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.
Monday, June 9, 2014
The task ahead of Reserve Bank
Finance Minister reaches out to RBI Governor
The clear chemistry between Finance Minister Arun Jaitley and RBI Governor Raghuram Rajan has put to rest fears of a confrontation between the BJP-led government and the head of the central bank. The tone and tenor set in by the latest monetary policy brings in relief that India's central bank and Finance Ministry will be working in tandem to fight inflation and promote growth...........
Arun Jaitley underlines need to lower cost of business to revive growth
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| Union finance minister Arun Jaitley with Reserve Bank of India Governor Raghuram Rajan at a meeting at the central bank headquarters in Mumbai on Saturday |
Functioning of the Reserve Bank of India - A.Chandramouliswaran
Central Government, under the dynamic leadership of Shri Mody, is taking many steps to improve Governance. Reserve Bank of India cannot afford to lag behind especially since it had a record of much better standards of governance and efficiency.
It needs hardly any emphasis that the rules/regulations issued by the Bank to the entities regulated by it would serve their purpose only if they are implemented by the latter. It has been my experience ( now that I have been on the other side of the fence for a pretty long time) and also the experience of many others that banks do not follow the instructions issued by the RBI in a wide range of areas starting from payment of Savings Bank interest for delay in credit of cheques deposited into the account, clear description of the transactions in the Passbook/Statement., maintenance of minimum balance in a Savings Bank account, prompt payment to beneficiaries of inward remittances from abroad and payment of interest for delays in such payments, observance of regulations relating to foreign exchange remittances for residents for various personal purposes, remittances to non-residents from balances in their accounts, issue of Foreign Inward remittance Certificates (FIRC) and hundred other areas. With large scale delegation of powers to authorised dealers in the area of foreign exchange remittances, the intention of the Reserve Bank of India for good customer service is totally frustrated by the ignorance and carelessness of the branches of authorised dealers. I am aware of the difficulties in tackling this task. But then, if this is not tackled by suitable internal and external audits, including that of RBI, good and efficient customer service would not be achieved notwithstanding appointment of any number of Customer Service Groups/ Committees.
I would next come to the functioning of the RBI. In our times decades ago, the officials could perhaps be accused of an attitudinal problem in that generally they were perhaps negative in their approach and strained every nerve to find an argument to say "No" to the request!! This was perhaps conditioned by the atmosphere prevailing then. In recent periods, it has been my experience that while the officials are helpful and have a positive and helpful attitude, they are not always found to be thorough with the rules/regulations and the latter ingredient is also a prerequisite for efficient and good customer service. The policy of the RBI relating to placement of officials and the relaxed and liberal approach to the level of efficiency including the speed of disposal expected of them in practice may have take some some blame for this situation. Responses to clarifications sought on the instructions issued by the RBI and grievances of members of the public are very much delayed. It is high time that time limits for disposal of letters addressed to the Bank are laid down and enforced ruthlessly. As if the delay is not sufficient, the contents of the reply from the RBI are on occasions frustrating when the letter says that "the Bank has carefully considered the request but regrets its inability to be of any assistance in the matter." Such replies are better avoided even in their internal communications to the employees even though they are common and perhaps continue till this day. If my memory serves me right, there were instructions issued much before I retired long long ago that explanatory remarks have to be given for the decision of the RBI in its communication to a member of the public who had approached it for any matter. Unfortunately, these instructions are not being followed even now.
- A.Chandramouliswaran
K C Chakrabarty – An Accidental Banker ? - Lessons for Top Management
Read.........
Fin Mkt Watchdogs Ask FM to Raise 80C Volume
............The matter cropped at the Financial Stability and Development Council (FSDC) meeting on Saturday afternoon when Jaitley met heads of all financial services and market regulators. The country's savings have dipped to a nine-year low amid spiraling inflation, drop in profits of businesses and the inclination of household savers to buy more gold and park less money in traditional financial instruments. The savings rate in the economy has slipped from a high of little more than 38 per cent......................................
