.....On the timing of last month’s directive to banks asking them to desist from offering zero per cent EMI schemes through credit cards, Chakrabarty said the timing is absolutely right. “During the festive season, mis-selling is at its peak, so wrong things should not happen when more people come (to buy). Whatever you (banks) are doing, convey it to the customers,,” he said. “There is no ban on giving loans on credit cards. What we are saying is don’t charge customers. Don’t charge more per cent by saying zero per cent,” he added.......
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.
Thursday, October 10, 2013
Credit card loans: RBI says has no issues if done transparently
....."There is no ban on giving loans on credit cards. Don't charge 12 per cent actually and claim that I am charging only zero per cent interest," RBI Deputy Governor K C Chakrabarty told reporters here. It could be noted that RBI had last month banned zero per cent interest schemes offered by various bank to credit card holders saying the scheme lacks transparency. The move is likely to dent banks festive season sales........
Obituary
E.P.VEERARAGHAVAN (81) Retired Officer, RBI, Chennai expired on 5-10-2013. Ph: 22604902.
Hindu
This week, withdraw from an ATM, get crisp new notes
.........Such complaints may now reduce, as the Reserve Bank of India, Chennai, has instructed various banks in the city to provide fresh notes to its customers, particularly through ATMs. Starting last week, RBI officials initiated the process and directed banks to feed new notes, particularly of those under the denomination of Rs. 100 and Rs. 500, into their ATMs................
Contentful questions.......
My View on "Growth, Low Inflation to be RBI’s Priority":
This interview gives in one place Dr Rajan’s perceptions on RBI’s role, RBI-GOI relationship and the need for skill development in RBI, among other issues. Team ET has asked right questions and where there was ambiguity in questions, the answers were elaborate to make things clear. It was a refreshing experience reading this, as, in some interviews in the recent past with heads of some organizations, published in the media, the questions had more ‘content’ than the answers.
- M.G.Warrier
Former Chief of Reserve Bank of India meets CBSL governor
Former Governor of the Reserve Bank of India, Dr. D. Subbarao has visited the Governor of the Central Bank of Sri Lanka Ajith Nivard Cabraal on Tuesday............
Unrealistic appeal
This refers to “Cheap loans: By how much can you cut rates, FinMin asks banks” (Business Line, October 9). Asking commercial banks to disclose information regarding the possibility of cut in lending rates, has been viewed from two angles can be seen asa stimulus measure to expand the demand for consumer durable goods in the short run. It also seems like a poll campaign in disguise. Whatever the motive, it will ultimately nullify the constructive measures taken by the RBI to contain inflation. How can a bank lend money to the extent of 10 times its deposits just to get one-tenth of it as additional capital from the Centre?
- S. Lakshminarayanan, Cuddalore (HBL)
Cash-ferrying companies flout rules on weapons
.......The Internal Security Division, in a September 10, 2013 letter, sought information about this matter from the Reserve Bank of India (RBI) but is yet to get a reply. Information has been sought on, among other things, carrying bulk cash, guidelines on type of vehicle (security levels) to be used for transportation and model copy of contract document between private security agencies and banks for cash in transit.
Seminar on banking
The College of Cooperation, Banking and Management of Kerala Agricultural University is hosting a two-day national seminar on ‘Contours of Indian Banking’ on October 23 and 24 at the University Central Auditorium on the main campus.........
Bitcoins: Exciting, anarchic and risky
...Bitcoins are an anonymous, decentralised digital currency. In contrast to electronic money, no company controls the bitcoin, nor ever could: all the rules about how it works are embedded in the very operation of trade, including the rate of inflation and how to verify transactions. For most users, the easiest way to get bitcoins is to buy them. But due to strict anti-money laundering controls, even that is tricky...........
Globalisation vs the rupee
.......Some economists say that we have not had enough ‘reforms’ to keep India attractive for foreign investments; others point to the enormous increase in our Current Accounts Deficit as the import bill has increased substantially; yet others blame the recent upswing of the American economy and other global factors. Caught in the crossfire of facts and opinions is the poor resident of the non-stock-market-investing Bharat, struggling to obtain even basic necessities like food and shelter. Do our decision-makers understand that this citizen is suffering not due to inadequate ‘development’, but because of an inappropriate model of economic growth? Faith in this model has privileged cold growth (GDP) statistics over meaningful indicators of human well-being, sharply increased inequities.......
