VITALINFO at sunrise............

Each and every day all eyes,

Are on VITALINFO  at sunrise,

This comes as no surprise,

As dear Mangesh believes in the saying::

'Early to bed, early to rise,

makes a man Healthy, Wealthy & Wise'. 

- Frank R Misquith, Bangalore

Dear Mangesh

Once again congratulations. Excellent. Your work has been appreciated by our Hon'ble Governor Sir. Getting appreciations from respected Governor Sir is an indeed a great achievement in your life. Keep it up. Wish you all the best.

R K Gujar, Ex- PS

May I request you to add the name of Sarojini Venkatachalam to your list of retirees who receive your communications. I had the privilege of working with Sarojini in the then CPC for many years. Warm regards,

- S.S.Tarapore, Former Deputy Governor

Dear Mangeshji,

You deserve the appreciation for the yeoman service rendered by you.

- Srinivasan, Cochin 

Mangesh,

Kindly include B.K.Pal, our  former  Executive Director in the mailing list  of VITALINFO.

- K.D.Savkur, Ex-CGM

  

Dear Mr Tarambale 

Kindly include me in your VITALINFO List. Regards

- S.Venkatachalam, CGM, Estate, MRO

Thank you for your effort in putting these news items together every day. It is very informative. As I will be retiring as at the end of September I request that the material be sent to my personal email id.  Thank you. All good wishes as you continue this great work. Regards  

- Sujatha Elizabeth Prasad, CGM and BO Chennai

United Forum meets Governor

.......Governor informed that meanwhile he had met Sri Rajiv Takru, Secretary, Department of Financial Services, Ministry of Finance, who referred to the Government's proposal to statutorise RBI Staff Regulations under Section 58 of the RBI Act 1934 and desired that it be done at the earliest.  On pension matters Sri Takru still sticks to his earlier stand of external comparabilities......... 

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

‘Indian banks unprepared to mitigate risk’

......Speaking on risk-based supervision in Indian banking at a meeting organised by the Bankers’ Club, Dr. Chakrabarty said that the global financial crisis had shown that banks that were doing well were also the ones that bore greater risk. “After the global crisis, there is no such thing as risk-free returns, only returns-free risk,” he said. “The focus area, from a supervisory perspective, should be to identify institutions that are bearing greater risk,”...........

Read - The Hindu

'Most bankers unaware of number of customers'

RBI Deputy Governor K C Chakrabarty, known for his candid remarks, on Monday took a dig at top executives of major banks on lack of information sharing and discrepancy in data submitted to the RBI. Speaking at the Bankers' meet organised by Vijaya Bank here, Chakrabarty said that one account is classified as NPA in a bank and the same account does not fall under NPA in the other bank.........

Read - Deccan Herald

Repo rate hike cannot act as an effective measure in taming inflation

..........The second flaw in RBI’s approach towards inflation is the conviction that repo rate is an effective tool to contain inflation. Does repo rate always help in containing inflation? Is inflation a purely demand-push factor? Can it be controlled without managing supply side constraints? How can repo rate be effective if international crude prices go up? Also, with ever-increasing wages in rural areas supported by government policy measures and in urban areas because of ongoing business activities, is it possible to arrest the rise of inflation? Can RBI control inflation, when the government decides to give semi-annual dearness allowance hike of 10% to its more than 50-lakh employees, thereby adding substantially to purchasing power?...........

Read - Moneylife

RBI's stance on consumer inflation bodes well for investors

Retail investors could see better real rates of return in the coming months the Reserve Bank of India increases its focus on tackling consumer price inflation. In the new policy framework, the RBI has clearly targeted inflation as its top priority and is likely to assign a higher weight to consumer price inflation (CPI) as against only targeting the wholesale price index (WPI)............

Read | Business Standard

Mayaram finds out 'systemic failures' in NSEL crisis

...........The report details long term measures, Economic Affairs Secretary Arvind Mayaram, who headed the Panel, told reporters here. Meanwhile, according to sources, the NSEL report has found "minor systematic" failures in the functioning of the exchange. The panel had met on Friday and finalised the report on National Spot Exchange Ltd (NSEL) - a commodities bourse which is grappling with Rs 5,600 crore payment crisis. The findings are based on reports of two working groups -- Enforcement Directorate and Reserve Bank.........

