Banks, LIC, SSC to Conduct Written Tests in Only Online Method?

..........Banking sector officials are of the opinion that valuable time is being wasted in paper based method.  The officials have to work hard to decide the exams centers in paper based method.  Sometimes the questions papers are leaked and there are security problems also in this method.  Scanning the OMR sheets and announcing the results is taking at least two to three months time.  Completion of recruitment process is also taking much time.  Thus banks prefer to conduct the recruitment exams in online method as they are believed to be safer.......

Read........

RBI bans cooperative bank in UP from conducting business

..........The bank was put under a multi-agency probe by the finance ministry last year after money laundering allegations had surfaced in an Intelligence Bureau report. Prior to the IB report, the RBI had carried out its own investigation and found that the cooperative bank was allegedly running fictitious loan accounts, had cash deposits and withdrawal of crores of rupees in which the beneficiaries were 'unknown'. ......

Read - TOI

Banking on better times

......... The RBI has projected the capital requirement for the banking industry for the next five years at nearly ₹500,000 crore, of which ₹415,000 crore is required by PSBs alone. Even if only a third of the capital is from equity — the rest through subordinated debt and various hybrid instruments — the Centre would have to contribute ₹90,000 crore or so to maintain its existing stakes in PSBs. Given its precarious fiscal position.........

Read - HBL

RBI yet to approve YES Bank board appointments

............It is learnt RBI's nod is still pending. While the reasons are not known, the central bank typically examines 'fit and proper' criteria before permitting board-level appointments in private sector banks. "An application to RBI has been made by the bank recently," a spokesperson of YES Bank told Business Standard in an e-mailed response. The spokesperson, however, did not respond on the reasons for the delay.......

Read | Business Standard

Narendra Modi's golden opportunity - T C A Srinivasa-Raghavan

................But it is probably futile to think it will be abolished. That wouldn't work politically in a democracy full of poor voters. So the second-best solution is to minimise the evil and keep the rates down to an absolute minimum - like 20 per cent for those who earn more than Rs 1 crore a year, 15 per cent for those who earn between Rs 10 lakh and .............

Read | Business Standard

Fighting food inflation

......... The fight against food inflation is critical for the government as it will have an impact on the monetary policy of the Reserve Bank of India. Food inflation rebounded in May to 9.50 per cent after a slight dip in April, and the June data are unlikely to be encouraging — which means that easier interest rates to spur growth are now that much more distant.

Read - The Hindu

A fresh poverty line

........There is another issue. Poverty-level income (or expenditure) should be measured on the basis of households, not individuals - because the spending unit is the household, not the individual. A five-member family would find it easier to manage on Rs 10,000 per month than a two-member family on Rs 4,000, though both households have the same level of per capita income. But data matching income or expenditure to size of household do not exist, and will have to be worked out. The subsequent task of enumerating...........

Read | Business Standard

Narendra Modi’s reforms to target bank funding

........A growing asset-liability mismatch in the Indian banking system and the need to ensure a steady flow of long-term capital for the infrastructure sector have pushed officials to consider reforms to the use of senior bonds as a bank funding tool, the people said. Details of the measures are still under negotiation ahead of the 10 July Union Budget statement, but the discussions ongoing within the finance ministry underline the new government’s determination to address the failings of India’s banking system.......................

Read - Mint

Sensitise NGOs on compliance of rules on foreign funds: Rajnath

......... NGOs should be sensitised about adhering to rules and regulations while receiving foreign grants. Mr. Singh’s observations come after a recent report by the Intelligence Bureau alleged that foreign grants by NGOs were being misused to obstruct various developmental projects in the country. The Home Minister was given a presentation by the Foreigners Division on Visa Policy Citizenship Act, Foreigners’ Contribution and Registration Act (FCRA) and related issues........

Read - The Hindu

Kaushal is new IDFC risk officer

Infrastructure financier IDFC, which was recently granted a commercial banking licence, has appointed Pavan Pal Kaushal as its chief risk officer. Kaushal has taken charge from Tuesday. Before joining IDFC, he was heading the Financial Services Risk Practice in Ernst & Young. He has also worked ........

REad | Business Standard

HR Khan back as RBI Deputy Governor

The Government on Thursday re-appointed Harun Rashid Khan as the Deputy Governor of the Reserve Bank of India. The appointment has been made for two years with effect from July 4, 2014 or until further orders, whichever is earlier, RBI said..........

