do an early eligibility test
......V. Raveendran, Assistant General Manager, Reserve Bank of India, who reviewed the District Credit Plan in detail, said the reporting system of banking statistics witnessed a commendable improvement in Kozhikode, especially in the 96 per cent submission of lead bank returns (LBR). Expressing satisfaction over the overall performance of the banking system, he said the district could have performed better with a little more attention on the Other Priority Sectors..........
Celebrate credit quality transparency initiatives
......................Along the same lines, RBI’s move to force banks to detect stress early (and penalise if not done) has to be specially commended, though this too should have been done years ago. There is no reliable estimate of what fraction of bank loans fall under SMA2, i.e. borrowers who pay between 61 and 90 days and technically avoid being called non-performing, and banks are understandably tight-lipped about this (many have not bothered to record this properly before). But RBI should mandate banks to disclose that number on a quarterly basis. And then, .............
Impediments in Recovery of Non-performing Assets
Recently, there have been some judicial pronouncements by the apex court determining the scope of powers of enforcement of securities without the intervention of the courts, by the banks and FIs under the SARFAESI Act. The apex court has reiterated the need to protect the interest of borrowers, and emphasized that the exercise of extraordinary powers of recovery , by banks and FIs must be in compliance with the provisions of the SARFAESI Act.............
Read - ET
Read - ET
Now, Telangana to knock on the doors of RBI for crop loan recast
..........Caught in the crossfire are the banks whose NPAs would rise dramatically in the current quarter if the RBI does not come to their rescue. Close to Rs 10,000 crore in Andhra and around Rs 5,000 crore loans in Telangana are expected to freshly add to the NPAs from this month onwards as the short-term production loans given in April last year remained unpaid for the last 90 days, according to officials. “This is going to be a big setback for banks because they will have to make a provisioning for the fresh NPAs that will further affect their profitability. The interest calculated so far on these loans will have to be returned now. This will further dent their performance,” ............
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