....“We believe private sector banks such as ICICI Bank, Axis Bank and HDFC Bank will perform well in the medium to long term. These banks may continue to take away market share of PSBs, as the latter are expected to go slow on lending amid bad loans and capital requirements. While we see things improving for PSBs too, we remain very selective on the space, with SBI and BoB among our top picks.”.....
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.
Tuesday, August 19, 2014
RBI's Bharat Bill Payment System: What It Will Mean for You
......By interconnecting all the different organisations working in this space, the RBI wants to create a single brand image that can be used anytime, and anywhere. It is a great idea, one which should bring a lot of benefits to the customers. But getting all the different agencies on board is key to its success - it's a move that could help e-commerce a lot, for example. Right now, all online stores use different payment gateways, and ..........
Splitting bank CMD posts before board empowerment is like putting cart before horse
....experts warn that going ahead with the plan without properly empowering bank boards could be like putting the cart before the horse. Among those who have issued a note of caution are former Axis Bank chairman PJ Nayak, who headed a Reserve Bank of India (RBI) panel that originally recommended the separation of posts. The Nayak report had recommended separation of the two posts, but only at the end of a three-phase transition process to fully empower the boards. “Such board empowerment requires several complementary measures to be taken. It is unclear as yet whether they will be (taken),” ...........
RBI license to Coop Bank to open 12 more new branches
.......In a significant development in the banking sector of the remote A&N Islands, the Reserve Bank of India (RBI) has granted license to A&N State Coop Bank to open three more bank branches at Kamorta, Chouldari and Dollygunj. These branches are apart from the nine branches license for which was granted by the RBI in April this year. The nine branches to be opened across various places of A&N Islands include Long Island, Nimbutala, Kishori Nagar, Mahatma Gandhi Govt College Mayabunder, Junglighat, Burmanallah, Betapur, Chowra and Wandoor............
Read.......
Mauritius play abused by India Inc: CBI
.........The ministry has now taken up the matter with the Reserve Bank of India. A committee headed by then RBI governor D Subbarao had approved the recommendation of the panel that chose the now tainted SK Jain for the top job at Syndicate Bank. In separate letters written to banking secretary GS Sandhu and revenue secretary Shaktikant Das last week, the CBI chief has said that many corporate houses were indulging in “third-party transfers” in violation of RBI guidelines. Sinha has flagged to Sandhu that banks too have been party to these illegal “third-party transfers”, wherein billing is routed through an intermediary in a third location, which is frequently a tax haven.....
Banks ride on e-commerce wave to woo consumers
It is not just retailers that are cashing in on the e-commerce wave; banks, too, are not far behind in wooing customers by offering online deals and discounts. Private-sector banks have been either launching e-commerce sites exclusively for their customers or have been tying up with more online retailers to provide better offers.........
NPAs of PSBs could rise on tighter asset sale norms
.........Thanks to lax norms on asset sales, banks have resorted to aggressively selling bad assets to asset reconstruction companies (ARCs) by paying up five per cent of the total value of security receipts issued by the ARC. By paying a small amount, banks were aggressively transferring bad debts to ARCs, .........
Saving capitalism from the government
.But often, honest candidates fail to make the cut, and corrupt politicians continue to be patronized by voters. Reserve Bank of India governor Raghuram Rajan noted the same in a lecture presented last week: “Every so often we see the emergence of a group, usually upper middle class professionals, who want to clean up politics. But when these ‘good’ people stand for election, they tend to lose their deposits. Does the electorate really not want squeaky clean government?..........
Financial inclusion pangs
................There is no dearth of products launched by the government for financial inclusion. If there is any dearth, then that is in the implementation of such schemes. Often, inclusion measures give new tools in the hands of comparatively well-off people to earn more dishonest money. ........
Banks gear up for financial inclusion drive in 2 states
.............Having already covered over 95 per cent households in rural and urban areas under the existing financial inclusion plan in Punjab and Haryana, bankers expect the remaining households in these two states to be covered soon. In order to achieve the target in time, the banks have been allocated wards in urban areas and sub -service areas in rural areas by the convenor bank in these states.........
