Mobile user verification will be based on UID Number

The Unique Identification (UID) Number project, which is poised to use the vast 700 million plus mobile subscriber database and distribution network to help complete the project, will in turn become the basis of issuing mobile connections in the future. UID Number will be the definitive proof for subscriber verification.

Noted cardiac surgeon R K Panda hurt in road mishap

The internationally renowned cardio-vascular and thoracic surgeon and director of the Mumbai based Asian Heart Institute, Dr Ramakant Panda, was injured in a road mishap in Nagaon district in Assam when his car collided head-on with a speeding truck.  Dr Panda sustained injuries on his head. His son Saswat (20) also sustained some injuries, Nagaon deputy commissioner M Angamuthu said.  The incident took place at around 1:45 pm at Samaguri, about 200 km east of Guwahati.  The renowned surgeon, who had successfully conducted multiple heart surgeries on Assam Chief Minister Tarun Gogoi, is a state guest and was travelling along with his wife, son and daughter to the Kaziranga National Park from Guwahati. He was first admitted to the Nagaon Civil Hospital and was later airlifted to Guwahati.

Sebi, RBI to discuss global indices futures

Sebi will be meeting RBI officials shortly to discuss the proposal on introduction of futures trading on overseas indices at the local exchanges.The National Stock Exchange (NSE) had approached Sebi seeking approval for launching futures trading on popular global indices like S&P 500 and Dow Jones Index of US, denominated in rupees.

Vidyadhar Anaskar’s 4th term on RBI task force

Vidya Sahakari Bank Ltd chairman, Vidyadhar Anaskar, has been appointed member of the task force for urban co-operative banks set up by the Reserve Bank of India (RBI). This is the fourth consecutive year that Anaskar will serve on it. Anaskar is director of the Pune District Urban Co-operative Banks Association and the Maharashtra State Urban Co-operative Banks Federation. The task force has been formed on the basis of a memorandum of understanding between the Centre and the state government. The panel will take decisions relating to urban co-operative banks in the state. According to a press release, Anaskar has been representing the urban co-operative banks since January 2008 on the task force. He has represented over 170 urban co-operative banks in the state and has also conducted special sessions for over 265 banks for free to guide their employees on technical and legal issues. He works as a visiting lecturer in various reputed institutes, including the College of Banking run by the RBI, the Yashwantrao Chavan Academy of Development Administration. He is a also tax consultant.

RBI buildings found eligible for issue of Star Label for energy conservation

Sebi awaits public view on Jalan panel report

The Securities and Exchange Board of India (Sebi) executive director JN Gupta on Monday said the regulator has not yet formed a view on the recommendation submitted by the Bimal Jalan committee. Sebi has given time till December 31 for market participants to send their suggestions and comments. "Once the public comments are received, Sebi will follow its normal process of actions," he said. But Gupta, who was also a member of the Jalan Committee, which reviewed the ownership structure and corporate governance of the market infrastructure institutions (MII),said the committee had tried to suggest measures that could keep pace with fast changing market practices and are capable of handling the outcome of a potential risk posed by these institutions. Other panelist who had come against the committee's key recommendations stated that globally stock exchanges remained stable even as big banks and financial institutions collapsed and hence there was no need for imposing stringent restrictions on stock exchange's operations.

...Rangarajan pegs it lower at 5.5%, sees growth at 9%

Inflation is expected to come down to 5.5% by March 2011, Prime Minister’s EconomicAdvisoryCouncilchairman C Rangarajan said on Monday. Besides,the PM panel also sees the country to achieve a GDP growth rate between 8.5-9% in the current fiscal. “I think by March (2011), we can expect (WPI) inflation to come down to 5.5%,” Rangarajan said on the sidelines of the 93rd annual conference of Indian Economic Association. “I think any level of inflation beyond 5% (threshold level of inflation) is uncomfortable,”he asserted.

BSE launches Shariah 50 index

The Bombay Stock Exchange today launched India's first Shariah-compliant index, to promote financial inclusion among Muslims. The `BSE Tasis  "The introduction of the BSE Tasis Shariah Index will give Islamic and other socially responsible investors another means to access the Indian market and will help attract pools of capital to India from the Gulf, Europe, and Southeast Asia," said Madhu Kannan, managing director and CEO of BSE. "This index will create increased awareness on financial investments amongst the masses and help enhance financial inclusion. It will also build a base for licensing for the construction of Shariah-compliant financial products, including mutual funds, ETFs, and structured products," Kannan added. Prime Minister Manmohan Singh, during his visit to Kuala Lumpur in October, had said he would ask the Reserve Bank of India to learn more about Islamic financial products from Malaysia.

