Urjit Patel panel wanted all members to be appointed by RBI
Isn't it time to review the 'fit and proper' criteria for banking licence, particularly with reference to individuals applying for it, asks Tamal Bandyopadhyay?
'If Urjit Patel had resigned after the five-state elections results people would have taken a different view. So this was the right time for him to resign.' 'He rightly resigned as he felt the differences with the government were not getting settled.'
The central bank's tough new rules spell major changes in the competitive landscape for financial services audits.
In FY23, the State Bank of India (SBI) reported a 57.4 per cent jump in its net profit to Rs 55,684.17 crore. But the chairman of the country's largest bank, Dinesh Khara's annual pay for this creditable performance was just Rs 37 lakh (his peers at state-run banks are no better off). Look at his private bank rivals - most pocketed in excess of Rs 7 crore annually - plus stock options.
'Those who come from outside are surprised at the relatively small strength of the RBI supervisory cadre, relative to the needs of the country and the needs of the financial sector.'
The RBI, according to the source, wants details on the procedure followed for credit appraisal by the bank while giving loans to Videocon.
As deputy governor, Patel headed the RBI panel to draft the monetary policy report, which became the basis of the ongoing reforms at the apex bank
Market leaders in this line of business - New India Assurance and Tata AIG - have begun to reassess the premium on risk exposure of their portfolio in the director's and officer's liability business.
An NBFC must actively manage its collateral positions, differentiating between encumbered and unencumbered assets, and monitor such assets so that they can be mobilised in a timely manner, central bank says in circular.
Duvvuri Subbarao recounts how his tensions with P Chidambaram and Pranab Mukherjee, then finance ministers, over monetary policy spilled over into other issues in the central bank in this excerpt from Who Moved My Interest Rate?, his memoir of his term as Reserve Bank of India governor.
The 42-year-old Acharya's appointment for a three-year tenure was cleared by the Appointments Committee of the Cabinet.
'We have essentially tried to set out an agenda for the next five years and it, in essence, represents the political commitment to that agenda.'
A crucial meet of the Reserve Bank's central board is underway amid a rift between the central bank and the government over future course of policies. Expectations of a positive outcome boosted market mood after the meeting began.
For the past 10 years or more, the RBI has been turning down dozens of applications under the RTI Act that sought disclosing the list of wilful defaulters and the RBI's inspection reports. In fact, it is the only organisation that has a granular and complete view of the heist that has been going on for 25 years at least. But it has escaped any blame for the multiple rounds of bankruptcy and massive periodic recapitalisation of public sector banks caused by bad loans. In fact, they don't want anyone to know how incompetent and collusive they have been in handling bad loans, says Debashis Basu.
To further strengthen the supervision on non-banking entities (NBFCs), the Reserve Bank on Tuesday issued revised guidelines on a Prompt Corrective Action (PCA) framework for such companies, excluding government-owned ones, effective from October 1, 2022, on the lines of what it had introduced for banks in 2002. The RBI came up with stricter supervisory norms under the PCA framework for banks after their bad loans mounted and balance-sheets bled badly. This involved restricting them from fresh lending, brand opening and, hiring, among others. The RBI said the revised PCA framework is also applicable to all deposit-taking non-banking financial companies (NBFCs), all non-deposit taking NBFCs in the middle, upper and top layers, including investment and credit companies, core investment companies, infrastructure debt funds, infrastructure finance companies and microfinance institutions.
The quizzing of the 48-year-old daughter-in-law of superstar Amitabh Bachchan and Samajwadi Party MP Jaya Bachchan comes weeks after her husband Abhishek Bachchan was questioned by the agency in another case emerging from the same set of papers linked to the offshore leaks case, they said.
For banks, the package will limit the burden of provisioning for stressed loans. Besides, the proposed restructuring package for MSMEs with a credit of up to Rs 25 crore is expected to provide a breather to units from this sector.
Will RBI chief have the final say, in the form of a veto
Only Rs 10,720 crore of the junked currency notes did not return to the banking system, rest 99.9 per cent was deposited raising question mark over the government's effort of curbing black money through the demonetisation.
Application deadline may be extended but no leeway on priority-sector targets.
That's all it takes to protect an institution -- just one person with no past and no greed for the future, says Shekhar Gupta.
Other members of the high-level advisory committee are former RBI Deputy Governor Usha Thorat, former Securities and Exchange Board of India Chairman C B Bhave, and Nachiket M Mor, Director of the Central Board of Directors of RBI, Governor Raghuram Rajan said.
With the July 1 deadline to apply for bank licence fast approaching, aspirants are scrambling to meet the Reserve Bank of India's (RBI) eligibility criteria to apply.
Will Arundhati Bhattacharya be the RBI's first woman governor? Or will Urjit Patel succeed Raghuram Rajanas RBI governor when his term ends on September 4?
It's time the regulator did some introspection.
The report contains names of entities eligible for bank licences. It was not immediately known how many applicants have been shortlisted by the high-level advisory panel.
Private equity (PE) is set to play a bigger role in banks. Of 21 recommendations accepted by the Reserve Bank of India (RBI) out of 31 made by its Internal Working Group (IWG), its stance on non-promoter holdings in private banks is seen with excitement, though it doesn't refer to PEs explicitly. On non-promoter holdings in these banks, the RBI said this will be capped at 10 per cent of the paid-up voting equity share capital in the case "of natural persons and non-financial institutions and entities"; and "at 15 per cent for all categories of financial institutions, entities, supranational institutions, public sector undertaking, or the government." While this is a modification of the IWG's stance for the non-promoter holding in banks at up to 15 per cent, it does open up a huge window for PEs, all the same. This is because, while the RBI has remained silent on the eligibility of industrial houses for bank licences, fresh high-quality capital in large amounts can only come from PEs.
Has the Modi government been more at odds with institutions than other governments? There is no doubt that there have been more run-ins. While the RBI and CBI cases have drawn attention, there have been others, less publicised, Subhomoy Bhattacharjee points out.
This is not her first stint in North Block or in leading a major economic ministry. She started Prime Minister Narendra Modi's first term as minister of state for finance, was made the commerce minister, and then became the defence minister.
Govt reconstitutes body, says will not interfere in senior PSB appointments
RBI has appointed R Subramaniakumar, the ex-managing director of Indian Overseas Bank as the administrator of the third largest pureplay mortgage lender.
Central bank sees action as discriminatory, unfair
In the last few years, zero per cent financing has become quite attractive as consumers aspire to buy the latest products, especially in categories such as mobile phones and television sets.
'The temptation of governments, to have a finger in the RBI pie will be just too great to resist, unless extensive amendments are carried out in the RBI Act treating it almost as the fourth branch of the government.'
The Reserve Bank of India said Airtel's board of directors and shareholders have passed resolutions agreeing to increase the limit on the purchase of its equity shares and convertible debentures by foreign institutional investors.
Unlike any other business, banking is a turf where the captain's role is the most critical. Often a bank is defined by the personality of the CEO who runs it. Both HDFC Bank and Kotak Mahindra Bank are the creation of their CEOs, notes Tamal Bandyopadhyay.
Based on this screening, the committee may weed out applications that do not meet the eligibility yardstick or the 'fit and proper' criteria for securing a licence.
In yet another step to attract foreign money, the Reserve Bank of India (RBI) has allowed non-resident investors to acquire shares of listed Indian companies through stock exchanges under the foreign direct investment (FDI) scheme.
'For years, the RBI has been warning banks on probable frauds in bank guarantees and advised them to exercise due care.' 'PSB staffers feel their jobs are secured, hence there is no need to be vigilant and exercise financial prudence.'
