Diplomatic Banker Has a Will of Steel

If Duvvuri Subbarao had some anxious moments as Reserve Bank of India Governor due to his deputy KC Chakrabarty's plainspeak -on subjects ranging from interest rates to banker behaviour -Raghuram Rajan can breathe easy. SS Mundra, the latest deputy governor appointed to the RBI, is a diplomat in a banker's clothing. To hear Mundra in a conversation without a microphone is hard, however close you are to him. But the glacial softness conceals a will of steel -Mundra does not give up easily........

Read - ET

राजन यांचे अंजन

."गव्हर्नन्स‘ किंवा कार्यपद्धतीतील सुधारणांवर सरकारने जसा भर दिला, त्याविषयी जशी चर्चा केली, त्या तुलनेत आर्थिक क्षेत्रातील मूलभूत धोरणात्मक सुधारणा आणि त्याआधारे पुनर्रचना हा विषय सध्या तरी कोपऱ्यात ढकलला गेल्याचे जाणवते. काही अर्थतज्ज्ञ फक्त त्याविषयी खंत व्यक्त करीत असले, तरी एकूण राजकीय चर्चाविश्‍वाचा तो भाग झाला नाही, हे वास्तव नाकारता येण्यासारखे नाही. या परिस्थितीत ज्येष्ठ अर्थतज्ज्ञ आणि रिझर्व्ह बॅंकेचे गव्हर्नर रघुराम राजन यांनी मुंबईत ललित दोशी स्मृती व्याख्यानात बोलताना देशातील सरकाराश्रित भांडवलशाहीवर (क्रॉनी कॅपिटॅलिझम) केलेली टीका डोळ्यांत अंजन घालणारी आणि सुधारणांची दिशा स्पष्ट करणारी आहे. राजन यांनी नेमक्‍या वर्मावर बोट ठेवले आहे. आपण सरकारप्रणीत समाजवादाकडून आता सरकाराश्रित भांडवलशाही चालवत आहोत आणि त्यामुळे फक्त मूठभरांचेच उखळ पांढरे होत आहे. हे चित्र बदलून विकासाचा पंथ धरायचा असेल तर खरीखुरी निकोप स्पर्धा, उद्योजकतेला वाव, समान संधी यांची गरज आहे, अशा शब्दांत राजन यांनी सध्याच्या स्थितीवर बोट ठेवले. ..........

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Read - Sakal

Finance and opportunity in India - Dr.Raghuram Rajan

Address by Dr. Raghuram Rajan, Governor of the Bank of India, at the Twentieth Lalit Doshi Memorial Lecture, Mumbai, 11 August 2014

.........The broader takeaway is that financial inclusion and direct benefits transfer can be a way of liberating the poor from dependency on indifferently delivered public services, and thus indirectly from the venal but effective politician. It is not a cure-all but will help the poor out of poverty and towards true political independence. But financial inclusion can do more; by liberating the poor and the marginalized from the clutches of the moneylender, by providing credit and advice to the entrepreneurial amongst the poor, and by giving............

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What is Wrong with Crony Capitalism

RBI governor Raghuram Rajan deplored crony capitalism recently , as it harms free enterprise, efficiency and growth. He is, of course, right. But crony capitalism has played a huge role in the initial, economic take-off of practically all countries. The British Crown gave the East India Company a monopoly over trade with India. Abraham Lincoln, a successful, erstwhile railroad attorney , signed away one-tenth the land of the United States to some railroad companies to connect the east and west coasts of the nation by rail. ............

Read - ET

Former RBI chief prepares for new role as chairman of government spending initiative

Former Reserve Bank of India Governor Bimal Jalan was on Tuesday named the chairman of the Expenditure Management Commission. The new initiative was unveiled in Finance Minister Arun Jaitley's Budget speech to improve the efficacy of the government spending in order to achieve maximum output. The 72-year-old Jalan was appointed to the post by Prime Minister Narendra Modi. Subir Gokarn, a former Deputy Governor of the RBI, was named a member of the Expenditure Management Commission, which was given 18 months to submit its report..........

