.........Now, banks stung by bad loans are buying insurance to cover default risk, which should make borrowing costlier for students. The total value of all currently disbursed loans, according to Reserve Bank of India data, is Rs 5,510 crore. In 2011-12, the ratio of bad loans was 4.5 per cent, and according to banking experts, has gone up in 2012-13 by another 100 basis points. That makes it important to ask ourselves should we be treating educational loans as other loans.............
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, May 29, 2013
Singapore NPA norms hit banks
..............Banks such as State Bank of India (SBI), Bank of Baroda (BoB), Bank of India (BoI) and ICICI Bank, who have businesses in Singapore, are the ones affected by this. While banks don’t reveal the exact geographical break-up of their international advances, between 5-10% of the international lending for these banks could come from Singapore operations................
SBI chief may get extension, LIC & UTI await new heads
The ills of public sector banks, SBI included, can be traced to their parentage
.......This is not to hold a blind brief for public sector banks. Admittedly, they are often lethargic and function more like bureaucracies than like commercial ventures. But the very fact that many of the top-rung at new private sector banks cut their teeth in these very same PSBs that are now being condemned should give lie to the naïve belief that the latter are inherently ‘unbankable’ as one business daily scathingly put it............
Talks on for merger of bank with SBI
Tuesday, May 28, 2013
Why isn’t anyone accepting Rs.5 notes in Hyderabad?
.........While the 50ps coin presents a minor problem, the issue of the 5-rupee note is yet to receive clarity. Most businesses do not accept 5-rupee notes, declaring that the “banks don’t take them anymore.” Countering this, officials from the RBI Hyderabad insist that no such move to phase out 5-rupee notes has been undertaken so far. “In the case of phased out notes or coins, you will realise that it is only the coins below 25 paise that have been phased out. The 1-rupee, 2-rupee and 5-rupee as well as the 50ps coins are still legal,” said an official of the RBI..................
RBI not to ban banks from selling gold coins
.............Speaking on the sidelines of a meeting at the College of Agricultural Banking here, Subbarao said that he recognised that the attractiveness of gold was a consequence of high inflation, but pointed out the need to invest in financial savings which is good for the economy........
Don’t leave banking to machines - V.K.Sharma, former Executive Director
Are Depositors at the Mercy of Bank IT Systems?
Far too many glitches in banks' IT systems affect consumers adversely. Who checks whether redressal systems exist and operate in a fair and equitable manner? RBI should work at depositors' protection instead of sitting in an ivory tower and producing reports on "disincentivising cheque usage" by penalising depositors.......
Best Practices To Help Banks In India Protect Cardholder Info
In light of cyber attacks getting increasingly targeted against financial institutions and fraudulent card use becoming more frequent in India, the Reserve Bank of India, India’s central bank, has mandated that banks in India put in place additional factor of authentication for all card not present (CNP) transactions, and introduce security measures to safeguard their customers against cyber attacks and misuse of electronic payment systems...........
Doubts on Inflation Index Bonds? RBI’s FAQs out
The Reserve Bank of India’s (RBI) plan to launch Inflation Indexed Bonds (IIBs) is old news and a lot has been written about . However, little was known about the fine points. The RBI has sought to bring some clarity on the scheme by bringing out a set of FAQ, we bring you ten most important fine points, you should know:............
Exchange of Torn Currency
...... RBI’s reach with its presence restricted to just 19 centres is quite limited and commercial banks with their vide network of branches are better positioned to meet the requirements of common persons relating to currency and coins. The rationale behind the proposed move is to better serve the interest of the common person. However, RBI will continue to manage the distribution of bank notes and coins through the currency chests and bank branches.........
Read......
PF set to cover all pay, not just basic
You
may end up saving more in the months ahead with the Employees Provident
Fund Organization getting ready to re-notify a new definition of
“compensation” that will include all your allowances, amid intense
lobbying against the move by industry bodies...............
Read - TOI
Read - TOI
My View on book review - 'Financial Policies'
I
had seen your review early this morning.It is far too
generous.Characteristic of you is to set out things in a manner in
which the reader is tempted to take a look at the book.This is the first
review to appear and I deeply appreciate your taking time to write the
review.
Warm regards,
S.S.Tarapore
Warm regards,
S.S.Tarapore
*********************************************************
Undoubtedly, this is an excellent review. I hold SST in high regard and
used to have lot of interaction with him while he was E D and also D G. I
must buy this book for my personal library as it covers almost the same
period and problems, I have lived in/with. Hearty congratulations!
