.............“I am hopeful that in the days ahead CAFRAL will continue its efforts to stimulate discourse on various themes that the banking and finance sector is currently grappling with”................
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.
Saturday, September 6, 2014
RBI sets up permanent gallery on financial literacy
The Reserve Bank today set up a first of its kind permanent digital gallery here aimed at spreading awareness on financial literacy. "It will be a permanent gallery on financial literacy", Reserve Bank of India, Regional Director, J Sadakkadulla told reporters here. ....
ICICI Bank organized Coin Exchange Mela at its Sangli Miraj branch in Maharashtra
ICICI Bank Ltd, India’s largest private sector bank, organised Coin Exchange Mela at its Sangli Miraj branch in Maharashtra on August 21, 2014, under the guidance of the Reserve Bank of India.The event was inaugurated by Mr. R. B. Nandoskar, Deputy General Manager, Reserve Bank of India.......
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RBI officer held for forgery
BERHAMPUR: Kandhamal police on Thursday arrested a Reserve Bank of India (RBI) officer from Bhubaneswar on charges of producing a fake certificate to get the job. He was in service for 36 years. The accused was identified as Prasant Kumar Pradhan, 58, Assistant Manager, RBI......
When Modi borrowed Nachiket Mor's Yojana
It is not the first time that politicians have piggybacked on RBI’s financial inclusion drive
......The panel report had a dissent note from the two committee members - Shikha Sharma, CEO & MD of Axis Bank and SS Mundra, CMD of Bank of Baroda and now deputy governor of RBI- with their comment saying, "Looking at the enormity of the task, more particularly in low density rural areas, and the need of supporting physical as well as virtual infrastructure vis-à-vis their present state, the timeline looks pressing". They suggested January 2018 as a more "realistic and implementable" target date.......
Govt notifies terms for Jalan expenditure reform panel
..........It is to review major areas of central government expenditure and institutional arrangements, including the budgeting process and fiscal resposibility rules, “without compromising the commitment to fiscal discipline”. It will suggest measures to improve efficiencies in the existing expenditure classification system, including the focus on capital expenditure. The panel, to be headquartered in Delhi, will give an interim report before the Budget of 2015-16 and its final report before the Budget of 2016-17.........
Right place at the right time
My View on "The man who turned the economic tide":
India was waiting for the kind of leadership Dr Raghuram Rajan and Modi are capable of providing. Both have some common qualities. Both are willing to work for the country's good. Both are good listeners. Both lead from the front. Both are willing to change course, if someone is able to convince that there are better options. In their respective fields, both have the advantage of age. Both are lucky to be at the right place at the right time.
- M.G.Warrier
Slow governance responsible for decline in growth: RBI Governor Raghuram Rajan
...........Rajan's vision for India's banking system involves a more competitive banking structure. Stressing that India needs more banks, he said that the RBI was a little more conservative in the current round of licensing, given that it was timed around the elections. The RBI, he said, will come out with a framework on the NBFC sector, which needs to complement the banking sector. PSU banks, he said, constitute 70 per cent of the total banking sector assets..............
RBI may relook at priority sector norms for foreign banks: Raghuram Rajan
...................“One possible solution could involve domestic banks doing more agriculture lending and foreign banks doing more SME (small and medium enterprises) lending,” Rajan said at an investor summit organized by Citigroup in Boston, on Thursday. Under the current RBI norms, foreign banks with 20 branches or more, in India, have a target of 40% priority sector lending of their total lending. This is on par with all domestic banks in India. Foreign banks with less than 20 branches have a priority sector lending target of 32%. Foreign banks have long argued for more liberal priority sector norms since they do not have an extensive branch network and access to rural areas. “Financial inclusion is a long-term positive and will help in bringing in more deposits into the banking system,” Rajan said..............
