.....Addressing a media conference in this connection along with CPI district secretary J.V. Satyaranayana Murthy here on Tuesday, Mr. Anjaneyulu said at a time when the Centre and the RBI were talking of financial inclusion the common man was unable to approach the public sector banks, which were concentrating more on high value customers. He said in the last few months about half-a-dozen unscrupulous finance companies had downed shutters in Visakhapatnam resulting in several families going bankrupt.......
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, April 3, 2013
IFRS implementation by banking cos unlikely before 2015: ICAI
New Delhi: Recommendations on implementation of IFRS standards by banking companies have been given to the Reserve Bank of India but are unlikely to come into force before 2015, according to accounting regulator ICAI. Going forward, Indian accounting standard would be converged with the International Financial Reporting Standards (IFRS)............
KVP's kin summoned by ED
.........The ED which got the matter verified through RBI also came to a conclusion that a Fema case could be made out against Raju's firm. In fact, another Rs 600 crore too flowed into the Raju company through the same Mauritius route.......
Crop loan waiver: farmers turn to CM as last resort
.....The RBI, in its “master circular-guidelines for relief measures by banks in areas affected by natural calamities” dated July 2, 2012, says: the principal amount of the short-term loan as well as the interest due for repayment in the year of occurrence of the natural calamity may be converted into term loan. Generally, the restructured period for repayment may be three to five years …. The restructured portion of the short term loans and term loans which have been converted into fresh loans may be treated as current dues and not be classified as NPA.”.......
Tuesday, April 2, 2013
New thinking by an old hand
............As in the past when he was with the Reserve Bank of India (RBI), he continued to look upon his role as one in search of issues (the more complex the better!) and to suggest solutions. He combines a breadth of vision with an intensity of gaze which is rare among monetarists! He relates monetary issues to the larger fiscal and developmental and weaves them organically.................
RBI's powers not to be clipped: FSLRC
 |
.........Autonomy and accountability are two sides of a coin and need to be balanced......... |
Read - IE
RBI offers its officers flexible work timings
Aligns HR Policy With Global Practice To Improve Employees’ Work-Life Balance
.......... “The
RBI felt the need to adopt a flexi-time approach to align its HR
practices with the best in the country and in the world, and to
supplement its efforts at being a knowledge institution,” said Alpana
Killawala, Chief General Manager, Department of Communication, RBI.
“More importantly, as younger people join the stream of our officers, we
want them to balance their home and work lives,” Killawala said. While
the project is a pilot that the policy maker with 18,000-strong
workforce has started from January 2, 2013, it clearly indicates the
growing importance of maintaining a work-life balance in the public
sector as well........
Reserve Bank Officers' Co-op. Credit Society Ltd goes digital
Visit the site.................
Information sent by Sh A R A L Shaikh and Madan Gauria, (EXRBITES Group)
Big guns like Montek, CII & Asshocham, NCAER ignore FSLRC!
The FSLRC headed by Justice B N Srikrishna, invited about 27 persons and organisations for interactions. However, industry bodies like CII and Assocham, Planning Commission's deputy chairman Montek Singh Ahluwalia and RBI's former Governor Dr Y V Reddy did not bother to engage in the interactions................
Read - Moneylife
The biased work of FSLRC
..........For a commission that wanted to put in place a legislative framework for the financial sector that endures for a considerable length of time, it is unfortunate that it chose to recommend that the finance minister be appointed the chairperson of the Financial Stability and Development Council (FSDC). It did this, instead of recommending a more transparent and meritocratic process of the government recommending nominees chosen through a public and transparent process, subject to the confirmation of Parliament. .............
RBI cannot resolve all national problems through monetary policy: Sanjeev Sanyal
................If it has to choose between growth and inflation, the central bank should try to first curtail inflation. There is enough evidence from economic history that a central bank's first mandate is inflation control as it can be very difficult once inflationary expectations get anchored at the wrong level. This is particularly true when the constraint to growth is not demand but supply side issues. It is not the central bank's job to revive growth if there are supply side constraints and the economy has an inflation problem. Broader economic measures are needed to resolve this situation and RBI cannot resolve all national problems through monetary policy..............
Change of guard in financial sector in
This financial year will see many new personalities taking charge in India's financial sector. There will be new faces at the helm of the banking regulator, the country's largest bank and the largest insurance company. The chairman of the markets regulator will complete his three-year term in February 2014 but there is not much clarity on whether he would get an extension. A look at some challenges for the new leaders............
Impractical recommendations of FSLRC - Manohar Mahajan
I fully endorse the views expressed above.In sixth pay commission report, its author had created hotchpotch by clubbing various grades in paybands which had created a lot of anamolies and played havoc on country's financial health by recommending windfall gains for government employees. Similarly in its report FSLRC has made a number of impractical recommendations, if accepted would create a total mess in the financial sector which hitherto has been well regulated by the present regulators. Failure of FSA both in UK and Japan is well known and there is no point in implementing the same. The mere fact that four members who had hands on experience both in finance and banking have given note of dissent should be enough reason to put the Justice Krishana's FSLRC Report to the cold storage. As rightly felt, the ultimate feeling one gets after reading the report is that the Government of day, particularly FM and cronies in Ministry wanted to put RBI in tight spot by clipping its wings and Justice Krishana appears to have done their bidding by making such bizzare suggestion and reinventing the wheel. Given the short time available to the present set up in the Government as elections appear round t he cornor, the Government should of its own not take up the report for its implementation and leave it for the next Government. Any action in haste would spell disaster for the financial sector and Governement of the day should refrain from it.
- Manohar Mahajan
Re-visiting the trouble - T.C.A. SRINIVASA-RAGHAVAN
.....The slow reforms of the mid-1980s in the financial sector happened because the so-called ‘Hindu’ rate of growth forced them on the government. As S S Tarapore, former deputy governor of the RBI, once put it, there were over 200 rates of interest in the economy. Simply reducing the rates at the short end was a major reform..........
Counterfeit currency menace
Despite remedial steps by the Reserve Bank of India (RBI) during the past few years, circulation of counterfeit Indian currency notes of higher denomination appears to have once again assumed alarming proportion particularly in Jammu and Kashmir. The reports of seizure of fake currency notes from traders in Jammu region last year appears to be just a tip of the iceberg of the problem that is afflicting the state.........
Read - Kashmir Times
Read - Kashmir Times
Rural banking in the digital age
..........Financial inclusion could definitely aid to this efforts - hats off to the recent efforts made by the banks and the policy encouragement by RBI. Inclusive growth is the current compulsion of a sound public policy. True, there has been a convergence in the business interest of the banking community in financial inclusion. Financial inclusion is to be treated as a business investment. Banks are to move to the masses as a natural process of financial inclusion. The banks are already in the process of financial inclusion very much - opening and operating rural branches, rural coverage, agri-lending, SHG bank linkages, social onus of banks, etc. in fact, the process has been given the new name ‘financial inclusion’. Still, to bring the farmers under the ambit of financial inclusion the increasing role of commodity exchanges in the matter of providing forward market linkages and price discovery is being largely felt...............
RBI to meet bankers on Thursday for pre-policy discussions
The Reserve Bank of India (RBI) will meet the country's top bankers on Thursday's for pre-policy discussions, in which the latter will seek a deferral of the higher provisioning norms that came into effect today. In addition, the recent RBI norm that increased the threshold level of bulk deposits to Rs 1 crore from Rs 15 lakh is hurting the retail savers and it needs to be reversed, bankers said. RBI governor D Subbarao, along with four deputy governors, will meet the bankers. The central bank's annual monetary policy will be announced on May 3...........
Will the Post Office Bank be a boon or a bane?
..... But considering the intricacies involved in converting the PO into a full service bank that can effectively, efficiently and successfully compete with the centuries old public sector banks and the existing and upcoming high-flying private sector banks, whether it will be boon or a bane for the common people can only be known after it is up and running, as the saying goes, “the proof of pudding is in eating”.
Ponzi scam: Crime branch intimates RBI, collector
......Crime branch which is probing the multi-crore scam has now intimated the Reserve Bank of India along with evidence to prove the financial scam of Abhay Gandhi, who was arrested in 2012. "RBI officials have told us that they shall file a complaint against the company which was being operated by Gandhi. His firm did not procure the license or permission to carry out such financial transactions," said a crime branch official........
SUCO bank nets Rs. 3.2 crore profit
.....The bank was awaiting clearance from the Reserve Bank of India for the proposed branches at Bangalore, Shimoga, Yadgir, Lingasugur and Raichur (second branch). The bank had also plans to institute three cash awards of Rs. 1 lakh each for innovative farming, adoption of technology in farming and best agricultural and rural reporting.........
RBI redefines core investment firms' rules on entry into insurance
........ “While the eligibility criteria, in general, are similar to that for other NBFCs, no ceiling is being stipulated for CICs in their investment in an insurance joint venture. Further, it is clarified that CICs cannot undertake an insurance agency business,” ...........
