HSBC takes its name from its roots as the Hongkong and Shanghai Banking Corporation, but there has long been a joke inside and outside the firm that the name stands for "How Simple Became Complicated".............
The very purpose of VITALINFO is to provide a platform for wider dissemination of updated information related to and happening of events in and around RBI.
Friday, December 14, 2012
NBFCs well placed to comply with RBI’s latest norms
Mumbai: Most non-banking finance companies (NBFCs) are well placed to adjust to an increase in provisioning requirements, higher capital adequacy ratio and tighter norms on bad loan classification, analysts said, even as rating agency Crisil Ltd said the new norms, when implemented, will impact NBFCs’ profitability. The Reserve Bank of India (RBI) draft guidelines, released on Wednesday, propose to raise tier I capital or the core capital for all NBFCs. The guidelines propose to give NBFCs two years to arrange for the required capital..........
Making NBFCs safer
RBI’s draft norms for NBFCs may come across as softer than those proposed by the Usha Thorat Committee last year, but it’s clear the regulator wants a tighter grip on these intermediaries. The general idea seems to be to keep a closer watch on the larger players, especially those that are mobilising money from the public, and not worry too much about the smaller lot. As the regulator points out, since many of the companies are highly leveraged—they borrow a fair amount from the banks—their well-being is important for the health of the financial system. The fact that they’re offering more ‘complex’ products also seems to be a matter of concern for RBI...........
ICICI, IDBI hit dirt tracks for growth
.....Private banks such as ICICI Bank have been gradually pushing their rural initiatives for want of customers and cost-effectiveness of the rural branches. Even the public sector banks, which are pioneers in rural banking, have been slow as the unbanked areas are too remote without a link of a road and other infrastructure facilities. To counter these problems, RBI allows banks to have business correspondents in rural areas. A business correspondent can be any resident of the village or neighbouring village, a company having operations in these locations. Only NBFCs are barred from being business correspondents......
Taking steps to deal with fake notes: Chidambaram
.....The finance minister said steps have been taken to prevent entry and circulation of fake currency. Improving security features of bank notes and preventing entry of fake currency are ways to deal with the problem, he said. The National Investigation Agency (NIA) is the nodal agency to deal with the problem of the counterfeit notes and steps are also being taken to install note sorting machines at bank branches, he said. Chidambaram informed the House that with a view to increasing the life of bank notes, particularly in lower dominations, the RBI in consultation with government has been considering various options including printing of polymer bank notes. He said a decision had accordingly been taken to introduce one billion pieces of Rs. 10 bank notes on polymer in a field trial basis in five cities.........
It's time to get an Aadhaar card
.....But its utility, at present, is limited to know-your-customer (KYC) norms. So, you can open a bank account easily but for any other financial transaction, you will still have to go through the KYC rigmarole and produce multiple documents. For instance, if you want a home loan, you will still have to produce other documents, such as utility bill or ration card as proof of residence. Even in the case of other financial products like insurance or mutual funds, while Aadhaar may be accepted as KYC proof, it is not sufficient for making transactions. And, many telecom companies do not accept it if you want to purchase a SIM.......
Next Aadhaar in financial inclusion: Saral prepaid card
Delhi government on Wednesday launched the ‘Saral Money Prepaid card’ to provide banking services to those people who are unable to open a bank account due to lack of supporting documents for their ‘know your customer’ (KYC) verification. Saral has been launched by five of India’s prominent banks namely Axis Bank, HDFC Bank, ICICI Bank, Indian Overseas Bank and State Bank of India in collaboration with the payment gateway provider, Visa and Aadhar. To open a bank account with the above five banks and to get a Saral Money Prepaid card, a person will now just have to produce the Aadhar card to fulfil the KYC norms. The limit of such accounts will be Rs 50,000 and the customer will be able to do cashless transactions with the help of the Saral card at the many authorised places in the city...........
Illegal investment schemes spread as regulators play a waiting game
Local police and state government more effective than central regulators such as RBI, Sebi
....However, in the books of the companies fictitious entries have been made and in the name of sale and purchase by way of sham transactions and the companies have been receiving deposits from the citizens with a promise to give regular interest or returns on the deposits.” In doing so, the companies have not taken any permission from the Reserve Bank of India and also no registration is made under the provisions of the Companies Act and the Banking Regulation Act, 1949, the order said. Thus with absolute lack of know your customer and other prudential norms, there is no control over what kind of money comes into these schemes making them fertile breeding ground for political and unaccounted sums of money.....
