Shri B.Mahapatra - The Quintessential central banker ReTyres - S.Ganeshkumar

RBI PS Fraternity and VITALINFO on behalf of all its readers wish Shri B.Mahapatra a very happy n healthy ReTyred life ahead..............

Executive Director Shri B Mahapatra lays down office today after selfless service of more than three decades in the Bank. He has great qualities and is a quintessential central banker. Many of us would remember his clear lectures when he was in the Bankers' Training College (little wonder since the first job of Shri Mahapatra was that of a lecturer!) when apart from imparting knowledge, he was one of the authors of many books aimed at demystifying many technical topics. Many may not know that his immediate job before RBI was in the State Bank of India - and Banking operations and development has been his forte since then and till now. As the Regional Director of Kolkata office, he not only ushered in many innovative ideas but most importantly, he had the human touch and one could say that he knew almost the entire RBI, Kolkata family. A thorough professional, he excelled in clarity of thought and expression (his simple yet clear explanation about the use of Aadhar card as the document for KYC in a recent State Finance Secretaries conference won accolades from the Chief Secretaries gathered at the conference!) and a person who ensured that work was always done on time, every time. There is comfort for us that he would continue to be with us for six months more in an advisory role (something that he excelled in performing in his career!); we wish this connoisseur of cricket a fantastic second innings in the days to come! 
-  S.Ganeshkumar, CGM-In-Charge, DGBA

Needed, a Growth Commission - C.Rangarajan

..........If the word “planning” is reminiscent of an earlier period, it may be substituted by “development” or “growth.” The other two functions performed by the Planning Commission now can be delegated to other authorities in the government. The allocation function can go to the Finance Commission and project evaluation can be taken care of by strengthening the Ministries. Thus, a National Development Commission or Growth Commission, which is charged with a mandate to prepare a blueprint with goals and objectives to be achieved over a defined period, may still be the need of the hour.......

Read - The Hindu

BANKING, REFORMS & CORRUPTION

Dear Shri Warrier,

Thanks a lot for sending a copy of your book BANKING, REFORMS & CORRUPTION- DEVELOPMENT ISSUES IN 21st CENTURY INDIA. It goes to your credit that the book has been liberally appreciated by eminent personalities like Sh S S Tarapore and Mrs Usha Thorat. As you have mentioned in the preface, you have really expressed your perceptions, anxieties and aspirations about 21st century India Growth story with focus on resource management in Indian context. It is always easy to criticise or find faults with the existing system. Anyone can do it. But you have gone one step further giving practical solutions to the problems. This is really worth appreciating and people sitting in authority should take note of it. Whether they accept your suggestions or not but they need to be debated. In the form of this book you have brought out a well researched document on the prevailing problems with our financial structure. You have also raised critically important issues in the present context which require immediate attention and are required to be addressed on priority basis especially issues like Human Resource Management in RBI, other banks and Public Sector Undertakings. In the chapter on Gold Management you have rightly pointed out that the time has come for authorities to think of setting up professional and dedicated institutions who can handle the gold from banking angle. Ultimately people invest in gold for the sake of security. If a person can be assured that appreciated value of gold will be taken care of, all the gold with public or lying in lockers will come out. 

I am sure in our Group whosoever will get opportunity to lay hands on your book, like me, he/she will read the last chapter first because it deals with pension. That is altogether different thing that it talks of National Pension Scheme. You have also brought out another dimension to the topic of Post Retirement life like old age homes, retirement villages to enable senior citizens to live a dignified life. It has gained all the way more importance in the modern times when families are shrinking and social values are undergoing a sea change. 

Wishing you all the best.

With regards

Madan Gauria, EXRBITES 

HDFC Bank organizes Secure Banking workshop in Lucknow

LUCKNOW: HDFC Bank launched its secure banking programme at Lucknow in Uttar Pradesh. The initiative is part of HDFC Bank's ongoing endeavor to create customer awareness about safe banking practices. The programme will be rolled out across all 284 branches in Uttar Pradesh to educate customers and create awareness. The initiative was launched by guest of honour, Kshitij Singh, Assistant General Manager, Reserve Bank of India, Lucknow. .........

