M.C. MEETING HELD AT VIJAYAWADA ON 10TH JULY 2011

M.C. Meeting of Central Bank Officers’ Association, Andhra Pradesh was held at Vijayawada on 10th July 2011 to take stock of the situation and deliberate on several important issues concerning the officers functioning in the Unit area. The house has decided upon the issues to be taken up with the management on priority basis and passed several resolutions.

As per the decisions of the M.C. Meeting, CBOA-AP has taken up the issues with the management immediately and requested them to initiate necessary steps to resolve the issues.

We are placing here the letter written to Zonal Manager, Hyderabad along with copies of resolutions passed by the Meeting unanimously.

LETTER ADDRSSED TO ZONAL MANAGER, HYDERABAD

GS / CBOA/ 2011 / 154                                DATE: 12.07.2011

ZONAL MANAGER

CENTRAL BANK OF INDIA

ZONAL OFFICE

HYDERABAD

Dear Sir,

REG: M.C. MEETING OF OUR ASSOCIATION

In connection with the above, we would like to inform you that Managing Committee of our Association was held at Vijayawada on 10th July 2011 to take stock of the situation and issues concerning the officers working in our unit area.

The Managing Committee has discussed several issues including the ensuing rotational transfers of Scale-I Officers, partisan attitude of the Regional Management, apart from other issues.

After threadbare discussions, Managing Committee has unanimously passed several resolutions and also decided to request the management to initiate necessary steps for resolving the issues raised therein the meeting.

We enclose herewith copies of the resolutions passed by the Managing Committee and request you to initiate necessary steps in resolving the issues.

Yours sincerely,

Sd/-

(C.A. MALLIKARJUNA RAO)

GENERAL SECRETARY

Encl: As above

RESOLUTION PROPOSED TO THE MANAGING COMMITTEE MEETING HELD ON 10^TH JULY 2011 AT VIJAYAWADA

Several Scale-I Officers were transferred by the management from one Region to another Region in the Zone under Six Years Policy. All of them have been facing lot of hardships due to the separation from their families and children, who are in crucial stage of their life. The Six Years Policy announced by the bank during 2006 only resulted in demotivating these senior Scale-I Officers.

We have been demanding the management since 2007 to delete the provision of transfer of Scale-I Officers from one Region to another Region after six years of their continuous stay in a Region. Management has recently amended the transfer norms and deleted the compulsory transfer of Scale-I Officers from one Region to another Region after their continuous stay of six years in the Region. The amendment has given relief to many Scale-I Officers who are on the verge of transfer to other Regions due to their six years continuous stay in the Region.

This matter was deliberated at length by the house and the following resolution was passed.

-    That the management should transfer the Scale-I Officers, who were transferred from one Region to another Region under Six Years Policy, to their parent Region, irrespective of their stay in their present place of posting in the Region.

RESOLUTION PROPOSED TO THE MANAGING COMMITTEE MEETING HELD ON 10^TH JULY 2011 AT VIJAYAWADA

Central Office has considered the request transfer applications of All India Officers of May 2008 batch and affected the inter-zone transfers. Central Office has also instructed the Zones to rotate the Scale-I Officers who have completed three years in a place as of 31^st May 2011. However, a large no. of Officers, who were promoted from clerical cadre to Officer Cadre in Scale-I during October 2008, are not becoming eligible for rotation as they will be completing their tenure of three years only in October 2011. They are losing the opportunity of rotations and going back to their respective Regions by only three months,

This matter was deliberated at length by the house and the following resolution was passed.

-         That the Management should transfer the Scale-I Officers, who were promoted from Clerical Cadre to Scale-I in October 2008, to their parent Region during the ensuing rotations without stipulating for completion of three years tenure at their place of posting.

RESOLUTION PROPOSED TO THE MANAGING COMMITTEE MEETING HELD ON 10^TH JULY 2011 AT VIJAYAWADA

Management, at all levels, should function in the interest of the bank and should not interfere in the affairs of trade union or function in collusion with the trade unions by taking sides. The actions of the management should motivate all the staff members irrespective of their trade union affiliations. However, the trade union sponsored activities of the management would only result in affecting the morale and motivation of the staff members working in the demarcated area.

Regional Management, Vijayawada has been functioning in a way detrimental to the interests of Officers affiliated to Majority Officers’ Association and acting as per the dictates of Minority Officers’ Union and their affiliated wing of Award Staff. There have been several instances whereby interests of the Bank have been jeopardized for the sake of Minority Officers’ Union and their affiliated members.