MP Rajeev Chandrasekhar asks FM to make regulatory bodies accountable
...........Under the existing architecture, the financial sector is regulated by eight agencies, which are Reserve Bank of India (RBI), Securities and Exchange Board of India (SEBI), Insurance Regulatory and Development Authority (IRDA), Pension Fund Regulatory and Development Authority (PFRDA) and Forward Markets Commission (FMC), Securities Appellate Tribunal (SAT), Deposit Insurance and Credit Guarantee Corporation (DICGC), and Financial Sector Development Council (FSDC). However, from the consumers’ perspective, the track record of these regulators is a huge disappointment. In fact, there is hardly an example of an investor or saver receiving satisfactory redressal of his grievances from these regulators........
CAFRAL - Conference on Financial Frauds
....The objective of the conference is to deliberate on the framework for strengthening the mechanism to deal with financial frauds in the financial sector and understanding best practices in banks by inviting the top regulatory authorities from the CVC, RBI, Police Department and eminent legal authorities..........
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THE POSTMAN KNOCKS
As “India Post as banking platform” by Charan Singh rightly concludes (June 6), the post office has touched the life of every Indian, irrespective of age, caste or place. It can be a banking partner for us. Today, more than 50 per cent of Indian adults do not have a bank account and banking as a whole is an ever-growing industry. It has never seen a decline in business volumes. The department of post and telecommunications appears to be precisely qualified to meet the objectives of the licensing policy of the RBI, as P&T has the necessary infrastructure and network to penetrate the rural sector. Hope the new government leverages India Post for banking operations fruitfully, without further loss of time and reaches the heart, hand and mind of the Indian populace.
- RS Raghavan, Bangalore
Consider the RBI policy as an indicator
...........“From a hawkish tone, the policy was more dovish, trying to balance growth while curbing inflation. Steps to increase credit availability by reducing the Statutory Liquidity Ratio (SLR) by 50 basis points to 22.5% starting mid June 2014 should help in increased availability of funds required for growth. However, this is unlikely to result immediately into a reduction in rates in the near term.The thrust still seems to be on curbing inflation despite the need to fuel the ailing economy.”................
India’s economic scenario : Glimmer of hope ?
............Financial inclusion has still to travel miles and miles more to see the smiles! Incidences of regional imbalances have to be done away with over time. No war please. If we want to fight it is best to fight against poverty, unemployment and crimes – looking at the plight of SAARC Nations!!............
Emerging Economies and Capital Flows – the poisoned chalice
......Hence, to expect technocrats and policymakers in emerging economies to get past political obstacles and pursue a rational and painful reform path – especially when times are good – is to demand of them a feat that policymakers in the West had not attempted.Indeed, Raghuram Rajan had referred precisely to these issues in the Andrew Crockett Memorial Lecture he delivered in June 2013.[4] His recent remarks on the collapse of global policy co-ordination, in fact, should be seen in the context of his remarks made then about the large spillover effects from unconventional monetary policies pursued in the West, the unproven efficacy of macroprudential measures, the difficulty of persuading economic participants to practise delayed gratification when times are good..........
A peek into the prime ministers economic vision
...........His speech, after a book launch at 7, Race Course Road, his official residence, underscored the importance of an urban and rural growth agenda, revival of the 'green revolution' in agriculture, a focus on renewable energy, exploiting the 'demographic dividend', making 100 'smart' cities and quick decision-making. Skill, scale and speed are what India needs to compete with China, Modi said..........
Steady and safe
...................The government should accept that instead of intruding on Mr Rajan’s turf. It should concentrate on the many tasks that it has to address on the economic front. The government should acknowledge that there are major supply constraints that are contributing to keeping inflation at a high level. It should start the work, sooner than later, to remove these constraints. The success of such measures will prepare the ground for the RBI to review and alter its position on interest rates. The RBI’s position is thus not unrelated to the overall economic situation that is prevailing in India today, thanks to the ..............
'No' by 'Yes' = long silence
My View on "YES Bank calls Madhu Kapur's allegations baseless,...":
Yes Bank Management's 'No' to Mrs Madhu Kapur's demands and long silence of the regulator, the RBI on the issue surprises the shareholders of the Bank and the people at large about the affairs of the bank. Allegations and counter-allegations are going on for months together and the publlc are entitled to know the correct position particularly with regard to her claim to be a director, her questioning the appointment of Mr Srinivasan with the clearance of RBI etc. Will RBI clarify the position for the good of the banking industry and the depositors, shareholders of the Yes Bank?
