.........The current business environment was highly dynamic and changes were occurring at a rapid pace, Bansal said, adding new bank licences were being considered, which would increase competition further. Regulatory pressures were increasing and credit offtake continued to be challenging, he said in a communication to employees................
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.
Wednesday, October 16, 2013
Postal Life Insurance day celebrated
....Postal life insurance was started with effect from 01 February 1884 for central government/ state government officials, defence personnel, officials of govt institutions, municipal corporation and boards, government universities, employees of nationalized banks, additional bodies of State Banks of India and Reserve Bank, operational units under central/state government, UTI, IDBI and employees of state insurance corporation...........
Aadhaar de-duplication myth busted. Any answers, Mr Nilekani?
..........According to a report in Matrubhoomi, a Kerala-based newspaper, PV Narayanan, a resident of Panatthadi panchayat received two Aadhaar numbers: 548780623023 and 356459270677. The names on both these letters issued by UIDAI are same, with slight different photos. Narayanan probably may have registered at two places or centres. But, surprisingly, his fingerprints seem to have passed the so-called ‘robust’ de-duplication test of UIDAI. Since Aadhaar includes an iris scan, this too seems to have been missed...........
Tuesday, October 15, 2013
Is the Raghuram Rajan-Chidambaram bonhomie too good to be true?
........When Chidambaram returned to the Finance Ministry from another corner in the North Block -- Home Ministry -- only a little over a year was left of Subbarao's extended five-year tenure. Subbarao's predecessor Y V Reddy also had skirmishes with the North Block on the issue of autonomy and fiscal consolidation. However, the finance minister showed his disappointment with monetary stance taken by Subbarao when the former had already announced a five-year fiscal consolidation road map. Rajan is still in the honeymoon period. Criticizing the governor from the beginning itself would take sting out of the criticism, analysts say. Moreover, taking on Rajan is not the same as opposing Subbarao's policy since the former is renowned world over for his commentaries on the financial world..........
India Needs More Banks, Foreign or Not
RBI governor Raghuram Rajan’s promise of easier entry of foreign
banks into India is welcome. This would raise competition and efficiency and
bring in technology and expertise to foster financial inclusion. Much of rural
India lies outside the reach of banking, because of the high cost of
traditional banking. True, foreign banks also operate largely in urban areas:
of the 333 foreign bank branches, 331 are in urban areas, of which only 44 are
in under-banked districts..............
Read - ET
Bigger play for foreign banks easier said than done?
Could Raghuram Rajan’s announcement on letting foreign banks enter India in a bigger way, be easier said than done? At a time when there is literally no good news coming out of India, and the government is in no position to undertake big reforms in a pre-election year, the RBI seems to be initiating these bold moves in a bid to attract more capital into the country..........
AIBEA opposes banking reforms
The All India Bank Employees Association on Monday said that it will launch an agitation if the Reserve Bank of India proceeds with any proposal allowing takeover of Indian banks by foreign banks. “We strongly oppose the RBI Governor’s proposals aimed at takeover of our banks by foreign banks. These are against our country’s interest,” C.H. Venkatachalam, General Secretary of the association, said............
BJP demands debate on banking reforms
.........The BJP on Monday said Rajan’s statement went against the statements made by the Centre that the policy of “nationalisation” of banks would not be reversed. It said such a policy decision with far-reaching implications should not have been announced on foreign soil without any discussions in India.........
BRAKES ON BANKING BY POST OFFICES
.......... The finance ministry objected on the ground that the Indian Posts has been incurring huge losses over the last 11 years that will not enthuse the RBI to give it a licence to start the bank. Its loss in 2011- 12 alone was Rs 6346 crore. The Finance Ministry also cited a poor financial track records of the postal department that does not give it credibility to start the banking operations..........
Lighter moment.............
Raghuram Rajan, Governor of Reserve Bank of India and his wife Radhika enjoy a lighter moment with Arundhati Bhattacharya (right), Chairperson, State Bank of India, during a reception on the sidelines of the World Bank-IMF Autumn Summit 2013 in Washington DC on Sunday.
