Portfolios of EDs

...........Sources in the central bank indicate, both seniority and merit was considered by making the appointments. The central bank has nine executive directors, and one of them S Karuppasamy, retired recently. R Gandhi, who was executive director, has now been promoted to deputy governor. Also, .......

Read - BS

Shri DK Mohanty

1.Department of Economic & Policy Research

2. Department of Statistics & Information Management

3. Monetary Policy Department

4. Secretary's Department

5. Financial Stability Unit

Shri P. Vijaya Bhaskar

1. Department of Non-Banking Supervision

2. Financial Markets Department

3. Department of Communication

4. Risk Monitoring Department

Shri B. Mahapatra

1. Department of Banking Operations & Development

2. Department of Government & Bank Accounts

3. Inspection Department

Shri G. Padmanabhan

1.Department of Information Technology

2. Department of Payment & Settlement Systems

3. Foreign Exchange Department

4. Department of External Investments & Operations

Shri Jasbir Singh

Deposit Insurance and Credit Guarantee Corporation

Dr (Smt.) Deepali Pant Joshi

1. Customer Service Department

2. Rural Planning and Credit Department

3. Right to Information Act (also First Appellate

Authority)

Shri N S Vishwanathan

1. Department of Expenditure & Budgetary Control

2. Urban Banks Department

3. Legal department

4. Alternate Appellate Authority (under RIA)

Shri U S Paliwal

1.Department of Currency Management

2.Premises Department

3.Human Resource Management Department

(including Rajbhasha)

Shri Chandan Sinha

1. Internal Debt Management Department

2. Department of Banking Supervision

3. Central Security Cell

Portfolios of DGs

City Rife with Counterfeit Currency Notes

........Officials say that the fake notes being circulated in the city come through outsiders who reach the state for jobs and other business activities. Migrant labourers, truck drivers and interstate businessmen coming to the city are suspected to be the links of the counterfeit notes mafia. In majority of the cases, the arrested persons hail from West Bengal, which is notorious for many counterfeit note printing units..........

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

Inflow of fake currency rises in election time

.......The 40-page RBI working paper authored by Sanjay Bose and Abhiman Das have pointed to 3.90 lakh counterfeit currency notes detected in the banking system annually on an aggregate basis over a five-year period, 2007-12. This translates to about seven fake notes for every one million currency notes in circulation. It is lesser than the IB assessment but is based on a scientific study done by the two authors for RBI’s department of economic and policy research. But, the report concedes that there has been a steady increase in FICN in higher denominations of Rs 1,000 and Rs 500. .........

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

Withdrawal of gold import curbs to be calibrated: Mayaram

Curbs on gold imports in India will not be withdrawn immediately, but will be done in a calibrated manner, economic affairs secretary Arvind Mayaram said on Friday.........

Read - Mint

L&T Fin seeks RBI nod to buy promoter stake in Yes Bank

................“If the bank is issuing shares, it will be done with full public disclosure,” Monga had said earlier this week. If the stake buy goes through, this would be the first deal where an NBFC would be acquiring a bank in India. Earlier in 2004, RBI had allowed IndusInd Bank to acquire Ashok Leyland Finance business.........

Read - FE

Top-3 pvt banks live up to expectations

Notwithstanding a tough macro economic environment, leading private banks ICICI, HDFC and Axis put up resilient growth in the March quarter. While Axis Bank’s profits were ahead of estimates, those of ICICI Bank and HDFC Bank was in line with expectations..........

Read | Business Standard

Raghuram Rajan votes

Reserve Bank Governor Raghuram Rajan voted at a booth near his official residence off Peddar Road in south Mumbai

Granting licences to corporate sector tricky affair: KC Chakrabarty

Deputy Governor’s job is less challenging than the CMD of a bank

............ Distribution of currency/coins is a big issue. This is because we have left it to the RBI and banks. The RBI focuses more on distribution, as a result they are unable to monitor whether banks are doing it or not. The view of the government- constituted high level committee on currency management, which I chaired, is that, we must use the private parties (franchise model) for distribution. We have already done it for foreign exchange which has worked well................