Love and regards-----------------------------P B Kulkarni
********************************************
Dear Shri Ramachandran:
I read your review of SST's book which I have gone through some
time ago. The review does full justice to the author and to the contents
of the book. As usual you have been objective and to the point.
Congratulations.
Regards,
Vasudevan
****************************************
-- It is an arduous task to review a book containing 64 chapters .The job becomes more difficult when the author is SST who is precise ,clear and forceful.To leave out anything would be a painful decision Within these limitations you have done an excellent job..We must consider ourselves lucky to have known SST a man of great wisdom,courage to present facts without any fear and to crown it all abundant humility. May God give him good health and a long life
-- It is an arduous task to review a book containing 64 chapters .The job becomes more difficult when the author is SST who is precise ,clear and forceful.To leave out anything would be a painful decision Within these limitations you have done an excellent job..We must consider ourselves lucky to have known SST a man of great wisdom,courage to present facts without any fear and to crown it all abundant humility. May God give him good health and a long life
Unni
*********************************************************************
Excellent
review which gives a clear summary of the book which sounds very good. I
would like to read the chapter with reference to Hayek. If possible
please xerox it for me later. Congrats on a superb performance.
Meenakshi Tyagarajan
********************************************************************************
Respected
PPR thank you brilliant review.Dr Tarapore has a brilliant mind he is a
towering colossus an astute statesman a quintessential statesman and is
a fantastic human being he is very generous with time and actually
takes the time to mentor and most by precept -I very greatly admire him
and congratulate you on the review. Warm regards
Deepali Pant Joshi
***************************************************
As Mr
Tarapore has mastery over economic and monetary policies , you have
mastery on reviewing books authored by veteran economists and this
latest review has diligently brought out in a few words what Mr Tarapore
has covered in his books, of course leaving the anxiety for the readers
to have a complete reading of the contents of the book. Excellent
effort and deserves appreciation.
With regards,
Dr.T.V.Gopalakrishnan
With regards,
Dr.T.V.Gopalakrishnan
Cobrapost exposures: What next? - M.G.Warrier
...........On an earlier occasion (Seventh Nurul Matin Memorial Lecture, Bangladesh Institute of Bank Management, Dhaka, 2007) speaking on “Ethics in Banking” Dr Jalan had this to say: “Adherence to the ‘Rule of Law’ in a democratic society is an essential minimum requirement of ethical behaviour” He agreed with Professor Nurul Islam who had observed on the same dais that “…..ethics in banking, economic transactions and in society in general, are all interrelated. The solution needs to cover all related areas, including the systematic political factors.” ...........
Risks in New Banks Licensing -- Dr.T.V.Gopalakrishnan
.........RBI cannot take any regulatory risk damaging its own reputation as happened in the case of GTB in late 1990s.The fit and proper criteria of Directors of GTB was conveniently ignored and the bank had to be finally closed by merging it with OBCLtd in 2004. It is going to be a litmus test for RBI for issue of licenses to Corporates to start banks.............
13 co-op banks turned insolvent last fiscal
As many as 13 cooperative banks failed in 2012-13, resulting in credit insurance company DICGC paying nearly Rs 160 crore to depositors. Among the 13 cooperative banks, which failed to repay deposits to customers, nine are from Maharashtra, two from Gujarat and one each from Andhra Pradesh and Odisha............
Reserve Bank Cancels the Licence of Arjun Urban Co-operative Bank Ltd., Solapur, (Maharashtra)
......Therefore, RBI took the extreme measure of cancelling the licence of the bank in the interest of bank's depositors. With the cancellation of licence and commencement of liquidation proceedings, the process of paying the depositors of the Arjun Urban Co-operative Bank Ltd, Solapur, (Maharashtra)) the amount insured as per the DICGC Act, will be set in motion subject to the terms and conditions of the Deposit Insurance Scheme. Consequent to the cancellation of its licence, Arjun Urban Co-operative Bank Ltd., Solapur, (Maharashtra) is prohibited from carrying on ‘banking business’ as defined in section 5(b) of the Act........
BofA-ML expects RBI to cut rates in June
...."We think that the RBI cannot afford to wait much longer as the primary liquidity injected today will drive deposit growth six months later,..............
