ATM cos see scope for more growth

....RBI data shows that in June 2012, public sector banks had deployed 56,801 ATMs with average transactions of 183 per day and average daily withdrawals worth of Rs 4.9 lakh per machine. A year later, the number of ATMs has jumped to 75,707 machines and the average number of transactions continues to be close at 167 with average daily withdrawal of Rs 4.8 lakh.........

Read - TOI

Interest rate risks: RBI wants banks to look at derivatives

.........“You can go into derivatives, but as I understand, particularly our public sector banks are not there in that domain. In fact, I seriously urge they should look at that for mitigating the interest rate risks,”.............

Read | Business Standard

RBI to set up panel for bank licences by Oct

..........At a banking conference on Tuesday, RBI Executive Director B Mahapatra told reporters that the central bank is currently screening the applications. The applications are being initially screened based on technical aspects before the regulator and the committee consider the efficacy of business plans submitted by the applicants and, most importantly, judge whether they meet the central bank’s ‘fit & proper’ criteria. “Our internal screening, we have just started the process. We are seeing whether the applications are complete and all documents are in place,” Mahapatra said.............

Read - FE

The task before Raghuram Rajan

.............To come back to Rajan’s book, at one place he argues: “Organizations like the IMF (International Monetary Fund) recruit students trained in industrial countries, especially the United States. Most of the macroeconomic principles that are taught derive from the experiences of industrial countries, where organized markets typically function fairly well. So it is natural for the staff to favour certain kinds of intervention in the functioning of markets, such as monetary policy, while being critical of other kinds of intervention, such as those in the foreign exchange market.”...........

Read - Mint

Can Rajan make a difference as RBI Governor? - YES

While much of the conjecture on what Raghuram Rajan will do differently has been on monetary policy, little attention has been paid to his core competence in banking systems and regulation, where he has made a major contribution. Having authored the Report on Financial Reforms and gone through the financial crisis advising what to do, he would be expected to take the Indian banking system to a new level, given the twin goals of meeting the regulatory challenges while bringing about financial inclusion..............

Read - HBL

Can Rajan make a difference as RBI Governor? - NO

............. As an economist who foretold the death of Wall Street as it existed before 2008, Rajan can, and should, bring to bear his rich knowledge of that “irrational exuberance.” The RBI’s traditional gradualism on loosening up, once berated, can, in fact, find endorsement by a prescient intellect. As Governor that is where Rajan can make a difference, but not much elsewhere. The rest could just be par for the course — once the hype dies down.

Read - HBL

Don’t Let the Guv off Easily

This refers to ‘Trilemma that Felled Guv’ (ET, Aug 14). It is true that high fiscal deficits and structural rigidities tend to reduce the effectiveness of monetary policy as a stabilisation tool in an open economy. But, in the Indian context, monetary policy is no less consequential than fiscal policy in affecting investment decisions. In fact, in an open economy, policy lags are normally much shorter for monetary policy than fiscal policy. Thus, interest rate changes may produce a quicker impact on investment than, say, a change in tax policies. India’s current economic slowdown has resulted primarily from “The Great Policy Paralysis”, slow administrative decision making and a sustained hike in interest rates culminating in creating a poor business environment, hurting investment and growth. A slow-growing global economy has not helped us either. To absolve Dr Subbarao by saying that he was left with no option but to fight inflation and that he could not have focused on growth simultaneously is a little hard to digest. His fault lay in pressing the interest rate pedal for far too long than was required. 

- MANISH KUMAR, Patna (ET)

SBI welcomes Subbarao's comments on reducing CRR, SLR

........"I am very happy at the Governor's announcement...When we ask for the reduction in the cash reserve ratio, it is not only for selfish interest, it will help the country and the people by diverting capital for productive purposes," he said at an event here. Chaudhuri had started a debate on withdrawing the cash reserve ratio (CRR), which is the amount of deposits banks have to park with RBI, calling it as "dead money".............

Read...........

RBI restricts FIIs from purchasing shares of Axis Bank

The Reserve Bank of India (RBI) today restricted foreign institutional investors (FIIs) from purchasing shares in Axis Bank as the overall foreign share holding has crossed the limit of 49 per cent........

Read - HBL

RBI quiz in Indore on September 7

INDORE: In Madhya Pradesh, Bhopal and Indore have been chosen as the locations for RBIQ (RBI Quiz). The pre-quarter final and quarter final of RBIQ will be held at both of the locations on September 06, and 07, 2013 respectively from 09.30am to 12.30pm.............

