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.
Monday, March 25, 2013
Capital flow conundrums - Dr.Subir Gokarn
Blood donation camp
Imphal, Mar 23 : 27 Assam Rifles of 28 Sector under HQ IGAR (South) participated in a Blood Donation Camp organised by Blood Bank RIMS Imphal and RBI Guwahati on 23 Mar 2013 at Charang Pat Makhlang in Thoubal District. Blood donation is one of the noblest gestures of humanity which promotes fraternity, unity and brotherhood and also serves to ensure peace, prosperity & progress of the nation.........
RBI Outreach Programme held
.....As part of the village outreach programme of RBI, Executive Director Gopalakrishna and Regional Director Jena interacted with school students. As a part of the RBI's initiative of financial awareness programmes, UBI organized a free health check-up camp at the village and SBI extended note/coin exchange facility to the public as an effort to be in line with RBI's clean note policy.........
RBI top official backs one account per family
..........."The RBI wants every family of the country to have at least one account in any bank. If they are very poor, provisions have been made so that accounts can be opened with zero balance,"...............
All women bank branch inaugurated at Muzaffarpur
.........The branch is 100th of the North Bihar Grameen Bank in the state, bank sources said. Regional Director of Reserve Bank of India P K Jena, NABARD Chief General Manager D B Despandey and other senior bank employees were present on the occasion.
Protest against directive on banks
The State unit of All-India Bank Officers Confederation (AIBOC) has protested against the directive to keep bank offices open on Good Friday and Easter Sunday. Abraham Shaji John, secretary of the State unit of AIBOC, said here that the directive infringed upon the religious rights of Christian bank officers and employees. The directive is learnt to have been issued by the Ministry of Finance through the Reserve Bank of India...............
Getting regulation right
...........To the extent the idea is to prevent cases from falling between the cracks, it is a good one—the HLCC mechanism that preceded the FSDC didn’t really work and FSDC hasn’t had to deal with any crisis. While there are issues over an RBI sans a DMO—who will ensure banks buy government paper and if the DMO is part of the finance ministry, this creates moral hazard—the real challenge will be in staffing the UFA. If the idea is just to staff it with Sebi/Irda/Pfrda/FMC personnel, it’s not clear how it will work—indeed, over-centralisation could be a new problem.........
Former regulators cold to super-regulator plan
The proposal of the Financial Sector Legislative Reforms Commission (FSLRC) to have a unified regulator for the financial sector has not gone down well with former regulators of various financial sectors. Former regulators and industry experts are of the view that a super-regulator would not be able to do justice in addressing the varied problems that each of the financial sector faces........
Search for structure
................ Of course, for the potential benefits to be realised, legislation is only part of the story. Organisational structure, human capital and performance incentives are all issues that have dogged regulators in the old model; they will probably pose an even more significant challenge in this more complex scenario. As always, the battle can be won or lost in translating good intentions into workable solutions.
Why High Finance Needs Just One Regulator
............The
next question: should the RBI be kept out of the unified agency, making
it a half-way house? Ideally, the RBI should be allowed to oversee
banking and payments at least for the next five years for the simple
reason that it has been able to manage monetary policy better when it
supervises banks, manages forex reserves and also government debt............
The angry optimist
............."There is no policy maker in the world who has targeted monetary policy on the basis of the current account deficit. Name one." He expounds on that, and says he's working on some research that examines, using the Taylor Rule, which central banks have done well and which done poorly in meeting their goals. His conclusion? "By far the worst central bank in the world in 2011 was the RBI.".........
We are taking steps to improve the overall investment climate: C Rangarajan
..............The term used is 'stagflationary tendencies' in developing economies as a whole, including India, to describe a situation where growth below trend and high inflation co-exist. The paper does not use the word 'stagflation', which has a very specific connotation in economic literature. We are still growing at around five per cent (yearly) and I expect the growth rate to pick up further in the next financial year...............
District co-op banks told to introduce core banking
.........“Initially,
all DCC banks will have to implement the core banking system, wherein
information of all accounts will be available on the bank’s intranet, so
that basic transactions can be carried out at any branch. This
technology is successfully used in all private and public sector banks
in the country. Some urban cooperative banks have also implemented this
technology.”........
