......Talks of merging smaller public sector banks with their larger peers have been doing rounds for sometime, as asset quality issues and heavy regulatory regime have impacted ability of small banks to raise funds to meet Basel III norms. The government is also considering the proposal to set up a holding company for public sector banks to help them raise funds by leveraging their combined assets, Sandhu said. " We have to examine it, whether that is the right way to go. That is under consideration," he said................
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.
Saturday, July 12, 2014
Huge bank recapitalisation bill a fiscal risk: Fitch
Fitch Ratings has said the need to infuse capital in public sector banks is (PSBs) large enough to pose a risk to the Union government's fiscal targets, if the task falls on the latter. The Union Budget has estimated the new investment requirement at Rs 2,40,000 crore in PSBs till March 2019...........
Asset quality improvement in banking is one-two quarters away
.....Over the past few months, foreign fund flows have been strong and equity markets have been riding on the expectation of green shoots for pick up in industrial activity bolstered by a pro-business government. However, Edelweiss Securities Ltd feels that asset quality improvement for banking and financial services sector is still one to two quarters away............
Bypassing RBI tools to raise funds for infrastructure not prudent
............. This is also one of reasons why Indian banks came out unscathed from the global financial meltdown in 2008. So are we risking our banking system by allowing banks to raise long-term resource for infrastructure by bypassing SLR requirements. The lax credit appraisal system in the public sector banks that control two-third of the banking is already showing up by way of non-performing assets. Loans to infrastructure projects have been the worst hit since the economic slowdown. The banks have not only ..........
Pinarayi hits out at RBI
Communist Party of India (Marxist) State secretary Pinarayi Vijayan on Friday urged the Reserve Bank of India (RBI) not to shackle major cooperative banks in the State which performed well. Mr. Vijayan said the RBI was now directing cooperative banks to forgo their social commitment and concentrate on profit-making banking business.
The Hindu
Loan waiver scheme to affect credit discipline: Nabard
..............The governments know that it is not the right thing to do. But farmers would need some help in times of certain problems, Nabard regional Chief General Manager (Telangana, AP) Jiji Mammen, said. He said the bank has an exposure of Rs 7,600 crore in crop loans in the two States. The bank has not received any communication from the Reserve Bank of India on the loan waiver issue............
Agri loan waiver: 6,823 ineligible beneficiaries detected
...................."All direct agricultural loans disbursed to farmers between March 31, 1997 and March 31, 2007, overdue as on December 31, 2007, which remained unpaid until February 29, 2008 were covered under the scheme," he said. Reserve Bank of India (RBI) and National Bank for Agriculture & Rural Development (NABARD) were the nodal agencies for the scheme. They had issued "directions to the lending institutions on January 1, 2013 and January 14, 2013, respectively to examine the cases of any irregularities and take corrective steps.........
After driver's suicide, auto unions ask govt to curb illegal financiers
.......Auto Union JAC member A Sathi Reddy, in a statement, alleged that the Telangana government is turning a blind eye to the illegal activities of the unorganised financiers, who are neither registered with the Reserve Bank of India nor with any other government agency. A few days ago, a PIL was filed in the Hyderabad high court on the same issue, he added...........
Friday, July 11, 2014
RBI's Central Board met at Chennai to take stock of current economic situation & other issues
Raghuram Rajan says ‘determined’ to bring down consumer inflation
Nudges and pushes - Dr.Subir Gokarn
........I, for one, did expect the speech to begin with an overarching strategic statement, laying out an economic road map for the five-year term. Though there were some initial hints of this, in the event, Mr Jaitley dived straight into details. If there was, indeed, a big picture behind all these details, it had to be discerned. As the speech unfolded, outlines of a big picture did emerge from all the little details. Here are a few of its aspects..........
Tribute to Guru CVN by Shishya
I regret to read about the sad demise of Shri C.V.Nair. I did not work under him. I came across Shri Nair at New Delhi, when I attended in the year 1972 the All India Conference of Officers Association (representing the of Kanpur unit) conducted to go into the recommendations of the Cadres Review Committee, appointed by RBI and to offer the views of the Officers' Association to the Bank. The way he conducted the proceedings was excellent, having full clarity on all the issues affecting the Officers. He was one of the officers involved in furnishing lot of data on various issues affecting the Officers, before the CRC. He was also involved in the process of the Reserve Bank ameliorating the service conditions of Officers in various aspects - ensuring to a great extent that the transfers were not made at a time that would affect the academic year of the children, to bring inter-mobility of officers between the general side departments and specialised departments and in many other areas. I Pray to God to rest his soul in peace and tranquility.
