............In this backdrop, the forward guidance suggests that while RBI is relatively confident of meeting the eight per cent inflation target by January 2015, it sees upside risks to the six per cent CPI target by January 2016 i.e. it is in no rush to cut rates.........
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, August 6, 2014
As RBI Fights it, MPs Unaware of Inflation
Here's a lesson in economics. Lalita-ji goes to the local mandi with Rs. 80 in her purse. What can she get? 1 kg of tomatoes. Jaya-ji goes to the canteen where she works, also with Rs. 80 in her purse. What can she get? A bowl of tomato soup with a slice of bread (Rs 8), fried fish and chips (Rs 25), a chicken sandwich (Rs 6), fresh fruit juice (Rs 14), fruit salad with cream (Rs 14), pudding (Rs. 12) and still have one rupee left over, which could presumably be used to tip the server. Welcome to the land where time seems to have stood still, at least as far as inflation is concerned -the Houses of Parliament...........
Read - ET
Read - ET
Banking on facts
.......The bank nationalisation of 1969 was an overnight decision of a single individual (incidentally, a non-expert on the subject) against the expert advice of the then Reserve Bank of India Governor L K Jha, and that too without any rationale. The only reason for the decision, narrated to a friend years later by the august personality who took it was: "They (my political adversaries) drove me to the wall and left me with no other option," (vide RBI History Vol 3 p.53).
RBI’s Own ‘Financial Inclusion’
While RBI is gearing up to play a key role in the grand plan to bring 150 million households into the formal financial system, RBI employees have obtained a nice fat ‘financial inclusion’ of their own.............
Grievance about Grievance Mechanism - A.Chandramouliswaran
I have read with interest Dr TVG's experience with ICICI bank published in 'MoneyLife' and reproduced in VITALINFO. A good number of people have been having such grievances with these banks for a long time and there seems to be no solution in the Indian banking machinery. I share his view that the knowledge of the officials at the operational level (including the Branch Manager) of these high tech banks leaves scope for substantial improvement. They probably do not need this knowledge as they have practically no authority and are worse than post offices. All that they do is to pass on every request received from their customers to their superiors at the controlling/head offices and act as per the instructions received from them. The top officials of these banks before they moved to these banks used to complain about over centralisation in the RBI !! I also agree with TVG that while the Grievance Mechanism has been put in place, it does not really solve your grievances ! I have even experienced that the staff entrusted with dealing with the grievances (I have a suspicion that this work has been outsourced !) do not understand the issues raised and send you irrelevant responses. The tragedy is that when the matter is taken up either with the Ombudsman or with the Customer Service Department at the central office of RBI, the grievance does not get redressed. Some junior officials at the RBI deal with these references in a casual and routine manner. Incidentally, my high tech bank, to my good luck, has no issues in sending me the OTP to my registered email address and to my registered mobile number. I received the OTP thru SMS to my mobile even though I have not opted for International roaming as I am also presently in USA.
- A.Chandramouliswaran
Obituary
I deeply regret to advise you of the demise of Shri.S.Rama Iyer in Andheri, Mumbai on August 4, 2014. He was 91 years old and had served in the Bank for almost 40 years. He was a Comptist in the Exchange Control Department. He is survived by his wife, two sons and a daughter. The elder son and daughter are working in RBI, Mumbai. Rama Iyer was a dedicated, humble man and deeply religious. We pray that his soul rests in peace.
- P.P.Ramachandran
RBI inter-school quiz
..........SS Barik, Regional Director, RBI, Guwahati will be the chief guest of the quiz competition. Pradeep Atmaram, GreyCaps India Pvt Ltd will also attend the programme as the quiz master.......
Students invited for quiz competition on RBI's role, banking
....................."The Reserve Bank of India, New Delhi Office invites students in IX, X, XI and XII of all the schools including government schools, private schools and public schools, to participate in RBIQ 2014, an all-India Inter-School Quiz," RBI said in a release. .........
