Use of corp bond funds for infra push not a viable option: Reddy

Dr.Y.V.Reddy, former governor of Reserve Bank of India (RBI), has rejected the view held by his successor at the central bank that a developed corporate bond market is necessary to fund infrastructure.  Instead, he called for good governance by indicating that public policy should play an active role in funding infrastructure. “Bad governance will feed in itself for bad finance (and misallocation of resources),” he said.   Both Subir Gokarn, Deputy Governor, and Deepak Mohanty, Executive Director, called for a need to develop corporate bond market to help financing of infrastructure at a seminar on ‘Investment and Its Finance’ in Mumbai over the past two days.

Chinese Bank Enters India Market

With a branch planned in Mumbai, Industrial and Commercial Bank of China (ICBC) (601398,1398.HK) may become the first operational Chinese bank in India. The China Banking Regulatory Commission (CBRC) and the Reserve Bank of India (RBI) signed a memorandum in December 16. Ministry of Commerce representative Wu Donghua said many Chinese enterprises in India need capital support, and Chinese branches there address that need. Separately, China Development Bank signed a series of agreements with India telecom operator Reliance Communications, energy company Essar Group and ICICI Bank.

RBI to build strong corp bond market to fund infra

Developing Bond Market Critical To Revving Up Growth Engine, Says Gokarn

Reserve Bank Deputy Governor Subir Gokarn on Thursday said the central bank is focusing on developing a strong corporate bond market to fund infrastructure development that will require an estimated $1 trillion during the 12th Plan period.  “We are focusing on developing long-term corporate bond market to support banks in financing infrastructure projects,” he said. Mr Gokarn was delivering his keynote address at the ASEM (Asian-Europe) Conference organised by the Reserve Bank of India and the European Commission here this morning. “We need a strong corporate bond market as we have to take away the burden on banks from financing long-term funding needs of the infrastructure sector which is targeted at $1 trillion over the 5-year period beginning 2012,” he said.

RBI opts for growth over inflation for now

RBI kept key policy rates unchanged on Thursday, signalling that maintaining growth momentum was a priority while taking steps to infuse close to 50,000 crore of liquidity. This will ease pressure on banks to raise rates both on lending and deposits in the near term.  However, going by the hawkish tone of the mid-term policy review statement, the bond market is now bracing for a rise in interest rates in January when the next review is due. RBI has raised rates six times this year to fight inflation, and has warned that risk to its 5.5% inflation estimate in March is on the upside.   The mid-term review appeared to be more of a fire-fighting measure with attempts to pump money into the banking system, which saw a record deficit of 1.44 lakh crore as reflected in bank borrowings from RBI on Thursday. According to the apex bank, the deficit was making it tough for the banking system to sustain credit delivery.   RBI said although the liquidity crunch has helped achieve its objective by getting banks to raise rates, the shortfall was way outside its comfort zone.

Bank studies in school curriculum soon

The Reserve Bank of India has prepared a well-researched study material for school and college students which is soon going to be introduced in the school curriculum across the nation. Making this announcement here on Monday while addressing students of Ranchi University at the Senate hall, RBI governor, D Subbarao, said, "All schools in the country would include a chapter to promote financial deepening whereas colleges have been asked to include some module of finance in certain subjects," he said.  Acknowledging that only 40 per cent of the households have bank accounts, Subbarao said even among them very few are active accounts. "We give targets for financial inclusion to banks and they open the accounts but the idea is not paperwork but to make it functional, which can be achieved only when the account holder realizes the importance and operational benefits of his or her bank account, for which financial literacy is must," he said. Answering to a query raised by chief secretary, A K Singh, if there is any incongruity in written and verbal instructions issued by RBI, Subbarao admitted that certain RBI instructions are not followed by banks in letter and spirit. Singh raised the issue of banks refusing to extend credits to borrowers even in cases where the RBI has struck-off the need for collateral. Replying to this, Subbarao said that at a recent meeting with branch managers of different banks in Pune, he was apprised of the difficulty faced by banks. "Though there is technically no need for collateral for education loans upto Rs 4 lakh and loan for micro, small and medium enterprises upto Rs 1 crore, bankers have the onus of recovering the amount for which they want to take no risk," he said, adding that the RBI is strengthening its monitoring system and trying to find a viable solution for this.  Answering to a query raised by Rashid Anwar, an MBA student of Ranchi University, he spoke of a committee appointed by the RBI to make the inflation figure more generic and pragmatic. "We realise that one inflation figure for the entire nation cannot be appropriate in the light of the fact that different states have different income levels and consumption basket for which a rural and urban index is being considered to begin with," he said. In response to a question of Tanush Khatri, another student, Subbarao assured that he would take up the matter of ATMs churning out counterfeit currencies with the bank authorities in Jharkhand. "It has been reported many times, especially from bordering states, about counterfeit notes being included in circulation but the RBI is taking every possible step by educating masses, including bank officials about being able to identify," he said. However, he got a poor response from students when Subbarao asked if they have seen advertisements related to counterfeit currency in television and newspapers issued by the RBI from time to time.

Satellite banks and ATMs in Jharkhand soon: RBI

Reserve Bank of India is planning to set up satellite banks as well as ATMs in Jharkhand so as to make banking facilities reach out to villagers there. The idea was shared by RBI governor, D Subbarao. He said that during the initial level, the satellite banks will be made operational on weekly basis and with time get converted to full fledged branches. Report from state government officials read that out of the 4423 village panchayats in the state, 1540 were still in need for banking to reach out to them.

A day before policy, RBI governor gets a feel of 'discounted' Bharat

You might have expected Reserve Bank of India Governor D. Subbarao to ponder over the country's economic problems and banks' fund needs sitting at his freshly furnished swanky office a day before he brings out now what is known as the mid-quarter monetary policy review. Subbarao had something else in his mind. He landed up instead at a dusty village, 40 km west of Ranchi. "But you don't get to know how people are affected by RBI's policies sitting in Mumbai. Isn't it?" Subbarao asked in broken Hindi to an audience of villagers at what the financial regulator calls an outreach programme where few state-run banks put up stalls to showcase products of self-help groups they support and also the technologies they are using to achieve the seemingly elusive target of financial inclusion.  And it was a lesson on the limits of financial inclusion for the Governor. The outreach programme had various technology providers demonstrating how their hand-held devices armed with biometric identification feature can act as a bank branch for the largely un-banked villagers who mostly depend on a single crop paddy with no access to irrigation, and some sundry forest products. A villager, after being shown how he can withdraw Rs 100 from his account using that hand-held device, gingerly showed the receipt to Subbarao. “Just 300 rupees! Why? You should keep more money in your account!” a shocked Subbarao asked the villager looking at his account balance. At a loss for a reply, the villager climbed down the stage with a dry smile. “Welcome to Bharat!” a banker in the audience retorted with a grin. A hand-held device wouldn't possibly raise your income in hand, the banker might have thought. "Here people wait for months to encash their NREGA cheques so they trade in them: A Rs 100 cheque is sold for Rs 70,” said A.K. Singh, Jharkhand's chief secretary, who was on the podium along with Subbarao. The rate of cheque-discounting could be a unhappy lesson for Subbarao apart from the very need for a government-given cheque to be discounted in the first place.  From Bharat to India, the journey on the dirt road appears quite long.