Kotak Mahindra Bank to move into Bandra Kurla Complex
Kotak Mahindra Bank Managing Director Uday Kotak along with the bank’s operating management committee, including C. Jayaram and Dipak Gupta, are soon to get a swank new office address at Bandra Kurla Complex in Mumbai. After playing host to the who’s who of Mumbai’s banking corporates, including ICICI Bank, Bank of Baroda, Bank of India, IDFC, Standard Chartered, HSBC, Deutsche Bank and Citibank, the complex is now set to welcome the latest entrant after a four-year wait...........
IBA and UFBU Again Ditch Bankers - October 2013 Round too Fails
...Union leaders need to realize that they already have lost the crucial time for wage revisions and bankers are fast losing faith in them. This round of talks was held exactly after two months and now the salary revision has already become due for almost an year. Every passing week, weakens the strength of unions to negotiate..........
Wage Revision Talk : Bank Employees resentment on delaying tendency of Govt
Wage revision talk was held in cordial environment but govt representative IBA’s unconfirmed assurance was hurdle in reaching on any conclusion. The UFBU has shown their concerned and dissatisfaction on undue delay and demonstrations throughout the country in all State capitals and other Major Centres on 22nd October 2013 demanding expeditious wage settlement...........
Clarify this............
My View on "UFBU CIRCULAR - Another Failure Stares Top Union ...":
With reference to the comment “UFBU demanded that the cost on superannuation and welfare measures should not be included in the cost of wage revision.” will someone clarify whether the issue “the changes in wage structure for employees covered by NPS” covered in the current negotiations. This category of employees should get the loss on account of non-availability of defined benefit pension scheme factored in in their remuneration package as in the case of employees in organisations where there is no pension scheme.
- M.G.Warrier
“If all you have is a hammer, everything looks like a nail!
My View on "I am not superman, says RBI Governor on euphoria s...":
The ‘euphoria’ surrounding Dr Raghuram Rajan is multi-dimensional. His educational background, career progression so far and the young age at which he has become RBI Governor may have helped him get initial attention. But what make the common man and stakeholders look forward to his next move or read more meaning into his observations are the abundance of common sense in his approach and willingness to listen. Dr Rajan’s present position will give strength to his observations and arguments which were all along been the result of deep study and analysis. Damodaran observed in his recent report on ‘Reforming the Regulatory Environment for Doing Business in India’ that “If all you have is a hammer, everything looks like a nail! Such are the concerns relating to raising economic growth that everything in the business environment seems to be a candidate for reforms.” No wonder, in such a chaotic phase of development, when someone who can understand India-specific development issues from an international perspective and speak a language which will be clear to economists, politicians and common man in the same measure, India will pamper and support him and look forward to his next move. People will easily expand his observation “I think, with the financial sector reforms, coupled with the real sector reforms, growth turnaround should be on its way” to mean much more than an expression of faith.
- M.G.Warrier
Reorganising bank selection advisory panel is a good governance imperative for the RBI!
........Therefore, as noted earlier, the banking selection advisory panel would surely have to dispassionately and objectively analyse the capacity and weaknesses in the existing RBI supervision process, with regard to financial conglomerates in order to make a proper judgement on whether (or not) RBI’s strategy of ring-fencing banking entities of large industrial business groups, can be achieved in real time. This needs to be noted with great care!.......
Is RBI More Pro-customer?
.....All these examples raise an obvious question: If RBI is so willing to bat for the consumer, why do we still have so many customer complaints? This happens for two reasons. Like other regulators, RBI also has no direct interaction with consumers. It only reacts when the number of consumer complaints to the banking ombudsmen, or through media reports, is large enough to draw the attention of its top brass. ...........
Towards inflation targeting
The Reserve Bank of India's (RBI's) in-house rule for setting interest rates is a secret sauce in desperate need of a new recipe. The ingredients for the rate-setting formula are not known. But a Breakingviews examination of India's call-money rates, inflation and gross domestic product (GDP) over the past 13 years shows that the central bank has historically placed a rather low emphasis on taming inflation, while fretting more about output slumps and currency swings.............
