End of glorious innings - DEAPly shocked

I am at a loss for words to properly express my feelings. I admit that I was not fortunate to know Dr. Meenakshi Tyagarajan closely. But, even the limited association I had left a deep impression on me.  She was a motherly figure and I always felt quite at home with her. The first time she talked to me was in 1979 and it was to ask me for a paper based on my Ph.D. thesis for publication in the RBI Staff Papers. I was sure that it was a mistaken identity and told so to my friend (if I remember right).  Within an hour she came to me (second floor, Main Building—she was then located on the third floor of Amar Building) and assured that there was no mistake and that she was asking only me.  I doubt anyone will ever have such simplicity.  Moreover, when the piece was held at the Department Head level for a fairly long time, she met the person, got it cleared, came out of the cabin and told me “I bearded the lioness in its den”. (The exact words).  She had excellent command over the languages.  Once she wrote a small piece on local train travel at Mumbai (then Bombay). She described the movement of trains in the harbor lines thus: “crawling with considerable reluctance”.  She was a voracious reader.  Both of us were ardent fans of Sujatha.  Our assessment of any of his works was almost identical—even to the use of words to describe them.  Just before retirement, she asked me to suggest some literary books in Tamizh for reading at home.  I suggested ‘Kamba Ramayanam,’ ‘Bharathiar Paadalgal’ and ‘Nalayira Divya Prabandam’ besides Kalki’s works.  When I met her after 2-3 years later at her Adayar house, she remembered it and said that my suggestion was appropriate but added that I should have also included ‘Puranaanooru’.  She said that she had read it also and was amazed at the variety of subjects covered in it.  Importantly, her next statment is unforgettable:  “I should have read Tamizh books long back. I wasted my time reading English books”. True grand-daughter of Maadavaiya.  MT had always been simple, helpful, and cheerful and, I think, that is HER GREATNESS.  The world has lost a very good human being. RIP. 

- N. Nagarajan

She was the key person in setting up the Organizational Chart, way back in 1979 (established in 1982) when I worked with her in the erstwhile Management Services Division (O & M Division) under the aegis of Dr.Y.B.Damle at EROS Thetatre building. A talented woman and great Indian Economist! May her soul RIP! 

- Janaki Ravindran

I feel grieved over the sudden demise of Dr. Meenakshi Tyagarajan who had glorious innings in the Bank and whom I hold in high esteem.  Although I had not met her personally, I had the good fortune and privilege of getting insightful mails from her, which are a treasure trove for me. In the process, I also got encouragement and cheering words from her.  

I had prepared a detailed critique of 3rd Volume of the RBI History (in response to the desire of a CGM) which while throwing light on positive features had highlighted several serious omissions and commissions. My esteemed colleague PPR Sir had pointed out some 300 grammatical errors in it. What was objectionable was that the book contained invidious comments against two of our Governors and a DG, which were not borne out by facts and were wholly uncalled for in an authorised history of Bank's publication meant for posterity; these great personalities who had done a lot for the RBI were not alive to defend themselves.  The Review was appreciated by many and for a wide feedback was published in Without Reserve. Unfortunately, it was edited and slashed in such a manner that it had lost some of its sheen and essence. Dr. Tyagarajan had offered her feedback in a letter addressed to the Editor of Without Reserve but for some inexplicable reasons, it was not published. For persons like me who had in his own humble and small way assisted some of the Editors in 'nurturing' the magazine, this was a rude shock.  Dr. Tyagarajan must have been hurt by non-publication of the letter, which really provided some valuable inputs and advice for future historians.  As it is, our senior colleagues including those who had made immense contributions towards enhancing  the reputation of this august institution were deeply hurt by deprivation of the Pension for no fault of theirs. And its a pity that the same institution  refused to publish even a letter from her!.  Earlier, I had prepared a comprehensive Paper containing an Evolution of Training Arrangements in the Reserve Bank (Capacity Building), which was published in two parts in successive issues of WR.  I had drawn  heavily from and taken inspiration from Dr.Tyagarajan's book on the evolution of the RBSC, Chennai. 

Later in June 2010, we had, through the courtesy of CGM, Shri Bazil Shaikh, sent  a copy of  the Bank's book, Mint Road Milestones: RBI At 75, published to commemorate the occasion of the Platinum Jubilee Celebrations of the Bank to Dr. Tyagarajan.  I am one of the authors of the book (other two  being Bazil Shaikh - the main architect and Ranjeeta Dubey, a great organiser) ; veteran colleague PPR Sir, 'a man for all seasons', had reviewed the book, which appears in his delightful  'A Bunch of Fragrant Roses'.    

