Press Release*
June 2012
Reserve Bank Cancels the Licence of The
Madhavpura Mercantile Co-perative
Bank Ltd., Ahmedabad (Gujarat)
June 7, 2012
In view of the fact that The Madhavpura Mercantile
Co-operative Bank Ltd, Ahmedabad (Gujarat) [the cooperative
bank] had ceased to be solvent, all efforts to
revive it in close consultation with the Government of
India had failed and the depositors were being
inconvenienced by continued uncertainty, the Reserve
Bank of India (RBI) passed an order cancelling the
banking licence issued to the co-operative bank with
effect from the close of business on June 4, 2012. The
Central Registrar of Co-operative Societies, New Delhi
(CRCS) has also been requested to issue an order for
winding up the co-operative bank and appoint a
liquidator.
The co-operative bank was granted a licence by
RBI on August 19, 1994 to commence banking business
in India. During 1999-2000 the co-operative bank
resorted to indiscriminate lending, particularly to stock
broking firms in gross violation of lending norms. In
March 2001, there was a sudden run on the co-operative
bank following rumours of its large exposure to Ketan
Parekh, a leading stock broker at Mumbai, who suffered
huge losses in his share dealings. The co-operative bank
was also holding substantial amount (`800.00 crore) of
inter-bank deposits from a large number of UCBs in
Gujarat and from other banks and this posed a systemic
risk for the co-operative banks in Gujarat. With a view
to protecting the interests of the depositors, RBI issued
directions to the bank on March 13, 2001 under Section
35A of the Banking Regulation Act, 1949 (AACS) [the
act] restricting certain operations. RBI issued requisition
to Central Registrar of Co-operative Societies (CRCS) to
supersede the Board of Directors of the co-operative
bank under Section 48 of the Multi State Co-operative Societies Act, 1984. The CRCS superseded the Board
and appointed an Administrator on March 14, 2001 to
oversee the affairs of the co-operative bank.
The statutory inspection of the co-operative bank
conducted by RBI under section 35 of the Act with
reference to financial position of the bank as on March
31, 2001 inter alia revealed its precarious financial
position as under :
i. The co-operative bank’s net worth was
assessed at (-) `1147.13 crore and the bank was
not having adequate assets to meet its
liabilities as required under Section 22 (3) (a)
of the Act.
ii. The co-operative bank had not complied with
the requirements of minimum capital and
reserves in terms of the provisions of Section
11 (1) of the Act.
iii. The entire capital and reserves of the cooperative
bank had eroded and the deposit
erosion was to the extent of 90.9 per cent.
iv. The gross NPAs formed 88.2 per cent of the
gross advances.
v. The co-operative bank had a net loss of
`1192.81 crore.
In order to safeguard the interests of the depositors
and a large number of UCBs which had placed deposits
with the co-operative bank, the Government of India/
CRCS formulated a Scheme of Reconstruction for the
co-operative bank. Consequently, the directions
imposed by RBI under Section 35 A of the B.R.Act, 1949
(AACS) were withdrawn and the Scheme of
Reconstruction was made applicable from the close of
business of August 23, 2001 for a period of ten years
with the approval of RBI. The scheme envisaged
infusion of funds, retention of existing deposits,
converting call money borrowings from banks/
institutions into term deposits, DICGC meeting its
obligation in full to the co-operative bank’s eligible depositors, investment of fresh deposits in Government
securities, management aspects etc. During the period
of ten years, the Reconstruction Scheme did not make
much progress mainly due to non-fulfillment of
commitments for contribution to Revival Fund by UCBs
and poor track record of recovery including from Ketan
Parekh. The scheme expired on August 23, 2011.
RBI conducted statutory inspection of the cooperative
bank under Section 35 of the Act with
reference to its financial position as on March 31, 2011.
