..............Calling for cross-border cooperation in regulating suppliers, RBI has warned that it would have to go in for higher indigenization if vendors do not adopt 'know your customer' norms while selling. RBI's tough talk will have an impact in the global market as India is the largest producer of currency notes. With 7,647 crore notes printed every year, India generates more than double the notes printed in US and...............
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.
Thursday, April 24, 2014
High Court notice to Reserve Bank of India on religious coins
........The plea said that such coins is like indulging into anti secular actions. “These symbols undermine the secular character, a basic feature of the constitution,” said the advocate appearing for petitioner. In 2010, the plea said the RBI brought into circulation a five rupee coin in celebration of 1,000 years of Brihadeeswara temple in Thanjavur, with its image embossed on it. In 2013, it issued another five rupee coin with the figure of Shri Mata Vaishno Devi Shrine Board embossed on it................
RBI restrictions hit gold flow to Bangalore
................The acute non-availability of gold in the City and other regions is due to RBI restrictions that allow only 40 per cent of the gold imported in the previous year and the extent of gold India usually trades in. India usually consumes 900 tonnes of gold a year, which is 75 tonnes a day. Now, the country is getting less than 300 tonnes. When there is shortage of gold supply,....................
Finmin to Seek 7,000 Crore more for Bank Capitalisation
..........“The initial demand made was for around . 22,000 crore (for all financial institutions), which was pared down by the Planning Commission,” said the official, who is from the finance ministry. According to the official, the ministry will seek the extra amount because of the huge requirement of capital under Basel-III rules. According to the Reserve Bank of India, state-run banks will need about . 4.15 lakh crore – . 1.40-1.50 lakh crore of equity and . 2.65-2.75 lakh crore in nonequity capital – to meet higher capital requirements under Basel III. The RBI has already postponed the local deadline............
Set to enter big league, Bandhan to bank on core competence
.........“Our customers, who are mostly women, are very happy and excited that we bagged a banking licence. They are saying that after we launch the operations, they can come to our branches and avail full-fledged banking services. It means a lot to them,” says Tapas Paul, branch manager at Bandhan’s Nuntia branch in Bagnan..............
How RBI blocked evergreening of overseas loans
...The Reserve Bank of India has been goading banks for faster dfacetection and resolution of bad assets. Now, the regulator seems to have shifted its focus to the overseas subsidiaries and branches of Indian banks that have been evergreening loan accounts to prevent them from turning bad. Once a loan turns bad, a bank needs to set aside money to provide for such a bad loan and this hits its profitability. Evergreening refers to the practice of giving a fresh loan to repay an old loan....
RBI prescribes uniform accounting norms for asset reconstruction firms
...........Referring to booking income, the RBI said yields should be recognised only after fully redeeming the entire principal amount of security receipts and instruments issued to investors. Management fees may be recognised on an accrual basis.........
Public sector banks’ NPAs
..............The banking regulator has recently recognized that every new bank cannot be a universal bank. As for the existing ones, this emphasizes the need for staff specializing in different kinds of businesses. This is all the more necessary when risk management and capital ratios are increasingly being based on models in quantitative finance. Is there a blind reliance on accepting the output of the black box as gospel truth?...............
The messy path to deleveraging
............Rajan recognizes the centrality of trust in this process. “Public confidence in banks and the perception about the legitimacy of things like recapitalizing banks has a lot to do with whether you think the money has gone in the right direction,” said Rajan in his first interview to Mint after taking charge as central bank governor...............
Govt Asks RBI for Ways and Means Advances
The State government is in touch with the Reserve Bank of India (RBI) for securing ‘Ways and Means Advances’ for both Telangana and Residuary Andhra Pradesh states right from the day one of the formation of the two states. This is because the new states should not face any cash crunch for normal administrative works. ‘’The Ways and Means Advances issue is under the consideration of the RBI,” said sources in the finance department. However.........
Would RBI say YES to L&T Finance Plans?
YES Bank and L&T Finance Holdings are independently testing the regulatory waters on what the Reserve Bank of India’s stance could be on a possible merger or a stake purchase by one of the two in the other, said two people familiar with the development. YES Bank chairman MR Srinivasan, who used to be with the central bank, met some officials of the banking regulator to try and get............
Read - ET
Read - ET
Wednesday, April 23, 2014
Selection to the post of Executive Director
The undernoted Senior Officers in Grade 'F' have been found suitable for promotion to the post of Executive Director:
(i) Shri N.S. Vishwanathan
(ii) Shri U.S. Paliwal
(iii) Shri Chandan Sinha
RBI Guv Could Be at the Centre of New Order
............. In the last 25 years, the working relationship between the government represented by the finance minister and RBI governors may not have always been smooth. Yet, despite frosty ties, especially towards the fag end of the tenures of at least more than one governor, the political establishment has held back perhaps mindful of the downside to cutting the institution and its head to size. Former finance minister, Yashwant Sinha is one of those who is quick to dismiss such speculation. A new government should not rock the boat and change the head of the central bank, he says, making it clear that he reckons Rajan is doing well and would distinguish himself further. ...........
'Inspired' Reports
My View on Will NaMo And Raghuram Rajan Work Together?
