Two employees of a State Bank of India (SBI) branch here have been booked for allegedly committing fraud, police said today. The alleged fraud, which involves illegal transfer of Rs 1.15 crore, took place at the SBI branch in Kadiri area and came to light during inspection of accounts, they said. ..........
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.
Friday, May 23, 2014
Thursday, May 22, 2014
Making government banks bankable
........The key shift that needs to be made is in the relationship of the government with the public sector banks. Till now, government control, especially through the finance ministry, has been complete with the banks being used to achieve objectives of state policy. This “government-as-sovereign” role has deeply politicized governance in these banks. Directors on the board are appointed either in keeping with anachronistic provisions of laws such as the Banking Regulations Act, 1949 or through political interference. As a result, ............
Indian Banking At Cross Roads ?
........Thus in nut shell we can say that there are challenging periods ahead for Aam Banker, as they have to continue to struggle with long working hours, poor salary and pressure from unions to go on strikes frequently on issues on which they may not be interested to go on strike etc. They have to bear the wrath of the government and public for the ills for which they are not directly responsible. Now they need to take their independent decisions rather than swayed by emotions. If bank reforms take place in the right earnest and government holding is brought just below 50%, they will have more positive impact than negative vibrations. In such a situation officers may be out of CVC clutches and RTI. They will not be forced to give loans purely on political and corrupt considerations. With options of new banks, youngsters can look for greener pastures elsewhere. However, ............
Read.........
Monetary relics
.....For a start, the RBI could remove the SLR/CRR obligations on long-term bonds or deposits raised by banks to fund infrastructure projects. This is especially relevant in an economy in dire need of big-ticket investments. Given that infrastructure already accounts for over a third of all outstanding loans by banks to industry — not to mention a significant portion of their stressed assets — banks may well be reluctant to lend further ............
Recovering NPAs
.............This refers to the Charan Singh's article "Why are NPAs higher in public sector banks?"(May 20). Comparing non-performing assets (NPAs) and the recovery practices of private and public banks is like comparing apples and oranges since the internal ecosystems both work in are poles apart. The very fact that private banks have urban, higher ticket-size assets and mostly do not tread in the muddy backwaters of the Indian economy - infrastructure and direct agriculture - helps ........
New Govt to decide on RBI Dy Governor appointment
.......The Prime Minister’s Office has now returned the file to the Department of Financial Services in the Finance Ministry with a note that the next Government will take a call on the RBI Deputy Governor’s appointment, sources close to the development said.............
Banks must build a structure to provide superior and efficient customer service - Deepali Pant Joshi
Inaugural address by Dr Deepali Pant Joshi, Executive Director of the Reserve Bank of India, at the Conference of Principal Code Compliance Officers of banks, convened by the Banking Codes & Standards Board of India (BCSBI), Mumbai, 20 May 2014
.........Financial consumer protection, when reinforced with financial inclusion and financial literacy, will lead to enhanced financial stability. We have had a great thrust on financial inclusion; as a result, several new consumers of banking products have come into the banking system. We have to ensure adequate customer protection for these new users of banking services. We have to help them through financial education, literacy and awareness to use the diverse range of products and services offered by the banks. Awareness of the customer has to be increased. With greater awareness of customers, must come, heightened responsibility of the provider of financial services. Please appreciate that today RBI, BCSBI and banks are all working under a greater lens of public scrutiny and under Right To Information...............
Read........
Bharatiya Mahila Bank included in second schedule to RBI Act
.......Post inclusion in the second schedule or commercial bank category, the lender becomes eligible for loans from RBI on bank rate and also acquires membership of clearing houses. Also, it provides that any activity of the bank would not adversely affect the interests of depositors. The Reserve Bank in a notification today said, ". The name of Bharatiya Mahila Bank Limited has been included in the Second Schedule to the Reserve Bank of India Act, 1934.".............