- Mohana Rao
I knew and had high regards and respect for Mr CV Nair. I attended several General Council Meetings which he presided over. In one of GC meetings, when I vehemently opposed CAIIB as a condition for confirmation of DR officers, he called me aside after the meeting and told me that had I spent half of the energy in trying to pass CAIIB instead of fighting against the Bank's policy, I would have achieved my goal. I also worked under him when he was the Manager (RD) in Calcutta (Kolkatta). I had fought with him as the Secreatry of the Calcutta unit. But I always admired him. He, perhaps, was the only person who addressed the then Governors by their names while attending JCC meetings. He used to say that in the JCC meetings the President of the Officers Association is no way less than the Governor in status. Very bold, lucid and logical and firm in his arguments with the Bank. I always remained his 'shishya' (student) though on several occasions I had differed with him openly as General Council Member earlier and as the Secretary of RBIOA of Calcutta unit later. My sautes to the great CV Nair.
- P.Arvindan
With profound grief I share the sad demise of C.Vijayan Nair with all those who know him as CV Nair. He has been an expert in agricultural finance and a master orator besides a great writer. As a stenographer when I was attached to him, it was a pleasure to take down his dictation which helped me in improving my language and such was his flow of language and with words he will knit a garland. Precise with points, he used to face any deliberations - as I had opportunities to take down the proceedings of several meetings in which he participated and with authentic information he will put forth his views. At the same time he is very jovial and used to take everything light and a great analyzing personality. I had a small incident to quote here about the jovial quality of CVN. When I was assisting Mr.V.V.Mahadevan in his capacity as the Private Secretary to late B.N.Srivastava, who was then ED in charge of administration, CVN was then holding the charge of Chief Manager, DAPM. He used to come to meet for discussion of official cases with BNS and in one of the discussions, BNS was in a signing spree of cases in the presence of CVN and when I happened to enter the cabin of BNS, CVN called me “Sridharan, please bring all the pending cases now itself as BNS is in an initialing mood and this is the time to clear off all cases” BNS looked at CVN and laughed and when I was about to ask as to its seriousness, CVN said it was a joke that he cracked and it should not be taken seriously and I should not bring all the cases at that point of time. CVN is known for his critical analysis and at the same time a person with cool, calm and above all a very good humane displaying his simplicity in every approach.In his demise, we have lost a very simple but brilliant officer who also led the Officers community through his great leadership quality both in the official field as also in the Officers’ Association’s activities. Let me join all to pray - may his soul rest in peace!
- R.Sridharan
Former Principal Private Secretary to Governor
Meru Cabs asks RBI to extend recurring payment rules to foreign players like Uber
......Meru says foreign players like Uber are able to circumvent the mandated two-stage credit card authentication by routing their transactions through foreign payment gateways, on which RBI has no jurisdiction. This allows them to store credit card details and use them for recurring transactions without the RBI’s mandated 2-factor authentication. The report also points out that Uber can also charge consumer’s credit card directly in case of taxi cancellations, which is currently not available for any other Indian taxi players..........
Notice to RBI on Unilever petition
Unilever has filed a petition in the Bombay High Court against the Reserve Bank of India's directive asking it to file a revised application for preferential allotment of shares in Hindustan Lever Ltd (HLL). A notice to this effect was served on RBI on Friday. Bank officials confirmed this today. The application follows the move by............
Govt to sell stakes in PSBs instead of recapitalisation
The government stake in most public sector banks (PSBs) will fall as and when they access capital markets to fund their growth and meet the Basel III requirement. But, the government will continue to hold majority stake in all the banks. The annual recapitalisation exercise for banks is likely to be replaced by selling stake to retail investors. As a part of the stake selling exercise, the public sector banks will have a special offering for retail investors to give them a direct ownership. The government ........
RBI will work with govt on monetary framework: Raghuram Rajan
.........“Hopefully, by the end of the year, we think the economy is on course to come down to a consumer price index (CPI) inflation rate of about 8% and by the end of next year, to a level of 6%, and we will be in discussion with the government on monetary framework made in the budget announcemt..................
Budget 2014: Ground set for turf war between RBI and government
A battle for regulatory turf seems to be in the offing between Reserve Bank of India and the government with the finance minister pushing proposals by the Financial Sector Legislative Reforms Commission which was roundly criticized by RBI governor Raghuram Rajan...........
FM in tune with Rajan plans on monetary policy, new banks
..............The government also said norms of on-tap bank licences as well as niche banks will be announced during the course of the year – an initiative which RBI is perusing actively. “After making suitable changes to current framework, a structure will be put in place for continuous authorization of universal banks in the private sector in the current financial year. RBI will create a framework for licensing small banks and other differentiated banks,” Jaitley said.................
Union Budget 2014-15: Govt, RBI to devise modern monetary policy framework
.........The tone for inflation targeting was set by Finance Minister Arun Jaitley in his budget speech when he stressed on a modern monetary policy framework to meet challenges of an increasingly complex economy. RBI Governor Raghuram Rajan was in agreement with Jaitley when he said the central bank would develop the framework in consultation with the government during the year. Retail inflation rose to 8.28 per cent in May on account of rising food prices. Through the new mechanism, the government and the Reserve Bank of India (RBI) may look to bring down consumer inflation to 8 per cent by this year-end...........
Forward looking but not a dream budget for SMEs
..........One of the proposals that makes sense is the government proposing to set up a committee to examine the flow of funds to SMEs. The proposed committee will have representatives from Reserve Bank of India, Finance Ministry and the Ministry of Small and Medium Enterprises. This was very much needed. Although it is common knowledge that SMEs in India face severe challenges in terms of access to capital at different stages of running an enterprise and also grapple with high interest rates, government records on the problem are dismal. A centrally monitored ............
Budget 2014 displays intent towards financial inclusion
............... "After making suitable changes to current framework, a structure will be put in place for continuous authorisation of universal banks in the private sector in the current financial year. RBI (Reserve Bank of India) will create a framework for licensing small banks and other differentiated banks. Differentiated banks serving niche interests, local area banks, payment banks, etc., are contemplated to meet credit and remittance needs of small businesses, unorganised sector, low income households, farmers and migrant workforce."..........
Liberal infrastructure funding regime for banks
..........Put simply, these funds will not attract norms like Cash Reserve Ratio (CRR), Statutory Liquidity Ratio (SLR) and those on priority sector lending. While the finer details are awaited, banks will have more to lend for funding long-term infra projects. At present, for every Rs 100 crore raised through deposits, banks have to keep Rs 4 crore with Reserve Bank India as CRR (which earns zero interest income) and invest Rs 22.5 crore in government bonds to meet SLR norms. Beside, Rs 40 crore has to be lent to priority sectors. ........
Too early to declare victory over non-performing assets battle: RBI Governor Raghuram Rajan
............."I think, the most immediate problem we have to confront is that of rising level of stressed assets in the banking system. Fortunately in the last quarter those levels of stressed assets tapered off or flattened out. But, it is too early to declare victory," ................
AAP slams Naidu over farm loan waiver
Chief Minister N. Chandrababu Naidu may have heaved a sigh of relief after the Reserve Bank of India gave its nod for rescheduling of the farm loans, but the TDP supremo has drawn flak for ‘inviting’ the loan waiver trouble upon a new fledgling government. “Mr. Naidu used the loan-waiver promise as bait to garner votes in the elections and landed on a sticky wicket in the aftermath of polls. He should have done his home work properly on the feasibility of the proposal,”...........
Thursday, July 10, 2014
RBI Governor Dr.Raghuram Rajan visits Chennai
Dr.Raghuram Rajan, Governor of RBI has arrived at Chennai today in connection with the Central Board Meeting to be held on 10th July 2014.
The Governor gave audience this morning in separate meetings to the Executive Committee Members of the Forum of Retired Employees of RBI, Chennai and the United Forum of Officers and Employees of RBI. Sri R.Gandhi, Dy.Governor, Dr.Sadakkadulla, Regional Director (TN) and other officials were also present in the meeting.
The Executive Committee of the Forum of Retired Employees felicitated Dr.Raghuram Rajan on his assuming office as Governor of RBI. They honoured him with a shawl and presented a memento. While thanking the Governor for all the efforts he has taken after his assuming office for getting Government's approval to restore Updation of Pension, the Forum requested him to use his good offices for implementation thereof without further loss of time. They also requested him to grant enhancement of Ex-gratia amount to the Pre-1986 retirees which was stagnant for a long period. They impressed upon the Governor that this issue can be settled within the powers of the Governor. The Forum has submitted a written appeal to Governor in support of these requests. Sri T.G.Nair, Gen.Secretary of All India Retirees Assocation from Mumbai also joined the delegation.
