.........."Last year, the ratings were only shared with individual member banks and it was displayed on our website as a group. But from this fiscal we are planning to put the ratings of individual banks in public domain," BCSBI Chairman A C Mahajan told PTI............
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 30, 2014
'Blacklisted' Donor Agency Funds Gujarat Government Projects
.......The Reserve Bank of India (RBI) has been asked to obtain the government's permission before releasing funding from Netherlands-based Greenpeace International and Climate Works Foundation, both contributors to Greenpeace India. But did the government do due diligence on Climate Works before placing it on a watch list?...........
PayPal goes slow on India, focuses on analytics
..............Owned by eBay, PayPal moved out of India in phases because of Reserve Bank of India (RBI) regulations that treated it as a quasi-financial body since it offers services like the online wallet that allows users to store money in the online account. RBI wanted PayPal to transfer the money to banks within a pre-determined timeframe instead of holding the money in its online account. In effect, it only allowed PayPal to function as a payment gateway, limiting the scope of its platform. “RBI placed some restrictions because they didn’t want frauds to happen,”..............
Middle-class angst and the budget
...........Realistically, apart from some marginal tinkering with exemptions limits, Sec. 80 C exemptions and so on, the NDA government will be doing a service if it can revive interest in some of the existing schemes by making them investor-friendly. For instance, it can, in conjunction with the Reserve Bank of India (RBI), make the CPI-linked inflation bonds a worthwhile proposition for investors. That means the bonds should offer at least a quarterly interest (it is now payable after 10 years). It should be better ..........
Lenders feel 'trust deficit' in gems and jewellery sector
................"As of today, there is a huge trust deficit within the industry, bankers, regulators and government. This is one segment where trust is most important," Bank of Baroda's Chairman and Managing Director S S Mundra said, speaking at a gathering of the gems and jewellery industry over the weekend. His reservations included the likely diversion of funds .........
SEBI issues warning against fraudulent regulatory calls
......."It has come to the notice of the Securities and Exchange Board of India that certain unidentified persons posing as SEBI officials are advising public, to invest in insurance policy/financial products to avail bonus gifts, promotional offers or other such offers," said a public notice issued by the market regulator. "SEBI hereby urges the public to remain alert and not to fall prey to such frauds or scams perpetrated by miscreants which impersonate as employees/officers of SEBI," ..........
Sebi plans surprise inspection of 'paper' cos
.........The typical modus-operandi of such entities involves setting up of a company, followed by tall claims about their proposed business ventures. Then an exercise is undertaken to collect funds from investors, including through IPOs (Initial Public Offers) of shares and issuance of other securities. However, their business plans remain on paper only and they later divert funds collected from investors for personal gains or for other purposes, while leaving investors in lurch..........
Banks Rush to Dump Their Bad Loans, Make a Beeline for ARCs
..............Increasing stress on the loan book has been worrying bankers as it eats into their profits and limits their ability to expand the loan book. As a result, a number of banks are selling stressed loans to ARCs. Data released by the Reserve Bank of India show that for commercial banks, gross nonperforming assets (NPA) bad loans before making provisions stood at 4% of total advances in March compared with.............
RBI turns down A.P.’s request to approve loan waiver scheme
...........The Kotaiah Committee on Loan Waiver, which met RBI officials recently, also raised the re-scheduling of loans for farmers in 575 drought and cyclone affected mandals. However, no concrete assurance was given to the committee, sources said. If the RBI concedes the State government’s request, then farmers will get some relief on repayment of loans worth about Rs.12,000 crore availed by them in ...............
Ex-MLA files PIL
............The PIL would come up for hearing on Monday. Mr. Jayaprakash made the Centre, Reserve Bank of India, Indian Banks Association, Andhra Pradesh and Telangana State governments, Election Commission of India, Telugu Desam Party (TDP), and Telangana Rashtra Samithi (TRS) as respondents. The PIL says that the waiver of crop loan violates the Article 14 and 293 of the Constitution and ........
Loan repayments stop in Andhra Pradesh, Telangana
.....................“The discussions were very preliminary. RBI can examine any scheme only after the details of the scheme are available. RBI has always maintained that waivers undermine credit culture and discipline and, hence, are harmful for the health of the banking system and stability,” the RBI response said. Even before the loan waiver programme has been finalized, several borrowers have already stopped repayments in anticipation of loans being waived, said senior bankers...................
