Wednesday, March 28, 2012

SBI rolls out one-time settlement scheme for small units

State Bank of India has launched a one-time settlement (OTS) scheme for recovering bad loans in its micro, small and medium enterprises (MSME) portfolio. India’s largest bank has seen a net increase of Rs 3,902 crore in bad loans in its MSME portfolio in the first nine months of the current financial year.

Tax information exchange pact signed with Argentina

India has signed a tax information exchange agreement with Argentina. This is the tenth such pact in the past three years. This pact with Argentina would enable Indian tax authorities to obtain specific information, including banking related, on tax evasion cases. The other such pacts signed by India are with the Bahamas, Bermuda, British Virgin Islands, Cayman Islands, Isle of Man, Guernsey, