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Wednesday, September 10, 2014
Lap 2: Challenges for Raghuram Rajan - Dr. A.Vasudevan
Those who move the markets
Reserve Bank of India Governor Raghuram Rajan took charge of India's central bank when the rupee seemed to be in a tailspin while the country was facing runaway inflation. He stabilised the rupee and put up a more credible fight against inflation. These actions have landed him on the fourth annual Bloomberg Markets 50 Most Influential list, which will appear in the magazine's October special issue. He, however, isn't the only Indian banker on the list. The list also features State Bank of India Chairman Arundhati Bhattacharya. A selection of the 50 on the list:..........
Out at 70: RBI sets age limit for MD, CEO of private banks
......"It has been decided that the upper age limit for Managing Director & Chief Executive Officers (MD & CEO) and other Whole Time Directors (WTDs) of banks in the private sector should be 70 years," the Reserve Bank of India (RBI) said in a notification. This means beyond 70 years of age nobody "should continue" in the posts in a private bank, it said.........
Bank Employees stand for 25% Salary hike is just and sacrosanct ! : Complete book
...........The goal of this dissertation in this approach paper is to enhance the awareness of the bank employees and their well wishers to generate inquiring minds, with view of galvanizing strategies to settle the present impasse in the ongoing 10th bipartite negotiations. The goal is to prepare and merge their hearts and minds to resist, repulse the intransigence of IBA /Government combine in denying bankers just wage revision by considering their demand of minimum 25 % that too in pay slip components as against the tradition till 9th bipartite of settling wage load on establishment expenditure.................
Disrupted supply of new coin-bags creates increased premium in black-marketing of coins
...... It is indeed a sorry aspect that RBI cannot ensure adequate supply of coin-bags even after spending too much on overheads in setting up its subsidiary Security Minting and Printing Corporation of India Limited (SMPCIL) specifically for the purpose. If planners at SMPCIL cannot plan such simple ideas to ensure eliminating premium on coin-bags, then it is of no use to spend on such a subsidiary unit of RBI.
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aNOther apex institution???
My View on "How India compares on financial inclusion against ...":
A very interesting analysis. What is disturbing is, while some among the people responsible for policy formulation and implementation find time to respond in the media when personal issues are raised, very few responses we find on articles and comments like this from political or economic leadership who can clarify or defend policy. The handling of financial inclusion in the recent past has been, as if, it is the responsibility of public sector commercial banks. Such an approach weakens the existing infrastructure available for achieving the objective of financial inclusion. Cooperatives, NBFCs, NGOs and corporate are part of such structure. The existing institutional structure should be brought to the mainstream by providing regulatory support and making them functional in the present competitive environment. Please, please, do not come back with a suggestion for another apex institution to do this.
- M.G.Warrier, Mumbai
Open a Healthy Debate!
......Thanks to the vision of those who took over governance from the British, we have a strong foundation supported by a Constitution which has stood the test of time, a public sector which can shoulder responsibility and institutions, like the judiciary, Election Commission, Reserve Bank of India and CAG, which have withstood external pressures. One wishes, the new government musters enough strength and moral courage to open a healthy debate within the country on...........
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My View on "Reserve Bank to pick talent via UPSC-like test":
In the present scenario, the move to go for common-cadre of officers in RBI and making recruitment process more broad-based and professional is in the right direction. But, the hurry with which the RBI top management is trying to implement the well-intended measures may make its own path slippery. Till a decade back, RBI used to learn from its own experience and make corrections midway. The present move gives an impression that RBI has not learnt any lesson from the failure of its recent ‘Executive Interns’ experiment. One option to minimize damage could be to allow the existing staff (within certain age limit and having needed qualification) to migrate to the new cadre after testing their ‘fitness’ through an appropriate evaluation. Better still, would be creating a Financial Sector Service at national level, on the pattern of IAS and Tata Administrative Service (accepting the better features of both) which could be common for financial sector regulatory organizations and public sector banks including State Bank of India. Such service should first absorb the existing talent within the organizations and go for further recruitment after two or three years depending on need.
