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.
Wednesday, August 27, 2014
Hits 'n' misses: Analysing Raghuram Rajan's first year in office
RBI to Step Up Vigilance on Banking Sector to Prevent Frauds: Deputy Governor
.........While speaking on the sidelines of an industry event in Mumbai, Mr Gandhi emphasised the need to go "deeper", and hence, the apex bank may also carry out forensic audits of banks. "One has to go behind the fraud and their modus operandi to find out what are the loopholes...which need to be corrected. For that, forensic audits may be done," he said........
RBI for Making Aadhaar Sole Platform for Financial Inclusion
........."We need to resolve the issues regarding the legality of the Aadhaar number so that this can be the sole number for any financial transactions ... Then the whole financial inclusion programme, including the direct benefit transfers, can be rolled out without hitches and any duplication," RBI Executive Director Deepali Pant-Joshi said at an event organised by Dun & Bradsheet in Mumbai.........
Financial inclusion mandates do not work
.........."These mandates do not work, you need to create an enabling environment for it. In order to make the financial inclusion plan effective steps have to be taken to create a credit absorption capacity which can be built via financial literacy. Other things such as proximity to banking services and less documentation process should also be ensured,".........
Debt waivers inimical to repayment ethic: RBI official
..........."On farm loan waiver issue, you know I have been on a hand-to-hand combat (mode) with the Andhra government. I said no! No! No," RBI Executive Director Deepali Pant Joshi told reporters on the sidelines of an industry conference here, when asked about the progress on debt waiver issue. ................
Nabard's rural infra fund needs a relook, says RBI official
A senior Reserve Bank official today expressed displeasure at the working of Nabard's rural infrastructure development fund (RFID) and termed it a "committed line of credit" to the states which is not getting used for creation of credit absorption capacities. As an alternative to the RIDF, which gets funded through the priority sector lending (PSL) shortfalls by banks, Deepali Pant Joshi, RBI Executive Director, suggested a migration to newer instruments like tradable PSL certificates............
RBI releases note, poster on KYC to help public open accounts
Reserve Bank today released a note and a poster to increase awareness about Know Your Customer (KYC) norms for opening bank accounts. The objective of this is to bring awareness among the general public about the KYC simplification measures taken by the Reserve Bank in the recent times with a view to helping the common man in opening bank accounts, RBI said in a notification............
RBI takes the first step towards customer protection
.........The draft is important because in it RBI formally accepts that the sale of third-party products (not the ones manufactured by banks but others such as mutual funds, insurance and car loans) comes under its regulatory umbrella. My fight with RBI for a decade has been the unforgivable attitude of “not-my-problem”. It has actually been said to me: this is not our problem; the other regulators need to deal with it. But with this draft, third-party product sale, advice and due diligence is firmly the bank’s responsibility. I see the draft as a step in the right direction, but I find that it falls short of giving a road map of implementation, leaving it to the interpretation of each bank. Banks are known to tick boxes set before them by RBI and smirk offline at having had the regulator. RBI will have to show intent to put teeth into these regulations..............
RBI waives address proof for small accounts
The Reserve Bank of India (RBI) on Tuesday allowed banks to open small accounts for people, without seeking ‘officially valid KYC documents’. The central bank has also allowed banks to accept single proof for both identity and address instead of the current practice of asking for different documents. “A small account can be opened on the basis of a self-attested photograph and putting her/his signature or thumb print in the presence of an official of the bank,” said a circular issued by the bank on Tuesday............
RBI says its system rugged enough to handle scams
The banking system must have been rocked by the Syndicate Bank fraud that was unearthed a while ago, but, Reserve Bank of India (RBI) is not flustered, going by the reaction of RBI Banking Ombudsman (BO) M Palanisamy said today in Bangalore. Speaking to reporters in Bangalore today, Palanisamy said that a solitary instance of fraud cannot bring down a bank. "Banks are subject to regulation and online reporting of its NPAs (non-performing assets) and also the offsite surveillance system. Many banks across the globe are in crisis. But in India, with constant monitoring by the RBI, all banks, including foreign ones are running properly," ..........
