Friday, April 11, 2014

Can't have cake and eat it too....



Before I proceed to offer my unsolicited comments (views have been asked for only from the regional units of the RBIOA), let me at the outset make one point clear. I cannot claim much expertise and detailed knowledge in the area since my experience is limited acquired while serving as CGM,HRDD for 11 months(!!) and having been entrusted with the 1992 Pay revision negotiations with all the Associations. (HRDD Chief ought not to have been entrusted with this work.). Nevertheless, I believe that my views on the aspects on which I am offering my comments are sound.
2. Pension Updation even in the Central Government has been introduced only in the last two Pay Commissions and was non-existent prior to that date. If we in the RBI demand pension updation, as in the Central Government, on the ground that the Bank's scheme of pension is on the lines of the GOI, then it is only logical that the rules relating to Pension updation( whether it is the definition of 'pay',  manner of fixation of revised pension etc) in the RBI cannot be different and have to follow the rules in the GOI as decided by the Pay Commission. We cannot have the best of both the worlds( RBI's rules relating to determination of pension and rules of the Pay Commission in the matter) and to demand it betrays lack of realism. Hence, if we wish to have the benefit of updation of pension, we have to accept the conditionality of the GOI. 
Secondly, the rationale of pension updation is that pensioners who had retired from a particular grade should be eligible to draw the same amount regardless of their date of retirement. If this is so, it would appear that 'Pay revision' and 'Updation of pension' would have to follow the same periodicity (10 years as at present) and one cannot be delinked from the other. Otherwise, it would not be possible to ensure the drawal of same quantum of pension by all pensioners who had retired from the same grade but at different points of time. I would be happy to know whether there is any flaw in my argument and if there is I am willing to stand corrected.
3. In view of the above, it would be good if RBIOA find it possible to consent to the proposal with in the next 10 days as the issue has taken many years to get resolved.
4. As regards the condition relating to "rationalisation of perks" of serving employees, this is totally irrelevant to the issue and one cannot see any connection between this aspect and pension updation and pension option. Governor should with all his authority, backed up by his standing, reputation and skills in argument, take up this point with the GOI and most of us have confidence that he can and would do it. SBI officers have enjoyed better perks than the officers of the RBI for several decades( when perks were practically non-existent in the RBI) and I am sure that they would be enjoying excellent perks even now. 
- A.Chandramouliswaran, E.D (Retired)


The Finance Ministry current direction to RBI on wage and pension updation at the span of every 10 years on the lines of 6th CPC and also that of future CPCs need to be rejected by RBI management to keep itself autonomous as per it's charter in real sense.Whether, the Top Management can do it or not due to obvious reasons will make the success and fall of the United Forums's efforts in the matter until forceful voice is raised in the matter. It appears that the bank's agreeing to RBI Staff Regulation statutorization in principle is giving space to government in amending staff matters by them. In case, United Forum is unable to keep the existing A+ Position vis a viz IAS Officers in Pay and perks matters, then they should ensure time bound promotion in RBI at IAS pattern at the minimum. pay rise on length of service of 30+ years at par with Secretary to GOI to all RBI Officers is to be insured and assured. I am sure when you talk boldly on this line only to Bank and GOI will be able to succeed and handle the bureaucrats suitably. Kindly think on this line also along for getting the leverage.

regards. 
- Capt. C B Gupta



My personal view on the current debate on pension updation:

1. Pension was introduced in RBI effective January 1, 1986. A regular revision of pension has not happened so far. The revision once done(effective November 1, 1997) was dragged to court due to some irrational stand taken by Finance Ministry. 
2. The position at 1 explains the urgency for pension revision. Conceding such urgency, during Governor Dr Subbarao’s period, Family Pension was revised. As there was a doubling of Family Pension from 15% of Pay to 30% of Pay the unacceptable and wrong method of arriving at revised family pension amount went unnoticed. Bank has so far been able to protect the interests of family pensioners post-revision, though the revision came very late. My view is that RBI should go ahead with revision of pension and find methods to protect the interests of the employees/pensioners. RBI can do this and delay in implementing the revision is not in the institution’s interest.
3. The conditionalities reportedly proposed by Finance Ministry are reminiscent of conditionalities totally unrelated to the projects usually imposed by IMF/World Bank for project loans given to ‘poor’ countries. The wage structure for workmen is based on negotiated settlement/s and last such settlement expired on October 31, 2012. Stealthily getting nods for change in service conditions without negotiation on major service conditions, besides being illegal, is denial of natural justice. 