ICICI bid to stretch Kamath stint
ICICI Bank intends to ask the Reserve Bank of India to relax its 70-year age limit for bank chairmen in order to give Kundapur Vaman Kamath the opportunity to stay on as chairman of the country’s second largest commercial bank until 2019.........
Fresh row in bank CMD appointments
Fresh
controversy has broken out over appointments of new bank chiefs after
the finance ministry changed an earlier proposal for appointments of at
least half-a-dozen chairmen of public sector lenders. At the
centre of the row is the change in the appointment policy for IDBI Bank
CMD, where the ministry had decided against moving an existing bank
chief to the Mumbai-based bank........
Read - TOI
Read - TOI
An Analysis Of Financial Sector Reforms
.....India has been a witness to a sea change in the way banking has been done in the past more than two decades. Since 1991, the Reserve Bank of India (RBI) took steps to reform the Indian banking system at a measured pace so that growth could be achieved without exposure to any systemic risks. Some of these initiatives were deregulation of interest rates, dilution of the government stake in public sector banks (PSBs), guidelines being issued for risk management, asset classification, and provisioning. Technology has made tremendous impact in banking.................
Central bank may switch to reverse repo if rains are normal
..........The RBI governor D. Subbarao has pointed out in his recent analyst conference call that “at the moment you recognize that we are still maintaining an anti-inflation stance. And as we have indicated, inflation threat is still very much there. There are a number of upside risk factors that could potentially come into play, so the expectation should be that liquidity will be in deficit for the next few months at least. How much (inflation moderation) is an open question. How much it comes down and whether we assess that decline in inflation to be pure sustained and durable, it will depend on that judgement”.............
Gold’s journey in the last two decades…
The last 20 years have been spectacular for gold. From the world economic crisis to increasing investment demand and tight supplies, there were many reasons for the yellow metal’s glitter. If you had invested in gold in 1993, you would be sitting on a fortune now with the metal’s price having risen 400 per cent. ...........
Banks cry foul as gold importers raise premium
..............“With banks almost stopping import of gold, there is a huge demand-supply mismatch, which has pushed up the premium. The objective of RBI, which was to discourage gold import, is not met,” ...............
Indian Central Bank Kills "Trillion Rupee Gold Coin" Idea, Enforces More Gold Controls
.........Ironically, without imposing specific dimensional limitations, there was the risk that India may boldly go where only a bunch of financially illiterate, click-baiting media dilettantes, desperate to pitch the idiotic idea of a “trillion dollar coin” made out of platinum to bypass the debt ceiling limit (at least until the Treasury was forced to firmly crush this nonsense with a just as idiotic public statement), and arbitrage RBI directive loophole to create a massive coin, against which banks would subsequently lend out cash............
Read..............
RBI imposes restrictions on bank loans against gold
"...it is advised that while granting advance against the security of specially minted gold coins sold by them, banks should ensure that the weight of the coin does not exceed 50 grams per customer,"..............
SEBI reform can aid crackdown on Ponzi pedlars
...............Another problem is the grey area between ' deposit' and ' investment'. Many companies are promoting both deposit and investment activities. This leads to dual surveillance, both by the RBI and SEBI- or none at all. Both can shift the responsibility on the other. It is necessary for the two regulators to coordinate their surveillance activities. Perhaps the powers of the RBI may be delegated to SEBI, where the primary activity of a company is investment; and powers of SEBI may be delegated to the RBI, where the primary activity of a company is deposit. It is time that the finance and corporate affairs ministries clear up the ' no man's land' between the two regulators.
Vijaya Bank to open Aadhaar enrolment counters
.......Ultra-small branches (USBs), an initiative to bring banking services to rural areas, has been a success with many in the district availing themselves of benefits of USBs under Vijaya Bank’s financial inclusion project, assistant general manager of National Bank for Agricultural and Rural Development Bindumadhava Vadavi said. The Direct Cash Transfer scheme will be introduced in the district shortly, R. Balakrishna, Assistant General Manager, Reserve Bank of India, said.........
Merger of Banks in India: SBI and SBT on Verse, PSU Banks on way
........With the Union government gunning for two or three world-size banks in India, the merger of Kerala-based State Bank of Travancore with the State Bank of India is an eagerly awaited development in banking circles. While bosses in the two banks don’t deny the prospect of a merger, its timing remains a million dollar question. There are developments, which when strung together, cement the belief that merger could happen during this financial year..............
