India's banks face tough period

I

ndia's struggling banking sector will face a period of lower profitability as it seeks to raise at least Rs 5,00,000 crore (USD 90bn) in extra capital to meet the new Basel III international banking standards, the head of the nation's central bank has warned........... 

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Indian Banks Have Catalyzed Growth: Now They Have to Grow

....."If the economy grows 8%, 9% or 6.5%, the banking sector will grow at at least two-and-a-half times the rate of India’s GDP growth. The sector could grow 16%-to-24% per annum year-on-year for the next decade. That means by 2020, we as a sector can be five times what we are today. So the growth opportunity is huge.".........

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1/3rd of new ATMs should be visually-challenged friendly: RBI

...."It has been brought to our notice...that visually challenged persons are facing problems in availing banking facilities like internet banking... Banks are, therefore, advised to strictly adhere to instructions... and extend all banking facilities to persons with blindness, low-vision and other disabilities.," ......

Read - Hindustan Times

Fraudulent debit card transactions on the rise in AP

Fraudulent Internet debit card transactions are on the rise in the state and form the second highest among the complaints being received by the Banking Ombudsman after the disputed ATM transactions. In this case, the additional security feature — an instant password sent to customer’s mobile phone at the time of every transaction — provided by the banks to check such instances has also become the target of the fraudsters, according to M Sebastian, Banking Ombudsman of Andhra Pradesh...........

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Credit card usage 30 times that of debit card payments annually: RBI

Indians use a credit card for an average payment amount of about Rs 55,000 in a year — which is nearly 30 times the money spent through debit cards. However, the number of debit cards in the country is more than 15 times than that of credit cards, shows an analysis of data available with Reserve Bank of India............

Read - HBL

No debit cards please, we're Indians

Indians use a credit card for an average payment amount of about Rs.55,000 in a year — which is nearly 30 times the money spent through debit cards. However, the number of debit cards in the country is more than 15 times than that of credit cards, shows an analysis of data available with Reserve Bank of India........ 

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Swiping with value additions

ON THE CARDS

Visa offering packaged security solutions to banks for cards issued on their platform   National Payments Corporation of India lowers charges to make inroads in the market share of international payment gateways   Against established international players like Visa and Mastercard, NPCI has two strengths to play at — cost effectiveness and rural reach   NPCI offers services at flat 40% discount   NPCI, promoted by banks, also plans to launch an international debit card on similar terms in June 2013

Read - BS

How to beat a cheque-stealer

How can you beat the crook who stole your cheque from the bank’s drop box? Easy. Write down the account number of the person after his name in the column ‘Pay’ on the cheque leaf. The Banking Ombudsman (Delhi, J&K and some parts of UP and Haryana), M. Rajeshwar Rao, toldBusiness Line: “People, while depositing, do write the name, account number and phone number on the reverse of the cheque. However, when the cheque is sent for clearance, normally the front portion is photocopied or scanned and sent. If details are ok and there is no alteration, the cheque is cleared.....

Read - HBL

World Bank appoints Kaushik Basu as chief economist

...."Having worked in ministry of finance, in addition to his impressive academic achievements, Kaushik is uniquely suited to help us offer evidence-based solutions and advice to client countries and provide innovative excellence in leading our development research,” ...... 

Read - BS

Short-Term Sacrifice for Long-Term Growth - Duvvuri Subbarao

NEW YORK, August 29, 2012 — Dr. Duvvuri Subbarao, Governor of the Reserve Bank of India, defends his monetary policy and offers his reasons why potential investors should be optimistic about the Indian economy.......

RBI rules out allowing mobile wallet facility by mobile operators

.....RBI Deputy Governor HR Khan on Wednesday ruled out allowing mobile network operators (MNOs) from offering cash-out or mobile wallet facility unless they convert their services as banking business correspondents, reports PTI.  "We don't want to permit cash-out facility by the mobile network operators. We are very clear that they should not bypass the banking regulations. However, mobile wallet facility can be given to them if they work as business correspondents of banks," Khan told reporters, at the second day of the FICCI-IBA banking summit.....

