............Guesswork suggests RBI finds a band of approximately 59-60.25 acceptable. Foreign institutional investors (FIIs), which use highly sophisticated algorithms, would have a better idea of the exact levels. Anyhow, there seems a trigger point where RBI will intervene. If there is indeed such a pattern of RBI action and the FIIs have deciphered it, they could also start acting upon the 'RBI put'. FIIs have actually been net equity buyers in the past two sessions, albeit in small quantities..............
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.
Monday, August 5, 2013
RBI curbs on gold import opposed
........Explaining the association’s views on the RBI order, its president B. Girirajan made it clear on Friday the main objection was to the RBI directive that 20 per cent of gold imported by banks and other recognised agencies should be kept in customs bonded warehouses and 75 per cent in bonded warehouses should be exported as gold jewellery............
Banks use social media to woo youth
...........New-age/Gen-Y customers are more inclined to trust the advice of friends and acquaintances on financial products and services for decision-making. And, they are embracing social networking, social bookmarking and social shopping more than ever as a medium to gather this information, share experiences and make decisions, according to study by the Institute for Development and Research in Banking Technology (IDRBT), an arm of Reserve Bank of India..............
Fake RBI officers dupe man of Rs 7.5 lakh
In another incident of online lottery fraud, a woman and her aides claiming to be officers from Reserve Bank of India (RBI) duped a man of Rs 7.5 lakh. Ankush Mahadev Borude (42) of Charholi in Haveli taluka, lodged filed a complaint at Vishrantwadi station after realising he had been cheated. Police booked one woman named Neha and her unidentified aides and charged them with cheating and forgery and under sections of the Information Technology Act.........
Greed lured even literate investors into emu scam: RBI
Most of the duped investors in the multi-crore emu contract farming scam in the district last year were literates and very knowledgeable and had been lured by 'greed', according to a survey by Reserve Bank of India. The investors had been lured by attractive schemes offered by the emu farms, RBI Chief General Manager V Vasanthan said here today............
State-run banks soft targets for fraud
Nationalised banks account for just 17.5 per cent of the fraud cases that have been registered in India’s banking system in the past four years. But what is alarming is that over 83 per cent of the cumulative losses of Rs 29,910 crore due to such acts occurred at state-run lenders, raising a question over the efficacy of systems in place in the wake of the Cobrapost expose. The data on frauds in the banking system was compiled by RBI based on information filed by the banks................
With few checks, thieves swipe stolen cards without any hassle
..............Despite banks instructing retailers to request customers for identity proof, most commercial establishments give the process the go-by. Owners of shops and restaurants say they usually do not have the time to cross-check if the transaction is kosher. The RBI had directed banks to install card swiping devices that require customers to enter PIN numbers at commercial outlets from July 1, but few establishments offer this additional security feature. The lack of checks has resulted in a spurt in fraudulent card use, say security experts. .........
Resolve your problems with the right RTI application
..............All government institutions fall under the purview of the RTI. Institutions such as the Reserve Bank of India, Securities and Exchange Board of India (Sebi), Insurance Regulatory and Development Authority (Irda) and public sector banks have PIOs. But a private bank or a private company isn't obliged to have a PIO. So, if you have an unresolved complaint against a private sector bank, first file a complaint with the banking ombudsman; then, file an RTI application seeking the status of your complaint. This would ensure you get a response from the ombudsman, who would have to ask the bank for details of the complaint............
CM writes to RBI over loan repayment of mining-affected
.........In a letter sent to RBI Governor D Subbarao on July 26, Parrikar, while highlighting the economic slowdown caused as a result of direct and indirect halt in mining activities, said banks are pressurizing borrowers who are affected by mining to repay their dues. The borrowers had requested the banks to re-phase and restructure the loans last year with the hope that mining would start this year. They approached banks with the same request this year as mining has not resumed. However, Parrikar claimed that this request for another restructuring of their accounts is not being considered by the banks.............
Jaffer Sharief wants CBI probe into Amanath bank scam
...............The bank, mainly a minority institution, has been in dire straits, as RBI directed it to freeze all transactions following blatant violation of the central bank’s guidelines. For the last six months, the bank has been allowing depositors to withdraw only Rs 1,000 per account. It announced recently that depositors’ monies would be returned after Ramzan.............