Income tax: Don’t panic if your return is under taxman's scrutiny
...........An individual need not panic if his case is up for scrutiny and must reply to all queries raised either through a letter or by appearing in person. The tax official can demand salary certificate or Form 16, which gives details of gross salary paid and taxes deducted, rent receipts and rent agreement with the landlord, if any rent exemption is claimed, and bank statements. The TDS certificate in Form 16A must be preserved and produced before the income-tax official. The income-tax department can send the notice within a year from the end of the month in which the assessee filed the return. The notice has a predefined format with the taxpayer’s name, address, Permanent Account Number and the year for which it has been issued,........
Banking Revamp Bill Won't Burn a Hole
............As the late I G Patel mentions in his memoirs, Indira Gandhi summoned him and said, “For political reasons, it has been decided to nationalise the banks. You have to prepare within 24 hours the Bill, a note for the Cabinet and a speech for me to make to the nation on the radio tomorrow evening. Can you do it and make sure there is no leak?“
Read - ET
Waking up to the BRICS
...........Then, there are other questions that will need to be answered in the days ahead. If China is unable to dominate this institution, will it prefer to prioritise investments through its (proposed) Asian Infrastructure Investment Bank? How soon can the central banks of the member countries devise arrangements to act as depository institutions for the NDB? And, how will the NDB raise funds in different countries? What will be the currency or currencies of choice? All important posers which can be addressed if the resolve is unerring...............
`Not even grads, but on bank boards'
You might expect renowned financial or business experts to sit on the boards of banks, but that isn't always true in the case of state-run banks. Petrol pump owners, a Doordarshan anchor, the head of a ladies club, trustees of religious boards and a clutch of small-time politicians are some of the independent directors on boards of public sector banks. The presence of this motley bunch seems to have driven the government to initiate a clean-up............
Read - TOI
Read - TOI
Will India Inc actually bring women on board?
India can become an inspiration for other developing countries if it is able to demonstrate an actual change in the women representation on corporate boards, mandated by the new Companies Act, as well as influence their presence in senior leadership. Amongst the developing economies, where India is the first country with such an Act, China led with an 8% representation of women on boards. Brazil followed close with 6%, and India was at 5% as of 2012. However, these numbers are far lower than the developed countries...........
Read - TOI
Read - TOI
Syndicate Bank case doesn't reflect entire PSB system: Rajan
.................."I think the balance has to be maintained, and we have to be careful that while we do a thorough investigation and culprits are brought to book, it doesn't become a witch-hunt which then stalls the entire credit process. So, we have to be careful and I think that the investigative agencies will do their job appropriately,"...............
Syndicate Bank fiasco: Caution note for PSBs
..........“When the government gets complaints against CMDs of PSBs and confronts them on it, their standard response is that the decision was taken by the credit approval committee. It can’t be collective responsibility. Head of the committee has to be accountable,” the official added. A former RBI governor, however, said the problem cannot be fixed unless the government stops interfering in the functioning of state-owned banks.........
CBI sets up probe against own officers
Central Bureau of Investigation (CBI) has ordered an internal inquiry against its own officers probing the bribery scandal involving Syndicate Bank chairman and managing director S K Jain. The CBI has initiated the latest inquiry against its sleuths for not arresting Neeraj Singhal, vice chairman and managing director of Bhushan Steel, one of the companies that was trying to settle its outstanding loan with a bribe. CBI team had explicit orders from the agency director Ranjit Sinha to arrest Singhal but they decided to let him go after they reached his bungalow in Delhi last Saturday..........
Syndicate Bank's woes
.............With his arrest and the bribery scandal coming to light, the Manipal-headquartered bank, which prides itself as "Faithful. Friendly" will see its credibility take a beating.
Bihar govt not serious about fake chit fund firms
.....Regional Director, Reserve Bank of India (RBI), Patna region, M K Verma told reporters on Monday that the state was yet to have its own registrar of chits (ROC) and, as a consequence, all the 26 chit fund companies of the state are illegal as of now for no fault of theirs, adding that it was the Chit Funds' Act that made it mandatory for every chit fund company to get the state government approval through the ROC concerned. He said the list of chit fund companies was also given by the RBI to the state government officials concerned......
