Former RBI Deputy Governor Shyamala Gopinath joins Ernst & Young

MUMBAI: Shyamala Gopinath, former Deputy Governor of Reserve Bank of India, has joined the global advisory council of professional services firm Ernst & Young, signalling the growing significance of the Indian market for the Big Four accounting firms and underscoring the intention of the company to realign as per strict governance norms globally.  Gopinath has been appointed as an independent non-executive to the top governance body of the global assurance, tax, transaction and advisory leader, to advise on policy and strategy.  The appointment of one of India's leading former regulators on the global council of a professional services firm comes at a time when the European Union has suggested a draft law to split the world's top four audit firms to crack down on conflicts of interest and on shortcomings as highlighted by the recent financial crisis.  The Big Four typically refers to Deloitte, Ernst & Young, KPMG and PricewaterhouseCoopers. Gopinath is one of the five independent non-executives to be appointed by Ernst & Young. Earlier, in February 2011, the firm had appointed three independent non-executives. Concurrent with Gopinath's appointment, Ernst & Young also appointed Lim Hwee Hua, a former minister in the Prime Minister's office, government of Singapore, as an independent non-executive.  Ernst Young's global advisory council has the powers to approve appointments of key senior executives, including chairman, chief executive officer, and will also review their performances. The council shall also be involved in the management of reputational risks and other governance risks. Confirming her appointment, Gopinath said: "I am pleased to join Ernst & Young's Global Advisory Council as an independent non-executive member. This will provide me an opportunity to work together with some of the finest minds with a view to enhancing the role of professional services organisations."

ET 

Youth will determine India’s future: Subir Gokarn, Deputy Governor of RBI

This event has given an opportunity for the students to create a platform to build tomorrow’s CFOs and financial events like MONETA is the need of an hour,” he further  said. Think. Invest. Win, an annual event, organised by the students of R. A. Podar College of Commerce and Economics to drive industry interaction with academia and to create a platform to build tomorrow’s CFOs. Subir Gokarn, Deputy Governor of RBI was the Chief Guest for closing ceremony, while Yatrik Vin, Senior Vice-President – Finance & Accounts of NSE, J B Bhoria, Regional Director of RBI and Smt Supriya Patnaik, Chief General Manager of RBI were the guest of honour. While addressing students during the concluding day of annual fest, MONETA 2011 at R. A. Podar College of Commerce and Economics, here at Matunga, Subir Gokarn, Deputy Governor of RBI said that India’s future won’t simply be determined by powerful Chief Executing Officers and political leaders, but by its young people. “You are the future leaders, innovators, educators, entrepreneurs and organising such financial extravaganza like MONETA, enables students the ability and the financial acumen to handle various situations that may arise in the increasingly complex financial markets of today. This event has given an opportunity for the students to create a platform to build tomorrow’s CFOs and financial events like MONETA is the need of an hour,” he further said. At Podar, according to Dr s Shobana Vasudevan, Principle of R. A. Podar College of Commerce and Economics they strongly believe that real progress of India lies in development of rural population. “The key to this progress is connecting the villages with the modern world and bringing out the untapped potential of the larger mass. To maintain this gap, the students of Podar have resolved to impact financial literacy to those who do not have access to information but the urge to learn,” she stressed. Earlier, Subir Gokarn, Deputy Governor of RBI gave away a winner’s trophy to St Xaviers College of Arts and Commerce, Kolkata, who were declared winners of MONETA 2011. Bhopal Institute of Social Sciences were declared as the first runner-up, while B. K. Mazumdar Institute of Management, Ahmedabad were the second runner-up of MONETA 2011. According to Parth Popat, Chairman of MONETA 2011, Podar Moneta 2011 aspires to inspire students to cannily manage financial resources at their disposal through systematic planning, diligent application and judicial revision. “Our vision is to connect the theoretical knowledge of students to the real world and bring out potential financial wizards from amongst the student community, while our mission is to create a training ground for budding investors without being exposed to monetary loss,” he said. The event is sponsored by supported by National Stock Exchange (NSE), India Infoline Group, CNBC TV18, Entrepreneur, Woodland, DSP BlackRock Mutual Fund, Dena Bank, Super CFO, Close UP, Pond’s, Bright Outdoor Media Pvt Ltd and Croma.

http://www.indiainfoline.com/Markets/News/Youth-will-determine-Indias-future-Subir-Gokarn-Deputy-Governor-of-RBI/5308580200

Won an online lottery? Inform nodal agencies immediately

.......Several investors have been duped in the past and RBI has on several occasion cautioned the public not to fall prey. The latest RBI initiative goes a step further and provides a legal platform to lodge complaints regarding such incidents with ease. More complaints will help investigating authorities nab culprits........

