...............However, one thing is very sure. RBI and the Government may not have a smooth sailing in a lot of areas. How soon and effectively they sort out the differences for better financial framework will decide the pace of economic recovery of the nation. And in our opinion, it is not going to happen any time soon. Given the messy legacy and sticky issues in the economy, a stable recovery is likely to take at least two three years. In the meantime, investors would do well to use bottom up stock picking approach. A bet on the broad macro economy may lead to burnt fingers. How do you think the equation between the RBI and the Government will impact the recovery process? Do share your views.............
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.
Friday, July 18, 2014
Reserve Bank of India, Monetary Authority of Hong Kong ink MoU for information exchange
...."The RBI today signed a Memorandum of Understanding (MoU) for supervisory cooperation and exchange of supervisory information with the Monetary Authority, Hong Kong," RBI said in a notification. The MoU with Monetary Authority, Hong Kong, was signed by Arthur Yuen, Deputy Chief Executive, Banking, the Monetary Authority, Hong Kong and Harun R Khan, Deputy Governor, RBI. The signing ceremony was held at the Monetary Authority office in Hong Kong.
NABARD emerging as economic growth engine
.......K. K. Saraf, Regional Director, Reserve Bank of India, in his key note address congratulated all the NABARD for its efforts in the development of agriculture and rural development in the state especially, the role played under micro finance, financial inclusion and covering of farmers under Kisan Credit Card scheme. The role played by NABARD for inclusive growth through watershed, financial inclusion, SHG-Bank linkage, village development, credit planning and other related activities was highly appreciable............
Read - Rising Kashmir
'Nabard’s growth has few parallels among peers'
..........Nirmal Chand, Regional Director, Reserve Bank of India, Thiruvananthapuram, credited Nabard with success in piloting the core banking solution in cooperatives sector and driving financial inclusion. But its capabilities would be tested while seeking to ensure raised level of capital adequacy in the sector as mandated by the Reserve Bank. According to Chand, Union Budget 2014-15 sets great store by the Nabard’s proven credentials in executing major tasks in enabling the rural and agricultural sectors.............
Honour for Veena maestro D. Balakrishna
Srikrishna erred - Dr.T.V.Gopalakrishnan
My View on "Time will tell who behaved like 'NAWABs":
Justice Srikrishna should have come out in the report how to improve the legal system of the country instead of taking away the powers of a very well functioning institution with all limitations. RBI has earned a name and has got recognition from all over the world. Once the limited autonomy it enjoys is taken away, the mess that the financial system particularly the banking system and the chaos that the economy may face are something unimaginable especially when the legal system in the country cannot provide any sort of relief. Time the legal system is revamped first before venturing into changes elsewhere.
- Dr.T.V.Gopalakrishnan
Mysterious Money Trail
.............Y.V. Reddy and V. Leeladhar ran the crusade for the RBI and K.M. Abraham and C.B. Bhave for Sebi. It sounds spooky when it is revealed that there were 93 lakh deposit holders who did not claim their money and that there are no records on Rs 40,000 crore of funds. Such money, according to the regulator, should have been transferred to the government fund if this was the case. Has the mystery been solved? You never can tell............
Why ICICI Bank is one of the best companies to work for
.........Even after two years, the company does not sack the underperforming employees but only tells them that they will not be eligible for any increments, new job roles or bonuses, etc. Also, it never displaces pregnant women and people whose children are taking board exams. "If a person 45 years of age or above is asked to go, the person and the spouse continue to get medical support till they are 60," says Ramkumar. That is the reason why even former employees such as B. Shubhendu, who has worked in several multinational as well as Indian banks, still credits his stint at ICICI Bank as one of the most rewarding experience: "If it was not for the low pay slab, I would not have quit. They are caring, but are alert about non-performers,".........
Improve service first to domestic customers
.........KYC and Technology also become more of a handicap than a help for customers to switch banks. Old generation banks under certain compulsions do care old generation people where as new generation banks have been enjoying the unwritten freedom to ignore old generation people. When the domestic customers undergo harassing..........
