RBI suggests charge for cash withdrawal and deposit through cheques

RBI has suggested that banks should charge for cash withdrawal and deposit through cheques while the government agencies should do away with convenience charges for online payment of utility bills.

As per the discussion paper floated by RBI, high cash withdrawals and deposits of cash by individuals may also be charged in order to avoid increased dependence to cash-based transactions.

The other major suggestions include restriction on number of free cheque books, high fee on cheque books, mandatory online payment of credit card bills and ban on post-dated cheques. It also suggested that the government should discourage cheque collection boxes at public places.

The suggestions, on which the RBI has invited comments from public by February 28, seek to encourage greater adoption of electronic mode of payment.

Should You Eat While You Negotiate?

HBR : Lakshmi Balachandra  |   9:00 AM January 29, 2013

Across cultures, dining together is a common part of the process of reaching negotiated agreements. In Russia and Japan, important business dealings are conducted almost exclusively while dining and drinking and in the U.S., many negotiations begin with "Let's do lunch." But are business deals actually improved when people discuss important matters over a meal?

To explore this question, I conducted two experiments. The first compared negotiations that took place over a meal in restaurants to negotiations in conference rooms, without any food to eat. In the second, negotiations were conducted with or without a meal in a business conference room. In the experiments, 132 MBA students negotiated a complex joint venture agreement between two companies. In the simulation, a provisional deal is in place, but a variety of terms must still be considered and agreed upon to maximize profits for their companies. The negotiators must determine how to handle each term of the deal. As is typical in many negotiations, in order to maximize their profits, the negotiators must share information and work together with the other side to learn where the most value can be created.

The greatest possible profits were created by the parties who were able to discern the other side's preferences and then work collectively to discover the profit maximizing outcomes for the joint venture, rather than merely considering their own company's profits. In the simulation, this can only be accomplished when the negotiators make trade-offs and then compensate each other from the net gains to the joint venture. The maximum value that can be created jointly for both companies is $75 million. Deals can be struck at lower combined values, down to as low as $38 million. To explore how eating together affected negotiation outcomes, I considered the total value created by both companies.

The students who ate together while negotiating — either at a restaurant or over food brought into a business conference room — created significantly increased profits compared to those who negotiated without dining. (Individuals who negotiated in restaurants created 12% greater profits and those who negotiated over food in a conference room created 11% greater profits.) This suggests that eating while deciding important matters offers profitable, measurable benefits through mutually productive discussions.

I designed a third experiment to test if it was in fact the act of eating together and not merely sharing a separate task that led to the better negotiated outcomes. I had 45 MBA students negotiate the same simulation, but instead of negotiating while eating, half of the groups negotiated while completing a jigsaw puzzle that had nothing to do with the negotiation. In this experiment, I found that the negotiators who shared a common task did not create better negotiation outcomes than those who only negotiated the deal.

I expected that both sharing a meal and collaborating on an activity would increase trust between the participants — and perhaps that the cultural history attached to eating together would increase trust more than sharing other activities — but when I surveyed participants in both studies, the trust levels they reported did not increase.

Why else might eating together improve the outcome of negotiations? There may be biological factors at work. When the negotiators in my first two studies ate, they immediately increased their glucose levels. Research has shown that the consumption of glucose enhances complex brain activities, bolstering self-control and regulating prejudice and aggressive behaviors. Other research has shown that unconscious mimicking behaviors of others leads to increased pro-social behaviors; when individuals eat together they enact the same movements. This unconscious mimicking of each other may induce positive feelings towards both the other party and the matter under discussion.

In future experiments, I will continue to explore the reasons why eating while deciding important matters increases the productivity of discussions. In the meantime, you would be wise to suggest "doing lunch" whenever you meet to negotiate.

LAKSHMI BALACHANDRA

Lakshmi Balachandra is an Assistant Professor of Entrepreneurship at Babson College and a Fellow at the Women and Public Policy Program at the Harvard Kennedy School of Government. She researches how entrepreneurs can successfully negotiate with investors.

The debate beyond rate cuts

A file photo of RBI governor D. Subbarao. Photo: Abhijit Bhatlekar/Mint

Live Mint :Tue, Jan 29 2013. 01 51 PM IST

As expected, the Reserve Bank of India (RBI) has moved to make money cheaper. The Indian central bank has reduced the repo rate and the cash reserve ratio by 25 basis points each. Governor D. Subbarao has said that this is expected to support growth by encouraging investment and will continue to anchor medium-term inflation expectations. RBI has also cut its gross domestic product (GDP) growth forecast for the current fiscal to 5.5% from 5.8%. Inflation is expected to be at 6.8% by the end of the current fiscal, from the earlier forecast of 7.5%.

