Saturday, October 6, 2012

A BUNCH OF FRAGRANT ROSES


P.P.Ramachandran, 76 years old (in fact young), is a postgraduate in Economics, postgraduate in Comparative Mythology, and Certificate and Diploma holder in Sanskrit from Mumbai University. He has served in the Reserve Bank of India for 40 years and retired as Deputy General Manager. He writes for a number of journals and is a prolific reviewer of books and a book selector for libraries. He gives lectures regularly to audiences, young and old, on different disciplines. He is a rare bird — a literary banker. His hobbies are reading, writing, and watching English and Malayalam movies and art-films.  

On his 76th birthday today, the book entitled "A BUNCH OF FRAGRANT ROSES" authored by P.P.Ramachandran is published Academic Foundation. The book has a Foreword by Shri S.S.Tarapore, Former Deputy Governor of RBI.
                                             

S.S.Tarapore
Foreword

P.P. Ramachandran, “Chandru” as he is affectionately known, was an official of the Reserve Bank of India for forty years. The stereotyped view of a central banker is a dry, humourless person focussed exclusively on his profession. Ramachandran is one of the rare birds who just cannot be classified into a cubby hole.

Ramachandran’s canvas is the whole wide world and he paints life with a vignette and readers will find this Collectors’ Item an unputdownable book. The sheer breadth of his vision is wonderful to the point of bewilderment. In this slim volume, Ramachandran deftly handles subjects as widely variegated as contemporary issues, religion, science, the fine arts, mythology, social issues and biographical sketches.

Ramachandran is a reconnoitre of events and encounters with eminent personalities. He is at his scintillating best handling vastly different subjects and in one life time he has successively performed as central banker, journalist, social worker, critic, biographer and many more.

At the Reserve Bank of India functions he would regale the audience with his amazing memory of events and inter-action with prominent personalities. Like the Village School Master in Oliver Goldsmith’s ‘The Deserted Village’ it could be said of Ramachandran:  “And still they gaz’d and still the wonder grew, that one small head could carry all he knew”.

Ramachandran’s writings are a Sonata-- a sheaf of memories-- and the reader’s appetite would be whetted by this book and look forward to future volumes by him. Ramachandran is truly a Man for All Seasons.
                                                                                                                                    ABOUT THE BOOK

Here is a delightful medley of essays, articles, speeches, travelogues, book reviews and correspondence with the greats. 

The book is divided into five sections.

The first section includes his tributes to great personalities at various functions. We have a chance to read his tribute to Vinda Karandikar, Durga Bhagwat, Albert Einstein, Dwaram Venkataswamy Naidu, M.S. Subbulakshmi, Mumbai’s bookseller T.N.Shanbag, and S. Chandrasekhar. 

Section two consists of 16 book reviews. Ramachandran is a regular reviewer of books for Free Press Journal and “Shanmukha”. He covers a variety of subjects with an authority that is impressive. 

The third section is dedicated to travelogues. These are based on his travels to Europe, America, Ashtavinayak, Uttaranchal and Konkan and contain vignettes of a delightful nature. 

The fourth section covers essays on a variety of subjects such as religion, science, mythology, and light articles on a number  of interesting subjects.

The fifth section covers his correspondence with great personalities like Rajaji, Radhakrishnan,  Khushwant Singh, H.R.F. Keating , Pope John Paul I I and Paul Gallico.

In sum, this book is a veritable feast.

My View on "Tenure for Non-official Directors in RBI"


The decision of the Government for limiting to two terms (each of 4 years) the tenure of non official directors in the RBI Board has not come a day soon. In fact, the continuance in the past of non-official directors on the Board for as long as 10 years or more was the result of the Government not making up its mind on the names sent to them by the RBI for being appointed to its Board. It would be advisable for the Government, in consultation with the RBI, to lay down the criteria ( and make it public) for being considered for the position in the RBI Board. On the basis of the criteria, the persons could be left to be identified by the RBI Governor and the number to be identified would depend on the vacancies. The number could be larger than the vacancies in the Board and the final selection would have to be done by the Finance Secretary and the Governor sitting together on the basis of full agreement between them. Governor should have a full say in the appointments.