The Governor was receptive and gave a patient hearing. He expressed his happiness over meeting the retirees. Regarding the ex-gratia enhancement he said he would look into the matter and do the needful. Regarding the Pension updation he admitted that the process is taking time despite best efforts. He assured that he will do everything to ensure a fair settlement of the issue at the earliest.
It is understood that during their meeting the United Forum of Officers and employees of RBI took objection to the Bank's unilateral decisions in respect of the re-organisation of the Bank's functions. The United Forum also demanded that one or two of Central Office departments may be brought to Chennai. They also demanded that updation of pension and one more option for pension should be implemented early. During the discussion they also insisted that adequate care should be taken to see that the interest of the serving employees is not compromised.
The Governor replied to the United Forum that the Bank will take the Unions into confidence while deciding about re-organising the functions. The Governor said he will consider the suggestion to de-centralise some of the Central Office functions by shifting the departments to its various offices. The Governor's reply in respect of the demand for updation of pension was the same as given to the retirees' forum.
- Chandraiah
RBI board to take up COO issue on Thursday
...........It is learnt the proposal to have a COO with a DG's rank was first taken up during a meeting of a committee of the central board, which generally meets every Wednesday. The latter suggested this be taken up at a board meeting of the central bank, where Union government nominees are also present. The economic affairs secretary and financial services secretary are nominated as board members. It is, however, not clear if RBI will seek the board's approval or only inform it. The increase in the number of DGs, and also EDs, are part of a personnel restructuring the central bank is currently undertaking. RBI plans to increase the number of EDs from nine at present to 11...........
Obituary
I deeply regret to advise you of the sad demise on 9th July 2014 in Trivandrum of Shri.C.Vijayan Nair. He retired as Executive Director. Shri Nair was born on October 16, 1926 and joined RBI as a Rural Credit Officer in October 1959. He had served for a number of years in ACD and held the post of Calcutta Manager. He retired on March 31,1986 as ED in charge of Administration. Shri Nair was for a number of years President of RBI Officers Association and made notable contributions to Staff welfare. He was a very gregarious and genial personality and leaves behind a large circle of friends and admirers. He was not married. We pray that his soul rests in peace.
- P.P.Ramachandran.
Slice of history - Retirement of CVN
 |
| A floral tribute from the Governor, for a job well done. |
On March 31, 1986, Shri C.V.Nair, Executive Director, retired after a 26-year-long career which began in October 1959 when he joined the Bank as Rural Credit Officer. But his association with the RBI began a year earlier with his appointment as Principal of Block Level Co-op. Officers Training Centre, Hyderabad, which was the first of two such training centres set up under the joint auspices of the Government of India and the RBI. Shri Nair's success story is a long one, the first chapter being set in the erstwhile ACD where he steadily rose to become Additional Chief Officer in 1979. As Manager of Calcutta Office in 1981, he won the appreciation of the employees and top rnanagenent through his superb managerial ability: In December 1982, he became Chief Manager and again in March 1984 he was elevated to the position of Executive Director. During his tenure as ED he handled, among other things, the negotiations with various categories of staff with a skill of his own, which culminated in wage settlements.
Source : Without Reserve January - March 1986
CVN : Accomplished orator with courage of conviction
In the passing away of Shri Nair RBI has lost one of its most illustrious officers. I had the privilege of working under him when he was Calcutta Manager. He had the courage of conviction to stand against any unjust or arbitrary decision of Central Office. When I was transferred from Calcutta, he defied the order and retained me. Again, when Class IV staff went on agitation all over India, managers vied with each other in suspending or dismissing the agitators. Only Mr. Nair stood firm saying that if he suspends or dismisses anybody, he should stay so and not reinstated at the drop of a hat. The managers, especially Kanpur Manager, had to eat humble pie when all those who were suspended or dismissed were unconditionally reinstated. Mr. Nair was known for his great sense of humour. Even in gravest of situation his sense of humour prevailed. He was an accomplished orator full of wit and humour. And above all he was the most vehement critic of the bank's personnel policies.
May his soul rest in eternal peace.
- B. K.Kamath, CGM Retd
Canara Bank plays gynaec with sexist job application
Canara Bank has come under fire over a recruitment form that allegedly sought to reject women candidates on the basis of personal health details such as their menstrual cycle and pregnancy. The document, introduced earlier this year, has been withdrawn following the furore it sparked. The withdrawal came after an employees' union said the details had nothing to do with their job and amounted to a violation of human rights and gender discrimination.....
