It will not come as a surprise if people soon start stowing valuables and precious items under their bed instead of renting out a locker in the neighbourhood bank. There are several complaints how banks are taking advantage of the soaring demand for lockers to force customers to shell out lakhs of rupees for a decent-sized locker. Leading the pack are none other than nationalised banks that have almost made it compulsory for any customer seeking a locker, to invest in fixed deposits and open an account, in violation of the Reserve Bank of India (RBI) rules........
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.
Tuesday, October 22, 2013
DA (Projected) from November 2013 to Bank Staff
....On the above data its average comes to 237 and it is equivalent to 1960=100 CPI 5409 and 637 slabs. On the above data bank employees DA is expected to be increased......
Re-thinking Financial Education
.....Therefore, while educating the financially excluded poor about the fundamentals of financial literacy for eg- why invest, why save, why insure etc, as is done by RBI under National Strategy for Financial Education, such approaches should be adopted in the financial literacy initiatives by RBI, PFRD, IRDA and other stakeholders. Initiatives to disseminate financial education should be based on the insights from the MicroSave study and cues should be taken from IFMR trust’s KGFS, to make them meaningful and effective in promoting financial inclusion in India.
Bankers to reschedule loans to farmers
........The bank officials also said that they also wanted to provide a helping hand to the victims while agreeing to reschedule loans to farmers and fishermen. Joint Director of Agriculture Department has been asked to issue letters explaining the damage to the respective farmers. Andhra Bank DGM A. Ramakrishna Rao, RBI Assistant General Manager Anuradha and Srikakulam DRDA Project Director P. Rajanikantha Rao were present .
RBI asks banks to justify low credit-deposit ratio
At the 83rd meeting of the quarterly State Level Bankers’ Committee (SLBC) held in the city on Monday under the chairmanship of Finance Secretary of Goa, P. Krishnamurthy, J.B. Bhoria of the Reserve Bank of India (RBI) questioned the banks as to why there was no improvement in the credit delivery and improvement in the Credit-Deposit ratio of the banks in Goa.......
India Inc wants RBI to put end to rate hikes
.........Industry chambers including Confederation of Indian Industry, and representatives of credit rating agencies held pre-monetary policy discussions with RBI top brass including Governor Raghuram Rajan. The second quarter review of monetary policy is slated on October 29, 2013. CII suggested that the RBI should sends out a signal that there would be no further tightening and the Central Bank would start to move to a more accommodative monetary stance............
Installment under reverse mortgage scheme to be tax free: National Housing Bank
With an aim to make the reverse mortgage facility more attractive for senior citizens, the government has decided to give tax break on installment earned by pledging his residential property. Now it has been decided that annuity would be tax exempt, National Housing Bank Chairman and Managing Director R V Verma said........
E-KYC to be accepted for verification: Irda
Insurance Regulatory and Development Authority (Irda) said on Monday that the e-KYC (electronic know-your-customer) services operationalised by the Unique Identification Authority of India (UIDAI) will be accepted as valid KYC process for insurance. Earlier, Irda had informed insurers that a letter issued by the UIDAI containing details such as name, address and Aadhaar number was a valid document for customer identification..........
RBI eases rules for expanding bank network
The Reserve Bank of India (RBI) told banks that extension counters, satellite offices, mobile branches, Central Processing Centres (CPCs), service branches and administrative offices can be freely opened in any centre.............
Slow progress in registration for Aadhaar leaves officials worried
Though Dharwad is one of the districts where the Direct Transfer of Cash (DTC) scheme has been launched as a pilot project, the slow progress in Aadhaar registration has left the authorities worried. The issue came to light at the district lead bank meeting held here on Monday. Pralhad Joshi, MP; zilla panchayat chief executive officer P.A. Meghannavar; lead district manager Basavaraj Hoogar, Reserve Bank of India representative R.P. Chaudhari, and National Bank Agriculture and Rural Development (NABARD) assistant general manager Y.N. Mahadevaiah took part in the meeting.............
