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Wednesday, June 11, 2014
RBI must not be a puppet of international powers
RBI : Gandhi says urban co-op bks’ issues stem from faulty governance
.....“Many of the problems faced by the UCBs (urban co-operative banks) are due to governance issues and lack of professionalism,” Gandhi said at the ‘Conference of Urban Co-operative Banks’ held in Ahmedabad on Jun 8. A copy of his speech was posted on the RBI website today. Gandhi also pointed out that the functioning of urban co-operative banks was skewed towards creditors and that depositors had very little say in how their funds were managed. Creditors have a larger say in governance while depositors have very little stake and there is a need to empower them appropriately, Gandhi said. In his address, Gandhi also touched upon the need to evaluate the present regulatory framework for the transition of urban co-operative banks to full fledged commercial banks. “It is important to mention here that once co-operative banks reach a certain threshold level, they are also expected to follow a regimen like large banks and standardised global practices, which may not be possible within the existing legal structure of co-operative banks,” Gandhi said...........
'Existing legal framework for urban co-op banks needs to be revisited'
..........Addressing the Conference of Urban Co-operative Banks (UCBs) in Ahmedabad, R Gandhi, Deputy Governor, RBI, said “…once cooperative banks reach a certain threshold level, they are also expected to follow a regimen like large banks and standardised global practices, which may not be possible within the existing legal structure of cooperative banks. “Thus, before we move forward, the existing legal and regulatory framework needs to be revisited to enable smooth transition..........
New-Gen Urban Cooperative Banks—Some Musings
.............Since the theme of the Seminar is “Next-Gen Co-operative Banks” let me now briefly dwell on the subject. To begin with let us analyse some of the best global practices in cooperative banking and their implications for next- gen cooperative banks in India, before moving forward to what is our expectation from these banks. The co-operative banking sector contributes significantly to the growth, stability and competitiveness of the European banking industry at a local and regional level. Ordinary citizens can become members / owners of co-operative banks with relatively small investments. As a result, they have a direct say in the business and are involved in the governance, strategy and risk management processes. The core business.............
Scholarship in memory of late Dr.Meenakshi Tyagarajan
At every birthday of mine, from age 8 until the age of 18, she
always gave me the gift of reading, by buying me the most thought-provoking
books. She would send me additional reading material through my mom, regularly
from the British Council library. Stern, but, compassionate. Brilliant and
seemingly irreverent, and yet, simple. While someone recommended that I read
'The Complete Works of Shakespeare' as a 15 year-old, she recommended that I
read Charles Lamb's abridged version first. When I had begun reading
Irving Wallace, she had suggested that I also read Edgar Wallace. She always
advised that I read good literature. I consider Dr. Meenakshi Tyagarajan to be
the biggest reason for my modest command of the queen's language today.
- Shivkumar Raman
Two Scholarships have been endowed for the Two Best Girl
Students in the field of Economics in the name of Dr.Meenakshi Tyagarajan
Amount--- Rs. 20,000/-
College--S I E S College--Sion, Mumbai
Donor---Shri.Shivkumar Raman*
* Shivkumar is the son of Smt. Mythreyi and Shri.P.Raman.
Mythreyi was the longest associated friend of Meenakshi--over 50 years. And
Shivkumar lovingly recalls the influence of Meenakshi on him and his
intellectual development.
- P.P.Ramachandran
ICICI Bank organised Coin Exchange Melas across 17 branches in Uttar Pradesh
......Mr Jogi Meghanath, General Manager, Issue Department, RBI Lucknow inaugurated the event. These melas were organised to offer free facilities of exchanging currency notes with coins or currency notes to the general public. They are much-awaited events that receive an overwhelming response from people from all walks of life.................
Banking Behemoth: SBI to Merge 5 Arms with Itself
State Bank of India, the nation's biggest lender, will kick off consolidation in the banking industry by combining five associate banks as it prepares to fund the econo my that is on the cusp of a strong a two decades ago. growth like China two decades ago. The combination of the associates will enhance the asset base of SBI to Rs. 21.9 lakh crore, and add 5,658 branches to its 15,143 branches. The combined market share will rise to 24%, from 19%, making it a formidable force. “The timing is very conducive now,“ SBI Chairman Arundhati Bhattacharya told............
Read - ET
Read - ET
India Not The Next China, But Getting There
.......“Among the top 10 banks in the world, three of them are Chinese. Why did that happen? Because the Chinese economy grew and, therefore, the banks had to grow in order to provide credit,” she said. “Things will happen in India if the Indian economy grows. India will need bigger banks. To build bigger banks organically is difficult. So, to do it in an inorganic way by clubbing some of the banks will be the best route,.........
Coordination mechanism by RBI : Better organisation - Better Idea
My View on t "Better regulatory coordination vital":
Last couple of years have seen a welcome rise in the awareness level about the role of regulation and regulators in governance and management of resources in general. Perhaps, CAG Vinod Rai’s 2G report made the beginning of a new phase in the financial history of India. Still, we have seen regulators remaining silent spectators, when their sacred ‘space’ was being encroached by political masters through ‘executive’ actions, which on several occasions did not stand scrutiny, or had to be rushed through back-door maneuverings in legislatures. AADHAAR, National Pension System, coal mines allocation, oil pricing…the list can go on and on, if examples are needed.
As M Damodaran put it, when regulated entities-these include government and public sector-‘move from one unregulated jurisdiction to another’ or find out means to circumvent need for legislative changes, the burden of the regulators increase. In such situations, coordination and fast sharing of information among regulators become crucial.