Anchoring inflationary expectations
..........Supply shocks, not excess demand, have powered inflation in India in recent times, so the Reserve Bank of India (RBI), even while reducing demand, has aimed it more at anchoring inflationary expectations. But exactly how this works in the Indian context is not clear. A widely shared perspective, though, is that the RBI reducing its policy rates even marginally would amount to giving up the fight against inflation. But then, growth is also included among the RBI’s objectives. Therefore, giving some weight to growth shouldn’t really imply it is giving up on inflation........
Reuters poll: RBI to hold rates on December 18
.......Respondents were almost evenly divided on expectations for a cut in CRR, a tool the Reserve Bank of India has been using to ease a cash crunch and prod banks to loosen lending rates. At 4.25 percent, CRR is at its lowest since 1976. Of the 33 respondents, 16 expect a CRR cut on Tuesday of either 25 or 50 basis points, while most also expect a further CRR cut in the March quarter. While expectations are near-unanimous for an interest rate cut in the March quarter, 20 of 36 respondents expect 50 basis points of cuts, which is deeper than the 25 basis point expected in the October pre-policy poll. The RBI is expected to review monetary policy in January and again in March...........
Private finance firms thrive under regulators' nose
BHUBANESWAR: Rule: Every non-banking financial company (NBFC) must obtain permission from the Reserve Bank of India (RBI) to provide financial services to people. Reality: Many of the financial management firms, including chit fund companies, are operating in Bhubaneswar and other parts of the state in contravention of RBI guidelines..........
Banks to remain stressed next year too: Fitch
........"There is a risk that our initial gross NPA ratio forecast of 3.75 per cent could rise to 4.2 per cent this fiscal due to a more protracted downturn, the impact of which should be felt over the next three-four quarters," Fitch said in a report. "The stress is not yet completely visible in the reported NPAs, but is clear in the performing restructured loans,"..........
Is FM right in allowing banks to trade in commodity futures?
...... while allowing banks to speculate will certainly add more depth to the market, it must not be forgotten that Indian banks do not have the product and market knowledge to trade in derivatives. Secondly, Indian banks lack market knowledge and expertise to benefit from trading in commodity futures and the RBI too has warned banks about risky trading instruments..........
Banks lost Rs 4,448 crore to fraud in 2011-12
....Citing RBI, the statement said, major frauds included misuse of loans sanctioned for purposes other than those for which these are sanctioned, lack of proper due diligence by the banks and direct sales agents (DSA), fake title deeds submitted as collateral security and disposal of assets created by loans without the knowledge of the bank. In some cases, “ the banks had not carried out the pre sanction inspection of property for the acquisition of which the loan was being sanctioned to ascertain if the unit/ property really existed.”..................
Thursday, December 13, 2012
Scam mail comes with RBI boss' picture
RBI governor, Dr D. Subbarao, is the latest ‘medium’ and ‘victim’ in a major online scam where the gullible gets hooked by an offer of $500,000. The mail, clearly meant to cheat the recipient by using the photograph of the RBI governor to make it look authentic, claims that Dr Subbarao has asked to release all unclaimed fund after a meeting with UN secretary general Ban Ki-moon and senate committee on finance, RBI, on November 18 this year............
Know your documents
A rare error in a Reserve Bank of India (RBI) notification has caused minor confusion among bankers. In order to relax Know Your Customer norms for opening bank accounts, an RBI-issued notification had said a customer need not furnish a separate proof of address if the identity document carries the same address. Giving examples of such documents, RBI listed driving licence and passport. It also added PAN (permanent account number) card to this list. Now, it’s well-known that a PAN card carries only an individual’s permanent account number, name, father or husband’s name, date of birth and a photograph, but never the address.
BS
5 banks launch Aadhaar-linked bank account
Five banks, including SBI, ICICI Bank and Axis Bank, today launched Saral Money bank account product which allows customers to open an account using Aadhaar card as address as well as identity proof. The RBI has recently directed banks to accept Aadhaar letter as the proof of both identity and address if the address provided by the account holder is the same as that on the Aadhaar card. “Through a product like Aadhaar-enabled KYC (Know Your Customer), we are bringing down the cost of account and that makes a product lot more attractive. And it will definitely further the cause of financial inclusion,” Axis Bank Managing Director and CEO Shikha Sharma said during the launch of Saral Money’, which is jointly launched by Axis Bank, ICICI Bank, HDFC Bank, SBI and Indian Overseas Bank.......
Financial Inclusion for Muslims in India: How Can Islamic Finance Help?
