.............A characteristic of Mujumdar’s approach to life was to help those in difficulty, even if they did not seek his help. His writings were centred on compassion for the downtrodden and that is what he practised in life. He believed in a Socratic tradition of free and frank exchange of views even if they revealed sharp differences and he believed that this was essential to progress. On a personal note, I was, over the years, the recipient of sharp criticism from Mujumdar of my work, but at the same time I have been a major beneficiary of his unstinted support in my career. I had never imagined that the loss of a sparring partner would hurt that much.
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Saturday, August 23, 2014
Restructuring of RBI - A.Chandramouliswaran, Former Executive Director
I have written this piece inspite of some initial reservations on account of my retirement long long ago and that I may not be conversant with all subsequent developments in the Bank. I was persuaded to attempt this piece after the invitation of views from more persons by the 'Newsletter' and after I read the views of my former lovable colleague, Shri V.S.Das.
At the outset, I hold the view that the Governor, with the approval of the Central Board where ever it is necessary, should be free to introduce changes in the organisational structure of the Bank for it to be effective in the performance of its functions. Of course, as the Board itself has put, all the stake holders involved in the exercise have to be consulted, the most important of them being the staff of the Bank whose reasonable expectations in their career path should not get seriously affected. This is important since, unlike the IAS officers, who have access to practically every post in all the institutions of the country, officers of the Bank have to look mostly for their career progression with in the Bank.
After recognising the authority of the Governor to make changes, it has to be said that it is unfortunate that the Board has blessed the proposals of one more Deputy Governor and two more Executive Directors in the Bank apart from other changes the details of which are not known. It may not serve any real purpose to offer views on this matter since this seems to be a fait accompli. Nevertheless, it is difficult to resist the temptation of expressing views on the subject for whatever they are worth. RBI had only three Deputy Governors for a long time. If my memory serves me right, the fourth Deputy Governor was mainly to function as the full time Chairman of NABARD apart from handling, say, just one or two departments of the Bank. A full time Chairman ( who is not a Deputy Governor ) has been in charge of NABARD for a long time and hence the Bank should be able to manage with only three Deputy Governors. Like wise, additional posts of Executive Director are unnecessary since already there are too many of them (most of them perhaps function as in charges of two departments if not as head of a single department) and there is a case for reduction in their number. Posts of Executive Director, Principal Chief General Manager etc should not be created just for the sake of providing promotional opportunities. These posts would lose their charm if they are too many. Apart from these posts losing charm, so many posts at the level of Executive Director and the Deputy Governor would not be really necessary if only we look at the papers which are being pushed up to and seen by them. Over the years (even when I was in service), papers got pushed to higher and higher levels and the delegation of authority suffered seriously. Officers at various levels have to be encouraged (even compelled) to take decisions at their level (of course in accordance with rules relating to delegation of powers and authority which has to be periodically reviewed and revised). Managerial competence and confidence in their judgement would develop in the officers only when they learn to take decisions. When one of the Deputy Governors during my service casually mentioned to me of heavy work load at his desk, I had politely told him that if he permits me I would look at the papers sent to him and mark them with different colours to indicate which should not have been sent to him,which are in a grey area and which have been rightfully sent to him and that he may have take a view. It is needless to add that he was not inclined to add to my workload !
In order that officers of the Bank have promotional opportunities, Governor should explore the possibility of officers of RBI at levels from 'Chief General Manager' onwards, being accommodated, by way of deputation initially, in various institutions in the country and there is scope for such a move. The need for lateral induction in the RBI of officers at senior levels could be substantially eliminated if only the Bank take care not to destroy the specialisation of officers in certain areas in the name of 'combined seniority' and giving effect to it in a manner which is not worthy of an institution like the central bank of the country. The expertise of officers in various areas whose performance is outstanding and who have great potential could further be augmented by allowing them to remain in that area and through suitable training in India and abroad.