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Ideas of India's uncertainties

..........The first essay under part one, "Politics", is an overview by Bimal Jalan. Mr Jalan expresses valid concerns about the high and increasing criminalisation of politics and corruption in contemporary India, aided and abetted by investigative and judicial processes that are kept deliberately cumbersome and slow by vested interests. These issues must be solved if India is to move back to a high growth path. However, the loss of gross domestic product (GDP) growth that Mr Jalan attributes to multi-party coalitions is perhaps really due to weak leadership. After all,..........

Read | Business Standard

'Need’ful recommendations

My View on  "RBI transfers almost entire surplus to govt": 

“It was reasoned that government should need the fund now which is facing high fiscal deficit that’s needed to be brought down” explains it all. Just as ‘people get the government they deserve’, GOI and RBI get the recommendations they ‘need’ from panels. This is not just a premature, harsh response to the beginning of the gradual weakening of a central bank’s financial strength. Lamenting on the fall of RBI’s aggregate reserves from 11.9 per cent of balance sheet size to 10.1 per cent during the five year period ending June 2013, I had observed as under:

“To ensure that temptations of government emanating from external compulsions do not dilute the strength of RBI’s balance sheet, GOI should take measures to augment the share capital and reserves of RBI after carrying out appropriate amendment to RBI Act. Till such time RBI should be allowed to retain surplus income by transfer to reserves. Considering the size of the balance sheet and the internal and external pressures on its income generating capabilities, as also the nature of shocks the bank has to absorb from time to time, the central bank’s reserves need to be augmented on an ongoing basis.”*

*Page 47, Banking, Reforms & Corruption: Development Issues in 21st Century India By M G Warrier(samparkworld@hotmail.com) 

- M G Warrier, Mumbai 

A welcome move

..........Given the complexities of a modern, globally integrated and growing economy like India’s, setting monetary policy is complex. It can neither be mechanical and in line with the experience of other central banks. Nor can it toe a set political line. An economy is a “complex animal” and setting monetary policy has to have a sense of judgment about it. It is in this context that monetary policy is best left to the expertise and the judgment of the central banker. The reason why we welcome Jaitley’s assertion about the independence of the RBI in setting its policy parameters. In our present context, Governor Raghuram Rajan had given an inkling of what he proposes to do with his “conditional statement”:........

Read - DNA

A hunt for PPF that leads to toxic sales pitches

............But to experience it myself was an entirely different thing. It was a simple visit to my bank branches to open a Public Provident Fund (PPF) account, which once again put into focus the way financial products are being sold by banks. Here’s how the conversations went with relationship managers (RMs) at the two banks I visited.....................

Read - Mint

Financial inclusion times

........... While the proof of the Centre’s and the state’s direct benefits programmes needs to be seen, we are in a new phase of financial inclusion. And with money from the state and the Centre all set to flow into bank accounts, inclusion seems more viable since, this time around, the banks stand to benefit from opening and servicing the accounts of the poor.

Read - FE

Mobile banking zooms as India gets smarter

A sharp increase in use of smartphones has led to a sudden surge in mobile banking transactions — almost four times in a year in value terms. Leading the pack is ICICI Bank, the country’s largest private-sector lender, which has reported a three-fold rise to clock more than Rs 1,000 crore worth of transactions in a month, the first time by a bank in India...........

Read | Business Standard

VITALINFO - enthusiasm, endurance and perseverance

My View on VITALINFO - Delay regretted.........
Shri Anand Sinha, former Deputy Governor has requested you to kindly include his new mail id for VITALINFO. Regards. 