ICBC applies to RBI as China banks line for India foray

Despite the signing of a framework joint financial-services agreement between India and China, it will be some time before the first bank from Beijing, the Industrial &Commercial Bank of China Ltd, opens its doors for business in India. The bank has applied to RBI for setting up branches in India but is yet to get a clearance from the top-level policy body that includes the Ministries of External Affairs and Finance,and RBI.

Jalan report anti-growth.....

MCX'SX has lambasted the Bimal Jalan report and said it seeks to "undo everything that has been achieved in the past few years" in the domestic capital markets.

FINMIN, PSB Chiefs to take up HR policy recast today

The ministry of finance has called a high-level meeting of chiefs of major public sector banks to discuss recast of HR policies on Thursday. Financial services secretary R Gopalan and Planning Commission member Arun Maira are likely to meet chiefs of five state-owned banks--State Bank of India, Punjab National Bank, Bank of Baroda, Union Bank of India and United Bank of India --to discuss Khandelwal committee report suggesting major changes in PSB's HR policies. The committee was appointed by the ministry of Finance(MoF)under the chairmanship Anil Khandelwal, former chairman of Bank of Baroda, to chart out action plans for PSBs on HR front. Sources said that a presentation will be made by the government before a select group of bankers and academicians during the meeting.  Representatives from premier management institutes like Indian Institute of Management(Ahmedabad)&IIM (Kolkata) and Indian School of Business (Hyderabad) are also likely to attend the meeting, added the source. Another committee formed under Alok Nigam, joint secretary MoF, to find out the ways to implement Khandelwal report, has also recently submitted its report. Khandelwal report has recommended bank specific wage and service conditions instead of industry-widesettlement. The report has also suggested that variable pay should be made a major component of wages and banks should to go in for cost to company (CTC) in the future.  Banks should also monitor staff costs and endeavour to achieve staff cost ratio of 50% in the next five years, said the report.  The report has advocated that based on well defined efficiency criteria major PSBs could be recognised and rewarded for their superior performance and excellence while some large well performing banks to be considered for `Navratna' status and smaller banks for `Mini Navratna' status. Large banks with business mix of over Rs 3 lakh crore to be provided ED (HR) to drive HR agenda from the top. A steering committee of the board on HR to be constituted to discuss critical HR issues, said the report. On manpower and recruitment planning, the report has said it should be an annual well structured and rigorous exercise for five yearperiod,factoringgapsin skills and competencies.

RBI board opposes govt grip on staff issues

The central board of Reserve Bank of India (RBI) has opposed a government move to have control over the central bank’s staff-related matters. The proposal to make staff regulations statutory and bring them under the subordinate regulation of Parliament was discussed at RBI’s board meeting in Kolkata last week. According to sources, RBI Governor D Subbarao mooted the proposal during the board meeting. But three board members and a few executive directors opposed it on the grounds that it would affect RBI’s independent functioning. The central bank would have to take the government’s approval on issues like salary, service conditions, promotions and incentives of its employees. Sources said following the opposition, the proposal has now been deferred. It is highly unusual for a proposal to meet with stiff resistance from RBI board members. The government has been putting pressure on RBI to make staff regulations statutory under Section 58 of the RBI Act, 1934, and bring them under the subordinate legislation of Parliament. The central board of RBI consists of the governor, all deputy governors and representatives from industry and government. At present, the government nominee on RBI’s board is Finance Secretary Ashok Chawla. Executive directors are not board members, but are invitees to the meeting. Recently, the government had asked RBI to take its approval before finalising central bank employees’ pay hikes, which the regulator had not initially agreed to. Later, the central bank agreed to ‘brief’ the finance ministry about the pay revision, but said it would not seek approval. During the year, there were at least two instances when the government’s actions prompted Subbarao to highlight the importance of RBI’s autonomy and independence. The first was over the ministry’s decision to refer all regulatory disputes on hybrid financial products to a committee headed by the finance minister. Later, RBI also expressed concern about the proposed Financial Stability & Development Council and said financial stability should be the exclusive mandate of the central bank.

Saraswat Co-op Bank seeks to become a private bank

To overcome the inherent restrictions in the co-operative banking model on raising capital, the country's largest co-operative bank is mulling the option of converting into a private sector bank. The Mumbai-headquartered Saraswat Co-operative Bank has apparently started working towards this end. A bigger play in the banking landscape by seeking the Reserve Bank of India's permission to spread its wings across the country – currently, it has presence in Maharashtra, Gujarat, Madhya Pradesh, Karnataka, Goa and Delhi – and giving stock options to employees are in the works. At present, co-operative banks can strengthen their core capital only by issuing shares at face value, ranging from Rs 10 to Rs 100, and plough back of profits. The capital market is off-limits for them. This restriction on bolstering core capital is proving to be a stumbling block for growing assets. The only urban co-operative bank that has converted (in 1995) into a private sector bank so far is the Development Co-operative Bank. This bank was re-christened as Development Credit Bank.

UK Sinha to succeed Bhave at SEBI

Senior bureaucrat and chairman of UTI Asset Management Co. Ltd U.K. Sinha will become the next chairman of the Securities and Exchange Board of India (Sebi). A Central government panel headed by cabinet secretary K.M. Chandrasekhar has chosen Sinha from a list of candidates including senior bankers and bureaucrats, according to three persons familiar with the development. A formal announcement by the government is expected in January. Sinha, who will assume office in the third week of February, declined comment.

Banking on a new era for micro lending

CHANDRA Shekhar Ghosh, the founder-chairman of Bandhan Financial Services, is waging a lone battle against the entry of private equity funds in the country’s microfinance sector. He has so far managed to keep the nineyear-old Bandhan, now the country’s fourth-largest microfinance institution by assets, free from the grips of private equity players despite the pressure of having to mobilise resources to fund its growth. Foreign private equities come in droves to encash the prospect of the booming local MFI sector. Many feel it becomes difficult for MFIs to keep the all-inclusive interest rates below 24% a year, once private money spinners fund them for returns as high as 25-30%. Even RBI is uncomfortable with private equities ruling the roost, but then for most large MFIs, it was rather easier to get private money from abroad than arranging funds from government agencies like SIDBI.

