Need to move an Interlocutory Application

Dear Parab, 

With the grace of God life is ok. LIC Pensioners letter dt 12/4/2014 is addressed to present CJI whose tenure will be over by 27-04-2014 when Justice Lodha will assume charge as CJI. I do not expect any action on this letter. What action we should take for our pending issue of "pension updation" depends on what the Government has communicated to the RBI. I do not find exact text of this communication anywhere, not even in the latest Hitguj dt 15/4/2014. Is it possible to send the exact copy of full text of the above communication or copy of such communication has not been handed over the United Forum? If the RBI/GOI have not parted with the said communication, it will be necessary to move an Interlocutory Application (in Writ Petition No. 2403 of 2009 between AIRBREA, Mumbai and RBI & Anr, pending before the Bombay High Court,) inter alia, seeking direction for production of the said communication, as it has immediate relevance to the pending issues before Hon'ble Bombay High Court. This will also activate the case, where it can be shown how injustice is perpetuated against the pensioners by side tracking these issues by the RBI/GOI. Please discuss with colleagues and consider further action, since the FORUM has already rejected what is being offered by the RBI/GOI. 

Please also keep the following principles in mind: 

i.  ".....emolutions should not be seriously  out of line with those extended to Central Government

employees, or out of step with those paid to commercial banks." (para 29 -- chapter on # Special Position of the RBI as the Central Bank of the Country - the National Industrial Tribunal (Bank Disputes) Desai Tribunal - Former Chief Jusice Gujarat High Court = 1962.# 

ii. No staff or officer (serving or retired) of the RBI shall get any salary, emoluments, or other terms and conditions which is or are less favourable than to which he is entitled immediately before "cut off date" which the Central Board may approve for migrating to the proposal of the Government to RBI in the communication, the full text of which is not disclosed to the FORUM. {This is based on the principles in Sec. 54AA of RBI Act, 1934 as well as the IDBI Act, UTI Act, NABARD Act, NHB Act, etc etc,}

With regards, 

- M. A. Batki

Dear Shri Batki Sahab, 

Many thanks for your kind expressions. Yes I do agree with you that we have to necessarily observe external relativity (as also internal relativity) in the matters of emoluments as also monthly pension. I am only afraid that the the MoF is taking our pound of flesh by not giving equitable  treatment to us. Rather, they are giving step-motherly treatment to us. Unlike the Bank, one day we have to take on MoF  and knock the doors of justice for our demands are genuine.  Further, while attempting  to bring the pending Writ Petition on board, MoF made tall statement that GOI exchequer  is loser  on account of payment of revised pension to pre 1-11-1997 retirees. This shows their hidden agenda.  The pension fund of the Bank is to the tune of Rs. 8939.89 crores as per  the last closing  balance of the Bank. It is our fund and not that of MoF. Intention to bring this point to your kind notice is that MoF is totally prejudiced against us. As the Bank failed to defend, we have to take on them. I am thankful to you for giving your kind consent for sharing your views with RBItes. 

Hope RBItes note your views seriously.

With kind regards, 

- L.R.Parab

Discrimination amongst retirees neither just nor equitable

My View on "'Pay revision' and 'Pension updation' two sides of...": 

Shri A. Chandramouliswaran Sir would like some clarification- whether pay and pension revision should be in 'consonance' with GOI, once in 10 years.Otherwise, it would not be possible to ensure that all pensioners who have retired in the same grade but at different points of time, draw the same quantum of pension. I try to clarify /submit to the best of my knowledge. A letter published in the FPJ dated 05-10-2013 (reproduced) reflects the present/actual -pension drawn - position of -Civil-pensioners retired at different points of time.{ Defence pensioners are getting / going to get-once the formalities are complete effective from this month of April, 2014, OROP-same rank same pension depending on length of service in the same grade/rank etc} Unrectified pension anomaly-GOI There is an issue related to government pensioners that remains unresolved for over a decade: government pensioners not getting One Rank One Pension (OROP) based on length of qualifying service etc. This is a reasonable demand, as majority of the pre-2006 pensioners are living in low dignity compared to post-2006 pensioners in the midst of similar conditions of spiraling prices and skyrocketing inflation. Pre- 2006 pensioners have been granted pension as per the fitment formula – not less than 50% of the revised ( 2006) minimum pay and grade pay relevant to the scale of pay that the employee has retired (family pensioners- 30 percent). To mention by way of a single illustration : a pensioner who retired between Jan 1 , 1996 and December 31,2005 at the maximum of the scale corresponding to the 2006 scale of PB4: Rs 37000 to Rs 67000 plus grade pay of Rs 10000 is assured of Rs 27350 in pension and a family pension of Rs. 16410 as per fitment, as against Rs 38,500 and Rs 23,100 respectively drawn by a post 2006 retiree at the end scale- at maximum.

