by Renuka Sane.
Retail finance in India is once again in the news for reasons of fraud, this time in the form of the Saradha Group in West Bengal. There is a general sense that such schemes proliferate because of the failure of financial inclusion, and that better supervision by current regulators will bring . . . → Read More: Mis-selling: from impressions to evidence
by Suyash Rai and Smriti Parsheera
The first task in dealing with ponzi schemes is correctly defining the scope of financial regulation. Once a firm is classified as a financial service provider, the appropriate regulator must choose a regulatory strategy for it. Assuming SEBI had clear jurisdiction with Sahara or MMM, what would SEBI . . . → Read More: Regulatory strategy for savings/investment schemes, that would address ponzi schemes
The investigative journalism by cobrapost, their videos, and Monika Halan in Mint add up to an important story. Most of us have enormous respect for the achievements of Axis Bank, HDFC Bank and ICICI Bank. But as Monika emphasises, there are also genuine problems there. We saw it first with the hard-driving mis-selling . . . → Read More: Important work by cobrapost that illuminates high-powered incentives
by Bindu Ananth and Kshama Fernandes
Over 2006-12, RBI and SEBI have created a strong and conducive regulatory environment for securitisation, listing of securitised debt instruments, and standards of transparency and reporting. Securitisation volumes have picked up and we recently witnessed the first listed transaction.
In October 2011, the income tax authorities issued a . . . → Read More: Unanticipated consequences of Finance Bill provisions on securitisation
by Harsh Vardhan.
The CEO of a leading bank recently caused a flutter in the banking community by demanding the abolition of the Cash Reserve Ratio (CRR). RBI has promptly appointed a committee to look at this issue. The reserve ratios, CRR and SLR (Statutory Liquidity Reserve), are an important feature of Indian banking . . . → Read More: Rethinking the Statutory Liquidity Ratio (SLR) in Indian banking
by Harsh Vardhan.
What would you say if someone was borrowing money at 8% and investing it to earn around 3%? “Uninformed!”, “financially illiterate!” or even outright “foolish”! And yet this is what our government has been doing with trillions of rupees over the last many years and has committed to continue to do . . . → Read More: Should government capitalise public sector banks?
Here’s something that I would normally call irony if it weren’t so evil:
Wells Fargo Home Mortgage (WFC) has fired a Des Moines worker over a 1963 incident at a Laundromat involving a fake dime in the wake of new employment guidelines. Richard Eggers, 68, was fired in July from his job as a . . . → Read More: Let’s Hope They Fire the Rest
The N.Y. Times (the New York freaking Times!) defends the big banks:
BANKS aren’t always popular even in the best of times, but the anger of recent years is unprecedented. The anger, while understandable, has fueled the misguided idea that we should break up the nation’s largest banks. The argument is simple and sound-bite . . . → Read More: Try This On For Size
Ila Patnaik in the Indian Express on the role of the Ministry of Finance in India’s growth. Pratap Bhanu Mehta in the Indian Express on India’s cabinet reshuffle. Anil Padmanabhan in the Mint about how things have changed at MoF after Chidambaram got back.
Bibek Debroy on a major problem that afflicts India today: . . . → Read More: Interesting Readings for August 21, 2012