Read - Moneylife

RBI cold to mobile wallet

HUMBS DOWN TO VIRTUAL MONEY

RBI Deputy Governor says mobile phone operators can’t be allowed to provide a cash-out facility from virtual wallets to customers, as it would amount to ‘bypass banking’ Airtel launched m-wallet services to enable a customer in making utility payments and transfer money from one user to another Current norms allow mobile transactions if it is attached to a specific use, such as paying electricity bills or shopping at retail establishment Central bank does not allow encashment of the balance available in mobile wallets Security, privacy and acceptability are other obstacles in the way of moving towards mobile payments Bankers feel the regulator may consider allowing issuance of mobile wallets by business correspondents without the need of a Know Your Customer exercise

Read - BS 

‘Mahesh Bank Teachers’ Awards

........Shri M.Sebastian, Chief General Manager & Banking Ombudsman, RBI, Hyderabad has emphasized the need of financial literacy to the student in addition to the text book education, which is very important in the human life. The World is behind financial education and RBI emphasizes the literacy on financial system.   Sebastian felt that financial literacy should not be confined to the financial institutions but also to extend to the teaching community since teachers have greatest influence on the minds of students. Teachers play a major role in shaping the young India and good facilitator to the student as well,  Sebastian avered. He complimented the entire team of Mahesh Bank for instituting Mahesh Bank Teachers’ Award and said that this event should continue as an annual feature henceforth. Sebastian conveyed greetings to the teaching community on the Teachers Day......... 

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Essay Competition on topics of agriculture & rural development

College of Agricultural Banking (CAB), RBI, Pune Announces Essay Competition on topics of agriculture & rural development..... 

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3rd Annual get-together of EXRBITES

As you know our Group EXRBITES was founded on 24th September, 2009 and has completed 3 successful years. The credit for which goes to all the members. Today we can say proudly that EXRBITES has come a long way.  While on our first annual day we were only 60 with 22 from Chandigarh, today we are 301 from all over India and abroad, with 54 from Chandigarh alone. Like earlier two years we propose to celebrate our Third Annual day  also in a grand manner.  To celebrate the event in a befitting manner we propose to arrange a contributory lunch-on family get-together in Hotel Shiraaz II, SCO 15, Sector 5, Behind K C Theatre, Panchkula between 11 am to 4 pm on Sunday, 30th September, 2012. The contribution for the same will be Rs. 250/- per head. Those who are interested may please convey their acceptance and number of persons to the undersigned by phone/SMS or email as early as possible but in any case not later than 23rd September, 2012. You are welcome to bring your friends if you think that they can be our prospective members. Please feel free to send your suggestions to make the programme a success.  

with regards, 

Madan Gauria

Moderator

Exrbites

Tel: 0172-2666780,  09569172198,  09915106631

email: madan.gauria@yahoo.com

Serving or retired.... doesn't matter.................

 Click to know and join the EXRBITES Group...... 

Dearth of coins: Fact or fallacy?

....The RBI has identified “distribution” and “delivery” as the constraints leading to shortage of coins and currency notes across markets in the country. “We have identified that distribution is an issue in this respect even as the last mile delivery has also been a problem,” the RBI Deputy Governor said. Distribution of coins and currency notes across six lakh villages in the country is not an easy task and it depends on the network available. “Even banks do not have such a network”, the RBI official said......

Read - The Shillong Times

SLBC panel identifies steps to boost CD ratio in Karnataka

......The sub-committee in its recommendation to the SLBC has suggested that lending to agriculture allied activities like dairy, poultry, horticulture (fruits and vegetables) should be given priority. The other recommendations are credit flow to Micro, Small and Medium Enterprises (MSME) units through adoption of clusters identified by United Nations Industrial Development Organization (UNIDO) in the state should be accelerated. Housing sector also offers scope for higher credit dispensation.....

Read - HBL

Missing the punchline

On Tuesday, reporters raced each other out of a banking summit in Mumbai to file their stories  without waiting for the punchline. The unlikely humourist was D. Subbarao, governor of the RBI, a rather humourless institution. But when the economy is a black joke — black as coal, in fact — he can perhaps be excused his attempt to lighten up........

Read - Indian Express

Money supply

With reference to the article, “RBI allows too much money supply” (Business Line, September 5) it should be noted that at times of unyielding inflation, money supply in the system should be such as to enable people to buy essentials of daily needs without difficulty. The present availability of money is quite reasonable in relation to the prevailing inflationary situation and commodity prices. The substantial fall in savings deposits in banks in recent time would vouch for the above fact. The lack of enough cash in hands when commodity prices rule high would cause immense hardship to the common man.