Saturday, June 28, 2014
Let’s get real about this Budget - Dr.S.S.Tarapore
............Economists should take heed that today the Planning Commission is empty, the Prime Minister’s Economic Advisory Council has not been reconstituted and the ministry of finance does not have a Chief Economic Adviser. Have we economists rendered ourselves redundant?
Higher regulatory capital for banks - V.K.Sharma
.........After the fact, regulators became wiser and thought up Basel 3 norms, which mandate a minimum leverage ratio of 3%, or a maximum leverage of 33 times! Given that even this 3% is rather low, one can imagine where banks were on this parameter before the cataclysm. Even this rather modest number seems very ambitious if one reckons the fact that even this has to be complied with only by March 2018. Significantly though, ..........
Many challenges to stability
...........The periodic publication of such reports by the RBI is in line with best practices around the world for major central banks. As in the case of previous editions, the recent FSR aims to promote awareness about vulnerabilities in the financial system. Other important objectives are to examine the resilience of the financial institutions and to encourage a debate on the development and regulation of the financial sector. Most of these objectives are also currently being examined at the highest levels of the government and the RBI, .........
Call for better monetary policy coordination at global level
...........In its 9th Financial Stability Report, the central bank said with the eventual removal of policy accommodation in the AEs, better global policy coordination could reduce unexpected spillovers and improve trust which may be essential for future coordination. RBI Governor Raghuram Rajan had underscored the importance global monetary policy coordination twice in the last two months — at the Brookings Institution in April and at a conference organised by the Bank of Japan (BoJ) in May...................
Change RBI Governor: Swamy to PM
..........In a letter to the Prime Minister, Dr. Swamy has enclosed a copy of a letter from former Supreme Court judge Justice B.N. Srikrishna, which he says is an indictment of the RBI governor for his wrong policies. He also pointed out that it sends a wrong message about the NDA government that persons like Dr. Rajan would continue to be Governor of the RBI on the grounds that he is qualified as if “there are no patriotic Indians who are at least or more qualified than him”...........
'Grave' situation - B.K.Kamath
This is with reference to Dr. TVG',s item in today's VITALINFO.
It is wrong to put the entire blame for pension revision on our Govr. and MOF. Let us introspect. and analyse the role of our overzealous HRD. I can cite innumerable instances of HRD withholding benefits extended by GOI or Govr.
Those who were in Guwahati during 1984-86 might recall how we were denied partially the benefit of special allowance of 25% of pay and halting allowance on transfer to north east. Having failed to get redressal from the then PPD, I had to take recourse to Govr. personally during the Central Board meeting at Guwahati.. The Govr. Late Mr. R. N. Malhotra, immediately on returning to CO directed to issue AC rectifying the anomaly. But the overzealous PPD made it with prospective effect. Retrospective was given only after I brought to the noticed the Govr. through my monthly DO letter. Another example of their perverse attitude is the issue of circular in 1986 or so withdrawing conveyance allowance to the Managers (now RDs) who had their quarters in the branch premises on the ridiculous argument that they don't have to commute. This circular was also withdrawn after I protested in my monthly DO letter as Manager. Those days any grievance or suggestion included in the Manager's monthly DO letters to the Govr. were immediately acted upon. I can go on ad infinitum.
Now coming to pension revision, from the mails exchanged on the subject, while conveying the un principle approval Takru had put only one condition that pension can be done only once in ten years as in case of CG employees. I don't recollect his having mentioned 2012 as the effective date. If anybody has authentic information to the contrary I may be enlightened. Under any circumstances it cannot be 2012 for the simple reason the negotiations are not making any headway. Who knows MOF may say since the last revision was in 2007 the next revision is not due till 2017. Since our last revision was done in 1997 logic and equity demand that the next revision should be as in 2007 applying the ten year criterion. Besides as the date of accord of in principle approval, 2007 scales were in force. Once this is done subsequent revisions can be coterminus with the industry revision. I would strongly urge the office bearers of the FORUM to urge upon the Govr. to immediately revise our pension to 2007 scales without further reference to MOF.so that those of us with one leg in grave peacefully die realising our decade old dream.