Tears from onions
.........These patterns exacerbate the dilemma that the RBI will have to resolve. Given that it hiked the repo rate in September, it is very unlikely to reverse course so soon. At best, it can use the relatively muted core inflation reading to justify status quo on the repo rate, while continuing to roll back on the marginal standing facility (MSF) rate, thereby effecting some short-term loosening. On the other hand, with RBI Governor Raghuram Rajan's perceived preference for the CPI as the policy benchmark, the patterns from that index suggest that ...........
Onion prices push up inflation RBI’s rate cut hope fades, Rajan running out of options
As expected, inflation hit a seven month- high of 6.46 in September. This may make it difficult for the Reserve Bank to cut key interest rate on October 29 to spur industrial growth. Newly appointed RBI Governor, Raghuram Rajan had last month hiked interest rates to control the economy. While he did try and inject some liquidity into the system by lowering the Marginal Standing Facility for banks twice since he took over, his hands are clearly tied on the repo rate front. This time, with food inflation creating serious problems, the RBI will be hard press to ease repo rate...............
Have onions tied Superman’s hands?
......However, Rajan has also said that the focus of the central bank would remain on growth too, with the emphasis shifting depending on the situation. All in all, there has not been a significant change in the RBI’s stance on growth - inflation dynamics after D.Subbarao vacated the governor’s office...........
India must focus on growth as markets stabilize: Chanda Kochhar
........“The steps taken by the Reserve Bank of India (RBI), including those to roll back some of the previous liquidity tightening and measures to lure inflows from overseas Indians have had a cooling effect,” she said in an interview in Washington D.C. “The economic slowdown is weighing on banks’ asset quality though it isn’t bad enough to create a big kind of havoc,” she said. “Finally what we need to focus on is growth in the country,” she said. “It’s the investment story that has fallen off currently. What we really need is a much more conducive environment.”...........
The Game’s Bond, Gold Bond
..... Once
the scheme stabilises, expect steady inflows to counter the redemption
outflows. Should there be a serious mismatch, inflows can be stimulated
by recalibrating interest rates. Finally, Reserve Bank of India itself
sits on over 550 tonnes of gold that could be used for redemptions in
the worst-case scenario.
Centre returns moneylending Bill 7th time
...... The government is understood to have asked the state to reconsider the Bill because it overlapped with several provisions of various central laws including the Reserve Bank of India Act, Companies Act and Banking Regulation Act.........
Alarming slide in Re’s value
........... The remedial steps need to be taken at the earliest with the intervention of the central bank in the country. This has been long ignored by the RBI during the past few years as a result of which the Rupee slide against US dollar has continued. Since money flow in the market is continuing at a high speed that is a new phenomenon in........
Bank ATM goof-ups and how to handle them
......If you thought this is an imaginary situation, it is not. This happened for real and is cited in an RBI document. The acquiring bank (other bank) approached the banking ombudsman (BO), and informed them that the disputed amount was remitted to the issuing bank (own bank) through NEFT. The BO advised the issuing bank to credit the amount into the customer’s account, along with a penalty of Rs 100 per day for delay, as per the apex bank’s rules. On further investigation, the BO found that............
Low pay forcing techies to seek alternative careers
......There are lakhs of technical graduates who have joined or are trying to find jobs as police constables, bank clerks/officers and civil servants. According to bankers, all new recruitments are dominated by the B.Techs. The data speaks for itself: State Bank of India, the top recruiter among banks, recently hired 1,500 probationary officers. “About 80-85 per cent of them are graduate engineers,’’ said C.R. Sasikumar, Chief General Manager, SBI........
Monday, October 14, 2013
USA, Mother Of Economic Ills - Dr. Duvvuri Subbarao
....Dr. Duvvuri Subbarao, former Reserve Bank of India (RBI) Governor, speaking at the Association of Professional Bankers-Sri Lanka’s silver jubilee anniversary celebrations on Tuesday (October 8) said that the global financial crisis of 2008 showed that the world was not decoupled. But globalisation and its effects world over from an economic perspective is not a 21st century phenomenon. The effects of globalisation and its economic ramifications thereof may have had been first felt as far back as 84 years ago, in 1929, ie the year in which the world saw the onset of the Great Depression, beginning with the collapse of the New York Stock Exchange..........