Tuesday, August 5, 2014
Inside Governor Rajan's mind
..............The RBI could have tightened further and then subsequently eased, but it appears to prefer - correctly, in my view - an extended neutral stance. The recent decline in the benchmark 10-year government yield because of the issuance of a new benchmark shouldn't be taken to contain any signal about the RBI's monetary stance. Unlike the June policy statement, Tuesday's review will also be complemented with a media interview with the RBI Governor Raghuram Rajan and his team, and a conference call with analysts. Consequently...........
Strategic reserves
In his first public statement after he took over as governor of the Reserve Bank of India in September 2013, Raghuram Rajan had said India needs to build a bulletproof national balance sheet if it is to withstand global financial shocks. The central bank has since then added nearly $45 billion to its foreign exchange war chest....................
Raghuram Rajan must prepare ground for a post-taper world
RBI governors have no option but to master the art of tightrope-walking. Regardless of what diehard inflation-targeters may say, the reality is central bankers have to strike a careful balance between price stability and growth while framing monetary policy. In that sense, Raghuram Rajan's position as he contemplates his third bimonthly policy statement tomorrow is no different from US Federal Reserve chairman Janet Yellen's. But there the similarity ends.............
Decoding RBI’s inflation dilemma: India may have to wait longer for a rate cut
.........The RBI, during the regime of Duvvuri Subbarao, has all along maintained that the RBI cannot be an inflation targeting central bank unlike those of countries like New Zealand and Chile. Rajan too has maintained the same stance and has refused to admit that he has embraced an inflation target, but in reality, the central bank has quietly moved to inflation targeting already. That’s where the problem lies............
Will RBI cut rates? It should!
.......But there might be a larger reason for Jaitley sticking to the 4.1% deficit target. It is to convince RBI that there is an additional reason to cut rates on August 5, and reason beyond the sharp and stable decline in inflation rates. So, will RBI oblige? The market certainly does not think so.........
Award for IVDP president
............The Award was conferred on Mr. Francis for his contribution in the field of social service since 1979. It carries a trophy, a citation, and a donation of Rs. 5 lakh to a charitable trust/NGO as per the choice of the awardee. Deputy Governor of Reserve Bank of India S.S. Mundra presented the Award to Mr. Francis........
The Emerging Big Picture
......The volume under review has twenty- one contributors out of which eleven are from the R B I family. Out of sixty articles thirty one are by RBI Executives – past and present. This includes four Governors, two Deputy Governors and this invests the book with special authority and importance. In a learned introduction, Dr. Kapila points out how after half a century of zero growth between 1900 and 1950, India grew at 3.5 per cent in the first decade of planned development. In the past two decades the growth rate doubled to 7 per cent. The peak growth was 9.5 per cent during 2005- 2008. However, it slumped to 6.2 per cent in 2011- 12 and further to 5 per cent in 2012- 2013. This could be the rate for 2013- 14............
Jaitley to address boards of RBI, SEBI on Sunday
.............The customary post-Budget meeting of the Finance Minister with the boards of the two regulators on August 10 is taking place against the backdrop of pick up in economic indicators after India posted sub-five percent growth for two fiscals in a row. The Reserve Bank will announce its third bi-monthly monetary policy tomorrow amid expectations that it may cut rates and take other steps to promote industrial activities. Jaitley was earlier scheduled to address the RBI board on Saturday........
Recruitment of ‘Specialist Adviser (Research) in Grade-F’
..........This is a newly created Specialist position for Research purposes. Since this is a leadership position, no further career progression is envisaged in the normal course for the position. Associated benefits are on ‘ín-situ’ basis only..............
