A large number of prospective loan seekers thronged the SBI's three-day-long 'Vasant Rin Utsav' which was inaugurated by Reserve Bank of India's Regional Director G Mahalingam at S K Memorial Hall here on Friday. After the inauguration, keys of six cars and sanction letters of five loans were given away to borrowers by the chief general manager, SBI, Jeevandas Narayan, who was present as chief guest. The main attraction of the fair is 50 % concession in processing fee for car loans and 0.25% concession in interest rate from 37th month till the tenure of the home loans. About 12 car dealers and 20 builders have put up their stalls at the fair.
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Saturday, February 12, 2011
Star TV Talent Leadership and HR Awards at the World HRD Congress
Sandip Ghose, Regional Director, RBI, New Delhi distributing Star TV Talent Leadership and HR Awards at the World HRD Congress
RBI Governor holds talks with CS
Reserve Bank of India Governor D Subbarao and senior RBI officials held talks with the Chief Secretary Awani Vaish and senior officials of the State Government at Bhopal on Thursday. They expressed concern over the ratio reduction in loan deposit in tribal-dominated districts. It was informed at the meeting that there was 40 per cent depletion in loan deposit in eight tribal districts. The Reserve Bank of India Governor instructed the banks to come up with improvement in this regard. There should be 65 per cent loan deposit in the state and 40 per cent in tribal districts. The banks assured that they would extend the figure in next financial year. Welcoming the visit of Reserve Bank of India Governor to Madhya Pradesh, the Chief Secretary said that the regional office of Reserve Bank of India was working actively. The Reserve Bank of India Governor said that he was very much impressed with the State Government for designing joint agenda, which could not be seen in other States. At the meeting, the State Government drew the attention of the Reserve Bank of India Governor to State Government grant to set up hand held device, smart card and bio metric ATM by banks. Subbarao was informed that banking facility at the village more than 2000 population needed in Madhya Pradesh. Subbarao appreciated this initiative and said it would be decided only after positive results of financial audit in next financial year. E-kiosk is being used by State Bank of India that should be conducted by other banks too. The RBI Governor was apprised of education loan for the education of poor children under Government guarantee. Subbarao asked the banks to provide educational loan of Rs 4 lakh without guarantee so as to benefit maximum people. The security to banks was also discussed at the meeting.
BOB opens its all Ladies staff Branch at Pune
Bank of Baroda has opened its all women staff branch at Sinhgad Road,Pune.The branch was inaugurated at the hands of Shri R K Bakshi,ED of Bank of Baroda,in the presence of Ms Kamala Rajan, CGM & Principal, College of Agriculture Banking, RBI, Pune. N Ramani,Corporate General Manager and C D Kalkar,GM-Maharashtra & Goa Zone of the Bank.Speaking on the occasion,R K Bakshi said that women are making mark in all walks of life and banking is no exception.He assured the customers that the branch will be providing advisory services to the customers in addition to normal banking products and services.
RBI again raps banks on teaser loans
Flexible inflation targeting best, says Bank of Israel Governor
Friday, February 11, 2011
RBI Board meets at Bhopal
The Central Board of the Reserve Bank of India met today in Bhopal. The meeting reviewed key economic, monetary and financial developments. Dr D. Subbarao, Governor, Reserve Bank of India chaired the meeting. Shri Y.H. Malegam, Prof. Suresh Tendulkar, Prof. U.R. Rao, Shri Lakshmi Chand, Shri H.P. Ranina, Smt. Shashi Rajagopalan, Shri Suresh Neotia, Dr. A. Vaidyanathan, Prof M. M. Sharma and Shri Sanjay Labroo were present at the meeting of the Central Board. Deputy Governors of the Reserve Bank, Smt. Shyamala Gopinath, Dr. K.C. Chakrabarty, Dr. Subir Gokarn and Shri Anand Sinha were also present. The Central Board of Directors of the Reserve Bank meets at least once every quarter. The Board has scheduled meetings in Mumbai, Chennai and Kolkata each year. The post-budget meeting of the Board, traditionally held in New Delhi, is addressed by the Union Finance Minister. The other meetings of the Board are held in the remaining state capitals by rotation. The main function of the Central Board of the Reserve Bank is to provide overall direction to its affairs. The Governor had a meeting today with the senior State Government and bank officials. The banks agreed to achieve a overall target of 65% CD ratio and target of 40% CD ratio in the 8 low CD ratio districts, mostly tribal by 2011-12. It was decided that a team of officers from Reserve Bank of India, Commercial Banks and State Government would visit villages to make assessment of the work done, prepare a financial inclusion plan and ensure that by end of March 2012 all 2736 villages with population of above 2000 are covered in Madhya Pradesh. The banks may also draw up a special plan to include nearby villages below 2000 population. The State Government has also assured to include financial education in the curriculum of schools at higher secondary level by the academic year 2012-13. The other issues discussed at the meeting included higher credit flow for education loans, issues relating to urban co-operative banks and security of bank branches. Earlier, on February 7 and 8, 2011, Dr. Subbarao visited Chhattisgarh. The Governor visited Khadma Village in Dharmatri district of Chhattisgarh for an outreach programme, where he interacted with the villagers, school children and SHGs, etc. The Governor called on the Chief Minister Dr. Raman Singh and discussed issues of mutual interest. Along with the Chief Minister, he laid the foundation stone of office building for RBI Office at Naya Raipur. The Governor also interacted with students of IIM, Raipur.