The house deliberated at length about the actions of Regional Management including transfers of Mr. A.V. Ramana Murthy to Srikakulam, Mr. V.R.A. Achary from Suryabagh to Anakapalli and deputations of Mr. G.N. Trimurthulu from Chilakalapudi to Benz Circle for more than a year, Mr. K. Pardhasaradhi from Mylavaram to Benz Circle, Mr. G.V. Raveendra Kumar from Ardhavaram to Suryabagh apart from other issues.

This matter was deliberated at length by the house and the following resolution was passed.

-       That the management should immediately initiate corrective measures to maintain cordial industrial relations in the Region and to restore confidence among the officers working in Vijayawada Region on impartiality of the administration.

BANK ASSOCIATION TELLS MEMBERS NOT TO GO OVERBOARD

The Indian Banks' Association (IBA) has warned banks not to go overboard in their drive to recover bad loans. The caution from the lobby of banks' management comes after some state-run lenders such as Corporation Bank and the State Bank of India, in their zest to recover bad debts, put up photographs of defaulting borrowers at their branches.

At a meeting of the chiefs of large commercial banks, IBA said such a method could create stress on borrowers which could backfire. There are past instances when borrowers committed suicide due to aggressive recovery procedure adopted by banks, which led to the lender being dragged to court. Banks have now decided to display photos of only willful defaulters, sources said.

Earlier, industry bodies protested saying banks were being unfair to their clients. However, defending its loan recovery method, Corporation Bank chairman and managing director Ramnath N Pradeep said: "If borrowers can adopt different means to avoid payment of loans, bankers too can adopt ways to recover loans." "So far, the response in recovery of money has been good. We have recovered over Rs 200 crore from written-off accounts," he said, adding, "We are not targeting farmers and poor borrowers in the recovery drive."

SOURCE: http://articles.economictimes.indiatimes.com/2011-07-06/news/29743654_1_loan-recovery-bad-loans-state-bank

SBI HIKES DEPOSIT RATES BY UP TO 1%, HOME LOAN EMIS TO GO UP

Country's largest lender State Bank of India today increased lending rates by 25 basis points and raised deposit rates by up to 100 basis points, a move that will make home, auto and other loans more expensive, but will provide better returns to savers

The bank has revised the base rate or the minimum lending rate upwards by 25 basis points (bps), or 0.25 per cent, to 9.50 per cent with effect from July 11, SBI said in a statement.

The interest rates on fixed deposits with a maturity period of 1-10 years has been fixed at 9.25 per cent. The new deposit rates would be effective from July 11.

The bank has also raised its benchmark prime lending rate (BPLR), used to determine floating interest rate loans, have been increased to 14.25 per cent from 14 per cent.

The decision follows the rate hike announced by the Reserve Bank in its policy review last month. Several banks, including major private lender ICICI Bank ,Canara Bank , Bank of Baroda , have already raised their lending rates.

According to the statement, deposits up to 90 days will fetch an interest rate of 7 per cent as against 6.25 per cent.

The interest rates for fixed deposits with a maturity period of 1-10 years would be 9.25 per cent. Current deposits between 1 year and 554 days earn an interest of 8.25 per cent.

SBI has also decided to waive the penalty for premature withdrawal of deposits up to 90 days. For premature withdrawal of other deposits, it reduced the penalty to 0.50 per cent from from 1 per cent.

The RBI hiked key short-term lending and borrowing rates by 25 basis points (0.25 per cent) each with immediate effect to tackle inflation. The short-term lending (repo) rate rose to 7.5 per cent and the borrowing (reverse repo) rate to 6.5 per cent.

Last week, besides ICICI Bank, other public sector lender Indian Overseas Bank, Corporation Bank and Dena Bank also hiked their base rate by 25 basis points each.

While other banks have raised only the lending rates, SBI is the first bank to announce a hike in both lending and deposit rates.

   

SOURCE: http://economictimes.indiatimes.com/news/news-by-industry/banking/finance/banking/sbi-hikes-deposit-rates-by-up-to-1-home-loan-emis-to-go-up/articleshow/9137400.cms

SBI RATE HIKE: LOANS DEARER BY 0.25%, GET 1% MORE ON DEPOSITS

The State Bank of India has made loans dearer by 25 basis points, paying heed to the Reserve Bank of India's monetary squeezing strategy. It has raised deposit rates by up to 100 bps. While a higher loan rate is expected to reduce money supply and check rising inflation, it may also compress economic expansion.

This is the third time the country's largest bank has raised the lending rate this fiscal, effecting a cumulative 125 bps rise since April. SBI's new base rate will be 9.50% a year, raised from 9.25% earlier. All new rates will be effective from July 11. A 25 bps increase means a rise of quarter percentage point.

