..........In terms of economic activity, the turnaround in mining and quarrying (2.1 per cent) and manufacturing (3.5 per cent) are particularly impressive as they were in negative territory last year. These sub-sectors along with electricity, gas and water supply, which posted an impressive 10.2 per cent increase have benefited from recent policy decisions and, especially in the case of mining, environmental clearances. There has been a slight decrease in agriculture growth to 3.8 per cent from 4 per cent a year ago. However,....
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.
Thursday, September 4, 2014
SUPREME COURT ORDERS RBI TO TRANSFER GREENPEACE FUNDS TO IDBI BANK AC
The Delhi High Court today issued notice to the Ministry of Home Affairs (MHA) seeking its response in a petition filed by Greenpeace India alleging that the government had blocked its foreign funds. The court also directed that Greenpeace India’s blocked funds to be moved from RBI’s account to the NGO’s account with IDBI Bank, Greenpeace said. The money has to be put in a fixed deposit until October 10. The government has to file their response to the HC notice in the next two weeks. The next hearing of the case will be on 10th October.....
RESERVE BANK CONDUCTS CHANDIGARH ROUND OF RBIQ
As part of its continuing initiatives for promoting financial awareness and education, Reserve Bank of India (RBI) Chandigarh conducted RBIQ, an Inter-School Quiz today at the Tagore Theatre, Sector 18, Chandigarh. The main objective of the quiz was to create awareness and interest in the young student community about banking and finance, the history and role of RBI, other banking/ financial institutions, economics, current affairs,......
Customers facing hardships in transactions as banks brace for ATM fee switch
......Retail bank customers using the automated teller machines (ATMs) of banks where they do not have accounts are facing hardships as software glitches in banks' migration towards payment for ATM transactions have led to many machines rejecting the demand for withdrawal, or dispensing less than half of what is sought, increasing the number of transactions.............
Maharashtra’s women coop bank spreads wings
........"At present, MannDeshi Mahila Bank has seven branches at Satara and Pune. The NBFC model will help us begin micro-lending initiatives in other parts of the country and scale up pan India gradually," she explained. "The model for growth has been very simple. Expand branches and, alongside, also open rural business schools for women in the area," Sinha added. Mann Deshi has enabled 1,85,000 women to save, 10,000 to own property and 42,000 to set up businesses and emerge as developers of their local eco-systems. Last year, ...........
RBI stipulates conditions for acquiring UCBs by commercial banks
...The RBI has introduced the above mentioned stipulations to ensure that the process of consolidation by way of non-disruptive exit of weak entities by a scheme of transfer of assets and liabilities of urban co-operative banks (UCBs) to commercial banks is undertaken in a transparent manner..........
Implementation of OTS scheme only after RBI nod: banks
PANAJI: Ahead of the notification of the one-time settlement (OTS) scheme, bankers said that action on the scheme can be taken only after receiving permission from the Reserve Bank of India (RBI). The Goa government, bankers pointed out, is eager to relieve the loan burden of barge owners, truck operators and mining machinery operators through the OTS scheme. But executing the scheme is not a straightforward process and is likely to take time from the bank end, they said. The Reserve Bank of India’s endorsement is crucial for co-operative banks too, said senior officials of state urban banks adding that once it is received, they will also have to seek consent from their shareholders. Co-operative banks have held several meetings with the government on .........
Foreign banks allowed to lend in rupees
..........The Reserve Bank of India (RBI) on Wednesday allowed non-resident foreign banks to offer debt to local companies in Indian rupees. Foreign lenders can extend external commercial borrowings (ECBs) in Indian currency, if they mobilises Indian rupees through swaps undertaken with authorised dealers in India. Ashutosh Khajuria, president, Federal Bank, said, “This will be a competition for domestic banks as foreign banks will not be bound by the reserve requirements of cash reserve ratio (CRR) and Statutory Liquidity Requirement (SLR). So they may be able to lend at cheaper rates.”......