- M G Warrier, Thiruvananthapuram

Time Taken for Revision of Salaries of Bankers vs Parliamentarians

....UFBU has miserably failed to take the advantage of the pre-election period to extract an honourable settlement for the bankers.    After the new government is installed, bankers will be more at the mercy of the new government, who will be in no way in hurry to settle the issues. ....

RBI issues fresh norms to curb customer discrimination

...To study credit pricing, RBI had formed a working group headed by Anand Sinha, former deputy governor of the central bank. The panel’s report, made public on Thursday, has suggested stringent norms to make loan pricing more transparent. “The working group recommends the spread charged to an existing customer cannot be increased except on account of deterioration in the customer’s credit risk profile,” RBI said........

Banks must lay down policy for sale, buying of property abroad

...The RBI also said banks should ensure that all future transactions relating to purchase or sale of real estate as well as acquiring or letting out property on lease or rental basis at overseas centres must be undertaken in accordance with the Board approved policy. " It has come to our notice that some Indian banks have committed certain lapses in purchase/ sale of real estate as well as in acquiring/ letting out property on lease/ rental basis at some places in foreign countries," the RBI said....

NPA situation unlikely to improve this fiscal: A&M

....The World Bank in a report released yesterday had said in India the problem is the banking sector's growing exposure to company debt. The fear is that this could ultimately affect the government's finances through its ownership of state banks and the need to prop up distressed but systemically important banks.  The Reserve Bank of India (RBI) recently had issued guidelines to banks for early detection and curbing of non-performing assets (NPAs). .....

Bandhan Financial eyes deposits from existing client base in bank avatar

.......“Our customers do have cash surpluses from time to time, especially after they have repaid a loan. Now, they keep this money at home, but once we’re a bank, we can access it. Nearly 100% of our customers are women and they feel the need to save. Besides, there are two earning members in every family, so there is scope to raise deposits,” .........

To bank or not to bank: that is the question

........Given the record of the private sector banks, the RBI should have exercised caution. Who will take care of financial losses of these banks? Compared with public sector banks, their business size will be small, and they can focus only at the micro level. We need banks that can cater at the national level,” ...

Poor customer service at ATMs flayed

....The Reserve Bank of India (RBI), in a survey of ATMs, has found several deficiencies in services. These relate to messages showing insufficient cash and non-availability of contact details for lodging complaints at the ATM centres......

Cloning cards – the latest online menace

........This incident has also brought to light that cloning of credit/debit cards is the new growing industry in India and the reasons, cyber experts believe, are many. One of them is that cloning a card these days is as easy as photocopying a document with the innumerable softwares available online. A person just needs to go online, type cloning software and hundreds of them will come up...

Virtual credit cards: Future of money

.....In India, several banks and credit card issuers including SBI Cards — a joint venture between State Bank of India and GE, ICICI Bank, Citibank, Axis Bank and HDFC have already launched virtual credit cards to facilitate e-commerce, which is a major force driving the surge of virtual credit cards. Virtual credit cards are not issued physically. Credit card holders can use their cards by accessing their Internet banking facilities and providing their card details. The bank generates a........

Gubbi gets White Label ATM

BTI Payments Pvt. Ltd., one among the companies approved by the Reserve Bank of India (RBI) to establish 9,000 White Label Automated Teller Machines (ATMs) across the country, has set up the first facility at Gubbi in Tumkur district...........

Thursday, April 10, 2014

RBI's Deputy Governor R Gandhi: A 'simple man' well-qualified for new job


......He is so trustworthy that he was executive assistant to two governors — S Venkitaramanan and C Rangarajan. That's probably why Mehta, who was a deputy governor at RBI before moving to Sebi, could not leave Gandhi behind. "He is a simple man," and "He is a good man," is all one gets to hear from colleagues and friends when questioned about his personality. He might have progressed well in life, but going by the so-called social standards, he may not be considered that progressive because it was on his father's order that he took up central banking. .............

