Defaulters on loan repayment have dealt a heavy blow to the reputation of Ernakulam District Cooperative Bank. With non-performing assets touching Rs. 400 crore, RBI has lowered the bank’s classification from A to B. The bank incurred a loss of Rs. 25 crore as on March 31, 2012. The non-performing assets have exceeded the prescribed limit set by RBI, leading to the lowering of the bank’s classification. RBI had imposed a penalty of Rs. 5 lakh on the bank last year for sanctioning unsecured loans......
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.
Saturday, November 23, 2013
Bank unions to observe one-day strike on Dec 19
..........A decision to this effect was taken at a meeting held here recently, UFBU said in a statement on Friday. “The United Forum of Bank Unions deliberated at length about the anti-people policies of the government, especially with regard to the banking reforms, which are bound not only to hit the common people but also the resources of the country,” it said.......
IDFC, LIC Housing Fin may make the grade for new bank licences: Goldman Sachs
......Among the 26 aspirants for new banking licences, IDFC and LIC Housing comply with some of the main requirements like a successful business track record for more than 10 years, diversified shareholding with public holding in excess of 51% in their respective companies, a steady earnings stream, more than 50% independent directors, and already regulated by the RBI and National Housing Bank (NHB) -which put them in the central bank's comfort zone..............
Reinvent state-owned banks
A former Deputy Governor of the Reserve Bank of India once compared the chiefs of public and private banks thus: "A PSU bank chairman will walk into my office with an ingratiating smile, a slight crouch to show submission, and mouth gushing compliments about, say, a speech I have delivered somewhere, calling me 'sir' several times. A private bank chief will walk in, greet me as xxxx [his first name], and proceed to discuss issues as an equal." It was a telling story about attitudes and mental frameworks that, inevitably,.........
Clear & present danger: Bad loans
....Indian banks will have to scale up in business to meet the needs of a growing economy and also meet regulatory standards, the apex bank noted. On its part, the central bank would ensure bank credit flow to productive sectors and it believes banks' investment in government securities must reduce from the current mandated 23% under the Statutory Liquidity Ratio. “It is necessary to reduce banks’ requirements of investing in government securities in a calibrated way,” the RBI said...........
Meet The Guys Who Really Commit Bank Fraud
.........Chakravarty highlighted the vigilance failure by pointing out the high number of high value advances-related frauds in public sector banks. He then quoted an interesting statistic: “Our analysis suggests that of 719 officers found accountable in 230 large value fraud accounts, 426 officers were up to the rank of Senior Manager, 196 officers were Chief Managers and AGMs, 94 officers were of the rank of DGM, GM and CGM and only 3 officials were from the top management and the board of directors. This statistic highlights, he said and we would principally concur, the skewed nature of the punitive vigilance process and its tendency to focus on the lower level functionaries.........
Rs 3,652 crore lying idle in bank accounts
....It is not just government banks that have unclaimed deposits. Even private banks have such deposits. ICICI Bank leads the private banks with Rs 100.3 crore lying as unclaimed in all types of deposits followed by Federal Bank with Rs 44.3 crore. In 2012, the Centre proposed to transfer this amount into Depositor Education and Awareness Fund to be used for promotion of the depositors' interest and other purposes as may be specified by the RBI from time to time, but there was a lot of opposition to the plan and it was put on hold.
RBI asks banks to treat customers fairly
.....The Reserve Bank has also taken a lead in ensuring that bank’s customers in India are treated fairly. Over the years, it has initiated several customer-centric measures and inculcated a culture of treating customers fairly through regulatory and supervisory interventions. The Reserve Bank initiative led to the setting up of the Banking Codes and Standards Board of India (BCSBI), an autonomous and independent body, which has been entrusted with the task of setting codes and standards for banking services in India. The Codes of Commitment are binding on BCSBI members and non-compliance thereof by member banks is a valid ground of complaint under the Banking Ombudsman Scheme(BOS). In a bid to empower consumers and protect their rights, the Reserve Bank has also instituted the Banking Ombudsman Scheme as an apex level, cost free grievance redressal mechanism for deficiencies in services by banks..........
Red flag over realty exposure of banks
........New private sector banks, along with State Bank of India (SBI) and its associate banks, were the most aggressive in extending loans to sensitive sectors. While the SBI group has seen 25.6 per cent growth in these sectors, for new private banks this was 19.8 per cent. Overall loan growth in the banking system was 13.6 per cent in 2012-13..........