Miscreant clones doc's debit card, misuses it 371 times
........She reported the matter to the Cyber Crime Police (CCP), which discovered that a miscreant had stolen the details of her card and made 371 transactions. Interestingly, the doctor had not checked her savings account for over a year. The CCP, which has now registered an FIR, found that the miscreant had used the cloned card to book train tickets, shop on Flipkart and recharge his/her mobile phone. After enquiring with the bank, the doctor found someone had been misusing her card since 2013..............
Does money grow on trees? No, in an ATM
............An employee of the local block development office who lives in the area said he saw a large number of people queued up in front of the ATM last night. “I found it unusual. I live in the neighbourhood, but had never before seen so many people outside the ATM at night. I asked one of them what was the matter. He told me more money was coming out of the ATM than the amount keyed in. I informed the police,”.............
Jago Aam Banker Jago – Revolution Needed in PS Banks to De-Stress Banking Community
.........Things can be changed if Aam Banker decides to hit back. I am of the view that PNB management was not at all in a mood to take action for suspending the duo nor were unions interested to demand action this far. However, the hue and cry raised by Aam Banker on the FaceBook and other social media / websites forced the union leaders to escalate this issue and soon top management also realized that it is the reputation of the bank which is at stack and if action is further delayed it can make irreparable damage to the already fragile relationship between top management and middle and junior management officers...............
Who abrogated J&K’s fiscal autonomy?
.....The last nail in the coffin of autonomy was hammered in by Omar Abdullah in 2010 by shifting the banking operations of the state government from J&K Bank to Reserve Bank of India (RBI) from 1st of April this year 2011. The sign off with RBI, which changed not only the financial but also the fiscal relationship with the Union of India, should have been approved by the state legislative assembly. The assembly was bypassed and what is worse informed much after the deed was done! First and foremost, J&K Bank ceased to be the "lender of last resort" to the J&K Government which it has been since its inception. .....
DCCBs case: Maharashtra CM did not act despite RBI governor's word
Litigation to revive the three district central cooperative banks (DCCBs) from Vidarbha continues, but the situation may never have arisen if chief minister Prithviraj Chavan had acted promptly on a request by the RBI governor. Governor Dr D Subbarao wrote to Chavan in 2012 that the six beleaguered banks at Nagpur, Wardha, Buldhana, Osmanabad, Jalna and Dhule-Nandurbar needed capital infusion from the government. But the CM, for reasons best known to him, delayed the decision for the three banks in Vidarbha......
CRRID to write to RBI for implementing banking treaty with Pakistan
.....RBI and SBP had entered into an agreement for the opening of banking sector under which both sides had decided to grant permission to set up two bank branches on reciprocal basis, stated Professor Satish Verma, RBI chair, CRRID on Wednesday. He said both sides were yet to decide on specific banks and locations for open the branches. Currently, Indian traders receive money through Dubai-based branch of Pakistan's Habib Bank, said Prof Verma. He also questioned why financial dealings were being routed through a third country, especially when both India and Pak had agreed in principal to open banking sector for transparent trade. Stating that there was no direct bank-to-bank agreement between two countries, Prof Verma also apprehended some irregular channels', including hawala transactions, being used by traders from both sides to exchange money. "I wonder why the banking agreement couldn't be implemented even after nine years. CRRID has decided to write to RBI to implement the agreement made with SBP," he informed TOI......
Finmin wants PFs to invest 15% each in equities, ETFs
.....Further, the finance ministry has proposed some relaxation in PFs investing in bank deposits. While the earlier rule allowed PFs to invest in fixed deposits of only those banks which had NPAs of less than 2%, the new rule extended it to not more than 4%. Also, the PFs have been allowed to invest in rated infrastructure debt funds asset backed securities. PFs can also invest some money in debt mutual funds regulated by Sebi, said the new investment guideline......
Government to proceed with its recommendations
......Other recommendations of the Commission, however, have been rapped by Reserve Bank of India Governor Raghuram Rajan. In a recent speech, he described one such idea, of a unified regulator, as "somewhat schizophrenic" and went on to say the report was inconsistent. On the other hand, the Survey, which said the FSLRC report marked an important milestone in financial reforms, felt the IFC articulated clear objectives for financial regulation, where government intervention is required......
