Undeterred by the economic slowdown and a sluggish demand for credit, HDFC Bank Limited is planning to open 300 new branches across India, adding to its existing branch network of 3,119. The country branch head of HDFC Bank Navin Puri said the bank is waiting for the approval of the Reserve Bank of India over the new branches and is hoping to strengthen its presence in retail banking...........
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.
Friday, August 30, 2013
HCBL Co-operative Bank organizes workshop on financial inclusion
.......The facility of 24*7 Banking E-Lobby has also been provided in remote areas so that customers can keep in touch with the Banking facilities at any point of time. This effort of the Bank to reach out its customers was well praised by the Governor of RBI - Dr. D Subbarao during his visit of the Bank's e-lobby in Lalpur Karota Village, Barabanki. As a step ahead towards its Social and Financial Inclusion, the Bank has supported and encouraged groups of Chikan and Zardoji Karigars who were originally being exploited by wholesalers.........
Online banking malware a serious and growing threat
.......“We found an online banking malware that modifies an infected computer’s hosts file to redirect a customer of certain banks to phishing sites. We also saw more Citadel variants (detected as ZBOT), targeting different financial service institutions. These malware not only target big banks, but also smaller ones, including those that exclusively cater to online banking customers. As predicted, cybercriminals carried out developments in malware distribution and refinement for existing tools,” ..........
Thursday, August 29, 2013
Use regional languages for financial inclusion: Subbarao to banks
RBI, govt should protect investors from illegal schemes: D Subbarao
........."It is the responsibility of the government and the regulators to protect people from such fraudulent schemes," said Subbarao, who demits office in a week's time. He was speaking at the Reserve Bank headquarters here ahead of the presentation of Rajbhasha shields to commercial banks and other financial institutions..............
“Driving ePayments Growth in India”
6th Financial Inclusion and Digital Payments Conference
With new license being issued by RBI, what is in store for White Label ATM business in
India? What are the opportunities and initial challenges being faced by the players?
How will big banking brands connect with White Label ATMs and co-exist in the competitive world?
Given RBI’s mandate to increase the reach to Rural and Tier II & III cities, what role can
large national banks play to grow the sector? How do they see co-existing with new players?..............
Look Beyond Textbooks to Undo the Damage
........Do you think the change of guard at RBI could hasten things?
RBI’s
policy has been steady. I have never seen sudden changes. So we need to
wait and watch what the policy stance would be, but if I were to put on
the table what probably is required today, it would be a relook at
interest rates..............Get Ready for Another Asian Financial Crisis
Make
no mistake, a second Asian Financial Crisis is on its way. This storm
will not blow over soon. It originated in the US, when the Fed proposed
to taper and end quantitative easing. The frightening thing is that this
will happen in stages over the next 12-18 months, and each turn of the
liquidity screw can cause a fresh financial storm. Nothing Chidambaram
or Raghuram Rajan say can avert the storm............
Read - ET
Read - ET
What is happening in the economy? - Dr.T.V.Gopalakrishnan
At this rate what will happen to the economy and the masses. People are losing their sleep as they are unable to understand or secure their life economically, socially and physically. As on today, a hundred rupee note can at best fetch a kg of Onion and perhaps one Kg of Potato. And there are people who have not seen or handled even hundred Rupee note. What is this Government doing for the masses. The equitable management of the economy has been given a go by and a few who are after power and money are allowed to dictate. The RBI and the Govt have no targets for rupee dollar rate but some segments of the market have a definite target and they are able to pull down the rupee the way they want. Mismanagement of the domestic economy is the root cause for all these evils and creation of wealth by a few at the cost of majority of the masses have taken the economy to such a pass. Absence of the Governance system which is the very essence of keeping the economy on track has led to this state of affairs and for this the bureaucracy and the Government in power are only answerable.Now the task is really difficult.
(This comment appeared in Business Line in response to an article " Dollar Demand sinks the rupee" in BL dated 28/8/13).
Let’s fight for economic freedom
......Why should the Government not sell its stakes in various banks and actually do its job of regulating the sector through the RBI? Why should oil companies not be allowed to buy and sell petrol and diesel freely at market-determined prices? Why should discoms not compete with each other to provide electricity to households who have the choice to buy from different entities? All this will require time, effort and substantial change in mindset..................