While talking on Human Resource practices, Shri Das has indirectly hinted (at least, I think so ) that certain recent moves in the Bank had to be relooked. Human Relations Management Department should have high credibility before its policies find acceptance by the staff of the Bank. The policies in various areas such as posting, promotion, transfer, training in India and abroad, Performance Appraisal (including moderation of reports at the HRM department in the central office) have to be spelt out and should be known to every one so that there is no scope for favouritism and there is cooperation from the staff to the implementation of the HR policies. Frequent changes in the rules relating to rotation and placement of officers in various departments, eligibility criteria for promotion etc had caused havoc in the past and if I read Shri Das's views carefully, the position seems to have only further worsened. I may conclude with one more observation. In the context of recent suspension and arrest of a Chairman of a public sector bank, it was mentioned that eligibility criteria for appointment to the post of Chairman/ Executive Director got changed frequently. This had happened in the RBI also for appointment to the post of Executive Director in the RBI which naturally helped some persons and adversely affected some others.
- A.Chandramouliswaran
COOrdination......
My View on "COO - Interpretation of RBI Act : M. A. Batki":
Legalities apart, if the felt need is ‘to have a fifth Deputy Governor’ to share responsibilities, as finance ministry suggested, the procedures could be followed and the objective can be achieved. After all, there were times when only two DGs were in position. If the purpose is to make one person responsible to ‘coordinate’ four DGs’ work, perhaps that job cannot be delegated beyond a point and Governor will have to continue to do it with ‘secretariat support’. Cutting and pasting concepts like ‘COO’ from companies or central banks elsewhere will add to problems.
- M.G.Warrier
Why not one of the 4 DGs can be redesignated as COO and his existing portfolio can be redistributed among the other 3 DGs? Are the DGs so overburdend that they cannot take on some additional responsibilities and thereby save the botheration and consequent delay in creation of another post of DG?
Obituary
Mr. G.R. Inamdar, Ex Jt. C.O.expired on 18/08/2014. He was attached to erstwhile ACD, Garment House, Worli, Mumbai. (Phone Nos. 09920146488 / 022-24227728)
- Ravi Subandh
Shri Sat Parkash Gupta expired on 20-08-2014. He was President of RBI New Delhi Pensioners' Forum for the last about one decade Shradhanjali Sabha is being held at 2.00 p.m. on Sunday, the 24th August ,2014 in Agrasen Bhawan near Jawalaheri Market Chowk in Paschim Vihar, New Delhi - 110063. May his soul rest in peace.
- Ranjit Kumar Rehan
RBI quiz competition held: 2 DPS students win city round
.........Speaking on the occasion, D P Sharma, General Manager, RBI said that the RBIQ was being organized with a view to create awareness and interest about the history and role of RBI, banking, finance, other banking institutions, economics, current affairs, personalities and events that have contributed to the growth and progress of the country over the years. RBIQ is aimed at connecting RBI and the young student community enrolled in schools across the country and achieve extensive dissemination of financial literacy, he added. It also provides an opportunity for recognizing and encouraging bright young students on a national platform. ..........
Harassed by bank? Ombudsman can provide relief
................Addressing the annual press conference on Friday, RBI Banking Ombudsman (Bihar and Jharkhand) Patric Barla and RBI's Patna AGM Gyaneshwar Pathak said there are 27 grounds on which the customers can file complaints. These include issues related to deposit accounts, clearance of cheques and drafts, remittances, ATM, debit or credit cards and loans and advances. However, corruption-related matters and matters under litigation are not handled by the OBO. "The customer himself or through his representative, other than his advocate, can write letter or e-mail to the OBO or can file the complaint online," said Barla. However, before moving the OBO, it is necessary for a customer to first submit a written representation to the bank concerned. If the complaint is rejected or no reply is received from the bank within one month from the date of representation or the reply is not satisfactory, s/he may lodge a complaint with the Banking Ombudsman. "One should write to us within one year of writing to the bank concerned," said Pathak.......
RBI brings out draft charter of customer rights
.........In the Right to Fair Treatment, RBI has said that both the customer and the financial services provider have a right to be treated with courtesy. "The customer should not be unfairly discriminated against on grounds such as gender, age, religion, caste and physical ability when offering and delivering financial products," said the banking regulator............
Govt. will need to walk the talk: RBI
Retaining its projections of 5.5 per cent growth for the year and 8 per cent inflation by January, the Reserve Bank of India (RBI), in its latest assessment of the economy, has warned that unless the Narendra Modi government delivers on the steps it outlined in the Budget for revenue augmentation and expenditure controls, meeting the stiff fiscal deficit target will be a challenge..........
RBI calls for deeper cooperation among major central banks for second time
..........."While international monetary policy coordination where advanced economies' central banks prepare the markets and allow gradual adjustments remains the first best policy choice, the emerging economies' domestic policy responses will need to gear up to convince markets on stable inflation, smooth exchange rate adjustments and effective micro and macro prudential policies,"............
Decoding RBI annual report: Killing inflation only way to achieve sustainable growth
.........“Look guys, world around people have accepted inflation targeting as the best way to deal with macro-economic problems. Killing high inflation is the only path to achieve everything else you might want—a safe financial system and an environment for sustainable economic growth. We need to act now.”...........
RBI optimistic
......Here is a catch, though. According to the RBI figures, bank’s lending to five infrastructure sectors are found to be most stressed. Although overall stressed assets of scheduled commercial banks have marginally declined, bank loans to private sector for infrastructure, iron and steel, textiles and mining (including coal) constitute 24 per cent of total advances, but they represent over half of banks’ stressed assets. So the question that is staring at us, taking the RBI figures only, is how do we finance our growth?.............
Inflation-hawk RBI must now nurture growth
.........RBI, unfortunately, remains too much biased on its inflation-controlling mandate and seems to be soft-pedalling, if not ignoring, the growth-boosting objective. This is despite the fact that the WPI inflation has moderated to 5-month low of 5.2 per cent and core inflation at less than RBI’s comfort zone of 4 per cent. How can the country’s money manager be so inert to growth objective if the economy is growing at less than 5 per cent for the past two years, which is worse than the 6.7 per cent expansion seen during Lehman crisis year of 2008-09? How can the RBI be so shy in cutting rates when WPI inflation is well within controllable limits?.........
Experts analyse impact of RBI's new repo regime
.................So, in that 14 day cycle they are doing the 14 day Repo four times. So, the same amount is split four times plus they are supplementing it with a 3 day and a 4 day Repo so that at all times some money is being made available, it is the same money but it is being made available four times a reporting cycle. Separately they are also going to auction government cash balances as and when the government has a cash balance........
Credit Summit India 2014
The 1st Annual Credit Summit 2014 will be held at the Hotel Palladium, Mumbai, India on 26 August 2014
.............The Credit Summit India 2014 will look at winning strategies in this increasingly growing, volatile and complex market, analyzing what’s new in Credit strategy, and how are new trends emerging in Asian Credit space versus the rest of the world. The prestigious Summit will highlight upcoming Credit investment opportunities across India and explore the latest products and strategies available to financial advisers, providing actionable guidance on portfolio implementation. This Summit promises to provide a dynamic forum for education and networking between leading luminaries from the Credit market space from India and abroad............
Bhasin elected as IBA chief
T. M. Bhasin, Chairman and Managing Director of Indian Bank, has been elected as the Chairman of Indian Banks’ Association (IBA), which is a representative body of CMDs and CEOs of public sector, private sector and foreign banks.........
Reserve Bank of India notifies increased PPF deposit limit of Rs 1.5 lakh per year
..............."We forward herewith a copy of the Government of India Notification...The Government of India, vide this Notification, has enhanced the individual subscription limit under the Public Provident Fund (PPF) Scheme, 1968, from existing Rs 1,00,000 to Rs 1,50,000 in a financial year," RBI said in a communication to banks..................
दरमहा १३ नि:शुल्क एटीएम उलाढाली नोव्हेंबरनंतरही शक्य!