Accordingly, its fresh housing and car loans will be dearer by 25 bps straightaway, as these are mostly linked to banks' base rate. Interest rates on new loans and advances are now linked to base rate since July 1, 2010.

The bank has increased its benchmark prime lending rate by the same extent. BPLR is linked to loans and advances sanctioned up to June 30, 2010. Borrowers who opted for fixed rate loans will not be impacted by the latest trend as their contracted rates will remain unchanged.

While the bank increased deposit rates for most maturities, it reduced rates for 180-240 days' tenure. It will pay 25 bps more at 7% for deposits up to 90 days while deposits for 91-189 days will fetch 7.25% a year. Depositors will get a uniform 9.25% rate for more than one-year period.

To provide depositors more flexibility, SBI has waived penalty for premature withdrawal for deposits up to 90 days and reduced the penalty by 50 bps to 0.5% for tenures beyond 90 days.

Private sector Dhanlaxmi Bank hiked its lending rates by 25 bps too. "The base rate and the BPLR will be revised to 10.25% and 19.25%, respectively, from the current 10% and 19%," the bank said in a statement. Dhanlaxmi Bank chief financial officer Bipin Kabra said: "The hike in our base rate and BLPR reflects tight monetary conditions and is in line with market trends."

A host of other lenders, including ICICI Bank, has already raised lending rates by 25 bps earlier this month.ICICI Bank raised its base rate to 9.50% while Canara Bank raised the benchmark rate by the same extent to 10.25%. Viyaja Bank, Corporation Bank and Indian Overseas Bank followed suit and have raised their base rates to 10.25% while Dena Bank has revised its base rate to 10.20%.

SOURCE: http://economictimes.indiatimes.com/news/news-by-industry/banking/finance/banking/sbi-rate-hike-loans-dearer-by-025-get-1-more-on-deposits/articleshow/9144428.cms

AIBOC CIRCULAR NO. 66 DATED 06.07.2011

AIBOC issued its circular No. 66 dated 065.7.2011 on All India Bank Strike to be observed on 05th August 2011.

CIRCULAR NO.66                                            06.07.2011

TO ALL AFFILIATES/MEMBERS:

MARCH ON TO 5TH AUGUST ALL INDIA BANK STRIKE

We reproduce hereunder the text of UFBU Circular No.UFBU/2011/8 dated 3rd July, 2011 contents of which are self-explicit.

With greetings,

Sd/-

(G.D. NADAF)

GENERAL SECRETARY

TEXT

All our unions and members are by now aware that it has been decided to postpone the strike from 7th July, 2011 to 5th August, 2011 in view of the delayed commencement of the Parliament session. In a way, this has given us further time to campaign on our issues and demands and to further extensively mobilise our members for the sustained struggles ahead.

We have already informed the IBA, all Bank managements and the Chief Labour Commissioner, Government of India about the postponement of the strike.

As decided in our UFBU meeting, we are adding the demand: “Settle the demands of employees/officers of Regional Rural Banks, Co-operative Banks and the Bank Daily Deposit Collectors.”

The amended Strike Notice is being sent to the IBA and all other concerned authorities.  Our Unions in RRBs and Co-operatives have to serve separate Notices on their management as per their practice.

The following preparatory programmes are given for implementation by all our Unions:

i)                    Holding of State-level UFBU meetings to discuss and implement further programmes.

ii)     Memorandum signed by all employees and officers to be submitted to the Branch Manager/Incharge of the offices before 15-7-2011 (wherever this programme has already not been completed).

iii)                Deputation to the CMDs/MDs of all Banks by leaders of the UFBU constituent unions in each Bank and submitting the memorandum wherever this programme has not been undertaken so far. Joint demonstrations can be held on that day before the Central Offices of the Banks.

iv)                Meetings and Conventions to mobilize our members as well as to solicit   support of other trade unions

v)                  Display of posters before all branches/offices

vi)                Distribution of leaflets to the customers and general public about our demands

vii)              Letters from UFBU to all Central Trade Unions seeking their support and solidarity.

viii)            Letters from UFBU to political parties seeking their support to our demands.

ix)       Letters from UFBU to Members of Parliament requesting them to raise our issues in the Parliament during the session

x)                  Press meet/press release, etc between 25th and 30th July, 2011

xi)                Lunch-time evening time demonstrations in all branches/centres on 20-7-11 and 1-8-11.

xii)              Dharna in all State Capitals on 27-7-2011

xiii)            Centralised Mass Rallies/processions in all cities and towns on 2-8-2011.

xiv)            Demonstrations in all branches on 4-8-2011

ALL INDIA BANK STRIKE: 5TH AUGUST, 2011: Demonstrations and Rallies.

Comrades, the need of the hour is unity and united struggle to effectively thwart the attacks and achieve our demands. Hence, we appeal to all our unions to move together and implement the programmes successfully.

With greetings,

Yours Comradely,

Sd/-

C.H.VENKATACHALAM

CONVENOR

SUCCESSFUL CANDIDATES LIST OF CLERICAL RECRUITMENT IN CENTRAL BANK OF INDIA

Central Bank of India has announced the list of successful candidates of the written test held for the recruitment of Clerical Cadre. We are placing herebelow the link for the list.

https://www.centralbankofindia.co.in/upload/successful_candidate_list_Clerk2011_updated.pdf

SBI LAUNCHES DEBIT-CUM-TRANSIT CARD FOR BANGALORE METRO RAIL

SBI and Bangalore Metro Rail Corporation Limited (BMRCL) today launched SBI-Debit-Cum-Transit card, designed to facilitate hassle-free travel in the upcoming mass transport system.

Besides acting as a transit card, the SBI-Debit-Cum-Transit card can be used for ATM transactions, at shops and malls and also at the bank's green channel counters, SBI officials said.

The card, which consists of an e-purse that facilitates storing rupee value for travel in 'Namma Metro,' was launched at a function attended by, among others, SBI Chairman Pratip Chaudhuri.

The e-purse can be topped up through any of SBI's banking channels like ATM, mobile and internet banking apart from cash.

BMRCL Managing Director N Sivasailam said the card was the first of its kind in the world, adding such an initiative was expected to be introduced for London metro commuters only next year.

He said once the 'Namma Metro' line develops, BMRCL would come up with fresh offers for other banks to come out with a similar card initiative.

Sivasailam thanked SBI for giving a loan of Rs 850 crore at an interest rate of base rate-plus-0.75 per cent at a time when it's not easy to get such loans even at base rate-plus-two per cent.

Bangalore metro is yet to become operational, but he said RDSO (Research, Design and Standards Organisation under Railways) has completed oscillation trials on 'Namma Metro' Reach-1 stretch from M G Road to Byapanahalli, with a total of six stations.

SOURCE: http://economictimes.indiatimes.com/news/news-by-industry/banking/finance/banking/sbi-launches-debit-cum-transit-card-for-bangalore-metro-rail/articleshow/9125343.cms

RBI CAUTIONS BANKS ON RISING USE OF FORGED DOCUMENTS

The Reserve Bank of India has cautioned banks about the increasing number of frauds that were perpetrated by the use of forged documents that had been certified by professionals – that is, valuers, advocates and chartered accountants.  In a circular to all bank CEOs last week, the RBI said that in a study of large frauds, it has noticed these things happened even in branches that were subject to concurrent audit. It said that in many instances, audit responsibility was assigned to bank staff without adequate training

 It has asked concurrent auditors to look into the genuineness of documents of title and has asked them to check with local revenue authorities where necessary.  It has also asked banks to independently authenticate the genuineness of the certificate issued by any authority that is submitted by the borrower.

Where it is established that such certification is wrong, the Indian Banks Association (IBA) should put in place a process to issue a ‘caution list' about the certifier to all banks, the circular said.

HOME LOANS

Asked about the extent of the problem, Mr Rohit Mahajan, Executive Director & National Head - Forensic Services, KPMG India, says, “Our experience working with banks involving home loans portfolio has indicated several issues such as inconsistent documentation, double financing, inflated valuation and others.”

He adds that the aspects typically forged in loans segment include credit history of individuals so as to be able to obtain more loan and overvaluation above the market values to avail higher loan amount.

Besides, there are also builder induced frauds where individuals in connivance with builders forge property documents (especially in case of buildings under construction) to avail loans. The builder sells the same property to multiple buyers. All forged documents are typically used to avail multiple loans from various banks or to increase loan amounts from a bank, according to him.

SOURCE: http://www.thehindubusinessline.com/industry-and-economy/banking/article2201179.ece

IOB CLEANS UP BALANCE-SHEET WITH RS 970-CR WRITE-OFF

In an effort to clean-up its balance sheet, Indian Overseas Bank wrote bad debts worth about Rs 970 crore in 2010-11. The bank also sold 37 bad accounts for Rs 415 crore to an asset reconstruction company (ARC).

The bank had bad debts of Rs 3,089 crore (2.7 per cent) for the financial year ending March 31, 2011, compared with Rs 3,611 crore (4.4 per cent) the previous year.

The bank would continue to chase these bad accounts and not let these defaulters off-the-hook although the loans are written off in the balance sheet, the bank officials told Business Line.