RBI to tighten norms to check mis-selling by banks
....The move comes in the wake of a RBI scrutiny that found many banks not adhering to 'know your customer' (KYC) norms for sale of third-party products. The central bank had also fined many banks for the violation..........
Steps to sensitise people on chit fund companies
.....Mallick directed all block development officers to organize investor awareness programmes by involving bankers and officers of the RBI to provide information relating to non-banking companies and unincorporated bodies collecting money from public. We have been warning people about the mushrooming of chit funds and advised the police to take appropriate action against such fraud, said Mallick. ................
Only 5 students are on board UoP MTech aviation course
.....Twelve of the 20 registered candidates have cancelled their admissions to MTech in aviation of University of Pune (UoP) citing inability to pay the hefty fees and fluctuating Euro to Indian rupee. It appears that the much touted course will now take off with merely eight students. University officials admit that one of the other reasons for candidates backing out from the course was the stringent rules of Reserve Bank of India (RBI) regarding education loan. ....
T. Nagar post office to get 1st postal ATM
......The State’s first ATM for postal savings account holders will be set up at T. Nagar head post office by next month. This pilot initiative is part of the postal department’s project to network post offices with core banking facility on the lines of banks. In the initial phase, four post offices have been chosen to be interconnected for savings bank account operations.........
ATMs in Odisha: Withdraw cash at your risk
.......As many as 70% of the 3136 ATMs in the state do not have security guards. Though RBI often issues standard advisories to banks to adopt safety measures in ATMs, the execution is appalling. "Violation of the safety guidelines has come to our notice at many ATM counters. We will find out whether RBI has the power to take action against the errant banks," said a senior police officer. RBI sought to wash its hands off the responsibility. "It is not the lookout of the RBI to see if banks are taking safety measures in ATMs. We have no power to take action," said an RBI officer.........
Pune cops to seek RBI guidelines
.........Pol, who was speaking on the sidelines of a meeting convened by the police with security officials of all banks, also said that he will soon be meeting with senior-level managers of banks to take stock of the number of branches and ATMs they have in the city. "The police can only make the banks aware, but the guidelines have to come from the RBI and we will be writing to them urging them to issue the same at the earliest," Pol said............
Notice issued on plea for security at ATMs
The Madras High Court Bench here has ordered issuance of notice to Union Home Secretary and the RBI among others on a PILseeking posting of security guards, aged not more than 45, in all ATM kiosks in view of robberies, including the recent brutal attack on a woman in Bangalore. Chief Justice Rajesh Kumar Agrawal and Justice M Jeychandran also ordered notice to Reserve Bank of India Governor, Union Finance Secretary and state officials on the petition by law student C Anandraj. The petitioner also sought a direction to install Closed Circuit TV (CCTV) cameras, burglar alarms with sensors linking to the nearest police station and the bank branches.....
LIC stops selling 14 life policies over Irda diktat
......“This is part of our compliance to the new product norms. There is no cause for worry. New products will be launched to substitute them,” said a senior LIC official. He, however, refused to comment on the exact number of plans withdrawn. Irda had also extended the deadline to phase out group products not complying with the new guidelines from July 1. Later, this deadline was extended to August 1.........
Friday, November 22, 2013
Why we should rethink our monetary policy - Charan Singh
......Traditionally, any responsible central bank, to safeguard the interests of citizens, would tighten the monetary policy when fiscal profligacy, especially during an election year, is observed. But if it impinges on growth and unemployment - the two other objectives of monetary policy - then the monetary stance probably needs to be boldly revisited and not seen through a traditional lens.
Rajan went with majority views of technical committee members in Oct
The Reserve Bank of India (RBI) governor Raghuram Rajan went with the majority views of the members of the Technical Advisory Committee (TAC) on monetary policy to hike the repo rate and cut the Marginal Standing Facility (MSF) rate last month. The minutes of the meeting was released on Thursday as per which expressing concerns on inflation as also on the external front, four members supported raising the repo rate by 25 basis points while bringing down the MSF rate by the same amount..........