Read - TOI
Race hots up for IDBI top post
The
post of chairman is set to fall vacant at IDBI Bank around mid-2013
when incumbent R M Malla retires. According to sources, Balkrishna
Batra, deputy MD, has been shortlisted for the top post. Batra, an IDBI
veteran, has been looking after the corporate banking function. Also in
the reckoning is Sushil Munhot, chief executive of SIDBI and an IDBI
Bank veteran of 28 years. Although Munhot has not been interviewed for
the position, insiders say that his appointment is possible since he is
already a chief executive and this would be a lateral movement.
TOI
TOI
Sharp business practices of banks need to be curbed
Central bankers, as a breed, are known for their reticence and taciturn countenance. Markets and the media alike scramble to read between the lines when central bankers speak. Not so with Reserve Bank of India’s Deputy Governor, K.C. Chakrabarty, who is an atypical central banker. He speaks his mind, and when he does so, he is an absolute delight for the media................
RBI trying to mask regulatory mechanism failure: Cobrapost
......Criticising RBI Deputy Governor K.C. Chakrabarty’s statement in which he had said that there was no scam behind the alleged Cobrapost expose, the online portal’s Editor, Aniruddha Bahal, said it was a “brazen attempt” by the senior RBI official to give a clean chit to these banks – ICICI Bank, HDFC Bank and Axis Bank – even before probe into the matter was over. “The manner in which the RBI Deputy Governor has rushed to issue the statement, even before the Central Bank could complete the inquest it has initiated into money laundering practices by the three banks, even before these banks could complete their own investigations into the alleged misdemeanour of their officials, and even before the Income Tax Department could come up with its own finding, is tantamount to be self-serving and is a brazen attempt on the part of the Deputy Governor to not only give these banks a clean chit but also mask the miserable failure of the banking regulatory mechanism of the RBI,”......
Single ID across banks can deter money laundering: Experts
..........An implementation of unique customer identity across banks and insurance companies, strong Know Your Customer Practices, and exemplary penalties or punishment for staff to ensure compliance are some of the solutions that can help to prevent money laundering and the black money racket, which are damaging the country like woodboring beetles.............
‘Banking sector has bright future’
Role of bankers in facilitating development and implementing social initiatives of the government, including direct benefit transfer, is significant, according to K.P. Muralidharan, general manager, Syndicate Bank........
Populism in Indian banking
.................The Reserve Bank of India (RBI), for instance, obligates both public and private banks to allocate about 40% of their total loan advances towards supporting the so-called priority sectors such as agriculture, small-scale industries, housing and education, apart from specific branch requirements. It is obvious that neither RBI nor the government can know if borrowers in priority sectors are creditworthy, or if it is economically viable for banks to open branches in rural areas. The huge pile of non-performing assets (NPAs) in the balance sheets of banks points to the adverse effects of such institutional fiddling with banks...............
Signalling key issues
......The CRR remains at an all time low of 4 per cent. Many bankers, led by SBI Chairman, feel that the CRR needs to be done away with. The reasoning is that the bank funds kept impounded with the RBI earn little or no interest. Its use as a policy instrument is questionable in a vastly changed environment.....
Dangers of a risk-taking banking culture
.........Citizens have reposed a lot of faith in the Indian banking system. And this is also true in case of the inquiry procedures of banks, but can they expect that these probes will look beyond the procedural lapses in this particular case? If these banks intend to do so, first and foremost they will have to examine the organizational culture to which they subscribe. It is true that negative results in any quarter are unacceptable to all banks and employees and leaders need to achieve at least a double-digit growth in every segment. And one’s pay package is also performance-linked, heavily inclined towards variable pay. A one-line catch description of their organizational culture could well be do or die—either you perform or get sidelined..........
Over to Guv, please............
Shri Chakraborty, Deputy Governor's remarks, as reported in the Press, in regard to Cobra post sting operation are liable to be misunderstood and hence are unfortunate. If I understand correctly, the sting operation reveals the identities of the officials who are prepared to assist the customer who would like to convert his black money and not that any such transaction had taken place. In any case, it would have been better if the Deputy Governor had waited for the RBI team to submit its report (which has to be by March 31, 2013). RBI has to be very careful before making pronouncements. It looks like that the culture of RBI has changed over time after induction of commercial bankers into its fold. I hope that a Press release, approved by the Governor, is issued immediately to correct any misunderstanding of the stand of the RBI in this matter.