- Hemant D. Gajare, PS

Dear Sir, Please include the e-mail ids of Shri A. K. Sarangi, CGM, HRMD, CO and Shri S. R. Pattanaik, DGM, HRMD, CO in the mailing list of VITALINFO magazine, as they are very much interested in receiving the same. Regards 

- Praveen Yadav, Manager, HRMD

Excellent. It makes you well read. Ahead of others. Regards 

- V.S.Malekar, HRMD 

Dear Mr Tarambale, The great work that you are doing in putting together all this vital information is commendable and highly appreciated. 

- Luella Saldanha, Assistant Manager, Belapur

Dear Tarambale Sir, 

I am astonished by your efforts to compile all the information, articles etc relating to banking and finance from all the news papers. Anybody who goes through your blog needn't read any news paper! I appreciate your enthusiasm, endurance and perseverance really it requires lot of patience. Bravo!! Regards

 - Sanjay S Dehade, Manager, Belapur

Mangesh, 

While we appreciate your dedication, personally my appeal to you would be to get up an hour later. 3 a.m. is too early. Like fluctuations in the stock market, we should be prepared for situations like the one you faced. We know that you can more than make up on the next day, even if VITALINFO has to take a holiday. 

- M.G.Warrier

Dear Mangesh,

There are no words to thank you for your hard work by getting up at 3.30 A.M or even earlier daily to make available to us information on a lot of subjects. 

- Rajappan Nair

Dear Tarambale, 

Don't know why but today morning I was feeling very angry with you for the delay. Then I realized - the restlessness was the same that one feels when the newspaper is delayed. Please keep it up. Regards 

- Shailendra Trivedi

Dear Mangesh,

Why feeling sorry about it? In fact we are so grateful to you for this wonderful and painstaking service. No doubt I missed it today when I opened my smartphone at about 7 a.m. Because VITALINFO is the first news (channel) even before TV news or paper news, I like to read. Thanks and regards 
- P.Aravind 

RBI financial quiz (RBIQ) at Pune

The winning teams Sungrace High School (2^nd runners up), The Cathedral Vidhya School (Winners) and City International School (1^st runners up) with the quiz master and senior officials from RBI, Pune

The annual all-India Inter-School RBI financial quiz (RBIQ) for Pune Centre was held at the MES Auditorium, Kothrud, Pune on August 11, 2014. The Quiz launched by the Reserve Bank of India in 2012, is an effort of the Reserve Bank towards spreading awareness about financial matters, especially among children. Organized for the third year in a row, RBIQ this year saw participation from 84 schools located in Pune area, across all boards of education. Shri Lloyd Saldanha was the quizmaster. 

2 In her inaugural address Smt. Meena Hemchandra, Principal Chief General Manager, College of Agricultural Banking, RBI, Pune, spoke about the initiatives taken by RBI in the sphere of financial literacy. She emphasized the importance of financial education and exhorted students to be aware of financial matters as it was going to be part of their everyday life. 

3 Among the six teams which qualified for the final round, Master Nihal Dalal and Master Jeh Patel of The Cathedral Vidhya School, Lonavala, emerged as winners. They will now move to the Zonal finals scheduled at Mumbai on November 10, 2014. Miss Sanjana Rai    and Master Dibyanshu Gautam of City International School, Pimpri were the first runners up while Miss Sheetal Potale and Master Devendra Kondhalkar of Sungrace High School, Pune, were the second runners up. 

4 Shri Shyam Aggarwal, Chief Editor, Aaj ka Anand gave away the prizes to the winners. 

KV-II team wins Port Blair round of RBIQ-2014

The Port Blair round of the RBIQ-2014 was conducted by Reserve Bank of India (RBI), Kolkata here in Port Blair on August 11, 2014 at the auditorium of Dr. B.R. Ambedkar Institute of Technology. A large number of school children of this area participated in the event. The team from KV –II represented by Gaurav Kundu and Lakshmi Prasad  won the Port Blair round of RBIQ-2014.  The runners up were Ankita Sarkar and Pryesh Jain from Navy School.  The winning team will take part in the Zonal Finals of Eastern Region scheduled to be held on 7^thNovember, 2014 at Kolkata. The Quiz was conducted by renowned quizmaster Dr. Ashish Tripathi from Greycaps Pvt. Ltd., Bengaluru.................