Now, village gets mobile banking service

Mobile banking services which was being concentrated in the urban areas of Karnataka till now, is being extended to rural areas also, taking rural masses towards economic empowerment.  For the first time in the state, the Reserve Bank of India has extended its mobile banking services to Harwada village in Ankola taluk through the Syndicate Bank. Harwada is mainly dominated by the fishermen community and all its 1,200 families residing in this village can avail the banking service. With this facility, the villagers of Harwada have become customers of Syndicate Bank, said bank officials.

RBI may get to oversee banks’ related outfits

THE government plans to empower the Reserve Bank of India (RBI) to allow it to inspect related arms of banks such as mutual funds and insurance companies to ensure their operations do not pose any systemic risk to the lenders.   The finance ministry plans to incorporate new provisions in amendments to a banking legislation to allow the central bank greater regulatory oversight over associate enterprises of banking companies such as mutual funds, insurance and factoring operations, said a senior official in the ministry.  The ministry plans to seek the approval of the cabinet this month for changes which will be part of the Banking Laws Bill. The official said the proposal seeking to provide more powers of oversight to RBI was taken after an assessment of emerging global regulations, especially in response to the crisis in the global financial markets that involved some systemically important financial institutions, the official said.

Search panel conducts interviews for Sebi chief

A government search panel today held interviews for the post of the Securities and Exchange Board of India (Sebi) chairman, which will fall vacant on February 17 after incumbent C B Bhave’s term ends. Association of Mutual Funds in India’s (Amfi’s) Chairman U K Sinha and Corporate Affairs Secretary R Badyopadhyay are considered front-runners for the post.  The search panel expressed hope that the new chairman would be appointed before the post fell vacant. “The post would fall vacant on February 17, 2011. We would have the successor before that,” said Finance Secretary Ashok Chawla, a part of the panel. Other people in the race include Additional Secretary, Department of Disinvestment, S Pradhan, Madhya Pradesh Principal Secretary G P Singhal and two State Bank of India (SBI) Managing Directors, S K Bhattacharya and RSridharan. Of those selected for the final interview, at least two — SBI Chairman O P Bhatt and Reserve Bank of India (RBI) Deputy Governor K C Chakrabarty — expressed their unwillingness for the position, sources said. The panel headed by Cabinet Secretary K M Chandrasekhar includes Financial Services Secretary R Gopalan and Department of Personnel Secretary Shantanu Consul.

Safeguard regulatory autonomy, Bhave says

RBI road map for rural banking

RBI Deputy Governor Subir Gokarn at Parakuchi village in Kamrup district on Sunday.

Guwahati, Dec. 12: The Reserve Bank of India (RBI) has drawn a road map to bring 2,327 villages in Assam with a population of over 2,000 under the banking system. The exercise would be completed by March 2012. RBI deputy governor Subir Gokarn said the RBI was committed to bring banks closer to people and was taking all steps to do the needful. Gokarn’s first visit to Assam brought him to Parakuchi village, 40km from Guwahati, in Kamrup district to inaugurate a financial outreach camp.  On the issue of directing private banks to set up facilities in rural areas, Gokarn said they could not direct the banks as there was always a question of viability. “If it is viable, they will come,” he said

Microfin pioneer Yunus lashes out at Indian outfits

BANGLADESHI microfinance pioneer Muhammad Yunus on Sunday attacked companies for “misusing and abusing” his original concept of helping the poor via small loans, after a backlash against profit-making lenders.   Mr Yunus admitted the reputation of microcredit had been tarnished by Indian commercial companies that charge high interest rates and use heavy-handed tactics to collect repayments.

Bimal Jalan Committee Report on stock exchanges sparks debate

The Bimal Jalan Committee report on stock exchanges is a good report and well-argued though the committee may have erred on the side of caution," Rajesh Chakrabarti, assistant professor ­finance,ISB,observed on Friday . Kicking off a panel discussion on the report held in the city,  Chakrabarti pointed out that the 5% cap, the maximum stake that individuals and corporations can hold in an exchange, was the rule in many countries. He also argued that stability and not mindless competition was more important. Competition, he said, could be sub-optimal and "haven't really done too much on Wall Street". An exchange chief's role was to bring ininvestors to trade at one place and increasing the number of exchanges could lead to greater fragmentation.

May increase rates if inflation doesn’t come within RBI’s comfort zone: Chakrabarty

With inflation still looming large, Reserve Bank of India (RBI) Deputy Governor K C Chakrabarty today hinted the central bank was open to another increase in key policy rates.  During the previous policy review, Governor D Subbarao had indicated the chances of another rate increase were relatively low as inflation was moderate.  “The governor said it might not be necessary. That does not mean if there is a pause you cannot do it (raise rates). If it needs to be done, it can be done; that is his choice,” Chakrabarty said when asked if RBI was open to raising rates despite the pause indication in the November policy.  An accommodative monetary policy was not required at present due to the high growth rate, Chakrabarty said, on the sidelines of a Confederation of Indian Industry event at Kolkata today.

Release the Bhagat Singh coin series, appeals NGO

Chandigarh, Dec 10 – An NGO working to propagate the ideology of freedom fighter Bhagat Singh Friday appealed to Prime Minister Manmohan Singh to release of the currency coins commemorating the martyr. Members of All India Shaheed Bhagat Singh Brigade charged the central government with ‘unnecessarily delaying’ the circulation of these coins that were   minted in the denomination of Rs.100 and Rs. 5. In 2007, the government had announced to issue coins bearing the image of Shaheed-e-azam (great martyr) Bhagat Singh. We have checked with the Reserve Bank of India and found the coins were made in 2008 but till date, the authorities concerned have not given the green signal to bring these out in public,’ organisation chief Yadvinder Singh told reporters

SEBI calls for provisions to protect autonomy

The capital market regulator has sought provisions to ensure the autonomy of regulatory bodies. “It is imperative to make sure there are adequate supportive provisions in the laws and rules to maintain the autonomous character of these institutions,” said C B Bhave, chairman, Securities & Exchange Board of India (Sebi). Bhave’s statement comes close on the heels of a stand-off between the Reserve Bank of India (RBI) and ministry of finance on the issue of autonomy. Early this year, the central bank objected to an ordinance that gave a committee headed by the finance minister overriding powers in the event of inter-regulatory disputes

RBI to convene meet on microfinance institutions issue

The Reserve Bank of India (RBI) will convene a meeting of banks to gauge their stand in relation to microfinance institutions (MFIs) in the interim period between the submission of the Malegam committee report and its study by the bank. RBI Governor Duvvuri Subbarao told mediapersons here Thursday that the meeting might be held in the next two weeks though the final decision is yet to be taken.

