........As per official figures released last year, NRKs sent a staggering total of over Rs500 billion (Dh33.6 billion) to banks in Kerala during the 2011-2012 fiscal year. Most of this was from Malayalees employed in the Middle East. The NRK Affairs Ministry in the state has already announced plans for floating development project bonds for NRKs and is reportedly in contact with the Reserve Bank of India to explore the possibilities of opening an exclusive bank for them.......
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.
Saturday, April 13, 2013
All Meghalaya blocks to have banks: Sangma
........"We have taken up the matter with the Ministry of Finance and the Reserve Bank of India and the government had a "robust economic approach" involving effective implementation of developmental programmes through accountability and expansion of resource base,".............
Maharashtra's first all-women post office launched
Mumbai: The state's first Mahila Dak Ghar, a post office entirely operated by women, was inaugurated here on Friday. Located near the collectorate, the Old Customs House, Asiatic Library and the Reserve Bank of India in south Mumbai, the post office will be open from 10 am to 6 pm..........
FSLRC: The cast of 146
There is little experience in India with large complex projects of drafting law. The process adopted by FSLRC had many strengths. In the table below, I have pulled together the names of all 146 persons mentioned in the report..........
RBI penalises JP Morgan Chase for violating risk-managment norms
........The penalty on the bank is for "contraventions of various directions and instructions issued by the Reserve Bank in respect of Risk Management and Inter Bank Dealings and Compliance Functions". These contraventions took place in 2011-2012, it added. "We have noted RBI observations and taken remedial measures," JP Morgan Chase India spokesperson said.........
Indian Economy 2013 – 2014 – Forecast & Predictions
.......The external sector will be pressurized during the year and the challenges faced in FY13 such as rising current account deficit will continue to play in the mind of the government and RBI while formulating policies. However, it is expected that there would be some improvement in the CAD and the continued flows of foreign capital will keep the rupee largely stable – assuming that geo-political tensions do not deteriorate and global economic conditions remain where they are, with the recovery process also being cautious.........
A Holistic Approach to Money Management
........Setting aside the obvious point that bank accounts are among the easiest indicators to track, the policy focus on “banking the unbanked” seems to rest on the premise that bank accounts have a special role in financial inclusion. Three important functions ascribed to bank accounts are: a place to save, a money management hub, and a way to establish an ongoing relationship with a formal financial institution (an “on-ramp” to other services). These assumptions appear to underpin much of financial inclusion thinking and policy............
The lending rate dilemma
....The RBI is mulling over the recommendation made by its nominated committee that the first 7-10 years of a home loan tenure carry a fixed interest rate which later may be reset to the floating rates or the then prevailing rates. This recommendation seems worth considering. Floating rates are quite confusing for the common home loan borrower who invariably pays a higher EMI when the rates increase but does not benefit when the rates subside......
Disappointed India Inc seeks cut in interest rates by RBI
.........PHDCCI President Suman Jyoti Khaitan pitched for 100 basis points (1 percent) cut in short-term interest rate by the RBI in its forthcoming credit policy, saying such a step was necessary to improve investor sentiments and promote growth. "Tight monetary stance by RBI has impacted investment sentiments in the economy and inflation still remains in an uncomfortable growth trajectory," ........
Agriculture is a contrasting picture of stagnation and change induced by consumption: report
RBI Governor D Subbarao recently talked of changing consumption pattern in rural areas towards protein diet which has led to higher inflation in these items. In a different context, a CII-Mckinsey report also pointed towards this trend. The third Food and Agriculture Integrated Development Action Report titled: ‘India as an agriculture and high value food powerhouse: A new vision for 2030, prepared jointly by CII and McKinsey and Company, said the story of Indian agriculture in the last more than a decade or so has been changing gears to some extent with a significant alteration in consumption patterns skewed towards high-value food items prompting higher production of these crops and rise in output per agriculture worker...........
Solan, Kullu to be covered under DBT scheme from July
......He expressed satisfaction that the banks in the State had surpassed five National parameters out of six stipulated by Reserve Bank of India and during the year 2012-13, made fresh disbursement to the tune of Rs 6,260 crore to 3.34 lakh new beneficiaries, achieving 93 per cent of target up to December, 2012.......
Gujarat, the gateway to India: fact or farce?
...........Nothwithstanding the government claims, it is an open fact that Gujarat’s FDI numbers have always been the same or lower through the years. Reserve Bank of India’s FDI figures encompassing the decade of 2000 to 2011 reveal that while Gujarat received just about $7.2 billion in FDI, Maharashtra got $45.8 billion and Delhi over $26 billion. Even Karnataka and Tamil Nadu, with a $8.3 billion and $7.3 billion share, got a larger piece of the national FDI pie............