It was revealed that the co-operative bank’s assessed
net worth was (-) `1316.50 crore, CRAR was (-) 1941.1
per cent, gross NPAs were `1126.55 crore i.e. almost
99.99 per cent of its gross advances, accumulated losses
were `1357.41 crore and deposit erosion was 100 per
cent. Due to precarious financial position of the cooperative
bank, it was placed under Directions issued
under Section 35 A of the Act from the close of business
of August 23, 2011 for a period of six months and
extended up to August 23, 2012, subject to review. The
existing Board of Administrators was also allowed to
continue till further orders. The Ministry of Agriculture,
Govt. of India was advised vide our letter dated August
23, 2011 to firm up the proposal, if any, for revival of
the co-operative bank in consultation with various
stakeholders and forward to us for further consideration.
Govt. of India, vide their letter dated September
7, 2011 forwarded a Modified Reconstruction Scheme
proposed by the co-operative bank. The Modified
Reconstruction Scheme was examined and it was found
that its Net Worth would remain negative, even if the
said Modified Scheme is implemented. Its chances of
revival were, therefore, considered remote. The Govt.
of India was also advised of the position that there is
no other option but to initiate the process of liquidation
of the bank.
Central TAFCUB, in its meeting held on January
4, 2012, also recommended that there are no other
options but to initiate steps for liquidation of the bank.
In view of the precarious financial position of the
co-operative bank, a Show Cause Notice (SCN) dated
March 16, 2012 was issued asking it to show cause as
to why the license granted to it to carry on banking business in India under Section 22 of the Act should
not be cancelled. The co-operative bank in its reply
dated April 18, 2012 to the SCN accepted that the
precarious financial position of the co-operative bank
which was attributed to the fraud amounting to
`1200.00 crore committed on the co-operative bank by
the share broking community including Ketan Parekh
and his associates in collusion with the then members
of the Board of Directors. As per the bank, an amount
of `803.00 crore constituting 72 per cent of the total
advances were unsecured due to unenforceable
securities and defective documentation and hence not
recoverable. The co-operative bank also accepted that
the Reconstruction Scheme failed due to non-fulfillment
of commitment of UCBs to contribute to the Revival
Fund because many UCBs feared for the safety of their
moneys and even the amount of `343.36 crore was
returned in terms of CRCS notification of April 2008 on
the representation made by the co-operative bank and
petition filed by them before the Gujarat High Court.
The Board of Administrators through a resolution left
it to RBI to decide the future set up of the co-operative
bank. Thus the co-operative bank accepted all the
irregularities/deficiencies observed in the SCN issued
for cancellation of licence.
The co-operative bank had furnished another
revival plan envisaging a loan of 1000.00 crore from
World Bank/European Banks which will be procured by
an NRI who will invest `500.00 crore for the next ten
years in the form of preference shares totaling `5000.00
crore. It was observed that the co-operative bank was
neither aware of the antecedents of the investor nor
the genuineness of the sources of the funds. The
co-operative bank was not sure whether the proposal
will result in a turnaround for the co-operative bank by
making its net worth positive. The proposal is also not
in conformity with the bye-laws of the bank for
allotment of preference shares to an investor who is
not a loanee and the proposed capital structure is not
in conformity with the provisions of Section 33 of the
Multi State Co-op. Societies Act, 2002. Hence, it has not
been considered a concrete proposal for revival.
As already stated the financial position of the cooperative
bank as on March 31, 2011 was highly precarious with Assessed Net Worth at (-) `1316.50
crore, CRAR at (-) 1941.1 per cent, gross NPAs at 99.99
per cent of its gross advances (`1126.59 crore) and
accumulated losses at `1357.41 crore. The deposits of
the bank have been eroded fully. The co-operative bank
has admitted that the revival of the bank failed due to
difficulty in mobilising revival fund from the
contributing UCBs and poor track record of recovery
particularly from the Ketan Parekh group. The
co-operative bank was placed under directions under
Section 35A of the Act with effect form August 23, 2011.
The Modified Reconstruction Scheme forwarded by
Govt. of India was not found to be viable and Govt. of
India was advised vide our letter dated December 26,
2011. The fresh proposal envisaging investment of
`1000.00 crore is neither complete nor viable for revival
of the co-operative bank as already explained in para 9
above. It is also not in conformity with the provisions
of Multi State Co-operative Societies Act, 2002 and the
guidelines issued by RBI.