રિઝર્વ બેન્કમાંથી ૨૦ રૂપિયાની નકલી નોટ મળી
.........તમારા ખિસ્સામાં પડેલી ૫૦૦ કે ૧૦૦૦ની જ નહીં પણ ૨૦ અને ૫૦ રૂપિયાની નોટ પણ નકલી હોઈ શકે છે..! હાલમાં જ રિઝર્વ બેન્કમાંથી ૨૦ રૂપિયાની નકલી ચલણી નોટ મળી આવી છે. છ મહિનામાં ૨૫ લાખ રૂપિયાથી વધુની ૪૨૦૦થી વધુ નકલી ચલણી નોટ શહેરની એક ડઝન બેન્કમાંથી મળી આવી છે. ઉચ્ચ પોલીસ અધિકારીઓનું સ્પષ્ટ કહેવું છે કે, પાકિસ્તાન ભારતને પાયમાલ કરવા માટે હવે ૧૦૦૦ કે ૫૦૦ નહીં પરંતુ આવી નાની ચલણી નોટો પણ છાપવા લાગ્યું છે........
Raghuram Rajan's RBI to banks: Make all new ATMs talking machines from July
...........The RBI's directive today came on its prior advice to banks in 2009 to make bank branches and ATMs accessible to people with disabilities and make at least one-third of the new ATMs installed as talking ATMs with Braille keypads. "It is, therefore, reiterated that banks should make all new ATMs installed from July 1, 2014, as talking ATMs with Braille keypads," RBI said in a notification............
नई पहल, अब ATM से निकलेगा 50 रुपये का नोट
.....RBI ने निर्देश दिया है कि अगर ATM में 500 रुपए के नोट रखे हैं तो उसमें 100 रुपए के नोट होने चाहिए। इसी प्रकार 100 रुपए के नोट हैं तो उसमें 50 रुपए के भी नोट होने चाहिए। RBI से मिले इस आदेश के बाद कुछ बैंकों ने अपने ATM में 50 रुपए के नोट डालने शुरू कर दिए हैं।
Read......
RBI defers Aadhaar-linked payment plan mechanism
..........."This was communicated by the regulator to Indian Banks Association...While the project has not been scrapped, it has been kept in abeyance," said a banker. IBA is the association of bank managements. "It took a while for RBI to take the decision... that we believe is because of the importance that the UPA II government had placed on Aadhaar. It was a favourite project under Nandan Nilekani, who everyone thought was very close to the power centres. The panel's report was not made public,"
SBI Launches Tab Banking Service
.........Under Tab Banking, the bank’s staff will visit the customers at their home or office and by using the tablets get complete formalities for opening an account like photographs of applicant, scan identity/address proof and fill in the application in front of the customer and upload it to the central hub for further processing.........
Cheque clearing plaints force review of uniform holiday calendar
.....A Reserve Bank of India circular has attributed the delay to ‘taking extension for return-clearing on days which are not declared as holiday under uniform holiday calendar’. The circular said that the Department of Payment and Settlement Systems did not favour providing blockage/extension on days which are not declared as holiday according to the calendar. It may be recalled that the uniform holiday calendar was launched in Chennai and Mumbai last year and covered several States/Union territories.............
Inflation control tops RBI agenda for new govt
........With inflation-control on top of RBI Governor Raghuram Rajan’s mind, sources familiar with the developments said implementation of the Urjit Patel committee’s recommendations will be the main agenda the central bank will take up for discussions with the new finance minister. The Patel committee had suggested inflation targeting should be RBI’s singular mandate and the central bank should be accountable for meeting the target.........
Bank fined Rs. 12,000 for not returning property documents
..After this the complainant requested the bank to hand over his agreement documents. The bank however failed to do so. Aggrieved by this, the complainant approached the forum and filed a complaint. The forum after going through the complaint asked the bank to file its reply. The bank however failed to do so. The forum while passing orders maintained that after the complainant had repaid the entire loan amount, it was the bank’s duty to hand over the documents, but it did not do so. ..........
Many NBFCs Not Following Rules, Says Home Minister
.........The RBI code asks all NBFCs to publish their interest rates on websites and other media. The loanees should be given awareness on interest rates and other conditions. ‘’Though the RBI is the authority to act against such violation, the police can act up on specific complaints,’’ he said. The minister said micro-finance agencies are also liable to follow the RBI guidelines...........