This kind of discrimination amongst retirees is neither just nor equitable. Such anomalies should be addressed at the very earliest. Kindly see below -added to the above letter in order to make the point clearer. 5th CPC revision in GOI :The fixation of pension was subject to the ' provision, in no case, shall be lower than 50% of the revised 1996 pay relevant to the scale of pay that the employee had retired. IF THE ABOVE MENTIONED PROVISO -NOT LESS THAN 50%..granted to old pensioners was not in the fitment formula : 

(A)The basic pension of Shri K. Ganesh, my neighbour, a pensioner retired in 1988 at the maximum in the 4th CPC scale-01-01-1986 (S-29 scale : the same relevant 2006 quoted in the letter : Rs.5900--Rs.7300) would have been Rs.7300/2=Rs.3650. He got pension revision as per 5th CPC(1996) and subsequently, in 2008, he got pension revision as per 6th CPC(2006). HIS revised basic pension is Rs.27350/- .He is not 'rotting' at the basic pension of Rs.3650/- (Although the basic pension of 'old' 1997, Nov. pay scales- RBI retirees and 2002, Nov. pay scales -RBI retirees is remaining unchanged/not revised but not 'rotting' as they get 228.96% and 144.54% dearness relief respectively and those retired in 2007, Nov. pay scales get 99.90% DR. 

(B)Shri M.P.Kulkarni retired in 1998 at the maximum in the 5th CPC-01-01-1996 (the same S-29 scale)---Rs.18400-Rs22400. His basic has been revised to Rs.27350/-.

A note posted in VITALINFO-'OROP@2007: Loud but logical' may be seen. 

- R.G.Nakhate

If it is really so than Association/Unions should drop demand of pension updation. 

1. Wage revision once is 5 years is always better compare to once in 10 years that too depends on the mercy of Govt. 

2.Pension updation in Govt. Of India is not statutory in nature and a result of a executive order(notification), What if govt. stops updating the pension for its employees in future.

3. As on date some sizable allowances qualify for DA in Bank , what if these are excluded from the definition of Pay.It will result in reduction in salary of existing employees.

4. In commercial banks only non optees paid the price of option i.e. refund of employers share with interest and some extra money as trade off. Why should all employees pay the price for few non optees.

5. There may be a immediate decrease in pension amount if some allowances are left out.How wise will it be to take less pension today to get some benefit after 10 years.

6. Will it be possible to convince existing retirees to opt for a lesser pension in lieu of updation and present employees to give away their benefits which is going to affect their payments of loan EMI's, expenses of education of children etc.

7. Those joined bank after January 2012 has nothing to do with both option and updation. Why they should sacrifice their present pay and perqs for others?

This issue reached a stage where it will lead to loss to present employees to benefit retirees. It is best in the interest of all to drop this demand immediately and concentrate on revision of pay and perqs which are already due from November 2012. 

- Anonymous

LEAVE TRAVEL CONCESSION/HOME TRAVEL CONCESSION BAN ON VISIT TO OVERSEAS CENTERS AS PART OF LTC/HTC

.......Though these revised guidelines have been sent at the instance of Department of Financial Services, Government of India, it is in total violation of the spirit of bipartism. We have sent our protest letter to IBA requesting them to withdraw the revised guidelines, as we have already demanded the review of the Leave Travel Concession scheme........ 

Read..........

DEMAND FOR FIVE DAY WORKING WEEK IN BANKING INDUSTRY

......Our regulator, the RBI as well as Central and most of the State Govt. offices work only for five days and few have 2nd& 4th  Saturdays off. We humbly submit that the experience in the banking industry clearly establishes that by keeping the branches open for extended hours or all days does not lead to increase in business or accretion of new business. In 2009, when there was aggressiveness from new generation private sector banks for business, all the banks introduced 7 day banking and 8 to 8 banking. Within a year, all the banks wound up this experiment as there was low patronage and the cost to benefit ratio was unfavorable. With introduction of so many alternate channels of delivery due to IT initiatives, like ATMs, Internet banking, Mobile banking etc., majority of the customers in the metropolis, urban and semi urban areas have migrated to these for their normal banking needs..........

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That indelible identity

.........Manmohan was then the governor of the Reserve Bank of India. As soon as he learnt of the government’s decision on the commission’s recommendations, he flew to Delhi and met the prime minister. I had it from the most authoritative source that he told Indira Gandhi that the government’s decision would do more harm to the country than good; those states facing the most acute financial crunch because of the denial of the commission’s recommendation, funds for them, would be forced to come to the RBI and they would ask for more overdrafts. The RBI, taking account of the circumstances, would be morally bound to print notes and hand them over to the states in distress, thus ...........

Read - The Telegraph

Regulating capital account - some thoughts : H.R.Khan

.......In a capital scarce economy like ours, it is perhaps logical that there should be close monitoring of out-bound investments. The case for overseas direct investment (ODI) rests on permitting Indian entrepreneurs to exploit avenues for profitable investment abroad. With this in view, we have progressively liberalized the regulatory regime for ODI. But as in case of any investment, ODI must also yield returns over time. Notwithstanding not very satisfactory experience so far in respect of inflow of income from our investments abroad, an investor friendly regulatory regime continues in place. Recent changes in the ODI regulations no way seeks to dent...........