- B. K. Kamath, CGM (Retd)
Red Tape - M.G.Warrier
My View on "Is there any hope for Relief for RBI Retiree's? - ...":
Here Dr Gopalakrishnan’s words echo the sentiments of a couple of thousands of RBI retirees and their families whose organic links with RBI had been cut due to retirement/death of a serving employee in the early 1990’s or earlier. Majority of them are in their eighties. In one of my personal representations on the subject (NOT AS A BENEFICIARY), I had mentioned to the then Governor Dr Subbarao that making the story of Bank’s handling the pension issue post-1997 public, may affect the reputation of the organisation. It is said, a poem is best enjoyed, if the poet gives expression to one’s feelings exactly in a manner one would have done it, if one had the poet’s vision and ability to express. Dr Gopalakrishnan has written what I would have liked to write, if I had that skill. Hope, this piece pierces through the hard matter which was known in olden days as ‘RED TAPE’!
- M.G.Warrier
RBI Retirees - A Hapless Lot - P.P.Ramachandran
Please refer to the strong indictment of RBI Governor and Government of India by Dr. T.V.Gopalakrishnan. I had sent two appeals to Governor Duvvuri Subbarao on 30-3--2012 and 20--2--2013 where I had brought out vividly the pitiable condition of Retirees. I had pointed out in my first letter that " Retirees are perishing like "Flies in a Forest Fire" I gave a list of Fifty retirees who had died recently (by that date) . My second letter provided another list of 100 Departed Retirees. A fresh list beyond February 2013 will yield another 100 names. I am too much consumed by anguish to prepare this new list of Departees. All of them and the rest of the surviving retirees have given their "Blood, Toil, Tears and Sweat" for this august institution. The lists include several who have rendered outstanding service to RBI and were treated with great honour and considerable respect during their service. But the years they have spent in retirement has been one of precipitous decline into despair. Sans doubt the utterly dissatisfied souls of these 250 persons are hovering over the Corridors of Power in RBI. The Government of India has taken good care of its retirees and treated R B I retirees with contempt and disdain. Secretary after succeeding Secretary has contributed confusion and delay to the upholding of our right. With a Governor like Dr. Raghuram Rajan--a person of international repute--it would be a mere act of will by him to solve problems of Retirees and allow them to spend happily their last few days on this desolate planet. They are fast dwindling race !
- P.P.Ramachandran
Bank unions meet FM, press for early wage revision
............Jaitley assured representatives of the United Forum of Bank Unions (UFBU) Financial Services Secretary R S Sandhu would look into the matter and the settlement process expedited, union leaders said. General secretaries of nine employee unions under the UFBU were present at the meeting,........
RBI to work on July 1 during annual closing of accounts
.........."On a review and in order to facilitate the settlement of market transactions as also to aid the transactions of the general public, the Reserve Bank of India has decided that it will remain open even for public transactions on July 1, 2014,"..............
Financial inclusion in mind, RBI turns to UID
Despite the uncertainty surrounding the future of the Unique Identity (UID) project, or Aadhaar, the Reserve Bank of India (RBI) is testing a mobile-based payments system linked to this platform. Remittances through this platform skip the traditional banking channel and ..............
'Locking the stable when the horse has bolted'
My View on "Fix Aadhaar, don’t junk it":
There is some merit in fearing that Aadhaar enrollment of citizens and non-citizens has enabled the non-citizens to become citizens in a dubious manner. This is a serious issue and the UPA govt / UIDAI should have addressed it before implementing the programme. Mr Nilenkani has failed to address this issue and he was only keen on announcing numbers of cards issued and getting the credit for the speedy implementation of the programme. It is the sad reflection of the educated like Mr Nilenkani and the UPA govt in not envisaging this problem and even after knowing about it their failure to address it. It is not clear how many of those 63 crore enrolled are non-citizens. Now, attempting to rectify it is like 'locking the stable when the horse has already bolted'. It is virtually impossible to track the non-citizens from among the Aadhaar card holders. Until this issue is resolved, Aadhaar card programme should not be continued lest it would endanger the security of our country.
- S.Santhanam
WKH financial awareness camp
.........Addressing the gathering, AGM, RBI Shillong, C. Sangpu Vaiphei said that the main objective of the camp was to create awareness on financial and banking related matters so as to achieve 100% financial inclusion in the village within a short span of time. He also emphasized the benefit of having Basic Saving Bank Deposit Account,...........