Banking licence norms by Jan

RBI will be ready with its draft guidelines on new banking licences by January, governor D Subbarao said on Thursday. It will put a gist of feedback received on the new licence issue in its website shortly. The RBI central board has on Thursday discussed issues like initial capital for new banks and their likely business model, and how would the promoters capital be diluted after initial years. We received a broad spectrum of feedback and there is no clear-cut opinion one way or the other, Mr Subbarao said

RBI wants ideas on savings rate freeing

Reserve Bank of India governor D Subbarao today said the central bank was unsure about the impact if savings rates were deregulated and if it would make interest rates unstable. We will bring out a discussion paper soon on the (subject) and want banks to give suggestions on it,” he said. The central bank’s mid-term policy review had said the discussion paper would delineate the pros and cons of deregulating the savings deposit rates, which had remained unchanged at 3.5 per cent per annum since March 1, 2003. “There is a chance that once it comes, banks will abandon low-income household services. If interest rates go down, it will affect small savers and if it goes up, it may impact the costs of banks. We are not clear about its outcome,” Subbarao said. Adding: “If we talk about the positives, it may give additional flexibility for banks; they can come up with innovative products. Moreover, if interest rates go up, it will attract more savings and the apex bank will have a better idea of monetary policy transmission.”

INFLATION STILL ABOVE RBI’s COMFORT ZONE: SUBBARAO

Reserve Bank of India (RBI) Governor Duvvuri Subbarao today said inflation was still above the central bank’s tolerance level and it would revisit the gross domestic product (GDP) growth numbers in its quarterly policy in January.  RBI had earlier projected that the economy would grow 8.5 per cent in the financial year ending March 2011. “Inflation is coming down, but is still above RBI’s tolerance level. On the other hand, the growth is encouraging. RBI will revisit the growth numbers in its third quarter review,” Subbarao told reporters after a meeting with West Bengal Chief Minister Buddhadeb Bhattacharjee

Inflation expected to reduce

The central bank’s deputy governor, Subir Gokarn, today said inflation was expected to reduce in the coming months. And, that liquidity was a concern. “Though a crisis still prevails internationally, in the domestic front things are hopeful, as the GDP and IIP numbers were good in the second quarter. The most important thing is that overall inflation is showing signs of decline. Though some food items are still under pressure, even food inflation is expected to be down,” he said.

Microsoft introduces tracking protection on Internet Explorer

As the debate continues about a potential privacy system that would allow con- sumers to opt out of having their data collected online, Mi- crosoft Corp. on Tuesday an nounced a feature for the new- est version of Internet Explorer that would permit users to stop certain websites from tracking them. The feature, which will exist in Internet Explorer 9, avail- able next year, will let users limit the ability of third-party companies to track them on- line. The announcement comes less than a week after the Federal Trade Commission (FTC) advocated a “do not track“ mechanism that could be built into a browser and alert websites that a user did not want to be monitored.

Diesel, petrol price hike looming

With inflation worries easing, the minsterial panel on fuels could raise diesel prices by Rs 1-2 a litre next week in a bid to reduce losses of state-run oilmarketers and boost investor confidence ahead of a follow-on public offer from market leader IndianOil.

RBI to issue coins to commemorate Mother Teresa

The Reserve Bank of India (RBI) today said it would issue new Rs5 coins to commemorate the birth centenary of Nobel laureate Mother Teresa. "The Reserve Bank of India will shortly put into circulation coins of Rs5 with the theme, Birth Centenary of Mother Teresa," RBI said in a statement. The coins commemorating the founder of the Missionaries of Charity would be circular in shape and have a diameter of 23 millimeter, it added. Mother Teresa was born as Agnes Gonxha Bojaxhiu on August 26, 1910, in present-day Skopje in the Republic of Macedonia. Besides, the existing Rs5 coins will continue to be in circulation.

A question of control

This refers to the report “Govt tightens grip on RBI” (December 7). There is nothing unusual or objectionable if, in a democracy, the legislature wishes to have a say in policies that are implemented through various arms of the government. In this context, the government’s concern on the contours of the Reserve Bank of India’s (RBI) staff management is understandable. At the same time, this makes glaringly obvious the anxiety of a government that is losing its grip on governance and is, therefore, attempting to showcase some instances of making its boys obey.

The RBI Staff Regulations, 1948 and HR management of the central bank have stood the test of time and never been a cause of problems for the Centre. RBI’s central boards and governors have been consistently showing the maturity to consult the central government on important matters and, by and large, all finance ministers including the present prime minister have respected the RBI’s autonomy. The current impasse appears to be the result of some misunderstandings at lower levels. The earlier the issues are settled amicably before they affect individual egos, the better.

MG Warrier, Mumbai

First among equals

Reserve Bank of India employee representatives have objected to the finance ministry’s reported move to keep North Block informed of the salary structure and perks. However, a section of the market feels that the central bank should not be granted preferential treatment when other financial sector regulators such as the watchdog for the capital markets, insurance and pension are adopting the same practices. 

It’s fight to the finish for SBI top job

Lobbying is in full swing for the top job at the country’s largest bank, the State Bank of India , with its chairman OP Bhatt set to complete his term early next year. Some of the potential candidates, who also include CEOs of large state-owned banks, are ensuring that there are no problems on the vigilance front, which will help expedite the process.

Microfinance institutions under stress, not threat: RBI

Microfinance institutions (MFI) are an integral part of financial inclusion in India but are currently under some stress, Reserve Bank of India Deputy Governor Subir Gokarn said on Tuesday. "The MFI industry might be under little stress as the banks are finding it difficult to lend to them at this moment. But the system as a whole is not under threat," Gokarn told reporters on the sidelines of an outreach programme on the outskirts of Kolkata.

Govt tightens grip on RBI

Board meet to give govt final say on central bank’s staff-related matters.