Read - TOI

Kannada: Bank officials pulled up

........The RBI authorities accepted the lapses when KDA officials explained about non-implementation of the policy in certain areas and told the officials that it would be done in three months. KDA asked the RBI to send circular to banks coming under its purview to follow the guidelines............

Read......

Credit card, ATM complaints flood banking ombudsman

........."Though the total number of complaints went down by 16.59% compared to the previous year, card-related grievances increased by 2.5%. This year, we received 450 card-related complaints," said banking ombudsman B K Bhoi. "The decline is disappointing and we feel there is a need to create more awareness among public regarding service of the ombudsman," Bhoi said...............

Read - TOI

Participatory Banking instead of Islamic Banking

.......... After all SEBI has allowed Islamic Finance without terming it as Islamic because the finance based on equity is driven from Islamic ethics. Similarly if RBI allows equity based banking or participatory finance, it would be secular by nature equally acceptable and beneficial to all religious communities including Muslims. If provided an opportunity to discuss and debate among the Economist, experts on Participatory finance can help all realize the significance of Participatory banking and finance to reduce poverty, economic imbalances, inflation, rupee devaluation, fiscal deficit and loss in foreign reserves. This model will help India accelerate the most important task of financial inclusion, foreign direct investments, build rupee value with better economic growth and capital inflows from abroad and within the nation among different segments and section...........

Read - Muslim Mirror

FM rebuts critics on economy

Finance Minister P Chidambaram said on Wednesday the central bank's mandate could not be price stability alone; this had to be set in the context of a larger goal of economic growth and employment generation. Replying to a debate in the Rajya Sabha on the country's economic situation, he said,"My government believes that while price stability is indeed important, it has to be in the larger context of growth and employment generation. Let Parliament take a stand on it, so that the message will go to the central bank."............

Read | Business Standard

Containing financial risks more important than propping growth: Anand Sinha

........Addressing the FIBAC banking conference here, Sinha, without referring to the domestic context, where forex market volatility forced the RBI to adopt liquidity tightening measures since the past one month, said monetary policy has to be sensitive and it cannot leave everything to macro- prudential measures. "Central banks while formulating their monetary policy will have to keep a much longer time horizon (normally two years) in view and adjust their monetary policy so that the objective of financial stability is achieved even if it leads to some dip in growth and some under-shooting of inflation target," Sinha said, though he did not directly allude to the domestic context.........

Read - ET

RBI steps should not be seen as a "capital control" measure

Finance Minister P Chidambaram tonight said the steps announced by RBI to curb investment by Indian companies abroad should not be "overinterpreted" as a "capital control" measure on corporates and that the apex bank will revisit it at an appropriate time. ..........

Read | Business Standard

Clampdown on forex outflow

........Late in the evening, the RBI accompanied its step of moderating outflows by taking another measure to encourage more inflows from NRIs. It deregulated interest rates on non-resident (external) rupee (NRE) deposits and ordinary non-resident (NRO) Accounts. According to the current rules, interest rates offered by banks on NRE deposits cannot be higher than those offered by them on comparable domestic rupee deposits. The RBI also waived the requirement under which banks must maintain cash reserve ratio and statutory liquidity ratio on Foreign Currency Non-Resident Bank [FCNR (B)] and Non-Resident (External) Rupee (NRE) deposits...........

Read - The Telegraph

In name of saving Indian rupee, RBI brings controls back

..............This means residents won't be able to take out more than $ 75,000 in a year by way of travel or investment, and are barred from making an investment in a property abroad. But foreign exchange analysts said the measure will have little impact as a firefighting measure for the RBI, as it tries to conserve resources to defend the rupee and cut back on the size of the current account deficit..............

Read - IE

RBI prohibits import of gold coins, medallions without licence

New Delhi: Seeking to reduce the import of gold, the Reserve Bank Wednesday prohibited inward shipment of gold coins, medallions and dores without license. "From now onwards, import of gold in the form of coins and medallions is prohibited and henceforth all import of gold in any form or purity shall be subject to a licence issued by DGFT prescribing 20-80 scheme," Economic Affairs Secretary Arvind Mayaram told reporters here...........

Read..........

Yes Bank case: Bombay HC to decide jurisdiction issue first

The Bombay high court on Wednesday said it would first decide whether it has the jurisdiction to hear the suit filed by Madhu Kapur, the widow of Yes Bank co-founder Ashok Kapur, challenging appointment of directors nominated by the current managing director Rana Kapoor. The lawyer of Rana Kapoor, co-founder of the bank (who is married to Madhu’s sister), has said that high court has no jurisdiction to hear matters about appointment of directors. Justice S.J. Kathawala said he would have to decide this issue first...........

