Savings bank a/c number portability on anvil: Finance ministry

Source : ET :PTI | Jan 3, 2012, 05.23PM IST

 The finance ministry is working on savings banks account number portability, which will allow a customer to retain his account number while changing his bank.

"We want to do it (savings a/c number portability). Right now there are some technical problems...we have identified them. We will overcome them soon," financial services secretary D K Mittal told reporters here.

He was speaking after a meeting in the ministry, which among others was attended by economic affairs secretary R Gopalan, finance secretary R S Gujral and chief economic adviser Kaushik Basu.

He said banks would have to work on identification code, know your customers (KYC) norms and core banking solution ( CBS) for implementing the savings bank account number portability.
The move would help customers change banks, without the need of going through the KYC norms again. Last year, the government had allowed portability of mobile numbers and health insurance policies.


In October last year, the Reserve Bank had deregulated interest rates on savings account deposits, following which few private sector lenders have hiked rates to as much as 7 per cent.


Mittal further said capital infusion in PSU banks would be completed by the end of this fiscal. "We will complete the process of bank recapitalisation by March 31," he said. The government has already announced that it is committed to providing adequate capital to public sector banks, so as to maintain their Tier-I capital at 8 per cent.


The government has made Budget provision of Rs 6,000 crore for capital infusion in PSU banks in the current fiscal.


State Bank of India, Bank of Baroda, Union Bank of India, IDBI Bank and Syndicate Bank are some of the lenders which will be benefited by the capital infusion initiative of the government.

Eyes set on Post Office banks and liberalisation of sector

Source :E T :3 JAN, 2012, 10.12AM IST, PTI 

 The government's plan to tap into India's vast postal system to reach out to the unbanked population by utilising offices across the country as banks is expected to take some shape this year as the proposal has been sent to the Finance Ministry for its nod.

The idea that 1.55 lakh Post Offices could double up as banks is aimed at aiding the government's goal of financial inclusion, especially in rural areas. Once implemented, coverage of the country's banking network will increase three-fold in one stroke.

Around 90 per cent of the Post Office branches are in rural areas. In contrast, out of approximately 87,000 bank branches in the country, around 24,000 are in rural India.

India Post is the biggest postal network in the world, a major portion of which, about 1.4 lakh post offices, are located in rural India.

Although the idea has been around for a while, Communications Minister Kapil Sibal brought it centre-stage in July. However, before it takes shape, the Acts governing the banking and postal sectors will have to go through major amendments.

"Before applying for a banking licence, there are certain procedures that need to be completed. The work is in progress and the proposal has been submitted to the Ministry of Finance for its nod to go ahead," a government official privy to the development told PTI.

The year may witness quite a few amendments to the 113- year-old Post Office Act, which are aimed at opening up the sector.

The proposed amendments in The Indian Post Office Act, 1898, include recognising the services of private courier players and bringing them under the regulatory ambit. This will legalise 'forbidden services' like sending personal letters through private courier companies.

However, a lot needs to be done within the Department of Posts before reforms are implemented in the sector, as the industry is demanding that the services wing of the DoP should be a separate entity. This could be done along the lines of BSNL, which was hived-off from the Department of Telecom, industry players have said.

During 2011, Sibal made efforts to kick-off reforms in the sector, starting with India Post.

"After many years, we have seen government is ready to listen to industry. Minister (Sibal) has said that no policy decision will be made without taking views of industry. It's a highly welcome move, but DoP officials are still not ready to open up," said an industry representative.

How to Sell to China Now

Source :Bloomberg:Karen E. Klein :December 30, 2011, 10:05 AM EST

With robust economic growth, the Chinese business sector is poised for a 2012 “buying binge” that could benefit small U.S. companies, says James Chan, president of Asia Marketing & Management, a Philadelphia consultancy. Chan was born in Canton (now Guangzhou) and educated in Hong Kong and the U.S., and he has been advising American exporters since 1981. He says he has never seen such an opportune time for small business to target the Chinese market. “This is a new frontier, filled with both real opportunities and new risks,” he says. Chan spoke about both with Smart Answers columnist Karen E. Klein. Edited excerpts of their conversation follow.

Why should small and midsize U.S. businesses take on the hard work and the risk of exporting to China?

There was an old, mid-20th century American idea that everybody in the world should beat a path to our door. That idea was very true in 1960. Today it’s incorrect and anachronistic.

What’s changing now?

The Chinese government has been placing full-page color advertisements this year touting its China International Fair for Trade in Services. Instead of just jet turbines, it seems the next wave in selling to China is going to be intangible services and technical expertise, which many small businesses do very well.

What kind of technology and know-how are they looking for?

What you want to sell is a niche product or service, or better yet, a niche of a niche. You can’t go over there and say, “I can help you write a press release.” But even a one-person consultancy can approach a big Chinese company and say, “I’m connected with newspapers. I can cast your company’s new product so that it can be understood by the American reading public.” Now, that’s how you get top dollar.

Some small U.S. business owners fear that their proprietary formulas or skills will be pirated if they take them overseas, particularly to China. How do they deal with that?

Anything in China that succeeds, people will replicate it. Piracy is really an equal opportunity thing in China. Small and midsize companies should not be paralyzed by this fact. They should focus on their hands-on, daily experience that can’t be copied.

How risky is doing business in China?

It’s very risky. For one thing, Chinese companies want you not only to sell them your product or service but also to teach them how to make or do what you do. Everyone selling in China will hit that demand as part of the negotiation process. And some people will say yes. What I have to do is explain that we can’t sell them our baby because if we do, we have no business and we’ll all starve.

How else is negotiating a business deal different?

In America, you sign a contract, and every word means something; it can be interpreted literally, and it’s largely enforceable in court. But in China, a contract is more like a suggestion, or an expression of a preference.

And it’s difficult for Westerners to sue successfully under China’s legal system?

Western law is new in China. When I first went back there in 1982, there were practically no lawyers. The court system is different, and business law may not be enforceable, or enforcement may be spotty and inconsistent.

But the major reason contracts are not viewed the same is that Chinese culture sees the law as something made by people, so it can also be changed by people. That is, you can convince someone by reasoning, cajoling, arguing, or crying for six hours until the person caves in.

What’s the Chinese view of American exports?

Chinese companies and the Chinese people have great respect for American products that are durable and made with care. They don’t have to be luxury items. A friend of mine told me that increasingly his company is selling baby milk powder to China. Because they had a scare with bad baby formula, Chinese consumers who have the extra $5 would rather buy imported formula, and a lot more of them have that extra money than they used to.

What’s the biggest fallacy about selling in China?

Some people are in denial and think they can succeed quickly. Real entrepreneurs understand that it takes time to break into a new market. You can’t just send out tens of thousands of e-mail messages. You have to go to China, do technical sales seminars, answer questions, dine with people. Then you have to take the time for them to argue with you over price, delivery, and credit terms before they finally place a small order to test you out. The unfamiliarity is difficult to overcome. But if U.S. entrepreneurs are willing to give China a chance, and persevere a little longer, the potential is almost unlimited.

Karen E. Klein is a Los Angeles-based writer 

Singapore Growth Slows as Lee Predicts ‘Difficult’ Outlook

Source :Bloomberg :Shamim Adam :January 03, 2012, 10:16 AM EST

Dec. 31 (Bloomberg) -- Singapore’s expansion slowed in 2011 and growth next year will be constrained by a “difficult” global environment and government efforts to reduce the inflow of foreign workers, Prime Minister Lee Hsien Loong said.

Gross domestic product rose 4.8 percent this year, Lee, 59, said in his New Year message released in Singapore today. That compares with the government’s earlier forecast of a 5 percent increase. The economy will expand 1 percent to 3 percent in 2012, Lee said, reiterating an earlier estimate.

