RBI says it's not an immediate concern

The Reserve Bank of India (RBI) has said that the Met department forecast for a sub-normal monsoon is not a serious concern. According to the second revised forecast, the Met Department on Tuesday had said that monsoon rains are expected to be 95 per cent of the long-term average of 50 years — down from the April forecast of 98 per cent. Rainfall between 96-104 per cent is considered normal monsoon. “The impact of it would be a function of what’s the regional spread of it. And one element of the forecast was that in the pulses and oilseed zone, there will be 94 per cent rains. Regional forecast tend to be that much more inaccurate. Going by the monsoon forecast, I do not think there is any immediate concern in terms of prices of these commodities which have been the stress point for the last couple of days,” said RBI Deputy Governor Subir Gokarn. When asked about the impact of the Greece crisis, Gokarn said: “The resolution of the Greece situation will clearly reduce some of the uncertainties surrounding the Euro zone economy. But there are other risk factors also. The US is also showing some signs of moderation. So, it is not confined to Europe. It appears to be a broad-based weakening of the momentum what we saw in the first quarter.” “We are looking at the impact it will have on various factors including the commodity prices. We have seen some softening of prices in the past few weeks. If that continues, it will change the overall inflation scenario somewhat.” However, Gokarn was quick to add that it was too early to take a firm call on this. “It could also impact capital inflows, that’s something we just have to wait and watch — how different developments in different parts of the global economy impacts capital inflows.” With rising interest rates, the deputy governor said the spread between the deposit growth and credit growth was declining. “Banks’ credit growth should be expected to slow down. We expect the deposit rates to go up which has been happening. So the wedge between deposit growth and credit growth which had peaked at around 9 per cent before our January policy is now a little less than five per cent,” Gokarn added.

BS

SBI-BOM Credit Card launched

Absence of regulator mars property valuations

RBI has also pointed to a nexus between independent valuers appointed by banks and a section of real estate developers, which is never ideal. All these issues are threatening the health of the financial ecosystem and are primarily due to the lack of any regulation or standards that valuers are required to follow.......

Click to read..............  

Pranab to meet PSU bank chiefs on July 8

Finance Minister Pranab Mukherjee will hold a review meeting with the heads of public sector banks and financial institution in the light of rising interest rates and concerns of slowdown.  The meeting will take stock of the financial performance of the banks during the financial year ended March, 2011.  It would also dwell upon credit flow to the productive sectors, sources said. The Finance Ministry will deliberate on non-performing assets, agriculture loan, credit to infrastructure sector and matters related to human resources in the public sector banks, they said. In addition, bankers would also voice their concern and fear on economy and subsequent impact on their business. Heads of public sector financial institutions like the Nabard, Sidbi, NHB, IIFCL and Exim Bank would also attend the meeting. One of the key focus of the meeting would be on providing banking facility in unbanked areas. The Finance Ministry would seek information about the progress on financial inclusion front carried out by individual banks. Banks would also provide banking facilities to habitations having a population of over 2,000 by March, 2012. The banks have identified about 73,000 such habitations for providing banking facilities using appropriate technologies, he had said. “A multi-media campaign, Swabhimaan, has been launched to inform, educate and motivate people to open bank accounts. During this year, banks will cover 20,000 villages and remaining will be covered during 2011-12,” he had said. Last year, Finance Minister had conducted regional meetings, which were attended by PSU bankers along with the concerned Chief Ministers. This was with the objective to better understand state- wise flow of credit to the agriculture sector, credit-deposit ratio and loan to weaker section of society among others.

BS 

Central Law must for orderly growth of MFI sector: Chakrabarty



RBI calls for Central Law for MFI



Mumbai: The senior-most Deputy Governor of the Reserve Bank, K C Chakrabarty, has called for Central legislation to regulate the troubled microfinance sector as in its absence, states will be free to take action that may nullify the Centre's efforts for a uniform policy. If we don't act under a common set of regulations, it won't be practical to work. Five states having five different laws on the same subject will have practical difficulties for the industry. But if still some states want to act differently, I cannot stop them. They are sovereign in their territories. "Till a central law is in place, the Andhra type situation can arise again and will nullify what the Reserve Bank is doing to properly regulate them," Chakrabarty told a news agency. His comments come on the heels of media reports saying the Centre has left the troubled MFI industry to fend for itself and has put the plan to enact a central legislation on the backburner. The Rs 20,000 crores microfinance sector was thrown into a tizzy last October when Andhra Pradesh issued an Ordinance that sought stringent regulation of the industry, following reports of a spate of suicides by harried borrowers. Andhra is the largest MFI market in the country, with over 60 per cent of total business taking place there. Following this, loan recovery slowed to a trickle and banks also refused to offer fresh funds to MFIs. Then a worried RBI set up a committee under the chairmanship of noted chartered accountant Y H Malegam, who submitted his report early this year.  The report recommended capping MFI interest rates at 24 percent, banned MFIs from lending to the individuals that have already borrowed amounts and banned coercive loan recovery by agents, among other things.  On the overall situation in the MFI space since April, when the RBI implemented some of the proposals of the Malegam panel report, such as capping interest rates, he said, "They have at least survived the crisis. Also, luckily the problem has not gone out of control and out of Andhra." Stating that one has to wait and see how the situation evolves, Chakrabarty said since the RBI has created a framework for MFIs and has issued guidelines to them and asked banks to resume lending, he hopes it will improve now.  "There is also an agreement to restructure the debts of MFIs and banks also have assured us that they will start funding again," Chakrabarty, who looks after MFIs at the Central Bank, said. Clarifying that the RBI is not in conflict with any state, Chakrabarty said, "What we said is that what Andhra wants is being taken care of by the Malegam report. But a state is sovereign and RBI cannot stop it from regulating entities operating in it. But such steps will affect the smooth operations of MFIs." On whether he has received any communication from Andhra, he said, "Why should they get in touch with us? I have not written to them, nor have they written to me. There may be certain areas where more coordination is possible. All I am saying is that let the system be first stabilized, after which we can look at the pending issues. But states are sovereign and are free to do what they feel like doing," he concluded.

