Leadership, performance and transformation through personnel management : V.S.Das

Inaugural address by Mr V S Das, Executive Director of the Reserve Bank of India, at the seminar on “Leadership, performance and transformation through personnel management” held at the Jamnalal Bajaj Institute of Management Studies, Mumbai, 15 July 2012

.......In conclusion, let me leave you, with four types of knowledge that I feel are imperative for weaving together the ideas subsumed in the theme of today’s Seminar: (i) Self-knowledge or personal values and goals; (ii) Social Network Knowledge that involves those who surround you daily; (iii) Organizational Knowledge that extends to knowing and understanding people at all levels at the work-place; and (iv) Contextual Knowledge which engages myriad other stakeholders that your organization directly or indirectly works with......

 

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Statistics in the Reserve Bank of India - Deepak Mohanty

Welcome remarks by Mr Deepak Mohanty, Executive Director of the Reserve Bank of India, on the occasion of 6th Statistics Day Conference, Reserve Bank of India, Mumbai, 17 July 2012

........The Reserve Bank’s policy canvas is large and goes beyond the rubric of a traditional central bank. We have the primary responsibility of compilation of banking and financial statistics as well as balance of payments statistics. We have also been compiling corporate finance statistics. We have been keenly aware of the need to constantly improve the statistics in terms of coverage, quality, frequency and level of dissemination.......

 

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Will 90% NBFCs lose RBI registration due to new norms

India's majority of non-banking finance companies (NBFCs) may be freed from the regulatory clutches provided RBI implements one of the recommendations made by Usha Thorat Committee, which suggested maintaining a minimum asset size of more than Rs 50 crore along with a net owned fund of Rs 2 crore; for registering any new NBFC...................

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RBI holds outreach program

Vows 100% financial inclusion with JK Bank support

Srinagar, July 18: As part of its financial inclusion, Reserve Bank of India, Jammu office, today organized an outreach programme at village Theeru in Ganderbal.  The programme was presided over by K K Saraf, Regional Director, RBI, Jammu. Showkat Ahmad Mir, DDC, Ganderbal, was the chief guest and Rajeshwar Rao, Banking Ombudsman, RBI, New Delhi was the Guest of Honour on the occasion.................

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Bank employees stage dharna

....“Core jobs should not be outsourced. The word ‘core jobs’ is not well defined by the Reserve Bank of India. Without permanent jobs, there will be no sense of belonging or security for the employees,”....

Read - The Hindu

Financial SMS provider SWIFT to expand footprint in India

....."We are working with RBI and eight banks to offer a range of services including transaction networks covering local banks, securities clearances and settlement as well as other electronics mode of transactions," .......

Read - BS

Understanding safety of bank deposits

....Deposit Insurance and Credit Guarantee Corporation (DICGC) a wholly owned subsidiary of Reserve Bank of India (RBI) is the institution which has the responsibility of insuring deposits of customers made in banks. Deposits made by a customer in a bank upto Rs. 100000 is insured by DICGC provided the bank has availed deposit insurance from DICGC......

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Talking money

The phrase “paisa bolta hai" (money talks) is common in India as a euphemism for the bribe people pay to get any work done, especially among the public service providers. Now, the Reserve Bank of India has co-opted the phrase as part of a wider education effort on counterfeit currency. “Pehchano paise ki boli, kyunki paisa bolta hai“ (understand the language of money, because it talks), the central bank says on the website paisaboltahai.rbi.org.in. The site gives the specifics of all currency notes that the central bank prints and is aimed at dealing with counterfeit currency

BS

Control with care

Apropos the report “Govt and RBI are not adversaries: Subbarao” (July 17), the RBI Governor has rightly suggested that the government should refrain from micromanaging public sector banks. At the same time, one should also consider that in these times of economic turbulence, when any crisis in the banking sector could prove a disaster for the country’s economy, the government would prefer to keep a close watch on the sector’s performance. However, this does not call for interference in the day-to-day operations of public sector banks since that will only stymie their performance. Operational decisions can be left to individual banks, since there is sufficient competition in the market to enforce the necessary discipline. The present situation, however, calls for the RBI to review individual/group credit exposures and prescribe ceiling norms for credit to major sectors, so as to avoid fallouts from concentration risk. The RBI or the government may step in with directives for those banks in which they notice a continued deterioration in key parameters such as asset quality, profitability and so on.

 - V Sridhar Kolkata (BS)

Bite the bullet

.....The government must also use its influence with the Reserve Bank of India in order to introduce some much-needed monetary expansion. The RBI has been excessively cautious — or biased — in its policies. It seems to have given undue weight to the need to control prices, and done very little to take steps to ensure availability of credit. The pronounced slowdown in the economy cries out for a fair bit of monetary expansion......

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Decoding the supply puzzle

This refers to the news report about the RBI governor recommending a producer price index to measure the selling price of goods and services as a more effective policy tool. Such an index will help check at what prices the products and services are being sold to the end consumer. This move will help check the economy’s supply side, which I think is the main reason for inflation. This index will also help identify the role of middlemen in the supply chain.