.............Among other interesting insights that were made in the webinar, with a recording now available at http://www.ethicainstitute.com/achieving_financial_inclusion_for_indian_muslims.aspx, was the notion that India represents the "last frontier" for Islamic finance, which is the largest global alternative financial system and is now present in many Muslim minority countries across the world. A comparative analysis of how different governments in such countries have facilitated Islamic finance was also made during the webinar that included countries such as France, Ireland, Luxembourg, USA, Canada, UK, Hong Kong, Singapore, Australia, Thailand, Kenya, Sri Lanka and South Africa. This analysis becomes all the more relevant in light of the landmark statement made last month by the Reserve Bank of India (RBI) Governor D. Subbarao that sought an amendment to the current banking laws in order to introduce Islamic banking in India. So what is it that is required to kick start Islamic banking and finance in India?...........
The RBI has a very tough job ahead of it: Dr Pronab Sen, Planning Commission
.........What do you think would be the correct course of action the RBI should take?
The RBI has a very tough job ahead of it. When we talk about rate cuts, it should be seen independently of the larger monetary policy. The fact is we have had two cuts in the CRR. If the investment cycle does not pick up, there is going to be downward pressure on the market interest rates and the RBI cannot allow the policy rates to diverge too much from what is happening in the market. Otherwise, the policy rates tend to lose the relevance. So at some point in time, the RBI is going to simply cut the policy rates to bring it in line and in a sense, restore the quiver of arrows that they have. ..............
NEW FORMAT CHEQUES
RBI has decided to introduce new format cheques for all bank transactions across the country from the year 2013. Following this decision, all the cheques in the old format will be condemned and the cheques in the new format will be invariably in force. However, this proposed move of the RBI is fraught with a hitch in so far as the bank clientele who have issued post-dated cheques to a third party 3 to 6 months in advance so as to redeem the same by the banks in the year 2013 would have to face the problem of their cheques getting bounced when the proposed move would come into force. Hence, it is expedient that the RBI makes certain amendment to their policy of new cheque format and accordingly relax the rule so as to allow the redemption of all post-dated cheques until the end of the current financial year.
Bh Indu Sekhar, Tarnaka (Hindu)
RBI asks banks to consider issuing debit cards with photographs to prevent misuse
..........."With a view to reducing the instances of misuse of lost/stolen cards, banks may consider issuing cards with photographs of the cardholder or any other advanced methods that may evolve from time to time," the RBI said while issuing guidelines for issuance of debit cards. The guidelines were issued after a comprehensive review of existing instructions on issue of debit cards.......
Banks can issue only online debit cards: RBI
Debit cards that do not ask for an authorisation code when used in shops or anywhere else will be discontinued soon. The Reserve Bank of India has asked banks to issue only those debit cards, including co-branded ones, where typing such codes are mandatory, within the next six months.......
Banks can issue online debit cards without RBI nod
......However, bankers should conform to the norms laid down by the RBI while issuing such cards. The RBI has asked banks to follow board-approved policies. Strict compliance with KYC (know your customer) norms, AML (anti-money laundering) standards, CFT (combating of financing of terrorism) and obligation of banks under PMLA (Prevention of Money Laundering Act) is a must, the banking regulator said.......
Sending money from kirana store via SMS
Remitting money from the kirana store in the neighbourhood or allowing cash withdrawal from your bank account through a text message has become possible, with private sector lenders starting to offer these services. YES Bank is partnering retail stores to allow customers in remitting money through these shops. "Curiosity killed the cat. In our case, curiosity gave us a new business strategy," Anand Bajaj, executive vice-president and chief innovation officer at YES Bank, told Business Standard.........
NBFCs may need RBI nod for change in ownership control
N
on Banking Financial Companies (NBFC) would need RBI's prior approval before making changes in their ownership control, a draft guideline of the central bank said. The RBI's draft guidelines based on Usha Thorat Committee report also seek to make mandatory for all deposit-taking NBFCs to obtain credit rating. Appointment of CEOs of NBFCs with asset size of Rs 1,000 crore and above would require the RBI approval, it added.......
The tyranny of KYC norms
It is the season for KYCs. For the uninitiated, that is “know your customer”. Your bank wants to know you. Your gas supplier wants to know you. And, of course, your telephone service provider also wants to know you. Huge caution, though, to those of you who may have a Ghajini-style short-term memory loss; or for those who may be too old, too sick, too busy or just too stressed to remember details. KYC is not just about giving your address, date of birth and other such mundane stuff — but also about remembering the precise details you fill out in the form, and for several years to come!.......
‘We are slowly opening up the bond market for FIIs’
The Reserve Bank of India will allow foreign institutional investors (FIIs) to invest more in government securities and corporate bonds, said Deputy Governor, H. R. Khan. In the works is a proposal to allow FIIs to invest $5 billion each in government securities and corporate bonds without any restriction on residual maturity...........