Jagran Post

Microfinance firms asked to be ‘fair’ to the poor

Mumbai: It’s back to basics for the Rs. 20,000 crore Indian microfinance sector as industry lobby group Sa-Dhan, which counts at least 250 microfinance institutions (MFIs) as members, has asked all such firms to deal “fairly” with debtors and avoid coercion in collecting dues. The association will in the next few weeks discuss compliance issues with individual MFIs, Sa-Dhan executive director Mathew Titus said. “The effort is to move towards a new regulatory regime,” he added. Sa-Dhan’s proposed code of conduct, which has been circulated among members, says recovery officers of MFIs should avoid “confronting the clients or their family members under any situation” and the staff should “not enter the house of the client for recovery of loans”. MFIs should also not insist on repayment “in case there is severe illness in the family of the clients”.  The code needs to be approved by the boards of individual companies. MFIs extend tiny loans to poor borrowers, typically for a year, at around 24% interest. The industry is facing a crisis after Andhra Pradesh, which accounts for a quarter of the domestic microlending market, passed a strict law in October to regulate MFIs following reports of coercion in recovering loans that allegedly led to suicides. Loan repayments have since fallen drastically to around 10% for most MFIs, including the country’s largest and only listed microlender, SKS Microfinance Ltd, and Basix group-promoted Bhartiya Samruddhi Finance Ltd, both of which are based in Andhra Pradesh. SKS and Basix saw at least one-fourth of their loan book shrinking in the past nine months. Most MFIs have had to stop fresh loans. Commercial banks, too, stopped lending to these firms, adding to their woes.

The latest development on self-regulation has coincided with a meeting Sa-Dhan held last week with Reserve Bank of India Deputy Governor K.C. Chakrabarty and chiefs of large commercial banks in Mumbai to discuss urgent resumption of fresh funding to the ailing sector that is facing severe cash crunch. At the meeting, microlenders assured commercial banks they will stick to the code of conduct and avoid resorting to any harsh practices or discriminate against borrowers based on caste or religion. Chakrabarty asked lenders to restart lending to the sector considering the larger goal of financial inclusion, according to a person who attended the meeting. “We told them (banks) we will ensure compliance (of best practices). We will repay. I do hope they will start lending now,” said the person, who did not want to be named. Sa-Dhan has also assured banks that MFIs will be transparent in their operations and supply information on customers and business through a credit bureau. The association has asked its members to report their business details to credit bureaux. Indian banks have lent a minimum Rs. 14,000 crore to the industry with Small Industries Development Bank of India and State Bank of India (SBI) having the largest exposures. Senior bankers, however, made it clear they will not lend to MFIs unless they are convinced that unfair practices do not occur again and operations become more transparent. “They have to convince all stakeholders—banks, regulator and customers—that they have changed their behaviour,” said an SBI official. “If they continue to do what they do now, then things can again become difficult for them,” the banker said, requesting anonymity. Titus is optimistic about changes in the industry and the approach of microlenders to customers. “Our findings indicate there is a scope of improvement on aspects of the code of conduct as well as strengths to be built on,” he said. “What we are telling MFIs is that they should bring in training programmes to improve the staff behaviour,” he added. Although 87% of MFIs have guidelines on staff behaviour, only 20% of them carry out internal audits on field staff behaviour, according to a social performance study conducted by Sa-Dhan. “Since many complaints are coming from clients on unethical staff behaviour, internal audit assumes importance and needs to be carried by all MFIs,” Titus said.  As far as avoiding over-indebtedness is concerned, 63% of MFIs conduct client appraisal before giving fresh loans, but only 39% of them assess client indebtedness to other institutions, which has emerged as a major criticism of the sector, he said.

Mint 

Bank security rules to boost tech spending

Bangalore: Latest RBI guidelines on banks' technology governance, information security, audit, outsourcing and cyber fraud could open up a $300-million opportunity for IT vendors and audit firms. The central bank recently directed IT governance frameworks, data leakage prevention, encryption, multi-factor authentication and digital asset archiving mechanisms for banks. The RBI working group's April 29 recommendations on information security and electronic banking will spur investments in software products, consulting, system integration and IT services. Market-watchers said the guidelines liberalise vendor qualification criteria in some respects, lowering entry barriers for tier II and maybe even tier III players into public sector banks. While estimates on actual banking spending vary, experts said the rules, to be implemented in a year, could boost a bank's technology spending in the near term by approximately 30%. For IT services firms, the RBI mandate presents opportunities in IT strategy, information security, business continuity, disaster recovery, and information security audit, Ramanath L Ram, vice president of India and Middle East Consulting at Wipro Infotech noted. “Some guidelines that were issued earlier will also be used along with the new ones. Since RBI has come up with a specific time frame of one year, more banks are expected to go for implementation or would be looking to speed up existing initiatives,” he said.

FE

Inflation- Indexed Bonds for Senior Citizens – S.S.Tarapore

It is recognized that inflation devastates Senior Citizens the most as they have no protection against inflation. A small proportion of the working population is covered by some kind of cost of living adjustments but the majority is defenseless against the scourge of inflation. Senior Citizens depend on the earning from their meagre savings. When the real value of their savings is eroded, they have nowhere to go. A Senior Citizens Savings Scheme is presently available, under which a deposit is placed with the government for five years at an interest rate of 9 per cent per annum, for a maximum amount of Rs 15, lakh. Let us assume that the average inflation rate is 7 per cent per annum. Since Senior Citizens can avail of this facility at the age of 60 years, by the time he is 65 years old a capital sum of Rs 100, in real terms, is reduced to Rs 71 and at age 70 the capital, in real terms, would be only Rs 51. If the Senior Citizen lives till the age of 75 years, the real value of the capital is reduced to Rs 36. No wonder Senior Citizens are very quickly reduced to penury. An amount of Rs 15 lakh, at 9 per cent per annum would generate an annual income of Rs 135,000 or Rs 11250 per month. At today’s cost of living this is by no means a luxurious income. Moreover, with inflation at 7 per cent per annum the Senior Citizen earns a return of only 2 per cent in real terms; in other words, in real terms, the Senior Citizen’s income is even lower. The issue of an Indexed Bond has been discussed in India for over 15 years. In the 1990s, an excellent study by the Reserve Bank of India (RBI) Development Research Group ( DRG) was prepared by Dr. Vikas Chitre and others. While this was examined by the government, one of the top policy advisers of the government shot down the proposal as he believed that the authorities would not be able to contain inflation and, as such, the Indexed Bond would be very costly for the government. In addition, it was felt that such a scheme would be infectious and indexation would become all pervasive. The bogey was raised that the Indian authorities could fall into a situation akin to the Italian Scala Mobile  (sliding scale inflation adjustment) in the 1970s and 1980s under which everything was indexed and this generated massive inflation. The issue of an Indexed Bond was revived, in India, in 2003 under which there was to be an Indexed Bond called the Dada- Dadi Bond ( note the gender bias!). With the change in the Central Government in 2004, this proposal was given a quiet burial. It is paradoxical that government economic policy Pundits recognize the need for inflation adjustment for employees of Central and State Governments, public sector units and the corporate sector yet they express grave concerns if Senior Citizens are protected. Some policymakers have rightly diagnosed that India may have shifted from the earlier norm of a tolerable rate of inflation of 5 per cent per annum to a new norm of 7 per cent per annum. Pious pronouncements are made by policymakers that inflation must be controlled but this is tempered by the strongly held view that anti- inflationary policies should not affect growth. If an enduring high rate of growth is the objective this can only be attained under a regime of low inflation rates. To hope that high growth rates would be sustained without strong anti- inflationary policies is wishful thinking. How should Indexed Bonds operate? Experts rightly argue that if the real rate of interest is higher than the real rate of growth of the economy, the growth rate will fall. Almost all macroeconomic projections point to a medium- term growth of the economy of 8 per cent plus. It is nobody’s case that the Index Bond should carry an assured 8 per cent real rate of interest. As a starter, it would suffice if we provide for a 4 per cent real rate of interest, which would be very modest in the context of an average real rate of growth of 8 per cent. Like the present Senior Citizens Savings Scheme, the Inflation Indexed Bond should have an investment ceiling of Rs 15 lakh. The inflation adjustment could be done on the basis of the inflation rate in the previous year. If the real rate of interest on the Indexed Bond is 4 per cent and the inflation rate is 7 per cent the bond holder would be paid a rate of 11 per cent. If the inflation rate is say 4 per cent the Bond holder will receive 8 per cent. It would be necessary to specify the specific inflation index i. e. the Wholesale Price Index (WPI) or the Consumer Price Index ( CPI). If the inflation rate averages 7 per cent, on maturity the Bond holder should receive Rs 140 for an initial investment of Rs 100. In other words, the Bond holder should be protected for both the income stream as also the capital value of the investment. An Inflation Indexed Bond would be a strong assertion by the authorities of their intention to bring about an enduring reduction in the inflation rate. Such a scheme would be a strong incentive for the government to bring down inflation. Denying Senior Citizens protection against inflation would not be reflective of a caring society. The time has come for the government to bite the bullet and introduce an Inflation Indexed Bond for Senior Citizens.
Free Press Journalress Journal