India story is intact, even with inflation cloud, says Raghuram Rajan
.........The report quotes the governor as saying the RBI considers it prudent to be prepared for the eventual exit from low rates. The central bank has pushed the average duration of bond holding to three years and built up adequate reserves while also curbing volatility in the forex market. Rajan also said that the limits for government securities will be steadily increased but the RBI is comfortable with the current limits. On the price rise, the governor observed that while inflation was off peaks, it remained high due to supply-side rigidities. Nevertheless, the aim was to achieve 6% by January 2016 and to fight rising inflation just once. However, he added that...........
Consumer inflation still high says Raghuram Rajan
India’s consumer price inflation (CPI) may be below its peak but is still high due to supply-side constraints, while food prices remain another concern, Citigroup quoted Reserve Bank of India governor Raghuram Rajan as saying during an investor conference. “Inflation still remains high on supply-side rigidities. Food inflation is a source of discomfort and given the sub-par monsoon this year, there is a need to keep an eye on food inflation,” Citigroup reported Rajan as saying at a meeting with US investors on Thursday..............
Making it affordable
...............In the past one decade, there has been surge in funding to long-term advances in the form of home loans. As such the portfolio towards long-term lending is increasing rapidly in the books of every bank, thus posing a big challenge for the ALM in managing asset-liability mismatch. The need of the hour is to facilitate banks to generate long term, cheaper and sustainable funds for which the RBI has initiated a few noteworthy steps. It issued a circular on July 15 to all banks, permitting them to issue long-term bonds with a minimum maturity of seven years to raise resources for lending to infrastructure projects and affordable housing. The National Housing Bank may follow suit and may issue similar guidelines to ......
RBI to hold interest rates on September 30: report
....According to the global financial services major, the Consumer Price Index-based inflation is peaking off and is expected to be around 7.5-8 per cent in September. "We expect the RBI to begin to cut rates starting February with stable oil prices and rupee providing comfort that CPI inflation will come off to 6 per cent by early 2016," BofA-ML said in a research note. The Wholesale Price Index-based inflation fell to a 5-month low of 5.19 per cent in July on account of decline in vegetable prices, while the CPI-based retail rose marginally to 7.96 per cent in July, from 7.46 per cent in June.....
Don’t confuse luck with performance
........There are two indications that it was pure “dumb luck” that allowed GDP growth to register a two-year high in the very first quarter of the Modi regime. The first piece of luck was due to the often over-quoted “base effect”, i.e., the corresponding quarterly figure last year was low, and therefore the bounce-back was above normal. But how low were last year’s April-June numbers? As it turns out, the base was not only low, but very low. As readers of this column know, the ministry of finance (and RBI!) cannot decipher this simple fact because they rely on estimates of year-on-year (yoy) growth; this estimate hides considerably more than it reveals and can lead to grievous errors of interpretation. For example............
SBI launches new products for children
.......Pehla Kadam is a Savings Bank account for minor of any age operated jointly with his/her parent/guardian, while Pehli Udaan is a singly operated Savings Bank Account for a minor aged 10 years and above and who can sign uniformly. Specially branded passbook and cheque book have been designed for these products. All the account holders will be given an exclusively designed personalised photo ATM-cum-Debit Card, the bank said in a statement......
The Great Salary Puzzle
..............With the arrival of technology (core banking), clerical jobs are no longer indispensable. But clerical staff can’t be promoted to the officer cadre merely on the basis of years of service — a similar move in the mid-1980s to 2000 period hit the quality of middle management. For the talented, there’s no reason to stay on in banks which make no ‘concession’ to their qualities. As former RBI Deputy Governor K.C. Chakrabarty says: “You need to manage people. And for this you need to discriminate between people; I mean positive discrimination.” Is lateral recruitment the way forward? “If you hire from top B-schools, chances are they will leave the organisation after a few years if their ambitions are not fulfilled,” says Kumar. “You may also find that you have hired the worst of the best.” ............
Bank Officers Letter to Prime Minister Narendra Modi for Intervention in Wage Revision
......Incidentally wage revision of the bank employees who are the lowest paid in comparison to peer sector is due since November 2012 and the snail pace at which the Indian Banks’ Association is dealing with the matter is causing lot of anxiety, anguish, and frustration amongst all of us. While we once again assure you of our wholehearted involvement in any step/action call given by the Government under your leadership, we request your indulgence in the matter of our wage negotiations as per the Charter of Demand submitted by us on 30th October, 2012, to the Chairman of IBA, delay in which has become a matter of concern for all of us..........