UID Aadhaar card: Ambition sans innocence
.....Whichever side of the debate one is on, there is no denying that the minimum that is needed for cash transfer is a system in place which can deliver the cash. The acknowledged fact is that there are hardly any banking services available to the poor. In illustration, this is what Dr Deepali Pant Joshi, Executive Director, RBI said in a talk delivered on 4 May 2013: “Under the roadmap for providing banking outlets in villages with population above 2000, banking outlets have been opened in hitherto 74199 unbanked villages comprising 2493 branches, 69374 Business Correspondents (BCs) and 2332 through other modes like ATMs, mobile van, etc.” And: “As per the roadmap drawn about 4,84,000 villages with population less than 2,000 have been allotted to various banks. Provision of banking services are to be made in the next three years.”........
Don't treat medical tourists as criminals: Prathap Reddy, Apollo Hospitals
....I began in a different era, when the struggle started with a big question mark on how to fund a hospital. To fund my first hospital, I had to make 20 pilgrimages between Delhi and Reserve Bank of India in Mumbai. After that, I remember writing to the then prime minister Rajiv Gandhi that I wish I had set up a beedi or beer factory instead of starting a healthcare company............
Getting it wrong on gold
......Indian demand for gold is inelastic which means the price, whether high or low, is immaterial to the demand/consumption of commodity. About 800 tonnes or more of gold— whether priced $2000 per troy oz or $1000 per troy oz, will land in the country somehow. Since the 10% duty fosters an arbitrage through grey channels, more imports will be unofficial than official. So, the administrative steps may appear logical but curbing imports has initiated large-scale smuggling of gold. Therefore, national wealth will not be accounted correctly in the country’s balance sheet.........
Hunt for Gold at the cost of tax payer's money-irrational - Dr.T.V.Gopalakrishnan
In India, some very strange events do take place and people's attention is easily diverted from all major and serious issues.The latest rush for gold based on a some self styled saint's dream has really caught the attention of all and the Government has been dragged to chase the mirage at the cost of tax payers' money.............
Read.......
Amanath Bank’s shareholders approve takeover
............“Shareholders have approved the takeover unanimously. While we normally would have about 500 shareholders participating in the regular general body, Sunday saw a turnout of more than a thousand since a historic decision was being taken,” bank’s President Naseer Ahmed, said. The decision would be conveyed to Canara Bank, RBI and Registrar of Cooperative Societies, he added.............
RBI to favour price control, EMIs may not come down
....Reserve Bank of India (RBI) Governor Raghuram Rajan is widely expected to raise the repo rate —its key lending rate — by 0.25% points in its quarterly credit policy review next Tuesday. So, expect your EMIs to stay elevated, if not rise further.......
RBI eases Uttarakhand flood-related claims
......Relief for the families of the 4,120 persons missing in Uttarakhand flash flood during June 14-20, 2013. All the scheduled commercial banks of the country are advised to settle the claims related to family members of the missing persons on submission of two documents according to a late evening circular form The Reserve Bank of India (RBI). The family members of the missing persons can get the claims settled by submitting two documents – the death certificate issued by the designated officer under Ministry Home Affairs circular and a letter of indemnity.........
Policy watch: P-notes: The big money laundering machine
....The RBI notification compelled banks and investors to cut their dollar positions. Curiously, nobody in the policy circles probed further. It was as if everyone knew that some FIIs had been short-selling the rupee in non-deliverable trades without prior formal sanction from P-note holders. It was as if someone powerful in the government had given them the go-ahead, confident that nobody would intervene. That is, till the RBI decided to pull the plug. P-notes were prevented from eroding the rupee.........
Soaring vegetable prices fuelling inflation: Rangarajan
... “Capital flows will not only be adequate to cover the deficit but may even add to reserves, he added. With regard to fiscal deficit, the former Reserve Bank of India Governor said there is a need to raise the revenue-GDP ratio and contain expenditure, more particularly subsidies which need to be pruned, well-focussed and prioritised. “Government has to decide which subsidies must take preference over others. What is needed is to have a fix on the quantum of subsidies to be provided as a proportion of GDP or of government revenue,” he said, adding several policy actions that may be not popular were needed...........
