...........In the early 1960s, the RBI had to impose a regime of moratorium, amalgamation and mergers on hundreds of small banks. With the deeply ingrained belief in the immortality of scheduled commercial banks, the concept of a bank dying is alien to the culture of Indian commercial banking. The upshot of this is that profits are private and losses are public. The RBI should undertake a hard look again before going in for a proliferation of small banks...............
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.
Friday, August 8, 2014
Rajan Warns of a Global Market ‘Crash’
....Rajan said that back then, countries were engaged in a period of competitive devaluation, in a similar way to central banks now being engaged in ever more accommodative policies. “We are taking a greater chance of having another crash at a time when the world is less capable of bearing the cost,” Rajan said in an interview on the journal's website dated Wednesday. Rajan said he worried about the impact of investors exiting markets all at once after buying heavily into assets inflated by these loose central bank policies. “There will be major market volatility if that occurs. True, it may not happen if we can find a way to unwind everything steadily. But it is a big hope and a prayer,” Rajan said....
Read - ET
Khan: RBI discussing with govt on auctioning cash balances
.......... “We have been in discussion with government whether they can release the (cash balance) figure… as of now, they have some reservation about releasing figures… We are in discussion with the government about auctioning their balances,” Khan said in a post-policy conference call with analysts. The government keeps its cash balances with............
Read - FPJ
FEMA administration — Prospects and Challenges : G Padmanabhan
............Speaking at the seminar, RBI Executive Director G Padmanabhan said, "the Indian economy requires investment on a massive scale not only to sustain a high growth momentum, but also to create the physical and social infrastructure to fulfil the needs of one and a quarter billion aspiring Indians. India has a high rate of savings, but it is inadequate to meet the gargantuan investment needs of today." While on the subject of foreign investment, it is important to note ..............
Unconventional monetary policy and the Indian economy - Deepak Mohanty
Paper presented by Mr Deepak Mohanty, Executive Director of the Reserve Bank of India, in the SAARCFINANCE Governors’ Symposium, Colombo, 24 July 2014
....The limitation of transmission of conventional monetary policy through interest rate led major central banks to undertake measures which were monetary in nature but unconventional in their instruments and operational targets. For example, a crisis may impair the normal functioning of financial markets. In such a situation, central banks can resort to direct financial asset purchases and/or loosen collateral standards to expand their balance sheets. In the recent global financial crisis ........
Read......
RBI to widen campaign area
......“The reason for the marginal decline maybe because more people were satisfied about the scheme the earlier year. But I can assure you that there was no less effort from the banking ombudsman office of RBI to take the awareness campaign forward,” Anand Prakash, the banking ombudsman for the Northeast, told reporters here today..............
RBI proposes 'anytime anywhere' bill payment system
.............In this backdrop, the RBI has proposed Bharat Bill Payment System (BBPS) with an objective to implement an integrated bill payment system and "offer interoperable and accessible bill payment service to customers through a network of agents, enabling multiple payment modes, and providing instant confirmation of payment. "Hence, it has been decided that the existing players in the online commerce segment catering to the requirements of bill payments as well as aggregation of payment services (in relation to bill payments) will be a part of BBPS," the RBI's draft guidelines said. ..........
VITALINFO - Delay regretted.........
Dear all,
Due to non-availability of internet, today's VITALINFO is delayed. Though I was ready to start working at 3.30 a.m. as usual, I was not able to do so. Finally, I had to go to another location to resume the VITALINFO. The delay is deeply regretted with a sincere request to bear with me.
- Mangesh
GITAM award for Rangarajan
GITAM University will present its annual GITAM Foundation Award to noted economist and former Governor of Reserve Bank of India C. Ranagarajan at its 34th Foundation Day celebrations on August 9.
The Hindu
SBI's first woman chairperson Arundhati Bhattacharya is ringing in change
.........."If the past chairmen and the top management had not had the ability to envision what the future would be like, we would have become irrelevant a long time ago," says Bhattacharya , who is yet to move to her new renovated chairperson's office. The 58-year old, however, agrees that much cannot be done in a very short tenure. "It takes time for something to really filter down and start giving results," she says. The government now seems keen to set the house of SBI in order. Bhattacharya's entry into the corner room has brought some firsts to the bank, often a victim of musical chairs at the top. For the first time, the bank is experimenting with a fixed tenure for the chairman - Bhattacharya has got a fixed three-year term...........