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Bankers Pack Pistols to Chase $21 Billion of Indian Clients Without Accounts

...........Risking his life to bring financial services to rural India is just part of the job for India’s correspondent bankers like Haque: almost 200,000 traders, shopkeepers, and small business owners across India who are part of a push to reach the estimated 65 percent of the adult population which, according to the World Bank, doesn’t have a bank account. ...........

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Daylight theft in RBI Square; man relieved of Rs 50,000 booty

 In a daring day light robbery, two motorcyclists looted a middle-aged man near a petrol pump at RBI Square at around 2 pm on Sunday afternoon. The theft material included a gold chain and Rs 20,000 cash. Sitabuldi police have booked the thieves and started investigations.........

Read - Nagpur Today

Economic Milestone: Nationalisation of Banks (1969)

.......Morarji Desai, who was finance minister then, remained adamant and refused to go ahead with the proposal. “Recent experience does not suggest that large banks need to be taken over so as to do something they have not been doing,” he wrote. However, on July 19, 1969, the Banking Companies (Acquisition and Transfer of Undertakings) Ordinance resulted in the ownership of 14 banks being transferred to the state. This made Desai’s position in the cabinet untenable.................

Read - Forbes India

STATE-OWNED BANKS - Graft Check: Is Pay Hike a Solution?

..............Private sector bankers are paid astronomical sums, which they justify on grounds of profitability -performance determines pay . Whereas the standard for puibic sector banks is one pay , one scale across the board. This gives rise to multiple questions: Does such a policy work at a time when businesses need to turn in profits rather than simply be a tool to deliver the government's welfare measures? Salary levels are low, but does that justify being corrupt and taking bribes for loan sanctions? If so, how is it that thousands of other state-run bankers are clean? Is this a case of poor individual moral standards rather than pay? .......

Read - ET

Small Banks Turn to Open Source Solutions to Cut Costs

............While the country’s large banks have already invested in corebanking systems, this is an important year for banking technology in India. About a thousand urban co-operative banks are yet to migrate to a core banking system and are likely to choose hosted solutions on a pay-as-you-go basis. As of March, only a third of 1,589 urban co-operative banks that have been told by the central bank to migrate to a core banking system have done so. The rest of the market is up for grabs...........

Read - ET

RBI sparks confusion despite $4.1 billion in cash injections

..............The announcements come after RBI Governor Raghuram Rajan said last week the central bank would consider issuing more frequent and shorter-dated repos, or cash-for-loans transactions to smoothen volatility in money markets. The RBI began 7- and 14-day term repos in October, but traders complained they were announced too sporadically, making it hard for banks to manage their near-term cash needs. Still, some analysts noted that despite the confusion on Tuesday, the injection of funds by the RBI would prove a positive for markets............

Read | Business Standard

What should be the economic priority of the Narendra Modi government?

.................The hard truth is that even if a country “gets things right” regarding spending, subsidies, taxes and regulations, its economy won’t become a thriving, innovative giant with deep capital markets unless its money achieves a Rock of Gibraltar-like reputation for reliability. Raghuram Rajan, the new governor of the Reserve Bank of India (RBI), seems to understand the harmful impact of inflation. But for India to break decisively from its bad monetary habits of the past, two key things are critical..........

Read - Forbes India

For the unbanked

..............The role of financial literacy, of both potential customers as well as financial service providers, also needs to be emphasised. This implies distribution of literature in the local and simple language, designing flexibility in instruments and offering tenors that are attractive to the local population and training banking officials to be consumer-friendly. In the field survey undertaken by us in Gubbi, Tumkur, it emerged that financial literacy also needs to be imparted to bank officials. The financial requirements of farmers are different from those of artisans in the same rural area. In general, unbanked people prefer ease in banking .............