Read.......

RBI group wants use of Public Key Infrastructure for safe payment system

......As per the final report submitted by the group, all banks’ internet banking applications should mandatorily create authentication environment for password-based two-factor authentication as well as PKI-based system for authentication and transaction verification in online banking transaction. Besides that in online banking transactions, banks should provide the option to its customers for enabling PKI for its online banking transactions as optional feature for all customers. The group has also recommended that ..........

Read | Business Standard

Ways to Meet Basel III Capital Norms

.........The GoI could also attempt taking up the arduous task of improving investor perception of PSBs. Possibly, this could be achieved by making some structural changes in the process of making senior-level appointments at the PSBs and aligning the incentives of bank staff. Further, developing a framework to ensure timely resolution of problems concerning large accounts (not necessarily overdue accounts) and improving credit discipline among..............

Read - ET

SBI says too early to introduce differential bank licences here

........However, SBI said in the report, there are certain key issues regarding priority sector lending and high concentration risk that need to be resolved before differentiated licences are given out. Differentiated licences could impact priority sector lending, as specialised institutions may not have to meet the extant targets for such lending, which is otherwise applicable to all commercial banks, it said. Also, differential banking licences in the area of corporate banking and infrastructure banking would need far more developed financial markets, it said............

Read - FPJ

Bandhan Financial Services leads push to get poor to banks

........“The issue is, how I can reduce the lending rate for the poor?” Ghosh said. “Reaching them is expensive. Bandhan is paying a large amount to banks to borrow the money we lend to poor people. The cost of funds which gets reduced and that benefit I can pass on to my customers.”..........

Read - Mint

RBI asks bank boards to review BCs operations, payments

..........While issuing guidelines for commercial banks to scale up the BC model, RBI said that insistence by banks on BCs to fully prefund their accounts even after considerably long business relationship has become a major impediment in scaling up operations of BCs. Also, delayed payment of remuneration of BCs and passing on the responsibility of insuring cash to BCs have been proving to be irritants in increasing the usage in large number of bank accounts opened. RBI said that boards of banks must review the operations of BCs ...........

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Sebi, RBI ready for market shocks on day of election results

 India’s financial regulators and stock exchanges have formed a special committee to ensure that sharp swings in financial markets on the day the results of the ongoing general elections come out (Friday, 16 May) do not cause any systemic or liquidity risks. The Reserve Bank of India (RBI) and the Securities and Exchange Board of India (Sebi) will jointly monitor and review risk management systems for the country’s financial markets through special stress tests for equity, currency and bond markets even as the results come out, according to two people familiar with the matter who asked not to be identified.............

Read - Mint

RBI may set new pricing norms for state debt in phases

.........Holders of state debt - which are largely made up of banks - could be pushed to mark them to market prices in several stages as opposed to in one go, the officials said, although they noted the RBI has not yet decided whether it will implement the proposal. The officials added the central bank is also considering adopting a uniform pricing method used for government bonds to sell state debt. Under this method,.........

Read | Business Standard

RBI panel suggests FRA to deal with failing institutions

.........The central bank constituted the working group in January 2013 under the chairmanship of then RBI Deputy Governor Anand Sinha, with Economic Affairs Secretary Arvind Mayaram as co-chairperson. The group recommended that the FRA can be set up by either converting the Deposit Insurance and Credit Guarantee Corporation (DICGC) or creating a new entity that will subsume the DICGC. "The mandate of FRA will be to resolve failed financial institutions and FMIs (other than those owned and operated by RBI) along with providing deposit insurance and protection to insurance policy holders and investors/clients within limits, if required at the resolution stage," the report said. It said with a view to detect problems ............

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Uncertain regulatory environment hurts gold loans in India

........“The adverse impact on financial flexibility following RBI regulations on private placement of debentures, revised RBI securitisation guidelines, removal of priority sector tag on loans backed by receivables of gold loan and cautious lender approach, have led to an uncertain regulatory environment that is hurting gold loans,'' said Vibha Batra at Icra Ratings. However, an analysis on the gold loan market in India has noted that the sector is set to grow at a compounded annual growth rate of 26.33% over the period 2012-2016. One of the key factors.............

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Banker Who Cares for Kids with Cancer

......... Jaideep Khanna, the 49-year-old country head of British bank Barclays, is on a mission to raise funds for the organisation, and at the same time quench his thirst for some adventure and stay fit. There are many not-for-profit organisations that fund cancer treatment, but this one provides accommodation for the family of those kids being treated for cancer..............

Read - ET

G. Gopalakrishna takes voluntary retirement from RBI

Mumbai: G. Gopalakrishna, the senior-most executive director at the Reserve Bank of India (RBI), has taken voluntary retirement to take charge as director of the Centre for Advanced Financial Research and Learning (Caferal), RBI said on Monday........