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Bank password not so safe

Internet bank account hacking has now expanded to RBI’s much hyped One Time Password (OTP) security system. With few banks adopting OTP for online and credit card transactions, incidents of hacking have already been reported from Mumbai and Kolkata. Cyber security analysts say there are multiple risks involved in the OTP system. While a mobile service provider can reissue a SIM card, if not used for 3 months, a hacker can also avail of a duplicate sim card by producing fake identification documents. In one such case of hacking in Kolkata, the fraudsters have approached the mobile service provider with a fake voter’s ID of the bank customer and obtained a SIM card. The complainant filed under adjudication application. “The OTP has exposed the vulnerability of mobile phones in internet banking. While there is talk about poor ‘know your customer’ (KYC) procedure in the banking sector, we should not forget that KYC is equally weak in the mobile phone sector. In the Kolkata case, by the time the fraudster managed to obtain a duplicate SIM card, the original customer’s mobile phone was de-activated and even before he came to terms with the fault, the transaction had happened from his account,” cyber security adviser N.A. Vijayashankar said. In another case, the customer who had an online account went abroad and his attempts to de-register his account went in vain as the bank demanded his physical presence. Here again, his mobile number may get re-issued to a different customer by the mobile service provider. “Even if none of these compromises take place, hacking is still possible as fraudsters have been using malwares which these measures cannot thwart. Banks verify only login verification and not transaction verification. In the US, Federal Financial Institutions Examination Council (FFIEC) issued supplementary guidelines this June stating that OTP is vulnerable and explicitly states that transaction data verification should be done. Banks in our country can go for the next-generation technology which can guarantee both login and transaction verification”, said Mr Mohan Sundaram, who is CEO of firm Red Force Lab, which deals with cyber security solutions.

DC

ATMs to be made disabled-friendly

NEW DELHI: In what can be termed a much needed intervention for the differently abled , the office of the chief commissioner for persons with disabilities has written to the Department of Banking Operations and Development to make automated teller machines (ATMs) in the city disabled-friendly.  This move follows an RTI application and representation filed by a differentlyabled PhD scholar from Jawaharlal Nehru University, Kumar Nripendra Pathak, asking for making ATMs to be made barrier free for persons with disabilities.  In a letter dated December 5, 2012, the deputy chief commissioner in the office of the chief commissioner for persons with disabilities, under the Ministry for Social Justice and Empowerment has asked the banking operations and development department "to ensure that ATMs are made accessible to persons with disabilities in a time bound manner. Action taken in the matter may please be intimated to this office at the earliest".  Pathak said: "I noticed that for wheel-chair bound people and for people with other disabilities like me accessing ATMs are a tough ask. Most have no ramps and the height is also not right for people using wheel chairs. Simply put, we can't use the ATMs in their present state. Moreover , it is not safe to disclose our PIN number to anyone. I therefore filed an RTI with the Reserve Bank of India to find out what policies were in place for disabled persons. There I got to know of a Master Circular on Branch Authorisation of 2009 where banks were advised to provide all existing and future ATMs with ramps so that wheel chair users/ persons with disabilities can access them easily. The banks have not been adhering to the RBI directives since July 1, 2009.  The circular also asked the banks to make arrangements in such a way that the height of the ATM does not create an impediment in its use by a wheel chair user. Pathak in his representation pointed out that the directives are not being implemented by banks and cited the example of an ATM belonging to a national bank at the JNU campus . The letter from the office of the chief commissioner for persons with disabilities also cited Section 46 of the Persons with Disabilities Act, 1995 which provides for non discrimination against persons with disabilities.