Read - HBL

Khan has earlier worked as the RBI Executive Director, Regional Director of the bank’s New Delhi office and Principal, College of Agricultural Banking, Pune. Khan had his schooling in Bhubaneswar, graduation from the BJB Autonomous College, Master’s degree in Political Science from the Utkal University and MPhil in International Studies from the JNU, New Delhi.  He had started his central banking career in 1978 as a Probationary Officer.

7% growth is not an unrealistic proposition: Subir Gokarn

In a conversation between Mint’s editor R. Sukumar and Subir Gokarn, former deputy governor of the Reserve Bank of India, at the BRIDGE BRIEFINGS held at Bridge School of Management last week, Gokarn talked about the factors that could trigger the next spurt in economic growth. Edited excerpts:........

Read - Mint

Rethinking Fiscal and Monetary Policies - M.G.Warrier

.............The best conclusion for this article could be a recent quote from my former colleague Dr. Charan Singh who is now the RBI Chair Professor of Economics at the Indian Institute of Management, Bangalore:
“Historically, inflation targeting has been generally adopted by countries recording hyperinflation. In India, that has never been the case. Therefore, inflicting such high interest rates on the Indian public in the name of combating inflation has only resulted in lower investment and growth, and higher non-performing assets. In view of the young population
of India, our priorities should probably be on ensuring higher employment and growth and not just low inflation.” Without disagreeing, I would add that inflation need to be maintained at tolerable levels, to maintain stability in cost of living for those who do not have ‘savings’ to fall upon to subsidise expenses as prices fluctuate to their disadvantage! The managers of fiscal and monetary policy cannot be blamed as inflation is only one of the indicators that tell them the results of various fiscal and monetary policy measures they initiate. Depending on the direction they look, they are always able to either venture an optimistic prediction or tell us where either of them need correct the next step. Rethinking Fiscal and Monetary Policies.

Read..........

Memorandum - Increase of ex-gratia to pre-1986 retirees

Dear Friends,

As you are aware that Shri R.Gandhi, Dy.Governor, visited Chennai to attend the 90th Anniversary of RBIEA, Chennai on 30th June 2014. The Office-bearers of the Forum of Retired Employees of RBI, Chennai met him and presented a memorandum seeking immediate revision (increase) in the ex-gratia paid to pre-1986 retirees. The text of the letter submitted is appended below for your information. 

- Chandraiah

Respected Sir,

Increase in ex-gratia for pre-1986 retirees

We wish to bring the following to your kind attention for sympathetic consideration and favourable orders. 

The pre-1986 retirees, all of them aged above 87 years, were the unfortunate lot left out of the pension scheme introduced by the Bank in 1990 with retrospective effect from 1986.  The quantum of CPF and gratuity received by them was small and got eroded within a few years in meeting various family commitments.  Considering the hardship experienced by them the Bank was gracious enough to grant them Rs. 300/- as basic ex-gratia irrespective of the cadre along with a cadre-wise differential sum as medical allowance with effect from 1.11.1997.  The last increase in the medical allowance was effected from 1.4.2008.  Since then the amount of ex-gratia has remained static.  While the pensioners receive Dearness Relief once in 6 months in the ranging from Rs. 600/- to Rs. 1200/- approximately the ex-gratia beneficiaries get hardly   Rs. 100/-.  This is a pitiable situation considering the present high cost of living.  

This issue of enhancement of ex-gratia has been pending for quite a long time.   Com. Samir Ghosh, the Convener of the United Forum of Officers and Employees of RBI raised this issue with the then Governor Dr. D. Subba Rao during the Central Board Meeting held in Chennai on 4.7.2013. The Governor assured to look into the matter and do the needful.  A memorandum dated 6.12.2013, signed by the Pre-1986 retirees was also submitted to the Governor.  Com. Samir Ghosh wrote to the Bank on 27.3.2014 enclosing a chart from Chennai Office giving the relevant positions of ex-gratia amount drawn by the pre-1986 retirees and the pension amount drawn by the first batch of pensioners, the latter being vastly in excess of the former.  The chart referred to above is enclosed for your kind reference.  As per the chart the      ex-gratia comprising Basic + DA + Medical Allowance drawn by the pre-1986 retirees cadre-wise and the pension drawn by the first batch of pensioners as on date are as follows: 

Class IV – Rs. 6,163/-, Class III – 6,563/-, Gr. A, B & C – 7,163/-, Gr. D & E – Rs. 7,763/-, Gr. F & above – Rs. 8,363/- whereas the pension drawn by the first batch of pensioners ranges roughly from Rs. 13,000/- to Rs. 26,000/-.  We are confident that your good self would agree that the above quantum of ex-gratia is inadequate to meet the ever increasing cost of living including medicines which is integral to their existence. In these circumstances, they are constrained to depend on their kith and kin to pull on the remainder of their life with a sense of shame and indignity. 