In this context, it would  be interesting to recount an incident twenty four years ago while I was serving  as  the Joint Secretary and acting Secretary to the RBI Board.  Shri Talwar, who had distinguished himself not only by his knowledge, integrity but also by his fierce independence as the Chairman of SBI and Chairman of IDBI,was approached by me over phone ( as per instructions) and requested to let me have some particulars about him for being considered for a position in the RBI Board. He asked me the purpose for the enquiry and when I had to reveal the purpose, he promptly and politely told me that he was not interested in the position! Later, I read in one of his articles that Board positions in India, whether it is a Statutory Corporation or a company, are filled only to comply with the statutory requirements and the Boards rarely serve any useful purpose! One wonders whether this was the reason which had prompted him not to show any interest in serving on the RBI Board!! In the opinion of some keen observers of the Indian scene,' Independent Director' is a contradiction in terms !!


- A. Chandramouliswaran (via e-mail)

RBI quiz for kids on Oct 12

....... The Reserve Bank of India, Kanpur, is organising an All India Inter School Quiz contest at Vigyan Parishad, Prayag on October 12. The aim is to apprise students about the RBI and role and history of other financial institutions, ordinary banking, economics, national and international current affairs and progress of the country.  Assistant Manager Jivan Kumar Chowdhaury said children from 120 schools will participate in the quiz........

Vanishing coins are turned into razors and ornaments


Indian intelligence officials have cracked the mystery behind eastern India's acute coin shortage: the money is being melted down and smuggled to Bangladesh where they are turned into razor blades and ornaments. "At least twice, we seized sacks of Indian coins from people near the Bangladesh border in recent years. Those who were carrying them confessed that the coins were going to the other side of the border. They also said that the metals from these coins were being used to make shaving blades and shining steel ornaments in Bangladesh,"........


Frivolous complaints bog down selection of public sector banks chairmen


NEW DELHI: The task of appointing chairmen of state-run banks is proving to be a challenge for the government, with its vigilance machinery getting bogged down in a myriad of corruption charges against selected candidates. Since taking office in July, P Chidambaram has cleared the selection of chairmen for six state-run banks, including lateral movement of two bank chiefs. However, two banks-Bank of India and Canara Bank-have been functioning without a chief since Monday.........




Government presses RBI on new bank licences

....The government, however, is determined to set the ball rolling in this season of reforms. RBI had said it was awaiting amendments in the Banking Regulation Act before issuing the final guidelines. RBI wants more power, such as dissolving a bank’s board, before it allows new entrants. However, “the ministry said the Act will be amended but it should not hold RBI from forming the guidelines”, said another source. Also, there were opinions that at least non-banking finance companies (NBFCs) be allowed to set up banks till the Act was amended. Interestingly, RBI has asked the government to extend the tenure of one of its Deputy Governors, Anand Sinha, by a year. Sinha will complete his two-year term in February 2013 and heads the department of banking operations and development that will issue the final guidelines on new banking licences.............

SC seeks law officers assistance on plea against FDI in retail

........During the hearing, the bench also wanted to know from Sharma whether subsequent to the government's circular on the issue of FDI in retail, any follow up circular was issued by the Reserve Bank of India (RBI) as there is some missing link in the petition. The advocate said the RBI has not issued any regulation after 2008................

Working Group on Cloud computing option for small size UCBs

......The study observed that many Urban Cooperative banks have been providing IT support to other cooperative banks which included sharing of Data Centre and DR sites, Automated Teller Machines and Payment Gateways. Some of these banks were also providing their software solutions as outright sale or fees based ASP model. It was observed that two leading software company had been also offering cloud like services which included core banking as well as many other solutions such as HR solutions, e-mail, storage, etc which the banks could choose. These services were mostly on private cloud like set up. The Working Group has recommended caution while adopting cloud computing solutions by the Urban Cooperative banks till such time that all issues related to its standards and technology management processes are understood and resolved.................

Bank NPAs may cross Rs 2 lakh crore by March

................The study titled ‘Growing Heat of NPAs on Banking Sector’ released by RBI Deputy Governor Dr K C Chakrabarty at a function here on Friday said the continuing pressures on Indian economy would result in pushing the NPA ratio from 2.94 in June, 2012 to about 3.75 by the end of the current fiscal. “A plethora of issues like rising trends in stress assets, increased provisioning, issues of asset quality and challenges of requisitioning additional capital to keep growing business together with burgeoning twin deficits of fiscal and current accounts have collectively contributed to this dismal situation of increased NPA levels and falling bottom line,” according to the study. ..............

RBI's projection of budget deficit will be shape monetary policy: Subbarao


NEW DELHI: The Reserve Bank of India is to make a projection of India's probable budget deficit this fiscal year that will shape monetary policy, Governor Duvvuri Subbarao said. "It is not yet clear what the final fiscal deficit number for this year is going to be," Subbarao said in response to questions at a briefing in India's southern state of Puducherry on Thursday............