From the facts and circumstances mentioned
above it is observed that :
i) The co-operative bank is not complying with
the provision of Sections 11(1) and 22(3) (a) &
(b) of the Act. There is no revival plan or
merger proposal pending with RBI.
ii) There is no likelihood of the co-operative bank
being able to resume normal functioning in
the foreseeable future.
iii) The co-operative bank is not in a position to
pay its present and future depositors in full
as and when their claims accrue.
iv) The affairs of the co-operative bank are being
conducted in a manner detrimental to the
interests of its depositors.
v) The financial position of the co-operative bank
is so precarious that there is no scope for its
revival
vi) The public interest would be adversely affected
if the co-operative bank is allowed to carry on
its business any further.
Therefore, Reserve Bank of India took the extreme
measure of cancelling the licence of the co-operative
bank in the interest of co-operative bank’s depositors.
Consequent to the cancellation of licence, The
Madhavpura Mercantile Co-operative Bank Ltd.,
Ahmedabad (Gujarat) is prohibited from carrying on
the business of ‘banking’ as defined in Section 5(b) of
the Banking Regulation Act, 1949 (AACS).
For any clarifications, depositors may approach
Shri Kamaljeet Singh, Assistant General Manager, Urban
Banks Department, Reserve Bank of India, Ahmedabad.
His contact details are as below:
Postal Address: Urban Banks Department, Reserve
Bank of India, Ahmedabad Regional Office, La Gajjar
Chambers, Ashram Road, Ahmedabad -380 009,
Telephone Number: (079) 26582822, Fax Number: (079)
26584853.
Certificate of Registration of Sri Sai Siri
Finance & Leasing Ltd. – Cancelled
June 8, 2012
The Reserve Bank of India has on April 19, 2012
cancelled the certificate of registration No.B-09.00176
dated March 1, 2005, issued to Sri Sai Siri Finance and
Leasing Ltd., having its registered office at D.No.40-9/1-
8, Vasavya Nagar Vijaywada-520010 for carrying on the
business of a non-banking financial institution as the
company has voluntarily exited from carrying on NBFI
activities. Following cancellation of the registration
certificate the company cannot transact the business
of a non-banking financial institution.
By the powers conferred under Section 45-IA (6)
of the Reserve Bank of India Act, 1934, the Reserve Bank
can cancel the registration certificate of a non-banking
financial company. The business of a non-banking
financial institution is defined in clause (a) of Section
45-I of the Reserve Bank of India Act, 1934.
Dr. K C Chakrabarty re-appointed as RBI
Deputy Governor for three more months
June 13, 2012
The Government of India today re-appointed Dr.
K C Chakrabarty as the Deputy Governor of the Reserve
Bank of India for a further period of three months
beyond June 14, 2012 or until further orders, whichever
is earlier.
Dr. K C Chakrabarty was appointed as Deputy
Governor in 2009 for a period of three years from the
date of his taking charge or until further orders,
whichever was earlier. Dr. K C Chakrabarty took charge
as Deputy Governor of the Reserve Bank on June 15,
2009.
Meeting of the FSDC Sub-Committee
Hyderabad
June 14, 2012
A meeting of the Sub-Committee of the Financial
Stability Development Council (FSDC) was held today
in Hyderabad. Dr. D. Subbarao, Governor, Reserve Bank
of India, chaired the meeting. The meeting was
attended by Shri U. K. Sinha, Chairman, SEBI; Shri J.
Harinarayan, Chairman, IRDA; Shri Yogesh Agrawal,
Chairman, PFRDA; Deputy Governors of RBI Dr. K.C.
Chakrabarty, Dr. Subir Gokarn, Shri Anand Sinha and
Shri H.R. Khan, Shri V. S. Das, Executive Director, RBI
and other officials.
The Sub-Committee reviewed the recent
developments in the global economy, specifically in the
Eurozone and the US and the consequences for India.
The concerns on slowing growth, persistent inflationary
pressures, growing twin deficits and negative market
perceptions were discussed. The concerns arising from
the quantum of gold imports and their contribution to
the current account deficit featured in the discussions.