Financial inclusion and the rate of interest - Dr.N.A.Mujumdar
..In its zeal to implement the Basel norms with its attendant risk weightages, the RBI ended up in evolving a highly inequitable interest rate structure – a structure in which small income borrowers subsidised high income borrowers. A small farmer was required to pay 12 per cent interest, while a high rated corporate entity could raise money from banks at 6 per cent. It took the RBI more than a decade to realise this mistake and in the meanwhile, small borrowers suffered. The road to financial inclusion is not always paved with good intentions..............
Financial literacy among urban working young people low: Study
.........The working paper suggests any intervention strategy to enhance financial literacy among the working young must take into account sociological and behavioural aspects. "The influence of the contextual variables suggests the focus of any strategy for improving the financial well-being of youngsters in India would have to be broader than just the individual," it said...........
RBI employee hangs self
Nagpur News : A 50-year-old junior engineer of Reserve Bank of India hanged himself at his Ganguly layout residence in Sonegaon on Friday evening. Kaushalyedra Singh Brij Bihari Singh took the extreme step after he returned home from office on Friday. His son Malka Singh told police that Singh had locked himself in the room since after he came from office around 5.30 pm. “We called him for dinner but he didn’t respond. Thinking that he is tired and want to rest, we didn’t disturb him. The incident came to light next morning when he didn’t open the door in the morning and his body was found hanging after breaking the door,” said Malka Singh in his police statement. Police informed that no suicide note was found. Cops suspect that he was disturbed over his family issues. A police source told that he was depressed over his wife’s illness.
UFBU CIRCULAR - Another Failure Stares Top Union Leaders
....... since there is no satisfactory progress towards revision of wages and it is unduly delayed, the Constituents of UFBU decided to exhibit their dissatisfaction. UFBU has, accordingly, decided to express its dissatisfaction by conducting demonstrations throughout the country in all State Capitals and other Major Centres on 22nd October 2013 demanding expeditious wage settlement. We request all our units/members to conduct massive demonstrations at all these Centre and make it a thunderous success...........
Why are there so few women bankers?
........In the Reserve Bank of India (RBI), it was a 68-year wait for a woman to reach the deputy governor’s post. The central bank traditionally has one governor and three to four deputy governors to formulate monetary policy and run the banking system. RBI’s first woman deputy governor, Kishori J. Udeshi, took over in June 2003. Subsequently, two more women reached this tier—Usha Thorat and Shyamala Gopinath. Against this backdrop, the State Bank of India’s wait of 206 years to get its first woman chairperson has been a bit longer. With Arundhati Bhattacharya, 57, moving into the corner office at the nation’s largest lender, women chief executive officers (CEOs) now control close to 40% of India’s banking industry assets. This is an interesting piece of information as..........
A conspiracy of silence
......Regulators need to first ensure that the basic structures of a financial system are intact. It is because of its no-nonsense approach to core regulation that the Reserve Bank of India is respected worldwide. ..........
RBI term repos - A.Seshan
......... For increasing liquidity, the RBI should raise the ceiling on the amount of repos and/or MSF by 25 basis points of net demand and time liabilities. It will have a greater effect on liquidity than term repos that should be revisited for its effectiveness...............
