தந்தையாக இருப்பது கடினமான பணி: ஒபாமா

தி இந்து:ஞாயிறு, ஜூன் 15, 2014

தந்தையாக இருப்பது மிகவும் கடினமான ஆனால் அதுவும் பெருமைக்குரிய பணிதான்' என்று அமெரிக்க அதிபர் ஒபாமா கூறியுள்ளார்.

அமெரிக்காவில் தந்தையர் களைப் போற்றும் விதமாக, ஒவ்வொரு ஆண்டும் ஜூன் மாதம் மூன்றாவது ஞாயிற்றுக் கிழமையை தந்தையர் தினமாகக் கொண்டாடுவது வழக்கம். இந்த ஆண்டு இன்று (ஜூன் 15) கொண்டாடப்படுகிறது.

இரண்டு பெண் குழந்தைக ளுக்குத் தந்தையான ஒபாமா தனது தந்தையர் தின உரையில் கூறும்போது, "தந்தையாக இருப்பதுதான் மிகவும் கடினமான பணி.

எப்போதும் கவனிப்புடனும், அவ்வப்போது தியாகங்களையும் தேவையான அளவுக்குப் பொறுமையையும் வேண்டும். தந்தையின் இருப்பு, ஆதரவு, அக்கறைக்கு நிகரானது எதுவும் இல்லை. தங்களின் குழந்தைகளுக்கு ஆசானாக, நண்பனாக, முன் மாதிரியாக தந்தையர்களே இருக்கிறார்கள். அவர்கள் நமக்கு கடின உழைப்பையும், நேர்மையையும் கற்றுத் தருகிறார்கள்.

திருமணமாகி இருந்தாலோ, விவாகரத்தாகி இருந்தாலோ எப்படியிருந்தாலும், ஒரு குழந்தைக்கு தந்தையின் அரவணைப்பு என்பது மிகவும் முக்கியமானது. வாழவும் வளரவும் கற்றுத்தரும் தந்தையர் களுக்கு இந்த தந்தையர் தினத்தில் எங்களின் நன்றிகளைத் தெரிவிக்கிறோம்" என்று கூறியுள்ளார்.

RBI eases Know Your Customer norms for opening bank accounts

Reetu Sharma :!3 June 2014

The Reserve Bank of India has come to the rescue of all those who face roadblocks while opening a bank account due to lack of ‘address proof’.

Relieving migrant workers and employees with transferable jobs who find themselves having to face harrowing procedures to access banking services, the RBI on Monday said that a bank account can now be opened with just one address proof, which can be either permanent or local.

Freedom from ‘address proof’

The move, which will also benefit millions living in rented accommodations, came in the form of a notification issued by the RBI, said, “Henceforth, customers may submit only one documentary proof of address (either current or permanent) while opening a bank account or while undergoing periodic updation. In case the address submitted changes, fresh proof of address may be submitted to the branch within a period of six months.”

This means that now a person from any State — say Delhi — can open a bank account without going through bureaucratic hassles even in Andhra Pradesh using the address proof of his home State.

Simplifying the Know Your Customer (KYC) norms for opening accounts, the Central bank also said, “In case the proof of address furnished by the customer is not the local address or address where the customer is currently residing, the bank may take a declaration of the local address on which all correspondence will be made by the bank with the customer. No proof is required to be submitted for such address for correspondence/local address. This address may be verified by the bank through ‘positive confirmation’ such as acknowledgment of receipt of (i) letter, cheque books, ATM cards; (ii) telephonic conversation; (iii) visits; etc.”

The RBI added, “In the event of change in this address due to relocation or any other reason, customers may intimate the new address for correspondence to the bank within two weeks of such a change.”

The story so far…

Till now, all customers who wanted to open a bank account had to submit an identity proof (PAN card, voter’s ID, driving licence or any other identity), along with utility bills (electricity bill) which acted as an address proof. The banks used to insist on address proof of the place where the customer is residing. The entire process, needless to say, was a big source of hassle for customers.

Ashish Kumar, who works in an outsourcing firm, told Niti Central, “I could not open my bank account in Delhi because I didn’t have a permanent address in the city. The Bank did not open my bank account and I had to face a lot of problems. For every single grievance, I had to either go to my native place or take help of my friends living in Delhi, who had their accounts here. Now finally, I will be able to open an account in this city.”

But why this change now?

Explaining the rationale behind the move, the notification said, “Reserve Bank has been receiving representations/references from various quarters, especially migrant workers, transferred employees etc. regarding problems faced in submitting a proof of current/permanent address while opening a bank account. The matter has since been examined in the light of amendment to the Prevention of Money Laundering Rules (Maintenance of Records), 2005, and accordingly it has been decided to simplify the requirement of submission of proof of address.”

