......................Along the same lines, RBI’s move to force banks to detect stress early (and penalise if not done) has to be specially commended, though this too should have been done years ago. There is no reliable estimate of what fraction of bank loans fall under SMA2, i.e. borrowers who pay between 61 and 90 days and technically avoid being called non-performing, and banks are understandably tight-lipped about this (many have not bothered to record this properly before). But RBI should mandate banks to disclose that number on a quarterly basis. And then, .............
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.
Wednesday, July 2, 2014
Impediments in Recovery of Non-performing Assets
Recently, there have been some judicial pronouncements by the apex court determining the scope of powers of enforcement of securities without the intervention of the courts, by the banks and FIs under the SARFAESI Act. The apex court has reiterated the need to protect the interest of borrowers, and emphasized that the exercise of extraordinary powers of recovery , by banks and FIs must be in compliance with the provisions of the SARFAESI Act.............
Read - ET
Read - ET
Now, Telangana to knock on the doors of RBI for crop loan recast
..........Caught in the crossfire are the banks whose NPAs would rise dramatically in the current quarter if the RBI does not come to their rescue. Close to Rs 10,000 crore in Andhra and around Rs 5,000 crore loans in Telangana are expected to freshly add to the NPAs from this month onwards as the short-term production loans given in April last year remained unpaid for the last 90 days, according to officials. “This is going to be a big setback for banks because they will have to make a provisioning for the fresh NPAs that will further affect their profitability. The interest calculated so far on these loans will have to be returned now. This will further dent their performance,” ............
Tuesday, July 1, 2014
Budget 2014- 15: Nightmare or relief? - Dr.S.S.Tarapore
..........While powerful lobbies would effectively articulate their needs, the plea of the common person would be that inflation not be inflicted upon them and they be spared electric shocks of punitive measures which are portrayed as rectification of historical distortions.
Read - FPJ
Make Customer Service Ratio as Part of RBI's evaluation of banks - Dr.T.V.Gopalakrishnan
..........Unfortunately some of the private secctor banks' staff are not even aware of the existene of an Ombudsman or a Regulator in the name of RBI and many times they express their ignorance by saying with all innocence that they have not seen such a bank in their vicinity. Whom to blame.............
Some lessons from the past
Symbiosis Institute of Business Management (SIBM), Bengaluru, recently played host to Rabi N Mishra, Chief General Manager, Reserve Bank of India. Rabi, an economist by learning and a senior financial specialist by profession, is a Harvard University alumnus and currently holds the position of an advisor, Financial Stability Department, Central Bank of Oman (on secondment from RBI).During an interactive session with the management students, he..............
Uncertainty looms over RBI dy governors appointment
................Khan who was an executive director at the central bank, was promoted as deputy governor on 4 July 2011 and was given a three year term. As DG, he has several important portfolios, like foreign exchange, external investments and operations, internal debt management, among others. So far it is not clear if Khan will be reappointed for another two years. Sources indicate there is a possibility that he may get an extension for three to six months........
PenOp should be 'on tap'
The previous government was misled on pension issue. The blind introduction of NPS through back-door for a section of central government employees under external pressure, then forcing like-minded state governments to follow suit, interference in the implementation of existing funded pension schemes in several public sector organisations are all the result of this. The new government should review the whole issue. As regards pension option, it should be available ‘on tap’ subject to the same terms first optees were given the switch over from PF to pension.
- M.G.Warrier
Sampathraman elected president FKCCI
............Sampathraman had worked in Reserve Bank of India (RBI), Nagpur and Kirloskar Oil Engines Ltd, Pune. Currently, he is the Chairman and Managing Director of DPK Engineers (manufacturer of diesel power generating sets) in Bangalore..........
RBI Quiz Contests for Students 2014
The Reserve Bank of India to conduct quiz competitions for school students as a part of its efforts towards financial literacy in Bangalore, Mangalore and Mysore in the months of July and August...............
World outside RBI
My View on "Fit-to-play the second inning................":
Best wishes to Ramachandra Shelar and Milind Khopkar when they are joining us. My own experience is, if one is healthy and the environment around is peaceful, there is enough ‘work’ to do outside RBI. Wish both of them and all other RBI colleagues who are retiring today (June 30, 2014), a happy, healthy, peaceful, active post-retirement life. To continue the interaction, each one of them is invited to regularly visit VITALINFO and to join Madan Gauria’s EXRBITES Group (For any suggestion/problem/assistance or any further information you want about the Group please feel free to contact Shri Madan Gauria on madan.gauria@yahoo.com)
- M.G.Warrier
Tax exemption limit under 80C may rise to Rs 2 lakh
.............Presently the investments and expenditures up to a combined limit of Rs 1 lakh get exemptions under Sections 80C, 80CC and 80 CCC of the Income-Tax Act. Sources said the revenue department is assessing the burden on the exchequer in case of increase in the benefit limit. The announcement is expected in the Budget................