Raghuram Rajan enjoying honeymoon period with markets: Rajwade
.........Currency expert AV Rajwade told NDTV that the rupee will continue to face headwinds until the core problems impacting the currency are sorted out internally. He also believed that Reserve Bank Governor Raghuram Rajan is enjoying a "honeymoon period" with markets, which has led to some stability in the currency. "He obviously is extremely articulate and intelligent and his verbal intervention in terms of statements has done the trick twice so far. Whether that can change fundamentals I have doubts on that issue," Mr Rajwade said.................
RBI should embrace anti-inflation policies, says Nobel-winning economist
If Reserve Bank of India (RBI) Governor Raghuram Rajan has to choose between taming inflation and focusing on growth, it has to be the former, Nobel Laureate Andrew Michael Spence said on Thursday. "High inflation and low growth is a tough deadlock that the Indian economy is facing," he said on the sidelines of the K B Lall Memorial Lecture.........
NPS needs rebirth
My View on "From a wannabe MF, the NPS should go back to basic...":
There can be no two views on NPS as a concept which can, in ideal conditions graduate into an investment instrument for securing the objectives detailed in the article. But the background in which the original NPS (New Pension Scheme) came into being in 2004 and the scheme’s progress so far do not generate hope. When conceived, its immediate ‘mandate’ was to eliminate the then existing defined benefit based pension scheme in government and public sector. Centre was in a hurry to give some alibi for not creating a pension fund. The Central government employees who were in service as on December 31, 2003 have a Defined Benefit Pension Scheme. The pension liabilities of central government which were being met on a Pay As You Go basis were becoming unmanageable. According to a 2008 estimate, the net present value of Centre’s pension liabilities was Rs 3,35,628 crore(6th Pay Commission Report,2008). Considering this staggering liability which grows proportionately with rise in inflation rate and periodical revision in pay structure, Central Budget, 2003-04 contained a proposal to introduce the new restructured defined contribution pension system for new entrants to central government service. The New Pension Scheme (NPS) for new entrants to central government service from January 1, 2004, except to Armed Forces, in the first stage, replacing the existing system of defined benefit pension system was thus introduced through a notification dated December 22, 2003.
In the NPS corpus of about Rs35,000 crore mentioned in the article, less than ten percent is accounted for by members outside the government and public sector employees for whom NPS has been made compulsory.
Considering the above background and now that the PFRDA Chairman has resigned in not so enviable circumstances, and already there are different views on overlapping jurisdictions of IRDA and PFRDA, really, NPS will have to take a rebirth to serve the large workforce which can become its clientele.
- M.G.Warrier
Much as I would wish to..................
My View on "Bharatiya Mahila Bank: Let this not be another UID...":
Banking by gender was initiated by the SBI with the ushering in of a Streeshakti scheme. It did not move forward. A scheme with gender bias did not succeed but would a bank itself dedicated to women succeed although I would wish for its success. But the factors for its success just do not exist from the website displayed. The business model is basically flawed. Take for example the Sreenidhi SHG Bank with AP State patronage. The NPAs are already mounting in a year's time. it is dedicated to women SHGs. The Bank would like to take deposits from men but lends only to women! Supposing these male depositors want to borrow against their deposits - would they be denied the loans? Second, there are lots of women enterprises currently in the MSME sector financed by several other banks - both the private and public sector. Will they be taken over by this BMB in the first eight cities where it is planning to open branches? Is such takeover possible if the borrowing enterprises would not like to shift? Some of these are in industrial estates/industrial clusters closer to the banks from where they borrowed. There are many issues to the capital adequacy maintenance, security etc.
- Yerram Raju
NABARD - Representation by Grade 'D' Officers to NBOA
..........inviting her attention to the clause of residual service of more than two years for the promotion from Grade 'D' to 'E' which is not there in RBI promotion policy.............
Flailing state
.....Finance minister P Chidambaram says the new bank is the substance and not a mere symbol of women's empowerment. Facts suggest otherwise. Public sector banks, entities under the Finance ministry's control, disburse about 75% of bank credit in India. Four of them, including India's largest bank, State Bank of India, are headed by women. If there is a discriminatory approach to public sector bank lending, fix it. Starting a new bank will not solve the problem. Moreover,.........
Urban Co-op Banks in Better Health
Urban
co-operative banks have received a certificate of good behaviour from
the central bank as most of them qualify to be in the safe category. According
to the new classification, at end-March 2013 around 67% of the urban
co-operative banks, or UCBs, were assigned A and B rating, up from 61%
as at end-March 2012, the Reserve Bank’s latest Trend and Progress in
Banking released on Thursday noted. These banks accounted for 85% of the
banking business, up from 78% as at end-March 2012 of the total banking
business (deposits plus advances) of the urban co-operative banks. There was a perceptible improvement.............