There are reports in the press for some time now that Dr Raghuram Rajan may not be allowed to continue as the Governor of RBI if NDA comes to power at the centre. These are 'inspired' reports at the behest of some elements who for their own reasons do not wish Dr Raghuram Rajan to be at the helm of the central bank of the country. Shri Modi has been known to support competent civil servants and is stated to believe in implementing his policies and in running the state/ country with their help as he is only too aware of the position that a member of the ruling party who is competent does not always get the solid backing of his party for a ministerial post.The converse, viz.a member of the ruling party who is not known for his knowledge and competence but gets the support of members of his party for a position in the Council of Ministers for various reasons (which are not better listed !), is also true. It is, therefore, very unlikely that Shri Modi would be foolish to deprive himself of the services of a giant in the International Finance area. It would not be unfair to even suggest that the IAS lobby could also be behind such reports as the bureaucrats in the Finance Ministry cannot boss over Dr Raghuram Rajan and would have to be content with playing second fiddle to him. It is high time that the Central bank of the country got a person of the stature of Dr Raghuram Rajan who should be given extension of service for another two years well before his present term of three years expires. He could transform the financial sector of the country in this period of 5 years provided he is backed up by the Prime Minister ( Shri Modi).
- A.Chandramouliswaran
Quite matured as they are both the PM in the making and the present Governor have the national interest upper most in their minds. Rating of Gujarat on some announced criteria should not bother NAMO since he as a good leader should be able to take such controversies as academic. The country need not wait in bated breath but with positive hope.
- Dr. Yerram Raju
RBI needs to be made more independent, accountable to people
.........This was exactly what RBI’s Ujit Patel Committee prescribed in its recommendations proposing the setting up of a Committee of Wise men where the RBI governor would have a vote and could also be overruled. Under the present autonomy dispensation the right vested in the governor to take the final call makes it less democratic over the decision of an appropriate committee of multi-disciplinary professional experts. This can ensure that the government of the day doesn’t make arbitrary demands on the functioning of RBI.............
Read - Moneylife
Copied below is my response to a report of September 15, 2010 in the Economic Times. Being reproduced to draw attention to the fact that the focus of this article is on an issue which has been neglected for years and a meaningful debate at this juncture is most appropriate:
“This refers to the report ‘It’s not over, RBI again writes to finmin on autonomy’ (ET, September 15). Of late, the finance ministry has been having problems with almost all regulators. It is not the other way round. Because of RBI’s premier position, the issues in which the central bank is involved get media attention. The proposal to super-impose a body to oversee the functioning or coordinate among various regulatory bodies and give it a permanent and legal status had ab initio met with the response that government is finding an alternate route to encroach on the autonomy of individual regulators. Subsequent developments have only proved the initial fears right.
The sound health of the financial sector can be ensured only by allowing all regulators and supervisors in the sector including RBI, SEBI and IRDA to feel the freedom to perform their mandated responsibilities efficiently, within the statutory framework. Presently, their well-intended policy initiatives and even administrative actions are being pre-audited and guided by a Finance Ministry which itself is suffocating under compulsions of coalition politics.
PM who knows the harm strained relationships between regulators and FM can cause to the economy must immediately intervene and try for a breakthrough. If the buck doesn’t stop there, we will see more and more of controversies like the present one, capable of destroying the gains made by the Indian economy, mostly during the period Dr Manmohan Singh was in charge.
- M.G.Warrier
RBI has collective wisdom
My View on "Raghuram Rajan’s tandava spells death for economy":
Growth and Inflation targeting are not incoherent but mutually reinforcing goals, although the basic parameter by which we measure growth - namely, the GDP - has serious limitations at this point of economic history more than ever. The policy rejig would depend on which Government comes to power and which policy direction they would take. RBI shall exercise its autonomy but only with the full support of the Government. It has become wont with some analysts to take on persons instead of institutions as in an institution like the RBI there is collective wisdom that unleashes the policies. It should however be admitted that over the years hypocrisy has taken precedence over transparency. Most institutions fail even to acknowledge responsible correspondence with several personal assistants ornating their administrative chambers. It is a cultural issue more than economic issue.
- Dr.Yerram Raju
Which comes first - Egg or hen?
My View on "Fraudulent mails in RBI's name continue":
Many of the recipients of such mail would have deposited money in the designated account. We may issue disclaimer from RBI, but the common man feels that RBI and Govt should do more than just issuing of disclaimers. There is someone who is using the name of RBI and duping people and the Central Bank and the Central / State Governments are not taking necessary steps or are waiting for the crime to take place before taking precautionary measures. It is not all that difficult to nail such miscreants. They will be asking these innocent people to deposit the amount (Rs15999 in this case) in a bank account. The beneficiary of such accounts will most likely be used as a money mule by such miscreants who will come to collect the money in cash after it has been deposited in bank account. So, with the help of police, the person coming for collecting cash will give a lead to the actual mastermind who is sending these mails. If this is followed in some of the cases, then such activities can be controlled and many innocent people’s hard earned money can be saved. But the moot question is, RBI won't act because this is the duty of Police and NOT RBI. The police will not act till the crime has taken place - means till someone has deposited money and did not receive his 4 crore and he makes a complaint to the police. In the entire process – criminals are flourishing and innocent common men are left with nothing but cursing the authorities.
- Mukesh Kumar
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.ParabDiscrimination 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........
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..........
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 ...........
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...........
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 ..........
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............
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.”..........
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 ...........
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.............
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,.........
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 ............
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.............
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
Tuesday, April 22, 2014
G. Gopalakrishna takes voluntary retirement from RBI
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.............
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............
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...........
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..........
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............
'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.
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................
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..........
Read.............
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............
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
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...........
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,“.............
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