- T.R.Anandan, Coimbatore (HBL)

RuPay cards to be acceptable at all PoS terminals by January

......"The RuPay will be acceptable in all PoS terminals from January, which is at present accepted in 48,000 merchant terminals," AP Hota, managing director and chief executive of NPCI told reporters on the sidelines of a banking summit organised by FICCI and IBA......

Read - Moneylife

For Bankers, work-from-home benefit staff & boost profits

In an age when the working class spends at least a couple of hours a day commuting either on busy roads or in overloaded trains and metros, flexiplace working is considered progressive HR. Now, a clutch of foreign banks operating in India has realised that allowing people to work from home is not just employee-friendly but employer-friendly too........

Read - ET

Self-service — add it to the banking lexicon

This comes as a whiff of fresh air, for sure. Banks are encouraging customers to take up the concept of self-service in India in a big way. Though at an early stage, the technology is being used to reduce customer traffic at bank branches and let employees focus more on serious banking services...........

Read - DNA

ICICI working on technology to offer transaction services through Facebook

ICICI Bank will soon add another digital platform for dispensing its banking transaction services —  Facebook. The country’s largest private sector lender was the first bank in India to use the social media site to provide services such as account enquiry and cheque book request. Now it is preparing to take this initiative one step forward by offering transaction services to its Facebook customers. This is part of its efforts to provide its customers next gen banking solutions in line with its Khayaal Aapka (your care) philosophy..............

Read - HBL

Across the board

Foreign institutional investors (FIIs) have been worried about the rising debt levels of India’s large business groups for some time. But their latest concerns focus on the presence of the chief of a major infrastructure group on the board of the Reserve Bank of India (RBI), which regulates the banking sector. He was inducted last September for a four-year period......... 

Read - BS

Debate on CRR

A formal debate on whether or not to continue with CRR would be most welcome. CRR is an important monetary tool in the hands of the RBI to control liquidity in the system, both in terms of maintaining a reasonable level of inflation and having conducive interest rates for the growth of the economy. From the bankers’ view point, CRR is presently not fetching any value and their concerns are understandable as income, profit and resources are all now under serious strain.

- S Umashankar, Nagpur (HBL)

RBI needs CRR

This refers to your edit “Debating cash reserve ratio” (September 4). At a time when the Reserve Bank of India (RBI) has been fighting a persistently stubborn bout of inflation in the country, the debate on the relevance of the cash reserve ratio (CRR) is unfortunate. RBI has kept multiple tools of credit control to address multiple objectives and the CRR has been used to manage structural changes in liquidity. Although liquidity can be managed through open market operations, the inadequate size and lack of depth in the Indian bond market limit the potency of that tool. Even if the banking regulator agrees to do away with the CRR, the funds that are released to the banking system cannot supplement the liquidity position of banks. Perhaps one way to pacify banks is to reintroduce interest payable on such deposits held as CRR with the central bank.

 - K V Rao Bangalore (BS)

CRR cut will enable bank to reduce base rate: SBI chief

State Bank of India Chairman Pratip Chaudhuri again made a strong pitch for a reduction in banks’ Cash Reserve Ratio (CRR) at the Reserve Bank’s mid-quarter review of monetary policy scheduled September 7.................... 

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The hidden truth to PSB profitability

........What makes the situation worrisome for state-owned banks is the inadequate provisioning for these bad loans. In 2009, the Reserve Bank of India (RBI) had made it mandatory for banks to put aside Rs 70 for every Rs 100 that had become an NPL. Last April, the central bank unexpectedly relaxed the norms on this provisioning coverage ratio (PCR), under which banks were not required to maintain a PCR of 70 per cent for bad loans after September 2010.............. 

Read - BS

‘Investors should put money in fixed income avenues’

......“As a result, inflation is likely to rise in the coming months. So we are not hoping for the RBI to announce any cut in repo rates in 2012. There are possibilities of a 25 basis-point cut between January and March of 2013. At present, RBI is not decreasing the rate as inflation will not come down with that, and it might increase further. On the contrary, growth will be hampered. So they will continue the current rate levels till end of 2012,” ........ 