As the pre-1986 retirees are very few in number -- the all India figure being 380 as on 30.06.2014, a sizable increase in the basic ex-gratia and medical allowance will only be a negligible burden to the Bank.  Considering the major relief the senior retirees will get in the evening of their life it is not a burden but a noble and timely gesture from the great institution. The Bank should also take into account the fact that the Commercial Banks and the Government have recently enhanced the ex-gratia for their pre-1986 retirees/surviving spouses.  Further, the Bank was beneficent enough to persuade the GOI to raise the family pension on par with the government’s family pension from 12.1.2013. Considering the fact that the number of pre-1986 retirees/surviving spouses is fast dwindling the increase in their ex-gratia has to be effected without further loss of time and without linking it to updation of pension.  

These senior retirees served the Bank with dedication and toiled for its success in its initial years of existence despite getting less salaries during the entire period of their service with endless hours of work often extending up to midnight without additional compensation and therefore deserve more attention from the Bank. 

We appeal to you Sir, to consider the plight of the senior retirees sympathetically and initiate necessary action at the earliest to provide a reasonable increase in their basic ex-gratia and the medical allowance.  As the relief sought for is well within the powers of the Governor/Central Board, we anxiously and with great hope await the Bank’s early orders in this regard so that the senior retirees could spend their last days with peace and dignity.  

Thanking you Sir, 

Yours faithfully, 

(A. MANOHARAN)

General Secretary

Ocean of uncertainty

My View on  "Achhe Din (kab) aanewale hai?? - K.N.S.Unni": 

One’s opposition to interference with RBI’s autonomy in carrying out its mandated role, one’s irritation with Srikrishna’s proposal for a sword above RBI, one’s trust in the scriptures like Gita…all melts down and flows towards the ocean of uncertainty with which all of us retirees of RBI will join, one day. Dr Gopalakrishnan used to start his discourses saying that ‘me and none of you sitting before me existed this day, last century and none of us will remain on this side of the planet, this day next century…’In between, can we not help each other…by doing whatever is within our ‘legitimate powers’? Yes, I am still on RBI pension and ex-gratia issues! There is a pension fund created to make sure that every living pensioner and serving employee eligible for pension will be paid pension as it becomes due. Periodic revision was factored into RBI Pension Regulations and if any doubt was left, it was clarified through a March 13, 1992 internal circular. If all these still leave RBI in doubt and resultant procrastination, the institution deserves to be ‘supervised’ by someone above!  

- M.G.Warrier

RBI uses fewer banks to buy foreign exchange

........According to currency dealers, a few months ago, five to seven state-run nationalised banks used to intervene in the market on a day-to-day basis. Now, a couple of banks intervene, that too, at a level set by RBI. The same strategy is followed when it comes to selling dollars............

Read | Business Standard

Taxpayers to share their email-id, cell phone in I-T returns

Taxpayers filing their I-T returns this year will now have to share their email-id and mobile phone number with the tax department. The Central Board of Direct Taxes (CBDT), the administrative authority of the Income Tax department, has introduced a new column in the I-T returns Forms asking for the tax filers personal email-id and mobile number..........

Read - FE

AllBank expands gold loan scheme

...........“A large part of our gold loan business is concentrated in south India. Now, we are planning to expand in other parts of the country as well. We have started in the east and will expand further,”..................

Read - The Telegraph

Need for review of rural credit architecture

My View on "UN special envoy hails RBI's work on financial inc...": 

Copied below are the concluding paras of my July 8, 2013 article on the subject posted at moneylife.in:

“The banking system has done a commendable job in this direction (towards financial inclusion) in comparatively literate and affluent geographical areas through the network of rural branches, rural financial institutions (RFIs) including cooperatives, Regional Rural Banks (RRBs) and rural branches of commercial banks. The focus shifted midway, somewhere during 1990s to urban and metropolitan lending. Rise in rural deposits and urban credit created imbalances and certain bypass routes were allowed for banks to achieve their priority lending targets. Like Mutual Funds (MFs) investing in schemes of other MFs to pair risks, banks started searching for other intermediaries like microfinance institutions (MFIs) for providing credit to small borrowers. MFIs, in some cases borrow from banks at low rates and lend at up to three times the borrowing rates, in the same area where bank branches function. So as long as banks source rural deposits, they should also shoulder the responsibility of providing credit in rural areas at reasonable interest rates.