Investors dial up mobile payments
..........In a document released last year, the central bank spelt out its vision for an electronic payments system and clarified that it would actively monitor governance of payment solutions companies, previously the responsibility of commercial banks. "RBI is taking a balanced approach to push electronic transactions and addressing key risks to avoid frauds," said Mohit Bhatnagar a managing director at Sequoia Capital, which has also funded Chennai-based Prizm Payments and Zaakpay in Delhi. In the past year, nearly half a dozen payment technology ventures have raised risk capital funding as overall industry sentiment turns positive on a sector where demand is growing fast. ..........
How banks price loans needs to change, and RBI’s nudge is welcome
..... At a time when banks stare at mounting bad loans, RBI wants to put in place a risk practice of global standard. Gross non-performing assets of public sector banks shot up by Rs 47,000 crore to Rs 1,84,193 crore in December 2012 from Rs 1,37,102 crore in March that year. There cannot be any second opinion on customers with the same risk profile getting similar treatment in loan pricing. But despite several reminders from RBI, most banks have continued to blatantly favour some customers and discriminate against others for reasons never adequately explained because of the opaque way loan pricing is done. In its regular quarterly inspections, RBI has started asking banks to justify the pricing of certain loans......
Lenders want higher provision on recast loan to be deferred
The Reserve Bank of India (RBI) will meet the country’s top bankers on 4 April for the pre-policy discussions in which the later will request deferring of the higher provisioning norms that comes to effect from 1 April. RBI Governor D Subbarao, along with four deputy governors, will meet the bankers for the pre-policy interaction. The annual monetary policy review of RBI will be announced on 3 May...........
SBI notice riles farmers
.............When contacted, a State Bank of India official said the letters were issued by the controller of the zonal office of Tiruchi and were well within the guidelines. According to a lead bank official, banks had received guidelines to deal with the mounting NPAs. RBI has allowed for such publication of ‘wilful defaulters’. “However, we only engage recovery agents, and have not used publication of photographs as recovery tactic.”..............
‘Banking sector set to grow by leaps and bounds’
.....Assistant General Manager of NABARD K.I. Shariff said a banking job offered security and opportunity to help the needy people. A career in a bank was more stable than the one in IT industry. He asked the students not to get disheartened by the huge competition saying only a miniscule of the applicants took it seriously. Over 70 per cent of applicants attempted without proper training and skills........
Karnataka Bank eyes 27% business growth
.......Under the financial inclusion initiatives, it has opened 10 financial inclusion branches, 26 ultra small branches, 1 FLCC (financial literacy & credit counselling centre) thus providing banking services to 122 gram panchayats consisting of 591 villages through business correspondents services.......
Mallya sues banks for selling pledged USL shares
............The petition, filed by UB Holding in the High Court, seeks a stay on sale of shares of its subsidiary USL by SBI after the bank sold a portion of UB shares it held as security in the market last week, said an SBI official who wanted not to be named. "We have sold a part of the USL shares. We have also received a legal notice from UB Holding restraining us from doing so. But despite that, we decided to sell them and are likely to sell the remaining shares as well as we are confident of the court ruling in our favour," said a senior SBI official requesting anonymity........
Monday, April 1, 2013
Good Samaritan with head and heart
A warm farewell was given to Dr.Sandip Ghose on 28th March 2013 in the Banking Hall of RBI, Main Building, Mumbai. A large no. of RBItes and Ex-RBItes had gathered on the occasion. While the speakers expressed with emotion, Dr.Sandip went with wet eyes down memory lane..............
................In
the annals of the Reserve Bank your name should be written in golden letters
for playing a positive and courageous role as Head of Human Resources
Department. What has placed you above others are your qualities of head and heart
and your easy accessibility despite tremendous work pressures. Your
capacity for giving a patient hearing to whosoever approached you with a
problem and your genuine desire to help, and your boundless energy and rare
communication skills serve you very well. No wonder, whosoever came in
contact with you, discovered a Good Samaritan...............
Shri Vijay Malekar, Manager, HRMD compered the farewell function. Click to Read..........
Kabhi Alwida Na Kehna...........