RBI Governor highlights five dilemmas in regulatory role
Reserve Bank of India (RBI) Governor D Subbarao and four Deputy Governors addressed a gathering of bankers in a meeting organised by Bankers' Club, Bhopal on Wednesday at Hotel Noor-us-Sabah Palace. Executive Director of Central Bank of India RK Dubey was also present on the occasion. Speaking on the occasion, Subbarao highlighted the five dilemmas being faced by the RBI in its regulatory role. He also underlined the fact that unless the commercial banks, which are the conduit to implement various policy decisions, do not understand the underlying concerns, such policies will not be effective. Elaborating on the five dilemmas, he stated that the first issue is how to balance the demands of growth and inflation management. Food inflation and commodity price inflation, as is well known, are the two main drivers of inflation. Changing food habits, especially in rural areas, due to increased consumption capacity, is causing structural inflation. Rise in commodity prices, such as oil, is resulting in commodity price inflation. Credit growth is another factor contributing to inflation. The challenge before the RBI is to balance the demands of growth and inflation, and ensure that the relevant policies result in expected outcomes. Deputy Governor Shyamala Gopinath explained the importance of financial stability reports which enable Reserve Bank of India to foresee different scenarios and undertake remedial measures. Developments in the recent past show that even in developed financial economies having well developed market, systemic risk is significantly higher than under adverse market conditions. Deputy Governor KC Chakrabarty exhorted banks to activate all their field controlling offices and branch offices so that banking facilities reach the entire population. At present, bank credit is not available to a majority of the population and almost a half of the population is bereft of banking services. Thus the need for activating the field units, Chakrabarty explained. Deputy Governor Subir Gokarn made an assessment of the state of the economy and the rapidly changing global environment. It is difficult to predict about emerging scenarios. Rising oil prices is causing greater concern. Deputy Governor Anand Sinha explained the need for collective behaviour of the system. He also underlined the need for bringing non-banking system under some kind of regulation, similar to the banking system. Executive Director of Central Bank of India RK Dubey spoke about the declining CD ratio in the State and pointed out that financial tie ups for big industrial units are mostly finalised outside the State and do not get reflected in the CD ratio of the State.
Hope govt adopts fiscal consolidation plan: D Subbarao
The government should adopt a plan of fiscal consolidation in the coming financial year to April 2012 and beyond, the Reserve Bank of India Governor Duvvuri Subbarao said on Thursday. Subbarao's comments come just over two weeks before Finance Minister Pranab Mukherjee releases his budget for the next financial year on Feb. 28. Persistently high food prices have been a bugbear for the Reserve Bank. The central bank at its January 25 credit policy had warned of food inflation spilling over to the general inflation process as it raised the reverse repo and repo rates by 25 bps. Today, Governor D Subbarao has said that it is difficult to balance growth and inflation. Recent spurt in oil prices and the crisis in Egypt would add to India's domestic woes. Subbarao said, "Spurt in oil prices on Egypt crisis will hurt India," adding,"we have to be prepared for a further spurt in oil prices." He said structural rigidity and rising commodity prices are pushing inflation higher. He also does not see much movement in prices of wheat and rice, adding that it is difficult to say that the government's welfare schemes are feeding inflation. Food inflation eased in late January to just over 13% after having reached a one-year high of more than 18% on December 25, due to soaring prices of onions and potatoes. The RBI chief also urged for a consolidation in the Indian banking system. He said it is up to banks to come forward with merger proposals. He added that the size of Indian banks was smaller compared to their global peers. His advice to banks was to "set interest rates in a way that they do not hurt growth." He further said that the central bank would evaluate the business models of applicants looking to setup new banks. The Malegam Committee had recently recommended a 24% interest rate cap on loans paid by microfinance institutions. He said he would meet representatives of states and MFIs to discuss the Malegam report and work out modalities to implement the panel's recommendations. He also revealed that plans are in the works to form a panel to study a slowdown in foreign direct investment. Subbarao said that the panel would suggest ways to encourage FDI.