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IBA Invited UFBU for Next Round Wage Talk on 17 Sept on PM Intervention
......As information received from AIBOC General Secretary Sri Harvinder Singh that IBA has invited UFBU for wage revision talk on 17.09.2014 in Mumbai at 2 PM. The banking sources said that this is going to be happen on intervention of PM Shri Narendra Modi who is much impressed with general bank employees dedicated support to govt programmes implemention like PMJDY ...........
The fault lies elsewhere - R.G.Nakhate
My View on "RBI norms may hit co-op depositors":
This is with reference to the article in the TOI,"RBI norms may hit co-op depositors ". A retrograde step by RBI. It may result in run on the deposits of Co-operative Banks or the depositors would not in future risk to put more than Rs.1 lakh (fully protected insurance cover is Rs. 1 lakh including interest earned on the amount deposited). The depositors, by and large, put their money in banks to earn some interest as they consider that they cannot take risk in investing in mutual funds and ever volatile unpredictable share market. Many depositors are attracted to put money in Co-operative banks as they generally offer half to one percent more interest on term deposits. It is not fault of the depositors if the Co-operative banks (or any other sector banks) fail. The fault lies elsewhere, no need to elaborate.Why mete out punishment to gullible depositors?
With a view to ensuring public confidence and providing a greater measure of protection to depositors (small depositors in particular) the Government and RBI established Deposit Insurance Corporation (DICGC) way back in 1962. The limit of Insurance Cover which was originally fixed at Rs.1500, was revised to Rs.5000 in 1968, to Rs 10000 in 1970, to Rs.20000 in 1976, to Rs.30000 in 1980 and to Rs.100000 from May,1993. GOI/RBI/DICGC have not (It is against the interest of common man / depositors) increased the limit of deposit insurance cover for the last 21 years though the deposits have grown considerably. The Deposit Insurance Fund of DICGC which was Rs.312 crore as on 31-03-1993 has gone up by about 115 times in 21 years to Rs.36120 crore as on 31-03-2013 which is indicative of deposit growth. The claims settled, since inception of deposit insurance, too have gone up from Rs.178 crore to Rs.4505 crore during the same period. (Source : DICGC Annual Report 2012-13) But, it is high time to increase the limit of insurance cover to Rs 8 lakhs to Rs.10 lakhs. (at least to Rs.5 lakhs). Rupees ten or five lakhs of today - in 2014 is not even worth to Rupees one lakh or half of one lakh of 1993.
DICGC, RBI and GOI should take necessary steps to increase the limit of deposit insurance. May they not subject the depositors to suffer; the depositors (have) put their hard earned money, their life savings in the co-operative banks reposing full faith in BANKS, in DICGC and in RBI (the Regulator),
- R.G.Nakhate
‘Ownership rights’ uncovered
My View on "Jan Dhan cover: LIC says no to premium":
The initial response to Jan Dhan from implementing agencies and prospective beneficiaries has been encouraging. The ‘packaging’ was attractive with bank account, a ‘credit’ card and elements of life insurance and eligibility for a small overdraft conceptually conceived as part of one financial product. It is understandable that the new government did not get enough time to refine all linkages and take into confidence all stakeholders. This does not absolve government’s responsibility to find funds for financing projects it wishes to implement. Even indirect coercion to force LIC or public sector banks to incur losses in the process of implementing schemes beneficial to society is not welcome. LIC’s dissent has to be seen in this perspective. Transparency in accounting each rupee with LIC and the depositors’ funds with banks is a must. Government should not use its ‘ownership rights’ to divert illusory surpluses with statutory bodies and public sector undertakings, howsoever popular the causes it proposes to finance be.