I feel nothing can be better than to reproduce, by way of Tributes to Dr. Meenakshi Tyagarajan,  an extract from a mail sent by her to DG Smt. Usha Thorat, which speaks volumes on the warmth and affectionate and endearing personality of Dr.MeenakshiTyagarajan, besides, of course,  her deep attachment to this august institution :

"This must be a surprise to you -and I presume a pleasant one. Difficult to accept, but it is over a quarter century since I left the Bank.  I haven't followed the institution's development very closely but I know that it has changed vastly and mainly for the better.  And it has given me much pleasure and pride to follow the careers of the 'girls of my time, you and Shyamala'. It is to congratulate you on one of your recent achievements that I am writing this.  Through the kindness of Mr..Khot, I received a copy of "Mint Road Milestones" from him. I also learnt that this was entirely your idea and effort, accomplished in an unbelievably short period.  I have been dipping into it and reading bits at intervals.  It is not the sort of book that one - at least I - can read at one stretch.  I have enjoyed, and am still enjoying, the book and feel that it is one of the best publications of the Bank - one truly worthy of the (platinum) occasion.  Enormous effort must have gone into the collection of the material, the photographs particularly.  That apart, the substantive part, the account of the evolution of the Bank's functions, is very good and highly readable.  I feel that in time, you are likely to look back on this publication as a 'milestone' in your career.  

I can anticipate your response. - that it was the dedication and hard work of the team behind the volume that was responsible for the success.  I agree and offer them my congratulations too.  But surely it was your support, guidance and above all, encouragement that ensured the quality of the work.  I know enough of conditions not only in the Bank but in any bureaucratic set up to understand this.  With my best wishes for similar successes in the future."       

May the noble soul of Dr.Meenakshi Tyagarajan rest in peace!      

- Surendra Khot

National Payments Corporation of India notifies managerial jobs

National Payments Corporation of India (NPCI), set up by Reserve Bank of India (RBI), requires Managers in Technology / Operations / Business Development / Risk & Audit / Finance & Accounts to fill up the vacant posts..........

Read.........

It Pays to File Returns Early, But Keep Changes in Mind

.........Salaried employees will start getting their Form 16 from their employers in the next couple of weeks. They should start the process of filing returns right away, say experts. “If you file your returns now rather than waiting till July, the chances of your tax refund, if any, being processed sooner is higher. Also, the e-filing site’s servers tend to be busy towards the end of tax-filing season, which could cause delays,”..........

Read - ET

Get ready for single-window payment for all bills

.........RBI is in the process of setting up an Indian Bill Payment System, a centralised payment gateway to make all kinds of bill payments smooth. The payments process will be instituted through a GIRO (government internal revenue order)-based system, where all the billers such as utility payments, taxes, university fees, examination fees and insurance premiums, among others, come on a common platform that will enable payers to make payments directly to billers........

Read | Business Standard

Soon, banks to set up Lok Adalats for settling cheque bouncing cases

The Law ministry is working on amendments to the Legal Services Authority Act that would allow leading banks to set up permanent Lok Adalats on their premises for settlement of all disputes related to cheque bounce. Retired district judges or additional district judges will be appointed as chairpersons of such Lok Adalats in consultation with the high court concerned and the state government...................

Read - TOI

Limited benefit of no-interest period in credit cards

Credit card companies, often, dangle offers that seem irresistible. But most probably, they are not as profitable as they seem. The latest one: A no-interest period offer. This offer allows you to carry forward the outstanding amount, for a specific time without paying any interest. This may seem very attractive, as the bank is allowing free revolving credit. But there are a few factors that customers must keep in mind, or else they could end up losing money. ..............

Read | Business Standard

RBI seen to go on forex mop-up drive

........“It is not as if the forex market will wait for the RBI to buy the entire $80 billion. All it is looking for is a confirmation that the RBI has returned to the Jalan-Reddy policy of building forex reserves to guard against contagion,”.......

Read - The Telegraph

Economy & Currency Outlook: How much can Delhi do?

......This begs the question of whether rates can be cut if inflation remains high? Of course not. This is why Delhi needs to adopt the Urjit Patel committee's proposed inflation targeting framework to contain inflation expectations. In any case, there has been popular support for an inflation mandate for RBI ever since C Rangarajan's tightening brought inflation down to five per cent annually from eight per cent in the mid-1990s. Yet, given supply shocks, the inflation target itself needs to be sufficiently flexible to work. While ........

Read | Business Standard

Bandhan Financial Services lowers lending rate by 50 bps

......The move may prompt Bandhan's rivals to review their interest rates. "Bandhan may have taken this decision from a forward-looking standpoint as it is now transforming itself into a bank and reconfiguring many aspects of its operations," said Alok Prasad, chief executive officer at Micro Finance Institutions Network (MFIN), 

Read - ET

‘Bandhan will show that the poor are also bankable’

.......We will merge the existing microfinance business with the bank. But our thrust area will be medium and small scale sectors. Reaching the un-banked areas would be one of the biggest areas of opportunity. We will target the poor and the segment just above that. We would like to show that the poor can also be bankable. Our entire loan portfolio is directed at priority sectors and our recovery rate is 99.5 percent.......