The government is likely to have a final say on issues such as salary, service conditions, promotions and incentives of the Reserve Bank of India’s employees. These are, till now, under RBI’s own purview.  The government has been pressing RBI for three years to make its staff regulations statutory under Section 58 of the RBI Act, 1934, and bring it under the subordinate legislation of Parliament. According to sources, a resolution to this effect is expected to be approved at the board meeting scheduled this Thursday in Kolkata. RBI had so far been resisting the move. Recently, the government asked RBI to take its approval before finalising pay raises for the central bank’s employees. The regulator resisted and a compromise was agreed, under which RBI would ‘brief’ finance ministry officials about pay revisions before implementing these. However, the central bank insisted it would not seek government approval. “RBI is an autonomous body. If it gives in to the government demand to make staff regulation statutory, then all decisions on central bank employees, like service conditions and benefits, which are now taken by RBI will need government’s approval,” said Samir Ghosh, general secretary, All India Reserve Bank Employees’ Association. Ghosh has written letters to RBI Governor D Subbarao and other central board members, requesting they not sacrifice independence on staff matters. “The central government is very much insistent in this regard and desires to get it approved in the board meeting of the bank at the earliest. This, we apprehend, will further dilute the independent functioning of RBI and make it a subservient institution to the finance ministry,” Ghosh wrote to one of the board members. During the year, there were at least two instances when certain actions of the government had prompted Subbarao to highlight the importance of RBI’s autonomy. The first was over the ministry’s decision to refer all regulatory disputes on hybrid financial products to a committee headed by the finance minister. RBI also expressed its concern about the proposed Financial Stability and Development Council, on the reasoning that financial stability should be the exclusive mandate of the central bank.

RBI ASKS BANKS TO OPEN RESOURCE CENTRES FOR FINANCIAL INCLUSION

The Reserve Bank of India (RBI) has urged commercial banks to open financial inclusion resource centres throughout the country. These would work as a store-house of all relevant information pertaining to financial inclusion. “Though RBI is doing its bit by opening financial inclusion resource centres, it’s not enough. So, commercial banks should also open such centres as this is a good development and commercial proposition,” RBI Governor D Subbarao said on the sidelines of the launch of a financial inclusion resource centre here today.  The central bank, which has opened such centres in Pune and Chandigarh, was planning to open two more, one each in Kolkata and Mumbai, he added. RBI is pushing banks to provide basic banking services in villages with a population of 2,000 and above by 2012 and those with a population of less than 2,000 over the next three to five years.

“Both banks and state governments are majority stakeholders in the financial inclusion process. While this will ensure better governance in states due to better transparency, banks will get low-cost deposits to protect themselves from asset-liability mismatches,” he said.  He, however, added the financial inclusion process was slow in many regions and should be expedited.  Earlier, banks had submitted their financial inclusion plans to the regulator, according to which around 200,000 business correspondents and customer service points would start work over next two-and a-half years. Also, 4,000 branches in unbanked villages and 100 million no-frills accounts would be opened. Recently, RBI made a policy change by allowing for profit organisations to act as business correspondents to speed up financial inclusion. “Commercial banks should see financial inclusion as an opportunity rather than an obligation,” Subbarao said. He said technology should be used to meet financial inclusion targets.

RBI conducts fiscal outreach programme

NORTH GUWAHATI, Dec 6 – As a part of the second phase of the financial outreach programmes, the Reserve Bank of India, Guwahati conducted a financial outreach camp at Sesawng village of Aizawl district in Mizoram recently. The objective of the camp was to create awareness about financial products, schemes and services offered by the financial institutions, banks and government departments. Various financial institutions, including Mizoram Rural Bank, Mizoram Cooperative Apex Bank Ltd., KVIC, DRDA, DIC, NEDFi, NABARD, SIDBI, etc., participated in the camp and put up their respective stalls to disseminate information on their financial products. The Executive Director of RBI, VS Das graced the occasion as the chief guest while other guests included Surekha Marandi, Regional Director of North Eastern States, Vanlalnghaka, Additional Secretary Finance, Banking Ombudsman of North Eastern States and other senior officials. The audience included residents of the village and children from various schools.  Later, a meeting was held where among others, V.S.Das, executive director of the RBI, explained the role of the bank in containing inflation to ensure price stability in the country by promoting sound banking system. The speeches delivered by the appointed bank officials were followed by a question-answer session wherein various queries raised by the audience were answered by the chief guest and other senior bank officials.  A quiz programme on topics relating to RBI and banking was also conducted for school children and prizes were distributed to the winners. Mementos were distributed to the winners. Mementos were distributed to all the participants. The Executive Director, V.S.Das also announced the gift of computers to the Govt. High School and Middle Schools.

Bhave may get 2 year extension as SEBI Chief

Move In Line With Tenure Of Regulator Bosses -

In a surprise move, incumbent Sebi chief C B Bhave is being considered for extension in service by a high-level search panel that was set up to find his successor at the market regulator.

RBI tells public about its activities, schemes

The Reserve Bank of India, Kanpur has set up a financial literacy camp at the ongoing Kanpur Mahotsav at Motijheel Ground with an objective to acquaint common people with its role and functions.  The camp aims to apprise the common masses about various activities and the schemes of RBI, like banking Ombudsman scheme, young scholar scheme, summer placement scheme, non-banking financial companies etc. The camp aims to create public awareness on salient features of a genuine currency note. The public and the visitors to the stall are also being apprised about due diligence to be taken while depositing money with non-banking financial companies. Financial literacy material was also distributed among the public.  In coordination with SBI, Motijheel branch, exchange facility for fresh notes and coins has also been provided to the public.  

V.Kannan - Executive Director of Oriental Bank of Commerce

V.Kannan assumed charge as Executive Director of Oriental Bank of Commerce.  Prior to this, he was General Manager, Bank of Maharashtra, where he started his career in 1976.

Money transfer at your fingertips

The days of writing cheques were long past passe. Till recently, the easiest way to transfer money was through Internet or phone banking. The entire process took another step forward last week--now you can transfer money through your cellphone. The National Payments Cor- poration of India (NPCI) has launched an inter-bank mobile payment service (IMPS), which will enable savings account holders to transfer money to another account within the country using their cellphone.
Is it available to all? To avail the facility, it is man- datory that the bank in which you hold an account and the one in which the beneficiary has an account are linked to the IMPS. Currently, seven banks have gone live with the system-- State Bank of India, ICICI Bank Ltd, Union Bank of India, Bank of India, HDFC Bank Ltd, Axis Bank Ltd and Yes Bank Ltd. Seven more are in the process of going live and several others are in the preliminary phase.

PSB unions call for watchdog

In view of the recent housing loan bribery scam involving top officials from public sector banks (PSBs) and LIC Housing Finance, bank unions have sought the setting up of an independent audit commission for banks. All-India Bank Employees Association (AIBEA), the largest union of bank staff, has demanded that the government constitute an audit commission similar to the Comptroller & Auditor General (CAG) so that greater transparency can be ensured.

Another demand of the staff union is doing away with the methodology by which the central auditor for a PSB is selected. “Previously, Reserve Bank of India appointed the central auditors for the banks to audit their annual accounts,” said Venkatachalam. “Now (for over a year) the PSBs select a panel of auditors and RBI selects one out of it. Since banks can influence an auditor of its choice, we’ve demanded revoking the system”.  Since PSBs are custodians of R35 lakh crore in deposits, they should be accountable to the nation for all their financial activities, the union claimed.