Read - Mint

Off the radar, FinMin gets a key adviser

Even while the Bharatiya Janata Party has moved the Election Commission to stop the appointment of the Lokpal and the next Army Chief midway through the election, the Centre has made a key appointment in the Finance Ministry.  Ila Patnaik, RBI Chair Professor at the National Institute of Public Finance and Policy and columnist, has been appointed Principal Economic Adviser, a post vacant since November 2013.............

Read - The Hindu

Political over-reach by EC, RBI Governor

........I feel strongly that Governor, R.B.I. should immediately withdraw the permission so as not to create unnecessary lack of confidence and want of rapport between R.B.I. and the new government. Already there is a bias against public sector - this is clear from the fact none of major political parties though at each other's throat in their election offensive has even remotely praised public sector; rather all are promising to encourage private sector - ironically forgetting compulsion for socialism highlighted in the preamble to our Constitution............

Read - Kashmir Times

Will NaMo And Raghuram Rajan Work Together?

......While other senior market analysts also predict a showdown between NaMo and Rajan once (if) the former comes to power, the BJP leader may also want to consider that the confidence of foreign investors in Indian markets has shown a huge upsurge since Rajan has taken charge. Removing the governor may cause an ill-timed turmoil for a BJP that want to stabilize itself at the center. While the RBI Act of 1934 certainly gives the government the ability to retain or remove Rajan – “The central government may remove from office the governor, a deputy governor or any other director” – it may also be considered that no government has removed an RBI governor in the 80 years since the central bank was instituted...........

Read.....

Three-in-one tribute to a legend

My View on  "Dr N A Mujumdar: In Memoriam : S.S.Tarapore": 

This three-in-one tribute to a legend may not have had a parallel. The essay depicts the qualities of head and heart of the departed soul, gives an account of how he reached the commanding position where he stayed for decades and more important, gives an account of how Dr Mujumdar conducted himself in his personal and official life in some detail for those who may aspire to follow his (Dr N A Mujumdar's) path. The closeness of Tarapore to the person has made this elucidation possible. Society of economists, analysts, scholars and students will immensely benefit from this article. 

- M G Warrier, Thiruvananthapuram

Fraudulent mails in RBI's name continue

.......The RBI has rubbished existence of such a committee, and its spokesperson Alpana Killawala confirmed to TOI that the mail was fraudulent and said the RBI has been issuing public notices communicating to people not to indulge in any communication or sharing of details to such mails. However, two months later, a new mail, seen as a continuation to the first one, has reached lakhs of people..........

Read - TOI

Silence on Next Date of Wage Revision - Will UFBU Perish Like MMS Government ?

....  The next meeting should have happened by now  (middle of April 2014 has already passed) but there are not even any hints for the same.  However, bankers are as helpless under these leaders as common Indian was during last five years under Congress regime.   At last, general public in India has started hoping that their will be fresh set of government - may he Modi or somebody else. They are sure that they will get............

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'Pay revision' and 'Pension updation' two sides of one coin

Even if the RBI circular issued in the year 1992 promised periodical pension revision, the rules relating to such revision have to be on the lines of revision in Government for the simple reason that our main argument in support of pension updation is that this has been allowed by the recommendations of the Pay Commission and accepted by the Government and our Pension Scheme is on the lines of the Government Scheme. Benefits of pension updation given by the RBI (thanks to Dr Jalan) to those who had retired prior to 1997 have not been withdrawn as the circular of the Bank withdrawing it was initially stayed by the Bombay High Court and subsequently in its judgement, I believe, has also been struck down. (I hope I am correct on the facts). Many have been saying that 'Pay revision' and 'Pension updation' cannot be linked as these are two separate matters. I have argued in my earlier mails to the Newsletter that they cannot be delinked and the periodicity of both have to be the same which is presently 10 years since otherwise it would not be possible to ensure that all pensioners, who have retired in the same grade but at different points of time, draw the same quantum of pension. In spite of my specific appeal to the knowledgeable community of MT's Newsletter readers to let me know whether there is any flaw in my argument, no one, to the best of my information, has so far touched on this point. 

- A.Chandramouliswaran

Not prudent to knock the doors of court

My View on PRR invokes RTI in 'public interest'
The views expressed by the "Anonymous" are his right and graceful vent for and on behalf of serving employees, majority of whom are working under stress and strain. A junior colleague of mine in 2000, now occupying a senior position tells me" Sir, you are lucky; retired, free from office tension, pressure of work - too much these days, no supporting staff . Nothing is secret about remuneration, perks etc. in the computer age and under the RTI. The salary has gone up four/five folds and the number of persons suffering from hyper tension has doubled. Expectations of higher ups are very high. We are not super humans. Can' t say, whether "I" can live a septuagenarian like you, Sir !" I tried to pacify him that the God grant him and members of his family health  and happiness, May he  jivet sharadh shatam. If the statistics are worthy of belief , see the data of (depleting) RBI staff strength , which the "Anonymous" laments about.