RBI must understand factors responsible for decline in FDI: Subbarao
The Reserve Bank of India would conduct an internal study on practices responsible for the decline in the direct foreign investment (FDI) flows in the country. Talking to media in Bhopal after the meeting of the central board of Reserve Bank of India, Governor D. Subbarao said that RBI must understand the factors responsible for the decline in the FDI.
Bank unions suggest ‘Banking Ombudsman’ be changed to ‘Banking Lokpal’
Bank employee unions insist name of grievances cell should be easily understood by common citizens; also push for a special counter for senior citizens. A committee set up by the Reserve Bank of India (RBI) to look into the issues of customer services has agreed to change the name of the Banking Ombudsman to something simpler like the 'Banking Lokpal', which is less of a tongue-twister. This suggestion was made by the Indian National Bank Employees' Federation (INBEF) to the committee headed by M Damodaran as many customers from rural areas were not familiar with the term ombudsman and would therefore not be forthcoming with their complaints on banking services to the department. Subhash Sawant, general secretary, INBEF, said, "Many bank customers mainly from rural customers do not understand what ombudsman is all about. When we ask them to file a complaint with the ombudsman, they simply ask us, 'What is ombudsman?' The Federation has also suggested that the number of offices of the banking ombudsman be increased. Currently there is only one office that is based in Mumbai and it covers mainly Maharashtra and Goa. It has also asked that a special counter should cater to senior citizens at the branches of all banks, during the first 10 days of every month, as the number of pensioners has increased sharply. In its reply to IBNEF with respect to its suggestions, the committee said, "The title of the RBI Banking Ombudsman may be changed to a simpler, easily understandable one. The area of operations of the Ombudsman may also be enlarged." In a letter to the Federation the committee also said, "The number of pensioners is increasing. Special counters for pensioners may be considered especially during the first week of every month." "The committee has agreed in principle to our recommendations. We welcome the response on the matter of senior citizens. About the matter of changing the name of the banking ombudsman, we will know when the report is out," Mr Sawant said. Other bank unions were also represented along with the IBNEF at the meeting with the Damodaran committee which also discussed issues like clean currency notes, shortage of banking staff and banking-related security.
Panel to oversee Presidency faculty
The state government has formed a committee to oversee faculty recruitment at Presidency University to ensure quality. Former RBI governor Bimal Jalan, economist Amiya Bagchi, chairman of West Bengal Council for Higher Education, Subimal Sen and vice- chancellor of the university, Amita Chatterjee, have been named by the state higher education department as members of the committee. Advertisements will be published in newspapers and applications invited from candidates across the country and abroad. "Presidency University has a long tradition of excellence. Every recruitment made will be done keeping in mind that this tradition has to be furthered," said state higher education secretary, Satish Tewari.
Unhappy about poor show, chief secy asks banks to set target
Unhappy with poor credit-deposit (CD) ratio in Jharkhand, chief secretary A K singh on Wednesday asked the bankers in the state to pull their socks up by setting monthly targets and conducting day-to-day monitoring. Singh's comments came at a time when the Reserve Bank of India is monitoring the financial inclusion drive of the banks all over the country. The chief secretary was addressing the 32nd state level bankers' committee (SLBC) meet on Wednesday. The chief secretary was irked to find that the CD ratio in the state by December 2010 was 43.99 per cent which was not only below the national benchmark of 60 per cent but also lower than the December 2009 figure of 45.22 per cent.