Sebi: Hits, misses and the road ahead
.......It requires an unblinkered assessment of Sebi’s history to understand why Sebi has failed to stand up as a fearless watchdog of investor rights so far. At a time when the Financial Sector Legislative Reforms Commission (FSLRC) has proposed several new financial regulators, Sebi’s history serves as a cautionary tale, illustrating the gargantuan challenges in creating effective independent regulators in the country..............
Monday, May 27, 2013
Frontline Managers Conference
Social costs of financial exclusion - Dr.N.A.Mujumdar
.........If only the commission had cared to look at India's own empirical experience, it would not have been misled. Perhaps the commission was too obsessed with " international best practices." The evolution of the Indian financial system is unique in a number of ways. The founding fathers of the Reserve Bank of India ( RBI) built into its statutes the responsibility of promoting agricultural credit. This was unusual for a country which was still a British Colony. Nationalisation of major commercial banks in 1969, the phenomenal branch expansion programme, unprecedented in the history of world banking and fixing credit targets with a view to ensuring wider disbursal of credit - these were indeed bold steps at that point of time in financial history - much before financial inclusion became internationally fashionable.............
Which way is public policy headed? - Dr.Deepali Pant Joshi
..........In recent times, however, the financial sector has, of its own accord, assumed overweening importance. This has resulted in chronic ‘financialisation’, a situation where all value that is exchanged, whether tangible, intangible, present or future promises, is reduced to a financial instrument or a derivative of a financial instrument with hectic trading allowed...............
Reserve Bank sets tone for innovative, inclusive dev
....... Financial Literacy Material is also getting added emphasis to link the financially excluded segment with the banking system. This is aimed at promoting massive awareness about financial products. A model for conduct of literacy camps has been designed by RBI to be followed by banks. Detailed operational modalities are also being put in place for effective financial access to the excluded. Consistency in the financial literacy material has been planned for reaching the target audience in a simple and lucid manner. Financial literacy material, a Financial Literacy Guide, a Financial Diary and a set of 16 Financial Literacy Posters as a standard curriculum in literacy camps prepared by regulator will be an innovative step in devising suitable communication channels so that the messages reach the target audience effectively............
Promoting financial literacy in villages
....A National Bank for Agriculture and Rural Development (NABARD)-sponsored financial literacy project in the rural areas of Jalore and Sirohi districts in Rajasthan is expected to benefit about 25,000 villagers by the end of this month by creating awareness of basic concepts of savings, deposits, loans and insurance. The NABARD has taken the initiative launched through a private agency, Fino Pay Tech, with the objective of promoting financial literacy leading to greater financial inclusion and empowerment which has been identified as a priority by the Reserve Bank of India............
Sangam University BBA MBA Students Attend Financial Literacy initiative
Under the Financial Literacy initiative, a batch of 40 MBA / BBA students of Sangam University, Bhilwara along with their three faculty members visited Reserve Bank of India RBI Jaipur Office on May 16, 2013. The trip was aimed at getting better insight regarding functions and working of Reserve Bank of India. Dr. Sathyan David, Regional Director inaugurated the special session which was arranged for the Sangam students in the Lecture Hall of RBI Jaipur. Highlighting about history of money, evolution of central banking and the role of Central Bank in economies of countries, Dr Sathyan advised the students to read a variety of journals and books, so that they may keep themselves abreast with the latest developments around the world. Two short films on the History of RBI were also shown to the students..............
Read..........
Read..........
V back to 'Re'serve........................
 |
| Vitalcation over................... Back to 'Re'serve....... |
Have a good, restful and relaxing holiday. We will be looking forward to the Vitalinfo's resumption with all eagerness...................
So,
VITALINFO is back to 'Re'serve................................
Banks need to come clean on notes
..........In its latest directive, the RBI bemoans that “certain branches of banks continue to follow old practices like stapling, writing number of note pieces in loose packets on watermark window of notes disfiguring the watermark impression and rendering it difficult for easy recognition.” It has also asked them to sort out the notes into bundles that are “issuable” and “non-issuable”. Only clean notes should be given to the public, it says..................
Obituary
I am sorry to advise you of the sad demise of Shri Madhav.D.Shinde, in Mumbai on May 13, 2013. He was 86 years old and had served in DESACS for a number of years as AGM. He eventually joined NABARD, from where he retired. May his soul rest in peace.
- P.P.Ramachandran (via e-mail)
Most companies view office romance as personal turf
.........Even in transferable jobs, relationships have flourished. The Reserve Bank of India (RBI), for one, has seen several such instances and has even helped couples get posted in the same city for their convenience. It has been observed when people spend time together at the workplace, they are likely to get into personal relationships...............