RBI may allow repo trades through CP, CD
The Reserve Bank of India ( RBI) may soon allow repo trades between market players through Certificate of Deposits (CDs) and Commercial Papers (CPs). “Given that not much of transaction happen and also that there is a demand, we will allow repo in CDs and CPs,” said HR Khan, deputy governor of RBI at CII event on Wednesday. Khan also said that the government is expected to notify on reducing withholding tax on rupee-denominated infrastructure bonds soon. Besides that the RBI was also considering whether foreign investors can be allowed to participate in currency futures trading..........
RBI policy: Financials in focus
.......If the RBI beats expectations in that it does announce a rate cut along with a CRR cut, the Bank Nifty is likely to jump to a new high — beyond the 13,000 mark. If the RBI offers just a CRR cut, the index is likely to move down slightly but find support at around 12,100. If the RBI hikes rates and doesn't offer a cut, a sharp fall till below the 12,000 level could result. So, the trader is seeing a potential movement of about 500-600 points in either direction.
Inflation will be game-changer
....Inflation is going to be the game changer in times to come, as it would determine the Reserve Bank of India’s (RBI) rate action. ICICI Securities estimates the annual inflation at 7.08 per cent in November, the lowest since December 2009. Despite this, RBI might not start cutting the benchmark rates from December. Other economists like Deepali Bhargava of Espirito Santo, however, believe inflation for November could come in at 7.68 per cent year-on-year. Even if inflation comes in above RBI's comfort level, economists expect the central bank to cut rates only next year..........
Banks should look at quality of data they provide: RBI Regional Director
Banks should address data quality, which is a key for sustainable growth and they should also look at MSME sector for the growth, according to a Reserve Bank of India official. In his keynote address at Credit Information Bureau (India) ltd (CIBIL) seminar on "Increasing credit penetration and improved asset quality" N S Vishwanathan, Regional Director, RBI, said, "When it comes to credit infor about the borrower is the key and how to reduce cost. Quality of information is key in retail segment, which is growing fast. "Data quality is the major issue, while we see quantity, depth, coverage of data are increasing."
IIP Numbers: Green Shoots Or Fluke?
.........The central bank has said any interest rate cut is "highly improbable" at the meeting next week, since it expects price pressures to remain elevated following a hike in the price of heavily subsidised diesel in September. Some economists expect a cut in cash reserve ratios (CRR) for banks, to help liquidity. Any data signals that the economy is past the trough of its slowdown will bolster the RBI's case that taming inflation should take precedence over reviving growth in its rate-setting policy. November wholesale price index data, which the Reserve Bank of India gives more weight to in setting policy than the relatively new consumer price index, is due to be released on Friday. "With inflation likely at 7.8 per cent in November, a rate cut is ruled out in December. I do not expect any CRR cut also as the government is maintaining large cash balances with the RBI," said Sujan Hajra, chief economist with Anand Rathi securities in Mumbai..........
Government aims at complete financial inclusion
.....The government is also giving a push to rural ATMs. State run banks plan to install around 63,000 ATMs. Cash Management firms who manage transfer, transporting and other service related issue of ATMs are also gearing themselves to explore the opportunities. One of the largest firms in the segment SIS Prosegur is already working to create a cash management infrastructure........
Decline in WPI must for RBI to cut rates: C Rangarajan, PMEAC
.The concern about inflation will be a major factor. The CPI number which has been released today is not very satisfactory, but let us wait for the WPI index number. If inflation, according to WPI, shows some decline, then I believe there will be some room for the RBI to rethink, but if it does not, perhaps we will have to wait till January........
IIP surprises: Will Subbu be able to battle inflation in peace now?
Reserve Bank of India (RBI) Governor Duvvuri Subbarao just got a new number to factor in before he unveils his review of the monetary policy on 18 December. Surprising most economists and observers on the upside, the latest Index of Industrial Production (IIP) print for October 2012 came in at a healthy 8.2 percent, much higher than most expectations which were in the region of 4.5 percent..........
Credit tap runs dry for small biz
.....There are hundreds of Periyaswamis, nay lakhs of them, with similar stories playing out in different parts of the country, triggered by the recent moves by the Reserve Bank to encourage banks to lend directly to the Micro, Small and Medium Enterprises (MSME) in the country..........
RBI not ‘taken on record’ Walmart remittance into Bharti firm
The Reserve Bank has “not taken on record” the documents filed for investment of Rs 455 crore by Walmart into Bharti group firm Cedar Support Services and alleged FEMA violation in the matter which was referred to the Enforcement Directorate. “The form FC-GPR filed for issuance of the Compulsorily Convertible Debentures (CCD) has not been taken on record by the RBI to ensure that the CCD are FDI compliant instruments and for the purpose certain information has been called for from the company,” Minister of State for Commerce and Industry S Jagathrakshakan said in a written reply in the Rajya Sabha..........
