Improving Capacity is Key to Financial Empowerment

..........A lot has already been said about the Jan Dhan Yojana; by the eloquent prime minister himself and then by advertisers, commentators and other worthies. It is phenomenal as far as communication and intent goes. It warms the heart to know that the bullet trains will not bypass the small hapless woman, but that there is a plan to empower her in plastic and reward points.It is difficult to argue with the potential of financial inclusion to significantly change lives and create long term, sustainable value. And yet, it will be a while before we know if the Yojana triggered or delayed financial inclusion.........

Read - ET

`The Worst is Over for Banking'

.............We have been working on how to integrate the two generations among the workforce.The challenge was to use the experience of old staffers while not killing youngsters' enthusiasm. All our team members are home grown, barring me and one senior in the treasury. That was a conscious choice for two reasons. We believe there is a lot of talent inside and if we hire youngsters and give them the exposure, they are more wedded to the institution. This has worked.....

Read - ET

SBI's operations disrupted in Kashmir valley due to floods

......"Banking operations in Srinagar are completely disrupted due to floods. We have 66 branches in the valley. Out of total branches, minimum of 60 are supposed to be closed, while there is no connectivity with rest of branches which are located on the outskirts, so we are not sure whether they are functioning," .......

Read - ET

It is up to bank to recover money from guarantor or borrower: NCDRC

...........National Consumer Disputes Redressal Commission (NCDRC), presided by Justice J M Malik, dismissed the complaint filed by Kerala resident R S Vasan against Canara Bank, while rejecting his contention that he was not a guarantor and that for the recovery, the bank should have first approached the family of the borrower who had died. "It is well-settled that it is the choice of the bank to recover the money either from the guarantor or the borrower. It is abhorrent from the principles of law to say that the bank must first of all recover the money from the borrower and thereafter it can proceed against the guarantor," NCDRC said. ...........

Read - ET

RBI says management, group companies can also be named as wilful defaulters

..............."While dealing with wilful default of a single borrowing company in a group, the banks and financial institutes (FIs) should consider the track record of the individual company, with reference to its repayment performance to its lenders. However, in cases where guarantees furnished by the companies within the group on behalf of the wilfully defaulting units are not honoured when invoked by the banks/ FIs, such group companiesshould also be reckoned as wilful defaulters,” RBI said in its clarification...........

Read - Moneylife

What deters investment in India today?

.........An explanation for the slow growth rate of manufacturing in India, as recently offered by the Governor of the Reserve Bank of India (RBI), runs in terms of the ‘poor risk-appetite’ of the country’s industrial sector. This not only overlooks the cost of credit, considered very high even by the Ministry of Finance, but also aspects concerning the portfolio balance of firms in the corporate sector. Looking at the balance sheets of Indian corporates, as per RBI estimates, one notices a decline in the .........

Read - The Hindu

Wary banks park excess liquidity with RBI at 7%, but won’t cut deposit rates

.......“It is difficult for us to cut rates when inflation is high. Depositors expect a real rate of return. Deposit rates will start trending down when inflation trends down,” said State Bank of India chairperson Arundhati Bhattacharya. Bankers are wary that if they cut deposit rates on the back of this transient improvement in liquidity, depositors may pull out money as retail inflation remains near 8%. Year-on-year deposit growth was 13.58% as of August 22 while credit growth was 11.04%, a four-year low........

Read - FE

SBI sends wilful defaulter notice to Vijay Mallya

............"We have already sent a notice to KFA (to declare it as wilful defaulter). There is a mandatory time that needs to be given to them to respond and that time is currently on," said Arundhati Bhattacharya, chairperson of SBI. SBI, which is the lead bank of a lender consortium to the crippled carrier, has an exposure of over Rs 1,600 crore.............

Read - Deccan Herald

Reserve Bank to pick talent via UPSC-like test

...........“Starting from 2015, there shall be common recruitment for all core functions of the bank,” the RBI said in an internal report on HR initiatives. At present, it recruits officers and support staff for core and non-core functions through different examinations, such as the Grade ‘B’ officers level exam. The RBI now has about 17,000 employees. The proposed common recruitment will not only cover traditional areas such as economics and statistics but also include niche skills, such as risk management, financial markets trading, accounting, legal, human resources management and counselling. The officers that are recruited will have a common seniority. In effect, it will be like the common cadre under the All India Services of the Union Public Service Commission...........

Read - HBL

Thoughtful analysis

My View on "Pension reforms miss the wood for the trees": 

This is a thoughtful analysis of an issue which is viewed by different people depending mainly on the individual age and job profile. Having said that there is need to debate the inadequacies in the old age care and social security systems considering the alarming rate at which the population of ‘senior citizens’ is growing and the disgraceful manner in which that category is being described as a burden on the ‘working’ and ‘earning’ population. C R L Narasimhan writing in his column Financial Scene on July 21, 2014 had referred to a response from me and said that The Hindu will revisit issues like the NPS, the method of calculating pension and the capping of the minimum wage. Seen in this perspective, the issues like inadequacy of returns on retirement savings, the unprofessional way in which funds with EPFO and NPS are managed raised here and the greedy manner in which government look at and handle funds with FPFO, LIC and public sector organizations should be further debated for suggesting corrective measures. 