Slips with holograms to replace coins on Kolkata buses
Kolkata,
May 25 (IANS) The familiar scenes of commuters arguing with conductors
in Kolkata buses over short change may soon be a thing of past as the bus operators have now hit upon the idea of handing out coupons, or "due slips" with holograms, in lieu of change. Faced with an acute shortage of coins,
operators on select routes would give these slips to the passengers.
These will contain the amount of change to be refunded, the bus number,
as well as the routes on which they can be availed............
RBI to issue Rs 5 coins on Vaishno Devi Shrine Board's 25 yrs
...On the reverse of the coin, "the face of the coin shall bear the picture of Mata Vaishno Devi in the centre with inscription 'Shri Mata Vaishno Devi Shrine Board' in Devnagri script on the upper periphery and Shri Mata Vaishno Devi Shrine Board in English on the lower periphery",..........
Financial Policies
S.S.Tarapore was the distinguished Deputy Governor of RBI and had served there for 35 years. He was seconded to the IMF from 1971- 1979 and was the Chairman of several committees and is presently connected with the Administrative Staff College of India and the Skoch Development Foundation. The book under review – his articles from financial dailies - is a running commentary of India’s recent financial policies and raises issues affecting the policy makers and participants in financial markets. It is divided into a dozen parts with 84 short chapters. The distinguishing quality of the volume is that ...............
RBI Governor to address IPE
.....The Reserve Bank of India Governor D. Subbarao is expected to kick off the golden jubilee year celebrations of the Institute of Public Enterprise (IPE), Hyderabad, with a lecture on June 7........
House panel for multi-disciplinary body to monitor public deposits
.........The body should consist of representatives of the Reserve Bank of India (RBI), the Securities and Exchange Board of India (SEBI), the Ministry of Corporate Affairs and State Governments. This view emerged on Friday in a meeting of the Standing Committee on Finance to discuss the scam involving money pooling schemes, especially the Saradha scam in West Bengal. RBI Governor D. Subbarao and his deputy Anand Sinha made a presentation on various regulatory aspects. SEBI chief U.K. Sinha is slated to submit his views on May 31........
Subbarao agreed with minority of advisors, show minutes
...........The meeting was chaired by Subbarao. The other internal members present were the four deputy governors — Urjit Patel, K C Chakrabarty, Anand Sinha and H R Khan. RBI officers Deepak Mohanty, Michael D Patra, B M Misra, B K Bhoi and Pardeep Maria also attended. External members were Y H Malegam, Indira Rajaraman, Shankar Acharya, Errol D’Souza, Ashima Goyal, Arvind Virmani and Chetan Ghate. Most members felt the global economy was weaker than before. On the domestic front, most felt overall demand was weak..............
Legislating SARFAESI Act
............The other issue that Dr. Drabu has extensively dealt with in his column is the extension of the Reserve Bank of India Act, 1934 to the State. My knowledge and information about it is in my capacity as the former Special Secretary to Government Finance Department where banking was one of the important assignment I handled. On SARFEASI, Dr. Drabu has dangerously concluded his column saying: “If the Government enforces SARFEASI it will only succeed in PSU banks being seen as outposts of financial imperialism. The contention will be that the people of the State have to mortgage their special status to get a commercial loan. It is a choice that no one should not be asked to make.”...........
Read - Greater Kashmir
Banks force customers to take insurance with study loans
.........Banks providing education loans are violating the Reserve Bank of India (RBI) guidelines by forcing their clients to take a life insurance equal to the loan amount to negate the risk involved in the same. The RBI guidelines state that it is not mandatory to get a life insurance along with an education loan; banks may provide life insurance only with the consent of the borrowing party.............
Where were you when chit funds cheated people, panel asks RBI
The parliamentary standing committee on finance on Friday questioned Reserve Bank of India governor D Subbarao on the chit fund fraud. BJP leader Yashwant Sinha, who is the chairman of the committee, is likely to write to finance minister P Chidambaram on the urgent need for the ministry to build a mechanism to curb the chit fund menace........
Who killed Namdeo?
........Farmers are often denied institutional credit. Eighty per cent of them are defaulters, and are not eligible for bank loans. The state has not bothered to approach the Reserve Bank of India (RBI) to seek reconstruction of loans to enable defaulters to repay and seek fresh loans, says Kishore Tiwari of Vidarbha Jan Andolan Samiti. This is despite the RBI's willingness to consider it, he says..........