Since the much-awaited review of the monetary policy is now out of the way, the markets will get back to analysing whether this rate cut will help revive investment activity and boost growth, in light of the fact that inflation is expected to remain above the central bank’s comfort level. Subbarao, in his statement, noted: “There is an increasing likelihood of inflation remaining range-bound around current levels going into 2013-14. This provides space, albeit limited, for monetary policy to give greater emphasis to growth risks.”

It is becoming increasingly important that limitations to monetary policy to stimulate growth are accepted. If the Indian economy is to revive in a sustainable manner, corrections need to be initiated at the fundamental level.

There are two major impending challenges in the macroeconomic management of the country—reviving economic growth and managing the current account. On the one hand, it is important to revive economic growth, which will enhance investor confidence, create employment and help the government raise revenues in order to bring back its books in order. On the other hand, there is an urgent need to contain the current account deficit (CAD), which has significantly raised the dependence on the international capital flows. CAD reached a high of 5.4% of gross domestic product (GDP) in the second quarter of the current fiscal and created a gap of $7 billion per month that has to be filled by capital flows from abroad. Although the financing has been relatively easy, the increased dependence and the rising component of debt flows may pose challenges to financial stability in the medium to long run.

A rate cut, theoretically, will help revive consumption and investment demand leading to higher growth. However, a recovery in demand could push up imports and magnify CAD. RBI in its third quarter review of macroeconomic and monetary developments noted: “With the likelihood that CAD/GDP ratio may exceed 4% of GDP for the second successive year in 2012-13, prudence is necessary while stimulating aggregate demand.” For growth, it has been reasoned enough that a rate cut alone will not do much. Lower interest rates, for example, will not help revive mining output, ensure fuel supply at power plants or speed up project clearances—notable immediate challenges in reviving growth.

Apart from the much talked about procedural delays in project implementation, India needs reforms at various levels that will make growth lot more sustainable and also help boost exports. This will also allow RBI to focus on inflation and reduce the burden with respect to anchoring growth and managing currency. A lot can be achieved by correcting the anomalies in the manufacturing sector. The Indian manufacturing sector and, as a consequence, exports from India are heavily skewed in favour of high skill and capital-intensive sectors. This is one of the reasons why the dependence on agriculture for livelihoods has not reduced significantly, and India is missing on the opportunity in exports of labour-intensive sectors such as textiles.

One of the reasons for this anomaly, as underlined by economists Jagdish Bhagwati and Arvind Panagariya in India’s Tryst with Destiny: Debunking Myths that Undermine Progress and Addressing New Challenges (2012), is rigid conditions in the labour market, which have not allowed large-scale labour-intensive sectors in the country to develop. The two economists note: “The true explanation lies instead in the fact that additional layers of regulations and barriers remains to discourage the emergence of large-scale labour-intensive manufacturing in India. The dominant cause is highly inflexible labour market, which makes the cost of labour in the formal sector excessively high.” According to a study by the Asian Development Bank, Enterprises in Asia: Fostering Dynamism in SMEs, published in 2009, only 10.5% of the workers in the manufacturing sectors in India were employed in firms with more than 200 workers. The ratio for China was at 52%.

Clearly, India is not only losing on the exports front, but also on the opportunity to create mass employment which will push growth and make it lot more sustainable. Consequently, labour-intensive manufacturing activities that are shifting out of China because of rising wages, though China still maintains dominance, are flowing to smaller countries such as Bangladesh and Vietnam instead of coming to India.

The debate on returning to a sustainable higher rate of growth, therefore, needs to broaden.

 Yes, interest rates and the cost of capital is important,

 but it is still a necessary but not a sufficient condition 

for attaining growth and prosperity

 

The Ratan Tata I Knew: 'So where do you keep the washing machine?'

Brotin Banerjee   : January 28, 2013  | 12:04 IST


Tata Housing Development Company CEO Brotin Banerjee. PHOTO: Nishikant Gamre

In my limited interactions with Mr Ratan Tata, I have seen an amazing ability to foresee things and trends before they happen. And then there is his ability to motivate people to take the plunge. 