Bandhan to hire most staff from rural areas
..............“We work predominantly in the rural areas, so it’s where we would be drawing most of our staff from. Close to 70% of our 57 lakh customers resides there and we wish to continue serving them. The reason is our staff need to have a through understanding of the need, culture and socio-economic environment of the people they would be serving if we wish to meaningfully contribute to our customers. Also, it is difficult to retain staff if we send urban people to work in rural branches thereby creating problem in staff retention while a village folk would be too willing to serve in an urban branch,”........
Bigger or smarter? Why SBI should divest its subsidiaries and not merge them
.........At some point in the future, when policy allows, the SBI should even consider selling its subsidiaries. Even now, it could consider retaining 51 percent and letting a private promoter buy a 10 percent stake and run the show. This way, it would get a bigger value for its stake dilution. Public ownership with privatised management is an idea whose time may have come.
The only argument one can see against SBI selling its subsidiaries is this: it may not want its own former subsidiaries to compete with it. But the point is this: competition is anyway going to grow. So this is not necessarily a great argument. This is the time for all three – the RBI, the government and SBI – to try out new ideas. The old idea of growing big is passé. Big may merely mean fat in future. The thing is to get smarter..........
Reshuffle on Cards for SBI Top Brass
..........State Bank of India is set for a major churn at the top after the government appointed two new managing directors in the bank, opening up the possibility of more down-the-line promotions. But the new government took time to promote B Sriram and VG Kannan as MDs which has delayed the entire process, an SBI official said, refusing to be named.............
The technology that banks use, can land you in trouble - Dr.T.V.Gopalakrishnan
............I think it would be better for the Bank to improve its services for domestic customers first, before it attempts to introduce/ improve its services to customers outside the country. The bank has a system to receive complaints and feedback, and these can be registered at various levels, but the fact remains that the replies are standardised from all levels and the complainants receive the same stereotyped replies. Knowledge of banking is alien to its operational level staff and the human touch and interaction cannot be expected of them......
Five free transactions from third-party ATM likely to come down to two
Saving account holders in the cities might soon have to limit their transaction from third party ATM as the number of free withdrawals is likely to come down to two from five a month, a daily newspaper has reported........
Where are the role models?
........... Does it need to stressed that the top echelons should become role models for the lower hierarchy? The arrest of Syndicate Bank Chairman and Managing Director Sudhir Kumar Jain and his accomplices proves that corruption at higher levels percolates to the lower level, which results in the common man suffering the most. Is it not time these ........
Govt Must Not Name Bank Chiefs
............The government should accept the RBI's suggestion to disassociate itself from the process to name heads of public sector banks, and give the job to an independent panel of experts. Appointments can then be fully delinked from political patron age. Two, the remuneration of public sector bank chiefs should be market linked. Now, their pay is far lower than the private sector, prompting a few to use unscrupulous ways to make money . Also, PSBs cannot attract and retain talent when their competitors pay more. This must change.........
Read - ET
Calling PSU banks to account
................. A scheme is reportedly being prepared, the goal of which will be to ensure that every family in the country has at least two bank accounts and access to a Rs 5,000-overdraft facility. On the face of it, this smacks of the old-style approach of using PSU banks for wider social objectives without regard to profitability. There is no doubt that financial inclusion is an important objective, but to achieve it we must devise strategies that rely less on target-setting and more on facilitating the adoption of technologies and partnerships that can significantly drive down the costs of delivering financial services. Meanwhile, ........
We will release names of bank loan defaulters, says AIBEA
...........Rather than recovering the non-performing assets, the Union Government, and Reserve Bank of India were attempting to cover it up through steps such as adjusting them against profits, and creation of Asset Reconstruction Company, said S. Ganesh, Erode unit general secretary of All India Bank Employees Association here on Saturday....................
How to deal with corrupt bosses of state-owned banks
............Yes, there are bank chiefs who are dishonest. They give loans to those who don’t deserve them and make money cutting such deals. They make money but their banks pay the price. The Reserve Bank of India (RBI) is well aware of this practice. So is the finance ministry. But they don’t openly talk about it as that may shatter public confidence in our banking system, some 70% of which is accounted for by state-owned banks.......................