Read - ET
Bank strike on December 19
NEW DELHI, NOV 20:
Over a million bank employees will go on all-India strike on December 19. This has been decided by the United Forum of Bank Union (UFBU), a representative body of nine bank unions. The strike call is for wage revision demand and also for expressing opposition to banking reforms of the Government, C.H.Venkatachalam, Secretary General of All India Bank Employees Association said.
HBL
RBI plans to reduce banks' requirement of investing in g-secs in calibrated manner
...........“One of the mandates for the Reserve Bank in the RBI Act is ensuring the flow of credit to productive sectors of the economy. In this context, it is necessary to reduce banks' requirements of investing in g-secs in a calibrated way, to what is strictly needed from a prudential perspective. It is recognised that the scope for such reduction will increase as government finances improve. Further, as the penetration of other financial institutions, such as pension funds and insurance companies increases, it will be possible to reduce the need for commercial banks to invest in g-secs,”..........
RBI favours easing regulatory hazards for bank licensing
....The RBI said one of it’s discussion papers favours ‘continuous authorisations’ of new banks and explores the possibility of converting large urban co-operative banks into commercials banks to impart dynamism to the banking system. “However, this is not to undermine the need for ensuring sufficiently stringent entry norms to prevent the entry of banks of questionable soundness or competence, since their proliferations could undermine public confidence of the overall integrity of the banking system,” the RBI said............
'Banking business of Rs 288 lakh cr by 2020'
......"Notwithstanding the development of various types of banks, Indian banking sector is yet to meet the desired banking penetration and inclusion as witnessed in most advanced and some of the emerging economies,".......
Banking on women
......That there is a gender bias in banking services is clear. It was precisely this that led to the creation of women's cooperative banks such as the Shri Mahila Sewa Sahakari Bank Ltd. which extended financial support to self-employed women in the unorganised sector. Yet, it is not clear if an all-new, full-service bank is the way to get more women into the financial system. Could not the same objective have been achieved through the existing public sector banks that have an extensive network in rural areas, where financial exclusion of women is the most acute? The BMB will face the same issues as other public sector banks; if anything, it will be handicapped even more by the fact that it is a start-up operation. For example...........
Bhartiya Mahila Bank: Focus on financial inclusion and promotion of entrepreneurship, not kitchen loans
.....A bank is supposed to be for women of this country, where men can not only be employees, but also have an account opening facility. So what is that differentiates this new bank with other banks that we have in India? Sounds funny but to start with it is “kitchen loan” as per the initial press reports. After all, kitchen is the place where most of the women in India spend their maximum time. This kitchen loan is the start up USP of this bank which must make our Finance Minister happy who was completely wrong to think that all banks were just clones of each other and were offering the same products and services much to his disappointment...........
Foreign banks faced highest number of customer complaints in FY13: RBI
....The common refrain is that public sector banks cannot match the level of customer service provided by foreign and private sector banks. But the truth may just be the opposite. The number of complaints per bank branch/account has been highest for foreign banks followed by private sector banks during 2012-13. According to the report released by the Reserve Bank of India (RBI) titled ‘Trend and progress of banking in india 2012-13’, there were 1,543 complaints per 100 bank branches of foreign banks, highest among all bank groups. This was followed by private sector banks ............
RBI for diluting Govt stake in public sector banks
............The RBI referred to the dilution of Government shareholding in the context of public sector banks requiring additional capital to implement the Basel-III capital regulation. RBI said the Basel III norms lay more focus and importance on quality, consistency and transparency of banks’ capital base. It has estimated that the additional capital requirements of domestic banks for full Basel-III implementation till March 2018 is to the tune of Rs 4.15 lakh crore, of which equity capital will be about Rs 1.4-1.5 lakh crore while non-equity capital will be about Rs 2.65-2.75 lakh crore..........
Dhanlaxmi Bank - Change in Directorate
Dhanlaxmi Bank Ltd has informed BSE that Reserve Bank of India (RBI) has vide letter dated October 28, 2013 appointed Shri Raja Selvaraj, General Manager, Rural Planning and Credit Department, RBI, Chennai as Additional Director of the Bank in place of Shri Manoranjan Dash, General Manager, RBI, Hyderabad for a period of two years with effect from November 01, 2013 to October 31, 2015 or tilt further orders of RBI whichever is earlier.