(Sheila ki) chavanni

It was not very long ago that I used to be the darling of the people. I was light, with a smooth round edge, not big enough to be a burden, not small enough to be almost worthless. I was not really worried, especially when there was talk about Rs 500 and Rs 1,000 currency notes being taken out of the system. Truth is, I even chuckled at the thought of seeing those big paper notes being hauled down from their pedestal. But what I had failed to notice was that in the new economy and with high inflation, people had stopped using me. I have been, truth be told, invalid for some time. But still, when the Reserve Bank of India official came over to my place last week to tell me that I was retiring — at 54! — I was shocked and felt betrayed. After 54 years of service to the nation, they’re now putting me in the Great Coin Pile.  Thirty years ago when I was a young man, I was a 25 paise coin who got you plenty of things. I would get you a satisfying cup of hot tea, or a plate of hot, steaming pakoras, or even a paratha, thick and spicy enough to fill your stomach and inject you with energy for the whole day. For those with a sweet tooth, you could barter me for a cup of ice cream or a pocketful of sweets. In Delhi, I was particularly loved by those folks who went around town in buses. With me in their pockets, they could go anywhere in the city and meet their near and dear ones. They could also exchange me for a few select gifts — yes, cheap and small, but nonetheless special, for you could still get those small plastic toys for my value. I actually quite like my nickname ‘Chavanni’ — from 'char anna' (four annas) from the old British Indian monetary system. I should have realised that my days of walking about unfettered and in demand were going to be over when I started hearing less and less people asking for a 'Chavanni'. But since I love you folks as much as you once loved me, I will be around and you may see me on the footpaths of Chandni Chowk and in the albums of coin collectors — or as the old (bless his soul!) — one anna coin would call these people, numismatists. The RBI says I have been 'demonetised'. I don't like that word. It has something a bit demonic about it, not to mention carrying the vague notion of all life being extinguished from me. Economists say that my death — I mean retirement — is a telling reflection of the state of the Indian economy. Some of my remaining supporters try to argue that my disappearance from active life would affect the poor as from now on, there won't be — can't be — any item priced 25 paise. But even I know the truth: nothing has been worth 25 paise for a long time now. To get a toffee or a mouthfreshner from the paanwala, it now takes at least two of me. With my departure, the 50 paise coin moves into the frontline, becoming the smallest currency. Well, at least now I'll be joining my old pals who were put out to pasture over the last many decades: the hexagonal 20 paise coin, the undulating rim of the 10 paise coin, the sideways square of the 10 paise coin. The 1, 2 and 3 paise were phased out in the 1970s and, to tell you the truth, I don't quite recall their faces anymore. After all these years of service, only one man in the country has bothered to criticise the decision to take me out of the system: Gujarat chief minister Narendra Modi. He has said that the central government has sacrificed a poor chavanni as it couldn't take out the mighty Rs 1,000 notes as demanded by those fighting against black money. Oh well, goodbye and all that. I bet you won't get a smoother-edged, classier-looking coin than me. I bet you 25 paise you won't.

Hindustan Times 

25-paise coin

From July 1, another small coin disappeared from circulation. I am left with the memories of the good old days when the 25-paise coin was able to work wonders. My brother and I worked hard to collect the neem nuts in our backyards. We used to sell them and get 25 paise each. We would then walk up to 4 miles to see a film. Tickets were priced at 25 paise in touring cinemas. Our father used to give us an extra 10 paise to buy some snacks during the interval. Up to the last day of its circulation, the 25-paise coin had its use — it could buy me a packet of betel nut.

P. Poovalingam, Tirunelveli

That the value of money has declined significantly is evident from the fact that 25 paise is now just a piece of metal with no value. Though this may not be sensational in itself, it may the pave way for the decline of 50 paise, and one-rupee and two-rupee coins. The value of one rupee before seven or eight decades is comparable to Rs.100 today.

Ishwarya Chandrasekar, Srirangam

The 25-paise coin became obsolete long ago. It was first felt when beggars refused to take it. In market transactions, even 50-paise coins are rare. Both the buyer and the seller can afford to forgo the small change. The days of the 50-paise coins are also limited.

Gokul Burman, Nadia

No doubt, all of us have lots of stories and memories about the quarter of a rupee or charana. But we need to be practical. What can one get for 25 paise today? Not even a cup of tea from a street vendor. It is at least a decade since shops and establishments in Bangalore stopped accepting the coin. Let us move ahead, not retreat.