Banking imbroglio between India, Singapore
...."The very high and differential treatment in respect of applicability of AMR for Indian banks compared to other foreign banks is adversely impacting the viability and profitability of Indian QFBs present there. In fact, the high and differential AMR requirement is one reason why there is no application for a third QFB licence from any other (Indian) bank," .........
India: Central Bank to Determine Whether Mobile App Uber is Violating Foreign Exchange Rules
......The Association has accused Uber of dodging the routine two-stage credit card authentication process, mandated by the RBI, through the use of an international payment gateway. According to the complaint, fares collected in India should not be routed through an international payment gateway as Uber is just a facilitator for a transaction, between a driver and a customer, who are both Indian citizens. Two Indian citizens cannot do business in a foreign currency, unless one holds an RBI forex broking licence, the complaint adds........
Monday, August 18, 2014
PSU bank staff must be given more support and motivation: Former RBI Dy Governor
.......Leeladhar, who was honoured yesterday with a lifetime achievement award of the State Bankers’ Club for his commitment to banking, noted: “We have the best of the people in public sector banks, but we need to give a little more motivation to them.”........
Conversation with Reserve Bank of India boss
........I ask Rajan how he has found returning to India. “The hierarchies took some getting used to,” he admits with a smile. India’s antiquated bureaucracy still operates by passing physical files between departments, while rank is established via protocols such as who arrives last on a conference call. “Of course, you don’t make your own phone calls,” he says. “And the personal assistants will fight very hard, when there is any ambiguity, to establish their superiority over the person they’re calling.”.........
Crony capitalism threatens growth
The Reserve Bank of India Governor Raghuram Rajan has forcefully underscored the danger that crony capitalism poses to India’s growth story. While delivering the Lalit Doshi memorial lecture, he argued that it creates oligarchies that slow down growth. This is not the first time that he has held forth on this topic. India has the ‘ dubious distinction’ of the largest number of billionaires per trillion dollars of GDP; that many of them have amassed wealth from land, real estate and natural resources due to proximity to government. This eliminates competition, widens disparities and slows growth. The dark side of crony capitalism is reflected in the sharp rise in big- ticket corruption after reforms were implemented since 1991, a fact that upsets even the ardent advocates of liberalisation. The late economist I G Patel admitted that one of his greatest disappointments was that reforms have not “ made much impression on corruption.” This was par for the course in the earlier license- permit raj -- in which vast discretionary powers encouraged rent- seeking or garnering of huge benefits by manipulating the environment in which economic activities take place by those in authority.
The concern is that .......
For inclusion, banish cash - Janmejaya Sinha
............According to the Reserve Bank of India's data, cash still accounts for 90 per cent of all monetary transactions in India. Even as growing numbers in cities are using electronic payment systems, such as the National Electronic Funds Transfer (NEFT), these made up a paltry 3.2 per cent of total payments across the country in 2012-13. In fact, even old-fashioned cheques account for less than 10 per cent of total payments. A medium-term vision to bring down cash from 90 per cent to even 50 per cent of payments would dramatically spur inclusion..................
Making ATM transactions expensive: Is RBI contradicting its own stance?
.......In other words, by suddenly making ATM transactions expensive, the RBI has broken the process of gradual transition to paperless banking and is sending people back to the congested bank branches to withdraw money. While there is a rationale behind limiting ATM transactions in other bank-ATMs (ATM networks of most banks have improved in metros over years), there is no logic in limiting on bank-ATM transactions. The government has also been pushing state-owned banks and financial institutions to make payments only through electronic transfers and not through cheques from 1 September 2011. The larger idea is part of its e-governance initiative to move towards a paperless funds transfer system. The rationale, according to RBI deputy governor, H R Khan, is that for the banks, this approach would be economical proposition as it would reduce paper handling costs.........
KYC for Subbarao
.......... "Dr Subbarao, excuse me for using your example," Rajan said, adding, "So most recently we did away with the requirement that you should have proof of current address. Proof of any address will do and the bank will determine the proof of current address over time.".........