IRDA: Asleep at the wheel?
..........Should the RBI be completely divested of its public debt management function? And should it deal in government securities only to implement its monetary policy moves? Across countries, has life insurance growth been facilitated by the existence of credible fixed-income markets? What is the impact of sustained, “positive” real interest rates on the growth of fixed-income markets and wholesale investors such as insurance companies, pension funds? That is the kind of public pressure that the IRDA should be applying on other policy-makers to force action.........
Tough days ahead for Sahara Parivar
.......In an interview earlier this year, Subrata Roy talked about a "lady sitting on the Sebi board" who acted with vengeance. Roy was probably referring to former Reserve Bank of India Deputy Governor Usha Thorat, who was a nominee member on the Sebi board. According to Roy, Thorat got Sebi to act against Sahara to avenge the humiliation of the central bank in the Supreme Court. Observers say the very purpose of having an RBI person in Sebi is to enable coordination between the two bodies. There were other 'ladies', too. Usha Narayanan, executive director of Sebi, was heading the department that vetted initial public offering documents. In September 2009, Sahara Prime City filed an offer document for an IPO. Narayanan's department got a letter from one Roshan Lal raising questions about housing bonds floated by Sahara. This letter triggered inquiries and subsequent investigations...........
India Inc sitting on a debt time bomb and banks are paying the price
....The only conclusion that one can draw from this is that India Inc is sitting on a debt time bomb. “Large corporates continue to be under significant stress as out of the top-50 companies by debt with interest coverage<1 in the second quarter, 23 companies haven’t covered interest in seven or more quarters in past two years and 38 companies were loss making at a profit after tax level,” write the analysts........
Read...............
Mis-selling: Treat customers fairly, RBI to tell banks
With cases of mis-selling by banks continuing to come into light Reserve Bank of India plans to introduce the concept of `treat customer's fairly' (TCF) for sale of third-party products. Under the TCF norms, introduced first by UK's Financial services authority, it is not enough for banks to merely stick to rules, they must prove that they have acted in the best interest of the customer. ..........
For financial inclusion, try black magic
.......The government can effectively apply the pincer of demonetisation in the following way: 1000- and 500-rupee notes should be demonetised without notice. Those holding these notes must be instructed to deposit them in their bank accounts. Those without bank accounts should be instructed to open accounts to deposit these notes; KYC procedures should not be fussed over. In course of time high-denomination notes can be reintroduced but bearing different denominations, say Rs 600 and Rs 1200, in recognition of the fact that inflation has eroded their value as well as to avoid the confusion that is likely to result if the old denomination notes are reintroduced. Marketing experts aver that before a product launch, it must be ensured that the products are available. So too with banks — banks need to have branches before the masses are exhorted to embrace the banking culture........
RBI classifies SKS as NBFC-MFI
SKS Microfinance Limited, the only listed microfinance institution (MFI) in the country, has stated the Reserve Bank of India (RBI) had classified the company as a Non-Banking Financial Company-Micro Finance Institution (NBFC-MFI) (Non-Deposit taking) from its existing status of NBFC (Non-Deposit taking)......................
At SBI, profit dips with new CEO
........But Bhattacharya will probably find solace in the fact that her predecessor, Pratip Chaudhuri, had a more harrowing experience when he took charge in April 2011. In his first quarter as SBI chairman, Chaudhuri saw the bank reporting its lowest quarterly profit in over a decade. The net profit had plunged 99 per cent on an year-on-year basis. O P Bhatt who was the chairman of SBI immediately before Chaudhuri, had a similar experience. The bank's profit had declined 35 per cent from a year earlier in Bhatt's first quarter as its chief.