Read - Mint

Centre reiterates Aadhar’s validity

 ........“Government of India has recognised the letter issued by the Unique Identification Authority of India (UIDAI) containing details of name, address and Aadhaar Number as an “officially valid document” to satisfy the “Know Your Customer” (KYC) norm,” the Minister said in his reply. The RBI has also advised the banks to accept Aadhaar Letter Card as a ‘officially valid document’ for opening accounts, he said adding , banks were advised to accept Aadhaar letter issued by UIDAI as a proof of identity and address, for opening accounts, if the address provided by the account holder is the same as that on Aadhaar letter...........

Read - The Shillong Times

NSEL crisis: Prime Minister's Office to set up special team, says report

..........It would also comprise of officials from the Reserve Bank of India (RBI), Securities and Exchange Board of India (Sebi), Directorate of Revenue Intelligence and Enforcement Directorate. The mandate of the committee would also be to see that there are no systemic threats...............

Read.......

Loss of face for NCP, state bank out of red

MUMBAI: Two years after the RBI superseded the NCP-controlled Maharashtra State Cooperative Bank for rampant financial irregularities and administration collapse, the nodal bank for all cooperative banks in the state is now out of the red owing to the stringent measures taken by administrator Vijay Kumar Agarwal, a retired bureaucrat........

Read - TOI

The idea of banks becoming brokers will gain acceptance: Vijayan

...........Speaking on the sidelines of an insurance summit organised by the Confederation Indian Industry, Vijayan said banks don’t canvass for new customers to sell these products, but utilise their existing customer networks for the same. “If you are a representative of the customer, they should be given the best choice of products.” In its regulations on licensing banks as insurance brokers, Irda said that each applicant (scheduled bank) should have obtained prior approval of Reserve Bank of India (RBI) before applying for a licence to act as an insurance broker. The licence, once granted, will be valid for three years after which it will have to be renewed...............

Read | Business Standard

Two pluses, one minus and an unknown

..............Overall, his thinking seems to be in the Fund-Bank mould - when what has saved India in the past is going against received wisdom. The Indian economy and the social forces driving it are far too complex for solutions of any particular kind to work. Besides, there's no point in having a brilliant RBI governor if politicians do not listen to him. You need a person who is able to add persuasion to advice behind the scenes. In this, an insider who knows how the system works has a greater chance of success.

Read | Business Standard

Looking back to see ahead

...........In the present context, pursuing this goal will inevitably bring him into conflict with the finance ministry and the minister, Chidambaram, as has been the fate of outgoing Subbarao. Subbarao’s single minded devotion to inflation control and to the independence of the central bank brought him into direct confrontation with the finance ministry. When in the face of falling growth numbers Chidambaram was desperately and openly asking for interest rate cuts, Subbarao kept on increasing the interest rates—for 13 times at a stretch -- in copybook style economics. In pursuing his professed objective, Subbarao kept his own counsel and asserted the independence of the central bank over the political establishment............

Read - DNA

Subbarao comes out against 'monopoly' in banking sector

.............Subbarao said the country should aspire to have a few Indian multinational banks in the near future by selective acquisition. "What type of largeness should Indian banks attempt? Large banks like the Chinese banks or large banks with global presence? ... It may take years for our banks to become global players by way of organic growth."..............

Read - IE

NBFCs must be under RBI watch, says Subbarao

.......The RBI Governor’s comment assumes significance in view of the government’s plan to take away the regulation of non-banking financial companies from the central bank, and put it under a unified financial authority. Dr. Subbarao said any such move would prove detrimental to financial stability................

Read - The Hindu

CRR, SLR could come down further: Subbarao

Outgoing RBI Governor D. Subbarao, who had disagreed with the bankers’ call to further trim the cash reserve ratio (CRR) or pay interest on these deposits and cut SLR, on Tuesday said “perhaps” there is a need to reduce these rates. “I do recognise that there is a demand, and perhaps a need, for further reduction (in CRR and SLR),” he told .........