RBI shores up currency reserves
.......“The RBI maintains a foreign exchange reserve buffer that is commensurate with the needs of the Indian economy,” the central bank said. Meanwhile, an RBI committee is reviewing measures rolled out last year to stabilise the rupee, according to one of the officials. Those steps included currency swap concessions for banks raising money from abroad and a special dollar window to state oil companies.......
Reserve Bank of India eases gold import rules
........Commenting on the RBI decision, the All-India Gems and Jewellery Federation (GJF) Chairman Haresh Soni said this is a positive step for the industry as supplies will increase. It will help in reducing the domestic gold prices as this smoothening of supply will help in reducing the premiums, which currently is ruling at USD 80-90 an ounce, he said. India is the largest importer of gold, which is mainly utilised to meet the demand of the jewellery industry......
Wednesday, May 21, 2014
RBI plans radical overhaul of customer protection norms
RBI to austere customer care; says banks must shape up
.......Banks may soon have to pull up their socks if they want to avoid being named and shamed. Starting next year, the Banking Code and Standard Board of India (BCSBI), a watchdog set up by the RBI will publicly declare the names of all those banks that failed to adhere to the customer service rules prescribed by them. BCSBI says it has already started grading banks based on the quality of their services and hopes that this will force banks to behave better. AC Mahajan, Chairman, BCSBI says, “Governing council decided monitoring codes for so many years then why not start rating banks.
RBI GOVERNOR IN MODI ERA - TO BE OR NOT TO BE...................
.............RBI is accountable to the Finance Ministry and not the
Parliament but at the same time, RBI Governors have been strong enough,
independent enough to never allow the Finance Ministry to dictate what should
go into its monetary policies. Rajan’s predecessor, Subbarao was extremely
independent, even to the extent where he and Chidambaram could not see
eye-to-eye as he refused to toe the line set by the Finance Ministry. Rajan is
also unlikely to dance to the tunes of the new Govt and his steadfast focus on
keeping a tight leash on inflation will continue..............
FM choice, Rajan retention & reforms to drive mkt mood :DBS
......"The triggers for further equity action will be the new government's reform agenda. In the immediate term, selection of the finance minister and decision to retain the RBI chief are likely to provide a boost to sentiment and keep the rupee supported," ........
The fifth 'C' gets going at ICICI Bank
...........The CEO says she has no problems if people refer to her as a boring banker because of the bank's obsession with caution, as the so-called boring part of any banking business gives the core operating revenues. "The extra cream and cherries will depend on how the environment moves. In the banking business, you have to take risks, but the risk should be understood, quantified and priced in. It is risk management and not risk avoidance," Kochhar says. The move has paid off well in the current business environment as even though non-performing assets, or NPAs, and restructured assets have gone up requiring higher provisions, the bank has been able to increase its net interest margins, giving it the ability to absorb the extra risk.............
Obituary
Shri GUL BUTANI (70), our colleague from Economic Department expired on May 19, 2014 at USA. He was a brilliant officer and a wonderful associate while in the Bank. May his soul rest in peace.
- PM PRITHIANI
RBI to take over management of Telangana’s public debt from 2 June
.........."Under the agreement, which shall be effective from 2 June, 2014, the Reserve Bank of India shall carry on the general banking business of the Government of Telangana, manage its rupee public debt and act as the sole agent for investment of Government’s funds," RBI said in a release today...........
Inflation control tops RBI agenda for new govt
............While some of the recommendations of the panel have already been implemented, the government’s comfort is required for pushing through some of the other key suggestions, such as setting up a five-member monetary policy committee (MPC) with a majority of the members representing RBI. The finance ministry under P Chidambaram had raised its reservations on the issue and made a detailed presentation to the Prime Minister’s Office (PMO). Since no conclusion was reached during the previous government’s tenure, sources indicated Rajan would engage with the new government on this issue...........
