The very purpose of VITALINFO is to provide a platform for wider dissemination of updated information related to and happening of events in and around RBI.
Friday, September 27, 2013
Deutsche Bank award for ‘financial economist’ Raghuram Rajan
Line of Credit
...........When the central banker offers himself as the only game in town, in an environment where politicians only have choices between the bad and the worse, he becomes the only game in town. Everyone cedes the stage to the central banker, who cannot admit that his tools are untried and of unknown efficacy. The central banker has to be confident, and will constantly refer to the many bullets he still has even if he has very few. But that very public confidence traps him because the public wants to know why he is not doing more................
He deserves it...........
My View on "Raghuram Rajan brings Wall Street flavour to Mint ...":
"Raghuram Rajan brings Wall Street flavour to Mint Street,
This is definitely no mean feat,
For this he deserves a wholesome treat,
We have no doubt he is in the right seat.
- Frank R Misquith
Vijaya Bank opens 10 branches in Mandya
........Speaking at the financial inclusion outreach programme organised by Vijaya Bank in Adichunchanagiri in Mandya district, RBI Deputy Governor K.C. Chakrabarty stressed on the need for the rural people to move towards formal financial mainstream so that the excluded sections of society could get the benefits of banking services. He also emphasised the need for inculcating the habit of savings among the rural people and called upon them to get credit facilities from banks to improve their living standards. He also lauded the efforts of Vijaya Bank in bringing the hitherto deprived sections of society into banking fold............
Banks urged to ensure large firms to make payments to SMEs on time
RBI shouldn't micromanage, says Jalan
.....At the convention, though unwilling to comment about Reserve Bank of India (RBIs) recent diktat on zero percent EMI schemes former RBI governor Bimal Jalan told CNBC-TV18's managing editor Shereen Bhan that the central bank should not undertake micro-management of the policy. “Reserve Bank or the central bank of India should not be in the business of micro-managing,” said Bimal Jalan, former governor, RBI..................
Will look into new bank licences after RBI scrutiny: Jalan
The proposed external committee will look into new bank licence applications once RBI completes the basic scrutiny, said Bimal Jalan who heads the High Level Advisory Committee (HLAC). "Work is still in progress. The Reserve Bank has received applications. It is doing first round of scrutiny. Then we will see how we go about it," Jalan said at AIMA event .........
RBI prods banks to bring in more dollars
................In a separate release, the RBI assured banks that it would take appropriate measure to infuse liquidity, including bond purchases under open-market operations, if needed. “The Reserve Bank is closely and continuously monitoring liquidity conditions and will take actions as appropriate, including open-market operations, to ensure that adequate liquidity is available to support the flow of credit to productive sectors of the economy,” the central bank said...............
SBI clamps down on trade union activity
State Bank of India, the country’s largest lender, on Wednesday terminated the so-called check-off facility to its officers’ federation in its biggest clampdown on trade union activities in decades. Under the check-off facility, SBI used to remit the subscription fee from the salary accounts of member officers to the account of the association on the day of salary payment, typically the 25th of every month. This is the latest of a series of steps the SBI management has taken to control the officers’ union. Since August last year, SBI has taken action against officers engaged in trade union activities, including transfers to far-off locations and issuance of chargesheets.......
SBI chairman’s post: Arundhati Bhattacharya’s name cleared by FM
Mumbai: Finance minister P. Chidambaram has cleared the name of Arundhati Bhattacharya, managing director and chief financial officer of State Bank of India (SBI), for the post of chairman of the bank, according to two people familiar with the development. Bhattacharya’s name will be finalized for the SBI top job only after the appointments committee of the cabinet (ACC), headed by Prime Minister, gives its clearance. The announcement is likely by the end of this month. If indeed that happens, she will be State Bank’s first woman head....
My View on "7th Pay panel formed, retirement age may go up 62 ...":
Viewed from any angle, this is a welcome move. This time, the Commission will not have to hurry through the processes of consultations and drafting as the effective date of implementation will be January 1, 2016. It is good news that Centre will be giving some thought taking the views of stakeholders, even before the constitution and announcement of Terms of Reference (TOR). It would have been ideal, if Centre appointed a National Wages Commission to coordinate the efforts of VII Pay Commission and wage negotiations across public and private sectors to ensure some clarity of approach in ensuring some broad sectoral relativity and relationship of compensation packages with skill and career progression.