Anand Wadadekar Pune (BS)

Tools of change - M G Warrier

This refers to the report “RBI wants a producer price index for inflation” (July 18). Earlier, too, the RBI governor had expressed concern over multiple tools being used by the government and various agencies to gauge price rise, with specific reference to the incoherence in the movement of wholesale price index (WPI) and consumer price index (CPI). Now RBI Governor D Subbarao has proposed a producer price index (PPI). The government and the authorities concerned should take this forward to enhance credibility and transparency in statistical tools. These statistical tools affect the common man’s daily life since they play an integral role in defining the cash flow of the poorest man’s household budget to the country’s current account deficit. Efforts should be made to use indices for understanding the movement of costs, prices and margins, industry- and sector-wise, and even in the country’s different geographical areas. This could be made possible by evolving PPI, CPI and margin index (tracking margins available at various levels in financial products, pharmaceuticals, real estate, services and so on) with dedicated purposes. Like the Tata Nano brought about some change in the automobile manufacturers’ mindset, the various indices, if scientifically evolved with transparency and speed, may bring about a change in our approach to rent, costs, profits and margins.

BS

My View on ''Counterfeit note makes senior citizen run from pillar to post''

 ''What Shri Kardar has said is that i) he got the note from BOI. ii)banks should have a mechanism to verify notes at the counter itself. iii)how can a lay man identify a fake note. A 80 years old person would certainly not lie. It is many a times common man would not be able to identify fake notes as he has no acumen to this effect. It is bank that is suppose to have expertise in the matter. Bank is also suppose to have required machinery / mechanism to detect fake notes which common man can not afford. Everybody, including President of AIRBEA Nagpur knows that RBI has virtually done away with responsibilty of examination of currency notes by closing its note examination counters and entrusted it to banks which have currency chests. Unfortunately,these banks-psu,private and highflier MNCs-are profit motivated and they do not resort to examination of notes which they receive as it is a costly affair of deploying note examiners. Whereas, once upon a time,in RBI every note was subjected to examination by Note Examiners. Now RBI is also thinking interms of profit as it has reduced its Note Examiners drastically and absolved itself from statutory responsibilty entrusted to it by the Government. Now, neither RBI nor above stated banks are interested in protecting common man. This is from where suffering of common man starts. What Shri Kardar suffers is an example. Whole nation is suffering on this account..This issue is supposed to be taken care of by the Parliament of India. Or else common man has to put to legal test. Can Shri Kedar, who is retired person, afford to take legal course?. ''

- L.R.Parab

 

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Dr Subbarao’s haircuts - TCA Srinivasa Raghavan

....Therein lies an economic question of Marshallian proportions: what determines the price of haircuts — the amount of work that the barber must do or something else? Like Dr Subbarao who is a late comer to the puzzle, I have always been fascinated by the economics of haircutting, not least because quality is invariant to price.....

Read - HBL

My View on "Subbarao compares spiralling haircut costs and inflation"

It was refreshing to read the Governor's comment on increasing  hair cut costs over the years. Very few persons of his stature have the rare ability to laugh at themselves which speaks of him as modesty personified. In early seventies, in a similar situation, when  asked the reason for hiking hair cut charges, the barber had this to say. "Sahib, don't you think we mortals have to strain our eyes to find hairs on your plate to give  customers like you a semblance of a hair cut?" He had a point = I was dumb struck looking at my receding hair line in the polished mirror.

- K.D.Savkur

Banks seen to cut lending rates

......“In the mad rush for deposit mobilisation, banks waged a rate war. It has been there for a long time. But the worst is now over. The RBI and the finance ministry have taken corrective measures to prevent banks from unnecessarily expanding their balance sheets. As a result, cost of funds for banks has also started coming down,” .......

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Which inflation concept is right for RBI?

.....There are basically two ways of looking at monetary policy targeting. The first is to look at a particular inflation number and work towards bringing it down. The other is to look at it from a theoretical or ideological standpoint and then use this basis for targeting inflation. This becomes important because, on its own, the inflation number we are targeting may not be influenced by monetary policy—which appears to be the case today......

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Falling Rupee: RBI cries, Government smiles

.....The government has taken some bold step to control CAD & would be taking a sigh of relief as trade deficit has narrowed down. Falling rupee might have left RBI crying but it has indeed given a reason for government to cheer.

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State-owned banks in the government-RBI crossfire

It is not new ---- the RBI-government tussle is not only on policy rates; in matters related to PSU banks, the state has been treading on RBI’s toes for years. But there are important differences between earlier and now. During the Chidambaram-YV Reddy period, the RBI had to fight bigger fires, like reining in the runaway growth of some private banks, and hence did not raise too much stink over this issue.......

Read - Mint

New govt rules will weaken public sector banks

The valuation gap between public sector and private sector banks is expected to increase, if the government has its way. Recent news flow indicates a rift between the finance ministry and the Reserve Bank of India with public sector banks being at the receiving end. After opposing the government’s legislation of setting up a Debt Management Office (DMO), RBI Governor Duvvuri Subbarao has objected to the ministry issuing orders to public sector bank directly and bypassing the board........

Read - BS

RBI rate cut unlikely as inflation to remain sticky: Killol Pandya, Daiwa Mutual Fund

.....There is a lot of talk regarding the soft inflation number prompting the RBI to take some steps on the rate front, especially in the context of the action some international central banks have taken. But the RBI continues to be worried about fuel and food inflation.......

Read - ET

Data gaps in NBFCs, co-op banks, inflation calculation: RBI

....“While the RBI’s coverage of the banking sector is quite robust, its coverage of NBFCs is much less so... This is a gap we must fill as the role of NBFCs in the financial intermediation process has been growing rapidly,”......

Read - Indian Express

Does India Still Have a Growth Story to Tell?

......Like the U.S. Federal Reserve, the Reserve Bank of India (RBI) plays a key role in promoting economic growth. But the RBI is dealing with a classic Catch-22 scenario; on the one hand, they have low growth rates to contend with, while on the other there’s surging inflation to consider. The RBI lowered its benchmark interest rate by 50 basis points a few months ago, and has since May it has been left unchanged at 8%. Accelerating inflation coupled with a greatly devalued Rupee make another rate cut a near impossibility, and despite extreme political and social pressure to do so, the RBI has been able to resist lowering it..........