Accountability diffused
My View on "Bleeding with mounting NPAs":
I am not sure what purpose Dr K.C. Chakraborthy wanted to serve with his anguish at the writing off of lakh and odd crores of NPAs arising out of corporate lending as opposed to a mere INR70000cr for agricultural lending by the Government. It is the government that helped write off and not the banks. In the case of the former, all such write offs are reported quarterly to the RBI with full details. If the decisions were wrong why did not the RBI pull them up and shape up things? Why should a Dy. Governor vent out his anger at the malaise in public? This is a sad commentary on the regulator more than the erring banks. I have mentioned in these columns sometime back that the due diligence processes of banks has been bartered away with outside credit rating institutions. Banks turning to group approach to credit sanctions as ordained by the Government of India, most corporate credit decisions stand at the doorstep of management and not of the supervisory Board, if there is any. The accountability for credit decision has got diffused. Credit risk management has been on continuous dilution when it came to big loans to corporates while it became stringent for the Micro, small and medium enterprises where recourse to guarantee is available. Even at the CGTMSE thresholds the banks insist on collaterals and make the productive sector suffer. Debt restructuring even under very well deserving cases for the MSME sector rarely takes place while for the corporate CDR is scrupulously followed. The CDR devolves on the Bank as full blown bad debt warranting write off as during the CDR the little available collateral gets eroded as several banks slept over their collateral.
- Yerram Raju
RBI raises concerns about bank loans, debt recovery
........Banks need to strengthen their recovery processes, and it should be focused on “efficiency and fairness—preserving the value of underlying assets and jobs where possible, even while redeploying unviable assets to new uses and compensating employees fairly”, the RBI report said. To do this, there is “urgent need for accelerating the working of debt recovery tribunals and asset reconstruction companies”. If economic growth picks up, the bad debt position “may improve”, the report said.............
Amend laws to speed up recovery of bad bank loans: Association
......All India Bank Employees Association (AIBEA) has described increasing bad loans of public sector banks as a "serious menace" and asked the government to make necessary changes in recovery laws to deal with the issue. "Increasing bad loans of banks is a serious menace. These loans are eating into the very vitals of our banks," C H Venkatchalam, Secretary General of AIBEA, said in a statement here today. AIBEA represents more than 7 lakh employees............
Irish firm to make fund transfers for students cheaper
..........Instead of making a wire transfer, students will now have the option of depositing the university tuition fee at a local bank account courtesy ‘PaytoStudy’, an online payment system from Ireland-based Taxback Group, its Chief Executive Officer Terry Clune, told Business Line. The Reserve Bank of India had recently approved of the company’s proposal and has given it a licence to transfer funds for Indian students paying for their overseas studies, Clune said on the sidelines of a media interaction.....
Rethinking on ATM
My View on "Missing ATM guard aids attack":
The ATMs are technically mini branches of a given bank which may not necessarily allow deposits of cash and negotiable instruments like those in developed countries,but carry operational risks and involve cost.The cost of providing security to each and every ATM may not be necessarily cost effective in India as most of them are for cash withdrawal purposes.To provide security even if outsourced,for a given ATM atleast the bank has to pay for 3 guards and make arrangements for substitutes, leave reserves and costs like Provident fund/health cards/liveries and some others.Technically while ATMs are customer friendly facilities,for banks these are not so friendly.The cash that they load into the ATMs do not earn them anything but have a cost of insurance, transferring between currency-chests/storage centres,cost of transporting and additional security,etc. etc. Taking into account customer complaints regarding break-downs, forged/defective notes/failures of terminals, etc. they have their own impact on the banks's cost and efficiencies.The solution may perhaps lie in locating ATMs of group of banks in clusters on main roads/residential colonies of areas with more traffic and asking them to provide for common security by sharing cost and responsibility for operational arrangements. In case of more than 3 banks operating ATMs in the same premises,set of two guards may be thought of for round the clock security. RBI may have to come forward to approve such an arrangement.
Horror at the ATM
..........Here, I wish to mention an interesting meeting we had with the Reserve Bank of India on the “Clean Note Policy” introduced nearly a decade ago. The RBI wanted my bank to install note-counting machines, to which our answer was that the machines were expensive. The top RBI official said that rather than remitting our bank’s dividend of more than Rs.1,000 crore to the government, we could do so after ensuring our needs, such as this, first. .........
Police write to RBI on cash van security
NEW DELHI: Delhi Police on Thursday wrote a letter to the security manager of Reserve Bank of India seeking steps to ensure that banks are made responsible for security of vans carrying cash. They had earlier written to cash management agencies to ensure such measures or face action..........