Chalte Chalte Mere Ye Geet Yaad Rakhna
Kabhi Alwida Na Kehna
Rote Hanste Bas Yoon Hi Tum Gungunate Rehna
Kabhi Alwida Na Kehna
Pyar Karte Karte Hum Tum Kahin Kho Jaayenge
In Hi Baharon Ke Aanchal Mein Thak Ke So Jaayenge
Sapnon Ko Phir Bhi Tum Yoon Hi Sajaate Rehna
Kabhi Alwida Na Kehna...
Beech Raah Mein Dilbar Bichhad Jayen Kahin Hum Agar
Aur Sooni Si Lage Tumhe Jeevan Ki Yeh Dagar
Hum Laut Aayenge Tum Yoon Hi Bulate Rehna
Kabhi Alwida Na Kehna.....................
Kabhi Alwida Na Kehna
Rote Hanste Bas Yoon Hi Tum Gungunate Rehna
Kabhi Alwida Na Kehna
Pyar Karte Karte Hum Tum Kahin Kho Jaayenge
In Hi Baharon Ke Aanchal Mein Thak Ke So Jaayenge
Sapnon Ko Phir Bhi Tum Yoon Hi Sajaate Rehna
Kabhi Alwida Na Kehna...
Beech Raah Mein Dilbar Bichhad Jayen Kahin Hum Agar
Aur Sooni Si Lage Tumhe Jeevan Ki Yeh Dagar
Hum Laut Aayenge Tum Yoon Hi Bulate Rehna
Kabhi Alwida Na Kehna.....................
Reviewing the RBI Act - A.Seshan
...... A vital matter affecting everyone in the country - the "tolerable inflation rate" - was never discussed in Parliament. When I first made the suggestion for a new RBI Act about 15 years ago, I felt that the late N A Palkhivala would be an ideal chairman for the review committee. The government should find someone of his stature to head the proposed commission.
FSLRC report: Will financial sector really benefit from it? - Dr. Subir Gokarn
........The objective of distributing responsibility for making the monetary policy decision is legitimate. I don’t have any problems with the objective which is to take the onus of the judgement away from one individual and spread it across a structure a formal collective process. How it has to be structured is a question that raises several questions. So, who are these people? Will they be employees of the RBI or employees of the government? What does that mean for their loyalties? Are they independent even though they have contractual arrangements with either RBI or the finance ministry or some other entity? These are the sort of nitty grities that can make or break this arrangement because ultimately, this arrangement depends entirely on the perception of autonomy and independence. If that committee is not perceived to be autonomous or independent, the entire credibility of monetary policy becomes suspect...........
My View on "Govt Sins come back to haunt us"
......The rupee has already depreciated by more than 20 % in the last couple of years and further devaluation if any will only boomerang.Time for RBI and the GOVT to shed their ego and act jointly on a war footing before the situation worsens further...........
My View on "The FSLRC Report is flawed in its approach"
....The very fact that four members have dissented and expressed their own views, is an indication that the recommendations if implemented will not help to bring efficiency and soundness to the financial system which has been well nurtured and made to resist to yield to any temptations unworthy of, by the Reserve Bank and other regulators..........
Freedom for the RBI
.......One way to look at these recommendations — apart from the one on entrusting public debt management and bond auctions, now handled by the RBI, to a separate agency — is that they undermine the idea of an independent central bank. In the context of the recent not-so-veiled differences between the Finance Ministry (which constituted the FSLRC) and the RBI over the issue of rate cuts, it is even quite natural to voice such suspicions. But that amounts to a very mechanical reading and naïve understanding of central bank autonomy.......
Regulators exist only to protect consumers: B N Srikrishna
.....The time frame depends on how the government wants to go about it. We have shown the path forward and the time frame depends on whether the government traverses the path walking, running, by bullock cart or by a Ferrari. That the situation was not hunky dory is seen from the fact that the government thought it fit to appoint a high-powered commission, with such a wide remit.........
RBI against panel proposal to form super-regulator for financial firms
......"At present, the jurisdiction of Reserve Bank extends over critical economic pricing variables like money market interest rates, medium to long-term interest rates and exchange rates. These rates have a bearing on monetary policy function. Since the Commission proposes to continue monetary policy with Reserve Bank, it is necessary that the regulatory jurisdiction over these (G-Sec, Bond and forex) markets continues with Reserve Bank.".......
India’s new monetary politics
...................It is well accepted that the conduct of monetary policy has to be handed to technocrats who take a longer view, rather than politicians with incentives to think for the short term. It is precisely such operational independence that provides a buffer against what economists call the time-inconsistency problem, which in practical terms often means increasing tolerance for inflation in pursuit of growth. Such inflationary bias will be minimized only when there is minimal government leverage over monetary policy................