As RBI locks bank's FDs, man struggles to fund surgery
..........With the Rs 3-lakh surgery scheduled for tomorrow at Hinduja Hospital, Vaidhya has been trying to encash his R4-lakh fixed deposit (FD) at Kapol Cooperative Bank, only to be told he could not do so because the RBI appointed an administrator to the bank and banned premature withdrawals of FDs last week...............
‘Gambling debts led UK graduate to murder aunt’
Gambling debts and the pressure to repay his lenders led a 29-year-old MS graduate from the University of Glasgow to murder his aunt in Royapettah last Tuesday, the police have said. The victim, Mehrunnisa (55), a retired RBI employee, was found dead last week, gagged and with her hands and legs tied up, at her second floor house on Devarajan Street. Her body was found by her husband Ali Ahmed, who runs a printing press. The murder had sent shockwaves in the city.........
SBI to open digital bank in malls, will offer instant loans
..............The first lot comprising of seven pilot digital branches will be opened largely in high street malls in various cities on Tuesday . The banking stores are supported by self-service touch devices, which enable instant account opening with an instant debit card. Customers will have access to remote experts through high definition videos............
Read - TOI
Home ministry asks RBI get ATMs that can generate receipts in Hindi
.................ET has accessed identical letters written by the home ministry on February 25 to the RBI governor Raghuram Rajan, then secretary of department of financial services Rajiv Takru and chairman of the Indian Banks Association KR Kamath, asking for only those ATMs to be procured in future that can produce receipts both in Hindi and English and instructions to two major foreign suppliers to upgrade the software in the existing ATMs to ensure printouts in Hindi...................
Soon, access all investment details from one Demat account
...........The sub-committee of the Financial Stability and Development Council, or FSDC, a forum of regulators monitoring financial stability and inter-regulatory co-ordination, headed by the Reserve Bank of India governor, has been working on this initiative after former finance minister P Chidambaram announced a single demat account for all financial investments in the interim budget.............
Look at long term planning
My View on "Food Inflation: A Stubborn Sore in the Indian Econ...":
For taming inflation or plainly to retain prices within acceptable levels, long term planning, regulatory support and coordinated efforts by government and stakeholders in the market and better consumer-awareness may have to get more attention. Onion prices are one indicator to show how those who gain a control over stocks of goods that have a longer shelf-life manipulate prices. Government may not need an economist to tell that the position of demand and supply has an impact on prices. Procurement by processing industry and wholesalers who have ongoing responsibility to maintain supplies to retail outlets like departmental stores and supply-chains, purchase by affluent pockets/states within the country which can afford to pay higher prices and export-commitments affect prices of vegetables, meat and eggs. A long term solution may have to look at improving/increasing production by ensuring remunerative farm-gate prices, estimating in advance the state-wise requirements for consumption, processing and export and regulating inter-state movements taking into account the potential for increasing local production.
- M.G.Warrier
RBI switches to online bond platform to manage cash conditions
.................Using an electronic trading platform that gives the RBI anonymity marks a departure from its usual open market operations and from the practices of other major central banks in Asia. The RBI had previously used open market operations to add or drain liquidity, a relatively public system that allowed traders to position themselves to try to profit from the central bank's transactions..........
Financial inclusion transactions data to help focus on growth
...................A team from Reserve Bank of India (RBI) had visited some branches in the district recently to study the reason for the low CD ratio in the district, he said. Prasad Rao suggested that the banks focus more on extending financial assistance to MSME (micro, small and medium enterprises) in the district. This will also help create more job opportunities in the region.......
Banks and budget: cut stake in PSU banks, rein in inflation
.........Third, the government should chart out a clear plan to cut its stake in public sector unit (PSU) banks, as recommended by the P.J. Nayak Committee. That will help with the fiscal deficit problem as divestment will raise funds. Moreover, banks will be allowed to raise more money from the open market and it solves the recapitalization problem. In the...........
Vijay Mallya gets more time to appear before wilful defaulter panel
Chairman of Kingfisher Airlines, Vijay Mallya, has been granted 15 more days for appearing before a committee constituted by United Bank of India to examine if the liquor baron has defaulted to the lender deliberately................