Read | Business Standard

Avoid the gold loan route

........First, the RBI imposed restrictions on gold imports and barred banks from bulk purchasing gold. Secondly, it restricted banks from lending against gold to less than 50 gram per person, and completely barred financiers from lending against gold mutual funds and exchange-traded funds. To make matters worse, gold prices have fallen over seven% in the last one year. That means existing borrowers would have to pay up more collateral. And newer borrowers will have to contend with a lot less in loan value...........

Read | Business Standard

Government to review FCCB, depositary receipt rules

...The finance ministry on Monday said: "It has been decided to constitute a committee to review the scheme comprehensively keeping in view the new company law and the recent legislations in the financial markets, the current state of the macro economy and the financial markets, the needs of the Indian companies and foreign investors and the need for simplification and legal clarity of the scheme." Apart from Sahoo, the other members of the committee are G Padmanabhan, Executive Director, RBI, S Ravindran, executive director, Sebi, Ajay Shah, NIPFP and PR Suresh, consultant, PMEAC, among others. .......

Read - ET

Finance ministry, RBI in talks on easier rules for infra debt funds

New Delhi: The finance ministry is in talks with the Reserve Bank of India (RBI) to liberalize the rules to allow newly created infrastructure debt funds (IDFs) to take over, or assume, more loans from banks without having to set aside money if they later restructure the loans. At present, if IDFs extend the tenure of such debt instruments, the central bank categorizes them as restructured loans, increasing the provisioning requirements........

Read - Mint

RBI hunts many bears

.........RBI’s assessment of the economy is largely gloomy. On the domestic front, growth has weakened with continuing sluggishness in industrial activity and services. Consumption is beginning to weaken in rural areas and consumption of durable goods has been hardest hit. While some pick-up of activity is expected on account of agriculture and the upturn in exports, the pace of infrastructure project completion has been subdued. ...........

Read - Deccan Herald

Current economic scene doesn't allow optimism: Bimal Jalan

...........Speaking to CNBC-TV18, Jalan says the policymakers must take pro-growth measures, which will impact the current account positively. He feels the fiscal deficit is tough to control given the high government expenditure. "The RBI can start easing monetary policy once inflation is under control," he says.............

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

Capital Local Area Bank makes hay in Punjab's virgin market

....."Getting approvals from RBI was a tremendous task. The pocket we zeroed in on was an NRI (non-resident Indian) belt of Punjab that is presumed to be an affluent block of the state. Nevertheless, there were unbanked villages and suburbs there, and commercial banks (both public and private) did not open branches there due to the low volume of business. Being a small player, we found it viable to set up branches there,"................

Read | Business Standard

RBI now against 0% EMIs for consumer goods, banks withdraw finance schemes; festive sales likely to be hit

.........RBI feels consumers have been fooled by zero per cent or discounted interest rateschemes into believing that bank funding comes for free, and wants them stopped. Consumer durable manufacturers offer the zero per cent facility mostly on high-value products such as smartphones, LED TVs and premium home appliances. ............

Red - ET

NPAs: RBI opposes Sarfaesi protection to US Exim Bank

The Reserve Bank of India (RBI) has said it is against empowering the US Exim Bank to invoke India’s Sarfaesi Act to recover bad loans even as the matter is slated to be discussed during the US visit of Prime Minister Manmohan Singh this month...........

Read - FE

RBI announces committee to provide roadmap for financial inclusion

........Other members of the committee include Prakash Bakshi, chairman, NABARD, Vikram Pandit, former CEO of Citigroup, S. S. Mundra, chairman and managing director, Bank of Baroda, Shikha Sharma, managing director and CEO, Axis Bank, Sunil Kaushal, CEO, Standard Chartered Bank, India from the banking fraternity. From non banking financial companies ........

Read | Business Standard

Needed, a ‘self-regulatory organisation’ for MFIs

.....A self-regulatory organisation for microfinance institutions will play a complementary role to the Reserve Bank of India, according to a top industry official. “The microfinance industry is highly distributed and has many small players. The RBI has limited presence on the ground,” said Alok Prasad, CEO, Microfinance Institutions Network (MFIN), an umbrella body of over 40 microfinance companies in the country..............