Read - The Hindu

Bandhan - Arrow out of bow

My View on  "Bandhan to start banking operations 600 branches": 

Kudos to Bandhan for taking steps to move forward with about 600 rural bank branches. A few but significant challenges for Bandhan MFI becoming Bandhan Bank would be:

Now providing microfinance is the main and only business of Bandhan MFI. But, providing microfinance will become one of the overall business segments of Bandhan Bank to comply with the Priority Sector Lending commitments of the RBI. So, more of those unbanked and underbanked may be forced to go back to informal sector particularly money lenders and big land lords. Financial Inclusion may also be only a show case activity instead of it being its main activity being carried on on a Mission mode.The staff of Bandhan MFI are paid relatively less than those offered for holding similar positions in banks. Once Bandhan Bank starts operating, the existing staff of MFI who would be transferred to Bandhan Bank would have to be paid higher salaries commensurate with that of their counter parts in the banking industry. We have the example of RRBs before us as it started with low cost banking but ended up paying salaries equivalent to the PS Banks and huge capital infusion year after year has become the norm. Bandhan Bank may also face similar situation in future. What could have been done by the RBI is that it would have issued a preferential licence to enable Bandhan MFI to function on the lines of Bancosol of Bolivia or Grameen Bank of Bangladesh so that it may not lose its character as a leading MFI in the country. Now it is like an arrow that has gone out of the bow and RBI will have little control on the formation of Bandhan Bank which would lose its MFI character if not in the short run, but certainly in the long run. 

- Santhanam

Don’t expect much from new banks

........When the RBI framed the guidelines for new licences, it seemed to think that corporate houses with their deep pockets could make a big difference to competition. It is evident that the regulator has since become more wary about a host of concerns about their entry. It is not clear where corporate houses now stand. Are they free to apply for licences a little later? Or are they too welcome only under “differentiated licensing”. If the latter, it is doubtful that corporate houses will be interested.........

Read - HBL

Spell out action taken in NPA scam: Bombay high court to CBI

...........The petitioner has alleged that RBI and the nationalised banks do not comply with the Banking Regulation Act, 1969, which mandates periodical submission of audit reports to the RBI. The same is not complied with in order to suppress the NPA scenario and shield the culprit beneficiaries working in collusion with the banking authorities, alleges the petition............

Read - DNA

Cultivating NPAs

...........As of September 2012, according to an RBI working paper by Shashidhar Lokare, priority sector lending accounted for 31.1% of all gross advances but 41.7% of all NPAs; the figures for the non-priority sector were 68.9% and 58.3%, respectively. It is true that the figures will change once you take into account the relatively higher share of restructured assets for industry, but there can be little doubt priority sector lending is a big source of NPAs. More important, ................

Read - FE

Banks find it easier to offload NPAs after RBI tweaks norm, says HSBC report

.........A sudden rush to sell distressed assets to asset reconstruction companies (ARCs) in Q4 could be attributed to the RBI allowing banks to write back the excess provisions made over the book value when the NPL is sold, says an HSBC report..........

Read - FE

Public or Private, Banks May Need Image Makeover

.......Banking may be perceived as staid or conservative, but their imagery shows a vivacity and vibrancy like any other consumer-facing category. And, now with the RBI opening up licences to newer players, it would be interesting to note if the new players follow their sub category codes or will they innovate. With penetration and share fight both being challenges in the category, it will be interesting to see the approaches that will be taken by the new players and how the older players will reposition themselves with a changing competitive landscape...........

Read - ET

RBI panel says don’t force banks to become to insurance brokers

...........The reluctance on the part of the RBI and banks is clearly visible in the latest report being prepared by an RBI panel. The RBI’s working group on bancassurance has suggested that no model should be unilaterally imposed on banks and that the choice of becoming a multiple corporate agent or a broker should be left to the respective banks and their boards. Under the existing regulations, a bank is allowed to distribute policies of one life and one non-life insurer as its corporate agency partner................

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SBI's most luxurious bank 'Kohinoor Royale' opens account for minimum Rs 1 crore

........This innovative ‘by invitation’ only Branch of SBBJ, Kohinoor is a very unique concept for getting business of ultra HNIs, an area hitherto virtually untouched by PSU Banks. This is a specialized Branch, where the accounts shall be opened only by invitation. The Bank’s expectation shall be to have a minimum of seven figure business from all customers at this Branch. This outfit is being loosely called a ‘crorepati branch’.  The branch has state-of-the-art outfit with royal ambience which is an instant attraction for intended customers. Kohinoor Royale Banking Centre at Jaipur is meant for Kohinoors of modern India. It has a five star ambience with ultra modern facilities. The Branch has a plush lounge named Deewane Khass, which consists of Rajkosh, the locker facility, Shringar, the dressing room, and Darbar, a conference room with video conference facility apart from personal business centers, cafeteria, and most comfortable sitting arrangements. The lounge has both music and TV channels for the entertainment of visiting customers...............

