'Vested interest' in 'Public interest'

My View on  "PRR invokes RTI in 'public interest'": 

There is no logic or rationale for linking pension revision-an issue which has been remaining undecided for decades- and regular wage revision. Having got messed up, let us have a look at both the issues.

Pension revision:

RBI has a funded pension scheme. RBI Pension Regulations when introduced, it was accompanied by an assurance about periodic revision vide RBI circular of March 13, 1992. Even if GOI wants to bring about any change in periodicity of revision of RBI Pension, it is appropriate to allow the present revision(The 1997 revision though under implementation is according to GOI still in dispute) which is overdue even if the periodicity is 10 years.

Wage revision:

Historically, RBI wage revision follows wage revision in banking industry. Current negotiation between IBA and bank unions has not reached any finality. In the present scenario, various components of remuneration package will have to be revised at different intervals. If periodicity of revision of basic pay is to be 10 years instead of the present 5 years, the rise will have to be 30 to 40 percent against the present offer of 10 to 15 per cent. In any case all these should form part of the negotiation of the next wage settlement to be made effective from November 1, 2012 as the earlier settlement expired on October 31, 2012.

Why we are discussing this:

Because, some vested interests in the bureaucracy have successfully confused the thought process of decision-makers. I believe, Dr Raghuram Rajan is capable of independent thinking. 

- M.G.Warrier

Disadvantage of having stubborn 'specialists'

My View on "Payment banks: RBI governor, deputy differ": 

This is one disadvantage of having stubborn 'specialists' at the top of any institution. The Indian financial system has space for several types of institutions to serve different types of needs. This recognition was there, till, perhaps, the beginning of imported reforms circa 1991. The multi-agency system comprising cooperatives, banks in cooperative, private and public sectors and even the traditional money lender besides chit funds and other players which co-existed then were serving divergent needs of urban and rural clientele at that point of time. With reforms the role expectations changed and the focus shifted to strengthening and supporting private sector banks. Private sector banks were interested in the ‘creamy layer’ of the business and that explains their share remaining low in the total banking business. Right approach would be to re-invent the multi-agency system allowing institutions of various categories to grow and function, maintaining the overall health of the financial system. Post Offices and ‘payment banks’ should be allowed to play their role with appropriate regulatory and financial support where necessary. Each unit of any system should not be expected to be independently viable. 

- M.G.Warrier

Raghuram Rajan’s tandava spells death for economy

......When Subbarao was RBI Governor, and followed Yaga Reddy's policy of seeking to emulate Jawaharlal Nehru in destroying domestic industry in India, then Finance Minister Pranab Mukherjee sought to knock some sense into the Central banker. However, because of backing from Prime Minister Manmohan Singh, who has been as dismissive of the travails of domestic industry as he is solicitous of foreign commercial interests, Subbarao refused Pranab Babu's request. Raghuram Rajan too has the backing of the individual who chose him for his current job, Manmohan Singh, which is why he is on his present destructive course. For any rational mind, growth and employment are as important as inflation targeting, which is why it is inexplicable why three successive RBI Governors have focused only on inflation, that too by........

Read - Sunday Guardian

Postal bank test awaits new govt

The high profile spat between the Reserve Bank of India and the finance ministry over converting India’s loss-making 1.54 lakh post offices under India Post into a bank is likely to be one of the challenging issues that the next government will have to handle......

Read - The Telegraph

New bank licences: Why RBI chose only two banks

.........Former deputy governor Anand Sinha once said, “We are painfully aware of the pitfalls (of industrial houses owning banks), but we will make sure that regulations are not subverted,” and he stuck to his words. The regulator’s reluctance to give licences to corporations is well-known but the way it has managed to stick to its stance despite agreeing to open the doors to companies under pressure from the government is remarkable. The credit goes to former RBI governor D. Subbarao as well as current one,Raghuram Rajan—.......