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Banks told to take a closer look at crop loans

......whether banks were ensuring that the amounts given were being utilised for the intended use. He said that subvention amounts must reach the beneficiary and asked whether banks followed norms of Reserve Bank of India (RBI) and NABARD while giving crop loans. “Is credit for agriculture going in the right direction?,”.............

Read - The Hindu

Individuals can retain earnings in forex accounts: RBI

Individual residents who receive foreign currency will not be required to convert the funds into rupees, while exporters and corporates are mandated to do so, RBI said............

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Maharashtra’s co-op banks to lose Rs 900 cr zilla parishad deposits

.....Earlier this year, RBI had put 42 co-operative banks across India on a revival programme that involved a thorough scrutiny of them, besides barring them from accepting fresh deposits. RBI has given the banks until 30 September to draw up a revival plan. The programme, known as the monitorable action plan (MAP), was a last-ditch effort by RBI to revive the distressed banks. If the co-operative banks under watch are unable to improve their positions by September, they may be asked to either shut down or merge with other banks. During this period, the operations of the banks and their business decisions will be scrutinised by special panels comprising top officials of RBI and the National Bank for Agriculture and Rural Development (Nabard)............

Read - Mint

QFIs can invest $1 b in MF debt schemes

......“In consultation with the Government of India (GoI) and the Reserve Bank of India (RBI), it has now been decided to allow Qualified Foreign Investors (QFIs) to invest in Indian corporate debt securities and debt schemes of Indian mutual funds,”..........

Read - The Hindu

RBI asks banks not to give additional rate to NRI staff member

...."Accordingly, the discretion given to banks to allow the benefit of additional interest rate of one per cent per annum as available to bank's own staff on deposits under NRE/NRO accounts stands withdrawn," RBI said in a separate notification......

Read - TOI

Lack of required approval held back CBDT action on HSBC

......RBI sources said the banking regulator was looking into the matter. There is a process which the central bank has to follow in such matters. The role of RBI will be relevant only if it is found that Indian operations of foreign banks facilitated movement of funds from India, another official said.

Read - BS

RBI fiat on forward bookings upsets cashew exporters

Cashew exporters want Director-General of Foreign Trade (DGFT) to take up with the Finance Ministry the issue of a Reserve Bank of India circular on foreign currency forward bookings. The RBI circular to banks providing export credit said that all forward currency bookings by exporters and importers should fully be on deliverable basis. Any exchange gain from the forward booking, in case of cancellation of an export order, should not be passed on to the exporter.........

Read - The Hindu

Cheque fraud now comes at a higher price

....Taking a tough stand on those who issue cheques without sufficient balance in the bank, the Supreme Court said that the accused will have to undergo further imprisonment if compensation was not paid. The apex court in the case of R Mohan vs AK Vijay Kumar said that “deterrence can be infused into the order only by providing for a default sentence. If merely an order directing compensation is passed, it would be totally ineffective. It could be an order without any deterrence or apprehension of immediate adverse consequences in case of its non-observance,” .....

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Shaking Up the Citadels

.....Many years ago, the government had contemplated abolishing the banking division in the ministry. YV Reddy — who was secretary of that division in the mid 90s — says, what is relevant is to make a distinction between ownership and sovereign functions. According to him, the banking division should be divided in a way that there should be a financial sector regulation division, which is entirely a sovereign function. “It is a political decision, but it should not erode the autonomy,” he says adding that this was something even the UK government went through. Perhaps, a review by Prime Minister Manmohan Singh, who is now in charge of the finance ministry, is in order now.......

Read - ET - Page 17 

RBI needs to talk to GoI

.....it’s high time RBI and the finance ministry had a candid discussion instead of talking at each other through the media. If RBI isn’t going to cut rates in a meaningful manner till the government does its bit on easing supply constraints and on cutting expenditure, and the government isn’t going to do anything to ease supply constraints in a hurry, this seems to be the surest recipe for stagflation even if, as some argue, we’re not in stagflation at the moment.

Read - FE Editorial

DCB Bank inaugurates new Corporate Office

DCB Bank (Development Credit Bank Limited) new Corporate Office was inaugurated by Mr. P Vijaya Bhaskar, Executive Director, Reserve Bank of India at a ceremony graced by Prince Rahim Aga Khan from Aga Khan Fund for Economic Development (AKFED), Mr. Sultan Allana, Director AKFED, Mr. Nasser Munjee, Chairman DCB Bank and Board of Directors DCB Bank. The new Corporate Office is located on the 6th floor of Peninsula Business Park in Lower Parel.......

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Counterfeit note makes senior citizen run from pillar to post

Nagpur : ........."There is hardly any chance of a fake note being given away from the bank's counter. Moreover, under any situation the customer should check all notes before leaving the counter," said the manager. Kardar is sticking to his claim that he got the note from BOI. "Banks should have a mechanism to verify notes at the counter itself. How can a lay man identify a fake note," he asks. President of the Nagpur branch of All India RBI Employees Association (AIRBEA), Bidyut Charaborty, said that if Kardar is to be believed then getting a fake note from a bank counter is indeed a matter of concern. Banks are supposed to thoroughly check the notes before keeping them at the counter. Banks must have verifying machines at counters though many do not install one, said a source in RBI.

Read - TOI

Private banking licences: Bank employees to go on all-India strike

Public sector bank employees will go on a two-day nation-wide strike from July 25 to protest against government's moves to grant banking licences to private business houses and closing down of rural branches......

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Policy rate alone not responsible for slow growth: Subbarao

....."The Reserve Bank maintains that interest cost is only one of the several factors that have dampened growth, and the increase in policy rate by the Reserve Bank alone cannot explain the investment slow down," ............

Watch the video..........

RBI takes first steps to save consumers from exploitative investment schemes

The Reserve Bank of India has taken its first step to protect consumers from exploitative investment schemes by releasing a draft National Strategy for Financial Education on Monday.............

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Here’s what Subbarao has to say about inflation

........“I must hasten to add that sacrificing growth is only in the short-term. In the medium-term, there is no trade-off between growth and inflation,” the RBI Governor said. “There is a threshold level of inflation. Below the threshold, may be, there is a trade-off between growth and inflation. But above the threshold, there is definitely no trade-off between growth and inflation,” he said. However, the RBI governor said his views on inflation should not be read as a preview to the decisions to be taken in the quarterly monetary policy review on July 31.............

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Subbarao compares spiralling haircut costs and inflation

                                                  (The Telegraph)

Reserve Bank Governor Duvuuri Subbarao today cited his receding hairline and the high rates for his hair cut to make a point on inflation. He said he used to pay Rs 25 for a haircut 20 years ago which went up to Rs 50 even as his hair thinned. However, in recent times, though the hair growth has been almost nil, he is paying Rs 150 for a haircut. "Now when I have virtually no hair left, I pay Rs 150 for a haircut," the career bureaucrat-turned-central banker said to a laughter ................

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Read more........ Wondering why your barber charges high rates for hair cut? RBI governor shares the same concern


Watch the video..........

Core inflation may not be true indicator: Subbarao

Reserve Bank of India (RBI) Governor D. Subbarao on Tuesday added a new dimension to the ongoing debate on what is the ideal measure of inflation that the Indian central bank should track while framing policy decisions, saying core inflation might not be a true indicator of price movement in Indian conditions.........................

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Can policymakers stomach another bout of food inflation?

.....India's wholesale and consumer price inflation levels are way above the Reserve Bank of India's comfort lines, central bank Governor Duvvuri Subbarao said on Monday. India's wholesale price index (WPI), the main inflation gauge, rose to a lower-than-expected annual 7.25% in June, its slowest rate since January, helped by moderation in fuel prices. The RBI's threshold level for inflation is around 5%, he said.......

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Make Zero CAD cornerstone of policy making: Reddy

New Delhi: With the current account deficit (CAD) overshooting 4 percent of GDP mark in 2011-12, former RBI Governor Y V Reddy Tuesday said India's medium-term economic growth strategy should be aimed to achieve zero CAD. "Zero current account deficit in medium term should be the cornerstone of the policy making," he said at the lecture of IPF, a partnership between NCAER and Washington based Brookings Institution..........

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The meaning of liquidity

What is the difference between leverage and high leverage? Ask Y V Reddy, former Reserve Bank of India (RBI) Governor, who was at his wittiest best at the Indian Overseas Bank’s platinum jubilee commemorative lecture. “Basically, leverage means others’ money and high leverage means that you are playing more with others’ money,” he said. And what does liquidity mean? “Liquidity has many meanings ... we have aggregate liquidity, then we have CRR [cash reserve ratio] and OMO [open market operations]. And, of course, in Hyderabad after 7 p m, liquidity means beer and whisky. That’s why we have important conferences at 5 o’clock,” he added.

BS

Reform is not laundry list; focus on micros must: YV Reddy

Neither growth nor inflation should drive interest rate policy. The correct rate is one that promotes savings.

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Political aims too matter, RBI governor to economic advisors

D Subbarao has urged economic advisors to consider the government's political objectives while suggesting measures, turning around the old-school theory of giving unbiased apolitical advice...........

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Subbarao moots producer price index to measure inflation

The Reserve Bank of India on Tuesday mooted a producer price index (PPI) that would be able to measure inflation more accurately. According to Reserve Bank of India Governor D. Subbarao, the present ways of measuring inflation do not take into account cost escalations of...........

Read - Hindustan Times

Statistics and Statistical Analysis in RBI’s Work: Dr. D Subbarao

Address by Dr. D. Subbarao, Governor, Reserve Bank of India at the Sixth Annual Statistics Day Conference, Reserve Bank of India, Mumbai, July 17, 2012

......I want to reiterate that the Reserve Bank is deeply conscious of positioning itself as a knowledge institution. We place great store by the timeliness and accuracy of data and in the skill sets for analysing and interpreting that data. Oftentimes, the complex problems of the real world test the adequacy and the integrity of our data sets as also our ability to analyse and interpret them. We make best efforts to improve our data collection and analysis and to be mindful of the conceptual and measurement errors. We are not the best practice, but will spare no effort to reach the best practice, if not set the best practice itself. .........

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Why slowdown? RBI at sea; will probe

......"I have asked our economic research department to do a detailed study on the time-series relationship between real interest rate and investment activity. We expect to put out that report in the public domain in the next couple of months,"........

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Bankers express concern over decline in CD ratio

......Mr Vijaykumar A., Manager, RBI, Bangalore, said that declining trend in CD ratio is a worrisome factor. Bankers have not achieved CD ratio of 60 per cent, which is the benchmark prescribed by the RBI. Banks with less than 60 per cent CD ratio should accelerate lending. Disbursements in tertiary sector such as segments like housing and education needs improvement, he said.......