According to the bank's annual report, sale of 37 bad accounts with a book outstanding of Rs 415 crore was sold to an asset reconstruction company for a sale consideration of Rs 265 crore. Since the book value of the bad debts is only Rs 200 crore, the bank would make a profit of Rs 65 crore on the sale of the loans to ARCs.

Although the book outstanding was Rs 415 crore, it is the net book-value of bad debts that are considered. Net book-value is book outstanding minus provisioning made on the account. The net book-value of these bad debts was only Rs 200 crore.

The bank made a cash recovery of Rs 1,402 crore (including recovery from written-off accounts and recovery of undebited interest).

The bank managed to recover Rs 206 crore through compromise settlement involving Rs 354 crore.

SOURCE: http://www.thehindubusinessline.com/industry-and-economy/banking/article2201497.ece

BANKS URGED TO ADAPT NEW TECHNOLOGIES

Banks will put in place strong and robust systems and adapt emerging technologies to draw economies of scale and reduce operational cost, according to Mr Ramnath Pradeep, Chairman and Managing Director of Corporation Bank and Honorary Chairman of Bankers' Club of Mangalore.

He was addressing the members of the Bankers' Club of Mangalore at the corporate office of Corporation Bank here on Tuesday evening.

He said that banks need to gear up to absorb new technologies and have improved delivery of services for comfort to customers. Technological innovation should be fully exploited and results gained should be used in making services competitive, he said.

The forum of banker's club should be effectively used for exchange of information mutually beneficial for sound business growth and avoid likely problems being faced by the bankers, he added.

A press release said here that Bankers' Club had arranged a presentation on emerging technologies and cloud computing by Mr H. Srikrishnan, Co-founder and Director of Vayane Services.

Mr B.R. Bhat, General Manager of Corporation Bank and Executive President of Bankers' Club, introduced the subject Cloud Computing and urged the bankers to make use of the opportunities.

Ms Renuka Bangera, Secretary of the Bankers' Club, proposed a vote of thanks. Mr Narendra Singh and Mr Ashwani Kumar, Executive Directors of Corporation Bank, were present on the occasion.

SOURCE: http://www.thehindubusinessline.com/industry-and-economy/banking/article2201424.ece

GOVT MACRO DATA NOT RELIABLE, SAYS RBI

The Reserve bank of India (RBI) has said it cannot make policy decisions relying on the data provided by the government. RBI governor D Subbarao said on Tuesday the central bank has been facing severe headwinds on multiple fronts because of the erroneous data published by the government-from advance estimates of GDP to revisions in industrial production (IIP) numbers to the preference of WPI over CPI as the measure for inflation.

"We are handicapped by the reliability of some of the basic data that we need to use in policy calculations," Subbarao said while speaking at RBI's Statistics Day, and warned that poor quality data could potentially mislead policy calculations. "We make policies in real time and if the provisional data that these are based on are inaccurate, the resultant policies can turn out to be sub-optimal choices," he said.

For example, in the post-Lehman era when RBI is in a high alert mode, there have been frequent revisions to data related to GDP, one of the most watched numbers for policy makers, investors and economists, not only within India, but also globally. Like in February 2010, the advance estimate for GDP growth for 2009-10 was pegged at 6.8%. Three months later, this was revised to 7.7% while in February 2011, the quick estimates pegged it at 9.1%-a change of over 40% within a year. "Therefore, policy that per force had to use information on advance estimate of GDP was fraught with the risk of underestimating the growth momentum," Subbarao said.

Economists outside of RBI with whom TOI spoke to also pointed out the problems they have been facing with the erroneous data published by the government. Given the recent track record of such data, these are seen with suspicion. But in the absence of any other alternative, they have to work with unreliable numbers.

A recent report by Siddhartha Sanyal of Barclays Capital pointed out a huge discrepancy between the rise in India's petroleum import bill and the rise in the crude oil prices. The report showed that there was a "surprising stagnation" in India's oil import bill since December 2010. "The average rise in the oil import bill was a mere 6% year-on-year during December 2010-April 2011, despite the fact that global crude oil prices rose more than 30% during that time," Sanyal said. "This raises doubts about the trajectory of India's oil import bill in the coming months," he added. Economists also pointed out some other recent incidents of serious lapses relating to publications of important economic data.

For example, in August 2010, the government's GDP growth data from the income side showed a stable growth of 8.8% while from the expenditure side it showed a miniscule growth of 3.8%. As questions were raised, within a couple of days, the GDP growth data from the expenditure side was revised to about 10%.

Economists also pointed out that of late weekly as well as monthly inflation data are regularly revised by a substantial margin, and mostly on the upside. This, in turn, fails to give analysts and policy makers the true state of the economy apart from hampering policy decisions, they said.