SBI to hire 2,986 probationary officers
........The online registration can be done during September 1 – 18, 2014. The written examination would be conducted tentatively in November 2014. Graduates who are in the age group of 21-30 years are eligible to apply and age relaxation would be extended as per the Government norms..........
Wednesday, September 3, 2014
Raghuram Rajan: The One-Handed Economist
Five pillars, one man
..... So far, Rajan has also hit a blank with his innovative idea of a holding company to insulate banks from political pressure, and his attempts to hire Nachiket Mor—his pointsperson for work on inclusive banking—are also facing resistance from the finance ministry. Rajan still needs to do a lot more to complete ‘missing markets’—this includes not just corporate bonds but also converting trade receivables to an electronic and tradeable format to improve credit to MSMEs—but such is the nature of the job, most attention will remain focussed on the rupee and inflation levels, both of which are more determined by how the government behaves. By all accounts, it has been a great first year for Rajan.
One year on, RBI Governor Rajan going strong
51-year old Rajan has two more years to go as RBI Governor, going by the tenure given to him last year. It is expected that the under his leadership, the central bank will become more dynamic, responding quickly to meet the needs of the emerging economy, which is seeing green shoots of recovery under the new Government.
What Rajan needs to do to cement his legacy
......A hypothetical question, though one relevant from the perspective of central banking, is, would Dr Rajan -- the top-notch academic who has often warned about the shortcomings of an excessive reliance by developed economies on central banks and monetary policy to fix their problems, and not enough on structural reforms -- have recommended such swap windows if he were not a central-bank governor? In other words, did Governor Rajan, the practitioner, lower the bar for policy options, from doing what is primarily right but painful in the short-term to doing what should be a no-no even if it is effective in the near term? The above is not a new dilemma for central bankers........
Since his appointment as RBI governor Raghuram Rajan has delivered on most counts with courage of conviction
.....It was a perfect storm when Rajan, the former professor of finance at the Chicago University's Booth School of Business, landed in RBI — currency at a record low, inflation was stubbornly high, current account deficit maligning the economic reputation, untrustworthy fiscal numbers, and above all, the taper tantrums of the Federal Reserve. In such a situation, Day One in office should have been limited to pleasantries and thanking everyone under the sun 'for giving him an opportunity to.......
'Insiders' vs 'outsiders' at RBI - A.Seshan
.........External recruitment should be resorted to only, say, when expertise like knowledge of quantitative techniques in economics is not available within the RBI. Except for those in specialised departments like economic research, there is now common seniority for the staff that levels opportunities for promotion. The RBI should re-examine the question of common seniority for all so that the economic researcher or statistician or the legal expert can migrate to other departments if he or she is found unsuitable for promotion within the current department.
RBI has hived off much of its work areas - George Aedayod
My View on "RBI Aapkee Hain Kaun? - Surendra Khot":
On the rising numbers at the top, and the dwindling work men coupled with high speed promotions to DRs the institution is certain to have a short supply of high caliber humans with vision and leadership. One wonders how the exponential growth in higher posts augers well with the harnessing of technology since what many men did yesterday is today automated, and supervisory staff should have declined even if the human capability had remained the same or increased over the decades. The fact remains RBI has hived off much of its work areas too.
- George Aedayod
Outside view for an Outsider - R.G.Nakhate
My View on "RBI Aapkee Hain Kaun? - Surendra Khot":
RBI Apkee Kaun Hai by Shri Surendra Khot is singularly revealing some vital facets of HR in RBI family show in a balanced reporting. It is informative and a right sequel to bashing a few days ago by former ED Shri. V.S.Das. All India RBI staff strength was 34000 plus ( 6000 + Class I, 19500+ Class III and 8600+ Class IV ) in 1984. After thirty years, it is minus 20000 in 2014. Much of reduction in staff strength is in Class III and Class IV. The leaders are aware for sure. They know considerable growth of bank branches, many new players in banking industry during last few decades, and large scale recruitment of staff during last five years. They know the need and urgency to strengthen the RBI.