I have also seen an ability to look at the big picture and at the same time go into the details of a proposal. For instance, when we would present him our project plans or even floor plans, he would ask questions on the distance between two buildings and how are we were addressing privacy concerns of the residents. He would also ponder over how to make the residences more usable at night. 

When we were working on low-cost housing, Mr Tata would ask about how we could make flats more liveable and maximise space - he would ask questions like where would one keep a study table or where the washing machine would go. 

Along with such details he was able to bring expertise from other industries into our business. He spoke about how we could replicate the robotic car assembly to build houses fast, with contour crafting technology that uses a robotic arm - an overhead crane that moves the concrete mixture. His ability to grasp complex issues very fast is also amazing.

At the same time, he remains a very down-to-earth person and what comes across in personal interactions is his humility and his ability to be respectful to even a stranger.


(As told to Suman Layak)Brotin Banerjee is the Chief Executive Officer of Tata Housing Development Company Ltd and is among the youngest CEOs in the group today. In the past, he also led Barista till the time the Tatas were investors in the group.

கொஞ்சம் சினிமா ...கொஞ்சம் பாப்கார்ன் Viswaroopam Movie Review

Praveen Kumar from New Jersey :one India

Friday, January 25, 2013, 12:06 [IST]

Rating: 3.5/5



The wait is over. Kamal Hassan's biggest-ever film Viswaroopam, which has been delayed for one or the other reason, has seen the light of day in foreign countries but not in Tamil Nadu and other Southern states as the High Court has stayed the release after several Muslim groups raised objection. After a gap of three years, Kamal Hassan is back with Viswaroopam, which is written, directed and produced by himself. 

The film was supposed to be directed by Selvaraghavan but as the director walked out of the film due to other commitments, Kamal took the responsibility of directing the film. The film is simultaneously made in Tamil, Telugu and Hindi. It is made with the budget of Rs 95 crore, which is the second highest budget Tamil film after Rajinikanth's blockbuster Endhiran. What does the multilingual action-thriller has to offer? 

A reader named Praveen Kumar from New Jersey reviewed the film, as the movie was not released here. Read on for the review... 

The movie starts in America. Viswanath (Kamal Hassan), who will be seen as Kathak trainer, is surrounded by girls and one among them is Andrea Jeremiah. This makes Dr Nirupama (Pooja Kumar) to doubt on her hubby's character and hires a detective, who gets killed by Al-Qaeda group. 

The Al-Qaeda is planning to plant a Nuclear Bomb in New York and Kamal Hassan is well-aware of it. How? He has a past where he has a connection with the terrorist group, which is headed by Omar (Rahul Bose). 


Will the terrorist organisation succeed in their mission? What role does Kamal play? Is he a terrorist or an undercover agent? To know all these, you should watch the film. The story of the film begins on a slow note but it is gripping.

 The first half is entirely shot in the US, and keeps you engaged and generate a lot of curiosity. When it comes to second half, the narration is dragging at parts but gets interesting with Kamal Hassan's past getting revealed. 

Viswaroopam has a wonderful story. It is well-backed by technical aspects like action and cinematography. It has to be noted that only one song will be part of the film even though the album of the film has a couple of tracks. Kamal ends on the note that Viswaroopam will continue until Omar or he is killed.



What do you expect Kamal Hassan to deliver? The man, who has done countless experimental roles and called as the modern-day Stanislavsky of Tamil cinema, is brilliant. Be it in his avatar of Kathak dancer with feminine qualities, or in the role of a terrorist, he proves again why he is the best when it comes to acting. He looks terrific in the Jihadi warrior getup

Pooja Kumar is a new find and she looks promising. She is sexy and adds glam quotient to the film. But Andrea Jeremiah has not got a big role and her role is not well described. Rahul Bose is astounding in the role of terrorist. Shekar Kapoor is good and rest others are okay.



 Of all technical aspects, Sanu Varghese's cinematography stands tall, as he has done a brilliant job. He has wonderfully captured some of the rarest locales of Afghanistan. Shankar Ehsaan Loy's two songs are good and background score is excellent. Especially, it is a treat to watch the Jet Fighter scenes on Auro 3D sound format. However, Mahesh Narayanan's editing would have been better had he reduced the length of the film.





Verdict: Being a fan, I enjoyed the film thoroughly and the film is on par with Hollywood standards. My rating is 3.5.

Reserve Bank eases rules for FII investment in debt

The Hindu :MUMBAI, January 24, 2013

The Reserve Bank of India (RBI), on Thursday, notified the enhanced limit of investing in government securities (G-Secs) by foreign institutional investors (FIIs) and long-term investors by $5 billion to $25 billion from $20 billion.