The situation calls for a review of the entire rural credit architecture for an overhaul. The changes necessary may include:

• • Reviving the role of Rural Financial Institutions (RFIs) including rural and semi-urban branches of commercial banks, cooperatives and Regional Rural Banks which have strayed away from their mandated responsibilities,

• • Identifying costs for financial intermediaries that cannot be factored into interest costs and specifying the agency which should meet them, if the activity has to remain bankable,

• • Without going back to the abandoned “regulated interest rates regime”, working out and specifying broad bands within which ultimate lending rates should remain when bank funds are sourced for the purpose, and

• • Reducing the number of bypass routes allowed for priority sector lending to the minimum. 

Such a review may be necessary at this stage, irrespective of who gets a license for a new commercial bank.” 

- M G Warrier, Mumbai

Controlling rising prices

........Both macro policies like monetary tightening by the RBI as well as commodity-specific measures implemented by different branches of the government (trade policies and domestic interventions in food markets) have to be used to deal with inflation. The questions to ask are: Why have interest rate policies not been as effective as intended? Is food demand interest rate sensitive? Do food prices lead to generalised price changes leading to inflation as macroeconomists know it? Overall, .......

Read - The Hindu

Despite pay cut, IDFC's Rajiv Lall gives bankers a run for their money

In terms of salary, banker-in-waiting Rajiv Lall, executive chairman of IDFC Ltd, already has a head start over commercial bankers. Despite the fact that he took a pay cut last financial year, Lall's salary is second only to that of Aditya Puri, managing director of HDFC Bank. According to IDFC's annual report...........

Read | Business Standard

Hibernating NBFCs want govt to end slowdown winter

Deciding not to grow is a tough call that any business is forced to take during any period of its life cycle. Chief executives of non-banking finance companies (NBFCs), particularly those funding commercial vehicles and equipment, did exactly that when the economy came to a grinding halt some time back. And that decision is yet to be revoked, in a telling sign that the core of the economy is still to get out of the woods..............

Read - DNA

MasterCard & Visa Face Big Assault from Govt's RuPay

...............In a communiqué to banks last week, Gurdial Singh Sandhu, secretary at the finance ministry's department of financial services, “urged“ CEOs of public sector banks to issue RuPay cards to all existing customers who do not have debit cards as well as to new clients. Banks have also been told to “encourage“ merchant establishments to install point of sale terminals for RuPay cards, ...........

Read - ET

Depositors’ body flays banks’ move to charge for ATM use by non-customers

......Further, due to the convenience of withdrawing money anywhere and anytime, customers’ maintain higher balances in savings bank accounts.  This is beneficial for banks as these low-cost deposits not only support loan growth but also boost their margins. If the RBI gives its assent to the IBA proposal, banks may see customers queuing up at the branches for transactions, defeating the purpose of installing ATMs..........

Read - HBL

Secure banking programme launched in Surat

......"Banking in India has made tremendous programme in the last two decades. Customers today have access to multiple platforms to conduct banking transactions. However, the secure banking programme educates the customers about the do's and don'ts to avoid risks.".............

Read - TOI

CM to lay stone for Chittoor rural bank

Chief Minister N. Chandrababu Naidu has accepted to lay the foundation stone for the construction of the headquarters building of the Sapthagiri Grameena Bank (SGB) at Chittoor town, and the schedule will be finalised soon.........

Read - The Hindu

‘T’ now pitches for rescheduling of loans

With the implementation of loan waiver scheme proving to be difficult after the RBI expressed its reservations, the Telangana government has now decided to approach the apex bank at least for rescheduling of crop loans. A team of finance department officials are leaving for Mumbai on Friday to submit a representation to the RBI for rescheduling of outstanding crop loans which stood at Rs.17,000 crore as on March 31.............

Read - The Hindu

SBI's farm credit faces default pressures on debt wavier plans

........."The payment discipline has been vitiated due to plans to waive off loans. At present, defaults are restricted only to these two states and hope it does not spread to other regions. The rise in defaults was not due to drought conditions," ..........

Read | Business Standard

UN special envoy hails RBI's work on financial inclusion

................"(The RBI has) one of the most comprehensive and forward looking visions on financial inclusion around the globe," the UN special envoy told reporters here after meeting RBI top brass, including Governor Raghuram Rajan. "The RBI has been doing an incredible work during the last five to 10 years on it," she said..............