Banks wary of meeting extra steps at ATMs
.....The order specifically enlisted three measures: One, directing the banks to station security guards at ATM kiosks at all times; two, instal suitable CCTV cameras in all kiosks that is placed in such a way to ensure that it records the happenings both inside and outside the kiosk; and three, instal burglar alarm at all kiosks. The police commissioner’s written order has made it clear that if the banks fail to comply with these requirements by 4 pm on Sunday they will be restrained from providing ATM service to their customers.........
‘Security lax at ATM kiosks’
...... Some
said there was lack of clear guidelines from the RBI about security
arrangements in ATM kiosks, most confirm provision of closed circuit
television cameras (CCTV) and “caretakers” at all their ATM kiosks. Yet
others said they would comply with enhanced security-related guidelines
that the RBI mandates in view of the Bangalore case. Bharat Kumar, general manager (planning) of Bank of Maharashtra says there
are “watch-guards” present at all their 117 ATMs in Pune district, but
ruled out the need to arm them as long as there was round-the-clock
monitoring of the kiosks............
Double digit growth in ATMs driven primarily by private sector banks
............The report said that the penetration of ATMs across the country increased in 2012-13 with the total number of ATMs crossing 1,00,000, clocking a double digit growth during the year. However, RBI said that this growth was driven primarily by private sector banks, with their share in total ATMs picking up rapidly to about 38%. With While Label ATMs expected to take off, RBI said that there would be more spurt expected. The central bank also said that there has been the faster rise in off-site ATMs. ..............
Centre decides to leave Chief Economic Advisor post vacant
.......“Even though an Economic Survey will not be tabled by the government, it has decided it does not require the services of a CEA at a time when the economy is going through a painful economic slowdown,” ............
Thursday, November 21, 2013
Impressed by dedication of RBItes - Dr.Raghuram Rajan
Our Governor Dr. Raghuram G. Rajan inaugurated the renovated
Class IV Union Office in Amar Building, Mumbai at 4.00 p.m. today and while delivering
his speech stated that wherever he goes, people say that RBI is a very honest
and intelligent organization. He further stated that he is impressed by the
dedication to work by all the employees of the Bank. He also observed that in
many institutions, although the work culture/ dedication to work deteriorate by
passage of time, in RBI, the same are very good even after around 80 years of
constitution of RBI. He also acknowledged the fact that the dialogue/
constructive dialogue between the union/ associations with management should
continue and with the co-operation of all concerned, RBI can achieve great
success. Let us uphold the belief reposed on us by our Governor.
- C. Subash, Secretary, RBIOA
Should RBI prefer CPI over WPI?
.............In this light, the WPI-CPI debate must be more nuanced and cautious than a simple binary choice. It’s also important to not lose sight of its genesis too, one of which is RBI’s failure to bring inflation under control over 2009-11. Something new was needed to cover the loss of credibility and the new CPI happened to come along at the right time. First, there was talk of a ‘new normal’ for inflation, implying a higher target. If I am not mistaken, it was the IMF that first suggested shifting to the CPI for better inflation control; several analysts then took this up............
- Renu Kohli
.....For an economy like India, the role of inflation expectations which are driven largely by non-core inflation as expenditure on food and fuel inflation constitutes a significant part (59.2%) of household income cannot be ignored as they have important ramifications for saving-investment behaviour. As such, headline inflation (WPI and CPI) should continue to guide monetary policy in the near term........
- Shubhada Rao
Will central banks remain supreme?
.........Over the last few years, the central banks of the largest advanced economies have assumed a quasi-dominant policymaking position. In 2008, they were called upon to fix financial-market dysfunction before it tipped the world into Great Depression II. In the five years since then, they have taken on greater responsibility for delivering a growing list of economic and financial outcomes.........
Cheque clearance in banks to be made easy and fast
.........As a sequel to the decision which has been taken following the direction of the Reserve Bank of India, the Pondicherry Banker’s Clearing House (PBCH), which is functioning from No:15, Rue Suffren, Puducherry, will close its operation on Saturday. The PBCH has so far been receiving post-dated cheques or equated monthly instalment cheques from networking bank branches for processing them. They were personally handed over by staffers of the banks concerned. Hereafter, branches of banks, upon receiving cheques from customers, will scan and forward them to the Cheque Truncation System at Chennai (southern grid) after following all mandatory procedures........
Tendulkar and the taper talk
.............Unless inflation and government expenditure is brought under control, which looks difficult at this stage, Indian markets will remain like a cricket team which scores well only when the conditions are favorable but fails whenever there is even little bit of juice on the wicket. And you don’t need Tendulkar to be telling you that this is not a great sign for a side that aspires to rise and shine.
