RBI needs RaRa - ​A.Chandramouliswaran

This is on recent discussions on the recommendations of the FSLRC. It is strange that while the Government are considering greater autonomy to Public sector banks, even while ensuring their accountability, the autonomy of the Central bank of the country seems to be in danger as a result of the recommendations of the FSLRC. Reserve Bank of India, as the Central Bank of the country, is on a completely different footing from other regulatory authorities such as SEBI, IRDA. The rationale of a Central Bank for a country is to have an institution, free from political influences, in ensuring sound economic and financial policies which would impart stability to the currency and the economy of the country. It was recognised, while arguing for the establishment of an independent central banking institution, that the Government and its political leadership, in a parliamentary democracy, would not be in a position to avoid the influence of political considerations on economic policies which when permitted might not be to the advantage of the currency and credit system of the country. Hence, the autonomy of the RBI is of paramount importance to the country. This does not mean that RBI would not be accountable for its policies and for its acts of omission and commission. Views are perhaps being aired in some responsible quarters to have some control over the RBI because it had not been made sufficiently accountable for its operations. For example, for some acts of omission or commission (more often the former), accountability has not been fixed at fairly senior levels in the hierarchy of the RBI and it was allowed to go scot free. No responsible person can take any objection to accountability being fixed on the RBI as this has to go hand in hand with the authority given to it. 

Mere statutory independence alone may not be sufficient for the RBI to act independently since much depends on its functionaries to safeguard its autonomy. Have the persons, who argue eloquently today for the autonomy of the RBI and voice their opinions about the dominating nature of the ministry officials, done their small part for protecting the independence of the RBI is a question better left to their conscience. 

The present Finance Minister is a brilliant person and from all indications publicly available seems to be getting on famously with the Governor. I am sure he could be trusted not do any thing, which would erode the autonomy of the RBI, without consultation with the Governor. Hence, the fears on account of the FSLRC recommendations are unlikely to come true.

In the unlikely event of the Government implementing the recommendations of the Srikrishna Commission in regard to the Monetary Policy Committee etc etc, Dr Raghuram Rajan could think of stepping down from the post so that  posterity would not blame him for downgrading the Institution. In my humble opinion, RBI needs, at the present juncture and for the successful tenure of the NDA Government, Dr Raghuram Rajan more than the latter needing the RBI! 

- ​A.Chandramouliswaran

Srikrishna's JudgeMendations

My View on  "Where the Twain Shall Meet": 

Now on FSLRC report should remain a reference point. As the FSLRC Chairman opted to write a report which he thought would satisfy the then FM and did not listen to his own colleagues in the Commission, or convince them as to why he was not able to go with them on vital issues, the final product (FSLRC Report) has several deficiencies that will surface as and when the government takes up the recommendations for initiating legislative or ‘executive’ action. Notes of dissent from 4 members out of seven who signed the report are indicative of the Chairman’s approach. The Commission wrote the report as if it was a ‘judgement’ whereas the task assigned to it was to make ‘recommendations’. The irritation being expressed by Justice Srikrishna in the context of Dr Rajan’s June, 2014 observations about certain ‘recommendations’ has to be viewed from this perspective. 

- M.G.Warrier

Time will tell who behaved like 'NAWABs

My View on  "Regulators function as Nawabs: Srikrishna": 

The original Srikrishna while giving 'GEETOPADESHA' to Arjuna took ample care to take the disciple into confidence at every stage, by allowing him to raise doubts and clearing them 'online'. Gita was a 'consensus' report. Justice Srikrishna failed to convince (about the stance he took while writing the report) four out of seven members who signed the FSLRC report. Time will tell who behaved like 'NAWABs' 

- M.G.Warrier

Give new declaration for lower tax deduction

................Typically, employers calculate the tax liability of their employees on the basis of the investment declaration given by the employees. The taxes are computed after taking deductions into account and the sum is deducted from the employees’ salaries in 12 instalments. Experts expect the Finance Bill to be approved in both Houses of Parliament by August. That means till July, most salaried individuals are likely to pay tax at the earlier income tax rates. In the meanwhile, most employers are expected to update their payroll software. Once the new tax rules come into effect,..........

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RBI - Recruitment for the post of Assistant

he Reserve Bank of India invites applications from eligible candidates for 506 posts of “Assistant” in various offices of the Bank. Selection for the post will be through a country-wide competitive Online Examination and Interview.

The full text of the advertisement is available on the Banks’ website www.rbi.org.in and is also being published in the Employment News/ Rojghar Samachar on or after July 26, 2014.

Application will be accepted only Online through the Banks’ website.

Important Dates:

Website Link Open		16.07.2014 to 06.08.2014
Payment of Examination Fees	Online	16.07.2014 to 06.08.2014
	At Bank Branches	18.07.2014 to 11.08.2014
Schedule of Online Test (Tentative)		Varied dates around fourth week of September 2014

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Police and SBI blame each other over false arrest

.........The branch manager allegedly found that 91 currency notes of Rs.1,000 each were 'fake', and called the police who arrested the two men. The police even procured a four-day remand for further interrogation, but when the RBI checked the notes two days later, they were found to be genuine. Based on the report, the judicial magistrate Aashish Saldi, on May 20, discharged both personnel. The case will now come up for hearing on October 16.