Some more liquidity, please
By rolling back a steep increase in short-term rates, opening the floodgates on FCNR deposits, and infusing liquidity through bond purchases, the Reserve Bank of India has been signalling to banks and the bond markets that it isn’t entirely anti-growth. But for these measures to be really effective, the central bank needs to do much more..................
RBI couldn’t care less about corrupt UPA
.......It is indeed a relief to see Governor Raghuram Rajan at the RBI beginning to ease up on the liquidity. This is essential for growth, even as the IMF expects barely 3.8 per cent growth in GDP this year, down from its earlier estimate by a dramatic two per cent points, but going up to 5.1 per cent next year. Of course, even five per cent odd was a 10 year low when it happened last year, and therefore, the current dip estimated is all the more significant. It shows the Government’s economic policies are just not working...........
From anxiety to complacency in six weeks?
......The tide began to turn in early September with the new Reserve Bank of India (RBI) governor's confident and well-considered initial policy statement on September 4, including the announcement of swap facilities to banks for foreign currency non-resident (bank), or FCNR (B), deposits with maturity of three years and over at a rate of 3.5 per cent per year. This quasi-exchange rate guarantee soon triggered fresh inflows. Within days of this initiative, ..........
India Inc needs stronger bankruptcy legislation for efficient revival process
....If Reserve Bank of India Governor Raghuram Rajan's plans to expedite loan recast and speed up the resolution of unviable businesses come through, India's economic recovery from any slump in the future could be as quick as that of the US, unlike Japan, where companies linger on like in India..........
CAD, growth and the rule of law
The Second Quarter Monetary Policy Review is due end of this month. We are currently in a scenario of the higher Current Account Deficit at 4.9% of the GDP than both the previous quarters, as well as Q1 2012- 13. India would do well to use the breathing space that has been provided by the US deferment of tapering, to fix its Current Account Deficit ( CAD) and resuscitate growth. While it is the Current Account deficit and deficit in output growth rate which are garnering maximum attention, there is a third deficit - a Rule of Law deficit, equally important due to ......
Beyond the taper talk
....In India, though RBI has raised the repo rate and is increasingly been seen to be moving away from the Wholesale Price Index towards the Consumer Price Index as the key operating variable, this transition may not be easy as the interest rates will have to be increased by a fair amount in order to undertake this policy shift. However, raising interest at this point will affect sentiments and expectations around growth. Notably, RBI will also have to reassess its position on the exchange rate and capital flows, as focus in last few months has been on external sector management...........
Why you need to be careful when your bank changes your home loan rate
.....A simple online search on home loan complaints will throw various cases where banks have goofed up with customer’s home loan agreement. It is thus wise to figure out what can go wrong in advance, so that you can be cautious and avoid having to face an unpleasant situation...........
Public sector banks will score this festive season
Has the recent Reserve Bank of India dictate asking banks to stop zero per cent equated monthly instalment (EMI) schemes, as well as the rising prices of electronic gadgets, spoilt your Diwali shopping plans? If so, you may still have a chance of buying the iPhone 5 or the LED TV you have been eyeing!...........
Wednesday, October 9, 2013
Nachiket Mor : Return of the Finance Prodigy
..........Nachiket Mor, the man who ran the treasury,
corporate funding, and learnt how a retail customer behaves from his perch at
ICICI Bank, will wear the hat of a jury in two key panels constituted by
Raghuram Rajan, the man who told a partying Wall Street that the music had
stopped long ago. “He straddles many worlds,” says Rajan. “We could not pick up
a better and more capable person who has seen all aspects — the theoretical as
well as the practical — to give us a sense of the future of what we should be
doing.” ..........
Concern over impending takeover of DICGC
All India Reserve Bank Employees Association writes to Governor............
Also read this........
Can’t change rules midway, process for bank licences won’t be rolled back
........Many are criticising this move saying it will lead to more bad loans, besides leading to distortions. Even RBI Deputy Governor K C Chakrabarty was quoted as saying that it is not prudent to increase consumption by lowering interest rates because if the interest rate goes up, loans will become NPAs. How do you respond to that?
The RBI Deputy Governor was quoted completely out of context. He told me that the answer that he gave was in reference to a theoretical question asked by a student at a function he attended. That, unfortunately, has been taken and portrayed as some kind of criticism of the government policy. It was not............