New govt must get stalled projects off the ground on priority: bankers
.......Bankers want the government to push economic development on a priority basis. Pressing issues such as policy stability and simplification of business regulations should be carried out seamlessly, they said. For the last two years, India has seen sub-five per cent annual growth; for this year, most growth estimates stand at 5.5 per cent......
RBI introduces common registration form for various NBFCs
.........."Now, there will be a common application form for Non- Banking Financial Companies (NBFCs), Non-Banking Financial Company-Micro Finance Institutions (NBFC-MFIs), NBFC-Factors and Infrastructure Development Finance- Non-Banking Financial Companies (IDF-NBFCs),"...........
NBFCs should follow fair practice code: Ramesh Chennitala
Home Minister Ramesh Chennithala on Tuesday urged non-banking financial companies (NBFCs) to follow the Fair Practice Code stipulated by the Reserve Bank of India (RBI) last year. They would face action if they failed to comply with the code, he said..............
RBI to have regular process of bank licences: Rajan
Reserve Bank of India Governor Raghuram Rajan Tuesday said the central bank would soon announce a regular process of granting bank licences, ending the current system of giving it in tranches. "The Reserve Bank of India is committed to freeing entry in banking," Rajan said at an event organised by the Competition Commission of India.............
RBI chief floats policy balloons
..........PSBs, said Rajan, were in a worse position than their private counterparts in attracting human resources. In the past, he said, PSBs had the best talent; today, past hiring freezes had decimated their middle-management ranks, with private banks having also poached talented personnel. He advised state-owned banks to recruit laterally. "But, to do so, they need to be able to promise employees responsibility, as well as the freedom of action."...........
RBI says introduction of payments banks can reduce SLR ratio
......A payments bank, which will take deposits and offer payment and remittance services, will be constrained to invest all its funds in safe instruments such as government securities, Rajan said. The RBI governor said the proposed Post Bank could start as a payments bank, making use of post office outlets to raise deposits and make payments. The Department of Posts had applied for a banking licence in the last round. At that time RBI said it would consider the application of Department of Posts separately in consultation with the government. Rajan said a commercial bank could convert itself into a payments bank by maintaining 100% SLR margins, indicating that regulations will not favour a payments bank unduly..........
Recommendations to Improve India's Public-Sector Banks' Governance Are Credit Positive
.........Although we do not think it is likely that the government would allow its stake in public-sector banks to fall below 50%, there is a higher probability that the government would implement a watered down version of these recommendations. Even such an outcome would be credit positive for public-sector banks.
Bank licences: RBI may bet big on small NBFCs
............ “A number of eminently practicable suggestions have been made to reform PSBs. We need to examine all these ideas carefully, many of which will help give public sector banks the flexibility to compete in the new environment.” Rajan did not quite agree with outgoing finance minister P Chidambaram's idea of Indian mega banks, which can compete on a global scale. “Rather than focussing on mergers (to form mega banks), it is better to have a good management structure and proper governance in place for all banks.”...........
PSU banks need to free themselves from govt influence: Raghuram Rajan
.............."If public sector banks become competitive, and especially if they do so by distancing themselves from the influence of the government without sacrificing their 'public' character, they will be able to raise money much more easily from the markets. "Indeed, the better performers will be able to raise more, unlike the current situation where the not so good performers have a greater call on the public purse. Competition will improve efficiency,"...........
A Golden Opportunity to Move Forward on the Reforms Path
........So what is it that a new government with the comfort of parliamentary numbers should do? India now has several regulators in the financial sector enjoying varying degrees of autonomy and respect. Over the last decade or so, after transfer of power from the ministry of finance to the new regulators, the government has chipped away at some of the institutions. One of its failures has been the inability to accept and settle professional differences with the regulators as illustrated by the experience of Sebi during CB Bhave and KM Abraham's tenure and at RBI during the tenures of YV Reddy and later D Subbarao. A new finance minister will have to mend ties with some of the regulators, alter the terms of engagement and allow them to grow and respect them without the shadow of a mai-baap relationship, and also ensure accountability .........
