A day before policy, RBI governor gets a feel of 'discounted' Bharat

You might have expected Reserve Bank of India Governor D. Subbarao to ponder over the country's economic problems and banks' fund needs sitting at his freshly furnished swanky office a day before he brings out now what is known as the mid-quarter monetary policy review. Subbarao had something else in his mind. He landed up instead at a dusty village, 40 km west of Ranchi. "But you don't get to know how people are affected by RBI's policies sitting in Mumbai. Isn't it?" Subbarao asked in broken Hindi to an audience of villagers at what the financial regulator calls an outreach programme where few state-run banks put up stalls to showcase products of self-help groups they support and also the technologies they are using to achieve the seemingly elusive target of financial inclusion.  And it was a lesson on the limits of financial inclusion for the Governor. The outreach programme had various technology providers demonstrating how their hand-held devices armed with biometric identification feature can act as a bank branch for the largely un-banked villagers who mostly depend on a single crop paddy with no access to irrigation, and some sundry forest products. A villager, after being shown how he can withdraw Rs 100 from his account using that hand-held device, gingerly showed the receipt to Subbarao. “Just 300 rupees! Why? You should keep more money in your account!” a shocked Subbarao asked the villager looking at his account balance. At a loss for a reply, the villager climbed down the stage with a dry smile. “Welcome to Bharat!” a banker in the audience retorted with a grin. A hand-held device wouldn't possibly raise your income in hand, the banker might have thought. "Here people wait for months to encash their NREGA cheques so they trade in them: A Rs 100 cheque is sold for Rs 70,” said A.K. Singh, Jharkhand's chief secretary, who was on the podium along with Subbarao. The rate of cheque-discounting could be a unhappy lesson for Subbarao apart from the very need for a government-given cheque to be discounted in the first place.  From Bharat to India, the journey on the dirt road appears quite long.

ICBC applies to RBI as China banks line for India foray

Despite the signing of a framework joint financial-services agreement between India and China, it will be some time before the first bank from Beijing, the Industrial &Commercial Bank of China Ltd, opens its doors for business in India. The bank has applied to RBI for setting up branches in India but is yet to get a clearance from the top-level policy body that includes the Ministries of External Affairs and Finance,and RBI.

Jalan report anti-growth.....

MCX'SX has lambasted the Bimal Jalan report and said it seeks to "undo everything that has been achieved in the past few years" in the domestic capital markets.

FINMIN, PSB Chiefs to take up HR policy recast today

The ministry of finance has called a high-level meeting of chiefs of major public sector banks to discuss recast of HR policies on Thursday. Financial services secretary R Gopalan and Planning Commission member Arun Maira are likely to meet chiefs of five state-owned banks--State Bank of India, Punjab National Bank, Bank of Baroda, Union Bank of India and United Bank of India --to discuss Khandelwal committee report suggesting major changes in PSB's HR policies. The committee was appointed by the ministry of Finance(MoF)under the chairmanship Anil Khandelwal, former chairman of Bank of Baroda, to chart out action plans for PSBs on HR front. Sources said that a presentation will be made by the government before a select group of bankers and academicians during the meeting.  Representatives from premier management institutes like Indian Institute of Management(Ahmedabad)&IIM (Kolkata) and Indian School of Business (Hyderabad) are also likely to attend the meeting, added the source. Another committee formed under Alok Nigam, joint secretary MoF, to find out the ways to implement Khandelwal report, has also recently submitted its report. Khandelwal report has recommended bank specific wage and service conditions instead of industry-widesettlement. The report has also suggested that variable pay should be made a major component of wages and banks should to go in for cost to company (CTC) in the future.  Banks should also monitor staff costs and endeavour to achieve staff cost ratio of 50% in the next five years, said the report.  The report has advocated that based on well defined efficiency criteria major PSBs could be recognised and rewarded for their superior performance and excellence while some large well performing banks to be considered for `Navratna' status and smaller banks for `Mini Navratna' status. Large banks with business mix of over Rs 3 lakh crore to be provided ED (HR) to drive HR agenda from the top. A steering committee of the board on HR to be constituted to discuss critical HR issues, said the report. On manpower and recruitment planning, the report has said it should be an annual well structured and rigorous exercise for five yearperiod,factoringgapsin skills and competencies.