SOURCE: http://economictimes.indiatimes.com/news/news-by-industry/banking/finance/banking/govt-macro-data-not-reliable-says-rbi/articleshow/9119601.cms

QUALITY OF DATA FAILS POLICYMAKING: RBI

Policymaking at the Reserve Bank is often failed by 'bewildering' quality of data that does not reflect real economic activity, raising doubts on its growth and inflation forecasts, Governor D Subbarao said amid debate whether the last few years of growth created jobs, or destroyed them.

A field study of demand by Goldman Sachs validates the governor's doubts about various numbers such as the Wholesale Price Index and Index of Industrial Production, as 10 rate hikes in the past 15 months are still not dampening demand while official data points to a slowdown.

At the "Reserve Bank, we are handicapped by the reliability of some of the basic data that we need to use in policy calculations", Subbarao said at the 5th Annual Statistics Day Conference. "The recently put-out data on employment throw up a paradox as they simultaneously indicate fewer jobs created in the five-year period to 2010 along with a decline in the long-term unemployment rate." Economic forecasts of every institution, from the Central Statistical Organisation to the Planning Commission and the central bank, have been questioned in the last two years as many of them turned out to be inaccurate, forcing revisions.

VOLATILITY PERSISTS IN NEW IIP SERIES

Probably, the dubious data made policymakers mis-read the evolving situation that is now blamed for the economy 'overheating'. "Rising incomes, accumulated wealth from the past decade, and confidence in future earnings ability are driving consumption demand from premium apples to cosmetics, and edible oils to LED TVs," says Tushar Poddar, economist at Goldman Sachs.

"The interest rate increases have thus barely had an impact on the consumption demand from unlevered middle-class Indian households." The world's biggest securities firm, in its field study, has found that there has been no let-up in demand for hair oils even after a 35% rise in prices. The largest retail store in Ahmedabad clocked a 30% rise in sales this year despite price increases.

"The marketing head of a food company says that they have been raising the prices of premium apples every month, without any impact on demand," says Goldman. "They wanted to see the ability of the consumer to absorb the price increases, and thus demand has been price-inelastic."

The RBI and government attributed rising prices to food products in early stages, but recent data indicates a spike in prices of manufactured products. In the last few months, data on IIP and GDP growth have been too volatile for even experts to make an educated guess.

"This is analytically bewildering," said Subbarao on the IIP. "The volatility persists in new series too," which was supposed to smoothen the fluctuations. ``For the longest period of time, entire 2010 and even as late as May this year, both the authorities and analysts had been holding on to the nearly religious view that India's inflation was all due to unfortunate supply shocks and acts of God.

Needless to say the RBI raised rates with none of the urgency that the situation demanded until May this year. More than a year after the inflation scare began,'' Jahangir Aziz, chief india economist at JPMorgan said. For 2009-10, the advance estimate of GDP growth rate at market prices from the expenditure side, which came out in February 2010, was 6.8%. That was changed to 7.7% in the revised estimates in May 2010 and again to 9.1% in the quick estimates in February 2011.

Initial WPI estimates for January 2011 were 8.2%, and 8.3% for February. Both were raised by 120 basis points later. A basis point is 0.01 percentage point. But it may not be fair to conclude that the monetary policy measures were ineffective.

"It's a dynamic situation," says Sonal Varma, economist at Nomura Securities. "It may not be fair to say that policy action by the Reserve Bank has not had the desired impact." The central bank, which looks at various data to take decisions, in its last policy relied on corporate earnings numbers to justify its move to raise rates by a quarter point. Amid demand for an end to rate increases based on the dubious WPI and IIP data, Subbarao raised rates pointing to sharp rise in absolute sales and profit, though profitability fell.

SOURCE: http://economictimes.indiatimes.com/news/news-by-industry/banking/finance/banking/quality-of-data-fails-policymaking-rbi/articleshow/9118186.cms

19 BANKS TO HOLD COMMON EXAM FOR OFFICERS’ POSTS IN SEPT

If you are aspiring to be an officer in any one of 19 public sector banks, you will now have to take the first of its kind Common Written Examination (CWE) on September 18.

The Institute of Banking Personal Selection (IBPS) has notified the CWE on behalf of the participating banks on Wednesday.

Except State Bank of India (SBI), almost all other major banks have come together for conducting the exam.

SBI has its own set up for recruitment which is also being handled by IBPS.

A score in the IBPS exam is now mandatory for selection of probationary officers/management trainees, says the IBPS notification hosted on its portal.