Read - HBL

Tackling the eventual taper - Charan Singh

.......There may be a need to sequence the difficult reforms in these difficult times of both, the domestic and the global economies. For now, the guide-post for policymakers could be the words of Rabindranath Tagore— “If they answer not to thy call, walk alone”. In this context, Raghuram Rajan’s statement with the mid-quarter review seems very resolute.

Read - FE

Montek for more efforts to revive economic growth

......."I do not believe by the way that the critical constraint on revival of the economy is to tinker with short-term rates. "I know that nothing would be better for growth than for the long-term interest rate to come down but the idea that the RBI Governor can lower the long-term rates by lowering the short-term rates, no matter what is happening in the macro economy. It is just plain rock,"..................

Read | Business Standard

Getting a job in Sebi is 10 times harder than in Google

A hundred thousand candidates have applied to the Securities and Exchange Board of India (Sebi) after it advertised for new officers to join the market watchdog. This puts the number of candidates at over 1,300 for every opening, according to two people familiar with the matter — one Sebi official and the other a person who gave the exam; neither wanted to be identified. There are only 75 posts available.......

Read | Business Standard

Expert expects India to allow Islamic banking

...The existing Banking Regulation Act (1949) of India hinders the establishment of Islamic banking as it does not allow banks to operate on a profit-loss basis and forbids murabaha, or, the buying, selling, or barter of goods.“I strongly believe India soon will take some positive steps, either to amend the laws of the Reserve Bank of India (the country’s central bank) or promulgate ordinance to make way forward to establish Islamic banking system by 2014,” said Dr Manzoor Alam, President of Indo-Arab Economic Cooperation Forum, and also an expert of Islamic banking............

Read.........

Vijaya Bank FI Outreach

Dr K. C. Chakrabarty, Deputy Governor of Reserve Bank of India (RBI), will inaugurate Vijaya Bank’s Financial Inclusion Outreach Programme at 10 a.m. on September 24 at Adichunchanagiri in Mandya district..........

Read - HBL

Federal Bank MD

The Reserve Bank of India has approved a three-year extension for Shyam Srinivasan, Managing Director & CEO of Kerala- headquartered Federal Bank. The extension would be with effect from Monday, a press release said here. Mr. Srinivasan first took charge as MD and CEO on September 23, 2010. ........

Read - The Hindu

Moody's downgrades SBI's rating to 'Baa3'

......According to SBI’s managing director and chief financial officer Arundhati Bhattacharya, the rating action will have no impact on domestic or international business. Moody’s said the decision to lower senior unsecured debt rating reflects two negative factors affecting SBI’s credit profile. First, SBI’s standalone credit profile continues to face negative pressures in the context of a slowdown of the Indian economy. These pressures were reflected in the change in the outlook on financial strength rating. .............

Read | Business Standard

Chaudhuri leaves SBI merger for successor

.......He said as there would be a shuffle of top management jobs after his retirement, it was appropriate to leave the decision to his successor. SBI's top management consists of the chairman and four managing directors, one each looking after the balance sheet, international operations, domestic operations and subsidiaries & associate banks. Chaudhuri said he'd prepared the groundwork, economic logic and momentum for the system to pick up. "The report is ready…the factors which are to be considered are ready but which one to pick... I think there is generally a unanimity in this view but I should leave it to my successor."...............

Read | Business Standard

Bhattacharya, Contractor frontrunners for SBI top post

.......Once the finance minister signs off, the note will go to the cabinet and the Prime Minister’s office for final clearance. Four managing directors of the nation’s largest lender were interviewed on Saturday by a panel comprising financial services secretary Rajiv Takru and Reserve Bank of India (RBI) Deputy Governor Anand Sinha, among others...........

Read - Mint

SBI Buffeted by Tight Liquidity

Is the country's largest lender, State Bank of India (SBI), battling a liquidity crunch? So goes the murmur among senior bankers who got a whiff of an unprecedented decision taken by SBI last week. SBI has directed its offices to stop discounting letters of credit (LC) other than those opened by SBI and its associate banks, which together command 25% of the local banking business. The move could hurt business because LC discounting is the lifeblood of local and cross-border trade........