Punching in card PIN can help prevent fraud
.............Although bankers said keying in the PIN would provide additional safety, consumer acceptance would be a critical factor in determining its success. "In many smaller establishments, the consumer may be standing next to or in front of the shopkeeper while keying in the PIN and instead of being a security enhancer, it could actually end up being a hazard," said a banker.
Startup Village incubatee Payd offers low-cost payment system for SMEs
..........In other words, unlike existing payment services, you don’t have to pay a hefty fee for installation. Registration is completely free and businesses can sign up online and immediately start accepting payments, according to Nambiar. The product is currently in beta and awaiting RBI approval. “We will launch a pilot with a few select brands in a few cities as soon as we receive RBI approval,” said Nambiar..................
Friday, April 12, 2013
Inflation-indexed bonds likely in a month: RBI
Inflation indexed bonds: Will it find buyers?
........Inflation index bonds will be linked to the wholesale price index (WPI) and indexation will happen every six months. The maturity period is likely to be in the range of 7-15 years.
But, the calculation of coupons needs to be simple to understand and transparent for it to get more retail participation. Also, the distribution mechanism would play a crucial role...........
Cobrapost expose: RBI mulls action against erring banks
Reserve Bank Deputy Governor H R Khan on Thursday said the central bank is initiating action against ICICI Bank, HDFC Bank and Axis Bank in connection with allegations of money laundering by Cobrapost. “Actions are on the way. Scrutiny has been done, actions are being taken both in respect of systemic level and at the individual banks,” he said when asked if RBI has completed investigations on Cobrapost exposes. “I will not be able to tell you the details but actions are being taken. Actions are being initiated both at the system level and the individual bank level,” he said on the sidelines of an event organised by National Housing Bank in New Delhi.............
Bank Licences: RBI should make financial inclusion an opportunity not an obligation - Janmejaya Sinha
 |
| ..........The RBI should allow the recipients of new licences time to comply with the guidelines as it did to the earlier recipients of bank licences. About 18 months after starting operations should be a fair period for such compliance. Overall, I believe the guidelines deserve our praise.......... |
Banks looted to finance terrorism: Security expert
...Based on the concept of crypto currency, Bit coin is an internet-based alternative currency which uses electronic signatures and was developed in 2009. Sivanandhan, who is the Security Adviser for the Central Security Cell of the Reserve Bank of India, said that unfortunately investment in security was still considered a redundant expenditure by banks and financial institutions. He added that banking surveillance was yet to leverage the possibilities of video analytics............
My View on Updation on "Pension Updation............."
The news is welcome. But pensioners and their associations have to be on guard. The Mandarins of the Ministry of Finance (MoF) may yet launch a rearguard battle to dilute the benefits by making the updating of pensions prospective, i.e., from 2012 for which the revision of pay scales is due, rather than retrospective. If the principle is approved, logically the retired staff are entitled to arrears in relation to the past revisions of pensions. Secondly, the RBI should pay interest on the arrears at the Bank Rate. These issues may be taken up, if required, after the approval of the proposal is officially announced and the Bank issues a circular to implement it. Raising them at this stage may only help the MoF to delay the final decision. Unlike on the last occasion legal action may be taken early if the two points are not conceded. Augmenting the “Fighting Fund” with contributions from the pensioners should not be difficult.
- A. Seshan
No doubt this is a good news. We had Rs 7184 crore in Superannuation Fund as on 30 June 2012.Keeping in view the demographic and financial structure of RBI pensioners,if we compute an annual pension of Rs 2 lakh (which is on the higher side) for 10,000 pensioners, the entire expenditure would be Rs 200 crore p.a; whereas the yield on our Superannuation Fund @ GOI Bonds would be Rs 560 crore.Even a minuscule interest component would be sufficient to cover the cost of Pension Updation. Then why should we approach GOI as a SUPPLICANT and give them a written assurance that the cost would be met by our own internal earmarked funds when their legit and otherwise expenditure play havoc with the finances of our country i.e. result in drastic increase in fiscal deficit leading to depreciation in Re, inflation, increase in interest rates etc.Anything which impacts exchange rate, interest rate,inflation, money supply i.e. variables of monetary policy, it is they who should get clearance from us. Seventh Pay Commission announcement would be done by the year end. Prior RBI approval should be obtained for this. Another question, why Pension should be restricted to 50% of last pay. Why can't we be flexible and fix the same at 70%,80% or 100% of last pay when Fifth Pay Commission has opined that RBI can give pension updation depending on its financial strength.We are not a burden on our country in a way Central Bureaucracy is. This type of issues which concern handful of RBI employees where no external financial impact is there, should best be left to RBI.