Achieving financial inclusion
........ It is hoped the RBI takes note of the views of Dr CD Datey, who sacrificed his career to oppose the establishment of RRBs in 1975. The small banks may not serve the purpose of financial inclusion. The Centre should rather think of having small branches of the commercial banks with all facilities of core banking solutions (CBS) which may ensure cent per cent financial inclusion.
Angry Mumbai Schools approach RBI governor
..........."It is a pity to see such qualified sportsmen, who are officers at the RBI, using such foul and abusive language. Even after the cops arrived, they were still behaving violently. I am really upset over the whole incident and hope that the RBI takes stern action against those who were responsible for such behaviour,"........
JOINT MEETING OF RBI, GOVT OFFICIALS HELD
..Among the seized currency notes, there are 903 notes of Rs1,000 denomination, 618 of Rs500 denomination and 44 of Rs100 denomination. Present in the meeting were RBI Chief General Manager, Nagpur, S V Raghavan, RBI General Manager, Raipur Office Nirmalchand, Assistant Inspector General of Police, Chhattisgarh, Sanjay Sharma besides officials from Airports Authority of India and BSNL.
Guidelines For Creating Posts of GMs, DGMs and AGMs in Public Sector Banks
........Based on above guidelines, MoF has calculated the maximum number of General Managers in each Public Sector Bank based on the business mix as on 31/03/2013. The details of posts of GMs is given below based on MoF guidelines. These guidelines will now be reviewed only based on the business mix as on 31.03.2015 and the ceiling provided below shall remain effective till next review. As per MoF circular, it appears that Punjab National Bank, Canara Bank, Bank of India already have exceeded the number of posts at General Manager level. MoF has allowed them to retain the existing number of General Managers.........
Let more Women Rise to the Top
We
welcome the appointment of Arundhati Bhattacharya, the first woman to
steer the country’s largest lender, the State Bank of India. She joins
other women heading public and private sector banks in India, all of
whom have been chosen on merit and performance, and not because of their
gender. But in sectors other than banking, there is a dearth of women
in the senior-most positions. Which is strange and calls out to be
remedied...........
Read - ET
Read - ET
Bhattacharya underlines tech in SBI’s war on NPAs
.....To improve NPA management, SBI will employ more tools than before, with emphasis on effective use of IT. Bhattacharya said IT is going to be used in risk mitigation, product pricing, customer-related issues and in raising productivity. The bank will also ramp up technology to tackle loan recovery. Focus will also be on structure rationalistaion and improved time resolution to fight bad loans...........
No plan to slash lending rates, says SBI chief
.........The new chairperson has also proposed removing the cap of two transfers on ‘spouse grounds’ for both female and male employees. She is also considering introducing a longer sabbatical (leave on loss of pay) for employees, especially women, similar to the scheme she introduced in SBI Caps, when she was heading it. At present, SBI Capital offers leave without pay for up to six years.
Who is Arundhati Bhattacharya?
..............Her elevation came after the glass ceiling was broken in 1996, when Tarjani Vakil took over as head of Exim Bank. Ms Vakil's appointment was followed by Ranjana Kumar, who was appointed chairman and managing director of Indian Bank. Over the past few years, India's banking sector has seen a few more woman heads. Shubhalakshmi Panse, Vijaylakshmi R Iyer and Archana Bhargav are heading state-run Allahabad Bank, Bank of India and United Bank of India, respectively. In the private sector, Chanda Kochhar and Shikha Sharma now head ICICI Bank and Axis Bank, respectively. At the Reserve Bank of India (RBI), Shyamala Gopinath, K J Udeshi and Usha Thorat have all been Deputy Governors............
Appropriate to indicate the facts - K.Kanagasabapathy
My View on "Cash holding confusion - A.Seshan":
Yes. This is a ridiculous practice to say the least. Previously when government's cash balance exceeded Rs.50,000 crore, the amount was invested in government's own securities. Now perhaps the entire amount over and above Rs.100 crore is invested in government's own securities. Even if the government's cash balance is invested in securities and goes into investment account of the central government, the impact on the market of such high balances is the same. It would be appropriate at least to indicate in a foot note that so much amount of cash balance is invested in government securities. The impact of such high balances is technically equivalent to a CRR imposed on the system. Yet another issue is that RBI indirectly pays interest equivalent to interest on invested securities, since the interest on such securities accrue to the government. Since RBI is not paying any interest on banking system's balances on account of CRR, it would be proper for RBI not to extend the benefit of investment of surplus cash balances of the government in its own securities. Rakesh Mohan committee on Financial sector assessment earlier recommended that such surplus cash balances can be lent in the overnight market, since such accumulation of balances cause every time a cash crunch, rather unintended, on the system. On this also, no decision seems to have been taken. Yet another irony is that government continues to borrow heavily even when it has huge cash balances which only precipitates the cash crunch caused by the surplus balances.