Smaller better than larger
My View on "Achieving financial inclusion":
Lot has changed from 1975 to now in banking sector from the way it works to the way it perceives the future. Small private banks have proved their proximity to the customer much better than the larger banks. Large public and private sector banks had huge HR problems in deploying their personnel to the rural areas and many branches in such places in the upswing of profit motive were closed down. Even later given preference they would stay off these areas. It is the small banks and the cooperatives that the author talked of that came to the rescue of the small and marginal farmers and tenant farmers, several small businesses, artisans and micro enterprises. It became a herculean task initially in the mid-1990s to take the SHGs to the commercial banks and NABARD struggled a lot. Instead of strengthening the existing rural cooperative infrastructure which the Nabard ceremoniously neglected, without even introducing a common accounting system until Vaidyanathan Committee insisted and with a vast contributory negligence, to plead today for large banks in the name of capital would tantamount to ignoring financial inclusion. Further, to say that small banks would suffer from capital is also not correct. Once they have build trust capital would flow. The size of Capital we are seeking today as buffer is to insure the interests of the depositors on one side and on the other larger side, failings of the banks in risk management. There are also more number of UCBs that outperformed their peers than those that failed. This is one of the reasons to permit the UCBs also as prospective clients in the new bank licensing policy regime.
- Yerram Raju
Future Roadmap
........he foresight and timely action of the RBI and Government of India ensured its merger with Punjab National Bank. Few other problem resolutions and strategic consolidations have taken place in the banking sector amongst about 35 mergers and acquisitions in India, post 1990 economic reforms. However few failures of Cooperative banks could not escape the ultimate closure. This brings into focus well-timed discussions within the Reserve Bank of India, drawing lessons from the causes and factors of domestic and international failures and the complexities of globalisation. A view is gaining ground that the RBI needs to strictly control certain risky tendencies of few banks in the country to minimise shocking surprises as happened in USA,UK and elsewhere. ........
A Hopeful New Phase Called 'Raghuram Rajya'
......As in the Ramayana, it reflected a belief in an ideal cast of characters – the ideal father, the ideal brother, the ideal wife (all subsumed, in contemporary life, into the ideal citizen), the ideal king and the ideal servant (in contemporary life, ideal elected representatives and ideal bureaucrats). While the word “ideal” is curiously old-fashioned and, indeed, sometimes seems almost laughable in current usage, it actually reflects the only true reality of man. For many years of my life (the last few that I spent in New York), I was known as Ideal Boy, so I know what it means. And now, we have another Ideal Boy at the head of the RBI.........................
I am not superman, says RBI Governor on euphoria surrounding him
Big banking sector reforms coming soon: Raghuram Rajan
.....The policy framework for the entry of foreign banks in India, Mr. Rajan added, would be unveiled in the next few weeks. The banking sector reforms, in particular to those facilitating entry of foreign banks in India in a “big way” is part of the five pillars of reforms, including monetary policy framework, which the RBI is going to implement in the next few years, the RBI Governor said. “For foreign banks, if you adopt a wholly-owned subsidiaries structure and we are coming up with details on that in the next couple of weeks, we will allow you near national treatment,” he said, quickly adding that there would be two conditions..........
Policy soon to facilitate entry of foreign banks: Rajan
......The banking sector reforms, in particular to those facilitating entry of foreign banks in India in a “big way”, is part of the five pillars of reforms, including monetary policy framework, which RBI was to implement in the next few years, the RBI Governor said. “For foreign banks, if you adopt a wholly-owned subsidiaries structure and we are coming up with details on that in the next couple of weeks, we will allow you near-national treatment,” he said, quickly adding there would be two conditions..........
RBI puts corporate black sheep on notice
.....Take the two statements, made independently of each other, and it is clear that things do not augur well for the black sheep in corporate India. Actually the strategy is more than just a clean-up operation; it is a way of killing several birds with one stone. By couching the argument with the line that the public needs to know, the governor is seeking to usher in transparency—a key element if India has to continue to make its transition from an exception-based to a rules-based regime. At the same time, he has been careful not to tar all bad debts with the same brush by clearly focusing on projects where promoters have winged it on minimal equity infusion together with a huge overhang of debt..............
RBI shouldn't go by retail prices
.....So, should the RBI continue to use WPI as the anchor for monetary policy? The case against using WPI is that it captures prices only at the wholesale level, rather than retail prices. Further, WPI does not adequately capture movement in the prices of services, which make up more than 60 per cent of the GDP. Former RBI Governor D. Subbarao had rightly pointed out that focusing on CPI reflects the welfare objective of monetary policy better. However, he cautioned against using CPI for monetary policy for three reasons..........
