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Monday, October 20, 2014

Main News Today 21st October 14

Bombay High Court seeks Reserve Bank of India's response to PIL on Non-Performing Assets-DNA

The Bombay High Court has asked the Reserve Bank of India to respond to a petition which seeks CBI probe into fraudulent grant of loans and consequent rise in nationalised banks' non-performing assets.

The division bench of Justices Abhay Oka and GS Kulkarni last week directed RBI to file a reply and posted the matter for hearing on December 9. The PIL, filed by activist Ketan Tirodkar, says the NPAs of nationalised banks jumped from Rs 455 crore in March 2008 to Rs 9,190 crore in March 2012 as per the data obtained under the Right to Information Act.
Tirodkar further says that several banks had reported to CBI at least 140 cases of fraud in loans between 2008 to 2012. However there is no information as to whether cases were registered.

The nationalised banks have not complied with the Banking Regulation Act which requires that periodically annual reports be submitted to the apex bank. Had the reports been submitted the fraud would have come to light, the PIL says.

This was done to shield the beneficiaries of such bad loans who are in league with bank officials, it alleges.

The bank authorities sanctioned loans in many cases by manipulating the feasibility reports and did not report accumulating NPAs to RBI, it says.

"When such defaults in repayment of loans are brought to the notice of the apex bank, it is not possible at that stage to issue corrections and the banks are forced to write off the loans or settle them for peanuts," the PIL says, seeking a direction to CBI to register criminal cases.

http://www.dnaindia.com/india/report-bombay-high-court-seeks-reserve-bank-of-india-s-response-to-pil-on-non-performing-assets-2027911

PSU bank trio in a spot in UK-The Telegraph

Mumbai, Oct. 20: At least three Indian public sector banks with operations in the UK may have to rejig their structure after the Bank of England’s Prudential Regulatory Authority (PRA) announced new norms last month.
 
Banking circles fear the new norms can affect the operations of the State Bank of India (SBI), the Bank of Baroda and the Bank of India, which largely serve the diaspora there.
Last month, the PRA had issued a detailed guideline on the supervision of international banks following a draft note in February.
 
In the UK, foreign banks can operate either as subsidiaries or as branches.
A subsidiary is a legal entity separate from the parent and meets its own capital and liquidity requirements. A branch may not have its own capital base or board.
Such branches are monitored by the home state supervisor (HSS) where the bank is based and the PRA.
 
Under the latest norms, the PRA will cover both new and existing branches to ensure the safety and stability of the UK’s financial system. It will also assess whether the home country’s supervision is equivalent to that of the PRA.
 
The PRA said it would allow banks to offer retail services beyond the minimum levels if there is a “very high level of assurance from the HSS”.
Further, such branches will be allowed wholesale banking at a level that is not critical to the UK economy, which means any disruption in their service should not result in financial instability in that country.
 
The PRA indicated that the new conditions would not apply to international banks with less than £100 million of deposits.
 
The SBI and other banks have deposits of more than £100 million in the UK. Hence, these lenders will now have to tweak the structure and take the subsidiary route.
These banks can continue to operate as branches, depending on the PRA’s assessment.
“Where an HSS is determined not to be equivalent... the firm will need to operate in the UK as a subsidiary,” the PRA said.
 
Meanwhile, the State Bank of India has said it is determined to continue retail banking operations in the UK despite the crackdown by the Bank of England, reports PTI.
According to the agency, Mrutyunjay Mahapatra, the UK head of the bank, has told The Times newspaper that the bank will keep serving retail customers in Britain as well as open new branches
 
http://www.telegraphindia.com/1141021/jsp/business/story_18947611.jsp#.VEWRaOfrbIU
 
RBI injects Rs 98.12 bn in banking system
 
The Reserve Bank of India (RBI) has injected Rs 98.12 billion in the banking system via 1-day repo on Oct. 20, 2014. At the auction conducted under liquidity adjustment facility, the central bank received 30 bids for 1-day repo, were accepted. These repos are traded at a fixed rate of 8%. RBI absorbed Rs 105.72 billion via 3-days reverse repo on Oct. 17, 2014. At the auction conducted under liquidity adjustment facility, the central bank received 33 bids for 1-day reverse repo, which was accepted. These reverse repos are traded at a fixed rate of 7%.