Yes. This is a ridiculous practice to say the least. Previously when government's cash balance exceeded Rs.50,000 crore, the amount was invested in government's own securities. Now perhaps the entire amount over and above Rs.100 crore is invested in government's own securities. Even if the government's cash balance is invested in securities and goes into investment account of the central government, the impact on the market of such high balances is the same. It would be appropriate at least to indicate in a foot note that so much amount of cash balance is invested in government securities. The impact of such high balances is technically equivalent to a CRR imposed on the system. Yet another issue is that RBI indirectly pays interest equivalent to interest on invested securities, since the interest on such securities accrue to the government. Since RBI is not paying any interest on banking system's balances on account of CRR, it would be proper for RBI not to extend the benefit of investment of surplus cash balances of the government in its own securities. Rakesh Mohan committee on Financial sector assessment earlier recommended that such surplus cash balances can be lent in the overnight market, since such accumulation of balances cause every time a cash crunch, rather unintended, on the system. On this also, no decision seems to have been taken. Yet another irony is that government continues to borrow heavily even when it has huge cash balances which only precipitates the cash crunch caused by the surplus balances.
- K.Kanagasabapathy
‘FUNDING FOR LENDING’ SCHEME MAY CRAMP BANKS FOR SPACE ON LOW INTEREST RATES
....Though the Government has announced that it will infuse `14,000 crore in PSU banks, allowing them to lend at attractive rates in the festival season, sources pointed out that this move may also not prevent the CoF of these banks to fall short by 0.1 per cent. Analysts too feel that the proposed ‘funding for lending’ scheme may not help banks to lend at cheaper rates..........
Stop criticizing Gov...........
My View on "THE SECRET DIARY OF RBI GOVERNOR":
The tragedy is that every tom dick and harry has either started giving suggestions to the new RBI Governor or criticizing him on policy initiatives he has started taking. Is it partly due to either jealousy or some others and playing shadow boxing. There is clear indication of political overtones in the remarks of the author against a more erudite, intelligent and a more competent person who is a hope for all of us to give true direction to the economy.
- M.K.Bandopadhyaya
Working backwards
.........Committee member Shaibal Gupta has written a long dissent note appended in the report. Gupta, among other things, questions the committee’s decision to assign equal weights to each of the sub-components (such as monthly per capita expenditure and percentage of SC/ST population) for calculating the overall index for the state.........
MSF cut: RBI weakens its inflation-fighting credentials
........After all, it is just over a fortnight ago that the Bank in its wisdom thought it fit to reduce the MSF by 75 basis points, rather than go in for a more aggressive easing on the grounds that consumer price inflation is still high and savings in financial instruments is less than desirable. Has anything changed on either of these two fronts? No! What has changed is that .........
A Consistent RBI Policy
The
RBI has eased interest rate on borrowings under the marginal standing
facility (MSF), defined as an emergency way that banks use when they
face a paucity of funds. The RBI must have a consistent policy to
regulate the money market. Tampering with instruments of credit control
or credit creation measures such as the repo rate, MSF, open market
operations, etc, often will deprive banks of cost-effective and
profit-maximising strategies.
- S RAMAKRISHNASAYEE, Ranipet (ET)
- S RAMAKRISHNASAYEE, Ranipet (ET)
Keep reversing
......This is good news and it will ease liquidity conditions in the market. An RBI committee headed by Deputy Governor Urjit Patel is working on a new monetary policy operational framework. Until the committee makes its recommendations and a new framework is put in place, one may expect that the RBI will move back, albeit slowly, to the framework that existed before mid-July...........
CAD target of $70 bn is imminently reachable: Rajan
"........There is increasingly a sense amongst analysts, amongst commentators that India's current account deficit (CAD) problem is under control. $70 billion that the government proposed as a CAD after calculating it with us seems now imminently reachable. Some independent analysts are saying it will be even better,"........