C.K. Saseendran, Bangalore

(Business Line) 

Raise our monthly pensions: RBI Unions

NAGPUR: The employees' unions of Reserve Bank of India demand equal pension benefits on par with those of their counterparts working in central government departments. A chalking-a-strategy meet organized by joint body of all the unions operating in the country's apex bank is to be held on July 7 in Chennai, which in later stages would be followed by a protest march on Tuesday. There is a special stress on increasing the family pension, a dole given to the dependent spouse after the employee's death. The family pension in RBI does not go more than Rs 7,688 a month for even for a senior officer's kin, which is too less to compare it to the rising cost of living, say unions. Family pension beneficiaries in RBI are expected to run in a few thousands. "RBI has enough funds to increase the pension but the government is creating a hurdle. It feels that unions in other financial institutions may raise a similar demand too but there are some organizations which cannot afford a pension revision," alleged Secretary of All India RBI Employees Association (AIRBIEA), Bidyut Chakraborty. However, RBI unions contend that if the central government employees get a benefit even without any specific provision of funds, why should not those serving the apex bank. The pay commission has increased family pension to 30% of the last drawn pay. The unions say RBI has a corpus of Rs 5,000 crore as collections towards provident fund. A part of it can be easily diverted to pension payment. At RBI, the dependents of senior officers get a maximum pension of Rs 7,688 a month which is Rs 23,604 in the case of central government. The minimum monthly family pension for an RBI officers' dependent is Rs 5,533 which is Rs 16,599 in the case of a central government employee. It is worse for the Class IV workers where the family pension does not exceed Rs 3,715 a month while their counterparts in central government get a maximum pension of Rs 11,145 per month, he said. Chakraborty said the union has demanded a second option for pension too. There are around 2,000 RBI employees who did not go in for pension option the first time and many of them want to change their decision, added Chakraborty. A second option will enable them getting a monthly pension payment or else a lumpsum provident fund is handed over. The pension is paid from the bank's contribution towards an employee's PF.

TOI

Savings bank interest rates – Best left administered

If the RBI is now sitting on the horns of the Hamletian dilemma of deregulation or administration of SB interest rates, the one simple question that they have to ask themselves before deciding in favour of deregulation is this: Is it at all necessary to open this Pandora's box now? Does not mythology tell us that it could well lead to chaos?..........

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Worrying credit pattern

Data released by RBI show that the farm sector has trailed the non-food sector in credit growth. That would not appear unusual since industry and services are the driving force of economic growth and banks would want to seek ..............

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Finally the wait is over - Govt clears appointment of HR Khan as RBI Deputy Gov



Click here to watch live...........

 

Unions bat for RBI autonomy

NAGPUR: Unions in Reserve Bank of India (RBI) are opposing the move to statutorise RBI staff regulations 1948, which means it will be converted into an Act of Parliament bringing the apex bank's employees under direct control of the government. A proposal mooted a couple of years ago is likely to be decided in the RBI board meeting scheduled to be held on July 7. Unions say it would take away the bank's autonomy with likely impact on its policy-making freedom. Even though RBI's Governor and Deputy Governors are government appointees, officers upto the level of Executive Director come from the ranks. If brought under the government, there are chances that the senior officers may not be able to function independently indirectly having an impact on the policy-making, said a union representative. As the RBI board would meet on July 7, unions will also hold a joint conference at Chennai to decide the further course of action on the same day. It may be followed by a series of strikes, said secretary of All India Reserve Bank Employees Association (AIRBEA), Bidyut Chakraborty.  Unions have been opposing satutorisation of RBI Staff Regulations ever since the proposal was mooted, he added. They have also opposed creation of a separate Debt Management Office for managing government's public borrowings. Unions claim that the governor has also supported them on this issue. RBI unions have also demanded parity with central government employees in the payment of family pension. This is paid to the dependent spouse after an employee's death. "The number of family pension beneficiaries runs into a few thousands in the RBI. If compared to the sixth pay commission scales applicable to central government employees, dependents of RBI employees continue to get a pittance," said Chakraborty. The unions' say RBI has a corpus of Rs 5,000 crore as collections towards provident fund. A part of it can be diverted for pension payment. "If the central government, which does not have a specific provision for meeting its pension liability, has increased the pay out, why should RBI, sitting on a huge corpus, not do so," asked Chakraborty.  The central government has increased family pension to 30% of the deceased employees' last drawn pay. At RBI, the dependents of senior officers get a maximum pension of Rs 7688 a month which is Rs 23,604 in the case of central government. The minimum monthly family pension for a RBI officers' dependent is Rs 5533 which is Rs 16,599 in the central government.  It is worse for the Class IV workers where the family pension does not exceed Rs 3715 a month while their counterpart in central government get a maximum pension of Rs 11,145 per month, he said. Chakraborty said the union has demanded a second option for pension too. There are around 2,000 RBI employees who did not go in for pension option the first time and many of them want to change their decision, added Chakraborty.

TOI

SBI celebrates 57 Foundation Day



Dr.Amarendra Sahoo, Regional Director, RBI, Lucknow



LUCKNOW: The State Bank of India (SBI) celebrated its 57th Foundation Day on Friday. At the bank's local head office, 21 new branches (5 in metro, 3 in urban, 5 in semi-urban and 8 in rural centres),101 new ATMs , 400 green channel counters were inaugurated by UP chief secretary Anoop Mishra in the presence of RBI's Regional Director Amrendra Sahoo,  Chief General Manager of SBI Abhay K Singh, chief secretary (institutional finance) Yogesh Kumar, director (institutional finance) S S Yadav and additional director (institutional finance) Rakesh Krishna. Speaking on the occasion, Mishra said that SBI is the foremost bank of India and by the launch of these new initiatives, the bank will be able to serve the customers in a better way.  Abhay Singh said that customer care remains the topmost priority of SBI. He added that the bank in Uttar Pradesh is serving people through a network of more than 1,600 branches, 1,500 ATMs, and hundreds of villages are being covered through business correspondents and business facilitators. On this occasion, Madan Mohan Shukla, member, local board, SBI, R K Agrawal, general manger, NW-I, and H N Das, general manger, NW-II were also present on the occasion.

TOI

UP may formulate Action Plan for augmenting CD Ratio

Perturbed over low Credit Deposit Ratio (CDR) in Uttar Pradesh, especially in the Bundelkhand region, the state government may formulate an Action Plan in partnership with commercial banks. This has to be seen in the backdrop of UP seeking private investment to the tune of Rs 2,00,000 crore across sectors to prop up its economy. Although, UP is the second largest economy after Maharashtra, its CDR is around 48 per cent, much lower than the national average of around 70 per cent. The issue of the low CDR in UP was discussed in the recent State Level Bankers’ Committee (SLBC) meeting in Lucknow. “The SLBC decided to double credit flow to the agriculture and Micro, Small and Medium Enterprises (MSME) sectors in UP,” Reserve Bank of India (RBI) Regional Director Amarendra Sahoo told Business Standard. The segments identified for emphasis are minor irrigation and rural road connectivity. He said the Action Plan would be laid down by the government in concert with banks. “The banks have assured to increase credit flow commensurate with the credit absorption capacity created by the state government,” Sahoo added. The government feels the CDR of UP should ideally be 60 per cent. The higher is the CDR, the higher is credit deployment to more credit-users. Low CDR indicates low industrial and commercial activity, especially in eastern and Bundelkhand regions. It also indicates flight of domestic savings to other industrialised and more developed states to spur their development activities. UP is a vast and populous state with rough geographical and climatic conditions in certain pockets. Almost 80 per cent of the population lives in rural areas with low literacy and high poverty. Thus, banks need to intensify their network with a sense of commitment, the government feels. Sahoo, however, denied that there was flight of capital from UP. “In fact, several projects in UP receive funds from banks sanctioned in Delhi and other places.” Earlier, a sub-committee had been formed to prepare a report on UP districts, where CDR was below 40 per cent. In short term, SLBC aims to increase their CDR beyond 40 per cent mark. There are 34 districts in UP, where CDR is below 40. This mainly includes eastern UP districts, such as Balrampur, Gonda, Mirzapur, Sonebhadra, Allahabad, Faizabad, Jhansi, Mau, Varanasi, Basti, Ballia, Deoria, Azamgarh, Jaunpur, Etawah etc. The bankers maintain that credit exposure in UP was low partially because companies headquartered in Delhi, Noida and Mumbai avail of credit facilities there rather than in UP, where they only have their smaller units. Therefore, the credit is showed in the accounts of the parent company based elsewhere. “The CD Ratio in UP has been improving and we are confident that with increased focus on agriculture and MSME sector, it would rise further,” Allahabad Bank general manager R K Jain said.