When contacted, Mr M. Balachandran, Head of IBPS, told Business Line that the score of a candidate would be valid for one year from the date of examination to be considered for appointment.

The examination would be conducted once in six months to cater to the needs of job-aspirants.

It would consist of five papers (in reasoning, quantitative aptitude, and so on) for 250 marks, besides a descriptive test in English.

“We are expecting that over 10 lakh people will appear for the first exam in September,'' the IBPS Chief said.

From a candidate's perspective, CWE would be beneficial as they can apply for jobs in any participating bank without taking individual exams.

“Upon notification from a particular bank, one can directly apply and face interview/personality test directly,” Mr Balachandran said.

An IBPS study had shown that on an average a bank job-aspirant takes four to five tests in a year which can now be avoided.

The notification of vacancies by individual banks would be done separately by them and they could be benefited by the availability of a ready-pool of qualified, tested candidates to hire.

`”he recruitment time for a bank can now come down from 6-8 months to 2-3 months due to the new system,'' he added.

Those who wish to take CWE should register online before August 1.

IBPS would also start a similar process for clerical posts as well.

SOURCE: http://www.thehindubusinessline.com/industry-and-economy/banking/article2201130.ece

SHRI HARUN RASHID KHAN ASSUMES CHARGE AS RBI DEPUTY GOVERNOR

Shri Harun Rashid Khan took over today as Deputy Governor of the Reserve Bank of India.  As Deputy Governor he has been appointed for a period of three years.  He will look after Central Security Cell, Department of External Investments and Operations, Department of Government and Bank Accounts, Department of Payment and Settlement Systems, Foreign Exchange Department, Internal Debt Management Department and Inspection Department.

Prior to being appointed as Deputy Governor Shri Khan was Executive Director of Reserve Bank of India since October 2007 and looked after the Department of External Investments and Operations, Foreign Exchange Department, Internal Debt Management Department and Department of Government and Bank Accounts.  He was earlier Regional Director of the Bank’s New Delhi Office and prior to that he was Principal of the College of Agricultural Banking in Pune.  Shri Khan’s central banking career spanned over 32 years during which he has discharged diverse responsibilities in RBI in areas of rural credit, currency management, banking supervision & regulation, debt management, reserve management, exchange control, personnel administration and internal accounts of the Bank. Shri Khan has been associated with number of internal and external committees, such as, Committee on Technology Exports, Committee on Ways and Means Advances to the State Governments (as Member Secretary), Working Group on Instruments of Sterilisation (as Convener), International Task Force on Central Counterparties (CCPs), Working Group on Model Fiscal Responsibility and Budget Management Bill for States (as Convener).

He was closely involved with the Internal Group of RBI on Rural Credit and Microfinance (popularly known as the Khan Committee) as the chairman.  Based on the recommendations of the Khan Committee, the Reserve Bank issued guidelines to expand the banking outreach through Business Facilitators and Business Correspondents with ICT support for spearheading financial inclusion in the country.

As Executive Director, Shri Khan represented the Reserve Bank on the Working Group on the G-20 on “Reinforcing International Cooperation & Market Integrity” and the Committee on Global Financial Systems (CGFS) of the Bank for International Settlement (BIS).

Shri Khan was also the Nominee Director of RBI on the boards of Dena Bank, Bank of Maharashtra, Punjab and Sind Bank, Bank of Rajasthan and the Orissa State Finance Corporation (OSFC).

Shri Khan joined Reserve Bank in 1978 after his Masters in Political Science from Utkal University, Bhubaneswar and Masters in Philosophy from the School of International Studies, Jawaharlal Nehru University, New Delhi.  Shri Khan is a Certified Associate of the Indian Institute of Banking and Finance (CAIIB) and holds Diploma in Business Management (DBM).  He is married to Rosy and has a daughter, Sara.

The portfolios of Deputy Governors are as under:

Dr. K.C. Chakrabarty

1. Customer Services Department
2. Department of Administration and Personnel Management
3. Department of Banking Supervision
4. Department of Currency Management
5. Financial Stability Unit
6. Human Resources Development Department
7. Rural Planning and Credit Department
8. Secretary's Department
9. Co-ordination Work

Dr. Subir Gokarn 

1. Department of Communication
2. Department of Economic Policy and Research
3. Deposit Insurance and Credit Guarantee Corporation
4. Department of Statistics and Information Management
5. Financial Markets Department
6. Monetary Policy Department
7. Rajbhasha Department
8. Right to Information (RIA)

Shri Anand Sinha

1. Department of Banking Operations and Development
2. Department of Expenditure and Budgetary Control
3. Department of Information Technology
4. Department of Non-Banking Supervision
5. Legal Department
6. Premises Department
7. Urban Banks Department