Read - DNA

RBI has no FDI data of Wal-Mart's Rs 455 crore in Bharti unit

US retail giant Wal-Mart Stores Inc has invested Rs 455.8 crore in a subsidiary of Bharti Ventures in 2010 via its Mauritius arm but the RBI has no FDI data of the same, Parliament was informed today........

Read - ET

The usurers in AP are back in business

Two years after Andhra Pradesh cracked down on micro-lenders with a stringent new law, the usurers are back in force and poor borrowers are in danger of sliding into their clutches......

Read - Mint

Aphro Trust scam: Cops issue alert for kingpin

CHENNAI: A look-out circular has been issued against I P Yesudoss, managing director of Aphro Trust. The trust had, in violation of RBI guidelines, allegedly collected money from several people after promising to secure loans for them............

Read - TOI

Deveshwar appointed on RBI board

New Delhi, Sep 4 (IANS) The government has appointed ITC chairman Y.C. Deveshwar as a director on the central board of directors of the Reserve Bank of India. A notification to this effect was issued by Vijay Malhotra, undersecretary in the finance ministry. Deveshwar's appointment will be for a period of four years.

Profile........

Yahoo News

‘Language plays important role in financial inclusion’

.....Meena Hemachandra, Principal of College of Agricultural Banking, said that banking is a business related to all people, and requested all to use Hindi extensively. They should not be overly mindful of the fact that they are unable to find the exact words to use......

Read - HBL

Basel III to benefit Indian banking system: Subbarao

.........“The moral hazard relating to too-big-to-fail institutions which encourages risky behaviour by larger banks has been a huge issue on the post-crisis reform agenda,”......

Read - The Hindu

RBI allows too much money supply - A.Seshan

........Carrying the imprimatur of the Central Board of Directors, the Annual Report of the Reserve Bank of India (RBI) is perhaps its most authentic statement on the state of the economy and the possible solutions to the various problems faced in almost every sector........

Read - HBL

RBI expresses helplessness on shortage of coins of rupees one and five

Have you been blaming the Reserve Bank of India (RBI) for the changes in currency and the fact that the Rs2 coin looks like the Re 1 coin, the 50 paise coin like the demonetised 25 paise coin, etc.? RTI (Right to Information) activist Subhash Agarwal has discovered that the blame lies with the finance ministry, Government of India...........

Read - Moneylife

Govt mints more two rupee coins in 2011-12

......The RBI has replied that the production of these coins was also increasing and their availability would improve. It has, however, declined to say anything on the design of the one rupee coin which the activist has found to be very similar to the 10 paise coin. Instead it has directed him to take up the matter with the Government of India since the design is done by them.

Read - HBL

Engine trouble in India

....“The persistence of inflation at a high average rate of 9% during 2011-12 further atrophied financial saving, as households attempted to stave off the downward pressure on their real consumption,” said RBI in its annual report, and added: “The trend of falling savings rate, particularly that of public sector savings, needs to be reversed for adequate resources to be available to support a high-growth trajectory during the 12th Plan”........

Read - Mint

Two-speed economy

.....The lack of growth in industry is also seen in the credit numbers for banks. The latest Reserve Bank of India data shows that growth in bank credit to all types of industry—micro and small, medium, and large—has been zero this fiscal. Between 23 March and 27 July, there has been absolutely no growth in bank credit to industry.........

Read - Mint

Subbarao adds levity to CRR debate

.....The first condition being, the members of the committee -- the SBI Chairman and Deputy Governor of RBI be locked up in a room till they come to an amicable solution. Second, the findings of the committee should not be made public until his own term expires as the Governor...... 

Read - HBL

Humour in reserve

....The impish humour of Y.V. Reddy was always liable to break out unexpectedly. On Tuesday, his successor cracked what seemed liked a funny one, but was probably also meant as a message. ......

Read - Mint

CRR row: RBI Governor doesn't see an end !

Reserve Bank of India Governor Duvvuri Subbarao on Tuesday played down the cash reserve ratio controversy between his senior most deputy and the nation's largest bank SBI, saying that he is not too sure whether the two will sink their differences before he demits office............ 

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CRR row: RBI guv glues sparring aides in panel

Readl - Hindustan Times

No easing, just teasing, from India's central bank chief

He often opts for the unexpected when it comes to monetary policy reviews, recently disappointing those looking for a cut in interest rates, and on Tuesday he cracked a joke that took a bunch of news-hungry reporters and market players for a ride. Before beginning his speech at one of the country's largest and most prestigious banking events, the Reserve Bank of India chief said in a serious tone that he had something to announce.........