It is up to government to deal with black money issue: RBI
Reserve Bank of India (RBI) today said it had limited powers to deal with the issue of black money as confidentiality clause came in the way of handling the problem of money kept in bank lockers. Current rules do not allow banks to find out what had been kept in their lockers, RBI Governor D Subbarao said at a press conference here. "All this is governed by a confidentiality clause about which nothing can be done at the moment," he said, answering a query on unaccounted money in the lockers of Indian banks. Answering another question, Subbarao, who was on a two -day visit to the city, said although the RBI had no role to play in the Union Budget, it stood for fiscal consolidation of the banks. Subbarao said maintaining a balance between financial growth and controlling inflation was a tough task, but the apex bank was competent enough to handle this scenario.
India to face challenge of inclusive growth
Reserve Bank of India (RBI) Governor D. Subbarao said India would face the challenges of inclusive growth in the coming days as the country would move on a higher growth trajectory. Inaugurating an exhibition named Newsibition here on Wednesday, Subbarao said: ""In the second decade of the new millennium we are going to face challenges of inclusive growth and of meeting the challenges of transcending to higher growth rate." Newsibition traces the journey of the Reserve Bank down 75 years through photographs, documents and visuals. The exhibition has been divided into nine sections representing different phases of Reserve Bank's evolution. "Last year, the Reserve Bank of India (RBI) completed its 75th year. Since the time RBI was established 75 years back, how it grew and the area in which RBI worked, the governors of RBI, the security features of the currency notes, this is all we want to show through this exhibition," said Alpana Killewala, Spokesperson of RBI. The exhibition is part of the Bank's outreach and financial literacy efforts, which commenced with the setting up of the Reserve Bank's Monetary Museum in Mumbai.
GOVT BANKS OPT FOR FASTER PROMOTIONS
It is now possible for public sector bank employees to climb the career ladder faster. Keeping in mind the shortfall that is expected at the top in the coming years, banks are tweaking their human resource policies. According to studies conducted by different banks, around 340,000 lakh employees will retire in the next 10 years. To compensate for this and support expansion, banks have to look at employing 500,000 to 700,000 people in the next 10 years. To start with, some banks have introduced a fast-track promotion channel through which a deserving employee can rise much faster as compared to the traditional route. Union Bank of India’s fast track channel can promote a scale-1 employee to scale-5 in 11 years. “Thus, if a person joins our bank at the age of 23-25 years, he/she can be an assistant general manager by the age of 35-40,” said Chairman and Managing Director M V Nair. The bank has promoted 548 employees through this system in the last four financial years. “This amounts to 11 per cent of total promotions in the period,” said Nair. To take the shorter route, an employee must clear written tests, group discussions and personal interviews. promotion channel. “Currently, the average age at the general managyears,” said to look into issues related to human resources in public sector banks had pointed out that in the next five years, 80 per cent general managers, 65 per cent deputy general managers, 58 per cent assistant general managers and 44 per cent chief managers would retire. To address the issue, the committee had proposed a comprehensive strategy for succession planning and leadership development.
Thursday, February 10, 2011
Subbarao keen to retain his signature’s weight
The privileges of being the Governor of the Reserve Bank of India are many. One of them is having one’s signature stamped across the millions of currency notes of various denominations churned out from the country’s mints. Governor D Subbarao, however, indicated a governor may not always swell with pride when he stares down at his signature plastered on currency notes. “The value I attach to my sign is not just about the validity of the currency, but to ensure the purchasing power was preserved,” Subbarao told students of the Indian Institute of Management yesterday, on being asked how he felt looking at the wad of currency notes bearing his name. Inflation has emerged as a difficult problem for Subbarao and he has been forced to revise upwards the forecast for March inflation to seven per cent from the earlier 5.5 per cent. The headline number, at 8.4 per cent, is way above the perceived comfort zone of 4-4.5 per cent. At a felicitation function for the Governor in his ancestral town of Eluru in Andhra Pradesh, a speaker had said Subbarao was very close to the hearts of people. He had reckoned that Subbarao was close to the hearts as people put the currency notes signed by him in the upper pockets of their shirts. Subbarao knows that soaring food prices are now giving heartaches to many. Perhaps more comfortable with the grilling by students rather than the press corps, Subbarao was full of anecdotes and wise cracks. When asked by reporters what went into monetary policy