It also hiked the investment limit in corporate bonds by these entities by $5 billion $50 billion from $45 billion.

Long-term investors include SEBI-registered sovereign wealth funds (SWFs), multilateral agencies, endowment funds, insurance funds, pension funds and foreign central banks.

The RBI also relaxed some investment rules by removing the maturity restrictions for first time foreign investors on dated G-Secs. Earlier it was mandated that the first time foreign investors of G-Secs must buy securities with at least three-year residual maturity. “But such investments will not be allowed in short-term paper like Treasury Bills,” the RBI added.

Further, the central bank has also restricted foreign investors from buying certificates of deposits and commercial paper.

In the total corporate debt limit of $50 billion, the RBI stipulated a sub-limit of $25 billion each for infrastructure and other than infrastructure sector bonds. In addition, qualified foreign investors (QFIs) would continue to be eligible to invest in corporate debt securities (without any lock-in or residual maturity clause) and mutual fund debt schemes, subject to a total overall ceiling of $1 billion.

“This limit of $1 billion shall continue to be over and above the revised limit of $50 billion for investment in corporate debt,” the RBI added.

As a measure of further relaxation, it has been decided to dispense with the condition of one year lock-in period for the limit of $22 billion (comprising the limits of infrastructure bonds of $12 billion and $10 billion for non-resident investment in IDFs) within the overall limit of $25 billion for foreign investment in infrastructure corporate bond.

The residual maturity period (at the time of first purchase) requirement for the entire limit of $22 billion for foreign investment in the infrastructure sector has been uniformly kept at 15 months. The five-year residual maturity requirement for investments by QFIs within the $3 billion limit has been modified to three years original maturity.

Maturity restrictions for first time foreign investors on dated G-Secs removed

Removal of rules requiring FIIs to hold infrastructure debt for at least one year

What this Inauguration Means to President Obama

 Transcipt of Obama ' s Speach ( 3.17 mts)

0:01

I started public service working in communities. Throughout my career, what has always given

0:09

me energy, what's given me hope, is just how good and decent and resilient and strong the

0:15

American people are. The theme of this year's inauguration is "Our People. Our Future."

0:21

I really believe that when our people are succeeding when they have the tools that they need to get

0:26

a great education, get a good job, look after their kids, have some basic security, that

0:34

there is nothing that can stop America.

0:38

Two figures that I admire probably more than anybody in American history is Dr. King and

0:43

President Lincoln. For me to have the opportunity to be sworn in using the bibles of these two

0:49

men that I admire so deeply on the 150th anniversary of the Emancipation Proclamation, 50th anniversary

0:56

of the March on Washington is I think fitting because their actions - the movements they

1:04

represented - are the only reason that it's possible for me to be inaugurated. It is also

1:10

a reminder for me that this country has gone through some very tough times before but we

1:15

always come out on the other side. This task of constantly perfecting our union, making

1:21

it more fair, making sure that everybody in this country has a fair shot, that if you

1:26

work hard you can make it regardless of the circumstances of your birth or what you look

1:31

like or where you come from, what god you pray to, I think that it's probably the

1:36

most important thing to keep in mind when your POTUS. So, me stating before the entire

1:43

country that I will uphold my oath of office while at the same time letting them know that

1:50

there is a connection between me being here and the sacrifices of those in the past, I

1:56

think, is entirely fitting.

2:01

[cheering]

2:02

I remember the train ride that we took down from Philadelphia; crowds lined the entire

2:08

route. It was an incredible reminder of the diversity of our country. The other thing

2:14

that really sticks in my mind was a day of service. Because the inauguration comes close

2:20

to Dr. King's birthday, we had a tradition of serving on that weekend. We painted a homeless

2:28

shelter, our daughters put together care packages for our troops overseas. I think it's a

2:36

terrific reminder of who we are as Americans. The last memory I have that really moved me

2:42

a lot was the Commander in Chief ball. Michelle and I danced our traditional first dance at

2:47

that ball but then we each paired off with a couple of service members who were representing

2:53

all of those folks who have made such enormous sacrifices on behalf of our freedom. The inauguration

2:59

reminds us of the role that we have as fellow citizens in promoting a common good as well

3:07

as making sure we're carrying out our individual responsibilities. That is the reason that

3:14

America has been successful in the past and that's why we'll be successful in the

3:17

future.