Year      Class I      Class III      Class IV         Total

1985        6358         19645         8674    =      34677

                                                             

2013        8148           3588         5713    =      17449 *

The staff strength of  has reduced -a 'geometrical' regression during  last 28 - 30 years. There has been ' tremendous ' man power growth else where in the economy during the same period. The number of bank branches, both public and private banks, their staff strength has nearly doubled in the last two decades. The total staff strength of RBI as on 30-06-2013 was 17449  (* RBI Annual Report). The number of pensioners and family pensioners as on 30-06-2012 was 16250 and 4943 respectively, a total of 21193 (Shri L.R.Parab in the "Retirees' HITGUJ"). The figures by themselves undisputably disclose what the "Anonymous" intends (to)/say(s). Also, it is a fact to be acknowledged that there has been much change, reduction in some functions,(a few functions have vanished), nature of work, off site inspections, procedural aspects etc. necessitating reduction in staff strength. But,  do not warrant ' depletion ' as alarming as has been seen/observed in RBI. It is upto you, the Anonymous to direct "XYZ'  to initiate action to find a lasting solution for depleting staff strength. I am sure more than 90% of, if not all, the pensioners appreciate the apprehensions of the Anonymous. They are equally baffled /perturbed with the 'conditions' of GOI. RBI pensioners have been fighting for updation of pension for more than a decade .The Forum has been giving solid support to the pensioners' cause for last four/ five years. The Forum has been instrumental to (the idea) hold 'silent morchas' etc.at Board meets. The pensioners want that the issue of updation of their pension which is piercing into their life-span be settled amicably by negotiations/by dialogue. The issues involved,  their pros and cons, need to be deliberated at length. Not necessarily by sacrificing  wage revision once in 5 years as is hitherto vogue in the industry or perks etc. Who stops GOI to merge DA/DR with basic pay/pension once the percentage of DA/DR breaches 50% ? GOI DA/DR is 100% from 01-01-2014. It has breached 50% twice. GOI has already recommended merger of DA/DR to 7th CPC. The GOI employees and pensioners are hopeful of achieving the same within a month after formation of new Government at the Centre. The merger of DA/DR almost amounts pay /pension revision mid two CPCs excepting benefit of fitment weight-age. The merger has some other benefits too, no need to go into details. The petition filed by three retirees (Retired Employees Association) in Bombay High Court is pending _ may get a 'victory' but unlikely before another 6-7 years/  may be by 2020. LIC pensioners have been fighting for pension updation and 100% DA neutralisation for pre 1997, August pensioners for last 15 years. Despite the 2010 judgement of Rajasthan High Court in favour of pensioners, and the Supreme court and other courts petitions/SLPs flied have upheld the verdict of Rajasthan High court, the fight continues, without tangible finality in sight. (Sorry-I have been repeating  the LIC etc.court cases ..) In sum, it may not be prudent to knock the doors of court at this crucial juncture. 

- R.G.Nakhate

Dearness Allowance Controversy

.........I remind once again, D.A. for central government employees is paid on the aggregate of Basic Pay, Grade Pay and Transport Allowance.  But, bank staff get their D.A. only on their Basic Pay.   So................

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Human Capital in Banks Emerging Challenges

........Banks need to have pool of qualified and potential work force especially at top level not only to lead the team at present but also to meet the future requirements of the organization. Although most PSBs identify succession planning is an important but little has been done in this regard. Banks have already started experiencing the gaps and likely to continue the situation in the ensuing years also. Of late, to tide over the problem, banks have adopted quick promotion system without exposure to leadership grooming, is really a challenge to PSBs. Hence, there is an imminent need to..........

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The flow of money

.......For example, when there is a situation of inflation, i.e, comparative price rise, the central bank may decide to tighten the supply of money by increasing the reserve requirements of the banks and the key interest rates. Tightening the supply of money because what happens during Inflation is that lot of money chases few goods. There is money but with a weak purchasing power. Now, banks will have to pay more towards the central bank which reduces the amount of money in circulation. Such a policy is called a Contractionary Monetary Policy........

Read - Greater Kashmir

Capitalist voice

My View on  "Raghuram Rajan’s tandava spells death for economy": 

Leaving aside the near personal comments against Dr Raghuram Rajan, resorted to, perhaps, to impress the reader about the author’s proximity to Dr Rajan’s earlier employer, let us look at the issues raised. The base rates announced by RBI takes time to make any impact on the deposit/lending rates of banks in India. Economic growth has always been a concern factored in Monetary Policy announcements. Interest rates in India are not comparable to those in developed countries like US where need to manage inflation is not much. RBI is dependent on GOI’s fiscal policy on getting the environment congenial for implementing a Monetary Policy which the central bank considers appropriate. Partly the lament in the article betrays the huge expectations from Dr Rajan about listening to the capitalist voice. Where one can dispute the growth rate in employment, Indian industry, viewed from any other growth parameter has not suffered. Last quarter major companies in India have posted better results. Indian companies, generally, have not been very keen in increasing the numbers on their pay rolls. 

