Archive for March 9th, 2018

When central banks have to intervene to ensure responsible recruitment in the financial advisory industry…

March 9, 2018

Financial industry is showing no signs of improving and continue to pay crazy incentives especially when they poach talent from other companies. This is requiring intervention from authorities who are scared of repeat of 2007 crisis.

Of all such authorities, Monetary Authority of Singapore has taken action against such poaching tactics:

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FinTech cooperation between Maharashtra State and Singapore

March 9, 2018

Came across this Memorandum of Understanding signed between Monetary Authority of Singapore and Maharashtra State.

One thought finance/banking was a Centre subject under the Indian Constitution. One also does not see RBI mentioned in the press release. Not sure about political economy around such decisions.

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Artificial intelligence (AI) in finance – six warnings

March 9, 2018

Prof Joachim Wuermeling of the Deutsche Bundesbank cautions against all this rise of tech and AI in finance:

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When RBI penalises SBI and how relations between the two have changed over the years…

March 9, 2018

RBI recently imposed a penalty on SBI for non-compliance with RBI directions on Detection and Impounding of Counterfeit Notes. There was a penalty imposed in 2013 as well for deficiencies/lapses observed in the operation and maintenance of the Currency Chest at SBI, Secunderabad branch. The size of the earlier penalty was a vague amount of Rs 5,62,555/-and this time it isRs 40 lakh.

The purpose of this post is not to highlight the amount of penalties but suggest how far things have come in the relations between the two entities. SBI as an organisation existed much before RBI and thus always had this overbearing effect on latter.

Infact before RBI came in the picture, the State Bank of India (called Imperial Bank before 1955) was like a quasi central bank in the country. Thus, SBI has always been blamed for treating RBI as this junior in the game. Most of the earlier staff for RBI was picked from Imperial Bank including the first RBI Governor Osborne Smith. This continued even later as the heads of SBI were seen as contenders for top jobs at RBI.

There is interesting passage in RBI Second History Volume (1951-67 pg 349) about the acrimonious relations between the two. This despite the fact that RBI owed 55% share in SBI when it was nationalised. They sparred over SBI acting as a lender of last resort to commercial banks:

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