Read - ET

Banks will follow suit if RBI cuts rate, says bankers


Indian banks will reduce their interest rates if the Reserve Bank of India cuts its key lending rate at its mid-term policy review on October 30, K.R. Kamath, chairman of the Indian Banks' Association, assured the Reserve Bank of India (RBI) Governor Duvvuri Subbarao on Friday. Mr Kamath, who also heads the state-run Punjab National Bank, and other top bankers met Dr Subbarao and the four deputy governors of the central bank at a pre-policy meeting ahead of its second quarter monetary policy review scheduled for 30 October..........

The tough road ahead for financial sector reforms

..........Of India’s financial regulators, RBI enjoys relatively greater autonomy because of three key differentiating factors: greater control over finances, a well-paid team of in-house technocrats, and a convention allowing independence in central banking. Autonomy allowed RBI under former Governor Y.V.Reddy to take counter-cyclical measures ahead of the global financial crisis in 2008 despite being under pressure from the Centre not to do so. Reddy’s interventions saved the economy from major damage during the crisis. Although RBI has lost sheen since then, it still remains among the better managed central banks in the developing world.........

RBI monetary policy awaits govt data on fiscal deficit: Subbarao

.......On the steps government has taken to control fisal deficit, he said, “What else the government has to do is a question of details. But as far as RBI is concerned, the final number will be important. How they get it will be important for the country, for the economy and for all of us. But I am saying, in the short term, for the monetary policy calculation, the number is important.” Pointing that RBI will take all the views on economic growth into consideration when it comes out with its next monetary policy review slates for October 30, Subbarao said, “RBI’s effort is to curb inflation while supporting growth.”.......

Bankers prefer CRR cut

Banks, on Friday, favoured reduction in the Cash Reserve Ratio (CRR) rather than the repo rate cut in the forthcoming monetary policy review as it would reduce their cost of funds and make monetary transmission faster..........

State Bank of India Chairman: No Room for More Loans to Kingfisher Air

......."Banks are still giving time to Mr. Mallya to get an investor, because if we pull the plug, it [the situation] would be irretrievable," Mr. Chaudhuri said. He was speaking after a meeting of officials from the Indian banking industry and the Reserve Bank of India ahead of the central bank's next rate-setting meeting on Oct. 30........

Structure of holding company for public sector banks: Finance ministry seeks RBI's views

.........."The finance minister had also sought more clarity and hence it was suggested that consultations should be held with the RBI on issues such as equity structure, share-holding pattern and inter-linkages between banks, which may arise due to such a structure," a finance ministry official, who did not want to be named, said. Finance Minister P Chidambaram is expected to give approval for the holding companies after the Reserve Bank of India's suggestions have been incorporated in the proposed model, the official said......

Chidambaram to visit Mumbai today


P Chidambaram is set to visit Mumbai on Saturday for the first time after taking over as finance minister. On his agenda are meetings with officials of the Reserve Bank of India (RBI), the Securities and Exchange Board of India (Sebi) and stock exchanges. The minister will also meet institutional investors. According to senior government officials, Chidambaram’s schedule will begin from Mint Road, headquarters of the RBI, where he is expected to discuss the fiscal and monetary situation with the top brass of the banking regulator. The minister is expected to impress upon the RBI that the government is serious about bringing down the fiscal deficit, and encourage the apex bank to cut rates. The government also wants the RBI to speed up work for giving licences for new banks.......


Friday, October 5, 2012

High time RBI bought more gold - S S Tarapore

...........There are distinct advantages in being first off the block in the pursuit of increasing the gold proportion. There has all along been a strong aversion, both in the government and the Reserve Bank of India (RBI), to enhancing the gold proportion in reserves. It is argued that the present price of gold is too high and that it may well crash. The movements of gold and currencies are not predictable. A 9 per cent gold proportion in reserves leaves the Indian economy vulnerable, if gold prices explode. It would be prudent to gradually raise the proportion of gold to, say, 20 per cent over the next 12-24 months.............

Banks urged to report suspicious transactions


Banks are expected to submit reports on fraudulent transactions handled at the branches to the Finance Ministry, but most of such incidents go unreported. The financial intelligence unit of the Finance Ministry will impose penalty on banks that do not report fraudulent transactions, said Sanjay Kumar, Additional Director, financial intelligence unit, Finance Ministry. He was addressing a seminar on ‘compliance with Prevention of Money Laundering Act,’ organised by the National Federation of Urban Cooperative Banks and Credit Societies and Kerala Cooperative Urban Banks and Credit Societies, on Wednesday. He said the financial intelligence unit had imposed penalty on some private banks for not complying with the Act. P.N. Nandakumar, AGM, RBI, Thiruvananthapuram, inaugurated the seminar.

