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.
Wednesday, January 9, 2013
FINMIN WANTS TO EXTEND INDIAN BANKS’ ASSOCIATION’S UMARJI’S TERM
MR
Umarji, chief legal advisor at IBA, is set to complete his term in
March this year. But finance ministry is keen that Umarji gets an
extension since he is a hands-on person on banking laws. Also, finmin
would want to gain from Umarji’s expertise, given that the government
would like to pass as many reforms before the next election. A former
RBI ED and framed Sarfaesi Act, he also helped RBI in drafting the
recently-amended Banking Regulation Act.
ET
ET
BANKS GIVE IPADS TO DGM AND ABOVE TO CONNECT WITH GENNEXT
Most
PSBs are becoming tech savvy. Many have started distributing iPads to
senior officials in the hope that they would be better positioned to
relate with young customers. SBI has given iPads to all officers who are
of DGM rank and above, while BoI and IOB have given it to all their GMs
and above. Atleast now PSU bankers have something to look forward to.
ET
ET
Banks rush for state government securities on signs of cash easing
......The bank official explained that the excess holdings gave additional cushion to raise cash from RBI through the repurchase window. Banks excess holdings of 9 per cent gave them leeway to borrow at least Rs five lakh crore from RBI for meeting their cash conditions. Borrowings from RBI were also seen as a low cost route of funding, since it was not treated as part of the net demand and time liabilities, unlike deposits.......
Goa office of Directorate of Enforcement to be upgraded
.......In the past, following criticism in the State Legislature, the then Congress-led government constituted a committee under the then State Joint Secretary (Debt Management) for examining the cases related to acquisition of immovable property by foreign nationals. The committee took up 480 cases of which after finding prima facie violations, nearly 300 were forwarded to the Directorate of Enforcement for action while some were moved to RBI.
Tuesday, January 8, 2013
Subir Gokarn paid the price for disagreeing with the government: CLSA
RBI cites law to stonewall RTI info
As cases of denial of information under the Right to Information Act pile up, the Reserve Bank of India approached various courts as many as nine times against the Central Information Commission’s (CIC) orders directing it to provide information. Seven of these cases are now pending in the Delhi High Court while two are in the Bombay High Court. Not only has the RBI preferred litigation against providing information, the central bank earlier this year also refused to give information on expenses it has incurred on such litigation against CIC orders. Besides these nine cases, there are three others cases in which the RBI sought to become a petitioner to block information against the CIC’s decisions. In these cases, National Bank for Agriculture and Rural Development (NABARD) and ICICI Bank are currently petitioners. The RBI wants to defend them by becoming a petitioner too...........
How Ernakulam officials ensured every single adult there opened a bank account
.......The thought morphed into resolve. And Kerala's local bank officials set the ball rolling. "With Ernakulam we have made a beginning. The RBI's goal is to do this in the entire country," says C.V. Geroge, General Manager at RBI's Kochi office. As many as 45 banks from public, private and cooperative sectors have spread their presence in the district with 850 branches and about 1,000 ATMs. In fact, just two banks - State Bank of Travancore and Federal Bank - account for close to 200 branches. The regional heads of all banks, insurance companies and other financial institutions met frequently, exchanged notes and went about the task in a concerted manner..........
Ombudsman scheme to be reviewed
..........“With a view to examine the Scheme in its entirety, an internal working group has been constituted in RBI under the Chairmanship of Suma Varma, Chief General Manager, Customer Service Department, RBI,” said the Annual Report of the Banking Ombudsman Scheme, 2011-12. The group will include two banking ombudsmen, representatives from regulatory wings of RBI, Indian Bank’s Association (IBA) and Banking Codes and Standards Board of India (BCSBI). The working group will identify grounds of complaints that have become redundant and add new grounds reflecting aspirations of customers. It would also examine the possibility of extending the scheme to cooperative banks and review the grounds of appeal under the BOS...............
Ashwini Ponappa to move back to Bangalore
Shuttler Ashwini Ponappa is all set to move back to Bangalore, a place which the Olympian feels is more conducive for training and playing badminton than Hyderabad where she is living at the moment. "I am shifting my base to Bangalore as my father, who is a RBI official, is moving back to the city. I am more comfortable playing and training in Bangalore than Hyderabad due to the very good facilities available.............