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FinMin asks PSU banks to focus on mobilising CASA deposits

..........“Banks have been asked to cut down their reliance on bulk deposits. They need to focus on mobilising low-cost deposits. They should be focusing more on CASA (current account savings account),” Financial Services Secretary Gurdial Singh Sandhu told PTI. They should be aiming at 40 per cent CASA for improving their profitability, he said.......

Read - HBL

Indian banks will have to raise Rs 3 lakh crore in external capital: IOB DGM

..........“It will be difficult for the government to find such a large amount to capitalise the public sector banks. The situation of the private sector banks will not be much different, leading to merger and consolidation of the banks,” he opined. RBI’s directive to implement the Basel III norms by 2018 March was also a big challenge, he said..........

Read - The Hindu

JK Bank conducts financial literacy camps

...........In Budgam, the FLCC center Budgam organized a financial literacy camp at Boys Higher Secondary School (Budgam). A large number of students along with the faculty members participated in the camp, wherein the Facilitator FLCC Budgam educated the students about Saving Bank Account Schemes introduced by the Bank which cater to the requirements of student community drawing scholarships from the Government. The District Development Manager, NABARD, also apprised the participants about various income generating schemes under farm sector and self employment activities...............

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Government writes to RBI, seeks higher borrowing limit for Exim Bank

.........In a letter to the RBI governor, the commerce secretary has asked for differential treatment from commercial banks and sought a higher borrowing limit for Exim Bank. "If Indian project exports are to compete with China on the basis of co-financing offered by Exim Bank, its leverage ratio may be raised from the present 10 times of NOF to at least 15 times of NOF," the letter said. 

Read - ET

No Effect of Nabard's Fund Threat on Govt

The State Government has not shown any interest in completing rural infrastructure projects on time despite warning of the National Bank for Agriculture and Rural Development (Nabard) to shelve sanctioned projects which have remained incomplete beyond the stipulated time. The Nabard had sanctioned 385 projects of the Rural Development department under rural infrastructure development fund (RIDF) in eight tranches. The State Government had made a budgetary provision of `210 crore for these projects in 2013-14.......

Read..........

Tamil Nadu and Gujarat finances: some pluses and minuses

..........A perusal of the report of the Reserve Bank of India, ‘State Finances: A Study of Budgets of 2013-14,’ published early this year, reveals that in the debt-Gross State Domestic Product (GSDP) ratio and the interest payments-revenue receipts ratio for the fiscal 2011-2012, Tamil Nadu was better placed than Gujarat.  Also, be it the State’s Own Revenue......

Read - The Hindu

The West Can Learn From India's Central Banker

.........Rajan’s insights and policy recommendations are not totally new, and he is not the first developing country official to speak out. Still, he is the first person to openly take up the issue on the basis of an impressive trio of relevant central bank experience in a systemically important developing country, a remarkable academic pedigree and a successful tenure as the economic counselor of the International Monetary Fund. As such, it should be much harder for Western policy makers, and for their representatives at multilateral institutions, to dismiss his arguments............

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Leader or led?

...............Singh at 50 had become governor of the Reserve Bank of India. Pranab Mukherjee was the finance minister, and wanted Bank of Credit and Commerce International (BCCI) to get a branch in Bombay, as it then was. BCCI was run by an influential Pakistani, had West Asian connections and a dodgy reputation. Singh as governor resisted; when Mukherjee insisted, Singh offered his resignation. He was then told that the government would take away RBI's bank licensing powers, so Singh decided it was better to make an exception rather than be rigid and damage RBI as an institution.............

Read | Business Standard

PC’s model code

.......When elections are held over as many weeks as they are, the FM has said, it is a bad idea to not allow the government to function during this period. The Election Commission, for instance, told the government that it could not implement the Rangarajan committee’s recommendation on hiking gas prices. Fortunately, the EC allowed RBI to go ahead with issuing bank licenses, but it was pretty much touch and go for a long time. At a time when the economy needs the government to be taking quick decisions, it cannot be subject to such restrictions. No one doubts the EC’s intentions, but complex decision-making cannot be subject to what the EC decides—........

Read - FE

Rules and guidelines for LTC/LFC issued by Ministry of Finance

Letter submitted to the Bank by Reserve Bank of India Officers' Association opposing the move of Govt on LFC in Bank

...........We are seriously hurt and emotionally agitated that instructions are being issued to the Governor / Central Board of the central bank of the country by an officer at the level of Under Secretary to the Government of India......... 