- A.Chandramouliswaran, Former Executive Director
Money laundering sting: too many questions
...........Codenamed ‘Operation Red Spider’, the expose has not caught any banker laundering money but found them capable of doing such things by simulating situations of a broker of a corrupt politician looking for ways to change the colour of his boss’ money. Had Cobrapost gone one step ahead and caught bank officials actually doing so, it would have been a different story (it had done so in ‘Operation Duryodhana’, filming several members of Parliament accepting cash bribes in return for asking questions). There are questions which both the banks involved as well as Cobrapost should answer, even as RBI and other agencies have launched a system-wide probe...............
Cobrapost slams RBI clean chit to money laundering in bank
..........Cobrapost.com refuted the statement of the RBI Deputy Governor calling it a self-laudatory exercise and something premature, presumptive and preposterous aimed at “sweeping under the carpet the alleged involvement of the banking majors in money laundering”. For the RBI to say that there is no offence as there was “no transaction” is a very novice reading of the law and a willful ignorance of rules and regulations supposed to be crafted and implemented by the RBI itself, the release said.............
Board to improve Rupee Bank's health
PUNE: The administrative board appointed to the city-based Rupee Cooperative Bank has assured account holders that their deposits and savings were secure and the bank's financial position will improve within six months. Vidyadhar Anaskar, one of the two members on the administrative board, gave the assurance at a meeting between the administrative board and account holders on Thursday.............
Safe makers eye banks’ financial inclusion plans
........ "The government decision to expand banking into unbanked areas of the country to fulfill the 'financial inclusion' objective and the proposal to enable 1.56 lakh post offices to offer full banking retail services can emerge as a big opportunity for safes,"............
‘No notable gains seen’
The cut in repo rate has not come at the appropriate time for borrowers who may have to wait and watch if the banks will be able to pass on the benefits after April. A look by BALAJI RAO........
Read - The Hindu
Reserve Bank of India not averse to Islamic Banking: Regional Director
.............“The Reserve Bank of India is not averse to the Islamic banking or interest-free banking system. If by introducing the system in India, the Muslim community which constitute such a large population in the country is benefited, there is no reason why the system is not introduced in the country”, Bhoria said while addressing the entrepreneurs and bankers who turned in a large number to listen to the first ever high ranking RBI officer visiting Malegaon....................
Counterfeit Indian currency notes surfacing abroad: RBI
A Reserve Bank of India study on counterfeit notes has observed that such notes have also begun to surface abroad, keeping pace with the convertible currencies. The study estimates that seizures of Indian counterfeit currency in the Swiss system for the last ten years have risen fast. From hardly one or two pieces in 2001, the number of notes seized was 1,144 in 2011. The comparable seizure for Swiss francs is 3,702 and of US dollars, 2,228..........
Former professor cheated of 25 lakh; Nigerian national held
............Claiming that his relative had left behind $18 million in his bank account, the accused wrote to the professor that the amount could be transferred in his name on payment of certain charges. Accordingly the professor agreed to appoint a legal attorney, following which the accused directed him to deposit some amount to obtain “anti-terrorist certificate” from the United Nations and a no-objection from the Reserve Bank of India.........
Retirement Planning: Investing for an unpredictable future
.......... You don’t know how long you will live for, what your expenses will be, how inflation will affect expenditure, and much else. With no clue as to how large a reasonable retirement corpus is sufficient, how should one plan for retirement?........
Read - Moneylife
Nationalised banks in Rs 1.55 lakh crore debt trap
..............In a growing trend, several government-owned banks are resorting to settlements and write-offs rather than actual recovery. Canara Bank and Corporation Bank are trying to opt for the settlement and write-off route. Gupta, however, cautions that write-offs are hardly the way out of this precarious situation. “The moment you write-off (bad stock), your PCR (Provision Coverage Ratio) comes down. There is a limit to how much you can write off,”........
SKS Microfinance may raise Rs 3,000 cr next fiscal
Hyderabad: SKS Microfinance, India's only listed micro lender, may raise Rs 3,000 crore during the next fiscal to meet its lending requirements, a senior official of the company said. S Dilli Raj, chief financial officer, SKS said the recent rate cut by the RBI is expected to show its effect on the borrowing rates April onwards......