- M G Warrier, Mumbai
MFIs told to bring customers for Jan Dhan Yojana
.........Several other MFIs are also experimenting with cash-less transactions in microlending. For example, Janalaskshmi has tied up with DCB (Development Credit Bank) to launch a co-branded prepaid card for disbursal of small loans to its urban clientele. “For MFIs, nearly 95 per cent borrowers are women. So MFIs can not only facilitate opening bank accounts for women, but also their spouses, which could take the number to nearly 40 million. MFIs can also play other roles in the Jan Dhan Yojna, like doing due diligence for banks in case of overdraft facilities,”...........
`RBI's inflation focus means rates won't change for 6 mths'
........I don't think there is a general perception that NPAs are because of wilful defaults. Projects are built on certain assumptions and if they (raw material supply, timely completion and interest rates) change, they impact project quality... and that is what has happened in the last few years. This leads to higher leverage as they are not able to repay because the project is not generating cash.There may be some cases of wilful default, but for banks it is always possible to identify if the external environment or internal capabilities are to blame. It is not difficult to identify a wilful defaulter.......
Tops Indian banks ponder over proposed 'Gold Deposit Account' scheme
........ the tenure of gold deposit would be three years. The interest will be calculated based on the prevailing rates. Upon maturity, the investor’s account will be credited with more gold equivalent to the amount of interest earned during the tenure. The banks can either deposit the collected gold with the Reserve Bank of India (RBI) or lend it to jewellers. The scheme has already been formally approved by the RBI, subject to implementation of fool-proof mechanisms to determine the purity of deposited gold. According to MMTC-PAMP India, advanced software to ensure purity checks through more than 250 hallmarking centres in the country is in its final stages of development. The banks are now being asked to forward their suggestions ..........
Uber cool but unsafe?
..........Today, proponents of the Uber model aver that ‘innovation’ allows the customer to enjoy his ride and disembark at his destination without fumbling for cash or having to enter an authorisation PIN, as card details are pre-stored. This innovation is not new; the hotel industry has been using it for a long time with a pre-authorisation taken at the time of booking. The only difference being, that if mandated, you will still need to use 3D-Secure whilst making the booking. So, in a trade-off between risk and convenience, what would you choose? Risk your card being used by a hacker in ‘Nigeria’ or protect it using 3D secure?........
No takers for R20,000-cr NPAs as banks, ARCs spar over valuations
.........The head of a large ARC said reconstruction companies were not ready to buy assets unless banks offered them loans at attractive reserve prices. “Lenders should realise that since we have to pay 15% upfront now compared with 5% earlier, the reserve price should be lower. However, banks appear to be unwilling to drop the value of the assets," he observed. Last month, Reserve Bank of India (RBI) had asked asset reconstruction companies (ARCs) to increase the mandatory upfront investment in security receipts (SRs) to 15% from the earlier 5% to ensure ARCs have 'more skin in the game'.............
Wilful defaulter tag a ‘powerful weapon’ for creditors
......“The wilful defaulter tag is a powerful weapon in the hands of creditors for resolving distressed assets. It shuts out access to credit within the Indian financial system for a borrower,”.......
PNB challenges HC order allowing lawyers to represent Kingfisher
Punjab National Bank (PNB) has challenged a Delhi High Court order allowing lawyers to represent Kingfisher Airlines in proceedings initiated by the bank to decide whether the grounded carrier and its regulators are wilful defaulters for non-payment of dues. PNB in its plea has sought setting aside of the High Court’s August 28 order which had also stayed the bank’s notice to the extent it threatened to hold the airlines and its guarantors United Breweries (Holdings) Ltd (UBHL) and Vijay Mallya as wilful defaulters in the event of no reply within seven days from August 21........
Syndicate Bank CMD, others told to reply to CBI plea
A Delhi court on Friday sought response of Syndicate Bank chief managing director Sudhir Kumar Jain, CMD of Prakash Industries Ved Prakash Agarwal and another accused, arrested in a bribery case, on CBI's plea seeking to record their specimen voice for its ongoing investigation. Special CBI judge Swarana Kanta Sharma directed Jain, Agarwal and Vineet Godha to reply on September 10, when the court will also hear the arguments on CBI's plea. The court also said that.........
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