BS 

Institutions vs. Individuals

Good leadership desirable, good institutions necessary

One individual can destroy an entire institution. Individuals are, therefore, key to the success of any institution. Yet, institutional traditions can limit the damage that individuals can do. Preserving traditions is, therefore, the key to the longevity of good institutions. Consider the two institutions in the public eye at the moment. The office of the Comptroller and Auditor General (CAG) of India and the Sri Sathya Sai Central Trust. Has the temptation to seek publicity harmed the institution of the CAG? Perhaps it has. If the CAG had not sought out the media and given public speeches on morality in public life, the role of civil society and such like, it may have helped retain the reputation of the institution as a quiet scrutiniser of governmental spending. With just a couple of misjudgments, caused by the current craze among civil servants to seek personal glory, an individual has hurt the credibility of an institution. Is the CAG an auditor or an activist? The case of the Sri Sathya Sai Central Trust is even more stark. As long as the late Sathya Sai Baba was alive not a finger was pointed at any financial wrongdoing by the very same people who continue to administer the Trust. Surely, Sai Baba alone was not managing the finances and affairs of the huge institution he had created. The very same people who are doing so today were in charge earlier too. The death of the man at the top should not make so much of a difference that a great spiritual and philanthropic institution is suddenly eyed with suspicion. Or is it that as long as Baba was alive no one dared to question his institution’s financial integrity, and now anything goes? At a time when so many national institutions, governmental and non-governmental, are coming under increased scrutiny, the question of the role of individuals in preserving them has become particularly relevant. For example, the opposition political parties have charged Dr Manmohan Singh with weakening the institution of prime minister by accepting the political leadership role of the chairperson of the ruling coalition and intervention in policy making by the National Advisory Council. On the other hand, Union Finance Minister Pranab Mukherjee has been accused of weakening the institutional standing of the Reserve Bank of India, another great national institution, by creating new institutions that blur the ‘first among equals’ status of the governor of the central bank. The challenge before both Prime Minister Singh and RBI Governor Subbarao has been a similar one — of seeking to preserve the standing of the institution they head without projecting their individual personality. This is easier said than done. Some individuals raise the standing of the institution they head, but more often than not the challenge for any individual heading a great institution is to ensure the continued standing of that institution against the envy of individuals who covet their position. In the extant case of the Sri Sathya Sai Baba Central Trust one can only hope that raising questions about the financial dealings of a few individuals will not harm the reputation of the institutions that have been built, since they have done a commendable job, just as the CAG and RBI and all the other institutions where the role of individuals is questioned for one reason or another.

BS

 

RBI Approves Proposed Dividend of Dhanlaxmi Bank Ltd

Dhanlaxmi Bank Ltd, Thrissur, Kerala based private bank has informed BSE that Reserve Bank of India (RBI) has conveyed their approval for declaring dividend at the rate of 5% i.e. Re. 0.50/- per share on the face value of Rs. 10/- for the year 2010-2011. On 3rd June, 2011, Dhanlaxmi Bank has announced an increase in interest rates on select term deposits by up to 50 basis points from June 6, 2011. The Bank’s total revenue of Q4 has grown by 29.66 % to reach to Rs. 249.47 cr. in March, 2011 from Rs. 192.4 cr. in December, 2010. In same period net profit of bank has increased to Rs 7.26 cr. from Rs. 1.62 cr. in March, 2010.  The bank’s annual total revenue has reached to Rs 534.37 cr. for the FY 2009-10 and at the same time net profit increased to Rs. 23.30 crore. The Bank’s CAR has risen to 13.39 %, while its NPM touch to 2.91 %. Foreign institutional investors (FII) are holding 32.66 % in the company in while domestic institutional investors (DII) are holding 6.47%, and 60.87% share holds by others in Dena Bank.

http://goindocal.com/ 

Parekh hopes RBI will take a break from rate hike spree

HDFC Chairman Deepak Parekh has said he hopes the RBI would maintain status quo on rates during its monetary policy review scheduled for later this month to maintain a balance between growth and inflation. "I don't think the Reserve Bank will look at another interest rate hike because we need to have a balance between growth and inflation," he told reporters on the sidelines of an event here last night. "I hope we get a breather before the next round of hike in interest rate...I hope the Governor of RBI does not do anything (hike rates) in July."  Since March 2010, the central bank has upped its key rates ten times, with the latest being on June 16, when it hiked short-term lending and borrowing rates by 25 basis points each to 7.5 and 6.5 per cent, respectively. One could draw comfort from the declining trend in food inflation, the top financial sector expert said, adding this would help RBI to keep the key interest rates unchanged. "I think inflation is settling down. The numbers that have come out on food inflation is certainly down, which is very hopeful."  After a month-long uptrend, food inflation plunged to a one-and-a-half month low of 7.78 per cent for the week ended June 18, down from 9.13 per cent in the previous week, as vegetables and pulses became cheaper. On HDFC Bank increasing its interest rates, Parekh said it was not on the cards at the moment.  On the e-auction of land, Parekh said, "the 'Land Acquisition Bill, 2007' is still pending before Parliament. I hope that in the monsoon session it is taken up because it has been in waiting for the last 3-4 years."  It may be recalled that Parekh had said in his annual letter to the shareholders on compulsory implementation of e-auction for land transactions and a special 'Settlement Commission' for now scrapped Urban Land Ceiling & Regulation Act (ULCRA) related-cases.  "These baby steps will go a long way in alleviating the housing problems in India," the finance sector veteran had said in the letter.