RBI set to moot apex holding co for bank groups - Deputy Governor Shyamala Gopinath

An internal working group of the Reserve Bank of India (RBI) is likely to propose the model of an apex holding company (AHC) for banking conglomerates. It is veering to the view that this structure, as opposed to that of intermediate holding company, would ensure that nonbanking entities within a banking group are directly owned by the AHC. This would reduce contagion risk and protect the relevant bank's reputation. The group headed by Deputy Governor Shyamala Gopinath is working on a draft paper which examines several global models of structuring of banking groups and lists the pros and cons.The group reckons that in the Indian context the model of apex holding company might be preferable, said a source in the know of the development. Listing out the advantages of the AHC model, the source said, “This company will be an investment company which will have control over group companies.According to this model, the bank and the non-bank subsidiaries in a banking group would be owned by the holding firm. The proposed apex holding company model is different from the intermediate holding company that banks like ICICI Bank and SBI planned to set up in 2007. "The proposed apex banking model would require amendments to existing laws and the committee is examining this aspect also," said another source. Additionally, considering that the RBI is in the process of examining granting banking license to new entrants including industrial houses the committee is examining if this structure should be made mandatory for the new entrants.

Pawar bats for urban co-op banks, seeks RBI support

Union Agriculture Minister Sharad Pawar on Saturday asked the Reserve Bank of India (RBI) to adopt a more supportive attitude toward urban cooperative banks (UCBs) while admitting that the wrongdoers did not deserve any sympathy. He said UCBs needed financial support in adopting core banking solutions (CBS) to achieve better efficiency of operations and transparency of transactions. Speaking at the national launch of CBS in UCBs here, the minister said though the cooperative sector’s share in the banking industry was just four per cent, it catered to the poor and the middle class for whom private banks were still out of reach. Pawar said it was possible that the money needed for CBS implementation could come from NABARD. “We will discuss this with NABARD and ensure that small banks do not lack support... small banks should consolidate themselves by forming strategic groups,” he said, adding change was needed in UCBs through integration of technology.

REGULATORY FAILURES

Governments in India have for long regulated many economic and other activities within the framework of the Constitution and the laws passed by the Central or state legislatures. Since no law can be so detailed that it covers all the complexities of implementation, rules and regulations are framed to enable governments to give flesh to the skeletons of overall policies. During the four decades or so when India was committed to a “socialistic pattern” of society, ministers and their bureaucrats developed regulations that controlled almost every aspect of economic activity. There was much abuse of these powers; favours were given to some, bribes smoothed the way for many, nepotism was common, financial and other support to political mentors was the price for some. This continues despite liberalization and the withdrawal of government from many areas of control. This is because decisions that could enable large profits were taken in an opaque manner. There was considerable discretion given to ministers and bureaucrats, easily subject to misuse.  Independent regulators were created to get over this difficulty. The first regulator who took over many of the government’s powers was the Reserve Bank of India, though it remained ultimately subservient to the finance minister and his office. The RBI determined monetary policy. Though there is no legislation that gives it the mandate, it uses monetary policy (money supply, interest rates) to keep inflation within limits. It also manages the external value of the rupee by buying and selling foreign currencies and increasing and decreasing the flow of rupees. It also regulates the different financial institutions.

Make phonebanking more secure: RBI

Banks will ask for an additional password from their credit card customers from the new year for any transactions conducted over phone, subsequent to a Reserve Bank of India (RBI) direction for making phone banking more secure. According to the RBI guideline, all banks will mandatorily decline any telephonic banking transactions, including the automated IVR (interactive voice response) services where customers do not have a onetime password (OTP) for such services with effect from 1 January. However, the OTP will be valid for a single use and would remain in effect for a period of two hours. Customers would need to generate a separate OTP for each IVR transaction.

RBI joins bribes-for-loans scam probe

The Reserve Bank of India has joined the Central Bureau of Investigation in probing the ‘bribes-for-loans’ scandal involving at least 15 companies, in an attempt to prevent loans given to them from burning a hole in lenders’ books.  The central bank has written to all banks seeking details of their lending to firms named by the CBI in an investigation into violations in sanctioning of loans by executives in return for bribes.
“The RBI is trying to assess the extent of exposure, the quality of these assets, and whether banks followed norms while lending to these firms.” Officials at the RBI could not be reached for comment during the weekend.

