Pl wait for the full story राजन,बैंकिंग का टाइटेनिक बैंड बजाने लगे RBI in Privatization mode,COO Coup to hire private sector People to trim up all its 27 departments as Govt to review senior public sector bank appointments बदलेगा आरबीआई कानून भी पलाश विश्वास Aug 14 2014 : The Economic Times (Mumbai) In Radical Revamp, Mor may Come to RBI as COO MC GOVARDHANA RANGAN & SANGITA MEHTA MUMBAI Central bank approves Rajans proposal for overhaul of the institution The Reserve Bank of India board has approved Governor Raghuram Rajans proposal for a radical overhaul of the institution aimed at shaking up a system seen as staid and rigid, by shrinking organisational bloat and reducing overlaps. It also seeks to establish the post of chief operating officer, an executive whos likely to be made responsible for executing the central banks reform agenda. “RBI board has approved the broad contours of the restructuring plan, includ ing the creation of a position of a COO,“ the central bank said in response to a query from ET. The new position may not be ranked at deputy governor level as sought by Rajan, at least for the time being, said two people familiar with the matter. The next rung, or the third-highest rank at the central bank, is that of executive director. Nachiket Mor is regarded as the most likely candidate for the COOs job. Mor is a former executive director of ICICI Bank and also headed the RBI committee on financial inclusion. Rajan wants to trim the 27 different departments at the central bank. Hes also said to be keen on making lateral hires from the private sector as is done in the US and UK. Further Discussions with Govt 3 The boards approval for his plan is a boost for Rajan, who has already taken steps to transform monetary policy-making by adopting the inflation-targeting framework suggested by his deputy Urjit Patel. This approach is cited as the reason for the two decades of prosperity before the 2008 credit crisis. Although the government has not yet formally approved this, statements from finance minister Arun Jaitley and others indicate that its broadly in agreement with this strategy. The creation of the new post will be discussed further with the government as it will require legislative changes. “Since that position is intended to be at the DG (deputy governor) level, the positions status will have to be discussed further with the government, and then will require legislative change,“ said RBI. The COO will probably be entrusted with implementing the reforms that Rajan wants, including pushing financial inclusion, differentiated banks and developing new structures for financial markets, said one of the persons cited above. It will not interfere with the existing structures that administer banks and financial markets, the person said. Rajan spoke highly of Mor in comments to ET when he chose him to head the financial inclusion panel last year. “We could not pick up a better and more capable person who has seen all aspects the theoretical as well as the practical -to give us a sense of the future of what we should be doing,“ Rajan had said. Rajans plan includes bringing every aspect of the central bank under just five functional departments, supervised by the four deputy governors and COO. Some departments such as the supervision and inspection departments of banks as well as NBFCs could be merged to avoid overlap. Aug 14 2014 : The Times of India (Ahmedabad) Govt turns down RBIs COO appointment plan Sidhartha & Surojit Gupta New Delhi TNN The government has turned down a move by RBI management to appoint a chief operating officer for the central bank. It has instead asked it to seek amendments to the RBI Act to appoint a fifth deputy governor. The stand taken by the finance ministry is seen as a signal to Mint Road that the government will set the overall architecture, under which regulatory agencies have to function. RBI had sought to push through the appointment of a COO through a board resolution on July 10 — when Budget was presented — but was prevented from doing so at the last minute by the finance ministry. Government officials questioned the move, arguing that the two finance ministry representatives on RBI board — finance secretary Arvind Mayaram and financial services secretary G S Sandhu — could not have attended the meeting due to the Budget. The issue was again listed on the RBI board meet agenda last weekend but the government refused to play ball, arguing that crucial appointments can’s be decided in this fashion and can be challenged in court. In its current form, the law allows for the appointment of four deputy governors and the rules prescribe the selction criteria. While two deputy governors are internal candidates, the third is a public sector bank chief and the fourth is an external expert, usually an econo mist. RBI now wanted a fifth deputy governor and suggested that an officer on special duty or a chief operating officer could be appointed since amending the law will take a while. Sources in the government said the fifth deputy governor could also be an internal candidate. Before S S Mundhra’s appointment as deputy governor, a section within the central bank had suggested that a private sector banker could be considered for the job, but the finance ministry had turned down the proposal. Aug 14 2014 : The Times of India (Ahmedabad) Govt to review senior public sector bank appointments Sidhartha & Neeraj Chauhan New Delhi TNN CBI Directors Note Talks Of `Irregularities The finance ministry has decided to take a relook at recent appointments of top-level public sector bank executives as well as aclutch of proposals to designate chairmen just before the UPA demitted office, in what is seen as a direct fallout of the recent arrest of the Syndicate Bank chief by CBI on alleged corruption charges. Senior finance ministry officials told TOI that a review has become necessary in view of the irregularities that have come to light. Finance minister Arun Jaitley has written to the Reserve Bank of India governor Raghuram Rajan, who heads the appointment board that selects state-run bank chiefs, as well as cabinet secretary Ajit Seth, who processes all papers for the appointments committee of cabinet, sources said. Some of the appointments processed during UPA s closing days lacked transparency and there are indications that some political considerations may have played a part, they added. In a letter to the finance ministry , CBI chief Ranjit Sinha has pointed to some ir regularities that have been noticed by the investigative agency during the Syndicate Bank probe. Sources said CBI has suggested a “legal scrutiny“ as it has found clues sug gesting that ACRs and inter views “were managed“ and some middlemen also played arole. Sinha said Jain was appointed despite having “poor” ACRs. “We have told the government that appointments deserve to go under legal scrutiny. The government has to take a call. There are reports of irregularities in several appointments. We have informed the government about it,” the CBI chief said. For the past few years, appointment of several bank chiefs, executive directors as well has independent directors have been viewed with a degree of suspicion and have often resulted in controversy. The candidates are selected on the basis of an appraisal of the confidential reports (ACRs), which carry 70 marks, and candidates appearing for interviews for executive directors and CMDs can get another 30 marks. Apart from the RBI governor, financial services secretary, an RBI deputy governor and external experts are part of the appointments board. Similarly, there is no clarity on what goes into deciding the allotment of banks. There have been instances of some of the candidates barely opening their account in the interviews but still being recommended for appointment based on their ACRs. In 2012, while appointing a second-rung executive, the department of financial services was accused of changing the grades from “very good” to “outstanding”, making the executive eligible for the job. Once the gap was pointed out, the appointments committee of cabinet had put the appointment on hold, but later cleared it. Mission financial inclusion on Aug 15 Prime Minister Narendra Modi will launch a nationwide financial inclusion campaign by August-end to provide banking, insurance and pension cover to 7.5 crore households. Non-banking finance companies will be roped in to widen the net. The PM is set to announce the National Mission on Financial Inclusion -aiming to reach 15 crore individuals by 2015 -in his August 15 speech and kick off the project in the capital on August 28 or 29. Under the programme, a basic bank account would be opened with Rupay debit card, including accident insurance cover of Rs 1 lakh. On several occasions, the department of financial services has changes the criteria for appointment. For instance, to become a public sector bank CMD, the candidate should have been an executive director for at least two years and should have at least two years to go for retirement. Often these stipulations have been tweaked. For instance, this January, as reported by TOI, the government allowed general managers of public sector banks who had less than the stipulated three years to go for superannuation to appear for an interview. This allowed five candidates to appear for the interview at a notice of just a few hours. The exercise to com,plete the selection 13 EDs came weeks before election were announced and on the Anand Sinha was to demit office as RBI deputy governor.
Posted on: Thu, 14 Aug 2014 07:10:52 +0000
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