BS

SAIL bags Randstad Award-2011 for HR practices & Employer branding

Maharatna Steel Authority of India Limited (SAIL) has won the prestigious Randstad Award for 2011 under ‘Manufacturing Industries’ category. Shri B. B. Singh, Director (Personnel) received the award from Dr. Bimal Jalan, Ex-Governor, RBI in an award function held at Hotel Taj Palace, New Delhi on 29th June 2011. The Randstad Awards were instituted in 2000, by Randstad globally to encourage best practices and to build ‘Employer Brand’. Ma Foi Randstad is a part of Randstad, world’s second largest HR services company. Randstad awards in India are being given for the first time to the “Most Attractive Employer” brand based on a research done to gauge the ‘Employer’s image’ among the potential workforce and the working public through extensive online research. The employers are evaluated on 17 different factors. These include job security, salary, working atmosphere, job content, work-life balance, future prospects, values, training and management.

BS 

Property prices dip in Bangalore, 7 other cities

Property prices in eight major cities of the country, including Bangalore, have slumped up to 15 per cent in the first three months of 2011, according to the latest data of the National Housing Bank. The reason is attributed to slowdown in property demand for houses owing to high property prices and rising interest rates. According to the National Housing Bank (NHB), during January-March 2011, housing prices have declined in eight major cities by up to 15 per cent. “But prices in six cities, including Delhi, have gone up marginally,” R V Verma, NHB Chairman and Managing Director, said. The prices of residential properties have fallen maximum in Kochi by 14.92 per cent in January-March compared to the previous quarter. Bangalore with 12.87 per cent stood second, followed by Faridabad (6.37 per cent), Hyderabad (4.6 per cent), Surat (3.76) per cent, Bhopal (3.55 per cent) and Jaipur at 2.63 per cent. Kolkata has shown a marginal decline. Notably, RBI had raised the repo and reverse repo rate for 10 times since March 2010 to control inflation. However, the prices have increased in six cities, including Delhi. In Pune, prices of residential properties went up by 5.02 per cent, followed by Lucknow (3.09 per cent) and Delhi (2.64 per cent). Marginal price rise was seen in Ahmedabad, Chennai and Mumbai. Speaking about the plans of NHB for 2011-12, Verma said the bank, which is owned by the Reserve Bank of India would raise Rs 11,000 crore during the fiscal to fund housing activities compared to Rs 9,000 crore in 2010-11.

Deccan Herald 

'Monetary policy adjustment can not curb rise in food prices' - Atul Joshi, MD & CEO, Fitch Ratings India

Monetary policies are not capable of addressing food price inflation. It basically addresses manufactured products inflation. What is worrying the RBI and the government is increase in non-food manufactured prices, which increased............

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Withdrawal of 25 paise coin hurts religious sentiments

Rohtak: The religious sentiments of the people in Rohtak got hurt, after the central government issued a notification stating that from June 30, 2011, the 25 paise metal coin would no longer be used as legal tender. Preisets expressed disappointment as they offered the coins to the deities. The different communities in the country had tremendous faith on these metal coins and were in a habit of using Rs. 1.25 on every auspicious occasion. According to the Reserve Bank of India (RBI), June 30th was the last day when the 25 paise coin was permissible in circulation

http://www.indiablooms.com/BusinessVideoDetails/businessVideoDetails020711b.php 

Inflation woes: From 4.9% to 8.1% in no time to adjust for the common man

There was an element of surprise in the manner in which inflation panned out during the year, given that each of Reserve Bank of India's (RBI) year-end inflation projections missed the mark. Even though the central bank revised its March 2011 inflation target upwards from.......

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Non-official director for Dena Bank

The Central Government, after consultations with Reserve Bank of India, has nominated J. Balasubramanian as part-time non-official director under Chartered Accountant category on the board of Dena Bank for three years with effect from the date of notification (June 30) of his appointment or until further orders, whichever is earlier, according to a release. Mr. Balasubramanian is a practising Chartered Accountant.

The Hindu 

Rest in peace 25 paise

One popular joke online plays on the fact that one 25 paise coin was worth four aanas. “The government said we can’t handle one Anna (Hazare) what will we do with four,”........

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Is India going off track or staying on course?

The RBI's strategy: Raise interest rates to mop up money, slow the economy and lower inflation. It's working — partially. But inflation is at its highest in 16 years. This is also undermining....

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Govt clears appointment of HR Khan as RBI Deputy Gov

Government has cleared appointment of  H.R.Khan as RBI Deputy Governor, reports CNBC-TV18’s Latha Venkatesh. Khan will replace Shyamala Gopinath who retired on June 20, after a seven-year stint as Deputy Governor. The government order appointing khan as deputy governor is likely to be issued on Monday. A search committee to select a new Deputy Governor, headed by RBI Governor D Subbarao, had suggested two candidates — H.R.Khan and G Gopalakrishna — for the Deputy Governor's post, after interviewing seven RBI Executive Directors. RBI Deputy Governor is appointed for a maximum of five years and the retirement age for a deputy governor is 62. To be eligible for the Deputy Governor’s post, a candidate must have at least two years of service left.