RBI may allow lower provision cover ratio during downturn

The Reserve Bank of India is working on a comprehensive policy that will allow banks to bring down the provision coverage ratio during downturn. However, this will have to be done in a phased manner, said Mr Anand Sinha, Executive Director, RBI.  The RBI had asked banks, in October 2009, to maintain a provision coverage ratio of 70 per cent. “We asked banks to maintain a provision coverage ratio of 70 per cent as part of the build-up phase. It has perhaps been causing some kind of discomfort. It is not meant to be kept at that level. There will be a release phase, which we are working on. We will come out with a comprehensive policy under which banks may be allowed to use the provisions made under certain conditions,” said Mr Sinha, while addressing Bancon 2010.

SEBI Chief may get extension

The government is likely to ask C B Bhave to continue as SEBI chairman. Sources said the Prime Minister's Office recently asked the Cabinet Secretariat why Bhave's term should not be extended. THE government is likely to ask C B Bhave to continue as the capital market regulator. Bhave's term expires in February 2011 and a search committee was set up in September -almost six months in advance -to find the next chairman for the Securities and Exchange Board of India (SEBI).  A meeting of the search committee that was scheduled to meet on Friday to interview about a dozen shortlisted candidates was cancelled just a day before. A new date for the meeting is yet to be finalised, the sources said.  When asked if the government asked him to continue, Bhave refused to comment.

Rejig of SBI’s top brass in works

New Delhi: The State Bank of India, the country’s largest bank, is set to get a new-look top management with the government starting the process to find a replacement to Om Prakash Bhatt, who is due to retire as chairman in March. In addition, three new managing directors will be appointed over the next few months. Earlier, SBI could at best get two managing directors. However, after an amendment to the law governing the public sector lender, four managing directors can be appointed.   At present, R Sridharan is the only managing director after S K Bhattacharya retired in October.  While Hemant Contractor, deputy managing director (DMD) in charge of corporate banking, and Pratip Chaudhuri, DMD in charge of international banking, are likely to be appointed as managing directors, it is unclear who the fourth MD would be.  Chaudhuri and Contractor would also be contenders for the top job at SBI once Bhatt steps down after a fiveyear term. Sources privy to the appointment process told TOI that other DMDs who have at least two years of residual service and have adequate experience as deputy managing directors would be considered for the chairman’s post.  Sources said the finance minister has already asked that the process be expedited and a selection committee comprising finance ministry and RBI officials, besides external experts, would soon evaluate the candidates.  Bhatt is one of the longest serving SBI chairmen and is credited with reinvigorating the public sector lender.

Sinha set to be Deputy Governor of RBI

New Delhi: The government is set to appoint Anand Sinha as the fourth deputy governor of RBI. His appointment had run into a hurdle due to some complaints received by the government. But officials said that Sinha's appointment will be notified in the next few days.

Banking regulations need to be streamlined: Subbarao

Reserve Bank of India Governor D Subbarao  on Friday pitched for streamlining banking regulations, saying some were 'confusing' even though they served the banking system well.
On the existing arrays of laws in the banking sector, he favoured a single legislation to remove inconsistencies. Subbarao also asserted that the proposed financial sector reforms should be driven more by the sectoral regulator Reserve Bank of India than by a legislative panel.

Policy direction should drive the work of the proposed financial sector legislative reforms commission and not the other way around, Subbarao said.The RBI Governor was delivering the inaugural address at the two-day Bancon 2010, one of the premier annual bankers meets. He said there is an urgent need to streamline the plethora of regulations governing the banking system in the country. There is a whole lot confusing laws out there. But it has served the system well by helping maintain an orderly banking system.

The Banking Regulation Act has not only stood the test of time, but several of its provisions have all helped the Reserve Bank in preventing crises and maintaining financial stability", he said.

"But the recent global financial crisis has taught us that our regulations have to change according to the need of the time . . .", Subbarao said. Arguing that there is an urgent need for streamlining and fine-tuning the existing array of laws, the Governor said, we need to do so to level the playing field as the existing laws are uneven. A single legislation will bring about clarity and do away with the inconsistencies currently governing the banking system. "The prime motivation for rewriting the laws should be to integrate the various statutes, reflect the lessons from the (recent global financial) crisis and aid inclusive growth", Subbarao said. The global financial crisis threw up a number of areas requiring significant legislative action either because there is no legislation or because the prevailing legislation is inadequate, he said. Subbarao said the decision to set up a financial sector legislative reforms commission to rewrite and clean up the financial sector laws, to bring them in line with the requirements of the sector, was very timely and vital. However, the Governor was quick to add, "I have one caveat. It is important to recognise that bringing about policy changes or regulatory architecture cannot be the remit of a legislative reforms commission". "Such changes have to be debated as a prelude to the work of a commission so that the commission has a clear policy direction", the RBI Governor said."In short policy direction should drive the work of the proposed legislative commission and not the other way around", Subbarao said.

The country's 81 banks -- out of which 24 are state-run, 21 private and rest 34 are foreign banks, are governed by a number of laws. The current statutory arrangement we have is a baffling plethora of laws governing different segments of the banking industry, Subbarao said. He explained that while the nationalised banks are governed by the Banking Companies (Acquisition and Transfer of Undertaking) Acts of 1970 and 1980, State Bank of India  and its subsidiaries are governed by their respective statutes.

When it comes to private sector banks, he said they come under the purview of the Companies Act of 1956 and the Banking Regulation Act of 1949.He said foreign banks which have registered their documents with the registrar under Section 592 of the Companies Act are also banking companies under the Banking Regulation Act. The Governor said even certain provisions of the Banking Regulation Act have been made applicable to public sector banks. "Similarly, some provisions of the RBI Act too are applicable to nationalised banks, State Bank of India and its subsidiaries, private sector banks and foreign bank", he told the meeting. 

RBI to introduce plastic notes to address fake currency issue - Dr.Amarendra Sahoo

http://www.hindustantimes.com/audio-news-video/RBI-to-introduce-plastic-notes-to-address-fake-currency-issue/Article2-624561.aspx

Learning 2010

The Celebration of Learning 2010 had been organised to commemorate just that, the admission of 170 slum children to Delhi University and other institutes of higher education. And what a celebration it was. Asha was delighted to welcome honoured guests, all of whom have been incredible supporters of Asha’s Higher Education Programme. Mr K R Kamath, CMD, Punjab National Bank, HE Mr Peter Varghese, Australian High Commissioner, HE Mr Bob Hiensch, Ambassador of the Netherlands, HE Mr Kenneth Thompson, Ambassador of Ireland, HE Mr Rupert Holborow, New Zealand High Commissioner and Mr Sandip Ghose, Regional Director Reserve Bank of India, contributed words of wisdom and encouragement to our students after they heard the story of one such child who courageously explained his journey before the extraordinary gathering. 

