ING Vysya Bank changes senior management team

B L 19 Sep 2014

South-based old private sector lender ING Vysya Bank announced changes in its senior management across retail banking, IT, audit and operations.

The bank appointed Ashok Rao B as Chief Operating Officer with effect from October 1, 2014, and Ambuj Chandna as Chief Distribution Officer in Retail Liabilities effective October 13, 2014, the bank said in a statement.

In addition, Sonalee Panda will be Chief Marketing Officer and Anantha Raman to be Chief Auditor.

Current Country head – Branch banking, Marketing and Private client group, Brett Morgan and head of operations A Meenakshi will pursue opportunities outside the bank, the bank said.

Shailendra Bhandari, MD & CEO, said, “I am pleased to announce the changes in the leadership team. This is in line with the bank’s philosophy to groom internal talent. Keeping in mind our ambitious growth plans, we continue to develop our leadership pipeline with job rotation, stretch assignments and international exposure.”

Banks to be careful about Jan Dhan Yojana: RBI

P Vijaya Bhaskar, Executive Director, Reserve Bank of India addresses on RBI perspective on the role banks can play in reviving industrial growth at Banking Colloquium in Kolkata on Friday. Photo: Ashoke Chakrabarty

PTI 19 Sep 2014

The Reserve Bank on Friday warned the banks to be more careful while opening accounts under the Jan-Dhan Yojana, saying that a single individual could open multiple accounts in the lure of Rs 1 lakh insurance cover.

“There are some caveats when the banks are implementing the financial inclusion scheme under the recently launched Jan-Dhan programme,” RBI Executive Director P Vijay Bhaskar said at a CII seminar in Kolkata on Friday.

He said people could open accounts in different banks using different identity documents like PAN card, Aadhar among others in the lure of getting insurance cover of Rs 1 lakh from all the banks.

The banks should have a single information sharing system by which this possible misuse could be stopped. Another possible threat was ‘smurfing’, the RBI official said.

In this case, hawala operators would spilt the whole amount into several small units beyond the threshold using several bank accounts and send money overseas.

The last was ‘money mules’ by which an individual would operate through another person’s bank account.

Talking about the north-eastern region, he said the SLBCs and the SLCCs should take steps to improve the credit-deposit ratio of the region as the CD ratio was much lower than the national average.

Earlier this week, RBI Governor Raghuram Rajan had cautioned banks on the risks involved in just hunting for numbers with regards to Jan Dhan scheme, asking them not to compromise on core objectives of the programme.

“When we roll out the scheme, we have to make sure it does not go off the track. The target is universality, not just speed and numbers,” Dr Rajan had said.

The scheme can be a “waste” if it leads to duplication of accounts, if no transaction happens on the new accounts and if the new users get bad experiences, he had added.

U. Srinivas, who made the mandolin his own, and many others’

U. Srinivas managed the rare feat of constructing, on a rail parallel to his Carnatic career, formidable renown in a genre that is unfortunately best described by that weak word—fusion. Photo: The Hindu

Samanth Subramanian  Live Mint 19 sep 2014

Careers in the classical arts are not often remembered for courage. Too many other elements tend to intrude into the discussion, and to be prized heavily by purists: a strict fealty to tradition, for example, or the flourishes of genius, or capacious knowledge. But it is courage that most plainly marks out the career Uppalapu Srinivas, the swift-fingered mandolin artist who passed away in Chennai on Friday, after a bout of illness, at the age of 45.

Srinivas possessed those other attributes as well, to be sure, and genius foremost among them. He took to his father’s mandolin with precocious ease when he was only six years old, growing up in a small town in Andhra Pradesh. Since no serious mandolin teachers were available to train him, Srinivas learned by ear, listening to Carnatic singers and picking out krithis and ragams on his frets. He performed his first full Carnatic concert at the age of nine; two years later, he arrived in Chennai—then Madras—to play in the December music season. It was the equivalent of a teenaged banjo player being given the stage at Carnegie Hall.

At the time, Srinivas was a novelty, because of his age but also because of his instrument. Nobody had ever embarked upon a Carnatic career with a mandolin in hand before. Among the several conservative rigidities built into Carnatic music is a reluctance to admit unfamiliar instruments—instruments that, the patriarchs worry, may not replicate the art’s gamakas, the delicate oscillations between notes that flavour a ragam just so. A mandolin can perform gamakas perfectly, just as a veena has done for centuries. Yet Srinivas’s instrument was essentially an alien one, and it would have been simple for the novelty to have worn off, and for Carnatic music to turn its face away once again from the mandolin. Remarkably, though, Srinivas persevered, convinced that he could carve his own furrow in the field, and that the mandolin could be true to, and even exemplify, the lovely complications of Carnatic music.

