...The Parliamentary Standing Committee on Finance, headed by former finance minister and BJP leader Yashwant Sinha, finalised its report on the new bank licences at its meeting here Friday. According to sources, the most of members opposed the bank licences going to corporate houses and the same concerns have been reflected in the report which will be submitted to Lok Sabha Speaker Meira Kumar soon. The members felt that since there is no such practice to give bank licences to corporate houses anywhere in the world, India should not be an exception.........
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.
Saturday, September 28, 2013
‘Govt won’t be kind to wilful defaulters’
..Non-performing
assets (NPAs) are something that nobody would like to encourage, and
certainly we are not interested in encouraging them or in supporting
them or holding out a fig leaf of an apology on behalf of NPAs. There
are reasons why they suddenly appear to have grown. We have created a
system of system-based NPAs, which means the system itself throws up
NPAs. Now that system-generated NPAs have started coming out, some
balance sheets have taken a hit..............
FM backs priority sector tag for exports
Finance
minister P Chidambaram has said that his ministry supported the demand
for including exports under priority sector finance and will take up the
matter with the Reserve Bank of India. Priority sector refers
to the business activity identified by the regulator with mandatory
lending targets. Banks not meeting the targets have to invest in
low-yielding government funds for that sector......
Read - TOI
Read - TOI
Decoding Rajan’s Frankfurt speech: Why central banks fuel bubbles
....Rajan in his Frankfurt speech for a change agreed with Greenspan. As he said “We should wonder whether lower and lower interest rates are in fact part of the problem, I say I don’t know.” It is easy to conclude from the statements of Greenspan as well Rajan that central bank governors do understand the perils of printing money to keep interest rates low. Given that why are they still continuing to print money?............
RBI governor says forex reserves comfortable
.......Rajan, who was speaking at a seminar in Frankfurt, reiterated the policy stance of the central bank was “neutral” at this point in time, though he said high and persistent retail price inflation was a concern. “At this point, we are neutral, we will see how things develop,” he said when asked about the central bank’s policy stance. The RBI chief added inflation was not just due to higher food prices. “Unfortunately, there is still some inflation when you strip out the effects of food and energy. Therefore, it is not just food, it’s other factors also, which are driving inflation,” Rajan told reporters on the sidelines of the conference............
Manish Chokhani backs RBI governor; says India story intact
Just for the near-term talking about interest rates how did you read the recent move from Reserve Bank of India ? There was a lot of optimism that maybe Raghuram Rajan’s rein will mark the beginning of softer interest rates, something which a lot of people think is a perquisite for the kind of bull market that we saw few years back. Do you get the sense that we will probably have to live with fairly high interest rates for a protracted period of time even from here?.............
Mamata unhappy with Rajan Committee Report
..........."I am deeply shocked and anguished by the outright and discriminatory approach of the Central Government towards Bengal in entertaining the Raghuram Rajan Committee Report," Mamata stated on her official Facebook page............
Rajan panel wasn't unanimous in framing underdevelopment index
There is some consolation for Bharatiya Janata Party’s prime ministerial candidate and Gujarat Chief Minister Narendra Modi: Not everyone in a panel headed by Reserve Bank of India Governor and former chief economic advisor Raghuram Rajan had favoured the inclusion of Gujarat in the list of less developed states........
Raghuram Rajan Committee report on states 'least developed'
.......Had this come to me as a paper submitted for publication and sent to me for "refereeing”, I would have sent it back, asking for substantial revisions. It is a least developed report. And the tragedy is that, unlike a journal paper, there will be serious discussions around it.
Friday, September 27, 2013
Deutsche Bank award for ‘financial economist’ Raghuram Rajan
Line of Credit
...........When the central banker offers himself as the only game in town, in an environment where politicians only have choices between the bad and the worse, he becomes the only game in town. Everyone cedes the stage to the central banker, who cannot admit that his tools are untried and of unknown efficacy. The central banker has to be confident, and will constantly refer to the many bullets he still has even if he has very few. But that very public confidence traps him because the public wants to know why he is not doing more................
He deserves it...........
My View on "Raghuram Rajan brings Wall Street flavour to Mint ...":
"Raghuram Rajan brings Wall Street flavour to Mint Street,
This is definitely no mean feat,
For this he deserves a wholesome treat,
We have no doubt he is in the right seat.