Minister yet to take action in Samata Bank case
........Samata Bank got into trouble seven years ago due to bad lending practice for which the management is being held responsible. Initially, RBI had issued an order restricting withdrawal amount by each depositor to Rs1,000. RBI action had left the 57,000 odd depositors in lurch. Many of them were pushed into financial distress when their money got stuck up in the bank. The bank's operations was wound up three years ago.........
FCI's swap deal with Barclays, Axis went awry as it lost about Rs 34 crore: CAG
......The Reserve Bank of India has already flagged off concerns on the end use of interest rate swaps, as the negative spreads between interest rate swaps and similar tenor government bonds indicate, these instruments are not being used for the intended purpose of hedging. "The situation here in the IRS segment is almost getting to the point where the IRS market is existing almost entirely for its own sake and to the almost complete exclusion of the needs of the real sector, creating a massive "financial sector-real sector imbalance," V.K.Sharma, Executive Director, RBI, had said at a seminar on November 8.........
Banking Bill will not go back to parliamentary committee: Chidambaram
..............The passage of the Bill is critical to the government as it will pave the way for the central bank to issue new banking licenses to the private sector. Late November, Mr Chidambaram had said the RBI should begin issuing new bank licences, and that amendments to the Bill are simply to formalise powers that the central bank is seeking. However, RBI Governor D Subbarao had said it would be not possible without fulfilling the enabling conditions.
Wednesday, December 12, 2012
Building trust in banking
We have just listened to the 12th Nurul Matin Memorial Lecture titled 'Trust in banking' delivered by eminent economist and illustrious former RBI Governor Dr. Y. V. Reddy. We are truly glad and gratified to get Dr. Reddy in the list of luminaries delivering the memorial lecture. At the outset Dr. Reddy very graciously underscored the special relationship he feels with us here at Bangladesh, which I can respond to only by asserting that the feeling is mutual, and that we look up to him as a trusted friend and mentor. The annual Nurul Matin memorial lectures of recent years have delved deep into issues and challenges in upholding of banking ethics, focusing mainly on our own local context. With 'trust in banking' as his lecture theme, Dr. Reddy has chosen to begin from the wider global context, where we saw severe erosion of trust in financial systems and their regulators since the global financial crisis of 2008-2009, particularly in leading advanced Western economies. Trust, according to Professor Reddy, has indeed close affinity with ethics, morals, values, sense of fairness etc which he rightly claims to be country specific and culture specific. As such he brings a lot of fresh air in the discussion on a topic which is not only of immense significance to all of us, but provides......
Brave senior citizen, daughter-in-law nab thief
......According to Satellite police, Jagdish Shah, a retired RBI official, who lives with his family at Roopmadhuri Society in Satellite, was in his drawing room with his wife Ramila, 60, having their morning tea at 7.45 am. Roopal, Shah's daughter-in-law, had gone to drop her daughter at a nearby school. Shah's son has a bedroom on the first floor of the two-storey residence........
RBIQ : Telecast Schedule
The Zonal Finals & National Finals of RBIQ
will be telecast on Zee Business as per the following schedule :
Original Telecast Dates :
· East
Zone Finals : December 15th
· North
Zone Finals : December 22nd
· South
Zone Finals : December 29th
· West
Zone Finals : January 5th
· National
Finals : January 12th
The Telecast Time for all the above-mentioned days (all Saturdays)
will be 8 pm to 9 pm.
Repeat Telecast Dates :
These episodes will also have Repeat Telecasts on the
following day, i.e. Sunday (December 16th, December 23rd,
December 30th, January 6th and January 13th). The
telecast Time for all the Repeat Telecasts will be 11 am to 12 noon.
2. Zee Business is
available on all leading DTH/Cable networks. The Channel Nos. on which Zee
Business is shown on some of these DTH/Cable networks are as under:
· Tata
Sky : 506
· Dish TV
: 590
· Airtel
: 286
· Videocon DTH
: 343
· Hathway
: 906
3. The Promos for these episodes are
scheduled from 6 pm onwards today, i.e. December 11th on Zee Business.
4. You, along with your family
members, may please like to watch these exciting RBIQ
episodes on the above dates
बैंककर्मियो का प्रदर्शन
 |
| कोलकाता मे वृहस्पतिवार को रिजर्व बैंक के कर्मचारियो ने विभिन्न मांगो को लेकर मूक प्रदर्शन किया। यह प्रदर्शन उस समय किया गया जब रिजर्व बैंक के गवर्नर डी. सुब्बाराव अपने सहयोगी अधिकारियो के साथ शहर मे ही मीटिंग कर रहे थे। |
RBI,JK Bank hold interactive meet on FEMA 1999
Srinagar, Dec 11: In association with J&K Bank, Reserve Bank of India (RBI) today kicked off a two-day interactive meet with bankers on Foreign Exchange Management Act (FEMA)-1999 here at the Bank’s Corporate Headquarters. The meeting was chaired by RBI Regional Director (Jammu), K K Saraf in presence of J&K Bank Executive President Parvez Ahmad, RBI Chief General Manger, (FED) Mumbai Rashmi Fauzdar, J&K Bank Presidents Shafat Ahmad, Nayeemullah,, J&K Bank Vice President P K Tickoo , RBI,DGM FED (Jammu) A K Mattu and RBI DGM FED (Mumbai) P K Kar.........