- M.G.Warrier

Intervention difficult when currency falls sharply, says RBI

......In a speech at a recent event at Cape Town, South Africa, Reserve Bank of India's Deputy Governor H R Khan had highlighted the importance of building foreign exchange reserves to deal with sudden outflows. "Intervention in the face of the sharp depreciation is a difficult choice for several reasons, including loss of reserves, particularly in a country like India where the external liabilities far exceed the official reserves," Khan said............

Read - BS

High Rates Will Tame Prices, RBI to Tell Next Govt

The Reserve Bank of India (RBI) will explain to the new government the need to keep inflation under control and why keeping interest rates relatively high may be unavoidable to achieve that, government officials familiar with RBI’s thinking said. Further, RBI, which is in the process of formulating new guidelines for bank licences, was unlikely to allow corporate houses to set up new banks in the near future, the officials said...........

Read - ET

Bank licence: Long wait for corporates likely

..........Though the idea of granting bank licences to corporate groups has not been ruled out, a cautious approach will continue to influence the decision making process in this area. The new government that is to be formed next month will also have to be consulted by the banking regulator before a final view on new bank licences for the corporate sector is taken...........

Read | Business Standard

Finmin Favours Merger of Smaller PSU Banks

.......Mergers in state-run banks have been opposed on the grounds that there are cultural and technological differences in their functioning. In the past, the mergers have not only been opposed by the unions but also by chairmen and executive directors as it will also lead to lesser number of posts available. “The primary concern is the branding issue. There's fierce customer loyalty among smaller banks and if you merge them with a larger bank, then you have to look at what happens to the brand and how customers respond,“.............

Read - ET

'India not yet ready for differentiated banks'

............"The differential banking activity licences issued to RRBs and local area banks (LABs) could achieve limited success which prompted authorities to call for large size banks to go for rapid financial inclusion in a time bound manner." It would be very difficult for a differentiated bank to survive by selling only one or two products..........

Read | Business Standard

RBI wary, not against, corp-backed banks: Sources

.......the big preoccupation of the RBI these days is: how to restructure the banking space? It is not at all looking at junking the Mor committee report. In fact, the Nachiket Mor report is the basis of their discussion. The RBI wants to look at various kinds of banks. All banks need not be universal banks,.............. 

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Banking on the wife

...........The bank has been receiving several calls from men asking for loans for their wives and when the bank staff asks them what they will do with the money, the stock answer is, "She will do something, we have not decided yet. You give the loan first.".........

Read | Business Standard

Foreign stake: HDFC Bank says law can’t apply retrospectively

Private sector lender HDFC Bank Ltd. on Monday said parent Housing Development Finance Corp. Ltd. (HDFC), which is majority-owned by foreign institutional investors (FIIs), shouldn’t be considered as foreign because changes in the law defining overseas stake in a firm cannot apply retrospectively. The remarks come in the backdrop of Reserve Bank of India (RBI) banning foreign investors from picking up more shares in HDFC Bank.............

Read - Mint

Can't allow non-compete clause in pharma FDI: RBI

........."The extant FDI policy for pharmaceutical sector has since been reviewed and it has now been decided with immediate effect that the existing policy would continue with the condition that 'non-compete' clause would not be allowed except in special circumstances with the approval of the Foreign Investment Promotion Board (FIPB) of the Government of India," ...........

Read | Business Standard

The safety pin

........The additional security measure is a part of global standards for inter-operation of integrated circuit cards at the point-of-sale terminals for authenticating credit card transactions. The microchip stores the information of the card holder and the PIN comes in an encrypted form known only to the card holder.............

Read - FE

HDFC Bank sets Guinness World Record

HDFC Bank has created a new Guiness World Record. The Annual Blood Donation Drive organised by the bank in December 2013 has been recognised as the largest effort of its kind across the globe. "The largest blood donation (multiple venues) involved 61,902 participants and was achieved by HDFC Bank Ltd. (India), with 1,115 blood donation camps held across 709 locations in India on December 6, 2013," states the official citation from Guiness World Record............

Read | Business Standard

Dr N A Mujumdar: In Memoriam : S.S.Tarapore

...........Governors M Narasimham, I G Patel and Manmohan Singh, all had great respect for his views. Dr Patel and Dr Manmohan Singh would, on occasions, refrain from taking certain measures in deference to the views of Dr Mujumdar, whom they called the ‘ High Priest of Policy.’ The 1981- 82 liquidity bind Commentators today freely talk of a liquidity crunch, the moment there is the slightest measure of monetary tightening. The 1981- 82 liquidity bind was unprecedented. Policy interest rates were raised sharply and stringent liquidity stipulations were prescribed. The money market was tight, rediscounting of bills by the RBI was discontinued and discretionary refinance was severely curtailed. In internal discussions, Dr Mujumdar argued that the monetary tightening could be milder. But once the policy was decided.......