Why blame the RBI?
........ Being a bankers' bank, regulator and supervisor, no doubt the Reserve Bank of India (RBI) has the moral and physical responsibility to ensure that banks do not err, and indulge in transactions that are against prescribed rules and guidelines. However, one ought to acknowledge that the RBI, with its limited resources of manpower - 17,000-odd staff - cannot be expected to scrutinise millions of transactions involving exotic products carried out by banks and their associate business concerns, having thousands of branches, and whose only philosophy is to make money at any cost...........
All-women co-op bank opens first branch in Pune
Established
in 1997 in Mhaswad village of Mann taluka in Satara, the bank is
opening its first branch in Pune at Dhayari on May 27.
........“One of our main aims in coming to Pune is to get a bigger market for the rural women. It will be a challenge because the dynamics of urban and semi-urban areas are different from that of rural areas. Economic activities pursued by women in cities are different. The Pune branch of the bank will help Mann Deshi scale and expand its operations.”............
Read - TOI
CENTRAL BANK OF INDIA’S “FIRST WOMEN’S BRANCH” IN MADHYA PRADESH INAUGURATED
On the inaugural function Shri M V Tanksale, Chairman & Managing Director, Central Bank of India handing over a cheque of loan amount to the woman beneficiary. Shri P R Ravimohan, Regional Director, RBI, Dr. Rajendra Singh, Chief General Manager of NABARD and Shri Umesh Singh, Field General Manager, Central Bank of India, Bhopal Zonal Office were also present on the occasion............
HC notice to Centre, RBI and Amanath bank
The Karnataka High Court on Thursday ordered issue of notices to the Union government, the Reserve Bank of India and the Amanath Bank on a batch of petitions filed by bank’s depositors seeking permission to withdraw their money.............
NDCC bank board dissolved superseded, administrator appointed
.........While the state government stated that it had sought permission from the Reserve Bank of India (RBI) for appointing an administrator, the office of the commissioner for cooperation and registration of cooperative societies stated that the report filed by NABARD pointed out serious discrepancies in the working of the bank.........
FM tells banks to gear up for a growing economy
The economy will revive this fiscal, and will grow by one percentage point more than last fiscal, Finance Minister P. Chidambaram said here on Saturday. “In the next year, I expect it to grow by another one per cent (percentage point) more,” Mr. Chidambaram said while inaugurating the new building of Canara Bank................
From financing to funding
..........In addition to this, it is not too well kept a secret that banks are refinancing and restructuring loans. These are currently being done to “evergreen” accounts. As such, much of this is being done in partial or complete violation of the regulatory guidelines. This makes the banking sector very weak and vulnerable. The need is to refinance and restructure in line with the economic cycle and in a constructive manner. In this context, it might be worthwhile for RBI to relook at some of its more stringent and mechanical prudential norms. And instead of focusing too much on interest rate, focus on relaxing some prudential norms but tighten the provisioning policy. Instead, RBI relaxed the provisioning norms..............
Something to cheer about
.........The expected cuts in interest rates as well as the cash reserve ratio (the proportion of deposits that banks have to park with RBI) may finally nudge commercial banks to reduce lending rates, thus, encouraging borrowers to engage in commercial activity (for individuals, this could mean buying a house or car; for businesses, this would mean investing in expansion or buyouts). There are political and policy signals as well. At long last,..........
No tax exemption for inflation-indexed bonds: RBI
........."The new instruments to be issued down the line when perhaps CPI index stabilises, we may move over (to consumer price inflation). But currently, the choice is for WPI inflation for the current series which is going to be issued (on June 4)," Reserve Bank Executive Director R Gandhi said. Gandhi, who oversees the internal debt management department, was speaking during a specially-arranged conference call with market participants to clear doubts surrounding inflation index bonds (IIBs), the first tranche of which is to be issued on June 4. ................
The story behind the bond rally
Bond dealers in Mumbai, India’s financial capital, have started enjoying their Friday evenings once again. Despite a record highRs.5.79 trillion gross government borrowing programme for the current fiscal, bond yields are dropping and wholesale price inflation is declining every month to levels below what analysts expect.............
RBI will take some time to act against banks flouting KYC norms
The Reserve Bank of India may take some time to act against banks violating the know-your-customer (KYC) norms, according to Rajiv Takru, Secretary, Department of Financial Services. “We should not expect any action from the RBI in the next week or 10 days. The Board of Financial Supervision in the RBI has to follow a certain process,” ............