Arrested Syndicate Bank MD S K Jain suspended
...........‘‘We have suspended him (S K Jain) and two executive directors (EDs) have been given charge of the bank as an interim arrangement,’’ the secretary told PTI. M Anjaneya Prasad and T K Srivastava are the two EDs of the Bangalore-based bank. Jain, along with seven other accused were remanded in CBI custody for four days as the agency plans to probe various other angles into the case that may emerge from the telephonic transcripts of the official and conduits........
Syndicate Bank fiasco: Jain helped hide Rs 100-cr NPAs
..................CBI has also alleged Jain used to negotiate directly with the companies on the bribe amount and once the deal was struck, he used the hawala channel to receive the money, the sources said. They alleged that once the bribe amount was agreed upon, the company used to pay a hawala operator who forwarded the payment to other businessmen who finally made the payment to brother-in laws of Jain in Mumbai; they too have been arrested.............
Putting the poor on the list
..............Finally, a key part of financial inclusion is financial literacy. There could be regular interactive training workshops organised in post offices on financial products suited to the rural sector. This will make take the process of financial inclusion much further with a focus on financial literacy and a reason to visit post offices on a regular basis......
A Rs 75,000-crore loan mela?
.................Recall that, some 15 crore people will be covered by this massive programme. If each one of them gets a Rs 5,000 overdraft, India needs to find Rs 75,000 crore of new money from somewhere to lend to those among the poorest. The government is using the term "overdraft", and not loan. Banks will hold no security against this overdraft. It is surely unfair to expect those who have never had access to bank accounts to put up assets to borrow money. They may deserve an overdraft. But the question is what kind of behaviour will it encourage among borrowers?..........
More resources for the poor
...........where will all this money come from and what is the possibility of fair distribution of money in an inefficient and corruption-prone public sector? There is a need to rethink this financial inclusion plan. This money should be diverted to plans that can fix the severe problem of poverty in India. Although,....
India Post may apply for payments bank licence
........If post offices are converted into banks, they will have to offer competitive interest rates to depositors. Besides it remains to be seen whether all bank deposits are offered tax treatment, similar to post office savings, once the postal department is given a banking licence. While the RBI did not grant a banking licence to India Post earlier this year, it said that the postal department and the government should look at the issue separately...........
Sebi in Touch With RBI Over Wilful Defaulters' Regulation
....."We are in consultation with the Reserve Bank of India for finalising the wilful defaulter regulations," Securities and Exchange Board of India (Sebi) Chairman U K Sinha told reporters on the sidelines of an event at the BSE here. The banking watchdog has reportedly been mulling a ban on capital raising activities by such entities. RBI is devising ways of sharing real time information on such activities with the capital market regulator................
RBI cautions against two firms claiming to be NBFCs
The Reserve Bank of India (RBI) has cautioned general public from depositing money with two firms claiming to be Non-Banking Financial Company (NBFC) despite not receiving requisite Certificate of Registration (CoR), said deputy general manager, RBI, Ahmedabad, in a public notice issued here. The public notice was issued by deputy general manager, RBI, Ahmedabad, on August 2............
NBFCs Guard Their Golden Turf Despite Tough RBI Code
..........It is reckoned that nearly 65 per cent of household gold holdings in rural markets. The reach by the likes of Muthoot Finance, which has over 4,400 branches across the country, will help them to tap this growing market. “RBI’s view to maintain the loan-to-value for bank’s gold loans for non-agricultural end uses is a fair one and it shows that the regulators want to shape up this emerging sector for long term giving level playing field to all players,” ..........
Telangana officials to thrash out loan issues with RBI
.....However, the RBI has written to government that it will agree only for rescheduling of loans taken during last year (2013-14). They also informed that they will consider rescheduling of loans only in 377 mandals that were declared cyclone and drought-affected in 2013. Hence, the 77 mandals that were recently declared Phailin-affected last month will not meet the criterion and will not be considered eligible................