RBI Apkee Kaun Hai by Shri Surendra Khot is singularly revealing some vital facets of HR in RBI family show in a balanced reporting. It is informative and a right sequel to bashing a few days ago by former ED Shri. V.S.Das. All India RBI staff strength was 34000 plus ( 6000 + Class I, 19500+ Class III and 8600+ Class IV ) in 1984. After thirty years, it is minus 20000 in 2014. Much of reduction in staff strength is in Class III and Class IV. The leaders are aware for sure. They know considerable growth of bank branches, many new players in banking industry during last few decades, and large scale recruitment of staff during last five years. They know the need and urgency to strengthen the RBI.
There was large scale direct placement of Officers in Grade B in RBI in early 1980. They rose in their position very fast compared to their seniors. Many reached the position of GMs/CGMs in short span of fifteen/ twenty years and by virtue of that are forced to stagnate ( without the benefit of stagnation increment unlike ABC grades nor running 'Pay Band' scale upto ED unlike GOI)
There are a few reasons justifiable for dwindling manpower in RBI - no one can deny.There were few scams in 1980s and there are scams in every sphere of life, a new scam coming to light every next day. Has the RBI failed in carrying out certain important functions/ duties? Slowly relinquishing responsibility of regulator? There is urgency to go into shortcomings ,if any, in the Banks overall functioning, man power shortage etc. in the recent years etc . There is imperative need to entrust the job to HR -expert committee - headed by one of the Top Brasses /Bosses in the Bank or an outsider (to get independent unbiased views ) to identify HR problems, work areas, staff requirement/ deployment etc. and recommend long term solution / remedy for implementation.
In a lighter vein,
RBI may not have: AGM/DGM/GM (Inward/Outward).
- R.G.Nakhate.
Vigilance Commission questions top-level appointments in PSBs
.........The names were shortlisted during the tenure of the last UPA government. The Commission has denied vigilance clearance to these recommended persons, the sources said. The Commission has, prima facie, claimed to have found instances where more marks were given to some of the candidates in their interview allegedly without any basis to secure their entry into the banks, they said. The CVC, in its communique to the Ministry, has cited recent media reports about alleged irregularities in top level appointments in the public sector banks. RBI Governor is the head of the board that selects state-run bank chiefs........
Go slow on overenthusiasm - Dr.Yerram Raju
My View on "The great Indian financial inclusion circus":
The Mission, at the outset, is highly laudable. But questions deep remain.
Trend and Progress Report of the RBI (p.84) says it all regarding the progress of Financial Inclusion: the number of accounts opened 73mn basic savings bank accounts since 2005 (the year of introduction) through all institutional arrangements and hold Rs.55bn in the accounts but had only transactions worth Rs.7bn or near one eighth. Post 2010 an average of 10mn SB accounts per annum were opened in an accelerated mode. But on a single day 1.3mn accounts were opened!!
Like all other target oriented schemes that went through the public sector banks' windows, this new Financial Inclusion Mission had surpassed the ten million accounts in single day by 3million. Whenever and whatever the Government of India ordains to the PSBs it shall be done and it shall be done with enthusiasm publicly displayed. What is the planning that has gone in for achieving this and how perfect it is, is not much of a bother now as much as impressing the FM and PM.
The issues that need attention are:
Politicians right from the village level, and some institutional and individual brokers should not lay seize of the opportunity. The way some well intentioned schemes went awry in the past was that such persons would introduce a group; have the accounts opened; and for each credit account get a commission from the bank; pay a balance out of credit generated in cash to the account holder and trade with the rest of the money. When the repayment is due, he would pay into the borrower's account the amount he has actually used out of the loan leaving the original balance utilized by the borrower unpaid. Since this would constitute only 15-20 percent banks would gloss over and permit a roll over of the credit. The money circulation goes on till it reaches NPA level in the actual borrower's account. Dispute resolution mechanism commences and the lucky would resolve. The same mechanism got repeated between the BCs and their agents vis-Ã -vis the account holders. The disputes between the BCs and Agents and the related Banks are still on, on such scores.