Sunday, October 19, 2014

Why Bankers Demand Indefinite Strike

There is no doubt in it, that the steps taken by leaders of UFBU during last two years for wage revision of ban staff are not at all up to the mark and not upto the expectation of bank staff and not even 10 per cent of what used to happen a decade ago for expeditious settlement of wage revision.
UFBU showed casual attitude in submission of Charter of Demand and it is they who abnormally delayed its submission to Indian Bank Association and/ or Ministry of Finance , it is they who remained sleeping for months together and it is they who remained casual , inactive and ineffective starting from first wage talk till last dialogue which took place on wage revision. Management of bank under the banner of IBA gave humiliating response during each wage talk which took place and showed disrespect to UFBU even in fixing a date for next wage talk.

I need not enlighten elaborately on the progress which took place on wage revision during last two years. I have in the past too narrated how casual are leaders and how IBA is giving humiliating treatment to our so called militant leaders. Now after lapse of almost two years if bank staff demand for indefinite strike instead of one or two day strike, their demand is not unjustified. It is proper to mention here that it is only in banking industry that bank staff voluntarily opt for loss of pay for the period they remain on strike. Bank staff offer loss of pay even if they are on leave for some reason or the other.

Matter of strike for indefinite period may appear to be lose venture but why such demand is vehemently and forcefully coming from bank staff themselves who have to loss their pay for such strike period is a matter of consideration and all leaders who think them as true and militant leaders must ponder over it and give valid reasons to Aam bankers to pacify their anger. If they have any genuine reason for such casual approach , they should place the same before Aam Bankers and try to act in more transparent way.

If you want to read full article please click on following link

Full article on Why UFBU is abused for abnormal delay in wage revision?

Saturday, October 18, 2014

Issue Of Wage Revision Reaches FM Through Javedkar

Javadekar leads bank employees' delegation to meet FM-Times of India 19.10.2014

NEW DELHI: Representatives of bank employees headed by Union minister Prakash Javadekar on Saturday met finance minister Arun Jaitley for early settlement of wage revision negotiations.

Javadekar said the finance minister assured the delegation that he would look into the matter and the settlement process would be expedited.

The delegation's meeting with the finance minister came days after the umbrella body of the lenders IBA rejected the union's call for steeper wage hike.


Javadekar, who earlier worked as bank employees before actively getting into the politics, said the wage revision of public sector bank employees has been due since November 2012.

In the last round of wage revision settlement signed in 2010 for 2007-12, the management had agreed to 17.5 % raise in total salary.

Unions had gone on a two-day nation-wide strike in February to press for their demands.

Citing high inflation, they had rejected the management's offer of a 10% hike in the cash component of the pay package, which was improved to 11 per cent after the two days nationwide strike.

The delegation also asked the finance minister to give fair treatment to employees of the United Western Bank (UWB) which had merged with Industrial Development Bank of India (IDBI).

"The finance minister has already assured that he would look into the matter and do whatever needed," Javadekar said.

He also led a separate delegation of LIC employees to the finance minister to press the demand for justice for LIC employees and officers whose wage negotiations have altered.

"Just a preliminary talk had happened and after even two year of new wage revision which was due in 2012, the situation in 2014 that there is no meaningful talks have taken place.

"We requested him that the talks should be immediately started and concluded as early as possible so as to give justice to the LIC employees and the officers," Javadekar said


Link for Abve News in Times of India


 

Friday, October 17, 2014

Demand For Low Interest Regime

When RBI actually began to lower its repo rates between Oct 2008 and Feb 2010, with the rates finally bottoming at 4.75-5 per cent levels, credit growth too, surprisingly, lost steam. Growth in bank lending came off peak levels, and fell to 16-17 per cent in this period.
 
Even in more recent times, when the RBI reduced its repo rate between April 2012 and May 2013, credit growth scarcely responded. Between the two periods, the RBI reduced the repo rate by 125 basis points. But credit growth in 2012-13 decelerated further to 14 per cent, from 17 per cent in 2011-12.
 
Credit clearly, could not revive as long as economic growth was so sluggish. Real GDP growth, which was at 6.7 per cent in 2011-12, had slipped below 5 per cent in 2012-13. This clearly shows that bank credit offtake, the appetite to borrow, is more a function of economic growth and business confidence than the actual cost of money. Over the last ten years, the credit growth has been 2.5 to 3 times the real GDP growth and this multiplier has held good in bad as well as good times.
 
Today, the economy is going through one of its most troubled periods in recent history, growing less than 5 per cent for two consecutive years-- 2012-13 and 2013- 14. It is no surprise therefore that bank credit too, after growing at 22 per cent annually since 2004-05, slipped substantially in 2012-13 and 2013-14 to 13-14 per cent.