Read - HT

Tata Comm hopes new services will boost White Label ATM business

............“We are witnessing better transactions than estimated. In some instances, they are similar to bank ATMs. Our strong focus on the right locations and innovative ways of deployment, such as neighbourhood formats, kirana stores and Porta Cabins ensures that the ATM rollout, especially in deeper geographies, is  viable to operate,” said Sanjeev Patel, CEO, Tata Communications Payment Solutions Ltd (TCPSL). A wholly owned subsidiary of Tata Communications, TCPSL plans to set up 15,000 WLAs by 2016 as mandated by the RBI............

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A year after currency crisis

.................Since the rupee hit its nadir on August 28, 2013, (68.85 against the $), becoming the worst performing Asian currency, its fortunes have changed after RBI Governor Raghuram Rajan announced steps to attract inflows on his first day in office (September 4). A look at how changing macroeconomic fundamentals helped the rupee gain strength....

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'BRICS should frame own internet governance model'

.............."Snowden's revelations have demonstrated the need for secure email, calendaring, messaging, search, file-sharing and storage and video systems, which would protect BRICS' economic and cultural spaces, as well as leaders and citizens from Five Eyes spying," the statement said. Five Eyes is a term used to signify the alliance of five major countries that share intelligence - the UK, the US, Canada, Australia, and New Zealand.............

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A useful lender?

............The question remains: what is the purpose of the BRICS Bank? After all, both India and China have questions about the governance in their banking sectors; is it the case that a new bank, such as this, is likely to help matters? India itself is unlikely to need it. Existing multilateral lenders are not strapped of funds at the moment, and Indian projects do not have to jump through too many onerous hoops to qualify...............

Read | Business Standard

BRICS Bank: worthless at best, a disaster at worst

.........In other words, there’s little going for the BRICS Bank other than the little whiny post-colonial voice that still lives within all of us, the one which readily insists that anything that the US and the West have power in is worse for India than something the Chinese run. The problem is that setting up the BRICS Bank merely reduces the power of any argument we would want to make about substantial reform to the IMF and the World Bank.  And, in any case, what that internal whiny voice counsels is stupid – and, in the long run, suicidal. Remember how China blocks the Asian Development Bank from funding projects in our Northeast? .............

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A bank made of different Brics

.....The bank can help India considerably as it is a capital-starved country. For example, to fund infrastructure creation alone in the years ahead, India needs close to $500 billion. That sum cannot be obtained from a single source or even a couple of sources. The greater the number of lenders, the closer India can come to getting its hands on that kind of money. The bank can..................

Read - Mint

BRICS Joint Forex Action Not Discussed but 'Worth Thinking About': RBI

The five BRICS countries have not discussed coordinated forex intervention in global markets, but it is an idea "worth thinking about," Reserve Bank of India (RBI) deputy governor Urjit Patel told Reuters on Tuesday. The leaders of the five top emerging market economies agreed on Tuesday on a landmark deal to create a $100 billion development bank and a reserves fund of the same size to challenge Western dominance over global finances. While the BRICS nations..............

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Old Plan to Merge HDFC and HDFC Bank Back in Focus

...........A possible merger of the two group companies could create a financial behemoth that could eliminate costs of doing the mortgage business for both, say analysts. HDFC, which is at the receiving end during days of high interest rates, may benefit more from the merger. Benefits for HDFC Bank, which earns fee income from origi nating mortgages for its parent, will be lesser. “Since the RBI has cleared the impediment, they can think about it,“ said Vaibhav Agrawal, vice-president research, Angel Broking. “At least on paper, the hindrance is removed.“ There is no proposal yet, though top executives from both the organisations have discussed the issue in the past ............

Read - ET

ICICI Bank introduces convenient banking service for Indians migrating to Canada

.............The service, 'ICICI Bank Global Banking – Hello Canada', offers a customers the ease of opening a Canadian Dollar account with ICICI Bank Canada along with an NRI (non-resident Indian) savings account with the bank in India. The customer can open both accounts with simplified documentation by visiting ICICI Bank's branch in India only once................

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Decision-making in PSBs

.......... While these structural changes are welcome, as the P J Nayak Committee pointed out, the rot lies in the weak processes followed at the board-level deliberations and decision-making. The agenda papers and proposal notes put up to the board leave much to be desired and hide more than what is disclosed. Different directors playing to their constituencies do not take the management to task ............

Read | Business Standard Opinion

Indian Bank pays dividend to govt

...........This is over and above 30 per cent interim dividend paid by the bank to the government on January 25, 2014, Indian Bank said in a statement. The bank had paid Rs 103.15 crore as interim dividend.........

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Govt, RBI to tighten loan recovery norms

The government and the Reserve Bank of India (RBI) are looking to further  tighten recovery norms for wilful defaulters to counter the persistent issue of rising non-performing assets (NPA) — loans that do not yield returns. While the issue is being looked into and discussions expected to start soon, sources said that defaulters if found wilful, might not be given the flexibility of time and recourse processes which unnecessary derails the recovery process...........

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Name & shame: Banks can publish photos of wilful defaulters, says SC

In a move that may discourage firms from defaulting on bank loans, the Supreme Court has allowed lenders to publish names and photographs of wilful defaulters in newspapers in the larger public interest. The apex court said that the decision to resort to this measure would be taken by officers of the rank of general managers and above............

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RBI to consider farm loan recast for 3-year period

........The offer includes moratorium on payment in the first year and repayment of the entire loan along with interest in the remaining two years, according to the sources. When contacted, the representatives of local banks said they were yet to receive any information in this regard. According to officials engaged in the loan waiver/reschedulement exercise in both the states, the banking regulator also sought to know if the governments would be able to back this plan. The RBI also made it clear that the gold loans, even if taken for agriculture purpose, would not be considered under the scheme.........

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