Read - TOI

Failed ATM withdrawals a concern, says banking ombudsman

.............According to N Krishna Mohan, Banking Ombudsman for Andhra Pradesh and Telangana states, the cash that remained undelivered in this manner was often pocketed by those who periodically open the ATM to replenish it with cash. "As the bank does not keep tab of such failed remittances on a real time basis they obviously fail to notice that the cash accumulated in the 'divert tray' was pocked by those who are entrusted with the job of replenishing the ATM with cash. Customers face the prospect of loosing the money as the banks question the customer's claim in the absence of any proof," Krishna Mohan said............

Read | Business Standard

Watch the video

4th Annual Capacity Building Workshop for taxi operators, hoteliers

Sikkim Express

Ghatkopar bank robber left behind Rs 3L in `loose change'

..............The “uniqueness“ of the heist has alarmed the police, who say it bears multiple signs of an insider job. The thief, they point out, gained entry into the bank painlessly by using sets of duplicate keys. Hiding from the CCTV cameras under an umbrella, he opened the strongroom--which is accessed only by the bank manager and cashier--again with duplicate keys. He took a bagful of money out of the branch and returned for another round of stealing. Altogether, he took away Rs 55.4 lakh. There was another Rs 3 lakh in the room, but he did not remove it “because the notes were of the denominations of Rs 5 and Rs 10,”................

Read - TOI

RBI launches 8th Round of Survey on Computer Software and Information Technology Enabled Services Exports

The Reserve Bank of India has launched the 8th round of its Survey on Computer Software and Information Technology Enabled Services (ITES) Exports. The reference period for the Survey is 2013-14.............

Read........

RBI simplifies ECB norms

...........RBI said the company should meet the conditions like all-in-cost of fresh ECB must be less than that of the all-in-cost of existing ECB. Consent of the existing lender must also be available. Other conditions include the refinancing shall be undertaken before the maturity of the existing ECB and the borrower must neither be in the RBI’s defaulter list and nor .....

Read - FE

Rebooting pension reforms with retirement plans

...........The original design of NPS was visionary—unbundling fund management, centralized record keeping and annuitization, portability across employers, individual accounts, simplified commoditized indexed product options and low costs through competitive bidding. The NPS that has got implemented on the ground is not the first-best solution as was envisaged but a diluted version of the original framework..........

Read - Mint

RCom ready with USSD platform for mobile banking

............."Financial inclusion is a national priority and we are proud to launch this platform whichcan offer basic financial services even in areas that are beyond the reach oftraditional banking. Mobile technology has a crucial role to play in servicingthe under-banked and unbanked sections of society, and RCom's endeavor is tobridge this gap with its customised solutions," .........

Read | Business Standard

Jan Dhan Yojana conflicts with RBI’s payment banks, but the system may yet evolve

Every two years, India's financial inclusion drive reformats itself into a brand new, entirely unrecognisable avatar. Till about three years ago, it starred banks, the Reserve Bank of India and banking correspondent companies. Then came DBTs and the finance ministry, with its common banking correspondent (BC) auctions. Also came Aadhaar, opening bank accounts and keen to become sole authenticator for all financial transactions. In 2014, the landscape has changed again........ 

Read - ET

Top bankers sweat it out in rural India to rope in un-banked homes

.............Bankers have however continued to face the real challenges of the financial inclusion programme. What is more worrying them is that each account also incurs an annual maintenance of about Rs 100. But, in the long run, the huge network of bank accounts is expected to plug the pilferage in the direct benefit transfers and banks hope to earn commissions by running government programmes. If worked well, this is a big advantage because the government and the banks can keep a tab on the beneficiaries of the subsidy schemes, says a banker.........

Read - DNA

How Raghuram Rajan changed rupee's fortunes

...............On September 4, at a time when the rupee was the worst performer among Asian currencies, Raghuram Rajan took charge as RBI’s governor. A slew of measures that he announced for attracting inflows helped improve sentiment. With these steps, the rupee’s fortunes also turned. Business Standard looks at the situation a year ago and compares it with now........