This simplification of procedure to open an account will specially help those who face difficulty in doing so in the cities where they work.

As the process becomes more user-friendly, the number of account-holders is likely to increase because the complex process till now has been a barrier to entry.

In the opinion of officials

Earlier, even Reserve Bank Governor Raghuram Rajan had emphasised the need to make KYC norms less bureaucratic as a big chunk of Indian population still doesn’t have access to banking.

Speaking at the 10th convocation of the National Institute of Bank Management in Pune, Rajan said, “It is a shame that so many people in our country don’t have access to banking. Can we do this (KYC) better (without) compromising on security, while allowing ease of access? That is something we need to think about. We have to be innovative.”

A Business Standard report from last year says, “In a study done by Crisil, just one in two Indians has access to a savings bank account and just one in seven Indians has access to bank credit. There are merely 684 million savings bank accounts in the country with a population of 1.2 billion.”

RBI has taken this decision to ease the process of account opening and make the norms easier for customers. This will also help them achieve the goal of financial inclusion which is the top agenda of Indian finance in 2014.

Expressing a note of caution, RK Bansal, Executive Director of IDBI Bank was quoted byBusiness Standard as saying, “Though this is a step ahead in financial inclusion, it may pose some operational challenges initially for the banks. “Banks will have to be careful in verifying the permanent address. It will slightly increase the requirement of verification.”

Govt looking to hike I-T exemption limit to ₹5 lakh

Finance standing panel under Yashwant Sinha had suggested slab changes

BL :NEW DELHI, JUNE 13:  2014

The upcoming Budget may put more money in people’s pockets as the Modi Government is considering raising the income tax limit and tinkering with the existing tax slabs.

Indications are that the exemption limit will be raised to ₹5 lakh from the current ₹2 lakh; meaning, people earning ₹5 lakh or less annually will not have to pay tax.

Currently, tax is levied at the rate of 10 per cent on income of ₹2-5 lakh, 20 per cent on income of ₹5-10 lakh and 30 per cent on income above ₹10 lakh (see table).

Education cess

Further, there is an education cess and an additional surcharge at the rate of 10 per cent on income exceeding ₹1 crore.

The previous Government had rejected the suggestion of the last Standing Committee on Finance, headed by senior BJP leader Yashwant Sinha, that the I-T exemption ceiling be raised to ₹3 lakh.

The panel had recommended nil tax for income up to ₹3 lakh, 10 per cent for income of ₹3-10 lakh, 20 per cent for ₹10-20 lakh and 30 per cent for income beyond ₹20 lakh.

However, the Ministry had said that the total revenue loss on account of the changes and removal of cess would work out to around ₹60,000 crore.

Pros and cons

The argument in favour of changing the structure is that it would put more money in the hands of people and, in turn, raise demand for various goods and services, boosting the manufacturing and services sectors.

At the same time, more consumption would also result in higher collection of indirect taxes, which would compensate the fall in income-tax collection.

While some feel that more money in the hands of people will also help them combat inflation, economists believe that more money in circulation may actually fuel inflation.

(This article was published on June 13, 2014)

They are your friend, even family

Satyanarayan Iyer :BL 12 June 2014

Banks vie to project themselves as people you can trust. 

But why do the taglines of different banks sound so similar?

Being present on Facebook or twitter certainly does not mean a bank is customer friendly. But an increasing number of banks want to enhance their presence on social media and present a more human face.

A visit to the original Facebook pages of some of the Indian banks and the record of these banks is there for all to see. India’s largest lender State Bank of India has close to 3 lakh Likes on Facebook. It is, however, the private sector banks which seem to be taking the cake when it comes to befriending patrons through social networking sites, thanks to their early start. ICICI Bank has about 2.9 million Likes, HDFC Bank has garnered about 2.2 million and Axis Bank has over 2.4 million.

While presence on social media is a relatively recent concept, banks have always tried to project a friendly face by coming up with suitable taglines, among other things.

At least four (IDBI Bank, Vijaya Bank, Syndicate Bank and Indian Bank) have the word “friend” in their taglines.

Some others want to get a step closer and even become family.

Bank of Maharashtra, Dena Bank and Karnataka Bank have the word “family” and unsurprisingly the word “trust” appears in taglines more than half-a-dozen times for different banks either directly or implicitly.

Banking on keywords

In some ways, banks have no option but to use keywords such as “trust” to further their cause.

According to Vivek Gupta, Senior Vice President - Brand Science at market research firm IMRB International, “The important thing with a bank is that people go there to save money. So, trust is the most important factor for banks and insurance companies.”

So they have to be careful about saying the right things through their communication and not take away from the trust factor. But that coin has a flip side too. The emphasis on sending out the right message is so much that banks often end up having identical taglines. At least two sets of public sector banks have similar taglines.