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Mad chase for GDP growth

..... large percentage of what our retailers offer is imported; including fruits and festival goodies. During the 1995 -2005 decade, according to the RBI report, blue-collared jobs in the organised sector in India declined! During the same decade, China created 72 million new factory jobs in their manufacturing sector, mainly for their unemployed rural youth. The problem is not the lack of enterprise amongst our people, but the complete mismanagement in handling the manufacturing sector.......

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India growth story clip dips to 7.5%, says RBI

....."Assessing India's potential growth rate, consistent with our objective of low and stable inflation, remains a challenge. In its annual report for 2009-10, the Reserve Bank had reported that the potential output of the Indian economy may have dropped from 8.5 % pre-crisis to 8% post-crisis,".......

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Micromanage now, regret later

The Reserve Bank of India (RBI) Governor has publicly cautioned the government against micromanaging public sector banks directly, explaining that the correct route through which the government as majority owner should work is the board, on which it has its nominees. Then, for good measure, he has added that this would be in line with good governance, in which the government could set an example! A limit of sorts was crossed recently when the government, or the department of financial services, first issued a letter to banks to limit their acceptance of certificates of deposit and bulk deposits and, on confronting a volley of protest from bank chiefs, held the instructions in abeyance. It is useful to trace the history of micromanagement ...............

Read - BS

Maharashtra to provide loans to farmers through state co-op bank

Since the RBI has passed strictures against the district co-operative banks, the state government decided to provide loan to farmers through state co-operative bank................

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Are the entry barriers for companies to set up banks too high?

........Last week, the Reserve Bank of India (RBI) issued the gist of comments from various constituents and stakeholders as a prelude to announcing a new framework for new banking licences. One of the comments was on the entry capital. Whereas RBI’s discussion papers suggest a threshold of Rs 500 crore, some stakeholders say the limit should be raised to Rs 1,000 crore. There is a high order of prudence and analysis that seems to have gone into this suggestion. ........

Read - BS

SBI to stop appointing individual business facilitators

...............The bank has asked individual facilitators to either upgrade into a business correspondent or associate themselves with institutions — like NGOs — to bring credibility in operations. SBI now suggests business facilitators to follow the business correspondent model in setting up customer service points and conducting banking operations through point-of-sale terminals, mobile phones or other such smart devices. In order to ensure greater financial inclusion, the Reserve Bank of India had in 2006 instructed banks to use the services of business correspondents and business facilitators. Business correspondents carry out much wider function, including that of disbursal of small value credit, collection of small value deposits, sale of third party products and receipt and delivery of small value remittances. SBI currently has a network of 30,000 such correspondents across the country.

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Establish standards for MFI independent directors as first step to ensure good corporate governance

The RBI and the Union Finance Ministry must provide clear guidelines on the appointment, roles, compensation and evaluation of independent directors for microfinance companies, critical for effective and ethical operations

As the Reserve Bank of India (RBI) and the Union Ministry of Finance (MoF) work hard on building a clear regulatory architecture for microfinance, they would do well to remember that an important cog in the whole scheme of things is to ensure good corporate governance on the ground. There can be no compromise on that as much of the Andhra Pradesh and Indian microfinance crisis of 2010 can be traced to poor............

 

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IUCB launches speedy loan recovery mission

Imphal, July 16 2012:In compliance with the directive of Reserve Bank of India (RBI), Imphal Urban Co-operative Bank (IUCB) has started its Speedy and Efficient Loan Recovery Mission from today........

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Do not micromanage PSU banks, former RBI chief YV Reddy tells government

.........Reddy, whose conservative policies are widely regarded as having insulated India's financial system from the global economic meltdown of 2008, appeared to endorse the views of his successor Duvvuri Subbarao, who last week said the finance ministry should demonstrate exemplary corporate governance by exercising its ownership rights through bank boards.........

......Reddy also disagreed with one of his predecessors, C Rangarajan, who now heads the PMEAC, on the preconditions for issuing new bank licences.......

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‘RBI serves the nation, not the Govt’

The Reserve Bank of India’s Governor has a responsibility to speak up. As a public servant, he owes his loyalty to the country and the Constitution — and not just to a government in transit, the Governor, Dr D. Subbarao, said. He was quoting the late I.G. Patel, a former RBI Governor, while speaking at the launch of a collection of the latter’s essays — Of Economics, Politics and Development...............

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Govt and RBI are not adversaries: Subbarao

....We are not adversaries and we share a common goal. And I think some disagreement is natural,” he said. “There are disagreements within the government and there are disagreements between the government, regulators and public policy institutions. In fact, I would worry if there is complete agreement.” ............

Read - BS

RBI official highlights problematic international regulations

G Padmanabhan, an Executive Director of the Reserve Bank of India, delivered a speech on July 13 in which he assessed the effects of global banking regulations on the Indian economy. Speaking at the Bankers Club in Raipur, Padmanabhan said that co-ordinated international regulations could create positive externalities for India, but might need to be changed to account for the needs of the domestic economy. "For instance, guidance on the conduct of the counter-cyclical capital buffer for India may require some adjustment," he said, explaining that the credit-to-GDP ratio was potentially problematic for credit growth in India.............

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Former RBI governor YV Reddy rules out stagflation for now

Dismissing fears of stagflation, Former Reserve Bank Governor Y V Reddy today said India is still one of the fastest growing large economies." "Where is the issue of stagflation? Though inflation is a concern but that does not mean that we are de-growing... still we are one of the fastest growing large economies," Reddy, who is credited with formulating policies that absorbed the shock emanating from 2008 global financial crisis, told........

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In an interview with The Wall Street Journal, Mr. Reddy says............