- Sitendra Kumar
When RBI is mandated to manage the monetary policy and to ensure the onerous task of maintaining the value of the Rupee and in effect to try and achieve 'Growth with Stability', is this glorious institution not capable enough to find solution on its own to a less important problem like 'Updation of Pension' of Retired Employees. I feel wiser counsels should prevail and the GOI should leave the issue to RBI Management to suitably solve the issue without raising unnecessary spoke in the wheel.
- Srinivasan, Cochin
Economy is not the villain
.....Looking at the above reasons, it would appear that nothing but ‘economic malfunctioning’ led to higher NPAs. There is little to say on system identification of NPAs. All the other four factors are ‘economic’ factors. So, how valid is the ‘economy downturn’ hypothesis? The RBI Report on Trend and Progress of Banking in India, 2011-12 blamed “the slowdown prevailing in the domestic economy” as the prime cause for increase in NPAs (paragraph 4.29). In general, there are two broad reasons for any economic occurrence: (a) endogenous and (b) exogenous. While endogenous factors are controllable, exogenous ones are not. By holding the economy responsible for higher NPAs, bankers are evading responsibility for the ‘controllable’ (or exogenous) factors. However, there are ways to deal with exogenous factors........
Many slots empty, PSU banks told to ease promotions
..........RBI data shows there are about 4 lakh officers in the 29 PSU banks as on March 31, 2011. Nearly 20 per cent of them are expected to retire by 2015 while the pace of recruitment is far lower. The new rules circulated to banks by the finance ministry say they can lower the minimum experience required for a scale by three months and also relax the minimum marks in the annual performance appraisals..........
Chidambaram to sell India story in Canada, US next week
.....The Minister is likely to spell out steps taken by the government to streamline FII investment in the debt market. Sources said Chidambaram, accompanied by senior Finance Ministry officials and RBI Deputy Governor Urjit Patel, would also seek investments into various sectors, mainly infrastructure for which the government has pegged expenditure at nearly $1 trillion during the 12th Plan (2012-17)........
Bank outlook bleak
.....To be sure, the figures above are a broad brush summary. Private banks, as has been seen in the past several quarters, are likely to post earnings growth of 20% or more. Still, the economic environment being depressed as it is, banks would have depended on factors such as trading gains to shore up their profit........
Reserve Bank of India calls for FDI amendments to stop clandestine flow of cash to tobacco firms
..............RBI in a letter sent to the finance ministry has highlighted the fact that there is a need to check "circumvention of FDI norms by international tobacco companies and their conduits", sources said. The central bank has recommended that the government should incorporate a specific clause to plug this loophole. RBI has cited the example of the lottery business, in which the government has banned FDI and also introduced a specific clause pertaining to marketing as well...........
NABARD - Request for Enhancement/Revision of facilities to Officers at par with that of officers in RBI
Please refer to various provisos of NABARD Act, 1982 and NABARD Staff Rules, 1982 on the captioned subject matter. In terms of the provisos under reference, the practice in vogue since the inception of NABARD and as per the agreed upon and settlement of the issue under reference, we request the improvement/enhancement/revision of the following facilities to Officers of NABARD- .......
Read...........
Read...........
Cooperative societies to promote self-help groups
.....A senior official in NABARD said that only good working/well functioning credit societies in the district would be involved as SHPIs. The designated SHPIs will be given ‘promotional grant assistances’ by NABARD for each of the self help groups that were credit linked with it. “These grants are going to be profits for the societies,” NABARD sources said.......
Nabard starts direct credit line to coop banks
......As on March 31, 2013, five DCCBs have been sanctioned a direct credit line of Rs 181 crore by Nabard. "This is the first time that we have started such a credit line to DCCBs in Uttarakhand," said state Nabard chief general manager, S Selvaraj. Under the programme, Rs 22 crore has been released to the DCCBs of Nainital, Pauri and Udham Singh Nagar......