Governance reforms in banks: The Nayak Committee Report
..........The Nayak committee needs to be complimented for taking the bull by its horns and addressing the issue of process squarely. While arguing for fundamental changes in the way the public sector banks function, the committee presents a compelling case by examining the performance of these banks in comparison with the private sector counterparts. The committee, starts its report by pressing the alarm bells on the performance of these banks; moves to analyse what cripples them; and then addresses the issue of governance. The of governance of bank boards is not a stand-alone issue that could be tinkered by recommending some changes here and there, but has to be examined comprehensively..............
RBI for 20% credit enhancement by banks to corporate bonds
......The limit on partial credit enhancement will be set at whichever is lower---20 per cent credit enhancement or the funds needed to raise the rating by two notches. Banks should adopt a board-approved policy on partial credit enhancements, covering issues such as assessment of risk and setting limits, RBI said in its draft norms released on Tuesday.............
Catholic Syrian Bank, Ratnakar Bank to hit capital market this year
.........While Catholic Syrian Bank is planning to raise about Rs 300 crore from the fresh share issue, RBL Bank may raise Rs 800 crore from the IPO. The two banks have been advised by Reserve Bank of India over the past few years to gear up for an IPO and now the P J Nayak committee report on governance issue of banks also states that the two banks have to list by December 2014...........
SBI plans to offer 55 lakh shares to staff at a discount
.........India’s largest bank said it proposes to offer the equity shares to its employees at such discount as may be decided by its board. The discount will be based on the average of the weekly high and low of the closing prices of the shares quoted on the NSE during the two weeks preceding the launch date, but at a price not less than ₹1,565 an equity share............
Are there really zero interest EMI schemes? Yes and no
..........In zero EMI schemes offered on credit card outstanding, the interest element was often camouflaged and passed on to the customer in the form of processing fee. After the central bank issued the circular, retailers had indeed reduced the number of such schemes. So, how are some retailers still able to offer such deals?...............
Officials undecided on foreign investment in HDFC Bank
A meeting to take the views of the industry department, finance ministry and the Reserve Bank of India (RBI) on raising the foreign investment limit in HDFC Bank remained inconclusive on Tuesday. Now, Finance Secretary Arvind Mayaram would decide whether another meeting is to be held or the matter would straight go to the Foreign Investment Promotion Board (FIPB), sources said..........
Faulty I-T server logs off taxpayers
..........“It is very unfortunate that server is down at such a crucial time. If there had been any tech ere had been any tech nical fault or delay by the taxpayer, the I-T department would have quickly issued notice. But when the department is itself at fault, nothing can be done,“...........
Read - TOI
Coming Soon: The First Bitcoin Debit Card
Bitcoin users are on the cusp of being able to spend their hard-earned cryptocurrency at any business that accepts debit or credit cards. This new development in payments has been achieved by Palo Alto-based company Xapo, which already provides hot wallet and cold storage services. This summer, Xapo will begin issuing debit card numbers to its users, and for a fee of $15, a physical card to use at brick-and-mortar locations................
Tuesday, May 20, 2014
Why are NPAs higher in public sector banks? - Charan Singh
....In a slowing economy, it is natural to assume that NPAs will increase. But in November 2013, K C Chakrabarty, then RBI deputy governor, had observed that the primary cause of rising NPAs was not the global slowdown but deficiencies in the credit and recovery mechanism. In fact, there could still be another factor: the procedure followed in extending and monitoring credit, for which there are significant differences in the approach of PSBs and private sector banks. This difference in approach can be easily identified if .........
'Inflation to Veer Towards RBI's Comfort Zone'
.......“We now feel more confident that India will emerge from the stagflation type of environment over the next few quarters,” Morgan Stanley said in a research note. It, however, added that inflation is expected to head towards 6 per cent. “The GDP growth is to accelerate by 210 bps over the next 8 quarters to 6.8 per cent. Inflation will finally head towards RBI’s comfort zone of 6 per cent over the next two year,”........
Bhagwati advises Modi to retain Rajan as RBI governor
......Replying to PTI questions, the economist put his weight behind Reserve Bank Governor Rajan, advocating that he should remain at the helm. "I also believe that he (Modi) ought to keep Raghuram Rajan. He is a major economist who commands international respect as well," said Bhagwati, Professor at Columbia University.......