Read - Mint

The challenge: a bank account for everyone

.........Financial inclusion is certainly not a new dispensation that Indian policymakers are craving. The nationalisation of banks in 1969 and the thrust on branch building that followed were attempts at including the financially excluded. Even in the previous round of bank licensing (in 2003-04) new players were directed to open branches in rural and semi-urban geographies.........

Read | Business Standard

Indian Banks Arming Themselves To Fight the Rise in Cyber Crime

..........Addressing the annual conference ‘ITS Enabling The Digital World’ in Pune recently, G Gopalakrishna, Executive Director, Reserve Bank of India (RBI) pointed out that banks are not doing enough to create awareness amongst customers. In an age of EMV pins and Aadhaar (biometric validation), a lot is at stake. He urged banks to form risk management committees on the board levels in order to identify and specialise in tackling possible frauds.............

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आईसीआईसीआई बैंक शाखाओं में ही पकड़ गए थे जाली नोट

......आरबीआई की गाइड लाइन के मुताबिक नकली करेंसी पाए जाने पर उसी दिन आरबीआई को सूचना देनी होती है और चौबीस घंटे में संबंधित थाना में एफआईआर दर्ज करानी होती है। बैंक ने इस मामले में घोर लापरवाही बरती। शाखाओं में नकली नोट मिलते रहे और बैंक ने आरबीआई और पुलिस को सूचना तक नहीं दी। आईसीआईसीआई बैंक के अफसरों ने ऐसा क्यों किया? इसके पीछे कोई साजिश है या लापरवाही? पुलिस इन्हीं तथ्यों की पड़ताल कर रही है। ............

Read - Amar Ujala

ICICI Bank scales up fully-automated Touch Banking branches to 100

............."We have observed that an individual spends around 10 hours a day at work. It leaves very little time to do routine works including day-to-day banking. So, we felt the need to offer our customers an option of banking at theirconvenience and at any time of the day," .......

Read | Business Standard

Country’s largest lender goes stingy in Kashmir

Contrary to central bank instructions on credit-deposit ratio, country’s largest lender, State Bank of India, is stingy in lending in Jammu and Kashmir while it mops up heavy deposits from the state.  As against RBI’s benchmark of minimum 40 per cent credit deposit ratio mandatory for banks in Jammu and Kashmir, SBI has just 27.7 per cent............

Read - Greater Kashmir

Why not a ‘Post Bank of India’? Dr.S.S.Tarapore

............The new government should undertake a concerted drive to remove the conceptual cobwebs preventing the setting up of a Postal Bank, considering the great potential such a bank has for taking banking to the masses.

Read - HBL

Payment banks aren't financially inclusive: Chakrabarty

........All public institutions in our country have one greatest strength and one greatest weakness. Our greatest strength is that we know all our weaknesses and all our problems, then what is our greatest weakness- after knowing our weaknesses we don’t do anything about that for several years. This is applicable to all institutions and this is applicable to RBI also. The strength of RBI is knowledge. We have adequate knowledge though many people say RBI people don’t know. We have good knowledge but what we don’t have is the courage to convert that knowledge into action.............

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Payment banks: RBI governor, deputy differ

 Outgoing Reserve Bank of India deputy governor K C Chakrabarty has questioned the viability of payment banks and has said that they do not serve the purpose of financial inclusion. The statement comes at a time when RBI governor Raghuram Rajan has indicated that the central bank was in favour of issuing bank licences for limited purposes such as payments..................

Read - TOI

Little big bank

..........“It would be a natural growth for NBFCs to turn into full-fledged banks. To make financial inclusion close to reality, one must experiment and there are a lot of aspects worth thinking about like — deposits, mobile banking, making use of existing technology, telecom, Aadhar and so on. It will be a narrow view if we look at financial inclusion only through bank accounts,” ........

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Which way will the two new banks go?

The granting of banking licences to IDFC and Bandhan is interesting when looked at from the point of view of the character of the institutions that have been chosen by RBI. One is an MFI while the other is an infrastructure-finance company. If an NBFC was awarded this privilege, then the transition would have been relatively seamless. But once .........