We have a knack of potential misuse, if not abuse of facilities that are well intentioned. Only when systemic initiatives right from the beginning are put in place such eventualities can be avoided. After all Rs.5000x1.3mn and even half of it is big money for pursuing Ponzi schemes by the financial brokers.
The best solution would be not to release cash by way of overdraft but only allow merchant outlets to liberally act on the Rupay and Kisan Credit Cards for all the consumption requirements as these cards are biometric. However, going by the credit card frauds in the country, which have only been on the rise, the banks have to be continuously on guard.
ATMs should dispense only up to Rs.1000 in cash of Rs.100 denomination in a credit cycle covering Rs.5000 per month and the rest should be only through merchant outlets.
We have a responsibility to ensure that the system does not derail due to overenthusiasm among the main stakeholders. half-yearly special audit and evaluation by independent agencies, specifically directed at financial inclusion efforts would go a long way.
- Dr.Yerram Raju
State approves of central help to revive district central cooperative banks
............The finance ministry's package, worth over Rs 2,000 crore, will help 23 crisis-ridden DCCBs in UP, Jammu & Kashmir, West Bengal and Maharashtra. Under the plan, the centre will infuse as much as 40% of the funds required by these banks to meet the financial parameters to get approval from the Reserve Bank of India (RBI). DCCBs, which form a part of the three-tier farm loan lending structure, also serve as political turfs in Maharashtra...........
NetApp partners Nabard on data centres for cooperative banks
..........To drive faster transactions and comply with regulatory requirements stipulated by the Reserve Bank of India, Nabard said it was imperative to bring all the cooperatives onto a technology platform, which would be cost effective and efficient. The move will also enable the government to transfer subsidy and other payments to account holders based on their Aadhaar numbers...........
Why RBI shouldn’t worry only about online payment security
...........In other words, RBI should stop imposing a one-size fits all approach to payment security. Two-factor authentication should apply to transactions beyond a certain size, which could either be a percentage of the credit limit or an amount set by the customer. The limits can be for each transaction and also include a daily limit, as fraudsters can circumvent the per transaction limit to make a large number of low-value transactions. Schneier calls this approach authenticating the transaction, rather than authenticating the user. It will be a tragedy if.........
More curbs in offing for wilful defaulters
The finance ministry is in talks with the Reserve Bank of India (RBI) to ensure defaulting companies are not able to open accounts in banks that are not part of the lending consortium to divert their cash flows........
Reserve Bank Cancels Licences of Five NBFCs
.......The companies, all of which belong to Kolkata, cannot transact the business of non-banking financial institution, the apex bank said in a statement..........
Read.............
Read.............
Private non-financial firms' sales contracted in 2013-14: RBI
.......Releasing the data on the performance of the private corporate sector (non-financial), the RBI Tuesday said the information technology (IT) sector recovered in 2013-14 showing higher sales growth. According to the RBI, the data is compiled on the basis of abridged financial results of 2,854 listed non-government, non-financial companies............
Jan Dhan Yojna feasible, but unsure of costing: Ex-Bankers
.......Speaking about the scheme, which seeks to provide two accounts to 7.5 crore identified households by August 2018, two eminent bankers sought to figure out if its implementation will be a drain on the banking system.. While former MD and CFO at State Bank of India Diwakar Gupta, in an interview to CNBC-TV18's Latha Venkatesh, said it is difficult to give an exact cost of the operation, former deputy governor KC Chakraborty said he sees no problem in banks spending Rs 18,000 crore on Jan-Dhan Yojana.............