Moneycontrol

Politically Correct Subbarao Govt’s Safest Bet for Mint St



Subbarao may get extension as RBI Governor, but others in race too



The government has started the process of selecting the next RBI governor, with indications that the incumbent, Duvvuri Subbarao, could be in line for another term. Multiple sources within the government that ET spoke to said Subbarao, who will complete his three-year term in office this September, appears to be the best candidate to run India’s central bank for the next year or two. In their reckoning, the former civil servant, whose last assignment was in North Block where he was finance secretary, has had no major run-ins with the government as RBI governor unlike fellow regulator CB Bhave, whose term at Sebi was not extended. Moreover, he has synchronised policymaking with the government’s economic agenda. The other potential candidates for this job are Kaushik Basu, chief economic advisor in the finance ministry; and Ashok Lahiri, former chief economic advisor and now India’s executive director on the board of Asian Development Bank who met the PM last week. Kaushik Basu is known to enjoy an excellent rapport with both the prime minister and finance minister. A few months ago, he was sounded out for the job and is understood to have sought the advice of a few colleagues in the finance ministry. “I told him that he has the right credentials to handle the job. At the same time, I forewarned him about the administrative skills that would be required to head a mammoth organisation like the RBI,” said a former finance ministry official on condition of anonymity. Govt would Prefer to Play it Safe Now. That is why Subbarao’s administrative experience may count. Prime Minister Manmohan Singh, himself a former governor of the RBI dating back to the 1980s, will take a decision after consulting Finance Minister Pranab Mukherjee. Until now, the government has never had a formal selection process for the top job at Mint Street. The last time—in 2008—then finance minister P Chidambaram and C Rangarajan, then chairman of the Prime Minister’s Economic Advisory Council and also a former RBI governor, had held informal meetings with Subbarao and Rakesh Mohan, who was then deputy governor of the RBI, before choosing the former, senior officials said.
“This government is, in principle, not averse to giving extensions to top functionaries,” said a PMO official. According to officials, the government, which has faced flak for the controversial appointment of the chief vigilance commissioner, would prefer to play it safe and steer clear of any fresh controversy. “There is no reason to rock the boat now. Subbarao enjoys a good rapport with the finance minister. Last year, he had concerns about the RBI’s autonomy being undermined when the government announced the setting up of the financial stability and development council, or FSDC. But the RBI’s concerns have largely been addressed now,” said a regulator who did not wish to be identified. In the past, governors such as Venugopal Reddy, Bimal Jalan and C Rangarajan all enjoyed a five-year tenure, and the rules do permit for a fresh term of two years if the government finally settles on Subbarao. The RBI and Subbarao have been criticised recently for what economists term as being behind the curve, or not raising interest rates more aggressively to combat inflation. His baby steps approach or a policy of raising rates steadily has been panned by critics, though there is a recognition that the government ought to be pitching in more to tackle inflation. Subbarao, who succeeded the feisty YV Reddy as governor in September 2008, had a baptism by fire. Within days of taking over, he had to handle the repercussions of the global financial crisis after the collapse of storied investment bank Lehman Brothers. Their styles were contrasting—Subbarao preferring a more direct and open line of communication with financial market participants unlike Reddy who often surprised the market with his policy moves. Unlike the archetypal central banker, Subbarao has adopted a consultative approach and has communicated to the market in a simple style devoid of the customary central bankspeak or jargon. Officials who have worked with both the RBI and finance ministry say unlike Reddy, Subbarao is not dogmatic and even when he has differences with the government, is not viewed as being rigid. The closest he perhaps came to courting trouble was when he communicated to the government the RBI’s objection to provisions of a legislation that was seen as undermining the primacy of the central bank as the first among equals compared with other regulators in the financial sector. That and the stance of former Sebi chairman Bhave had evoked a sharp response from the finance minister in Parliament when he said “regulators did not come from heaven”. Says Abheek Barua, chief economist, HDFC Bank: “Subbarao was brought in with a specific mandate to handle the crisis and he has done a remarkable job. He has managed to handle many of the problems that arose from the crisis that still remains at the global level.” Barua reckons that Subbarao has been unfairly blamed for not handling inflation well as a significant part of inflation was due to structural and international factors, which he says the RBI cannot do much about. “If given an extension, his major challenge would be to manage inflation,” he said.

ET

Interactive meet on foreign exchange

GUNTUR :  The Reserve Bank of India (RBI) is organising an interactive session with the public on foreign exchange matters at Siddhartha Gardens on the Ring Road here from 4 p.m to 6 p.m on July 5. The apex bank is also holding an exhibition on ‘Foreign Exchange for You' on July 5 and 6, 2011 at the same venue, according to a press release by RBI Assistant General Manager A.K. Pathak. RBI Regional Director A. Sambasiva Rao and other senior officials will participate in the programmes being organised to spread awareness about foreign exchange facilities available to common citizens and for businesses. The exhibition showcases foreign exchange facilities available for residents and non-residents, rules for foreign direct investment in India, overseas direct investment, and external commercial borrowings. District Collector V.N. Vishnu will inaugurate the exhibition at 10.30 a.m on July 5. It will be open to the public from 10.30 a.m to 6.30 p.m.

The Hindu 

RBI to Announce Monetary Policy 2011-12 First Quarter Review on 26th July

The Governor, Reserve Bank of India, Dr. D. Subbarao, will announce the First Quarter Review of Monetary Policy 2011-12 on Tuesday, July 26, 2011. As per information, this will be done in a meeting with the chief executives of major scheduled commercial banks at 11.00 a.m. on July 26, 2011 at the Central Office, Reserve Bank of India, Mumbai.

abclive.in 

Chain-snatchers held

CHENNAI: TAMBARAM : An autorickshaw driver and a motorcyclist chased and apprehended two persons who were part of a five-member gang that allegedly indulged in chain-snatching at Ayanavaram on Friday. According to police sources, Shyamala (40) of RBI Quarters in Choolaimedu was waiting for a bus near ESI Hospital in Ayanavaram when an unidentified man snatched her three-sovereign chain. The victim raised an alarm drawing the attention of an autorickshaw driver and a motorcyclist who chased the suspect.  The accused person got into a waiting autorickshaw and tried to escape. However, the motorcyclist intercepted them after a chase. While three persons, including the man who snatched the gold chain escaped, the motorcyclist managed to apprehend two others in the autorickshaw. The gold chain was recovered from their possession.  The two were handed over to the Ayanavaram police for investigation. The autorickshaw used to commit the offence was seized. A special team has been formed to apprehend others involved in the case, the sources added.

The Hindu  

RBI cautions people

Hyderabad : The Reserve Bank of India has cautioned people against some companies which were operating as non-banking financial institutions and collecting deposits without obtaining a certificate of registration (CoR) from the RBI. S. Durai Rajan, RBI Deputy General Manager, in a statement said that no company or entity by name M/s Forex Achievements was registered as a company under the Companies Act, 1956, which was a pre-requisite for obtaining CoR from the bank. He said that the CoR bearing Reg. No. 07.00410 dated April 7, 2010 displayed by the above company on its website was a fabricated one and not issued by the RBI to it. Before making investments, people should visit the website of the RBI to check whether the companies they were placing deposits with were registered with the Reserve Bank and entitled to hold deposits.

The Hindu 

Report fraud cases of Rs 1 cr and above to CBI: RBI to banks

In order to check banking frauds, the Reserve Bank of India (RBI) today asked public sector lenders to promptly report cases of cheating involving Rs 1 crore and above to the CBI, and of the lesser amount to the police. "Incidence of frauds, dacoities, robberies, etc, in banks is a matter of concern," the RBI said, issuing guidelines for reporting frauds. Private and foreign banks have been asked to report cases of fraud involving an amount of Rs 1 lakh and above to the police. Fraud by employees exceeding Rs 10,000 should also be reported to the police so that the guilty persons do not go unpunished, the RBI said. Besides, it added that cases involving more than Rs 7.5 crore should be reported to Banking Security and Fraud Cell of the respective centres, which is specialised cell of the Economic Offences Wing of the CBI. The central bank said that it had been observed that frauds are, at times, detected in banks long after their perpetration. It also pointed out, "On some occasions, RBI comes to know about frauds involving large amounts only through press reports." Banks should, therefore, ensure that the reporting system is suitably streamlined so that frauds are reported without any delay, RBI said, adding that they must fix staff accountability in respect of delays in reporting fraud cases to the central bank. As per the guidelines, fraud cases involving amounts of Rs 1 crore and above should also be reported to Serious Fraud Investigation Office (SFIO) in Ministry of Company Affairs, besides CBI. The guidelines also said the banks should ensure that all frauds of Rs 1 lakh and above are reported to their boards promptly. The RBI has been advising banks from time to time about the major fraud-prone areas and the safeguards necessary for prevention of frauds. Misappropriation and criminal breach of trust, fraudulent encashment through forged instruments, negligence and cash shortages, are some of the common frauds observed in the banking industry.