- M G Warrier, Mumbai
Beware: Citizens being robbed through bogus lottery emails sent in name of ‘Reserve Bank’
..........According to sources, several citizens have fallen prey to these bogus emails and continue to get trapped in the nefarious net. RBI never sends such mails: “No such emails are sent on behalf of the Reserve Bank of India (RBI) nor any lottery or prize amount is given by the Bank. The RBI has nothing to do with these emails,” asserted R Srinivas Rao, Public Relations Officer of RBI Nagpur.......
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Moneylife Foundation calls for a round-table discussion on ATMs usage and charges
..........Monelife Foundation has called for a round-table discussion on this issue at Moneylife Foundation Knowledge Centre at Dadar in Mumbai on 13 September 2014 between 2.30pm to 4.30pm. All citizens, activists and NGOs who wish to be part of this discussion and take this forward are invited to join the round-table. There is also a need to write to the RBI that any directive that leads to increased costs to the depositor must be discussed with bank customers, the largest stakeholders. Currently, banks have the freedom to decide their charges and interest rates without reference to RBI. So, if some banks found it prudent to curb usage or disallow third-party transactions, they could have gone ahead and done it without RBI’s intervention. So why the RBI directive?..........
E-Sentries Now Take a Swipe at ATM Burglars'
..........Integrated surveillance systems are being put in place to help banks receive alerts from ATMs across the country , be it someone breaking into an ATM in Palakkad or Ludhiana. All the monitoring happens from one point, depending on the company that sets up the system based on the bank's needs. The alert-based monitoring system is a software that buzzes an alarm for about 30 different kinds of activities inside the ATM, barring a normal withdrawal or other transactions. It detects attempts to tamper with the cash vending machine and any unusual movement inside an ATM such as a person staying inside for more than a few minutes -and throws up alerts at the control room. This helps someone......
Read - ET
Lords of financial crises
..........The International Monetary Fund (IMF) has managed to remain cloaked in secrecy despite being constantly in the public eye. As a multinational organisation with 188 member nations, the IMF is referenced in every financial crisis. Its biennial summits are attended by the who's who of global finance. The World Economic Outlook and the annual country reports are obsessively dissected. Yet very few people understand what the IMF does and how it does it.......
The Lehman moment
..........The firms raise large amounts either from the vulnerable sectors by promising unsustainable returns or even from the PSBs at lower rates and in turn, lend at usurious rates to the same sector. The consequences are disastrous as would be evident from the recent cases of Sahara or Saradha. The PSBs have to compete with these shadow bankers and in target-based lending, huge NPAs are inevitable. Not that the Reserve Bank of India or the Finance Ministry are not trying to address this problem, but the fundamental philosophy underlying the safe and sound running of the banks must be observed. The RBI Governor, Raghuram Rajan, has lamented the predominance of crony capitalism in the economy in general and the banking industry in particular. This must be faced squarely and with expediency. And yet one wonders how close the PSBs are to their Lehman moment.
Govt to collect services trade data on its own
............While the directorate general of commercial intelligence and statistics (DGCI&S) collects the merchandise exports and imports data, for the services exports and imports data, the commerce ministry relies solely on the Reserve Bank of India (RBI), which collects the data through the payments system. A commerce ministry official said the ministry has authorized various agencies for the pilot projects and the data will be collected under the supervision of the DGCI&S. “We had discussions with the RBI who also agreed that we should develop our own system of collecting services trade data because they rely on payment system to collect the same data which is not always foolproof,” he said, requesting anonymity............
Banks want repo facility on Saturdays
..........There other reason why banks wants the facility on Saturdays because of 95% cash reserve (CRR) requirement on a daily basis and 100% on the reporting fortnight. "CRR is required to be maintained at 95% on a daily basis. That being the case, I cannot afford take any chances. If there is a sudden big payment, I can take funds from the repo window at the end of the day. If there is no such window, I have to keep excess funds," she said............
World Bank warns of global jobs crisis
..............“As this report makes clear, there is a shortage of jobs and quality jobs. And, equally disturbingly, we’re also seeing wage and income inequality widening within many G20 countries, although progress has been made in a few emerging economies, like Brazil and South Africa,” he added. He said overall, emerging market economies had done better than advanced G20 countries in job creation, driven primarily by China and Brazil but the outlook was bleak. “Current projections are dim. Challenging times loom large,” said Twose.............