The five P's of financial inclusion
............Financial inclusion is about getting five things right: product, place, price, protection, and profit. If we are to draw in the poor, we need products that address their needs; a safe place to save, a reliable way to send and receive money, a quick way to borrow in times of need or to escape the clutches of the moneylender, easy-to-understand accident, life and health insurance, and an avenue to engage in saving for old age. Simplicity and reliability are key - what one thinks one is paying for is what one should get, without hidden clauses or opt-outs to trip one up. The transactions costs of obtaining the product, including the price and the intermediary charges, should be low. Furthermore, any regulatory burden should be minimal. New and inexperienced customers will require protection. The RBI is beefing up the consumer protection code, emphasising the need for suitable products that are simple and easy to understand. Financial inclusion cannot be achieved without it being profitable. So the last 'P' is that there should be profits at the bottom of the pyramid............
NREGA increased rural wages only 10%, rest from other sources: Raghuram Rajan
.........."Women instead of working in fields or working as agricultural labourers at the younger end have gone to schools and at the older end moved back into households. That is not an entirely bad development; in fact that reflects the greater wealth in rural areas," Rajan.........
Myopia of the elite: Raghuram Rajan’s take on the PDS versus DBT debate
......Being the incumbent Governor of India’s central bank which last checked is yet to abandon its commitment to social justice and development, the basis of his prescription should ideally be a number of field-surveys of the actual Kirana stores of the cities, towns and villages of our country. However, he didn’t make it clear during his speech. It seems he probably distilled this recommendation, supported by equal vigour by other supply-side economists too, during his years of residency in the USA, where even local groceries look like elite departmental stores of India.........
FM hints at sops to increase savings
........."Low domestic growth and high inflation continue to have an adverse effect on saving-investment dynamics. While households' financial savings (which include bank deposits) as per cent of Gross Domestic Product (GDP) have been falling, expenditure on valuables (which includes gold) has risen over the past few years though it declined in 2013-14. This trend reflects financial disintermediation with households switching away from financial savings to valuables mainly gold," the Reserve Bank of India (RBI) has said in its financial stability report released in June. RBI believes that the consistent high inflation and the consequent low real rate of return on financial assets are the reasons that people have been reducing their exposure to financial savings........
PSU banks may decide staff housing loan policy on their own
...........The Department of Financial Services of the Ministry of Finance had earlier advised that housing loan to bank employees be negotiated strictly as part of the bipartite wage settlement. But responding to an IBA communication, banks have now been given the option to either decide on their own or suggest if they feel this to be a part of wage negotiations. The IBA has been advised "to take appropriate action to convey the same to all public sector banks for deciding the matter…''
Defensive story will continue for some time
.......Overall, the picture is somewhat reassuring. The economy seems to be pulling itself out of a two-year period of stagnation. However, this is unlikely to be a "V-shaped" recovery with a sharp rebound. It seems we'll see gradual improvement quarter-by-quarter................
IDBI Bank to declare KFA wilful defaulter
.......IDBI Bank Chairman & Managing Director M S Raghavan said the bankers' consortium was taking steps against Kingfisher Airlines. "We will declare (Kingfisher Airlines as a wilful defaulter) very, very soon. We have already taken it (the proposal) to the (bank's) board," he said and clarified IDBI Bank's exposure to the airline was Rs 750 crore, and not Rs 950 crore as reported in media reports. IDBI Bank was the first bank to declare Kingfisher Airlines' default and it went to court to recall its loan. The bank is now taking the next step to recover its dues......
Planning decommissioned
.......It is not that the panel's demise came instantly. In fact, the downfall started in the 1990s when the government clipped the powers the Planning Commission exercised on the states. It tried to remain relevant by exercising its authority through other avenues, but could not ever reach its old glory. Modi has been able to mothball the Planning Commission because it is not a Constitutional body, unlike the Finance Commission.......
Experts throw light on India’s tax structure, foreign exchange reserves
......G. Padmanabhan stated that the Indian government is improving foreign exchange reserves through non-borrowing methods by increasing capital account inflows and reducing current account outflows. India's central bank has also shown increased efficiency in its monitoring mechanism. The emphasis is now more on the flow of Foreign Direct Investment (FDI) than the Foreign Institutional Investors (FII) inflows. The RBI has also formed a special committee on keeping a daily watch on foreign exchange market for better control, he added...............
Foreign Exchange Management Manual - Book Review by P.P.Ramachandran
.........The author D. Khilnani is a veteran in the field of Exchange control having served in the Reserve Bank for 33 years and was associated with every facet of exchange control. For a long time, foreign exchange was treated as a controlled commodity because of its limited availability. The early stages of foreign exchange management in the country focused on control of foreign exchange by regulating the demand due to limited supply. Exchange control was introduced in India under the Defence of India Rules on a purely temporary basis. The statutory power for exchange control was provided by the Foreign Exchange Regulation Act ( FERA) of 1947 which was subsequently replaced by a more comprehensive Foreign Exchange Regulation Act, 1973. This Act empowered the Reserve Bank to control .........
How to regulate shadow banks
............Many economists argue that the forms of shadow banking are so diverse that the current literature on its regulation (that tends to be largely US-centric) has little relevance. It is difficult to disagree with this entirely but a couple of things need to be borne in mind. First, financial instruments and structures similar to the US are slowly evolving in India. I would take the case of money market mutual funds and their increasing role in disintermediation - companies issuing short-term debt (commercial paper) instead of borrowing from banks. Let me make a quick qualification. We are ...................
RBI forms committee to monitor shadow banking; realty in focus
.......Confirming the development, RBI spokesperson Alpana Killawalla told HT: "An inter-regulatory group has been set up to monitor developments in the area of shadow banking under the chairmanship of RBI executive director P Vijaya Bhaskar." Shadow banking refers to banking-like activity by non-banking finance companies (NBFCs) that remain outside the regulatory net. They generally operate as intermediaries between investors and borrowers.......
RBI bars 6 ISIS men from holding accounts
........An RBI notification dated August 14 says: "…it should be ensured that the name/s of the proposed customer does not appear in the list. Further, banks should scan all existing accounts to ensure that no account is held by or linked to any of the entities or individuals included in the list." "As far as freezing of funds, financial assets or economic resources or related services held in the form of bank accounts of the designated individuals/entities are concerned, action should be taken as detailed…"
Life's tough for bank treasury officials
.........Ashish Joshi (name changed) is desperate for some divine intervention these days. For, he believes the “temple” on Mint Road (headquarters of the Reserve Bank), guiding his destiny so far, has turned him away. Joshi, a senior executive in the treasury department of one of the largest foreign banks present in India, says he isn’t alone. Peers in other banks share his angst. “The uncertainties in global and domestic markets are a way of life for us. But what hurts is RBI’s apathy,” says Joshi, who has added a few creases on his forehead in recent days..........
New norms soon for PSU bank directors; CMD post to be split
...The government has decided to split the posts of chairman and managing director. The chairman would be a reputed person from the industry or a professional while the MD would have a fixed term of three years, which would be extendable by two more years. The government is also likely to bring a provision to transfer an MD if a bank slips, marking a clear shift from past practice........
Read - ET
Syndicate Bank case judge hints at bribe attempt
In a shocking disclosure, a special CBI judge on Saturday said that the high-profile accused in the alleged Syndicate Bank bribery case had sought to influence her. “Please tell your clients to stop sending love letters to me. I am already from a welloff background, if you don't stop this act, I will direct CBI to take action against you,“ special CBI judge Swarana Kanta Sharma said. The judge warned of action against the accused for making attempts of “influencing“ her by writing “love letters“ to her........
BANKING'S BIG BLACK HOLE
For every chairman of a public sector bank (PSB) who waxes eloquent about cracking down on the dodgy universe of middlemen that exists between lenders and borrowers, there are several in the PSB system who will tell you it's not the simplest of tasks. Reason: in many instances, the middlemen aren't chartered accountants or non bankers but retired PSB honchos who know the ins and outs of the loans business and who often join the corporate houses whose loan cases they would have dealt with while in service. Once they're out of it, they begin canvassing for sanctions of additional limits or loans. No banker worth his pinstripes will come on record with such examples, but in private they may just narrate to you the curious case of a retired deputy managing director at one of India's biggest PSBs who was seen carrying the briefcase of the promoter of a company he had joined on retirement. Guess where they were headed: to the headquarters of the bank he served at, of course!........