Read...........
RBI to issue new Rs 20 denomination notes
......."The RBI will shortly issue rupees 20 denomination banknotes incorporating rupee symbol, with inset letter E, in the Mahatma Gandhi Series-2005 bearing the signature of Raghuram G Rajan, Governor," RBI said in a release. ........
Rs 10 coins to be issued by Reserve Bank of India on diamond jubilee of Coir Board
The Reserve Bank will soon put to circulation Rs 10 denominated coins on the occasion of diamond jubilee of Coir Board. "The government has minted the above mentioned coins which the Reserve Bank of India will shortly put into circulation," ...........
RBI quiz for students
................The preliminary and quarter final rounds will be held in Hyderabad on July 25 and in Visakhapatnam it is slated at Mother Teresa Dental Auditorium, GITAM University on July 28. The winning teams from each centre will join the other winners from across South India. While the zonal round is scheduled on November 7 in Chennai, the semi finals and finals will be held in Mumbai in November........
Good news for subscribers, Provident Fund deposits likely to fetch higher rate of returns
.......... “The calculations are yet to be firmed up but efforts are on to ensure that the returns are higher than the 8.75 per cent announced for last fiscal,” said a senior official. But the Employees’ Provident Fund Organisation (EPFO) will have to review its estimates once the higher wage limit is notified........
IBPS PO 4th CWE Exam 2014: Online Apply, Eligibility and Exam date Notification
IBPS has announced 4th CWE, Common Written Examination PO/MT for the recruitment of Probationary Officer/ Management Trainee vacancies in Public Sector Banks and online registration will be started from 22.07.2014 to 11.08.2014 . IBPS has made all preparation for conducting recruitment exam 2014. As sources said approx 35,000 vacancies will be fulfilled from this exam.........
SBI manager out of India, out of pocket!
The Bombay high court has rapped the State Bank of India (SBI) for posting a manager abroad at a promised salary and reducing it later. Calling the bank’s decision “wholly arbitrary”, the court has said that on the basis of salary offers, people make life decisions like shifting with family and selecting educational institutes for children. Ravindra Nath was posted to the SBI’s Johannesburg branch in June 2000 and was offered a salary of $1,965 a month. Four months later, he was informed that it was being reduced to $1,300.........
Read - TOI
Bank staff association plans anti-privatisation stir
.............the P.J. Nayak committee, appointed recently by the Reserve Bank of India, had made a series of recommendations that would further erode the popular banking base of public sector banks. The recommendations include repeal of the Bank Nationalisation Act and bringing banks under the Companies Act. The panel moots creation of a Bank Investment Company that should be given ownership functions of the banks. The government should not appoint directors in the banks. The panel also recommends merger of banks. The new measures being adopted by the government, in pursuance of the policies followed by the previous government, were contrary to the banking system ..........
Is it the end of gold saving schemes?
.........Jewellers are planning to approach the government for an amendment. So will there be a review? “The capital market regulator’s view points are different in terms of risk and mitigation. If the government is looking at reviewing the details in the Act, then may be the product can come back with checks and balances. It could be worked out in a way where companies make a declaration to the government to make sure that the information about the deposits is made available,”..............
Skimmer walks away with Rs 2.6L from Andheri ATM
In what could be termed as the perfect crime, a man covering his face with a handkerchief and wearing a helmet entered an ATM booth in Andheri (West) and, with the help of a skimmer device, which was already fitted, managed to get card details of 11 customers, withdrawing Rs 2.60 lakh. The accused had also put a sticky CCTV camera to procure the PIN of the cards. The footage of CCTV in the ATM booth and one on the opposite side showed the accused had come on a bike but his licence plate number is not clearly visible in the footage..........
First Data launches its mobile payment solution
..........“Merchants today are looking for a simple and reliable solution from a trusted partner to enable them to grow their business with customers. We are confident that our mPOS solution provides a cost-effective solution for converting on-the-go cash payments to electronic and for small merchants to start accepting cards. With this, First Data will provide all services to merchants through a single window rather than them having to interact with multiple providers.”..............