India needs more banks before more bank accounts
..The trouble, of course, is that financial “inclusion” means more than simply owning a bank account, or a little life insurance. The success of any banking and financial system ought to be judged on how easily and cheaply it provides access to credit. By this measure, the State-dominated Indian banking system has largely failed. For one, credit is too expensive. Bank prime lending rates tend to be several percentage points higher than the Reserve Bank of India’s benchmark lending rate (if the benchmark rate is 8 percent, the prime lending rate can be as high as 14 percent). At the same time, the biggest banks function as near-oligopolies. They have little incentive to expand coverage and lend to the poor or to small entrepreneurs. At the root of these two problems of cost and access is a debilitating lack of competition........
The politics of banking sector distress
.......The colonial Acts carefully classed defaults and debt and helped farmers selectively. At that time, the banking system did not lend to farmers extensively and most of the lending was done by moneylenders. These laws ensured that while farmers received some relief, the overall system of agricultural lending was not destroyed. In contrast, in independent India, both lending and waiving off money to the farm sector has been reckless. First, banks are pressured into lending to so-called priority sectors without any risk evaluation and then loans are waived off at the mere hint of distress among borrowers. The dangerous periods for banks are just before.........
Electronic payments spike
While the Reserve Bank of India mulls over a plan to introduce plastic currency notes, more and more Indians are using electronic methods for their transactions. Electronic methods — computerised transfer of money and use of credit/debit cards — now make up nearly two-thirds of all retail payments............
Withdrawal a Pain as Banks Brace for ATM Fee Switch
........Retail bank customers using the automated teller machines (ATMs) of banks where they do not have accounts are facing hardships as software glitches in banks' migration towards payment for ATM transactions have led to many machines rejecting the demand for withdrawal, or dispensing less than half of what is sought, increasing the number of transactions..........
Read - ET
Know What's `Right' for Better Banking
....... “The banks' code of commitment to customers had persuasive powers. Now the RBI will have legislative powers to act against the banks if they fail to adhere to the charter. Customers can approach the central bank's customer service department to resolve grievances,“ says a retired head of a large public sector bank. Here's a look at the proposed rights and the likely benefits for customers:...........
Limited Liability, Wilful Defaulters
.....Banking must change from wink-and-nod games in patronage to serious assessment of business viability, risk and credit need, swift identification of bad loans and their immediate resolution to recover whatever can be recovered. Throwing good money after bad because someone higher up in the food chain told the banker to do that must stop. The banker's poor judgement must be tolerated if honest, penalised if mala fide; and display of good judgement rewarded handsomely.........
Banks' capital adequacy ratio at 6-year low
......The situation is worrisome, as bad loans continue to mount amid a slowing economy, where interest rates have stayed elevated. Gross non-performing assets (NPAs) of public-sector banks increased to 4.1 per cent as of the end of March from 3.6 per cent a year ago. Their net NPA as a proportion of net advances were 2.2 per cent, compared with 1.7 per during the same period a year earlier..........
Paying utility bills on time may boost your credit score
The Reserve Bank of India (RBI) has formed a working group to examine how customer transaction data in areas such as utility bill payments can be used for signaling credit worthiness. Credit information companies currently rate borrowers by assigning scores using information provided by members such as banks and non-banking finance companies (NBFCs). .............
Axis Bank launches Shopaholics Online Festival
......The bank has tied up with 52 reputed online merchants across 8 different categories, to offer online flash sale exclusively for Axis Bank Credit & Debit Cardholders,” the bank said in a statement. Offers will be available on categories such as travel, bill payments & recharge, mobiles & electronics, entertainment, apparel & accessories, books stationery & gifts, food & groceries and homes & lifestyle......
Tuesday, September 2, 2014
RBI Aapkee Hain Kaun? - Surendra Khot
Now for the hard part
............A hypothetical question, though one relevant from the perspective of central banking, is, would Dr Rajan - the top-notch academic who has often warned about the shortcomings of an excessive reliance by developed economies on central banks and monetary policy to fix their problems, and not enough on structural reforms - have recommended such swap windows if he were not a central-bank governor? In other words, did Governor Rajan, the practitioner, lower the bar for policy options, from doing what is primarily right but painful in the short-term to doing what should be a no-no even if it is effective in the near term? The above is not a new dilemma for central bankers..............