Cash-rich PSUs may team up to launch new-generation bank
With the Reserve Bank of India (RBI) expected to issue banking licences to a host of prospective companies, a fresh licence may be given to a consortium of cash-rich public sector enterprises (PSUs). “The finance ministry is keen that one new bank licence be given in the public sector space to a consortium of say three-four cash-rich PSUs,” a top government official, who did not wish to be identified, told HT...........
'Bank mergers lead to too-big-to-fail entities'
..........Are our regulators well positioned to evaluate the consequences to competition in different sub-markets and across regulatory jurisdictions? Is there a role for the Competition Commission of India (CCI) here? Finally, we have seen bank mergers lead to too-big-to-fail entities. What constitutes a merger too far? How do the relative merits of prudential regulation and competition regulation weigh?.................
Compensate bank customers if they fail to get desired service
.......Though most of the public sector banks did come out with time norms for services like encashment of cheques and issue of drafts and displayed them in their notice boards, these norms were never seriously followed.They remained only on paper, as there was no penalty imposed on banks for non-adherence to these time norms. It is possible for the RBI under its existing powers to stipulate penalties for non-delivery of stipulated services by banks and provide for compensation to the banking public for failure of any bank to honour its commitments to its customers. ......
New bank licences | The contenders
The deadline for applying for a banking licence expires on 1 July. At least two dozen companies, both in the private and public sectors, are busy drawing up plans for their entry into banking, being opened up again a decade after the Reserve Bank of India (RBI) allowed the entry of two new banks. India nationalized 14 large banks in 1969 and another six in 1980. RBI has so far given licences to only a dozen private banks in two phases, including the conversion of a cooperative bank into a commercial bank..........
Merging PSBs won’t help
........The merits of consolidation in the banking space have been discussed often but attempts to merge banks have met with little success, partly because employee unions have resisted the idea. Perhaps the Reserve Bank of India (RBI) will give its perspective on the subject in a paper on that it plans to put out soon. There’s little doubt, however, that many of the smaller public sector banks have been stressed over the past year or so...............
Clip Discretionary Wings of PSB Chiefs, Says CBI
.....A
CBI court recently sentenced a former chairman of Indian Bank to one
year rigorous imprisonment by in a cheating case causing loss to the
bank. The banking sector body, Indian Banks Association, has opposed the
move citing that such measures will impact the bank’s competitiveness. “Discretionary
power is a part of the bank’s financial and managerial autonomy. The
IBA has opposed any such measure,” said an IBA official, requesting
anonymity............
Damodaran committee report on biz climate likely next month
.................SBI Chairman Pratip Chaudhuri, NTPC chief Arup Roy Choudhury, BHEL chief Director B P Rao, representatives from Sebi, Reserve Bank of India and the Ministries of Corporate Affairs, Finance, Power, Petroleum, Highways, Commerce and Industry and Urban Development are also part of the panel. Recently, Corporate Affairs Minister Sachin Pilot had said that he has asked the committee for concise, tangible and actionable suggestions...............
Make ‘basic’ banking services free!
.............The RBI should, therefore, now take up the cause of depositors in right earnest not only in the interest of improving the savings rate in the country, but also with a view to restore the trust of the public and get their patronage before grating new banking licenses, as banks have lost the confidence of the general public due to their callous attitude towards the customers and the recent exposures of unhealthy practices in the functioning of commercial banks in our country.
Online fraud: Why should you not blame banks
........From time to time, the Reserve Bank of India has made it clear that it nerve asks personal bank account details. The central bank has of late, embarked on a series of measure to stop this growing menace to fleece bank customers. "We keep requesting CERT-IN to block the ip addresses from which such mails are sent. But the fraudsters use dynamic ip addresses and therefore blocking of ip addresses is not a very effective way to stop such frauds. Banks have also been asked to post a warning on their websites,"............
Are housing finance companies relevant? - NO
.....Of course, there is hardly any difference in the regulatory powers vested in RBI and NHB, which narrows the scope for regulatory arbitrage. With regard to interest rate and prudential regulations when RBI issues some guidelines, the NHB follows suit, or at times takes the lead like in waiver of prepayment penalty on home loans. In this case, the NHB moved first and then the RBI issued its notification asking banks to waive prepayment penalty.............