TOI

Finance ministry pushes banks to fast-track bad loan recovery

MUMBAI: The finance ministry is pushing capital-strapped public sector banks to hasten recovery of bad loans to improve health, and has promised to fill vacancies at debt recovery tribunals (DRT) across the nation, partly responsible for inordinate delays in ending disputes.  "Needless to say that Rs 2 lakh crore (of bad loans) are a drag on the capital of banks," a bureaucrat from the finance ministry wrote to bank chairmen recently.  "All cases should be reviewed and... ensured that all cases pending above two years should be cleared by March 2012." Banks last year wrote off almost 10% of their gross bad loans as various recovery forums failed.  Recovery through DRTs fell to 28% of the total referred cases in 2011, from 32% ayear earlier, data from the Reserve Bank of India (RBI) shows.  Under the SARFAESI Act, it was a little better at 38%, compared with 30% in the same period previous year. Bankers had complained to the finance ministry that the DRT mechanism was not functioning efficiently, which in turn was making it difficult for them to recover dues. They had said the tribunals lacked presiding officers and recovery officers.

ET

Relax lending norms for loss-making units: Textiles Ministry to RBI

NEW DELHI: The Textiles Ministry has said it will urge the Reserve Bank to relax lending norms for the textile industry which has been hit by the volatility in raw material prices and slump in domestic demand. "Something needs to be done... something needs to be worked out regarding the asset classification (norms). Whether the Reserve Bank of India (RBI) let its guard down on some of the norms that is something we have to work very hard upon in this month," Textiles Secretary Rita Menon said. The Textiles Ministry has been following the matter with the RBI and the Finance Ministry after considering the industry's demand for resetting of bank loans worth Rs one lakh crore.

ET

RBI move, key numbers to decide stock market course

....... The other major economic reading - inflation - which is expected to fall to 9.04% in November from 9.73% in the previous month, may come as a relief to investors. Investors will closely watch the non-food component of the wholesale inflation data, which will be announced on Wednesday that is considered to be key to the outcome of RBI's rate-setting meet on Friday...........

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Big danger from a declining rupee for India

.... The Reserve Bank of India (RBI), the last line of defense against a currency meltdown, has cautiously begun to support the rupee, but its firepower may be more limited than its $300 billion in reserves would suggest..............

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CRISIS OF COMPETENCE - Economic policy in India has lost its focus

..... The deputy chairman of the Planning Commission (I remember) responded that inflation was bad but nothing should be done that would adversely affect growth. So for two years he and the government left the control of inflation to the Reserve Bank of India. The RBI used monetary policies of higher interest rates and a squeeze on liquidity. The liquidity squeeze was a failure since large inflows of volatile foreign institutional investment and non-resident Indian deposits kept supplementing the rupee supply. Interest cuts did not dampen inflation..............

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ACTION UNLIKELY; DIRECTION TO CHANGE

...... Slowing growth and lower inflation will encourage RBI to change its policy direction, but it may not happen too soon as inflation will remain higher than the policy rate, possibly till December, and even though food inflation is coming down sharply, we don’t know yet the level of the non-food manufacturing inflation, a proxy for core inflation...........

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Govt must contain inflation

Not to speak of the US and the Eurozone nations, the Indian economy, too, seems to have been passing through a difficult phase. Double-digit inflation, the falling growth rate, disinterest of foreign investors in India, rapid depreciation of the rupee against the American dollar, the virtual failure of the monetary policy so far pursued by the RBI to curb the deteriorating trend and, above all, the surprisingly indifferent attitude of the government, conveniently shifting the blame for the current worrisome situation to the global environment, surely indicate that the country is headed for large-scale unemployment and general unrest. To stall the rapid depreciation of the rupee, the government could probably impose a complete ban on the import of gold at least for the time being. It could also reduce to some extent the import of crude oil and introduce rationing of petrol and diesel to be used by individual vehicle users. Automobile companies could be persuaded not to import components till the situation improved. Domestic investors should be guided to abstain from investing in foreign as well as domestic equities so far as the flight of foreign capital from the economy continues. The RBI could use a limited amount of foreign exchange to purchase the rupee in the open market. Serious efforts should be made to earn more and more dollars through the export of Indian goods to the markets other than the US and the Eurozone. To fight inflation, the government should possibly try to find ways and means to stabilise the prices of petroleum products (curtail duties). There is nothing wrong in the RBI’s monetary policy of raising the interest rate. Its effectiveness seems to have been hampered by the ill-conceived taxation policy. So long as the rate of inflation remains higher than the rate of interest on bank deposits, total interest earnings should logically be exempt from income tax. This would make bank deposits more attractive for those who otherwise prefer to invest in gold, silver, etc, or increase their expenditure on consumption. Higher bank deposits could certainly increase the credit creating capacity of commercial banks at a lower rate of interest for industry, a higher repo rate of the RBI notwithstanding. This could ultimately lead to a reduction in the cost of industrial output as also a higher economic growth rate.