Without fixing fisc, reform is dangerous: YV Reddy

CBSE agrees to introduce financial education in school curriculum

The Central Board of Secondary Education or CBSE is likely to take the lead in introducing financial education in its post primary level curriculum after taking a leaf out of Reserve Bank of India's financial literacy goal. RBI recognises that basic knowledge about monetary aspects play a key role in financial inclusion and inclusive growth. Imparting financial education among the masses at the early stage of a life cycle can make a real difference in a country where many do not get the opportunity to study beyond school level. "This is truer in case of girl students. One must keep it in mind that for such students, this could be the last opportunity in life to get formal inputs on financial education," RBI said in a draft guidelines on financial education released on Monday..................

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SEBI, RBI for financially aware and empowered India

Financial sector regulators, including RBI and Sebi, today proposed a nationwide survey for assessing financial inclusion and literacy in the country and educate 500 million adults, besides providing financial education to school children. The draft 'National Strategy for Financial Education' seeks to "create a financially aware and empowered India" and convert savers into investors. It pitches for a five-year action plan for financial literacy with initial focus on four sectors - banking, securities market, insurance and retirement planning..........

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Timely warning from RBI

.......Since the government isn’t particularly concerned about corporate governance when it comes to itself, RBI must be more assertive. Governor Subbarao’s message is loud and clear but if the government chooses not to hear, RBI must step in to protect the interests of banks. Meanwhile, Mittal would do well to limit his views to the boardroom.

Rerad - FE Editorial

Obituary

Mr. K. Gopinath Menon, Ex. NABARD/RBI passed away on 15.07.2012. Mobile: 98411-43577 / 94443-15937.

Hindu

Deepak Parekh to head Financing Infrastructure panel

The committee was set up in November 2010 under the chairmanship of Rakesh Mohan, former Deputy Governor of RBI

The government has appointed eminent banker Deepak Parekh as the new Chairman of the high-level committee on Financing Infrastructure.The committee was set up in November 2010 under the chairmanship of Rakesh Mohan, former Deputy Governor of Reserve Bank of India. The committee was mandated to review existing policies and suggest necessary changes in the investment framework in the high-priority infrastructure sector............ 

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Mobile-Enabled Savings via the Business Correspondent Model in India

........In India, microfinance institutions aren’t permitted to intermediate deposits, and regulators are encouraging the business correspondent model to further financial inclusion. The Reserve Bank of India (RBI) permitted banks to use the services of intermediaries who act as business correspondents (or agent) to provide banking services.We saw an opportunity to test the potential of the business correspondent approach as a means of scaling mobile savings services for the poor, working with our long-time partner, Cashpor, an MFI operating in two of India’s poorest states – Bihar and Uttar Pradesh.........

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RBI imposes Rs 5 lakh penalty on Karad Urban Co-op Bank

........According to RBI guidelines, urban co-operative banks are required to obtain prior permission from it for shifting to a different locality or municipal ward. The bank has been penalised for shifting its location in Sangli, Maharashtra without RBI permission, the circular said............

Read - ET

Why Subbarao will be watching the skies and a lot more

....But chances are, RBI governor Duvvuri Subbarao won’t oblige. After he stood firm and refused to cut rates at RBI’s 18 June mid-quarter policy review, sections of India Inc came up with predictable howls of protest. However, given Subbarao’s earlier statements explaining his stand, it’s difficult to envisage RBI will consider monetary easing just yet. And there’s good reason for not doing so.......

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Post-WPI, Subbu will play more Baba Sehgal than Ilaiyaraaja

.....For Duvvuri Subbarao to make melody like Ilaiyaraaja a lot of things which are not under his control need to come together. Ilaiyaraaja has control over the people he works with. He can tell his musicians what to play. He can ask his singers to sing in a certain way. He can ask his lyric writer to write a certain kind of song. And so on. Subbarao does not have the same control over the other players in the economy. So, in the meanwhile, it is safe to say that try he might as much to make melody like Ilaiyaraaja, chances are he is more likely to come up with a song Baba Sehgal once made. It was called “Main Bhi Madonna”. Those who have heard the song will know that melody has never been “murdered” more.

 

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Growth trouble

.....There is trouble ahead for the Indian economy. On Monday, the International Monetary Fund (IMF) pared its growth forecast for the Indian economy this year to 6.1% from 6.8% earlier. On the same day, the governor of the Reserve Bank of India (RBI), D. Subbarao, said inflation continued to be above the central bank’s comfort zone. This is a clear hint that interest rates may not be brought down as quickly as the government and businesses want.........

Read - Mint

A 50 bps rate cut now better than 150 bps in Oct

The Reserve Bank of India (RBI) should use the lower-than-expected June inflation numbers to cut the repo rate by 50 basis points (bps) in its July 31 policy review. If the central bank waits for further confirmation of inflation trending down and growth coming off, it would be forced to cut rates by wider margins in its policy reviews in September and October. .......

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India’s twin-track inflation

.....Such a twin-track inflation problem creates complicated policy dilemmas. The Reserve Bank of India tracks core inflation—which excludes volatile food and fuel prices—very closely. It has been receding, mainly because the Indian economy is now growing below its potential. The trend in core inflation strengthens the case for lower interest rates.....

Read - Mint

Upside risks to inflation persist

....“We expect all policy rates to remain unchanged on July 31. Eventually, rates have to come down. But for this scenario to play out, India’s inflation has to sustainably decline at or below 6.5 per cent.”.....

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India inflation way above RBI's comfort level: Duvvuri Subbarao

.........."We are unelected...but we take decisions that affect the entire country. So, we must be very sensitive to rendering accountability for our actions and the results of those actions,".............