KC Land & Finance eyeing differentiated bank licence
............ "We are keen to operate on a regional level with a special focus on farmers, NRIs and SMEs. We are from a rural background and have a strong foothold in the rural market. There are certain areas in Punjab where bank branches or business correspondent model is yet to be operational. We will target these areas and bring more people under the banking ambit which can help spur the regional economy."........
RBI sets stiff terms for niche bank licences
The Reserve Bank of India (RBI) on Thursday paved the way for niche banking by issuing draft guidelines for setting up payment banks and small banks. While payment banks will offer remittance services, small banks will offer low-ticket loans and basic banking services within a limited area of operation. After initial screening to ensure eligibility, the central bank will set up an external committee to vet applications, which will be invited after the final norms are issued. Successful applicants will have to start operations within a year of the date of approval............
Small, payment banks a backdoor entry for companies into banking
.........As per the draft guidelines, existing non- bank finance companies, non- bank prepaid instrument issuers, corporate business correspondents, mobile telephone companies, super- market chains, companies, real sector co- operatives, and public sector entities were deemed eligible to apply for a payment bank. "... small local banks can play an important role in the supply of credit to micro and small enterprises, agriculture and banking services in unbanked and under- banked regions in the country, the RBI has decided to allow new " small banks" in the private sector," the RBI said.............
RBI proposes Rs 100 crore minimum capital required for setting up small bank and payment bank
.........The RBI has placed the Draft Guidelines for Licensing of Payments Banks and Draft Guidelines for Licensing of Small Banks for views/comments on the draft guidelines from all interested parties and general public. Both, payments banks and small banks are niche or differentiated banks; with the common objective of furthering financial inclusion. While small banks will provide a whole suite of basic banking products, such as, deposits and supply of credit, but in a limited area of operation, payments banks will provide a limited range of products, such as, .........
The rupee's risky overvaluation
................. A third argument against rupee depreciation is that if the Reserve Bank of India (RBI) mops up incoming foreign exchange, the consequent increase in rupee liquidity would further complicate the tricky task of containing inflation. At the risk of sounding like a stuck record, this article argues that India is taking a risky and sub-optimal approach by allowing the rupee to be overvalued against the dollar........
RBI efforts bear fruit, CDR cases down
..........The amount of loans referred in Q1FY15 stood at R2,720 crore compared to R39,521 crore in the year-ago period. Bankers and CDR cell officials said this fall in referrals is a result of RBI guidelines on early detection of stressed assets where it had directed banks, in December last year, to classify loans on the basis of the number of days interest payments are due. Due to that...........
A prudent gamble?
...............After some apparent reluctance initially, the Reserve Bank of India (RBI) seems to have taken to the idea, extending the broad exemptions to funds raised and lent to low-cost housing projects. The details apart, the main benefit of the exemptions from the banks' point of view is that their cost of funds will decline in the absence of the prudential load, which can then be passed on to borrowers. But it would be naive to think that.........
Financing infrastructure
...........Such mismatch can be avoided if banks are able to access long-term funds at relatively low cost. The RBI’s latest move — which follows Finance Minister Arun Jaitley’s Budget announcement — facilitates both. Banks today are required to keep ₹4 out of every ₹100 mobilised as deposits with the RBI, on which they earn no interest. They also have to compulsorily invest another ₹22.5 in government securities, apart from earmarking 40 per cent of their credit to so-called priority sectors. These pre-emptions...........
Building on BRICS
...........Viewed from this perspective, the new institution's initiatives will only supplement IMF and World Bank, and there is enough unattended space for the new bank. There are limitations in the "already impaired" vision of the rich, and the poor cannot wait on the sidelines for their basic needs to be met.........
