Sunday, December 18, 2011

Investment Awareness and Investors Meet 2011 held in Sikkim

E.E.Karthak
Gangtok, December 16, 2011: The Investment Awareness and Investors’ Meet 2011, was organised on 14th of December 2011 at Hotel Golden Pagoda, Gangtok with EE Karthak, GM, Reserve Bank of India as the Guest of Honor. The seminar covered the investment awareness on different market such as equity, commodities, debt, currencies and on different Mutual Funds available in the market and the current condition of Global Economy and the opportunities with the Indian Economy. Another main issue of the discussion was the role of RBI and different regulatory boards of India such as SEBI, Forward Market Commission and on the increasing inflation rate in different sectors resulting in rising commodity prices and Currency market volatility. The most appreciable and attractive part of the event was the speech of GM, RBI on the Investment Awareness and appeal the investors not to invest on any illegal funds or companies. It was also stressed that investors should check and read all the offer documents before making any investments. The programme was fully on general awareness rather than any sales.  The seminar greeted PK Pradhan, Chairmen, Citizen Urban Cooperative bank on the successful completion of 10 years of local cooperative bank Citizen Urban Cooperative bank as an inspiration for the youth. The event was hosted by Minjo Lama Pakhrin. It was organised by PCS Securities Limited and PCS Commodities Private Limited. 

Know your rights at the ATM

If your bank allows cash withdrawal, balance enquiry and payment of bills, all in one single login, then chances are high that your ATM transactions are less secure.................

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Real villain: RBI isn’t killing growth, government is

......We can all agree that the government hasn’t done a sterling job of managing the economy. But putting the entire onus of growth on the RBI by clamouring for an interest rate cut is unfair.....

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Hard money: It’s less Subbarao vs FM, more PMO vs Sonia

What’s really going on in monetary policy? Who is calling the shots, and why? Why is the Reserve Bank of India (RBI) still hawkish when the economy is dramatically slowing down and industrial growth has just crashed to negative territory in October?............

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Indian rupee being printed in Pakistan?

Economic warfare may be an old game the Germans started in the 30s, printing enemy country currencies to destroy their economy. Now, Indian currencies are printed in Pakistan. The report submitted by the government prior to the Asia-Pacific Group (APG) annual meeting on money laundering here in July had wanted a tab on Pakistan’s strategy to route the fake currencies into the country through Nepal, Bangladesh, UAE, Sri Lanka and South-East Asian countries like Thailand and Malaysia. It said roughly four out of every 1,000 currency notes in the country was fake. The latest analysis of trends of fake notes done by various probe agencies says that from January to July this year, seizures in Kerala and Lakshadweep were to the tune of just Rs2.1 lakh. There have been no major seizures and those through banking channels were much lower. Coastal area seizure was just worth Rs1.5 lakh. Besides migrant labourers who are agents, it is big game with money routed through UAE, especially to areas like Malappuram and Chavakkad where the centres work under the façade of clinics or treatment centres. Some visitors are carriers of fake notes. The state government has handed over cases of fake currency seizures to the National Investigation Agency. The NIA superintendent of police, Mr Sunil I, who heads the probe into the Rs8.9 lakh woth notes seized from Taliparambu in Kannur, says the agency was looking into various links in the case. The former Coast Guard director-general, Mr Prabhakar Paleri, says Kerala is generally a peaceful state and can be a safe destination for the landing of such notes that are sent out, especially from UAE.
Asian Age

Govt to strengthen security features of currency notes

To address the menace of counterfeit notes, the government plans to strengthen the security features of the Indian currency and will increase the risk factors for carriers of fake notes. "India is a victim of injection of fake currency in our economy. There are indications that fake currency is being injected from some of our neighbouring countries either as a source or as a route," Finance Minister Pranab Mukherjee said today. He was speaking at foundation stone laying ceremony of Bank Note Line at Security Paper Mill (SPM) here. At the same time, he said, the government is ensuring that the enforcement mechanism acts as deterrence to those who are involved in the circulation of fake currency. The efforts have been to increase the risk factors for carriers of fake currency in India, the minister said. "The effort of the government is to make security features of Indian currency so strong that it becomes highly difficult to fake," Mukherjee added. A committee of officials from Department Economic Affairs, Reserve Bank, Bhartiya Reserve Bank Note Mudran, Security Printing and Minting Corp and security agencies has been constituted for short listing of security features through global competitive bidding. Besides, a separate committee of RBI is finalising the new design of the next series of the Indian Bank Note. "It is expected that this two-prong strategy of the government to fight the menace of fake currency in India will yield substantial results in years to come," he said. Mukherjee said that efforts are also being made to indigenise the requirement of currency paper. "I am told that the procurement of one line costing about Rs 489 crore is in process, which will further strengthen our indigenous capacity," he added. Order for design, procurement, supply, installation and commissioning of CWBN paper line of 6000 MT has already been placed at a cost of about Rs 445 crore. The project is likely to be completed by October, 2013. "The completion of the project will reduce our dependence on foreign supplier. This will also reduce the possibility of diversion of papers supplied by foreign supplier to other destinations for the purposes of generating fake currency," Mukherjee said. He said the long term goal should be to meet the domestic requirement related to currency and subsequently cater to the demand of the international market. The requirement of specific type of inks used in currency printing is likely to be fully made by Bank Note Press, Dewas by upgrading the ink factory. The modernisation of the factory is under process, he added. A joint venture company called Bank Note Paper Mill India for the production of indigenous currency paper has been set up at Mysore with 50:50 equity participation by SPMCIL and Bhartiya Reserve Bank Note Mudran, a subsidiary of RBI. This paper mill will have capacity to produce 12,000 tonnes of currency paper annually. The planned currency paper production of JV combined with production at SPM, Hoshangabad will be able to produce about 21,000 MT of paper annually. This will meet about 90 per cent of the currency paper requirements by 2014 end. 
DNA