RBI appointment referred to EC for approval

The Election Commission will have a say in deciding a replacement for incumbent RBI Deputy Governor KC Chakrabarty, who had sought early retirement from the central bank. Although a search panel headed by RBI Governor Raghuram Rajan had zeroed in on a banker to take charge of this prestigious position, the Central Government, it is understood, wants to play it safe...........

RBI - fighting a lone battle

My View on  "The RBI gets it right": 


While I disagree with many of the words used in the conclusion which reads “The mandarins who run the Union finance ministry come from the top of the civil service examination merit list; those who run the postal department come from far below. How can a Brahmin find so much merit in an OBC?”, it is tough to find reasons to contest the grounds for making such an observation. Last few years have seen the central bank (Reserve Bank of India) as an institution fighting a lone battle to perform its mandated role as efficiently as it would have enjoyed doing. Most of the Governors and Deputy Governors who were in position during the last decade and a half, did understand the role expectations from RBI once they started operating from Mint Street. But the hostility of lower rung finance ministry officials for extraneous reasons made their life difficult. This resulted in the evolution of three power centres, namely RBI, its Governor and the finance ministry taking different positions on important policy issues. It is comforting to find that Dr Raghuram Rajan has been able to assert leadership and coordinate among these three divergent pulls and pushes. His willingness to unlearn what is not relevant to the Indian context and to prepare RBI to meet the new challenges by making the priorities clear to his deputies inside RBI and giving expression to his expectations from GOI in no uncertain words gives one hope about RBI getting back on the right track quickly. 

- M G Warrier, Thiruvananthapuram 

Changing perceptions

The rupee’s recent appreciation to below 60 a dollar — it is hovering around those levels — is a significant development and not just because of its breaching a psychologically important mark. At one level, its recent strength would appear to mirror the changing perceptions of investors, especially from............

Suitable choice



It is a good development that a person with mild manners and belief in taking people along has been appointed in this position. Equally important is the aspect that he holds a doctorate in banking and hence should be a suitable choice for the post. In the past, some persons who have no background even in Finance not to speak of banking were appointed to this Ministry. IAS officers who were working, say, in the Water resources Ministry and with out much background in Finance are appointed to this Ministry as they are supposed to be all knowing!!It is also good that at present no IAS officer is a part of the top management( Governor/Dy Governors)of the RBI and I wish this position continues. In fact, I had expressed a view long ago in an article in the 'Business Standard' that there should be no quota for appointment to the post of Dy.Governor, i.e one/two from the RBI, one from the Banking Industry and one either from the IAS/an Economist. Highly competent persons should be appointed and in the process, if some section is not represented, it should not matter. 

- A.Chandramouliswaran

Dr.N.A. Mujumdar - Prayer meet

Dr. Narasinh Annaji Mujumdar (former Principal Adviser, Reserve Bank of India) passed away on April 6, 2014. He was a selfless, caring, loving person, and a source of inspiration to many. His strong spirit will always remain with us. Fondly remembered by his wife, Shashikala Mujumdar his son, Sudesh Mujumdar; his daughter, Mamata Patwardhan and her husband, Shailesh Patwardhan; his grandchildren, Sharvari, Medha, and Jayant, the entire Patwardhan & Mujumdar families; and his Friends and Colleagues. 
Prayer meet on Friday 18th April from 5pm to 7pm at Sri Admar Mutt Temple, 115 H, Near Fire Station, S V Road, Andheri West, Mumbai - 58.
Thank you for your condolences & support     magmata@hotmail.com 

Revisit inclusion

...... Of course, there is a large gap between the banks and the people with potential to seek financial inclusion. Just because of making villagers to have an access to a bank account inclusion wouldn’t be completed. A micro study on the income and savings of the account holder must be made to stimulate him to deposit savings and to seek small finance from banks to augment his earning capacity in small business ventures...........

Pension updation and opening of fresh option - RBIOA circular

.....First of all it would be in fitness of things if the facts are placed before you so that an informed decision can be taken by each one of you..............