Banking sector: Bad loans, governance, capital top concerns
......Constraints like dual regulation of public sector banks by the finance ministry and RBI, short appointment tenure of the leadership in banks, low compensation, vigilance enforcement and applicability of the right to information law should be rapidly eliminated or significantly reduced to avoid erosion of competitiveness of state-owned banks, the panel said. The Nayak committee has also recommended................
Basel balm
Central bankers know what's wrong with the world economy but are struggling to come up with a cure. That, at least, is the message from the latest annual report from the Bank for International Settlements. It worries that global growth is feeble and financial markets are piling up risks. Yet its proposed remedies of tighter monetary policy and structural reform are far from convincing..................
Dealing with defaulters
.............Apart from the fallouts of this scam of enormous proportions being perpetrated on the Indian economy, the issue has a moral aspect as well. Why should the taxpayer's hard-earned money be squandered away repeatedly? And why should an honest entrepreneur repaying his loan, be at a disadvantage, compared to the dishonest ones?................
ARCs or Money Spinners?
Apropos `Good Money After Bad' (ET, Jun 30), the writer has not indicated what is lacking in the RBI approach. Also, banks stop charging interest on the NPA accounts, so, should the ARC be allowed to demand the entire principal loan plus the uncharged interest till the date of assignment? Typically , ARCs buy loans at a value that is less than even the principal. AAIFR's decisions could be a good guide: funds invested by ARC plus interest thereon at a reasonable rate. Otherwise, it becomes a money-spinning business without much benefit to the economy. - A B TELANG
ET
ET
Regulators mull common standard
To catch tax evaders, Sebi and other regulators are planning to put in place a common reporting standard (CRS) for all financial institutions under their purview to facilitate an automatic exchange of suspicious trades and other information through a global pool. The CRS would also prescribe the standard due diligence ..............
Indian banks make inroads into Myanmar
..........The so-called “look East” policy refers to India’s attempts to build economic relationships with South-East Asian nations. According to bankers, bilateral trade between the countries will rise exponentially once the road project to connect India’s Mizoram with Myanmar and Bangladesh gets operational. Incidentally, the World Bank in June granted a soft loan of $107 million to develop the road project...............
IFC offer for Bandhan
.............“We have a strategic relationship with Bandhan, which is a key IFC client. We are looking to help them in their transformation into a bank. We hope to support them financially and share our global experience of similar transformations,” ...........
For the currency markets to breathe freely
................It is obvious that these changes reflect the views of the new man at the helm of the RBI. When Raghuram Rajan took over the reins of the RBI in September, he took a dig at the prevailing mindset on Mint Street by saying, “We cannot create depth by banning position taking or mandating trading based only on well-defined ‘legitimate’ needs.” If only those with these legitimate needs — read hedgers — were allowed into the market, there would be no trading activity at all. In the absence of traders, volumes are hurt and that in turn impacts price discovery. The RBI governor’s distaste for the restrictive attitude of regulators and preference for free markets is evident in............
Monday, June 30, 2014
What is indeed broken needs to be fixed
................All that the media picked up was the adjective "schizophrenic" coming as it did from none less than the central bank chief. The two "areas of tension" are appellate oversight of regulatory decisions, and the re-engineering of the financial sector's regulatory architecture by consolidating most regulatory agencies into a combined organisation. Most debate on the FSLRC report has been on the latter. The attention of both incumbents and retired regulators has been riveted on it at the expense of a wide range of other recommendations.............
Highly technical strong message - Dr.T.V.Gopalakrishnan
The article is highly technical and carries a strong message that higher regulatory capital or leverage ratio would mean involuntary monetary tightening as it were. This is true provided the balance sheet is drawn strictly as per the regulatory prescriptions and accounting standards.Is this happening in India is a major question? Fudging and window dressing of balance sheets is an established practice in India and the ratios referred to in the article cannot be given a serious weightage as such. The NIM, ROA,Capital Adequacy Ratio etc are all to a great extend only showing indicative trends and not necessarily the correct position. The NPAs are grossly underestimated and the off balance sheet items which get converted into risky assets do not seem to be getting a realistic assessment. The regulatory capital ratio exceeds the requirement level by a wide margin cannot be taken as a correct and comfortable picture. The ratio of pure equity capital in relation to all risky assets is perhaps a better assessment as regulatory capital has some components which are manipulative in nature. If pure equity capital is taken as a yard stick,the Indian banks particularly Public Sector banks cannot be said to be showing a comfortable position as increase in pure capital ie equity capital may not be proportionate to the increase in risk weighted assets.
Integrated growth - M.G.Warrier
..........While conceding that a short essay cannot be expected to cover all aspects of growth, taking the debate forward, one is tempted to add the conservation and overhaul of the available infrastructure, moving towards a higher literacy level, better and affordable healthcare facilities for all and .............