Shri H.R. Khan

1. Central Security Cell
2. Department of External Investments and Operations
3. Department of Government and Bank Accounts
4. Department of Payment and Settlement Systems
5. Foreign Exchange Department
6. Internal Debt Management Department
7. Inspection Departments 

SOURCE: http://www.rbi.org.in/scripts/BS_PressReleaseDisplay.aspx?prid=24670

SHRI G. PADMANABHAN TAKES CHARGE AS NEW ED AT RBI

Shri G. Padmanabhan assumed charge as Executive Director of the Reserve Bank of India today. As Executive Director, Shri Padmanabhan will look after Department of Information and Technology, Department of Payment and Settlement Systems and Foreign Exchange Department.

Prior to his appointment as Executive Director,Shri Padmanabhan was heading the Department of Payment & Settlement Systems in the Bank since March 2005.

He is a post graduate in Economics (First Class- First) from the University of Kerala and an MBA (International Banking and Finance) from the Birmingham University, UK.

SOURCE: http://www.rbi.org.in/scripts/BS_PressReleaseDisplay.aspx?prid=24674

BANKS SET TO IMPROVE ASSET QUALITY: S&P REPORT

The asset quality of the banks are set to improve in view of the sound performance of the economy, easing of the earnings pressure as banks regained pricing power due to high demand for credit, global rating agency Standard & Poor's said in a report on Monday.

"We expect the asset quality of banking sector to improve in view of the economy's sound performance. The banks could also benefit from the limited loan concentration and India's lower leverage than other Asian countries' in terms of a ratio of overall credit to GDP," Standard & Poor's credit analyst Geeta Chugh said in the report titled 'Industry report card: Indian banks are likely to ride an economic growth wave.'

The report further notes that earnings pressure on banks eased in the last fiscal, as banks regained pricing power due to high demand for credit.

The report specifically notes that the introduction of the base rate also boosted profitability of banks. Another reason for its optimistic outlook is the banks' decision to delay the repricing of liabilities amid rising interest rates.

However, the report warns of the rising inflation, competition and evolving risk management practices which could hinder growth of the domestic banks. But it takes umbrage that the sound growth of the economy, favourable demographics, and under-penetration are likely to benefit banks in the long-run, due to the limited loan concentration.

The report also warns that the surge in real estate prices in some pockets poses a credit risk to banks.

"We expect the non-performing loan ratio to start declining in fiscal 2012, later than for banks in other regions. This is because the central bank allowed banks to restructure loans at the peak of the financial crisis without classifying them as non-performing," notes Chugh. The average NPA ratio stood at 2.6 percent in last fiscal.

SOURCE: http://economictimes.indiatimes.com/news/news-by-industry/banking/finance/banking/banks-set-to-improve-asset-quality-sp-report/articleshow/9101993.cms

BOB TO FOCUS ON CASA, DISCOURAGE BULK DEPOSITS: MALLYA

As advances lose steam with the rising interest rate scenario and the fixed deposit rates go up, city-based public sector lender Bank of Baroda (BoB) today said it will bring down its dependence on bulk deposits and will focus more on CASA deposits to shore up its funds.

"Our thrust this fiscal will be on the efficient pricing of deposits and loans, higher CASA (current and savings accounts) mobilisation and lower dependence on bulk deposits to ensure better margins," bank chairman and managing director MD Mallya told PTI on the sidelines of its 15th annual general meeting here.

"We would endeavour to attain a well-balanced growth in its loan book across different sectors like retail, SMEs, agriculture, wholesale and across different geographies, including overseas markets," Mallya added.

The chairman further said, the bank plans to add 500 more branches this year and open nine branches overseas. "With the addition of 500 more branches, total number of branches will go up to 4,000 with a footprint in all the states and Union Territories of the country," he added.

These overseas branches will come up in the UAE , and the African nations of Kenya, Botswana and Uganda. BoB has over 39 million global customers as of now.

The city-based bank, which was founded by Sayajirao Gaekwad III, the king of the erstwhile princely state of Baroda, in 1908, also announced 165 per cent (Rs 16.50 a share) dividend, against Rs 15.50 it had paid the year before.

On the recruitment, Mallya said, the bank would hire 4,000 personnel in the current year.

Stating that the current fiscal is going to be quite challenging for the banking industry, Mallya said given this, managing credit growth above industry-average along with superior asset quality will be the key challenge for the bank.

SOURCE: http://economictimes.indiatimes.com/news/news-by-industry/banking/finance/banking/bob-to-focus-on-casa-discourage-bulk-deposits-mallya/articleshow/9100993.cms