Friday, August 1, 2014
SS Mundra assumes office as RBI Deputy Governor
 |
| Subhash Sheoratan Mundra |
Bank of Baroda announces cessation of Chairman cum Managing Director
Bank of Baroda announced that the Central Government, vide its notification dated 30 July 2014, has appointed S. S. Mundra, Chairman & Managing Director of the Bank as Deputy Governor, Reserve Bank of India for a period of three years from the date of his taking over charge of the post. Accordingly, he has been relieved from Bank of Baroda on 30 July 2014 on the close of working hours and therefore ceased to be Chairman & Managing Director of the Bank.
Gold Bank - An idea whose time has come - M.G.Warrier
If RBI is able to make the right moves and convince Government of India about the advantages of setting up the Gold Bank, the move could alter India's Gold landscape forever!............
Gold premiums in relative check
...........In June, there was a widespread expectation of a cut in the Union Budget in the tariff on gold. From mid-June till Budget was presented on July 10, gold was even quoted at a discount to the cost. RBI had also, in May, permitted star trading houses to import gold, resulting in a steep increase in June inflows. In that month, 92 tonnes arrived in India officially. Importers were offering gold...............
Suggestion merits consideration
My View on "Small banks or banks for ‘small’ people? - Vijay M...":
Vijay Mahajan has proposed most important changes needed in the draft guidelines of the RBI. The area limitation has affected the growth of RRBs and later LABs. Of course, Basix, the parent organisation of Vijay Mahajan has also a LAB and with all its excellent team and resources available, it is unable to expand. Similarly, his suggestion to keep a cap on the loan amount to one unit (individual/firm/co) merits consideration as otherwise the unbanked and the underbanked will continue to be excluded. In fact, the asset portfolio of small banks should have at least 85% of their loans to the financially excluded. Add the non-asset based services such as remittance services for all, pension services for all, insurance services for all etc.
- S.Santhanam
Govt looks to extend mobile banking to all types of phones: Arun Jaitley
..................The government plans to use a mix of small branches, kiosks, ATMs (automated teller machines), business correspondents and mobile banking to ensure better and faster access to banking services for the rural and urban population. The Reserve Bank of India (RBI) is also in touch with various entrepreneurs to look for innovative technologies that can enable mobile banking to be used on all types of phones. To be sure, bankers admit that this will be a difficult task...........
The monetary policy angle
..........This is the ideal moment for RBI to give a signal that it favours soft rates to maintain the growth momentum visible in industry and elsewhere.
At a turn and yet not
..........But can it be said with certainty that inflation risks have altogether disappeared? There is, of course, the near-term risk of a deficient monsoon, which could push up food inflation. Looking to long-term inflation expectations, RBI could well choose to see through a short-term, transient spike. But the sequential rise in inflation momentum is a factor. More subdued at retail levels, the pick-up in core-WPI inflation has steadily sustained for eight, successive months; quite unlike CPI-core inflation, which shows......
RBI policy: The danger has not yet passed
............That said, the policy implication is clear. The government needs to tackle food inflation on a war footing, releasing stocks of cereals, importing pulses and oilseeds, cracking down on speculative hoarding and transporting food stocks quickly from surplus to deficient areas. And the RBI needs to maintain its anti-inflationary stance to ensure wage pressures remain muted. All told, the need for a complementary policy stance between Delhi and Mumbai could not be greater. We, therefore, expect the RBI to............
Reserve Bank likely to focus on liquidity management
............Harding believes RBI has a choice between a cut in policy rates or to raise the amount of refinance from the overnight repo counter from the current 0.25 per cent of net demand and time liabilities (NDTL). In July, RBI has infused about Rs 170,000 crore by way of term repos; even so, overnight rates continue to be volatile. Banks have not been tapping the Marginal Standing Facility of RBI much and there have also been .....
RBI: Three burning questions
We continue to expect RBI Governor Raghuram Rajan to hold rates on August 5. That said, three questions arise. When will the central bank cut rates to support growth? We do not see any material change .........