The India of 2013 is not the India of 1991
........Further, a more rounded food security mechanism can help insulate the poor from rising food inflation. This can free up the Reserve Bank of India to then look at the manufacturing inflation as a dominant basis for making monetary policy and help ease interest rates for industry. All this needs a dramatic improvement in governance and a return to normality in the strained relations between the bureaucracy, the political class and the judiciary. Some argue that this can only happen after the general election, whenever it is held..........
FinMin blames RBI policy, project clearance lag for economic slowdown
Blaming the economic slowdown in 2011-12 and 2012-13 to RBI's tight monetary policy as well as hindrances in clearance of projects, the Finance Ministry has said the government has taken a slew of measures to improve investor sentiment and address the fiscal situation but the global economic situation is yet to recover remarkably.......
Welcome move
Transfer of ownership of DICGC to GOI is a welcome move. Perhaps, with this move, government is admitting that risk to financial assets emanate mostly from government policies and insuring deposits and guaranteeing recovery of bank credit should be government’s responsibility. It is hoped that GOI will compensate RBI for the share transfer and the proceeds will go into RBI’s reserves and this time it will not be a ‘book adjustment’, as was on certain earlier occasions.
- M.G.Warrier
RBI’s concerns go farther
In August 2010, BS had published my following comments, when RBI released the discussion paper on new bank licenses:
“The discussion paper on new bank licences released by RBI may, in the coming days, bring to fore the problems and challenges faced by financial sector as the issues raised in the paper go much beyond the government’s intention to give a greater role for private sector in banking to promote financial inclusion and reduce government’s financial commitments for running banks. It is quite natural that as a regulatory body responsible for the health of the financial sector, RBI’s concerns go farther from just the net worth of the promoter or his professional capability to run a bank. RBI’s intention to regularize and ratify the parallel banks which can conform to regulatory norms and rehabilitate some RRBs which may have manpower and infrastructure in place but may be finding it difficult to perform for want of leadership as also the central bank’s desire to keep the business of banking trustworthy is evident from the issues raised in the discussion paper. The present scenario is partly the result of GOI and RBI keeping the banking reforms in the backburner after allowing some banks in the private sector. At this delayed hour at least, a total view of banking needs and institutional infrastructure for meeting them may have to be taken before implementing short term solutions. If this is not done corporates at the national level and small borrowers at the ground level will continue to bypass the banking system.”
The present discussion paper justifies my views.
- M.G.Warrier
Level the playing field
........in India, including banks, have become whipping boys of the government and regulators. Government officials use these organisations for carrying out their agenda. It is not that these organisations cannot compete with their private sector counterparts. They will outperform them if a level playing field in terms of skill, technology, opportunities and autonomy in management is assured.............
Maid hides 1.5kg gold in TV set
....The employer, Ananth, a resident of Jnanabharathi IX Phase and Assistant Manager with the Reserve Bank of India, on Monday lodged a police complaint saying he suspected his domestic help, Salma, of having stolen the gold ornaments he had brought from a bank locker on Sunday. Ananth said on that day, Salma left his house without informing anyone. Jnanabharathi police swooped down on Salma's house on Tuesday, and the woman protested her innocence.............
RBI looking into the issue of SBI shaming students
CHENNAI: The Reserve Bank of India (RBI) is looking into the complaint against State Bank of India (SBI) for shaming students and their parents for defaulting on their education loan. "RBI's Assistant General Manager Sharmila Sampath Kumar has sent me an email on August 28 stating that the issue is receiving the attention of the central bank," K Srinivasan, convenor,education loan task force (ELTF), said here Wednesday........
Govt sets up task force for currency swap arrangement
Rattled by the continued decline in the value of rupee, the Commerce and Industry Ministry has constituted a task force comprising representatives from the Ministry, Department of Economic Affairs, Reserve Bank of India (RBI), SBI, industry bodies FICCI, CII and Federation of Indian Exporters Organisation (FIEO) to work out currency swap arrangements with key trading partners of India...........
NPAs: Massive slippages in banks call for tough measures
...........It is hoped that Raghuram Rajan, the new governor of RBI, will usher in urgent modifications in the archaic procedures and processes. In India, when there is a banking regulator in the form of RBI for over half a century, why the MoF and not the RBI is reacting to sharp deteriorations in the quality of loan asset portfolio of banking sector as a whole. This is indeed an extremely alarming worry for all, which if not addressed on a priority basis, will lead India to the Cyprus or Greece type bank collapses...........