Read - ET

Young Bankers Are Really Fast Learners............

I learnt that bank life and dreams can never meet..
Because when they meet,
both will lose their meaning.....

Read.........

Supreme Court says Aadhaar not necessary for essential services

.....In a significant development, the Supreme Court on Monday has ruled that Aadhaar or the unique identification (UID) number, the United Progressive Alliance (UPA)'s ambitious scheme, is not mandatory to avail essential services from the government. Various state governments have been insisting on making Aadhaar compulsory for a range of formalities, including marriage registration, disbursal of salaries and provident fund among other public services............

Read - Moneylife

TRAI cautions banks, financial institutions against unregistered calls

.........The TRAI has named such banks and financial institutions which have been flouting the aforesaid regulation by marketing their products and services through unregistered telemarketers. These banks or financial institutions are - Axis Bank, Citi Bank, HDFC Bank, ICICI Bank, Kotak Mahindra, Punjab National Bank and the State Bank of India...............

Read | Business Standard

Sahara, Peerless repaid depositors Rs 20,000 cr since 2007-08

.....The RBI had fought a pitched legal battle with the RNBCs over what it termed their “inherently unviable business model”, expressing concern over the mushrooming growth of financial investment companies that were offering staggering rates of interest to depositors. Between 1987 and the mid-1990s, the RBI was engaged in a running battle with Peerless after it issued orders barring the RNBC from accepting fresh deposits. While the Supreme Court allowed Peerless to continue its business, it told the RBI to take steps to “prevent exploitation of ignorant subscribers”...............

Read - HBL

Insiders’ role in online thefts: Experts

...... “The insider within a bank may provide the fraudster with information such as the ‘fattest’ account in the bank, the account number, user ID, the registered mobile number and even the prospective victim’s KYC documents. The fraudster now knows the mobile company whose services the victim is using and arranges for an insider in that company to get the victim’s KYC details. Without these insiders, such crimes are not possible,”.............

Read - TOI

ICICI Bank launches security features loaded credit card

..........We have always leveraged technology to make banking both convenient and secure for our customers. Our continuing adoption of innovative technology is part of our commitment to strengthen our relationship with our customers. The ICICI Bank Carbon, powered by Visa CodeSure, is another step in this direction. We are happy to launch this card in association with Visa, for the first time in Asia and I am sure that this will be as popular in India as it is in some of the European countries. This card will be one of the safest available for online and standard use and also comes with an EMV chip for added security against counterfeiting.”..............

Read.........

Monetary policy: Governor Rajan’s imprimatur - Dr.S.S.Tarapore

Reserve Bank of India (RBI) Governor Raghuram Rajan’s maiden monetary policy presentation reflects his unmistakable imprimatur, pedigree, panache and style. Governor Rajan’s thoughts were clearly set out in the inaugural statement of September 4, 2013. As enshrined in the RBI Act, 1934, the primary role of the central bank is monetary stability which he unequivocally interprets as low and stable expectations of inflation, whether the inflation stems from domestic sources or from changes in the value of the currency, from supply constraints or demand pressures. This is a major departure from mainstream thinking in India which bemoans that monetary policy cannot handle structural or imported inflation. Rajan comes out as an inflation fighter irrespective of the source of inflation..........

Read - Free Press Journal

The taper that didn't - Subir Gokarn

.........Looking specifically at the Indian situation, we have experienced three episodes of sharp currency depreciation during the past two years - August-December 2011, March-August 2012 and, most recently, May-September 2013. In all three episodes, a number of measures were taken to try and arrest the slide of the rupee. But if we are to be realistic about what eased the downward pressure on the rupee on all three occasions, we must admit that it was nothing that we did that mattered; it was entirely the result of liquidity infusions from outside.................

Read | Business Standard

Rajan walks the tightrope - A.Seshan

..........There was no announcement of the next review for the quarter July-September 2013. Earlier, the management had announced it for October 29. The US Fed meets on the 29th and the 30th of the month and its decisions will be known in India on the 31st. Following the healthy practice introduced in the latest mid-quarter review, I believe the RBI may reschedule its full-fledged quarterly review with bankers on November 1. Can the economy expect some Diwali gift from the Fed and the RBI?