BRICS bank gets the thumbs up from IMF
The International Monetary Fund on Thursday welcomed the move to set up a new BRICS development bank, saying that it is ready to work with the Bank’s leadership. “I would like to congratulate you on hosting a successful meeting of the BRICS leaders in Fortaleza, Brazil, and especially on establishing the Contingent Reserve Arrangement,” IMF managing director Christine Lagarde said in a message conveyed to the Brazilian President, Dilma Rousseff.....
A development bank for developing nations
..............The getting together of the five leading developing nations is attractive as they had a combined share of around 20% of the global GDP in 2013 (IMF). However, all the nations are quite different in terms of politics, economic structures and governance. The concept of BRICS is more notional as these are countries which are geographically spread out with little competitive advantage in terms of distance or physical contiguity. Hence, this experiment will set a new financial trend.........
Banks to benefit more than HFCs through long-term bonds: Icra
...............The guidelines say banks can raise long term resources to finance their long term loans to affordable housing through minimum regulatory pre-emption like exemption in the mandatory government security holding and cash reserve ratio and priority sector lending, Icra said. The state-run banks, which have a better presence in the lower ticket loans segment, will benefit more as the definition of what constitutes as affordable housing has been enlarged, it said............
Loan waiver: A.P. urges RBI to extend repayment period
.............Mr. Ramakrishnudu told reporters here on Thursday that normally RBI would give one year’s moratorium and five-year period for repayment but it agreed for a three-year period this time, including moratorium. “We are asking that to be extended to seven to 10 years”, he added. Besides urging RBI to fix the upper limit at Rs.1.5 lakh, the State government wants gold loans up to Rs. 50,000 to be rescheduled..........
Bad loans hit cooperative banking sector in state
..............With 4,839 branches and 1,576 ATMs, cooperative banks have made their presence felt in every nook and corner of the state. In rural areas, cooperative banks are the only banks available to a large section of population. The Reserve Bank of India (RBI) and commissioner of cooperatives have joint control over banks. RBI can suspend the business of banks and appoint administrators by dismissing the board of directors. According to Dhanajay Dhoipode, joint registrar of cooperative societies, 10 banks have administrators as the RBI had dismissed their board of directors to save the banks and their depositors as bad loans piled up.........
COMING SOON TO DALAL STREET - A HUMDINGER . 20,000-Crore ` Share Sale by SBI
...India's largest bank is in discussions with the finance ministry over its financial requirements. The government is expected to support the plan as it's open to lowering its stake in state-run banks to 51%, besides which it doesn't have anywhere near the money needed to infuse the capital they require...............
Ethiopia seeks out Indian banks to boost investment
.........."Previously the Ethiopian government tried to support (investment funds) by availing investment finance with 70:30 ratio - 70 percent loan and 30 percent equity," Ethiopia's Minister for Industry, Ahmed Abetew, told IANS. "But nowadays, the demand for loan is higher than available loanable funds," he said. "That is why the presence of SBI presence is very crucial here in Ethiopia for availing investment funds for Indian companies as well as other companies."..........
SBI ties up with RML for cheaper agri info for customers
.............The information, to be delivered in SMS form in nine languages, will include updates on weather, input prices, crop diseases, government schemes/initiatives and market prices of produce, it said in a release. "As per the new understanding, the service would be made even more affordable to SBI's agri customers," it said.........
Thursday, July 17, 2014
RBI needs RaRa - A.Chandramouliswaran
Mere statutory independence alone may not be sufficient for the RBI to act independently since much depends on its functionaries to safeguard its autonomy. Have the persons, who argue eloquently today for the autonomy of the RBI and voice their opinions about the dominating nature of the ministry officials, done their small part for protecting the independence of the RBI is a question better left to their conscience.
The present Finance Minister is a brilliant person and from all indications publicly available seems to be getting on famously with the Governor. I am sure he could be trusted not do any thing, which would erode the autonomy of the RBI, without consultation with the Governor. Hence, the fears on account of the FSLRC recommendations are unlikely to come true.