Don’t tax interest income
........Interest on bank deposits also violates the canon of economy of collection. Both for banks and the Government, a large workforce is engaged in computing these taxes, collecting no-TDS forms, issuing TDS certificates, filing returns, and so on, including a lot of back-office drudgery. This, we believe, must be costing a lot to banks and the government alike, in terms of money, time and manpower............
Cards top customer complaints in banks
Was your account debited even when the ATM failed to dispense cash? Did your banker levy excessive charge on your credit card and refuse to reverse it? Well, you are not alone. The ‘Banking Ombudsman Annual Report’ for 2011-12 released in January shows at least 14,492 bank customers had card-related complaints during this period, 9,350 of which pertained to ATM/debit cards alone..................
J&K Bank convenes DLRC meets in Kashmir
SRINAGAR, Mar 24: To review achievements under District Credit Plan 2012-13, J&K Bank convened a District Level Review Committee (DLRC) meeting of Ganderbal under the Chairmanship of DDC Ganderbal Itrat Hussain Rafiqi. CPO Mukhtar Ahmad Bazaz, AGM RBI Ved Prakash, the Bank’s Cluster Head Ganderbal Abdul Hamid Khan, all district officers and district coordinators of all banks operating in the district attended the meeting.
Lead District Manager Ganderbal briefed the house about the achievements of the banks operating in the district under District Credit Plan (DCP) 2012-13...........
Read - Kashmir Times
Lead District Manager Ganderbal briefed the house about the achievements of the banks operating in the district under District Credit Plan (DCP) 2012-13...........
Read - Kashmir Times
NPCI flags data hurdle to cash transfers
The direct cash transfer scheme may have got off to a start with much fanfare. But lack of standardisation on the part of state governments in storing beneficiary data is making life difficult for banks to collate the same. And there lies the biggest challenge, believes A P Hota Managing Director and CEO of National Payments Corporation of India (NPCI),................
The UPA's misadventures
Apropos the editorial "RBI runs out of room" (March 20), securing growth must no doubt be an overriding concern. But the other side of the picture needs to be given as much importance. Despite our economy being fairly insulated from the global downturn of 2008, the UPA-II - in a burst of neoliberalism - went in for massive welfare schemes under the guise of economic stimulus. The Reserve Bank of India has been firm on the reduction in policy rates being contingent on containing the fiscal deficit. Despite this,............
PSBs, insurers to pay Rs 9,000 cr dividend
Hard-pressed for funds, the government is expected to get over Rs 9,000 crore in dividend from state-owned banks and insurance companies in 2013-14. These institutions are estimated to have contributed Rs 8,377.64 crore dividend to government in the current fiscal. As per the official data, State Bank of India (SBI) would pay the highest dividend at Rs 1,750.12 crore, followed by Life Insurance Corporation of India (LIC) at Rs 1,564.48 crore and Punjab National Bank at Rs 506.52 crore........
PSU bank holding firm plan gets stuck
.................A finance ministry note, based on recommendations made by RBI-appointed Shyamala Gopinath group on setting up a financial holding company, was to be taken up by the cabinet last month. “The note has been prepared. It has now been sent for inter-ministerial consultations,” a finance ministry official told Financial Chronicle. The official was not willing to hazard a guess on the timeframe for completing the consultations to enable the cabinet to take up the issue...................
Achievements of Rajasthan better than other States’: Gehlot
Rajasthan Chief Minister Ashok Gehlot has described the State’s achievements in different sectors during his tenure as “commendable”, saying the Reserve Bank of India, the Planning Commission and the Comptroller & Auditor General had praised them, and announced some more sops for the urban and rural population..................
Westpac, Sumitomo get RBI nod for India ops
Westpac
Banking Corp and Sumitomo Mitsui Banking Corp are the two latest
foreign lenders to get RBI nod for banking operations in India.