Read - ET
Read - ET
Mobile banking: Govt banks fail to tap the cost advantage
...........The private sector banks are now talking about minimum 100 per cent growth in the value of mobile transactions over the next one year. This kind of growth is possible since mobile banking has become a core part of their strategy which is evident from their marketing and communication strategies. In addition, these banks have tailor-made apps to suit different technology platforms like android, windows, iOS, etc for the benefit of the customer. These banks are attempting to make the experience of transacting in the digital world device agnostic and as a result, all the features that are available on the web, are mostly available on the mobile handset............
A step forward in promotinge-banking
..........“With better systems in place such as online banking and mobile banking, services like e-payments have not been gaining popularity as expected. Most people are paranoid about carrying out the transactions online and there is a need to bring more clarity on the secure e-banking system,” says RBI Manager (banking) in Hyderabad D.V. Sreenivasa Babu.............
Maladies in private banks
.........You always get black sheep in a crowd. There are many honest managers in public sector banks, otherwise the country would not have run properly. High compensation packages do not necessarily ensure honesty. Don't we come across major cases of corruptions in private sector banks as well? ........
United Bank game for greater risk appetite
..........“We have approached the RBI to allow lending to AA- rated borrowers. The RBI has been gradually easing restrictions on lending and we are positive that this would come soon,” UBI executive director Sanjay Arya said. Last year, the central bank had imposed a cap of Rs 10 crore on lending, with the UBI’s non-performing assets rising to 10.82 per cent of the advances at the end of December and its capital adequacy ratio coming close to the minimum requirement of 9 per cent under Basel III norms. The RBI, however, relaxed the restrictions in June as the bank posted a profit for the quarter ended March after suffering losses in the previous two quarters mostly on account of higher provisions for bad assets. The regulator allowed.....
Avoid parental guidance on some financial habits
.........His aggression in investment is a reflection of the changing times. With the vast change in lifestyles, in which watching a single movie in a mall costs at least a couple of thousand rupees for a family of four, and with the cost of education and health care rising 10-20 per cent annually, the need to save in instruments that return more and are also, most probably, riskier is growing. According to the changing times, you also need to change your financial decisions. To start with, the basics:..............
Digitising insurance policies is free for customers
...........The biggest advantage is that policyholders do not have to pay any additional charges for the EIA. The expenses of tying up with the IR and providing these facilities will be borne by the insurance company. Once the policy is in electronic form, you don't have to worry about policy papers getting misplaced or lost. You can use the EIA for viewing multiple policies, making online premium payments, updating any change in address, keeping track of complaints and grievances..........
Saturday, August 16, 2014
Corporate governance applies as much to RBI as to banks
....It is no one's case that the organisational structure of any institution, least of all of the central bank of the country, should be cast in stone. But it creates a bad precedent when a structure that has by and large stood the test of time, is sought to altered to accommodate one particular individual, however deserving. It also paves the way for future ad hoc appointments............
RBI renovate hits jump | Which debt-laden cos to deposit in?
.........Meanwhile, a offer to sinecure people from outward a organization is being against by staff who pronounced in a minute to a RBI house that a establishment has functioned good though a initiation of talent from elsewhere. Lateral hires could harm a career enrichment of existent staff and a pruning of several departments might not be in a best interests of a executive bank, according to employees. Staff kinship member will accommodate a administrator on Tuesday to plead grievances. “For a past 7 to 8 decades there have been many vicious situations and a existent indication has worked efficiently. We do not feel it is required to boost a series of executive directors and emissary governors,” pronounced Samir Ghosh, convenor of a United Forum of RBI Officers and Employees. “There is stress among a staff that parallel recruitment could hinder promotions and opportunities for a existent staff. To get imagination and specialists, a RBI should initial demeanour within a organisation.”..............
RBI Governor Raghuram Rajan to meet employees on recast plan
......... "We strongly oppose plans of an organisation revamp as it will hamper promotions, and one more officer almost in the rank of deputy governor will reduce the representation of RBI officers among the deputy governors. This is the first time there is so much of discontent within the organisation. We will not compromise on our stand of allowing outsiders to enter the rank and file of RBI.".............
Raghuram Rajan’s plan to overhaul RBI runs into opposition
...............For one thing, there's a dramatic contradiction in the interpretation of what happened at a central bank board meeting on Sunday in New Delhi between the RBI and the finance ministry. The central bank said on Thursday its proposals for the overhaul were approved and issued a statement to that effect, reaffirming an ET Page 1 story. The RBI statement indicated that the government was broadly in agreement with the central bank on its plans to revamp hiring, trim the number of departments an ..
