China influence in World Bank rises

Sources:ieAgencies ::Mon, Apr 26 10:58 AM

The World Bank recognized China's growing economic influence and agreed Sunday to elevate Beijing's voting power to behind only the U.S. and Japan in the 186-nation lending organization.

Lifting China above a number of Western powers, including Germany, France and Britain, also gives other nations with emerging economies more voice and say in how the bank operates and lends money.

Bank members also decided to increase the institution's capital by $3.5 billion; it was the first increase in more than 20 years.

China's stake at the bank, in terms of voting power, climbs from

2.78 percent to 4.42 percent. The U.S., the world's largest economy,

remains No. 1 spot at 15.85 percent, effectively giving it veto

power, followed by Japan at 6.84 percent.

Countries such as China, Brazil, India and Russia long have

complained about the dominance of the United States and European nations in the bank's decisions. Under an informal agreement dating to the end of World War II, an American is president of the bank and a European leads its sister institution, the International Monetary Fund.

Robert Zoellick, the bank's president, said at a news conference that the shift in voting power "recognizes that we need to consign outdated concepts like 'Third World' to history. Today the world is moving toward a new, fast evolving multipolar economy."

Speaking after a meeting of the bank's policy-setting Development Committee, Zoellick said countries with emerging economies are critical sources of demand in the global economic recovery under way and over time "can become multiple poles of growth."

But Oxfam, a development advocacy group, said the World Bank broke a promise made at its meeting last year in Turkey to protect the voice of the poorest countries.

"Of 47 countries in sub-Saharan Africa, said Caroline Hooper-Box, an Oxfam spokeswoman, "more than a third have lost share, stayed the same and one (Sudan) has gained." Zoellick said the capital increase "means that we will no longer face the possibility that we would have to cut back our lending later this year."

He said the bank has provided $105 billion in financial support to its members since the financial crisis began to bite in July 2008.

Treasury Secretary Timothy Geithner said the bank "made a strong and compelling case" for the capital increase and said he would seek approval of the U.S. share - about $117 million each year over five years - from Congress.

World running out of diamonds: De Beers

 
 

 

Source:I A NS :Apr 26 11:10 AM

London, April 26 : The supply of diamonds in the world is dwindling, said De Beers, the biggest miner of the sparkling gem.

De Beers said it will reduce its production to extend the life of its mines, The Telegraph reported Monday.

Des Kilalea, a diamond analyst at RBC Capital Markets, said that taking into account the moderated output diamond prices could rise by at least 5 percent a year for the next five years.

The diamond industry, in the past 20 years, has not found new diamond deposits to match the two biggest mines in Africa, which are owned by De Beers, or the Russian mines of Alrosa.

De Beers accounts for 40 percent of global rough diamond sales.

Punjab & Sind Bank IPO in June to raise Rs.500 crore

Source:Indo Asian News Service: Mon, Apr 26 04:23 PM

New Delhi, April 26 (IANS) Punjab and Sind Bank will hit the capital market with an initial public offering (IPO) of 50 million shares in June to raise around Rs.500 crore for business expansion, the public sector lender's managing director G.S. Vedi said Monday.

'We are in the advanced stage of preparations for launching an IPO. We understand that the government is actively considering the proposal and with this, we hope to launch it by June-end or first week of July,' Vedi told reporters here.

With the launch of the IPO, the government's stake in the bank will come down to 82 percent from the present 100 percent.

The funds raised will be utilised to expand the bank's business, Vedi said.

'We will file the prospectus with the Securities and Exchange Board of India by this month-end or the first week of the next month,' he said.

The bank targets to grow by at least 30 percent and have total business of over Rs.one lakh crore this financial year. Its total business stood at Rs.81,894 crore as on March 31, 2010.

The bank plans to take up the total number of branches to 1,000 by March 2011 from the present 920. It will open around 30 branches in villages.

It will also recruit 800 people, including 500 probationary officers, this fiscal.

Bank frauds solved with duo's arrest-South Delhi

Source:Express News Service :Sun, Apr 25 04:34 AM

The South Delhi police arrested two persons, including an employee of a public sector bank, and claimed to have solved at least two major cases in which large amount of money were withdrawn from the accounts of corporate and public entities with inside information.

The arrested duo have been identified as Sanjeev Kumar Verma, who was the gang leader, and Mukesh Kumar, who worked as a clerk at the Kamla Nagar branch of Canara Bank

and allegedly passed on vital information about big corporate account-holders in the bank.