Kapol Cooperative Bank Files Complaint With Cyber Cell Of Crime Branch
........And the latest victim to this malicious attack is the Kapol Cooperative Bank. Since yesterday morning wild rumours stating that “”RBI cancelled licences of Kapol Bank if any body have money please take it as soon as possible. Please inform if anyone has the account in the bank”…” “Kapol Bank Marve Branch ma bahu moti line lagi che there is a rumour in mkt ke bank uthi gai che plz withdraw a money in Kapol Bank any branch plz passed on message on u r friend relative etc” As the rumour spread like wildfire, worried customers rushed to make inquiries. However, the 75 year old bank which stands on solid financial ground with total business about Rs 1800 cores has refuted any shortcomings and has lodged a complaint with the Cyber Cell of the Mumbai Police..........
Mobile banking transactions double, payments rise threefold
.......ICICI Bank, which has the largest share in mobile banking payments, makes periodic offers to its customers to encourage them in using its mobile banking services. The bank has partnered several service providers to offer its customers discounts on their products and services. It has also tied up with different billers to allow its customers in making utility bill payments........
Cheating case against Ingen
................According to complainant Dr M K Mohammed Basheer, Van Ingen entered into an agreement to sell the entire Katikulam and Alathur estates in Wayanad that comprises 246 acres of coffee estate in 2004, for which he had even taken permission from the Reserve Bank of India (RBI). RBI permission is mandatory for selling immovable property owned in India by foreign nationals...........
Meeting Basel-III norms may affect infra funding, says ICRA
As banks move to meet their capital requirements for the Basel-III norms, they might be left with less money to fund infrastructure expansion in the country, according to a study by credit ratings agency ICRA. Therefore, infrastructure-based non-banking financial companies (NBFCs) might fill in the spots that banks vacate......
Lines of foreign control
.....What the new RBI norms would do, subject to approval from the Cabinet Committee on Economic Affairs, is to define control as the right to appoint a majority of directors on board or to control management and policy decisions, issues that companies typically spell out in their articles of association anyway. That is how, for instance, the Tata group was able to retain management control of what was then called Tisco even though several Birla firms collectively owned a larger stake in it than the Tatas through the eighties. The draft norms, however, would go some way towards clearing up a critical issue,......
Arms Length Pricing – RBI Approvals are deemed irrelevant
.........The RBI is only concerned with the foreign exchange and, therefore, would look into the matter from that point of view. The RBI, at the time of giving such permission would not keep in mind the provisions of the I T Act and that is the function of the income tax authorities ................
PSU banks fret as MF debt assets outpace fixed deposits
........Worried by this development, some bankers of state-run banks have met finance ministry and Reserve Bank of India officials, expressing their concerns over the growing debt asset size of mutual funds, said a person close to the industry who didn't want to be identified. .........
Banks, mutual funds earn abnormally high returns in money markets by breaching RBI rules
.....The trades have taken place as India considers forming a unified regulatory authority that would assume oversight of trading in currency, bond and derivatives markets from the central bank. The proposal does not address regulation of money markets, which is handled by the RBI. It was unclear whether the RBI is aware of the practices. A spokeswoman for the central bank declined to comment after being provided detailed verbal and emailed queries from Reuters...........
The capital inflow problem revisited
..............Corporate debt, which serves as a signal of easy credit policy, is already at alarming levels in many of Asia’s vibrant economies. In the case of China, Hong Kong, Singapore and Taiwan, such borrowing is already over the gross domestic products of their respective nations. India’s corporate debt levels look much more manageable at about half the country’s GDP, something that might be attributed to the Reserve Bank of India’s relatively conservative stance since 2008.............
Sahara victimised for years, but won't give up: Subrata Roy
Subrata Roy, the chief of the Sahara conglomerate, one of India's biggest corporate groups, has said he feels victimised by a chain-reaction of events that began with a political vendetta, followed by regulatory clampdowns by the Reserve Bank of India (RBI) and market regulator Securities and Exchange Board of India (SEBI)............
NHB to seek RBI nod for $ 200 m ECB this fiscal
National Housing Bank (NHB) will soon seek RBI nod to allow the housing finance regulator to raise $ 200 million external commercial borrowing (ECB) under the ‘affordable housing’ window this fiscal. Although NHB had last fiscal received RBI nod for the ECB mop-up, it could not go ahead with the transaction as the approval came in the later part of last fiscal........
KSIDC partners with Islamic fund
......RBI Governor D. Subbarao, during his recent visit to the city to declare Ernakulam as a fully banked district, had responded to the issue, stating that the Banking Regulation Act did not permit Islamic banking in the country. He had also said that alternative modes were available for raising funds. While the RBI is understood to have retained its position so far, the KSIDC has chosen an alternative route to join hands with the Islamic fund managers.......