.........त्यामुळे ग्राहकांना मुंबईस्थित एटीएममध्ये नव्या पद्धतीप्रमाणे एका महिन्यात आठ नि:शुल्क उलाढालींबरोबरच मुंबईबाहेर ठाणे, डोंबिवली, दहिसर, भाइंदर, वसई, नवी मुंबई या परिघावरील शहरांमध्ये स्थापित कोणत्याही बँकेच्या एटीएममधून अधिक पाच अशा एकूण १३ उलाढाली कोणत्याही शुल्काविना करता येणे सहज शक्य दिसते. डोंबिवलीस्थित आर्थिक साक्षरतेसाठी कार्य करणारे व माहिती-अधिकार कार्यकर्ते विजय गोखले यांनी या संबंधाने रिझव्र्ह बँकेच्या 'पेमेंट अँड सेटलमेंट सिस्टीम्स' विभागाच्या महाव्यवस्थापकांकडे परिपत्रकाबाबत खुलाशासाठी केलेल्या पाठपुराव्यातूनही ही बाब स्पष्ट झाली आहे.............
Read - Loksatta
Uber told to follow two-step verification for card payments
Global startups like San Francisco-based car hire company Uber and ecommerce players will have to rework their billing systems in India with the Reserve Bank of India insisting on second factor authentication for all `card not present' transactions in the country. The RBI has also banned dollar billing for local services and has asked companies using offshore payment gateways for transactions in India to immediately cease this practice and settle payments within the country. A `Card not present' or CNP transaction is the terminology used by the RBI to describe payments made without actually swiping the card but using details on the card.This applies to........
Uber’s payment system flouts norms: RBI
.......“These entities are evading the mandate of additional authentication by following payment models which are resulting in foreign exchange outflow. Such camouflaging and flouting of extant instructions on card security... resulting in an outflow of foreign exchange in the settlement of these transactions, is not acceptable,” RBI said in a circular issued late Friday evening. This is in violation of the Payment and Settlement Systems Act 2007 besides FEMA, it added.........
Rs.1 lakh cr of your money: What’ve banks done with it?
Bank funds of about Rs 1 lakh crore are caught up in frauds or under investigation by the Central Bureau of Investigation (CBI). But banks are greening their books by selling off bad loans to asset reconstruction companies (ARCs) or by restructuring payments (where the tenure of loan is altered when there is a repayment issue) or plain writing it off to make their balance-sheets rosier. As on June 30, about Rs 2.54 lakh crore of bank loans turned into bad loans after borrowers defaulted on repayments. Add another.........
Low-risk bank accounts conduit for money laundering
............Finally, the branch manager decided to close her bank account. But he stopped. He was not sure what to do, especially since funds have already moved through his branch. The case indicates that there was ‘MONEY LAUNDERING’ going on under the Manager’s nose. Mrs A was used as a mule against payment of some commission and the bank manager and staff were either inadequately trained or grossly negligent in ignoring the obvious red flags. The moral is that transactions in low income individual account should also be monitored with the same keen eyes as in other accounts and also.....
Basel III: LCR norms to make life tougher for Indian banks
...........Once LCR comes into play, banks will have to focus on stickier deposits. At the same time, on the asset side, they will have to increase the proportion of high quality liquid assets. This could constrain private banks’ lending capacity and keep rates higher for longer, pushing down profitability, the report says. According to research firm, most large banks will be able to meet the near-term target of 60 percent. However, the bigger challenge will be improve this to 100 percent, especially...............
GOI appoints two DMDs in NABARD
The Government of India through its notification, has appointed R Amalorpavanathan and H R Dave as the Deputy Managing Director’s in the National Bank and Rural Development (NABARD) for a period of five years from the date of their taking over. R Amalorpavanathan is B. E. ( agriculture) and Post Graduate in Management from IIM, Bangalore and Masters in Development Management from Asian Institue of Management, Philipines. At present, he is working as CGM in Business Initiative Deparment of NABARD Head Office, Mumbai. HR Dave is Graduate in Dairy technology and Post Graduate Diploma in Management fro IIM, Ahmedabad. At present he is working as CGM in Corporate Planning of NABARD Head Office, Mumbai.