A bill deducted 214 times
....."The cardholder had used his card for a one-time payment of Rs 2,200. But the bank had debited the same amount as many as 214 times, amounting to a whopping total of Rs 4,70,800 towards payment for telecom services. The bank's systems did not seem to have the filters to identify such aberrations. However, we were able to refund the entire amount to the cardholder by the bank," revealed M Palanisamy, banking ombudsman for Karnataka. .........
Tug of War On at RBI
Governor Raghuram Rajan may have prevailed over the staff union on RBI restructuring, but there's still some heartburn in the organisation. The officers' union is disturbed by his assertion that he has the legal power to appoint executives.This came after he told another union he will consider their objections. Is it just the unease of staff over something new happening after decades, or are the complaints genuine? Watch this space.
ET
ET
Persist to resist
My View on "RBI officers, staff threaten strike over lateral r...":
It is a necessary move. Officers are recruited with higher academic qualifications and after rigorous selection process. The training schedule is also well drafted. As they go up in the hierarchical ladder, they have to several filters. In a very steeply pyramidal structure chances of becoming an F grade is less and less. Not to speak of becoming an ED or DG. A very remote possibility. In such a situation, bringing an outsider at F grade or above level is a punishment for the serving officers. RBI tries to make such attempts periodically. When the present CGM of Communications Dept was recruited as Press Relations Officer at D grade level in that time we all resisted. Gate demonstrations and threat of strikes were given by all the Associations jointly. The Bank called the representatives and assured that such type of recruitment would be very rare and limited only for a very special assignment when such talents are not available within. We have to resist this move of the Bank in the interest of serving staff and officers.
- P Aravindan
3D VITALINFO
My View on "VITALINFO - 'Dedication n motivation on a proper t...":
- V.S. Das, former Executive Director
Please add me into your big list of admirers for the stupendous task you are handling. I only now know the exact meaning of the words 'dedication' and 'commitment'. God bless you and give you good health.
- B K Katyal, Ex-CGM
Dear Mangesh,
Rain or shine
At home or away
Mangesh always holds sway
Neither for a penny nor for a dime
He brings our VITALINFO
always on time.
A billion thanks Mangesh
- B. K. Kamath, Retd CGM
Dear Mangesh,
One should learn from you the three 'D's that "what is called dedication, devotion and discipline. It is amazing experience to read your VITALINFO. I am truly indebted to you for this selfless service of yours! There is no suitable word in the dictionary to praise you. I was struggling to post my comments on your blog/site but couldn't succeed! Hence this is my personal message to you. Kindly accept my best wishes and Kudos to VITALINFO !!! May God bless you! Regards
- Janaki, CAFRAL
Dear Mangesh
Congrats for the accolades you are getting for your well deserved single handed work from all and in particular from ex Governor. I fully agree with the suggestion of Mr.Mukesh Kumar MoF CAB and endorse the same ..You may get more energy and zeal to continue to offer us a full cup of coffee every morning. Best Luck.
- R R Kulkarni, Ex.GM NABARD and Ex. MoF CAB Pune
Sir
The comments of Shri Mukesh Kumar, F.M. are the same we wish to express. You have got all the Medals in these words. Keep it up.
- S S Hendre, AM, CAB, Pune
VitalInfo will never ever get derailed with this kind of dedication.
- Gopal
Wishing you all the best in the untiring effort to keep us up to date.
- Aravindakshan Menon
Looks, VITALINFO has grown into a 'FAMILY NEWSPAPER' for RBites. While it covers financial sector developments excellently well, VITALINFO also allows members of RBI family to share their thoughts. Mangesh, I still feel that you should get more support from RBI and appreciation from the users of VITALINFO. Warm regards
- M G Warrier
Dear Mangesh,
Kindly include the name of Shri D.T.Khilnani, author of the book "Foreign Exchange Management Manual". He had worked with me in the Economic Department thirty years ago and I am proud of his achievement. Kindly ensure that he gets VITALINFO regularly.