- Dr.Santhanam
RBI may let South Korean banks branch out in India
.........In the case of foreign banks, the RBI forwards their applications to an inter-departmental committee consisting of officials from the ministries of finance, home, commerce and external affairs. The banking regulator then takes a final decision on the basis of the panel’s recommendations. The panel, on June 6, gave its nod to Shinhan Bank’s application to open three more branches, as well as to Woori Bank and Industrial Bank of Korea to start one more branch each, the sources said...........
Shortage of Coins, Business Owners are Trying to Gain More from Customers
.......Mahatma Gandhi had something to say about this so many years ago. "You must be the change you want to see in the world". :-) I have this same problem in Mangalore getting change. I haven't seen a 5 Rs currency note in a long time, though Rs 2 coins seem to be very popular here. But it's strange that slightly prosperous roadside Chatwallahs or Chinese Food vendors give me whatever change I need. With already squeezing margins due to rising commodity prices, hotels are feeling the current situation too hot to handle. Besides, small grocery shops and retail establishments are also finding it difficult to procure coins.........
Unethical and Unfortunate
My View on "Banks ask Fin Min to reject AP govts farm loan wai...":
The announcement is unethical. But, is there any provision in the BR Act to write off bank loans by anyone other than the Board of Management of the Bank concerned? Is it a legally tenable move? Just because none of the Chairmen of any PSB has challenged it in the past, the govts also take for granted and issue waiver of loans from time to time.RBI should guide the banks on the legality of this move as it involves the profitability of the banks which in turn adversely affect the depositors' funds with these banks. Unfortunately, there is no word from the RBI in this regard.
- Dr.Santhanam
Write off of loans and offer of freebies - Dr.T.V.Gopalakrishnan
.............This sort of loans write offs in early 1990s and 2010s by the Central government and by Some State governments, Maharashtra ,Haryana etc though were severely objected to openly and privately by the previous successive Governors of the Resereve Bank, politicians however, ignored them and the write off of loans and generation of bad loans in anticipation of possible write off offers from the politicians have become the order of the day. The general discipline expected from borrowers has been on the decline. and..........
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Farm loan waiver will be implemented: KCR
..........“No work related to the issue has been done yet in the absence of details and the bankers are yet to come up with details of farmers’ outstanding dues. It will take at least 10 to 15 days to finalise the details, get clearance from the finance department and get the RBI approval before it actually come into force”,.......
It’s time to talk about the bad loans scam
........Previous Finance Ministers Pranab Mukherjee and P. Chidambaram perfected the art of ignoring the problem. They stayed silent on the issue and when pressed spoke about bad loans only in vague, inconsonant terms. That fuelled speculation that many bad loans were not just the result of bad business decisions but bad intent — that businessmen in cahoots with politicians, bankers and bureaucrats have been looting public sector banks merrily. After all, the rate of bad debt in government-owned banks is about 5-10 times higher than in private banks. Partly, this is because PSU banks lend more to the weaker priority sector. But it is undeniable that poor management and corruption are also major reasons public sector banks are bleeding.............
FinMin shortlists B Sriram, V G Kannan for MD posts of SBI
The Finance Ministry has shortlisted two senior officials of State Bank of India (SBI) for the post of managing directors of the country's largest bank. B Sriram, managing director of State Bank of Bikaner and Jaipur (SBBJ) and V G Kannan, managing director of SBI Capital Markets Ltd, are contenders for the post of two managing directors of the SBI, sources said. Names of shortlisted candidates have been sent to Finance Minister for his approval,....
Uday Kotak wins EY World Entrepreneur Of The Year Award
...........While accepting the award, Uday Kotak said, "I accept it with all humility on behalf of 1.2 billion Indians." He said, "It is recognition of the skills and dedication of the 25,000 employees of Kotak Mahindra Bank who have worked so hard to build a world class Indian financial services brand." Kotak set up Kotak Capital Management Finance Ltd in 1985. In 2003, it became India's first non-banking finance company to be converted into a bank................
SBI sensitises villagers on financial literacy prog
...........During the programme, the participants were sensitized about the role of bank in financial inclusion, financial planning, financial discipline, use of Information Communication Technology (ICT) to provide banking services in the rural/ unbanked areas, precautions to be taken while operating ATM/ Debit and Credit Cards, fictitious mails/SMSs offering money, chit funds, steps to be followed for resolution of grievance with bank including Banking Ombudsman Scheme 2006 of Reserve Bank of India (RBI) and undertaking Income Generating Activities (IGA) on scientific lines. They were also briefed about the need to develop long term relationship with bank for all round development..........