Multi-organ failure - Charan Singh
.....As a citizen, it is clear that the Union
Ministry of Finance and the RBI are aware of the grim situation. But
what is not clear is whether the two have a common view on the
diagnostics of the problem? Is it high interest rates, policy paralysis,
governance deficit or simple uncertainty that is the cause of lack of
demand and slow growth? In the absence of a credible and common
diagnosis, at least in the perception of the common public, how would a
strategic recovery path emerge that inspires confidence in the course of
treatment? It is this lack of direction and forward guidance that
probably is confusing the market...........
Indian Economy Since Independence
......This book initially designed for Delhi University students, was transformed over the years into an unusual book for students of all Indian universities.That eminent economist Dr. V. K. R. V. Rao declared that “ the book was a pioneering effort and was an unusual kind of text- book”. Students of economics find that most of the material germane to their studies are spread over hundreds of journals, periodicals, official documents publications of RBI, NCAER and ISI. Dr. Kapila has successfully compiled in one volume the kernel from these.......
Read - FPJ Book Review by P.P.Ramachandran
India needs Effective Bankruptcy Laws
RBI
Governor Raghuram Rajan wants effective resolution of bad loans that
shows zero tolerance of mismanagement and fraud but makes room for
genuine, surmountable difficulty. This means changing India’s current
laws and procedures for dealing with corporate sickness.............
Read - ET
Read - ET
FinMin sends Raghuram Rajan report to PlanCom for 'necessary action'
........"Following the recommendations of the Finance Minister and pursuant to the directions of the Prime Minister, I am enclosing a copy of the report of the (Rajan) Committee for necessary action," said an official communication from the Finance Ministry to the Planning Commission..........
Fake notes a worry for BMTC
...“Earlier, I never used to come across counterfeit notes, but now the situation has changed. A couple of times I myself had to pay from my pocket as passengers had duped me with fake notes. It is now a common hazard being faced by all conductors,” he said. “It is not easy for anyone to follow these people. So whenever I receive a Rs 500 note, I check it multiple times to ensure that I will not be at receiving end,”............
Fake currency gang busted, 2 arrested
...."The accused would buy steel at Rs 45-50 per kilogram and make 50 to 60 coins out of a sheet of metal," said an officer, adding that the trio would incur a cost of about Rs 1.20 for every coin they made. The accused would pay the workers 20 to 30 paisa for every coin they made. Manoj would deliver the coins and would charge as low as Rs 15,000 when the RBI charges around Rs 25,000 for every bag of coin. ..........
Hunt on for new finance secretary
Even as the Ministry of Finance (MoF) has started preparations for Budget 2014-15, and has asked different ministries to enumerate their estimates of receipts as well as expenditures for the next financial year, the Budget in all probability will be prepared by a new finance secretary and also a new chief economic advisor (CEA) to the MoF. Finance Secretary R S Gujral is due to retire next month, while the post of CEA fell vacant after Raghuram Rajan took over as the governor of the Reserve Bank of India last month.............
Chidambaram questions IMF’s methodology for calculating India’s growth projections
....."For example, India’s growth rate, which was projected at 5.6 per cent (at market prices) in the WEO July Update, has now been revised significantly downwards to 3.8 per cent. I would like to ask, respectfully, what is the information that IMF has gathered between July and September, that we do not have, that has impelled the Fund to drastically change the estimate? We do not share this pessimistic outlook. We also believe there is a need for review of the methodology for growth projections as in the past IMF projections have often been at divergence with final growth numbers," ...........
Gold: The new rules for investing
...........You can also monetise your old gold coins/jewellery by depositing your holdings with the gold deposit schemes of banks. The minimum maturity period for these deposits has been reduced from three years to six months by the Reserve Bank of India. The deposit scheme now offered by SBI allows you to deposit physical gold in jewellery or coin form for a nominal interest payment with the bank. When you make a deposit, the bank melts the jewellery, tests the purity of gold and then issues a deposit certificate which you hold till maturity.............