CEO salaries in public sector banks

........To most observers it would appear that the government is unnecessarily penny pinching when it comes to CEO pay. Their reasoning is that salary hikes are being blocked by the bureaucracy who does not want psu employees to get more than babus of an equivalent rank in the government.  Former RBI governor D Subbarao too supported psu chiefs on this issue pointing out that if psu banks had to compete with private sector lenders there should be a level playing field in salaries.  So why is there such an inverse wage structure in public sector banks?................

Know Your Bank first

My View on  "K(now) Y(our) C(haos)": 


KYC has become very handy for banks to Keep YOUR Customers Away. They demand some document which the customer does not have and drive them away from branches. Bank Employees serve themselves. Before going to the bank Know Your Bank first and Know your Compulsions to have an account opened. Employees will ensure that You Are Not a Wanted Customer and they have KYC norms to back their wish. God Save Indian Banks and Financial Inclusion which is never going to be there in the present two or three generations and future generations also as long as Bank employees and authorities do not really have a mind set to view customers as a Business Opportunity. If it is absolutely essential then only go to the Bank. NRI customers are the worst lot as they cannot have regular contacts as the phones are not meant afor any Communication and emails are seldom read and answered.They are lucky in the sense that they do not come in personal Contacts with the employees to incur their displeasure and wrath. 

- Dr.T.V.Gopalakrishnan


First thing to do is delink KYC from Money laundering. As former commercial banker I know the moment a branch manager gets a circular combining these two unconnected issues he or she will become rigid in handling a potential customer.Change the nomenclature to make it appeal a simple one. May be it can br christened Client Introduction Form. Allow BM and staff or a customer as eligible introducer .Things are likely to change.
- Santhanam

Postal dept asked to pay Rs 3 lakh for opening joint Public Provident Fund a/c

.....In May 2009, they went to deposit an additional amount into the PPF account but the postal authorities refused to accept it stating that as per the PPF regulations the account cannot be a joint one, they said in the complaint. They were also informed that the account will not carry any interest as it is treated as an invalid account. The authorities also informed them that the balance in the account can be paid only after completion of 15-year period. The Thane District Consumer Redressal Forum, in its order issued last week, took exception to the casual attitude of the postal department in dealing with such operations ...........

Managing NPAs: Cure worse than the Disease

........A former top executive of the RBI who did his Ph.D., on NPA Management has some good suggestion. Sans the statistical models creation of a ‘PRECAUTIONARY MARGIN RESERVE’ (PMR) suggested by him starts with a small levy of 0.10 percent to 0.75 percent on the following mandatory classification of standard advances. ............

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

RBI steps in to end 'unfair' scrutiny of PSU bankers

...To overcome this, the RBI proposes to establish a procedure and define what could be mala fide so that it can come under the purview of the vigilance authority. "Every policy is greeted with suspicion and scrutinised for evidence of malfeasance. 

ICICI Bank reports deposit of fake currency notes over several years

Country's largest private sector bank ICICI Bank has lodged an FIR in a city police station alleging fake currency notes with a face value Rs 10 crore were deposited in its different branches in the past several years............

Russian bank Vnesheconombank under probe for FEMA violation

..............."We are in discussion with the finance ministry over the issue. The bank's operations have not been suspended," an RBI official said. Under RBI guidelines, the bank can undertake only liaison activities and its role is limited to collecting information about possible market opportunities and providing information about the company and its products to prospective Indian customers. "They cannot earn any income in India," the RBI official said. 

Why two licences is all that we could have expected

......Perhaps we need 50 licences, perhaps not, but in any case the above assessment is a patent misreading of ground realities. Banking licences are not a simple regulatory matter decided within the four walls of the Reserve Bank of India (RBI), unlike, say, a circular sent to banks to increase provisions on restructured assets. And RBI knows it acutely. More so the governor, who has had an association with the central government.............

Differentiated Bank Licence Old Wine In New Bottle?

Within two months, three weeks, and five days of the Nachiket Mor panel glorifying IDFC for proving its mettle as a differentiated bank in a shaky Indian banking industry, its chairman Rajiv Lall was told his company has been granted the licence to convert it into a full-fledged commercial bank. Soon after granting the licence to IDFC, and micro-lender Bandhan Financial Services, Reserve Bank of India Governor Raghuram Rajan said the industry is on the cusp of a transformation in the form of differentiated and ‘on-tap’ banking licences. Going by the two signposts of India’s current financial system — Rajan and Mor — the country could soon have, at least theoretically, 10 different types of banks, serving various constituencies — from retail to infrastructure. Does that mean that scores of new banks are a panacea to all the economic ills?.....