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Liquidity in RBI comfort zone ahead of policy review

.........Banks are yet to effectively pass on the rate cut of 50 basis points announced by RBI in April. Bankers were of the view that reduction in policy rates did not help much, as liquidity was tight and high cost of funds limited their scope for reducing lending rates. The central bank is scheduled to announce the first quarter monetary policy review on July 31. RBI had opted to hold rates in the mid-quarter policy review in June, citing upside risks to inflation.....

Read - BS

More EM central banks join the easing crew

.........Worries about a growth collapse are clearly gathering pace. So how much room do central banks have to cut rates? Compared with Europe or the United States, certainly a lot. And with the exception of Indonesia and Philippines, interest rates in most countries are well above 2009 crisis lows. But Deutsche Bank analysts, who applied a variation of the Taylor rule (a monetary policy parameter stipulating how much nominal interest rates can be changed relative to inflation or output), conclude that in Asia, only Vietnam and Thailand have much room to cut rates. Malaysia and China have less scope to do so and the others not at all (Their model did not work well for India).........

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Indian Banks On Security Alert!

.....However, the good news is that the Reserve Bank of India has proactively directed banks to beef up their information security and risk management posture, outlining a number of checks in several categories to protect users’ information and money from cyber threats. Upadhya believes that it depends on how decision makers in the banking ecosystem can leverage technology to its fullest and ensure a secure enterprise.

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June inflation at 5-month low: India Inc clamours for rate cut, RBI unlikely to oblige

India's headline inflation fell to a five-month low in June, increasing the clamour for a cut in policy rates but the Reserve Bank of India governor D Subbarao quickly dashed hopes, saying it was still "way above the threshold"............

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New clients are a matter of interest for lenders

..........However, bankers say that if the RBI reduces rates in the monetary policy scheduled on July 31, they will pass on the benefit to the customers. “Unless RBI reduces rates banks will not be able to bring lending rates down. We will wait for RBI action," said S Raman, CMD, Canara Bank.

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PM’s job plan fails to take off in J&K

........The Expert Group – headed by former RBI Governor, C Rangarajan – had also suggested to run special training programmes for university and professional college students in collaboration with industry sector under the “Udaan Scheme”.........

Read - Deccan Herald

SARFAESI Act and its impact

.....It would have been appropriate, say, for the RBI to have studied/ audited the financials and methods of operations of the ARCs and the reasons for the existing trust deficit between banks and ARCs before the ministry issued this direction. Besides, the definition of authorised officer given in the SARFAESI Act does not include ARC, though it can be an agent.........

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Killing Me Softly With His Song...

.....That the central bank was well cognisant about the fact was evident in the 2002 speech made by former RBI governor Y V Reddy. “The availability and easy access to different forms of financial savings on an extensive scale, particularly for women, to protect the traditional stree dhan (jewellery given to brides) will prove to be the most viable policy option to encourage non-gold form of savings,” said Reddy. Today, much of the central bank’s action is aimed at just doing that. Besides forcing banks to increase their rural penetration, the central bank has looked to curb lending against gold by capping interest rates and jacking up the capital requirement for gold-lending non-banking finance companies. Besides, it is also toying with the idea of banning banks from selling gold coins. But the market seems to be turning a blind eye to the fact. The truth is, gold is no longer a ‘safe haven’. It’s just another alternative asset class that has turned speculative in nature......

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Anand Sharma pitches for interest rate cut to boost growth, exports

With inflation easing marginally to 7.25 per cent in June, Commerce and Industry Minister Anand Sharma today pitched for cut in interest rate by RBI in its month-end policy review to boost both growth and exports. "The cost of the credit has to be low so that the Indian industry remains competitive in the global context,"............

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Stealing is as easy as A, T, M

......the police will write a letter to banks across the city, asking them to enforce RBI safety guidelines, which state that a unique PIN should be generated for every transaction. Although the RBI's guideline came quite some time ago, many banks are yet to implement them........

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Well Spoken, Guv

In the Indian context where regulators are appointed by the government, it is not often that regulators speak their mind. Especially if it is to tell their political bosses off ! The Reserve Bank of India (RBI) Governor's show of spunk in telling the finance ministry not to micromanage banks must, therefore, be applauded. The RBI, unlike many other central banks, is not autonomous in law. Over a period of time, thanks to a succession of competent governors, it has won a certain degree of de-facto independence for itself. Nonetheless, governors, with some exceptions, have been wary of calling a spade a spade........ 

Read - ET

The 'Vivekananda formula'

.... There was a time when even the Reserve Bank of India (RBI) had an informal quota for an IAS officer nominee for the post of a deputy governor. That practice has been discontinued in the last couple of decades. And this perhaps could happen also because the central bank paid more attention to build a strong cadre of its own officials. As a result, today RBI has its own cadre of officers who have been nurtured to grow within the organisation, reducing its dependence on outside talent for filling key vacancies........

Read - BS

RBI website displays nothing

Browse the RBI website and look for the email IDs of its several departments. You will find none displayed. Try communicating online. The website's " contact us" slot does not accept most of the punctuation marks, in the text printed. And when the message is submitted, you are failed repeatedly, because of some " error occurred", and are asked to " try again," till you throw up your hands. Evidently, RBI's public service seems to lie in discouraging the public from contacting it. Why is it so? It is the culture of our government departments, organisations, and undertakings.

 

- V V Vijayan, Chembur (FPJ)

'Days of big bang reforms are over'

C Rangarajan, chairman of the Prime Minister's Economic Advisory Council, has been a dependable aide of Manmohan Singh for several years. He was RBI Governor when Singh announced two rounds of rupee depreciation in July 1991. Now, with the PM taking charge of the finance ministry, Rangarajan is once again busy devising the revival of Asia's third largest economy. He sounds optimistic about growth prospects this year and says the government is taking steps to revive investor sentiment and growth...........