My View on "Once a 'green horn', D Subbarao aims to demystify RBI in 2013"
This assessment of the role of the central bank and an appraisal of sorts of himself and his colleagues makes the case for longer tenures for incumbents at the top of institutions like RBI stronger. GOI should sit back and think whether it was necessary to ease out Subir Gokarn in just two years. Perhaps the error of judgment could be made up by planning in advance and ensuring at least a further two year term for Dr Subbarao who has by now understood the role of RBI and can execute a mission consistent with his vision briefly brought out in this New Year message to his colleagues. RBI and Indian Economy deserve a more mature treatment from GOI in 2013 !
- M G Warrier
Reforms implementation, the key
.......The Reserve Bank (RBI) has given a direction to banks that anyone with an Aadhaar Card will have a ‘no-frills’ account. The central bank had introduced ‘no-frills’ accounts in 2005 to provide basic banking facilities to the poor and promote financial inclusion. The accounts could be maintained without or with very low minimum balance. In fact, the RBI has asked commercial banks to convert the existing ’no-frills’ accounts into ‘Basic Savings Bank Deposit Accounts’. While there will be no limit on the number of deposits that can be made in a month, Basic Savings Bank Deposit Account holders will be allowed a maximum of four withdrawals in a month, including through ATMs. Critics argue that access to bank branches may be a problem. Owing to administrative cost it may not be profitable for banks to open bank branches in every village. As a way out, it is now mooted to have a banking correspondent in every village. .........
An overdraft for a ‘special case’
......As the Chairman of PNB was to retire on July 31, 1975, the RBI recommended for that post O.P. Gupta, Deputy General Manager of PNB. This was approved by Finance Minister C. Subramaniam and Home Minister K. Brahmananda Reddy. When the papers were sent to the Prime Minister as the third member of the appointments committee, she mentioned that Tuli’s name should also be considered for the post. Tuli was then Chairman of New Bank of India, in the private sector. However, the recommendation of the Finance Minister was redrafted and Tuli became Chairman and Managing Director of PNB on August 1, 1975. When the Shah Commission asked C. Subramaniam why O.P. Gupta was not appointed as recommended by the RBI, he said he had not known Tuli earlier, and that PNB was much bigger than New Bank of India. Asked whether the Prime Minister had suggested that Tuli be appointed, Subramaniam replied: ‘Yes.’.....
Banks want incentive for tax-saving deposits
..some banks requested that they be allowed to issue tax-free bonds, as has been allowed to other entities, because banks have good distribution network and can finance infrastructure projects.............
Piggyback selling
........... “Do you own a credit card?”. If the customer says yes, hoping to shake them off, they will then hard-sell their card, suggesting you use it because it has more benefits. The real benefit is for the company: Gaining a customer who already owns a card makes it easier for the company to secure the details required for fulfiling know-your-customer norms as mandated by the banking regulator.
Waiting for the RBI?
.........But there could be another factor at work here: expectations that banks may soon lower interest rates. Finance Minister P Chidambaram has made innumerable statements that the government has done its bit to rein in its fiscal deficit andcurb inflation, and therefore it’s time for the Reserve Bank of India to cut interest rates. All of this has strengthened the expectations of an interest rate cut when the next review of monetary policy takes place later this month......
SBI favours 2 % interest on current a/ c deposits
....." Reserve Bank should allow some interest... something like two per cent to be paid on current accounts... that will encourage more people to put ( money in banks) instead of keeping the money in cash.............
Cut lock-in period for tax saving deposits to 3yrs: Bankers
Bankers demanded that lock-in period for tax saving deposits be brought down to three years from five years to channelise more funds into the banking sector. In a pre-budget consultation with Finance Minister P Chidambaram, bankers also sought permission to issue tax-free bonds like other financial institutions for raising funds and augmenting business.........
'RBI to look at macro situation before deciding on rate cut'
Weeks ahead of its third quarter review of monetary policy, RBI today said it will look at current macroeconomic situation besides inflation before taking a call on reducing interest rates. "Definitely today the policy rate is 8 per cent. Inflation should come not come down to 3 per cent to review the rate but that is depending on the macro economic situation," RBI Deputy Governor K C Chakrabarty said..........
Basel-III: RBI mulls liquidity buffer from SLR portfolio
“We already have quite a bit of liquidity ratio requirement (banks in India)... The basic requirement of basic liquidity that has come is that it should be usable under stress. If we look at our SLR, it’s supposed to be maintained continuously,"..............