Reserve Bank of India to unveil third bi-monthly policy review on August 5
MUMBAI: Amid expectations of a rate cut to boost industrial activities, the Reserve Bank today said it will come out with its third bi-monthly Monetary Policy Review on Tuesday. The central bank in a release said: "The Reserve Bank of India will announce the Third Bi-monthly Monetary Policy Review, 2014-15 on Tuesday, August 5, 2014." ..............
Watch out! tricksters with fake notes on prowl
...........The ease with which they are able to exchange fake notes for genuine ones is mainly attributed to people’s negligence and ignorance of the features of a valid currency note, and sources of distribution of the currency. In the Kalidindi incident, counterfeit notes worth nearly Rs. 5 lakh were seized from eight persons who cheated gullible customers across Krishna and West Godavari districts. Six more accused in the same case were nabbed at Gudivada on Wednesday and Rs 2.10 lakh worth currency was seized from their possession. Tracking the original sources of fake notes in these two instances proved to be a daunting task for the police who have not yet found definite clues........
The Blue Boy ReTyres.............
 |
| Shri Mukund Sakulkar - The Blue Boy...... |
I retired from Bank’s service
as at the close of business on July 31, 2014 after putting in long 39 years of
service in this premier institution. During these long years, I had the
opportunity of working with many of you. When I reminisce the bygone years, I
am flooded with a sense of nostalgic feelings of many sweet memories. I owe a
lot to all of you for your unstinted personal and professional support and
guidance. As it would not be possible on my part to interact with all of you at
this point of time directly, I take this privilege to convey my sincere
gratitude to all of you. I will treasure the happy memories of my pleasant
association with all of you and earnestly look forward to interact with you in
future.
- M.P.Sakulkar, Manager, CAB, Pune
Financial Inclusion Mission to be big I-Day announcement
.........“The government is targeting the individual household rather than the village … this is a marked shift from earlier efforts where only opening of account was the focus of the financial inclusion drive,” Mr. Jaitley said. This is a big challenge and there are several difficulties such as lack of connectivity and infrastructure,........
High court lets Canara Bank take over Amanath
.........ustice Ram Mohan Reddy passed an order to this effect while hearing a batch of petitions filed by stakeholders both in support as well as against the merger. He has adjourned further hearing to November. Canara Bank will take over specified assets and liabilities of ACB. The doubtful assets will remain with Amanath Cooperative Society. The court also asked authorities to publicize through newspapers and television the working hours of the branches of ACB.........
Corporate Governance of Banks- About Time for Some CoCo?
............If CoCos issued to bank executives and directors have accounting trigger, they ought to have higher triggers than those issued to the investors, to align their interests strongly to the CoCo investors. Higher trigger for CoCos issued to Directors can in fact convey a leading signal for banking firms to recapitalize. The RBI has already recognised contingent capital instruments as Additional Tier I instruments in its recently released Basel III Guidelines. The RBI should augment that apparatus by mandating key banking personnel and non-executive independent directors to be paid equally in contingent convertible bonds and equity-based pay so that............
Banks bet on core bonds
............However, Chanda Kochhar, managing director and CEO of ICICI Bank, today said it was early to say whether funding costs would indeed come down. “We look at the pricing of loans based on the overall cost of funds. It is too premature to say what it (the RBI steps) will do to the overall cost of funding,” she said. Kochhar confirmed that the bank had launched an infrastructure bond to raise Rs 500 crore. The issue........
SBI Caps to make report on PSU bank merger within a month
.........."We have asked SBI Caps to do a study... We have given them two assignments. One is on the recapitalisation and other on bank consolidation. I hope within a month or so we will be getting something," .......