I’m pleasantly surprised by the economy’s ability to react: Raghuram Rajan
.....What I have said since then and I keep saying is that yes, inflation is a big concern for the Reserve Bank; that we intend to fight inflation. When we fight inflation, however, we keep in mind the state of the economy. Because of the lower level of output relative to potential, we also have disinflationary forces at work. Disinflation is not a one- month or two-month process. ..........
Inflation still biggest bugbear
Duvvuri Subbarao, the former Reserve Bank of India governor, will probably have the last chuckle. On Tuesday, the finance ministry forecast inflation based on the wholesale price index (WPI) at anywhere between 6.5 and 7.2 per cent at the end of 2013-14 — a number that is streets ahead of the RBI’s projection of 5 per cent that was made in the first quarter monetary policy review on July 20. The forecast is also higher than the 5.5 per cent projected by the PM’s Economic Advisory Council headed by C. Rangarajan in its report last month. For over a year, the finance ministry under P. Chidambaram and Subbarao have clashed over the conduct of the monetary policy.........
Raghuram vs America! Street caught in the crossfire
The stock markets seem to be been dancing to the tunes of what appears to be a battle of sorts between US Fed and RBI. What's heard on the Street is that markets are uncertain over what would happen in the US in terms of the ongoing shutdown, debt ceiling and quantitative easing..........
Economy has growth potential, CAD isn't an issue now: Rajan
....“A narrowing fiscal deficit is also something that international investors are looking at. One way to narrow the deficit would be a jump in diesel prices. if that’s not on the table, a sequential increase in diesel prices at a rate that makes us close to market price in the near future is important,” .........
Growth, Low Inflation to be RBI’s Priority
.......After
every RBI action, various government functionaries comment on it. But
this time when you raised repo rate, there were no comments from New
Delhi. How did you achieve it?
Anyway, look the finance ministry and the RBI talk. It has been true since September 4th, it was true before September 4th. We talk and very rarely one side surprises the other... Let me start by saying objectives are the same. Both sides want growth, both sides want low inflation. The pace and the instruments we use to achieve those objectives, there is always a healthy debate and ultimately I think this is true in every country and the whole issue is to try and convince the other side.......
Anyway, look the finance ministry and the RBI talk. It has been true since September 4th, it was true before September 4th. We talk and very rarely one side surprises the other... Let me start by saying objectives are the same. Both sides want growth, both sides want low inflation. The pace and the instruments we use to achieve those objectives, there is always a healthy debate and ultimately I think this is true in every country and the whole issue is to try and convince the other side.......
RBI’s Raghuram Rajan says things will only get better for India’s economy
The news on the economy will only start getting better from now, Reserve Bank of India (RBI) governor Raghuram Rajan said in an interview, reflecting a growing view in many quarters that the Indian economy has bottomed out. He listed the factors behind his assessment: rising exports in the second quarter; the possibility that the US’s problems would be temporary and that lawmakers in that country would arrive at a fiscal deal; stronger agri production; and the revival of many projects that were stalled............
Moneylife IMPACT: RBI asks High Mark exec chairman Anil Pandya to step down
Following several complaints and reports by Moneylife, the Reserve Bank is understood to have directed Prof Dr Anil Pandya to step down as executive chairman of High Mark, the troubled and cash strapped credit bureau. Reserve Bank of India (RBI) is understood to have asked Prof Dr Anil Pandya to step down as executive chairman of troubled and cash strapped credit bureau High Mark Credit Information Services Pvt Ltd. ........
P Chidambaram to reach Washington tomorrow for IMF-World Bank meetings
Finance Minister P Chidambaram will reach Washington tomorrow to attend the IMF/World Bank annual meetings, after which he will meet investors in San Francisco to hardsell India as an investment destination. Reserve Bank of India Governor Raghuram Rajan and Economic Affairs Secretary Arvind Mayaram, among others, will also attend the IMF/World Bank annual plenary meetings on October 11 and 12........
Panchayat-owned ATMs
......To further motivate the banks, panchayats could lease an ATM from the companies and offer wet lease to banks, making the installation of ATMs a reality in a large number of bigger and richer villages..........