RBI Guv Rajan completes a year in office: Report card
 |
| Duvvuri Subbarao, former Governor, RBI |
India needs RaRa
My View on "Raghuram Rajan is the best hope for UPA":
247Reserve Bank of India has never been following text books. Once inside, Dr Rajan also has been following RBI's practice of allowing monetary policy to evolve based on the need of the day. Those who are finding fault with his approach are those who have gravely misjudged both RBI and Dr Rajan. Dr Rajan's actions so far have not proved that he is improving his CV for his next job. India needs him for a much much longer period than the present term of 3 years and in all probability, his career in RBI may last longer than the majority of earlier Governors. In India, people respect some of the Ex-Governors of RBI much more than IMF Chiefs who generally work for their constituency and bosses.
- M.G.Warrier
RBI quietly drops MP Rajeev Gowda from Central Board
........According to RBI’s communications head, Alpana Killawala, "Shri Rajeev Gowda ceased to be a member of our Central Board effective June 12, 2014." Interestingly, the RBI did not issue a press release announcing Dr Gowda’s exit. There is no mention of him in theannual report page, which mentions the directors of the central and regional board, although he was certainly a director for a part of the period of the annual report. Dr Gowda’s website mentions that he is a “former” director on RBI’s central board.........
Meeting with Sh R L Das CGM-in Charge HRMD
Sarvashri S S Didolkar,Advisor,R P Donde,President,T G Nair,A P Kale,T P Kunhiraman,L R Parab,Vice Presidents, M B Talekar,General Secretary,Sambhaji More,Sedretary and M N Patil,Treasurer representatives of our Association met Sh R L Das,CGM-in-Carge HRMD on 22-08-2014 after the post renewal meeting of Group Mediclaim Policy in the morning.Sh Das informed the rorted outepresentatives that the matter relating to revision of pension is moving at faster speed and response of GOI is expected at any moment and in any case before Dipavali as all issues have been sorted out with the Government.He further informed that the Governor himself is seriously pursuing the matter at the highest level and FM Sh Arun Jetley On our requesting,the CGM-in Charge on expediting enhancement in ex-gratia to pre 1986 retirees,he stated that pension revision,opening of pension option and enhancement in ex-gratia to pre 1986 retirees will be resolved at one go.We thanked Sh Das for the update.
- Mohan Talekar
(forwarded by L.R.Parab)
No text book
My View on "Raghuram Rajan is the best hope for UPA":
Reserve Bank of India has never been following text books. Once inside, Dr Rajan also has been following RBI's practice of allowing monetary policy to evolve based on the need of the day. Those who are finding fault with his approach are those who have gravely misjudged both RBI and Dr Rajan. Dr Rajan's actions so far have not proved that he is improving his CV for his next job. India needs him for a much much longer period than the present term of 3 years and in all probability, his career in RBI may last longer than the majority of earlier Governors. In India, people respect some of the Ex-Governors of RBI much more than IMF Chiefs who generally work for their constituency and bosses.
- M.G.Warrier
From RBI Governor Raghuram Rajan to Goa CM Manohar Parrikar: 10 famous IITians who didn't end up as engineers in India
It is a dream for every Indian school child studying science in India to get into the prestigious IITs. The Indian Institute of Technology is a name that tops the list when you ask an engineering enthusiast about their future plans. The coveted engineering institute has produced some of the most famous Indians who hold responsible positions in Indian government. ........
RBI's Consumer Charter undermined by ATM usage diktat
................Now, consider how this plays out in connection with RBI’s diktat to restrict free usage of ATMs. Currently, banks have the freedom to decide their charges and interest rates without reference to RBI. So, if some banks found it prudent to curb usage or disallow third-party transactions, they could have gone ahead and done it without RBI’s intervention. So why the RBI directive? To make a anti-consumer action look like a regulatory diktat? The Indian Banks Association (IBA) used its influence on the central bank to ensure that angry customers do not vote with their feet and switch banks. Getting RBI to issue a directive removes the problem. ...........
