................All that the media picked up was the adjective "schizophrenic" coming as it did from none less than the central bank chief. The two "areas of tension" are appellate oversight of regulatory decisions, and the re-engineering of the financial sector's regulatory architecture by consolidating most regulatory agencies into a combined organisation. Most debate on the FSLRC report has been on the latter. The attention of both incumbents and retired regulators has been riveted on it at the expense of a wide range of other recommendations.............
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.
Monday, June 30, 2014
Highly technical strong message - Dr.T.V.Gopalakrishnan
The article is highly technical and carries a strong message that higher regulatory capital or leverage ratio would mean involuntary monetary tightening as it were. This is true provided the balance sheet is drawn strictly as per the regulatory prescriptions and accounting standards.Is this happening in India is a major question? Fudging and window dressing of balance sheets is an established practice in India and the ratios referred to in the article cannot be given a serious weightage as such. The NIM, ROA,Capital Adequacy Ratio etc are all to a great extend only showing indicative trends and not necessarily the correct position. The NPAs are grossly underestimated and the off balance sheet items which get converted into risky assets do not seem to be getting a realistic assessment. The regulatory capital ratio exceeds the requirement level by a wide margin cannot be taken as a correct and comfortable picture. The ratio of pure equity capital in relation to all risky assets is perhaps a better assessment as regulatory capital has some components which are manipulative in nature. If pure equity capital is taken as a yard stick,the Indian banks particularly Public Sector banks cannot be said to be showing a comfortable position as increase in pure capital ie equity capital may not be proportionate to the increase in risk weighted assets.
Integrated growth - M.G.Warrier
..........While conceding that a short essay cannot be expected to cover all aspects of growth, taking the debate forward, one is tempted to add the conservation and overhaul of the available infrastructure, moving towards a higher literacy level, better and affordable healthcare facilities for all and .............
Good Money After Bad
.............If RBI is technically sound, Indian banks will be forced to reduce the growth of their balance sheets, owing to inadequate equity capital. They will be forced to take in fewer deposits and give out fewer loans. This is going to exert a drag on economic growth. Some are enamoured by an easy solution: set up a National Asset Management Co (Namco) with government money , and transfer bad assets to Namco. Once the distressed assets are out of the way , banks will get back to happy days. But there is no free lunch..............
Oil and water - Dr.Subir Gokarn
They say that oil and water don't mix. Literally true, perhaps, but, speaking metaphorically, they can be an explosive combination. The mix between the two poses the most significant risk to the Indian economy over the next few months. It threatens to reignite the drivers of inflation, the fiscal deficit and the current account deficit. At this point, it is still a risk that might abate over the next few weeks, but if this were to happen, it would be entirely.......................
Food Inflation: A Stubborn Sore in the Indian Economy
..........However measures like RBI’s quarterly household inflation expectations surveys indicate that inflation expectations have been elevated in India in the past few years to double digit figures. Thus, in this scenario it is evident that though the direct role of monetary policy to combat inflation is limited, yet monetary action in a way helps to anchor inflation expectations. Thus to deal with the scenario of persistent food inflation, coupled with the speculation of weak monsoons and the Iraq Crisis, Mr. Jaitley’s Finance Ministry has to look beyond the budget to effectively fulfill its agenda. As pointed out by Shri Deepak Mohanty, Executive Director, RBI the first and foremost step should be to curb agricultural wastage by strengthening supply chain logistics and setting up cold chains and processing facility at production areas. Secondly, there is need to..........
RBI says India to implement US foreign tax compliance act
........FATCA mandates reporting by US taxpayers about certain financial accounts and offshore assets and reporting by foreign financial institutions about accounts held by US taxpayers or foreign entities in which US taxpayers hold a substantial ownership interest. Indian financial institutions with overseas branches have time until December 31 to register. However, they should register for GIIN only when the formal IGA is signed after cabinet approval, the RBI added,.........
‘(V)indicting’ Dr Rajan
My View on "Change RBI Governor: Swamy to PM":
The contents of the letter from Justice B N Srikrishna forwarded to the Prime Minister have not been revealed. Quite possibly, they may be on the lines of the short article, ‘indicting’ Dr Rajan, co-authored by Strikrishna and D Swarup and published in the Economic Times last week. Though any citizen can have a view on who should be the RBI Governor and the decision on who should hold that post is taken following certain processes and procedures, the issue having been raised by someone who can keep controversies live longer than their normal ‘shelf life’, let us go a little deeper into the background of the demand made by Dr Subrahmanyam Swamy. But for the age limit of 75 years for public offices imposed by Modi, Swamy would have got some job to do. Marginally he lost as he will be completing 75 this September. The next best option was to vigorously pursue other ‘cases’ on hand. But in those cases, the opponents have lost the ‘celibrity’ status with the Election results. Hanging on to the ‘fight’ agaist Dr Rajan makes sense in this context.
- M.G.Warrier
Letter to Finance Minister for Pension to RESIGNEES
..............While extending the first and second option of pension in 1995 and 2010 the employees who had resigned from the service of the bank were not made eligible to opt for the pension. Similarly the officers who had voluntarily retired under the respective schemes of banks were also not made eligible for the pension option. However after protracted legal battle the officers who had voluntarily retired from the bank’s service were made eligible to opt for pension and accordingly they started receiving the pension. The only category of employees / officers who had resigned from the services of the banks is left out of the pension scheme. The number of such left out employees / officers is not more than 2% in the banking industry as per rough estimates. A number of cases were filed....................