‘Ease curbs or release RBI gold reserves for festival season’
.........Surely enough, the Finance Ministry is already getting petitions from jewellers’ associations and States that he should help relax gold imports for pure consumption ahead of Diwali. Some jeweller associations have suggested that the Ministry keep its curbs on fresh gold import but supply for consumption during the festival season from the RBI’s existing reserves of about 600 tonnes of yellow metal...............
'Increasing gold, fuel imports reason for economic crisis'
Expressing concern about the growing Current Account Deficit of the country, Hyderabad Central University’s Department of Economics faculty member Vakulabharanam Vamsi blamed the increasing gold and fuel import of the country for the crisis. He was delivering the Ashis Sen memorial lecture on “Global economic crisis: Issues before Indian Financial Sector”, organised by RBI Employees Association Hyderabad branch here on Tuesday............
Ridiculous Instructions and the Unstable Rupee
.......In years past, RBI,
Mumbai (then, Bombay), used to buy spot pound sterling and forward up
to 12th month. RBI also used to sell pound sterling that was then
India’s intervention currency. These rates used to be quoted through the
Reuters Monitor screen and the RBI was bound by these rates to any
authorised dealer who approached the RBI with genuine merchant
transactions. As a sequel to such quotations, the Indian foreign
exchange market used to invariably settle down and trade in the band
between RBI’s buying and selling rates. Somehow, a few years after the
pound was displaced by the dollar as India’s intervention currency, this
practice was discontinued. In my view, it is worth a try again with the
dollar.............
Read - ET
Falling rupee and its counterfeit cousin!
While the rupee is touching new bottoms every day against the US dollar, the number of fake currency notes in India is increasing. Even the Security Press is printing blank notes. Can the new Governor of RBI look at polymer currency notes? Dr Raghuram G Rajan, Officer on Special Duty (OSD) at the Reserve Bank of India (RBI) Head Quarters in Mumbai, who would take over as the next Governor on 5th September, has his plate full of woes............
Bharat nirman on rupee ruins
....The domestic currency has lost alarmingly since Monday—Rs 5.64—and Rs 9.41 in the last one month not many market analysts were willing to bet on any quick recovery any time soon, without a decisive intervention of the government. “If steps are not taken to implement the reforms necessary to tackle the structural issues, the government will be left with the so-called '4D options': debt default, devaluation, deflation,” said Angelo Corbetta, head of Asia equity for Pioneer Investments in London, raising further alarm. Currency analysts now aver that an assault on the much talked about 70-level is only a matter of time..............
Fall in Indian rupee not necessarily a bad thing: Nordea AMC
Fall of rupee is not necessarily a bad thing as it will support exports which will help bridge the gap in current account deficit, Chief Executive Officer of Nordea Asset Management Company Allan Polack said. "Weakening of currency is not necessarily a bad thing. It will make exports competitive from the country," he said..........
'Irrational sentiment' impacting rupee value: FinMin
...."This is an irrational sentiment. It will correct itself. It is important to stay on the course. There is no need to panic," Economic Affairs Secretary Arvind Mayaram told reporters here. He was responding to a query on the value of the rupee, which fell to a new low of 68.75 against the dollar in intra-day trade today. The rupee has declined over 20 per cent since April on concerns about the country's widening current account deficit, slowing economic growth and capital outflows.............
Rupee torture: Between a red queen, yuvraaj and white veshti
....“Oh. But you could still do something about it?” asked the Queen. “Madam, my time is up. I am going back to Telangana. I have bought a nice house in Nizamabad. And will spend the next few years watching the mythological movies of the late NT Rama Rao garu. It’s up to the Professor now,” said Subbu as he left the room........
Will rupee rise from the ashes?
...There is anticipation that new RBI governor Raghuram G Rajan will usher in a pro-growth tilt in monetary policy, but analysts are of the view that there is little that the new central bank chief can do differently from his predecessor to steer the economy caught in a pincer attack of a falling rupee, sliding growth and high inflation. Investors would be keenly watching for forward looking cues on Rajan’s stance in the mid-quarter credit policy review on September 18, less than a fortnight after he takes over as India’s topmost monetary officer on September 5. “The most important problem that the RBI governor will have to address is that of managing the current account deficit (CAD). It’s a far deeper structural problem of which the falling rupee is a symptom,” said a senior policy maker, who did not wish to be identified.......
