Supervisory College For SBI and ICICI Bank

Supervisory college for SBI, ICICI Bank set up

The objective of a supervisory college is to help its members develop a better understanding of the risk profile

The Reserve Bank of India (RBI) has set up a supervisory college for State Bank of India (SBI) and ICICI Bank. The move is aimed to deal with supervisory issues revolving around these banks, and establish a co-operation mechanism for cross-border supervision. “Supervisory colleges have evolved the world over as an important component of effective supervisory oversight of an international banking group. This mechanism was developed with the aim of reducing supervisory overlap, and filling in supervisory gaps for better supervisory co-operation enunciated in Basel II framework,” said the RBI on Tuesday.

The concept was enunciated in the Basel Committee for Banking Supervision (BCBS) October 2010 document, “Good practice principles on supervisory colleges”.

“Though India does not have any systemically important banks (SIBs), with a view to benchmarking India with the best practices across the globe and in its capacity as the home country supervisor, the RBI decided to establish a supervisory college each for SBI and ICICI Bank as both have vast expanse of overseas operations spreading across many supervisory jurisdictions,” said the RBI.

For SBI, there are nine host country supervisors, while ICICI Bank has seven.

At a meeting of all the host country supervisors, held here on December 3 and 4, K. C. Chakrabarty, RBI Deputy Governor, hoped that the college, being a process and not a one-time forum, would become a key tool of consolidated supervision, particularly considering the ever-expanding footprint of Indian banks abroad. He was inaugurating the first meeting of supervisory colleges.

The overarching objective of a supervisory college is to help its members develop a better understanding of the risk profile of the banking group.

http://www.thehindu.com/business/companies/supervisory-college-for-sbi-icici-bank-set-up/article4164570.ece

No cartelisation in fixing savings deposit rates: SBI

MUMBAI, DEC 5: 

The nation’s largest bank SBI today dismissed allegations of cartelisation by big banks in keeping savings deposit rate unchanged despite the RBI deregulating this over a year ago.

Disputing the charges, SBI Managing Director and Chief Financial Officer Diwakar Gupta said the bank’s decision not to raise interest rates on savings deposits is a purely commercial one and does not amount to cartelisation.

“I said it is not cartelisation,” Gupta told reporters on the sidelines of a conference organised by consulting and accounting major PwC here.

SBI and its five subsidiaries, which nearly control 25 per cent of the banking system, have not increased their savings account deposit rates. They offer 4 per cent.

Gupta said he has been reading reports over the past few days about a possible action by the competition watchdog on banks for allegedly acting as a cartel by not increasing the rate on saving deposits, which was deregulated by the Reserve Bank in the October 2011 credit policy.

The interest rate on savings accounts was the only regulated product in banking till the RBI deregulated it.

Following this, only two commercial banks — Kotak Mahindra and Yes Bank — raised the deposit rates to 6 and 7 per cent respectively. These banks, which were facing problems in raising the low-cost CASA (Current Account, Savings Account) deposits in the past, claim the move has been immensely beneficial.

From the cooperatives space, city-based Saraswat Bank had also increased the rate to 7 per cent.

Other banks currently offer just 4 per cent on an annualised basis to savings bank account holders, which was even lower at 3.5 per cent till April 2011.

http://www.allbankingsolutions.com/Press-Release-Views/Impact-SF-cartilization.htm