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Bank stocks jump at Subbarao’s CRR joke

....After his speech, a reporter asked Subbarao if his comment was just a joke. He smiled, and said: “What do you think?” While the reporter took time to comprehend, the market didn’t wait. BSE Ltd’s Bankex, the index of 14 lenders, rose to erase losses. The gauge later dropped after the central bank said the comment was light-hearted and that no such panel exists......

Read - Mint

Subbarao's laughter therapy on CRR row

....There was pin-drop silence as the audience, comprising top bankers, didn’t know how to react. They were only too aware of the recent public spat between the RBI Deputy Governor and the SBI Chairman on the latter’s argument that CRR should be abolished. News hungry reporters rushed outside to flash the “story” to their respective websites, agencies and on television. Some even went to the extent of flashing “news” about a possible end to CRR that sowed confusion in the bond market....... 

Read - BS

A Reserve Ratio Evokes Unreserved Laughter

.....Subbarao, better known for his handling of interest rates, showed that he can also handle an unseemly public disagreement over divergent interests in an equally deft manner....... 

Read - ET 

Not Just CRR, Debate Other Policy Tools Too

The discussion on CRR should not just be restricted to the cash reserve requirement, but should also extend to other directed investments such as government bond holdings and lending. It will be delusory to maintain status quo on the ground that they saved India from the 2008 crisis,..........

Read - ET

Mint poll | No RBI rate cut seen; loan charges may drop

Read - Mint

Expect RBI to cut CRR by 100 bps: Pratip Chaudhuri

SBI Chairman Pratip Chaudhuri on Tuesday said he expects the RBI to the cut cash reserve ratio (CRR) by 100 basis points at the September 17 policy meet..........

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RBI may not touch CRR as of now: Shubhada Rao, Yes Bank

.... think that the RBI has a whole set of measures to alleviate liquidity problems. While at this point in time liquidity remains extremely comfortable, the scenario would change post the advance tax payments around September 15. The question would then arise that is it a structural liquidity issue or a temporary pressure on liquidity. Our sense is the RBI has kept its options open as far as......

Read - ET

Assocham wants interest free CRR to stay

.....“The case for continuation of CRR interest free is very valid as well as indispensable. It has worked well and perhaps is not an issue that needs any revisit,”.......

Read - HBL

My View on "EMPEROR, LOOK AT YOUR OWN CLOTHES"

This is not for the first time such a demand of putting RBI under CAG scrutiny has been raised in the press/media. It was demanded in post 1992- securities scam also when all and sundry wanted RBI under the audit purview of CAG. But the combined wisdom of the Government of the day and the RBI Management had preferred to keep RBI, the Central Bank of the Country, as it was and independent of any interference by any constitutional instrumentality much less the CAG. In writer's own admission that " RBI as an institution is known for its impeccable integrity and intellectual honesty " then why it should be brought under the CAG like any other Govt. Department. Central Banking is a specialization and is not every body's cup of tea. CAG's hands are already full and some its recent reports- supposed to be disputable as mentioned by none other than the country's Prime Minister who is known for his impeccable character world over, are not beyond further scrutiny by an independent authority- may be the Public Accounts Committee of the Parliament. Therefore, let the CAG first grapple with the jobs on hand and not add further to its and country's woes by expanding its area of operations. If RBI toay, tomorrow it could be SEBI and so on... Then who will scrutinise CAG's functioning?  With the changing times, the need of the hour should be to make RBI- a constitutional body on the lines of CVC and CAG itself with fixed tenure for the Governor like the Fedreserve. This will be in the best natioanal interest and Mr. TB should strive for it with all the force at his command.

- M L Mahajan, Ex-GM, HRMD

'Lend directly to borrower in priority sector'

.....“Lending directly to the beneficiary will ensure the management of credit and help banks understand the risks associated with this. While routing money through financial institutions, it’s they who take the risk and not banks,”......

Read - BS 

Banks credit to infrastructure sector won’t be termed as priority lending: Chakrabarty

.....“I have no problem in banks lending to infrastructure companies, but don’t classify that as priority sector lending,”......

