......The police point out that lack of security measures, violation of norms and negligence on the part of the security agencies had encouraged small-time thieves and gangsters to target such vehicles. The banks enter into agreements with the security agencies to transport cash and load it in the ATM counters. As per norms, the staff of the security agencies and those of the banks should carry the cash boxes. The security agencies have their own vehicles to transport cash, but sometimes hire private vehicles. “We have issued strict guidelines to the banks. The Reserve Bank of India (RBI) has also issued guidelines, but they have been neglected,”........
The very purpose of VITALINFO is to provide a platform for wider dissemination of updated information related to and happening of events in and around RBI.
Tuesday, October 9, 2012
Police probing finding of 4 fake currency notes
......According to police, Mr Loganathan, Assistant General Manager, RBI, Chennai, lodged a complaint with the Puducherry CID police stating that four counterfeit currency notes, one each of 1000 denomination and 50 denominations and Rs two hundred notes were found in the bundle of old and torn notes sent to RBI for replacement by the IOB and UCO Bank here......
Chidambaram mantra: Implement, divest, dilute
.....Signalling to the Reserve Bank of India (RBI) that fiscal and monetary policy should work in tandem to contain inflation and stimulate growth, the Finance Mnister said: “A tight money policy has dampened investment as well as growth, particularly in the industrial sector,”......
Jain Irrigation banks on NBFC business to improve finances
.......Jain Irrigation had received approval from the Reserve Bank of India (RBI) in July, 2012 to float a non-banking finance company (NBFC). The NBFC, Sustainable Agro-commercial Finance, is a joint venture between the promoters of Jain Irrigation and IFC, a member of the World Bank Group. The NBFC will begin operations on a pilot basis by opening 20-30 offices in Maharashtra. It will then expand its business to other states like Andhra Pradesh, Madhya Pradesh and Rajasthan........
Govt amends rules to allow IDR conversion into shares
.......Government has amended the rules governing Indian Depository Receipts issued in New Delhi by foreign companies, after financial regulators Reserve Bank of India and Securities and Exchange Board of India allowed part-conversion of securities into equity shares by investors........
Read.......
Karur Vysya Bank looking to offer students fee-payment service via mobile
Students can soon reduce the drudgery of standing in queues to pay their fees. They can instead use their mobile phone and do it from the comfort of their hostels or homes, a top official of Karur Vysya Bank said.........
Read - HBL
GITAM to host IEA meet
GITAM University will host the 95th annual conference of the Indian Economic Association from December 27 to 29 with the focal theme ‘Growth and Structural Changes in Employment’............
Read - The Hindu
Read - The Hindu
RBI's tight monetary policy dampened growth: Chidambaram
Even though Indian economy's growth declined to 6.5 per cent in 2011-12 and further to 5.5 per cent in the first quarter of this fiscal, it is no cause for undue worry, Finance Minister P Chidambaram said on Monday."These are challenging times for global economy. They are affecting market sentiments everywhere," the finance minister said in his opening remarks at the annual Economic Editors' Conference in New Delhi.
Citi Bank official to pay Rs 15 lakh for leaking account details
......The Delhi State Consumer Commission has ordered a Citi Bank branch manager to pay Rs 15 lakh as compensation to a credit card holder for leaking his account details to a third party. The consumer body awarded the damages saying the supply of credit card statement details of the card holder to a third party is a “violation of confidential relationship” between the bank and its customer and “betrayal of trust”........
Monday, October 8, 2012
Inflation: Gold versus financial assets - S.S.Tarapore
.......Augmenting the Gold Proportion in RBI's Forex Reserves Quite apart from measures to mobilise domestic gold, the RBI should consider raising the proportion of gold in RBI's forex reserves from the present level of 9 to 20%. This makes eminent sense as it would diversify the risks as between holdings in major currencies- US dollar, Euro, yen and sterling- and gold. Such a composition of the reserves would enable a better preservation of the value of the forex reserves. It is noteworthy that China has embarked on an aggressive increase in the central bank's reserves of gold by 1,000 tonnes per year and in a few years, China's central bank will be the largest holder of gold.