Read - ET

Indian Banks won’t be able to Cope with Unexpected Losses, Warns IMF

........In its global Global Financial Stability Report (GFSR) released on Wednesday, the IMF said Indian banks have not set aside enough money from profits to cover bad assets compared with others. “Relative to regional peers, loan loss provisioning appears low in Hungary, India, Indonesia, Malaysia and South Africa, suggesting that any potential credit quality deterioration may need to be absorbed by equity capital,” the report said. While most countries now meet the Basel-III minimum tier-1 capital requirement of 6%, the relative provisioning has created differences in lossabsorbing capacity. .........

UBI wants fetters on lending removed

The United Bank of India (UBI) plans to approach the Reserve Bank of India to allow it to lend more than Rs 10 crore — a cap imposed on it in November by the RBI. According to top officials of the UBI, the bank is expected to make a turnaround after a rigorous recovery drive from January........

Wednesday, April 9, 2014

RBI organizes customer service meet

Regional Director, Reserve Bank of India, Jammu and Kashmir, K K Saraf today exhorted the authorized dealers in J&K to educate their customers about various facilities available to exporters, importers, travelers, businessmen, tourists, etc. without contravening the provisions of the Foreign Exchange Management Act (FEMA), 1999.  He was addressing a Customer Service Meeting .........

Read - Greater Kashmir

The RBI gets it right

........As is well known, Mr Subbarao was not exactly popular with the Union finance ministry and the government, which was wide open to the idea of corporate houses getting bank licences. He was widely seen to be stalling the process and retired before the licences could be issued. The new RBI Governor, Raghuram Rajan, went one better..........

Alternate financial mechanism needed for small traders: CAIT

........A CAIT delegation recently met RBI Executive Director Deepali Pant Joshi and submitted a detailed memorandum demanding strengthening of cooperative bank system and non-banking finance companies (NBFCs), which are already primarily catering to the financial needs of small traders, the apex body of the trading community said in a statement. In its memorandum, the CAIT regretted that the core banking sector has failed to provide........

RBI is mature enough



Unlike several other top posts which had become controversial or had seen changes during political transitions in New Delhi, RBI Governor’s position did receive continuity and the incumbents never found it much difficult to adjust with the changes in policy perspectives during such transitions. GOI and Dr Raghuram Rajan were well aware about Elections 2014 when the offer and acceptance of the appointment were made in August 2013. Dr Rajan has also made it clear that he does not expect any problem in adjustiong with a change of guard in New Delhi. The present discussion in the media is perhaps fuelled by certain interests unhappy with the stability in approach to monetary policy and financial sector regulation RBI has been able to infuse despite political pressures. RBI is mature enough to survive such gossips. This observation is being made, despite the fact that the RBI Governor and his deputies do not enjoy any ‘job security’ similar to those enjoyed by those holding similar positions in other statutory bodies or judiciary. 

- M G Warrier 

Another dynastic legacy

..............As long as banks remain under dominant government ownership, politicians desperate for re-election will be tempted to go down this path, ignoring the long-term damage to the nation. As India looks set to end the dominance of the Nehru-Gandhi dynasty in politics, it is time to end the legacy of government dominance of the banking sector bequeathed to the country by the former prime minister Indira Gandhi. Otherwise, the broken credit transmission mechanism in a country that is still very much dependent...........

Finmin turns down RBI's proposal to divide CMD's post in PSBs

.........Rejecting the RBI's proposal to restructure the board of PSU banks, the Finance Ministry in a communication to RBI Governor Raghuram Rajan said "the board is headed by CMD (but that) does not mean that CMD enjoys absolute power and the board of the bank is subservient to CMD".............

Anil Kumar Yadav obtains first class Masters Degree in Nepali

VITALINFO  on behalf of all its readers extends heartiest congratulations to Shri Yadav.