Manippady demands resignation of Union Minister Rahman Khan over bank scam
.........After investigations pointed out to Mr. Khan’s complicity and that neither the Union Finance Ministry nor the Reserve Bank of India initiated action against him, the Minorities Commission had raised the issue with the Karnataka Lokayukta in December 2012 but there has been no progress since.
Thursday, April 11, 2013
The quest for an optimal central bank
 |
| A monetary policy committee that issues binding recommendations will erode RBI’s independence |
.............In our quest for designing an optimal central bank, we, therefore, need to ask whether we would like RBI to be another division in the central government subject to all possible interventions, or we would like it to be closer to other constitutional bodies such as the Election Commission of India or the higher judiciary that tend to work under the guidelines of the Constitution and not necessarily those of an incumbent government. A possible solution is to design a framework in which RBI will work under explicitly-stated medium- to longer-term economic objectives that are amenable to changes by Parliament and not by the government of the day.
New banking licences may give rise to crony capitalism, say MPs
.........The members wanted to know how the RBI proposes to prevent diversion of funds by industrial houses owning banks to their own companies and prevent crony capitalism, citing example of coal and telecom sectors. Some members cautioned the RBI against adopting auction route for grant of bank licences, arguing that it could encourage industrial houses with doubtful credentials to obtain licence.......
Licence to bank
............Given the state of financial inclusion in the country, there surely is more scope for newer entrants into banking; they should be given the opportunity as long as they satisfy entry criteria and the business is run on prudential norms. It is high time the RBI is allowed to complete the process of scrutinising applications and issue licences without further ado.
The Financial Sector Legislative Reforms Commission: Financial Liberalisation, Law and Market Architecture
......Still, the Commission’s report will not be without controversy. Perhaps the most significant effect of the FSLRC’s recommendations, if implemented in toto, would be to limit the role of the central bank. The RBI has been both lauded and pilloried for taking a cautious approach to financial liberalization. The FSLRC would create a separate agency responsible for managing public debt, removing these functions from the RBI. The FSLRC would also hand control over critical policy matters such as the objectives of monetary policy and the administration of at least inbound capital flows to the political branch of Government, the Central Government. Indian economic policy has been characterized by a high-pitched, if largely internal to the system, turf warfare between the Central Government, specifically the Ministry of Finance, and the RBI, over the pace of financial liberalization..............
Where do we go.. if failure to Reform the Regulators themselves.. ?
Swedish Magnus Lind, an internationally reputed scholar & closely connected
with me- in international fora-, is the Chair & Founder of the Global
Treasury Peer Network as also the central banking policy expert. A great &
credible commentator, who writes as under :
"
Evidence worldwide shows that catastrophes like the collapse of Lehman
Brothers, the explosion of the Deepwater Horizon oil rig in the Gulf
of Mexico, the meltdowns at the Fukushima Daiichi nuclear plant in Japan, and
the fatal grounding of the cruise ship Costa Concordia in Italy come
not from a lack of laws and regulations, but from deliberate non-enforcement of
the laws and regulations that already exist. Parties that are deemed
“too big to fail” (or “too big to jail”) feel free to continue with illegal
practices up until the point that a disaster occurs. The root cause the
regulators’ nonfeasance is clearly “regulatory capture”: the regulators are
protecting the industry instead of policing it. The response to this
by lawmakers has been not to fire or jail inefficient regulators, but to add
new and more onerous regulations.
Other
examples include the ECB being managed by governors having had the bank
supervisory responsibilities in the home countries at time of the crisis and
now they are supposed to become the bank supervisor of the whole of the EU.
What ensures they will succeed this time? Yet another example is the
constant meat scandals, beef lasagne contains horse meat instead. Why did all
the food supervisors not discover it a long time ago? Since many more examples
of meet fraud have surfaced. It’s quite clear that supervisors were sleeping
on the post.
Does
hiring more regulators and supervisors really add any value? How come they are
not being scrutinized for their failures? Maybe it’s because they are civil
servants and don’t have any personal responsibility? Political governance
does not at all reach the same standards as corporate governance. Far from.