Regulating the regulators
......On the RBI, FSLRC is clear that “alongside this independence, an accountability mechanism needs to be set up.” The commission wants to review the laws related to monetary policy and draft a monetary policy law emphasising the issues of independence, enumerated objectives, enumerated powers, and accountability mechanisms. The RBI has been opposing the creation of an independent public debt management agency, another recommendation by the FSLRC. The commission is for carving this function out of the RBI and making it independent. It also mooted that three functions of the RBI be performed by distinct boards which oversee the three areas of work of monetary policy, payments regulation and supervision, and banking regulation and supervision. There are hints about the need to clip the wings of regulators. .....
‘RBI should also be merged later’
The approach paper suggests that there should be a unified regulator for the financial sector, but why is the Reserve Bank of India untouched?
For the time being, we feel that the RBI should be left as it is and should continue with its functioning. However, at a later stage, depending on how things work out under a unified regulator, RBI should also be merged........
Read - Hindustan Times
For the time being, we feel that the RBI should be left as it is and should continue with its functioning. However, at a later stage, depending on how things work out under a unified regulator, RBI should also be merged........
Read - Hindustan Times
Common Regulatory Platform is Fine, but why Keep Banks Out?
......The paper is critical of sector-specific regulatory structures as the
breeding ground of a number of problems, including regulatory arbitrage
and regulatory capture. It lists Sebi (securities markets), Irda
(insurance), FMC (commodities) and PFRDA (pensions) as regulators that
should be folded into a new unified financial agency. The RBI is the
obvious exception —the paper envisages the RBI’s bank regulatory
functions to continue as they are. If one steps back a bit and sees what
is being said here at a conceptual level then the Commission is
recommending a switch from the current vertical structure of regulation
to a horizontal one.......
Banks asked to review activity levels in financial inclusion accounts
.......As per 2011 census, about 58.7 per cent households had reported availing of banking facilities. Out of the 24.69 crore households, 14.48 crore reported availing themselves of banking services. Nearly 10 crore households were not using the services. To promote financial inclusion, the Reserve Bank has asked banks to drop the ‘no—frills’ tag from the basic saving accounts as the nomenclature has become a stigma.
Fast track
..... As for “fasting”, Rangarajan suggested a better idea would be for women to stop buying gold instead, since gold imports jumped sharply this year........
Read - BS
Reform or steps to manage crisis?
...............In a recent speech, Y.V. Reddy, former Reserve Bank of India Governor, has said zero current account deficit in the external sector over the medium term should be the cornerstone of macro-management. A 2% current account deficit has been treated as an average since the reform process began, though the actual deficit in high-growth years was close to 1%, Reddy has pointed out. In recent past, RBI Governor D. Subbarao and Planning Commission’s Deputy Chairman Montek Singh Ahluwalia have said a 3% current account deficit is manageable. According to Reddy, the deficit should be close to zero on average...........
My View on "NABARD and RBI"..........
GOI, particularly Ministry of Finance, has been in the recent past, showing a tendency to treat various regulatory and supervisory organisations which were constituted under independent statutes, as government departments. The tone and tenor of observations to the media and elsewhere by spokespersons of Finance Ministry point to this disturbing pattern of behavior. Allowing functional autonomy is essential for vibrant growth of institutional structure especially in the financial sector. A very healthy practice of mutual consultations, as in the case of GOI and RBI (Governor and FM meet before and where necessary after every review of monetary policy and budget formulation) has been ensuring avoidance of conflict in policy directions during the last six decades. The assertion of ‘ownership rights’ by GOI is of recent origin and the latest tendency to formalize this approach via legislative measures as in the case of NABARD will weaken the institutional system.