RBI rule handicaps India's infrastructure hopes
A RBI ban on banks buying new issues of infrastructure bonds has handicapped Prime Minister Narendra Modi's chances of gathering billions of dollars needed for mega-projects through the bond market.......
Bank Accounts Not Inoperative if Dividend Cheque Credited in 2 Years: RBI
..............."Since dividend on shares is credited to Savings Bank accounts as per the mandate of the customer, the same should be treated as a customer induced transaction," the Reserve Bank said in a notification..................
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Read.........
Why Regulators Fail To Tame ‘Shadowy’ Banking Players
........Despite consistent efforts by Reserve Bank of India (RBI) and financial markets regulator Securities and Exchange Board of India (SEBI) to bring operations of shadow banking players under the ambit of financial scrutiny, these firms have continued to thrive, while triggering insurmountable risks that are typically associated with unregulated financial products. The reason is:........
Current account deficit narrows
....... “Notably,” said the RBI, “non-gold imports recorded a modest rise of 1.3 per cent as against a decline of 0.6 per cent in the corresponding quarter of last year reflecting some revival in economic activity.”...................
RBI amends Basel III guidelines for banks
.........The RBI said banks can now issue additional Tier 1 capital to retail investors subject to board approval. The RBI also said call options on the additional Tier 1 debt will now be permissible at 5 years versus 10 years earlier............
Set timelines to process loans proposals: RBI tells banks
....."Banks should clearly delineate the procedure for disposal of loan proposals, with appropriate timelines, and institute a suitable monitoring mechanism for reviewing applications pending beyond the specified period," RBI said in a notification. The central bank also asked banks to make suitable disclosures about timelines by conveying credit decisions through their websites, notice boards and product literature, among others. However, it said that banks should not compromise on due diligence requirements...........
Using Digital Handwriting to SECURE MOBILE BANKING
.....Apple plans to turn its next iPhone into a mobile wallet through a partnership with major payment networks, banks and retailers. The agreement includes Visa, MasterCard and American Express and will be unveiled on September 9 along with the next iPhone. The new iPhone will make mobile payment easier by including a near-field communication chip. That advancement along with Touch ID, a fingerprint recognition reader, will allow consumers to securely pay for items in a store with the touch of a finger. ...........
Read - ET
A big bang reform that may be spot on
...........Bank nationalisation saw a huge expansion in branches into the hinterland. The expansion of the branch network, in turn, caused money kept under the mattress to be swept into the banking system. Cash under the mattress may be savings for an individual but these do not translate into “saving” for the economy. “Saving,” in economic terms, is whatever is available for lending or investment, that is, savings that come into the financial system. Bank nationalisation caused the saving rate.......
Banks keep festive offers low-key as RBI frowns
............This is because the Reserve Bank of India (RBI) is not comfortable with the idea of loan rate discounts for new customers, depriving older ones.“RBI has been questioning banks about these special offers in the festival season. If the cost of funding hasn’t suddenly become favourable, how can banks introduce a cheaper rate of interest this time of the year?.......
BAD LOANS - Willful Defaulter Alert!
........Thankfully , there are other forces at play . The regulator has become more alert since the fiasco at United Bank.While no director of the bank was pulled up and no regulatory official was made accountable, there are frequent meetings between banks and the RBI these days for early detection of sticky loans. A surge in the stock market will help leveraged companies with excess capacity to cut debts.Bankers are asking questions they should have asked long ago, like the source of equity money organised by a promoter who floats a special purpose vehicle to borrow and fund a project........