Read - HBL

Wanted: An independent, accountable RBI

........As an institution, RBI is known for its impeccable integrity and intellectual honesty but not necessarily for pushing things in a time-bound manner. Many also feel it lacks accountability. Apart from ensuring price stability with one eye on economic growth, Rajan may need to look at some of the structural issues within the RBI bureaucracy. A few years ago, the head of a private bank had to approach a Deputy Governor of RBI as the central bank had refused to clear his salary structure for over six months. Under the norms, the salaries and bonuses of the chief executive officers (CEOs) of private and foreign banks need the clearance of the regulator. RBI has every right to say no to anybody, but the practice is to not clear these files for months without assigning any reason...............

Read - Mint

Bring in talent

The Reserve Bank of India is one of the most transparent and honest parts of the government. Amongst its obscurities is the way it manages the foreign exchange reserves of the country. No doubt it publishes a report on them once every six months; it is only five months out of date, which is presumably a creditable performance for a central bank of this kind.................

Read - The Telegraph

शंभराच्या नोटांवर नरेंद्र मोदी यांचा प्रचार!

भाजपने पंतप्रधानपदाचे उमेदवार म्हणून नरेंद्र मोदी यांचे नाव घोषित करताच त्यांच्या नावाचा बोलबाला सुरू झाला. किती असेल त्याची व्याप्ती? मराठवाडय़ातील काही शहरात ‘मोदी लाओ, देश बचाओ’ चा नारा आता चक्क शंभर रुपयांच्या नोटेवर देण्यात आला आहे! अनेक नोटांवर पांढऱ्या भागात तसा तयार केलेला ‘शिक्का’ मारून मोदींचा करण्यात आलेला हा प्रचार नियमांचे उल्लंघन करणारा असला तरी अद्याप तरी यावर कोणी आक्षेप नोंदविलेले नाहीत............

Read.......... 

Chances of An Honourable Settlement Are Becoming Dimmer and Dimmer As Time Is Passing

.....In these circumstances, the hope of honourable settlement are becoming dimmer and dimmer. I may look to be pessimistic, but this is reality. Therefore, there is a need for gearing up and ensure that union leaders do not buckle under pressure. Certainly our economy is facing crisis but it is more homemade due to corruption and mismanagement. Bankers should not suffer for such mismanagement.   Let us hope, union leaders will now realise the gravity of the situation and ensure that 10th BPS is concluded before the Lok Sabha elections are announced by Election Commission sometime in February 2014. Time is short, please hurry up if you wish to have a honourable and timely settlement.

Read..........

Obituary

Shri.R.Rajagopalan, retired Private Secretary passed away on September 16, 2013 in Mumbai.  He was 74 years old. He held respect for his proficiency. A major part of his career of about forty years  was in  DEAP, Mumbai. Ever smiling and always helpful he was a connoisseur in Carnatic music. He is survived by his wife (a teacher)  and two sons and their families. We pray that his soul rests in peace. 

- P.P.Ramachandran.

I AM Another YOU wins The Evergreen Medal Book Award

Miss Priya Kumar, daughter of Mrs. Sona Kumar (EXRBITES Group) & retired Assistant Manager from Inspection Department, Mumbai received the prestigious "Evergreen Medal Book Award" for her book "I am another you". 

Read more about the book............

(Inputs from Shri Madan Gauria, Moderator, EXRBITES Group.)

4th National Finance Conclave held at KIIT University

......The conclave had a very engaging panel discussion, which featured Dr. H. K. Pradhan, Senior Professor, XLRI, Mr. Paresh Gupta, CFO, Jubilant Biosys, Ms. Mythili Bhusnurmath, Consulting Editor, Times of India Group and Mr. Brajamohan Misra, Officer-in-charge, Dept .of Economic and Policy research, RBI. The panelists focused on three significant problems that the country is dealing with: external vulnerability, high gold imports widening the CAD and better market sentiments outside causing capital flight. Ensuring ease of doing business, better management of external factors, improvement of regulatory and policy environment and improving the educational system were some of the measures suggested..................

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

Nationwide banks strike on 25 September 2013

........The All India Bank Employees Association (AIBEA) and the Bank Employees Federation of India have called for an all-India bank strike on September 25 to protest against the Government’s proposal to effect mergers among public sector banks. They are also against the merger of Associate Banks with State Bank of India (SBI)................