Read | Business Standard

‘RBI should be accountable to Parliament’ - Dr.K.C.Chakrabarty

.......Ultimately, the central bank is created by the government … by Parliament. How can I say we will be a separate country? We are not talking about independence, it is about autonomy and I don’t think that is a big issue. Today, we have more autonomy and we have less accountability. Ideally, the central bank should be accountable to Parliament. .............

Read - TOI

If NPAs are high, everybody is responsible: K.C. Chakrabarty

.....f you are bringing somebody from commercial banking, what should be his appropriate role? In fact, somebody must find out why a commercial banker was brought to RBI. When the Board for Financial Supervision (BFS) was created, at that time there was a parliamentary committee which had gone into the securities scam. You read the recommendations of the committee and see what reply RBI gave.* If Reserve Bank does not stick to its own commitment to Parliament, what can I say? Personally for me, it has been a great learning experience. RBI has been very fair to me; it may not be fair to the banking system................

Read - Mint

My contrarian views have been vindicated: Chakrabarty

......"Being open and transparent is the hallmark of democracy. As a supervisor, my job is to communicate and shout, create the awareness. (Sooner) you do that, you will get a better result and more you delay, to that extent will be the damage. That is why I am happy about my stint in RBI," ...........

Read - BS

Rollout of ₹10 plastic notes hits technical hurdle: RBI’s Chakrabarty

.............To improve last mile connectivity, the RBI has decided to involve private entrepreneurs in the distribution function. The cash-in-transit companies/ business correspondents have been allowed to process coins and banknotes, including packaging, sorting and delivery to banks’ customers and for retrieval. Banks, including urban co-operative banks and regional rural banks, are also being involved to ensure that last mile delivery of cash-related services penetrates throughout the country. Chakrabarty said the RBI has also initiated a pilot exercise under..........

Read - HBL

Inclusion indecisiveness

.........It is somewhat surprising, then, that a road map for implementing the key recommendations of the Mor committee is yet to be outlined. Although hesitancy over this causing the delay has been denied, the fact that the last monetary policy announcement on April 1 did not specifically mention any plans to implement the recommendations lends some credence to the concern. Considering the importance that Governor Raghuram Rajan attaches to the agenda, one of the five pillars on which he is building his financial stability and development strategy, there were expectations of a big push based on the report. However, what seems to have come in the way are reservations..........

Read | Business Standard

BJP will eliminate discretion: Arun Jaitley

..........Asked to comment on speculation that there might be a change of guard at the Reserve Bank of India, Jaitley said, "We are not getting into issues relating to persons. I don't think we have reached that stage at all."......

Read - TOI

Start saving in banks: RBI to students

SHILLONG, April 23: Reserve Bank of India (RBI) Deputy General Manager T. Lhundim has stressed on the necessity of inculcating the habit of saving in the banks among the students community of the country. “Students are the future generation of our country so it is very important that we educate them about the importance of developing good financial habit,” Lhundim said. He was addressing the gathering at the Financial Literacy Campaign programme organized by RBI at Tpep-pale Secondary School, Jowai, on Wednesday.

Read - Meghalaya Times

Worth trying scrap gold

My View on  "RBI restrictions hit gold flow to Bangalore": 

The issues raised here are very relevant. The inherent fear to touch or talk about the huge domestic stock of gold in India is behind the artificial scarcity of the yellow metal and all concomitant problems like smuggling, unrealistic pricing and so on. The fear of gold was captured by K U B Rao in his report on Gold Management released in January, 2013 in the following words:

“Indians’ obsession for large investment in physical gold is the outcome of the confluence of numerous and divergent factors. Given the complexities involved in the lure for gold in India, a holistic strategy that deploys a combination of demand reduction measures, supply management measures and measures to increase monetisation of idle gold stocks needs to be put in place. Creation of an alternative asset class that may provide returns comparable to return on investment in physical gold with similar flexibility is important. A necessary pre-condition for reducing the excessive demand for the precious metal is to ensure benign inflationary environment along with achieving and maintaining macroeconomic stability.”