In the present scenario, in the financial sector, one cannot think of a better organisation other than Reserve bank of India to entrust the responsibility to put in place a coordination mechanism to ensure that all financial transactions higher than a pre-decided bench-mark complies with the regulatory norms of the body responsible to oversee such transactions. Perhaps, the finance minister could discuss this issue during his pre-budget interactions with RBI and other regulators in the financial sector.
- M G Warrier
Slice of History - RBI's Tryst with Partition
............India's central bank was confronted with difficult problems during the period when it was the common central bank for two dominions. However, the RBI incurred the displeasure of the Pakistan authorities who complained that the attitude adopted by India's central bank was `not in keeping with its duty as the banker of the Pakistan government and its currency authority'. The bank ceased to function ...........
Read - ET
Mid-sized firms bear brunt of fund crunch
.............“No one wants to take a hit by lending to companies which do not pay back,” said the official of a large state-run bank. Not wishing to be named, the official added, “But there is no blanket ban on them. When things improve, banks will resume lending.” While the pace of loan growth to micro and small companies and large firms, too, has declined in a slowing economy, that towards the infrastructure sector almost halved in the 12 months ending April, RBI data show. There are around 15 million registered medium-sized companies in India, around 20 million small companies, and about 5 million micro- and tiny enterprises, according to the SME Chamber of India, an industry lobby of small companies........
New law needed
My View on "Write off of loans and offer of freebies - Dr.T.V....":
There must be a new Law against loan write-offs by anybody other than the loan provider. Parliament has more private money lenders whose interests in write-offs would help augment private money lending for farmers. If the governments write off the private money lending for farmers, then all the suicides of farmers would come to a halt. Most farmer-suicides happened in homes that did not have institutional credit. Farmers do not trust the banks as much as the banks do not trust the farmers! Who else except the banks to blame?
- Dr.Yerram Raju
Increase 80C limit, list LIC: Banks tell FM
.........Jaitley was reportedly told that the revenue department loses Rs 31,000 crore every year on Rs 1 lakh deduction, and if the limit was increased to Rs 2 lakh the loss would increase to Rs 62,000, assuming all taxpayers availed the tax benefits. “Every year the finance minister is a mere listener. It was different this year,” said an executive............
Income tax rebates: Salaried can cut their outgo drastically
........Inclusion of registration and stamp duty fees under 80C not only reduces tax liability, but also saves the property buyer from further cash outgo. Also, an individual who has taken a home loan can avail of deduction towards principal repayment in the financial year. This will be above the R1.5-lakh rebate he gets on the interest amount paid towards the housing loan under Section 24. More importantly, even principal payment towards home loans taken from HUDCO qualifies for exemption under 80C. Also, subscription to the home loan account scheme of the National Housing Bank (NHB), or contributions made by an individual to any notified pension fund set up by NHB, also meet the deduction requirements......
Aadhaar enrollment agencies protest, stop work
......The enrollment imbroglio is the latest in a series of shocks for the project in recent weeks, with RBI suspending a plan to mandate Aadhaar-based biometric ATMs and the finance ministry stating that direct benefits transfer (DBT) can work even without Aadhaar. The development is significant amidst uncertainty at the UIDAI headquarters and field offices about the Aadhaar project's future under the new government.........
Read...........
RBI relaxes cap on United Banks loan sanctioning power
United Bank of India (UBI), which scripted a turnaround by returning to profitability in January-March quarter, has been allowed by the Reserve Bank of India (RBI) to consider loan proposals up to Rs 200 crore from 'AAA'-rate companies. The banking regulator had capped the lender's loan sanctioning power to Rs 10 crore following a rise in its bad assets and dip in the capital adequacy ratio...............
RBI introduces liquidity ratios for banks
............“The LCR would be binding on banks from January 1, 2015; with a view to provide a transition time for banks, the LCR requirement would be minimum 60 per cent for the calendar year 2015, i.e. with effect from January 1, 2015 and rise in equal steps to reach 100 per cent on January 1, 2019,” RBI said in a statement on Monday. Banks, however, has been asked to achieve a higher ratio than the minimum prescribed above as an effort towards better liquidity risk management. The move from the Indian banking regulator comes after the Basel Committee on Banking Supervision proposed certain reforms to strengthen capital and liquidity regulations in the aftermath of the global financial crisis of 2008.............
Lenders pitch for co to manage bad loans
...............“The prime concern of the banking sector representatives are long-term financing requirement for the infrastructure sector. Given the scale of the infrastructure projects these days, their gestation period is long and to support such projects in the future, the banking sector has asked the government to see that such schemes are formed.”...........
More Indians see inflation stabilizing: RBI survey
................The current survey, pertaining to the March quarter, was released on Tuesday. It found that 51.2% of the respondents expected prices to “increase by more than current rate” in the next three months, that is up to June. RBI said that in comparison, in the quarter ended September 2013, 74.5% of the respondents had been expecting prices to rise at more than the current rate in the next three-month period...........
Many PSB heads welcome Nayak panel report but with caution: BS poll
...............“The Nayak panel should have taken input from RBI before finalising the report. All the board level appointments are made after RBI’s approval of fit & proper. The selection committee for appointment of CMDs and executive directors is headed by RBI governor though he delegates one of the DG for the interviews. So RBI is also responsible for top appointments. RBI cannot wash off its hands if there is lack of governance in public sector bank’s boards,” said Pratip Chaudhuri, former chairman, State Bank of India..............
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