Govt likely to earmark Rs 1,300 cr for Post Bank of India
........There are around 90,000 bank branches in the country and provision of real-time banking services through postal network is estimated to triple the current banking network. The Post Bank of India is proposed to be owned by DoP, but with a completely independent board, governance structure and operations. It will have representation from Finance Ministry, Ministry of Communication & IT, besides independent directors on its board.............
RBI approves reforms in primary co-ops
........In States where the central/ state cooperative banks are fully computerised and on core banking systems, Primary cooperatives will function as their business correspondents. A circular from the head office of National Bank for Agriculture and Rural Development (Nabard) unveiled the reforms to state and central cooperative banks. Jose T. Abraham, President, All-India Nabard Employees Association, said this would mean the death knell for an estimated 93,000 primary cooperatives in the country. Rather than help financial inclusion, the new reform would only drive poor farmers and rural people to local moneylenders for meeting their credit needs, he added. The employees association would resist implementation of these reforms with all strength at its disposal..............
Nabard chief against splitting cooperative banks
 |
| ..............“If we split the bank which is serving entire Andhra Pradesh, we will create one more cooperative bank, one more board and have one more chairman. A good financial institution broken into two will become weak,”................. |
Kerala rejects NABARD fiat
The State government has rejected a directive of the National Bank for Agriculture and Rural Development (NABARD) to primary cooperative banks (PCBs) to stop accepting deposits and transfer their equity, loans, and deposits to district cooperative banks (DCBs) as recommended by the Prakash Bakshi Committee.............
Regional Rural (Gramin) Banks : Going Away From the Objectives?
In yet another attempt to save regional rural banks from collapse, the Government intends to take private parties on board. In this year’s Budget session of Parliament, the Finance Ministry tabled a Bill that allows regional rural banks (RRB), also known as Gramin Banks, to raise capital from private sources. Analysts are skeptical. They say private shareholding may ensure financial stability but would distract RRBs from their objective of strengthening rural economy.................
MP sets example, makes DBT a hit
.......The RBI allows a small bank branch for a population of 2,000 but in bigger states like MP it would translate into villagers having to travel 10 to 20 kms to visit a branch. Banks in states like Orissa and Bihar appointed banking correspondent for villages for last mile banking service but the model failed because of inadequate business and inconsistency in visits of the banking correspondents............
Banks slam brakes on loan disbursals
.......For whatever meagre disbursals are happening right now, banks are insisting on higher premiums over the base rate, making loans far more expensive than they ought to be. The present situation is an exact reversal of the earlier practice when banks were saddled with huge sanctioned loans that were not being availed by borrowers. Bankers say they will not be disbursing the sanctioned limits until there is clarity on where the interest rates are headed........
Understanding the poverty line
........A Committee chaired by one of India’s finest economists, former Chairman of the Prime Minister’s Economic Advisory Council and the National Statistical Commission, the late Suresh Tendulkar, computed poverty lines for 2004-05 at a level that was equivalent, in purchasing power parity (PPP) terms, to one U.S. dollar per person per day, which was the internationally accepted poverty line at that time............
A last chance for economic survival
.......The lower growth resulting from Dreze-Subbarao policies pushes up the fiscal deficit and consequently boosts inflation, thereby resulting in the RBI tightening the spigot even more harshly. In the process, the Central bank dooms hundreds of companies into defaulting on their loans. As a result of Dreze and Subbarao, the Indian banking sector is rapidly becoming as sick as the sector became during 2005-8 in the US and in parts of the EU, with the difference that this country does not have the financial cushion needed to stabilise the banks. Aware of this, speculators are making a killing out of making a safe bet, that the rupee is headed downwards towards 75 to a US dollar and even 90, thereby boosting prices (and monetary tightening) even more.................
Depressed Indian economy - Charan Singh
All-out effort to accelerate growth required
...........Finally, the RBI would help the economy recover by lowering interest rates. The government could consider lower interest rates, at least for loans to the housing sector and infrastructure to spur growth. Finally, to ensure recovery, special concessions could be considered for auto industry as were granted by President Obama in the USA. The need is to revive growth and all-out effort to achieve growth should be made by the policy-makers.
The writer is a Professor of Economics, RBI Chair, IIM, Bangalore. The views expressed are personal.
Bank of Maharashtra to get capital infusion of Rs 2,200 cr
...........“We are likely to get a capital infusion of Rs 2,200 crore from the government of India in September which will raise our core capital adequacy ratio from the present 7.57 per cent to over 8 per cent as required by the Reserve bank of India,” Narendra Singh, chairman and managing director of Bank of Maharashtra, said. However, it’s overall CAR under Basel II norms as of end June was 11.83 per cent, he said..................