Bankers cut consumer loans, cry foul on government missive
........“This is a case of directed lending. Directed lending in an economy can inherently result in losses mainly because credit discretion tends to be absent,” said Abizer Diwanji, a partner and head of financial services at global consulting firm EY, formerly known as Ernst and Young. “If lending is directed through incentivization, then the government should ensure that it is being done in a good credit risk policy framework. Risk management is very important,” Diwanji said, adding that directed lending for a limited period may not damage the system..........
This festive season, play your cards right
.....According to the Damodaran panel report, the percentage of interchange/ merchant fee charged by the card service providers for both debit and credit card being the same, a merchant is indifferent to a credit/debit card. Card data indicates that more than 80 per cent of the cards are debit cards and the customers feel that debit card is akin to cash as it directly debits their accounts and does not confer any advantage by way of a credit facility...........
Sebi working on guidelines for social media use in capital market
......That apart, with increasing popularity of platforms like Twitter and Facebook, capital market regulators worldwide are also looking to tap such tools to understand overall trends and also gather market intelligence. A senior Sebi (Securities and Exchange Board of India) official said it would take some time before the regulator finalises guidelines related to social media use...........
Saturday, October 12, 2013
Indians treat economy as they treat their cricket: Rajan
......"We Indians treat our economy very much the way we treat our cricket," Rajan said at a think tank event on Thursday, his first after taking over as RBI Governor. When the cricket team is doing well, the players can do no wrong. They are elevated to the level of God -- "disregarding the weaknesses that actually exist". When they do badly people throw rocks at their doors and castigate them for the same weaknesses, which were overlooked earlier, and which now look serious........
India won’t seek IMF funds in 5 years: Rajan
.."There's no way we are close to being a country in financial or economic crisis... There is not a chance we will go to the IMF for money in the next five years," he said at CNN's Debate on the Global Economy. The RBI has taken a series of measures to strengthen rupee and promote growth.........
RBI to launch new RTGS system on Oct 19
.......The RTGS system would process transactions such as inter-institutional/inter-bank transactions — the transfer of funds between two members/participants —RBI said in a statement. It would also deal with customer transactions — funds transfer/receipt on behalf of the customer of an RTGS participant member...........
Balancing act
.....Mr. Rajan needs more than a spanner to fix the problems being faced by the economy and in his first monetary policy announcement, after succeeding Mr. Subbarao, he has been tactical in his approach to address the situation with a long-term view rather than from a short-term perspective........
Why should RBI immediately disband newly appointed Committee on Financial Inclusion?
.......Let us look this with regard to the financial sector in the United States, which provides very useful learning with regard to conflicts of interest and their relationship to crisis situations. They hold very important lessons for the RBI which seems to be embarking on a very dangerous journey in its effort to turbo charge financial inclusion as well as give out banking licenses in a tearing hurry!..........
Remedies may be costlier
My View on "THE CURIOUS CASE OF RAGHURAM RAJAN":
Monetary easing and encouraging consumption to pep up the credit markets do not seem to gel well with the current risk environment. Further, aping the west in a conservative and cautious financial market is likely to put the risk appetite in wrong direction. The realization may come late and remedies may be costlier. The author is right in raising doubts about Dr Rajan's approach at the current juncture.
- Yerram Raju
Expression of views.........
My View on "Priority for non bank finance companies in bank li...":
While Dr Chakravarty’s freedom to express views need be defended, RBI Deputy Governor’s endorsement of NBFCs for banking licences quoting Kotak Bank’s success is likely to be interpreted in different ways. He could have followed Governor Dr Raghuram Rajan who said the number of new bank licences could be zero to 26. May be Dr Chakravarty remembers the subsequently corrected version of FM’s remark about seven new banks doing seven ‘different’ things.