VITALINFO : come back - welcome back !! - Prakash Bakshi


Dear Mangesh ji

Its once again pleasant mornings after an unscheduled break - and thank you so much for coming back. Having seen many re-locations I can understand the pangs in even getting back to usual 'official' work, but to come back with such a 'totally voluntary service' lifts you far above common bankers that we are. Thanks, and welcome back.

- Prakash Bakshi


Really happy to see you back again. This reflects on your commitment, involvement, love for learning  helping others to learn and making the circle of friends bigger and bigger. This revival of life for Vital Information adds more value  as if  some value  lost is regained. Hope the chain will not be broken and you will continue to serve and satisfy yourself and others as well. May God bless you Always and in All Ways. With regards, 
- Dr.T.V.Gopalakrishnan

K(now) Y(our) C(haos)


Perhaps many are unaware that the SBI no longer holds the AADHAR in the list of eligible Ids for opening a bank account. They are now asking their prospective clients to get the ration card, telephone bill, electricity bill etc. In fact, a couple of years in a discussion on KYC, I narrated the experience of a retired CGM of RBI with the SBI when he could not find acceptance of the IDs for his wife as a joint account holder! It was scripted in an article in the HBL both by me and the victim - Dr TV Gopalakrishnan. Bank branches have their own views of looking at KYC with due endorsement from their bosses. 
- Yerram Raju


When the ex-Governor of RBI himself has faced difficulties in opening a bank account, less said is better about the blind application of the guidelines on KYC norms for opening of bank accounts and carrying out of financial transactions ! 
- Rajappan Nair

Obituary

I regret to inform the sad demise of Shri Pious Miranda on 5th April 2014 at Andheri, Mumbai. He had retired as Assistant Manager from erstwhile Byculla Office. He was aged 73. He was a very helpful and genial person, and had a smiling face. May his soul rest in peace.

- S.Viswanathan

GS Sandhu - Making a propitious start

............his challenge will be to use this goodwill to sort out the current mess in the banking sector without ruffling too many feathers. His appointment has come at a time when the banking sector is reeling under huge bad loans and the Reserve Bank of India is looking at bringing in more players in the sector by issuing licences on tap. "We will try to put in place improved systems so that there is better corporate governance and non-performing assets are reduced. All other issues that are being discussed will be carried forward. We will see what more we can do to make banks contribute more to the growth of the economy," ........



NABARD's Untenable Step on Primary Agricultural Credit Societies

........It is this stance of NABARD, more than the BC concept, which stands exposed for its legal and constitutional impropriety. RBI/NABARD may enjoy certain privileges over state governments on regulatory matters, especially pertaining to cooperative banks. The rights of the states and the cooperatives, however, cannot be ignored when it comes to issues that affect the basic character of the cooperatives as member-owned bodies. Even the transparency of the process adopted by NABARD is under a cloud as it has not ............

Playing is paying, a career in sports

..........Footballer and RBI employee, Rolfred Coutinho agrees, "Iam glad to be a part of this prestigious institution. It's like killing two birds with one stone as Iam able to follow my dream and at the sametime create a secure future."

KC Land & Fin to meet RBI officials for banking permit

.............As reported in certain sections of media that RBI believes that differentiated banking licence will be more appropriate for some of the private players aspiring to set up banks in the country. Therefore, granting licence to operate on regional level also suits us.......................

Soon, technology that can ‘dissolve’ stolen credit cards

..............The materials are special polymers designed to quickly and completely melt away when a trigger is activated. It’s a fairly new field of study and Montazami said he’s making progress. The research team he’s leading, for example, is developing degradable polymer composite materials that are suitable platforms for electronic components. ...........

Read - FPJ

RBI asks banks to make credit card interest payment easier for users

........This is the first time the regulator has addressed the issue of credit card charges and this follows RBI’s recent instructions on waiver of pre-payment charges on floating-rate consumer loans and removal of penalty for non-maintenance of minimum balance in savings deposit accounts.......

Banks asked to make credit card charges "reasonable"

........."RBI has told us not to levy finance charges on outstanding credit card balances till the next billing date. So far, cardholders had to pay interest on credit card dues at the expiry of the due date. But this will offer them a few more interest free days. We are revising our practice accordingly," ..................