Final norms on new bank licences soon, says RBI
......Sinha said the central bank would look into the concerns raised by NBFCs. He, however, added nothing could be assured and advised NBFCs “to live with it”. He said there was no question of treating NBFCs on a par with banks, as banks had more stringent regulatory norms...............
Far reaching changes in powers of the banking regulator
........ The increase in number of banks would lead to more competition and better pricing for the retail customer both for deposit as well as credit products as the newer banks innovate to garner market share. Overall the Bill provides an enabling environment for the regulator and the development and growth of the banking sector.
Hike minimum investment limit for bank licence to Rs 1,000 crore: Assocham
............."Considering the heavy investment needed for technology up gradation for the future purposes, there can be a stipulation suggesting that minimum capital requirement shall be hiked to Rs 1,000 crore from Rs 500 crore within five years of starting the bank. This can help to ensure only serious and resourceful entities are eligible to apply," it said in a statement. ....................
RBI may allow partial SLR conversion to meet Basel-III
T
he Reserve Bank today hinted at allowing part of the statutory liquidity ratio (SLR) holdings of banks to be treated as liquid assets under the Basel-III guidelines, which will come into effect next fiscal. "We already have quite a bit of liquidity ratio requirement.... If you look at our SLR, it is supposed to be maintained continuously. "Therefore, question arises whether we add some more liquidity on top of SLR, which will be definitely not good for our banks. So, we are looking at carving out SLR so that a part of it can become usable," RBI Deputy Governor Anand Sinha told reporters on the sidelines of an event.........
RBI proposal may boost gold loan companies' growth: ICRA
The proposal by the Reserve Bank to increase the loan to value (LTV) ratio to 75 per cent from the present 60 per cent is likely to help gold loan companies increase their business volume at a reasonable rate, says a report by rating agency ICRA.............
Read.........
Read.........
NBFC body asks RBI for same benefits as banks
Non-banking finance companies (NBFCs), in a discussion with Anand Sinha, Deputy Governor of Reserve Bank of India (RBI) on Monday, have asked the RBI to put them on par with banks on areas such as risk weights as per the asset class, tax relief on provisions made for NPAs and permission to raise ECBs..............
Banking Ombudsman Report of 2011-12 shows customers getting the short shrift
...... since banking ombudsman is authorized to cover only specific areas of customer complaint, it will be in the interest of the customer to check whether thecomplaint to be raised by him falls under banking ombudsman’s jurisdiction. What is heartening to note is that The Reserve Bank of India (RBI) has decided to set up a working group to review the banking ombudsman scheme.
Will Cheque-bounce Law Lose its Sting?
..........Thanks to a law that was born a decade after Dickens died and then amended a century later, Indian banks slap a curt notice, threatening criminal proceedings, to force a borrower to pay up once a 'post-dated cheque' - a product of the retail loan boom - bounces. The law makes no difference between crafty borrowers trying to dupe banks and those who have missed their loan EMIs for having lost jobs. But with lakhs of cheque-bouncing cases clogging the courts, the law ministry is trying to figure out whether it makes sense to tweak the law and refer these default disputes for arbitration. It's an idea that has rattled banks............
RBI asked to give all details about NBFCs operating in Karnataka
Bangalore: The Karnataka High Court Monday directed the RBI to furnish within six weeks all details of Non Banking Finance Companies operating in the state and the names and number of private finance companies offering secured and unsecured loans............
RBI dispels NBFCs’ fears of closure
The Reserve Bank of India (RBI) on Monday dispelled fears of the non-banking financial companies (NBFCs) sector that the proposed recommendations of the Usha Thorat committee to maintain an asset size of Rs.25 crore will lead to the closure of small and mid size NBFCs in the country........
Read - Hindustan Times
RBI cancels registration of two NBFCs
Mumbai: The Reserve Bank Monday said it has cancelled registration of two non-banking financial companies -- Emcorp Finance Ltd and Care Credit and Investments Company Pvt Ltd. "Following cancellation of the registration certificate the companies cannot transact the business of a non-banking financial institution," the RBI said...........
Monday, January 7, 2013
Once a 'green horn', D Subbarao aims to demystify RBI in 2013
Calling himself a "green horn" at the time of joining Reserve Bank as its Governor over four years ago, Duvvuri Subbarao has now set a goal to demystify the 'black box' image of RBI and make it a role model for central banks globally. "For an outsider looking in, the RBI is like a black box. Everyone knows people in there do important things, but cannot figure out the connection between that and their lives". "It is important that we demystify the RBI so that people know enough to demand accountability from us,"..........
