Should the RBI work in tandem with the government’s priorities?

.......The finance minister offered a preview in a recent interview, when he opined that the “government and monetary authority must point…and walk in the same direction. As we take steps on the fiscal side, the RBI (Reserve Bank of India) should take steps on the monetary side.” Since RBI meets to decide the course of its policy rate on 30 October, this is a clear direction to its choice then, notwithstanding that September inflation figures are yet to be known. The question, however, is which fiscal steps is the central bank expected to match?.......

Read - Mint

A whole new way of lending: The dawn of e-microfinance

.......Kiva has been trying to evolve an India-specific business model for quite some time. The main challenge came from the Reserve Bank of India (RBI), which does not allow foreign nationals to lend directly to Indians. Thus, Kiva had to tweak its peer-to-peer lending model. The money raised from lenders in Kiva had to come in as external commercial borrowings (ECB) to Indians. These individual loans, pooled as ECBs, had to be transferred to a microfinance agency or NGO (called field partners), who, in turn, could lend to actual micro-borrowers. Another, RBI regulation requires that loans made to non-government microfinance institutions have a minimum term of three years. .......

Read - BS

Boost domestic growth to counter weak global signals: Gokarn

CHENNAI, OCT. 2: The global economic condition is still bleak, and according to most researchers the recovery is not going to happen any time soon. In this backdrop, appropriate domestic policies to develop the large domestic market and stimulate domestic growth would help offset the negative forces emanating from the global economy, said Subir Gokarn, Deputy Governor, Reserve Bank of India. Gokarn said this while delivering the 33rd Frank Moraes Memorial Lecture on ‘Driving the economy in an era of global recovery: Unleashing growth strategies for sustainable development’, under the auspices of the United Writers’ Association, here today........

Read - HBL

Food inflation is stubbornly high, says Subir Gokarn

CHENNAI: Food inflation is "stubbornly" high and is a barrier to economic growth, Reserve Bank Deputy Governor Subir Gokarn said here today. Gokarn also said the present growth scenario suggests that appropriate domestic policies can help India to offset the negative forces emanating from global economy..........

Read - ET

NAN - The God's Good Man

I  deeply regret to advise you of the sad demise of Shri.N.A.Naganathan on October 1st in Mumbai. He was 83 years old and had served in RBI  for 35 years. He retired from  ECD. He was one of the  Founding Fathers of Trade Unionism in  RBI. The four pillars of Trade Union in RBI  were Ashish Sen, K.A.Menon, S.N.Elavia and N.A.Naganathan. N A N --as he was fondly called--- was an authority on Bank Awards, Banking Commissions, all Agreements with the Bank. In fact senior executives of the Bank would rely on him for doubts about Awards and Commissions' recommendations. He was also an authority on  ECD  problems. He was accessible at all times and countless are the persons he has helped both in RBI and outside. When Chandraiah and Manoharan--from Chennai-- wanted to meet him I rang up  N A N,  he readily agreed to meet them without any notice and we spent a profitable 90 minutes. Many in our Group would have had the chance of working with N A N. God's Good Man that he was-- he died peacefully in sleep.

As reported by P.P.Ramachandran (via e-mail)

Red Salute to comrade..........

Com. Biren Sen, 84, Passed away at his son's residence at Roorkee. He served RBEA Kolkata and AIRBEA in various capacities. He Fought for and negotiated for the working Class. His services to the Trade Union Movement will stay in the memory for ever. His services during the turbulent period, 1968 is unforgettable. 

- B.Chandraiah (via e-mail)

We condole the death of Com. Biren Sen.  I have had the opportunity to work with him as CEC member of AIRBEA.  During negotiations with the Bank and during our own discussions he was  termed as Computer of AIRBEA during 1970-80.  Even the calculations got made by the management from Super computers were being critically examined by the team led by Com Biren Sen to find the most beneficial proposal to the employees in the long run.  We salute him.

-  P D S Uppal, Chandigarh

Obituary

Mr. P. Udhaya Kumar, Retd. Asst. Treasurer, RBI passed away on 21.09.2012. 13th day rituals at his residence : MIG-100, 8th Cross Street, 4th Main Road, Nolambur, Mugappair West, Chennai – 37. Mobile: 91766-51500.

The Hindu

Allahabad Bank gets new CMD

Shubhalaxmi Panse is the new chairperson and managing director of Allahabad Bank, following the government orders on her appointment. Panse has took charge of the Kolkata-based public sector bank on October 1. Earlier she was working as a executive director at Vijaya Bank.