ICICI Bank overtakes HDFC Bank as top private bank employer
With addition of over 10,000 jobs last fiscal, ICICI Bank has overtaken rival HDFC Bank as the biggest employer in the private banking space with more than 72,000 employees. Incidentally, HDFC Bank saw its employee headcount decline by 900 during the fiscal ended March 31, 2014, while at least five other major private sector banks saw their workforces grow during the year..............
Withdraw amendments to Multi-State Co-op Act: Sahakar Bharati
......microfinance institutions in the country have hardly been regulated, and some of them charge high interest rates. Since there is a need to regulate such institutions, the Government should introduce a strong Bill in this regard, he said. Stressing the need for setting up small local urban cooperative banks across the country, he said no urban cooperative bank has been set up in the country in the past 15 years. The RBI should announce norms for setting up new urban cooperative banks, he said........
SIT on black money decides to solve tax treaties’ secrecy puzzle
......The SIT, sources said, would look into the possibility of requesting competent courts and the relevant authorities in foreign jurisdictions for permission to share with other agencies the data obtained by the Central Board of Direct Taxes (CBDT) and the I-T department. The agencies for which the data access could be requested include Enforcement Directorate (ED), Directorate of Revenue Intelligence (DRI), Reserve Bank of India and CBI, so that suspects in such cases can be probed from various angles and under provisions of criminal laws........
Spot gold premia decline
............Though gold is imported and loaned to jewellers, the pricing is done when jeweller returns the gold to the lending bank. As loan periods usually exceed three months, spot premia are different after a loan period is over; the import duty, too, might be different. A source in the know said, “This is becoming an issue for lending banks, as they are not able to conclude how to price gold when jewellers return the gold taken on loan.”.................
Saturday, June 7, 2014
India Post as a banking platform - Charan Singh
............India Post has touched the life of every Indian. To preserve its heritage and extend its glory, post offices need not become banks, but could certainly consider a symbiotic business partnership with commercial banks to enhance financial inclusion and mobilise deposits.
Human capital is the most critical issue for banks
......Whether it is financial capital or human capital, it is driven by the kind of institution that you have and are you able to show continued, sustained progress. You’re hiring youngsters—they have a lot of energy, but very little experience. The middle-aged workforce is highly experienced. There’s a cultural mismatch, an ethnic mismatch and an experience mismatch. How do you foster that together, and bring a culture that requires leadership and a drill that needs to be deep into the organization? That’s the biggest challenge for the next three-five years… This is the time to talk less financial capital and talk more human capital..........
Sealing the Victory of the Corporate Sector
......Let me now turn to the background of the report of the RBI’s Nayak Committee report on public sector banks (PSBs) and the likely consequences of the acceptance of its recommendations. There was some illusion among Indian politicians and publicists that India would be immune to the global economic crisis beginning with the bankruptcy of Lehman Brothers. But once the economic crisis hit India, businesses began to fail and default on bank loans and non-performing assets of banks piled up. But paradoxically enough, analysts of the Indian banking system became concerned, especially from 2012 about the burgeoning loans of Indian corporate houses from domestic, especially PSBs..........
Students of IFIM Business School Awarded Post Graduate Degrees by Dr. K.C Chakrabarty, Former Deputy Governor, RBI
The lighting of the lamp signified the commencement of the august function. PGDM students of the 2012-14 batches were awarded their post-graduate degrees by Dr.K.C. Chakrabarty, while top performers of the batch were bestowed with awards for excellence in various fields. Dr. Chakrabarty congratulated the students & best performers during the ceremony, also said “Leadership is what sets apart individuals from the rest. Such skills are valued in organizations since it requires inherent qualities that surface to align a team.”.............
Reserve Bank of India ends penalty for dormant accounts
.........According to the RBI notification, banks should not take undue advantage of customer difficulty or inattention. Instead of levying penal charges for nonmaintenance of minimum balance in ordinary savings bank accounts, banks should limit services available on such accounts to those available to basic savings bank deposit accounts and restore the services when the balances improve to the minimum required level. Banks should not levy penal charges for nonmaintenance of minimum balances in any inoperative account. Banks should also limit the liability of customers in electronic banking transactions in cases where banks are not able to prove customer negligence, the RBI said.......