FSLRC and consumer protection
Consumers are blindsided. You could say the same about FSLRC members
.......My conclusion is that the FSLRC is clueless as to why caveat emptor actually does not work. A dead giveaway is its principle that consumer protection should "promote, and not hamper, innovation". The FSLRC talks glowingly of preserving financial innovation without explaining as to what really defines "innovation" and in whose interest? ........
Do away with special laws for SBI, LIC: FSLRC
.....Besides SBI and LIC, the other financial institutions which are governed by special laws include associate banks of SBI, EXIM Bank, National Housing Bank, NABARD, SIDBI and General Insurance Corporation. "The undertakings of all statutory institutions should be transferred to ordinary companies incorporated under the Companies Act, 1956 and their regulatory treatment should be identical as that applicable to all other financial companies," the FSLRC report said......
RBI asks fin regulators to keep close watch on product design
....."Financial sector regulators/supervisors and consumer protection bodies need to keep a close watch on product design and financial innovation in order to ensure that these are oriented towards consumer needs and expectations," Chakrabarty said recently in an event on Financial Consumer Protection. He said financial service providers should treat their customers fairly to protect them from vulnerabilities.........
Paying for past sins?
......But we must accept that fiscal policy is being forced to be, undesirably, pro-cyclical and is accentuating the slowdown. So let's not blame our woes on "global factors". Even as the Reserve Bank of India (RBI) is being goaded to cut rates to boost growth, fiscal tightness is impinging on that very growth impulse. In an ideal world, one would expect fiscal and monetary policy to be counter-cyclical and pull in the same direction. Instead, they have been horribly out of sync post-Lehman........
1991 reloaded
.....But governors of central banks have to be more circumspect. That is probably why Governor Subbarao spoke very guardedly about the green shoots during his I G Patel Memorial Lecture at London School of Economics. This is what he said: “…There is nothing inevitable about the India growth story. We can accelerate growth and improve welfare only if we effectively implement wide ranging economic and governance reforms. Slipping up on this will amount to a costly and potentially irreversible squandering away of opportunities.”........
Obituary
Shri B.E.Akali (also known as Shri Rohra) passed away on 22nd March 2013 in Mumbai. He was 84 years old. He had worked in several departments of the Bank.
Smt.Shirin Phiroze Sahiyar died on March 29th March 2013 in Mumbai. She was a victim to cancer. She was 75 years old and retired as Steno from the DEAP. She was very popular and leaves a large circle of friends.
- P.P.Ramachandran (via e-mail)
VITAL(INFO) inclusion ...............
Dear Tarambale,
This is to request you to include me in your mailing list for VITALINFO. In fact so long as I was in CAB I was getting it from you and got lot of valuable information. After my retirement it was stopped and I was thinking retired officers are not eligible to get it but very recently I have been informed that you have not prohibited retirees from getting this VITALINFO compiled by you. so I have made this request N HOPE to be included in your mailing list at the earliest.
With regards and thanks
K C Misra
Retd GM, CAB, RBI, Pune
Building BRICS without straw
.......... In a post-crisis world buffeted by financial instability and weak growth in major advanced economies, BRICS have a historic opportunity to enhance their position in global institutions of governance, and to be a stabilising force through demand rebalancing to weather global economic and financial turbulence. The benefits of cooperation are therefore immense for BRICS as well as for the global economy, but the challenges en route are daunting.
Reduced fiscal deficit key to lower lending rate: Montek
.....Seeking to drive home this point to a gathering of industrialists here on Friday, Deputy Chairman of the Planning Commission Montek Singh Ahluwalia said blaming the Reserve Bank of India (RBI) and its interest rate policy was a “slightly over-simplified approach. I am not saying that’s [interest policy] not an important instrument, but availability of medium-term money at reasonable rates cannot be achieved simply by operating on the repo rate in the system. It is actually achieved by reducing the fiscal deficit.”......
Soiled note count nosedives over 5 yrs
......Most banks are supposed to and authorised to accept soiled bank notes in exchange for full value. They are expected to extend this facility even to non-customers, but many banks refuse. “People may be taking better care of the high denomination notes and that could be the reason the number of notes coming for exchange is less,” Roy pointed out. RBI spokesperson Alpana Kilawala, “I won’t be able to comment now on the reason behind the reduction in the number of soiled notes coming for exchange.”