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

Also read the letter by AINBOA to NABARD Chairman

AIBEA opposes SBI move

.........While the Business Correspondent model itself is wrought with risks and deficiencies, it is really atrocious that Reliance had been handed over such vital banking functions by a major public sector bank. Itis strange that while RBI itself has not chosen to give them license to start their own Bank, SBI management has brought Reliance through backdoor method into dealing with regular banking services............

Read | Business Standard

SBI promotes 10 CGMs to Deputy MDs

.........State Bank of India has promoted 10 Chief General Managers to the position of Deputy Managing Director (DMD). The CGMs who have been promoted are: ........

Read - HBL

Different standards for different institutions........

My View on "After autonomy, the need to fix proper accountabil...": 

In spite of several recommendations that all the Acts of Parliament should have Regulatory Impact Assessment the Parliamentarians are averse to having this. If Parliament is not wanting to be accountable to the people putting it in place, how can one think that the RBI becoming accountable to Parliament would be a good practice? Regulatory Impact Assessment involves the Minister responsible for the introduction of the Act should get the assessment of the impact of the Act on the subjects of the Act during the last quarter of every year by a competent evaluation mechanism independent of the implementing agencies. Such Review should be placed before the Parliament during the first session every year and seek the opinion of the House for any improvements. If this were to take place, then it makes sense for autonomous institutions like the RBI also to be accountable to Parliament. We can't have different standards for different institutions in the case of accountability. 

- Dr.Yerram Raju

Here’s your chance to tell the RBI how high you think inflation could be in future

..........You will also have to give your views on the current inflation rate, its level after three months and after one year. In short, this is your chance to tell the RBI how much you expect to pay for various items like milk, wheat, rice, chana dal and tur dal. Keep in mind that the result of this survey will be used by the central bank as one of the important inputs to its monetary policy formulation.

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How will interest rates behave after the elections? This is what history tells us

.........However, it is highly likely that the interest rates will remain steady at the elevated level for some more months. This is because for the RBI to take any rate action, the government will have to take measures to ensure fiscal discipline. If the next government manages to cut subsidies, the RBI may be able to reduce policy rates. But then how much of a 25 basis point cut is actually transmitted into the economy?..........

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Various mobile banking apps vulnerable: Study

At a time when lenders have been encouraging consumers to go for mobile banking, a survey by Japanese security firm Trend Micro reveals that 15 bank related mobile apps and 39 online payment gateways, among several others, stand the risk of being exposed to cyber criminals. According to the study, social networking sites, shopping and health care apps used by Indian users are vulnerable............

Read | Business Standard

EKO model, an innovated financial inclusion model

..........The resounding success of M-Pesa demonstrated that the ubiquitous mobile technology offers considerable potential for lowering transaction costs and providing  secure  banking  services  to  vast  numbers of  poor  in  the  developing  world. RBI estimates say that there are still many households that are to be banked. The  burgeoning mobile  money  models  in  India target  precisely  this  widespread  need  for alternative  forms  of  saving  for  people  who  are  unbanked. Among various  such  initiatives, EKO  is  an  early  mover. ...............

Read.........

13.54 crore siphoned off from Railways with forged cheques

Sixteen people who withdrew Rs.13.54 crore from the account of the North-Eastern Railway (NER) over a month by forging cheques of the Reserve Bank of India have been booked by the Directorate of Enforcement. They have been charged with laundering the siphoned off money by investing it in movable and immovable assets. In a complaint filed before the court.......

Read - The Hindu

Authority on anvil to fight bank failures

...........Concerned that the present framework for resolving failed banks and financial institutions may not work in a major collapse, the government and the Reserve Bank of India (RBI) are looking at a proposal to create a Financial Resolution Authority (FRA) backed by law, which will permit temporary nationalization of failed institutions. The FRA has been proposed by a panel comprising RBI and finance ministry officials, which said that the present system of resolution of bank failures through shotgun marriages may not work in future if larger institutions fail. .............

Read - TOI

RBI switches 30 banks to risk-based supervision

........Former RBI Deputy Governor KC Chakrabarty in 2012 had submitted a report on the review of supervisory processes for commercial banks, and had suggested replacing the present compliance-based and transactiontesting approach (CAMELS) with the risk-based supervision (RBS) system. Several jurisdictions across the globe have adopted variations of the riskbased supervision. The RBI had, in the past, made several failed attempts to migrate to the RBS supervision. It had first tried to introduc .. 

Read - ET

Wilful bank loan default crosses Rs.70,000 cr

........The wilful bank loan default by 400 customers to various public sector banks have crossed the Rs.70,000-crore mark. Having released the names of top 50 wilful defaulters in December 2013, the All India Bank Employees’ Association (AIBEA) will publish the second list of remaining 350 candidates on Tuesday. The first set of 50 defaulters, consisting of a sitting Member of Parliament, a Central Minister and two Padma Shri awardees, collectively owe over Rs.40,000 crore to nationalised banks and the remaining 350 defaulters account for Rs.30,000 crore. In the last five years.........