In the unlikely event of the Government implementing the recommendations of the Srikrishna Commission in regard to the Monetary Policy Committee etc etc, Dr Raghuram Rajan could think of stepping down from the post so that posterity would not blame him for downgrading the Institution. In my humble opinion, RBI needs, at the present juncture and for the successful tenure of the NDA Government, Dr Raghuram Rajan more than the latter needing the RBI!
- A.Chandramouliswaran
Srikrishna's JudgeMendations
My View on "Where the Twain Shall Meet":
Now on FSLRC report should remain a reference point. As the FSLRC Chairman opted to write a report which he thought would satisfy the then FM and did not listen to his own colleagues in the Commission, or convince them as to why he was not able to go with them on vital issues, the final product (FSLRC Report) has several deficiencies that will surface as and when the government takes up the recommendations for initiating legislative or ‘executive’ action. Notes of dissent from 4 members out of seven who signed the report are indicative of the Chairman’s approach. The Commission wrote the report as if it was a ‘judgement’ whereas the task assigned to it was to make ‘recommendations’. The irritation being expressed by Justice Srikrishna in the context of Dr Rajan’s June, 2014 observations about certain ‘recommendations’ has to be viewed from this perspective.
- M.G.Warrier
Time will tell who behaved like 'NAWABs
My View on "Regulators function as Nawabs: Srikrishna":
The original Srikrishna while giving 'GEETOPADESHA' to Arjuna took ample care to take the disciple into confidence at every stage, by allowing him to raise doubts and clearing them 'online'. Gita was a 'consensus' report. Justice Srikrishna failed to convince (about the stance he took while writing the report) four out of seven members who signed the FSLRC report. Time will tell who behaved like 'NAWABs'
- M.G.Warrier
Give new declaration for lower tax deduction
................Typically, employers calculate the tax liability of their employees on the basis of the investment declaration given by the employees. The taxes are computed after taking deductions into account and the sum is deducted from the employees’ salaries in 12 instalments. Experts expect the Finance Bill to be approved in both Houses of Parliament by August. That means till July, most salaried individuals are likely to pay tax at the earlier income tax rates. In the meanwhile, most employers are expected to update their payroll software. Once the new tax rules come into effect,..........
RBI - Recruitment for the post of Assistant
he Reserve Bank of India invites applications from eligible candidates for 506 posts of “Assistant” in various offices of the Bank. Selection for the post will be through a country-wide competitive Online Examination and Interview.
The full text of the advertisement is available on the Banks’ website www.rbi.org.in and is also being published in the Employment News/ Rojghar Samachar on or after July 26, 2014.
Application will be accepted only Online through the Banks’ website.
Important Dates:
| Website Link Open | 16.07.2014 to 06.08.2014 | |
| Payment of Examination Fees | Online | 16.07.2014 to 06.08.2014 |
| At Bank Branches | 18.07.2014 to 11.08.2014 | |
| Schedule of Online Test (Tentative) | Varied dates around fourth week of September 2014 | |
Police and SBI blame each other over false arrest
.........The branch manager allegedly found that 91 currency notes of Rs.1,000 each were 'fake', and called the police who arrested the two men. The police even procured a four-day remand for further interrogation, but when the RBI checked the notes two days later, they were found to be genuine. Based on the report, the judicial magistrate Aashish Saldi, on May 20, discharged both personnel. The case will now come up for hearing on October 16.
Tata Comm hopes new services will boost White Label ATM business
............“We are witnessing better transactions than estimated. In some instances, they are similar to bank ATMs. Our strong focus on the right locations and innovative ways of deployment, such as neighbourhood formats, kirana stores and Porta Cabins ensures that the ATM rollout, especially in deeper geographies, is viable to operate,” said Sanjeev Patel, CEO, Tata Communications Payment Solutions Ltd (TCPSL). A wholly owned subsidiary of Tata Communications, TCPSL plans to set up 15,000 WLAs by 2016 as mandated by the RBI............
A year after currency crisis
.................Since the rupee hit its nadir on August 28, 2013, (68.85 against the $), becoming the worst performing Asian currency, its fortunes have changed after RBI Governor Raghuram Rajan announced steps to attract inflows on his first day in office (September 4). A look at how changing macroeconomic fundamentals helped the rupee gain strength....