Punishing the central bank
.........If even after this weakening of the central bank’s monetary stance, the government is bent on making it reduce the policy rates, the conclusion can only be that it wants to whittle down RBI’s independence. Gokarn’s “ouster” must be seen in this light. As the deputy governor for monetary policy, he was the keystone in formulating RBI’s monetary policy stance. In this, he acted in tandem with Subbarao. By ensuring his exit, the government has sent a clear signal that it will not tolerate a central bank that is independent beyond notional terms.
Jodi ka mamla................ KBC via RBSC
If
you have seen yesterday's (4th January) episode of KBC you might have
noticed that a young couple from RBI had appeared - Mrs. Nidhi Chaudhry
and Mr. Dev Raj. They met at RBSC Chennai during training. As you all
know that our Training college at Chennai is also known as
Marriage Bureau for DRs and in each batch a few marriages always takes
place. Promotees don't have that chance because by the time their number
comes for training at Chennai College they are already
married and settled in life. She
made it to the hot seat but unluckily could not win any amount. and
had to leave empty handed. She had selected a "Padav" at 6th question of
Rs.1,60,000/-. She made it to Rs. 80,000/- but was in too much hurry to
answer the last question despite having three lifelines. Anyway our
sympathy goes to her and we wish her a better luck next time. If you are
interested the question was at which degree temperature in both
Centigrade and Fahrenheit is same. The correct answer was - 40 degree
and she replied 40 degree. It
could not be made out from which office of RBI they had come. Anyway
she has already
left RBI as she is selected for I A S and is presently doing
training at Mussorie. However her husband is still working in RBI. If
any of our member has seen the programme, he/she may like to add more
information. And if you happen to know them please convey
our congratulations to them for making it to KBC. You are also free to
add your own experiences at RBSC Chennai.
Madan Gauria, Ex-AGM (Moderator - EXRBITES Group)
| Instantly comes to mind the persons to whom RBSC made life partners: YSP and Usha Thorat; Nalini and B. Mukherjee and Jerome D'Souza and Gokhale Madam......... - Surendra Khot, Ex-GM |
Exhibition on the “Documentary Heritage of Reserve Bank of India”
The
73rd Session of the Indian History Congress was inaugurated by His
Excellency Shri K. Sankaranarayanan, Governor of Maharastra on December 28, 2012. Addressing a large gathering of historians the Governor
observed that history is the universal teacher of mankind. It is a multi-faceted discipline and its subject matter is all that human beings have said,
done and thought. He further stressed
that the rulers must remain alive and sensitive to the basic needs and
developmental aspirations of the poor, the downtrodden and the
socio-economically backward sections of society. The History Congress was
attended by about 2500 delegates from different parts of the country and
abroad.
The
RBI Archives exhibition evoked good response and was visited by about 1800
visitors from University, College teachers,
academicians and research students from across the country. Some of dignitaries
who visited the stall included Professor Irfan Habib, Historian from Aligarh
Muslim University, Prof. S.Z.H. Jafri, Professor of History, University of
Delhi & Secretary, Indian History Congress, Shri B.M. Mishra, Officer-in
Charge, Department of Economic and Policy Research, RBI, Central Office, Smt.
Gunjeet Kaur, Director, History Cell, RBI, and Shri R.L. Sharma, Vice
Principal, College of Agricultural Banking, Pune.
The
officers from RBI Archives, i.e. Dr. R.L. Sahoo, Chief Archivist, Shri Ravi
Kiran Pala, Archivist, Dr. Savesh Singh, Assistant Chemist and Smt. D.D. Saraf,
Assistant Manager, managed the exhibition stall and distributed exhibition brochures to the visitors. RBI Archives
team received guidance from Smt. Meena Hemachandra, Chief General Manager and
Principal, CAB in making the exhibition a grand success.