The Hindu


More change as Rs 10 note gives way to coin

..............."At some point, as and when the demand determines, we will withdraw the Rs 10 note just like the Rs 5 note," said RBI Governor D Subbarao. "But the trouble is banks don't want to lift the Rs 10 coins. Banks say people prefer Rs 10 notes, so they are still in circulation. There is a shortage of capacity in the mint and the RBI's priority is for lower denomination coins, which is what poor people use. We saw the same resistance when Re 1 notes were withdrawn in the early '90s," he explained. ...............

Tweak laws to allow Islamic banking: RBI

PUDUCHERRY: The Reserve Bank of India (RBI) has written to the government to "restructure" or "amend" the laws to allow Islamic banking in India. Speaking at a local event, RBI Governor D Subbarao said: "Islamic banking is allowed in many parts of the world, but the Banking Regulation Act of India does not conform to Islamic banking because it allows banks to borrow from and deposit money with the RBI on interest. But we are in correspondence with the government on how our laws can be restructured or amended so that they are in conformity with Islamic banking."...........


Also read BS ....... Islamic banking on radar


Subbarao meets Chief Minister

PUDUCHERRY : The Reserve Bank of India (RBI) Governor D. Subbarao met the Chief Minister N. Rangasamy on Wednesday here. It was described as a courtesy call. The Chief Minister brought to his attention the large number of education loan applications pending in Puducherry.

Hindu

Yes Bank, FT to organise 2nd International Banking Summit in Mumbai on Oct 15-16

........Key speakers include Planning Commission Deputy Chairman Montek Singh Ahluwalia, Corporate Affairs  Minister M Veerappa Moily, Banque de France first deputy governor Anne Le Lorier, Banco de Mexico deputy governor Manuel Ramos Francia, Reserve Bank of India Deputy Governors K.C. Chakrabarty, Subir Gokarn, H.R. Khan and Anand Sinha, Brookings Institution President Strobe Talbott,........

Surface switch

In November 2010, the government formed a High Level Committee on Financing Infrastructure under the chairmanship of former Reserve Bank of India Deputy Governor Rakesh Mohan. But when the committee’s report was released on Wednesday, it had metamorphosed into the Deepak Parekh committee. What happened? .............



Govt initiates discussions on crucial issues through panels

........The Rakesh Mohan Committee was appointed to suggest measures on financing infrastructure projects. In meantime, Rakesh Mohan resigned from the committee, and HDFC group chairman Deepak Parekh was appointed its head. In its draft report submitted to Prime Minister Manmohan Singh, the panel recommended hike in railway passenger fares as well as electricity, natural gas and port tariffs. ........

Growth in India's net software exports slides to 10-year low

MUMBAI: The higher risk aversion by the Western outsourcing clients has impacted India's software receipts in the 12 months to June 2012. According to the latest trade data from the Reserve Bank of India (RBI), net software exports grew at the slowest rate of 4% in the last 10 years. .......

'Financial laws should be reviewed every 10 years'

........The FSLRC, which released an approach paper on harmonising financial sector laws on Monday, is likely to propose a sunset clause of about 10 years in its final report to be given to the government in March 2013. “From 1934 (when the Reserve Bank of India Act was passed) to 2012, you cannot have the same legislation in the country. Law itself can give a sunset clause. It could be 10 years and after that the law can be reviewed,” FSLRC Chairman Justice B N Srikrishna told reporters on Thursday.........

Don't forget the CAD

.......The RBI is not a single-issue bank, with a laser focus on inflation, as some might want it to be. Nor should it be such, for a certain amount of active, prudent management is essential to maintain macroeconomic stability in an economy as vulnerable as India’s. In this case, it is clear that the current account deficit is at levels that are, while not yet likely to cause a crisis, certainly enough that observers should worry........

'Fiscal deficit important policy input'

........The board meeting held on Thursday also discussed the Kelkar panel recommendations in this regard, he added. “We also reviewed the global and domestic macroeconomic situations. In that connection, we discussed the Kelkar committee recommendations to the central government. That is relevant and important to RBI because what the fiscal deficit is going to be is an important variable in our monetary policy calculation,” .......