If there is a will, there should be some way, to exploit productively at least a small portion of the domestic stock of gold which will minimise the need for gold import. There is no escape from standardising a major portion of non-jewellery surface gold and making it available for productive purposes. When every other asset can be accounted, government cannot be apologetic only about gold. Establishment of the Bullion Corporation of India proposed by the Working Group can play a major role in recycling and pooling of domestic scrap gold. In this context, the Committee’s following observation is relevant:

“Temples in India holds large quantities of gold jewellery offered by devotees to the deities. There is also significant amount of scrap gold in the country. Some estimates say that scrap gold that comes into the system is nearly 300 tonnes per annum. It would be worth trying to channel the existing supplies of scrap gold in the country into the financial system, so that the unproductive nature of the gold asset is turned into a financially-productive medium.” 

- M G WARRIER, Thiruvananthapuram

Pension updation?? Its Divide & Rule........

Dear Mangesh,

I am writing this out of deep anguish and acute frustration. When the British left India in 1947, the Indian politicians inherited their most lethal weapon, i.e. the divide and rule policy. We thought that our decade long wait for justice by way of pension upgradation finally ended when the GOI allegedly conveyed its "in principle" approval. But, alas it was not to be. By putting conditions such as revision once in ten years, excluding certain allowances from purview of pension and rationalisation of perks, GOI has driven a wedge between the serving and retired officers. Like the Kashmir issue and river water sharing disputes between two neighbouring states,  the cleavage of interests between aforesaid classes defies any imminent solution.The result is that those of us who are on the wrong side of seventies will soon end up as items in the Obituary Columns of VITALINFO and/or Without Reserve and oblivion without realising our dream of drawing a decent pension that we deserve.

 - B. Kamath, Retd. CGM

RBI v/s GOI pay comaprision

"Discrimination amongst retirees neither just nor equitable"

In continuation of my comments posted in VITALINFO on 23-04-2014 : The position of pay inclusive of all allowances at the minimum (appxly) and at the maximum (appxly) in respect of Grade B and above in RBI vis a vis in GOI (not exact-but-comparable ) is furnished below .................  - R.G.Nakhate Read.............

Ill conceived Government direction

My View on  "Need to move an Interlocutory Application": 

Points raised by Shri Batki and Shri Parab are Valued points. The pension to RBI Pensioners is to be paid from the pension fund raised from the contribution of the RBI Employees and NOT from the Consolidated Fund of India. As such, imposing of any conditionals by Finance Ministry are not reasonable on any ground and also do not provide natural justice to Pensioners. The Writ Petitioners may like to approach and raise their objections in Bombay High Court stating that the Speaking Order of The Government and the current Guide lines (conditionals) to RBI are contrary and need to be quashed.The pension Updation is to be allowed in the light of recent Supreme Court Judgments and RBI / Govt. to be directed not to make a different category within the pensioners contrary to law. An early hearing by High Court is necessary as many senior citizen are affected by this ill conceived Government direction to RBI by linking to pay revisions / modernization of the allowances of RBI Officers though these allowances are not paid to the pensioners. 

- Capt. C B Gupta

NPS doors opened for people above 60 taking up govt jobs

........“Keeping in view the difficulties being faced by subscribers, the authority has now decided to enrol all eligible government employees into NPS, irrespective of the age at the time of entry, subject to the condition that the total period of contribution to the NPS account shall not be more than 42 years,” .........

Read - FE

A new economic agenda

........The Indian financial system also suffers from a hangover of cronyism and corruption which has left government budgets on the verge of bankruptcy. This too needs fixing. It cannot be rectified by a Reserve Bank of India vitiating the investment climate with an obsession to contain inflationary pressure. It is like killing a patient to lower his body temperature..........

Read - The Hindu

IFC, partners focus on e-payment systems for India’s low-income households

........Addressing the workshop on future challenges, Vijay Chugh, Chief General Manager in the Department of Payment and Settlement Systems, said, “There is an urgent need for all stakeholders to collaborate to enable access to an efficient payment system for the unbanked and under-banked population at an affordable cost. This is envisaged in the Reserve Bank's vision statement.”........

Read.........

Bandhan to appoint consultants for banking foray soon

....."We are talking to various consultancy firms like KPMG, BCG, McKinsey and Ernst & Young, among others, for appointing a consultant. We will shortly give a mandate to one of them," ........

Read - BS

Forensic audit no solution to unearth the facts

...........The RBI mandates a failsafe warning mechanism to effectively monitor bad loans by putting in place appropriate  flagging indicators. Already in place  are a plethora of checks and balances from  bottom to top for reporting on shortfalls in securities, exceeding drawing powers, day-to-day on-line reporting requirements, ratification requests...............

Read - Moneylife

Gujarat HC Restores RBI's Power to Decide NPA Period

........"Section 2(1)(o) of Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act is held unconstitutional," the bench of Chief Justice Bhaskar Bhattachrya and Justice J B Pardiwala said. The High Court also observed that the Parliament was wrong in taking the power to decide NPA guidelines away from RBI. Before the amendment in 2004 to the Act, RBI was the regulator for the banking, non-banking institutions and securitization agencies for deciding the period after which the loans can be treated as NPA. Till 2004, RBI had set the NPA period for banks at 90 days, and at 180 days for NBFCs.........

Read - Outlook

Minus JKB and HDFC, banks miser at lending in JK

Srinagar, Apr 24: Not only the nationalized banks operating in J&K are conservative in lending but performance of most private sector banks in providing loans in the State is even worse.
 A cursory look at the performance of banks reveals that these banks are accumulating huge deposits in the state while their contribution to the credit portfolio in the state is negligible........

Read - Greater Kashmir

IndusInd Bank to foray into asset reconstruction

........."I think our new initiative, which is going to launch in the next two months, is about asset reconstruction. We will do asset reconstruction within the bank but in tie-ups with ARCs. The business plan is ready. We believe a huge stock of assets is coming into the ARCs as a business area that we need to look at and we will exploit," ........

Read | Business Standard

Markets await revamped IIBs from Reserve Bank

.......“The poor appetite is mainly because it is not transferable, that is, it cannot be traded in the secondary market and premature redemption is allowed only after three years with a penalty,” Mr. Khurana added. It will be difficult to quantify the exact demand for the product, but with the gross borrowing programme at Rs.6 lakh crore (approximately), “this could catch the interest of investors provided there is sizable liquidity created through continuous issuances”.............

Read - The Hindu

Yes Bank appoints two new directors amid legal case

.......The new directors have been appointed “in accordance with extant Reserve Bank of India (RBI) regulations and the New Companies Act 2013”, the bank said in a statement. It also announced the formation of two new committees, IT strategy and CSR (corporate social responsibility), as mandated by the new companies law. Yes Bank is one of the respondents in a case filed in the Bombay high court by Madhu Kapur, wife of late co-founder Ashok Kapur, demanding the right to nominate directors to the bank’s board..........

Read - Mint

Cheers and challenges for Raghuram Rajan - A.Vasudevan

.........Financial stability is the foundation on which central banking is based. With non-performing assets of banks on the rise at present in India and with uncertainties about the durability of the economic revival of industrialized economies, it is important that RBI makes it a point to provide the rationale for moving towards inflation targeting at this juncture. RBI should also provide an idea about the nature and quantum of its accountability for....................

Read - Mint

Well prepared for a ‘consensus’ approach

My View on  "RBI Guv Could Be at the Centre of New Order": 

This discussion serves one-perhaps only one- purpose. It gives an opportunity to those who are not generally RBI-watchers and to those who are really serious about understanding the ‘equation’ between RBI Governor and the finance ministry to ponder deeper. Suffice to say that the debate may not affect the continuity at Mint Road or more specifically the broad policy perspectives of RBI. In retrospect- as one who had argued that, in the circumstances that prevailed in July 2013, it was in the fitness of things to allow another year’s extension for Dr Subbarao- it seems the decision to shift Dr Raghuram Rajan in August-September 2013 to Mint Road was right and has served the purpose of having at least one person at the top who can take charge of the leadership in the Indian Economy when most others were unsure about their own survival. Dr Rajan who has been doing his homework for the position that was waiting for him, is by now well prepared to ensure a ‘consensus’ approach in policy matters where he has a say. This is evident first from the chapter “Afterword: What Lies Ahead for India” he added to his book Fault Lines during the early years of this decade read together with his recent speeches and observations.