Banks should show real yield on fixed deposits
..........However, banks continue to follow less transparent practice with other products and most important among them is the interest paid on fixed deposits (FDs). For example, the FD pamphlets from most banks usually carry two columns - one for the interest rate and other for the "annualised yield". The explanation to the annualised yield............
Over 19,000 micro and small units turn sick in AP
...........While 7,818 sick units were reported to be potentially viable, only 3,527 units were put under nursing, according to the press release. The federation urged the RBI to hasten the process of rehabilitation of these units at the earliest.
Microfinance crisis leads to loss of 35,000 jobs
........The headcount at another microlender, Spandana Sphoorty Financial Ltd, has come down to 4,400 from 13,500 in October 2010. While some of the former employees moved to other private financiers, many still remain jobless. Before the crisis, Andhra Pradesh was the biggest market for microfinance, accounting for more than one-fourth of the total assets of the industry. The southern state is now home to about Rs.6,000 crore of bad loans. MFIs depend on loans from large commercial banks. In 2011, banks restructured about Rs.6,000 crore worth of loans to six microlenders after the Reserve Bank of India (RBI) allowed them to do so without terming them non-performing assets or bad loans.........
Hidden debit card surcharge adds 'cost' fire to fuel in Bhopal
...Last year, RBI asked banks to cap charges on debit card transactions at 0.75% for transaction values up to Rs 2,000 and 1% for larger transactions. While banks are tightlipped on the issue, petrol pump owners say they refused to pay merchant discount rate (MDR) to banks and in turn banks are passing on the charge to customers..........
Zero-liability cards are useful
............... To protect yourself against this, you can opt for credit or debit cards which have the zero-liability feature. Both Visa and MasterCard offer this feature. RuPay will start offering this by the end of this year or early January, said an official from National Payments Corporation of India. But unless your card issuing bank offers this facility, you cannot avail of it. Banks have to incur an additional cost for the insurance to cover the liability in case of a loss of card, which pushes up their cost, which is why not all banks offer it, while some offer it on select cards...........
First Indonesian bank branch
.............“Our intention is to see how can we grow our business in Mumbai, and at the same time interact with regulators, including the RBI, in terms of how fast and where can we expand our services in the country,”.....
NRI takes 5% stake in Dhanlaxmi Bank
Prominent non-resident Indian (NRI) businessman M A Yusuffali has acquired 4.99 per cent stake in Thrissur- headquartered Dhanlaxmi Bank. However, he has not disclosed the amount of investment in Dhanlaxmi. After acquiring close to five per cent stake each in Federal Bank and Catholic Syrian Bank (CSB) this year itself, Yusuffali 's latest move is very crucial for Kerala’s banking sector...........
Monday, October 21, 2013
Depositors’ interests must be paramount - Dr.S.S.Tarapore
Tradeoffs inevitable in managing currency, says Gokarn
..........“The rupee rising is bringing down the cost of unavoidable imports. It is therefore feeding through into lower inflationary pressures domestically. So, to prevent the currency from rising in an inflationary situation means that you are going to have to do something more on the interest rate side to offset the inflationary pressures of an undervalued currency. That is the choice that has to be made,”.............
PlanCom member Narendra Jadhav keen to contest on Congress ticket
............ “The Congress high command will take a final decision on Jadhav's nomination. In Jadhav, the party will nominate an educationist with a reckoning at the global level.” Prime Minister Manmohan Singh has called Jadhav, “a role-model for the disempowered millions in our country.” As an economist, Jadhav worked with Reserve Bank of India, the International Monetary Fund, the Afghan and Ethiopian governments. As vice chancellor of Pune University, Jadhav transformed it to a model state university in India. In 2008, the Maharashtra chief minister appointed him as the chairman of a one man high powered committee in the context of farmers’ suicides. The Jadhav Committee Report has been accepted by the government and is being implemented.......
“Updation of Pension” - A misnomer
...........The Government has wrongly taken
the demand for “Updation of Pension” as a demand for revision of the “Pension
Scheme” itself. It has therefore to be clarified that the demand is only for
rectification of the anomaly in difference of the amount of pension paid to the
present Pensioners and others who
retired earlier...................