Need to bring down inflation further: D Subbarao, RBI Governor

PUDUCHERRY: India's central bank Governor said on Thursday inflation had to be brought down further, signalling the bank would stick to a hawkish stance, and the size of the fiscal deficit would be a key factor in determining monetary policy.............




RBI keeps up hawkish tone, says fiscal deficit key

.........“We must recognise, it was above 10 per cent, it has come down from double-digit level to what is now at 7.5 per cent. So first, we have to acknowledge that inflation has come down, we need to bring it down further,” Subbarao said. “The number of things that are necessary for inflation to come down, we will take into account, as we go into our October 30 policy,” Subbarao said after a central bank board meeting.........

Central bank's position paper on student loans

The Reserve Bank of India (RBI) is to issue a position paper on educational loans. The effort would be to push the education loan schemes in various banks, on the basis of the complaints the central bank had got from various stakeholders, said RBI Governor D Subbarao. The decision was taken in its central board meeting here, based on complaints that some banks were reluctant to do much on education loans, putting up various conditions for issuing these.........

Government should tackle subsidy issue, says RBI

The federal government must tackle subsidies to restore fiscal discipline, Reserve Bank of India Deputy Governor Subir Gokarn said on Wednesday, highlighting tensions between the country’s policymakers amid fears that it could suffer a credit rating downgrade..........

Won't intervene with rupee unless it turns volatile: RBI Governor

 The Reserve Bank of India will not 'intervene' to manipulate the rupee now that it is appreciating, apex bank governor D Subbarao said today. "Our policy is to intervene only to tackle volatility, not otherwise," he maintained............

Services sector grows at fastest pace in 7 months

.........Liquidity injections from the Fed and other major central banks have in the past pushed global commodity prices higher and resulted in rising inflation in emerging markets. That could pose a complication for the Reserve Bank of India which, although determined to fight inflation, may find the task difficult. “The RBI has limited room for policy rate cuts given the persistence of inflation, although further progress on fiscal consolidation and structural reforms may eventually pave the way for some easing,” .........

Cabinet OK for Competition Act changes

......."Voluntary mergers will come under the competition Act, involuntary mandated mergers, amalgamations mandated by the RBI in the case of banks mandated by the IRDA in case of insurance companies...We are asking for exemption. It will be in the Act," Chidambaram said. "We will ask for exemption for that category and the power is in the Act to provide for exemption...These are two cases where the Act already provides for involuntary amalgamation........

Havala, politics and the rupee

.........The Reserve Bank of India should act on its commitment to financial inclusion and amend its Master Circular on risk management to permit small to mid-sized companies (with net worth less than Rs 100 crore) to use these products. And if the havala becomes a noticeable smell in the air, the government should, despite its fiscal constraints, reduce the customs duty on gold to prevent the gold smuggling beast from coming back to life.

5.53 lakh households get ‘doorstep banking’

...........Started as a part of the financial inclusion program of the Reserve Bank of India (RBI) on behalf of several banks by FINO Paytech Limited, the unique program relies on an elaborate BC network comprising the local population, primarily shopkeepers, who act as the “village banker” with a portable equipment. The banking transactions are done through a biometric smart card, which acts as a passbook and ATM card for the account holders.

Read.....

Policy holders need safeguards in new life insurance norms: Experts

.......The Insurance Regulatory and Development Authority (IRDA) has also to see that the Reserve Bank of India (RBI) permit banks to become insurance brokers. The RBI has allowed banks to act only as corporate agents or referral partners........

RBI to allow 4 new banks, begin process this month

.......New banks are expected to make the sector more competitive and promote financial inclusion through greater access to banking services. The RBI had last issued guidelines for new banks in 2001 and given licences to Kotak Mahindra Bank and Yes Bank in 2003. The RBI’s announcement now will imply that the central bank has accepted the government position that it is not necessary to wait for the enactment of the Banking Laws Amendment Bill before the final guidelines are issued. However, the new licences will be given only after Parliament passes the bill.........

RBI's inaction over bank branches in unauthorised premises despite SC order

........Following a ruling by the Supreme Court on bank branches in unauthorised premises, local authorities had initiated action, however, the Reserve Bank of India (RBI) whose rules and guidelines were openly violated, still has not taken any action against the erring banks....... 

Read - Moneylife

Banks suspected of laundering let off with 5L fine

...All this unaccounted money, the IB alert said, could have been inducted into the banking system. Worse, the Reserve Bank of India, upon receiving complaints, had audited the functioning of the bank and concluded that 'Know Your Customer' guidelines were not followed by the Mercantile Cooperative Bank. It fined the bank Rs 5 lakh for the lapse. ..........

