VisVoice

Amalgamation of PMC Bank with Unity SFB:  Whether depositors and employees of PMC protected? RBI placed in public domain a draft scheme of amalgamation of The Punjab and Maharashtra Cooperative (PMC) Bank with Unity Small Finance Bank Ltd. (USFB). The regulator appear to specialise in being different each time, when reconstruction/ amalgamation schemes are announced for rescuing depositors and employees of ailing banks. The reconstruction plan of Yes Bank, a private sector bank, was carried out protecting all depositors, equity share holders, employees and other creditors with the exception of Tier-I Bond holders, whose claims were written off. In the case of LVB, a private sector bank again, its depositors, employees and other creditors were protected, but the claims of equity shareholders and Tier-II bond holders were nullified. In the case of  South Indian Co-operative Bank (SICB) (merged with Saraswat Bank), while depositors holding money up to Rs.1 lac were full...

  RBI Retail Direct Scheme   Brief : Hon’ble Prime Minister Narendra Modi has virtually launched Reserve Bank of India’s online portal RBI Retail Direct Scheme (RBI RD) ( https://rbiretaildirect.org.in ) on 12th November 2021. Through this portal,  retail investors can invest in government securities (g-sec) directly. So far, retail investors were investing in g-sec via  gilt mutual funds/ g-sec dealers in case of primary issuance and trading in BSE/NSE/Negotiated Dealing System (NDS-OM) in respect of securities listed in the secondary market. With the availability of the above portal, individual investors can open an account with RBI (called Retail Direct Gilt account or RDG) for participating in primary auction of g-sec as well as buy and sell g-sec in NSD-OM. The list of  g-sec include Treasury Bills, dated securities, Sovereign Gold Bonds (SGB) and State Development Loans (SDL). There is no need to open a separate demat account with any DP and the existing s...

Arrest of EX-SBI Chairman - Unfortunate and Demoralising Shri Pratip Chaudhuri, ex-chairman of State Bank of India (SBI) was arrested in Delhi by Rajasthan Police on 31st October 2021 for an alleged sale of a non-performing asset (NPA)—Hotel Gaudavan—to Alchemist ARC at a low value. Every banker including Shri Dinesh Khara, Chairman, SBI has termed the arrest as ‘extremely unfortunate’. SBI issued a statement of clarification, as the said project was financed by it and subsequent sale to an ARC, after the account turned into NPA, was carried out by the bank.  It could not have come at a worse time for the central government, which released a press statement on that day assuring bankers that their bonafide business decisions will be protected. Though the way the news published in the media appear to suggest that a director position was offered in the ARC as a quid pro quo for the sale of NPA by SBI to the ARC, during his period as Chairman of SBI, the clarification statement is...

  Extension to Shri Sakthikanta Das -  Reward for being compliant? To my article in the blog https://viswoice.blogspot.com/2021/10/3-year-extension-to-rbi-governor.html,  I received some interesting feedbacks.  Main Contentions were:  a) the present RBI Governor, more often, plays the role of 'yes boss' b) RBI's instiutional independence has been compromised during his tenure c) Professional concerns are not expressed openly and d) Extensio  may be the reward for transferring Rs.1.70 lac cr. surplus to the boss  (government) in 2019.   My Views: 1.  Whether all actions of the present Governor independent?   During the present Governor's period, MPC (Monetary Policy Committee) reduced repo rates by 250 basis points (135 points prior to COVID and 115 basis points with the onset of COVID). Major regulatory and support measures initiated during the period include (i) widening the gap between repo and reverse repo (65 bps as again...