Majority of poor remain excluded
.....The statement comes at a time when the RBI has indicated that the country would soon get its first payments bank in place. Such a bank would not extend credit, but will provide deposit and payment services. An RBI panel, headed by Nachiket Mor, had proposed the payments bank concept. As against a full-service bank, needing an initial capital of `500 crore, payments banks need just ` 50 crore entry capital to begin operations. India Post, with its nationwide reach, is among the main entities being considered for the payments bank route......
Give RBI inflation target to contain prices: The Economic Survey
.....It said that lower inflationary expectations would increase domestic household savings and make resources available for investment. “There is need for a formal monetary policy framework through which the RBI is given clarity of objective and operational autonomy in pursuit of that target,” said the Economic Survey......
Read - Deccan Chronicle
Check On Inflation
.......... “For effectively containing inflation requires putting in place a monetary policy framework defining a nominal anchor, as well as deregulating food markets to curb food inflation,“ says the latest economic survey . “Monetary policy is central to inflation in the long run.“ A government document backing Rajan's inflation targeting proposal augurs well for co-ordination between the new government and the central bank on policy issues. Any fiscal consolidation and moving towards market pricing of commodities such as fuel and fertiliser as well as rail fares, though may be inflation inducing in the short term, would help temper prices in the longer term.....
Read - ET
Read - ET
Bank accounts for all: PM Modi that's not financial inclusion
.........According to the Committee on Financial Inclusion chaired by Dr C Rangarajan, it “may be defined as the process of ensuring access to financial services and timely and adequate credit where needed by vulnerable groups such as weaker sections and low income groups at an affordable cost.” It’s clear - the term means access to services and credit. Going by a detailed speech by P Vijaya Bhaskar, Executive Director, Reserve Bank of India, at the MFIN and Access-Assist Summit in New Delhi in December 2013, it “broadens the resource base of the financial system by developing a culture of savings among large segment of rural population and plays its own role in the process of economic development. Further, by bringing low income groups within the........
New RBI Norms for Coop Banks Decried
Discussions on the demand for grants to the Cooperation Department in the Assembly on Tuesday witnessed members cutting across the political divide expressing concern about the RBI and NABARD guidelines based on the Prakash Bakshi report, which imposed heavy curbs on the functioning of the cooperative sector financial institutions.....
Co-op sector share in rural credit declining; PACs should be revitalised
The share of co-operatives in rural credit, which once stood at 60 per cent in 1990, has now declined to a paltry 15 per cent and therefore there is an urgent need to revitalise primary agricultural co-operatives (PACs) by converting them into multi-service centres, according to Jiji Mammen, the Chief General Manager of the NABARD, Hyderabad. He was speaking here on Wednesday at the inaugural of a three-day workshop and awareness programme............
Bank to pay Rs. 2 lakh to Amritsar resident for unfair trade practice
.... “Once the instructions had been given, the bank was not competent to renew the FDR for a further period of five years. They acted against the instructions of the complainant and it amounted to deficiency in service on their part. It also amounts to the adopting of unfair trade practice, as the intention of the bank becomes apparent that they wanted to withhold this deposit of the complainant and never wanted to give the benefit thereof to the complainant by depositing it in the overdraft account.”
Not intimated of move to block fund transfer: Greenpeace
....."On June 23, 2014, we had requested for a financial transfer from Greenpeace International, which transferred the money the very next day. On June 30, we were denied the money on the grounds that our bank, IDBI, had received instructions from the Reserve Bank of India that it would not be able to transfer the money unless it received a go-ahead from the Ministry of Home affairs."......
Banks start offering loans to Bandhan Financial
Banks are queuing up to lend money to Kolkata-based microfinance institution Bandhan Financial Services, which was among the lucky two to secure a banking licence from the Reserve Bank of India (RBI) in April this year. According to sources, three banks -Bank of India, Vijaya Bank and HSBC India-have sanctioned loans of Rs 700 crore last month. Mumbai-headquartered Bank of India has given the highest term loan facility of Rs 500 crore at an interest rate of 13.80 per cent. Bangalore-based Vijaya Bank has given Rs 50 crore term loan at a slightly higher 14.50 per cent per annum. And HSBC, one of the largest foreign banks in India, has agreed to offer a working capital loan of Rs 150 crore............
Loan waiver to elude some
The Reserve Bank of India may not reschedule the crop loans of all farmers in AP as 86 of the total 661 mandals in Seemandhra are not on the drought and cyclone-affected list submitted to the apex bank. Also, lack of clarity from the government regarding who will pay back the rescheduled loans has left the farmers worried......