Read - FE

RBI relaxes norms for its ED selection

With three executive directors' post will have to filled up at the Reserve Bank of India, the central bank has decided to relax the norms to accommodate more candidates. The residual service period criteria have been reduced to 2 years from 3 years..............

Read | Business Standard

PRR invokes RTI in 'public interest'

April 16, 2014      

The Central Public Information Officer,

Reserve Bank of India

Central  Office

Mumbai

(Through RBI, Thiruvananthapuram)

Dear Sir,

Right to Information Act, 2005

According to a recent circular issued by the RBI Officers’ Association, the Bank is reported to have conveyed to it that the Government has given its(in principle ) nod for the Bank’s proposal for revision of pension to its  pensioners provided certain conditions put forth by the former are agreed to.  Almost  all the conditions relate to the serving personnel.  The Government is understood to have added that “such a course of action would be most appropriate and desirable in public interest”.  (emphasis added ).

The present development has demolished conclusively the mythical conviction of the Bank’s Top Management which is on record having asserted,  unequivocally, that the issue  being a “simple” one is capable of early resolution, as “ the Government is not against updation, but only against illegal updation”  -- yet another ill founded view of the Government.

The matter calls for special attention, also in view of the following:-

(1)  The Government had, hitherto, taken the stand in different fora  that it had not issued to the Bank any statutorily binding order.  The invocation of the concept of “public interest” indicates a distinct deviation  in its perceptions  which has wider ramifications viewed in the context of the provision of  section 7 of the Reserve Bank of India Act.

b)  The several documents already accessed under the RTI Act do not reveal a single instance where the Government had invoked the concept of “public interest”.  It is not known whether this was ever projected or attempted to be projected during any of its interactions with the Bank on the issue.

c)  ‘Public interest’ in so far as it relates  to “updation”  of pension can only be in making improvements therein and certainly not in delaying or denying them by correlating the issue with wholly unrelated issues such as compensation package to the existing personnel.

d)  On the whole, the attempt  at invocation of the concept of “public interest” in this issue which had been remaining  unresolved for an   unduly long period of almost a decade appears to be preposterous, misconceived and, perhaps, motivated.

2)  The Bank having conveyed, with no signs of reservation,  the Government’s stand,  portrays itself as being tacitly in agreement with the same including the concept of “public interest”.

3)  In the  light  of the foregoing. I seek under section 6 of the Right to Information Act the following.

i)  Copy of the in-house note/opinion based on which the Bank has found it appropriate to go with the Government’s stand involving the concept of ‘public interest’ in the issue pertaining to revision of pension of a numerically insignificant section of pensioners juxtaposed    with the issue concerning wage structure etc of a relatively large number of serving personnel. 

ii)  Copies of  records (e.g. notes, minutes, etc.), if any, or extracts thereof evidencing the Government’s stand invoking the concept of ‘public interest’ in relation to pension updation (This can, for  the sake of convenience, pertain to the period from the close of 2011  when a formal request for clearance was sought from the Government).

4  The prescribed fee of Rs.10/- is enclosed.

Yours faithfully.

P. R. R. NAYAR , 4D, Wind brook Place,  Vellayambalam, Trivandrum - 10,  Tel: 2722602

Forwarded by Shri L.R.Parab

OROP@2007 - Loud but logical : R.G.Nakhate

......A fundamental question does, however, crop up why pension updation from 01-11-2012, why not pension updation from 01-11-2007, 10 years after 01-11-1997 as the  best ever pension accrued to GOI pensioners was from 01-01-1996 as per recommendation of 5th CPC. This question also deserves some suitable answer. May be I am thinking loud. But, surely all leaders would opt for updation from 01-11-2007. The leaders too have been all along pleading for pension updation retrospectively from 01-11-2002. Yes, if one rank one pension/ same rank same pension is granted in RBI from 01-11-2007?.......

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Bharatiya Mahila Bank ties up with CavinKare's Trend In Vogue

........CK Ranganathan, CMD, CavinKare, who said that the company is happy to associate with BMB in providing collateral free loans to prospective franchises across the country, especially women, said that the company would take the responsibility of finding right place for salon for its franchisees, negotiate with the land owner for rent, would bring in cost efficient service providers and suppliers, which would bring down the cost for the franchisee..............