Travellers take shorter trips to beat rupee heat
Indian travellers are opting for shorter overseas trips to destinations such as Thailand, Singapore and Dubai and have started booking in advance to avail cheaper rates to offset the impact of the weakening rupee, according to travel operators................
Kotak Mahindra Bank to open 10 specialised branches
In line with The Reserve Bank of India’s reforms policy in banking sector, the Kotak Mahindra Bank plans to open 10 specialised branches by March 2014 end. The 10 new specialised branches would be to cater to Agriculture Sector, Small and Medium Enterprises and Wealth and NRI Accounts. These would be opened in the cities of Bangalore, Delhi and Mumbai. Ludhiana’s Miller Ganj branch already caters to these sectors............
Wednesday, August 28, 2013
FinMin makes first move on FSLRC despite Subbarao's reservations
The government has made the first move to implement the contentious recommendations of the Financial Sector Legislative Reforms Commission (FSLRC), despite the strong reservations of outgoing Reserve Bank of India (RBI) Governor D Subbarao. In the last week of July, the finance ministry wrote to RBI Deputy Governor Urjit Patel, saying the government proposed to acquire RBI’s shareholding in Deposit Insurance and Credit Guarantee Corporation (DICGC), in line with FSLRC recommendations. Urjit Patel is chairman of DICGC, while RBI Executive Director Jasbir Singh is a board member.............
RBI suggests banking sector overhaul
...........“There is a case for reviewing the current ‘stop and go’ licensing policy and consider adopting a ‘continuous authorisation’ policy, as continuous authorisation keeps the competitive pressure on existing banks and also does not strain the banking system as ‘block’ licensing may do,” RBI said. However, it says such a policy could only be adopted after ensuring the entry norms are stringent, to encourage only well-qualified entities.................
RBI calls for government to dilute ownership in PSBs
.......“As regards the reduction in fiscal burden on account of recapitalisation of the public sector banks (PSBs), Government may consider options from menu of choices available such as issue of non—voting equity shares or differential voting equity shares, adopting FHC structure or diluting stake in PSBs,” the paper said. “Going forward, there is a better pay—off in enabling PSBs to improve their performance while promoting private sector banks,” the discussion paper titled ‘Banking Structure in India — The Way Forward’ said.........
SBI group topped list of customers' complaints in FY'13 in Raj
........Out of the total 4,099 complaints received by the ombudsman in 2012-13, 1,789 complaints were filed against the SBI and its associate banks and 1,121 complaints were against nationalised banks, whereas 65 complaints were against other public sector banks, N P Topno, Banking Ombudsman-Rajasthan, RBI told reporters here Tuesday. Maximum number of per branch complaints is 16 against Standard Chartered bank, 11 against HSBC, 5 against ING Vysys bank and 2.14 against Kotak Mahindra Bank Ltd..........
'Reliance Bank' to be listed after three years: Anil Ambani
.........Hopeful of getting a banking licence for 'Reliance Bank', industrialist Anil Ambani today said this proposed venture will help lower Reliance Capital's debt to one-fourth of current levels and would be listed as a separate entity with an IPO after three years........
Subsidiarisation may not be mandatory for foreign banks
.............“The regulatory expectation would be that those foreign banks, which meet the conditions and thresholds mandated for subsidiary presence for new entrants or which become systemically important by virtue of their balance sheet size, would voluntarily opt for converting their branches into WOS,”..............
RBI’s annual report slams Punjab govt’s poor debt management
........However, the report points out that some states, such as Punjab, are using these advances a bit too often as there is a perpetual mismatch between revenue receipts and revenue expenditure. The report shows that Punjab borrowed money for as many as 232 days during the last financial year and it also availed of a special WMA for 233 days during 2012-13. While normal ways and means advances are clean advances given to state governments, the special ways and means are secured advances against Union government securities that are time-bound..............