Kingfisher moves Calcutta High Court against UBI default notice
.............They submitted that the bank cited the Master Circular of Reserve Bank of India (RBI) which has not kept any provision for such representation. The counsels claimed that as there was no provision, it was the discretion of the bank concerned, but the UBI has disallowed its contention without citing any reason............
Wednesday, July 9, 2014
RBI Ex-Dy Guv Sinha Joins Amarchand & Mangaldas
A fiscal watchdog for India
...........There is a deeper problem here. The credibility of Indian fiscal statements is generally weak. A careful analysis of budgets over the past 25 years by economists Deepa Vaidya and K. Kanagasabapathy of the EPW Research Foundation shows that finance ministers consistently overestimate revenues and underestimate expenditure when they present their budgets. The result is that the actual fiscal and revenue deficits are far higher than what has been promised in the initial budget estimates. This tendency is starker during interim budgets. They say that..................
Inflation targeting fiscal policy
..........It has been pointed out that the lack of clarity in the Reserve Bank of India (RBI) on the monetary policy framework over the years—which enunciates the goals, strategies and operational tactics for this framework—coupled with large fiscal deficits have contributed to the prevalence of high and persistent inflation in recent years. The RBI, in recent montths.......................
A Sense of déjà vu? Time to Set India's Forex House in Order
.........The current account deficit -the excess of spending overseas than savings -declined to less than 2% of GDP from about 4.7% a year ago, thanks to the government's move to curb gold imports by raising import duty on gold and RBI's prudential measures, along with measures to boost dollar inflows. Yet, India's external debt indicators continue to be vulnerable. In terms of percentage of GDP, external debt rose to 23.4%, from 22% last year. While the short-term share of external debt has improved recently , the current share at 20% is significantly higher than what used to be a decade ago. This share was only 4% in 2004. It started rising sharply since the global crisis of 2008. Other indicators, too, are far from satisfactory. Take, for instance, .................
UTI’s Fake 50 Year Celebration
........A coffee table book of UTI’s history was released that day in the presence of almost all but two of its most controversial ex-chairmen in nearly four decades. One was the late MJ Pherwani (who grew UTI into a mammoth fixed-returns giving trust and development finance institution rolled in one, but set it up for a future fall) and the other was the late PS Subramanyam, who presided over its collapse, after it had already been seriously weakened. Did the coffee table book document its ignominious fall and split? How did UTIMF justify its claim of 50 years of glorious existence?.......
T(rust) lost between U & I - M.G.Warrier
My View on UTI’s Fake 50 Year Celebration
Many things stated here are true. But, it is also a fact that absence of professionalism in management caused the slow and steady deterioration of the functioning of a public sector organisation. Wrong persons found their way to top positions in UTI with ease. The institution was ‘destroyed’ from within. Some financial management experts should do a case study of the rise and ‘fall’ of UTI. Even the Unit-64 Scheme is worth studying. That scheme was also ‘destroyed’ by not bringing in innovations necessitated by changes in the environment in which it was existing.
Many things stated here are true. But, it is also a fact that absence of professionalism in management caused the slow and steady deterioration of the functioning of a public sector organisation. Wrong persons found their way to top positions in UTI with ease. The institution was ‘destroyed’ from within. Some financial management experts should do a case study of the rise and ‘fall’ of UTI. Even the Unit-64 Scheme is worth studying. That scheme was also ‘destroyed’ by not bringing in innovations necessitated by changes in the environment in which it was existing.
- M.G.Warrier
ICICI Bank organised 36 Coin Exchange Melas across Mumbai, Navi Mumbai and Thane in June, 2014
ICICI Bank Ltd, India’s largest private sector bank, organised 36 Coin Exchange Melas at its various branches in Mumbai, Navi Mumbai and Thane during June 2014, under the guidance of the Reserve Bank of India. The Bank organises Coin Exchange Melas to offer free facility of exchanging acceptable soiled and mutilated currency notes with coins to the general public and is a much-awaited event that receives an overwhelming response from people from all walks of life. Anyone can avail of this facility free of cost.........
Useful study
My View on "A Study on Analyzing the Trend of NPA Level in Pri...":
The Study is useful for researchers. None of the tables contain the unit of measurement regarding the amount: whether it is in thousands, lakhs, crores, millions for RBI itself has adopted lakhs in some years and later migrated to millions and billions. Further references have not taken into account several articles and articulations on the subject - both official and private.