No need to make RBI guv's office political - Jalan
Former RBI governor Bimal Jalan is optimistic about the government's ability to control prices. In an interview to TOI, he said the RBI governor's office should not be dependent on which party comes to power. Excerpts:.........
Read - TOI
Read - TOI
Bank unions issue strike call on May 23 against Nayak report
Giving a strike call on May 23 against recommendations of the P J Nayak Committee on corporate governance in public sector banks, various bank employees' associations said today they would oppose any attempt to privatise state-run banks. Last week, an RBI working committee headed by former Axis Bank chairman P J Nayak had suggested the government to cut its holding in public sector banks to below 50 per cent...........
SMALLER CURRENCY NOTE
An altogether new series of currency notes in different denominations should be issued, but in small sizes, to save heavy cost on printing of currency. Sizes of currency notes were last time reduced about half a century ago when notes of Rs.1, 2 and 5 were quite common in circulation. With coins in the denomination of Rs.10 already introduced, the Reserve Bank of India should now discontinue printing notes of these denominations like it has been done in the case of notes of Rs. 1, 2 and 5. Since the life of lower-denomination notes is quite low, it is senseless to waste public money on printing lower-denomination notes of up to Rs 10. Notes in a new denomination of Rs. 200 can also be introduced.
- Madhu Agrawal, Dariba, Delhi
(Pro)long(ed) Pause
My View on "RBI’s early warning signal suggests Rs 66,000 cr N...":
While the RBI is putting in place systems to bring in some sense of sanity in banking in India, the reality seems to be otherwise. Recently, if newspaper report is to be believed, that a team of CBI officials went to SBI to enquire about King Fisher Airlines NPAs etc. The team returned without any bit of information as SBI reportedly refused to share any information with the CBI. There is no clarificatory response from SBI about this press news. Why should SBI protect a known defaulter and has not classified it as a wilful defaulter? Why should there be such a long pause before every small action taken by banks against KFA? To see Mr Vijay Mallaya enjoying the IPL matches everyday in the cricket stadium while 1000s of KFA employees have not received their salaries and the SBI not prepared to take severe action against the company is something every sensible citizen in the country is entitled to know. Another case in point is the Sahara case. While SEBI claims that 20000+ letters to the investors returned undelivered as addresses were incorrect, RBI is silent without taking any action on the failure of KYC by Sahara group financial companies. Earlier RBI take action in these cases better for the banking system and the public at large.
- Dr.Santhanam
RBI action on NDCCB jolts teachers, farmers
NAGPUR: Many among the 15,000 school teachers in government aided schools in the district may be left high and dry this summer. They went through without salaries from January to March and are facing the same crisis again. Getting salary for May is likely to be tough affair, thanks to the RBI this time.......
HCBL Bank denies Sahara link
.......The Lucknow-based Bank maintained it was an "autonomous banking institution" functioning under dual regulation of Reserve Bank of India (RBI) and Uttar Pradesh Cooperative department. "Sahara Group is only our corporate client like any other customer," HCBL Cooperative Bank CEO Pawan Kapoor said .....
The NaMo factor in the digital economy
On a warm Thursday morning in New Delhi, Prime Minister-nominee Narendra Modi made a bold pitch for IT becoming the face of India, and, in the process, coined the Twitter-friendly phrase ‘India Talent (IT)’ + ‘Information Technology (IT)’ is equal to ‘India Tomorrow (IT)’..........
Narendra Modi is said to favour Arun Jaitley as next finance minister
.........Jaitley’s chances of getting the finance portfolio haven’t been diminished because of his election loss and incoming leader Modi is keen to nominate him, according to the leaders, who asked not to be identified because the discussions are private. Other candidates under consideration include former Cabinet member Arun Shourie and ex-central bank governor Bimal Jalan, they said..........
Banks urged to issue only CTS cheques
.....With the CTS cheques, the electronic image of the cheque is transmitted to the drawee bank by the clearing house. It speeds up the cheque clearance process. Though banks are supposed to issue only CTS instruments, some continue to issue non-CTS drafts and it takes a longer time for clearance. This can be considered as deficiency of service and taken up in a consumer court as it affects the public........