Read - The Hindu

Subbarao cautions on ‘too-big-to-fail’ banks

................Citing the 2008 credit crisis, which was triggered by too-big-to-fail banks, Subbarao said, “We don’t need monopolies… as large banks can become too-big-to-fail, leading to moral hazard problems.” He also said consolidation could pose problems of technology migration, customer attrition, cost of implementation, besides raise HR issues of seniority, salary, transfer, promotion, parity in perks and litigation. Large banks will not be able to provide the personalised services small banks offer...........

Read - HBL

Trilemma that Felled Guv

..........Subbarao faced a trilemma. He could not check inflation, manage the rupee and spur growth together. So, he focused on inflation. He failed in this because of a high fiscal deficit and the fact that inflation here is food-led, which monetary policy cannot check. Going for fast growth or exchange rate control, advocated by critics, would have worsened inflation. The trilemma felled Subbarao. It would have felled his critics too.  Central bankers cannot work miracles. They have a limited arsenal of limited effectiveness. For today’s problems or yesterday’s boom, RBI governors deserve little of the credit or discredit: those belong mainly to global winds and New Delhi’s follies.

Read - ET 

Raghuram Rajan’s transition from economist to policymaker

Raghuram Rajan assumes office as RBI Governor at a time when central banks in the advanced, beleaguered countries have come to shoulder extraordinary responsibilities that would normally reside with governments. This development, he recently observed, challenges the myth of central bankers being “mere technocrats, hovering independently over the politics and ideologies of their time,” adding that “their feet, too, have touched the ground.”...........

Read - Mint

New banks will improve efficiency in system: RBI deputy governor

......"We need to bring in more competition and new banks will improve efficiency. When new banks entered, PSBs were able to partly improve their productivity. But ironically later on those banks have themselves become inefficient," Mr Chakrabarty told reporters at a banking summit in Mumbai on Tuesday evening...........

Read........

RBI's timing - A.Seshan

...........Would it not be advisable to time the RBI policy deliberations a day or two after the FOMC meetings when the impact on the forex market would also be known?

Read | Business Standard

Finmin Seeks More Names For SBI Top Post

........“We have received a communication from the finance ministry asking for a relaxation in the case of A Krishna Kumar,” one of the officials quoted earlier said. The guidelines for the selection of SBI chairman stipulate that a candidate should have at least two years to go before retirement. This rule made all the managing directors at SBI, except Bhattacharya, ineligible for the post. “Among the other three managing directors, Krishna Kumar has the longest tenure and the government has decided to provide for a relaxation in this case,” another official said...........

 Read - ET

RBI takes steps to remove currency shortage

MUMBAI: The Reserve Bank on Tuesday came out with incentive scheme for banks to ensure distribution of notes and coins to the public, a step which will help in removing shortage of currency in circulation.  Accordingly, the existing scheme of incentives and penalties has been reviewed taking into consideration the recent developments in the area of exchange and distribution of bank notes and coins to the public, RBI said in a statement............

Read - TOI

RBI levies penalty on 25 banks: Will it change banking for good?

........... However,  RBI has not clarified as to whether such investigation by the tax and enforcement agencies was being carried out and if so, when it is expected to be completed for the sake of putting a lid on this much publicized role of banks in money laundering and tax evasion in our country. No doubt the banks would have quietly paid the penalty and got rid of the Damocles’ sword hanging on their head, but are these penalties deterrent enough to ensure that the rules and regulations will be followed scrupulously both in letter and spirit at least in future?...............

Read - Moneylife

Banks' deposit, loan structure have become wholesale: RBI

............“Allocational efficiency has not improved along the lines of the improvement in operational efficiency. The increase in operational efficiency has come at the cost of allocation efficiency. The benefit of increase in operational efficiency has not reached customers, particularly in rural areas,” said RBI deputy governor K C Chakrabarty. RBI data shows operational efficiency of banks has improved since financial sector reforms were initiated in 1991..............

Read | Business Standard

Apex bank logic to protect turf

.........Subbarao, who retires next month, has once again articulated his concern over the move to take non-banking finance companies out of the regulatory supervision of the RBI and place it within the ambit of the yet-to-be created Unified Financial Authority, which is the brainchild of the Financial Sector Legislative Reforms Commission (FSLRC) headed by former Supreme Court judge B.N. Srikrishna.................

Read - The Telegraph

Acting on the bigger picture

........Three sets of measures by the RBI — the first one was on July 15 — have given only limited respite with the rupee falling relentlessly after a brief period of trading in a narrow range of between 59 and 60 to the dollar. However, going by initial reactions on Monday and Tuesday, the government’s new package might not yet succeed in stabilising the rupee. The time has come to view the rapid rupee depreciation in a larger perspective .........