- Yerram Raju
Suicide case: Over 500 bankers hold protest Demand action against 2 officials named in suicide note
...........The protesting bank employees alleged that they had been working under adverse conditions and needed better infrastructure. “Strict action must be taken against the two officials who had been harassing Sehgal. We will continue our agitation. The future course of action will be decided tomorrow,” said Rajender Wali, a member of the PNB Officers Association.........
Forwarded by Madan Gauria
Govt eyes 200 mn new bank accounts in a year
.............The cost of the one-year plan is pegged at Rs 1,700 crore. Wages will take up Rs 1,200 crore. Promotion expenses, merchandising and infra will cost another Rs 500 crore. The National Bank for Agriculture and Rural Development is expected to chip in with Rs 1,000 crore and the rest will come from banks. Account holders completing a financial literacy programme will get instant overdrafts of Rs 5,000. Welfare benefits will flow into these accounts, reducing the chance of accounts turning dormant.........
No proposal to dilute govt ownership in PSBs below 50%: Govt
........"Major bank trade unions have protested against the implementation of the recommendations of the (P J Nayak) Committee including dilution of government ownership. There is no proposal with the government to dilute its ownership in PSBs below 50%," Minister of State for Finance Nirmala Sitharaman said in a written reply in the Rajya Sabha........
FinMin may bring back DFIs to fund infra needs
......."DFIs are the need of the day. A committee may be formed with some economists and a RBI representative to look into the issue. A call on setting up DFIs will be taken based on its recommendations," said a finance ministry official who did not wish to be identified. According to officials, RBI is opposed to the move as the Narasimham committee had already stated that with banks and DFIs moving close to each other in their scope of activities, DFIs were not required and they should be converted into banks or NBFCs. The finance ministry's view is that..........
Centre trying to weaken coop. sector: Pinarayi
...........Mr Vijayan alleged that certain quarters at the Centre wished to bring the co-operative sector under their control. The constitutional amendment and amendment of the Banking Act were made with this intention, he alleged.He alleged that the Centre was trying to control the co-operative banks with the help of RBI rules, sidelining the fact that the co-operative banks were formed through a legislation passed by the State Legislature........
RBI nod for rescheduling, waiving loans in AP
......................Addressing a press conference, the AP Finance Minister Yanamala Ramakrishnudu, Agriculture Minister P Pulla Rao and State Media Advisor Parakala Prabhakar, said that a formal communication on the loan reschedulement/ waiver is expected to be released by the RBI within the next couple of days. Earlier today, the State Chief minister, N Chandrababu Naidu, who spoke to the RBI Governor Raghuram Rajan, was assured by the latter that RBI would clear the proposal and details would be released through a communication, they said..............
Customers must ensure financial products are suitable for them
Banks are not willing to ensure that the products they sell to low-income customers are suitable for them, telling the apex bank instead that customers themselves must understand their own financial needs and bear responsibility for the choices they make. In January, a Reserve Bank of India (RBI) panel led by Nachiket Mor on financial services for small businesses and low-income households had suggested that banks move from the principle of caveat emptor (let the buyer beware) to caveat venditor (let the seller beware). It proposed a legally-protected right for low-income borrowers to get suitable financial services, suggesting banks can face legal action if found selling unsuitable products to them. However, when the central bank sought feedback ..............
Be selective in choice of bank, amount of FD to avoid shocks
.........However, customers of many other troubled co-operative banks are often not as lucky as they have to wait longer to get their money back. This is because the banking regulator merges a troubled bank with a sound one and depositors will have to wait for the process to be completed before they can get their money or stop worrying about its safety. The RBI orders a moratorium when a bank's financial stability is threatened. Depositors face some restrictions on withdrawing money from their ..
Tuesday, July 8, 2014
RBI official shows enforcing rules is tough business
In the continuing debate on whether over regulation has the potential to throttle the corporate sector or if businesses will always manage to beat the regulator at ways to skirt the rule book, a perspective from inside the Reserve Bank of India offers an insight into how tough it is to enforce financial regulations in the country. Speaking at a recent conference on corporate governance in Mumbai, G Padmanabhan, Executive Director, RBI recounted how companies responded to attempts by the central bank in 2007-08 to tweak the regulatory framework to discourage foreign currency borrowings by companies as a means to contain the rupee volatility......
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