Westpac’s Asia operations are headed by Bala Swaminathan, a veteran with
stints at a number of banks in India. It has big plans for Asia and
aims to grow its balance sheet in the region. Sumitomo Mitsui had
earlier picked up a 4.5% stake in Kotak Bank and had entered into an
investment banking tie-up with the private lender. In 2012, China’s
ICBC, National Australia Bank and Korea’s Woori Bank were allowed to set
shop in India. Although RBI has been hinting at mandatory
subsidiarization for multinational banks, foreign lenders are confident
that this will be limited to banks with a wide branch network.
Credit Potential Of Rs 8221 Cr Projected
JAMMU- Minister for Agriculture, G.H. Mir, today said that State Government has initiated people–centric governance model besides took various developmental measures which culminated into peace, economic progress and stability in the State. The Minister was addressing distinguished participants from State Government, representatives from RBI, Banks, Agriculture Universities and NGOs, after inaugurating State credit seminar, organized by National Bank for Agriculture and Rural Development (NABARD) Regional Office Jammu .........
HDFC Bank leads pvt sector in expanding ATM network
The country’s top three private sector banks appear to be outdoing each other in expanding their ATM network. As at January-end 2013, their collective ATM network witnessed an average year-on-year growth of 31 per cent. HDFC Bank led the private sector banks pack in expanding its ATM network.......
Pvt banks branch out, but remain close to cities
ICICI Bank’s Khatwa branch in Rajasthan is not far from Jaipur. Similarly, the village of Mangalya Sadak in Indore, Madhya Pradesh, where HDFC Bank recently opened a branch, is not exactly in a remote area, nor is Federal Bank’s Nilavarapetti branch near Salem. But all of them fit in the Reserve Bank of India’s (RBI) category of being located in ‘unbanked’ regions, which is why private sector banks, who like their public sector peers have financial inclusion targets to fulfill, are setting up branches here...........
Protect credit cards for nominal fee
...Kotak
Mahindra Bank has taken a lead in offering card protection service to
its customers. Shalini Mehta, executive vice president, Kotak Mahindra
Bank, said
card protection service is becoming immensely relevant in the present
times and the bank is looking for new and innovative ways to deliver
value to customers..........
Read - TOI
Cibil examines using phone, power bill payments in credit history
Mumbai: Credit Information Bureau (India) Ltd, or Cibil, the country’s largest collector of databases on borrowers, is in talks with the Reserve Bank of India (RBI) to use people’s payment history on electricity, water and fixed line telephone bills to help banks assess their credit worthiness. The talks are preliminary, Cibil managing director Arun Thukral said, adding that consultations with multiple regulators and the ministry of finance are required before the agency can go ahead with the plan........
Banks Dangle Foreign Offers to Retain Staff
.....The
managements of some of these international banks will in the next few
weeks prepare dossiers hard-selling the advantages of working for a
worldclass institution. Intangibles such as professional work
atmosphere, skill development opportunities, and prospects of working
with some of the best brains in the world now score over money as a
retention tool. There may be a direct need for more than 7,000 skilled
people as Shriram City Union, M&M Financial and Bajaj Finserv, among
others, scramble for about half-a-dozen banking licences likely to be
issued by RBI.....
Read - ET
Now, learn principles of Islamic banking and finance
Islamic banking and finance is fast emerging as a specialised area of finance sector with its presence in over 75 countries and assets under Islamic finance reaching over $1.5 trillion. To address the need the Bombay Stock Exchange (BSE) Institute and Taqwaa Advisory and Shariah Investment Solutions (TASIS), which have conducted workshops in the past, are now jointly launching an online certification course on Islamic Banking, Finance and Capital Market..............
Sahara: Beginning of the endgame?
...........Six years ago, in 2007, when the group was under tremendous pressure from another regulator—the Reserve Bank of India (RBI)—to moderate the growth of Sahara India Financial Corp. Ltd, a so-called residuary non-banking company (RNBC), and was forced to put every penny raised from the public in government bonds, Roy had sought a meeting with then central bank governor Y.V. Reddy for the “benefit” of his “vision and guidance.” (4 April 2007) Reddy politely declined, saying, “I have no personal vision and guidance that could be considered other than what has been articulated in public and also in the series of discussions between us.”.........
Sebi uses robotics to scan Sahara files
Flummoxed by the humongous task of sorting and verifying tonnes of investor papers received from Sahara group, the market regulator Sebi has put them in a huge warehouse having ‘automated robotic system’ document handling and storage vaults..............
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