'BRICS should frame own internet governance model'
.............."Snowden's revelations have demonstrated the need for secure email, calendaring, messaging, search, file-sharing and storage and video systems, which would protect BRICS' economic and cultural spaces, as well as leaders and citizens from Five Eyes spying," the statement said. Five Eyes is a term used to signify the alliance of five major countries that share intelligence - the UK, the US, Canada, Australia, and New Zealand.............
A useful lender?
............The question remains: what is the purpose of the BRICS Bank? After all, both India and China have questions about the governance in their banking sectors; is it the case that a new bank, such as this, is likely to help matters? India itself is unlikely to need it. Existing multilateral lenders are not strapped of funds at the moment, and Indian projects do not have to jump through too many onerous hoops to qualify...............
BRICS Bank: worthless at best, a disaster at worst
.........In other words, there’s little going for the BRICS Bank other than the little whiny post-colonial voice that still lives within all of us, the one which readily insists that anything that the US and the West have power in is worse for India than something the Chinese run. The problem is that setting up the BRICS Bank merely reduces the power of any argument we would want to make about substantial reform to the IMF and the World Bank. And, in any case, what that internal whiny voice counsels is stupid – and, in the long run, suicidal. Remember how China blocks the Asian Development Bank from funding projects in our Northeast? .............
A bank made of different Brics
.....The bank can help India considerably as it is a capital-starved country. For example, to fund infrastructure creation alone in the years ahead, India needs close to $500 billion. That sum cannot be obtained from a single source or even a couple of sources. The greater the number of lenders, the closer India can come to getting its hands on that kind of money. The bank can..................
BRICS Joint Forex Action Not Discussed but 'Worth Thinking About': RBI
The five BRICS countries have not discussed coordinated forex intervention in global markets, but it is an idea "worth thinking about," Reserve Bank of India (RBI) deputy governor Urjit Patel told Reuters on Tuesday. The leaders of the five top emerging market economies agreed on Tuesday on a landmark deal to create a $100 billion development bank and a reserves fund of the same size to challenge Western dominance over global finances. While the BRICS nations..............
Old Plan to Merge HDFC and HDFC Bank Back in Focus
...........A possible merger of the two group companies could create a financial behemoth that could eliminate costs of doing the mortgage business for both, say analysts. HDFC, which is at the receiving end during days of high interest rates, may benefit more from the merger. Benefits for HDFC Bank, which earns fee income from origi nating mortgages for its parent, will be lesser. “Since the RBI has cleared the impediment, they can think about it,“ said Vaibhav Agrawal, vice-president research, Angel Broking. “At least on paper, the hindrance is removed.“ There is no proposal yet, though top executives from both the organisations have discussed the issue in the past ............
ICICI Bank introduces convenient banking service for Indians migrating to Canada
.............The service, 'ICICI Bank Global Banking – Hello Canada', offers a customers the ease of opening a Canadian Dollar account with ICICI Bank Canada along with an NRI (non-resident Indian) savings account with the bank in India. The customer can open both accounts with simplified documentation by visiting ICICI Bank's branch in India only once................
Decision-making in PSBs
.......... While these structural changes are welcome, as the P J Nayak Committee pointed out, the rot lies in the weak processes followed at the board-level deliberations and decision-making. The agenda papers and proposal notes put up to the board leave much to be desired and hide more than what is disclosed. Different directors playing to their constituencies do not take the management to task ............
Indian Bank pays dividend to govt
...........This is over and above 30 per cent interim dividend paid by the bank to the government on January 25, 2014, Indian Bank said in a statement. The bank had paid Rs 103.15 crore as interim dividend.........
Govt, RBI to tighten loan recovery norms
The government and the Reserve Bank of India (RBI) are looking to further tighten recovery norms for wilful defaulters to counter the persistent issue of rising non-performing assets (NPA) — loans that do not yield returns. While the issue is being looked into and discussions expected to start soon, sources said that defaulters if found wilful, might not be given the flexibility of time and recourse processes which unnecessary derails the recovery process...........