BS 

Buck the trend

It's not just old currency notes that could be your lottery ticket. If you come across a bundle of out-of-circulation notes in some forgotten corner of your house, you’d either hold on to it for emotional reasons or simply toss it aside as junk. Or, if you are hard up for cash, you would exchange it for new notes. With somewhat similar thoughts, an old lady, a year-and-a-half ago, walked into the Reserve Bank of India in Mumbai to exchange some bundles of old one-rupee notes. After being pushed around for over an hour, she was approached by a bystander who exchanged the three bundles of 100 notes each for three crisp 100-rupee notes. The lady went away, thanking the helpful young man. Unknown to her, the man was a shrewd money changer — he sells old and rare notes to collectors. His trained eye quickly realised that the notes held by the lady were issued in 1951 and signed by finance secretary K G Ambegaonkar. He does these rounds of RBI regularly, hoping to find some treasures unknown to their naive holders. On this particular transaction, he made a killing – the three bundles were sold for Rs 1.5 lakh! Numismatists Kishore Jhunjhunwala and Jayesh Gala know several such transactions, the tinge of lament unmistakable on the lack of appreciation among the commoners of the treasures they unknowingly hold. And as their bit towards their beloved hobby, the two in conjunction with fellow paper money enthusiasts, Dilip Rajgor and N D Agarwal, recently published Standard Guide to Indian Paper Money, focusing on the bank notes issued post-Independence. The book dispels the myth that numismatists are interested only in notes and coins that are a few centuries old. There exist collectors who collect new notes with equal fervour. But why collect notes that are freely available? Here’s why. Unlike stamps, notes are collected not just for their designs but also for the prefix and serial numbers at the top right and bottom left corners. For a number like 23A 645671, 23A is the prefix and the rest the serial number. Experts can look at the number and tell how many of those notes were printed, and hence what is their availability in the market place. Of course, notes with unique numbers like 11A 111111 or 00A 000001 command a special value. Collectors can develop their own set of benchmarks using the book and anticipate the demand for some notes in the future. Jhunjhunwala gives an example: “Twenty-rupee notes were issued in 1972, signed by RBI governor S Jagannathan, up to the prefix 49A. Today this note can easily fetch you Rs 1,500. Similarly, 20 twenty-rupee notes were issued during D Subbarao’s time in 2009 up to the prefix 49A. This note is currently exchanging hands for less than Rs 100. A smart collector can spot an opportunity here — holding on to the 2009 note could thus give you handsome returns at some point in the future.” The authors have included a price guide in their book. The answer, like everything else, perhaps lies in the supply and demand. The key of course is the number of notes printed in a series and the then population of India — which gives the per-capita population of those notes. The other factors that go into determining the price are estimates of how many of the notes may have been destroyed, how many may have survived, what is the demand depending on how many collectors are seeking it and what was the last transaction amount. It is almost as complicated as it sounds. The new collectors need to interpret the numbers carefully. Should you use it appropriately, what the book says at the beginning may well come true — “Yah kitab paanch sau rupay main de rahe hain, lekin yeh aapko pachas hazaar say bhi jyada kaam aayegi” (This book is being given to you for Rs 500 but it will be worth more than Rs 50,000).

BS 

Ode to the chavanni

I can’t even remember how long back it was when I last used a 25 paisa coin. Yet, when I heard that the humble chavanni was going to be demonetarised from June 30, it felt like the end of an era that had long gone anyway. Like most Indians over 40, I had fond memories of a 25 paisa coin being enough for an orange bar, a plate of chaat and more. In fact, until 10 years ago, these coins were still in use in small towns. I remember collecting quite a few when I lived in Mirzapur 10 years ago, where seasonal vegetables often cost a rupee or two. Very often, the person who ironed our clothes gave us change in 10 and 25 paisa coins. And thanks to a longstanding coin collection habit, we soon found ourselves with a piggy bank full of coins of small denominations.  However, when we moved to Delhi with our shiny nickel treasure, it proved to be little more than fool’s gold. Nobody, not even vegetable vendors, was willing to accept small change. “I don’t even encourage 50 paisa coins,” said my local veggie guy loftily, “for vegetables have now gone beyond paisa rates now! With the cheapest of them costing at least Rs. 15 for a kilo, where is the scope of buying them with 25 and 50 paisa coins?” Eventually we decided to go to a bank to convert our small change into big money. The bank manager was politely shocked: “Would it not be better to give them as alms?” he suggested, “or perhaps to a temple? Maybe people there could find some use for all this small change…” We stuck to our guns, for even beggars on the road were openly refusing to accept small coins. Finally, when we received some 200 rupees in exchange for all the coins we’d collected in Mirzapur, it was with no small sense of achievement.  Between that day and today, I’ve watched the demise of smaller coins and the birth of the 10 rupee coin with some interest. To a large extent, this state of flux indicates how prices have risen in the last decade. Many readers would remember the often very unhygienic drinking-water carts that once sold glasses of drinking water for a paisa each. As demands for cleaner water grew, the carts upped their rates to 10 paisa, then 25, 50 and finally, a rupee. Today, chances are high that most of us quench our thirst on bottled water at a minimum of `10 a swig. Even temples that once customarily took offerings of Rs. 1.25 (the sava rupya prasad was considered extremely auspicious, especially in Hanuman temples on Tuesdays), today raise their eyebrows at such mean offerings. And who can forget the chavanniclass seats (front rows only) in movie halls of yore? They used to be the best seats in the house for everyone who enjoyed audience comments as much as the movies themselves. Today, with the cheapest movie tickets in metros costing `50, all that has disappeared into history and our collective memories. Will the 50 paisa coin also soon disappear into oblivion following the demise of the 25 paisa coin? Maybe. After all, most things that once cost half a rupee – bus tickets, orange bars, postage stamps and more – cost ten times as much today. Maybe we’ll witness the birth of the 50 rupee coin in the near future. Who knows? Meanwhile the changing face of Indian currency will continue to highlight the woes of people like them, as they struggle to make ends meet

GEETANJALI KRISHNA (BS)  

Dealing with recovery agents

The RBI has issued guidelines on training recovery agents and the methods they should adopt for collection..................

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Police to introduce e-beat systems for ATM security

The Reserve Bank of India and the police administration had instructed the banks' branches to place CCTV cameras on the premises facing the cash counter as well as covering the main banking transaction floor and peripheral areas to detect the movement of suspicious people..........

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Camp to identify talents of differently-abled persons

.........A.J. George, Assistant General Manger, Reserve Bank of India (RBI), R. Shankar Narayan, Assistant General Manager, National Bank for Agriculture and Rural Development (NABARD), KN. Subramanian, Lead District Manager, S. Samuel Inbaraj, Project Director, District Rural Development Agency (DRDA), and B. Anandhavalli, Project Officer, Mahalir Thittam, took part in the meeting.

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