Tuesday, October 8, 2013
Unmaking monetary policy
........If this is the case, then, between the mid-quarter review of September 20, in which the RBI announced a tightening of the monetary policy stance, and last week, its position appears to have changed. If not, it needs to provide some explanation for how stimulating demand for even some products is consistent with its anti-inflationary stance. Or, is this just another instance of monetary policy being hijacked by a finance ministry seeking to smooth over ruffled feathers in the business community?......
* The Governator *
Reserve Bank of India Governor Raghuram Rajan may not have an official twitter account but someone has set up a parody account on the microblogging site under the handle The Governator that has a modest following of 3,000-odd and some mildly amusing tweets....................
A Separate Debt Management Office - Charan Singh
......A separate debt management office also ensures that there are alternative views of the economic situation of the markets and the economy, and not just that special view which has been formed by the central bank through its trading desk and market intelligence. The debt manager has to carefully understand the pulse of the market and the economy through constant interaction, as debt manager has to regularly operate in the financial markets. Through proper coordination between the central bank and debt manager, a better view of the financial markets and the economy can be formed...........
JJ Irani addresses students at JRE School of Management
........Speaking at the event, Mr. Deepak Singhal, Regional Director, RBI, said, “The banking sector needs fresh talent more than ever before today. The country has 25 private banks, 40 foreign banks and 26-27 public banks with around 11 lakh employees. From a once healthy contribution of 30 per cent to the GDP, the banking sector is now contributing a meager 2 per cent. We need young and passionate bankers to take this figure back to where it was or maybe higher.”..............Lady at State Bank helm
Another glass ceiling has been broken. This time it is at the State Bank of India, the 207-year-old institution that ranks as the country’s largest commercial bank. Arundhati Bhattacharya has been appointed as the first woman chairperson of the bank, which traces it origins to the Bank of Calcutta that the British set up in 1806. Bhattacharya (57) succeeds Pratip Chaudhuri, who retired on September 30. She will have a three-year tenure — the first time that any SBI chairperson is getting such a fixed term............
RBI GUV, DENA BANK CMD TAKE STOCK OF SHGS’ WORK
........On the occasion, the RBI Governor also distributed scholarships to two meritorious students under Dena Bank’s ‘Vidya Laxmi Shiksha Yojana’, a press release issued by the bank stated here on Monday.
Due slips: CEIB writes to Kolkata police, RBI
.........Meanwhile, a private bus operator had filed an application last week in the high court seeking to be added as a party in the case. In the application, Chanchal Sarkar, a private bus operator, claimed that they had informed the state government and the RBI before introducing the coupons, due slips and plastic coins.
14th Finance Commission team arrives
What does Raghuram Rajan think of Ben Bernanke’s quantitative easing programme?
.......“The dilemma for central bankers is particularly acute when the immediate prospect of a terrible economic crisis is necessary for politicians to obtain the room to do the unpleasant but right thing,” quips Dr Rajan. This is particularly relevant in the Indian context. He says, “For the receiving country, it is unclear whether monetary policy should tighten and attract more inflows, or be accommodative and fuel the credit boom. ..........
Sticking To His Knitting
......Fast forward two months and we are at the Raja Aederi-designed Mahindra Tower in Worli, Mumbai, for a meeting with Mahindra Finance managing director, Ramesh Iyer. The Federer episode is especially fresh in our minds because the country’s biggest non-banking finance company (NBFC) by market capitalisation was one of the forerunners to get a banking licence — the defending champion, you could say — but it didn’t proceed with the application. And in spite of what is happening around, Iyer seems as surprisingly light-hearted as Federer was after his unexpected exit..........
Sahoo Panel initiates dialogue on FCCB, depository receipts
MUMBAI, OCT. 7:
The M.S. Sahoo Committee, set up to review the Global Depository Receipts, Foreign Currency Convertible Bonds and overseas issuances by unlisted Indian companies met in Mumbai on Monday. The Committee consists of G. Padmanabhan, Executive Director, RBI; S, Ravindran, Executive Director, SEBI; Ajay Shah of NIPFP; P.R. Suresh, Consultant, PMEAC; Pratik Gupta, Deutsche Equities and Somasekhar Sundaresan, Partner, J. Sagar Associates...........