IBA wage talks on Friday
The Indian Banks’ Association will hold the 10th round of wage revision talks with the United Forum of Bank Unions in Mumbai on June 13. All India Bank Employees’ Association General Secretary C. H. Venkatachalam said, “19 months have passed since officers and workmen organisations in the banking industry submitted their charter of demands for the 10th bipartite settlement. There was a standstill in the talks on account of the Lok Sabha polls. We expect the new government to expedite the settlement at the earliest.”
The Hindu
Obituary
SHRI JNS SHARMA, who retired as Assistant General Manger from Banking Ombudsman's Office, Bangalore passed away on June 6, 2014 in Bangalore. He was suffering from cancer for the past year or so. He was very humble, quite and a thorough gentleman. During his service, as I remember, he had never hurt any of his colleagues. His always smiling and kind face remains forever in our minds. He lived quietly, retired quietly and finally left quietly for his heavenly abode.
OUR SINCERE CONDOLENCES TO THE FAMILY GRIEVING THE IMMEASURABLE LOSS THEY SUFFERED IN THE DEATH OF SHRI. SHARMAJI. IN SUCH MOMENTS, THE WORDS WOULD BE SUPERFLUOUS. GOD REST HIS SOUL IN PEACE.
- S. I. QUADRI, (M-298)
RBI organizes financial literacy cum awareness programme at Kheer Bhawani
Reserve Bank of India, Srinagar set up a Financial Literacy cum Awareness stall on the occasion of Mela Kheer Bhawani at Tulmulla in Ganderbal District of central Kashmir.
In a statement issued here said a large number of people visited the RBI Stall in which Financial Literacy material prepared by RBI was distributed. The material covered various aspects of banking services, non-banking services and the grievance redressal mechanism available to the customers besides literature on basic banking concepts of thrift, saving and lending products, .........
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In a statement issued here said a large number of people visited the RBI Stall in which Financial Literacy material prepared by RBI was distributed. The material covered various aspects of banking services, non-banking services and the grievance redressal mechanism available to the customers besides literature on basic banking concepts of thrift, saving and lending products, .........
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SBI to have live electronic eye on ATMs in 6 months
Manned ATMs may soon be passe at State Bank of India (SBI). SBI and subsidiaries, with more than 27,000 ATMs all over the country, are readying to move its ATM security to electronic surveillance. We have floated tenders for comprehensive electronic surveillance of ATM installations as early as February 2014. In fact, we expect to put the act together in about six months,”..........
Never part with debit/credit card PIN: RBI
...........However, there are no specific instructions for traders. “Most banks transfer the amount to traders only after a few days. We insist customers register their mobile numbers with their banks to receive an intimation of the transaction as soon as the card is swiped,” said the RBI official. It is better to change the PIN every three months to prevent cyber fraud. RBI is also joining hands with various banks to hold electronic banking awareness and training (e-Baat) programmes.
Cyber criminals con senior citizen of Rs 60,000!
................With the boom in various e-payment services, cyber criminals seem to have invented a new modus operandi, as the case of Shriram Kulkarni (61) shows. The priest from Nashik lost Rs 60,000 from his State Bank of India (SBI) account to a conman posing as a representative of the Reserve Bank of India (RBI). Kulkarni got a call on his mobile at 5.30 pm on June 3 from someone who identified himself as a RBI representative. The person told Kulkarni that since he hadn’t submitted his Aadhar card, the two ATM-cum-debit cards, which he possessed, would have to be re-issued. He claimed that this exercise of verifying the cards and reissuing them had been going on a daily-basis for a year now.........
RBI invites Applications for Prof. K.N. Raj Memorial National Fellowship Scheme – 2014-15
The objective of this scheme is to encourage distinguished research scholars in India or abroad to work in academic institutions in India for a short period and to facilitate interaction between the scholar and other faculties of the institution in which the scholar would work. The theme will be identified by a Steering Committee on Economic and Policy Research (SCEPR) of the Reserve Bank of India........
Finmin plan to create holding co for PSU banks under fire
.........K.C.Chakrabarty, former Deputy Governor, RBI says: “Holding company structure is not going to serve the purpose for a longer time. It may solve your problem temporarily. Best thing is why don't you divest in existing PSU banks and let them go to the market… My basic question is why government needs to hold banks. Government’s job is not to do business, but to facilitate business.”...............