“The external environment is uncertain,” Lee said. “Debt problems in Europe are far from solved. Next year looks like being difficult for the global economy. As a small, open country, Singapore will inevitably be affected.”

Singapore, which uses the island’s dollar to manage inflation, said in October it will slow gains in its currency as it joined Asian nations in moving to shield their economies from faltering growth in Europe and China. At the same time, the island has sought to counter a voter backlash against a surge in immigration by promising to damp the influx of foreigners, a move Lee says will curb expansion.

“The extent of the soft landing in China, the pace of recovery in the U.S. and the downside risks in the euro zone are the three key factors that underscore Singapore’s outlook for 2012,” said Irvin Seah, an economist at DBS Group Holdings Ltd. in Singapore. Slowing the inflow of foreign workers will pose a “constraint” on growth as it raises business costs, he said.

Economic Contraction

The growth rate Lee estimates for 2011 implies that the fourth-quarter contraction in the economy “will be more severe than what most people in the market expected,” Seah said.

The economy probably shrank an annualized 5 percent in the fourth quarter from the previous three-month period, according to the median of 11 estimates in a Bloomberg News survey. The trade ministry will release the GDP report on Jan. 3.

The MSCI Asia Pacific Index of stocks slumped 17 percent this year as concern Europe’s protracted sovereign-debt crisis will weigh on the region’s growth halted a two-year rally in equities. Singapore’s benchmark Straits Times Index dropped by a similar amount, and its currency weakened 1 percent against the U.S. dollar.

China’s expansion is slowing as global growth falters and Premier Wen Jiabao maintains curbs on the property market to cool speculation and price gains in Asia’s biggest economy. The People’s Bank of China will maintain a “prudent” monetary stance and “ensure the continuity and stability” of policy in 2012, Governor Zhou Xiaochuan said in a New Year message.

General Election

Singapore, located at the southern end of the 600-mile (965-kilometer) Malacca Strait and home to the world’s second- busiest container port, has remained vulnerable to fluctuations in overseas demand for manufactured goods even as the government boosts the financial services and tourism industries to cut its reliance on exports.

Lee’s ruling People’s Action Party won the general election in May with the smallest margin of popular votes since independence in 1965 as citizens expressed discontent over the rising cost of living and competition with foreigners for jobs and housing.

Singaporeans also voted for a new president in August and former Deputy Prime Minister Tony Tan, who was backed by Lee and several ministers, won the largely ceremonial post with a margin of about 0.3 percent over his nearest rival.

New Norms

“Having made a significant political transition, we are all now adjusting to new norms in a changed environment,” the prime minister said today. “We are working hard to tackle our immediate challenges.”

Since the general election, the government has tightened rules on overseas labor and made it more expensive for foreigners to buy property in Singapore.

The government imposed additional taxes on purchases of private residential property in December to curb excessive investment that it said may spur economic and banking-industry risks. Foreigners and corporate entities will have to pay an additional 10 percent stamp duty, the government said Dec. 7.

“The government is committed to keeping homes affordable to all Singaporeans,” Lee said today, adding that the government will make more public housing available in 2012. “In the private property market, the additional buyer’s stamp duty will moderate capital inflows and foreign demand, and help to stabilize prices.”

Foreign Influx

The country, ranked by the World Bank as the easiest place to do business, has cut taxes in recent years to spur investment, prompting companies to hire hundreds of thousands of foreigners to fill positions. More than a third of the 5.2 million population is made up of foreigners and permanent residents, and about half of all new jobs created in 2010 went to workers from overseas.

The island is tightening the number of foreign workers entering the country to a “more sustainable” rate, Lee said today. The government announced in August that it would raise salary thresholds and require better educational qualifications for some non-Singaporean workers.

“Companies are already feeling the pinch,” especially small and medium-sized enterprises, Lee said. “Singaporeans will feel it too, because many foreign workers do jobs that serve citizens. Admitting fewer foreign workers also means forgoing business opportunities and accepting slower growth. This is one reason why we only expect 1 percent to 3 percent growth next year.”