Read - The Shillong Times
RBI to tighten prudential norms for 'important' banks
...............Based on their systemic importance scores, banks will be plotted into different buckets and D-SIBs will be required to have an additional common equity Tier 1 capital requirement ranging from 0.20 per cent to 0.80 per cent of the risk-weighted assets. “D-SIBs will also be subjected to differentiated supervisory requirements and higher intensity of supervision based on the risks that they pose to the financial system. The names of the banks classified as D-SIBs will be disclosed in August every year starting from 2015,”.........
Regular workshops for banks, FIs needed on credit appraisal processes: RBI
.........The abovementioned directive is part of the recommendations of the Committee to Recommend Data Format for Furnishing of Credit Information to Credit Information Companies (CICs). The RBI has now asked banks/financial institutions/ CICs to implement 11 of the recommendations. The RBI said banks/FIs should include in their credit appraisal processes/ loan policies, suitable provisions for obtaining CIRs from one or more CICs so that the credit decisions are based on information available in the system..........
Rajan seen succeeding as bad loans of banks fall from eight-year high
Bad loans in India are falling from an eight-year high in an early sign of success for central bank governor Raghuram Rajan’s push to strengthen the nation’s financial system. Non-performing debt as a proportion of total advances fell to 4% as of March 31 from 4.2% in September, which was the highest since 2005-2006, the Reserve Bank of India said in a report..........
Waiver - its deviation from normal practice
My View on "Farm loan waiver: Telangana, AP struggle for resou...":
The posture of the RBI on loans is well anticipated. Even agreeing to rescheduling should be considered a deviation from the normal practice. Agricultural loans become overdue only when the loans remain unpaid continuously for two successive crop seasons. The Banks have not put out in public domain nor did the State governments of AP and Telangana as to how many borrowers would have not repaid two successive crop loans or two installments continuously on the agricultural term loans that became coincidental to the crop loan dues. As on 30th September 2014, the NPAs in Agricultural segment of the then combined AP was just Rs.3800 crores!!
- Dr.Yerram Raju
Stringent guidelines for wilful defaulters on the cards
............The move to revisit wilful defaults comes at a time when non-performing assets (NPAs) in the banking system have seen a steep rise. According to RBI data, as of March 31 this year, gross NPAs in the banking system accounted for four per cent of gross advances, while net NPAs accounted for 2.2 per cent. Earlier, ...........
Banks should give monthly data about wilful defaulters: RBI
...............According to the new regulations, banks will have to furnish data on wilful defaulters of Rs 25 lakh and above for the quarter ended December 31, 2014, and of Rs 1 crore and above for the half year ended December 31, 2014, to credit information firms, and not to RBI.............
Sanjeev Kumar Gupta takes over as new ED at Axis Bank
.........Currently, Gupta is the President & CFO of the bank. In his new role Gupta will be involved in the bank's overall strategy and will also be responsible for the key corporate functions, the bank said............
Fewer women have relationship with banks: Usha Ananthasubramanian
.........She also spoke about the distinction between Bharatiya Mahila Bank and other public sector banks in India. Though the bank invited deposits from all genders and was open to doing business in all strata of the society, it addressed unique needs of women by providing a variety of products oriented towards helping women entrepreneurs and working women.............
Bharatiya Mahila Bank inks pact with GCCI to encourage women entrepreneurs
......As per the terms of MoU, BMB and GCCI-BWW would jointly conduct training workshops for GCCI-BWW members on the procedure for availing financial assistance. BMB will set up a simplified application process for loans of less than Rs 5 lakh by the GCCI-BWW members..............
Madhu Kapur challenges YES bank AGM resolutions
............Madhu Kapur, the second-largest shareholder of YES Bank, filed an amended suit in the high court here on Friday, challenging the resolutions passed at YES Bank's annual general meeting (AGM) on June 14. Kapur has challenged the appointment of directors and the reappointment of Rana Kapoor as managing director and chief executive......
Credit card spends & limits record an uptick
........Industry experts explain that though the number of credit card base is not increasing at a faster than expected rates the spend per card have been definitely increasing at a very rapid space. However, banks seem unfazed by this, as the idea now seems to be on increasing the spend per card than just increasing the number of cards, explain industry experts.............