- M G Warrier
SC overrules decision on cheques
The Supreme Court has overruled its own judgment regarding the law on bounced cheques. The Supreme Court as well as high courts have been following the wrong judgment in several cases under the Negotiable Instruments Act. Now it has turned the law around. In this case,..............
State-run banks to cut debit card usage fee
In a major fillip to e-commerce, state-run banks will soon lower fees for debit card transactions. The fee could be as low as Rs.2 per transaction and is expected to promote greater use of debit cards and a gradual reduction in cash purchases. The fee will be charged per transaction rather than as a percentage of the value of a purchase, as a massive proposed roll-out of point-of-sale (POS) terminals is expected to reduce costs........
HDFC Bank to double cash payment fees for credit cards
......The bank officials said there is a lot of manual work involved in branch-level transactions and that is the reason customers are asked to pay for these services. The move to hike these fees is in line with a strategy to encourage customers to use online mode and reduce cash handling and the related transaction processes at branches and ATMs, ......
RBI permits investment in Pakistan by India Inc
.......The RBI notification comes on a day when Indian External Affairs Minister S M Krishna is visiting Pakistan aimed at strengthening bilateral relations. "It has now been decided that the overseas direct investment by Indian parties in Pakistan shall henceforth be considered under the approval route," RBI said in a notification. The moves comes days after India allowed investment from Pakistan.......
The markets need a speed breaker
........The Reserve Bank of India’s (RBI’s) stance in its next credit policy could be crucial for animal spirits. A rate cut now could energise personal consumption during the upcoming festive season and if it’s passed on quickly, it could also help revive corporate investment plans. It’s an open question however, if the central bank will actually cut........
NBFCs defer fund-raising plans over interest rates' uncertainty
........“We will take a call once Reserve Bank of India (RBI) decides on interest rates. We have to see where the interest rates move if RBI reduces the key policy rates,”........
Ripple effects for banks as corporate loans turn bad
.......According to the Reserve Bank of India’ s latest financial stability report, asset quality concerns in the banking system persist as the growth in NPAs accelerated and continued to outpace credit growth........
Parekh panel suggestions premature: S K Goel
......The Reserve Bank of India has given a special dispensation to IIFCL. As against the 15 per cent capital adequacy for other non-bank finance companies, they have reduced the requirement for us to 12 per cent, in view of our government support. So, we might need around Rs 400 crore for next year............
Paucity of currency notes
I hope the Reserve Bank of India (RBI) doesn’t insist on replacing the Rs 10 note with its coin avatar. People still prefer currency notes to carrying coins. The RBI authorities must realise that it will only create problems in people’s day to day dealings. But it has taken a tough stand and seems to be on course to phasing out Rs 10 notes. Recently, there has been a shortage of Rs 10 notes and it appears the RBI has reduced its printing.
Banks are unable to provide a bundle of Rs 10 notes on specific request. Private banks are also not in favour of switching to coins. Due to high inflation, dependence on Rs 10 notes has increased. In fact, in many countries currency notes of 10-unit are exclusively available. Similarly, there is also a shortage of Rs 50 notes. I suspect the RBI has curtailed the printing of Rs 50 notes. I urge the RBI officials to consider public opinion in such matters.
- Amol Velankar (Pune Mirror)
Pakistan is main source of fake currency, Bangla conduit
........ "The Reserve Bank of India has informed (sic) that they have no estimate regarding increase in counterfeit currency in circulation." RBI spokesperson Alpana Killawala said, "There cannot be an estimate of fake currency in the economy. If one knew that, one would catch them and remove them from the economy. However, we have taken measures to create awareness among the public." As of now, the RBI, the Ministry of Finance, Ministry of Home Affairs, Central and state intelligence agencies and the Central Bureau of Investigation are working together to tackle the menace.........
Sunday, October 7, 2012
Microfinance in India - S.L.Shetty
 |
ISSUES, PROBLEMS AND PROSPECTS:
A CRITICAL REVIEW OF LITERATUREIn association with EPW Research Foundation, Mumbai |
Dr. S.L.