Read | Business Standard

Poverty definition immaterial for financial inclusion: Raghuram Rajan

.........“It doesn't matter that we have a precise definition. There's so much demand for financial services in the country that we don't need to delineate 'you get it, you don't'. Everybody needs it,” .............

Read | Business Standard

Governance in the corporate sector - certain perspectives - G Padmanabhan

Valedictory address by Mr G.Padmanabhan, Executive Director of the Reserve Bank of India, at the 15th National Conference of Practising Company Secretaries (PCS) on the theme "Practising Company Secretaries: The Facilitator for Corporate Growth", Mumbai, 27°28 June 2014

....During the past two decades, the importance of good corporate governance has come to the fore. The concern has been reinforced, particularly as it relates to the financial sector, in the backdrop of the global financial crisis. Suffice it to say here that it essentially comprises acting in a manner as to enjoy sustained trust of all the stakeholders which can broadly be grouped into four categories: the owners, the lenders, the customers and the regulators. The literature on corporate governance is voluminous and I too have spoken about it elsewhere. It is not my intention to go into the principles and practice of sound corporate governance here today. After jogging my mind about the issues that I should flag to an audience like this, I concluded that, given my background, it might be worthwhile to talk about............

Read.........

गोल्ड बॉन्ड संभाल सकते हैं आर्थिक हालात - एस एस तारापोर

........नीति निर्धारकों को गोल्ड के प्रयोग को प्रभावी बनाने के लिए भारतीय उपयोगकर्ताओं की उस मानसिकता को ध्यान में रखना होगा, जो समझते हैं कि सोना निवेश करने के लिए होता है न कि उपभोग करने के लिए। एक बार लोगों की यह मानसिकता समझ में आ गई तो नीति निर्माताओं के लिए घरेलू गोल्ड के प्रयोग राह आसान हो जाएगी। यहां सोने की राजनीतिक अर्थव्यवस्था को समझना जरूरी है। .............

Read - Bhaskar

Centre must set up gold bank, deposit accounts to check smuggling: Assocham

.............The industry chamber has mooted a proposal in this regard to the finance minister, nudging him to consider unveiling it in the upcoming Union Budget. "The gold bank would procure and retain gold abroad through offshore foreign currency borrowing. Using this gold from the gold bank, scheduled commercial banks can offer gold deposit account to their retail customers. finance minister could consider announcing it with the Budget," Assocham president Rana Kapoor said...............

Read - FE

RBI Seeks Quotes to Swap Gold to Improve Reserves Quality

..............The apex bank said the operation would "standardise the gold available with RBI in India with respect to international standards like London Good Delivery" and the gold acquired would be delivered to its overseas custodian, the Bank of England. Under the leadership of Governor Raghuram Rajan, appointed last year, the RBI has sought to modernise its market operations and improve the management of gold and foreign currency reserves that are worth a total of around $315 billion................

Read..........

Grand farewell to the brand persona

Monday, June 30, 2014 was the Annual Closing day across RBI offices. However, at Belapur, it was different. The annual closing witnessed the retirement of Shri Madan Khadgi, Personnel Officer and President of All India Reserve Bank Officers Association (AIRBOA). .  

United Forum of Reserve Bank Officers' Association & Employees, Belapur had organized a grand farewell to its beloved leader. The pictorial history of Shri Madan's journey of dedicated working in RBI captured from time to time was displayed near the stage. Aesthetic rangolis added colours to the event. The proramme commenced with traditional deep-prajwalan followed by garlanding of statutes of Chhatrapati Shivaji Maharaj and Bharat Ratna Dr. Babaseb Ambedkar. Shri Keshav Jagtap, Secretary, AIRBOA welcomed the dignitaries on the dais who were felicitated by the United Forum leaders of the Belpaur unit. 

Singing to the tunes of a novel concept - 'The Belapur Signature Song' written by Shri Madan Khadgi was presented by the staff. Then Shri Madan Khadgi was felicitated by the United Forum, Belapur with a huge garland (colloquially called as "Ajgar Har") and a traditional turban (in Marathi "Feta").   