Effectively any political administration can bankrupt any country and live
happily ever after. There is no transparency where the tax payers’ money is
spent. There is no percussion for financial crime in the political
world. Genocide is the only thing an administration should avoid. That may
lead to a conviction in The Hague. But impoverish a whole nation and putting
the global financial system at risk is ok. The Basel framework encourages
speculation in sovereign risk! We should acknowledge the largest financial
crashes are caused by political failure. But, the Govts. & Regulators are keen to spread the notion that politics is
low risk. "
Although
my colleague, Magnus Lind has been forthright and highly critical of Law
Enforcement agencies and Regulators of mainly G 7, the more Advanced Nations, I
do believe that the quality and role
definitions as also the performances of Law Enforcement Agencies and Regulatory
Bodies in all other geo-political jurisdictions, should not be measured with
the same set of yardsticks and parameters but aligned suitably to meet with domestic
ground realities. However, none of them can escape their mandated
responsibilities.. !!
In
this context, we do come across in our country, Bharat, time and again in
periodic succession disturbing instances of failure to detect, arrest or
prevent some major scams- economic or pure financial crimes due to lack of
oversight by the Govt machinery and or Regulators concerned. In majority of
frauds and scams of mind-boggling proportions, they are assigned and labelled
conveniently 'Systemic'. Frequent occurrences cannot go under the umbrage as
purely systemic ones. Then, what name one would categorise & assign to rare
earthquakes, flash floods, tsunamis, inter-galactical flares (solar ones are
common & routine..!), 9/11, 26/11 terrorist attacks, etc. Super-systemic..
? We will be fooling ourselves but end up in ceaseless miseries. We are already
in. not out of such disaters.
TRAI
failed .. 2G surfaced, Let us leave out the past ones like Harshad Mehtha
centered scam. or many other similar ones. Recent cases of MF sector crisis,
Drought relief and loan waiver scam, KYC related huge 'cash depositing’ scam
are not to be swept under the carpet easily. Compliance and internal control
failures were wide spread and not to be treated as a summer temporary skin
eruption in a finger. Such trends have been rampant, given the nature of Indian
polity, loose morals followed by a large segment of the society and tax
evaders. I dont slap my criticism on just present day rulers or regulators. All
those involved in the past two to three decades and all governing political
parties in the Centre or in the States as also Regulatory failures have to be
reckoned on this score. I agree that the Regulators in India, especially RBI,
and to a lesser extent, SEBI or infant IRDA (who have little or insignificant
presence) have acquitted themselves with great aplomb and accomplishments and especially
in the recent past, despite the onslaught of global crisis. The crisis, which
broke out in US financial sector, took multi-dimensions, has battered and
ruined many other jurisdictions beyond repairs since 2007. In all fairness, G 7
nations are the cause for global ruins. Regulatory nexus or failures are
empirically established and codified now. They are in the public domain.
RBI
singularly has come in for unbiased praise and is 'talked about' or cited as
the merited example. Globally, wherever I visited and participated in
international conferences, and other meets or as part of business promotion or
academic related visits, good words of praise coming from the region's highest
quarters, were ringing as sweet melody to my ears as Ex-RBI man. But, I do hear
not comforting feedback from the captains of industry & commerce or the
unwary common public at large across the length and the breadth of this
sprawling nation that, despite technological advances and modernisation of
Indian banking, customer service is far from satisfactory in many respects.
They do say, RBI is sitting in the ivory tower and their supervisory
oversight is 'Global' at just Macro levels and totally out-dated. They neither
have the time, machinery or resources to look into nano events at retail
ordinary customer points. RBI has steadily over the decades, withdrawn itself
from micro inspections but graduated to Inspection more of very large branches
and corporate Office. Ordinary common public have nothing to do with large
branches and corporate office.
RBI
inspection reports still seem to reflect the much abused phrase, " leave much
scope for improvement", whatever worth it has, when taken to the
Members of the Supervisory Board. Frankly speaking, the eyes and ears of RBI
have to be sharply fine-tuned. CAMELS and GOATS are good carriage medium but modern
'Risky' environs under globalisation and the instant impacts of technologically
& digitally connected coupling and decoupling of Markets beset with
dangerous covert weaknesses, call for radical and more innovative departures.
Training
of human resources 'leaves great scope for improvement'. Routine pep up inputs
are just not enough to face massive tsunami like disasters. RBi needs to relook
inwardly at the highest levels on its oversight functions. Regulations are not
enough. Compliance and in right spirits in banks, are required to be dug out carefully
with eagle’s eyes. One major area of concern, Corporate Governance, especially
in private sector banks, which is highly opaque but critically talked about
within well-informed circles, has not been seemingly 'adequately addressed'.
Red signals are visible and aired in the public media and by whistle-blowers.