Canara Bank considering takeover of Amanath bank
............Asked whether the bank, which has been slapped with a moratorium by the Reserve Bank of India against allowing withdrawals of more than Rs. 1,000 by depositors, would not become a burden, Mr. Dubey said, “Of course, we are aware of the moratorium by the Central bank, but we will also consider other factors, including how many (loan) accounts are secured, before we take a decision on the matter.” He said he was aware the cooperative bank was saddled with “some NPAs”........
What deterred new banking aspirants?
...............Though the licensing tranches started nearly 25 years after bank nationalisation in 1969, one in 11 applicants and one in 50 got RBI banking approvals in 1993 and 2003 respectively. Ten entities were granted approval in 1993, while in 2003, that was whittled down to just two applicants. But this time, the ratio may improve, as the base number is low at just 26 and the government may be keen to enlarge the banking network owing to its financial inclusion commitments.....................
‘We have to grow our business beyond infrastructure’
...............IDFC is one of the several players that have applied to the Reserve Bank of India for a banking licence. “It is a nice, interesting irony and coincidence that my outside-IDFC activities are helping a great deal in fashioning what I believe to be a very differentiated and promising business model for a new bank,” Lall said, during a recent interaction here..............
Move to settle YES Bank case out of court
Kapurs and Kapoors - the families of YES Bank's promoters, the late Ashok Kapur and Rana Kapoor, respectively - might not wait for the courts to solve the dispute over membership on the bank's board. A move is understood to have been initiated for an out-of-court settlement. According to people familiar with the development, a meeting between the families was held on Saturday to discuss whether the case could be settled outside court. Another meeting was scheduled on Sunday evening,..................
Saturday, August 3, 2013
Growth-inflation balance is not that straightforward: Subbarao
 |
| ...........“I get asked why must we first try to lower inflation and then strive to achieve growth. Or, why we cannot tolerate higher inflation in order to get higher growth. The trade-off is not as straightforward as that,” ................. |
New centre for information security opens
........The centre was formally launched by RBI Governor D. Subbarao at the annual technology awards presentation ceremony organised by the institute here on Friday. The CIAM would function as a “one-stop” resource centre for all information assurance and management technology, tools, literature and experts for the Indian banking and financial sector, Sambamurthy, Director, IDRBT, said............
SBI wins IDRBT Banking Technology Awards-2013
State Bank of India won three IDRBT Banking Technology Excellence Awards 2013 for “Electronic Payment Systems”, “Best use of technology for Financial Inclusion”, and “Customer Management & Business Intelligence” in the large bank category, at a function held at IDRBT, Hyderabad, on 2nd August 2013. The awards were received by the Chairman of the Bank Pratip Choudhury, from the governor of RBI, Dr D. Subbarao. Anand Sinha, Dy. Governor of RBI, was also present in the function.....................
Read...........
Read...........
RBI to come out with more measures to rein in NPA: Subbarao
....."It is true that NPA in public sector banks is higher because their decision variables are different and therefore NPAs are higher than private sector banks," he said. "In the Reserve Bank, we are concerned about it. It is a growing concern. Even on last Tuesday, when we met at the bank, we spoke about this,"............
Curbs on futures market will go only after Re stabilises: Subbarao
..............“In Reserve Bank’s view, undue volatility of the exchange rate is harmful for growth and stability, and such volatility should be curbed,” Subbarao said. On innovation and regulation, he said financial markets were different compared to other markets and, hence, required a different approach. “Financial markets are reflexive, in the sense that our beliefs about what may happen often influence what does happen. Common sense does not hold. The more financial insurance is written, the more likely that the insured event will occur because people who benefit from the contingency can make it happen,” Subbarao said............
Every effort will be made to finance current account deficit
................The ministry makes the point that the RBI figures of 2013 must be compared with the RBI figures of 2008. This point is well taken, though one would expect the RBI and Finance Ministry to give out the same figure in the future, to avoid confusion. The ministry also admits that some foreign debt related indicators do reflect vulnerability. The larger theme of the article is not denied.
Bank licences for companies will make sector competitive: RBI
......In a bid to ally concerns over issuing new bank licences to companies, RBI Governor D Subbarao today said corporates will bring in large amounts of capital and make the sector more competitive. "The main reason we have allowed corporates is to leverage their proven entrepreneurial talent and management expertise," Subbarao said at a function organised by the Institute for Development & Research in Banking Technology..........