Element of accountability
........While I fully agree with the views of Reserve Bank of India Deputy Governor K C Chakrabarty, the remedies suggested in the editorial would not prove to be of much help. Neither the tenure, the selection process, nor the pay packet per se are affecting the performance of managers in government-owned banks. But what is affecting their performance is the lack of accountability and the other ills mentioned by Chakrabarty. ...............
As Slew of Negatives Continue their Dadagiri, FM Shifts Blame on to Dada
For
the second time in less than a week, Finance Minister P Chidambaram
appeared to blame his predecessor Pranab Mukherjee, now the President of
India, for the dire state of the economy even as stock markets plunged
and the rupee fell to another record low. Shifting tack from his
usual theme of blaming the global environment, Chidambaram admitted
domestic problems had also contributed to the economy’s travails. These
domestic
problems, the minister told the Rajya Sabha, originated, at least in
part, during the tenure of his predecessor. “There are not just external
factors, there are also domestic factors.........
Read - ET
More reforms, not less
Finance minister P Chidambaram hit the nail on the head when he told Parliament that what India needed was more reforms, not less, that what the economy needed was less restrictions and not more, that it needed a more open economy and not a closed economy. This is especially important at a time when there is greater clamour, including from the ministry Chidambaram himself heads, to put higher import duties to curb imports; or to keep high export tariffs to restrict, for instance, the export of iron ore on grounds the domestic steel industry will benefit from this. The rupee has already paid a heavy price as investors felt the government and RBI were, together, going to impose capital controls—the finance minister has repeatedly pointed out that India has never imposed capital controls on repatriation of profits for instance, and ........
Exploring new avenues for revenues: Some suggestions
.........Both finance minister P Chidambaram and Reserve Bank of India (RBI) Governor D Subbarao, in separate talks to the media tried to calm down the public through their statements. The Finance Minister assured that there is no intention to introduce capital controls, including on repatriation.
Is Current Account Deficit really the culprit for India?
If you pick up any financial daily or switch on a business news channel today you will find the reason for India’s falling economic standards -- the current account deficit or the CAD. But is CAD really the culprit or are our 'sentiments' at play here?..........
Plotting the recovery- Charan Singh
......The problem of the widening current account deficit can be attributed to rising uncertainty in the economy, symbolised by large volumes of gold imports. As three-fourths of the gold in the country is purchased in rural areas, the government needs to consider providing financial instruments to address uncertainty in those areas. Illustratively, the government could consider inflation-indexed bonds to be made available through rural bank branches and post offices........
Policy dilemmas galore
........Bringing down inflation involves another dilemma. The Reserve Bank of India (RBI) has applied the conventional monetary tool to curb inflation - firming up interest rates - and has come to grief. Inflation has remained stubbornly high; it appeared to start coming down only recently. What has simultaneously happened is a fall in the growth rate - which is natural when you tighten money - which has, in turn, created fears of the onset of stagflation, a term that is being increasingly bandied about..............
Asia’s real problem is boosterism, not Fed policy
........Take India, which has been acting as though its rise to superpower status was inevitable, no matter what the government did (or, more important, didn’t do). Reforms have stalled, while unaffordable government handouts have proliferated. And with an election due in nine months, no one expects that the hard decisions needed to get the economy back on track will be taken. There’s great excitement that respected economist Raghuram Rajan will soon helm the Reserve Bank of India. But the nation’s problems—which include a government as bereft of ideas is it is flush with corruption and inefficiency—are largely beyond his control...............
FM chases runaway bride
.........Neither the RBI's knee- jerk intervention, nor the Finance Minister's repeated assertion that the government is in control of the economic situation, helped rein in the currency, one of the worst performers in Asia. The unbridled rupee ended at 66.24, a record closing low, after crashing over 3 per cent against Monday's close of 63.20. It hit all- time low of 66.30 minutes before the closing bell. Observers attributed the rupee crash to the passage of the food security bill in the Lok Sabha, which has set the alarm bells ringing about the country's fiscal health..............
How Jupiter's Vazirani is playing the Indian rupee slide
....The outgoing governor of the central bank is in the process of handing over the reins to his successor, Raghuram Rajan. Rajan does not officially take up his post until 5 September, leaving something of a power vacuum at the top of the RBI. In such an “interregnum”, it is quite easy to imagine policy paralysis, with a soon-to-be ex-governor unwilling to sanction, for instance, a major intervention in the foreign exchange markets, and a new governor not yet in a position to be able to do so.....................