Read - ET
Monday, September 1, 2014
‘I’m no Bond. I’m a banker on the move’
One year of Raghuram Rajan: A spring in his step
...................Rajan's other key task will be to deal with the far-reaching recommendations of the P J Nayak committee, which was set up to review governance issues. While the government has ruled out dilution of its stake below 51 per cent in public sector banks, RBI is confident that some of the other recommendations like splitting the chairman and managing directors' post and revamping the boards would bring transparency in functioning of these banks. Over to Dr Rajan..........
Raghuram Rajan’s year at the wicket
..............Central bankers are usually judged in two ways—their track record in maintaining the value of the currency as well as the systemic reforms they undertake during their tenure. Rajan has done well on the first count while his early statements on the second indicate that he is on the right track. The annual report released in August provides a succinct overview of the task Rajan has set himself. There are five pillars in the strategy to transform the Indian financial sector: a new monetary policy framework, a more competitive banking sector with differentiated licenses, deepening liquidity in the financial markets, financial inclusion and improving the ability of banks to cope with stress..............
Well Begun is Half Done
.............What about Rajan' performance in areas that are exclusively the RBI's domain? Here the record is mixed. The two broad areas of the RBI's responsibility -apart from monetary policy formulation and being banker to government -are financial sector stability development and bank supervision. On the first, there has been a flurry of activity. From is suing new bank licences and establishing guidelines for small and payments banks, to setting up commit tees to revise and strengthen the monetary policy framework (Urjit Patel committee), to look at financial ser vices for small business and low-income households (Nachiket More committee) and to review the governance of bank boards (Nayak commit tee), it's been a busy 12 months. What of action on the ground? The verdict will have to wait........
RBI shouldn't see things the same way as govt: Rajan
.....Reserve Bank of India governor Raghuram Rajan has dismissed talk of a growing wedge between him and the NDA government, saying, “The press always wants to find something interesting. Small things...are blown up.“ At the same time, he added, “I don't think it's good for RBI to see everything in the same way as the government does. We are the keepers of stability and therefore the government actually relies on us to stop them sometimes.“..........
Read - TOI
Raghuram Rajan is the best hope for UPA
..........Raghuram Rajan, who seems to be looking at the Managing Directorship of the IMF as his next job, claims that inflation hurts the poor. Indeed it does, but not as harshly as unemployment. As economists less wedded to Chicago School monetarist dogma than the RBI Governor have pointed out, a somewhat higher rate of inflation is more than bearable if there is double digit growth, whereas to a person who is lacking work, even constant prices are unbearable. Although the textbooks that he is following so blindly may not agree, in the real world, food inflation is the result of supply and distribution, hence higher interest rates are ineffective in curbing them. And in a context where inflation ........
Very interesting, open interaction
My View on "We cannot be seen as a paper tiger: Raghuram Rajan...":
Very interesting, open interaction. Just on one point let me think aloud. If you leave structural and legal issues, why at all public and private sector banks should have different approaches to conduct of business and responsibility to stakeholders? After all the major resources, namely deposits, come from the same source. Once I raised this issue, and was told I was talking 'communism'. I do not know. Intuitively, I feel, when organisations are dependent on public for their 'capital and resources', they should have level playing field and parity in responsibility to society.
- M G Warrier
Principled pragmatism
India prepared to face Fed rate hike: Rajan
.......RBI Governor Raghuram Rajan's comments to a newspaper came on the heels of US jobs data which has heated up speculation over when the Federal Reserve is likely to raise interest rates. Any decision by the Fed to raise rates, which have been held near zero since December 2008, will have implications for economies like India, as it could lead to capital outflows from emerging markets. That could put pressure on emerging market currencies, particularly .............
Indian banks' bad loan levels not 'scary' - RBI chief
.............The bulk of these bad loans are related to infrastructure projects, which have made banks circumspect over lending. "Is it of concern? Yes. Is it scary? No," Rajan told the Times of India, adding "...the point is there are two or three silver linings in the cloud of distressed assets." He said many delayed infrastructure projects were "getting back on stream" as the economy improved, and booming equity markets will also help banks raise the required capital........
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