Shetty’s interests in the
discipline of Economics have been wide-ranging, with macroeconomics and the
financial sector issues being the core. He served the Reserve Bank of India
(RBI) for 24 years and retired in 1993 as Chief of its research department. On
leaving the RBI, he became the Founder Director of EPW Research Foundation
(EPWRF) in which capacity he continued for 16 years. While in the RBI, he spent
4 years in a foreign central bank on an IMF assignment. In academic circles,
Dr. Shetty is known for his seminal work titled Structural Retrogression in the
Indian Economy since the Mid-Sixties (NIBM, 1978) and a series of other
contributions through the columns of the EPW. They have ranged from monetary
and fiscal policies to money market studies and development issues in the
financial sector.
ABOUT THE BOOK :
The study is an epitome
of the mind-boggling flurry of literature on the subject of microfinance. But,
it has gone far beyond the review of literature on the concept, country models
and history of microfinance movement in India; it has provided a thematic work
on the factual profiles of different microcredit programmes prevalent in the
country and their progress, The book contains a very up-to-date review of the
regulatory measures and their nuances and a detailed review of the evaluation
and impact studies. The book also dwells on the limitations of the mFI movement
to satisfy the credit needs of the vast informal sector enterprises which also
seem to get generally neglected by the formal financial institutions. This has
led the study to a review of the new initiatives which the authorities have
taken under the broad theme of ‘financial inclusion.’ Keeping the broader
objective of distributional goals embedded in the microfinance movement, the
book attempts an assessment of the wider challenges faced by the financial
system, and provides a dossier of suggestions for reaching out to the small and
informal sectors on a more effective scale. As for the mFI movement itself,
apart from bringing out it potentialities and also critiquing it, the study
presents a set of suggestions for strengthening and expanding its role.
NABARD and RBI
P S Rao’s article (“NABARD and RBI: A 30-Year Legacy Being Upturned”, EPW, 22 September 2012) has indeed made a strong case for the Government of India (GOI) not going forward with the amendments proposed by the National Bank for Agriculture and Rural Development (Amendment) Bill, 2012 that would have the effect of eliminating, in one way or the other, the financial and operational links between the Reserve Bank of India (RBI) and National Bank for Agriculture and Rural Development (NABARD) and subverting the autonomy of NABARD’s board of directors by making its decisions subject to GOI approval.............
RBI employee dies during Cauvery protest
.......Shivayogish told TOI that as part of Karnataka Bandh we had organized a bike rally from RBI campus to deputy commissioner's office. We left at 10.30am and reached Metagalli around 11.15am and were shouting slogans when Gauranna collapsed from the bike while raising slogans against Tamil Nadu. He was taken to hospital where doctors said he was brought dead. .......
Obituary
I am sorry to advise of the demise on October 3, 2012 in Mumbai of Shri.M.G.Hadkar. He was 78 years old. He had worked in the Bank for over three decades and retired as DGM in DBOD.
May his soul rest in peace.
- P.P.Ramachandran (via e-mail)
A Conversation With Chief Economic Adviser Raghuram G. Rajan
.........Many analysts say you are the leading candidate to become the governor of the Reserve Bank of India next year when Duvvuri Subbarao, the current governor, retires. What do you think about that?.....
Govt, RBI to expedite rules on new banking licences
The government and the Reserve Bank of India (RBI) have geared up to finalise the norms on new banking licences. In a meeting with the banking regulator, Finance Minister P Chidambaram has assured that necessary amendments would be made in the banking Act. “We have discussed this with RBI, and the central bank has agreed to take the process forward. I have assured RBI that we will do our best to get the amendment Bill passed in the winter session of Parliament,” said Chidambaram. The banking regulator had put out the draft norms on new banking licences in August 2011. A year later, RBI released the highlights of comments and feedback received on the draft norms...........