Expect turbulence with public sector bank mergers
............While mergers take care of accounting, legal and regulatory requirements, the banks face challenges of wages and compensation fitment, culture and systems and info technology platform integration, said experts and senior PSB executives. And, the resistance from bank staff and employees unions and local political interest could pose a formidable challenge. C H Venkatachalam, general secretary, All India Bank Employees’ Association (AIBEA), said there is absolutely no case for consolidation. There is enough space for many banks to do business when half the population is yet come under the ambit of financial services.........
RBI faces challenges in issuing differentiated banking licences
...............The new players will have to take banking solutions to the doorsteps of rural folks using technologies that can process transactions instantly. But why would a customer go to payment banks when post offices exist in every nook and corner of the country? There are over 1.55 lakh post offices and 90 per cent of them are in rural areas. People are also familiar with post office savings product that offers four per cent interest a year and five-year recurring deposits with 8.4 per cent a year. But experts are not amused. "Post offices don't have the technology backbone. The model is brick and mortar, which is a costly way of doing business," says Gupta. People's interaction with post offices is diminishing. "Nobody in metros or urban areas goes to post offices to send letters," says Amit Lakhotia, Vice President (Payments) at Paytm, an RBI-licensed prepaid card provider.........
Stake dilution in govt banks to start in November: Sandhu
.............“It will be a combination of follow-on public offer (FPO) and, in some cases, it will be through qualified institutional placement. It may start around Diwali, most likely November,” he told reporters after a meeting with the heads of PSBs and other financial institutions............
AP CM speaks with RBI Governor on loan recast
..........Following the conversation the RBI Governor has suggested to the state government to send a team of officials to discuss the issue with his executive director, according to the statement.
Madras HC appoints provisional liquidator for First Leasing
.............The bank counsel alleged company officials and employees colluded and stripped the company. At least two forensic reports have come out on the financial issues in the company - one from the Reserve Bank of India and another by an expert appointed by the company's board of directors. A large number of employees had submitted their resignation letters and under this circumstances, the operations of the company had to be taken care by a provisional liquidator, he argued...........
ARCs lap up half of bank bad loans on sale
..............he remaining consideration is issued as security receipts to the banks in lieu of payments that ARCs will make over a period of eight years based on their recovery. In order to prevent a pile-up of NPAs, the regulator has asked banks to segregate accounts on the date of repayment from the time they are 30 days due, 60 days due and 90 days. Banks such as SBI and BoI have started selling off accounts from the time they are due for 60 days. According to the RBI data, the gross NPAs of commercial banks were 4% of total advances in March 2014, while in the year-ago period it was 3.4%.....
Bitcoin Thriller
.......It is a villain. I believe the Bitcoin is bad in its current avatar. But a better version of it might emerge in the future, with more control. Right now the Bitcoin is about anonymity. It uses a protocol called TOR (The Onion Router) that allows the giver and receiver to remain anonymous, which makes it dangerous. In my book, it's used by the criminal underworld..........
It's Not Too Late to File Returns
Missed the deadline to file in come tax returns on July 31? Don't feel dejected. You can still file the returns without paying any penalty. Yes, contrary to the perception of many tax payers, there's still enough time to file your returns until March 31, 2015. However, there will be some implications. In fact, tax payers are allowed to file belated returns for two preceding financial years, even after the deadline. That is,...........
Read - ET
Read - ET
Women investors are confident, not overconfident
Finance and investments are generally considered masculine areas. A cursory look at the proportion of women in the finance profession as compared to, say, teaching or information technology, tells the story. However, careful academic research has established that women are more suited for stock trading than men. The chief differentiating factor between the two genders is the level of overconfidence in matters pertaining to finance. ...........
Loans targeted at women are beneficial
.............Though women-specific loans offer benefits, the case isn’t the same with women-specific deposits. Banks offer savings bank accounts for women with additional features but often, the minimum balance required is higher. For instance, the quarterly minimum balance required in case of Federal Bank’s regular savings bank account is Rs 1,000. But for its Mahila Mitra savings bank deposit for women, the requirement is Rs 5,000........
Thursday, July 31, 2014
Govt appoints S S Mundra as RBI Deputy Governor
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