Read - The Hindu

Sowing inclusion, reaping NPAs

............The issue is tricky because banks are reluctant to admit that farm loans are a drag on their balance sheets as it is politically correct to say that these loans are profitable. At a broader level, RBI needs to find ways to scale down this commitment for the banks, with the government pitching in to fill the gap. We need to strike a balance here and not go overboard on inclusive lending. New entrants into this arena should keep this in mind as they would be especially vulnerable...............

Read - FE

RBI mulls micro fin cos as business correspondent

The Reserve Bank of India is seriously considering the Nachiket Mor committee’s suggestion on allowing micro finance institutions to function as business correspondents of banks to further its efforts towards greater financial inclusion, sources close to the development told Cogencis. However, the move has faced serious opposition from various departments in the central bank.................

Read - FPJ

Bandhan to start banking operations 600 branches

................"We plan to start off with 600-700 branches across the country. Some of them may be either existing ones or new," Bandhan Financial CMD Chandra Sekhar Ghosh said. He said that 80 per cent of the branches would be in the rural areas and the rest in the urban regions..............

Read | Business Standard

SBI extends self-employment benefits to differently-abled

............. State Bank of India has decided to extend benefits of over 100 Rural Self Employment Training Institutes (RSETIs) to differently-abled individuals under its corporate social responsibility (CSR) initiative..........

Read - HBL

Yes Bank promoter case adjourned to June 19

...........The matter came up for hearing of notice of motion before Justice Roshan Dalvi, who adjourned the hearing to June 19, 2014 on account of court vacation beginning May 9, 2014. The counsels of the bank requested if the matter can be heard on Monday but was denied by the judge, who preferred to hear the two-judge bench order before beginning the hearing of the two parties. Yes Bank is due to hold its Annual General meeting in May or June, in which it could pass resolutions and discuss the disputed matter.........

Read - HBL

How to manage portfolio capital flows - Dr.S.S.Tarapore

......Deputy Governor HR Khan’s talk provides an excellent survey of the policy responses on exchange rate stability, the tools used to deal with heightened volatility and the need for adequate forex reserves. He also offers a hierarchy of choices on capital inflows and outflows and the non-deliverable forward market.............

Read - HBL

MONETARY POLICY - A Welcome, Refreshing Approach : M.G.Warrier

..............In effect, for quite some time now, we have a ‘caged’ Monetary Policy. Top echelons in government, by habit, pre-empt any manoeuvrability available to RBI Governor, by explicitly stating the direction and extent of relaxation in monetary policy, well before the announcement. During the initial weeks after Dr Rajan took over as Governor, there was perceivable change for the better. That was short-lived, though. Last year, while airing his policy concerns specifically about managing inflation, RBI Governor Dr Subbarao had stressed the need for synchronization between monetary and fiscal policies. He also mentioned that..........

Read - Global Analyst May 2014

‘The Govt & Central Bank Need to Work Together to Tackle Supply-side Issues

...........The key to all of Rajan is that he is from University of Chicago. And you have got to remember that Chicago economics is all about the relationship between the economic actions and the information that you have about the future. And Rajan’s policies have been designed to try and talk down what you think inflation will be 12-24 months from now. That’s what inflation targeting debate is all about. If you think an ex-professor of Chicago is talking, you understand exactly what he is up to............

Read - ET

After autonomy, the need to fix proper accountability of regulators

......Direct accountability of regulatory bodies to parliament is not Chakrabarty’s original idea and was recommended by the Damodaran committee last year. In addition, a draft regulatory reform bill, approved by the government last year, which also made similar recommendations, did not come up for consultation. In India, where most committee reports are reduced to good pieces of literature and draft bills and don’t see the light of the day for years, more and more regulators demanding not just more autonomy but also more accountability could mean that the Damodaran committee recommendations and the draft regulatory reform bill may be formalised. Former RBI governor D Subbarao has also expressed his support for making RBI directly accountable to parliament. Prior to his retirement in September last year, he had said that while the RBI Act does not lay down any formal framework to ensure accountability, it does follow “certain good practices (which) have evolved over the years.”............

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VITALINFO - Valiant efforts

I sincerely convey my thanks to you for the vital and timely information that are placed on your website (VITALINFO). It provides us a single platform for serving as well as retired bank employees for providing vital and critical information on banking sector/RBI. Please keep it up your valiant efforts in updating all of us. Congrats once again for the same. 

Regards 

- C.L. Nag, GM DNBS Kanpur

Why Raghuram Rajan will have to surrender to a Modi government

........If the next Government is bold, it will prioritise agricultural reform and fiscal consolidation for its first three years in office and then think about inflation targeting for the RBI in the latter half of its term. That time frame may be too long for Rajan, whose terms finishes a little over two years into the next Government's term, but it is probably the only politically reasonable and feasible way to proceed..............