The next wage settlement in government, public sector and organised sector in general will have to factor in, among other things, the following ground level realities:
i) After the introduction of New Pension System (NPS), there are two categories of employees in all organisations. The claims of employees covered by NPS for higher wages factoring in the reduction in real wages on account of subscription to NPS and the need to save more to ensure income comparable to the pension available to the employees who joined earlier than them are genuine.
ii) Industry parity. Workmen staff/Officers doing similar work in different categories across public and private sectors will have to be given comparable wages, additional compensation being provided for extra work.
iii) Outsourcing. Let us not forget a couple of recent industry experiences including that of Maruti. Employees who are on regular employment, even on contract, will have to be given clarity about their absorption in the institutions and a living wage till then. Circumventing labour laws is not in the long term interest of government/industry, besides the social security implications of such short-cuts.
iv) Institutions will have to revisit the recruitment policy (right from basic qualifications needed), career progression (traditional path is no more relevant or practical) and placement policy (rural posting, need for special skills etc.)
v) There is no escape from hiking the retirement age across sectors. This will even save costs on post-retirement care. As healthy retirees will in any case retaining some jobs, the argument emanating from the fear of job-reduction on raising retirement age is no longer valid.
M G WARRIER, Mumbai
Bank staff wage revision Vs Central Govt staff wage revision
Bank employees' wage revision talks in process and announcement of 7th Pay Commission for Central Govt. employees is positive indication for final negotiation......
I-T dept clarification on co-ops
THIRUVANANTHAPURAM, SEPT. 26:
The income tax department has said that limits for calling for information on deposits has been enhanced to Rs 5 lakh from Rs 2 lakh for cooperative banks and societies. Small depositors will not be inconvenienced, an official spokesman said here. This comes in the light of a call by the Kerala Primary Societies and Kerala Cooperative Employees Union for conducting protests and sit-in in front of income-tax offices on Friday against the taxman’s drive in the State......
RBI’s New Financial Inclusion Committee: Bypassing the Parliament?
There is a Microfinance Bill promoting financial inclusion pending in the Parliament. There is also a financial inclusion committee of the RBI currently live, under Dr KC Chakrabarty. So, how appropriate was it for the new RBI Governor to announce another committee on financial inclusion?........
Banking Service Charges: Our online survey results
.......We found that customers of private banks and nationalised banks were more aware of costs and charges, while a majority of customers in the two extremes—foreign banks and cooperative banks—responded with a ‘don’t know’ on most cost-related queries. Clearly, account-holders in foreign banks do not bother to check, while those of co-operative banks probably don’t avail of many of these services. Our own research shows that ................
RBI's welcome move - M.G.Warrier
This is a welcome move which was long overdue. Deregulation and liberalisation in India has been variously misunderstood as freedom to do whatever you want, so long as you are able to remain within the contours of established law, or, if you are willing to pay penalties when caught. RBI’s present guidance should be taken as indicative of the regulator’s concern to protect public interest. Government (at Centre and states) and corporates should review the tax and pricing policy to bring transparency and simplicity. The review should cover tax exemptions, subsidies and various ‘offers’ including discounts and prizes.
- M G WARRIER, Mumbai
Raghuram Rajan panel report
......The committee, headed by the then Chief Economic Advisor Raghuram Rajan (now RBI governor) which was set up by the government amid demand for "special category" status by Bihar, suggested a new methodology for devolving funds on states based on a 'Multi Dimensional Index (MDI)'.........
Raghuram Rajan panel report will help Bihar get more funds: Nitish Kumar
Read...........
Shocker for Modi: FinMin's index does not find Gujarat a developed State
Turning rate positive at last
You may not have realised it, but the "safe" returns you were getting from your fixed deposits were eating into your savings and were actually making you poorer. Or, at best, they could have been protecting your capital without really giving you the returns you thought you were getting. Here's how:.......
Rajan questions merit of low interest rates
Reserve Bank of India governor Raghuram Rajan is questioning whether current ultra-low interest rates are the right way to return to growth after the financial crisis. Central banks warded off a collapse of the global financial system through bank bailouts and rate cuts, and central bankers became "heroes".........
RBI focus still on currency stability
......Both Dr. Rajan’s detractors and admirers may be wrong in their reading of the monetary policy statement. It appears more plausible that Dr. Rajan’s policy stance is aimed at shoring up the rupee ahead of a change in the U.S. Fed’s policy about three months from now. The RBI may find it prudent not to say so for fear of adding to nervousness in the currency markets. It may choose to couch its stance in anti-inflationary terms. But currency stability seems to weigh more heavily on the RBI than its statement would suggest. Sustaining growth also appears to be a consideration...............