Banker, former MP Eknath Thakur dead
No board changes till 19 August, Yes Bank tells Bombay HC
..................However, justice G.S. Patel asked for an assurance from Yes Bank that it will not make any changes in the board till the hearing of Kapur’s plea. He said, “Once I have started hearing the motion, if the board constitution changes, then I don’t want to face a situation that reliefs sought by Darius Khambata (counsel for Madhu Kapur) become in-fructuous.” While the bank gave an assurance to justice Patel who is presiding over the case, it asked the court to not record the undertaking or pass an order to this effect...................
Appeal to Governor for 100+
Respected Governor Dr, Raghuram Rajan,
It is with great joy that I advise you that one of our RBI Retirees has crossed a Hundred Years!. This Centenarian was born on 22nd February 1914. He is Shri.P.V.Krishnamurthy who joined the Bank in the year 1935 as a Coin-Note-Examiner Grade II and retired in the year 1972 as Manager (equivalent to Regional Director of today). Happily he is in good health . He resides in Gopalapuram, Chennai with his wife, daughter and son-in-law.
Your distinguished predecessor Governor Dr. D.Subbarao, on my request, felicitated another RBI Retiree Shri M.G.Nair, who was on the brink of 100 years. Dr.Subbarao sent a team headed by Kochi Office Chief Shri E.Madhavan and a retired Adviser, Shri.K.N.S.Unni to the Ottapalam residence of Nair and he was presented with a shawl, coconut and the P J Gold Medallion and his wife a bouquet. Shri. Nair missed his Century by a whisker—a few months.
I earnestly request you to send a similar team headed by the R.D of Chennai and felicitate Shri.Krishnamurthy and his wife. \
Yours faithfully,
P.P.Ramachandran, (Retd DGM)
Reserve Bank Officers' Association on Lateral Recruitment - Restructuring and HR initiatives
................It is therefore highly debatable whether RBI should look for outsiders to perform research in a core functional area where RBI has excelled in the last few years. The issue assumes even more significance in the background of the fact that RBI has an army of well-trained competent officers in various levels and belonging to different age groups (with the younger officers providing and important second and third line of talent pools). Having said so, Bank going in for head hunt to bring in an officer of 35 years of age as direct grade 'F' officer...........
United Forum writes to Deputy Governor Shri S.S.Mundra
..........All the above issues are at various stages of development and immensely concern us. There have been huge mobilisations of employees and officers seeking redress including cease-work programme......
United Forum's letter to Governor/Members of the Central Board
........What we find disturbing is that the assurances coming from the topmost echelons of the institution are also not being honoured leaving us wondering as to whether this is by design!! We look at the chain of events relating to involvement of staff / officers and their feedback, we come to the disturbing conclusion.......
Gold imports: HC seeks Centre, RBI replies on plea against easing curbs
.....................Justice Vibhu Bakhru sought replies from the ministry of commerce and the RBI by 23 September on the plea of Delhi Bullion Jewellers Welfare Association, which contends that the circular was passed without following due procedure and is not a policy decision. The petitioner organization has contended the 21 May circular was issued in an “arbitrary manner” by the previous government right after the Lok Sabha election results were announced.........
Modi govt to take leaf out of MP CM rural banking book
..........But there were major innovative differences between the RBI's definition of an ultra-small bank and the Madhya Pradesh `samriddhi' banking. The RBI requirement is that an ultra-small bank should have a minimum core banking solution terminal linked to a passbook printer and a safe for cash collection. It could be even a mobile banking system operational from a van or a kiosk. However, in Madhya Pradesh .........
Sampoorn Vittiyea Samaveshan: RBI, NDA not on same page over financial inclusion
..........Top government sources told ET that the Reserve Bank of India (RBI) was in disagreement with three critical elements of the drive. For one, RBI has categorically stated that a Rs 5,000 overdraft "may not be allowed" for the 7.5 crore new bank accounts that the Centre is keen to open in the next year as a part of the financial inclusion drive. While the dispensation is recommending
‘RBI inspection not related to CMD’s arrest’
.............. “it is an annual process conducted by the RBI. The RBI has been doing this for the last two weeks under the AF-5 (annual financial accounting) guidelines. It is done for all banks and it is not connected to the alleged bribery charges against Mr. Jain or his arrest.”..............
Syndicate Bank is no one-off: Dear Rajan, here’s what you must do to clean up public banks
The Reserve Bank of India (RBI) seems to have somewhat underplayed the Syndicate Bank scam as a one-off incident. At least, that is the sense one gets looking at the comments of Raghuram Rajan on the matter at a presser that followed the monetary policy announcement on Tuesday. The governor cautioned that one shouldn't extrapolate the matter to other public sector banks. "I would emphasise that one should not extrapolate this to the entire public sector banking system and assume that all the problems in the public sector banks are because of criminality rather than other factors," Rajan said. He's right. Not all the problems in the public sector banks are because of criminality factor, but some are. The RBI must acknowledge that.......