RBI, finance ministry differ over COO post
........India’s financial services secretary G.S. Sandhu said that while the proposal was discussed at the RBI board meeting on 10 August, it was not approved because the RBI Act needs to be amended before any change can be made. “We have asked RBI to justify the creation of the new post and send the proposal to the government. First, we have to amend the RBI Act to increase the number of deputy governors after which we will see if a new post needs to be created or not. The new post, if created, also has to be approved by the Appointments Committee of the Cabinet,” he added. The 17-member RBI board has two government representatives—economic affairs secretary Arvind Mayaram and Sandhu. Part of the ambiguity on whether the proposal for a revamp had been “approved” by the board may have emerged from the fact that while the RBI board discusses and debates a number of the issues, it is not a voting body........
Why FinMin-Rajan unease is growing
......Rajan aimed to reform the central bank itself - the organisation, its functioning and human resources. And now, with differences between RBI and the finance ministry on the issue of appointing a chief operating officer (COO) coming out in the open, central bank watchers say it is the idea of transforming the organisation where the seed of the problem was sowed..........
RBI talks of HR recast, silent on COO decision
The RBI on Thursday said that its board has approved the broad contours of an HR restructuring plan to align the central bank with the needs of the domestic economyand changes in the economic environment. Although the RBI said it had proposed the creation of an additional position of a chief operating officer, its statement remained silent on approval by its board of directors on the issue............
Nachiket Mor faces resistance as many fear COO tag would make him No. 2 in RBI
.......But what led to a backfire is the designation — many RBI senior officers with aspirations to become executive directors and deputy governors and sticking to a well laid out line of reporting, were flummoxed at the possibility of the governor's buddy becoming the virtual Number 2 with a unfamiliar designation and no clear job description........
Daddy's Day Out: Raghuram Rajan loves playing video games with son
........The question: How does he feel to be so young and occupying a post that is usually considered the domain of silver-haired seniors? Rajan, one of the youngest RBI governors, took the question gamely. The mirth in his tone unmistakable, he replied one can be as young as one wants to be. "One needs to adopt new ideas. I exercise and play video games with my son and...I also try and adopt new ideas as much as I can," he said. Despite these exertions and his belief that age is just a number, Rajan went on to reveal that his son is none too impressed........
Young and jobless in India - Charan Singh
..........There is one silent segment of the population, the elderly, which gets neglected in most of the policies of the government. There are more than 11 crore elderly people in India who are above the age of 60 years — generally women — who are in urgent need of care, as nearly 90 per cent of them who are associated with the unorganised sector are not included in any sustainable social security programme. While some three crore elderly people who are under the ‘below poverty line’ category get about Rs. 500 as old age pension, the remaining eight crore have to fend for themselves. In view of the.......
RBI in talks to ease foreign investors' trade in securities
.........“We are discussing with various players to see what best can be done to smoothen the process of trading by the foreign investors in Indian securities”, RBI deputy governor H R Khantold reporters on the sideline of Odisha Economic and Banking Conclave, 2014 organised by the Bankers' Club here........
PLENARY SESSION “BANKING- THE CATALYST TO ECONOMIC GROWTH OF ODISHA”
The plenary session began with sharing of thoughts & ideas by the delegates over the different aspects of Banking and its effects on the economic growth and development of Odisha. The discussion was initiated by Mr. P.K. Jena, Regional Director RBI & President, The Bankers’ Club, Bhubaneswar who addressed the gathering about the conclave being a major step in giving a clear picture about the ideas to be followed by the banks in achieving the ultimate goal........
RBI Quiz Witnesses a Tight Contest
.......RBI Regional Director Nirmal Chand, who presented participation certificates and an RBI Financial Literacy kit to all participants, said that the competition was part of the financial literacy campaign by RBI. He said that children were the most captive audience. He said that schools were chosen for holding the quiz as children are in a position to tell their parents and friends about what they know of banking, economy and financial inclusion.