- P.P.Ramachandran
No decision on appointment of chief economic adviser
The finance ministry has not yet decided on the name of the new chief economic adviser, a top official said. According to the official, finance minister Arun Jaitley has met several people but has not finalized the name. The post of CEA has been lying vacant since Raghuram Rajan left the finance ministry to join the Reserve Bank as governor in September last year............
Income tax dues can be paid at RBI offices, 29 banks
...........“Pay IT dues in advance at RBI or at authorised bank branches...These will obviate the inconvenience involved in standing in long queues at the Reserve Bank offices,” RBI said in a notification today. It said the assessees can use alternate channels like select branches of banks or the facility of online payment of taxes offered by these banks..........
‘Interest rates likely to come down by this year-end’
........I think rates will come down by the end of this year. For this the RBI governor needs clear understanding on inflation and fiscal deficit. I don’t think interest rate at this point of time will bring in a major turnaround. Because rates for corporate borrowings, personal and car loans are down at this point of time and there is not much demand...so when it picks up RBI can always infuse liquidity by reducing SLR and CRR. So, I think we are in the right trajectory and dollar rupee is stable...........
A Banker's Shock
Bankers are known to drag their feet over demand for loan restructuring from small borrowers. A banker who had prolonged a restructuring demand from a client, got a shock of his life, when the promoter, in sheer frustration, walked up to the banker and laid the keys of his headquarters and factory on the banker's table saying: `You run the companay'.The banker was bewildered. Will this become a new norm?
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RBL Bank plans to raise Rs.1500 cr in maiden float
RBL Bank has hired four banks to manage a planned $250 million (Rs 1,511 crore) share sale in the first initial public offering in nine years by a private sector lender in the country, said people with knowledge of the matter..........
IDBI Exec To Head UBI?
The latest buzz within United Bank of India, the troubled lender which is showing signs of recovery quicker than expected, is that a top IDBI Bank executive could be its next chief. The IDBI executive seems to have collected UBI's annual report a few week's ago from the lender's Mumbai office. The executive was earlier to head another bank, but a vigilance commission enquiry halted the appointment.
ET
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Banks Get an Electric Shock, Fear a Surge in Bad Loans
The Supreme Court's ruling on Monday that declared the allocation of more than 200 coal blocks illegal has made the banking sector nervous about the final outcome, given that any likely cancellations will hurt borrowers' ability to repay loans and steeply increasing the bad debt burden...........
Read - ET
Read - ET
India Post retains banking ambition
.........."We intend to get into the banking space," said Kalpana Tewari, member (planning & technology) at the department. "We are waiting for the final guidelines to see how we fit into it and the benefits to the organisation. At present, we only have savings bank accounts and do not have credit or overdraft facility, since it is beyond our mandate. We have to work on these areas.".............
India Needs Its Banks to Clean Up Their Act
...............The Nayak report called for the government to reduce its stakes below 50 percent, giving private investors a majority stake. But for populists who believe the banking sector should help promote public interest, the proposal, which would amount to de facto privatization, bordered on sacrilege. India’s central bank chief, the well-regarded Raghuram Rajan, has suggested a middle ground. Already, Rajan and his Reserve Bank have taken smaller steps, such as tightening rules for restructuring bad loans and threatening penalties if banks don’t sell off those loans to force them to come clean about their bad assets and gradually get them off their books...........
'Minimum government, maximum governance' in public sector banks
........In effect, PSBs are subject to dual regulation by the finance ministry and RBI. All PSB board directors are appointed by the government based on criteria that are often not clear. Handicapped by the lack of specialist skills, the quality of PSB board deliberations tends to be poor and focussed more on tactical issues than on providing strategic direction3. The average tenures of PSB chairmen and executive directors are very short, and the process of promoting talent to senior positions has become bureaucratised. Compensation structures have also grown distorted such that ..........