Read | Business Standard

A star abroad, RBI boss riles bond traders at home

Since taking the helm of the Reserve Bank of India, Raghuram Rajan's agenda to reform markets has put the noses of Mumbai bond traders firmly out of joint by upending practices that provided them with a relatively secure rate of return..........

Read - BS

Bernanke's message

..........The sum and substance of Bernanke's message is that the economy needs to be run with appropriate fiscal and monetary measures. Expecting the stronger economies and their central banks to adjust for weaker economies is neither desirable nor feasible.

Read | Business Standard

RTI Judgement Series: Provide information on MTM position of banks

......"While banks may have given information to RBI in confidence or in trust, there does not appear to be any duty cast upon RBI to act in their benefit. RBI being a regulator of the banking sector obtains and maintains such information in regulatory or supervisory capacity. Therefore, there is no element of choice as such available to banks. There does not appear to be a creation of any fiduciary relationship between RBI and the banks."..........

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Innovation in payment banking

..........The basic proposition as laid out by the governor using banks and non-banks for payments and remittances is crucial for the way forward for inclusion and follows well established international practices. For the non-banks currently in the payments space, operationalizing the governor’s statement under the current framework would mean:..............

Read - Mint

Big Loan Defaulters to Face RBI Audit

.........The Board of Financial Supervision (BFS), chaired by RBI governor Raghuram Rajan, has, in fact, cleared a proposal that the central bank will conduct an independent forensic audit of corporates declared fraudulent by banks. Independent audits, however, will be restricted to corporates that have borrowed more than Rs 1,000 crore. The central bank will first try to get to the bottom of what went wrong........

Read - ET

Finmin widens monitoring of NPAs at public sector banks to top 50 accounts

...........The seriousness of the NPA problem was also captured by ratings agency Fitch. In a report released on Thursday, Fitch Ratings expressed concerns over stressed assets in India compared to other Asian emerging markets. Fitch said it “expects Indian banks' asset quality to weaken further, with stressed assets (NPAs and restructured loans) to rise from 10% (at mid-2013) to around 15% during FY15 (by March 2015).”.............

Read - FE

Turning of the credit cycle

...........The Reserve Bank of India (RBI) and the finance minister have fired their salvos by emphasising the importance of recognizing permanently impaired assets expeditiously and clearly differentiating them from assets which are temporarily challenged. This stance is very healthy for the banking system and the economy in the longer term as such assets lock up capital that can be put to much better use. It will also significantly free up lenders’ and bond investors’ bandwidth. Also welcome is RBI stressing on promoters making their share of sacrifice .........

Read - Mint

NBFCs approach RBI, govt over new companies Act

Non-banking finance companies (NBFCs) have approached the Reserve Bank of India (RBI) and the Ministry of Corporate Affairs to amend regulations under the new companies Act. These companies fear the stiff reserve requirements and norms on investment in government bonds will hit them hard..........

Read - BS

Amicus Curiae seeks audit of temple wealth

.......The audit, he said, should be undertaken by Mr. Rai and a team of auditors to be appointed by him. He should be assisted by a Deputy Governor of the Reserve Bank of India (RBI) who will be nominated by the RBI Governor in consultation with the Amicus Curiae. The audit should cover management of the temple, the Sree Padmanabha Swamy Temple Trust and allied institutions over the past 25 years. Mr. Rai should be empowered to take into custody and seal all documents of the trust properties forthwith, Mr. Subramaniam has suggested.............

Read - The Hindu

Permit farmers to open bank a/c with Aadhar: Bombay HC

.....However, the petitioners argued that several farmers who do not have bank accounts are still in the lurch. It was then, that the court suggested that farmers should be allowed to open bank accounts easily and not be made to submit a range of documents to avail of government relief, during times of calamity.  "Farmers should be allowed to open bank accounts with only Aadhar cards as identification. The whole point of issuing Aadhar cards was that no other document would be required," the court said......

