- P.P.Ramachandran (via e-mail)
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.
Tuesday, June 11, 2013
Distinguished intellectual former Deputy Governor no more...................
Cobrapost expose: RBI imposes fine on Axis, HDFC, ICICI banks
The Reserve Bank on Monday imposed a fine of Rs 5 crore on Axis Bank, Rs 4.5 crore on HDFC Bank and Rs 1 crore on ICICI Bank for violation of KYC norms and anti-money laundering guidelines after inquiring into charges levelled by a online portal Cobrapost. “After considering the facts of each case ... Reserve Bank came to conclusion that some of the violations were substantiated and warranted imposition of monetary penalty...” the central bank said in a statement.............
Axis Bank, HDFC Bank and ICICI Bank fined, but get off lightly
........The paltry amounts are indeed surprising. Perhaps the RBI's purpose is merely naming and shaming and no more. In a late night release, the RBI added the investigation had not revealed any prima facie evidence of money laundering by the banks................
UCBs in CBI net for laundering money
.....Given that UCBs have immense penetration across the country, violations of norms and irregularities committed by them are ‘particularly grave’. There are 1,645 UCBs, more than 8,150 branches, R2 lakh crore of deposits and their advances are valued at R1.3 lakh crore. While the RBI has filed a criminal case against the UP-based Indian Mercantile Cooperative Bank, it was the Intelligence Bureau that had alerted the finance ministry about the scam. The modus operandi involved depositing and withdrawing money from accounts of fictitious individuals............
K C Chakrabarty Wants to Keep Penalties at "Peanut" Level - Advocates only Naming and Shaming of Shameless People
.......Mr Chakrabarty appears to be completely on the sides of the violators of banking norms. He wants the fines to be only for naming and shaming for violators. Can Chakrabarty explain why number of officers, who were charge sheeted during his tenure as ED and CMD of the banks headed by him, were given punishments of suspension and dismissal. Why he did not change the policies so that violators / fraudsters should have been merely named and shamed. In that case, all banks must have a BlackBoard wherein the violators /fraudsters are named and then they can continue their jobs of violating the norms or looting the bank.I am surprised that how can a person of such a high rank can issue statements in defiance of his seniors like RBI Governor and Secretary, Financial Services. Had he left his General Manager untouched, if he had dared to such statements which were against his public stand. I feel it tantamount to defiance of seniors. If he had any such views, he should have talked about these within four walls i.e. during the meetings with RBI Governor and Mr Takru.............
CENTRAL STAFFERS TO RETIRE AT 62
.....This will be the third time that the retirement age of the central staff is being raised and it is bound to have the cascading effect on the states coming under pressure from the employees'' associations to follow suit. It was raised from 55 to 58 by then Prime Minister Jawaharlal Nehru in 1962 after the war with China and then to 60 years by the then NDA government in 1998 on the recommendation of the central pay commission..........
My View on "Of bankers and bureaucrats" - Manohar Mahajan
A brilliant analyses by Dr. Haseeb Drabhu, who is not only a renowned economist and columnist but himself an astute banker of high repute having led the JK Bank to newer heights.
As rightly observed by Dr. Drabhu, banker bashing has become a fashion with the mandarins of Ministry of Finance, particularly the department of financial services (earlier Banking Department). One wonders whether Secretary level officials should ride a rough shod over sufficiently senior bankers, CMDs/EDs who themselves are supposed to be at par with Additional Secretaries level. These poor chaps never ever contradict or respond to the uncalled for criticism of their style of functioning. May be they look forward for some post-retirement positions from the Government and in their vain hope continue to bear the insult. In this regard I am reminded of an old story. It goes like this”
“In a village a washer-man was having a Dog and a Donkey. As usual, the dog would receive all the love of the washer-man and his family whereas the poor donkey would get all the flak and beating from the washer-man despite having carried load of clothes daily. One day the dog asked the donkey “why do you continue to remain with this cruel washer-man despite all his beatings and why don’t you leave him for some good and gentle man.”? The donkey replied, ”I know yaar,…. but I have a very bright future here with the washer man”. Dog was surprised and asked “what was that bright future you have here with the washer man” Donkey looked around and replied , “whenever, the washer man scolds his young daughter, he says that he will marry her with his Donkey”. And I am waiting for that fateful day.”
Once having been the CMDs of these banks, these officials should be debarred from seeking any officials position including directorship on corporate companies. Then only they will work fearlessly and judiciously for the betterment of the banks they head. In this connection, a pertinent question arises - why banks in the private sector have been doing generally better than their counterparts in public sector with the same set of Regulatory and supervisory prescriptions from RBI. According to me the difference lies obviously in the manner of ownership. While the private sector banks are answerable to the shareholders, who do not interfere in day to day management of the banks, whereas in public sector banks (though almost all of them have limited public share holdings), the Government being the major shareholder, its officials try to meddle in the micromanagement of these banks to boss over them and the top management of these public (sarkari) banks do not have freedom and independence of taking decisions. Therefore, the fault for poor show of PSBs likes in the backyard of the major share holder i.e the Government .It should first set its own house in order and leave the public sector banks take their own decisions. After all, how long the major share holder would continue to undermine the interests of the minority share holders and time has come when-" sarkari banko mein sarkari dakhalandazi band honi chahiye"
A brilliant analyses by Dr. Haseeb Drabhu, who is not only a renowned economist and columnist but himself an astute banker of high repute having led the JK Bank to newer heights. As rightly observed by Dr. Drabhu, banker bashing has become a fashion with the mandarins of Ministry of Finance, particularly the department of financial services (earlier Banking Department). One wonders whether Secretary level officials should ride a rough shod over sufficiently senior bankers, CMDs/EDs who themselves are supposed to be at par with Additional Secretaries level. These poor chaps never ever contradict or respond to the uncalled for criticism of their style of functioning. May be they look forward for some post-retirement positions from the Government and in their vain hope continue to bear the insult. In this regard I am reminded of an old story. It goes like this”
“In a village a washer-man was having a Dog and a Donkey. As usual, the dog would receive all the love of the washer-man and his family whereas the poor donkey would get all the flak and beating from the washer-man despite having carried load of clothes daily. One day the dog asked the donkey “ why do you continue to remain with this cruel washer-man despite all his beatings and why don’t you leave him for some good and gentle man.”? The donkey replied, ”I know yaar,…. but I have a very bright future here with the washer man”. Dog was surprised and asked “what was that bright future you have here with the washer man” Donkey looked around and replied , “whenever, the washer man scolds his young daughter, he says that he will marry her with his Donkey”. And I am waiting for that fateful day.”