Read - Moneylife

Capital account counts

At the press conference after the mid-quarter review, Reserve Bank of India Governor Raghuram Rajan said the emphasis was on maintaining the internal stability of the rupee that should ensure it externally also. I am not sure of this. This view is a hangover from the days of the purchasing power parity theory when the current account decided the exchange rate. Today, it is the capital account that dominate..............

Read | Business Standard

Surprising but realistic

............He is no magician who can overnight transform the bleak economic situation into a high-growth economy. Besides, the onus for correcting the policy stance lies with the rulers in Delhi and not with the Governor in Mint Street, Mumbai. Happily for Rajan, he received great help from the US Fed, which swung the global markets in the positive direction on Thursday by its decision to put off the threatened tapering or withdrawal of easy liquidity................

Read - FPJ

India's New Central Bank Boss: Don't Count On Uncle Sugar

...........Rajan will be making a series of moves to deal with India’s problem of slowing growth, a stultified bureaucracy, a buckling infrastructure — all while looking ahead to the unpredictable fed. “Clueless on QE after Ben,” said a headline in the weekend Financial Chronicle. “Bernanke’s decision to sustain QE3 leaves his successor without any roadmap to solve the big economic puzzle.” In other words, you can’t count on Uncle Sugar’s generosity forever, maybe not for much longer. Basically, that’s what Rajan seems most worried about.

Read - Forbes

The impossible trinity

If you happen to be a central bank - dilemma is long passé; trilemma is the new reality of the financially liberalised world. Back home, the Reserve Bank of India (RBI) has been caught in the ‘impossible trinity’ trilemma where it has to tackle three concerns all at once - free capital flows, stable exchange rate, and independent monetary policy. What is the ‘impossible trinity’ ?...........

Read - HBL

RBI governor has 'asphyxiated' investor, should be removed: Swamy

.........."His economics has been known to be the same as that caused the US Depression of the 1920s, namely, following a conservative fiscal policy. Just when investment and capital market needed an injection of adrenalin, Dr Rajan asphyxiated the investor. By mid-2014, the government will be on the verge of default of payments,"...........

Read - TOI

Difficult to understand Raghuram Rajan's first monetary policy

......No one expected a reduction in repo rates, not yet. Incidentally, some banks have announced increases in rates (lending and deposit) before RBI’s mid-quarter review. But an increase in the repo rate? I don’t understand it. RBI is certainly privy to much more information than is there in the public domain...................

Read - ET

Two approaches to financial quandary

......In monetary terms, India is zigging while Indonesia is zagging, despite the many common challenges that have pummelled their currencies and markets in recent weeks. Both must balance a need to preserve economic growth for large, heavily poor populations, while at the same time preventing a build-up of inflation that might discourage longer-term investments - a balancing act that has bedevilled policymakers in the US and other affluent countries over the years.........

Read - The Sydney Morning Herald

Tightening while loosening

............ Dr Rajan has clearly sought to establish his credentials as an inflation fighter and the action should be seen as an indication of how monetary policy will operate during his term. The former move was simply taking advantage of the room that had been created by the recent actions. This room will run out soon; the next initiative on October 29, if not before, will most likely be to bring the MSF rate back to 100 basis points above the repo rate, which itself may be raised by another 25 basis points in response to higher inflation numbers. Beyond that, the tone of last Friday's statement suggests that monetary policy will remain tight as inflationary pressures intensify as a result of rupee depreciation and persistent supply bottlenecks...........

Read | Business Standard

An exercise in continuity

........The crux of the matter is irrespective of who is in charge there cannot be a radical policy shift from one Governor to another. In short, continuity is the norm rather than the exception. This has been amply proved by the monetary measures in Friday’s review................

Read - The Hindu

RBI ear for consumer prices

A section of economists believe the RBI is beginning to give more importance to consumer price index (CPI) than the wholesale price index (WPI). New RBI governor Raghuram Rajan had raised the repo rate — or the rate at which the apex bank lends to banks — to 7.50 per cent, stunning markets and industry. Usually, the RBI closely tracks the WPI numbers before taking policy actions, but indications seem to be otherwise.....