Bandhan Bank will usher in a new model in financial inclusion: CMD
..........“We will operate in a hub-and-spoke model,” says its Chairman and Managing Director, Chandra Shekhar Ghosh. While the nitty-gritty is yet to be finalised, Ghosh says he will bring about a new model in financial inclusion by connecting consumers, right from the large cities to the remotest of remote villages.........
Improving Capacity is Key to Financial Empowerment
..........A lot has already been said about the Jan Dhan Yojana; by the eloquent prime minister himself and then by advertisers, commentators and other worthies. It is phenomenal as far as communication and intent goes. It warms the heart to know that the bullet trains will not bypass the small hapless woman, but that there is a plan to empower her in plastic and reward points.It is difficult to argue with the potential of financial inclusion to significantly change lives and create long term, sustainable value. And yet, it will be a while before we know if the Yojana triggered or delayed financial inclusion.........
Read - ET
`The Worst is Over for Banking'
.............We have been working on how to integrate the two generations among the workforce.The challenge was to use the experience of old staffers while not killing youngsters' enthusiasm. All our team members are home grown, barring me and one senior in the treasury. That was a conscious choice for two reasons. We believe there is a lot of talent inside and if we hire youngsters and give them the exposure, they are more wedded to the institution. This has worked.....
Read - ET
SBI's operations disrupted in Kashmir valley due to floods
......"Banking operations in Srinagar are completely disrupted due to floods. We have 66 branches in the valley. Out of total branches, minimum of 60 are supposed to be closed, while there is no connectivity with rest of branches which are located on the outskirts, so we are not sure whether they are functioning," .......
It is up to bank to recover money from guarantor or borrower: NCDRC
...........National Consumer Disputes Redressal Commission (NCDRC), presided by Justice J M Malik, dismissed the complaint filed by Kerala resident R S Vasan against Canara Bank, while rejecting his contention that he was not a guarantor and that for the recovery, the bank should have first approached the family of the borrower who had died. "It is well-settled that it is the choice of the bank to recover the money either from the guarantor or the borrower. It is abhorrent from the principles of law to say that the bank must first of all recover the money from the borrower and thereafter it can proceed against the guarantor," NCDRC said. ...........
RBI says management, group companies can also be named as wilful defaulters
..............."While dealing with wilful default of a single borrowing company in a group, the banks and financial institutes (FIs) should consider the track record of the individual company, with reference to its repayment performance to its lenders. However, in cases where guarantees furnished by the companies within the group on behalf of the wilfully defaulting units are not honoured when invoked by the banks/ FIs, such group companiesshould also be reckoned as wilful defaulters,” RBI said in its clarification...........
What deters investment in India today?
.........An explanation for the slow growth rate of manufacturing in India, as recently offered by the Governor of the Reserve Bank of India (RBI), runs in terms of the ‘poor risk-appetite’ of the country’s industrial sector. This not only overlooks the cost of credit, considered very high even by the Ministry of Finance, but also aspects concerning the portfolio balance of firms in the corporate sector. Looking at the balance sheets of Indian corporates, as per RBI estimates, one notices a decline in the .........
Wary banks park excess liquidity with RBI at 7%, but won’t cut deposit rates
.......“It is difficult for us to cut rates when inflation is high. Depositors expect a real rate of return. Deposit rates will start trending down when inflation trends down,” said State Bank of India chairperson Arundhati Bhattacharya. Bankers are wary that if they cut deposit rates on the back of this transient improvement in liquidity, depositors may pull out money as retail inflation remains near 8%. Year-on-year deposit growth was 13.58% as of August 22 while credit growth was 11.04%, a four-year low........
SBI sends wilful defaulter notice to Vijay Mallya
............"We have already sent a notice to KFA (to declare it as wilful defaulter). There is a mandatory time that needs to be given to them to respond and that time is currently on," said Arundhati Bhattacharya, chairperson of SBI. SBI, which is the lead bank of a lender consortium to the crippled carrier, has an exposure of over Rs 1,600 crore.............
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