According to the police, the gang withdrew Rs 67 lakh from the account of National Book Trust at Canara Bank's Vasant Kunj branch. In a second case, they withdrew Rs 1.31 crore from Swaraj Mazda's account in a Chandigarh branch of the same bank.

A third gang member, one Neeraj Chauhan, is still absconding, the police said on Saturday.

The police have registered a case and formed a team to investigate the matter, on a complaint filed by I P Chawla, the manager of Canara Bank's Vasant Kunj branch.

The police learnt from their interrogation that Kumar allegedly passed on information about serial numbers of cheques that were yet to be presented.

Verma and Chauhan opened accounts in different private banks with fake identities and forged documents, the police said. After this, they made fake cheques of the required series and presented them in the private bank where they had opened accounts in the name of non-existing firms, an officer said.

The police recovered Rs 4,80,000 cash and a Hyundai Verna car from the duo's possession.

Court stays government-aided Islamic banking

Source: IANS:Thursday, April 8, 2010 |

Kochi, April 8  The Kerala High Court Thursday in an interim order restrained the government or state-run organisations from starting Islamic banks, but allowed a private company to start its operations.

The bench headed by Chief Justice J. Chalameshwar allowed Al-Baraka Company to go ahead with its operations.

Former union minister Subramaniam Swamy and one more person had petitioned the court against state-owned Kerala State Industrial Development Corporation starting an Islamic bank with private collaboration.

The court asked the state government to freeze all such activities till a final verdict on the issue.

Chief Minister V.S. Achuthanandan said the state government will look into all aspects of the court's interim verdict and then decide what needs to be done.

"We have to see if such a thing happens, will it be good for the people or would it be detrimental. So at the moment I do not wish to make any comments. We will study all aspects and then decide," said Achuthanandan.

Director of Al-Baraka, prominent businessman E.M. Najeeb said, "In the wake of this verdict, the board of the company will soon meet and decide the future course of action."

Al-Baraka has 14 promoters who have contributed Rs.4.2 crore and a

17-member board with prominent Middle East businessman P. Mohammed Ali as its chairman and another businessman, C.K. Menon, as the vice-chairman.

With the latest verdict, three government officials who are on the board of the company will have to step down.

According to the company, the proposed bank will give no interest and a sharia board will decide on what sort of investment to make.

Muslims are the second largest community in the state with close to 24 percent of the 3.2-crore population.

US witness 57 bank failures this year; 16 go belly up in April

Source:PTI, Apr 25, 2010, 02.04pm IST


NEW YORK: The American banking industry continues to be shaky, with nearly 15 banks on an average biting the dust every month.

Notwithstanding healthy economic growth and rebound of Wall Street majors, a staggering 57 banks have been shut down so far this year and seven of them collapsed last Friday.

As many as 15 entities, most of them small and medium banks, have gone out of business in the last two weeks. So far this month, 16 banks have gone bust.

The failure of the seven banks last Friday is expected to cost the Federal Deposit Insurance Corporation (FDIC) as much as $973.9 million.

FDIC is the federal agency which insures deposits at over 8,000 American banks.

The latest ones to go belly up are New Century Bank, Broadway Bank, Wheatland Bank, Peotone Bank and Trust Company, Citizens Bank and Trust Company of Chicago, Lincoln Park Savings Bank and Amcore Bank, National Association.

The number of failures are expected to climb till the labour market situation becomes more steady.

Despite a quarterly economic growth of over five per cent and improving performance of Wall Street firms, small and medium banks continues to be hit by defaults due to high rate of unemployment.

Currently, the jobless rate is over nine per cent. Last month, 19 banks went bust while the count of failures touched seven in February. The authorities closed down shut down 15 banks in January.

A whopping 211 entities have collapsed since the bankruptcy of Lehman Brothers in September 2008.

India to play major role in Asia's growth: IMF

Source:PTI, Apr 25, 2010, 03.54pm IST

WASHINGTON: India is now integrating more with the rest of Asia and will play a major role in the Asia's growth, top officials of the International Monetary Fund has said.

"You have a very rapidly growing large economy in the South Asia region, and that is India, and India is now also integrating much more with the rest of Asia," Kalpana Kochhar, IMF Deputy Director of the Asia Pacific Department told reporters late yesterday.