Friday, June 27, 2014
Stable Government Brightens Economic Recovery Prospect: RBI
......"Going forward, with the formation of a stable government, the prospects of recovery appear bright," the RBI said in the report. "However, supply side constraints need to be addressed to complement the Reserve Bank's efforts to contain inflation expectations." Those constraints largely refer to bottlenecks in food supplies..............
Both Srikrishna, Guv are Wrong - P K BISWAS
This refers to `Why Rajan is Wrong' (ET, Jun 26). Historically, society has always shackled innovation and change through legislation. B N Srikrishna should realise that universal medicine by way of legislation does not cure all ailments. Legislative restrictions directly or indirectly curb the need to innovate and, consequently , deprive society of fresh thoughts and approaches like a river being deprived of supply of fresh water. On his part, Raghuram Rajan should realise that autonomy does not grant licence to act as one likes, and any action is always subject to scrutiny . Deeds must be evaluated in terms of motives and achievements, and actions should not be washed away in the name of independent thinking. The balance between the two approaches decides the success or failure of an institution.
- P K BISWAS Former Executive Director , RBI Mumbai
ET
- P K BISWAS Former Executive Director , RBI Mumbai
ET
Views can change with positions
My View on "Why Rajan is Wrong?":
In a fast changing world, it is futile to scare people by quoting the positions they might have taken in a different context in the previous decade. This applies to economists and politicians too. One should go by the spirit of the following observation made by Dr Rajan in his June 17 speech:
"More broadly, the FSLRC seems to have a somewhat idealistic view of the benefits of reorganization. It seems to believe that once activities are combined in an organization, synergies can be fully exploited while if they exist in separate organizations, synergies will not be exploited. I too shared such a view, but I now believe it is too extreme. Silos within a large bureaucratic regulator may prevent synergies from being exploited, while frequent inter-regulatory meetings can allow regulators to capture many of available synergies between their activities. Indeed, one particularly useful proposal by the FSLRC is to put the Financial Sector Development Council on a firmer footing. It is a good venue for inter-regulatory cooperation, and its benefits are further augmented by personal interactions."
- M.G.Warrier
Beyond Rights and Wrongs
Raghuram Rajan, in his June 17 speech, had focused only on RBI, but `Why Rajan is Wrong' has used Sebi experiences and sanctity of “rule of law“ to conclude that he is wrong. The statement, “We reject Rajan's claim that the regulator must continue to have discretionary powers and should not be answerable,“ doesn't go well with Rajan's observation, “Am I arguing that no checks and balances are needed? Certainly not! But there are already checks and balances in place, including re view by con stitutional courts like high courts through writ petitions. Senior officers of the regulator are appointed, and can be removed, by the government. The FSLRC recommends an annual report to Parliament, as well as regular discussions with parliamentarians. These are good suggestions, which would add to oversight.“ The FSLRC report had dissenting notes from members K J Udeshi, P J Nayak and Y H Malegam. In effect, other than the chairman and the member-secretary , only two members had gone with the FSLRC report in its entirety .
- M G WARRIER Mumbai
- M G WARRIER Mumbai
ET
Is there any hope for Relief for RBI Retiree's? - Dr.T.V.Gopalakrishnan
.....RBI has the money and the authority to grant the updation but it prefers to remain silent and dance to the tune of the MoF for reasons unknown to the retirees but perhaps well known only to the top management. After the departure of Dr Jalan, two Governors have come and gone and they had very diplomatically side tracked the issue ..........
Read.......
Financial inclusion seminar on Jun 27
..........The workshop will revolve around participative panel discussions on the various aspects of the importance and need of Financial Inclusion, challenges and way forward, followed by a one-to-one interaction between bankers and various stakeholders. Through this release ICC welcomes delegates for participation. Dr. Jayanta Madhab, Ex- Economic & Financial Adviser to Chief Minister, Govt. of Assam will address as the Chief Guest while Guest of Honour Shri. MTM Guite, AGM-Financial Literacy Cell, RBI will speak on Reserve Bank of India regulations. Special Address on Financial Inclusion in North East – Perspective of NABARD will be delivered by Mr. A.P. Sandilya, Chief General Manager, NABARD,...............