SINGH INTERIM NABARD CHIEF

Rakesh Singh, additional secretary in the Department of Financial Services, took over the additional charge of chairman of the National Bank for Agriculture and Rural Development from Umesh Chandra Sarangi on Thursday. Singh, an IAS officer of 1978 batch from the Punjab cadre, would hold the charge till a new chairman is appointed. Interviews for the post took place on November 23. Sarangi, who took over on December 3, 2007, has been repatriated to the Maharashtra government.

Decision on new SEBI chairman by December end

Gokarn signals India may not cut Reserve Ratio to Ease Money

Reserve Bank of Deputy Governor Subir Gokarn today signaled the central bank will refrain from cutting the cash-reserve ratio to ease a crunch in the banking system that has driven bond yields to a one-month high. “The cash-reserve ratio clearly remains an option but we believe that our monetary stance is still anti-inflationary, we are still dealing with inflation,” Gokarn told reporters in New Delhi today. “We don’t want to send any mixed signals about a change in the monetary stance.”  The yields on 10-year government bonds reached the highest level in more than a month as banks borrowed an average 1 trillion rupees ($21.9 billion) a day from the central bank’s repurchase auction window in November, compared with 522 billion rupees a day in October, according to data compiled by Bloomberg.

“The RBI wants to wait and watch for the impact of its measures on liquidity before considering the CRR option,” said R.V.S. Sridhar, head of markets at Axis Bank Ltd. in Mumbai. “The liquidity shortage is quite tight and we would have liked the RBI to consider the CRR option more seriously.” The yield on the 7.80 percent note due May 2020 rose one basis point to 8.11 percent as of the 5 p.m. close in Mumbai, according to the central bank’s trading system. The price fell 0.29, or 29 paise, per 100 rupee face amount to 97.96.

“We are using instruments that will give us short-term control over liquidity without in any way compromising our stance,” Gokarn said. “We are using tactical measures like the statutory liquidity ratio.” Easing the statutory liquidity ratio, or the percentage of deposits banks must invest in government bonds, frees up as much as 500 billion rupees and has an “immediate impact,” he said.  The cash reserve ratio, or the proportion of money banks must set aside to meet prudential guidelines, is 6 percent. The Reserve Bank of India on Nov. 29 extended a facility to inject funds into the banking system and doubled the level of support to banks by relaxing a requirement to invest in bonds to ease the supply of money.

Disclose all fees in application form, says RBI

End of STD? BSNL brings national rates to local level

New Delhi: In a move that could trigger similar rate cuts from other service providers, Bharat Sanchar Nagar Ltd (BSNL) has brought its national long distance land-line tariffs at par with local land-line calls.  This impacts 32 million subscribers which includes BSNL’s 26.2 million land line subscribers as well as its 5.8 million WLL fixed line subscribers for whom STD calls, which used to cost 80 paise for two minutes, will now cost 80 paise for three minutes, or the same as BSNL’s existing local call rate.  These revised rates will be automatically available to all BSNL fixed line consumers across tariff plans but are not applicable to PCOs and for calls to special services.  This move is expected to dramatically increase the land-line traffic on BSNL’s network and substantially offset some of its losses, though company officials declined to reveal exact estimates.  BSNL’s local call rate is 80 paise for three minutes up to 300 calls, after which it goes up to Re 1 up to a maximum of Rs 1.20.

RBI Deputy Gov post: Delay surprises many

WHILE it is almost certain that Anand Sinha will succeed Usha Thorat as the next deputy governor of the Reserve Bank of India, the delay in announcing the appointment has surprised many people in Mint Street. If the appointment is delayed beyond February, Mr Sinha may just miss the bus as he is expected to retire by then. Such appointments, which are for at least a two-year term, are made before the candidate turns 60. In that case, the candidate for the post could be another Executive Director, HR Khan, who was also interviewed for the job.

RBI Governor stresses transparency in loans

RBI governor stresses transparency in loans TIMES NEWS NETWORK Pune: Reserve Bank of India (RBI) governor D Subba Rao said on Thursday that the RBI will ensure greater transparency in the loans sanctioned and disbursed by banks. "We will take steps to make lending procedures more transparent and bring accountability in bank lending," Rao told media on the sidelines of a function where he inaugurated the RBI centre for financial literacy and financial inclusion here. Every effort will be made to ensure that the flow of development finance reaches them who need it the most, Rao added. Rao’s statement assumes significance in the background of serious irregularities in housing loans that came to light on Wednesday in which banks and financial institutions are involved. The RBI Governor, however, said he would not respond to any media query other than about the event that he was attending. Rao also said the apex bank is seized of the concerns over the operations of microfinance institutions, especially in the governance and operational aspects. "We have appointed a committee to go into these issues and the report of this committee will come by the end of January 2011," he said. Rao said financial literacy and financial inclusion is a challenge that has to be shared by the entire banking industry. "We have advised banks to undertake their own campaigns to achieve the objective of higher financial literacy and greater financial inclusion. The centre in Pune is the second after the one started in Chandigarh and one more will be opened in Bangalore soon, Rao said. The Pune centre will organise workshops for capacity building in these two areas, besides undertaking studies to ascertain impediments to financial inclusion initiatives to aid policy formation. Apart from holding events for bankers and executives, it will also promote visits by school and college students, housewives and workers from the unorganised sector.

Be a more effective manager

DOERS DON’T ALWAYS MAKE GREAT managers. Such people are sincere. They progress at a normal rate, but can easily be replaced. To be an effective manager, a doer must have vision, be a people person and above all, be creative. TV Rao, professor of human resource and development at Indian Institute of Management Ahmedabad, offers several examples in his recent book ‘Managers Who Make a Difference’, to illustrate what qualities make an effective manager. He says that by communicating the company’s aspirations and culture to his subordinates, a manager could be more effective than others. An effective manager, he tells Dibyajyoti Chatterjee, is driven internally and does not leave things to chance, luck and other external factors.

1 Be action-oriented Your entire focus should be to achieve your goals — that is the key to earn credibility. Shantanu Prakash, MD & CEO of Educomp, an education company, says that when he started, his first office didn’t even have a fan. But that didn’t bother him. He was focussed on what he was doing. Today, Educomp is the largest education company in terms of market capitalisation. Unless a manger is target-driven, he cannot accomplish much.