Name & shame: Banks can publish photos of wilful defaulters, says SC
In a move that may discourage firms from defaulting on bank loans, the Supreme Court has allowed lenders to publish names and photographs of wilful defaulters in newspapers in the larger public interest. The apex court said that the decision to resort to this measure would be taken by officers of the rank of general managers and above............
RBI to consider farm loan recast for 3-year period
........The offer includes moratorium on payment in the first year and repayment of the entire loan along with interest in the remaining two years, according to the sources. When contacted, the representatives of local banks said they were yet to receive any information in this regard. According to officials engaged in the loan waiver/reschedulement exercise in both the states, the banking regulator also sought to know if the governments would be able to back this plan. The RBI also made it clear that the gold loans, even if taken for agriculture purpose, would not be considered under the scheme.........
Wednesday, July 16, 2014
Dr. Subbarao’s guest lecture at IIMB
Dear Friends,
We were privileged to have Dr. D Subbarao, speak at IIMB. He discussed about the global crisis of 2008 and India's response. He specifically shared the view that during the crisis it is very difficult to know the reasons and make mid-way correction and the policy maker does not have the benefit of hind sight. In the initial stages of the crisis, monetary policy was accommodative but then, with hind sight, probably, liquidity should have been drained faster and earlier than it was during his tenure. Also, a number of good suggestions are offered to the Governor but then the Governor has to take into consideration many different aspects of the economy before taking a decision. One such issue was related to building of international reserves. These and other important economic issues being presently debated in the country discussed by the former Governor.........
Hope you find it interesting.
Thanks
Charan Singh
Banks will discover the importance of SMEs: H R Khan
............."Banks will discover the importance of the SME segment for profitability and growth and new models to serve the SME segment profitably will be found, as more than three-fourths of the segment is still waiting to be served." .....
Where the Twain Shall Meet
..........Developing trust between the government and the central bank was visible even before the first step was taken by the government on either fiscal prudence, or committing to eliminating subsidies. When Rajan last month cut the statutory liquidity ratio of banks, the proportion of deposits to be held in government bonds, it was a sign of buying into the new government's promise. But the bonhomie could just be confined to fighting inflation. When it comes to changing the regulatory structure, it may not be smooth sailing given the many power centres and the recommendations of the Srikrishna Committee which could be the bedrock of reforms. Also, the internationalisation of Indian government securities and derivatives could put the RBI and the government in opposite camps. Despite his credentials as an advocate of free market practices during his career as a professor of finance, Rajan is seen to be slipping into the role of a typical regulator defending the turf and being conservative. Although he had argued for liberal markets, some believe that many of those ideas would be in cold storage...................
Regulators function as Nawabs: Srikrishna
...........Defending the recommendations to separate the regulatory, investigatory and adjudicatory responsibilities of the financial sector regulatory bodies such as the Securities and Exchange Board of India, the RBI, the Insurance Regulatory and Development Authority and others, Mr. Justice Srikrishna said regulators such as the State they represent were for the people and not vice versa. “The problem is that we have created regulators that function as mini State or ‘Nawab’…We [in the Commission] believe that, in a democracy, no one, not even the President, not even the regulator, is above the rule of law,” he said........
Justice Srikrishna defends FSLRC recommendations
Critical remarks made last month on the Financial Sector Legislative Reforms Commission (FSLRC)'s recommendations by Reserve Bank of India (RBI) Governor Raghuram Rajan were met with a heavy dose of resentment on Tuesday when the commission's chairman and retired Supreme Court judge Justice B N Srikrishna sought to separate the views of 'the independent academic Dr Rajan from that of RBI Governor Dr Rajan' on certain aspects............