Punjab National Bank’s ‘The name you can bank upon’ is tantalisingly close to Vijaya Bank’s ‘A friend you can bank upon’. Similarly, Union Bank of India's ‘Good people to bank with’ almost mirrors Indian Overseas Bank’s ‘Good people to grow with’.

Explaining the rationale for such a narrow selection, Gupta says, “Banks realise that there are only limited positioning platforms available, hence you find the same words or even similar taglines among banks.”

The perception that “Banking is a boring business” among bankers gets reflected in their taglines too. Banks are chary of tinkering too much with their taglines. Changes, if any, are slight.

While taglines have been crafted to try and establish a unique customer connect, most do not reflect the organisation’s personality. Most customers will testify to sub-optimal services, or even higher or arbitrary service charges imposed by their banks. There is a wide gap between what banks put out as what Gupta calls “wallpapers,” and the real services offered.

It was only when the private sector banks came into the landscape that service quality really started improving, adds Gupta. “Now, service quality is the real differentiator among banks.”

However, in rural areas and semi-urban areas, public sector banks still continue to enjoy a high degree of trust from customers.

Fear of bad press

Given the widespread use of technology, branding must really reflect the personality of the product or service, or stand the risk of being exposed.

According to Kiran Khalap, CEO of Chlorophyll Brand and Communications, “We now live in an internetworked world; brand communication can no longer afford to be untruthful! Because the customer will not only find out but also tell others that your brand is lying.”

It is also important that banks live up to their branding not only for customers but for their employees too.

“When a brand line reflects the idea that guides the business, it is an inspiration for the internal audience too: it provides a flag under which the employees can feel proud,” reflects Khalap.

After all, bank customers choose their banking partner based on proximity, ease of operations and when they have a choice they rely on service.

And it is not just Indian banks that do not live up to the brand projection.

Khalap says, “It is not just Indian banks that are guilty of having a brand line that the experience does not live up to! The tagline of Abbey Bank in the UK was “Get on top of your money,” but it posted losses (over $1 billion) two years in a row in 2001/2002. Even today, after the bank was taken over by Santander, there are customers trying to access their money from the bank.”

(This article was published on June 12, 2014)

Back To Basics :Benchmark Prime Lending Rate And Base rate,

RBI 12 th June 2013

Benchmark Prime Lending Rate (BPLR) is the rate at which commercial banks charge their customers who are most credit worthy. According to the Reserve Bank of India (RBI), banks can fix the BPLR with the approval of their Boards. However, the RBI stipulates the interest rates as BPLR is influenced by the Repo rate and Cash Reserve Ratio (CRR) apart from individual bank's policy.

However, the BPLR system failed to bring transparency in the lending rates of the banks. The calculations of BPLR is not that transparent and sometimes the banks under this system could lend to customers below the BPLR. So, Base Rate was introduced subsequently.

Base rate is the minimum Interest rate of a bank, below which it cannot lend, except for DRI allowances, loans to bank's own employees and loans to bank's depositors against their own deposits. The base rate system has replaced the BPLR from July 1, 2010. Since then the BPLR is gradually losing its importance except for the loans taken before July 1, 2010. In such cases, RBI has allowed to continue with BPLR at which the loans were approved. They were, however, given the option of switching to the base rate before the expiry of their loans.

RBI does not fix the base rate. Individual banks fix their own base rates and so each bank has its own base rate. The calculations of base rate involve elements which can be clearly identified and are common across buyers. Banks have to declare their respective base rates in the website in order to make lending more transparent.

According to RBI policies, banks have to revise their base Rate at least once every quarter. However, banks can review the base rates more than once a quarter. After doing the required calculations banks decide whether to enforce the new rate or carry on with the existing one.

Gulf countries reject SBI’s letters of credit, cite inadequate credit rating

Dheeraj Tiwari, ET Bureau | 11 Jun, 2014, 06.23AM 

NEW DELHI: Some Middle Eastern countries, including Qatar, have refused to accept the letters of credit (LC) issued by the country's largest bank, State Bank of India, saying that the bank does not have adequate credit rating. 

This can increase the cost of imports from these countries as buyers will need to furnish costlier LCs issued by foreign banks. Qatar is one of the biggest source of gas for India. 

SBI chairman Arundhati Bhattacharya said there was an issue which has now been resolved. "There was this issue some time back wherein they required LCs issued by AAA banks, but we explained that the bank is bound by the country's rating," she said. Standard & Poor's had downgraded SBI in 2012 to BBB-, the lowest investment grade rating, on expected deterioration in its asset quality. 

A senior finance ministry official said that the Qatar government wasn't yet convinced and that talks were on to solve the differences. "We are actively in talks with other countries as well so that there is no issue," he added, requesting anonymity. 