Uncertain phase ahead

Question mark over the government's ability to push through pending reforms

The last month of the first year of the new decade of this century has so far been very eventful for the country's economy. As the curtain is ready to drop for 2011, it is clear that India is headed for a difficult year ahead. Even as a cautious Reserve Bank of India kept the key rates unchanged, it is becoming increasingly clear that the economy has indeed hit the speed-breaker. The constant quibbling among political parties has only hurt the near and long-term cause of the economy. The ugly row that erupted in the wake of the Cabinet decision to allow up to 51 per cent FDI (foreign direct investment) in multi-brand retail saw Parliament go dysfunctional. In the wake of fierce opposition, the government had to backtrack and put the issue on backburner. The entire episode, however, had put a big question mark over the UPA Government's ability to push through the pending reform initiatives. This has already sent out negative signals to the global investing community. With the Vijay Mallya-headed Kingfisher Airlines facing severe financial crisis, it was widely speculated that the Centre would step in to free the skies by opening up FDI into the aviation sector. The inter-ministerial disagreement on this issue and also the wave of protests against the FDI in multi-brand retail have ensured that the skies are kept out of bound for the global investors.  Early this month, the government had to trim its growth forecast to 7.5 per cent for the fiscal. The Economic Survey, presented in February this year, had forecast a 9 per cent GDP growth. On the day when it lowered the GDP forecast, the government had also come out with a self-admission that a software-related error had inflated the country's export by $9 billion for the April-October period. More bad news was to follow subsequently. The government was stumped when the IIP number for October went into a negative trajectory. As if these were not enough, the rupee started getting under the nerves of the monetary and fiscal authorities. The depreciating rupee against the greenback has sent the calculations on the foreign trade front haywire. It was only after the rupee breached the 53-mark that the RBI stepped in to announce strong measures to curb speculations in forward contracts. The move had the desired effect with rupee moving up a little. It is against these all round negative signals that the Reserve Bank of India's mid-quarter monetary review was anticipated with great expectations. In the end, the apex bank preferred to take the cautious route and kept the key rates unchanged. Ironically, many a hurt participant in the economy lauded the status quo decision of the RBI. But the RBI drew predictable flak from the markets. The 30-share Bombay Sensitive Index (Sensex) tanked 345 points. The Nifty too went down. The RBI has indeed expressed its concerns over the growth. As 2011 is slowing moving into the pages of history, the country appears to be headed for uncertain phase in the coming year.
HBL

Audited bank books understate bad loans: RBI

Pointing to shortcomings in the quality of bank audits, the Reserve Bank of India (RBI) has said financial statements certified by accountants show lower non-performing assets than is actually the case. There is a difference between the levels of non-performing assets (NPAs) found during the course of supervisions (by RBI) and those in audited books of banks. Bad loans in certified statements are less, RBI Governor, D Subbarao, said on Saturday. Seeking an improvement on this front, Subbarao said, "We must identify where the systemic difference is coming from." He was addressing a conference organised by the Institute of Chartered Accountants of India (ICAI). Subbarao said accountants who sign bank books were RBI's "eyes and ears". He added the regulator expected them to send out early warning signals to assist the regulator in the supervisory process. A true and fair picture must be shown to shareholders, he said. The economic slowdown and rise in interest costs, owing to a rise of over 250 basis points in lending rates, have exerted pressure on the repayment capacity of retail and corporate borrowers. Gross NPAs of commercial banks rose to Rs 97,922 crore at end of March from Rs 84,698 crore a year ago, according to RBI data. On the demand to reduce branch audit work, he said relevant branch audits at public sector banks (PSBs) had significantly declined due to core banking facilities and centralised record keeping. The cost of audit of PSBs was significantly higher than the cost of auditing comparable private sector banks. However, ICAI has been resisted the move, as it would mean a reduction in work. ICAI's efforts in this regard are ill advised. Accountants should sharpen their skills in concurrent audits, rather than agitate for the retention of work which does not add value, Subbarao said. The profession had shied away from the responsibility of prevention and early detection of fraud, Subbarao said. The need for such a service exists, and if the profession did not fulfil that need, other agencies which could provide such services would displace auditors and deprive them of a potentially expanding opportunity, he added. The central bank governor also had a word of caution for accountants on monopoly in areas like signing financial statements, advising them against perpetuating their monopoly status. Accounting professionals were concerned about expanding career opportunities, owing to the institute's growing membership. The easy way out to expand opportunities would be to agitate for continuation of the monopoly position. However, this would be a mistake, Subbarao said, adding they should identify emerging opportunities and develop skills needed to exploit them.
BS