In the 1980s, he was hot, exciting property; the Carnatic singer T. M. Krishnarecalled once that his father gatecrashed a wedding reception just so that he could hear Srinivas play. But through the 1990s and then into the 2000s, as Srinivas matured, so did his music, and he came to be a fixture in the prestigious evening slot of the Madras Music Academy during the December season. This is where I’ve seen him most often, usually from the balcony, so that all I could see was his head, with its shaggy mane of hair, bent over his mandolin. From that height, the instrument was so small that it almost disappeared, and then it seemed as if Srinivas was strumming nothing at all, conjuring music out of thin air.

Everything about his technique was gentle and seductive, and so to the inattentive ear, his investigations of Kiravani or Sankarabharanam could fade into the background; an alert listener, though, could detect high classicism, an elaborate creativity in his improvisations, and even flashes of humour in the deft concluding twists to some of his phrases. His fingering was immaculate. “Eddie van Halen, eat your heart out,” George Harrison reportedly said in 2001, having stumbled upon one of Srinivas’s albums.

Srinivas managed the rare feat of constructing, on a rail parallel to his Carnatic career, formidable renown in a genre that is unfortunately best described by that weak word—fusion. He played at the West Berlin Jazz Festival in 1983 and at the Olympic Arts Festival in Barcelona in 1992. When the guitarist John McLaughlin revived his old ensemble Shakti under the name Remember Shakti, in 1997, Srinivas joined him, along with Zakir Hussain, the singer Shankar Mahadevan, and the percussionist V. Selvaganesh, all artists raring to push beyond the boundaries of their immediate sphere of music.

In a live performance, Remember Shakti could often be a whirl of energy tending towards the frenetic, but at some point during the concert, Srinivas would become the fulcrum of the ensemble, and the tempest would subside. The brightest patch of any Remember Shakti concert would come when Srinivas and McLaughlin riffed off each other, Srinivas sticking all the time to the tenets of his form but bending them this way and that to marvellous effect. There is, McLaughlin told the author Peter Lavezzoli in an interview for his book Bhairavi, “a kind of younger brother-elder brother relationship between the electric mandolin and the electric guitar that is a real delight.”

Courage can be loud and confrontational, but it can also be quiet and firm. On the cover of its inaugural issue in October 1983, the music magazineSruti featured the vocalist D.K. Pattammal and the 14-year-old Srinivas. Pattammal by then was one of the pillars of the art, but in her youth, she had battled barriers of her own in becoming the first Brahmin woman to perform full-fledged concerts, and in including in her repertoire improvisatory exercises then considered too complex for women. Pattammal took her stance without undue fuss, by just singing with honest beauty.

In a similar way, Srinivas ignored those who cavilled, put his head down, and created his own kind of honest, beautiful music. He was a brilliant musician, but he was a brave one as well.

Child’s bank account: Too much, too soon?

ABC of money: Shuchita Bhanushali opened a savings bank account for her son, Arnav, to teach him about saving. Photograph by S. Kumar/Mint


Vivina Vishwanathan  Live Mint 18 Sep 2014


While banks see it as an opportunity, parents prefer accounts operated under supervision

Shuchita Bhanushali, a 34-year-old homeopath who works with Smart Minds Tutorials in Mumbai, opened a bank account four years ago for her eight-and-a-half-year-old son, Arnav. “The intention is to inculcate the habit of saving, and to teach about money. And children, too, find it interesting to say, I have a bank account. Meanwhile, my son is happy when he saves, say, Rs.70,” said Bhanushali.

Parents opened bank accounts for their children even when the concept of exclusive children’s account was not there. Nirmala Nair, 60, a retired principal of a school in Mumbai had opened an account for her son Arjun in 1977. “I was introduced to banking after I got married. I wanted my children to know about banking at a very early stage. They never operated the account as minors, but through it I could explain the basics of banking to them,” she said.

Till May this year, a minor could operate a bank account only under a guardian’s supervision. But the Reserve Bank of India (RBI) asked banks to allow minors above the age of 10 to open and operate a savings bank account independently. Some big banks have either launched new accounts or tweaked their savings account products for minors, resulting in two broad categories of minor savings accounts—one that can be opened with the consent of the guardian, and the other, without the consent.

The savings account that can be independently opened and operated by a minor was launched only this month. For instance, State Bank of India (SBI) has launched Pehli Udaan, Federal Bank Ltd has Young Champ Account, and ICICI Bank Ltd has Smart Star Savings Account. A child older than 10 years can independently open such an account.