High Court fiat to RBI on Amanath Bank

........Assistant Solicitor General Kalyan Basavaraj in his memo to the Court submitted that the Union department of Finance had communicated that it had no objection for transfer of assets and liabilities of Amanath bank to Canara bank. “It is for the RBI to take action in this regard by following the Banking Regulation Act, 1949,” .............

India needs a competitive banking industry

........What this means is that the question of allowing new entities into the Indian banking market is intimately linked with the larger issue of banking structure. India has traditionally encouraged a range of banking institutions to provide credit to a growing economy even while commercial banks were at the centre of the strategy. Much has changed since then. The old development banks offering project finance have disappeared while...............

IDFC’s Lall says to start banking with branches in India and in Bharat

............As an NBFC (non-banking financial company), we have been allowed to provide only narrow suite of products to these clients. As we become a bank, we will have the opportunity to provide a range of products to our existing clients such as cash management, foreign exchange services etc. So this will diversify our sources of revenue, reduce our dependence on term lending, and as we seek to develop our depository franchise we will necessarily have to engage with retail clients. Financial inclusion will also be a focus area for us...........

Ethnic flavour: SBH to be chief banker to new Telangana state

........State Bank of Hyderabad (SBH), the only bank that owes its origins to the erstwhile Hyderabad State, is all set to become the principal banker to the new State that will combine 10 districts. “We are the lead bank in seven districts of Telangana region and its is logical that we will be main banker and convener to the State Level Bankers’ Committee (SLBC), to be formed immediately after the appointed date of June 2,’’ .................

Bank Unions protest against RBI's decision to give new banking licence

....."It is strange that even though the Standing Committee on Finance consisting of all major political parties has unanimously given its recommendations against the banking licenses at this juncture, the RBI is going ahead in their anxiety to appease the corporates. What our country needs strengthening of public sector Banks and not opening up banking sector to private players whose tract record is also not appreciable," ........

Monday, April 7, 2014

lndian Banking - Reform or Perish : M.G.Warrier

.......Even when the Reserve Bank of India (RBI) came out with the discussion paper on the issue of new bank licenses, it was known that the idea of setting up some more private sector banks was loaded with compulsions much beyond the governmentfs stated intention to give a greater role for private sector in banking to promote financial inclusion and reduce governmentfs financial commitments for running banks. The role so far played........... 

KYC norms need a relook: RBI chief

.........According to media reports, D. Subbarao faced problems opening a bank account in Hyderabad, where he has settled down post-retirement, as he could not provide proof of residence. Ironical as it may sound, it was Dr. Subbarao who made KYC (know-your-customer) norms for opening bank accounts and other financial transactions stringent.................

RBI Firm on Scrapping Pre-payment Penalty

........“The philosophy of not charging prepayment penalty on floating home loan account should be mutatis mutandis applied to other floating retail loan,” said AC Mahajan, chairman of Banking Codes and Standard Board of India. “If a customer is unable to maintain minimum account, banks should migrate such accounts to basic banking accounts, where they phase out value-added services,” said Mahajan.

Read - ET

Minimum balance: Better to maintain than risk high fees

...........So as banks suggest, the charges that you may have to pay for the bank’s services may be more than the penalty and hence it may be useful to still maintain the minimum balance requirement in the account and not become a habitual offender. Not to forget that your saving’s bank account earns you an interest ..................

Thirsty, hungry and sick - Dr.Subir Gokarn

.........On others, most particularly on the agricultural productivity front, even intense efforts at adaptation still leave the continent - and, presumably, the subcontinent - extremely vulnerable, with the risks only increasing over time. Clearly, these are issues that will become increasingly central to the overall economic policy debate.


VITALINFO - The mythical Phoenix

DEAR MANGESH,

It is indeed a great feeling to see and feel that your brainchild VITALINFO  has come back. As I did the forecast sometime back that VITALINFO will re-emerge and fly again like the mythical Phoenix, I am doubly happy that you have indeed made it come true. I am sure that thousands of your followers across the country and even in foreign shores are feeling the same joy and happiness. Many kudos to you and I wish that your endeavours will go on achieving many more milestones in days to come.

LONG LIVE VITALINFO !!!!!!!!!!!!!!!!!!!!!