BS

Let RBI Appoint Auditors for Private Banks,

New Delhi: Accounting regulator has urged the government to let the Reserve Bank of India appoint auditors of private banks, citing the inherent conflict of interest when auditors are chosen by the bank management. The Institute of Chartered Accountants of India (ICAI) has in a letter to the finance ministry and the ministry of corporate affairs urged ICAI has urged the government to allow independent regulator such as the Reserve Bank of India to appoint of auditors of private banks.........

Read - ET

A false dawn

....... ten of India’s top bankers, while meeting senior officials of the Reserve Bank of India, said that companies were continuing to keep capital expenditure on hold, concerned about business prospects. Their pipelines of sanctioned lending, the bankers agreed, were fast contracting; nobody wanted to borrow. One was quoted as saying that the top 100 companies would believe that “nothing has changed despite the reforms”.......

Read - BS

RBI hurdle for insurance broking

.......IRDA norms require the broking firm to be a legal entity under its jurisdiction. This means that banks would need to float a subsidiary to acquire a broking licence. According to regulatory sources, RBI does not want banks to float new subsidiaries in the financial sector, particularly ones where the contingent liability would be high........

Read - TOI

Will the RBI and IRDA dump their principles and follow the FM’s diktat?

Finance minister P Chidambaram wants a slew of changes which will mean getting the banking and insurance regulators to do what he says. Can he? The FM’s other moves, too, may not have many takers......

Read - Moneylife

Private banks fare better on asset quality, says RBI

The situation regarding non-performing assets has deteriorated significantly for the public sector banks (PSBs) over the last one year, the Reserve Bank of India (RBI) said in a report. According to the ‘Profile of Banks 2011-12’ released by the RBI, while the net ratio of non-performing assets (NPAs) of scheduled commercial banks (SCBs) rose from 0.97 per cent in 2010-11 to 1.28 per cent in 2011-12, it has been primarily driven by the rise in NPA levels of the PSBs......

Read - Indian Express

RBI may use rupee rise to beef up its forex reserves

Appreciating rupee will be an opportunity for the Reserve Bank of India (RBI) to beef up its foreign exchange reserves. After May 2008, India’s foreign exchange reserves have not crossed $300 billion and reserves are not more than 7-8 months of India’s imports, down from the total equivalent to 12-months’ imports........

Read...........

US Fed chief Ben Bernanke likely to discuss opening up financial services with RBI's D Subbarao

.......The two central bank chiefs will meet at the 25-storey headquarters of the Reserve Bank of India in Mint Street on October 10 during what could be the first visit by the head of the US Fed to India. Neither of Bernanke's celebrated predecessors, Paul Volcker (1979-87) and Alan Greenspan (1987-2006), set foot in India, the RBI spokeswoman confirmed. It's not clear if US Fed chiefs from earlier eras have visited India. .......

Read - ET

FSLRC moots new model for financial sector to ensure consumer protection

Read - ET

Parekh panel to submit report on infra funding to PM tomorrow

....... The Committee would suggest measures on issues for financing like sourcing of overseas funds, availability of debt and equity and formulation of comprehensive data. While setting up the HLC on Financing Infrastructure, the government had said in November 2010 that it would have a tenure of 18 months. The other members of this committee includes R Gopalan (former Secretary, Department of Economic Affairs), D K Mittal (Secretary, Department of Financial Services), IRDA Chairman J Hari Narayan, PFRDA Chairman Yogesh Agarwal, RBI Deputy Governor Subir Gokarn, SBI Chairman Pratip Chaudhuri and LIC Chairman D K Mehrotra.......

Read........

Yes and No, Mr Finance Minister

Differences between the government and the RBI are inevitable as they work on different time frame

.......For a minister who is anxious to see results and is eager to force the pace, it might be annoying to find the RBI march at a different pace. But it is inadvisable to ignore the inexorable logic of why countries the world over have institutionalised the present system of checks and balances; one that gives central banks the liberty of striking a different pace from that of their elected governments, albeit within a common overall framework. Dissent is the essence of a democracy, whether between individuals or between a government and the central bank........

Read - ET

RBI may ask banks to improve monetary transmission

The Reserve Bank of India (RBI) might ask banks to improve monetary transmission by cutting lending rates in response to the reduction in cash reserve ratio (CRR) it had announced in September. It had cut CRR by 25 basis points to 4.5 per cent of banks Net Demand and Time Liabilities. CRR is the proportion of total deposits a bank has to keep with RBI as cash.......

Read - BS

What to do if a fake note pops out of an ATM?

.......Asked to comment what a person was supposed to do in case he drew a counterfeit note from an ATM, Banking Ombudsman M. Sebastian told The Hindu that “such things should not happen.” The customer, he said, should lodge a police complaint, take up the issue with the bank concerned, and write a letter to the Issue Department of the RBI for appropriate action. “We do have checks and controls and validation system to be followed by all the banks before loading cash into ATMs,” he clarified........

Read -The Hindu