Read - HBL

Postal department can't find IIT-K, institute loses licence

A series of mistakes, apparently on the part of the postal department, led to the cancellation of the licence of the Indian Institute of Technology, Kanpur (IIT-K) under the Foreign Contribution Regulation Act (FCRA). The home union ministry took the action after it did not receive a reply to a show cause notice sent to the institute. The registrar of the institute RK Sachan said, "Every year we have to submit the annual statement of funds received from foreign sources to the home ministry and the Reserve Bank of India (RBI). Somehow, the ministry did not get the statement and issued a notice to the institute. The institute did not receive the notice either and hence could not reply to the ministry,"....

Read - Hindustan Times

Retirements will create 1.8 lakh vacancies in public sector banks

....The banking sector is expected to grow at approximately 20 per cent over the next decade and will need major induction of talent, a significant part of which is to replace vacancies arising due to retirements in public sector banks. At the current rate of attrition, the industry will need to hire over four lakh more people......

Read - HBL

Government can dilute stake to help PSBs meet Basel III norms: RBI

....“But will the Government sacrifice its majority shareholding responsibility, rights and obligations or will it amend the statutes such that even if their shareholding comes below 51 per cent, it continues to enjoy the privileges of a majority shareholder.”.....

Read - HBL

Mahesh Coop bank on expansion mode

....The Andhra Pradesh Mahesh Cooperative Urban Bank is expanding its operations to Maharashtra, Rajasthan and Gujarat. “Reserve Bank of India has acceded our request to extend our area of operations to these States,” according to Ramesh Kumar Bung, Chairman of the bank......

Read - HBL

Banks set up play area for kids, conference rooms for HNIs

Now, you don’t have to worry about the kids when you discuss your finances with the relationship manager at your bank branch. Private lenders like Federal Bank and Axis Bank have set up branches that have special areas for children, with books, toys and video games to keep them engaged while their parents are busy doing banking transactions................ 

Read - BS

Government, RBI worried over monitoring of Sahara Credit Society

India's financial regulators and the government are caught in a cleft stick over monitoring and regulation of a credit co-operative society backed by members of the Sahara Group. The entity, over which RBI and Sebi have no oversight powers, has substantial deposits...........

Read - ET

J&K Grameen Bank launches new services

Mumbai, Sept 4 (IBNS): J&K Grameen Bank, with the help of IDBI Intech’s i@Connect software, on Tuesday announced it has launched National Electronic Funds Transfer (NEFT) and Real Time Gross Settlement (RTGS) services. "RBI Circular dated 09th April 2012 (Access criteria for payment systems – sub-membership to centralized payment systems) had mooted this innovative concept of rural banks to become a sub-member to their sponsor bank," said on official spokesperson on Tuesday......

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Economic and financial developments in Uttarakhand - Deepak Mohanty

.....Against this background, let me now turn to the financial inclusion strategy of the Reserve Bank and what are the specific steps taken for Uttarakhand? It is important to bring the poor and under-privileged sections of the society within the banking fold for inclusive growth.  In this context, our recent financial inclusion drive has four key elements......

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EDB holds Kissan mela

Srinagar, Sep 2: E D Bank organized a Kissan Mela at Sugain, a remote village in Khag block of district  Budgam.  Chief Guest Ravinder Koul, AGM Reserve Bank of India on the occasion urged the farmers to come forward to avail KCC from the Bank for development of Agriculture in the area. “The area has a lot of scope and potential for Agri credit absorption,” he said. He suggested productive use of the credit and timely repayment of dues so that Banks can recycle the funds. 

Greater Kashmir

RBI asks banks to issue cheques with uniform features by Sep 30

Mumbai: The Reserve Bank today directed all banks to issue cheques with uniform features conforming to Cheque Truncation System (CTS) 2010 standard by end of this month. The homogeneity in security features act as deterrent against frauds, and the fixed field placement specifications facilitate straight-through-processing at drawee banks' end through the use of optical or image character recognition technology, RBI said in a notification......

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State B Bikaner - Appointment of RBI Nominee Director on the Board

State Bank of Bikaner and Jaipur has informed BSE that Reserve Bank of India, vide its letter dated August 22, 2012 has appointed, in terms of powers vested with RBI vide section 25(1)(b) of State Bank of India (Subsidiary Banks) Act, 1959, Smt. Malvika Sinha, Chief General Manager, Reserve Bank of India, New Delhi as RBI Nominee Director on the Board of State Bank of Bikaner & Jaipur with immediate effect, vice. Shri Rajesh Verma. 