DCBs enrolling individuals
On the directive of the RBI and at the insistence of Nabard, the District Cooperative Banks (DCBs) in the state have started enrolling individuals as members. So far, DCBs had been admitting only affiliated societies like Primary Agriculture Credit Societies (PACS) as members. Nabard had earlier issued a circular asking the PACS to entrust their assets and liabilities with the DCBs and function as DCB agencies............
Sarcasm and humor not in good taste.........
My View on "THE SECRET DIARY OF RBI GOVERNOR":
Why the author wants to write some rubbish out of his imagination. He could have written some positive sides of the Governor and his responsibilities of improving the economy with all its present challenges. The present Governor is only in his fifties and has a strong academic background with international exposure and experience in understanding the nuances of finance and how it plays havoc in destabilizing even a strong economy like US. Dr Raghuram Rajan has got a unique opportunity to understand the role of dirty politics preventing implementation of good economics and play his game of balancing politics and economics for the welfare of the masses and economic growth with currency stability, price stability, political stability and social development. The author's sarcasm and humor should have been on the positives of being a Governor of a Prestigious institution having challenges of unpredictable nature from domestic and international arena. That would have been more appreciable.
- Dr.T.V.Gopalakrishnan
What, why and how of retail banking: Issues & challenges - Dr.K.C.Chakrabarty
 |
| Inaugural address by Dr. KC Chakrabarty, Deputy Governor, Reserve Bank of India at the Bank CEOs Roundtable organised by CAFRAL in Udaipur on October 2, 2013 |
......Before we broach the subject of retail banking, let me begin by elucidating what is banking. You must be wondering why I am getting down to the basics. Believe me this has a purpose. We all understand ‘traditional’ banking as the process of financial intermediation wherein the bank acts as an intermediary between the savers and the borrowers. It accepts deposits for the purpose of making loans to the borrowers as also facilitates payments as part of the country’s payment and settlement systems. The banking industry has, however, undergone a lot of transformation over the last three decades. The banks have become a virtual marketplace offering...........
Cash holding confusion - A.Seshan
......One does not understand the rationale for keeping the cash holdings camouflaged in the balance sheet, making it difficult for analysts and every stakeholder in the market to understand trends in the economy. This runs counter to what the governor said in his first statement that he would follow the tradition of transparency and predictability.
Collective wisdom will prevail...........
My View on "Star trio on panel for new banks":
About the appointment of Dr Rajan as Governor, I had observed in The Global ANALYST that “This time, the process has been more transparent and all have accepted that among the candidates considered, the most meritorious has been selected.” Appointments to this panel should be a confidence booster to those who have been beleiving in RBI’s work ethics and ability to rise to the occasion. Whatever be the recommendations of this panel on the new bank license applications it will be vetting, nation will benefit from their collective wisdom and views on the future structure of financial institutions including banks in India.
- M.G.Warrier
My View on "7 new bank licences coming, says FM" - M.G.Warrier
.....Much earlier, by declaring the take off of All Women’s Bank in public sector, FM has already shown how deadlines can be fixed and institutional structure can be defined, if there is a will. Now, it is for the Jalan Committee to express their views on the future institutional framework in the banking sector, based on the Committee’s perceptions on the material on 26 applicants furnished to it and for RBI to select the 7 from those eligible candidates which conform to the FM’s prescriptions. Even if RBI is willing to go half way together, the clear indication from the FM is that the walk is going to be on parallel paths............
Does the RBI know how much conflicts of interest it has created?
..............Two questions sprang to my mind. Why has there been a rush by the RBI to form a committee to grant banking licenses when the Parliamentary Standing Committee on Finance (PSCF) is looking at the same subject? Why not wait for the report to be submitted to the Speaker and then have the Parliament debate the same, before deciding on the new bank licenses? ............
RBI considering making bank licensing process more frequent
.......“We propose to carry forward these ideas and come up with a detailed road map of necessary reform and regulations for free entry and making the licensing process more frequent after we get comments from the stakeholders,” RBI Deputy Governor K. C. Chakrabarty said here..............
Policy Watch: Post offices can fit into inclusive banking template, and here's how
....It would expose post offices to the discipline demanded by banks, and allow them to scale up towards financial discipline far more rigorously than is currently the case. And it would allow the Indian banking sector to increase its presence in rural India at lower costs..............