Read - IE

Muthoot Fincorp to act as biz correspondent for banks

...........“It should be ensured that there is no co-mingling of bank funds and those of the non-deposit taking NBFC appointed as business correspondent. There should be a specific contractual arrangement between the bank and the non-deposit taking NBFC to ensure that all possible conflicts of interest are adequately taken care of,” .........

Read | Business Standard

Five lessons from bribery scandals in banks

................The current cracks in the banking system should lead to many changes in the way the financial system is managed. The incentives of both the finance ministry and the Reserve Bank of India are aligned in this case. The former does not have the money to recapitalize banks while the latter needs to protect its credibility as an effective banking regulator...........

Read - Mint

Stakeholders to RBI: Penalize banks not meeting CDR in JK

.........Chairman, Kashmir Economic Alliance (KEA), Muhammad Yaseen Khan said: “I fail to understand why the RBI is not acting against these banks. While on other issues the RBI seems to be proactive, but when it comes to poor lending by SBI and PNB, the central bank acts as a mute spectator.” Khan said the RBI should take action against such banks which fail to meet the CDR benchmark. “They should be penalized for their failure to ensure mandatory credit flow to the priority sector.”.......

Read - Greater Kashmir

Sebi sets ball rolling for common KYC system for entire financial sector

........."The entities, regulated by other regulators in the financial sector specified by the board from time to time, may access the system of KRA for undertaking KYC of their clients who engage them for financial services," Sebi said in a notification. "The system of KRA may be connected with any central KYC registry authorised by the central government for the purpose of collation and sharing of the KYC information in the financial sector,” the market regulator added. The new norms would be called the 'Securities and Exchange Board of India KYC (Know Your Client) Registration Agency’ (Second Amendment) Regulations, 2014'........

Read - FE

Over 34,000 companies under RBI scanner for illegal NBFC operations: Government

................"The Ministry of Corporate Affairs sent a list of 34,754 companies having enabling clauses in their memorandum of association for undertaking NBFC like business, to identify companies which were carrying on the business in lines of NBFC without a license from RBI," Minister of State for Corporate Affairs Nirmala Sitharaman informed the Rajya Sabha in a written reply.  "RBI has commenced the process to ascertain the facts from all the companies which appear to have unauthorisedly accept .. 

Read - ET

Crop loans waived in Telangana

...........According to an official press release, the Cabinet has decided to "impress upon" the Reserve Bank of India (RBI) to consider other districts also for loan reschedulement "in view of the wide spread damage to crops in the last five years". It had directed the state finance secretary to rush to Mumbai to discuss the matter with the RBI........

Read | Business Standard

Concern in RS over rising number of bank loan defaults

JD(U) on Tuesday raised concern in Rajya Sabha over increasing number loan defaults in the country while referring to the CBI arrest of a bank CMD for bribery for not converting the outstanding loan of a private company into a Non-Performing Asset (NPA). Raising the issue during Zero Hour, K C Tyagi said ever since nationalisation of banks in the late 60s, "several lakh crores were due on capitalists"......

Read | Business Standard

Bankers may Ask EC to Ban Loan Waivers

..............“In Indian Banks' Association (IBA), there is a thinking whether we can ask the Election Commissioner to debar political parties from making any such announcements because if other states also start following this model, it will become dangerous for the banking system,“ said CVR Rajendran, CMD of Andhra Bank......

Read - ET

Sinha: A Suitable Innings

.........Sinha, 62, the first person to be at the helm of the regulator for more than three years since DR Mehta, introduced several major reforms after he took over on February 18, 2011. His latest pitch for tax benefits for Real Estate Investment Trusts, or REITs, was promptly cleared by the new government. This is on the heels of forming a long-term policy for the mutual fund industry. Here's a look at some of the key changes introduced by Sinha over the past four years.....

Read - ET