- Prabal  Sen, KOLKATA

Comparative Facts About DA in Banks Vs Central Government - A Wake Up Call for UFBU

.............We must also remember that the central government staff enjoy stagnation-free running scale of pay, throughout their career.  Bank staff reach their stagnation too early in their life – many of them before they attain 40 years of age.  This is a great injustice to the bank staff, considering the fact that as one gains more knowledge, skills and experience as one moves forward in the organisation, his salary does not change and he gets stuck at a position for decades.......

Read.........

DEAP Shock - Obituary


It is with great sorrow that I am informing you that Dr. N.A.Mujumdar, former Principal Adviser DEAP passed away in the early hours of April 6, 2014.The family is waiting for his son to come from the US. May his soul rest in peace.


- Dr.S.S.Tarapore
(forwarded by K.U.B.Rao)


Dr.Mujumdar served RBI for over three and a half decades and retired  as Principal Adviser in charge of the prestigious Credit Planning Cell, considered as the RBI's Brains Trust.  Dr.Mujumdar was an authority on Agricultural Economics and was  the Editor of the Indian Journal of Agricultural Economics and the Honorary Professor at the Society for Development Studies. He was Lecturer in the highly respected School of Economics of the University of Bombay. The I.M.F appointed him as Adviser to the five Central Banks of Zambia, Mauritius, Belize and Cambodia. He is author of a number of books including two volumes on Indian Agriculture. His latest book, released only six months ago, is "India’s New Development Agenda." He had to his credit a number of seminal articles published in the Economic and Political Weekly. He had a wide circle of friends, admirers and students. 
- P.P.Ramachandran

Raghuram Rajan may face showdown if Narendra Modi comes to power

........Strategists in Modi’s Bharatiya Janata Party (BJP), confident that his jobs-first policy pitch will secure a strong voter mandate, suggest that they would prefer to have one of their own at the helm of the RBI. That sets the stage for a confrontation with Rajan, who since being appointed last September has enjoyed an unusually smooth ride in a country where governments often treat the RBI as a punchbag for their own policy failings....................

Proposal to club wages with basic pay rejected; trade unions to move Election Commission

Trade unions will approach the Election Commission against the government decision to reject the proposal to club allowances with basic pay for PF deductions.............

RBI to issue Rs 5 coins on Acharya Tulsi birth centenary

Reserve Bank will shortly issue Rs 5 coins to commemorate the birth centenary of Acharya Tulsi.  "The Government of India has minted the above mentioned coins which the Reserve Bank of India will shortly put into circulation," ...........


Keep it down

..........That is why the Reserve Bank of India's (RBI's) failure to prevent the rupee from appreciating (by buying up enough dollars) in recent weeks has been disconcerting. The RBI governor said the other day that the rupee would be too strong if it climbed to 55 against the dollar - the level that prevailed before the currency slide began a year ago. One wishes he had put the bar lower. More than one ............

Manmohan Singh the ‘reluctant’ politician

Politics was never his cup of tea. But former prime minister late P.V. Narasimha Rao had closely studied Manmohan Singh’s track record as the Reserve Bank of India governor and as the deputy chairperson of the Planning Commission and was convinced that Manmohan was indeed the man he needed to change the form and substance of Indian economy – lock, stock and barrel. In fact, when word first reached Manmohan that the ‘PM’ had included him on his list of cabinet ministers and that he wanted him to be the nation’s next finance minister, he ignored it as some kind of a joke making its rounds in the corridors of South Block..........

Managing or destroying wealth?

...........So, here is what we need to do to prevent consumers being taken for a ride, especially by banks. The regulators need to approve fewer and simpler products. They need to regulate financial advice by banks in all its forms. Finally, banks need to be put under the direct supervision of the RBI. Failing that, the rules that govern banking ombudsmen must be modernised, making them applicable to all "services" sold irrespective of regulatory domain - and there should also be severe penalties attached. Neither customers nor financial services.............

Merchanting needs more RBI realism

...........Instructions to put the names of merchant traders in a caution list where the dues reach five per cent of their annual export earnings is too harsh -- Indian exporters placed in a similar position are not subject to such treatment. RBI seems to treat merchant traders with more suspicion than necessary. A more pertinent issue is that in these matters, .......