The great Indian slide show
.........To manage the volatility in the exchange rate, the RBI on July 15 raised short-term interest rate. But it hampered the credit flow to productive sectors. To ensure that industry does not grind to a halt for want of funds, the RBI decided to buy government bonds from banks. The government is thinking of slapping duties on more non-essential luxury goods. But the measures are yet to make any significant improvement in the situation..............
The Rupee has Fallen Below its Fair Value
........The real effective exchange rate (REER) — a weighted
average of our currency relative to our trading partners’ currencies,
adjusted for inflation — is a common measure of the alignment of a
currency to its true value. The RBI’s measure of REER uses the wholesale
price index (WPI) for India and consumer price index (CPI) for trading
partners, we re-estimated the REER using CPI for India as well, with
2005 as the base year. Our estimate of REER was at an average of 11.4 in
July. This means that despite the recent depreciation, the rupee was
11.4% higher than its fair value in July. Based on this, observers say
the rupee needs to correct more............
A speculative attack on the rupee?
.........In sum, a series of changes that have occurred since financial liberalisation began have increased India’s exposure to the adverse effects of currency speculation. Given the nature of these changes there is little that the RBI and the government can do about such speculation, despite the claim that: “While introducing currency futures, the Reserve Bank and the Securities and Exchange Board of India (SEBI) had put in place various safeguard mechanisms to monitor positions, prices and volumes in real time so as to control excessive speculation.” In any case, there is nothing whatsoever the RBI and the SEBI can do to curb speculation in the NDF market that is outside its jurisdiction............
Banks now using your missed call to authenticate yourself
......According to new system when a customer logs into Net banking with his password, a separate screen pops up with a landline number. One has to give a missed call from their mobile to the landline number within two minutes. NetCore software receives the missed call and matches it with the customer’s mobile number registered in the bank’s database to provide access...................
SBI to merge one associate bank this fiscal: Pratip Chaudhuri
...........“Right now we are in a position to merge one of the subsidiaries.... We may merge one associate bank this year,” SBI Chairman Pratip Chaudhuri told PTI in New Delhi. Asked if the bank has identified the suitable candidate, he said a decision in this respect is not yet taken. SBI first merged its associate State Bank of Saurashtra with itself in 2008. Two years later in 2010, State Bank of Indore was merged with SBI........
Rs. 230-crore irregularities found in loan waiver scheme: Chidambaram
......He said errors of exclusion and inclusion were natural in a scheme that involved 3.73 crore beneficiary accounts spread over one lakh bank branches through which Rs. 52,259-crore debts were waived. While enquiries by the RBI and Nabard were under way, so far they had detected irregularities in respect of 3,36,156 accounts involving Rs, 230 crore. The probe was taken up in the light of the CAG report exposing irregularities in waiving debt...........
Ponzi operators to face fine worth three- times of profits
.......... Operators of illegal moneypooling schemes will soon face penalties of up to three times the profit made by them, as against the current provision of a meagre fine of Rs one crore. The capital markets regulator Sebi ( Securities and Exchange Board of India) has decided to increase the monetary penalty for those running unauthorised Collective Investment Schemes ( CIS), as the existing mechanism have not proved to be sufficient to deter such illegal mobilisation of money...........
Dhanalaxmi Bank to mobilise Rs 37.75 crore by issue of shares
............A special resolution in this regard was passed at the 86th Annual General Meeting of the bank held here today, bank sources said. Equity shares of 10.5 lakh, 12.5 lakh and 52.5 lakh would be allotted to investors B K Raveendran Pillai, Mohanachandran Nair B and and N V George respectively as per rules of the Securities and Exchange Board of India, Capital and Disclosures Requirement, Reserve Bank of India, Union Finance Ministry and other relevant statutory authorities...........
Tuesday, August 27, 2013
Anchors aweigh!
Christening by fire
............Going by his amazing credentials, there could hardly be anyone better equipped to take on this challenge; moreover, he has also authored a full-fledged report on the Indian financial sector reforms that would have given him a first-hand feel of the issues, challenges and reforms for the banking and financial sector. There are not too many people who are given the opportunity to implement what they have preached. And so the Governor should simply go for implementing his own recommendations and liberalise the banking and financial sector; introduce an arm’s length regulation with a lighter touch; make RBI a more market-friendly regulator; and consolidate fragmented capacities that presently characterise this sector. These reforms have long been in waiting and need immediate attention..............