Are housing finance companies relevant? - YES
.........Despite debate on the differences between banks and HFCs and the need to have a separate regulatory regime for the latter, there is compelling rationale for dedicated housing finance companies.HFCs are governed by the NHB while banks are regulated by the RBI. The NHB is a sub-regulator of the RBI, specifically created for overseeing HFCs. All the regulatory changes seen on home loans have emanated from the NHB and have later been replicated by the RBI............
‘Gujarat’s is an example of balanced growth’
.......Among the other feathers in his cap are being a member of the Reserve Bank of India Western Area Board, a member of the Competition Commission of India, and holding positions on the boards of a number of public and private sector companies. At present, he is Director with Adani Institute of Infrastructure Management and Adani Institute of Medical Sciences.............
Saturday, May 18, 2013
Building bridges of camaraderie
When N R Pillai, a retired Assistant General Manager of the Reserve Bank of India, was accompanying His Holiness Swami Sankaracharya Onkaranand Saraswathi, the head of the Prayag Peeth, on a visit to the Lord Krishna temple in Guruvayur, he received a call on his mobile. Dr Mohammed Syed, a trustee of the Cheraman Mosque, asked whether Swami Saraswathi would drop in at the mosque on the way back to Kochi. The Swamiji readily agreed.............
Friday, May 17, 2013
Monetary policy in a cauldron - S.S.Tarapore
......A reduction in the cash reserve ratio requirements for banks would have been more damaging. Again, the RBI needs to be parsimonious in undertaking open market purchases of securities. The next Mid-Quarter Monetary Policy Review on June 17 and the First Quarterly Review on July 30 should be strategically used by the RBI to resist pressures for easing monetary policy.........
Getting RBI communication right - CHARAN SINGH
............In India, in the context of global market integration and increasing demand from media, there has been a significant progress in removing the mystique surrounding monetary policy as reasoned by YV Reddy (2008). RBI ensures a high degree of transparency about its objectives, policy formulation, and decision making as it helps to increase the effectiveness of monetary policy by promoting more informed decision making by economic agents. RBI’s communication policy involves regular publications, monetary policy documents, research studies and special speeches. In all cases, RBI’s communication has been improving over the years, especially in terms of number of speeches delivered by the top management across the world, mainly in India...............
Market and media’s Mahabharata syndrome
........The next paragraph of the report quoted Subbarao, saying at an event in Frankfurt the previous day, “We certainly will take note of the softening of inflation and the external payments situation in the next mid-quarter policy statement on 17 June.” A Bloomberg report too highlighted the inflation part in the beginning and later said he would take note of both while forming the policy in June. In other words, Subbarao made a general statement that he would take into consideration both the fall in inflation as well as trade but the media—both newspapers and websites—as well as the market chose to listen to only one part of his statement..........
Reforms’ unintended fallout
A mint-fresh working paper by the Reserve Bank of India once again trains the spotlight on a problem that, for five decades, every policy-maker has planned to snuff out, failed to, and then wished it would go away if ignored. But financial exclusion simply hasn’t, and we now have the central bank applying its forensic skills to an examination of its magnitude. The title of Working Paper Series 5/20/13 is almost admonitory: “Persistence of Informal Credit in Rural India: Regulatory Policies Need to Recognise Changing Landscape.” Authored by Narayan Chandra Pradhan, the paper is an updation of sorts; it puts together all extant surveys on indebtedness, the formal and informal channels of rural credit recorded from 1971-72 to 2002-03 by various agencies.............
VITALCATION..................
 |
| VITALINFO on vacation mode............... Will resume on 27th May 2013. Till then bye................. |
Obituary
I am sorry to advise you of the sad demise of Shri Madhav.D.Shinde, in Mumbai on May 13, 2013. He was 86 years old and had served in DESACS for a number of years as Assistant General Manager. He eventually joined NABARD, from where he retired. May his soul rest in peace.
- P.P.Ramachandran (via e-mail)
Mom and me contest
The results are in for The Hindu MetroPlus ‘Mom and Me’ photo contest, held to celebrate Mother’s Day. Readers were invited to send in their favourite photos of themselves with their mothers.............
ROSHAN KRISHNA AND RAJI GOWRISHANKAR
F-48, RBI Officers Quarters, Belhaven Gardens, Kowdiar, Thiruvananthapuram-695003. The best five entries have won gift coupons for..........
Read - The Hindu
Subscribe to:
Posts (Atom)