Comrade GOVI is no more...............
Shri P.GOVINDARAJAN (61
YEARS), Retd. Typist, RBI, Chennai (affectionately
called by his friends as GOVI) passed away around 8.30 a.m. on 2.8.2013. He
served RBIEA, Chennai as Asst. Secretary. He was ever smiling and ever helping
nature. In his death we have lost a very good friend, colleague and a
comrade. We pray for his soul to be rest in peace and convey our deep
sympathy and heartfelt condolences to the bereaved family members. The funeral
and last respects will take place on Saturday or Sunday depending
upon the arrival of his daughter from abroad. Address: F-3, Teju Tenaments, Plot No.
17-A, Fifth Main Road, BHEL Nagar,
Medawakkam, Chennai - 600 100. Phone
contact: 9500044310
- Balasubramanian K
Reserve Bank quiz to be conducted in Kochi
.............Schools interested in participating may contact nodal officers in Reserve Bank Of India before August 15. Shyni Sunil (0484 2400076) email : shynisunil@rbi.org.in or V Dhanya (0484 2401303) email: vdhanya@rbi.org.in )
SBI gets first woman MD
The Centre has appointed Arundhati Bhattacharya as a Managing Director of State Bank of India (SBI), the country’s largest commercial bank. She is the first woman Managing Director of SBI and is also tipped to be the Chairperson of the bank when incumbent Chairman, Pratip Chaudhuri, retires in end-September................RBI Governor resigns
The RBI Governor, Dr. D.Subba Rao, resigned today, saying that he cannot preside over the bifurcation of Andhra Bank. Due for retirement next month, his announcement caused ripples in the Financial circles. The Finance Minister stepped in to control the damage. While confirming the resignation, he assured the nation and particularly the customers of Andhra Bank and other investors, that there is no cause for worry. He said that his officials have worked out the details and action plan. The erstwhile Andhra Bank will be split into two separate entities—Telengana Bank and Seemandhra Bank. The capital, assets and liabilities will be split in the ratio 10:13 or 17:25 between them..............
Next RBI Governor - Why not insider?
After the announcement of the FM that he is on the lookout for a successor to Dr. Subba Rao several views have been expressed on the issue of a successor. An omission however has been as to why the successor should not be picked up from RBI itself. In the judiciary,in the defence forces, why even in the Govt. the man for the top position is chosen from within.Why should an exception be made in the case of RBI? The RBI has a talent pool from which the top man can be picked up Two DGs have been all along with RBI and therefore complete central bankers. One DG has not only RBI experience but valuable experience as a commercial banker and is a Ph.D. and other DG also a Ph.D although a new entrant to RBI has rich experience of work in financial institutions abroad.Should we not establish a convention that some one who is part and parcel of RBI should only aspire for the top job?
- K.N.S.Unni
Poll: Is Subbarao the 'worst performing' RBI Governor?
D Subbarao, who completes his five-year term as RBI Governor on September 5, was recently criticised by Arvind Panagariya, professor at Columbia University and a noted economist, on the ground that the central bank did not build foreign exchange reserves when the rupee was appreciating in 2009-10. Business Standard takes a look at the performance of RBI Governors since 1990...................
The Great Bank of Bengal
..............A Sentimental Journey describes a stroll on the Mall during which he and his cousins passed by Janki Das & Company, Lloyds Bank, Telegraph Office and Imperial Bank. Nevile takes us further on the Mall until we reach the splendid building of the General Post Office. Across the road, Nevile explains, stands the wonderful red-bricked building of the Reserve Bank of India. The mention of Imperial Bank and Reserve Bank as two distinct buildings on the Mall suggests that the Imperial Bank, after the creation of the Reserve Bank, moved to an adjacent building in the same vicinity, while the Reserve Bank operated from the erstwhile Bengal Bank Building..............
M S University clears way for Rs 2.50L recovery from deputy registrar
........The university had formed the committee after the embarrassment that it faced last year when the country's apex bank dragged the state university to Ahmedabad court by filing a civil suit demanding recovery of Rs 97,63,000 for not appointing a RBI Chair professor at the Department of Banking and Insurance at the Faculty of Commerce even as it had received Rs 50 lakh as corpus fund in 2002. The committee, which had professor Ranjan Aiyer as convener, submitted its report stating that no concrete efforts were made by those in-charge of the cell to get in touch with RBI..............