Lateral hiring frustrates staff: Pratip Chaudhuri

............Chaudhuri suggested that banks change the way they compensate people. He explained that the compensation structure of any employee was biased in favour of metros. “I think we need to have a reverse compensation. There should be a compensation to work in rural, semi-urban areas. In the next wage revision with the Indian Banks’ Association, this would one of the things (that would be addressed),” he added. 

Read - BS

SBI chief for a national debate on CRR

State Bank of India (SBI) Chairman Pratip Chaudhuri, on Monday, reiterated his stance on Cash Reserve Ratio (CRR) that it should be phased out completely and wanted a debate on the subject.........

Read - The Hindu

My View on "CRR - Breaking self imposed silence.........."

If in India the effect of CRR, as argued by Dr. Nagarajan, is neutral or even perverse, it is not clear as to why this instrument is used to block not only the statutory minimum ratio but also much in excess of it. Banks being commmercial entities and expected to make profits (fortunately, the earlier view that public sector banks are not expected to make profit is no longer stated) have a certain cost of funds and if interest is not paid even on the excess balance required to be maintained,how is this justified? Dr. Nagarajan should touch on this point.
- A. Chandramouliswaran

Dear all,

This is an interesting debate. The point raised by Mr.Chandramouliswaran (if the effect of CRR is neutral or perverse, why it is used?) remains unanswered. Dr.Nagarajan has left it to RBI younger generation. Let it be. I do recall that myself and Dr.Nagarajan debated this issue in mid 1980s when both of us were faculty in the BTC. The debate was endless-- and now also I leave at that. Here is a link which in technical sense explains how CRR operates in a lay man's language  http://www.tatamutualfund.com/Knowledge-Center/Cash%20Reserve%20Ratio.pps. 

I have also attached an article (first part only is relevant) on the issue of future of CRR written in 2010 

(http://xa.yimg.com/kq/groups/31273828/1757422588/name/about). Both  Dr.Nagarajan and Mr.Chandramouliswaran are my best friends--no offence to any of them. I am personally somewhat sympathetic to SBI Chairman's view in the current context of the banking system being sqeezed from every corner--high policy rate, CRR with not interest, Basel III, etc.,  but the way in which he put forth his views invited rightly the wrath of the Reserve Bank. He was also erroneous in some part of his statement as pointed out by Dr.Nagarajan (particularly relating to CRR application to non-banks). 

KSabapathy (via email)  

Debating cash reserve ratio

....CRR is a time-honoured instrument in the hands of a central bank to administer and calibrate monetary policy. The reason why Mr Chaudhuri may have felt emboldened to go public is that a distinction can be drawn between monetary policy and managing liquidity...........   

Read - BS

RBI can't abdicate its role

This refers to the Q&A with Reserve Bank of India (RBI) Deputy Governor K C Chakravarty (“It is not our job to help banks achieve targets,” September 3). His assertion that it is not the central bank’s job to help banks achieve targets ignores some fundamental issues. Who lays down the targets in the first place? Who sets limits on various activities of banks? Moreover, who owns these banks? The limits of credit provisioning to specified sectors of the economy and inter-sectoral allocations are devised by the Centre and RBI. Having laid down these parameters, it is improper to say no help needs to be extended to banks to reach these targets. Banks are severely handicapped by umpteen regulatory requirements. They do not enjoy the independence to do business on purely commercial considerations, prudential norms notwithstanding. They are not only ring-fenced by RBI regulations, but the international benchmarks laid down by the Basel requirements also create roadblocks on their strategic planning. It is also pertinent to point out that the strengths and weaknesses of all banks are not the same. Therefore, some space for individual manoeuvring is necessary.  

- G R Saha Kolkata (BS)

Look beyond the repo rate

As the mid-quarter monetary policy review due on September 17 draws near, the usual speculation about the Reserve Bank of India’s (RBI’s) action is building up. There is a minority that hopes that the combination of sub-six per cent growth in the last two quarters and somewhat lower-than-expected inflation rates will persuade the RBI to drop the policy rate. The majority in the markets, however, expects no change — particularly in the absence of any visible efforts by the government to pare the fiscal deficit or improve the food-supply situation.............. 