Financial regulators may oppose creation of unified agency
The Financial Sector Legislative Reforms Commission sees regulators resorting to ‘turf protection’ to keep at bay the creation of a ‘unified regulator’. This could be one of the obstacles coming in the way of the FSLRC’s plans to recommend a unified regulatory agency for the sector.....
Read - HBL
Chidambaram meets RBI, Sebi officials
Chidambaram promises more reforms
...The Finance Minister’s series of meetings today with officials of the Reserve Bank of India (RBI) and the Securities & Exchange Board of India (Sebi) were fruitful, he said, adding that the officials are supportive of the measures taken by the government. "We have to rediscover the path that we followed until a few years ago. We need confidence in ourselves and follow the laws of economics," he added............
RBI slaps fine of Rs 500,000 on Bapunagar Mihila Co-operative Bank for violating norms
.......The RBI found the bank guilty of violating guidelines on exceeding the ceiling on unsecured advances, delay in reporting of Suspicious Transaction Reports (STRs), non-filing of First Information Reports (FIRs) and delay in submission of FIRs without any cogent reasons, the central bank said in a statement.......
Allahabad Bank ED pitches for CRR cut
Allahabad Bank’s Executive Director T.R. Chawla has joined other top Indian bankers in making a pitch for a cut in Cash Reserve Ratio (CRR) to address the concerns of sluggish credit growth.........
Ranjan Dhawan appointed as Bank of Baroda ED
NEW DELHI, OCT 6:
The Centre has appointed Ranjan Dhawan as an Executive Director of Bank of Baroda. Dhawan, who is now Chief General Manager at Punjab National Bank, is expected to assume charge of his new role on November 1. He will replace Rajiv Kumar Bakshi, who is due to superannuate on October 31. Currently, BoB has three executive directors.
HBL
Bhupinder Nayyar takes charge as Oriental Bank ED
NEW DELHI:
Oriental Bank of Commerce has a new executive director in Bhupinder Nayyar. Nayyar, who was General Manager at Bank of India, assumed charge on Friday, a senior OBC official said. He comes in the place of S.C.Sinha, who superannuated on July 31.
HBL
Andhra Bank gets new ED
HYDERABAD, OCT. 5:
Satish Kumar Kalra has taken over as the new Executive Director of Andhra Bank in Mumbai today. Kalra joined the banking industry in 1981 as Probationary Officer in Allahabad Bank and worked in various capacities. Prior to joining Andhra Bank as Executive Director, he was General Manager, handling the Treasury Operations of Allahabad Bank at Mumbai.
HBL
Gold rush
It is really disturbing that major industrial countries hold much larger reserves of gold than emerging economies (“High time RBI bought more gold”, Business Line, October 5). Then, does this alone account for the economic status of rich and poor economies? In-depth study would reveal numerous factors, including imperialism and rapid advances in science and technology.
- K. Gopalan, Bangalore (HBL)
Financial inclusion scheme totters in Karur
The financial inclusion scheme aimed at universalising banking services and taking the fruits of banking technology to the rural masses and the poorest of the poor, is tottering for want of adequate personnel and support services. Lack of banking literacy is adding to the worries........
Group your savings accounts to enjoy benefits
You and your spouse have a savings account in the same bank. You are also thinking of opening an account there for your daughter. Did you know that all three can be clubbed together under a ‘Family/Group Savings Account’? Clubbing does not mean merging all these accounts into one. It simply means that the bank will identify the accounts of your family members with a common ‘family ID’.........
Saturday, October 6, 2012
A BUNCH OF FRAGRANT ROSES
P.P.Ramachandran, 76 years
old (in fact young), is a postgraduate in Economics, postgraduate in Comparative Mythology, and
Certificate and Diploma holder in Sanskrit from Mumbai University. He has served
in the Reserve Bank of India for 40 years and retired as Deputy General
Manager. He writes for a number of journals and is a prolific reviewer of
books and a book selector for libraries. He gives lectures regularly to
audiences, young and old, on different disciplines. He is a rare bird — a
literary banker. His hobbies are reading, writing, and watching English and
Malayalam movies and art-films.