Efforts afoot to free UCBs of duel control
A working group has been formed to remedy the confusion stemming from dual control over the urban cooperative banks by the state coop dept and the RBI, RBI’s General Manager Malbika Patel said..........
Aadhaar-based payments for beneficiaries in Prakasam dist.
........Chairing the meeting, the Collector urged bankers to popularise the comprehensive crop insurance scheme and ensure that the benefits reached the non-loanee farmers too. She asked them to provide institutional credit to more tenant farmers and expedite sanctioning and grounding of all government-sponsored welfare schemes with special focus on implementation of action plans for targeted groups from SCs, STs, BCs and minorities. She wanted bankers to realise their corporate social responsibility(CSR) and chip in with funds liberally for improving amenities in state-run schools and hostels. RBI AGM K. Hariharan, SBI Regional Manager K.S.R.Murthy, were among those who attended the meeting.
RBI to issue Rs 100 note with inset letter 'L'
....."The design of these notes to be issued now is similar in all respects to the Rs 100 bank notes in Mahatma Gandhi Series - 2005, issued earlier," ....
Swamy wants Subbarao to depose against Raja
Janata Party chief Subramanian Swamy has moved an application in a special court hearing the 2G spectrum scam for RBI Governor D Subbarao to be summoned as a witness in his private case filed against former Telecom Minister A Raja. Swamy, in his plea before Special CBI Judge OP Saini, has requested the court that Subbarao be asked to depose in the case since he was the Finance Secretary during the 2G scam period...........
3 NBFCs likely to get RBI nod for banking license: Antique
....."The guidelines do not specify the number of licenses but given the past record and the RBI's cautious approach, we believe a maximum of three or four licenses would be granted," the brokerage said in a note today. "The existing set of guidelines clearly eliminates chances of groups engaged in broking and real-estate activities as contenders - it offers adequate flexibility to RBI for 'choosing' the promoters of new banks.......
Bond yields rise on RBI's choice of OMO papers
MUMBAI: Benchmark central bond yields rose on Tuesday after the Reserve Bank of India bought less of the papers traders wanted to offload via open market operations. The RBI bought Rs 11603 crore of government bonds as against Rs 12000 crore scheduled. But dealers said the low acceptance of the 8.33 per cent 2026 and 8.07 per cent 2017 July bond, both well-traded papers, dented sentiment. .......
My View on "Hair raising Memo to RBI........................."
I think let the GUV pay attention to growth first.The interest rates must come down to give a boost to economy.Low interest rates will transfer into lower interest rate differential between us and other advanced countries,will stop any apprehension of sliding of Re, will bring stability in exchange rate, boost investor confidence etc. Concerned about fiscal deficit, inflation etc stop a few social sector schemes or PDS. The beneficiaries are in no way benefitted and money goes down the drain. RBI GUV retiring in Sept next. That's far away.Shri Mittal, Secy,Financial Affairs is retiring on 31 Jan, 2013. No chance of him replacing the GUV. One DG goes now in Dec end. Shri Gokurn is very good. He will be replaced by an economist. Before retiring on 31 Dec, 2012, Shri V.K.sharma has deciphered the Eurozone crisis.Only solution seems to be to abandon Greece or possibly Spain.
- Sitendra Kumar, Ex-General Manager, Jaipur (via e-mail)
Talent deficit is the product of deliberate neglect of HR issues
Article published in
Business Manager, December 2012 under Cover feature
The absence of talent in
banks today is the product of a deliberate neglect of HR related issues. The
ageing top level, problems in succession plans at various levels caused by,
among other things a ‘recruitment holiday’, since circa 1991, during which
period ‘outsourcing’ and adhocism forced distorted priorities in recruitment
and skill development are all grave issues affecting the functioning of banks.
M G WARRIER
(Former
General Manager, Reserve Bank of India
The need of the
hour is a thorough overhaul of HR policy and practices in banks, from Board
Room to front desk. The casual approach to HR management is behind many of the
problems being faced by the financial sector today.