The accounts that need parent’s consent have been in existence for some years. “The concept of children’s bank accounts has picked up in the past 7-8 years, with parents as joint holders,” said Vishal Narnolia, a banking analyst at SMC Global Securities Ltd. Axis Bank Ltd’s Future Stars Savings Account, ING Vysya Bank Ltd’s Zing Savings Account and SBI’s Pehla Kadam are some products in this category.

What’s on offer

For a savings account that can be opened and operated independently by a child, the child should be above the age of 10, and should be able to sign uniformly. She will be the sole operator of the account. As know-your-customer (KYC) documentation, the child will have to submit a proof of date of birth and KYC of a parent. Some banks also accept a written introduction by the principal on the school’s letterhead, which also has to mention the child’s address.

A child can visit any branch of the bank, and submit the documents. The account will be activated in 1-2 days. The child will get a debit card and a cheque book.

A savings account that requires a guardian’s consent will be opened jointly with the parent’s account. It can be operated jointly by the guardian or parent and the child, or only by the parent. The guardian has to provide her KYC documents along with the proof of the child’s date of birth. The cheque book will be issued to the guardian in the name of the minor.

Generally, the withdrawal and transaction limits are the same for both types of accounts. It normally ranges between Rs.1,000 and Rs.5,000 per day. However, the limit is lower at some banks if the account is opened when the child is below the age of 10 (therefore, the account is opened with a parent’s consent). The minimum balance requirement ranges from Rs.100 to Rs.2,500, and the periodicity can be quarterly or monthly. If the balance is not maintained, some banks charge Rs.100 per month, while others charge Rs.500 for six months. Some public sector banks don’t have a minimum balance requirement. Number of automated teller machine (ATM) transaction limits are the same as a normal bank account, and vary from bank to bank. Other common facilities include debit cards, message alerts and Internet banking facilities. Once the minor turns 18, the account gets converted into a regular account.

To monitor or not

Bankers, parents and financial planners offer different views on savings bank accounts that can be opened and operated independently by a minor. “It is very early for a 10-12-year-old to create an opinion about banking. For a 10-year-old, it is critical that the account is linked to a parent’s as the child doesn’t have an income and the money has to come from the parent’s bank account,” said Rajiv Anand, retail group executive and head-retail banking, Axis Bank. “Through kids’ bank accounts, we are not looking for large balances or selling multiple products but to create a relationship with money. Though some parents come looking for kids’ accounts, it is still a push product,” he added.

Some feel that children are more mature now and can handle money by themselves. “We think our product will inculcate a saving habit, and we can also capture a relationship at an early age,” said B. Sriram, managing director and group executive, national banking, SBI. “We have given a target of opening at least 100 kids’ savings accounts to every branch. We also plan to engage at parent-teacher association meetings,” he added.

Independent or not, this is clearly an opportunity that banks don’t want to miss. “Earlier, we used to give a dictionary with every recurring deposit that was opened in the name of a minor. (But) after Kotak Mahindra Bank launched Kotak Junior, we saw that it got a lot of attention, and we didn’t want to miss the opportunity,” said A. Surendran, retail business head, Federal Bank. “With RBI allowing children above the age of 10 to operate bank accounts independently, we decided to launch our product as well,” he added.

Many parents, however, are not comfortable with an independent account for their children. “I opened a bank account for my child a year ago. But I don’t think it is a good idea to give full control of the account to my child, even when she is 10 or 15 years old. I would be too scared to do that,” said Binoy Cherian, a 38-year-old Mumbai-based independent consultant, whose daughter, Kiyara, is 8 years old. Bhanushali and Nair, too, believe that exposing children to banking is a good idea but with supervision.

“You should introduce your child to banking, but at that age, they may not be mature enough to control money. It could lead to unimaginable repercussions too. When banks approached me to open accounts in my school, I had clearly said that a bank account can’t be opened without the consent of the guardian,” said Nair.

What should you do?

Exposing a child to banking using a formal method is a good approach. “A minor account held jointly is more the parent’s account, since the parent handles most of the transactions. But if a child operates it independently, the child will have more ownership. So, it is a positive move. But banks should be careful about how they engage with children,” said Suresh Sadagopan, a Mumbai-based financial planner.

In the end, the choice is yours. If you are comfortable letting your child learn how to bank on her own, go for it.

Look before you leap: A warning for Indian companies flocking to Chinese banks for aid

By K Yatish Rajawat F biz 20 Sep 2014

O ne of the most interesting development of President Xi Jinping’s India visit is the recognition Industrial & Commercial Bank of China (ICBC), the world’s largest bank by assets and capital, got in India’s infrastructure financing.