Fit-to-play the second inning................
Our
two friends are retiring from the Bank’s service on June 30, 2014.
Shri
Ramachandra Shelar, Private Secretary to the PCGM, DCM joined the Bank in the
erstwhile Institutional Finance Department on March 3, 1976. After working in the various departments of
the Bank for more than 38 years, he is retiring happily. Very shy, soft spoken and down-to-earth he
is. He used to be always behind the
curtain in our PS Meets also. We wish
him a healthy and happy retired life.
Shri Milind
Khopkar, Private Secretary to the Adviser, DEAP, is a well-known RBI sportsman and
known as Nana amongst his close circle of friends as well in the All-India RBI
sportspersons. We joined the Bank almost
together in the erstwhile Agricultural Credit Department in the month of May
1977 and became very close friends since then.
Nana is a Table Tennis player and also a Team Manager of RBI All India
Table Tennis team. He loves T.T. a
lot. He is still fit to play T.T. Always cheerful
and with smiling face, he has a lot of friends in the Bank, particularly
sportspersons. He was promoted as Private Secretary recently i.e. in July
2013. After serving for almost 37
years, he is retiring happily as a fit-to-play person. We know he will devote his retired life for
T.T. We wish him a very healthy and
sporting retired life.
- Vishnu
Yadav, PS
to ED (Mahapatra)
Nephew held for ex-RBI employee’s murder
The nephew of Mehrunnisa (55), a retired RBI employee who was found dead at her home in Royapettah on Tuesday, has been nabbed on charges of her murder. Police said he gagged her to death and stole 60 sovereigns of gold and Rs. 3 lakh from her house. A part of the stolen gold has been recovered. The former banker was found dead............
Agriculture gets priority in annual credit plan for Krishnagiri district
............Collector T.P. Rajesh released the annual credit plan. The first copy was received by Ravindran, Assistant General Manager, Reserve Bank of India. Agriculture gets the major share of Rs. 2060.66 crore, which accounts for 66 per cent of the total outlay. Under investment credit for agriculture, .......
JK Bank convenes sub-committee meet of SLBC
Srinagar, June 28: J&K Bank convened meeting of 6th Sub-committee of State Level Bankers Committee for export promotion today at the Bank's Corporate Headquarters, here. The meeting was chaired by Parvez Ahmad, Executive President, J&K Bank and was also attended by Kiran Sharma General Manager RBI, Jammu, ..........
Read - Greater Kashmir
Read - Greater Kashmir
File your IT Return “ Properly”
............Most people tend to be rather happy that a man comes by the desk, picks up your Form 16 and files your return. All for Rs. 300 only! ou feel you have done your duty and as such this irritant of filing returns is off your back for the next 12 months. By filing in this manner you have possibly committed a handful of civil and criminal offences. Here’s a quick list of items around concealment of income and thus evasion of tax which are by far the most common mistakes.............
Indian Banks' Association seeks fee for withdrawal from non-home urban bank ATMs
..........."We have recommended to the Reserve Bank of India imposing a fee for withdrawing money from non-home bank ATMs in urban areas, while no fee has been proposed for transactions in semi-urban and rural areas," IBA Chief Executive Officer M V Tanksale told PTI...............
Read more at: ET
Lack of awareness,bank deposit fee hinder mWallet India growth
........Players like MMP Mobi Wallet Payment Systems (MMPL), Oxigen, Paytm and MobiKwik feel that mWallet can play a major role in not just tier II and III cities but also in rural areas. Besides, mWallet applications enable the users not just to pay their utilities and mobile bills, but also buy various services like transport, banking, etc...............
New financial inclusion plan to kick off from August 15
............The main objective of the plan will be to open 20 crore new bank accounts within a span of one year--two bank accounts for each uncovered household. The novelty this time round is that one account has to be opened for a lady member of the household. The contours of this ambitious financial inclusion plan were discussed by Financial Services Secretary G.S.Sandhu at a meeting of Indian Banks Association (IBA) in Mumbai recently, .........
Microfinance on a turnaround track
............Greater regulatory clarity, including the recognition of the Micro Finance Institutions Network as a self-regulatory organisation by the Reserve Bank of India (RBI), and a stable operating environment have helped to boost the shareholders’ confidence in the sector. “The sector is far more resilient today than what it was in the past. Greater clarity from the RBI’s guidelines, deeper penetration of credit bureaux and increasing use of technology to improve..............
Treat gold deposits as part of CRR/SLR: bankers
......................“Gold is after all a store of value and is it possible for the regulator to treat a bit of our gold deposits as CRR or SLR instead of cash or government securities?’’, asked SBI Chairperson Arundhati Bhattacharya. She was speaking at the Diamond, Gem & Jewellery Banking summit organised by Gem & Jewellery Export Promotion Council (GJEPC). CRR is the part of deposits that banks park with the central bank (Reserve Bank of India) earning no interest and is at present 4 per cent while the SLR, at 22.5 per cent, is the part of deposits that must be invested in recognised securities and assets..............
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