 - M.G.Warrier

Conference of Risk Officers

Conference for Risk Officers 

North Zone ROs at New Delhi (Feb. 18-19) 

West Zone ROs  at Ahmedabad (March 18-19) 

East Zone ROs at Kolkata (March 24-25)

South Zone ROs at Bangalore (March 27-28)

CoDs at Belapur, Navi Mumbai (April 2-3)

CoDs at Belapur, Navi Mumbai (April 21-22) 

As a part of the continuing efforts to foster a risk management culture in the Bank, Risk Monitoring Department organized four zonal conferences for Risk Officers of all Regional Offices (ROs) and Training Establishments (TEs) and two rounds of conferences, covering all Central Office Departments. More than 100 Officers participated in these conferences. The conferences were inaugurated by Executive Director (Shri P. Vijaya Bhaskar).

ED (PVB) stressed the need for continuous efforts on part of all the CoDs/ROs and TEs for fostering risk management culture in the Bank. ED mentioned the background and genesis of RMD in the Bank and the importance given to ERM framework globally in other Central Banks particularly in the aftermath of the global-financial crisis. ED emphasized that each and every employee of the Bank should try to identify and mitigate the risks in his day to day working in the Bank. He emphasized the need for being particularly sensitive to aspects which had any implications for Reputation Risk. He also stressed the need for effective communication on risk related matters at every level of hierarchy which will help in developing a risk culture in the Bank. ED urged the Risk Officers to identify the unique risks faced by their respective Departments/Offices.

CGM, RMD (Shri M. Rajeshwar Rao) in his address outlined the ERM framework of the Bank and the major developments in this area since the inception of the department. He also delineated the roles and responsibilities of all stakeholders, including Risk Officers especially with regard to preparation of Risk Registers.

Sessions on Risk Assessment Methodology for Operational Risks, Framework for Incident reporting and preparation of Risk Registers were conducted during the conferences. The discussions were followed by hands on sessions on the applications developed for preparing Incident reporting and Risk Registers. The participants were also familiarized about the rationale and methodology for generating heat maps based on risk registers. All the sessions were interactive and participants actively shared their views on risk management and expressed their willingness and confidence in taking the process of risk management forward in the Bank. 

The witticisms of K.C. Chakrabarty

When K.C. Chakrabarty moved from the chairmanship of Punjab National Bank (PNB) to the deputy governor’s position at Reserve Bank of India (RBI), the fraternity of bank analysts was deeply disappointed. We just wondered who in the sector will entertain us. After all, there are few bankers who are great entertainers. And a banking regulator by definition will be even less of an entertainer. But Chakrabarty did not fail us. His indomitable spirit sustained the rough and tumble of central banking, and...............

Read - Mint

Interesting situation

My View on  "Discrimination amongst retirees neither just nor e...": 

1. A very interesting situation has arisen in RBI Pension updation field. Pension in RBI came into force w.e.f.01 November 1990 under RBI Pension regulation, 1990. This RBI Pension Regulation is being replaced for new entrants and shall cease to be from 1 January 2012 for NPS. That means the present pension regulations will be implementable to employees who worked in RBI during these 22 years. As the New pension Scheme (NPS) is started in RBI from 01 January 2012 on wards.I do not know whether the RBI Pension Regulation, 1990 Chapter 1. Reg. 1. (2) has been amended by the Bank for it's discontinuing to new entrants.Or, a new RBI Pension Regulation has been incorporated with parliament approval for new entrants w.e.f. 01 January 2012, the RBI Legal department will be the best to know this.

2. As far as the existing Pensioners under RBI Pension Regulations, 1990; one thing is clear that" Neither the pension can be reduced nor withdrawn by any Government Order without a judicial pronouncement." So, the Pension and DR received is assured for the entire future of the Pensioner. As regards Updation, the Bank to consider how best it can pay pension to the all equally at the same length and scale of pay with out making a different category among the pensioners against the law explained by Hon. Supreme Court in their various judgments chiefly Nakara Case.