Good Money After Bad
.............If RBI is technically sound, Indian banks will be forced to reduce the growth of their balance sheets, owing to inadequate equity capital. They will be forced to take in fewer deposits and give out fewer loans. This is going to exert a drag on economic growth. Some are enamoured by an easy solution: set up a National Asset Management Co (Namco) with government money , and transfer bad assets to Namco. Once the distressed assets are out of the way , banks will get back to happy days. But there is no free lunch..............
Oil and water - Dr.Subir Gokarn
They say that oil and water don't mix. Literally true, perhaps, but, speaking metaphorically, they can be an explosive combination. The mix between the two poses the most significant risk to the Indian economy over the next few months. It threatens to reignite the drivers of inflation, the fiscal deficit and the current account deficit. At this point, it is still a risk that might abate over the next few weeks, but if this were to happen, it would be entirely.......................
Food Inflation: A Stubborn Sore in the Indian Economy
..........However measures like RBI’s quarterly household inflation expectations surveys indicate that inflation expectations have been elevated in India in the past few years to double digit figures. Thus, in this scenario it is evident that though the direct role of monetary policy to combat inflation is limited, yet monetary action in a way helps to anchor inflation expectations. Thus to deal with the scenario of persistent food inflation, coupled with the speculation of weak monsoons and the Iraq Crisis, Mr. Jaitley’s Finance Ministry has to look beyond the budget to effectively fulfill its agenda. As pointed out by Shri Deepak Mohanty, Executive Director, RBI the first and foremost step should be to curb agricultural wastage by strengthening supply chain logistics and setting up cold chains and processing facility at production areas. Secondly, there is need to..........
RBI says India to implement US foreign tax compliance act
........FATCA mandates reporting by US taxpayers about certain financial accounts and offshore assets and reporting by foreign financial institutions about accounts held by US taxpayers or foreign entities in which US taxpayers hold a substantial ownership interest. Indian financial institutions with overseas branches have time until December 31 to register. However, they should register for GIIN only when the formal IGA is signed after cabinet approval, the RBI added,.........
‘(V)indicting’ Dr Rajan
My View on "Change RBI Governor: Swamy to PM":
The contents of the letter from Justice B N Srikrishna forwarded to the Prime Minister have not been revealed. Quite possibly, they may be on the lines of the short article, ‘indicting’ Dr Rajan, co-authored by Strikrishna and D Swarup and published in the Economic Times last week. Though any citizen can have a view on who should be the RBI Governor and the decision on who should hold that post is taken following certain processes and procedures, the issue having been raised by someone who can keep controversies live longer than their normal ‘shelf life’, let us go a little deeper into the background of the demand made by Dr Subrahmanyam Swamy. But for the age limit of 75 years for public offices imposed by Modi, Swamy would have got some job to do. Marginally he lost as he will be completing 75 this September. The next best option was to vigorously pursue other ‘cases’ on hand. But in those cases, the opponents have lost the ‘celibrity’ status with the Election results. Hanging on to the ‘fight’ agaist Dr Rajan makes sense in this context.
- M.G.Warrier
Letter to Finance Minister for Pension to RESIGNEES
..............While extending the first and second option of pension in 1995 and 2010 the employees who had resigned from the service of the bank were not made eligible to opt for the pension. Similarly the officers who had voluntarily retired under the respective schemes of banks were also not made eligible for the pension option. However after protracted legal battle the officers who had voluntarily retired from the bank’s service were made eligible to opt for pension and accordingly they started receiving the pension. The only category of employees / officers who had resigned from the services of the banks is left out of the pension scheme. The number of such left out employees / officers is not more than 2% in the banking industry as per rough estimates. A number of cases were filed....................
Fit-to-play the second inning................
Our
two friends are retiring from the Bank’s service on June 30, 2014.
Shri
Ramachandra Shelar, Private Secretary to the PCGM, DCM joined the Bank in the
erstwhile Institutional Finance Department on March 3, 1976. After working in the various departments of
the Bank for more than 38 years, he is retiring happily. Very shy, soft spoken and down-to-earth he
is. He used to be always behind the
curtain in our PS Meets also. We wish
him a healthy and happy retired life.
Shri Milind
Khopkar, Private Secretary to the Adviser, DEAP, is a well-known RBI sportsman and
known as Nana amongst his close circle of friends as well in the All-India RBI
sportspersons. We joined the Bank almost
together in the erstwhile Agricultural Credit Department in the month of May
1977 and became very close friends since then.