How UK, US fill up central bank posts
.............Let’s shift focus to India. When former RBI Governor Y.V. Reddy’s five-year term was coming to an end in September 2008, there was intense speculation on his successor and a possible second term. His deputy Rakesh Mohan, who was in the US on an assignment, was called back for an interview but then finance secretary of India D. Subbarao got the job. An upset Mohan, who was in charge of critical monetary policy, stayed put during the global financial crisis in the wake of the collapse of US investment bank Lehman Brothers Holdings Inc. but left in June 2009 before his term ended. His successor Subir Gokarn, chief economist of global rating agency Standard and Poor’s, was identified by a search committee headed by Subbarao. Gokarn’s three-year term ended on 23 November but he continued till 31 December till his successor was identified. Urjit R. Patel, a non-resident senior fellow of the Brookings Institution and an advisor to the Boston Consulting Group, will succeed Gokarn with a two-year term but it may take a while as even after Prime Minister Manmohan Singh signs off the appointment, it takes months to complete formalities for an outsider who is coming to Mint Road. There is nothing new in a Deputy Governor stepping down and his chair remaining empty, even for months. In fact, Gokarn stepped in five and a half months after Mohan had left. Similarly, K.C. Chakrabarty, another Deputy Governor, succeeded his predecessor V. Leeladhar after six-and-a-half months. But the appointment process is not always transparent; often it shows utter disregard for professionalism..........
Jaipur: Brokers rake in moolah as coins disappear
...........With no RBI vans coming to markets to deliver smaller denominations, the business of small-time brokers is getting bigger and they are charging between 10% and 15% for the change. The situation is so bad that long queues of people waiting to get change from RBI counters have become a common sight. “You go and waste your time in queues or you get it from the broker. We don’t waste time, so we go for the latter,” said another businessman in Chaura Rasta market. As a result, people have become a suffered lot, who on several occasions have to either make a forced buying or forgo a balance of Re1 or Rs2 coin with an assurance from shopkeepers that they will settle it next time. Notably, withdrawing the distribution of notes and coins and plans to let the selected counters of various banks handle this, is part of the RBI’s policy. “RBI officials are unwilling to carry out this responsibility. They think it can be done through authorised brokers and banks,” said a source.................
Stanchart opens branch in Thiruvananthapuram
THIRUVANANTHAPURAM, JAN. 4:
Standard Chartered Bank has launched a full-service branch here, making it the third in the State after Kochi and Ernakulam. Salim Gangadharan, RBI Regional Director, was the chief guest at the launch function held here on Friday..............
Telling inclusion
Even though Financial Services Secretary D K Mittal formally announced Urjit Patel’s name as the successor to Subir Gokarn as Deputy Governor in the Reserve Bank of India (RBI) on Friday, Gokarn’s name continued to appear in the list of top executives’ speaking engagements on the RBI’s website for the week December 31-January 6. This even though his one-month extension ended on December 31.
BS
Bankers draw flak at DLRC meet
.....Reserve Bank of India AGM Ranga Rao said primary aim of the DLRC was to keep the elected representatives posted about the priority sector loans. Responding to the complaint that some bankers were not providing data in time, he said the RBI ensure that bankers sent the necessary data to the lead bank in time.......
SBT to switch over to fully-automated loan processing system by 2014
State Bank of Travancore (SBT) is planning to switch over to a fully-automated loan processing system by 2014. The Reserve Bank of India (RBI) has been emphasising that the banks should look at proper risk management, with the help of information and technology on data analysis and individual credit scoring. The Kerala-based bank said it will kick-start the pilot scheme from June this year.........
RBI Financial Stability report: Lessons in financial planning
.............The Reserve Bank of India ( RBI) has come out with its Financial Stability report. The report talks in details about the risks which the financial system in India and also gives an overview of the way things have been shaping up in the Indian economy in general. However, the most interesting aspect of the report is that it provides a good insight into Indian household’s saving and investment behavior which can be used as a tool by financial planners...........
Managing Risks in Commercial and Retail Banking
Amalendu Ghosh was Chief of the Department of Banking Supervision of RBI, where he served for 36 years. He is an expert in supervision of banks, risk management and was closely connected with the implementation of the new Basel Capital Accord. He has brought out a manual for conduct of bank supervision especially for the switch to risk- based bank supervision system. His rich experience as risk management consultant to two commercial banks has endowed the present volume with extraordinary authenticity and reliability. Ghosh is eminently qualified to write on risk management and the book under review is the quintessence of his experience.............
Read - Book Review by P.P.Ramachandran
LATE SITTING IN BANKS - A BRIEF ANALYSIS - It Needs To Be Eradicated
.......The anticipated benefits in the above-mentioned area are a mere management ploy to extract more time and energy – without matching qualitative output – from the persons concerned. By sitting late, neither the persons concerned nor their institution gain anything. In fact, both tend to lose heavily. From the employees’ side, they undergo tremendous strain and stress and whatever work they do or pretend to do after regular office hours leads to losing one’s morale and motivation. From the organizational point of view, on the face of it, it may appear that extra output has been achieved. But in reality, people’s efficiency gradually comes down during the day and at one point, it tapers off. ......