3. Therefore, Bank is required to Pay Pension to an equal amount to Pensioners on each pay revisions at the same level ensuring no junior gets more pension at any point of time during the currency of RBI Pension Regulation, 1990 and that is called - - - Pension Updation.

4. It can be very easily be paid either merging all the superannuation elements in Basic Pay or the Grade Pay. Since, RBI Scales and positions are on different pattern, the Grade pay may be considered an additional allowance as paid with salary in Private Sector as a separate nomenclature. 

This solution will solve RBI Pension Updation issues without any problem. United Forum may consider it as one of their avenue along with other alternatives also. 

- Capt. C B Gupta

When we ask for updation of pension as in the case govt. pensioners, govt. says as updation is given along with wage settlement, once in 10 years only in govt. RBI may similarly extend the benefits,once in 10 years. Of course, in Banking industry wage revision is once in 5 years only.

We may therefore propose wage revision be continued as hitherto before,that is once in 5 years, and the updation given once in 10 years. GOI may also agree. In fact the first pension updation given in 2003 by RBI is on the basis of two 5 year wage settlements of 1992 and 1997 only. RBI may follow the same in future. The serving  staff may understand that by the denial of updation to the 10000 pensioners, like us, for the last 10 years, each one of us lost about a lakh of rupees on an average per year, that is total loss is more than 10 lakhs,per pensioner. This non-stop deprivation has to be put an end to, before the aged pensioners bid farewell to this world. The Serving Staff have to give a helping hand, as whatever little loss of new perks of 2007 wage settlement, will be insignificant considering the overall picture, as that loss could also be recouped later by negotiation. 

- Sendil

What it takes for a man to plunge into marriage & what of those who don't

Marriage is for the brave. For those with deep conviction. Married men make for better marathon runners at least in Bombay. Marriage is for those who can play the stock market even if Raghuram Rajan is not helming the Reserve Bank of India. Married men are believers and almost always deeply religious and wife fearing. They have .........

Read - ET

RBI panel moots centralised bill payment system

.........The report further said the standard setting role/ function has to be distinct from the operational aspects of the bill payments system.  "It is, therefore, recommended that the bill payments system follow a 'tiered structure' - the standard setting functions being carried out by a central body / agency (to be named as Bharat Bill Payment System - BBPS) with actual operations being carried out by multiple entities,".........

Read | Business Standard

Get ready for digital signatures

..........The roll out of digital signatures will also depend on how quickly customers adapt to it. “There is a recommendation to make it easy for customers to get a digital signature. That’s why possibly a period of 18 months is given,” said Deepak Sharma, executive vice-president and head-digital initiatives, Kotak Mahindra Bank Ltd. He added that the move will be good for customers, as they will..........

Read - Mint

10-15% cards used only for online transactions: RBI report

..........."Credit cards have a higher share in the discretionary category whereas debit cards dominate in routine expenses like utility payments. About 30% of credit card spends are being done online. At least 10-15% of customers use their cards only online, many from smaller cities," the.........

Read | Business Standard

RBI constrained to withdraw 75% of banknotes each year

........Such massive withdrawal of banknotes from circulation not only means additional cost for printing of fresh notes but also additional requirement of various resources used in production of banknotes. In this context, it becomes imperative that efforts are made to enhance the durability of the banknotes so that not only the wastages are reduced, but also resources are utilized in a sustainable manner, thereby ensuring that the environmental footprint of our currency management operations is minimized. Mechanization of soiled note processing while augmenting capacity has also thrown up new challenges ...........

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

Fake notes: RBI warns paper, ink suppliers

..............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...............

Read - TOI

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................

Read - Deccan Chronicle

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,....................

Read - Deccan Herald

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............

Read - ET

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..............

Read - FE

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....

Read - Mint

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.........

Read | Business Standard

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?...............

Read - Mint

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...............

Read - Mint

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.........

Read....

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

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. ...........

Read - ET

'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