External interference apart and the lacking sharp supervisory tools
as also the right fearless attitudes to swift cheese from the chalk, appear to
be the hurdles to detect 'conflict of interest and nexus' syndromes. The tip of
the iceburg is visible but collapse may not be far off, if stringent steps in
supervisory frameworks are not addressed with focus & attention required
thereof.
Everyone knows the squares, angles, corners and invisible needles,.. !!
Camels
& Goats are also fodders for gullible & crooks..
chameaux
et les chèvres sont fourrage pour les crédules
I
have activated the sirens.. Is any one in the right quarters listening..
May be, but
the train has to be sighted.. Sometimes will..
With
Love, only Love and Love ever
German
‘Prof.Subramanian, the Global Consultant’ Subbu
Retd. RBI Senior Executive - (+91 9845809857)
FSLRC recommendations on RBI: Stop, look and proceed ! - M.G.Warrier
...............Perhaps, the purpose would be served better, if the RBI is allowed to function with its present mandates, a coordination committee sorts out issues among the remaining regulators and if the government’s aim is to reduce the number of regulators, merge with RBI, and the agencies outside RBI one by one, as work stabilizes. The twin goals of one Unified Financial Agency and managing the man-power-related issued mentioned here would be better achieved this way............
Banking sector challenged by ‘new abnormal’
.....Why, despite times being far worse than 2008-09, is the RBI least inclined to grant concessions on draconian measures such as restructuring guidelines, non-banking financial company (NBFC) capital requirements, securitization rules and the Basel III global banking norms requirements? The subtext, not explicitly articulated, is that it realizes that waiting for the cycle to turn will be futile, and the system better learn to strengthen itself regardless of prevailing circumstances................
RBI nod may be must for NBFCs takeover
The takeover of shell non-banking finance companies (NBFCs) will have to pass through a new and high obstacle as the Reserve Bank of India moves to implement a plan to empower itself to approve the acquisition and transfer of licence of such companies to new buyers. The plan follows allegations of misuse of licence by the acquirers and flipping of licences by many defunct NBFCs...........
FinMin sub-committee to discuss inflation-linked bond
...“The meeting will discuss, among other things, the inflation indexed bonds with a view to give investors option to hedge their investments against inflation,” a Finance Ministry official said. At the meeting of the FSDC sub-committee the views of other sector regulators would also be taken into account for formulating the inflation indexed bonds, which was proposed in 2013-14 Budget...........
Two con artists arrested
..........."The culprits convinced Sankaraiah to deposit Rs 42 lakhs and even executed a bond and issued post-dated cheques to the tune of Rs 3 crore. Once, they even took him to Delhi on the pretext of depositing the amount in RBI to get foreign funds,'' .................
Does your credit card have extra safety features?
........Banks should also move towards real-time fraud monitoring system at the earliest, the RBI circular said. Nayak says that Visa already has such a system in place, but that has not yet been used by many banks here. “This is a risk management facility that has real-time fraud monitoring. We have data of customers and their spending habits. With this we would be able to detect fraud.” It may work better if banks also implement the other safety features that RBI has mandated, such as dynamic PIN, having real-time fraud monitoring systems in place and allowing customers to block their cards via SMS.
It’s too soon to celebrate a ‘turnaround’ in the economy
...........It’s true, of course, in a broad sense that the economy is close to bottoming out, and the consensus view is that a mild recovery could take effect from the June quarter. The RBI appears to be taking its foot off the brake pedal, instilling hopes that the interest rate environment will turn a bit more benign. And with Finance Minister P Chidambaram’s smoke-and-mirrors budget momentarily lifting the cloud of a sovereign rating downgrade, portfolio inflows have kept pace in sufficient quantities to finance the extraordinarily high current account deficit. And, yet, the very real prospects of a misdiagnosis of the underlying ailment – and a blase complacence that is never far from the surface – put this economic recovery at risk..........
Read........
Dr.Tapan Kumar Pradhan - A relentless crusader
.........Dr Pradhan has been a relentless crusader for bringing transparency in public institutions. By the innovative use of the Right to Information he has exposed gross irregularities in public affairs. In 2009, he made a petition to the Central Information Commission of India to bring about transparency in the Performance Appraisal System in RBI. Dr Pradhan was the first person in RBI and the second public sector employee overall in India to obtain his PAR report through RTI Act. Following his petition, Reserve Bank of India was forced to disclose the PAR reports to all employees. In the words of Smt Usha Thorat, the ex-Deputy Governor of RBI, Dr Pradhan makes "creative use of the RTI Act to redress individual grievances". Dr Pradhan has also used the RTI Act to expose massive irregularities in the Indian Railways, Central Board of Direct Taxes, Air India and the urban development authorities in Indian cities..................
