Policy paralysis at Reserve Bank of India?

There are critical issues on which the RBI and govt differ but should it take three years to sort them out?

........The RBI first released a discussion paper in August 2010 and a year later, in August 2011, it issued the draft guidelines on new bank licensing, seeking public comments. Since then, it has been in discussion with the finance ministry to prepare the final guidelines. With general elections a year away, more delay in finalizing the guidelines diminishes the chances of issuing any licence this year. One wonders who is suffering from policy paralysis—the RBI or the finance ministry?..........

Read - Mint

The Policy Muddles at Mint Street

The RBI (Reserve Bank of India) has been the master of all weather and seasons concerning India’s financial sector. It holds the pulse of the national economy with tempestuous effects. But even with all its prominence, the RBI has seldom crossed the contoured spirits which obfuscate the existing macroeconomic scenario. The scrimmages from its side are causing the fixture of topsy-turvy status in the policy domain, finally making the broad brush more frequent than the desirable spunky actions.............

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Growing disconnect

.....The divide between the financial sector and the real economy has widened recently. Many would argue that the rise of the financial services sector, as indeed many other services, is part of a global trend which has seen the eclipse of manufacturing in the developed countries. In India too, the services sector has bloomed and contributes to a larger share of the GDP than the industrial sector. While the above could be elaborated, the key issue in India now is simply this. How does one explain the obvious disconnect between the stock markets and the economy?.........

Read - The Hindu

Time for a national policy agenda - Subir Gokarn

....The investment-to-GDP ratio was relatively stable around 27 per cent in the few years before that period, but accelerated sharply to cross 30 per cent, peaking at 38 per cent, as I indicated earlier, in 2007-08. Now, there is a complex story behind this transformation, which only a much longer piece would do justice to. But there is one very important dimension to it, which is what I want to focus on here...........

Read - Business Standard

Dailyzine to Digest................. A journey of VITALINFO.......

                                                                                                                                                                  

is grateful for your feedback...........

Follow Up – Women thieves, who had stolen Rs 8.25 lakhs valuables, nabbbed within few hours

........On Saturday morning, Pushpa Deshmukh (66), wife of Babanrao, a retired Assistant General Manager of RBI, lodged a complaint about her gold valuables worth Rs 8.25 lakhs stolen from her Surendra Nagar residence. She claimed that on Thursday afternoon, two women had come to her house claiming that they will help to make an aadhar card........

Read – Nagpur Today

RBI chief D Subbarao visits villages in Odisha's Bhadrak district

Reserve Bank of India (RBI) Governor D Subbarao visited Geltua and Jalanga villages in Bhadrak to assess the development in there. During his visit to these two villages, he  interacted with the members of the Self Help Groups (SHGs) and Farmers Clubs of Geltua village and also............

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Bhadrak villagers air problems to RBI guv

.....After the Governor spoke about the benefits of the model village scheme, the villagers chose to air their grievances. "I had opened a no-frill account and subsequently deposited Rs 165. But, when I failed to deposit more money within six months, my account showed zero balance. On inquiry, the bank officials told me that my inability to deposit a minimum amount has resulted in zero balance,".............

Read - TOI

The coming revolt of financial savings - S.S.Tarapore

......The government should take serious note of the decline in household savings in financial assets from 12.9 per cent in 2009- 10 to 10.0 per cent in 2010- 11 and further to 7.8 per cent in 2011- 12 (RBI Annual Report for 2011- 12). This should be a strong signal to the government to reverse its wonton policy of hurting financial savings. If the government persists in pursuing this disastrous path, there will be a faster decline in household sector savings in financial assets and a move to gold and other financial assets.......

Read - FPJ

Financial services firms must be kept out of banking sector: J Hari Narayan, Irda chief

.....The move to issue new bank licences has prompted conflicting reactions. While the idea of conglomerates floating banks has been welcomed as they have the financial muscle, there is also the fear that they could manipulate it to further their business interests and compromise depositors' interest. "Insurance and banking must be boring businesses and real jazz must be in investment, mutual fund and venture capital funds,"........