Read - The Hindu

Most foreign banks open to local incorporation: RBI

Mumbai: Many of the 95 foreign banks at present operating in the country on branch model have shown interest in converting themselves into local subsidiaries, a senior Reserve Bank official said Tuesday. "Many banks are interested in subsidiarisation and the RBI is in the process of issuing the final guidelines on this," RBI Executive Director B Mahapatra told reporters on the sidelines of a banking event here this evening. He did not offer a timeline for the same...........

Read..........

Wholly-owned subsidiaries: RBI takes cautious approach

..........In an effort to protect the interests of retail depositors and creditors, the RBI has adopted a cautious approach towards wholly-owned subsidiaries. After all, in a buoyant economy, the relationship between bank branch and parent may be of little importance but, in adverse conditions, the structure and location of both assets and liabilities have the potential to become far more important. Local incorporation gives greater control to the host country regulator, which can act independently against the branch operations. The wholly-owned subsidiary model makes it easier to define the appropriate law of jurisdiction............

Read - ET

Schemes and scams

......For example, play the role of a restaurant owner in a country with hyper inflation. As the inflation rate shoots up, the menu prices need to be revised, sometimes several times daily! Through the money lab you can learn why currencies strengthen and weaken against one another. May be after a few currency games, you may be in a position to recommend to the Reserve Bank of India a solid defence for the poor rupee which is weakening on a daily basis. And meanwhile if some dodgy person comes to you with an emu investment scheme, you can tell him that such schemes are strictly for the birds!........

Read - The Hindu

RBI designates bank branches to collect income tax dues

".......... The public is required to wait in queues in the RBI for unnecessarily long periods. To obviate the inconvenience involved, assessees in the city are advised in their own interest to avoid last minute rush by remitting their income-tax dues sufficiently in advance to the due date," RBI said in a circular............

Read.......

What about bad loans?

I am disappointed that many learned columnists and journalists are not asking the Reserve Bank of India (RBI) or public sector bank chiefs the right questions. Why haven't we heard you ask them if depositors' money is now at risk?.........

Read | Business Standard

RBI to examine financials of 34,754 NBFCs: Meena

..........."It has been decided by RBI, that as a one-time measure, the financials of all these 34,754 companies (other than those registered with RBI) will be examined to ascertain their eligibility or otherwise for registration with RBI," Minister of State for Finance Namo Narain Meena said in a written reply in the Rajya Sabha. "The main objective is to determine whether among these companies there are NBFCs that ought to have registered with the RBI for carrying on their NBFI (non-banking financial institution) activities," he said..................

Read...........

Reserve Bank of India won't regulate virtual currency Bitcoin, yet

............ The Reserve Bank of India, which has its hands full trying to arrest the slump in the value of the rupee, will first seek to understand Bitcoins - which have attracted regulatory gaze in the United States -- before seeking to bring it under its purview. "As of now we are watching and learning about the developments in Bitcoins but are not regulating it," an RBI spokeswoman wrote in an e-mailed response. In a note published in June, the central bank acknowledged that virtual currencies "pose challenges in the form of regulatory, legal and operational risks." ...........

Read - ET

Also read 9 Things You Should Know About Bitcoins

India’s exchange rate policy

......The central bank should then announce that it does not care where the exchange rate is within +/-15% of this rate. This is a level of deviation so large as to account for difficulties in calculating competitive exchange rates and wide enough to account for normal market volatility. At the same time, this band is sufficiently wide that on the very rare occasions that the central bank has to intervene to defend the boundaries, it will appear so appropriate that the market will run with and not against it.........

Read - Mint

Takru’s tough talk: Banks must seek management change before recasting corporate loans

.........“We are seeing more and more cases of people who are taking advantage of the distress, trying to go to the debt recast cell, trying to go back on their obligations, not paying when they are supposed to, trying to negotiate deals with the banks for moratorium and better interest rates,” he said. The banking system has been “too” tolerant of such behaviour and this is not required, he said. Companies cannot sit back and expect that banks will continue to take hits on their behalf, he added.................

Read - HBL

Saving Government Banks from the Government

.........If Rajan has his way, something, which has not been discussed before, may come to the fore - the emergence of many banks, instead of just a few big ones. The central bank has been reluctant to issue more than a few banking licences, saying it may not be in the best interests of the nation. RBI could also partly be looking to prevent debt-laden conglomerates from cornering licences. Rajan, who has seen US community banks flourish and perform a role in the real economic activity, may turn the argument on its head..........

Read - ET

Brick-and-mortar branches still main source of business: bankers

.........“Five years ago, people said the brick-and-mortar branch was doomed. Those people have now come back. For example, when we opened branches in areas like the North-East, Chhattisgarh, UP and Himachal, many people including myself questioned it saying there are no people there but the consumption story has made that move look far sighted,” .............

Read - Mint

SBI displays photos to shame educational loan defaulters, faces flak

........."Would they ever be willing to portray the photograph of Mr Vijay Mallya for all the payments he has not paid back banks for years? This is a loss of dignity and human rights for the poor people. They should resort to legal recourse even in the worst case.".................

Read.........

IIFCL Appointment Irks FM

..........The Search Committee, comprising two secretaries to the government of India, the RBI Deputy Governor, and two prominent independent experts — the IIM-Lucknow director and HDFC Chairman Deepak Parekh — was aware of the fact that Bagla was the first choice for the same post during the last selection process done in March 2010, when his candidature was not considered by the then finance minister on account of conflict of interest.........

Read - ET

ATM cards with photo will check frauds: Ombudsman

Bangalore, Aug 13 (IANS) Banking Ombudsman in Karnataka M. Palanisamy Tuesday advised banks to issue chip-based ATM cards with customer's photo to check frauds committed through debit or credit cards. "As complaints related to misuse of debit or credit cards have jumped to 1,279 till June from 732 year ago, I have directed state-run and private banks to issue only chip-based ATM cards with photo of an individual customer to check their fraudulent use," Palanisamy told reporters here at the annual conference of the Reserve Bank of India's (RBI) regional office..............

Read.......

All about Savings Bank interest rates!

Every individual has a Savings Bank account, but pays little attention to the interest earned on the balance in this account. Some people may not even know that the balance they maintain in their savings bank accounts earn an interest. In the past,.......

Read - ET

SEBI to go in for a major overhaul

......The nine-member board of the capital markets regulator decided to implement a plan of action in this regard, following recommendations made by an independent consultant. Among others, it has been recommended that SEBI should impart a greater focus on mobilising household savings into capital market assets, strengthen its supervisory functions and its oversight of listed companies. Besides, it has been asked to work for a re-organisation of its functional departments, increase its manpower, improve its IT strategy for organisational efficiency and strengthen its training and performance management system.............

Read - The Hindu

Stop playing to the gallery - Dr.S.S.Tarapore

....... The Prime Minister and Finance Minister would recall their own statements of many years ago. The PM said: “there is no better anti-poverty programme than the control of inflation”. The FM has similarly said: “inflation control is the Dharma of the RBI”. Once the PM and FM are supportive of the RBI, overt criticism by government officials would stop and the RBI would be able to handle the onslaught of industry and others.............

Read - HBL

Fighting without fighting - Dr.Subir Gokarn

.........In these circumstances, it appears to me that increasing the supply of dollars is the more effective way to stabilise the rupee. Its collateral damage to growth will be relatively lower. As mentioned earlier, this can either be done through the IMF or through the market (either a sovereign issue or through the NRI channel). And if the former is perceived to be infeasible for political reasons, that leaves just the latter.................

Read | Business Standard

Reserve Bank and the art of communication

..........A very specific communication exercise — and this what this article is really about — by the Reserve Bank of India — has all the ingredients for an excellent case study. On July 30, while reviewing its credit policy, it issued its guidance — its assessment of what the monetary stance would be in the future. Of particular interest to all was when the RBI will roll back its liquidity squeezing measures it had announced in instalments a few weeks ahead of the policy to curb volatility in the rupee..........

Read - The Hindu

From lemma to pentilemma, via the Impossible Trinity

....In the beginning was presumably the lemma. It’s entirely possible that God said, “Let there be lemma”, and there was lemma. And the lemma shone in the darkness; and the darkness comprehended it not. Nor did I. So I looked up dictionary.com, which says a lemma is a subsidiary proposition introduced in proving another proposition; a helping theorem. Its only purpose lay in paving the way for something greater and grander, very probably monetary policy. The good thing about the lemma was that it was a proposition. Because to proposition is the first step in the long and convoluted road that leads to begetting. Thus it came to be, in the fullness of time, that the lemma begat the dilemma............