Read - TOI
Finance ministry plans to buy beaten-down shares of public sector banks
............"Banking stocks are at an all-time low. Our holding will increase if we directly infuse capital through preferential allotment of shares. Banks can explore other routes when conditions are conducive and the government will also get better return on its stake dilution," the official explained. Already some banks like Bank of Maharashtra have indicated to the finance ministry that they are not in a position to go ahead with their fund-raising plans through the qualified institutional placement route..............
No voting rights for foreign investors in Tamilnad Mercantile Bank: Court
.........The court, in its order dated July 29, 2013, said that since the Reserve Bank of India refused to acknowledge the holding of shares by the overseas investors, the banking company should be directed not to give effect to the transfer of shares. And, in case the transfer has been registered, the transferee shall not be entitled to voting rights, according to Chapter II amendment of Section 12B (3)...............
Tirupur exporters lash out at RBI
.........“It is ridiculous that the RBI is trying to suck out excess liquidity in the system by keeping the repo rate under the liquidity adjustment facility unchanged at 7.25 per cent instead of looking at the actual problems that lead to liquidity and inflation,”................
Will RBI's rupee-revival policy work?
..........While a lot of views have been expressed over the recent liquidity tightening, RBI’s steps in the last few weeks have to be seen in the perspective of the recent developments in the foreign exchange market. The currency has been a major challenge for the central bank in the recent months. While the rupee has been in a depreciating trend since the global crisis of 2008, the volatility in the exchange rate has increased in the recent months...............
ATM malfunction at Hotel Pinewood
I write this so that ATM/Debit card holders are kept informed of the wrong doings by some banks. I was presented a bill for dining at Hotel Pinewood on 15th July, 2013. I paid vide ICICI Debit card and soon after I received a message on my mobile that the amount has been deducted from my account. The same message was repeated 3 times. After a minute or two the waiter came back returning the card saying it was not working and showing error in the Hotel’s Swipe machine. On investigation it was found that the receptionist had swiped the card 3 times which means payment of the same bill three times as it was showing error. On checking with AXIS Bank, since the swipe machine was that of AXIS, it was found that no amount had been credited to the Hotel Pinewood account. Ultimately I had to pay cash the next day. The Hotel employees say that this is a common feature with the swipe machine. I have since taken up the matter with both ICICI and AXIS bank authorities but the matter lies unresolved till today. The moot question is where has the money gone. Who will pay and who is responsible for such glitches ? This is very frightening as we read all the time about scamming, hacking, fraudulent activities in ATM booths, ATM card cloning etc. Even the Ombudsman RBI is quiet on this issue. Customers should be very careful of internet transactions.
- Nesfied B Sangma
Income-Tax dept expects 3 crore tax returns to be e-filed this year
File, smile and go. This is what taxpayers would be chanting this year while filing their returns, the income tax department claims. But with electronic filing having become mandatory for assessees having net taxable above Rs 5 lakh from this year, the pressure on the tax department to keep the system capable of handling the pressure has become enormous. According to an income tax official the department expects around three crore e-returns this year. Of these as on July 29, more than 82 lakh e-returns have been filed a 40 per cent rise compared to the same period last year, the official said. Six lakh returns were filed on Tuesday................
Bank of Maharashtra posts profit of 266.33 crore in Q1
.............The
bank’s chairman Narendra Singh said the bank is in the process of
reorganizing its business to prepare for the challenges of the new
customer dynamics. Among the initiatives,
the bank is planning to roll out doorstep cash collection and
withdrawal facility, acceptance of stamp fee and related government
payments and wealth management services to its high net worth clients...................
A misnomer called food security
CHILD STUNTING and wasting, and mortality, is more likely to be due to infections and illnesses due to unsanitary conditions that result in inadequate absorption of nutrients, than due to undernutrition. These in turn may be linked to inadequate maternal health, insufficient access to health services, safe water and toilet facilities..........
Friday, August 2, 2013
RBI Governor to launch CIAM on Aug 2
Hyderabad, Jul 31 : Reserve Bank of India Governor D Subbarao will launch the Centre for Information Assurance and Management (CIAM), a pilot project on cloud computing, at the Institute for Development and Research in Banking Technology here on August 2. Dr Subbarao will also release the cloud security framework and present the prestigious IDRBT Banking Technology Excellence Awards for the Year 2012 - 13 on the occasion, IDRBT said in a statement..........