The Sub-Committee decided to set up a Working
Group to examine issues involved in framing a proposal
for a comprehensive resolution regime in the country
for all types of financial institutions, in compliance
with the Financial Stability Board’s (FSB) Key Attributes of Effective Resolution Regimes for financial institutions.
The Sub-Committee further discussed the extant gaps
in the regulatory framework for Collective Investment
Schemes and the need for the state governments to
take the lead in plugging these gaps. It resolved to take
forward the work on setting up a regulatory framework
for Investment Advisory Services.
The functioning of the Technical Group for
Financial Inclusion and Literacy and the Inter
Regulatory Technical Group was also reviewed. The Sub
Committee took note of the present status of financial
inclusion and suggested measures to deepen it further.
The Sub Committee deliberated on and approved the
National Strategy for Financial Literacy. The document
will be placed in public domain for wider consultation.
The Sub Committee deliberated on the potential
risks to financial stability flagged in the Financial
Stability Report scheduled for release at the end of June
2012.
Mid-Quarter Monetary Policy Review:
June 2012
June 18, 2012
Monetary and Liquidity Measures
On the basis of an assessment of the current
macroeconomic situation, it has been decided to:
• keep the cash reserve ratio (CRR) of scheduled
banks unchanged at 4.75 per cent of their net
demand and time liabilities; and
• keep the policy repo rate under the liquidity
adjustment facility (LAF) unchanged at 8.0 per
cent.
Consequently, the reverse repo rate under the LAF
will remain unchanged at 7.0 per cent, and the marginal
standing facility (MSF) rate and the Bank Rate at 9.0
per cent.
Introduction
2. Since the Reserve Bank’s Annual Policy statement
in April, global macroeconomic and financial conditions
have deteriorated. At the same time, the domestic macroeconomic situation too raises several deepening
concerns. While growth in 2011-12 has moderated
significantly, headline inflation remains above levels
consistent with sustainable growth. Importantly, retail
inflation is also on an uptrend.
3. The Reserve Bank had frontloaded the policy rate
reduction in April with a cut of 50 basis points. This
decision was based on the premise that the process of
fiscal consolidation critical for inflation management
would get under way, along with other supply-side
initiatives. Our assessment of the current growth inflation
dynamic is that there are several factors
responsible for the slowdown in activity, particularly
in investment, with the role of interest rates being
relatively small. Consequently, further reduction in the
policy interest rate at this juncture, rather than
supporting growth, could exacerbate inflationary
pressures.
Global Economy
4. The euro area sovereign debt problem has
continued to weigh on the global recovery. After a brief
phase of relative calm reflecting the large liquidity
injection by the European Central Bank (ECB), renewed
concerns have arisen about a sustainable solution to
the sovereign debt problem and the increasing
vulnerability of the banking sector. Consequently, risk
aversion has increased. Recent data suggest that US
economic recovery is weakening. Growth in major
emerging and developing economies (EDEs) is also
moderating. While slowing global growth has dampened
commodity prices, heightened risk aversion and the
resultant slowing of capital flows will have a significant
adverse impact on EDEs, including India. Also, should
there be an event shock, central banks in advanced
economies will likely do another round of quantitative
easing. This will have an adverse impact on growth and
inflation in EDEs, particularly on oil importing
countries such as India, through a possible rebound in
commodity prices.
Domestic Economy
Growth
5. Economic activity in 2011-12 moderated
sequentially over the quarters to take growth to a low of 5.3 per cent in Q4, though for the year as a whole it
was 6.5 per cent. Deceleration in industrial production
from the supply side and weak investment from the
demand side have, in particular, contributed to the
growth slowdown. The index of industrial production
(IIP) increased by just 0.1 per cent in April 2012. Even
as the manufacturing Purchasing Managers’ Index (PMI)
for May suggested that industrial activity remains in
an expansionary mode, there is no question that the
pace of expansion has slowed significantly.
6. In this context, it is relevant to assess as to what
extent high interest rates are affecting economic
growth. Estimates suggest that real effective bank
lending interest rates, though positive, remain
comparatively lower than the levels seen during the
high growth phase of 2003-08. This suggests that factors
other than interest rates are contributing more
significantly to the growth slowdown.