RBI to issue new Rs 1,000 banknotes within MG series-2005
........."The Reserve Bank will shortly issue Rs 1,000 denomination Banknotes incorporating rupee symbol, with 'R' inset letter, in the Mahatma Gandhi Series-2005," the RBI said in a notification. The year of printing '2014' will be printed on the reverse of the banknote.........
Back into the reckoning
My View on Former RBI chief prepares for new role as chairman of government....
It is heartening to know that Dr.Bimal Jalan, an illustrious former Governor of the Reserve Bank of India, who had steered the ship of the RBI through most difficult times, is back into the reckoning in Government corridors with his appointment as head of the Expenditure Management Commission. He was earlier associated with various Committees/Group but those were mostly set up by the RBI. He was nominated to the Rajya Sabha in August 2003, by the President of India 'for distinguished service to the country'. As is well known, Dr.Jalan had held several high level positions in India and abroad, including as Chief Economic Adviser to the Government, Banking Secretary, Finance Secretary, Chairman, Economic Advisory Council to the Pime Minister. Whereas many RBI Governors have been honoured by conferring Padma Awards, including Dr.C.Rangarajan and Dr.Y.V. Reddy who were recipients of Padma Vibhushan, the second highest Civilian Award, it appears that for some inexplicable reasons, Dr. Jalan has been overlooked for this deserving and coveted honour. Was it because he was nominated to the Rajya Sabha during NDA regime?
- Surendra Khot
RBI, CABINET SECRETARY SCRUTINISING APPOINTMENTS OF PSB CHIEFS
........."Time has come to be strict with PSU banks. I have urged the Cabinet Secretary and the RBI Governor to examine recent appointments in public sector banks," he told reporters in New Delhi. The CBI had recently written to the Finance Ministry alleging "irregularities" in appointments of chiefs of PSU banks, following which Jaitley called for a closer scrutiny of recent appointments.........
Centre bans campus recruitment of bank officers
.........It cites a decision of the Bombay High Court against campus recruitment in a connected petition, which has since been confirmed by the Supreme Court. “The said decision of the High Court may be brought to the knowledge of the board of directors of the bank immediately for meticulous compliance,” it added..........
Only 3 free withdrawals from other ATMs, 5 from own
........This will apply for transactions done at ATMs located in six metro centres — Mumbai, Delhi, Chennai, Kolkata, Bangalore and Hyderabad, which are well-served in terms of payment infrastructure. RBI said banks are free to offer free transactions above this mandated limit but not many banks are likely to offer freebies as cost of maintaining small accounts has risen over the years.
Charging for higher ATM use will lead to more branch visits
............."For banks, ATMs were supposed to save costs. Customers were encouraged to go to an ATM to withdraw money instead of visiting bank branches. But in the past few years, the volume of non-financial transactions has increased substantially. Banks do not earn any revenues from these transactions. Also, the ticket size of financial transactions has reduced significantly, making the entire process expensive for banks. Unless there is a control, banks are losing a whole lot of money. Hence, introduction of these charges was necessary," ............
Multi-crore Cossets scam: Two convicted, fined Rs. 1.12 lakh each
.......UT police had booked Nanda and Dugala in 2002 on complaint from Reserve Bank of India (RBI) on charges of duping residents of money. However, charges of cheating and duping residents were not proved.A complaint dated November 16, 2002, was lodged by SP Negi, deputy general manager-in-charge, RBI, Sector 17, Chandigarh, accusing Cossets Marketing Private Limited, Sector 26, Chandigarh, of fraud. The complainant submitted that the multi-level marketing company that had started operations in 2001 had enrolled three lakh members and had 40 centres across the country. The investors had made several complaints against the company of large-scale fraud......
Ex-RBI officer surrenders in Rs 650 crore Pen bank scam
NAVI MUMBAI: In a major breakthrough for the Rs 650-crore Pen Urban Cooperative Bank scam case, former deputy general manager of Reserve Bank of India, Abdul Bari Khan, has now surrendered before the Alibaug sessions court on Wednesday..........
Mobile banking: Govt banks fail to tap the cost advantage
.........But the story so far for the public sector banks has not been that encouraging, with the exception of State Bank of India (SBI) – that has clocked Rs 546 crore via mobile transactions in June. Some of the other state-run banks that are known to be tech savvy like Bank of Baroda recorded only Rs 35 crore transactions......