Tirupur exporters urge RBI Governor to arrest rupee gain
.......In a letter to the RBI Governor Raguram Rajan, Tirupur Exporters Association (TEA's) President A Sakthivel said that after the Lok Sabha results, the Rupee has been gaining against Dollar on a daily basis and on Monday morning it touched Rs 58.57 per dollar and is widely expected that the Rupee gain will continue in the coming days also, which may not overall augur well for the knitwear exporters of Tirupur....
Monday, May 19, 2014
Easy monetary policy pinches poor - Dr.S.S.Tarapore
....The Urjit Patel Report on ‘Strengthening the Monetary Policy Framework’ has provided yeoman service by taking an unequivocal stand that the first step is to shift the monetary policy indicator to the Consumer Price Index ( CPI). The criticism of the report is that food items have a 50 per cent weightage in the CPI and that the RBI, by focusing on the CPI, is using an indicator it cannot control. The critics miss the point that the CPI better tracks the consumption pattern of the masses. Moreover, it is not generally appreciated that food inflation invariably degenerates into generalised inflation. Generalised inflation is, and always is,......
Here's what Modi and his men must do after assuming power - Dr. Subir Gokarn
...............One of the biggest problems faced by the common man at the moment is the high inflation. The Reserve Bank has been focusing on Consumer Price Index (CPI) for some time now, which is still at a sticky 8 percent plus. This in turn will make it difficult for the RBI to lower rates, contrary to the wishes of the govern
Three national missions - Dr. Subir Gokarn
.......This is exactly what any government would have required if it were to come to grips with the structural issues that now threaten the Indian economy's growth prospects. Of all the many problems that can be put on a priority list, I believe that three are most critical. No attempt to put the economy on a higher growth trajectory will succeed unless these three problems are solved. Further,.......
Wage Revision for Bankers : "Kya ache din chalye gaye?"
..........UFBU delayed this to gain more levy but have hugely dented the bankers future wages. Now with Left front being routed (with hardly 10 seats in whole of India) and totally out of political scene, the Bank unions led by left, are likely to be ignored by central government, as they will become much weaker than what they were a few years back. Moreover, poor bankers may be forced to go on frequent strikes by UFBU (resulting in salary deductions) on issues other than wage revision............
PMEAC Chairman Rangarajan likely to resign
..........All the PMEAC members are likely to submit their resignations shortly as their term in co-terminus with that of the Prime Minister. The new BJP-led government headed by Narendra Modi will take within a few days. Dr. Rangarajan has been the Chairman of PMEAC since 2005. He is a well known economist and a former Member of Parliament...........
Fix the economy, don't target big business
........Perhaps the system as it exists today and the institutions that service it simply cannot catalyse a broad-based socioeconomic transformation. Take the example of the Reserve Bank of India (RBI). Despite the RBI's best efforts at enabling capital creation, there is a severe investment deficit in the country. Household savings are not channelled towards productive assets due to low levels of financial inclusion and a systemically unworkable model of universal banking that the RBI has held sacred ..
Sense of belonging
My View on "Governor's reply to a 10-year-old girl":
This letter from RBI Governor sends out two clear messages. (i) RBI handles other people's concerns with utmost care, and it responds in time (ii) The letter written within a fortnight of Dr Rajan assuming office, shows the individual's 'belonging' to the institution he is heading and his anxiety to protect the prestigious image of RBI.
- M G Warrier
RBI’s early warning signal suggests Rs 66,000 cr NPAs
............ Following a fiat from the Reserve Bank of India (RBI), banks have put in place a mechanism to spot troubled loan accounts early in the day, classifying these potentially troublesome exposures as “Special Mention Accounts” (SMAs). On a rough reckoning, loans that are not being serviced on time at four public sector banks are estimated at around Rs 66,000 crore. While ..........