Read - TOI

Surge in fake Indian currency seizures, Delhi tops the list

Intelligence agencies have seized fake Indian currency notes (FICN) of over Rs two crore face value during 2011-12, the highest seizure in past three years, with Delhi accounting for a major chunk........

Central Bank of India to add 1,750 ATMs in next 6 months

.......TM inaugurated today was the first ATM sourced under common tenders floated by public sector banks, statement further said.  There are 1,00,620 ATMs across the country by the end of August end according to the Reserve Bank of India data.  Out of these  49,023 are  ATMs which are located on the branch. There are 51,597 off site ATMs.

SBI plans to roll out 4,000 'Talking ATMs' for visually impaired


Banking major State Bank of India intends to roll out 4,000 Automated Teller Machines to cater to the needs of visually challenged people in the country. This target is expected to be achieved in the next two years, Rakesh Puri, General Manager, SBI, told Business Line here. SBI on Thursday launched its first ever "Talking ATM" that would allow visually and physically challenged people to access banking facilities at the machine, without having to visit the branches........

Read - HBL

ANU to offer courses in banking

......Certificate courses in trade finance, ALM & KYC, information system banker, project finance course, treasury for RBI employees, quantitative methods, customer service and banking codes and standards, SME, credit card for bankers, debt recovery agents, DRA – tele callers, financial inclusion, basics of banking and credit card operations are under examination.

Thursday, October 4, 2012

RBIQ held in Imphal


IMPHAL, Oct 2: Comet School was declared the winner of the Quarter final round of the Imphal edition of RBI Inter-School Quiz (RBIQ) which was held today at UNACCO School, Imphal. P.K.Jena, Regional Director, Reserve Bank of India, Guwahati inaugurated the event in the presence of a gathering of around 600 people consisting of students, parents, teachers of various schools of Imphal. The quiz was conducted by Barry O'Brien, a reputed quiz master. The selected team would participate in the zonal final round in November. Regional Director of RBI handed over the prizes to all the winners while all participants were presented mementos, RBI special brochures and participation certificates. The RBI has been launching an all India RBIQ with the initiative to promote financial literacy at school level among classes IX, X, XI and XII students.

What’s RBI waiting for?

........RBI needs to quickly put in place the norms proposed by the Mahapatra Committee—among them, higher provisions of 5% and personal guarantees by promoters. With the economy yet to get back on track, banks need to be extra cautious; they need to heed what the RBI panel has said—that slippages can be as high as 30% and not 15% as was earlier believed.

Read - FE Editorial

Tenure of non-official directors in RBI board may be capped

.........According to Section 8 (1) of the RBI Act, 1934, the Centre has the powers to nominate such experts as non-official directors to the RBI central board. The latest move is part of measures being taken to improve the governance and functioning of the RBI, they said. "Even the RBI Governor and Deputy Governors normally get a maximum of two tenures only. So it won't be proper to give indefinite tenures to non-official directors," an official said.........

Read - FE

RBI calls for expanding e-payment infrastructure

........The RBI said that an electronic GIRO instrument (A GIRO transfer is a payment instruction from one bank account to another bank account) for effecting credit transfer by a payer from any branch of a bank or from any other authorised non-bank would be explored. Further, considering the fact that cheque continues to be a dominant payment instrument in India, the scope of implementing a cheque based GIRO system would be examined.........

Read - HBL

Payment Gateway Systems - Alternative to MasterCard & Visa

Rupay was launched by National Payments Corporation of India (NPCI) on March 26, 2012. In its Payment System Vision document 2009-12, the Reserve Bank of India (RBI) had envisaged the possibility of launching a domestic card. Accordingly, NPCI was authorised for a pilot launch of RuPay debit card. The card has since been launched. The RuPay card is meant to promote a payments and settlement platform for card transactions at a low processing fee, making it viable for smaller merchant establishments to accept card payments for even low-value transactions. This is expected to provide a further fillip to card transactions in the country, thereby reducing the use of currency..........

Read........

Bhojpuri likely to be included in Eighth Schedule

.......Besides, it is expected from the Reserve Bank of India (RBI) to mention denomination on currency notes in all the scheduled languages. The RBI has, however, not been able to fulfill this provision with respect to all the 22 scheduled languages due to space constraints in the currency notes. "The RBI's provision will not be a problem as it can be dealt with through an executive order," said the official........