NO SURPRISES IN MONETARY POLICY
........Due to persistent inflation levels and subdued economic growth the central bank has been hawkish about the key interest rates in the past few quarters, keeping the rates tight including liquidity in an effort to contain the surge in inflation. But for a change this time the RBI’s stance has been more dovish than hawkish, signalling a positive sentiment post-election results. Perhaps the RBI too expects ...........
Aditya Puri remains highest-paid bank CEO in India
HDFC Bank's managing director (MD) Aditya Puri remained the highest-paid banking chief in the country in financial year 2013-14 (April-March). Puri, who is also the longest serving chief of an Indian bank, received a remuneration of Rs 6.07 crore in 2013-14, or 20.9% more than what he earned in the previous year. Chanda Kochhar, MD and CEO (chief executive officer) of ICICI Bank – the largest private sector lender in the country, received an increment of only 2% during this period. She earned Rs 5.23 crore during the year. However, the remuneration of Puri and Kochhar are not strictly comparable ...........
Bank NPAs: More loan defaulting cos under CBI glare
........According to the list of defaulters released by All India Bank Employees Association (AIBEA) last month, Rajat Pharma/Group has not paid loans of around Rs 434 crore. Similarly, Century Group has not paid loans of around Rs 624 crore. AIEBA has released list of 406 defaulter accounts amounting to Rs 70,300 crore, against whom banks have initiated legal action. The top fifty defaulters have unpaid loans of about Rs 40,528 crore. However, Kingfisher Airlines, which is topping the defaulter list with Rs 2,673 crore unpaid loans, is yet to face any action from CBI........
RBI asked to share info on coop bank
............"From the above submissions as well as on a bare perusal of the provisions of the BR Act cited by the Respondent, there appear to be restrictions on access to information held by or under the control of RBI. This is prima facie inconsistent with the RTI Act, which mandates disclosure of information unless exempted under Sections 8 and 9 of the RTI Act. Therefore, in accordance with Section 22 of the RTI Act, the Bench holds that the provisions of the RTI Act shall override the provisions of the BR Act as regards furnishing information. Consequently, whether or not information should be furnished has to be examined in light of Sections 8 and 9 of the RTI Act only.".........
Finance Commission team in J&K; meet local bodies
The 14th Finance Commission led by former RBI Governor Y V Reddy, which is in Jammu and Kashmir for a two-day visit, has met representatives of rural and urban local bodies of the state who apprised it of their fund requirements among other issues. The Commission, including former Planning Commission member Abhijit Sen, former Finance Secretary Sushma Nath, National Institute of Public Finance and Policy Director M Govind Rao and former acting Chairman of National Statistical Commission Sudipto Mundle, arrived here yesterday, an official spokesman said. ........
Despite state aid, DCCBs can't resume operations soon
....It was expected that RBI may accept the cooperatives' application to conduct operations after the aid was granted. However, sources say the cabinet move to approve Rs319 crore assistance to the three banks this week should have come a bit earlier. The situation would have been different had the aid been granted while the banking applications were still under consideration. For the RBI too, this comes as a unique case. "Now, the case will have to be considered afresh. Apart from considering the financial parameters, even legal aspects will have to be examined as never before such a case has come forth," said a source........
Banks ask Fin Min to reject AP govts farm loan waiver proposal
....... “We've (also) told the banking secretary that such a measure at this point will vitiate the (loan) recovery environment,” said a senior banker with direct knowledge of the matter. “We have said the proposed step should be properly examined. The Andhra government should look at alternative ways to support farmers.”.......
Sistema Shyam’s FIPB proposal must get RBI nod: DoT
The Department of Telecommunications will ask Sistema Shyam to take the approval of the Reserve Bank of India for issuing fresh redeemable preference shares to a Singapore subsidiary. The department has taken a view that since such instruments are considered debt, it falls under the rules governing external commercial borrowings (ECB) and not the Foreign Direct Investment laws..........
Friday, June 6, 2014
A sensible policy
..............Indeed, Finance Minister Arun Jaitley in a statement on social media endorsed the credit policy, saying it indicated a calibrated approach to balance between growth and inflation. The coming budget will indicate how far the fiscal deficit, camouflaged by P Chidambaram in various cooked- up entries, will impact the economic situation. A clear- cut enunciation of the real fiscal situation, warts and all, needs to be made in the budget, not just to reveal the statistical skullduggery of the previous regime, but to underline the difficulties in steering the economy out of the dire straits. This should also help the central bank frame its next installment of monetary policy............