Rajan Seen Switching Main RBI Price Gauge in Sign of Rate Rises
Reserve Bank of India Governor Raghuram Rajan is set to use consumer-price inflation as the main guide for monetary policy for the first time, a shift that signals further increases in the benchmark interest rate. Rajan, 50, will add to last week’s surprise repurchase-rate boost after specifying a pace of consumer-price gains as the key target, seven of 10 analysts said in a Bloomberg News survey. A panel he set up after becoming governor on Sept. 4 is due to report by December on revising the monetary-policy framework.........
Is Raghuram Rajan an inflation hawk?
.....That lends further support to the view that RBI is now looking at consumer price inflation, rather than wholesale price inflation, when deciding upon policy. During an interaction with analysts after the monetary policy statement on 20 September, Deputy Governor Urjit Patel said the central bank looked at multiple indicators, including WPI, CPI and CPI-IW, before arriving at a decision to hike the repo rate. But there are several reasons why CPI is likely to be the new governor’s favoured measure..........
RBI governor says forex reserves comfortable
..........The central bank has been cautious in using its forex to stem the depreciation of the rupee, which has weakened by 14.4 per cent against the dollar this financial year. Under Rajan, who took charge on September 4, the currency has been able to halt its fall, which has appreciated 5.5 per cent this month.................
RBI’s liquidity assurance: Is Raghuram Rajan nervous?
......RBI has promised to take appropriate actions, including open market operations (OMOs), to ensure that adequate liquidity is available to support the flow of credit to productive sectors of the economy. Indeed, OMOs will be the key to liquidity management. RBI has been generating primary liquidity through OMOs since fiscal 2009. Till then, RBI’s dollar buying was creating rupee liquidity as for every dollar it bought, an equivalent amount of rupee flowed into the system..............
Now, home loan cashback on RBI's radar
After directing banks not to offer zero per cent finance for purchase of consumer goods, the Reserve Bank of India (RBI) might also crack the whip on home loan products offering cashback facility or EMI (equated monthly instalment) waiver, people familiar with the development told Business Standard. The banking regulator is likely to review these products so see if pricing was done in a transparent manner..........
Let zero schemes finance growth, RBI
..........It is not the case that consumers are unaware that these financing schemes entail real costs on account of interest and documentation. They are aware that credit card-issuing banks charge a financing cost that product companies bear, to tempt consumers with "zero" offers. But this is not their concern. Nor should it be the RBI's. If the RBI is worried about the rates banks offer, it is welcome to examine the banks' books and ascertain if any rule is being violated............
Will RBI ban hit Deepavali sales?
.......The directive has come as a surprise to not just consumers like Mr. Jayaram but to various stakeholders. Banks, consumer finance firms and retail chains have adopted a cautious approach even as they get ready to evolve an alternative to attract customers during the ensuing festive season. Nearly one-third of total sales are driven by such hassle-free consumer finance schemes, said retailers, who fear the RBI directive will only add to woes related to rising prices. The prices of many consumer durables are likely to be revised next month...................
Are regulator penalties just?
With recent reports on levy of deterrent penalties by the Reserve Bank of India (RBI) on banks and by the Insurance Regulatory and Development Authority (Irda) on insurance companies, it is time to understand the basics of monetary penalty action processes that the three financial services regulators—Securities and Exchange Board of India (Sebi), RBI and Irda—undertake..........
Merry-go-round shifts axis of bling
Exporters of gold jewellery involved in round-tripping before the Reserve Bank’s (RBI) curbs on import of gold, which began in May, seem to have shifted focus to round-tripping of diamond-studded gold jewellery. Round-tripping is exporting of goods without much value addition, to avail cheaper export finance from banks and show a higher export performance to get the benefits of a star trading/export house..........
Social media travails
...... Well, the page handler might choose to ignore the news, but it is certainly difficult for the company management to ignore the RBI diktat.
IRDA slaps fine on Punjab & Sind Bank
.........In an order, the regulator said that the bank has received payments from Aviva Life Insurance Company Ltd as its corporate agent over and above the permissible level of commission in the form of rent for infrastructure and advertisement and publicity expenses, among others...........
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