- M.G.Warrier
Don’t worry about CAD
........While some of these measures could eventually get reversed once normalcy returns, it is important to impart structural stability to CAD with respect to gold imports. In this context, the policymakers can explore the possibility of setting up an apex body — The Gold Bank — which can procure and retain gold abroad through offshore foreign currency borrowing. Using this gold-backed backing, the scheduled commercial banks can offer a Gold Deposit Account to retail customers, which can represent notional units of gold and provide gold price return in weight terms. This will not only promote financialisation of incremental demand for gold, but also incentivise the deferment of the need for importing physical gold.........
Don’t give credit to govt, RBI for lowering CAD
......The government and the RBI know this but their concern on the weak INR overrode practical economics. The question is when will the restrictions on gold and silver imports be taken off? What will happen when the CAD shoots up on pent up demand for the commodities? Well, tomorrow is another day and we’ll take it as it comes, is the policy of the government and RBI. Hopefully, tomorrow will not come at the wrong time...........
Bankers, legislators abstain from DLRC meeting
The administration has decided to write to the Reserve Bank of India (RBI) about the absence of representatives of some banks from meetings being held in the district. Not only private sector banks but also public sector banks are reportedly taking these meetings for granted. Even legislators have not been attending the meeting............
‘Inconsistent’ monetary steps by RBI leaves Tirupur knitwear industrialists puzzled
..........“Really, we did not know what the apex bank is doing with this type of disordered decisions. It has been only a couple of days prior to this reduction, the same RBI raised the Repo rate by 25 basis points with the ‘opposite justification’ that the inflation is on a high and there is a need to suck out excess liquidity from the system. “While hiking the repo rate during September last week also the MSF has been brought down from 10.25 per cent to 9.5 per cent, which is paradoxical by its nature,” G. R. Senthilvel, secretary of Tirupur Exporters and Manufacturers Association, said.......
ICICI Bank organizes Coin Exchange Mela at Chandigarh
Chandigarh: ICICI Bank, India’s largest private sector bank, organised a Coin Exchange Mela on October 10, 2013 at its Sector 19C branch in Chandigarh, under the guidance of the Reserve Bank of India. ......
Indian Bank open new branches
.....Out of the 180 banking branches in Krishangiri district, 33 are from Indian Bank. The bank is leading in SHG lending and educational loans. Indian Bank’s share in SHG lending is 45 per cent and that of educational loan is 38 per cent. The new branches are being opened as part of the financial inclusion policy of the Reserve Bank of India.......
Why you should always check your bank balance statement
........So ensure you read your bank’s monthly account statement carefully and watch out for any discrepancies. If you don’t track your account regularly, there is a good possibility that any deductions or penalties could easily go unnoticed.......
Cyclone scare: Odisha seeks RBI help to ensure relief payments by banks
In view of the severe cyclonic storm 'Phailin' that is set to hit the coast of south Odisha by Saturday evening, the state government has sought the intervention of the Reserve Bank of India (RBI) to facilitate government payments towards relief expenditure. The state government has sounded a high alert in 21 districts that have been identified to be vulnerable to the impending storm........
SBT to expand footprint outside Kerala
.........By expanding in this region, “we will also meet the 18 per cent net banking credit extension to the agriculture sector laid down by the RBI,” said Sajeev Krishnan, managing director, SBT. The bank on Friday opened its regional office and retail assets central processing cell here. The facility will have 14 employees, to be headed by the respective AGMs. It will come under the Chennai zonal office. ........
Friday, October 11, 2013
Dr Subbarao And The Chakravyuha
RBI sending out contrarian signal
.........Meanwhile, the RBI has sent out a contrarian signal by ` persuading’ banks to offer cheap loans for buying consumer durables. A couple of public sector banks, already groaning under huge nonperforming assets, have felt obliged to cut the lending rate for buying scooters, television sets, etc. The last monetary policy review had seen the central bank tighten liquidity. In fact, a few days ago, it had clamped down on the zero- interest schemes that were offered by makers of consumer durables during the festival season. According to reports, the central bank was pressured by the finance ministry to try and neutralise the effect of that ban by persuading public sector banks to lower interests for borrowers intending to buy consumer goods this festival season. Otherwise, one cannot see the RBI squeezing liquidity..........
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