7. Further, one implication of the rupee depreciation
over the past several months is that domestic producers
have gained in competitiveness over foreign producers.
Over time, this should result in expanding exports and
contracting imports, thus acting as a demand stimulus.
Inflation
8. During 2011-12, headline WPI inflation rate
moderated from a peak of 10.0 per cent in September
2011 to 7.7 per cent in March 2012. However, during
2012-13 so far, provisional data suggest that it inched
up from 7.2 per cent in April to 7.6 per cent in May,
driven mainly by food and fuel prices. Primary food
articles inflation rose from negative [(-) 0.7 per cent)]
in January to 10.7 per cent in May largely due to a sharp
increase in vegetable prices. Protein inflation continued
to be in double digits. With food prices contributing so
heavily to headline inflation, the performance of the
south-west monsoon will also play a role in determining
inflationary conditions over the course of the current
year.
9. Though international crude prices have fallen
significantly from their levels in April 2012, the rupee
depreciation has significantly offset its impact on
wholesale prices. Further, even at the current lower
level of global crude oil prices, significant under recoveries persist in respect of administered petroleum
product prices. The positive development on the
inflation front is that core (non-food manufactured
products) inflation has trended down.
10. Consumer price index (CPI) inflation (as measured
by the new series, base year 2010) rose from 8.8 per
cent in February to 9.4 per cent in March and further
to 10.4 per cent in April. Significantly, CPI inflation,
excluding food and fuel, was also in double digits
suggesting that moderation in wholesale price inflation
has not transmitted to the retail level.
11. Notwithstanding the moderation in core inflation,
the persistence of overall inflation both at the wholesale
and retail levels, in the face of significant growth
slowdown, points to serious supply bottlenecks and
sticky inflation expectations. Also, in the absence of
pass-through from international crude oil prices to
domestic prices, the consumption of petroleum
products remains strong distorting price signals and
preventing the much needed adjustment in aggregate
demand. The consequent subsidy burden on the
Government is crowding out public investment at a
time when reviving investment, both public and
private, is a critical imperative. The widening current
account deficit (CAD), despite the slowdown in growth,
is symptomatic of demand-supply imbalances and a
pointer to the urgent need to resolve the supply
bottlenecks.
Liquidity Conditions
12. Although money supply (M3) growth has been
slightly under the projected trajectory, credit growth
has moved above the projected rate. Notably, the
widening wedge between deposit growth and credit
growth is intensifying liquidity pressures. However,
the open market operations (OMOs) have substantially
eased liquidity conditions, as is reflected in the
stabilisation of the overnight call money rate close to
the policy repo rate. To further augment liquidity and
encourage banks to increase credit flow to the export
sector, the Reserve Bank has increased the limit of
export credit refinance from 15 per cent of outstanding
export credit of banks to 50 per cent, which will
potentially release additionally liquidity of over `300 billion, equivalent to about 50 basis points reduction
in the CRR.
External sector
13. During 2011-12, the widening CAD, in the face of
worsening global economic and financial conditions,
exerted downward pressure on the rupee. As capital
inflows continue to remain muted, the rupee has
further depreciated since April. Prospects for increasing
capital inflows depend on both global conditions,
particularly a credible resolution of the euro area
situation, and an improvement in the domestic
investment climate.
Guidance
14. The evolving growth-inflation dynamic will
continue to influence the Reserve Bank’s stance on
interest rates. Core inflation has moderated, reflecting
demand conditions and lower pricing power. However,
both headline and retail inflation rates are rising, which
have a bearing on inflation expectations. Future actions
will depend on a continuing assessment of external
and domestic developments that contribute to lowering
inflation risks.
15. Management of liquidity remains a priority. Even
as the liquidity situation converges to the comfort zone,
the Reserve Bank will continue to use OMOs as and
when warranted to contain liquidity pressures.
16. Finally, recognising that the global situation is
turbulent, the Reserve Bank stands ready to use all
available instruments and measures to respond rapidly
and appropriately to any adverse developments.
