Applications invited for Chief Learning Officers for Indian Commercial Banks

            On 23/04/2014, RBI released the ‘Report of the Committee on Capacity Building in Banks and non-Banks’

            The report was placed on Reserve Bank of India’s website and the public have the option to submit their suggestions/comments on or before October 31, 2014.

Snailmail @ the Chief General Manager In-Charge, Reserve Bank of India, Department of Banking Operations and Development, Central Office, Mumbai

Email @ cgmicdbod@rbi.org.in

The above Committee was constituted by the Reserve Bank with the objective of implementing non-legislative recommendations of the Financial Sector Legislative Reforms Commission (FSLRC) relating to capacity building in banks and non-banks, streamlining training intervention and suggesting changes thereto in view of ever increasing challenges in banking and non-banking sectors.

The ambit of the Committee’s report is essentially human resource intervention that would be required for improving the efficacy and efficiency of personnel employed at various levels by banks and non-banking financial companies regulated by the Reserve Bank.

The most interesting recommendations of the Report are: -

1. Creation of position of “Chief Learning Officer” in banks and concept of return on learning
2. Entry point qualifications at recruitment stage, development of competency standards and certification/accreditation in various areas of training
3. Conducting a common Banking Aptitude Test (BAT) at entry levels.
4. eLearning as an important constituent for building capacity and imparting training

The Chief Learning Officer will be responsible for:-

• Leadership Development,
• Collaborative Learning across the organization,
• developing learning pedagogies tailored to the organization,
• measuring the quantum and quality of learning across the organization through various indicators,
• develop a Learnability Index for all personnel (i.e. a measure of the ability to learn of an individual) and apply that as an input into promotability,
• disseminate knowledge throughout the organization
• and continuously monitor and augment learning and sharing across the organization

PMJDY masterstroke to add 3.49 Crore Accounts – What an Idea Sirji!!

            The (Mahatma Gandhi National Rural Employment Guarantee Act ) NREGA Act 2005 provides enhancement of livelihood security, giving 100 days of guaranteed wage employment in every financial year to every household, whose adult members volunteer demanded unskilled manual work.

Panchayats at districts, intermediate and village levels will be the principal authorities for planning and implementation of the scheme.

MNREGA was set up on Feb 2, 2006 from district Anantapur in the state of Andhra Pradesh, India and originally protected 200 real "poorest" zones of the nation.

One of the major complaints of the workers under the NREGA Act 2005 was the consistent delay of wages.

Over the years the process got streamlined with migration from Cash based disbursements to Electronic based payments.

The absence of a wide-spread banking network was seen as a major hurdle in the roll-out of the electronic based payment system.

The Indian Posts with its comprehensive network  prompted the Rural Ministry to advise the workers to open savings accounts in Post Offices.

Now, with PMJDY generating wide spread interested amongst the rural populace, the Ministry of Rural Affairs is contemplating of nudging the workers to open PMJDY accounts in the Banks.

On the accounts being opened under PMJDY the wages mode would be modified from Post Office/Cooperative Bank to PMJDY Bank accounts.

The immediate impact would be an addition of 4.41 crores bank accounts if the residuary NREGA workers opt for PMJDY Bank Accounts.

What an Idea!

The conversion of accounts from Post Office to Banks under PMJDY mode is part of the MGNREGA PRC Agenda scheduled on 18th - 19th Sept 14

RBI cancels Licence of The Merchant’s Co-operative Bank Ltd., Dist. Dhule, Maharashtra

            On 27 August 2014, after RBI’s directions on cancellation of its banking licence, T’he Merchant’s Co-operative Bank Ltd., Dist. Dhule, Maharashtra’, shut its doors for ever.

The Reserve Bank of India has, on August 27, 2014, cancelled the licence of The Merchant’s Co-operative Bank Ltd., Dist. Dhule, Maharashtra to carry on banking business.      

    

 As such, the bank is forthwith precluded from transacting the business of 'banking' as defined in Section 5(b) of the Banking Regulation Act, 1949 (As applicable to Co-operative Societies) including acceptance/repayment of deposits.

Located on the banks of River Tapi in Maharashtra, Dhule is one of the few organized cities in India established before independence.

            Dhule is also famous for a large number of Solar Cookers spread across the district. Another recent attraction in Dhule is the Integrated Textile Park.

PMJDY – Which is better? – An Audit or An ePortal

            Still in its early days, PMJDY is already subject to an Audit. No, it is not audit of the PMJDY scheme, but the validation of basic bank accounts opened by various Indian Banks under PMJDY.

             The Indian Finance Ministry has given the mandate to KPMG to validate the number of basic banks claimed to have been opened by banks under PMJDY.

            The KPMG certification is an important tool for the NaMo ministry move to seek an entry into the Guinness Book of World Records, for the maximum number of bank accounts on a single day.

            The other spinoff the KPMG validation will be the comfort to the finance ministry on the claimed number of basic bank accounts opened by the banks.

            10 reasons why an ePortal should be the preferred monitoring tool rather than an Audit: -

01) Ease of data transfer from the respective banks CBS to the ePortal

02)Banks have been advised to open the PMJDY Bank Accounts under the Basic Banking Account product, which is uniform across all banks.

03)Reports of various types i.e District level, State level etc can easily be customized

04)After the initial set-up, no need of human intervention.

05)Real time availability of data

06)Reduces dependence on banks to submit the data manually

07)Cost effective, as no Maker-Checker will be required

08)Turnover in the account can be monitored

09)Steps can be taken to increase the stickiness of the accounts to the account holders

10) The ePortal can go live in 3 weeks i.e by Mahatma Gandhi’s Birthday

            

PMJDY - Overdraft of INR 5000. 5 reasons for success

    

The contours of Prime Minister Jan Dhan Yojana (PMJDY) Overdraft of INR 5000/- will be unveiled in the next couple of weeks.

As per the present thinking, the OD can be availed by account holders who have seeded their Aadhaar Number in the Banks account database and have satisfactory operations for 6 months.

Similar guidelines as applicable instant credit of outstation cheques may apply to OD requests too.

The guidelines for quantifying satisfactory operations are not laid down in black and white, but based on banker’s experience.

The following points are considered while assessing a customer account for satisfactory operations: -

a)    No cheque bounce

b)   No decline of eTransaction due to financial reasons

c)    Average balance

d)   Credits in the account at regular intervals.

There are many apprehensions that the due to OD facility a large number of accounts will slip into NPA mode and banking industry will face huge losses.

            Assuming out of the 7.5crs accounts, 20% (1,50,00,000) of accounts will be eligible to avail OD facility, funds to the tune of INR 7,500 crores would be required.

5 reasons why the NPA level will be LOW in the OD Accounts

01)  The accounts have already cleared the first step of credit appraisal i.e the satisfactory operations test.

02)Inflow of subsidy credits at regular intervals.

03)Inflow of other Government payouts

04)The Indian Jugaad ability to ensure credits and debits are always equal

05)The poor are always trustworthy, Yes, the poor always trustworthy