28 fake notes detected
.....Banking sources added that the counterfeit notes were detected after the cash from the branch had recently gone to one of the ‘currency chests,’ functioning as an extended ‘arm’ of RBI. It should be noted that about one-and-a-half years back, counterfeit notes were detected in a similar manner from among the remittances received at SBI branches in the district located at Tirupur-Uthukuli road, Dharapuram, and along West Car Street at Avinashi.........
Cosmos Co-op Bank plans 27 new branches
The Cosmos Co-operative Bank, India’s second biggest in its segment after Mumbai-based Saraswat Co-operative Bank, is planning to open 27 new branches in Maharashtra, Gujarat and Andra Pradesh to increase business, a top official said. “We have received permission from the Reserve Bank of India (RBI) to open 18 new branches and upgrade the existing nine extension counters into new branches,” Krishnakumar Goyal, chairman at Cosmos Co-operative Bank told Financial Chronicle. He said the bank will open 14 new branches in Maharashtra, four in Gujarat and two in Andra Pradesh in this financial year 2013-14. The location for seven more branches will be decided later, he said.............
Banking aspirants line up with clarifications on licence norms
.....The RBI will, however, go by 'fit and proper' criteria, which will include having a past record of sound credentials and integrity and financial soundness with a successful track record of 10 years, while giving licences. Many aspirants are also seeking clarifications on the 'fit and proper' criteria especially on issues that date back to more than a decade........
RBI set to unveil new norms for credit co-ops
.....Credit cooperatives are
not part of the payment system but they operate somewhat like banks,
accepting deposits. These institutions have been regulated by the
registrar for cooperatives. Unlike cooperative banks, they are not part
of the payment system and do not issue their own cheque books. However,
they maintain accounts with commercial banks and draw cheques on behalf
of customers. Recent amendments to the Banking Regulation Act
provide the central bank with more powers over the credit societies. New
guidelines will subject them to know your customer and anti-money
laundering norms similar to banks and also require reporting of
suspicious transactions......
RBI to enforce parity in interest rates for equals
.....RBI insists that banks should treat both new and old customers on par when they decide to reduce interest rates, rather than have promotional offers at reduced rates of interest to attract customers. Though most home loans are on floating interest rates, customers hardly ever get a reduction. Instead, they get their interest rates hiked in response to RBI’s repo rate hike or other policy decisions of the bank.......
RBI signs MoU with Banque De France and ACP
.....The MOU was signed by Mr. Robert Ophele, Deputy Governor, BdF and Chairman of Board of the ACP and by Shri G. Jaganmohan Rao, Chief General Manager-in-Charge, Department of Banking Supervision, on behalf of RBI. The MoU was signed in the presence of Dr. K.C. Chakrabarty, Deputy Governor, and Mrs. LE Lorier, Deputy Governor, BdF. The function was held at College of Agricultural Banking, Pune. The MoU provides a formal, yet legally non-binding, gateway of information between the supervisors. The MoU provides for sharing of information on health of the supervised entities, cooperation between the supervisors during on-site examinations, coordinated efforts during times of crises, frequent meetings between the supervisors, preserving the confidentiality of information shared.......
Read - The Asian Banker
High CAD points at India's waning competitive skill: Gokarn
.........."There is something fundamentally wrong with the competitiveness situation. If the trade gap is close to USD 60 billion, over 12 percent of gross domestic product (GDP), suggesting that we are not able to sell to the rest of the world effectively and we are increasingly dependent on rest of the world for our domestic consumption,"...........
Ministerial row holds up exports sops
.....After the CAD touched 6.7% of the GDP, the Finance Ministry stated that both the RBI and the government would continue to monitor the CAD and would take additional steps whenever warranted. Highly placed sources in the Commerce and Industry Ministry said that despite assurances to take effective steps by way of various sops, including financial incentives, to the labour-intensive exports sectors, the Finance Ministry is yet to take up “serious discussions” on the exact shape the package of sops will take.......
Finmin Seeks More Proactive Role From Non-Official Directors of PSU Banks
........According to the official, the ministry wants these directors to be
familiar with the key operations of the bank, and has said that the
performance of public sector banks should be compared with that of their
peers on matrices such as risk management, non-performing assets (NPAs) and customer acquisition and diversification........
A Smoother Road for Banks or Borrowers?