Read - Mint

India’s ‘craze for foreign’ must end

It would take extreme effort for Raghuram Rajan to do a worse job of ensuring economic growth than his immediate predecessor Duvvuri Subbarao, who will leave behind a banking and industrial wasteland by the time his extended term concludes in a few weeks' time. Given that he has been a loyal chela of the economic adviser to the Prime Minister, C. Rangarajan, it would be understandable if he were to expect to be given the Padma Vibhushan at the next investiture ceremony. Odder choices have been known to occur, no doubt inspired by the Nobel Peace Prize awarded to Henry Kissinger or the European Union. More apt than simply a national award would be the gifting of a ministerial-level commission chairmanship to Subbarao................

Read - The Sunday Guardian

INDIAN ORIGIN AMERICAN AS RESERVE BANK GOVERNOR - Vipin Malik

.........Second foreigner as Governor was: Sir James Braid Taylor July 1, 1937 to February 17, 1943 Dr. Urjit R. Patel was appointed Deputy Governor on 14.01.2013 of Indian origin with South African Passport. However, immediately after his Notification he obtained Indian Passport from Ministry of Home Affairs.There are four Deputy Governors under the Act and till date there have been fifty five Deputy Governors appointed by the Central Government.There is no debar under the RBI Act, 1934 on the qualification requirements of the RBI Governor as there is only disqualification of Directors and Members of the Boards.  Governor is also one of the Directors...........

Read - The Pioneer

Note forgers, beware

Cash transaction at the bill collection centre of Tamil Nadu Generation and Distribution Corporation has become a lot easier for residents in the western parts of the city. The bill collection centres have been provided with counterfeit money detector machines to identify fake notes, thereby even reducing the transaction time to a great extent..........

Read - The Hindu

Bank Employees Wage Revision on Right Track

........The delegation consisting of representatives from all the nine constituent of UFBU, United Forum of Bank Unions was led by Sh. Basudev Acharya, Member of Parliament. The Delegation submitted a memorandum to the Finance Minister with demands related to followings:............

Read......

Ring out the terminal, ring in the depot

...........S.Venugopalan, a resident of Vannandurai, says over the years MTC has discontinued a number of services on the stretch, citing that it was an elite neighborhood where many of its residents did not rely on bus services. “That was a wrong judgment as many from the fringes of Besant Nagar commute to north Chennai on work,” says the retired RBI officer, who has written many letters to MTC seeking more services on this route...........

Read - The Hindu

Obituary

Mrs. K.Rama (64) Ex-RBI, wife of N. Kasthuri, Chrompet (Ex RBI) died on 09/08 attained Acharyan Thiruvadi on 09/08/13. Phone: 2265 2619

Mr. M.V.Sundaram, Retd. Reserve Bank of India, Chennai died on 10/08/13. Ph. 26575887

Hindu

Where is the "DOMINO EFFECT? - Sitendra Kumar

In interaction with the associations on pension issues, Shri Takru has spoken about DOMINO EFFECT. What is this? It implies that if RBI personnel are sanctioned PENSION UPDATION, it would have to be acceded to SBI and thereafter to Canara Bank, Syndicate Bank, UCO Bank etc; i.e. to entire banking sector. Now the question is;..........

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Raghuram Rajan - ‘Young Economist’ : Will He Be Able To Put Economy Back on Track and Sustain Internal Politics at RBI and Political Pressures

....Now newspapers are full of praise for this so called Young Economist being at the helm of RBI affairs.  I too do not have doubt about his capabilities.  Question which arises in my mind is whether the ‘young age’ will become a virtue or a drag for his performance.  I am raising this issue as most of the bankers are facing such a clash of personalities in the banking sector. In last five or six years, some CMDs have brazenly promoted junior officers by ignoring the performance of seniors. These banks have seen  lot of personality clash as senior in service are being asked to serve under the junior people.  Such brazen violation of seniority has led to  slower growth of the banks and rise in NPAs. Rajan too is likely to face challenges  from his Deputies, some of them are much older and experienced in the field of banking......

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Race on for Rajan’s ‘lucky’ room

.....Paul moved to the Rashtrapati Bhawan as the President's high profile secretary. Rajan, who was the economic adviser to the Finance Minister, went on to become the RBI governor. So the room is considered to be lucky.

Read - The Sunday Guardian

Why Chidu and Rajan may not be walking together just yet

.......The astute economist that Rajan is known to be, despite his stint in government he will have to weigh the pros and cons and opt for the option which most guarantees financial stability for now. Simply put, his first monetary policy statement, which will be articulated on 18 September, just days after he takes over, will likely be one which may once again not make finance ministry mandarins too happy. Experts see Rajan as continuing with RBI’s policy of independence in policymaking, particularly given the present situation...........