The prime minister also pledged to intensify efforts to improve the bus and rail network after Singapore’s worst subway disruptions on record this month rankled commuters already complaining of crowded public transportation.

Bajaj Auto unveils small car RE60

Mr Rajiv Bajaj, Managing Director, Bajaj Auto, during the unveiling of the RE60
 in the Capital on Tuesday. Photo: Ramesh Sharma


Source :BL:murali gopalan:New Delhi :jan 3,2011

One of the best kept secrets in the Indian auto space was finally made public here on Tuesday.

The ultra-low cost car was first announced over four years ago as a project with Bajaj Auto and Renault-Nissan. It was then touted as the challenger to the Tata Nano but this is not what Mr Rajiv Bajaj, Managing Director, had in mind.

“In 2007, we started work on a low-cost car with Renault-Nissan but dropped this concept two years later because it did not make sense to us. The better option was to go for a four-wheeler,” he told reporters at a press conference.

Thus was born the RE60, where Bajaj Auto’s goal was to take the story of the three-wheeler into this new millennium as it did with the Chetak scooter which made way for the contemporary Pulsar motorcycle in the turn of the century.

“We are an ‘anti-car company’ from a marketing position point of view. This vehicle was born out of the costs and skills of a two-wheeler market. There must be a starting point for a strategy which in our case was a brand,” Mr Bajaj said.

The RE60 weighs barely 400 kilograms and is fitted with a 200cc engine in its rear which delivers 20 hp. It has petrol and CNG/LPG fuel options. The company believes that one of its biggest strengths is its mileage tipped to be over 35 kilometres to a litre. Likewise, on the carbon dioxide emissions front, it is about 60gm/km.

Bajaj Auto has not announced the price of the RE60 though it is expected to be in the Rs 1.8 lakh range. It will be produced in Aurangabad which is home to the existing three-wheeler range. The first set of vehicles is expected to debut in the coming months.

The company does three-wheeler sales of 500,000 units annually of which nearly two-thirds are exported. Its marketing consultant, Mr Jack Trout, had reiterated that the leader should do more. “He urged us to do something dramatic for the three-wheeler segment. The RE60 is the story of a four year journey. We have fulfilled Mr Trout’s vision and this is a testimony to our engineering. It is a new concept in urban transport,” Mr Bajaj said.

From the company’s point of view, the RE brand is synonymous with the autorickshaw where its core customer is the one who uses it daily. “India has five million three-wheelers of Bajaj Auto from different vintages. I do believe that State after State will be encouraged to replace them with the RE60,” he added.

Sri Lanka, though, could end up being the first market for the vehicle even ahead of India. Bajaj Auto exports 10,000 units a month of which nearly 9,000 vehicles are used in a personal capacity. It is here that the RE60 is expected to do very well.

Likewise, Africa is another key market for the company’s three-wheelers where monthly numbers are 12,000 units. Public transport is little to write home about in this part of the world and Bajaj Auto believes the RE60 can fulfil this need there.

The platform for the RE60 will also roll out three-wheelers and is part of the company’s de-risk strategy. “This is a platform designed by Bajaj Auto and we are not a contract manufacturer for anyone. We are free to brand our own four-wheeler built on this. With modifications, we can supply the vehicle to Renault-Nissan,” Mr Bajaj said.

And given that his company is anti-cars, he added that Renault-Nissan was free to walk away ‘if they are anti-four wheelers’.

“We believe in niche and are not in the rat race for volumes. As a four-wheeler company, we will not develop cars. I hope the RE60 becomes an international icon as it has huge opportunities across the world,” Mr Bajaj said.