Banking sector jobs set to rise
...Public sector banks (PSBs), which were going slow in their recruitment drive, have once again picked up, after the government’s financial inclusion programmes have gained momentum. There are an estimated 85,000 vacancies in various PSU banks across the country and the government is keen on filling these in this fiscal year itself. The State Bank of India (SBI) alone is expected to recruit nearly 20,000 staff and over 1,200 officers in this fiscal year alone. Other PSBs would also be recruiting 22,000 officer-level employees and 20,000 clerical-level employees............
Less dovish Federal Reserve is good for India: BofA-ML
A less dovish stance by the US Federal Reserve will serve to benefit the Indian economy, says a new report from Bank of America-Merrill Lynch (BofA-ML). A lower quantitative easing (QE) would help enable the Reserve Bank of India in pulling down interest rates, said Indranil Sen Gupta, of BofA-ML..........
Govt to send comments on bank licences to RBI
The government would soon send its comments to the Reserve Bank of India (RBI) on issuing new bank licences, Finance Minister P Chidambaram said today. RBI is preparing final guidelines for issuance of new bank licences after Parliament approved the Banking Laws (Amendment) Bill last month........
Resolve consumer complaints within 45 days: RBI deputy governor KC Chakrabarty
The Reserve Bank of India
is seeking to turn banking services in favour of customers from being
loaded in favour of banks as it works to weed out one-sided agreements
and ensure that customer complaints are resolved within 45 days, said
three people familiar with the thinking. The mercurial RBI Deputy Governor KC Chakrabarty,
a former career banker himself, told bank chairmen that the one-sided
agreements and discriminatory lending rates for identical collateral,
such as home, should end, said those people who did not want to be
identified......
Give preference to non-corporate sector for new banking licences: Rangarajan
.......“It is possible for the Reserve Bank to initially start with non-corporate business and find out whether there are suitable applicants and thereafter proceed to look at the other applicants,”..............
New banking licences make no sense: Percy Mistry
.......The problem in India is not that we do not have a sufficient number of banks. It is that 70% of our banking system is state-owned, inefficient, un-inclusive, and provides the means by which too cosy a nexus between the government and the wrong kind of private industrialists. The state-owned banks (SOBs) and insurance companies (SOIs) together provide the institutional mechanism to foster a dangerous and damaging type of crony capitalism regime in India as well as to indulge in electorally driven loan melas and loan write-offs. . That unfortunate nexus is decidedly kleptocratic in nature when it comes to looting the nation’s natural resources (whether spectrum or mineral or land) through the kind of public-private partnership that India does not need............
Closer to the unbanked
..........But a lot more needs to be done in improving corporate governance, customer service, transparency in banking operations and, importantly, freeing public sector banks from political interference and the dual control of the Finance Ministry and the RBI, as sometimes they appear work at cross purposes.
Why Joseph Stiglitz is wrong on many counts
..........Even as Reserve Bank of India (RBI) Governor Duvvuri Subbarao called for greater central bank independence in the context of expanded mandates “and their more explicit pursuit of real sector targets such as growth and unemployment,” Stiglitz threw cold water on the idea, reports The Times of India. He said the RBI, with more limited autonomy, had fared much better than those with more autonomy, including the US Fed..........
Banks to put information of frauds before audit committee: RBI
The Reserve Bank of India has directed banks to place information regarding any frauds before the audit committee of the board of directors every quarter. In a notification on Friday, RBI said an annual review of frauds should also be conducted and placed before the the board of directors...........
NBFCs knock RBI door to modify draft guidelines
The non-banking finance companies have prepared a presentation containing seven-point changes in the recently released draft guidelines by Usha Thorat committee. Finance Industry Development Council (FIDC), the industry body for NBFCs already met Uma Subramaniam, Chief General Manager (Department of Non-Banking Supervision), RBI to convey their reservation against select norms.............
Government still has time for two policy principles
........even in sectors where “independent” regulators are in place, there is absolutely no co-ordination to assist the investor who is regulated and the constituent who is sought to be protected. Turf wars have been escalated in recent times. The Reserve Bank of India (RBI) has increasingly been seeking to inspect stock brokers on the ground that they are also non-banking financial companies. .............