On his 76th
birthday today, the book entitled "A BUNCH OF FRAGRANT
ROSES" authored by P.P.Ramachandran is published Academic Foundation. The
book has a Foreword by Shri S.S.Tarapore, Former Deputy Governor of RBI.
 |
| S.S.Tarapore |
Foreword
P.P. Ramachandran,
“Chandru” as he is affectionately known, was an official of the Reserve
Bank of India for forty years. The stereotyped view of a
central banker is a dry, humourless person focussed exclusively on his
profession. Ramachandran is one of the rare birds who just cannot be classified
into a cubby hole.
Ramachandran’s canvas is
the whole wide world and he paints life with a vignette and readers will find
this Collectors’ Item an unputdownable book. The sheer breadth of his vision is
wonderful to the point of bewilderment. In this slim volume, Ramachandran
deftly handles subjects as widely variegated as contemporary issues, religion,
science, the fine arts, mythology, social issues and biographical sketches.
Ramachandran is a reconnoitre
of events and encounters with eminent personalities. He is at his scintillating
best handling vastly different subjects and in one life time he has
successively performed as central banker, journalist, social worker, critic,
biographer and many more.
At the Reserve Bank of India functions
he would regale the audience with his amazing memory of events and inter-action
with prominent personalities. Like the Village School Master in Oliver
Goldsmith’s ‘The Deserted Village’ it could be said of
Ramachandran: “And still they gaz’d and still the wonder grew, that one
small head could carry all he knew”.
Ramachandran’s writings are
a Sonata-- a sheaf of memories-- and the reader’s appetite would be whetted by
this book and look forward to future volumes by him. Ramachandran is
truly a Man for All Seasons.
ABOUT THE BOOK
Here is a delightful medley
of essays, articles, speeches, travelogues, book reviews and correspondence
with the greats.
The book is divided into
five sections.
The first section includes
his tributes to great personalities at various functions. We have a chance to
read his tribute to Vinda Karandikar, Durga Bhagwat, Albert Einstein, Dwaram
Venkataswamy Naidu, M.S. Subbulakshmi, Mumbai’s bookseller T.N.Shanbag, and S.
Chandrasekhar.
Section two consists of 16
book reviews. Ramachandran is a regular reviewer of books for Free Press
Journal and “Shanmukha”. He covers a variety of subjects with an authority that
is impressive.
The third section is
dedicated to travelogues. These are based on his travels to Europe, America,
Ashtavinayak, Uttaranchal and Konkan and contain vignettes of a delightful
nature.
The fourth section covers
essays on a variety of subjects such as religion, science, mythology, and light
articles on a number of interesting subjects.
The fifth section covers
his correspondence with great personalities like Rajaji, Radhakrishnan,
Khushwant Singh, H.R.F. Keating , Pope John Paul I I and Paul Gallico.
In sum, this book is a
veritable feast.
My View on "Tenure for Non-official Directors in RBI"
In this context, it would be interesting to recount an incident twenty four years ago while I was serving as the Joint Secretary and acting Secretary to the RBI Board. Shri Talwar, who had distinguished himself not only by his knowledge, integrity but also by his fierce independence as the Chairman of SBI and Chairman of IDBI,was approached by me over phone ( as per instructions) and requested to let me have some particulars about him for being considered for a position in the RBI Board. He asked me the purpose for the enquiry and when I had to reveal the purpose, he promptly and politely told me that he was not interested in the position! Later, I read in one of his articles that Board positions in India, whether it is a Statutory Corporation or a company, are filled only to comply with the statutory requirements and the Boards rarely serve any useful purpose! One wonders whether this was the reason which had prompted him not to show any interest in serving on the RBI Board!! In the opinion of some keen observers of the Indian scene,' Independent Director' is a contradiction in terms !!
- A. Chandramouliswaran (via e-mail)
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