The dignitaries and the staff could not stop themselves in describing the good qualities of brand persona Shri Madan Khadgi, his ability to write, direct, produce and acting in the drama, to name the few.  His unbiased and selfless leadership qualities were praised by one and all. Madan's balanced dual role as a personnel officer of the Bank and trade union leader proved to be two sides of one coin. General Manaer (O-I-C) Shri Ajay Michyari had special words for him. "Shri Khadgi speaks what he thinks and he thinks first and then speaks" Shri Michyari said and further added that Madan played both the roles of Personnel Officer and Union Leader impartially.  A grand farewell to the brand persona ended with vote of thanks by Shri Shashikant Pawar, Assistant Manager. 
- Shashikant Pawar

Achhe Din (kab) aanewale hai?? - K.N.S.Unni

My View on RBI Retirees - A Hapless Lot - P.P.Ramachandran

Please refer to plea of Shri.P.P.Ramachandran to Governor Dr.Raghuram Rajan. Beyond doubt there must be a close relationship between the Regulator (RBI) and the Finance Ministry. A “Give and Take” philosophy must imbue their connection—not animosity. Currently the atmosphere one suspects is vitiated by hatred and suspicion. In the past many of our Governors stepped into  RBI  after serving as Finance Secretaries which inevitably resulted in RBI culture being modelled to suit the dictates of the mandarins of the Finance Ministry. However Dr.Jalan and Reddy did their best to arrest the imposition from the Finance Ministry. We hear that a decision was taken,may be five years ago, to amend the pension regulations but between them the RBI and Finance Ministry moved the papers  back and forth for a long time until the day the then Finance Minister  who attended the Board Meeting asked the Governor  and the Secretary dealing with the case to have a one to one meeting and find a solution. My humble query to the powers that  be is simple-- whether such a lot of time should have been wasted to the great detriment of the old and dying retirees and also why  the Treasury and Central Bank did not  adopt an attitude of give and take to solve the  issues long  long ago—before hundreds of Retirees joined the Maker. Happily the scenario has changed and we have  a new government  under the leadership of one who promises us Achhe Din. I trust that  the darkest period  in the life of retirees is over and day light would soon come.A happy sign of Ache Din is perhaps the reshuffle of Secretaries in the Ministry. The insistence of the Government  that the  RBI should revise the pension only once in ten years whereas the wage revision would be once in five years raises the question whether we are back ward looking or forward looking Rather than pull the RBI retirees back to the level of Government employees a forward looking move could have been to reduce the ten year period prescribed for government employees to five years thus making both groups happy. One should be pardoned for expecting the Government  to add to the welfare of the working class rather than abridge it. 
- K.N.S.Unni, Adviser (Retired) 

RE 1 COIN DELAYS YATRA WORTH CRORES

The temple, the devotees and the state pumped in undiluted devotion and crores of rupees to make the 137th chariot procession of Lord Jagannath in the city a grand success. But a Re 1 coin delayed the annual fair that is normally organised with military-like precision and months of preparation. ............

Read - Ahmedabad Mirror

No signal yet for chariot wheels

My View on "FINDING A REPLACEMENT FOR CHAKRABARTY": 

Reserve Bank of India is one statutory body in the country which has been able to withstand the pangs of succession issues at the top for more than 7 decades of its existence, thanks to the maturity shown by those in charge of governance in Delhi. Recent developments in relation to filling up of top positions in judiciary, executive including those like state governors, statutory bodies and public sector organisations signal the need for transparent and rational succession plans. 

Developments like easing out of a Deputy Governor (Subir Gokarn) for no fault of his and a short-lived controversy about selection of a Deputy Governor from inside and the present delay in deciding on filling up of the vacancy caused by Chakrabarty’s resignation brings focus on the need to ensure continuity at the top in organisations like RBI and perhaps a quick review of the selection and placement procedure at higher levels. Perhaps the pool from which selection is made may need some change and the age profile (raising the upper age limit by 3 to 5 years from the present ‘normal’ at 62 years) need a review. 

Formulating and implementing succession plans for top government/public sector jobs with professionalism and efficiency in a graceful manner is imperative for allowing the institutions to function with reasonable functional autonomy within the legislative mandates.

Another point is that it will be next to impossible to attract talent to these government positions, given the meager remuneration offered. It is time to revise this, factoring in market realities. The present practice has resulted in compromises on quality and the nation can ill-afford this state of affairs. 

- M.G.Warrier

Lord Jagannaath's chariot wheels move very slowly and the Lord for a week from yesterday is in hibernation and would be back by 9th July. Hope the new Dy. Governor's appointment would be announced!!  

- Yerram Raju

Bankers Wage Revision in Positive Direction: UFBU Representation and Govt indication

.....As information received there are difference of opinions between bank employees unions and employees on hike of salary percentage  When the demand was raised in 2011 the hike of 25 % was reasonable but for today its required to be 35% minimum. As [per industry sources, the earlier govt was not in mood of settlement due to various political and hostile attitude but new govt approach is seems to be practical and bank employees wage revision is expected to be finalized in August 214 and bank employees may get increased salary from October 2014.............