Read - FPJ

Bandhan to start hiring in three months

....Ghosh, however, said it had not yet been finalised how many people would be needed at the senior management level. “It will depend on how many of our existing employees can be upgraded to the senior level for banking operations,” he pointed out. With employee strength of about 13,000, Bandhan is at present gearing up for capacity building down the line through intensive training. It already has eight training centres across the country.......

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The NIF option - Dr.Subir Gokarn

.........From the perspective of the NIF, though, the strategic dimension provides a foundation for the other two aspects. Strategy could be internalised into the structure, thus making it into a National Infrastructure Commission, for instance. Or it could be an external mandate to a more narrowly focused mechanism, combining finance and governance.....

Read | Business Standard

Call for 5-day week for state banks resurfaces

......... "A five-day week is already available in the international banking system. It is also available here - the Reserve Bank of India (RBI), central and state governments, and companies in the public sector work for (only) five days a week. We have been saying it should be introduced in the banking industry. The government had rejected the proposal but we have been pursuing it through UFBU,"...........

Read | Business Standard

Mor panel's financial inclusion report may be put on back burner

.......The committee's suggestion that existing commercial banks be allowed to hold payment banks as subsidiaries is also seen as unviable by RBI and the finance ministry. The ministry believes this might not serve the purpose of financial inclusion, as NBFCs charge very high interest rates and might continue to do so even after being converted into banks. Besides, the ministry also feels.........

Read - BS

Understanding PM Manmohan Singh, a wary leader

......In the run up to this, Singh had faced severe resistance from the finance ministry headed by Pranab Mukherjee to suggestions that Subbarao be given a fresh term. Although rebuffed in the early rounds, Singh held on only to finally approve unilaterally a second term for the governor of India's central bank. A rare case in India's history when the appointment was announced from the PMO and not the finance ministry as it happened later when Raghuram Rajan was chosen to head the RBI............

Read - ET page 18
Read -ET page 19 

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Prayer Meeting for Dr.Mujumdar

The location of the Prayer Meeting for Dr.Mujumdar was the Admar Mutt in Andheri. It was a very solemn occasion. We had an audience of 100 persons.The family had arranged for a pleasing,smiling photograph of Dr.Mujumdar, duly garlanded. The meeting began at 5 p.m with prayers by the younger brother of Dr.Mujumdar--who sang lustily  Ganesh Vandana and several other moving religious verses. He spoke briefly. This was followed by two cute speeches by the two granddaughters of Dr.Mujumdar--which revealed what a loving Grandpa he was.He induced in them a love for books, instilled a sense of discipline. The kids used to go for morning walks with the Grandpa as the walk would end with fresh tender coconut water !. 

Since Sudesh, the son could not attend his message was read out by his sister Mamata--a touching tribute. Mamata spoke after this but could barely control herself. She made a deeply moving speech. Then  we had tributes from Tarapore,Philip Thomas, Vasudevan,Shetty, one lady  and myself. Impressive accounts were given of the intellectual attainments and outstanding personal qualities of Dr.Mujumdar. I also spoke and my speech is given below.  Finally Shri Tarapore released the latest book of Dr.Mujumdar and gave the first copy to Smt.Mujumdar. She spoke a few words praying to the God that in her future janmas too she should have Dr.Mujumdar as her husband. The meeting concluded at 7 p.m. 

- P.P.Ramachandran

PPR's tribute to "Bhishma Pitamaha " of DEAP

It is with considerable trepidation that I stand before you to pay my humble Tribute to the "Bhishma Pitamaha " of  DEAP. We have gathered in such large numbers to mourn the sad demise  on April 6^th of  Dr.N.A.Mujumdar. He was  84 years old. He served in  R B I  for over three and a half decades . He was a distinguished economist whose Ph D thesis from Mumbai University was highly  acclaimed and published as a book titled: Some Problems of Underemployment. He has wide interests in rural issues , monetary and fiscal policies and international issues. He taught at Mumbai University and had the distinction of being awarded the prestigious Nuffield Fellowship at Oxford. On his return to India, he joined the Reserve Bank of India  in 1960 as Research Officer, and retired as Principal Adviser, Department of Economic Analysis and Policy in 1988. He also headed the Monetary Policy Unit--the Brains Trust of the RBI. His services were sought by the International Monetary Fund for secondment to the central banks of five different countries—Zambia, Mauritius, Tanzania, Belize and Cambodia. No single person has had assignments to such a large number of countries. That was Shri.Mujumdar. 

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 is author of a number of books including two volumes on Indian Agriculture. His last book, was " India’s New Development Agenda."--a book   bursting with radical ideas and presenting an incisive analysis of our problems. 

He belonged to an elite group of economists,like Shri.A.G.Chandavarkar, Deena Khatkhate, Dr.K.S.Krishnaswamy, M.Narasimhan, S.S.Tarapore,etc who wrote with authority  seminal articles published in  the legendary “  Economic and Political Weekly ". 