Duvvuri Subbarao responds to P Chidambaram, says inflation hurts poor
...."You can't bring it down without some sacrifice in growth... Inflation is a very regressive tax. It hurts poor people more than relatively better off people. The voice of hundreds of millions of poor people is not heard through the media,"................RBI likely to bring urban banks under Ombudsman's ambit
A proposal has been mooted to bring in co-operative urban banks under the purview of Banking Ombudsman in view of their key role in banking activity in many states. The proposal had been mooted by an internal committee of RBI and a final decision would be taken after eliciting views of the state governments, A Madasamy, Banking Ombudsman for Kerala and Lakshadweep, told reporters here today. Madasamy said though there was a strong opinion in favour of the proposal state governments' views were important in the matter since co-operatives come under them....................
Read | Business Standard
Number of bank fraud cases down but amount involved zooms 324%
.........According to Dr K C Chakrabarty, Deputy Governor of Reserve Bank of India (RBI), during the past few years, banking and financial service industry was most commonly victimized by fraud, which arose with sweeping changes in scope and magnitude of banking transactions, the emergence of hybrid financial products, increasing trend of overseas transactions, and dynamics of real-time fund movement and transformation. He was speaking at the National Conference on Financial Frauds organized by ASSOCHAM in New Delhi last week..............
HDFC Bank on rural Fin literacy drive in Goa
...........HDFC Bank will use the Financial Literacy Guide, provided by the RBI as the standard curriculum while conducting these camps. This material is currently available in Hindi and English. HDFC Bank has gone a step further in Goa and is the first bank to translate the guide into Konkani, which is the local language. This has been done in consultation with the RBI and will greatly increase the impact and efficacy of these camps in Goa. The Financial Literacy Guide is a comprehensive document that contains a note for trainers, guidelines for banks on how to conduct the camps, and financial literacy material. It also contains as well as a Financial Diary to track expenditure and a set of 16 posters. The purpose of this guide is to...............
Bus operators introduce plastic tokens flouting RBI norms
............."We know it is illegal and a violation of RBI guidelines, but we have no option. We approached the RBI several times to supply us with token in denominations of Rs 5, Rs 2 and Re 1 but we received no response. This forced us to resort to the illegal use plastic token,”..................
Demonstrations in front of Central Office Building on 8th August
Forum shall be holding massive silent demonstrations on the issues of pension updation and opening of pension option on..........
Read............
Read............
Cash fraud in the name of NABARD in W Midnapore
While the dust of the Saradha storm is yet to settle, a fresh bid to defraud gullible depositors is in the works in West Midnapore. In a clear throwback to the chit fund menace, which drew scores to park their hard-earned deposits in sham schemes, a gang of fraudsters have been going around several villages of the district, making collections in the name of the National Bank for Agriculture and Rural Development (NABARD),...................
Next RBI Governor - Succession planning desirable
It is surprising that GOI even at this late hour does not think of pragmatic succession plans for filing top positions like that of RBI Governor. Reserve Bank of India is one statutory body in the country which has been able to withstand the pangs of succession issues at the top for more than 7 decades of its existence, thanks to the maturity shown by those in charge of governance in Delhi. Recent developments brings to the fore the need to recall this and get a reassurance that whims and fancies of individuals destined to take decisions will not change this image. In 2011, the timely decision by Centre to give a two-year extension to RBI Governor Dr Subbarao stood apart as a decisive vote for stability at the Central Bank. This ensured continuity of policy perspective at a time when it was needed most and strengthened the RBI to pursue the right course it was following in different areas of its responsibility. A change of guard at that time would have resulted in slowing down of the processes of change in areas like fighting inflation, forex reserves management, financial inclusion and outreach and transparency in policy prescriptions where Dr Subbarao has made perceptible progress. Recent developments which saw easing out of a Deputy Governor (Subir Gokarn) for no fault of his and compulsions to retain another Deputy Governor for another year calls for a review of the selection and placement procedure at that level. Perhaps the pool from which selection is made and the age profile (raising the upper age limit by 3 to 5 years from the present ‘normal’ at 62 years) need a review. In the circumstances, it would be most appropriate to extend the tenure of Governor Dr Subbarao who is to retire within months, initially by another year at this juncture.
Formulating and implementing succession plans for top government/public sector jobs with professionalism and efficiency in a graceful manner is imperative for allowing the institutions to function with reasonable functional autonomy within the legislative mandates.