The Jamnagar Peoples Co-operative Bank
Ltd., Dist: Jamnagar – Penalised
June 18, 2012
The Reserve Bank of India has imposed a monetary
penalty of `1.00 lakh (Rupees one lakh only) on The
Jamnagar Peoples Co-operative Bank Ltd., Dist:
Jamnagar in exercise of the powers vested in it under
the provisions of Section 47A (1) (b) read with Section
46(4) of the Banking Regulation Act, 1949 (AACS), for
violation of RBI directives related to (a) ceiling on exposure to individual non SLR investments and (b)
prohibition from waiver of interest on a loan to an exdirector
under the provision of section 20A of the Act.
The Reserve Bank of India issued a Show Cause
Notice to the bank in response to which the bank
submitted a written reply. After considering the facts
of the case and the bank’s replies in the matter, the
Reserve Bank came to the conclusion that the violation
was substantiated and warranted imposition of the
penalty.
Certificate of Registration of Matruka
Investments Ltd. – Cancelled
June 19, 2012
The Reserve Bank of India has on June 1, 2012
cancelled the certificate of registration No.13.00315
dated March 9, 1998, issued to Matruka Investments
Ltd., having its registered office at Old No.27/1, 27/2
New No. 35/36, Sankey Road, Bangalore – 560001 for
carrying on the business of a non-banking financial
institution on supervisory grounds from carrying on
NBFI activities. Following cancellation of the registration
certificate the company cannot transact the business
of a non-banking financial institution.
By the powers conferred under Section 45-IA (6)
of the Reserve Bank of India Act, 1934, the Reserve Bank
can cancel the registration certificate of a non-banking
financial company. The business of a non-banking
financial institution is defined in clause (a) of Section
45-I of the Reserve Bank of India Act, 1934.
The Kalol Nagrik Sahakari Bank Limited,
Kalol, Dist. Gandhinagar (Gujarat) –
Penalised
June 20, 2012
The Reserve Bank of India has imposed a monetary
penalty of `5.00 lakh (Rupees five lakh only) on The
Kalol Nagrik Sahakari Bank Limited, Kalol, Dist.
Gandhinagar (Gujarat) in exercise of powers vested in
it under the provisions of Section 47(A)(1)(b) read with
Section 46(4) of the Banking Regulation Act, 1949 (As applicable to Co-operative Societies), for violation of
Reserve Bank of India instructions relating to Know
Your Customer (KYC) norms and Anti Money Laundering
(AML) guidelines.
The Reserve Bank of India had issued a show cause
notice to the bank, in response to which the bank
submitted a written reply. After considering the facts
of the case and the bank’s reply as also personal
submissions in the matter, the Reserve Bank of India
came to the conclusion that the violation was
substantiated and warranted imposition of the penalty.
The Bundi Urban Co-operative Bank
Limited, Bundi, Rajasthan – Penalised
June 27, 2012
The Reserve Bank of India has imposed a monetary
penalty of `2.00 lakh (Rupees two lakh only) on The
Bundi Urban Co-operative Bank Limited, Bundi,
Rajasthan in exercise of powers vested in it under the
provisions of Section 47(1)(b) read with Section 46(4)
of the Banking Regulation Act, 1949 (As applicable to
Co-operative Societies) as also the Section 30(1), read
with Section 26(6), of the Payment and Settlement
Systems Act, 2007, for repeated violations of Reserve
Bank of India directives relating to donation and levy
of service charges on customers.
The Reserve Bank of India had issued a show cause
notice to the bank, in response to which the bank
submitted a written reply. After considering the facts
of the case and the bank’s reply as also personal
submissions in the matter, the Reserve Bank of India
came to the conclusion that the violations were
substantiated and warranted imposition of the penalty.
RBI releases Draft Payment System
Vision Document 2012-15 for Public
Comments
June 27, 2012
The Reserve Bank of India, today released on its
website, the draft Payment System Vision Document
2012-15 for public consultation. Comments on the Vision Document are invited from members of the
public, academia, industry and other stakeholders.
Comments can be sent by email by 31 July, 2012.