Give Me That Promotion, Sir !!
The following poem of Dr Tapan Kumar Pradhan, Assistant General Manager, Thiruvananthpuram has entered the Final
of Poemhunter World Wide Poetry Contest. You may like to read it, as many
people have found it quite interesting....
VITALINFO- Always n All ways Appreciable - Dr.T.V.Gopalakrishnan
May I request you to add Ms.
Niranjana Shah to your invaluable VITALINFO. She was, for many years, in
the erstwhile CPC and then in DBOD and the Ombudsman's Office in Ahmedabad and
Mumbai. I had the opportunity of working with her in the CPC for many years. Warm
regards,
- S.S.Tarapore
Dear Mangesh,
I am presently in Singapore and now I feel all the more the importance
and utility of your blog. I am able to keep myself updated with the latest in
Banking, Finance and Indian Economy. You are really doing a wonderful job with
all commitment, sincerity and involvement and no word of appreciation will be
adequate enough to acknowledge your efforts and painstaking in bringing all the
information under the world of Finance together for the benefit of many who are
in India and abroad. May god bless you with all strength and enthusiasm always
and in all ways.
–
Dr.T.V.Gopalakrishnan
I came across VITALINFO and
I found it to be good and interesting. Kindly
include my name also in the list to enable me to have it regularly. Regards
- S K Shukla, Manager,
Planning Cell
HRMD, CO, Mumbai
HRMD, CO, Mumbai
NEW RS.10 NOTES
This is with reference to the Reserve Bank of India’s announcement about new Rs.10 currency notes with signatures of new RBI Governor Raghuram Rajan. Only some time back the RBI had announced plastic notes of the same denomination in select Indian cities on an experimental basis. The RBI should issue plastic notes rather than the traditional paper ones. With currency notes of smaller denominations — Re.1, Rs.2 and Rs.5 — already discontinued, the RBI should issue smaller-sized notes to save on currency printing. Sizes of currency notes were last reduced about half-a-century ago, when currency notes of Re.1 and Rs.2 were quite common in circulation. With coins in the denominations of Rs.5 and Rs.10 already in circulation, the RBI should discontinue printing notes of these denominations too. Since the life of lower denomination currency notes is quite low, it is senseless to waste public money on printing lower denomination currency notes of up to Rs.10. India should follow the example of the United Kingdom and the United States and stop printing currency notes of higher denomination like Rs.1,000 to check the menace of black money and fake currency.
Madhu Agrawal, Dariba, Delhi (Hindu)
Forthright and fearless - Ramphal will be remembered........
My View on Touching tribute by Shri Donde
I have been following your daily inputs starting with Mr. Donde's beautiful narration of the qualities of two comrades who have started their next journey. I had the privilege of interacting with Shri Ramphal Sharma as a fellow active member of the Officer's association. The most likeable quality in him was his forthrightness, fearlessness and sincerity of purpose. He was never scared of calling a spade a spade. But then always smiling. When ever I visited Delhi I made it a point to meet Ramphalji for a few minutes and to enjoy his tidbits.
May his soul rest in peace.
- B K Katyal
SBI rewards performers with overseas training
Talent
retention is increasingly emerging as a challenge for public sector banks
(PSBs). Their limited ability to reward top performers is one area where PSBs
lose out to private sector peers. With some new banks expected to enter the
space in about a year or so, the competition for talent is sure to get tougher.
Recently, banking major SBI hit upon an idea to reward its performers in a way
that may become an example for other PSBs. Last fiscal was a good year for
DFHL, the bond dealing arm of SBI. However, it was not possible for the bank to
reward DFHL’s top performers with huge bonuses or hikes. So Pratip Chaudhuri,
the recently retired chairman of SBI, offered DFHL’s performers a week’s training at London School of Economics
or Euromoney — at the bank’s expense. The training helped the executives
establish foreign links for the bank’s bond house, which is almost a necessity
in the present market.