- M.G.Warrier
Next RBI Governor - Due diligence in selection required
It is not only the question of RBI GUV being from outside the political ambit which troubles the politicians, but the vested interest of bureaucracy as well. Remember when Montek Singh was appointed Finance Secretary, there were loud protests from the IAS as they considered this post to be their prerogative. Dr Manmohan Singh as Finance Minister cooly gave the reply "Find me a person from IAS who is as intelligent as Montek Singh, I will appoint him". The IAS lobby had no reply.The media wrote that Dr Manmohan Singh backed Montek Singh to the hilt which was published on the first page of the news papers. The sole claim of IAS to be RBI GUV is that IAS man will be able to coordinate with various ministries on economic matters and system will run smoothly. Initially, Dr Subbarao was subservient to MoF and kept fiscal policy aspects predominantly in mind, but after one and a half year, he became a confirmed monetarist. As Fin Secretary, his view was that public debt matters should be in Government domain, he did not find anything wrong with subsidies, 5% Fiscal Deficit, 4-5% Current Account Deficit, micro management of banks (Shri Mittal was Secretary Financial Services with Subbarao as Finance Secretary), conservative FDI/FII policy etc; but became more open and assertive as RBI GUV i.e. what was right as Fin Secretary appeared to be wrong as RBI GUV.The central idea is anybody who comes from IAS struggles a lot to be independent, much energy is wasted squabbles with MoF, he faces resistance and in the process becomes reactive. As IAS, he is supposed to be subservient to the political masters but as RBI GUV one is supposed to have spine. Therefore a perfect due diligence is required for selection of GUV. Invite
all from Academia, Indians in world class institutions, bureaucrats,
Chief Executives of private/public sector/DGs of RBI etc and let the
best man be selected.
- Sitendra Kumar
Not the next RBI Governor
............ Chidambaram made it clear current Governor D Subbarao was not in the race as he wanted to "move on". Asked about the names of other likely candidate, Chidambaram joked, "I can tell you (Namo Narain) Meena, (Jesudasu) Seelam and I are not eligible.".............
Read | Business Standard
Who should be the next RBI Governor? Vote !
................After Finance Minister Palaniappan Chidambaram made it clear that Subbarao is not keen on an extension, the search intensified to fill the post of India’s most competent banker.................
High CPI due to cyclical, distributional problems: Subbarao
.......Talking on the subject 'Dilemmas in Central Banking', Subbarao said treading the growth-inflation balance, managing the impossible trinity and communication whether when, what and how are the three major dilemmas of the Banking Regulator. On the key dilemma, which is growth-inflation balance, Subbarao said, the three objectives of the Monetary policy are to contain inflation, stimulate growth and to ensure financial stability. In our context, the RBI tries to get the right balance............
Reserve Bank too erred in forex scam
............But the RBI in its affidavit to the Supreme Court in FIMMDA appeal had pleaded that this CBI suggestion should not be accepted. “This was strange since RBI’s own circulars have prescribed that such frauds should be referred to the CBI”, said a seasoned chartered accountant of Coimbatore.....................
PCBs to be stripped of banking powers
............The circular has been issued on the basis of the recommendations of the Prakash Bakshi committee constituted by the Reserve Bank of India (RBI) to streamline the functioning of credit cooperatives. The circular says the PCBs will function as business correspondents of the district and State cooperative banks. The share capital mobilised by them by way of share-linked capital of the loans will get transferred to the books of the district and State Cooperative banks. They will function as independent entities out of their own fund and earn income or service charges for rendering the services listed out by NABARD........
Plan panel objects to govt funds for Post Banks
........Officials said the Commission is of the view that the Rs 500 crore needed as initial paid up capital for launching Post Banks might not be feasible at the moment because of overall tight fiscal conditions. "Though in-principle the Commission does support the proposal, but current weak financial condition is acting as a hindrance," a senior official said..................
Stable exchange rate is important to attract investments: Subbarao
................Though some say the RBI has failed in taming the inflation but managed to pull down growth, the reality is that the headline inflation, measured by the wholesale price index, came down from double-digit levels to around 5 per cent. But consumer price inflation is still ruling high, which is mainly due to certain distributional issues. “I do not agree with the contention that RBI is obsessed with inflationary pressure. We have to keep in mind inflation, financial stability, and, at the same time, growth. We are concerned about all the three,” he said. But, in the current context, containing inflation is the prime agenda for the bank,..............