Pre-Budget talks: Chidambaram to meet bank chiefs, economists today
.....Indications are that the talks would centre around the Government’s capital infusion in banks, Basel-III capital rules and the issue of deteriorating NPA situation in the banking system. As the pre-Budget talks will happen weeks before the RBI is expected to review monetary policy, the issue of interest rates is likely to come up for discussion.......
Risk management: Whose money is it anyway?
............Top priority should be given to induct a continuous learning process on risk management for line managers. As stated by RBI Deputy Governor K.C. Chakrabarty, this would be a “retirement decade” for public sector banks, with thousands among the senior workforce set to retire by 2020. Banks need to develop an effective knowledge management framework to help retain the tacit knowledge of the retiring employees. Initiatives such as a “No Transfer” policy up to five years for critical departments such as risk management will help stabilise the function..............
Customer complaints up marginally in 2011-12: RBI
........The RBI also announced to set up a committee to review and update Banking Ombudsman Scheme, 2006. The committee will be chaired by Suma Verma. The working group has been constituted on the recommendations of Damodaran Committee on customer service.
Mr FM, gold isn’t the problem, the rupee is. Fix that
........The FM believes that India’s foreign exchange reserves would have gone up by $10.5 billion if gold imports were to have halved. The FM also believes that India’s CAD and the rupee value will improve if gold imports were to be curbed. Unfortunately, even RBI wants gold imports curbed in order to manage the rupee (INR) better. The FM and the RBI could never go more wrong in their understanding of gold. In fact the rise in the price of gold in India is more due to INR depreciation than demand......
Appeals against Banking Ombudsman Rise
MUMBAI: Appeals against the decisions of banking ombudsman
more than doubled in 2011-12, indicating that the customers as well as
banks are losing faith in the scheme promoted by the Reserve Bank of
India as an expeditious and inexpensive grievance redressal forum. ...........
Clear norms must to help net banking, says RBI’s Chakrabarty
.................“We have to take measures to initiate the process of evolving best practices in this area that match the international / global standards…..“What we need is the right attitude for customer care. Banks need to invest more time in harnessing the soft skills of their human resources to make them truly humane and humble while dealing with customers,” .................
Consumer protection and regulators
......... In my view, this is the first time the head of any of the three regulators – Irda, the Securities and Exchange Board of India (Sebi) and the Reserve Bank of India (RBI) – has publicly declared that the regulator’s role is primarily consumer protection. All these years, the three main regulators and also the fourth new one – the Pension Fund Regulatory and Development Authority – have acted as if consumer protection is a minor issue............
Can banks collect dues from defaulters like this?
.......... If the harassment persists, a simple email complaint to the banking ombudsman would solve the issue. RBI’s stringent guidelines include a warning that banks are responsible for the actions of the collection agency. In case of complaints, RBI can also disallow the bank from appointing a recovery agency..............
RBI: Gold-linked products needed to cut imports
.........“Given the insatiable lure for gold in the country, it is imperative that we introduce gold-linked products which result in the existing gold in bank lockers getting converted as financial products rather than unabated import of gold,” said G Padmanabhan, the Executive Director at RBI on Wednesday...................
Gold loans: RBI favours banks over NBFCs
........“Moderation in the operations of gold loan NBFCs may provide increased opportunity to banks to further enhance their share in the gold loan market. For this, banks would have to reorient their business models and customer services to fully tap the business opportunities in the gold loan market, as they may still lack the speed to deliver to borrowers whose needs are catered to by gold loans NBFCs so far,” the paper said..............
Gold is money: Why can’t UPA’s thinktank understand this?
....Currency debasement has been an unwritten policy goal of the Reserve Bank of India and the government and citizens understand that very well. So when Rangarajan says a “certain amount of gold demand is built into the Indian psyche”, the culprit for the same is the RBI. Of course, Rangarajan did mention inflation hedge as one of the reasons why people buy gold. But in the same breath he also mentioned that Indians purchased $66 billion worth of gold last year and this was $20 billion more than in the previous year. That is a wrong way to look at gold – if you accept that gold is an inflation hedge, then one ought to compare quantities imported rather than the dollar value of the same.........