........ In fact, the RBI’s March 18 notification is a major departure from its earlier stand on infrastructure lending. The RBI in April 2009 said that the rights, licences, authorisation
and the like charged to banks as collateral for projects, including
core sector ones, should not be reckoned as tangible security. So
what changed? With the RBI’s apparently huge concession to the
infrastructure sector becoming a reality now, the question that arises
is who in the corridors succeeded in convincing central bank governor
Duvvuri Subbarao to ease its earlier stringent norms. Despite
being a former Union finance secretary, Subbarao has a reputation of not
coming under pressure from anyone including his ex-boss and finance
minister P Chidambaram. During the reviews of monetary policies, he had
earlier surprised the government when he refused to budge an inch on
lowering of interest rates despite North Block openly appealing the
central bank to be a party on India’s growth story. Who then had
convinced the man on Mint Street?.......
Read - ET
Fraud costs ICICI Prudential Rs 90 lakh, police probe on
......"... We received several complaints from our customers complaining about the phone calls being received from people posing employees of the company and as officials of IRDA (Insurance Regulatory and Development Authority) making various promises inducing them to do certain acts which were prejudicial for the interests of the customers.........
PNB needs to overhaul branch banking model for rural scale-up
......While the Delhi-based public sector lender's deep branch network could give it an edge, it will need to change its traditional branch banking to apprise risks and monitor activity. This will help in operating cost efficiency, India Ratings said in its rating review........
HDFC Bank to charge customers for InstaAlert SMSes
......"Effective April 1, 2013, customers registered for InstaAlerts through 'SMS' will be charged," the bank said in a notification. However, InstaAlerts delivered through Emails would remain free. Customers registered for InstaAlert service with 'SMS' as the delivery channel will be charged Rs 15 per quarter in case of salary or savings accounts, while the charge would be Rs 25 per quarter for Current Account customers...............
Thane Dist Central Co-op bank duped Rs 1.30 crore
...........As the trio failed to pay loan instalments, the bank on March 28 auctioned the gold deposited with it. During the auction, the bank officials of the bank came to know that the gold deposited with them was fake..........
MLAs call for action against 'guilty' officials
......"It is apparent that the financial crisis has been caused by some of the members of the board of directors, but no action has been initiated against them. We want to create pressure on the authorities to take action." Bapat also alleged that the Reserve Bank of India (RBI) on February 23 put the bank under moratorium but between February 21 and 23, Rs 4 crore was withdrawn from the Bank. This act is suspicious and should be investigated thoroughly, he said.......
SBH waives FD pre-closure penalty
...... SBH is also launching a new term deposit scheme from April 1 with a maturity period of seven days to 14 days at 5 per cent interest for single deposit of Rs 25 lakh and above,...
Passing rate cut benefits: Banks face ALM hurdle
The RBI, over the last 12 months, has reduced interest rates by 75 basis points. The transmission of the cut by the banking system, in terms of lowering consumer level rates on loans, has been limited, largely due to the asset-liability mismatches (ALM) building up in the Indian banking system that has restricted the ability of the banks to transmit monetary easing.............
Saturday, March 30, 2013
RBI chief Subbarao to attend IMF conference next month
Financial inclusion likely to be part of banking code: Chakrabarty
‘Use e-court fee instead of stamp papers’
The Madras High Court has suggested to the Registry and all civil courts and Motor Accident Claim Tribunals to follow e-court fee payment system instead of judicial stamp papers. Justice R Sudhakar gave the suggestion while passing orders on a civil suit from United India Insurance Company praying for permission to pay the court fee of `48 lakh in the form of RBI challan instead of filing a big bundle of judicial stamp papers..................
AIRREA stir put off
.........."The proposed strike was deferred after conciliation with the government", said Dilip Kumar Mukherjee, secretary general of the association. AIRRBEA had called a strike on March 30 in support of its six point charter of demands. These included implementation of pension scheme for the rural bank employees at par with their counterparts in nationalized banks, amalgamation of all RRBs in the country and formation of the National Rural Bank (NRB) etc........
Modern central banking
Monetary committee needs to be handled carefully
.............Since the MPC in itself is a good idea as it brings a greater number of experts on board, it is important to ensure the baby doesn’t get thrown out with the bathwater. Ways have to be found to ensure the selection process is more independent and transparent, perhaps the number of persons to be appointed solely by the government can be reduced—let’s not forget regulators like the Chief Election Commissioner who have fixed tenures have tended to do a decent job. The onus of making it work lies with the government.