Read - FPJ
Reforms top FSDC meet's agenda
......Previous interactions of the FSDC sub-committee, which is chaired by the RBI governor, also discussed the governance issues relating to public sector banks. Other issues discussed included appointment of a chairman, selection of board members, accountability structure with regard to committee approach of decision making. Splitting of the chairman and managing director’s post in public sector banks was also discussed. Sources said some of the recommendations of the Financial Sector Legislative Reform Commission, which do not need legislative change, will also be discussed in the FSDC meet.........
Bond Market, not Banking Behemoths
The finance ministry is reportedly examining mergers of the country's state-run banks to create stronger financial institutions. True, Indian banks do not have large enough balance sheets to meet the needs of large rapidly globalising companies. Small public sector banks could gain economies of scale by merging, but mergers should be voluntary , board-driven and based on commercial decisions that would deliver greater value to shareholders, and not forced by bureaucratic whims. Also...........
Read - ET
Read - ET
RBI tightens norms for non-scheduled UCBs
Reserve Bank of India (RBI) has tightened regulations for non-scheduled co-operative banks, asking them to keep aside 4% of their deposits as cash reserve ratio (CRR) starting from 12 July 2014, up from 3% of deposits currently, to bring them on a par with their larger scheduled urban co-operative banks. Also, the percentage of deposits......
Solitary banks
..........In the past, government ownership has impeded the functioning of PSBs. In fact, the PSBs' financial health has deteriorated due to unwarranted government interference. The new governance structure mooted by the Nayak Committee, would bring operational freedom to the top management of PSBs. It is another matter whether the top managements of PSBs would be able to steer these banks to a new path, first by addressing the burgeoning issue of non-performing assets and then leading them to a new growth trajectory..........
There Does Not Seem To Be Everything Normal at UFBU
......UFBU has been silent since mid March 2014 ( over 80 days now ) as far as negotiations for 10th BPS are concerned. AIBOC has now written to IBA for initiating the process of talks. It is a matter of great concern that UFBU is so shell shocked since March 2014 that it has neither taken to task IBA on going back to the agreement to hold talks in the middle of April 2014, nor informed its cadre about the reasons for not taking up the issue at appropriate levels. The banking officers and workmen are bewildered by such an attitude.........
Bankers' Dream of 5 Day Working Shattered
..........Thus, I feel that for the time being the dream of bankers for 5 days week is shattered and UFBU needs to focus on core issue to bring bankers at par with the salaries of the central government. If still they do not understand these basics of negotiations, then Aam Bankers may teach them a lesson in days to come by mass exodus from these old and tired unions. The issue of 5 days working should be discussed only after completion of 10th BPS negotiations............
Except one, no private banks have issued RuPay cards: A P Hota
......The RuPay gateway has just started and the card base is only 15 million. Plus, for the card to pick up in various channels, all banks will have to start making changes in the system such as in e-commerce, etc. Also, banks will have to start issuing the cards. Of the only 15 million cards now, most have been issued by public sector banks (PSBs). Not a single private sector bank has, except Federal Bank...........
‘ India 13th largest non- cash payment mkt in the world’
India has become the 13th largest non- cash payment market globally, says a Frost & Sullivan report." India is currently the 13th largest non- cash payment market in the world with a high potential to grow significantly as more merchants install POS terminals and accept card payments," Director, Automation & Electronics at Frost & Sullivan, Niju V said. "Despite the high consumption volumes, there is very minimal local manufacturing or assembly activity," he said. While local manufacturing is restricted to just local assembly, we are highly reliable on imports for the entire electronics part in the product, he added............
Banks to move away from cash credit product
.......The Urjit Patel committee, which was set up by the RBI to review the monetary policy framework, had recommended that there was a need to move away from the overnight window to a spectrum of windows of different maturity. Following this, the central bank introduced the seven-day and 14-day term repo windows from which banks borrow at the market determined rate. Along with introducing the term repo windows, the central bank continued with the cap on repo borrowings via the overnight window........