Govt to gain the most from PSU bank reforms
...........Incidentally, weeks after the Nayak committee was constituted in January, RBI wrote a long letter to then financial services secretary Rajiv Takru on what ails the public sector banks. Many of the issues that have been raised by the Nayak panel—ranging from tenure of the chairman to composition of a bank board and government ownership—were highlighted in the RBI letter. Takru got back to RBI, defending the government’s stance on almost each and every issue. He even took the blame for rising non-performing assets of the public sector banks as the government pushed these banks to give many project loans in the wake of the North Atlantic financial crisis in 2008-09. The central bank has subsequently written back to Takru’s successor, G.S. Sandhu, refusing to accept the government’s arguments ..........
Bank unions to protest against privatisation on May 21
The United Forum of Bank Unions (UFBU) has called upon all unions of bank employees to organise protest meetings/demonstration after working hours on May 21 to condemn the recent recommendation of a Reserve Bank of India panel in favour of privatisation............
Fixing PSU Banks
..................And given that the government is in no position to contribute, it would be prudent to shed stake. The financial position of state-owned banks is fragile, which is partly masked by regulatory forbearance, and the capital of state-owned banks has eroded with the proportion of stressed assets rising rapidly—the PSU banks are losing their market-share to the private sector banks.........
PJ NAYAK PANEL'S SUGGESTIONS CAN BE GAME CHANGERS
..........Among the gamechangers could be the committee's recommendations such as cutting the government's stake to below 50%, and a new Bank Investment Company (BIC) to which the government will transfer its holdings in state-owned banks managed along the lines of a passive sovereign wealth fund aimed at ensuring good returns on investments, empowering the boards of these banks and ensuring that they are run professionally...........
Read - ET
The Economist to Modi: Be more strategic and ruthless, tackle rotten banks
...In the latest editorial, however, the magazine suggests three tasks to Modi to kick-start the economy – tackle rotten banks, break the destabilising cycle of stagflation and create more decent jobs. “Bad debts have soared as the economy has slowed and infrastructure projects have got snared by red tape. Banks have chosen to “extend and pretend” loans to zombie firms. The cost of cleaning up banks’ balance sheets could be as high as 4 per cent of GDP — slightly larger, in relative terms, than Wall Street’s bail-out. But until the banks are fit enough to finance a new cycle of investment, no recovery will happen,” it says..........
Interest rates unlikely to dip despite BJP win
Despite the BJP's manifesto objective of bringing down interest rates on coming to power, cost of funds is unlikely to come down in the short term as the government is expected to announce an oversized borrowing programme in its forthcoming Budget. The Reserve Bank of India is also expected to keep rates on hold in its June policy as it waits to see the impact of monsoons on food prices......
Managing money under Modi
......Second, increase the annual tax deduction of Rs 1 lakh to Rs 3 lakh. This popular deduction of Rs 1 lakh for various investments/expenses, like PF, PPF, and insurance premium, etc has not kept pace with the rising inflation. It is pertinent to note that this deduction helps people in taking investment decisions and encourages them to save for their long-term requirements...........
RBI to banks: Alert customers on fraud remittance schemes
To ensure that customers do not fall prey to fraudulent schemes promising cheaper funds from abroad, the Reserve Bank of India wants banks to consider prominently displaying messages cautioning them about the schemes on their websites as well as branch/ATM locations. The central bank also said banks could consider incorporating a column on “reason/ purpose for payment” in pay-in slips so that officials could advise customers not to remit money to fraudsters who float fraudulent schemes.............
Spending alone won't fetch you credit card rewards
.... "Be vigilant about minimum redemption amounts and blackout dates. Card holders must also pay attention to what categories of rewards they sign up for and if signing up for bonus requires them to redeem in several increments, and so on,''..............
ICICI Bank to charge customers for redeeming points on cards
.......Industry experts believe this could be a result of the waiver of the charges on inoperative accounts. The Reserve Bank of India (RBI) has now made it mandatory that banks will not be permitted to levy penalty on non-maintenance of minimum balance in any inoperative account. As a result, bankers said, consumers would have to pay more on other services. Experts believe this charge on cards is one of the alternatives that banks are now exploring........
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