Demise of a veteran......


Com. N.A. Naganathan, General Secretary and founder member of All India Reserve Bank Retired Officers Association and, also in the past, of All India Reserve Bank Staff Officers' Association (Now All India Reserve Bank Officers Association) passed away on 1 October 2012 at his residence at Andheri, Mumbai, due to old age. He had retired as a Gr. D officer in 1985.Late Com. Naganathan was born at Pallakad, Kerala on 18-10-1927 but had his education in Mumbai. An avid communist, he joined Reserve Bank Employees Association soon after he was employed in the Bank. He was Secretary of the Mumbai unit of the Association as also of All India Reserve Bank Employees Association. He was a studious officer and also very knowledgeable trade unionist . Along with the then senior comrades, he formed Staff Officers Association in the light of the Supreme Court decision making staff officers non-workmen. On retirement, he also took initiative in formation of Retired Officers Association. Because of the efforts of Late Com. Naganathan and his likes, we are enjoying pension to-day. However, our these seniors were deprived of pension, though they fought for it through-out their lives and later  for pre-1986 retirees in Supreme Court. Although these comrades continued with Retired Officers Association (now  defunct) and did not merge it with Reserve Bank Retired Employees Association, his advice was always available to us till last. We recall, he and Shri S.N. Elavia (now in his nineties) even participated in our Association's Dharna programme for improvements in pension.

We pay our respectful homage to the departed leader. May his soul rest in peace!

- R.P.Donde (via e-mail)

Fine product of Trade Union Movement......



Sorry to hear the sad demise of Com Biren. During late Com. Ashi Sen's leadership of AIRBEA, Com Biren was ably looking after statistical aspects of wage negotiations.Those days a small calculator in his hands did wonders not only to RBI community but also to the Banking Industry. He did yeoman's job when computers were not available for Trade Unions. We are grateful to him, a fine product of Calcuta Trade Union Movement ! Salute to him for his devoted work on trade union front.

 -  L R Parab (via e-mail)

My heartfelt condolences to the bereaved family of Com. Biren Sen who was doyan of AIRBEA and one of the architects of RBEA Calcutta. He was a shrewd negotiator of Bi-partite settlements and even the managements proposals were subjected to his sharp scrutiny which had benefitted the class III staff and thereby all others in RBI.

- V.Raveendran, RBI, Thiruvanathapuram 

Govt working on guarantee scheme for educational loans: RBI

Puducherry: In a bid to remove problems faced by students in obtaining education loans, government was working on a scheme under which it would extend guarantee for advances upto Rs 7.5 lakh, RBI Governor D Subba Rao said on Wednesday. "There are grievances of students not getting loans or encountering problems... Understanding that there is a problem, the government is now working on a guarantee scheme," he told students in Puducherry at an interactive programme organised by RBI and a national news channel..........

The ‘twin deficits’ myth

........Take the RBI’s latest Annual Report, which repeatedly warns of the risks emanating from the twin deficits, while claiming the CAD to have widened “due to impact of large government spending on aggregate demand”. And like all gospel truths, this one, too, requires no evidence! It is nobody’s case that CADs are good or governments (for that matter, even households and firms) must live beyond their means. But building dubious theories around them does no good to the pristine discipline of economics.

Read - HBL

Why India's FM and central bank chief have a tougher job than their US counterparts

........Fiscal and monetary policy should become less immune to such electoral vagaries. Constraints generally hamper optimal decisions, under the assumption that appropriate objective functions are being maximized. However, if there is uncertainty about objective function being maximized, more constraints are a good idea. If nothing else, they prevent FM and RBI Governor from doing what is known to be myopic and short-sighted, but is being indulged in for political compulsions. As the economy matures, budgets and monetary policy should both become continuing processes, not earmarked for one or two days of the year. Subbarao-Chidambaram might not quite state it in these terms, since independence from immediate government implies scrutiny and constraints imposed by Parliament. In addition, they will be robbed of some of their halo and mystique.........

India Inc meets Chidambaram, wants consumer finance rates brought down

........At the meeting, convened to seek industry suggestions for revving up investments and growth, India Inc also suggested reduction in fiscal deficit as a step towards encouraging RBI to cut interest rates. Industry chambers have been contending that high interest rates were stifling industrial growth and policy interventions were needed.........