Allahabad Bank revamps AllBank Finance

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Source :BL :Shobha Roy:kolkata:3 jan 2012

AllBank Finance — the 100 per cent subsidiary of Allahabad Bank that has been barely functional since 2005 — is now on a revamp spree. Hit by falling revenues and profits, that almost halved last fiscal, the company's board has been reconstituted and AllBank Finance plans to focus on new segments to drive its revenues.

The board — reconstituted by Allahabad Bank two months ago — will have four members from the bank, said Mr J. P. Dua, Chairman and Managing Director of the bank. “Mr Dua will be the chairman of the Board, while Mr D. Sarkar, executive director, and Mr A. B. Bhattacharjee and Mr Narang, both general managers, will be the directors on the board,” Mr Dua said. This apart, the board will have three independent directors — Mr Vinod Kothari, a chartered accountant and company secretary; Mr Subir Das and Mr Emron Samuel, both chartered accountants. Allahabad Bank has also selected Mr M. Satpathy as the vice-president and Chief Executive Officer of the company.

Under the new management, the company plans to venture into such new areas as trustee and custodial services and carry out techno-economic viability study of projects to improve earnings; besides raising debts, doing syndication of loans and distributing mutual funds.

Incorporated in 1951 as “Allahabad Bank Nominees Limited”, the company subsequently changed its name to “AllBank Finance Limited” in 1991.It has, however, remained dormant since 2005, Mr Dua said.

Hardening interest rates, tight liquidity and rising inflation pulled down AllBank Finance's revenues and profits, the company said in its annual report 2010-11. The company reported a 46 per cent drop in revenue, at Rs 5.80 crore, and 61 per cent decline in net profit to Rs 2.80 crore for the year ended March 31, 2011.

“Despite having adequate capital, the company has not been doing well due to the lack of focus. Our main aim now is to revive the focus,” Mr Dua said. The company — which has two branches, one each in Kolkata and Mumbai — plans to open one in Delhi by end January and another one, either in Bangalore or Chennai, by March.

Indians are second largest bribe payers in South Asia: Transparency International

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 Source :ne pakistan news;24Dec2011

New Delhi,  Fifty-four per cent of Indians who dealt with the police ended up paying a bribe in the past 12 months, according to a new survey of six South Asian countries published on Tuesday by anti-corruption organization Transparency International.

The survey found that more than one in three people who deal with public services said they pay bribes. South Asians regularly have to pay bribes when dealing with their public institutions, be it to speed up paperwork, avoid problems with authorities such as police, or simply access basic services. Two-thirds of Indians, Bangladeshis & Pakistanis who dealt with police paid bribe.

In Nepal, Pakistan, India & Sri Lanka, bribes were mostly paid to speed things up, highlighting how corruption can also be a barrier to business expansion, a press release from the organization said. In Sri Lanka significantly more people paid bribes to tax authorities than other services, while in Nepal & the Maldives, customs services reportedly receive the most bribes.

Transparency International report, Daily Lives & Corruption, Public Opinion in South Asia, surveyed 7500 people between 2010 and 2011 in Bangladesh, India, the Maldives, Nepal, Pakistan & Sri Lanka. The results help explain why the region is perceived to have some of world’s highest levels of corruption, with none of surveyed countries in top half of Transparency International’s Corruption Perceptions Index, in which they all score less than 3.5 out of 10.

Officials entrusted to oversee deals related to buying, selling, inheriting and renting land were the next likely to demand a bribe. While people across the region say the problem is getting worse, they are also likely to do something about it. Sixty-two per cent of those interviewed believe corruption has become worse in past three years. People from India & Pakistan are most pessimistic about worsening corruption.

In India tens of thousands demonstrated for strong anti-corruption laws in August. Less than a quarter of Indians surveyed thought their government’s efforts to fight corruption were effective.

According to the survey, the country most plagued by bribery is Bangladesh where 66 per cent report paying bribes to public institutions, mostly just to gain access to services that people should already be entitled to.

The survey asked questions concerning following nine pubic services: police, judiciary, customs, registry and permit services, land services, medical services, tax revenues, utilities and education.