Financing the world, so to say, is one of the global task that is set by the bank. “The Bank has actively put in efforts to serve the economic and trade relations between China and the rest of the world, meet the financial demand of customers across the globe, and promote business development on a global scale,” Chairman of ICBC, Jianj Jianqing, says in the annual report.

In a way, the bank is serving as the tip of the sword of China’s economic influence in the world.

In Africa, where the Chinese influence is well captured and reported, ICBC is the single largest shareholder in Standard Bank, a South African bank with presence in 18 countries. Therefore, it is important to see the role of ICBC in all the business deals that has been signed.

Take the most reported deal here, which is Indigo’s lease back arrangement for its A320 aircrafts. Indigo calls it an MoU with ICBC, and claims it is due to its consistent operational and financial performance. The press release is brief and has the most important detail of leaseback arrangement missing, i.e. the cost of funding.

“IndiGo already has a relationship with ICBC and this new effort to further explore the collaboration will cement the relationship for the longer term. Through this MoU, ICBC will provide IndiGo financial solutions for the introduction of A320 and the other family of aircraft to the fleet in the form of sale and lease back or financial lease or commercial lending. The number of aircraft would be over 30 aircraft and the value of the deal would reach to the amount of USD 2.6 billion,” Indigo’s release said.

Indigo, which claims its operational efficiency and not just its lease back model is the reason for its profitability, is also planning to go public soon. Almost every airline company that has gone public in India has destroyed shareholders’ wealth. Therefore, it is very important for Indigo to get the lowest possible rates of financing.

And ICBC can provide that. China is flush with foreign exchange reserves worth $3.2 trillion and needs to deploy it beyond American treasuries. Its banks are also flush with deposits that they have to deploy for higher yield abroad as local rates.

Indigo is not the first company nor will it be the last to discover the Chinese banks and their low rates.

Anil Ambani has always been ahead as a deal maker ahead of his times, in 2012 he raised $1.18 billion from a consortium of Chinese banks to retire debt for his telecom company Reliance Communications. The refinancing was at a rate of 5 percent, which is lower than the deposit rates of Indian banks. A second loan of $1.9 billion was raised for 3G expansion with an agreement to buy Huawei’s equipment.

Chinese banks are offering an opportunity for Indian entrepreneurs but there is a catch: Chinese funding might be cheap but their ability to leverage is not.

Chinese banks insist that companies should use Chinese equipment, which American, European and other companies also do. But what becomes a cause of concern is when Indian entrepreneurs become a proxy for Chinese influence in the country.

Once Indian entrepreneurs discover and get drunk on cheap Chinese loans they will use their political capital for China more actively. This is the threat that the Indian central bank needs to guard against when it is approving loans from Chinese banks. Maybe, the RBI’s deft touch on Chinese loans to Indian companies will keep the Chinese influence under check.

China’s experience in other countries like Brazil and Russia shows that Chinese banks are a great source of cheap funds but they also exert influence at the board level. For instance, Russian oil companies Roseneft and Transneft together raised $25 billion from the China Development Corporation to build an oil pipeline to China. The terms of the loan were too attractive to ignore but finally China insisted on a subsidised price for the oil supplied.

Petrobras of Brazil also raised $10 billion where China secured supply of oil and securitised the loan against payment. These are mega deals where China has used its banking heft to secure energy supplies.

The challenge that China faces in India and with the new government is more macro in nature. The stated goal of the BJP and its government at the Centre is creating manufacturing core in the India. Chinese imports are the biggest barrier to creating the manufacturing engine.

Chinese Premier Xi has smartly referred to India as the back office of the world, a dream that the previous UPA government believed in. But the fact is that without manufacturing jobs, there is no way all of India’s teeming youth will find employment.

There are several competitors for the back office title in the world. Technology that enables these jobs also makes these jobs very fluid and transferable. Companies and customers can shift a back office job from Gurgaon to Istanbul to Manilla on the basis of currency fluctuations.

Manufacturing jobs take time to shift from one country to another as there is capital, land and skilled labour involved all of which cannot be moved so easily. Moreover, Xi reference does not mean China will give up its ambition to become the services back office of the world.

Plus, manufacturing jobs are for a section or part of the population that has different educational background and experience this population cannot get back office jobs. So India will not give up its ambition to create manufacturing jobs. Will Chinese banks and a capital play a role in it? Only time will tell. But for now the China funds need to be far more scrutinised than they had been subjected to in the past. Let’s not get swept away with the cheap money. As they say in hindi, mehenga roya ek baar sasta roye baar baar (what is cheap brings more miseries over a period time what is expensive the cost is borne only once).