2 Be a team person Managers who want to be different give more priority to the team’s goals over individual goals. This is based on a simple fact: if the teams don’t do well, the organisation won’t either. An effective manager has to have strong interpersonal skills to build a team. Such managers think beyond themselves and think of the larger perspective.


3 Do things differently Managers who make a difference are also creative. Training and HR programmes should be initiated to revive creativity among subordinates. Moreover, one needs to practise creativity constantly. Working in teams creates an atmosphere for innovation. Tata Steel is a case in point. Vice chairman B Muthuraman, transformed spectators into participants in the making of company’s strategies. Every week workers from various departments got together for a three-hour meeting with no one from the management. Thoughts from them were exhibited in an exhibition. The company saved Rs 700 crore in a single year through various such initiatives.


4 Manage time and talent No one is so fortunate as to be able to use all the talent he has. But one has to keep maximising the opportunities to use talent by managing one’s time. The key to time management is to allow yourself to use your competencies and delegate those tasks that others can do a lower cost. In today’s environment, human capital is a precious resource, and competencies of people need to be properly utilised.


5 Keep your integrity Never commit to do things that you cannot do, and do not say things you do not believe in to please others. It adds to the overheads of your company and affects you negatively in the long run. A manager shouldn’t just be value-driven himself, but should also inculcate values among those he works with. Moreover, he should work towards the values of the organisation.

Banks can easily bear cost of Financial Inclusion

BANKS CAN EASILY BEAR  COST OF FINANCIAL INCLUSION

‘Absence of a delivery system the main stumbling block’ RBI Deputy Governor K C Chakrabarty said financial inclusion was no longer a policy choice but a policy compulsion  While banks are seeking government support, at least partially, to fund their financial inclusion programmes, the Reserve Bank of India (RBI) thinks the lenders can bear the cost comfortably. It says the challenge is not funding but to have a viable business and delivery model based on information, communication and technology. “In reality, the truth is that without appropriate technology, they (banks) could not have done it (financial inclusion) even when willing. It is not their willingness but lack of ability to deliver which is coming in the way,” RBI Deputy Governor KC Chakrabarty said in Bhubaneswar on Saturday. “In reality, the cost can easily be borne by the banks. The overall cost of financial inclusion will not be more than `3,000-4,000 crore per year. State and central governments can obviously provide a helping hand. Thus, the basic problem is not cost or willingness but absence of a business model and an ICT-based delivery model,” he said. RBI is pushing banks to achieve financial inclusion and the initial plan is to provide basic banking services to villages with a population of above 2,000 in the next two years. The banks also need to plan to cover villages with population of less than 2,000 in an integrated manner over next three to five years. The objective is also to provide banking services to the entire population in urban and metro centers Chakrabarty said if the country was aiming for financial stability, economic stability and inclusive growth with stability, it was not possible without financial inclusion. “Financial inclusion is no longer a policy choice but a policy compulsion today. And banking is a key driver for inclusive growth,” he said. The regulator had asked banks to submit their financial inclusion plans, duly approved by the respective broads. According to the plans submitted by the banks, close to 2,00,000 business correspondents and customer service points to be deployed over the next two-anda-half years. In addition, more than 4,000 branches will be opened in unbanked villages, besides over 100 million nofrills accounts. “The banks will really have to gear up for implementation of these plans. The numbers look good and if we can successfully execute the plans, India can present a role model to the world,” Chakrabarty said.

RBI needs to develop software to monitor banks’ functioning - Amitabh Ghosh, Former Governor

The Reserve Bank of India (RBI) needs to develop a software to monitor the banks and also interact with leading market players to keep track of the implementation of the financial regulations passed by it. These views were expressed by Amitabh Ghosh, former RBI Governor, at a panel discussion organised by the Indian Institute of Management, Lucknow during its annual leadership summit. Stressing on the need to regulate the financial sector, Ghosh cautioned against the over-regulation. He said the RBI has been passing regulations which are often ignored by the banks. “There is no meaning of instructions until they are implemented and it is not possible for the RBI to monitor the banks on a day-to-day basis,” said Ghosh. This is where a good IT system can play an important role, Ghosh opined. “The RBI should develop a software that captures all important day-to-day aspects of the bank, particularly the adverse aspects and the incumbents of the Central bank should take cognisance of the information. Only with such a monitoring system would it be possible for the RBI to control and regulate the sector,” he said.

DIN: New number must to file IT returns

New Delhi: Taxpayers will now have to procure a 'new number' for filing returns and making any communication with the Income Tax department.
   The unique Document identification number (DIN), on the lines of numbers like PAN and TAN, will be quoted on “every” income tax-related communication, including returns to be filed next year for the financial year 2010-11. According to the new guidelines brought out by the Central Board of Direct Taxes (CBDT), the DIN will be mandatory “in respect of every notice, order, letter or any correspondence” with the department, by the taxpayers.
   “The DIN will be generated by the I-T department and will be useful, essentially, for error-free filing of tax returns, claiming refunds and other communication with the department by the assesses,” a senior Finance Ministry official said.
   The ‘Aykar Sampark Kendras’ will hand out the DIN from this month, the official said. Assesses will not be put to any trouble, as the numbers will be generated and allotted by the department itself.
   I-T officials will also be allotted the numbers in order to streamline the process, the official said, adding, the number has to be produced thereon for every activity with the department. Taxpayers and tax collectors are currently required to quote Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN) among others when returns are filed with the department.
   According to section 282B of the Income Tax Act that deals with DIN, if the document sent to the tax authority does not bear this unique computer-generated number then “such document, letter or any correspondence shall be treated as invalid and shall be deemed never to have been received.”
   DIN is aimed at bringing more transparency in tax administration as the whole exercise involves a number of documents. PTI

Interviews for new SEBI Chief on Dec. 3

The government may soon decide on the successor to CB Bhave, chairman, Securities and Exchange Board of India (Sebi), with a selection panel scheduled to hold final interviews on December 3. Among those shortlisted for the post, U K Sinha, chairman, Association of Mutual Funds in India, and corporate affairs secretary R Bandyopadhyay are said to be the top contenders, according to sources.  Sources said the committee could consider calling more candidates, apart from those already shortlisted. One such person could be K P Krishnan, currently secretary of the Economic Advisory Council to the Prime Minister and formerly a joint secretary in the capital market division of the Department of Economic Affairs under the finance ministry.  About half a dozen persons had been selected for the final interviews, but at least two of them – State Bank of India Chairman O P Bhatt and Reserve Bank of India Deputy Governor K C Chakrabarty – might not be interested in the position, sources said. The panel had zeroed on seven candidates at its last meeting, but some of them opted out.