D N Tandon, Panchkula (The Tribune)

Bankers see stable lending in near term

Pratip Chaudhuri, Chairman, State Bank of India

.....“I don’t expect the lending rates to go up. I would expect the RBI to address the issue of liquidity as the industry has seen liquidity pressure,’’ .........

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RBI confronted with multiple concerns

....While formulating its policy for the upcoming review on December 16, the central bank is confounded with two additional problems. One is to prevent the slide of the rupee and the other is to address the liquidity deficit in the system. While the decline in capital flows to India has led the depreciation of the currency, additional government borrowing has created a liquidity shortage. ...........

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Interest in bank stocks to perk up ahead of Credit Policy

Stocks from banking space will remain in focus ahead of the Reserve Bank of India's Monetary Policy, which is scheduled to be held on December 16. Market participants are expecting at least 0.25 percentage point cut in cash reserve ratio (CRR) to improve liquidity in the system. Such a move to lower CRR (the amount banks are required to keep with the RBI), will help banks to lend more. CRR has been left unchanged at 6 per cent since May 2010. Recently, China cut CRR by 50 basis points effective December 5. In the last one-year period, the BSE Bankex fell 21.89 per cent against the BSE Sensex's decline of 16.89 per cent and BSE-500's 19.11 per cent. If RBI follows China, not only banking stocks (due to higher loan offtake), the overall market will see an improvement in sentiment due to enhanced liquidity.

HBL

RBI’s Dec 16 policy review to take note of forex volatility

Bhubaneswar: The Reserve Bank of India (RBI) is hopeful that there would be some improvement in the foreign exchange volatility in coming days. “In view of the European Union Summit we are expecting that there would be some corrections in the value of rupee,” said RBI Deputy Governor Harun Rashid Khan. He said that the outcome of the summit would bring some comfort to the world economy.  “RBI policy review on December 16 would take note of the foreign exchange volatility besides the problem of inflation and the NPAs of banks,” Khan said on the sidelines of a regional seminar on securities market, organised by Bhubaneswar Stock Exchange, on Saturday. The deputy governor said that the euro zone crisis has its impact on the Indian economy. India used to get funds from European banks, he said and added, “Now that the European banks are in trouble, the funds flow to the country would be dried up.” The country's commerce is going to be affected as India's export to European countries is about 20 to 30% of its total exports.  There would flight of capital as the Foreign Financial Institutions (FIIs) would withdraw from the stock market. Commodity prices is going to be affected as the country is importing about 70 to 80% of its fuel requirements. The nation also is going to face the problem of contamination as India's global integration index has gone up over the years.  The seminar was addressed by Sebi executive director J Ranganayakulu, CSE MD & CEO Madhab Reddy, Nalco company secretary KN Ravindra, Bhubaneswar Stock Exchange chairman Vivek Pattanayak, and CEO Debraj Biswal. 

FE

As growth stalls, RBI will start cutting rates in early 2012

........ While the 6.9 percent figure was largely on expected lines given the signs of slowdown, all eyes are on Reserve Bank Governor Duvvuri Subbarao and Mint Road mandarins once again. The expectations are that, with investment slowing down, an unwinding of the interest rate cycle has now become an imperative. The Reserve Bank of India is to unveil its Mid-quarter Review of Monetary Policy on 16 December.........