Financial Literacy in Rural Banking
...........The conception of financial literacy, as reflected in the Reserve Bank of India's Financial Literacy Guide, is packed with stereotypes of the poor as ignorant and in need of moral lessons on savings, consumption and credit. Financial literacy has to be positioned within a broader conceptual view of the financial system, so as to become a tool to raise critical consciousness and equip people to respond to the challenges posed by the financial sector. Further, financial literacy material must evolve from below, such that lives of the common people are organically a part of it. This paper also hints that........................
Spl Teams Rush to AP to Nab Ex-RBI Staff's Killer
CHENNAI: The city police, probing the murder of an ex-RBI staff, on Wednesday rushed a team to Kadapa in Andhra Pradesh based on specific input about the killers’ location. Meharunisha (55) was found dead by her husband Ali Mohammed Sayeed around 2.15 pm on Tuesday on the II floor of their residence. The ground and first floors of the house in Triplicane were being used to run a printing press business.............
Hike tax exemption on bank deposit interest to Rs 25K: AIBEA
Bank employees body AIBEA has demanded an increase in the exemption of tax on interest earned on bank deposits to Rs 25,000 from Rs 10,000 at present from the government in its maiden Budget next month. The limit of Rs 10,000 was fixed about a decade ago and hence needs to be revised, because bank deposits are the only source of income for senior citizens and retired employees, All India Bank Employees’ Association (AIBEA) General Secretary C H Venkatachalam told PTI......
Allahabad Bank plans to hire 1,100 people this fiscal
..While 600-odd recruitments would be made at the officer level; the remaining 500 would be clerical staff, Rakesh Sethi, Chairman and Managing Director, Allahabad Bank, said........
IBPS recruitment poses language hurdle to banks
........Appointment of people who speak languages other than Kannada to Karnataka, has created a road block in communication between farmers and bank officials. Earlier, the selection of bank employees who interacted with the agricultural community was done through campus interviews. Now, they are selected through the IBPS examinations held all over the country. This issue was highlighted at ......
SBI's Budget wishlist: Target job creation, MSMEs, infra
........If you look at the agriculture side also, if you look at the reports that have come from Reserve Bank of India (RBI) and otherwise, in agriculture we have been told in India the problem is fragmented land holding. Now, that is not really something that we should take as a given because if you consider China, they too have fragmented land holding then how is it that their productivity is from 6 to 190 percent more?...........
Relief for Customers In Credit Card Fraud
........Bank customers have often disputed transactions shown on their credit card bills and declined to pay. This has resulted in banks levying late-payment penalty. The new rule is announced by the Banking Cdes and Standard Board of India (BCSBI) that works to protect customer rights. It makes banks responsible to find evidence that the customer had authorised and was responsible for the disputed transactions.........
World Bank, IMF and USOTA to assisit India to set up non legislative financial bodies
...........The government has decided to rope in international bodies for seeking assistance for the establishment of three different entities - Public Debt office, Resolution Corporation and Financial Data Management Centre. These are three among the four task forces to be set up as envisaged under the recommendation of the Financial SectorLegislative Reforms Commission. The ministry of finance is in process of signing an agreement with .........
Farm loan waiver: Telangana, AP struggle for resources
.............According to government sources, the RBI is willing to consider the reschedulement of agri loans only if the government agrees to arrange for the repayment within one year. The expert panel constituted by the AP government met RBI Governor Raghuram Rajan on Wednesday to ask for rescheduling. However, no clear assurance came from the RBI even though one of the panel members, when contacted, said the regulator was in principle agreeable to the reschedulement............
RBI concerned at loan insurance, wants lending by cos in segment monitored
..............RBI said the lending activity of insurance companies, mainly life insurance ones, while not very large in comparison to total banking sector lending, is nevertheless significant. The amount was Rs 88,870 crore as at end-March, less than five per cent of the assets under management of insurance companies. A significant portion of these are secured against the surrender values of life insurance policies. “While the risk management framework and exposure limits (single issuer, group, and industry) are in place for insurance companies, there is a need to plug the possibility of any regulatory arbitrage by closely aligning the practices and regulations applicable to lending by insurance companies with those by banks,” said RBI in its report...........
NBFCs outside regulatory ambit may pose risk to financial system
...........A Shadow Banking Implementation Group carried out a preliminary study of such institutions and recommended that they be brought under some regulation. It found that there was a high degree of heterogeneity in business models and risk profiles across various non-banking financial entities in the organised as well as the unorganised (informal) sectors. It also identified “exempted” provident funds, unregulated chit funds, co-operative and credit societies and primary agricultural credit societies as groups of institutions that need a greater degree of oversight. “The study stresses on the need .......