Festival of coins

A lesson in Indian history, a tour around the world, tips on how to spot fake currency — all this and more are on offer at Mudra Utsav being held at Haldiram Banquet Hall in Ballygunge Park. The event is on till December 26. The Numismatic Society of Calcutta is holding the exhibition as part of its silver jubilee celebrations.  “Individual dealers usually interact directly with collectors and charge them whatever they fancy. Here there are many dealers under one roof, so one has the option of comparing prices,” says Sandip Jain, the president of the society.  Individual collections are also on display. Basant Kumar Rathi’s British India coins date from 1835 when uniform coinage was introduced. “The double mohur was equivalent to 30 pieces of silver rupee. Few people know that till 1969 our mint used to strike these William IV mohurs as personal souvenirs,” he said.  Also on display were Saibal Basu’s collection on Mughal India, especially the Nisar coins, which were issued since Jehangir’s rule for the express purpose of showering them on subjects on occasions like the emperor’s birthday.  Kunal Chatterjee’s collection of Republic of India coins shows how the mint, from where a coin is issued, leaves its mark. “If you find a dot under the year of issue, it is from Noida, a diamond indicates Bombay, a star Hyderabad. If there is no mark, it is from Calcutta,” says Ravi Shankar Sharma, the society’s secretary.  The Reserve Bank of India (RBI) has set up a stall, from where leaflets are being distributed on how to detect fake notes.  Many had lined up before a grading agency where international coins and bank notes were being graded for a charge.

Disclose meetings agenda, RBI told

An order passed by Chief Information Commissioner Satyananda Mishra makes it mandatory for the Reserve Bank of India (RBI) to disclose pre-board meeting agenda notes and minutes. RBI has been told to draft a “disclosure policy” by February 2011 to bring about greater transparency in the bank’s functioning. The Commission said such a move “will also set the trend for other banks to follow”. The decision came on an application filed by one Kishan Lal Mittal, a resident of Mumbai, who had asked from RBI the copies of the minutes of the meetings of governing board, board of directors, committee of directors of the central bank from April 2007 and information regarding the complaint handling procedures followed by it against banking/non-banking companies.  RBI’s Public Information Officer said the information was “voluminous” and would take a long time to furnish, which would result in wasting public money. What is more, RBI argued that providing the information “would amount to disclosure of information that could prejudicially affect the economic interests of India since RBI and its committees often deliberated on economically and financially strategic matters”. “We direct the CPIO to bring it to the notice of the competent authority in RBI to prepare its disclosure policy in respect of not only the minutes of the board and other meetings, but also in respect of all other information held by it in tune with the provisions of the Right to Information (RTI) Act and post this policy on its website,” Mishra said, while asking RBI to comply with the order by February 2011. “Once RBI makes it clear which information it would not disclose under the exemption provisions of the RTI Act, it would be clear to everyone what all information can be expected to be disclosed,” he said. “Such clear enunciation of the negative list of items/classes of information in conformity with the exemption provisions of the RTI Act would remove all doubts in the minds of the officers of the bank about what they must disclose and which they must not. This would minimise the use of the appellate mechanism and bring in much greater transparency in the functioning of the apex bank. It will also set a trend for other banks to follow,” Mishra added. RBI had argued initially that it be placed on the list of authorities exempt from the RTI Act. The government turned down the request.

Banking Laws – Need to change

There are several legislations that cover India’s financial sector. The Banking Regulation Act 1949, The Bank Nationalisation Act, 1970, The State Bank of India Act, 1955, The Reserve Bank of India Act, 1934, all regulate different segments of the sector, making regulation unwieldy. A comprehensive overhaul is long overdue. Nine months ago, the government announced its intent to form a Financial Sector Legislative Reforms Commission but nothing concrete has happened yet. The urgency to overhaul these laws cannot be overstated as India integrates with the global economy and complex products are introduced.

More than onion hike, pricey protein items are the problem – Dr.Gokarn

The Reserve Bank of In dia is seriously worried about the enduring nature of high prices of protein items, which it fears, carries a risk of spilling over to more generalised inflation. This, together with a rise in the prices of commodities globally, may force its hands to hike key policy rates in its quarterly review in January 2011. "Prices of protein items, specially milk, fish, eggs and meat that are not sensitive to monsoon, have been rising steadily. When this happens, and there is a trend, it carries a risk of spilling over to generalised inflation,"  said Subir Gokarn, Deputy Governor, Reserve Bank of India.

Third Quarter Review of Monetary Policy 2010-11 on January 25, 2011

Dr. D. Subbarao, Governor, Reserve Bank of India will announce the Third Quarter Review of Monetary Policy 2010-11 on Tuesday, January 25, 2011.  This will be done in a meeting with the chief executives of major scheduled commercial banks at 11.00 a.m. on January 25, 2011 at the Central Office, Reserve Bank of India, Mumbai.

RBI fines Rupee Co-op Bank

RBI has imposed a monetary penalty of Rs 5 lakh on Rupee Cooperative Bank, Pune, Maharashtra for violation of RBI guidelines. The bank had violated RBI directives by purchasing cheques beyond the ceiling of Rs 0.25 lakh in current accounts.

Bank staff oppose HR policies' recast

All India Bank Employees Association has termed the recommendations of Khandelwal Committee on recast of HR policies for PSBs detrimental to the interest of bank employees. The association will protest march to Parliament on February 23.