........ I salute Chief Justice N V Ramanna for his strictures against the Sanskriti School. He said, "What is the necessity for various state governments and ministries including the Defence Ministry and the Reserve Bank of India to fund the school run by officers' wives?" These 'wives' are all married to bureaucrats and the Chief Justice made it clear that he disapproved of them trying to 'create a separate island for children of these bureaucrats'.........
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.
Monday, October 28, 2013
Finmin rushes with bank appointments
.......While
it is unclear what has prompted the rush to conduct interviews, sources
suggested that the ministry is keen to finalize the appointments before
the next general elections. Bankers, however, fear that the exercise
may go waste if the next government decides to review the decisions of
UPA-II. The interviews are technically irrelevant as the Central
Vigilance Commission has in the past frowned upon the idea of giving a
blanket clearance several months in advance. But, that is not the only
reason for controversy..........
Will India align with IFRS?
........A major issue for Indian regulators is the lack of IFRS knowledge and experience in the accounting and auditing profession here. There is a need to align the industry-specific accounting guidances issued by various regulators. For example, the Reserve Bank of India issues guidance for banking companies, the Insurance Regulatory and Development Authority issues guidance for insurance companies, the Central Electricity Regulatory Commission issues guidance for electricity companies, SEBI issues guidance for listed companies, and the Ministry of Corporate Affairs too issues certain guidance.............
Fourteenth finance commission on Gujarat visit
......The Commission was set up by Government of India early in 2013 and is expected to submit its report by October, 2014. The period for which the Commission will recommend share of States in the Central taxes will be from 1.4.2015 to 31.03.2020. The Chairman of the Commission is Dr.Y.V. Reddy who was the Governor of Reserve Bank of India for five years till 2008. The other members of the Commission are ..........
The tortuous road to new bank licences
.........In any case, the process of awarding a new bank licence was never expected to be smooth. Among the several controversial issues, allowing large industrial houses to start a bank has been the most contentious. A very large number of respondents to RBI’s discussion paper were not in favour of awarding licences to big business houses. However, such policy issues have been decided. A few large industrial houses will be given permission to start banks. Amidst the riveting interest on the subject, two related developments merit attention..........
Takeover by foreign banks will be delayed
.............. "To allow takeovers by foreign banks means that a change in policy is needed, which can happen only if the Cabinet approves the increase in the cap in the banking sector,"..............
RBI queries applicants, regulators on new bank licences
.......As part of this process, RBI has asked many applicants to provide further details about their promoters, equity structure, financial inclusion programme, proposed banking model, among others, sources said. RBI is also seeking details from other regulators, including capital markets watchdog Sebi and insurance regulator IRDA, about the businesses of the applicant entities under their respective jurisdictions, they added. With regard to some applicants, RBI has also sought to know details about source of funds and compliance to the structural norms proposed for new banking players............
How new banks can win biz
.........It is not merely the right kind of leadership but also the right size at the start which is critical to deliver optimal execution. Banks need to maintain a balance between creativity and control of risk. The ability to use information and not just technology effectively is an imperative. Banking is information business and as such good quality data is central to any business. Banks are still in love with their management information system, which is essentially backward looking. They can gain immensely by deploying predictive analysis and not just stick to descriptive analysis. Technology and information are two distinct disciplines. New aspects such as data mining can make a huge difference. No business model will succeed without customer focus..........
Banker’s Guide to Building a Robust Institution
......But
leaders of new banks need to question what their strategy will be. Many
believe that a mix of an underpenetrated banking system combined with
an industry where 75% of the players are inefficient (PSU banks) makes
the Indian banking industry an attractive investment opportunity. They
are right. Can this really be their principal strategy? Do other leaders
think they have the same self belief and crushing work ethics that the
promoter of the bank they cite has? I doubt it...........
Taking Women on Board a Tough Act for Cos
...The rush is likely to intensify as companies
have a limited pool to searchfrom,said SureshRaina,senior partner at
Hunt Partners, an executivesearch andboard advisory firm. It doesn’t
help that top women bankers such as Chanda Kochhar and Shikha Sharma
can’t be tapped — Reserve Bank of India doesn’t allow bank CEOs to be on
boards of other companies except by rare special permission. Of India’s top 100 listed companies, 34 don’t have any women directors, according to data........
Agricultural Education & Knowledge Management
......The opening essay argues how sustainable agriculture requires the utilisation of both the codified knowledge of the researchers and tacit knowledge of the farmers for its development and adoption. Organisers need to access and apply new knowledge keeping in view the rich practical experience of farmers. The chapter on Agricultural Education emphasizes that it should reflect a right mix of scientific technology and orientation with an international dimension. Academic institutions should include representatives of industry and other employers on visiting committees, on advisory boards and in strategic planning. An analysis of the various phases of agricultural development in India after 1947 has shown that the focus has altered from human resource management to technical management to extension management.........