Nana is a Table Tennis player and also a Team Manager of RBI All India
Table Tennis team. He loves T.T. a
lot. He is still fit to play T.T. Always cheerful
and with smiling face, he has a lot of friends in the Bank, particularly
sportspersons. He was promoted as Private Secretary recently i.e. in July
2013. After serving for almost 37
years, he is retiring happily as a fit-to-play person. We know he will devote his retired life for
T.T. We wish him a very healthy and
sporting retired life.
- Vishnu
Yadav, PS
to ED (Mahapatra)
Nephew held for ex-RBI employee’s murder
The nephew of Mehrunnisa (55), a retired RBI employee who was found dead at her home in Royapettah on Tuesday, has been nabbed on charges of her murder. Police said he gagged her to death and stole 60 sovereigns of gold and Rs. 3 lakh from her house. A part of the stolen gold has been recovered. The former banker was found dead............
Agriculture gets priority in annual credit plan for Krishnagiri district
............Collector T.P. Rajesh released the annual credit plan. The first copy was received by Ravindran, Assistant General Manager, Reserve Bank of India. Agriculture gets the major share of Rs. 2060.66 crore, which accounts for 66 per cent of the total outlay. Under investment credit for agriculture, .......
JK Bank convenes sub-committee meet of SLBC
Srinagar, June 28: J&K Bank convened meeting of 6th Sub-committee of State Level Bankers Committee for export promotion today at the Bank's Corporate Headquarters, here. The meeting was chaired by Parvez Ahmad, Executive President, J&K Bank and was also attended by Kiran Sharma General Manager RBI, Jammu, ..........
Read - Greater Kashmir
Read - Greater Kashmir
File your IT Return “ Properly”
............Most people tend to be rather happy that a man comes by the desk, picks up your Form 16 and files your return. All for Rs. 300 only! ou feel you have done your duty and as such this irritant of filing returns is off your back for the next 12 months. By filing in this manner you have possibly committed a handful of civil and criminal offences. Here’s a quick list of items around concealment of income and thus evasion of tax which are by far the most common mistakes.............
Indian Banks' Association seeks fee for withdrawal from non-home urban bank ATMs
..........."We have recommended to the Reserve Bank of India imposing a fee for withdrawing money from non-home bank ATMs in urban areas, while no fee has been proposed for transactions in semi-urban and rural areas," IBA Chief Executive Officer M V Tanksale told PTI...............
Read more at: ET
Lack of awareness,bank deposit fee hinder mWallet India growth
........Players like MMP Mobi Wallet Payment Systems (MMPL), Oxigen, Paytm and MobiKwik feel that mWallet can play a major role in not just tier II and III cities but also in rural areas. Besides, mWallet applications enable the users not just to pay their utilities and mobile bills, but also buy various services like transport, banking, etc...............
New financial inclusion plan to kick off from August 15
............The main objective of the plan will be to open 20 crore new bank accounts within a span of one year--two bank accounts for each uncovered household. The novelty this time round is that one account has to be opened for a lady member of the household. The contours of this ambitious financial inclusion plan were discussed by Financial Services Secretary G.S.Sandhu at a meeting of Indian Banks Association (IBA) in Mumbai recently, .........
Microfinance on a turnaround track
............Greater regulatory clarity, including the recognition of the Micro Finance Institutions Network as a self-regulatory organisation by the Reserve Bank of India (RBI), and a stable operating environment have helped to boost the shareholders’ confidence in the sector. “The sector is far more resilient today than what it was in the past. Greater clarity from the RBI’s guidelines, deeper penetration of credit bureaux and increasing use of technology to improve..............
Treat gold deposits as part of CRR/SLR: bankers
......................“Gold is after all a store of value and is it possible for the regulator to treat a bit of our gold deposits as CRR or SLR instead of cash or government securities?’’, asked SBI Chairperson Arundhati Bhattacharya. She was speaking at the Diamond, Gem & Jewellery Banking summit organised by Gem & Jewellery Export Promotion Council (GJEPC). CRR is the part of deposits that banks park with the central bank (Reserve Bank of India) earning no interest and is at present 4 per cent while the SLR, at 22.5 per cent, is the part of deposits that must be invested in recognised securities and assets..............
Rs 5 crore in taxes recovered from co-op banks’ account holders
......... Sources said the department had recovered the tax money from defaulters under a special drive called 'Project UCB' launched on the directions of the Reserve Bank of India. (UCB stands for urban cooperative banks.) Under 'Project UCB, which was launched four years ago, the I-T department was able to identify 1,500 defaulters and detect more than Rs 55 crore income on which tax returns were filed only after the defaulters were issued notices.......
BCSBI to put customer srvc ratings of banks in public domain
.........."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............
'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
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