Trust the RBI
This refers to “Devious agenda to erode RBI’s autonomy” by S S Tarapore (July 14). The RBI should be independent with a clear mandate of protecting the currency. Price stability is the main responsibility of the central bank. It should be given a free hand in targeting inflation, and that target should be the CPI, as the RBI Governor Raghuram Rajan believes. The Government cannot instruct the RBI to cut rates when the CPI inflation goes out of the RBI’s comfort zone. We can find a lot of ways to suck out all the NPAs and free up capital in the banking system. All these problems can be solved if we trust the RBI to find solutions to our current problems.
- CR Arun
Aiming at the wrong target
...........This would represent a major departure from the current ad hoc arrangement, wherein RBI targets some combination of a number of different nominal variables, such as nominal gross domestic product (GDP), the exchange rate, Wholesale Price Index, and so on, and in which the central bank is not obliged to reveal to the public exactly what it is targeting and why. While there is much debate on whether CPI targeting is appropriate for an emerging economy such as India, that is for another time. Here, I would like to explain what is meant by "inflation targeting" in the first place, and where this policy - now used by leading central banks around the world - originates...........
The Indian Banks’ Association is shockingly anti-consumer
...............But the way, the bank lobby fought to keep giving savers minimal return and the time it took the RBI to do this speaks of IBA’s successful lobbying might. Bank consumers are not a unified entity and are unable to fight back................
8th Half Yearly Get-Together of Ex-RBIites
Hello dear Friends,
It looks that the days are rolling very fast; for, before the impressions of the previous get-together could fade away, it was already time for another get-together. This was held on Saturday 5th July 2014, in which many of you participated. Here is a brief report thereof.
Before giving a clout of the event, we, the organizers thank the participants who attended the meet in good numbers. For your information we state that 176 invitations were sent in all against which 132 of our friends responded. We consider this as a very encouraging one.
About the Meet:
The assembly was at 10:30 AM. Most of the participants had reached the venue quite early and even seen exchanging pleasantries / chatting amongst them, enjoying their cup of coffee/tea, with biscuits and cashew nuts. While the atmosphere was so encouraging, this went on for nearly an hour. This scene was very pleasant to oversee since some of them happen to come for the first time and they expressed happiness for the re-union with their beloved friends after a long gap of 10 to 15 years.
The meeting started around 11.30AM with Invocation by Shri.N.M.Rajashekharaiah followed by obituary reference of our departed friends and a minute’s silence was observed. It was a very sad moment as the departed souls images flashed in everybody’s mental screen. This however, was overcome when Shri.S.Venkata Subba Rao, our chief organiser of the meet got on to welcome the gathering. This was followed by our next programme of honouring our seniors who had completed 80 years of age, viz., S/Shri.K.Gopalan and N.Subba rao. While Shri.Gopalan (ex-CGM NABBARD) was honoured by another elder person, Shri.E.P.G.Subramanyam (ex-DyGM, RBI), Shri.Subba Rao (ex-MGR RBI) was honoured by Shri.N.D.Vasanth(ex-Dy GM). Shri Gopalan spoke few words in response to the honour.
A happy development during the period was that Shri.Venkata Subba Rao became the recipient of both the “ Kempegowda award” (of the BBMP) and “Bangalorean of the Year – 2013” (the latter is conferred by one of the most prestigious institutions – “ Bangalore Foundation”). In this background, he had sponsored an instrumental music, a classical programme – “Flute by Master Pramukh accompanied by Shri.Ananth on violin and Shri. Chandrashekhar on Mridanga.” The artistes rendered the programme for about 45 minutes which was so pleasant and absorbing that almost all the participants enjoyed the same in full measure. By then, it was 1 PM and time for break for lunch. The Lunch was sumptuous and delicious. After lunch, the participants dispersed with a sense of satisfaction.
Shri.N.D.Vasanth (ex Dy.GM) completed 50 years of married life. To celebrate this occasion, he distributed “Laddoos” to all the participants.
Shri.G.K.Jairam (ex AGM, RBI) very kindly clicked a number of snaps of RBIites and Shri.C.R.Raghavendra (ex Dy.GM – NNPP) uploaded the photos.
- ORGANISERS
Info shared by William Panakal
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