formulation, the stock answer remains the central bank looked at a plethora of domestic and international economic and banking data to get the inflation growth mix right. Subbarao had a different answer when the question was asked by the students. “There is no substitute for good judgment,” said Subbarao. Central banking works the best with a strong gut feeling, believes the governor. That, perhaps, explains why Subbarao has adopted a gradualist approach to the rise in interest rates — 175 basis points in the repo rate and 225 bps in the reverse repo rate, in seven rounds since March 2010. He also believed in transparency, Subbarao emphasised. That is why, under Subbarao, RBI has added a new paragraph in monetary policy statements that indicates the expectations of the central bank. “For a long time, we were nontransparent...we had our own expectations but would not tell that to markets,” Subbarao said. The data on prices, one, however, fears, is putting paid to that gut feel as well as the ‘expectations’ down the line. While he was at the microphone, Subbarao wasn’t sure he would get rapt attention from those assembled in the IIM auditorium that morning. The RBI governor has to deal with rather dreary and esoteric subjects that have a sedative impact on an average individual. Ironically, Subbarao’s wife Urmila is no different. “Usually when I start talking, my wife goes off to sleep. So please stay awake,” Subbarao said, pointing to Urmila, his wife, who was among the audience. Acknowledging the central bank’s vast canvas of operations that deal with swanky treasury rooms of multinational banks to humble dwelling of a farmer in forlorn parts of the country, the governor had another candid admission to make. “Two-and-a-half years as the RBI governor, I am not sure what RBI does,” he said. Subbarao’s term ends this September. One hopes he gets a longer run, especially because his three immediate predecessors had a minimum five-year tenure.
Inauguration of the exhibition ‘Mint Road Milestones’
Reserve Bank of India Governor D Subbarao looking at a photo after the inauguration of the exhibition ‘Mint Road Milestones,’ based on the 75-year journey of the RBI, in Bhopal.
Hard to ease liquidity amid high inflation, says Subbarao
The Reserve Bank of India faces a challenge in easing liquidity without signalling that it is loosening its anti-inflationary monetary policy stance, Duvvuri Subbarao, governor of the central bank said today. Liquidity in India’s financial system has been tight over the last few months, largely due to lower-than-expected government spending, forcing banks to borrow on average a net of around `850 billion ($18.72 billion) a day from the central bank at its repo window from November through January. The figure has in February dropped to around `720 billion on the back of some pickup in the government spending but advance tax outflows in March are expected again to tighten cash conditions. India is also battling stubbornly high inflation, standing at 8.43 per cent in December, and easy cash conditions could aggravate the inflationary pressures. “The dilemma is how to manage liquidity, ease liquidity without giving the message, indication, impression that we are loosening our anti-inflationary stance,” Subbarao said. “We do it either by CRR (cash reserve ratio) or by OMO (open market operation) but the question is if we reduce the CRR or do OMO in a situation, in acontext when we are trying to signal an anti-inflationary stance, the fear is the market gets mixed signals,” he said while speaking in central India. CRR is the percentage of deposits that banks must set aside with the central bank as cash, and some market participants have been expecting a cut in this ratio to help ease the tight cash. In a bid to help ease the severe liquidity crunch in the market, the central bank in its December monetary policy statement announced a four stage open market operation programme, offering to buy up to `480 billion from the market. The RBI has said it wants to keep liquidity in the banking system in a range between a `500 billion shortfall and a `500 billion surplus, or more generally a deficit or surplus of 1 per cent of banks’ total deposits. However, the central bank may have to move cautiously on any liquidity easing measures, as inflationary pressures are expected to persist in the current calendar year. Inflationary pressures from domestic sources as well as global commodity prices may intensify in some cases, RBI Deputy Governor Subir Gokarn said today, making the RBI’s job of balancing fighting inflation and easing liquidity that much more difficult.
Bank credit offtake up 23.4%: RBI
Credit offtake from public and private sector banks in the country grew by 23.4% for the one-year period ended January 28, indicating an upswing in industrial activity, says the Reserve Bank of India (RBI). For the one-year ended January 28 credit offtake stood at Rs 38.47 lakh crore as against Rs 31.18 lakh crore during the year ago period. During the period, deposits went up to Rs 51.28 lakh crore from Rs 44.39 lakh crore as on January, 2010, according to latest data from the RBI. In its annual monetary policy at the beginning of the fiscal, the RBI had estimated that credit offtake would grow by 20% this fiscal.
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