Read - The Telegraph

Dr Singh, follow Dilma Rousseff, not Obama

........Had our PM been a wee bit more 21st century in his outlook, he would have chosen a Reserve Bank of India Governor, who understands not Chicago University classrooms and textbooks but the needs of the economy of a country that Professor Raghuram Rajan knows hardly at all. Instead, Manmohan chose an RBI Governor, who does what Wall Street wants rather than what Dalal Street needs, and who believes that inflation can be tamed by higher interest rates. Raghuram Rajan has shown that he is as dedicated to wrecking Indian industry through higher interest rates as his predecessor Duvvuri Subbarao was..............

Read - The Sunday Guardian

Reading in between lines: Where Raghuram Rajan goofed up

........In my reckoning, yesterday’s monetary policy statement has failed to clarify objectives, instruments and operating procedure. As I read the statement, I could not understand whether this was a tightening or an easing. I spoke with veterans on the bond market and they were also fumbling............

Read..........

First impressions

........The direction of policy also remains confused. Should banks raise deposit and lending rates in response to the monetary policy, or lower them? Should businesses make plans expecting lower inflation and higher interest rates, or should they expect higher inflation and lower interest rates? The policy states that changes can be made anytime, and not only on policy days. Rajan's view, that India is prepared for the Fed tapering after the recent steps, suggests currency markets will remain shallow and businesses may see large volatility in them. Good communication is crucial to managing expectations and monetary policy must convey what the targets, instruments, and direction of policy are going to be.

Read IE

Timeline

Changes to India's SLR for banks since 1949

Changes to India's cash reserve ratio since 1992

Changes to India's reverse repo rate since 2001

Rajan kills hopes of recovery

.......... After a lifetime spent in the study and dissemination of such dogma — which incidentally has no relevance to the needs of an economy such as India — it was somewhat adventurous for the pink press to believe that the new RBI Governor would differ from his predecessor's policy of seeing the Economist magazine as the fountainhead of wisdom. Even a cursory knowledge of economics as applicable to India would show that raising interest rates does nothing to reduce the rate of inflation..................

Read - The Sunday Guardian

Deja vu: Raghuram Rajan's RBI may hike repo rate again, say analysts

Having been surprised by the repo rate increase on inflation concern, analysts expect new Reserve Bank Governor Raghuram Rajan to hike the key rate by another 0.50 percentage points this fiscal. The repo rate hike "indicates that the new Governor is focusing more on inflation than growth. We now expect RBI to increase repo rate by 0.25 per cent each at the next two policy meetings to 8 per cent by end of 2013," house economists at British lender Standard Chartered said............

Read - FE

Low-hanging fruits for Rajan to pluck

......The factors set out for determination of what is a non-negotiated contract and what in it would be an unfair term, could easily be prescribed by RBI using its existing powers under the Banking Regulation Act. Unfair conduct, abusive conduct, consumer data privacy, and fair disclosure norms, have all been provided for in IFC and RBI can easily adopt these under subordinate legislation, and regulate this core area of activity in its role as a regulator. Implementing these measures and swiftly making use of the first few violations as opportunities to articulate RBI's thought process and expectations would be a simple way to give this important area of financial sector reform a major leg-up..................

Read | Business Standard

Rip Van Winkle, Rajan & the Indian economy

....Tongues have already started wagging, and a section has started painting Rajan as the new villan in the uncertain story of Indian economy. One can view Rajan the individual through the prism of politics. Rajan the Governor, however, has no luxury to look at the economy from the narrow angle of politics............

Read - The Hindu

Was SBI aware that RBI would hike repo rate?

Did the India’s largest lender, State Bank of India (SBI),  know that the repo rate hike by the Reserve Bank of India (RBI) was in the offing when it hiked its lending and deposit rates a day ahead of the monetary policy review on Friday? According to some market experts SBI might have gotten the wind of what was coming. Senior bank officials, when contacted, would not respond. An e-mail on this issue sent to SBI remained unanswered............

Read - HT

Temple to take up RBI letter on gold stock

..The RBI had submitted a letter to the Attukal Temple Trust on August 29 seeking permission to calculate the stock of gold in the temple’s possession. Trust secretary Jyothish Kumar told The Hindu that the trust office-bearers had reservations about the request, and felt that it unfairly targeted only Hindu religious institutions...............