Read - BS

Don't let penalties stop you from pre-paying loans

......."Enquire about the exact amount of outstanding balance for the actual date of closure. For example, if you enquire today and go for a closure after three days, the bank may have not factored these three days' interest. So, even after you pay, this amount could be treated as 'balance due', though you believe you have closed the loan," 

Read - ET

RBI implements Bhaskar panel recommendations

............“To overcome the possible conflicts of interest in the benchmark setting process arising out of the current governance structure of the FIMMDA and FEDAI, an independent body, either separately or jointly, may be formed by FIMMDA and FEDAI for administration of the benchmarks,” ...........

Read - BS

There goes the rate cut

...............It remains unclear why the government doesn’t dump FCI’s bulging stocks in the market, given how cereal inflation is a stubborn 9-10%. Also, sooner rather than later, the government needs to address the issue of whether it is accepting the Urjit Patel committee’s recommendations—as long as RBI remains wedded to Patel’s 8% CPI inflation target by January 2015 and 6% by January 2016, it is not going to cut interest rates.

Read - FE

Mr Bernanke wants RBI to enjoy Autonomy - Dr.T.V.Gopalakrishnan's views

The RBI's autonomy is only on paper and it is only an  institution physically separated from the Central Government. All its functions are carried out in terms of the RBI Act of 1934 but with the tacit approval of the Government. As long as Government nominees are there on the RBI Board and Government expects RBI to get a clearance from the Ministry of Finance before announcement of any policy,there cannot be any autonomy for RBI. Further...........

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Improve data collection

..............Former RBI Governor Subbarao had repeatedly mentioned the poor quality of data. It is unfortunate that it has not captured the attention it deserved of the powers that be. As a result, economic decisions and policy measures taken on their basis are topsy-turvy, reflecting poorly on the economic indicators and welfare of the people.........

Read - HBL

Monetary sovereignty

.....What else should countries vulnerable to such shocks do? Dr Rajan's emphasis on more accessible multilateral financial safety nets is certainly acceptable in theory, but IMF governance reforms - which are necessary for this to happen - are effectively stuck; no country can afford to rely on this framework to the total exclusion of self-insurance. In effect,.............

Read - BS

The right inflation target

.........The RBI needs to seriously reconsider the idea of inflation targeting based on the CPI. The reason for it is food, which has an almost 50 per cent weight in the index. The inflation rates derived from this index would, hence, mainly reflect supply-side factors not amenable to control using interest rate tools. Those are more effective against.............

Read - HBL

Why Modi & Raghuram Rajan complement & not contradict each other

.............Is not Rajan dreaming the same, along with his friend and former banker Nachiket Mor who suggested ways to achieve financial inclusion in a 247-page report? The target of basic financial services for all adults is now January 2016, why would Modi throw out someone who is on the same wavelength?.................

Read - ET

Why RBI’s Raghuram Rajan should stop complaining about Fed policies

.............Rajan is right in airing his views on unconventional monetary policies as it does open up debate on the efficacies and side effects of such policies. However, asking the Fed or ECB to weigh the consequences of their policies on other economies is like asking the Indian government to weigh its subsidy policy on the economy............

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Mirror,Mirror on The Mind

M.G.Warrier's daughter Reshmy Warrier has published a collection of her 41 short poems in book form. The book is priced Rs125.

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SC slams Sebi, RBI for Saradha scam

The Supreme Court on Wednesday observed that the Saradha scam may not have occurred had monitoring agencies like the Securities and Exchange Board of India (Sebi) and the Reserve Bank of India (RBI) maintained adequate vigil. The bench of Justice T S Thakur and Justice C Nagappan was hearing a petition by Saradha depositors who prayed for a CBI inquiry...........

Read - TOI

New cities drive ING Vysya’s mobile banking business

......An online survey conducted in association with ING International Survey, London showed that 43 per cent of the respondents own a smart phone. “Another stronger reason for us to introduce the solution is that 50 per cent of those in the age group of 18-34 years use their mobiles more than desktops to access their bank accounts,” Morgan said.......