Freeing up NRI deposit rates will boost forex inflows, say bankers

The freeing up of interest rates on NRI (Non-Resident Indian) deposits by the Reserve Bank of India will attract more foreign currency, which in turn will strengthen the rupee, said bankers. The RBI, on Friday, deregulated the interest rates on Non-Resident (External) rupee (NRE) deposits and Ordinary Non-Resident (NRO) Accounts. The rates on these deposits should now be comparable those offered on domestic rupee deposits, said the RBI. As per RBI guidelines, banks can now determine their interest rates on both savings deposits and term deposits of one year and above maturity under NRE accounts and savings deposits under NRO accounts. In November, the RBI had increased the interest rates on NRE term deposits by 100 basis points and on FCNR (B) deposits by 25 basis points, thereby allowing banks to offer higher interest rates. Now the central bank has gone up a step further and de-regulated the interest rates altogether. As on October-end, the total NRE, NRO, FCNR deposits were at $51.975 billion, according to RBI data. According to Mr N. S. Venkatesh, Chief General Manager and head treasury, IDBI Bank, this move is welcome. It will bring in more foreign currency due to which the rupee will strengthen and imported inflation will come down. “As long as interest rates in India are higher than those in foreign countries, NRI deposits will be attractive. When huge amounts of money flow in, it is possible that the arbitrage could reduce. But until then we are likely to see good inflows,” Mr Venkatesh said. Currently, the interest rates on NRE deposits work out to less than 4 per cent. Post the deregulation, the interest rate would be higher, even after deducting the swap cost or the cost of converting the foreign currency into rupee.More money could flow into NRE deposits as the money is fully repatriable and there is no tax. So the effective return could work out to be fairly substantial, said an official from a public sector bank. How much interest banks will offer will depend on individual bank's requirement for funds and the scope for deployment. But for NRIs it is definitely an attractive investment at this point of time. “Even if someone borrows money overseas at LIBOR plus 100 basis points, pays a swap cost and covers it fully, the deposit will still fetch them a higher return,” explained the official. According to Mr Sumeet Vaid, CEO, Ffreedon Financial Planners, this is a right time for NRIs to invest in bank deposits as interest rates have peaked and the dollar-rupee exchange rate is in favour of the dollar. “It can't get better for NRIs in terms of the dollar's value and interest rates, as the RBI's own view says that interest rates have peaked,” he said.
HBL

RBI action halts rupee's free fall

............The coming weeks could see the rupee take support from the RBI's recent moves to shore it up. However, concerns about the domestic and international economy could translate into the dollar continuing as a safe haven for investors. This may restrict the rupee's gains.

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Govt should have defended rupee much earlier: Adi Godrej

...............The RBI should have intervened earlier than Thursday when it had announced a slew of measures to halt the rupee depreciation “by statements and policies,''..........

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“No major impact of the MoU signed with the RBI”

..... I can safely say that there has been no major impact of the MoU signed with the RBI. In fact they have released about Rs 2300 crore to the state government to pay off its debt incurred over the past many on account of the Over Draft (OD) from J&K bank........

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It's (still) the economy, stupid

In April 2008, Vikram Nimbalkar had everything going for him. He had just got married and, like him, his wife too had found a job in a technology outfit in the UK. By the end of the year, both were back in India, searching for a job as their employer asked them to leave in the wake of the worst financial crisis in several decades. It's been nearly three years now that the Nimbalkars haven't worked in an IT firm. Instead, they have moved to teaching at engineering colleges in Ghaziabad. While Vikram is in the process of switching over to a wellknown institute, the spate of bad news on the economy front has him worried. So are several others - from businessmen, who have now been complaining of deterioration for several months, to policymakers and politicians. In an interview, RBI deputy governor KC Chakrabarty told TOI that it is not clear whether we are out of the 2008 crisis or if it is the same crisis.
Times Crest

‘Financial literacy and inclusion go hand-in-hand’

.....“It is better to invest with a scheme/product that is overseen by regulators like the Reserve Bank of India (RBI), Insurance Regulatory and Development Authority (IRDA) or Securities and Exchange Board of India (SEBI). .........

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