Thanks to the strong
legislative foundation provided through Banking regulation Act, 1949 and the
efficient regulatory supervision and guidance by the Reserve bank of India , India
Actually, the
private-public sector divide in regard to meeting social responsibility
obligations/commitments and a discriminatory approach between the two sectors,
when it comes to government policy support is a legacy of the British Raj. Once
it is accepted that the resources of the country belong to the people and
irrespective of the nature of ownership (whether government or private
individuals/groups/families/organisations), all are handling public
funds/resources in a trusteeship sense, this divide can be bridged to a great
extent. This approach is all the more relevant for banks, as after all, their resources
come from public deposits and their major business comprises providing credit
and services to the public.
If the financial
sector has to rise to the expectations in regard to credit delivery, especially
to agriculture and service sectors, the banking infrastructure will need
structural reforms, skill development and a change in outlook on management of
human resources and related issues.
In July 2010,
Reserve Bank of India
“Although on the
face of it, the proposal may seem like a normal HR initiative at infusing young
blood with expertise and enthusiasm at a lower cost, no in-depth analysis may
be needed to find that this is a short-term remedy being tried out for a long
term problem.
Sooner than
later, the RBI, government and public sector organisations will have to wake up
to the reality that their recruitment, training, placement and compensation
strategies need thorough overhaul and this they have to do taking their
existing employees into confidence. A long-term solution may have to be found
for the HR-related problems, including the inability to hire experts at
market-related compensation. The Government and public sector organisations may
have to consider how best the ‘cost-to-company' (C to C) principles can be
integrated into their existing recruitment, training, placement and career
progression policies. This may involve the following:
·
Taking the existing employees
into confidence with an assurance that the changes will only improve the
working results of the organisation and they will get an opportunity to share
the benefits and new job opportunities and so long as they are prepared to
learn new things/upgrade their skills, the infusion of ‘experts' will not eat
into their career progression opportunities.
·
Inter-mobility of executives in
all cadres among comparable organisations. For instance, a banking/financial
sector service could be evolved for institutions including those in the private
sector and regulatory bodies in the financial sector.
·
A transparent guidance for
remuneration package based on paying capacity/need for skills for different
sectors. Proposals like the present one by RBI of shifting to C to C to reduce
costs will send wrong and unhealthy signals.”
Though aware
about the oddity in quoting oneself, two and a half years down the line, the
above observations gets relevance as it is gathered that the executive interns experiment
in RBI did not meet with much success and the entire financial sector is slowly
reconciling to the idea that HR in financial sector is different from say,
managing mine workers or farm labour. RBI has recently appointed a panel to review
HR practices in the central bank. Adhoc recruitment
of Executive Interns without planning their future deployment or absorption,
succumbing to pressure on promotion policies, not being able to convince GOI on
need to implement competitive remuneration packages for recruiting and
retaining efficient officers, failure to decide on updation of retirement benefits
at least on par with GOI are just some examples where even an organisation of
the stature of RBI can go wrong when preoccupied with other priorities. When it
comes to infusing professionalism in specialized areas like supervision and
forex and debt management RBI is facing several constraints, many of them
emanating from its failure to argue with North Block as Finance Ministry shows
an attitude akin to master-servant relationship.
Now that RBI has woken up, we may expect other statutory
bodies and public sector organisations followed by GOI (we can expect like that
only) will follow suit and think of an overhaul in their Human Resources
Development and Management (HRMD) practices. The
absence of talent in banks today is the product of a deliberate neglect of HR related
issues. The ageing top level, problems in succession plans at various levels
caused by, among other things a ‘recruitment holiday’, since circa 1991, during
which period ‘outsourcing’ and adhocism forced distorted priorities in
recruitment and skill development are all grave issues affecting the
functioning of banks.
HRD at the top
across sectors should become a national priority, if professionalism is to be
restored at lower layers which directly interact with the clientele. Guidance
for an overhaul of HR practices in banks should come from GOI and RBI factoring
in, among others, the following:
i)
A long-term recruitment policy
taking into account the skill and aptitude needs for rural, urban and
metropolitan services
ii)
Job security including social
security to ensure that the employees develop a sense of belonging to the
institution
iii)
An institution-specific wage
structure up to junior management levels ensuring ‘living wage’ and incentives
for performance, service in rural areas or tough terrains etc
iv)
GOI and IBA should provide
overall guidance in HR management, but leave details to individual banks who
should be made more responsible for in-house management
v)
Ideally, from middle management
level and upwards, easier inter-organizational mobility of staff should be
thought of
vi)
An Institute for Financial
Sector Management and an Indian Financial Sector Service could take care of
further skill development needs at higher levels.