TOI
New RTGS system to improve financial market efficiency: Rajan
.......“With its advanced liquidity and queue management features, the new RTGS system is expected to significantly improve the efficiency of financial markets,” Mr. Rajan said while inaugurating the ISO 20022-compliant system. The RTGS system is used to settle interbank fund transfers by banks and their customers and is critical in facilitating orderly settlement of payment obligations. With its implementation, new regulations will replace the operating guidelines and regulations of 2004.......
Planning Commission to take views of states on Rajan report: Official
........Planning Commission will hold wider consultation with stakeholders, including states, before firming up its views on the controversial Rajan panel report that has suggested abolishing the special category status to states. “We have to make up our mind about taking it to the National Development Council (NDC). We have to consult with the states in advance,” a top Planning Commission official said................
Financial Inclusion - Where do we stand?
.....The term financial Inclusion gained popularity in early 2000 when a United Nations study revealed the direct relation between financial exclusion and poverty. Since then, the government has taken a lot of initiatives to attain financial inclusion. In 2004, the Khan committee was setup to look after financial inclusion and recommendations of the commission were incorporated into the mid-term review of the policy (2005–06). RBI has taken several measures to increase the rate of financial inclusion. The branches of commercial banks have increased from 8321 in 1969 to 100,277 as on December 31, 2012...........
Read - The Indian Economist
Foundation plans to start financial literacy classes in Govt. schools
.......Even the Reserve Bank of India has come out with the view that various aspects of financial literacy must be included in the school curriculum. Rather than taking financial literacy as a separate subject, which might be viewed as an additional burden by students and teachers, the Country Director said they were integrating financial concepts with subject curriculum of mathematics and social science. While mathematics was used to teach students how to calculate the change they get while shopping, social sciences was used to highlight environmental benefits of switching off lights when not required, besides the cost-saving involved.........
India may benefit from financial access initiative
.........On the goal of universal access to financial services Mr. Kim said this month that it was “within reach thanks to new technologies, transformative business models and ambitious reforms,” adding that by as early as 2020 instruments as e-money accounts, debit cards and low-cost regular bank accounts could significantly increase financial access for those who are now excluded. Recognising that 650 million people still lack sufficient access to financial services in India the Reserve Bank of India introduced a regulation in 2006 allowing banks to use the services of third-party, non-bank agents to extend their services right to people’s doorsteps, the multilateral Consultative Group to Assist the Poor recently noted............
Fasten seat belts but wear a parachute
............The Reserve Bank of India (RBI) will have leeway on the external front, assuming the FOMC meeting doesn't change status quo. In its policy review at end-October, the RBI is expected to raise the repurchase rate again, to combat inflation. But it is also expected to reduce the marginal standing facility rate and it might carry out more open market operations to ensure banking sector liquidity. The Centre is promising to recapitalise public sector banks with more than the budgeted Rs 14,000 crore in the hope of stimulating domestic consumption in the festive season. Now for the bad news. There has been another...........
India and the IMF
........A pertinent question raised by Mr. Chidambaram has to do with the rationale, the reasons behind such a sharp downgrade: what is the significant bad news that the IMF has received between July and September to warrant such a steep downgrade? Many others too have made the point that the IMF’s methodology for calculating national accounts statistics is based on market prices whereas India publishes its estimates on factor cost. The Central Statistics Office (CSO) does give calculations on market prices also but those at factor cost are the usual reference point..........
While America was shuttered
......Former Reserve Bank of India (RBI) governor Duvvuri Subbarao must be thanking his lucky stars that his term in office ended when it did - right in the midst of the exodus of investors out of the country - on 3 September 2013. The capital flight out of India is no better depicted than by the nearly 20% drop in the Indian rupee versus the greenback from 54.79 rupee per US$ at the start of 2013 to a record low 68.15 rupee on the 28th of August. While the rupee's sharp depreciation was sparked by the sell-off in emerging markets ahead of widespread expectations of a taper in September, India's negative economic fundamentals - slowing growth, high inflation and ballooning budget and current account deficits (the highest among the BRICs) - greased the Indian currency's slide...............