- M G Warrier, Mumbai 

KRISHNA PUBLIC SCHOOL BAGS RBI QUIZ CONTEST

..........The Chhattisgarh round of the quiz received a very good response from schools all over the State and more than 70 teams participated in the preliminary rounds. While addressing the participants as chief guest for the event, RSU Vice-Chancellor Dr Sheo Kumar Pandey highlighted the role played by television in promoting modern day quizzing. He appreciated the efforts made by RBI and also posed two quiz questions to the participants. Dr Sanjeev Sharma, General Manager and Officer-in-Charge RBI, Raipur, in his welcome address outlined the financial literacy endeavours of RBI of which RBIQ was an important component. He also emphasized upon the important role played by financial literacy in the financial inclusion programs of RBI............

Read - The Pioneer

SBI launches multi-currency international debit card

.......“To begin with, the prepaid debit card will enable customers to load four currencies – US dollar, euro, Great Britain pound and Singapore dollar. More currencies will be added going forward as the card has the facility to be loaded up to 12 currencies, S K Mishra, Deputy Managing Director, SBI, said. Mishra added that outbound travel from India is growing with 35 million people travelling outside India. “This is expected to grow to 50 million in 2020. Consumers expect smart products to address their travel needs. The multi-currency foreign travel card gives an option to load currencies of choice at SBI’s branch network,” he said...........

Read - HBL

SBI seeks RBI’s nod to launch contact-less debit cards

The country’s largest lender State Bank of India today said it is planning to launch contact-less debit cards which would enable customers to carry out some transactions without entering the pin number. The bank has sought Reserve Bank’s permission for this. “Right now, for any card which has to be used, a customer has to put in the pin number. Some exception has to be made as for lower amount deals like buying a Metro or bus ticket, where he can simply show the card and get in......

Read - HBL

LVB hikes interest rate on savings accounts with over 1 lakh balance

.........“An increased rate of 5 per cent will be offered to all customers on entire balance (Rs one lakh and above), calculated on a daily basis. It means that even if a customer keeps balance of Rs. 1 lakh and above in his savings bank account for a single day, he will be paid interest at the rate of 5 per cent per annum for that day,” the old generation private sector bank said in a statement.............

Read - HBL

Kotak Bank appoints woman director on board

Kotak Mahindra Bank has appointed Farida Khambata as additional director on its board with immediate effect. The decision was taken at a board meeting on Sunday, September 7, Kotak Bank said in an exchange filing.............

Read - HBL

Arun Thiagarajan resigns from ING Vysya Bank

........In a notice to the BSE, the Bangalore-headquartered private sector bank said it is taking necessary steps to appoint a successor in due course. Thiagarajan had joined the bank, which has 547 branches and about 10,000 employees, in 2010..........

Read - HBL

Karnataka Bank appoints new additional director

Karnataka Bank Ltd has appointed BA Prabhakar, former Chairman and Managing Director (CMD) of Andhra Bank, as an Additional Director of the bank. The bank informed the BSE on Monday that the board, which met on September 6, has appointed Prabhakar as an Additional Director of the bank..............

Read - HBL

Women and the Funding Challenge

..........For many first-generation women entrepreneurs, securing funding comes with a gender baggage. In general, banks want women to cough up stiff collateral or rope in a male guarantor. “Women are still asked (by banks) if husband or father will be the guarantor,“ says Zankhana Kaur, director, TiE Stree Shakti, Mumbai, which promotes women entrepreneurship. Elsewhere, early-stage investors quiz them on, besides their business idea, personal matters like marriage, relocation and kids, and what would happen to the business in their event; these are things they would rarely ask a man, say women entrepreneurs who have tried to raise funds through formal channels. “While there has to be due diligence for a business case, you cannot have it as a check list,“ says Kaur..........

Read - ET

New highways to economic growth

..........Atri Mukherjee, in a report titled “Regional Inequality in Foreign Direct Investment Flows to India: The Problem and the Prospects” (2011), written for the Reserve Bank of India (RBI), says that for the period between 2008-2009 and 2011-2012, these six States received 70 per cent FDI; Delhi and Maharashtra between themselves accounted for 50 per cent FDI. To get over this inequality, it is important not just to develop other States which have been left behind, but also encourage their participation in reaching out to the outside world. Here, Mr. Modi would do well to take a leaf out of the book of both the U.S. and Chinese models of sub-national participation in economic diplomacy, where provinces which were not developed were given special attention......

Read - The Hindu

RBI norms on Basel III instruments are credit positive: Moody's

............“They will make the instruments more attractive to investors, broaden the investor base for additional Tier 1 (AT1) securities to include retail investors and allow banks to have a higher proportion of AT1 capital in their Tier 1 capital,” Moody’s said in its credit outlook report..........

Read - HBL