Montek Singh Tendulkar?
....... It was unclear, though, whether he was referring to Ahluwalia's longevity in the economic policymaking establishment or his achievements within it.
RBI asks NBFCs to take part in Lok Adalat on Nov 23
..........."RBI has appealed to all Non-Bank Finance Companies (NBFCs) to participate in the Lok Adalat being organised by the National Legal Services Authority (NALSA) on November 23, 2013," the central bank said in a release..........
Bleeding with mounting NPAs
My View on "Calling the bluff":
If clients like King Fisher Airlines continue to stall the efforts of banks in recovering their dues - recent one is getting a stay on banks from taking over the corporate office of KFA at Mumbai- it is no wonder, the banks will also continue to bleed with mounting NPAs. The RBI never wanted to investigate whether banks had violated basic tenets of banking while sanctioning loans to KFA and such big ticket clients. If media reports are to be believed, most of the banks have extended the loans without adequate collateral security to KFA. Is it not malafide and it is not clear why bank managements have been allowed to go free by the RBI. The sermons of the Deputy Governor Mr Chakrabarty will remain just sermons as he does not want to offer solutions to take action against such bankers who violated basic norms of lending. Again as media reports mention that those senior bankers who secured very low marks in the interview for the post of EDs of PSBs, and when they become CMDs later, what better banking will one have in our country? -
- S.Santhanam
Rich lists
This refers to the report "Banks wrote off Rs 1 lakh crore in 13 years: Chakrabarty" (November 19). It is heartening to find that a debate on who favours whom has started at the highest level. This is good for the health of the economy...........
RBI must focus on fair deal for savers and desist from OMOs to prevent inflation spiral
Hidden in page 40 of the Macroeconomic and Monetary Developments Q2 review, released by the Reserve Bank of India a day before the policy, is a link to a vital piece of information — the household inflation expectations survey. The RBI publishes three-month and one-year forward inflation expectations each quarter in the survey..........
Read - ET........
A(ny) T(ime) M(enace)
Delhi cops write to RBI for safety steps
......The officers discussed various measures to make ATMs safer. One of the suggestions was to install a self-locking mechanism on the rolling shutters of ATM booths so that only the authorized personnel can lower them.......
......The officers discussed various measures to make ATMs safer. One of the suggestions was to install a self-locking mechanism on the rolling shutters of ATM booths so that only the authorized personnel can lower them.......
Read - TOI
........... "It would add huge financial burden and banking will become costlier. Round-the-clock security would mean having three security guards, each on an eight-hour shift, for every ATM. That defeats the whole purpose of having machines for 24x7 banking,".........
Guard must or ATMs will be shut: Top cop
Banks' best bet is an armed guard
...... The Reserve Bank of India, the country's apex banking authority, has no written rule asking banks to employ guards to man ATMs. The regulator has only asked banks to beef up security in areas considered 'high-risk'. But in light of the growing number of incidents of urban violence and theft, banks have put in place certain security measures to curb such incidents...........
Home Minister lauds Jyothi’s courage
State Home Minister K.G. George lauded the courage of Jyothi Uday, the 38-year-old woman who was attacked on Tuesday while she was withdrawing money from an ATM near Corporation Circle. He said that the very fact that she had tried to fight back showed her courage, Mr. George said, wishing her a speedy recovery.........
Read - The Hindu
Secure the ATMs
....What is required therefore is a comprehensive, multi-level security arrangement, one that uses computer technology, surveillance cameras, automatic alarms, guards and police patrols. The Reserve Bank of India must make comprehensive security at ATMs mandatory............Shocker! This R 1000 note is to be sold at R 3.5 lakh online
..........There are many such websites that offer sale and purchase of special currency coins and notes with striking errors. These currency notes and coins have special numbers, errors, misprints, signatures or are vintage coins or notes................
Bharatiya Mahila Bank: Let this not be another UID or NREG
..........There does appear to be some hurry in inaugurating this enterprise as normally, the website of any new outfit is designed to near completion before it becomes operational. The present website could be an unofficial one. However, in this case, it may be inferred that the actual operations would be only after other prerequisites are in place including a formal website. One may expect business details such as interest rates being charged and products being offered to follow soon............
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