Read.........

RBI adviser says weak monsoon won’t stop India inflation slowing

.........“The policy stance of the RBI, which has the highest benchmark interest rate among Asia’s 10 biggest economies, is mainly aimed at tempering inflation expectations and not to prop up the rupee,” said Virmani. Governor Raghuram Rajan, who raised the repurchase rate three times in the past year to 8%, left borrowing costs unchanged at a 5 August review. “The RBI’s stance is clearly directed at inflation expectations,” said Virmani. “Any RBI action to reduce rupee volatility will occur at the time of instability..............

Read - Mint

Is India heading towards more financial sector volatility? - Renu Kohli

.............Fundamental bearings are extremely modest in contrast. Although remarks by officials indicate that April-June quarter GDP growth may be 5.5%. The Reuters poll consensus, data released this Thursday, was 5.3%, an improvement over January-March’s 4.6%. But last year’s low base (4.7%) can’t really be ignored. Neither can the fact that GDP growth is likely to be heavily predicated..........

Read - Mint

Does monetary policy really matter?

.............This means that the use of the traditional trade-off between growth and inflation, something which has been spoken of by textbooks and assiduously pursued by monetary authorities, may not really hold. Taking this a step forward, it goes beyond the rational expectations theory which says that monetary policy cannot affect growth, but also contests monetarism by saying that the best it can do is to adapt to inflation, when it cannot control it.

The crux really is that when we have a situation of supply-driven inflation and low-demand led growth, working on the production side and going in for pump-priming a la Keynes could work. At any rate, monetary policy may not really matter.

Read - FE

Reserve Bank of India Gov. Rajan: Inflation on Target

........A former chief economist for the International Monetary Fund who became governor of the Reserve Bank of India last September, Mr. Rajan has previously said he wants to see consumer-price inflation slow to 8% by January and 6% by 2016. "If we look like we're not set to hit it obviously we'll have to tighten," Mr. Rajan said. "If we look like we're going to achieve it well in advance, we have room to be more accommodating." Mr. Rajan, who as governor has final say over interest-rate setting, left the RBI's main policy interest rate unchanged at 8% earlier this month, citing slowing inflation that was still too high for comfort.........

Read..........

The Raghuram Rajan and Narendra Modi show

........A series of measures initiated by Raghuram Rajan, who took over as governor at the Reserve Bank of India (RBI) on September 4, however, helped arrest the slide of the rupee. Chief among these was the move to remove the dollar purchases of oil marketing companies from the market and to announce that these bills could be settled in rupees if necessary. ............

Read - FE

Banks face new consumer liability issue

........."Banks have been resisting becoming a broker for a long time since their officials would be held responsible for claims, grievances related to mis-selling and others. Now that the banking regulator has talked about liability for sale of third-party products, they would have to look into servicing all needs of customers,"...........

Read | Business Standard

PSBs and private banks

.....comparing PSBs with private banks is like comparing apples and oranges. PSBs were formed with the motive of rescuing an agrarian society from private money lenders and to infuse government help in the form of agriculture subsidies, which has been fulfilled to a large extent. Meanwhile, private banks exist for the benefit of the shareholders by augmenting profit. .....

Read | Business Standard

Banks seeks continuation of reporting on wilful defaulters after asset sale

..........Senior public sector bank executives said there is apprehension about misuse of system by willful defaulters after banks stop reporting on them. Taking benefit of lack of information sharing, they may try to getting fresh finance by floating new ventures. This reporting will help ARCs in recovery of dues out of the financial assets acquired by them and thus redeem Security receipts........

Read | Business Standard

‘RBI not inclined to cover more mandals in farm loan recast’

..........“Whatever could be done, last month we have already given,” K.R. Das, RBI’s regional director for Andhra Pradesh and Telangana said on Wednesday. The central bank had agreed to reschedule crop loans up to a maximum of Rs.1 lakh each taken between April and October 2013 in 120 mandals in Andhra Pradesh and 100 mandals in Telangana, covering a total of seven districts.................