SM Swathi appointed Bharatiya Mahila Bank ED
SM Swathi, General Manager of Corporation Bank, has been appointed as Executive Director of Bharatiya Mahila Bank. She had assumed office on August 14..............
Bandhan, India's newest bank, takes shape
........."Most applicants said that as an employer, Bandhan would provide them the opportunity to be part of a team setting up a bank with a new business model," says a human resource official at Bandhan. This might be a job-seeker's perfunctory reply to a commonly asked question in an interview, yet it hints at why Bandhan could be a game-changer in the world of banking.......
SBI chief: Jan Dhan scheme will bring down use of cash
..........Bhattacharya, in a statement, said with such rapid financial inclusion, the use of cash in India will decline in line with developed countries such as the UK (2 per cent), Australia (3 per cent), and Japan (6 per cent) going forward. According to an RBI empirical study, alternative payment channels such as cheques, credit/ debit cards and Internet banking are not only more efficient than paper currency, but also leave paper/ electronic trails, facilitating tax audit. Usually, such payment mechanisms act as partial substitutes for high-value currency. The SBI chief said the positive spillover from this structural transformation (via financial inclusion) in the long-run would be enormous. This apart, the move towards digital India would make good use of cost-effective cellular technology in future banking growth........
Andhra Bank CMD gets award
........The Rotary Club of Coimbatore has conferred the Pride of Coimbatore Award on the Chairman and Managing Director of Andhra Bank CVR Rajendran for his contribution to the banking industry for over four decades. Rajendran, a native of Devakottai, started his career as a clerk in Corporation Bank in the mid-70s. He served in various capacities across the country before being appointed to the helm at Andhra Bank...........
Petty peeves, the poor and a never ending corruption story
.....But after reading the first three papers you will have no idea where Rajan said these things. Did the Reserve Bank issue a statement? Was there a press conference to announce future measures? Only the Indian Express report tells you that these statements were part of the Literature Live! Independence lecture the RBI governor gave on Wednesday to an invited group at the Oberoi Towers rooftop...........
Information-less Reserve Bank of India with poor planners
........Poor knowledge of RBI was also reflected when it could not reveal under RTI response about the change in system of issuing silver-alloy commemorative coins not being made available to commoners at their face-value. RBI should update its knowledge that India in post-independence period for the first time issued silver-alloy coin of rupees ten again on occasion of Gandhi birth-centenary on 2nd October 1969 that too at its face-value so that even commoners could become part of commemoration by having .........
Dalit-run firms starved of funds as banks fight shy of lending to medium sector
.....But officials at medium-sized units allege that banks have been opting to invest in the RIDF rather than lend to medium-sized units fearing bad loans from such accounts, thus affecting the funding prospects of these firms. It also ensures that the principal amount is safe, said a bank official. "Banks are hesitant to fund several medium-sized units despite the fact that these loans will qualify to be PSL. They would rather invest in the RIDF," said Milind Kamble, president of Pune-based Dalit Indian Chamber of Commerce, an industry body for small and medium-sized firms run by Dalit entrepreneurs. The chamber, set up in 2003, has about 3,000 member firms with turnover ranging from Rs 10 lakh to Rs 2,000 crore. Besides the PSL, banks are also required to make available..........
HOW CAN THE STATE BANK OF INDIA PAY INTEREST IN GOLD?
.........An article caught my eye this week. The Tirumala Tirupati Temple in India has deposited gold at the State Bank of India, and is getting paid interest on their deposit. There is something unique about this. The interest is paid in gold. To understand why no one else is paying interest in gold, let’s first look at how one can use any asset class to make a dollar income: speculation............
Thursday, August 14, 2014
‘Venal Politicians’ Exploit the Poor to their Advantage: Rajan
Read - ET
Raghuram Rajan and India’s cursed equilibrium
.....“The poor and the under-privileged need the politician to help them get jobs and public services. The crooked politician needs the businessman to provide the funds that allow him to supply patronage to the poor and fight elections. The corrupt businessman needs the crooked politician to get public resources and contracts cheaply. And the politician needs the votes of the poor and underprivileged. Every constituency is tied in a cycle of dependence, which ensures that the status quo prevails.”.........
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