Bank complaints dip
............According to Banking Ombudsman S. Chattopadhyay, the regional office was conducting visits incognito at various branches to ensure proper banking services. She said banks were urged to increase its compliance with the regulations in the Banking Codes and Standards Board of India (BCSBI). An increase in the awareness among customers about the proper use of the banking ombudsman scheme also attributed to the decline in the number of complaints................
Financial inclusion is possible when the policy, mindset, philosophy and frame work are established
........Expressing his view on event theme ‘Journey Ahead: Tie-in Social Obligation Business Opportunity’, Mr. B.A. Prabhakar-Chairman Managing Director of Andhra Bank said, “RBI wants financial inclusion for inclusive growth but 50% of the villages in the country do not have any financial services. Banks must use ICT enabled services to reach out to rural masses to increase financial literacy. Banks must conduct camps / set up more centers in villages to reach out to common people.”..............
.....Other eminent speakers present at DB Financial Inclusion Conclave were A.D.M.Chavali, Executive Director, Indian Overseas bank , Mr. R.N. Dash – GM, RBI, Mr. V.B. Bhgavathi –GM- Andhra Bank, Mr. Alok Prasad, CEO-MFIN, Mr. G.S. Iyer –GM-Canara Bank, Mr. Kumara Swamy – DGM-SBH, Mr. Guru Harinadh Rao-DGM Corporation Bank..............
Inadequate storage, a major challenge for foodgrain management: RBI
..........To increase availability of food, the Reserve Bank of India suggested that the Government should take steps to create a market at the doorstep of the farmers, both for input supplies and marketing of the product. The central bank also flagged the issue of uneven distribution of warehouses and storage capacity relative to the population as well as the volume of foodgrains production across States in its annual report. With the diversification in agricultural activity as also the continued pressure on food prices, the RBI observed that there is an urgent need to address supply chain and marketing inefficiencies...............
Surrender their gold, country will prosper......
A couple of days back, the TOI carried a news item that gold plating is done extensively in the houses of Mukesh Ambani and Shah Rukh Khans. These are just two cases reported. In India, so many such individuals are living. It is reported in the article that about 25000- 30000 tons of gold are hoarded in India. If the above examples are any indication, the gold hoarding in India is a classic case of following Pareto's Principle with 80% of the gold wealth in the hands of 20% of the people in India. In reality, it may be 90-95% of gold will be just in the hands of 5-10% of the people in the country. So, target them and make them surrender their gold, country will prosper. Suggestion to increase investment climate and provide real and reasonable rate of return on savings will help to a great extent. In the long run, if we allow Islamic Banking with suitable checks and balances, it would increase the flow of foreign investments particularly from the UAE countries.
- S.Santhanam
The domestic household stock of gold in India estimated at over 25,000 tons, the country’s annual purchase of over 30 per cent of global gold purchase leading to an estimated cumulative demand of 1200 tons by 2020 and low share of gold in country’s forex reserves as compared to other countries and not always economic and prudent handling of this precious metal, all these and more point to the urgency in having a national policy for gold management. The economic and technical policy aspects highlighted in the article should get the attention they deserve from GOI. The policy should look at a strategy that will encourage transparency in transactions, elimination of wastages, standardization of valuation norms and facilities for gradually converting even the existing stock of gold with individuals and institutions to conform to internationally acceptable standards. RBI and Centre, in the early 1990’s actively considered setting up a Gold Bank with a mandate to do real gold-related banking, also taking care of the forex dimensions of the idea. However, the project was a non-starter presumably for profit-related reasons and possibly, external pressure. Perhaps the time is opportune to reopen the debate on professional management of India’s gold resources. Authorities should think in terms of dedicated professional institutions at regional/state level which will handle gold from a banking angle equipped with linkages for import and export of gold and gold products with borrowing and lending capabilities. The initiative has potential to take India out of the balance of payment and CAD problems the country is facing now.