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Low Rupee, Or High Rates; Can't Have Cake And Eat It Too

......Chidambaram and others have been blaming gold for the high CAD, but it is their low interest rate regime in a high inflation era, that pushed people to gold. Once you reward savings with higher interest rates, that will be the beginning of a new innings for the Indian economy. We need to make up our mind – whether we are acceptable to high interest rates for a while, or lower rupee. We can’t have the cake and eat it too.

Read - ET

PSU banks: time to adapt to social media

......... “A blend of physical and digital is the way forward. Banks can mine and harvest rich information from social media and it is a good building block for economic and customer research and trends”, the paper released recently by RBI Governor D. Subbarao said. The IDRBT acknowledges the challenges that confront the banking sector in this direction when it says existing organization structures and business processes are two main challenges that need to be overcome in view of a serious social media foray. Another barrier to adoption of social media is delay in process upgrades and updates. This was because of the fact that initiatives like centralised processing are not exploited enough.........

Read - The Hindu

‘RBI officials to visit four districts’

Senior officials from the Reserve Bank of India will soon visit four districts in the State to study the grievances of the micro sector entrepreneurs, particularly regarding the non-implementation of RBI guidelines on providing loans up to Rs. 10 lakh without collateral security,...........

Read - The Hindu

Police on the lookout for cooperative bank directors

...........Fearing arrest, the officials filed an application before the local court seeking anticipatory bail. However the First District Sessions Court rejected the application on Thursday. According to the police, the bank officials have remained ‘untraced’ ever since the complaint was filed. However Mr. Munavalli clarified the bank had remitted the amount to the Reserve Bank of India, and said the amount had been credited to ineligible beneficiaries due to the lack of proper guidelines...........

Read - The Hindu

IRDA allows banks to act as insurance brokers. Will the RBI agree?

......Reserve Bank of India (RBI) has said that banks assuming the role of insurance brokers may also lead to conflict of interests. While the RBI approval is required for banks to become brokers, IRDA is of the opinion that in case of any dispute arising out of insurance transactions, its jurisdiction should prevail. It added that the laws applicable to insurance contracts shall be enforced and information in this regard shall be furnished to the RBI..........

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Growth comes last

..........It is an open question how the government and the RBI will react to these figures, which show inflation high but steady, and the trade deficit declining, at the cost of a continued manufacturing slowdown. In the absence of an explicit policy shift to growth instead of stabilisation, this may well be the trend for the next few months.

Read | Business Standard

Compounding fees to be refunded to applicant's a/c via NEFT

...............The directive came as the RBI had received a number of applications for compounding of contraventions of FEMA which were sent without proper approvals from the authorities concerned. If an application has to be returned for this or any other reason, the application fees is also returned, it said............

Read | Business Standard

India's gold guzzling still high, spurs neighbours to act

......The RBI last moved on July 22, when it stipulated that 20 percent of gold brought into the country must head out again as jewellery - a move that has dried up supplies and stalled business as traders wait to find out how the rule will work. Demand in the country remains strong, however. Gold is still a must-have at weddings and festivals, which get into full swing in the next few months. There are signs now that Indians may be bringing in gold through neighbouring countries, pushing their imports sharply higher as well and prompting action by their governments. Pakistan has slapped a one-month ban on gold bought to make jewellery for export after its imports jumped 386 percent in the first half and topped $514 million in July alone - more than double what it bought in the first six months of 2012. "The difference in import duties seems to have provided the incentive for increased duty-free imports in Pakistan and smuggling to India," a statement on the finance ministry's website said...........

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Ratnakar Bank to buy part of RBS' businesses in India

Kolhapur-based Ratnakar Bank on Friday said it had agreed to buy Royal Bank of Scotland’s (RBS’) business banking, credit cards and mortgage portfolios in India. The private lender did not disclose the price at which it will buy these businesses. The deal is subject to approvals from the Competition Commission of India (CCI)........

Read | Business Standard

Karnataka Bank holds exporters’ meet in Panipat

.......A bank release said here on Monday that Bhat was speaking after inaugurating an exporters’ meet, jointly organised by Karnataka Bank, the Federation of Indian Export Organizations (FIEO) and Panipat Exporters’ Association, in Panipat recently. Bhat said the bank treats export credit as national priority, and it is committed to provide export credit to all the eligible exporters at a competitive interest rate..................

Read | HBL