'RBI must give bank licences to corporates with proven record'
The Reserve Bank must issue new bank licenses to corporate houses with proven track records in order to achieve financial inclusion as public sector banks alone will not be able to spread banking services to the entire country, PHD Chamber of Commmerce said today. "Private banks' entry has only made banking sector more competitive ever since their operations came into being," PHD Chamber President Suman Jyoti Khaitan said.......
Now, Aadhaar-linked accounts to be basis for mobile payments
The Supreme Court’s recent observation might have left the future of the Aadhaar-linked Direct Benefits Transfer (DBT) project hanging in the balance. But that does not seem to dim the government’s focus on the platform. It is now set to enable an ecosystem where mobile-to-mobile payments could be singularly effected through the Unique Identity (UID) number........
FM promises cheaper consumer loans but where’s the money to fund banks?
..........Now only if economics worked in such a linear sequence, even I could be the RBI governor. The first question is where is the government going to get this ‘extra’ money from? As Deputy Governor of the Reserve Bank of India KC Chakrabarty put it on Saturday “How much (will the government put in)? If the government has so much money, then no problem.”........
Moneylife IMPACT: I-T dept asks officials to use official email IDs
.....The Income-Tax (I-T) department has directed all of its officials to use official email IDs for all official communication. Moneylife had raised the issue of I-T officials sending mails to taxpayers using IDs from free email service providers like Gmail and Yahoo!.
Gold loan companies protest to RBI
......“RBI’s latest move partially contrasts with the Rao committee’s recommendations. While the committee suggested growth measures for gold loan NBFCs, RBI has for the last 18 months taken several hard measures to cap their growth. In addition to lower LTV (loan to value), stringent norms of KYC (know your customer) and on cheque payment over Rs 100,000 restrict the growth of gold loan companies,” ..........
Foreign students don’t need address proof for bank accounts
......RBI has advised banks to provide convenience to foreign students while opening bank accounts. Hence, RBI has allowed banks that are authorized to open or maintain non-resident external (NRE) accounts or non-resident ordinary (NRO) accounts to open an NRO bank account for a foreign student on the basis of her passport. The passport should have appropriate visa and immigration endorsement. The passport will be used as the proof of identity and address of her home country. Along with this, the foreign student should also submit a photograph and an offer letter of admission from the educational institute she studies at.........
To boost liquidity, RBI cuts MSF rate by 50 bps
In yet another move to ease liquidity for banks, the Reserve Bank of India on Monday eased interest rate on borrowings under the marginal standing facility (MSF) by 50 basis points (bps) to 9 per cent.........
Interest rates are going to stay high for many more quarters to come
......To stem that ebb and ensure that the Indian debt paper remained attractive for FIIs, the Reserve Bank of India (RBI) raised short-term interest rates, drawing sharp criticism from industry. Somehow, an impression gained currency that the then RBI governor D Subbarao, a vocal critic of lower interest rates in times of mounting inflation, used the opportunity to pull up rates still higher on the pretext of stopping dollars from moving out in huge quantities. Yet, the fact is that the RBI then had few other options other than raising the rates to stabilise the rupee. It was difficult to tell whether ...........
RBI to relax norms for forex futures after rupee stabilises
Reserve Bank today said it will look at easing restrictions on the forex futures market once stability improves in the foreign exchange market. "Once the stability improves in forex market, we will look at the whole gamut of futures market," RBI Deputy Governor H R Khan said on the sidelines of an event here........
Know how to tackle changes in your bank FD & loan rates
In the aftermath of the credit policy announced by the new Reserve Bank of India (RBI) governor, few areas have started witnessing changes. Bank deposit rates have started getting impacted as the lenders have started revising the offered rates for various time maturities. Even the loan rates have started to rise. In this situation, individuals will have to take some steps to get their finances in order. Here is a look at the situation and how this can be achieved.............
J&K Bank looks beyond India for wider play, to apply for licence
Jammu & Kashmir Bank is seeking overseas expansion and will soon apply to the Reserve Bank of India (RBI) to secure a licence for the same..........
Monday, October 7, 2013
RBI paper on banking structure - Dr.S.S.Tarapore
........The present columnist has been an early advocate of allowing industrial houses to apply for bank licences. Memories of the pre-nationalisation period, when industrial houses dominated the banking scene, are no longer relevant, as there are concentration ratios and prohibition on connected lending, which would prevent earlier malpractices from re- emerging. In the upshot, it would appear that political economy considerations will prevail and the actual granting of licences will take place only after May 2014...........
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