RBI advice on bank cash course
...............In his foreword, RBI governor Raghuram Rajan said the financial system remained stable, though public sector banks faced some major challenges, mainly in terms of asset quality and liquidity. Macro stress tests show that the system level capital to risk-weighted assets ratio of banks remains well above the regulatory minimum even under adverse macroeconomic conditions, said the report............
RBI sees better days ahead for economy
................The overall tone of the report reflected optimism generated by the thumping majority scored by the Bharatiya Janata Party in the recently-concluded general elections. "Going forward, with the formation of a stable government, the prospects of recovery appear bright," the RBI said. The central bank drew comfort from reduction in both fiscal and current account deficits and moderation of consumer price index (CPI) -based inflation..................
RBI: Policy coordination needed to reduce global spillover effects
................In the Report, the RBI said that in the absence of global policy coordination, cooperation and global safety nets, EMDEs may have to resort to less than optimal policy options such as strong macro-prudential measures including capital controls and reserve accumulation. “With their enormous clout, countries whose currencies serve as reserve assets can induce negative externalities on EMDEs through changes in their monetary policies,” it said.............
CS emphasizes need to regulate NBFCs, protect investor
........The meeting convened by Reserve Bank of India was attended by Principal Secretary Home, Suresh Kumar, Regional Director RBI, K K Saraf, Secretary Law, Mohammad Ashraf Mir, IGP, Arun Chowdhary, IGP CID, Dr B. Srinivas, General Manager, RBI, Jammu A.K Mattu, Chief Financial Consultant, Ravi Mangotra and representatives from SEBI, NHB, ICAI, and Union Ministry of Corporate Affairs and other senior officers. Chief Secretary while receiving brief on the status of registered Non-Banking Financial Companies in the State emphasized the need for regulation of this sector and priority to protect the interests of the depositors. He called for greater coordination between the Reserve Bank and the other regulatory..........
SLR may be cut further
............."As the liquidity coverage ratio (LCR) requirement increases progressively, RBI may consider it desirable to further reduce the pre-emption of banks' resources through the stipulation of SLR in gradual steps, along with a commensurate decline in the held-to-maturity (HTM) dispensation," ........
Arrangement between banks, asset reconstruction firms needs a relook
.................The RBI noted that as most of the securitisation activity is taking place predominantly with the issuance of security receipts (SRs) rather than cash, there is a concern that banks may tend to use this option to evergreen their balance sheets. SRs may not carry the stigma of NPAs (their value mainly being derived from the collateral and not based on the record of recovery), although the risk of loss of income on the asset still remains, in effect, with the originator (the bank). The central bank said under the current framework, the ‘real’ incremental value addition of ARCs in the process of ‘reconstruction’ of assets,............
Invisible receipts at $232.77 billion in FY14
The country's earnings from invisible receipts, including earnings from export of services like travel, health, etc, stood at USD 232.77 billion in 2013-14, the Reserve Bank of India said Thursday.........
Time banks tapped capital market for funds
............According to certain rough estimates, Indian banks’ additional capital requirements will be to the tune of ₹4.95 lakh crore over the period of phasing in of the Basel III capital requirements. In its 9th Financial Stability Report, the RBI said the Indian banking system needs to pay urgent and greater attention to the Basel regulations, especially those relating to subjecting banks to market discipline. Swifter progress towards a more robust emphasis on market discipline will result in better pay-offs not only for the Indian banking sector but also for the overall financial system, .............
Nabard hopes for budget largesse to give long-term loans
The National Bank for Agriculture and Rural Development (Nabard) wants the government to announce a Rs.5,000 crore fund in the annual budget on 10 July so that it can facilitate long-term loans to farmers to build drip-irrigation facilities and buy tractors, assets that will boost farm output and stem a sharp decline in capital investment in the sector. The aim is to provide long-term loans at attractive interest rates to farmers for long-term asset creation in agriculture, said Harsh Kumar Bhanwala, chairman of Nabard, a development bank set up by the government to ensure credit flow to agriculture and promote rural development............