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Loan rangers should be cautious

According to the RBI’s Master Circular, the consumer has to get all information regarding the loan in writing and in a local language. This information should include the terms and conditions governing the loan

..... I would suggest that you go through the “Master Circular on fair practices code” released by the Reserve Bank of India in the first week of July. It will help you understand and protect your rights better and also deal better with those giving you those loans. The Master Circular, which is a compilation of all the instructions issued by the regulator (RBI) to non-banking financial companies till date (June 30, 2012), tells you what your entitlements are vis-à-vis the loan agreement.......

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आरबीआई के डिप्टी गवर्नर सहित 17 को राहत नहीं

जयपुर. हाईकोर्ट ने आरबीआई के डिप्टी गवर्नर एच.आर. खान, राजस्थान बैंक के चेयरमैन रहे पीके तायल व एमडी डॉ. के.एम. भट्टाचार्य सहित राजस्थान बैंक के निदेशकों को राहत से इनकार कर दिया। हाईकोर्ट ने इनके खिलाफ अधीनस्थ कोर्ट की कार्रवाई को चुनौती देने वाली याचिकाओं व रोक लगाने के प्रार्थना पत्रों को निरस्त कर दिया। अधीनस्थ अदालत को निर्देश दिया कि वह प्रार्थियों की आपत्तियां सुनने के बाद मामले में आगामी कार्रवाई करे। न्यायाधीश महेशचन्द्र शर्मा ने यह आदेश एच.आर. खान व राजस्थान बैंक की याचिकाओं पर दिया।...............

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TOO FEW WOMEN AT TOP OF PSU BANKS?

......India’s government-owned banks have something to cheer about. For the first time, the public sector banks, which account for about 70% of the banking assets in the country, will have three women chief executive officers (CEOs). In its 43-year history, the state-run banking industry has had only 43 women chiefs.........

Read - Mint 

Licence To Bank

......Some aspirants (RBI has not named them) have pleaded that “the requirement of the bank having 25 per cent of branches in unbanked rural centres is too onerous; therefore, the requirement could be revised to 15 per cent to ensure a level playing field between existing and new banks”. In June, Deputy Governor K.C. Chakrabarty had noted that banks should “be actively encouraged to set targets for themselves to capture untapped business in rural areas covering approximately two-thirds of the country’s population” in its 600,000 villages. Many suggestions come from big industrial houses — (and nowhere in the draft guidelines did the RBI even refer to them!) — and non-banking finance companies with interests in real estate. Even the idea of a wholly-owned non-operative holding company (NOHC) has been sought to be diluted. The objective of the NOHC was to fence regulated financial services from other activities of the promoter group — commercial, industrial and financial activities not regulated by financial sector regulators. The chorus is that the requirement that the NOHC be wholly owned by promoters be “revisited, and diversified shareholding at the NOHC-level be permitted”....... 

Read -| Businessworld

Banks told to hold exclusive board meetings on policy, strategy issues every quarter

.....The reform measures come in the backdrop of the Reserve Bank of India recently asking the Government to show ‘exemplary behaviour of corporate governance and exercise its ownership rights through the board’......

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Gold: A protection from inappropriate policies - S.S.Tarapore

........ On interest rate increases and tightening of liquidity, India Inc. has been forcefully lobbying for easing of monetary policy and it would be creditable if the RBI can resist these pressures. While earnest attempts are being made to undertake a fiscal correction, political economy considerations appear to thwart effective action.........

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Banks can’t freeze accounts if Know Your Customer papers not submitted

.......The court also noted that the Reserve Bank of India also specifically provides for opening of accounts by low income group people who are unable to provide KYC documents. Banks are required to open accounts for such persons on the basis of an introduction from an account holder who has complied with all the KYC procedures and whose account is with the bank for at least six months with satisfactory transactions. The low income group account holders, whose accounts are opened in this manner, have a restriction that the total balance in their accounts cannot exceed Rs 50,000, and the total credit deposits cannot exceed Rs1 lakh per year. The court observed that in the present case, the account had been opened long back, yet the account had been illegally frozen. The court warned that if a bank freezes an account for non-compliance of KYC documents, appropriate action could be initiated against it either by the Reserve Bank or the Banking Ombudsman, so are required to safeguard the interests of all account holders......

Read - TOI

HC notice to Centre over NPA defination in SRFAESI Act

...."The section 2 (O) of the Securitisation Act 2002,is unconstitutional as it is arbitrary and unreasonable. It refers to RBI guidelines, which has a definition which is completely in contrast to the one stated in the Act," the petition read. "The section relies on what is sub standard, loss making and doubtful account to understand the term NPA, while the RBI guideline relies on NPA to explain what is Sub Standard, loss making and doubtful account. Thus the whole definition is arbitrary and unreasonable," it added. The petitioner further said, "The definition as stated in section 2 (O) empowers the bank to declare any account as NPA as per its whims and fancies. The delegation of power on the bank to declare a account NPA as per the definition which relies on RBI Guidelines which are ambiguous and contradictory to the definition stated in Securitization Act. Thus the section 2 (O) is required to be declared unconstitutional.".....

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NPAs in farm credit

This is regarding the observation of the RBI Governor about rising NPAs in the farm credit portfolio (Business Line, July 13). He has rightly observed that the unrealistic targets by the government on farm credit have led to manipulation of statistics by banks and multi-fold increase in NPAs...........

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