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Noteworthy: Rs 500 minting up 17 fold in 10 yrs

There has been a fundamental change in what is sitting in an Indian's wallet: it's got more peach-pink and moss-green than ever before. The appetite for the big bills - Rs 1,000 and Rs 500 - is growing furiously. The figures tell the story. The number of Rs 500 notes minted across the country has grown almost 17 fold in the last decade, from 213 million pieces in 2000-2001 to 3,543 million pieces in 2009-10. The number of Rs 1,000 notes minted annually has grown nearly nine times, from 115 million in 2000-01 to 1,008 million in 2009-10. Today, there are fewer notes of Rs 20 and Rs 50, whether individually or collectively, than the total number of Rs 500 notes out there. These notes have quietly disappeared from automated teller machines with the value of every cash withdrawal rising. "Growth in the value of banknotes outpaced that of volume, reflecting the continuing compositional shift towards higher denomination banknotes, particularly 1,000 and 500," the RBI said in its annual report. RTI activist Manoranjan Roy, who sought information on the number of notes printed by the RBI, found that the big denomination notes are in huge demand. Economist Ajit Ranade tried to explain the demand pointing at the near double-digit inflation for the last two years. "The same lifestyle today requires 10-20% more money." he said. K Gayathri from the Institute of Social and Economic Change, Bangalore, added that the growing economy had put more money in people's hands, especially those from the manufacturing and service sectors. Consequently, spending too had gone up. Companies that run ATMs too say they are stocking more money in the machine trays as the "average ticket size" (simply put, the one time withdrawal) has ballooned from Rs 5,000 to Rs 7,000 approximately in the last three years. "Cost of living has gone up, the rise in our aspirations and desires push up demand for cash," said Mani Mamallan, chief marketing officer of C-H Technologies that manages ATMs for the State Bank of India. Currency in circulation is the largest component of reserve money and is primarily determined by demand. "There was acceleration in currency in circulation in 2010-11 due to increased demand due to economic growth, high inflation and low yield on deposits," said RBI officials. 

TOI

Obituary

Shri.Babul Sukumar passed away on 29-11-2011. He was Deputy General Manager in Central Pension Cell in B K C, Mumbai. He was born on 12-9-1953 and had served in several Offices of the Bank and in several centres. He was a truly genial and helpful Officer - especially at the time of getting the P J Gold Coins he was very helpful. He leaves behind hundreds of good friends in the Bank.

Shri.M.O.Jacob passed away in Trivandrum on December 5,2011. He was 85 years old. He retired on 31-12-1985. He held the post of the Secretary of the R B I Employees Association, Trivandrum for several decades.

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

At CMs’ meet, Munda flays delay in setting up of State Cooperative Bank

During a conference of the Union Finance Minister and Chief Ministers of eastern States in Kolkata on Saturday, Jharkhand Chief Minister Arjun Munda expressed concerns over the delay in establishing a State Cooperative Bank in the last 11 years. He complained that the two nodal agencies, RBI and NABARD, have not taken any step in this direction. Munda made two specific demands - the State Bank of India and Bank Of India must open a branch in Ranchi and these must be headed by a Chief General Manager and General Manager so that they can effectively coordinate with banks in Jharkhand for better financial inclusion. Munda said that due to absence of a State Cooperative Bank around 39 lakh farmers have been facing problems obtaining easy loans. “Only nine lakh farmers have a credit card while the rest are forced to approach moneylenders,” he said.  Munda requested Finance Minister Pranab Mukherjee to instruct public sector banks to provide loans to farmers assuring all support from the State Government. Stating that only 9,562 non-farmers in Jharkhand have been given loans, he said urgent steps must be taken by the Central Government in this regard.  Criticising the functioning of public sector banks in Jharkhand, Munda said that the banks are supposed to reserve at least one per cent of the total amount of loan to be given to poor under a differential rate of interest whereas it is merely 0.44 percent. He said that the percentage of loans given to weaker sections of society and the SC and ST has fallen from 8.7 per cent to 5.25 per cent during this fiscal year. He said most of the villages of Jharkhand having a minimum population of 2,000 should have been provided with banking facility under the financial inclusion scheme. “There are 1,541 such villages against which only 904 villages have been covered under the banking correspondence scheme. Even these are not working properly,” Munda said. 

The Pioneer