Read - HBL

NBFCs turn to retail deposits to raise capital

........The Reserve Bank of India made it expensive for banks to raise money from the central bank after it reduced the overnight borrowing limit and raised the longer-term borrowing (term repos) limits in the money policy unveiled on April 1. Term repos are more expensive than ove­rnight borrowing...........

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CAFRAL RBI Recruitment 2014 Research Associates

Centre for Advanced Financial Research and Learning (CAFRAL) promoted by Reserve Bank of India (RBI) invites applications for the post of Research Associates on Contract Basis (For Two Years). Interested candidates......

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How to improve customer service at ATM kiosks?

........Apart from the problems enumerated in the aforesaid survey, there are a wide variety of other problems encountered by the public like swallowing of debit cards by the machines, not disbursing the full amount withdrawn and fraudulent withdrawals even after the loss of the ATM card is reported to the issuing bank.  In fact, RBI gives instructions to banks at various times, but there is no single authority to monitor compliance of these instructions. A case in point is as under:......

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And now, the ATMs strike back, the beetle style

........Attackers could soon be sprayed by a hot foam created by a cocktail of chemicals that come together when ATM surfaces covered with several layers of special plastic film are violently tampered with — ingeniously inspired by the natural weapon used by bombardier beetles by Swiss researchers. This certainly seems on the money. More so than most current defence mechanisms, in fact, which need electricity in order to work.

Read - ET

Bernanke's message to new govt: Ensure RBI's autonomy

..............Independence of the central bank is something clearly close to his heart. Asked for his advice to the next government about its relations with the Reserve Bank of India, Bernanke said he didn't know much about India's political dynamics, but what was critical for any country was that its central bank's independence be guarded. He was speaking at the second Kotak Presidium, a forum for global leaders to share ideas that shape the future. "You have an excellent central bank governor in Raghuram Rajan, who has been my long-time colleague as an academician in the US. As the Indian economy matures, an independent and responsible central bank is really central to its success," .........

Read - BS

Targeting inflation key for central bank, says Ben Bernanke

...........“Monetary policy benefits from clarity and transparency,” Bernanke said. “In a country where inflation is high, it is important that the market knows what you are doing.” To be sure, even with a single mandate, a central bank has to pay attention to growth to some extent, he said. Bernanke’s statement will boost the Reserve Bank of India’s efforts to target inflation in a more dedicated manner. A central bank panel headed by RBI deputy governor Urjit Patel had recommended that the bank should make inflation-targeting its central purpose. RBI is yet to accept the recommendations fully..............

Read - Mint

Ben rejects Rajan’s charge on QE impact

..........Bernanke made it clear that there were academic’ differences between him and Rajan over the issue of quantitative easing. “Raghu Rajan and I go back a long way. I have for a long time admired his work as an academic. He has made predictions of financial stress before the crisis and was very good during the crisis in promoting capital injections by the government. We discussed the spillover from monetary policy and we have somewhat different views. Basically, I am more optimistic that quantitative easing and similar policies can and have been effective. That is two people differing on academic issues,” said Bernanke...........

Read - TOI

Mor(e) questions than answers

My View on  "Mor Committee Recommendations – An analysis - Dr S...": 

The author deserves congratulations in the first place for the succinct analysis of the Report. After the Supreme Court indicted AADHAR instrumentality for deliverance of benefits from any institution Mor Report that relied wholesale on this instrument at once loses its relevance.

Second, the Committee failed to recognize the existing institutions in rural areas and the measures to make them effective in delivering intended benefits to the rural poor.

Third, it has not analysed the ills plaguing the BC instrument and the Banks that engaged them have issues; BCs have issues with the Banks; clients of BCs have issues: all these have not been dealt with in detail.

ATMs – white or color, no matter – are poorly fed even in urban areas. Several ATMs have labeled that they are fed with only Rs.500 and others with Rs.1000 and others with both. Rarely you get Rs.100s out of them. How many of the poor have such denominations and how many can in fact afford them. How can financial inclusion objectives be served with such instruments.