Deadline over, Nagpur District Central Cooperative Bank no closer to meeting RBI norms


NAGPUR: Even as the deadline for Nagpur District Central Cooperative Bank (NDCCB) to meet RBI parameters regarding finances ended on September 30, the bank is facing a tough time raising the Rs 160 crore required to meet the norms. The bank had been planning to sell off a major commercial complex it built in Mahal and get at least Rs 80 crore. The rest of the funds were to be contributed from profits and reserves. However, it has not been able to find any buyer.......

Classify HFCs separately from NBFCs: ASSOCHAM urges FinMin

.......In view of the shortage of the housing stock and low mortgage penetration, the Reserve Bank of India (RBI) has qualified housing loansas one of the priority sector industry. In its communication to the finance minister, ASSOCHAM has recommended that HFCs with their sole focus on housing finance should be treated at par with banks for priority sector lending.........

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Overdue NPA provisions to hit banks hard in Q2

........Though RBI carries out financial inspection every year, the process has been expedited from this year. Earlier, these inspections were carried out with a lag of 12-18 months. However, to ensure banks take corrective measures immediately, the banking regulator has now decided to complete the report of the previous year in the current year.........

PSU, other banks flock to portal for resolution of NPAs

Indian banks and financial institutions, which had cumulative non-performing assets (NPAs) worth about Rs 1.25 lakh crore by March 2012, are seeking help from a dedicated portal for resolution of their NPAs........


Diesel, power hikes need to be reviewed from growth angle: RBI


Ahead of its monetary policy review, RBI today said recent increase in diesel prices and a possible hike in power tariff will impact inflation but the central bank will have to view it from growth angle and be a “little sensitive to various adjustments that might take place”. “We have recognised the likely short-term impact of diesel price revision on inflation numbers. But we have to look at it in terms of (growth) trajectory and to the extent of helping to contain the fiscal deficit,” RBI Deputy Governor Subir Gokarn told reporters on the sidelines of a conference........

RBI to take into consideration government's recent decisions in Q2 policy review

Chennai: The Reserve Bank of India (RBI) will take some recent government decisions into consideration in its second quarter review of monetary policy, scheduled for October 30, 2012, RBI Deputy Governor Subir Gokarn said today. At its last policy meeting in September, the RBI left a section of India Inc. and markets disappointed with its decision to not cut the Bank Rate despite reducing the Cash Reserve Ratio by 25 basis points......

Reserve Bank's overkill on gold loans

.........That RBI has acted out of its responsibility to prevent critical risks from materialising is not in question. But what has fallen off the radar is a recognition of the potentially transformative impact of gold loans, particularly in monetising India’s vast stock of private gold, and in advancing financial inclusion (about 65 per cent of our gold is held by rural India). By restricting LTV to 60 per cent and selectively applying it to gold loan NBFCs, there’s the risk of stifling the original innovators in the business, and of needlessly reinvigorating the unorganised sector. Indeed, RBI would do well to keep an eye out for the flip side of it all, and not hesitate to recalibrate its policy responses when the evidence calls for it.

RBI aiming to ensure gold lending risks are controlled: Subir Gokarn

CHENNAI: The Reserve Bank is only trying to ensure that risks of lending towards gold are "controlled" by its regulatory steps like tightening prudential norms, RBI Deputy Governor Subir Gokarn today said. In major steps, RBI had asked banks to reduce exposure to NBFCs giving loan against the precious metal and set up a working group to suggest ways to deal with the issue..........

FDI in multi-brand retail will help increase productivity: RBI Deputy Governor

.......Observing that India has a low foodgrains productivity and inefficient distribution, he said increasing the scale of investments in organised retail is one way to increase productivity and distribution efficiency. “FDI is an enabler of that. Whether you accept the argument that FDI will do this or not, we have low productivity, we have inefficient distribution (mechanism)”, Gokarn said at the 102nd AGM of Southern Indian Chamber of Commerce and Industry........

Seriously, how many savings accounts do you really need?

Competition among banks is giving rise to innovation, much to the benefit of the consumers. For instance, after the Reserve Bank of India (RBI) deregulated interest rates on savings accounts last year, banks have been vying with each other to woo consumers........

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Wednesday, October 3, 2012

Should the RBI work in tandem with the government’s priorities?

.......The finance minister offered a preview in a recent interview, when he opined that the “government and monetary authority must point…and walk in the same direction. As we take steps on the fiscal side, the RBI (Reserve Bank of India) should take steps on the monetary side.” Since RBI meets to decide the course of its policy rate on 30 October, this is a clear direction to its choice then, notwithstanding that September inflation figures are yet to be known. The question, however, is which fiscal steps is the central bank expected to match?.......

Read - Mint