Indian banks to raise IT spending by 10% in 2014 - Gartner
......."The expansion strategy of banks is entering its peak in India with the release of two new bank licenses granted by the Reserve Bank of India (RBI) to IDFC and Bandhan Financial Services. There are another two dozen financial institutions still waiting for the same grant,"........
RBI tweaks methodology for computing rupee reference rate
The Reserve Bank of India said on Thursday it would tweak the metholodogy for computing the daily rupee reference rate from September 1, accepting the recommendations issued by a central bank committee on changes to various financial benchmarks........
PSB Boards to be Cleaned up: Sitharaman
The government is set to embark on a cleanup of public sector bank boards in light of the recent arrest of a bank chairman, said Nirmala Sitharaman, minister of state for finance as well as commerce & industry. ......
Read - ET
Read - ET
Leave the banks alone
.........The argument against any kind of relief either in the form of restructuring or write-offs is that it impinges on the operations and credibility of the financial system. Bankers would be in a quandary on whether or not to lend and could also dilute their standards knowing well that there are options available to avoid classifying such defaults as NPAs. Therefore, RBI needs to ensure that this credibility is not diluted in any way. The problem with loan-waivers is that..............
Inability to raise capital may hit banks’ capitalization: Amit Pandey
......The performance of India’s banks is closely linked to the underlying performance of the economy. Therefore, to put India’s economy—and its banking sector—back on track, we believe the government should introduce reforms that boost economic growth and control the country’s inflation and fiscal deficit. The measures required to improve growth prospects will entail providing policy, administrative, tax and regulatory certainty to improve the business climate and.......
Rescheduling crop loans: look beyond statistics, AP tells RBI
......After the Credit Policy, the RBI Governor had stated only in conditions where the agriculture production has dropped below 50 per cent due to adverse seasonal conditions that crop loans could be rescheduled. This has put both the Telangana and AP Governments in a piquant situation. The State Chief Secretary IYR Krishna Rao, in a communication to the Executive Director of RBI, has requested the rescheduling the crop loans and sent in a detailed analytical note on the agricultural situation during kharif 2013-14.........
Do ARCs help resolve NPAs or just bail out banks?
........Banks’ other major consideration for sale to ARCs is extremely tardy legal administration and enforcement. The government has recognised the need to remedy this, and the legal enforcement will have to be revamped urgently lest the country’s banking faces crisis. The current management fee driven model of ARCs also needs to evolve into an equitable risk-reward sharing model. Such models can be put in place only if the banks shed their tendency to avoid provisioning. A new organisation, called the NAMC has recently been proposed. It is supposed to work on taking over big ticket NPAs from banks and revive them. The second part of this two-part look at NPAs and asset re-construction will take a closer look at how these ideas will pan out in the future.
ARC of reason
.......Hopefully, that will lead ARCs to focus more on what is called resolution and recovery—essentially figuring out how the asset can generate cash flows. Perhaps the best step RBI has taken is to allow the ARCs to become members of the Joint Lenders Forum (JLF). What that will do is to help speed up debt aggregation—essentially allow the ARC to ‘buy out’ the loans quickly and in ample quantities so that it can act fast. Indeed, where it took ARCs anywhere between .........
Reserve Bank eases rules to kickstart infra funding
.......Until now, RBI had made it mandatory that refinance by way of take-out financing could take place only with an agreement with the consortium of lenders. The RBI now has allowed banks to refinance loans by way of full and partial take-out financing if the aggregate exposure of all institutional lenders to such project is a minimum of Rs 1,000 crore. The repayment period will be fixed by taking into account the.......
How important are forex reserves?
.......Earlier this week, in an interaction with business publications, RBI governor Raghuram Rajan said that reserves cannot buy a country immunity from volatility in global currency markets and at best will prevent second round impacts of that volatility. “Reserves are useful to have but they come at a cost… and we are financing another country. Should we be financing another country when we have significant financing needs?” Rajan argued. He went on to add that.........
Plea to Promote Interest-free Banking
.........The fundamental objective of the interest-free banking system is to eliminate exploitation of borrowers. It considers lending as an investment and distributes investment risk between the users and suppliers of funds. It has been proven that this type of banking will be a vital tool to move into the league of major financial centres of the world and achieve development and growth of the Indian banking sector, foreign participation in large-scale infrastructure projects, and active participation of around 20 per cent Indian citizens living in the country and abroad in banking and financial activities............
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