Read..........

RaRa - Realistic Analysis

My View on  "Why Rajan stands out": 

Very realistic analysis. By discussing more, we may be, in a way helping gossip-mongers and certain vested interests which are not comfortable about the stability in the Indian financial sector which is being preserved during these tough times. There were no two views about the selection of candidate for appointment of RBI Governor when Dr Raghuram Rajan was offered the post. With the exception of some media persons and some politicians who are not holding any responsible position, no one has raised any doubt about Dr Rajan’s continuance post-Election 2014. The people who go on opening up discussion again and again are unaware of how RBI functions or are interested in destabilising the Indian economy. 

- M.G.Warrier

The Rupee Dilemma

.........In a 2006 speech, Rajan, then the economic counselor and director of research at the International Monetary Fund, argued that lax monetary policy in rich countries could lead to dangerous macroeconomic distortions in developing countries. He claimed that investors purchase risky assets when advanced economies have falling interest rates, only to sell those assets when interest rates rise again. He termed this phenomenon “risk-shifting.” .............

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Controlling inflation by RBI

...........Without such an act giving power to RBI, this situation continues whatever measures RBI takes to control prices are not going to be of any sensible effect. In this context I request governor of RBI to convince the coming new government that an act be passed so that all prices and taxes levied by these authorities are approved by the Bank before they are implemented. Without prior approval of RBI no tax and increase in prices will be applicable.........

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RBI to issue Rs. 100, Rs. 50 banknotes with 2014 printing year shortly

..........."The Reserve Bank will shortly issue Rs 100 denomination banknotes incorporating symbol on the obverse and reverse, with inset letter L in both the numbering panels, in the Mahatma Gandhi Series-2005 bearing signature of Raghuram G Rajan, Governor, RBI," ..........

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RBI may not ease rates till Jan 2015: Icra

......."The expectation of below-average rainfall in conjunction with the structural factors that exert stickiness on food and non-food CPI inflation would make it challenging for the RBI to contain CPI inflation below 8 per cent by next January," the rating agency said on Thursday. Therefore, "the most likely scenario" is an extended pause for policy rates and monetary easing will be delayed until, at least, early 2015, the agency added..........

Read - Business Today - Business News

Deadline ends, old cheques make way for safe, fast CTS

...........Transactions with cheques that have magnetic ink character recognition (MICR) and not CTS technology will from Thursday be delayed, with banks likely to take four days or more from the date of deposit to credit the amount. Banks will from now clear MICR cheques only on Mondays and Fridays instead of three days a week, an RBI official in Chennai said. ................

Read - TOI

CTS cheque clearance facing delays

..........In most cases one day interest may not be sizable amount for an individual and hence the customer will not follow-up with the bank. However, in the above case, the customer did write to Bank of Maharashtra giving details of the proof given by Yes Bank. The customer was given credit of one day interest by Bank of Maharashtra, which proves that customers today are facing not just delay of cheque clearance but also loss of bank saving rate interest for a day or more. Will RBI issue a  circular so that banks give necessary credit for loss of interest without the customer asking for it?.......

Read - Moneylife

An SIP that provides $ hedge

.......While the fund house is targeting investors who will have dollar expenses in the future – child’s education or foreign travel. The good part is that the dollar reference rate (Reserve Bank of India reference rate) used for deducting will be of the week preceding the investment date. For instance, if you are investing on the May 15, the dollar rate considered will be of May 8. So, there will be some hedge available. In the case of this SIP, fluctuations in the currency, much like the stock market volatility, will get balanced ........

Read | Business Standard

Shilpa Shetty’s Gold Scheme May Hit Regulatory Hurdle

Celebrity entrepreneurs Raj Kundra and wife Shipla Shetty are selling a dream to people who want to own gold, if regulators do not object to the plan. Satyug Gold, a company promoted by them, is offering discounts of up to 37% on the purchase of gold bars and coins for those who are willing to pay the entire amount in advance and wait for two to five years to take delivery............

Read - ET

When your banker asks you to buy or sell a stock, simply ignore!

...........“It is important to restrict banks from selling insurance products (Life & General). Unfortunately the Reserve Bank of India (RBI) has not yet done anything on this issue. These days bank jobs are not to develop one's career as a banker but to become a salesman without paying much attention to the seriousness of banking business.” In April 2013, Moneylife Foundation sent a memorandum to RBI Governor on behalf of more than 21,500 members (at that time) to free the system of mis-selling of financial products by bankers, misusing the savers’ trust.........

Read - Moneylife

'Pvt banks made good profit on unsecured loans in FY14'

........Private sector lenders witnessed robust growth in credit cards and personal loan businesses in FY14, which helped them boost top line amid sluggish corporate credit demand in a slowing economy. ICICI Bank, India’s largest private sector lender, witnessed 141.6 per cent growth in personal loan disbursement in the past financial year, according to a report by Emkay Global Financial Services. The lender also saw.......