Co-operative societies now come under RTI Act
....Cooperative societies normally include co-operative banks, credit societies, sugar factories, handloom-power loom factories, distilleries, milk producing societies, water supply societies and so on. Henceforth, all such institutions will have to appoint Public Information Officers, Appellate Authorities and comply with all the provisions of the RTI Act. This is the most revolutionary event in the history of our country in the recent past..........
Take note, ATMs that can spot a fake are now here
Automatic teller machines, or ATMs, that can tell fake from real are here. Manufactures such as NCR Corporation and Diebold Systems are helping banks roll out new machines that not only deposit and dispense cash but can also detect counterfeit notes. State Bank of India, ICICI Bank and Axis Bank have already started installing these ATMs, also known as cash recycling machines. At present, these are being used as cash-deposit machines in which a customer can drop loose cash.....
Talking ATM to open in Bhubaneswar today
........On Friday, Sarkar along with RBI's Deputy Governor H R Khan is scheduled to inaugurate a regional office of the bank in Sambalpur. "After the inauguration, Sarkar will join Khan in a meeting of local bank heads and customers on Electronic Banking Awareness Training Programme,"......
RBI may extend licence period of firms authorised to operate ATMs
.....“We had called the operators to discuss their issues. The RBI may look into their demands for increasing the tenure of their licence,” the RBI official said on the condition of anonymity. Many company representatives have been requesting the RBI to extend the validity of the licences, two sources who were present at the meeting told Business Line. Under the RBI guidelines, the authorisation for setting up a WLA operation would be initially valid for a period of one year.......
FDI, FII rules are fine, but not enforcement
....However, a perusal of the IMF Balance of Payment Manual Version 6 and the RBI’s Balance of Payment Manual 2010 reveals that India adheres to the international best practice while defining both FDI and FII. As the RBI Manual itself points out, “With regard to FDI, while as per the international definition, for an investment to qualify as FDI the foreign investor needs to have a 10 per cent or higher stake in a given company, in India this has not been strictly adhered to.”.....
Nearing a Minsky moment
........Late last year, the Reserve Bank of India Governor gave a speech on the topic of G-20 and India. He argued that “the post-crisis debate on global imbalances has three interrelated facets. The first is the role of exchange rates in global rebalancing... Global rebalancing will require deficit economies to save more and consume less. They (deficit economies) need to depend for growth more on external demand which calls for a real depreciation of their currencies…” He then went on to argue that “export competitiveness…should come from improved productivity rather than an artificially calibrated exchange rate”. Howsoever laudable the objective, the fact is that ............
How India can get onto a 12% sustainable growth trajectory
.....A tiny fraction of this capital found its way into India and created a record setting growth of 9% for four years! This could have easily been 12% or more (as in China) but the Reserve Bank of India chose to curtail growth by raising interest rates to control food prices (a completely uncorrelated event) and thereby destroyed the prevailing positive Capital Asset Pricing Model, creating the current crises........
India sceptics are wrong, growth can return soon
...........This is why I have always argued that India's current woes do not reflect its long-term growth prospects. Instead, they are to be attributed to two short term factors: monetary squeeze by the Reserve Bank of India (RBI) and a virtual blockade of economic activity through wholesale denials of or indefinite delays in government clearances............
‘The economy has begun to turn around’
.....It is food inflation that has not come down. A lot of people say that food inflation is not something that can be tackled by keeping tight monetary policy. My own judgment is that the economy has begun to turn around and we have unutilised growth capacity. The RBI’s earlier view was that if you don’t have fiscal space please don’t rely on monetary policy. Now the dispute is only speed and pace. Some people think there should be more monetary loosening, while others think it should be a more careful process. In my view it’s not the monetary side that is the most crucial........
SEBI has gone beyond SC order, says Sahara Boss Roy
...............Playing a victim, Subrata Roy minced no words in criticizing the market regulator in an exclusive interview to CNBC-TV18 where he claimed that SEBI was making up stories without checking facts. He even went on to say that SEBI had gone beyond Supreme Court's order and was breaking all rules and law.............
Amanath Bank promises restoring transactions, but critics cry foul
... "The board of management has submitted a memorandum to the registrar of Co-operative Societies requesting him to impress upon the RBI in lifting its ban. The registrar have acknowledged the concern of the bank and has also recommended RBI to lift its directions,"...............
Wednesday, April 10, 2013
Fencing in the RBI
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