SBI chief, Pratip Chaudhuri, blames government for rising NPAs
Pratip Chaudhuri, chairman of the country's largest lender State Bank of India, blamed the government's tardiness in clearing projects and supply of coal - or the lack of it - as the reasons behind rising sticky loans in the banking sector. Speaking at a closed-door meeting between bank chiefs and senior Reserve Bank of India officials, Chaudhuri stoutly defended the banks, arguing they alone cannot be blamed for the spike in bad loans, which have hurt their balance sheets...............
A tale of two economies
............This collection of essays comes at a time when the roles of India and China in the global economic order and the state of their domestic economies are being widely debated. These essays will provide significant pointers to policymakers, governments and academics alike about the various dimensions of economic reforms, industrialisation and inclusive development in India and China. This collection is a timely intervention as it questions several conventional assumptions in policy circles in India about the paradigm of development that is best suited for the country................
Avoid borrowed resources from international markets
Raising funds from overseas may be easier but at what cost? Can the economy bear such losses? The cost will certainly outweigh the benefits. Instead, the FM would do well to raise domestic savings and improve the investment climate to attract inflows................
Read...........
Read...........
A sense of purpose
After RBI Governor D Subbarao contributed to the falling rupee on Tuesday by saying he thought this was the wrong time for a sovereign bond and that India didn’t need to go to the IMF for a line of credit, finance minister P Chidambaram did well to say the government has plans to get PSUs to raise funds abroad as well as to target NRIs and various sovereign wealth funds (SWF) to bolster India’s forex reserves................
NRI bonds fraught with legal challenges, says SBI chief
To bolster India's foreign exchange reserves and curb the sharp slide in the rupee, issuing long-term bonds to non-resident Indians in international currency is being considered. However, State Bank of India (SBI) Chairman Pratip Chaudhuri says this is an option fraught with legal and regulatory challenges......................
Why Chidu’s quasi-sovereign bond issue is a stupid idea
........A case in point is the issue of whether the country should issue a sovereign bond abroad to shore up foreign exchange reserves. In the alternative, given the Reserve Bank of India’s (RBI’s) opposition to the idea, the finance minister said, we could consider a quasi-sovereign bond issue (or issues) by state entities such as banks or cash-rich public sector companies. “All options are on the table”.............
Here's how Telangana bifurcation impacted RBI bond auction
The proposed bifurcation of Telangana from the state of Andhra Pradesh (AP) impacted the auction pricing of the latter's development loans at the Reserve Bank of India (RBI) on Wednesday. Investors got a higher premium on the cut-off yield at 9.84 percent for tenure of ten years............
RBI's monetary activism may take a toll on equities too
.......The outlook has turned bearish as there are few places to hide at the moment. Defensives are back in focus as staples and technology continue to report double digit growth, even as others are reporting muted performance. Financials have been downgraded by most analysts as they believe “monetary activism” will hinder the sector's growth and profitability. What’s worse is that few in the market believe that RBI will roll back its tightening measures in a calibrated way...............
Shielding the Rupee from Alien Threats
......Clearly,
given the level of the Indian economy’s global engagement, it is futile
for India’s central bank to try and manipulate the exchange rate in any
particular direction. What it can and should try to do is to allow the
market to price in as much information as possible, so that ...............
Display cash non-availability at ATM before transaction: RBI
....."The message regarding non-availability of cash in ATMs should be displayed before the transaction is initiated by the customer," the RBI said in a notification. Such notices may be displayed on the screen or in some other way. Banks should also highlight the ATM ID within the premises so that customers can quote it while making complaints or suggestions, according to the notification. The RBI said despite a number of instructions to banks to enhance customer service and handling of complaints, certain operational issues continue to persist. ...........
ING Vysya Bank launches premium debit card
....."The ING MasterCard Premium Debit cards with their superior benefits and innovative reward points system are a wonderful example of this commitment. We look forward to a long and fruitful partnership with ING and to many other such innovative products in the future." The card will be available in three variants -- Titanium, My World and World Exclusive -- and customers can choose the look and feel of the card from a selection of 50 images covering segments like sports, entertainment, lifestyle the company said............
Kotak Mahindra Bank to open 100 new branches in FY 2014
......."Expanding branch network is expected to boost premium banking business. There is untapped potential for premium banking business in smaller cities," ...........
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