- M.G.Warrier
Accounting gimmicks
This refers to the editorial "Non-performing managers" (August 26). The Reserve Bank of India (RBI) deputy governor's remarks on the reasons for the unabated growth in non-performing assets (NPAs) of public sector banks is true and this callousness gets accentuated when the slowdown of the economy also becomes handy to justify the non-performance. ..........
History Of Indian Banking Industry
.......The banking sector in India functions under the umbrella of the RBI—the regulatory, central bank. The Reserve Bank of India Act was passed in 1934 and the RBI was constituted in 1935 as the apex bank. The Banking Regulations Act was passed in 1949. This Act brought the RBI under government control.Under the Act, the RBI received wide ranging powers in regards to establishment of new banks, mergers and amalgamations of banks, opening and closing of branches of banks, maintaining certain standards of banking business, inspection of banks, etc. The Act also vested licensing powers and the authority to conduct inspections with the RBI. The Indian Banking system consists of different types of financial institutions which are responsible for the development of the country’s economy...........
RTI Judgement Series: CIC cannot abdicate its responsibilities to an expert body like RBI
...........While giving this judgement on 1 November 2011, Shailesh Gandhi, the then Central Information Commissioner said, “The Commission cannot abdicate its responsibilities under the RTI Act to RBI on the ground that the latter is an expert body. If the position of the Full Bench is to be accepted, it would lead to a situation where RBI would have the final say in whether information should be provided to a citizen or not. Extending this logic, all Public authorities could be the best judge of what information could be disclosed, since they are likely to be experts in matters connected with their working. The Commission cannot rely solely on the decision of the public authority and must look into the merits of the case itself. It must determine, on its own, whether the denial of information by the PIO was justified as per Sections 8 and 9 of the RTI Act.”.............
Command Responsibility - A Must For Banking Sector
....My mind stops working when I try to probe as to whether our CMDs and EDs en masse are so dumb that none of them could visualize the problems that can be faced by India on the current account deficit due to mass level encouragement of sale of gold? Is each one of them is such a big fools that none of them could feel that KYC norms are being flouted under their very nose, and finally on the expose of Cobrapost, RBI had to slap almost each one of them with penalty running in crores? Why RBI and MoF are silent on this incompetence of bank chiefs. What has gone wrong with their selection of CMDs and EDs that has led to a situation where non of them is competent enough to see through such lapses at such a mass and national level? I will call this the biggest failure of MoF / RBI in choosing such dumb people to head PS Banks..............
Despite 1/30 marks, four bankers set to be EDs
New
Delhi: Can you get a job after securing one mark out of 30 in an
interview? Yes, if you are an aspirant for the job of an executive
director in a public sector bank. The finance ministry has
recommended appointing four general managers of state-run banks as executive directors, on promotion, despite the candidates managing to
barely open their accounts during an interview conducted by a panel
headed by financial services secretary Rajiv Takru.........
Read - TOI
Read - TOI
His Master's Voice..............
My View on "Non-performing managers":
This is a balanced view of the present position of the top management of PSUs and PSBs in general. To comment on the non-performing administration in the public sector and government-owned bodies, these days, no deep research is needed. PSUs in India including Public Sector Banks have become whipping boys of government, regulators and the new generation advocates of privatization. Government (some officials and ministers) think they are the owners of PSUs and PSBs (in a way, they are!) and use them for carrying out their agenda and for milking them dry to quench their thirst. These institutions (and government) get the private sector-rejects or retired/retiring government officials at their top who carry out the wishes of their masters in government. It is not that these organizations cannot compete with their private sector counterparts. They will outperform them, if a level playing field in terms of skill, technology, opportunities and autonomy in management (including freedom in managing HR) is assured.
But, to make this possible, the selection procedure, at least from middle-management level and compensation package will need an overhaul. Career progression with appropriate provision for inter-mobility within the organization and at higher levels within the sector will have to be planned with the ideal age profiles at various levels and the need for a minimum tenure of 5 years for those who reach that level.
- M.G.Warrier
The more things change, they actually change...
..........A quick look at why the base rate mechanism is relatively more transparent than its predecessor (PLR) would be in order. Banks are not allowed to lend below their base rates to any borrowers. Hence, if market rates dip below the base rate, they have no choice but to drop base rates to get consumers. Base rates of banks currently range from 9.7 per cent and upwards. On top of the base rate, the bank charges a spread...........
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