Read - ET

India’s economic struggles captured

.........Authored by Bimal Jalan, one of India’s well-known economist and former governor of RBI who has held several top positions in the ministries of finance and industry, it is an essential read for anyone seriously interested in the history and future of India’s development as a nation. The author provides a virtual tour of the manner in which despite numerous destabilising elements and political and economic struggles India has managed to secure a place in the global map...............

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Not enough guards in currency for cash transfer

One lakh and counting... That’s the number of automated teller machines (ATMs) in India, both onsite (on bank premises) and offsite. And a whopping Rs15,000 crore is transported by road every day. But if cash management companies are to be believed, there just aren’t enough armed people to escort the cash load to and from these ATMs................

Read - DNA

Call to increase retirement age of bank employees to 65

...........The retirement age for bank employees should be increased to 65 for better utilisation of the services of seniors, said INTUC national president G. Sanjeeva Reddy. Many officers were joining private financial institutions after their superannuation and extending quality services. The Public Sector Units were unable to make use of their services fully as they were retiring by 60, he opined...........

Read - The Hindu

UFBU chalks out programmes for stir

.........A press release issued by UFBU district committee here informed that the committee chalked out programmes including branch visits, area wise conventions, street corner meetings and a centralised rally and a convention here on February 16 to mobilise support for the two-day strike..........

Read - The Hindu

Corporate banks lack social responsibility: Vayalar Ravi

...........“Through the Banking Amendment Bill, corporate houses want to take control of the Indian economy. They do not have any social responsibility and the move to allow corporates to start banks is not good for the country. Banks play a crucial role in bettering the economy,” he said. The minister opined that the policies initiated by Jawaharlal Nehru and Indira Gandhi should be protected. The minister added that the Reserve Bank of India should realise the importance of cooperative banks in the country........

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Bank unions should work together with managements: RBI Deputy Governor K C Chakrabarty

"We need strong and responsible trade unions in the banking system so that trade union and managements can fight market forces and help in making services available to all. Banking services should be available at everyone's doorsteps,........

Read - ET

18 EDs in race for CMD posts in 9 banks

As many as eighteen executive directors of various public sector banks are in the fray for the post of Chairman and Managing Director (CMD) in about nine banks.........

Read - HBL

Non-performing assets in Indian banks

...........The change in the policy of choosing auditors by public sector banks from the empanelled list of audit firms, deviating from the erstwhile practice of appointing bank auditors by a committee consisting of members of the banking division of the Ministry of Finance, RBI and CAG is intended for ensuring level playing field among all Indian banks in respect of appointment of the auditors. In the present scenario, it has become all the more important for RBI’s mandatory inspection to act as an effective deterrent for banks not to resort to non-adherence to applicable prudential norms and less provisioning for NPAs.

Read - BS

Development in the future tense

...................The attitude of the Reserve Bank of India (RBI) and of the corporate world is as though Assam never existed all these years and is some kind of a contemporary discovery. On a recent visit to Assam, RBI Governor D. Subba Rao spoke of the need to raise credit to micro, small and medium enterprises (MSME) and agricultural sectors and for the “deepening” of financial inclusion in Assam. It passes our understanding why this awareness has come about only now after all these years. Likewise, the RBI seems to have discovered only now that the credit–deposit ratio is very low in Assam at around 47 per cent, way below the national average of around 77 per cent. All these years banks have consistently hinted at poor recovery rates in Assam compared to some of the more advanced States of India in order to rationalize this discrimination. Instead of waking up to this gross discrimination only now, the RBI and other banks operating in Assam would have done much better by realizing that this was a problem of money management rather than anything else more serious. .................................

Read - The Sentinel, Assam

A study on Cooperative Banks in India with special reference to Lending Practices

...............At present there are several cooperative banks which are performing multipurpose functions of financial, administrative, supervisory and development in nature of expansion and development of cooperative credit system. In brief, the cooperative banks have to act as a friend, philosopher and guide to entire cooperative structure. The study is based on some successful co-op banks in Delhi (India). The study of the bank‟s performance along with the lending practices provided to the customers is herewith undertaken.................

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