Five public sector bankers in fray for RBI dy governor's post-Business Standard
Among the four deputy governors, one spot will fall vacant after K C Chakrabarty retires in June
Manojit Saha | Mumbai
March 19, 2014
The government has decided to interview five bankers - all from public sector banks - for the deputy governor's post at the Reserve Bank of India. Among the four deputy governors of RBI, one will fall vacant after K C Chakrabarty, who fills the slot of commercial bankers, retires in June.
K R Kamath, chairman and managing director of Punjab National Bank, Vijayalakshmi Iyer, chairperson and managing director of Bank of India, S S Mundra, chairman and managing director of Bank of Baroda, R K Dubey, CMD, Canara Bank, and M Narendra, chairman and managing director of Indian Overseas Bank will appear for the interview which will be conducted by the end of the month.
Kamath has the spend the maximum period as chairman who was also the head of Allahabad Bank before taking the charge of the Delhi-based lender in October 2009. Kamath is also the chairman of Indian Banks' Association.
Iyer took charge of Bank of India in November 2012 and was an executive director of Central Bank of India earlier. Mundra was an executive director of Union Bank of India and was appointed as bank of Baroda's chairman in January 2013 while Narendra took charge of the Chennai-based lender in November 2010. He was the executive director of Bank of India before his present role.
R K Dubey was appointed as Canara Bank's head in January 2013 and he was an ED in Central Bank of India earlier.
A search committee headed by Reserve Bank of India governor is typically formed to interview the candidates which also comprises eminent professors of management institutes and senior finance ministry officials.
The government has also ignored RBI's recommendation of broad basing the eligibility criteria by including bankers from the private sector and decided to stick to only public sector bank chief executive.
A deputy governor can be appointed for a maximum of five years or till the age of 62 while a candidate has to be below 60 years to become eligible for the post. However, there are instances when the criterions were relaxed.
Traditionally, among the four deputy governors, two are promoted from within the ranks of RBI while one is an economist and the fourth one is a commercial banker. Apart from Chakrabarty, the other deputy governors are HR Khan and Urjit Patel.
The governor is yet to announce Anand Sinha who retired from the deputy governor's post in January. Khan's three year tenure will also expire in July, though he will be eligible for extension.
Reserve Bank of India puts fraud detection expert on United Bank of India board-DNA
Reserve Bank of India on Tuesday inducted its official, Pravathy Sundaram, to the board of United Bank of India (UBoI).
As per the Banking Companies (Acquisition & Transfer of Undertakings) Act 1970, the finance ministry nominated the official who holds a rank of chief general manager at the RBI's department of banking and operations, and replaced Surekha Marandi, another RBI official whose three-year term has come to an end, a notification filed with the exchange authorities by UBoI said on Tuesday.
Parvathy Sundaram is an expert on investigations relating to frauds in the banking sector. In December last, she represented RBI and presented a paper at the Bank Fraud – Annual Summit 2013 organised by Fintelekt. Besides, she has made several observations on various frauds in the financial sector in several meets like National Conference on Financial Fraud organised by industry body Assocham at New Delhi in July.
Parvathy Sundaram is an expert on investigations relating to frauds in the banking sector. In December last, she represented RBI and presented a paper at the Bank Fraud – Annual Summit 2013 organised by Fintelekt. Besides, she has made several observations on various frauds in the financial sector in several meets like National Conference on Financial Fraud organised by industry body Assocham at New Delhi in July.
At the RBI, she introduced various norms for classifications and reporting of frauds that were later sent out to all scheduled commercial banks as a guiding note for their asset class.
The induction of Sundaram to the board of UBoI has occurred at a time when the finance ministry has conducted a forensic audit of the bank's books and with the central bank imposing a limit to which it could lend to a single borrower account. The Kolkata-based bank came under watchful eyes of the authorities after its chairman and managing director Archana Bhargava quit her post around the third week of February citing "health" reasons.