Why Govt, RBI want to put a lid on the gold rush
....While Finance Minister P Chidambaram hinted at making gold costlier, the central bank is firmer in its intentions. On January 2, Chidambaram asked the people to moderate gold buying, saying, “… we may be left with no choice but to make it a little more expensive to import gold. This matter is under the Government’s consideration.” Hours later, an RBI working group said fiscal measures to reduce gold imports might be revisited......
Friday, January 4, 2013
RBI chief stresses need for independence in monetary policy
MUMBAI: The Reserve Bank of India Governor Duvvuri Subbarao said on Thursday central banks need to be independent to make monetary policy decisions during a speech at a memorial event for the country’s first Indian central bank governor. The remarks come at a time when Subbarao is under immense pressure from the government to cut interest rates.......
RBI, government need to act in harmony: D Subbarao
.....Welcoming Nobel laureate Joseph Stiglitz at the C D Deshmukh Memorial Lecture here, Subbarao said, the monetary and fiscal policies should "act in harmony" to achieve common goals. The comment comes in the backdrop of growing instances of apparent divergent views between the RBI and the Finance Ministry on a string of issues, including lowering interest rates and issuance of new bank licences...........
Captain Subbarao Finds a Hard-Hitting Batsman
..............Reserve Bank of India Governor Duvvuri Subbarao, who has steadfastly refused to cut high interest rates to ensure price stability, is likely to find intellectual reinforcement from Urjit Patel, the new deputy governor of the central bank. The 49-year-old, a cricket and football fan from The Boston Consultancy Group, will have a two-year term at RBI in policymaking, succeeding Karl Marx lookalike Subir Gokarn.................
Newsmaker: Urjit R Patel
For Patel, this is a re-entry into RBI. Between 1995 and 1997, he had worked as an adviser with the bank on banking sector reforms, debt market, pension fund reforms, real exchange rate targeting and the development of the foreign exchange market. He had also worked as an adviser in the finance ministry during 1998-2001. In his new job, Patel’s experiences with RBI and the finance ministry are likely to be an asset. His appointment comes at a time when RBI and the finance ministry are having deep disagreements on rate cuts. Though the government has been urging RBI to cut the interest rates, RBI has steadfastly refused to do so. It has kept the repo rate at 8 per cent since April 2011. RBI’s doggedness comes despite Finance Minister P Chidambaram announcing a revised fiscal consolidation road map to show the government’s committment to prune the gap between the Centre’s expenditure and receipts.................
Why Urjit Patel is unlikely to be Chidu’s voice in RBI
........If you want to know what Patel may tell RBI Governor D Subbarao when it comes to the next monetary policy on 29 January, the answer will be: look at Patel’s PIGs. If Patel’s Pure Inflation Gauges are still showing an inflationary spike relative to sector-specific gauges like food of fuel, he will recommend that rates be maintained. If not, he may call for a cut. But in either case, it will not be because he has deep sympathy for P Chidambaram’s viewpoint. If he has been selected in order to get North Block’s views to Mint Street, he may be mismatched in that role.
Rangarajan to unveil banking tech expo
......Rangarajan will deliver the keynote address, “Delivering Technologies for Innovative Banking” which will discuss a spectrum of issues across all banking functions. Some of the prominent speakers at the IBEX conference include Saumitra Chaudhuri, Member, Planning Commission; K. C. Chakrabarty, Deputy Governor, RBI; Anand Sinha, Deputy Governor, RBI; M.V. Tanksale, CMD, Central Bank of India; R.M. Malla, CMD, IDBI Bank, and D. Sarkar, CMD, Union Bank of India. IBEX will feature an extensive trade exhibition that will showcase the latest in banking technology from across the world........
Cheque Truncation System: Banks to block circulation of non-CTS cheques by March 31
......The CTS 2010 standard is highly accessible and profitable though it might lead to the wastage of resources as people lack complete knowledge. The old cheques cannot be used for clearing but can still be used for withdrawal purpose. The last date to completely stop the circulation and usage of the old format was earlier decided to be December 31 which is now changed to March 31 and with people becoming more aware, it gives them quite some time to act accordingly for minimal wastage and misuse of resources............
Read - IE
Financial inclusion: A huge challenge
............. “Moving towards universal financial inclusion has been a national commitment,” the RBI has emphasised in its report. The Financial Inclusion Advisory Committee chaired by Dr K C Chakrabarty will explore viable, affordable and sustainable banking service delivery models for unbanked population and suggest appropriate regulatory framework to stabilise financial inclusion............
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