FPJ
FPJ
NABARD furthers its financial literacy campaign on rails
..........The National Bank of Agriculture and Rural Development (NABARD), as part of its ongoing financial literacy campaign today launched 'Vithiya Saksharatha Abhiyan' on trains here. The campaign, aimed at creating awareness on banking services was launched by flagging off Secunderabad -Guntur Golconda Express at Secunderabad Railway station. ..........
Bengal govts savings scheme in limbo as banks back out
.....................Launched after the Saradha scam as an alternative to dubious fund raising companies, by the West Bengal government, the scheme is now at the mercy United Bank of India-its sole distributor. The big setback for the plan comes with State Bank of India refusing to distribute the scheme at a low fee.........
XLRI boost for biz at bottom of pyramid
..........The competition invites successful models that involve livelihood initiatives with finance, banking products for poor, products innovations in micro finance, savings and insurance, sustainable innovations for the ultra poor, innovations in financial literacy and consumer protection, including literacy initiatives through Financial Literacy Centres, micro insurance and community-based initiatives and inclusive technological innovations that include mobile banking............
Filling up of the post of Dy. Registrar of Central Registry
...................Chief Managers or above in Reserve Bank of India (RBI) / National Bank for ... Nationalised Banks / State Bank of India), equivalent level officers in the public sector insurance companies are also eligible to apply.......
Court asks police to lodge FIR against ICICI Bank CEO
A local court has directed the police to lodge an FIR against ICICI Bank CEO Chanda Kochhar and head of card operations Vinay Valse in connection with allegations of cheating and fraud over online shopping through credit card. Chief Judicial Magistrate, Lucknow, Sunil Kumar pronounced the order on Thursday on a complaint filed by an ICICI Bank credit card holder Imran Ahmed, seeking direction for lodging an FIR and proper investigation in the matter...........
Depositors of a Maha co-op bank can withdraw only Rs 1,000: RBI
............RBI has also put curbs on operations such as entering any compromise or arrangement and selling, transferring or otherwise disposing of any of its properties or assets. "It can do so only with prior approval in writing from the Reserve Bank of India," the release said. RBI also clarified that its directions should not per se be construed as cancellation of its banking licence as the bank will continue to undertake banking business with restrictions till its financial position improves........
Corp Bank skipped FinMin norms while nominating board candidates
...........This comes after the finance minister wrote to the central bank for review of senior appointments and nominations in public sector banks. Officials at the bank do not deny the nominations do not conform with the guidelines. However, they say a legal opinion was taken saying the DFS guidelines are only "advisory in nature and not mandatory" and that if the nominations were turned down, the candidates would go to court.............
Canara Bank plans overseas expansion
.........The bank would add 20 more branches over the next five years when business from overseas offices was expected to double to 15 per cent (of the total business), he said. Canara Bank was looking to raise Rs.3,000 crore through qualified institutional placements, Mr. Dubey, said. “We have received the Reserve Bank of India approval. We are awaiting the Finance Ministry’s nod, and can launch the issue as soon as we get it,” he said, adding that the issue would have a greenshoe option.....
ICICI Bank plans to add more than 1.5 million accounts in FY15
............ the bank plans to take the branch on wheels concept that it introduced last year even further. Currently, the bank has 8 such mobile van based branches that provide banking services to a cluster of remote unbanked villages. Sabharwal, said that similar such number of branches that the bank plans to add hasn?t been decided on, but it will be significant. At the start of this year, the bank has also launched Tab banking for its rural customers to facilitate faster opening of savings account. Apart from savings account,........
Garo rebels release SBI employee
Shillong: After 17 days in captivity, State Bank of India (SBI) employee Subodh Kumar Mishra was released late on Wednesday night near Sibbari in the South Garo Hills.............
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