Read - Mint

RBI waits for things to settle down in AP

The Reserve Bank of India (RBI) is awaiting identification of the capital city for opening of its office in Andhra Pradesh. Right now, it is not thinking in that direction and moreover there is no request as yet from the Andhra Pradesh authorities. “As of now we are operating from Hyderabad for both the States”, said K.R.Das, Regional Director, (RBI), AP and Telangana. As a practice, the RBI sets up its offices in all State capitals. “We will definitely have our office in Andhra Pradesh also. Let things settle down”, Mr. Das told presspersons here on Wednesday........

Read - The Hindu

Putting the cat out of bag

My View on  "RBI for Making Aadhaar Sole Platform for Financial...": 

Ms Deepali Pant Joshi, ED, RBI has put the cat out of the bag. According to her "Over 90 per cent of the 4.1 per cent gross NPAs are created by large corporates," "Among the poorer sections, only 4.4 per cent of total NPAs are from the farm sector, while the share of the MSMEs is only 5.2 per cent. So where is the poor retail customers creating bad loans in the system? NPAs are not a creation of the poor but the rich," News that huge share of NPAs is from the corporates is no surprise given that NPAs like that of KFA loans, Bhushan Steels etc., are still not classified as wilful defaults. And RBI has done very little to bring sense to the bankers and it is just watching the actions from the sidelines. If none of their inspection reports of various banks which financed KFA has observed the failure of banks in classifying the KFA loan as a wilful default there is something wrong with the quality of such inspection reports and RBI should revisit those reports and find if there was any action required against the officials who inspected these banks. If the farm loan share is so low in NPA, then why should not RBI allow Andhra Pradesh Govt to waive the farm loans. Every year, every bank writes off huge amount of corporate debts through management decisions. Has any bank at any time waived any farm loan through management decision? The answer is a clear 'NO'. If banks fail to write off farm loans for genuine reasons the governments would be forced to step in. That is what AP govt is trying to do. 

- Dr.S.Santhanam

Centre won’t direct RBI on loan waiver

The Centre has expressed its helplessness in directing the Reserve Bank of India to reschedule crop loans despite Chief Minister  N. Chandrababu Naidu’s efforts. RBI has recently given the nod  for rescheduling of loans in four districts up to a limit of Rs1 lakh, excluding gold loans. Union finance minister Arun Jaitley on Tuesday suggested that the state government should directly deposit the money into the accounts of farmers instead of asking the RBI to direct the banks.............

Read - Deccan Chronicle

Banks seek stricter norms for reporting on wilful defaulters

Banks have urged the Reserve Bank of India (RBI) to amend the norms for reporting on wilful defaulters and non-performing assets (NPAs). They said to prevent defaulters from taking fresh loans from other lenders, reporting to RBI and credit information companies should continue even after NPAs were sold to asset reconstruction companies. Banks and financial institutions can’t grant additional facilities to those listed as wilful defaulters. Also,.........

Banks sRead | Business Standard

Syndicate Bank bribe-for-loan scandal signals deeper rot in banking system

......Recently, Reserve Bank of India (RBI) Governor Raghuram Rajan said that "a good middleman acts as a broker. But if the point of a middleman is to pay bribes, that is obviously not okay. Its part of the whole set of governance issues that we need to look at." This is a rare occasion when policymakers and bankers have accepted the presence of middlemen in the system.......

Read - Business Today

Few women manage Indian funds

............. ‘Women in fund management: a road map for achieving critical mass, and why it matters’. “Women represent a scant 10 per cent of traditional mutual fund managers and a lower percentage in alternative investments fields. Only three per cent of about 9,000 hedge funds have a woman in charge,” ............

Read | Business Standard

Vizag co-op bank eyes multisate licence

.............The cooperative bank currently operates 35 branches, of which two are in Telangana. In the next few years, it is planning to add three more branches in Telangana, mostly in Hyderabad, said Manam Anjaneyulu, chairman emeritus. After getting the multistate licence, the bank plans to enter Odissa and Karnataka.........

Read | Business Standard