Fix Aadhaar, don’t junk it
...........It is important to remember Aadhaar is not just a number, it is an enabler. Thanks to RBI and NPCI, electronic payments infrastructure has expanded and India has platforms now that support real time online authentication and transactions which connect to even banking correspondent agents across rural areas. Linking the Aadhaar authentication platform to the benefits transfer programmes of the government has already yielded good results. A recent randomised control trial of the ...........
Microfinance sector to rebound: CRISIL
....According to CRISIL, the sector will grow at a compounded annual rate of 35% , to reach Rs450 billion by end-March 2016 “supported by stronger building blocks”. In order to to sustain the current pace of growth, micro finance instituitons (MFIs) will have to raise equity; but that will require them to “address challenges associated with low promoter shareholdings and a near-term decline in profitability”, said CRISIL......
Thursday, June 26, 2014
Why Rajan is Wrong?
One regulator too many?
..........At another place, points out Rajan, the FSLRC suggests a strengthened Financial Sector Development Council as a venue for inter-regulatory functioning. Would not this serve to conserve and strengthen the synergies that the FSLRC at other places thinks a spanking new behemoth, the UFA, would? The arguments that Rajan puts forth raises another crucial question: Unless an existing system is shown to have broken or turned dysfunctional is it necessary to replace it? The FSLRC does not sound convincing in its implicit view, that extant institutions are inefficient and need to be re-organised to prevent systemic risks and market failures. What matters is not whether a country has a single or multiple regulators. Both structural arrangements failed to prevent the financial crisis of ......
BALANCED RESPONSE
The article “One regulator too many?” by Ashoak Upadhyay (June 25) is a balanced analysis of Raghuram Rajan’s observations on positions taken by the FSLRC. Initially, the media had sensationalised the views expressed by the governor who had said the FSLRC had wandered beyond its brief by trying to superimpose a tribunal on the RBI and that he was not comfortable with reinventing regulatory architecture in the banking sector. Those who are still in doubt may visit www.rbi.org.in and read the governor's speech once again.
- MG Warrier
Make capital out of Capital Market - Dr.T.V.Gopalakrishnan
..........It is the best opportune moment for the new government to come out with some innovative ideas and facilities to enhance, convert and divert the household savings into investments in capital market. The investments in shares through IPOs have turned out to be a very bad experience for retailers during the last decade because of high and greedy pricing of the issues and they have burnt their fingers forcing them to go out of the market and seeking greener pastures elsewhere. Persisting high inflation has added .........
Does India Really Need a Women-centric Bank?
........... The four key elements of empowerment according to the World Bank are access to information, inclusion and participation, accountability, and local organizational capacity. While economic factors do certainly play a role in improving a women's financial position, the context within which empowerment occurs is also important for understanding whether a particular intervention has been effective. When it comes to financial transactions, strong patriarchal norms may reduce the role of women to a mere conduit for accessing loans and banking services, rather than effecting any real change in the prevailing social structure. A woman's "emancipation" may remain contingent..........
IndusInd Bank unveils its third Currency Chest at Guindy, Chennai
IndusInd Bank has unveiled its third Currency Chest at Guindy, Chennai. Mr. K. Neethiragavan, General Manager, Reserve Bank of India inaugurated the Currency Chest in the presence of Mr. Paul Abraham, Chief Operating Officer, IndusInd Bank Ltd and other senior officials of the Bank...........
Tired with blind game...............
My View on "Thrust of trust by (re)tirees - R.Sridharan":
"Many knocks at the doors of justice have gone futile but we hope the day is not going to be far away when one knock will be heard by the policy makers and the doors of justice will open shortly."
...Doors of justice are wide open. People are 'acting' blind...Passing the buck and shifting the blame...It is in this context, I said, and I repeat, history will find it hard to pardon the 'individuals' responsible...
- M.G.Warrier
Ex-RBI Woman Staffer Found Killed in Triplicane Residence
CHENNAI: In a shocking incident, a 55-year-old woman, a former RBI staff, was found dead with mouth being gagged and another piece of cloth around the neck at her bedroom in Triplicane, here on Tuesday afternoon. About 60 sovereigns of gold jewellery, some of them worn by the deceased, and `3 lakh cash were reportedly stolen from her second floor residence on Devaraj Mudali Street. The CCTV grab from the building, which also ................
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