Read - FPJ - Book review by P.P.Ramachandran
Fed, RBI to drive stocks this week
.......For the week ahead, two central banks will play a key role in deciding the direction of Indian markets. The US Federal Reserve, in its two-day meeting ending Wednesday, will mull over the future of its massive bond purchase programme known as quantitative easing (QE)3. On Tuesday, the Reserve Bank of India (RBI) will decide whether to increase its key policy rate..........
Capital infusion in PSBs rests on December review
Rajeev Takru, secretary in the Department of Financial Services, said banks weren’t finding it difficult in carrying out their lending operations. In December, the Centre would review the performance of public sector banks in lending to the retail segment — consumer, automobile and home loans — before deciding on infusing additional capital in these.............
UPA's infinite wisdom: Minister seeks 2 more digs, ‘airlift’ of 4,000 tonnes of gold
....In a letter dated October 18, the minister of state for agriculture wrote to Culture Minister Chandresh Kumari Katoch referring to "two more treasures which need to be acted upon without any time loss". He asked Katoch to "consider sending a joint team" with representatives of the Ministry of Finance, Reserve Bank of India, ASI and the Geological Survey of India...........
Saturday, October 26, 2013
How, and How Not, to Analyse Bank Financial Performance - V.K.Sharma
........While on the how-and-how-not of bank financial performance analysis and evaluation, a tailpiece on banks' reporting of 'total business' will not be out of place and context. Typically, in India, it is routine for banks to report total business as the sum of deposits and loans to give analysts and investors a sense of growth in banks' business. But this is not only at variance with the international practice but also intellectually and conceptually flawed and vitiated for all ' business ' is about generating revenues and returns for shareholders and it is ' total assets' that precisely do that and it is tautological and axiomatic that there is no way revenue generating assets can exist and grow without corresponding expense contributing liabilities ! ..........
Rupee is stable when depreciates in orderly manner: KC Chakrabarty
......"When the rupee has to depreciate, it has to depreciate orderly. That is the meaning of stability. Stability does not mean that rupee will be at this particular level. What we are saying that if rupee has to depreciate or appreciate, it has to do so in an orderly manner, which is not happening right now. It goes to Rs 70 and then it comes to Rs 61," ..........
RBI’s Dy Gov points to agri models of Punjab, Gujarat to check food inflation
......"If we can bring the agricultural model of Punjab, Haryana in eastern Uttar Pradesh and Bihar, which have fertile soil and figure out a way to organise people, then it can increase productivity... I am told that Gujarat has 10% growth rate in agriculture, then why can't Maharashtra achieve the same GDP in agriculture?" Chakrabarty said, while delivering the keynote address at the Knowledge Summit '2013', .............
Do data have a context? - T C A Srinivasa-Raghavan
...........This means that the regulatory, external, technological, environmental, social or the political environments, singly or together, do influence the nature of activities. So, it is necessary to be very careful about how policy uses data. If the context is not identical we can - and do - end up getting the wrong policies. But then, all past data have some regulatory, natural, external, technological, social or the political context. Indeed, in India the problem is not confined to the contextuality of the data, which is a universal problem. Here it is exacerbated by bad data as well............
Need to infuse professionalism
My View on "How the RBI can be made more accountable – Part 2":
Issues raised in this and the previous article are very relevant in the present Indian context, not only for Reserve Bank of India, but across government, statutory bodies, public sector and private sector organisations or governance in general. Accountability is an important issue. Self-regulation and independence of organisations within the mandated role are also issues needing attention. As brought out here, appointments to board and downwards and tenure of appointment are important as also are the quality of people who take key positions, adequacy and transparency in compensation packages and so on. If we look back, we got the benefit of the services of Seshan, Vinod Rai, APJ Abdul Kalam, Bimal Jalan, Dr Manmohan Singh and now Dr Raghuram Rajan (the list is illustrative), by ‘accident’ rather than by appropriate succession plans or right exercise of choices. We should, at this stage, pool talent and make succession plan, an opportunity to infuse professionalism in managing organisations. Open debates like this initiated by Moneylife will expedite moving towards this objective. Refinements in legislation or issue of guidance by ministries should be to achieve well set out objectives and not to silence dissent.
- M.G.Warrier
A very good move
My View on "Banking woes! ombudsman coming incognito":
This is a very good move and can be followed by Ombudsmen attached to all regional offices of RBI. I would be extremely happy, from the point of view of customers, if this is immediately implemented by the new incumbent in Chennai, Shri Chiranjivee, who has recently taken over. The office of the Ombudsman in Chennai came out in poor light recently in one case involving a small private sector bank with its headquarters in Kerala.
- A.Chandramouliswaran
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