- Frank R Misquith
Vijaya Bank opens 10 branches in Mandya
........Speaking at the financial inclusion outreach programme organised by Vijaya Bank in Adichunchanagiri in Mandya district, RBI Deputy Governor K.C. Chakrabarty stressed on the need for the rural people to move towards formal financial mainstream so that the excluded sections of society could get the benefits of banking services. He also emphasised the need for inculcating the habit of savings among the rural people and called upon them to get credit facilities from banks to improve their living standards. He also lauded the efforts of Vijaya Bank in bringing the hitherto deprived sections of society into banking fold............
Banks urged to ensure large firms to make payments to SMEs on time
RBI shouldn't micromanage, says Jalan
.....At the convention, though unwilling to comment about Reserve Bank of India (RBIs) recent diktat on zero percent EMI schemes former RBI governor Bimal Jalan told CNBC-TV18's managing editor Shereen Bhan that the central bank should not undertake micro-management of the policy. “Reserve Bank or the central bank of India should not be in the business of micro-managing,” said Bimal Jalan, former governor, RBI..................
Will look into new bank licences after RBI scrutiny: Jalan
The proposed external committee will look into new bank licence applications once RBI completes the basic scrutiny, said Bimal Jalan who heads the High Level Advisory Committee (HLAC). "Work is still in progress. The Reserve Bank has received applications. It is doing first round of scrutiny. Then we will see how we go about it," Jalan said at AIMA event .........
RBI prods banks to bring in more dollars
................In a separate release, the RBI assured banks that it would take appropriate measure to infuse liquidity, including bond purchases under open-market operations, if needed. “The Reserve Bank is closely and continuously monitoring liquidity conditions and will take actions as appropriate, including open-market operations, to ensure that adequate liquidity is available to support the flow of credit to productive sectors of the economy,” the central bank said...............
SBI clamps down on trade union activity
State Bank of India, the country’s largest lender, on Wednesday terminated the so-called check-off facility to its officers’ federation in its biggest clampdown on trade union activities in decades. Under the check-off facility, SBI used to remit the subscription fee from the salary accounts of member officers to the account of the association on the day of salary payment, typically the 25th of every month. This is the latest of a series of steps the SBI management has taken to control the officers’ union. Since August last year, SBI has taken action against officers engaged in trade union activities, including transfers to far-off locations and issuance of chargesheets.......
SBI chairman’s post: Arundhati Bhattacharya’s name cleared by FM
Mumbai: Finance minister P. Chidambaram has cleared the name of Arundhati Bhattacharya, managing director and chief financial officer of State Bank of India (SBI), for the post of chairman of the bank, according to two people familiar with the development. Bhattacharya’s name will be finalized for the SBI top job only after the appointments committee of the cabinet (ACC), headed by Prime Minister, gives its clearance. The announcement is likely by the end of this month. If indeed that happens, she will be State Bank’s first woman head....
My View on "7th Pay panel formed, retirement age may go up 62 ...":
Viewed from any angle, this is a welcome move. This time, the Commission will not have to hurry through the processes of consultations and drafting as the effective date of implementation will be January 1, 2016. It is good news that Centre will be giving some thought taking the views of stakeholders, even before the constitution and announcement of Terms of Reference (TOR). It would have been ideal, if Centre appointed a National Wages Commission to coordinate the efforts of VII Pay Commission and wage negotiations across public and private sectors to ensure some clarity of approach in ensuring some broad sectoral relativity and relationship of compensation packages with skill and career progression.
The next wage settlement in government, public sector and organised sector in general will have to factor in, among other things, the following ground level realities:
i) After the introduction of New Pension System (NPS), there are two categories of employees in all organisations. The claims of employees covered by NPS for higher wages factoring in the reduction in real wages on account of subscription to NPS and the need to save more to ensure income comparable to the pension available to the employees who joined earlier than them are genuine.
ii) Industry parity. Workmen staff/Officers doing similar work in different categories across public and private sectors will have to be given comparable wages, additional compensation being provided for extra work.
iii) Outsourcing. Let us not forget a couple of recent industry experiences including that of Maruti. Employees who are on regular employment, even on contract, will have to be given clarity about their absorption in the institutions and a living wage till then. Circumventing labour laws is not in the long term interest of government/industry, besides the social security implications of such short-cuts.
iv) Institutions will have to revisit the recruitment policy (right from basic qualifications needed), career progression (traditional path is no more relevant or practical) and placement policy (rural posting, need for special skills etc.)
v) There is no escape from hiking the retirement age across sectors. This will even save costs on post-retirement care. As healthy retirees will in any case retaining some jobs, the argument emanating from the fear of job-reduction on raising retirement age is no longer valid.
M G WARRIER, Mumbai
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