RBI Board meets in Chennai

The Central Board of the Reserve Bank of India met today at Chennai. Dr. D. Subbarao, Governor, Reserve Bank of India, chaired the meeting. Dr. Anil Kakodkar, Shri Kiran Karnik, Prof. M.V. Rajeev Gowda, Dr. Nachiket M. Mor, Shri Y.H. Malegam, Shri Azim Premji, Shri K.M. Birla, Prof. Dipankar Gupta, Shri G.M. Rao, Dr. Indira Rajaraman, Shri Y.C. Deveshwar and Prof. Damodar Acharya, Directors, attended the meeting. Dr. K.C. Chakrabarty, Shri Anand Sinha, Shri Harun R. Khan and Dr. Urjit R. Patel, Deputy Governors, were also present.

The Board reviewed the current economic situation and global and domestic challenges and policy responses.

The Central Board meets at least once every quarter. Apart from holding meetings in Mumbai, Chennai, Kolkata and one in New Delhi after the Union Budget, which is addressed by the Finance Minister, the rest of the meetings are held in other state capitals by rotation. The main function of the Central Board of Directors of the Reserve Bank is to provide overall direction to its affairs.

Earlier, on July 3, 2013, the Governor chaired a special State Level Bankers™ Committee meeting. The meeting was attended by senior officials of the State Government, banks and the Reserve Bank. The following decisions were taken at this meeting:

• Banks in Tamil Nadu should speed up opening of branches and bank accounts in remote areas of the State as infrastructure in Tamil Nadu was relatively better. They should also improve the ratio of physical branches to bring it closer to the stipulated 25 per cent.
• In the next two months, the State Government will identify 10 districts of the State where Business Correspondents (BCs) can be trained, with the help of banks, in actual banking activities/products so as to enable them to increase business.
• In order to have a better understanding, the State Government would, through senior officers of District Industries Centre (DIC), initiate a study of banks on granting loans of less than ` 10 lakh without collaterals in four more districts of Tamil Nadu. The Reserve Bank will also associate with the study. Earlier, the Reserve Bank had undertaken a study of four districts in Tamil Nadu to assess whether banks were insisting on collaterals for loans below ` 10 lakh. It was observed that substantial part of loans under this category was granted without insisting on collaterals.
• Bankers would support the State Government™s effort in furthering agricultural insurance scheme, in six districts identified by the State.

Dwelling at length on the fraudulent money collection schemes prevalent in the country, the Governor stated that although schemes like chit funds and multi-level marketing companies did not fall under the jurisdiction of the Reserve Bank, it had, as a public policy measure undertaken to create awareness about these schemes. The Reserve Bank of India has, for instance, published in 13 languages, frequently asked questions (FAQs) about non-banking financial companies.  It also conducted a town hall meeting in Chandigarh on the subject in partnership with a national television channel. The Governor, then stressed on the need to sensitise police officials on this issue so that they give priority to these complaints. The Governor also emphasised the need to fast track the disposal of seized assets of the fraudsters to repay the public deposits. He informed that the Reserve Bank Staff College at Chennai would draw up a training capsule especially for senior police officials and urged the State Government to help the Reserve Bank in ramping up publicity about such fraudulent schemes through its district machinery. Since the public was generally unaware about who regulates what, the Reserve Bank has announced that the public could complain to any regulator and all regulators would coordinate resolution of complaints among themselves.