Technology should be a servant and not the master. As the critique put it reliance on lowly populated nations’ experiences and using them as instruments of convenience without examining the risks attached in detail is fraught with danger. Mobile technologies for payments and settlements have serious embedded risks right from passwords to web-enablement and in the context of increasing cyber crimes, how does Mor Committee ensure that the interests of the poor are protected with such introduction?

There are more questions than answers in Mor Committee Recommendations. RBI would actually do well to set aside the recommendations and use for academic purposes. 

- Dr.Yerram Raju

Relationship - Needs to be nurtured

My View on  "Jalan says flexi-targeting, coordination with govt...": 

If an ex-RBI Governor of Bimal Jalan’s stature, who is still closely associated with policy formulation in government and financial sector says, “…The utmost importance should be put on cohesion and coordination between policy makers in critical spheres”, it doesn’t need super-intelligence to infer that the observation comes in the context of the goings on in relation to the recent frictions between the political leadership in New Delhi and the Reserve Bank of India. As Dr Jalan and a few more Ex-RBI Governors who are part of or very close to the power centres in New Delhi know, RBI has always gone more than half way to accommodate GOI perceptions. Inadequate reciprocity from the other side and policy compulsions emenating from some of the roles not commonly handled by other central banks assigned to RBI, sometimes brought embarrassments to RBI Governor in public eye. As rightly observed by Dr Jalan, there is no escape for GOI and RBI from working in cohesion with broad national priorities in view. And here, solution does not lie in shifting public debt management from RBI to finance ministry or GOI fixing targets for management of inflation by RBI. In the Indian context, Finance Ministry and the central bank have a relationship which has to be nurtured and maintained without affecting harmony, even when difference of views may arise, as in the past.

- M G Warrier, Thiruvananthapuram 

Arvind Mayaram appointed as new Finance Secretary

.............."The Appointments Committee of the Cabinet (ACC) has approved that Arvind Mayaram,  secretary Department  of Economic Affairs, may be designated  as the Finance Secretary," an official statement said today.............

Read - BS

Obituary

Shri  N.Ramachandran passed away inn Mulund, Mumbai on  12th April, 2014. He was 88 years old. He had served as the  Private Secretary to several Deputy Governors of RBI nd finally retired from IDB I--where he was the P.S  to the Chairman. He is survived by his wife--also ex-employee of R B I  and two sons. We pray that his soul rests in peace.  

- P.P.Ramachandran

“Get More Customer-friendly”, says Rajan

.....................If Dr Rajan is serious about a fair deal for consumers, he has to fix the mis-selling of third-party products first. The Banking Ombudsman Scheme has to be modified to examine mis-selling of insurance and mutual funds and other products under ‘wealth management’. If Dr Rajan can open a dialogue with the central vigilance commission (CVC) to ensure that bankers are not traumatised by vigilance inquiries into legitimate decision, he should find it easier to get the........

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The Deferred Burden

............According to Mint Road, the total additional equity capital requirement due to Basel III is to the tune of Rs 1,75,000 crore. Former RBI governor Duvvuri Subbarao raised two questions. He asked whether the market could provide capital of this size and what the burden of recapitalising state-run banks would be on the central government? ...........

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High interest rates responsible for rising bad loans: Moody's

........."The government has encouraged lending in an effort to support development of the country's inadequate infrastructure, but although these intentions are positive, delays to projects and other regulatory issues have weighed on revenue, and thus, developers' ability to repay debt," it said. According to the report, the government and the Reserve Bank of India are tackling the issue now to ensure non-performing loans don't become a bigger problem. ......

Read - BS

Bank Licenses May Be On Tap, Will Anyone Tap?