Supreme Court On Black Money

India has signed double tax avoidance treaty with countries from whom the information related to back money has come to India. The agreement was signed much before BJP or NDA assumed power. Now as per terms of the agreement if BJP shares the information with media ,it may give MASALA to media and common men or opponents to fire bullets against the current government at centre led by Narendra Modi , but the foreign countries will stop disclosing names in unison with the agreement already signed by none other than Indian Government . It is immaterial whether BJP or Congress Party signed the agreement.

However as soon as the charges against culprits are established, the name can be    disclosed, as I understand from newspaper information. However the final order of Supreme court in this matter will throw light on this issue, how to deal with a situation where the country has to respect treaty signed by a government of India.

It is undoubtedly true that government, NDA or UPA cannot go against the spirit of agreement already signed with foreign countries by Indian government, headed by NDA or UPA , otherwise India as a whole will lose its credibility in international forum. No other country will sign such agreement in future with India. There are specific clauses in the tax treaties with countries (which have furnished names ) that prevent sharing of information. However the information is in various stages of processing and investigation and as soon as it is established that the charges are fit for legal action , the name will automatically come to media. I hop media will also understand the intricacies of treaties and will not give scope foreign countries to dilute their faith on India.

If you desire to read full article on this issue please click on following link to read in detail

Disclosing Name of Persons Who parked Black Money in Swiss Bank is Difficult

Thursday, October 16, 2014

Good or Bad News For Babus And Officers

Editorial: Giving To Receive?-Financial Express-16.10.2014
Is it a bribe or just tradition? The Narendra Modi government certainly frowns on it. The finance ministry has sent out a circular asking state-owned banks and insurance companies to desist from doling out Diwali gifts this year. This was in response to an informal directive from the PMO to ministries which have PSUs under their administrative control to advise their commercial arms not to send out gifts this Diwali. It had been a usual practice for PSUs to give expensive gifts during the festive season as part of their public relations exercise, but now, there is uncertainty over whether it is an austerity measure or an attempt to curb what could be viewed as inducement.


There are two sides to the story of Diwali gift-giving. Earlier, it used to be a box of sweets and dry fruits and diyas. Reliance took it to another level when, under Dhirubhai Ambani back in the 1980s, it started sending out luxury suit lengths. That opened the floodgates and, since then, Diwali gifts have become hugely expensive, from high-end watches and expensive liquor to pen sets that cost thousands, and, of course, the ubiquitous hampers full of imported goodies, including champagne. It created a brand new industry. In the last few years, gadgets have become desirable, so cellphones, laptops and tablets took pride of place. Of late, bureaucrats have started hinting at a wishlistthis year, to no one’s surprise, its the iPhone 6. There is also the other side, that its a traditional thing, a popular branding and PR exercise by most companies, without really expecting a quid pro quo. Even the media gets similar gifts and there is generally no payback expected. It is the gifts that arrive outside the festive season that give cause for suspicion.
 
 



Read Full news and write up on culture of Diwali gifts and Click On Following Link

Diwali Gifts for Babus And Offices and Ministers

Official Circular Of AIBOA On Bank Staff Agitational Programme


ALL INDIA BANK OFFICERS' ASSOCIATION
 


Circular Letter No. 19:VI:2014

October 14, 2014

Dear comrade,

 
v Bangalore meet decides to escalate the agitation to realise the delayed wage revision



v Withdrawal of co-operation with immediate effect

v ALL INDIA STRIKE on 12.11.2014

In the background of overlapping festivals in the month of October 2014 and also elections in the State of Maharashtra and Haryana, the original strike on 28.10.2014, THE date decided on 26.09.2014, has to be put on hold.

The Nine constituents met at Bangalore on 13.10.2014. AIBOA was represented by the undersigned and Com.S.S.Shishodia, President.

While AIBOA insisted for adherence to the strike date on 27.10.2014 to express the strong displeasure to the authorities concerned in the Industry and also to the Government of India the possible peculiar situation of clubbing strike date with intervening holidays and also the practical constraints in adherence to work to rule by officers alone were placed in the meeting.
 
After a detailed debate, the meeting came to an inescapable decision to escalate the agitation viz., withdrawal of co-operation with immediate effect by total workforce viz. OFFICERS / WORKMEN and also to observe the strike on 12th November 2014 besides the other programmes, already decided.
The UFBU circular is appended hereunder.


To Read Full Text Of circular, please click on following link

AIBOA Circular on Bank Staff Agitation Programme