Read - FE Editorial
My View on "FSLRC report: RBI's authority in question"
No point in doing an MRI of FSLRC report or the dissenting notes. Application of ‘collective wisdom’ is conspicuous by absence in the whole affair. Some vested interests are itching for a truncated central bank with diminished role with no say in the non-bank financial sector, the government securities market and the foreign exchange market. Logically implying that RBI would have no say in the management of the exchange rate and thereby in the forex reserves. Add to this the Commission’s view on government debt management. The Commission opts for a separate Debt Management Office (DMO), totally separated from the RBI, which is the dispensation North Block has been trying to push and RBI has been resisting for valid reasons for a long time now. Our finance ministry and FSLRC, ignore the evolution of the role of Reserve Bank of India and the care with which RBI has nurtured the financial sector concurrently successfully safeguarding GOI interests even in several areas which do not come under traditional central banking functions. When found necessary, at the appropriate time, new institutions were built by RBI in association with GOI to transfer responsibilities which either conflicted with its core functions or became unwieldy or unmanageably heavy. Time is not opportune for dismantling or truncating RBI which is doing creditably well as is being admitted in several international forums. Any regulatory changes should be to consolidate and restate the roles so far evolved and should not be a tool for Finance Ministry or any government department to usurp powers or responsibilities now with statutory regulators.
- M.G.Warrier
FSLRC members dissent about regulatory overreach and controls
| ............“The regulations governing capital controls on inward flows should be framed by the Government, in consultation with the RBI. The regulations governing capital controls on outward flows should be framed by the RBI, in consultation with the Government.”........... |
Read - Moneylife
Is a unified financial regulator a good idea? - YES
The Financial Sector Legislative Reforms Commission (FSLRC) is right in opting for a single or super regulator to replace those in equity, commodities, pensions and insurance sectors. The idea is to move from sectoral regulation to a broader framework of rules and principles...........
Is a unified financial regulator a good idea? - NO
.......Before we address the FSLRC’s suggestions for a regulatory model, it might be useful to ask if we would like to replicate the models followed in the West: the conglomerate financial institution, the “too-big, too correlated too interconnected to fail” enterprise that stymied both the UK and US regulators. If we decide to stay with diversified institutions, “with different ownership, incentives and objectives”, as Joseph Stiglitz put it in his recent lecture at the RBI, then, well-trained multiple regulators could be the best bet.
Debate over rate right
.....the Srikrishna committee has wormed in some insidious elements in its recommendation that should set alarm bells ringing. These elements raise questions about the independence of the RBI going forward, and whether or not monetary policy should be conducted at an arm’s length from the government of the day. Neither the federal open market committee of the Federal Reserve nor the monetary policy committee of the Bank of the England — the policy-framing bodies in the two countries — has a representative of the government sitting in on the deliberations........
The FSLRC Report is flawed in its approach
The best thing to do is to moth-ball it!
What is the prognosis for the report of a 10-member Commission, signed only by seven members, four of who append notes of dissent? Not very bright, perhaps! And when the Commission in question is also headed by retired Justice BN Srikrishna whose reports, he rued in an interview to The Economic Times, are either not acted upon (Mumbai riots) or are selectively acted upon (Sixth pay Commission), the future of the report must necessarily be a bit bleak...........
Read - ET
Sting’ in the air
The 2007-08 nightmare of the US financial system collapse and its universal effect on regulators and the central banks will not go away in a hurry, and the RBI is no exception. That the RBI has put in place a number of riders for permitting more private players in Indian banking is understandable. After all, allowing higher foreign stakes in aviation or retail is different from opening up insurance and banking.The RBI has been averse to private bank conglomerates, as it would need to arm itself with greater insight into their workings, which have spread unease across the globe.
R. Narayanan (HBL)
Government’s sins come back to haunt us!
......The RBI puts it well :’To minimize the possibility of external shocks further disrupting India’s growth sustainability over the next few years it is important to not only focus on financing of CAD but also on compressing CAD to lower more manageable levels..........
Read - ET
ICICI Bank shuts door on ex-employees
That’s when the human resource (HR) dropped the bomb. “There is a change in policy. We are not taking back former employees, at all.” The new policy at the largest private-sector lender in the country, with a muster roll of over 58,000 employees (as of March 2012), would apply across the group; so, the old boys could not even join a sister concern, according to officials. .........
Industrial, commercial hot spots top in credit cards sales: Survey
The usage of plastic money (credit cards, debit cards) is catching up in India as industrial hot-spots and tourism destinations report high rates of card usage, says a survey. According to a survey by Retail Management Solutions provider, Ginesys, besides tier I cities, the usage of plastic money is high in industrial hot-spots and tourism destinations...........
Subscribe to:
Posts (Atom)