LCs enable buyers to take delivery of goods without upfront payment and sellers to receive immediate payment soon after goods are shipped. 

"This could easily spread to other GCC (Gulf Cooperation Council) countries, so it is pertinent that the government intervene and sort out the issue before it leads to trade imbalance," said KPMG (India) partner and head of banking practice Harshvardhan Bisht.

India's banks have seen their ratings lowered following a sharp spike in non-performing loans be cause of an economic slowdown. In September 2013, ratings firm Moody's lowered its outlook on SBI's D+ financial strength rating to negative, citing asset quality and recapitalisation concerns. 

It had simultaneously downgraded the senior unsecured debt and local currency deposit ratings of SBI to Baa3 from Baa2, citing slowing growth and need for fresh capital. 

Non-performing assets of staterun banks rose to 4.44 per cent of their gross loans at the end of March 2014 from 2.32 per cent three years earlier. In its report, India Banking Outlook 2014: Little Respite in Sight, S&P said its outlook on the banks that it rates in India is negative to reflect the outlook on the sovereign credit rating on India. S&P has a negative outlook on India's BBB-minus rating. 

"We do not rate banks above the sovereign in India due to the direct and indirect influence of sovereign stress on banks," it noted in its report. India's 26 state-run banks will together need about Rs 4.15 lakh crore in fresh capital to be able to maintain lending growth under the Basel guidelines. The government is unable to meet this demand because of its own weak fiscal position.

SBI to merge five subsidiary banks with itself as it prepares to fund the Economy

Sangita Mehta & MC Govardhana Rangan, ET :11 June 2014

MUMBAI: State Bank of India, the nation's biggest lender, will kick off consolidation in the banking industry by combining five associate banks as it prepares to fund the economy that is on the cusp of a strong growth like China two decades ago.

The combination of the associates will enhance the asset base of SBI to Rs 21.9 lakh crore, and add 5,658 branches to its 15,143 branches. The combined market share will rise to 24%, from 19%, making it a formidable force. "The timing is very conducive now," SBI Chairman Arundhati Bhattacharya told ET.

"When I came in, there were a number of fires in the parent itself. So if you have to do something, first you need to look at the mother ship. Once the mother ship is in a better form, then obviously you can start looking at other areas. So I think that time has come, or it is approaching," said SBI Chairman Arundhati Bhattacharya.

She called for changes in a number of laws enacted by the previous government, including the land acquisition Act and the companies Act.

"While it (land acquisition Act) has done a good thing to ensure that land owners get adequate recompense, the process has become very long (the relief and rehabilitation process is too difficult to negotiate). Second, the labour laws. Third, in the new Companies Act there are various features that makes it so draconian that it is difficult to source independent members for the board," she said. Commenting on one of the major issues facing the banking sector — fresh capital of $50 billion, Bhattacharya said the amount was needed over five years. Further, as the economy turned around, the profitability of the sector would improve and these profits would boost capital. "...there are a number of innovative ways of raising capital. There is quasi equity that can be raised. Of course, the government may allow some amount of reduction of their shares to allow banks to raise capital from market. That may happen for stronger banks."

The state-dominated Indian banking system is tiny compared with developed markets, or China which has built up giant lenders in the past two decades. The market capitalisation of the Indian banking industry is estimated at about $185 billion, compared with China's largest bank ICBC's value of $217 billion, data from Bloomberg shows. The asset size is insignificant as well. "Three of the top ten banks in the world are Chinese," said Bhattacharya. "Why did that happen? Because the Chinese economy grew and therefore the banks had to grow in order to provide credit. Similarly, things will happen in India if the economy grows. India will need bigger banks. Now, to build bigger banks organically is very difficult. So to do it in an inorganic way by clubbing some of the banks will probably be the best route."

SBI's five associates are State Bank of TravancoreState Bank of Hyderabad, State Bank of Patiala, State Bank of Bikaner & Jaipur and State Bank of Mysore. Although consolidation was first mooted about a decade ago, nothing much happened with the staff unions being a stumbling block, and the previous United Progressive Alliance's policy inertia.

"This will not be an easy process given the strength of the bank unions," says Anil Agarwal, analyst at Morgan Stanley in a recent report. "But if the government is able to take this bold step, it will help improve industry profitability meaningfully."After a lot of effort, SBI integrated two associates — State Bank of Saurashtra and State Bank of Indore —with itself in the past decade.

Although consolidation was first mooted about a decade ago, nothing much happened with the staff unions being a stumbling block, and the previous United Progressive Alliance's policy inertia, said the ET report.

As per the ET report, the state-dominated Indian banking system is tiny compared with developed markets, or China which has built up giant lenders in the past two decades.

The market capitalisation of the Indian banking industry is estimated at about $185 billion, compared with China's largest bank ICBC's value of $217 billion, data from Bloomberg shows.