Banks Need a Cultural Revolution Under Modi
........It is easy to blame the malaise on wicked politicians, industrialists who have a stake in such appointments and pliant officials. The Nayak committee, which reviewed governance of bank boards earlier this year, said the boards are disempowered and the selection process for directors is being compromised.That means weak board governance. The committee reckons only radical reforms will work. Its blue print envisages bank boards being chosen by a Bank Boards Bureau comprising former bankers and then the bank boards themselves approving the selection process for CEOs. It also suggest a longer tenure for the CEO -which the finance ministry is also talking of now. On paper, it would be difficult to find fault with the selection process given that those who are part of it, including the secretary in charge of financial services and management professors from elite institutions, are not those who will just play ball.In almost all cases, vigilance approval also comes through. The question then is whether political pressure comes after that or before the final hurdle, forcing the leadership to settle for sub-optimal choices............
Jan Dhan: Banks target 1 cr accounts in two days
There is unusual level of activity at most public sector banks with the finance ministry setting an ambitious target of opening one crore bank accounts over two days — Thursday and Friday — which is nearly a third of the accounts in Delhi and a tenth the number in Maharashtra. This translates into each public sector bank branch opening close to 125 accounts each over the next two days, along with issuing Aadhaar numbers on the spot and authenticating the new address wherever the beneficiary of the no-frills account certifies a change in address......
Read - TOI
Read - TOI
Experts put their heads together on new avatar of plan panel
................“This is a work in progress, it’s not important to discuss upon the deliberations of today’s meeting, the outcome is important. And that decision will be taken by the Prime Minister. We also discussed upon how should the plan be allocated to states as well as upon the autonomy status to be granted to the new body,” Mr. Sinha said. He said it was a long standing need to reinvent the Planning Commission and the Prime Minister has taken a bold step. Replying to a question on how the plan allocation to the states will be given, he said it may be done through the Finance Commission. The meeting took place in two different groups simultaneously, one headed by Mr. Sinha had previous members of the Planning Commission, while the second group consisted of economists including Rajiv Kumar and Pronab Sen.....
Planning Commission replacement shouldn't allocate funds, say experts
............."The experts felt the appraisal function of schemes and programmes, which the Planning Commissions used to perform, should be handed over to the finance ministry," an official said. There was also a view that the new body could carry out long-term planning (with a 10-30-year horizon), the entire funding for which should be decided beforehand, without pre-empting contributions by state governments. Officials said the matter would now be decided by the prime minister.........
Read | Business Standard
Read | Business Standard
FinMin orders forensic audit of UCO Bank
........."We have ordered a limited forensic audit after complaints were filed with regards to some accounts. Those accounts have turned non-performing," official sources said. This is the fourth public sector bank (PSB) where forensic audit is being conducted after alleged cash-for-loan scam came to light with the arrest of Syndicate Bank Chairman and Managing Director S K Jain earlier this month.................
SC decision to ultimately benefit economy: Environment Minister IBA chief says banks may be hit by coal block order
.........."Banking sector pe impact ka jahaan tak savaal hai, jitni koyle ki khadaanein agar productive hai, agar us me se koyla nikal raha hai, aur who koyla agar production purpose ke liye ja raha hai, woh agar ruk jayega, toh swabhavik hai ki woh power production ko impact karega. Aur agar hamara paisa us power unit me laga hai, toh us account ke NPA hone ke chances badh jayenge (if the supply of coal from productive coal mines is restricted to power units then its natural that power generation will be affected. And if banks' money is in those power units, then the chances of that particular account becoming a nonperforming asset increase)," said Tanksale............
Aon Hewitt to design Bandhan pay packet
.........Aon Hewitt’s mandate includes designing a job grading structure along with a comprehensive and market benchmarked compensation and performance management programme for the proposed Bandhan Bank. “We aim to develop a unique banking organisation and want to ensure that the transformation of the organisation from being a microfinance company to a bank is rooted deeply in its philosophy and way of working..........
EPFO can invest 100% in govt bonds, PF rate at 8.75% for FY15
In a major policy shift to ensure security after workers’ retirement, the central board of trustees (CBT) of Employees Provident Fund Organisation (EPFO) on Tuesday raised the upper limit for investment in government bonds to 100% from the present 55% and rejected a proposal to allow putting employees' money into relatively risky equities or exchange traded funds. The CBT also approved the interest rate on PF for 20014-15 at last year's level of 8.75% as against the proposal of cutting it to 8.7%...........
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