The Payments System Vision Document 2012-15
envisages by ways and means of ensuring that ‘payment
and settlement systems in the country are safe,
efficient, interoperable, authorised, accessible, inclusive
and compliant with international standards’.
Accordingly, it proposes to ‘proactively encourage
electronic payment systems for ushering in a less-cash
society in India’ as its Vision.
The Reserve Bank had earlier published a Vision
Document outlining the course of action that would be
undertaken in the field of payment and settlement
systems over a three year period. The tasks laid out in
the above document have been completed to a large
extent. The new Vision Document intends to take the
Mission further to meet the growing payment needs
of the nation.
The Surat People’s Co-operative Bank
Ltd., Dist. Surat – Penalised
June 28, 2012
The Reserve Bank of India has imposed a monetary
penalty of `5.00 lakh (Rupees five lakh only) on The
Surat People’s Co-operative Bank Ltd., Dist. Surat, in
exercise of powers vested in it under the provisions of
Section 47(A)(1)(b) read with Section 46(4) of the
Banking Regulation Act, 1949 (As applicable to Cooperative
Societies), for violation of RBI directives/
instructions regarding (i) establishment/promotion of
trusts, (ii) loans and advances to firms/companies in
which director of the bank and their relatives were
interested and (iii) KYC norms etc.
The Reserve Bank of India had issued a show cause
notice to the bank, in response to which the bank
submitted a written reply. After considering the facts
of the case and the bank’s reply in the matter, the
Reserve Bank of India came to the conclusion that the
violation was substantiated and warranted imposition
of the penalty.
RBI Governor Dr. D. Subbarao appealed
to the banks to conduct town hall events
in local languages
June 29, 2012
‘Every bank should conduct a Town Hall event in
a chosen state entirely in the local language. In this
regard, they may coordinate with Reserve Bank’s
Customer Service Department and Department of
Communication to draw up a programme. This will be
our collective effort to reach out to people in their own
language’.
Dr. D. Subbarao, Governor, Reserve Bank of India
appealed to the banks today at Mumbai while awarding
the Rajbhasha Shields for the year 2010-2011.
Explaining the background of the appeal, Governor
said that every year in the month of October Reserve
Bank has been conducting town hall meetings. Usually
these meetings are conducted in Tier II cities. While
recollecting the RBI’s experiences in such meetings he
said that the questions in Hindi reflect a different set
of concerns from those that are asked in English. The
Hindi questions typically reflect middle class anxieties
and aspirations. The grievances they bring about are
different, more common and more intractable.
‘Listening to these questions in Hindi and attempting
to answer them has been a great learning experience
for me and for the Deputy Governors of RBI who
participate in the Town Hall events along with me’. Dr.
Subbarao also encouraged the banks to take the lead in
conducting town hall events to provide a forum for
interacting with the public and for listening to their
grievances, and suggestions. Adding that five such
programmes have already been conducted, he appealed
to the banks to conduct similar town hall events.
The annual Reserve Bank Rajbhasha Shield was
instituted in 1980 to encourage public sector banks to
use Hindi in their day-to-day work. The Reserve Bank
also conducts a competition for the house journals of
banks and financial institutions. The Reserve Bank
started an Inter-Bank Hindi Essay Competition from
2002-03. List of winners is enclosed.
On this occasion Dr. Subir Gokarn, Deputy
Governor, Reserve Bank of India while complimenting
the prize winning banks and financial institutions said
that the banking scenario has been changing in a rapid
pace. Technology advancement has brought changes in
the working pattern of banking. With the implementation
of packages like core banking solutions (CBS), language
issues are being resolved easily. He expressed his
happiness that the banks have started issuing pass
books in Hindi through CBS.
Earlier, Shri Bazil Shaikh, Chief General Manager,
Human Resource Management Department welcomed
the Chief Executives of banks and financial institutions.
Dr. Ramakant Gupta, Deputy General Manager,
Rajbhasha Department, Reserve Bank of India conducted
the programme and also proposed a vote of thanks.
The function was attended by chairmen and other
senior executives of banks and financial institutions.
|