"For example, trade between China and India is growing rapidly. Of course, it is mostly imports from China-but it has grown very rapidly in recent years. So prospects for integration both in the South Asia region amongst themselves and with the rest of Asia I think have greatly improved and will continue to do so," she said.

IMF Director, Asia Pacific Department, Anoop Singh said that the fund expects Asia to continue leading the global recovery and grow by about 7 per cent this year and next year.

"As is now well-known, China and India will again lead Asia's growth with growth rates of 10 and 8.8 per cent this year," he said.

While the pattern of recovery has varied in Asia, as it has in other regions, Singh said it is important to note that both the more domestically oriented economies such as China, India and Indonesia as well as the more export-oriented economies are experiencing strong upturns.

Responding to a question, Singh said the IMF expects output gaps to close this year in a number of economies, including countries in South Asia such as India.

"Therefore, it is not surprising that inflation has begun to turn up. I recently presented an outlook that shows how expectations have moved up. There is a significant contribution to higher inflation coming from food and energy prices.

"There are reasons for that increase in food and energy prices, so we are not yet seeing an increase in underlying inflation at the same rate at which we are seeing a rise in overall inflation," he said.

He said that there is a clear commitment in many countries to ensure that inflationary expectations do not broaden to result in higher underlying inflation.

"So we are seeing monetary policy already being tightened in a number of countries. For example, India moved the second time just last week," Singh said.

DLF arm buys out PE stake in group firm for Rs 3085 cr

 
Source:TNN, Apr 26, 2010, 12.44am IST

MUMBAI: In a move that could have far-reaching positive implications on the revenues of real estate major DLF, it has announced that Caraf Builders & Constructions, a fully owned subsidiary of the Gurgaon-based company, has raised its stake in DLF Assets (DAL) to 91%. The deal was done through the purchase of convertible shares from private equity firm SC Asia for Rs 3,085 crore.

Caraf, which has recently been merged into DLF, is the holding company of DAL that was set up by DLF promoters to buy commercial properties of DLF. ‘‘Caraf Builders & Constructions, a subsidiary of DLF, has purchased 24.52 crore compulsorily convertible preference shares (CCPS) issued by DAL and held by DSIPL (a company owned by SC Asia), for a consideration of Rs 3,085 crore,'' DLF said in a statement to the BSE.

Compulsorily convertible preference shares are those which have to be converted into ordinary shares after a predetermined date. The transaction is in line with DLF's overall strategy to consolidate its holding in DAL. Post this deal, SC Asia will continue to hold 4.6% in DAL.

Caraf is engaged in the business of acquisition and development of real estate properties in India and presently holds four rent-yielding properties in Gurgaon, Kolkata and Chandigarh. DAL is a co-developer for four IT/ITES Special Economic Zones (SEZs) based in Gurgaon, Chennai and Hyderabad, the DLF release said.

RBI’s new directive to make customer more careful regarding cheques

Source: Vaibhav Aggarwal,Rupeetimes,Apr 8, 2010

 

Reserve Bank of India has come up with a new circular which if implemented would force the customer to be more observant while issuing a cheque. The new circular states that the bank has full liberty to return a cheque if it bears any form of correction other than that in the date.

This means that any change in the amount, both numeric and words or change in the name of the payee would lead to the cheque being returned by the bank. The directive has been formulated as a measure by the RBI to prevent fraudulent activities which have become highly prevalent in the system.

HDFC Bank is in the process to implement the circular in its terms and conditions laid for cheque books.

Not all banks are in sink with the directive. "Frauds do not only happen because of cheque alterations. This is only one modus operandi. Some people change the cheque's page name; remove account payee and amount etc. Some people also print fake cheques. This one circular is not going to reduce such fraud cases," said Ramavatar Singh, general manager, Bank of India.

"No changes/corrections should be carried out on the cheques (other than for date validation purposes, if required). For any change in the payee's name, courtesy amount (amount in figures) or legal amount (amount in words), etc., fresh cheque forms should be used by customers," the circular states.

Although the standard format of writing a cheque refrains people to make any kind of alterations in the cheque but mostly banks clear cheques ignoring minor changes.

"There is no rule as such. If one or two corrections are made and if it is countersigned then the cheque can be cleared," said an official from a private bank.

"As of now we have not fixed any date for implementation of this circular. Somebody who is in a state of readiness can implement it. It is for the benefit of the customers," a RBI official said.