Read........

Timely suggestion

My View on "Review the RBI - A.Seshan": 

This is a timely suggestion.

It would be worthwhile to revisit the preamble of the Reserve Bank of India Act, 1934 which reads asunder:

“An Act to constitute a Reserve Bank of India.

Whereas it is expedient to constitute a Reserve Bank of India to regulate the issue of Bank notes and keeping of reserves with a view to securing monetary stability in India and generally to operate the currency and credit system of the country to its advantage;

And whereas in the present disorganization of the monetary systems of the world it is not possible to determine what will be suitable as a permanent basis for the Indian monetary system;

But whereas it is expedient to make temporary provision on the basis of the existing monetary system, and to leave the question of the monetary standard best suited to India to be considered when the international monetary position has become sufficiently clear and stable to make it possible to frame permanent measures;

It is hereby enacted as follows: -”

Beyond some cut and paste, because of changes in the institutional structure in the financial sector or external policy compulsions, the RBI Act has not yet been subjected to the comprehensive review, envisaged in its preamble. 

- M.G.Warrier

Plea for ‘no tax regime’ for pensioners

The Vellore Institute of Development Studies (VIDS) has urged the Central government to introduce a bold ‘No Tax Regime’ for all pensioners during the forthcoming Union budget, in order to enable the pensioners to lead a peaceful retired life. It also pleaded for exemption from income tax on all retirement benefits, including lump sum payments and monthly pension...................

Read - The Hindu

Little tax relief on the cards

............Tax experts say the government might not increase both the limits substantially, though a total increase of at least Rs 1 lakh crore is needed, as persistently high inflation had eroded household savings. "The government should give some benefit to people; there might be other ways to offset the revenue loss by cutting subsidies, higher disinvestment or improving compliance. If it is raised to Rs 3 lakh, it is a nominal increase," said Divya Baweja, senior director, Deloitte...........

Read | Business Standard

Inter School Quiz

The preliminary round of the All India Inter School quiz conducted by the Reserve Bank of India will be held in Karnataka at the following places between 9.30 a.m. and 12.30 p.m.: Shikshakara Sadan Auditorium, Kempegowda Road, opposite Cauvery Bhavan, Bangalore on August 14; Navajyothi Sabhanagana, JSS College for Women, Mysore, on July 28; and Loyola Hall, St. Aloysius Pre-University College campus, Mangalore, on August 1. Schools and colleges can send in the entries of a two- member team. The last date for registration is July 18. For details, email:hrdbangalore@rbi.org.inor call 080-22180416/080-22180338

The Hindu

RBI directs banks to oppose loan waiver proposal

A fresh diktat from the Reserve Bank of India, barring banks from giving in to government pressure and waive off farm loans, could be a death blow to lakhs of farmers, who are seeking a bailout package..........

Read - TOI

Now comment on credit report disputes

..........For instance, as banks keep on updating your credit behaviour, there may be a manual error in the information fed in. So, if your outstanding credit was Rs.5,000, but the bank accidentally entered it as Rs.50,000, the error should not effect your credit performance. The committee had suggested that additional fields should be created in the credit report to include dispute codes, consumer comments on the dispute and details of collateral..................

Read - Mint

Review bank branch audit norms: ICAI

..................The contention of the CA Institute members’ are that banks are guided by their overall aggregate exposure in branches with advances of below ₹ 20 crore and feel that it may not be material enough to warrant a statutory audit every year. “They (banks) look at the aggregate picture and contend that such branches account for only say 15-16 percent of the bank’s total advances. But what they don’t realise is the risk factor. If there is increased NPA in such branches, the entire profit of a bank in a financial year could get wiped out”, a chartered accountant said. Rather than only looking at “materiality” in terms of advances, the risk factor also needs to be considered by the banks and banking regulator, it was pointed out............

Read - HBL

Is time running out for Dhanlaxmi Bank?

.......At the peak of the crisis, the Reserve Bank of India (RBI) was apparently in favour of merging Dhanlaxmi Bank with another financially strong bank. "Former RBI governor D Subbarao was in favour of the merger," says a person familiar with the developments at the bank. "But the state government of Kerala opposed the merger on the ground that Dhanlaxmi was the only home-grown Hindu bank from Kerala." Dhanlaxmi, being one of those old-generation private banks, was given a chance to reinvent itself under a new management and Jayakumar was given charge in May 2012. While other lenders in a similar position, like Federal Bank and Ratnakar Bank, are on a strong footing now after a leadership change, the Thrissur-based lender has remained trapped in a web of increasing cost and high slippages (in non-performing assets), from which it is still yet to recover.........