Telecom companies can facilitate select banking services but their call is not compelling
..........Thus, the telecom operator acts like a banking correspondent-as per rules set by the Reserve Bank of India (RBI), within a 30 km radius of a branch in rural areas and 5 km in urban areas. It's a symbiotic relationship. Telcos need banks for accounts; banks need telcos for reach- there are 90,000 bank branches, while Airtel alone has 1.6 million outlets.........
Inflation targeting hardly works
.......What comes out strongly is the effect of persisting inflation. Countries with high pre-existing inflation are more vulnerable to commodity price shocks. A plausible explanation is the effect of inflation expectations, with firms responding to cost increases by raising prices. What are the implications for India of these results? First, many of the identified structural characteristics shown to be factors in cost transmission, one of which is the extent of fiscal dominance, have been regularly flagged by RBI in its analytic underpinning of monetary policy. Imbalances in these characteristics will have to be mitigated.......
Back to basics
Apropos A Seshan’s article “India is suffering from inertial inflation” (December 10), experts have interpreted the inflation phenomenon in different ways. That has added to the confusion of policy makers. The inflation versus growth trade-off – relevant as it may be analytically – is not as constraining in policy formulation as it is made out to be. There cannot be a Reserve Bank of India (RBI) prescription for reviving growth at variance with what the finance ministry suggests. The monetary and the fiscal policy mix, or the public expenditure policy, cannot work in isolation. Both RBI and the finance ministry allowed inflation to acquire structural proportions................
RBI Plans to Push Export Lending
NEW DELHI: The RBI has mooted a separate carve-out for export credit within the overall priority sector lending target for banks to make funds available for exports amidst rising concern that the declining exports will keep current account deficit elevated and depreciate the rupee, undermining its efforts to rein in inflation..........
Bank for the buck
.....For starters, banks — a proxy for the economy – will see a rebound in credit growth next year, as gross domestic product growth revives. Typically, when interest rates come down, stock prices tend to go up. Citi is positive on the sector and sees “reasonable returns on improving macros and bottoming micros”. As for PSU banks, the broader perception in the market is that asset quality has started improving and once the Reserve Bank of India ( RBI) starts cutting rates, things would improve. The market is building in rate cuts and a consequent uptick in loan growth in FY14. Ambit Capital expects PSU banks to outperform in the near future, as it sees signs of these stocks bouncing back from their relative lows. The market expects PSU banks to end the year with earnings growth of 11 per cent.......
Banks get SC's backing on derivative defaults
The Supreme Court on Tuesday ruled that banks were entitled to declare as a wilful defaulter any person who did not repay his dues under a foreign exchange derivatives contract. This was legal and within the various circulars issued by the Reserve Bank of India (RBI) in dealing with derivative transactions, the apex court said. The judgment paves the way for banks to resume recovery proceedings, which were stalled as the matter was sub judice............
Mobile banking: A technology gradually permeating into the system
The question for mobile banking
in India is not whether, but when. A string of parallel developments -
greater bank innovation, broadband spread and user inclination - is
providing new charge to mobile banking. There is still a long way to go
before m-banking achieves mass acceptance, but it's on its way.........
Refreshing change in the attitude of a British bank; a lesson for Indian banks?
......It is to regain public confidence or to project a customer-friendly image; one of the banks in London recently went out of the way to satisfy an aggrieved customer, a refreshing change in attitude from a stiff upper lip British banker.......
Restore trust in governance
.... The goings-on in Parliament and in other legislative bodies, the open spats between “responsible” heads of organisations on the one side and the political leadership on the other, continuous strictures from courts and media reports on unethical and corrupt practices by the rich and powerful, are all agonising..........
FDI vote underlines regulatory power
......Permission for a certain level of FDI in retailing, or for that matter, in any sector, is essentially brought into effect by amending a schedule to regulations made under the Foreign Exchange Management Act (FEMA). Parliament enacted FEMA, and authorised the government to make rules, and the Reserve Bank of India to make regulations, to implement the law. When government changes its policy on introducing FDI, the RBI amends the regulations to implement the policy......
Left draws Governor’s attention on chit funds
......Pointing out that the chit funds are operating against the guidelines of the Reserve Bank of India ( RBI), he said that the RBI had also directed the government to take action in the case.
Kerala co-ops on deposit mobilisation drive
......Kerala has a three-tier system in the co-operative credit mechanism — State Co-operative Bank at the apex, 14 district co-operative banks in the middle and 2,502 primary co-operative credit societies at the base level. In addition, there are 85 urban co-operative banks and 1,013 employees credit societies, according to SLBC. The high NPA level is a major concern of this sector — the net NPA is 15.31 per cent and the quantum of amount has increased to Rs 414.55 crore. Kerala’s co-operative sector is now set to introduce the core banking facility across all the banks. CBS has already been implemented in State Co-operative Bank and most of the district co-operative banks......
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