Read - BS

Will the liquidity dry up again?

................Of course, RBI can restart bond purchases, which have been stalled for the past two months. But it is clear that without concrete policy action, there is little chance of the liquidity deficit in the system moving to surplus. Thus, a proxy rate cut may just be wishful thinking.

Read - Mint

Bank employees welcome Central Government’s move

Tamil Nadu Bank Employees Federation (TNEF) state general secretary E. Arunachalam has welcomed the Union Government’s decision, following the recent bank employees’ strike, to withdraw the proposed amendment in Banking Regulation Act to keep bank mergers out of the ambit of Competition Commission of India........

Read - The Hindu 

Blame self-goals, not global crisis

........RBI starts by saying that the deceleration in growth seen in Indian economy is due to a combination of international and domestic factors. While this is correct, blaming the global environment only helps the government to pass on the buck, provides an alibi for inaction and an opportunity to attribute our own sins to ‘global factors’.........

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Mamata likely at bankers’ meet for development

..........According to sources from the state finance department, the possibility of the chief minister attending the meeting of SLBC, West Bengal has become bright after a recent communication from the Reserve Bank of India (RBI) to the chief minister’s office, where the apex bank requested Banerjee to interact with the banking circle more intimately to achieve the desirable economic development of the state............

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Banks may get more time to shed bulk deposits

...According to RBI’s definition, however, bulk deposits are corporate deposits that are generally Rs 1 crore and above with maturity of up to one year. “We are re-computing the share of our bulk deposits after we received the clarification from the ministry. According to the ministry’s definition, the proportion of our bulk deposit base will be lower than what we had earlier estimated. This will help us to meet the 15 per cent cap within the given timeline,” said another banker............

Read - BS

PSU banks make home loans a little sweeter

.....Earlier, in July, the Reserve Bank of India (RBI) announced a cut of one percentage point in the Statutory Liquidity Ratio (SLR) - the proportion of deposits that banks must invest in government bonds. PSU banks have taken advantage of the increased cash flow to make loans cheaper.......

Read - Hindustan Times

There isn't much time left for kick-starting the economy: Chanda Kochhar

.............. don’t want to guess what the central bank would do. My theory is simpler. While lower interest rates would be an enabling factor for investments to take place and for people to buy more homes or invest more in homes and cars, that alone won’t be enough. It is important now to kick-start the economy through executive decisions to restore confidence in the investment climate. The process of decision-making has to improve for projects that have been either completed or are nearing completion...................

Read - BS

Yes Bank to install ATMs at Kolkata metro stations soon

Yes Bank, India's fourth largest private sector Bank has won the bids to install and operate 19 ATMs across 16 Kolkata Metro stations. The roll-out of the network has been initiated with two locations at Mahanayak Uttam Kumar station and one at Kalighat station already being operational..........

Read - TOI 

RBI wants banks to install system to alert police

Worried over the rise in crime at banks’ automatic teller machines (ATMs), the Reserve Bank of India (RBI) has asked banks to install remote mechanisms that would automatically trigger alarm at the nearest police stations. This is expected to help the police reach the site of incident without delay...............

Read - BS

Starting today, you need to be doubly careful at an ATM

Going forward you need to be doubly careful while you are at an Automated Teller Machine (ATM). Reason: the Reserve Bank of India (RBI) has asked banks to disable their cash retraction facility at ATMs........

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Need cash? Visit nearest police station

JAIPUR: Next time when you urgently need some money, you can visit the nearest police station! This may sound a bit odd as people go to police station when they lose their money and not vice versa. However, various banks, both nationalized and private, have entered into an agreement with the police commissionerate here to install ATMs at police station premises in an effort to curb robberies and thefts......... 

Read - TOI

RoC: The dog that did not bark when Sahara came in

...... it is little coordination between the three regulators -, RBI, Sebi and RoC. After the RBI ordered Sahara India Financial Corporation to stop taking deposits from the public in 2008, two Sahara companies – SIREC and SHIC – started raising OFCDs by avoiding both RBI and Sebi. This could not have been a mere coincidence. Did the RBI not inform the minister of company affairs and Sebi to warn them against Sahara?........... 

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