Read| Business Standard

Plan to cover all unbanked GPs in Odisha prepared

..............."Keeping in view the existing infrastructure (connectivity, power supply, communication) and man power and viability aspect, it was viewed by all banks in the meeting dated June 24, 2014, that would be an herculean task to open huge number of branches in the unbanked GPs within three years. Hence, it was unanimously decided to prepare the branch opening plan for the period 2014-15 to 2018-19 covering five years instead of three years as suggested by the state government".......................

Read | Business Standard

Sebi chief U K Sinha to meet Arun Jaitley tomorrow

........The meeting assumes significance as Jaitley is gearing up to present his maiden Budget in Parliament on July 10. Sebi has been pressing that there is a need for uniform tax treatment of retirement related investments irrespective of the investment routes - pension products launched by mutual funds or the retirement funds managed by the government's EPFO (Employees' Provident Fund Office)...........

Read - FE

Government support to state-run banks to be factored in: S&P

...............S&P said the proposal does not change its assessment that the government is highly supportive of banks and that it would reassess the tendency of the government to provide extraordinary support at a later stage of the development of the resolution regime. However, S&P noted that garnering political commitment for such sweeping changes would be difficult. These changes would take a while to implement, making it tough.............

Read | Business Standard

R-Cap in talks with Sumitomo Mitsui for banking initiatives

The Anil Ambani-controlled Reliance Capital Ltd is in talks with Japan’s Sumitomo Mitsui Banking Corp. for various initiatives in banking for over a year, company said on Wednesday. In a statement to BSE, the company said it was “constantly exploring various strategic partnerships, which may or may not necessarily result into transactions.”...........

Read - Mint

Bandhan starts recruitment drive

.............Chairman of Bandhan Chandra Sekhar Ghosh earlier told PTI that the proposed bank would harness the best skills available in the market, so that customers were able to get the flavour of a new generation bank. However, he said that the shift from an MFI (micro-finance institution) to a new-generation bank would require a change in the mindset of the existing employees as they were so far dealing with poor people living in the semi-urban and rural areas..........

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World Bank officials to make field trip to Bandhan Financial Services

Onno Ruhl, Country Director, World Bank, along with other senior officials of the organisation will visit the Kolkata-based Bandhan Financial Services Pvt Ltd on July 10. Bandhan, a micro​-finance company, was recently given banking licences by the Reserve Bank of India (RBI)..........

Read - HBL

Wrongly billed for your credit card? Here’s what RBI says banks must do

.........the Reserve Bank of India has a set guidelines that banks need to follow. On Tuesday, the apex bank issued a master circular on credit card, debit card and rupee denominated co-branded prepaid card operations of banks, and here's what it had to say:..............

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Review the RBI - A.Seshan

The Reserve Bank of India Act 1934 has completed 80 years. Although it has been amended from time to time taking into account the recommendations of many committees and commissions appointed for various purposes there has been no comprehensive enquiry into its working with a view to replacing it with a new law in consonance with modern and recent trends in central banking. Meanwhile, many countries have enacted new laws to replace the old ones relating to their central banks. Such aspects as the objectives of monetary policy, autonomy, and role vis-à-vis other regulatory bodies need to be looked at afresh in the Indian context. The Financial Sector Legislative Reforms Commission has made some important recommendations that need to be taken into account. A commission with a view to formulating new legislation headed by a former finance minister or RBI governor on the review of the working of the Central bank could be announced in the Budget speech.

HBL

Do not destabilise Reserve Bank of India - M.G.Warrier

...........Not much research is needed to conclude that the Finance Ministry and FSLRC, in a hurry to resolve certain minor issues, ignored the evolution of the role of RBI and the care with which RBI has nurtured the financial sector. The Federal Reserve (in the US) and RBI function in two different worlds. To say that the time is not right for dismantling or truncating the RBI, which is doing creditably well as has been admitted in several international forums, would be stating the obvious.............

Read - Moneylife

Oily water - Dr.T.V.Gopalakrishnan

My View on Oil and water - Dr.Subir Gokarn

.......... With the liberalisation, some of the regulatory measures have been removed but banks' involvement in financing such activities are not ruled out as RBI does not micro manage things under liberalised environment. A strict vigilance if kept on these activities and the government can act on black money and initiate other administrative and economic measures,inflation impact because of monsoon shortage if any can be minimised...............

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