.........The fundamental question that will arise is that if a universal bank license is granted to one of those which failed in the latest round, how is that it turned `fit and proper’ in Jan. 2015, when it was not so in 2014 April. What is that that could make the rejects palatable to RBI? To be sure, the RBI, typical of its tradition, has not said why it rejected many, and why it chose the two. Many of the issues behind rejection could remain for years. The differentiated bank licenses may be an opportunity, but that may not be attractive for many in the current crop. The one idea that drove everyone ............

Read - ET

New Banks, Different Banking Agenda?

.............The proposed agenda of universal, differentiated banking can hardly be achieved by licensing two banks every ten years and PSL asset creation possibly requires more NBFC-like than bank-like framework. The Mor Committee report does suggest this direction, but by overhauling the licensing framework. Interestingly, while the Indian economy has grown to be highly iniquitous, banking policy has aggressively pushed equity. Given the challenges of ............

Read - ET

A vicious inflationary circle

..........There is a vicious circle at work here. The Reserve Bank of India (RBI) is working on the basis of the dominant monetary paradigm that a tight stance is required to quell inflationary expectations. However, if these expectations are being driven not so much by monetary policy actions but by the daily ground reality of rising food prices, the question logically arises: is the current stance going to make any difference at all to inflation? And, if not, should the RBI now accept the logic that it is better off focusing on growth by lowering interest rates rather than sticking to its current position? ............

Read - BS

Corporate America committed to investment in India

..............The industry representatives heard from Rajan the challenges RBI faces in taming inflation while promoting the growth necessary to keep the engine of India's economy thriving, all in the midst of factors beyond the respected institution's control, USIBC said. USIBC members noted their strong support for RBI's financial sector reforms including actions to further deepen India's debt capital markets toward long-term infrastructure development and manage risk, it said...........

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State Bank launches digital banking facilities

.........The sales staff of SBI will visit the customers at their door step and using the tablets get the formalities completed for account opening like details of KYC and photographs of applicant. In the case of..........

Read - HBL

State Bank of India to review branch policy in metros

...........The group plans to create profiles of potential centres for network optimisation. It is bringing in an external advisor for the exercise. Bank officers will work alongside the study team. These officials would later work to help implement the plans vetted by the bank...........

Read - BS

Give benefit of differential rate to micro and small enterprises sector: RBI to banks

.........."We advise that while pricing their loans to MSE borrowers, banks should take into account the incentives available to them in the form of the credit guarantee cover of the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE)," the apex bank said in a notification............

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How the credit information system can be made more efficient

.............The Reserve Bank of India (RBI) constituted a committee in March 2013 under the chairmanship of Aditya Puri, managing director of HDFC Bank, to examine reporting formats used by CICs and related issues. The committee, comprising representatives from various stakeholders including the CICs, public and private sector banks, foreign banks, has presented its report to the RBI. Its recommendations, if accepted, would have huge impact on stakeholders involved -- CICs, credit institutions and the consumer. Some of the recommendations will require changes in the law...........

Read - DNA

Check account & credit card statements every month

Have you ever thought of the possibility of your bank or credit card company charging you erroneously for something you didn’t have anything to do with? Are you among those who do not bother to check their bank statements regularly? Do you pay your credit card bills without glancing through the expenses listed? If you are one of these, it is time you woke up ............

Read - FE

Banks override credit card PIN need

...........a bank official said that in several places merchants have not yet managed to put in place the infrastructure necessary to facilitate PIN authorization. All restaurants have to put in place mobile point of sales terminals (card swipe machines) so that customers can pay by card without leaving their table. Swipe machines are not accessible to customers at some shops. In many busy outlets, merchants are finding that PIN authorization slows down the queue as many customers do not remember their number. To ensure that business is not affected, banks have bypassed the requirement of PIN in some machines. .........

Read -TOI

Mor Committee Recommendations – An analysis - Dr S Santhanam

.......Overall, the CCFS of Mor has attempted to map what are desirable for the accelerated growth of the financial sector.  But, in the process, it has left a lot of questions unanswered as ‘WHY’ of them have not been addressed. May be it may spur scope for setting up of more committees to deal with each of the recommendations. More the harder for the Regulator and the institutions to implement them. Finally, the user of financial services will .......

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