Raghuram Rajan's RBI gears up to launch interest rate futures
......Using only one bond future is the preferred option for many market participants since it would simplify the structure. However, the RBI is concerned that traders could seek to influence the market by aggressively trading the underlying bond, according to people involved in the discussions............
Dept of Posts cuts banking fund proposal to Rs 623 cr
..........The DoP has applied for a banking licence. The Reserve Bank of India is expected to issue licences to shortlisted entities in January 2014. “The DoP has lowered the proposal for funds it needs to start banking operations from about Rs 1,900 crore estimated earlier to about Rs 623 crore,” a government official told PTI. The Government has sent the DoP’s fund proposal to the Expenditure Finance Committee. Once cleared by EFC, the proposal will be placed before the Cabinet for final approval.............
New regime for foreign banks?
...........While foreign banks await RBI’s new norms, if the regulator continues to insist on being reciprocated as a precondition to the opening up of the sector, things will not change dramatically unless overseas watchdogs change their stance. For instance, if US is not ready to welcome Indian banks with open arms, Citibank cannot make it big in India to cash in on the opportunities that a burgeoning middle class and increasing rural consumption offer...........
Private banks head for the hinterland
.........A
lot of problems associated with rural banking are still around —
accessibility, high dependence on human resources and lack of banking
literacy among villagers, for example.
But bank officers are learning to deal with these issues, travelling
long distances, identifying and educating potential customers, forming
groups, and assessing their financial needs as well as their ability to
run a business. The focus is mostly on women customers and self-help
groups. Banks are providing
them with savings accounts, micro insurance and recurring deposits.
They are also linking them to their big clients who could become
customers for the products coming out of their cottage industries and
agri ventures...........
Read - TOI
FM to grill govt banks' chiefs tomorrow
Finance Minister P Chidambaram will take stock of public sector banks’ performance on Tuesday, to assess whether credit is being provided to productive sectors, selected sectors are being given a boost and if the lenders are reining in the growth of non-performing assets (NPAs). He will also review interest rates on non-resident Indian accounts, in focus to take advantage of the rupee’s depreciation...........
Moody's review meet with SBI brass this week
.......The ongoing reliance on a fiscally constrained owner (the government) to maintain capital at the levels desired by the regulator (the Reserve Bank of India) also had a bearing on the rating action, the agency had said. It had affirmed SBI’s financial strength rating at D+ but changed the outlook on this parameter to negative from the earlier stable. An SBI executive said the interaction (for the review) is to focus on capital adequacy and asset quality (non-performing assets and restructured loan book) of the bank................
Credit cards: Cash Back or Reward Points – which one to choose?
.......... In any case, a credit card should be used with caution and your expenses should remain within your budget, irrespective of nature of the card. Before going in for any card, carry out a cost-benefit analysis basing it on your current expenditure and sign on the form only after you are sure.
Kudos to credit bureaus
...........The microfinance industry has worked hard to create credit data on such a large number of borrowers. The Reserve Bank of India deserves appreciation for ensuring the setting up of credit bureaus under the Credit Information Act and coaxing and cajoling banks to share and seek information. Such data help..................
Product design key to success, say Indian bankers
Even as Reserve Bank of India (RBI) is working on launching a futures instrument in government bonds, market players are having reservations over the design of the proposed product, citing poor experience in the past with such derivative instruments............
Kotak Mahindra Bank may acquire smaller players
Uday
Kotak, VC & MD of Kotak Mahindra Bank, has set stiff expansion
targets. The bank, which took over a decade to grow to 500 branches, is
set to double its network in another three years. Also, the RBI has
asked the bank to bring down the promoters’ stake from 45% to 20% by
March 2018. But the scope for diluting capital through fresh issuance is
limited, considering that it has a capital adequacy of over 16%. And
bank stocks — despite the recent improvement — are still not doing well.
According to bankers, this gives Kotak an option to play the
consolidation card by acquiring some smaller players and the bank is
believed to be looking at such opportunities.
TOI
TOI
Syndicate Bank enters league of large banks: CMD S K Jain
......"Bank has been progressing on sound financials, and registered business level of Rs 3,46,000 crores with 33 million customers as on September 30. The bank is now in the league of large banks," ......