Raghuram Rajan-Narendra Modi relations could face big test should El Nino effects food prices
......The central bank kept its policy rate on hold on Tuesday, as widely expected, but eased rules to spur bank lending. "If the impact of El Nino is significant and pre-emptive measures by the government prove inadequate, then the RBI might hike rates to contain inflationary expectations," ........
Modi sets finmin priority: inflation combat
..........“As soon as the meeting began, Modi said looking at Mayaram that inflation is the first and foremost thing that the ministry needed to handle. Modi has asked Mayaram to include inflation in the first hundred days’ agenda and work out a plan to handle,” an official told dna. Finance ministry sources said a workable plan to address the supply-side issues to handle inflation will be submitted to the Prime Minister’s Office (PMO) soon............
RBI to take another shot at IIBs in FY15, with tweaks
........For the current fiscal, the RBI will offer two variants from the very beginning: inflation-indexed bonds and inflation-indexed savings certificates. The former will be primarily for institutional investors through the auction process, with a 20% limit for retail investors. The latter will be primarily available.......
Banks may soon be able to issue infrastructure bonds
In a bid to boost infrastructure lending, the Reserve Bank of India (RBI) is likely to allow banks to issue infrastructure bonds. These bonds will not attract the mandatory cash reserve ratio (CRR) and statutory liquidity ratio (SLR) provisions.............
RBI allows FPIs, NRIs to invest upto 26% in insurance
The Reserve Bank said overseas investors, including FPIs and NRIs, can invest up to 26 % in insurance and allied activities through the automatic route. Earlier in February, the government had allowed 26 % foreign investment in activities related to insurance like broking, third party administrators and surveyors and allowed FIIs and NRIs to invest in insurers within the stipulated cap..........
NBFC sources say RBI norms aimed at ending licence trade
........" There have been recent instances where we have seen entities that the RBI may not consider as fit and proper to hold large stake or promote an NBFC, bypassing the regulatory process of seeking a NBFC licence by acquiring or attempting to buy an existing NBFC," a senior industry official said. Sources said that the RBI was likely to be extremely strict with any such instances and may even cancel licences of NBFCs that are acquired in such a manner by those seeking to avoid tougher norms that are in the works. The attempts to acquire NBFCs so as to benefit from their licences have started after the RBI announced a moratorium on issuance of fresh NBFC licences from Apr 1........
New merger proposal to Indus Ind and Federal Bank
........"The Rupee Bank administrator met me on Wednesday. He is holding a meeting with Cooperative Minister Harshavardhan Patil in Mumbai today and we expect some decision on the merger soon. Rupee Cooperative Bank is a loss making bank and any acquiring bank will have to do a due diligence of its assets," Oulkar said. He said a merger proposal will be sent to the RBI once either Indus Ind or Federal Bank agrees for the merger. He said the RBI will have to submit a merger report and so would have either of the acquiring banks.........
RBI permits ANZ to open two new branches in India
...."The approval to open branches in these commercial hubs will strengthen our superior regional strategy, expand our ability to support clients and build on our position as a leading bank in Asia. India is the world's third largest economy on purchasing parity terms and it remains one of the fastest growing economies in the world...Continuing to connect our customers between India and the other32 countries in our network creates a further driver of growth for ANZ," ............
Federak Bank gets RBI nod to open representative office in Dubai
..........“Federal Bank has been granted approval by the Reserve Bank to open a representative office in Dubai, UAE,” the old generation private sector lender said in a statement. The representative office will function as a source of information to NRIs interested in foreign investments in the country, apart from serving the diaspora...........
CKP co- op bank account holders stage protest
Around 100 account holders of CKP Co- operative Bank protested against the bank at Wagle Estate here on Thursday following the RBI directives to allow bank customers to withdraw only Rs 1000 in six months. It was the second day of the bank customers’ protest.............
Housing fin schemes get new thrust
......“The change that RBI’s cautionary note brought was that now banks do not disburse the entire money upfront and instead disburse it in a construction-linked manner, which is a good thing,” ........
YES Bank calls Madhu Kapur's allegations baseless, untenable
.........YES Bank, however, has strongly denied these allegations, saying her statements were incorrect and defamatory. "The bank has always acted in a manner, which is in accordance with law and has upheld the principles of corporate and management governance. The subject matter in consideration at the AGM has been finalised in a transparent and legally compliant manner,".........
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