The induction of Sundaram to the board of UBoI has occurred at a time when the finance ministry has conducted a forensic audit of the bank's books and with the central bank imposing a limit to which it could lend to a single borrower account. The Kolkata-based bank came under watchful eyes of the authorities after its chairman and managing director Archana Bhargava quit her post around the third week of February citing "health" reasons.
Non-performing assets of the bank over the second and third quarter spiralled upwards to Rs 1727 crore after an initial net profit of Rs 45 crore in the first quarter (April-June 2013) of the current fiscal.
Reacting the induction of RBI official to the board, the bank termed Sundaram's appointment as a `routine' affair. "A new representative of RBI has been appointed as the three-year term of Surekha Marandi, who till now was the regulator's nominee on the board, has ended. We have been informed of Sundaram's designation as as chief general manager of department of banking supervision and nothing more," a director of UBoI told dna.
The bank is making an all-out effort in recovering NPAs. "Every employee is now geared towards recovery of bad loans. We hope by the end of the current financial year, we would be able to post surprisingly good financial results," the director said.
UBoI's gross NPA level touched Rs 8,546 crore by end of third quarter from just Rs 2,902 crore a year ago while capital adequacy ratio deteriorated to 9% from 10.2%.
Spiralling bad debts were partly attributed to glitches in its NPA identification system, which, the director claimed has more or less been rectified.
Spiralling bad debts were partly attributed to glitches in its NPA identification system, which, the director claimed has more or less been rectified.
The bank on Tuesday announced that it has reduced its base rate from 10.50% to 10.25% with effect from March 24, a news which was greeted by the markets and saw the scrip appreciate more than 3% during the day. The stock on Tuesday ended up 3.14% at Rs 27.90, but way below its 52-week high of Rs 61.70.
Bank-promoted ARCs barred from buying stressed asset from sponsor
While asset sale to ARCs were encouraged, but regulator today laid out norms to ensure transparency in such transactions
The Reserve Bank of India (RBI) has barred asset reconstruction companies (ARCs) to acquire bad loans from sponsor banks on a bilateral basis but allowed transactions if the asset is auctioned in a transparent manner, on arms length basis, and if prices are determined by the market factors.
With a view to tackle rising bad loans, the central bank had unveiled fresh guidelines in January and eased sell of loans to asset reconstruction companies.
Apart allowing banks to sell standard assets, the regulator had also allowed banks to reverse the excess provision on sale of NPA if the sale is for a value higher than the net book value to its bottomline in the year the amounts are received.
With a view to tackle rising bad loans, the central bank had unveiled fresh guidelines in January and eased sell of loans to asset reconstruction companies.
Apart allowing banks to sell standard assets, the regulator had also allowed banks to reverse the excess provision on sale of NPA if the sale is for a value higher than the net book value to its bottomline in the year the amounts are received.
While asset sale to ARCs were encouraged, but the regulator today laid out norms to ensure transparency in such transactions.
RBI said promoters of the defaulting company are allowed to buy back their assets from the ARCs or securitization companies if such a settlement will help in minimizing the cost of litigation.
Buy back is allowed if it arrests the negative impact of diminution in the value of secured assets which are likely to rapidly lose value once a unit becomes non operational.
The central bank has said the asset valuation by the ARCshould take into account the current value of the proposed settlement vis-a-vis the net present value of the recoveries under the alternative mode of resolution taking into consideration the timelines involved.
RBI said promoters of the defaulting company are allowed to buy back their assets from the ARCs or securitization companies if such a settlement will help in minimizing the cost of litigation.
Buy back is allowed if it arrests the negative impact of diminution in the value of secured assets which are likely to rapidly lose value once a unit becomes non operational.
The central bank has said the asset valuation by the ARCshould take into account the current value of the proposed settlement vis-a-vis the net present value of the recoveries under the alternative mode of resolution taking into consideration the timelines involved.
ARCs have also been asked to formulate a policy regarding stressed asset purchase which should be approved by their board.
No comments:
Post a Comment