20,000 Gram Panchayats in Maharashtra to get e-banking facilities
MUMBAI: In a bid to curb financial irregularities by self-help groups and money lenders, Maharashtra government has decided to start e-banking facilities in 20,000 state Gram Panchayats. There are around 28,000 Gram Panchayats in the state and out them 20,000 would have the e-banking facility..........
Saturday, October 19, 2013
Signals from RBI are now inflation-oriented: Subir Gokarn
Inclusion — don’t count on banks
..............None of the earlier committees came out with anything of a path-breaking nature. In other words, they did not upset the status quo — they assumed that building on the existing structure of financial intermediaries and exhorting them to work towards financial inclusion would do the trick. It has been a bank-led and dominated approach so far for attaining financial inclusion. While non-bank financial intermediaries have been grudgingly accepted to some extent on the credit creation side, the reliance is almost completely on the banking sector for mobilising the financial savings of the population..........
Financial inclusion can be better achieved through self-help groups: Nabard
............The FI drive, whereby financial services are sought to be extended to the hitherto large un-served population of the country, envisaged by the Government and the Reserve Bank of India entails banks engaging the services of BCs and BFs. According to a Nabard (National Bank for Agriculture and Rural Development) report, though the SHG-BLP (self-help group-bank linkage programme) is a step towards bringing the ‘unbanked’ poor into the mainstream banking channel, its formal acceptance as a financial inclusion channel by the central bank is still awaited...............
Author's approach on accountability deserves appreciation - Dr.T.V.Gopalakrishnan
My View on "Should the RBI be made more accountable?":
The article is very well written and has convincingly argued to fix accountability of RBI to the people of India for their fortunes and now the misfortunes. The RBI's core functions and additional functions are by and large carried out to the best of its professionalism and are presented before the Parliament and the Parliament Standing Committee on Finance. No doubt, RBI's functions often give rise to conflict of interest and this results perhaps in the necessity for fixing accountability for RBI.The reasons are not far to seek in making RBI working perhaps not in the interests of bringing in economic inequity. The RBI does not enjoy the autonomy as it deserves as a full fledged Central Bank. All its Directors are appointed by the Central government and they are not expected to dissent from the thinking of the Ministry of Finance or the Government. Unlike many Central Banks of the world, RBI has been entrusted with the responsibility of rural development by statute and other developmental functions apart from core Central Banking functions. Though NABARD has been set up exclusively for Agriculture and Rural Development, RBI has not been relieved of the development of agriculture and rural development. The Financial Inclusion cannot be the exclusive responsibility of RBI where the involvement of State, central and other agencies have an active role and responsibility taking into account the envisaged social and financial role of various financial institutions functioning both in rural and other areas. No doubt RBI has to be made accountable for its functions, but given the present circumstances,there are many aspects to be looked into taking into account the relationship between the RBI and the Government, the socio- economic conditions of the country and the general governance standards and accountability. The author's approach, however,deserves appreciation and a lot has to be done before the objective is set.
- Dr.T.V.Gopalakrishnan
Rajan’s baby: India may launch interest rate futures in 2 months
.......Although the plans are at an advanced stage, the sources said the Reserve Bank of India (RBI) has not yet finalised the structure of the interest rate futures product, which will allow investors to bet on the direction of rates. They declined to be identified publicly commenting on the closely-held discussions. “This product is Rajan’s baby so everyone is on their toes to make it a success. It will be launched in a month or two months at the most,” said one senior market participant who has been in discussions with the RBI, referring to new RBI Governor Raghuram Rajan...........
Bankers to deliberate stamp duty reduction for agri-loans
.........At a meeting of the Sub-Group on priority sector advances and Self Help Groups held on Thursday under the chairmanship of C.H. Gaushal, Assistant General Manager of State Bank of India (Lead Bank) and attended by P.P. Vetkar, AGM, Reserve Bank of India (RBI), the bankers have decided to take up with the State government a demand to bring down the stamp duty applicable to priority sector and agricultural loans up to Rs.2 lakh.........
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