Read - The Hindu

India Post pushes ahead with banking plan despite opposition

.Within the finance ministry, the department of financial services opposes the move, saying the postal department does not have the expertise to run a bank, including handling credit and other banking functions. It feels the business proposal is unlikely to be viable. But the postal department does not agree with this view, saying it has several years’ experience in deposit mobilization and that Post Bank of India will be run by professional management using its strong network.........

Read - Mint

Banking Facilities Inaccessible, Tribal Woman Suffers

..........After a lot of effort, she managed to get mandatory documents, including the Aadhaar card receipt, and submitted them to the bank, Madavi said. The bank officials, however, sent her back, saying the papers submitted by her can't be considered "valid" for opening an account, she said. When asked about this, the bank Manager said the documents provided by the woman are not sufficient for opening a new account. "If she produces all the required documents, her account will be opened." Despite the Reserve Bank of India's much-touted financial inclusion programme, which entails providing basic services in unbanked areas, people like Madavi still remain out of the formal banking sector.

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

RTI Judgement Series: Citizens have right to know about functioning of bank, including regulatory lapses

...........The Central Information Commission (CIC), while allowing an appeal, directed the Public Information Officer (PIO) of Reserve Bank of India (RBI) to provide complete information regarding working of Deendayal Nagari Sahakari Bank Ltd as well as inspection reports, file notings of RBI to the appellant under the Right to Information (RTI) Act.............

Read - Moneylife

Bank bosses behind bad loans

......But behind every stressed asset there is either the personal interest of a CMD, director or chartered accountant, or the involvement of joint interest. But they seldom get punished. Instead, the honest executive is made the sacrificial goat. Corporate lending decisions are invariably made by CMDs in their personal chambers and pushed through the system, overriding a genuine credit proposal secured through sincere efforts...........

Read - HBL

Rupee Bank depositors panic over losing money in merger with Saraswat Bank

........Although no formal announcements have been made in this regard yet, it seems that the distressed bank has hit upon a formula for its woes. Depositors with the bank complain that it has come to their notice that the authorities have decided to pay out only 65 per cent of the deposit amount, which means they would have to let go of the remaining 35 per cent. In a meeting held at Bhavani Peth yesterday, over 500 account holders unanimously decided to protest against this arrangement. The meeting comprised of depositors from all walks of life including pensioners, saving account holders, small and medium businessmen, traders and enterprises..........

Read - Pune Mirror

Saraswat; Shamrao Vithal warm up to idea of becoming private banks

Reserve Bank of India’s idea to giving room for urban cooperative banks (UCBs) to transform themselves into a private bank has warmed up hearts of many. Saraswat Bank and Shamrao Vithal Co-op Bank, both Mumbai-based large UCBs (Urban Co-operative Banks), have begun groundwork to travel the path as and when RBI firms up its mind.............

Read | Business Standard

Yikes, yet another (Damodaran) committee report

Sorry folks and due apologies Mr. Damodaran, but “Yikes” was exactly what Zenobia Aunty uttered when she learnt that yet another report had been made public. The title of this particular report was quite a mouthful – Report of the committee for reforming the regulatory environment for doing business in India. This committee was set up in August 2012 by the Ministry of Corporate Affairs............

Read - ET

INPA protest

............They claimed that interest rates ranging from 14.5 per cent to 19.5 per cent were set for educational loans by many banks. “ Some banks have been levying penalties despite a directive of the Reserve Bank of India,” they said.

Read - The Hindu

Scrap income tax: Swamy

....Swamy, who recently merged his Janata Party with the BJP, said abolition of direct income tax would come as a big relief to the salaried middle class and boost savings that would generate high growth. He said the revenue the government earns from direct income tax was a very small amount that could be foregone to boost growth..........

Read - The Telegraph

Raghuram Rajan needs to transform RBI into a multitasking innovator

.......But one does dream of a new paradigm in the regulatory and supervisory role of RBI. It is here that RBI is in full control of what it does and Rajan can bring a revolution. It will not be easy. The proud and traditionally conservative RBI has to be transformed by the new governor to deliver in a short time-span. ........

Read - ET