Read | Business Standard

Pay Vile Parle woman 3L, consumer panel tells bank

The state consumer disputes redressal commission has brought to book a bank for causing a loss of Rs 1.70 lakh to a Vile Parle woman, after it wrongfully retained 1,000 shares furnished by her as security for a cheque. Bank of Baroda will have to pay complainant Ketki Mehta Rs 1.70 lakh, along with a compensation of Rs 1.42 lakh. .........

Read - TOI

A single platform to pay all your bills?

........RBI is looking to build an entity similar to the National Payments Corporation of India (NPCI), which ensures standardized payment solutions. For instance, NPCI’s immediate payment system, an instant interbank electronic fund transfer service, allows you to transact across bank accounts. Similarly, the centralized bill payment system will allow you to transact across billers from a single point...............

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Pay college fee via credit card EMIs

.....Not only are banks recovering lost ground after RBI barred them from providing ‘zero percent’ EMI schemes, they have added new segments, including educational institutions like Sikkim Manipal University and coaching institutes like South-based Byju’s Classes. Very soon, consumers may also be able to pay their health and motor insurance premium through monthly EMIs thanks to this facility.......

Read - TOI

Don’t Let Reward Points Influence Your Card Usage

...........Aim to select a card that suits your needs than trying to shop for products and services that will yield reward points. Stick to a couple of cards that meet your requirements instead of hoarding several cards solely for rewards. “You should not obtain a credit card or use it for making payments merely to earn reward points. Reckless spending can lead you into debt traps. Credit cards are meant to be used only during emergencies. Use debit cards for making payments as far as possible,” .............

Read - ET

Why Rajan stands out

..........Rajan is a person of international standing academically and also as a financial expert. He was appointed to the office, which he eminently deserved, for a fixed term after adopting a well-laid down procedure. Any new government trying to tamper with his appointment would have to think many times before doing so. It would also tantamount to the incoming government being accused of encroaching on the autonomy of the country's central bank (which any democratic regime swears by) at its very start..............

Read | Business Standard

When a class V girl offered to help RBI governor Raghuram Rajan

.................But last September, when the government and RBI were battling a major crisis with the rupee hitting record lows and the current account deficit going beyond acceptable levels, Laila Indira Alva, a class V student of Sanskriti School, wrote to central bank governor Raghuram Rajan. "I have heard about the crisis our economy is facing... I have also heard about the fall of the rupee with respect to the dollar," Alva said in the letter to Rajan................

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FM to chair his last FSDC meet on May 13

.........As the meeting will be attended by RBI Governor Raghuram Rajan and heads of Sebi, Irda, PFRDA, FMC and senior finance ministry officials, the regulators would use the opportunity to bid farewell to the finance minister, said another official............

Read | Business Standard

Decrease of 17 slabs likely from May 2014

..Based on the above calculations the new DA is likely to be @ 97.35%, for the months of  May 2014 to July  2014.   [The DA for February  2014 to April  2014 was  99.90% ] i.e. decrease  of 2.55%. (decrease of17slabs)  We give below the likely DA for May,  2014 onwards....

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Bank officers' body to mark May 1 as 'Demands Day'

......Specific to the body's demand is the implementation of regulated working hours and five-day-a-week working schedule for the Indian banking industry. In a statement, the AIBOC said,"The five-day working week will not have any impact on the customer service or any inconvenience to the general public in the midst of technology advancement and enhanced digital delivery of banking services.".................

Read - BS

RBI, Finmin Spar over NPAs at PSU Banks

........ Bad loans at staterun banks have gone up at a brisk pace, unlike their private-sector rivals and foreign banks. The RBI says this was because of reckless lending to corporates, an allegation that has not gone down well with the ministry which says the banks were only following government advice to help boost the economy. In a discussion paper, titled ‘Management and Governance Issues in Public Sector Banks’ and presented to the government in March, the RBI said ............

Read - ET

Economy in black and white

........In such a scenario, the intense focus on recovering black money from offshore bank accounts is partly misguided and it would be much more prudent to invest in mechanisms that will help restrict the generation and outflow of such money. These mechanisms would include reforms in a number of areas identified as most vulnerable to generation of black money such as real estate, bullion and jewellery, financial markets, public procurement, cash economy, trade mispricing and transfer pricing. Moreover, while there are a number of legislations to tackle this problem, the implementation of these needs to be strengthened. In this context,....................

Read - DNA

RBI curbs on pre-payment penalty on floating rate loans put banks in a fix

The Reserve Bank of India (RB)’s advice to banks that they should not levy penalty on customers for prepaying their floating rate term loan has put lenders in a fix as they fear corporate houses, if they exercise the option, will create asset-liability mismatch problem.............

Read - Business Standard