One thing common to Dr.Mujumdar, S.S.Tarapore, A.Vasudevan, S.L.Shetty  and myself is that all of us have the same publishers—Academic Foundation. I got a call  from Shri.Rituraj Kapila, M .D of the Foundation that Dr.Mujumdar’s latest book was in the process of binding. Unfortunately he did not live to see it released. Dr.Mujumdar had a dialogue on his new book with Dr.Uma Kapila ,mother of Rituraj, only two days before his death.The posthumous book is “Reinventing Development Economics: Explorations from the Indian Experiment”. Rituraj  has sent me a copy for review.The book is an attempt at exploring the new aspects of development philosophy. Divided into six broad sections, it addresses the issues of: growth and development, monetary policy, banking policy, fiscal policy, food security and  global environment, with reference to the Indian economy. The underlying main theme of all the articles in the volume is promoting growth which is all-round and inclusive, equitable and above all growth which ultimately leads to the emergence of value-based compassionate society. 

Dr.Mujumdar’s Philosophy of Life is available in this new book.  “One of the ancient scriptures of India, Brahadaranyaka Upanishad enjoins that our life must be guided by the following three “Da -s”. Da-myata, that is control yourself; Da-tta that is give to others; and Da-yadhwam, that is be compassionate. Thus we must practice self-control, charity, and be compassionate. The Bhagawad Gita enjoins us to treat others as you treat yourself . What is good for you is good for others; what is bad for you is bad for others. Learn to rejoice in doing good to all creatures. Inculcating these qualities among individuals will go a long way towards eliminating society’s sicknesses like corruption, improving the quality of life and in general evolving a caring and compassionate society.”  

Our sincere condolences to the family. Their grief is shared by Dr.Mujumdar's wide circle of colleagues, friends and students. We pray that his soul rests in peace. 

-  P.P.Ramachandran 

'Vested interest' in 'Public interest'

My View on  "PRR invokes RTI in 'public interest'": 

There is no logic or rationale for linking pension revision-an issue which has been remaining undecided for decades- and regular wage revision. Having got messed up, let us have a look at both the issues.

Pension revision:

RBI has a funded pension scheme. RBI Pension Regulations when introduced, it was accompanied by an assurance about periodic revision vide RBI circular of March 13, 1992. Even if GOI wants to bring about any change in periodicity of revision of RBI Pension, it is appropriate to allow the present revision(The 1997 revision though under implementation is according to GOI still in dispute) which is overdue even if the periodicity is 10 years.

Wage revision:

Historically, RBI wage revision follows wage revision in banking industry. Current negotiation between IBA and bank unions has not reached any finality. In the present scenario, various components of remuneration package will have to be revised at different intervals. If periodicity of revision of basic pay is to be 10 years instead of the present 5 years, the rise will have to be 30 to 40 percent against the present offer of 10 to 15 per cent. In any case all these should form part of the negotiation of the next wage settlement to be made effective from November 1, 2012 as the earlier settlement expired on October 31, 2012.

Why we are discussing this:

Because, some vested interests in the bureaucracy have successfully confused the thought process of decision-makers. I believe, Dr Raghuram Rajan is capable of independent thinking. 

- M.G.Warrier

Disadvantage of having stubborn 'specialists'

My View on "Payment banks: RBI governor, deputy differ": 

This is one disadvantage of having stubborn 'specialists' at the top of any institution. The Indian financial system has space for several types of institutions to serve different types of needs. This recognition was there, till, perhaps, the beginning of imported reforms circa 1991. The multi-agency system comprising cooperatives, banks in cooperative, private and public sectors and even the traditional money lender besides chit funds and other players which co-existed then were serving divergent needs of urban and rural clientele at that point of time. With reforms the role expectations changed and the focus shifted to strengthening and supporting private sector banks. Private sector banks were interested in the ‘creamy layer’ of the business and that explains their share remaining low in the total banking business. Right approach would be to re-invent the multi-agency system allowing institutions of various categories to grow and function, maintaining the overall health of the financial system. Post Offices and ‘payment banks’ should be allowed to play their role with appropriate regulatory and financial support where necessary. Each unit of any system should not be expected to be independently viable. 

- M.G.Warrier

Raghuram Rajan’s tandava spells death for economy

......When Subbarao was RBI Governor, and followed Yaga Reddy's policy of seeking to emulate Jawaharlal Nehru in destroying domestic industry in India, then Finance Minister Pranab Mukherjee sought to knock some sense into the Central banker. However, because of backing from Prime Minister Manmohan Singh, who has been as dismissive of the travails of domestic industry as he is solicitous of foreign commercial interests, Subbarao refused Pranab Babu's request. Raghuram Rajan too has the backing of the individual who chose him for his current job, Manmohan Singh, which is why he is on his present destructive course. For any rational mind, growth and employment are as important as inflation targeting, which is why it is inexplicable why three successive RBI Governors have focused only on inflation, that too by........

Read - Sunday Guardian

Postal bank test awaits new govt

The high profile spat between the Reserve Bank of India and the finance ministry over converting India’s loss-making 1.54 lakh post offices under India Post into a bank is likely to be one of the challenging issues that the next government will have to handle......

Read - The Telegraph