Once having been the CMDs of these banks, these officials should be debarred from seeking any officials position including directorship on corporate companies. Then only they will work fearlessly and judiciously for the betterment of the banks they head. In this connection, a pertinent question arises - why banks in the private sector have been doing generally better than their counterparts in public sector with the same set of Regulatory and supervisory prescriptions from RBI. According to me the difference lies obviously in the manner of ownership. While the private sector banks are answerable to the shareholders, who do not interfere in day to day management of the banks, whereas in public sector banks (though almost all of them have limited public share holdings), the Government being the major shareholder, its officials try to meddle in the micromanagement of these banks to boss over them and the top management of these public (sarkari) banks do not have freedom and independence of taking decisions. Therefore, the fault for poor show of PSBs likes in the backyard of the major share holder i.e the Government .It should first set its own house in order and leave the public sector banks take their own decisions. After all, how long the major share holder would continue to undermine the interests of the minority share holders and time has come when-" sarkari banko mein sarkari dakhalandazi band honi chahiye"
- Manohar Mahajan
O P Bhatt joins Tata Steel as independent director
Tata Steel has appointed former SBI Chairman O P Bhatt as additional non-executive independent director in the company with effect from today...........
Banking as the new frontier
...........‘failure’ of the private sector to move into the expanding banking space has been attributed to two factors. The first is that the regulations and social obligations imposed on banking activity, and the caps on private shareholding and (more importantly) ‘voting rights’ are seen as having dissuaded private expansion.............
The demise of Rupee Cooperative Bank: A malady
.......Therefore, for cooperative banks, it will no longer be sufficient for RBI to be empowered to order the State Registrar of Cooperative Societies to liquidate, amalgamate or reconstruct a cooperative bank, or to supersede management. Instead, in order to be eligible for insurance from the Resolution Corporation), State governments will have to co-opt RBI as the banking regulator of cooperative banks in that state under law.............
Lifeline in sight for Rupee Bank patrons
......“It
is true that the Saraswat Cooperative Bank has shown interest in a
merger with the Rupee Bank. The Saraswat Bank will, however, have to
carry out due diligence of the Rupee Bank, which will help ascertain the
pros and cons of the merger,”............
Read - TOI
IT companies to benefit on weak rupee
.......... “Any company which generates a majority of its revenues in dollar- denominated markets will benefit if this sharp fall in rupee conversion rate continues. The only mitigating factor could be the hedging policies of some companies.”.............
India rupee in 'freefall' at record low against dollar
............The partially convertible Indian currency traded at a new low of 58.05 rupees to the dollar on Monday afternoon, sweeping past its previous low of 57.32 rupees hit on June 28. "This is a freefall," Abhishek Goenka, chief executive of consultancy firm India Forex Advisors, told AFP. The rupee's fall is the latest blow to the stuttering growth story of Asia's third largest economy, which has been beset by sharply slower growth, worsening public finances and political turmoil........................
Rupee fall: No reason to panic, says Mayaram
.........“I think this (sharp fall in rupee) is a panic in the market, which is unwarranted. I don’t think we should unduly get worried. We are watching the situation,” ...................
Finance ministry meets regulators, RBI on rupee
.....Among the measures discussed were the easing of rules for sovereign wealth funds that invest in India, the officials said. The meeting had been previously scheduled and was not in response to the rupee hitting a record low on Monday.
With rupee weak, RBI may have little room to cut interest rates
.... "A weak rupee will make oil imports expensive, which, in turn, will impact inflation. The RBI may not be comfortable cutting rates if inflation rises,".................
Rupee responses
Given recent tendencies, it was only a matter of time before the rupee fell below its previous low, touched a little under a year ago. When the downward trend first began in August 2011 and then intensified later that year, there was a strong opinion that the Reserve Bank of India (RBI) should take on the responsibility of containing the decline............
Dealing with the rupee
When P Chidambaram returned to the finance ministry last August, one of the questions he posed to his political colleagues was: what is your strategy if the rupee touches 60? This is what convinced the reluctant party to back the planned burst of reforms............
Rupee plunges to a record low, RBI prefers to stay away
.......As per latest data available from RBI, the central bank purchased $820 million in March and $518 million in April when the rupee appreciated by 0.15% and 0.87%, respectively. According to S S Tarapore, former deputy governor of the RBI, the currency is overvalued. “Adjusting for inflation rate differentials, the present nominal dollar-rupee rate should be closer to $1 = `70,” he wrote in a recent column.............
RBI should boost dollar supply: Assocham
......"Under these circumstances, RBI should actively sell dollar rather aggressively and tame the US currency. On its part, the finance ministry should continue to take more measures to encourage capital inflows. Only then, rupee will regain strength,".............
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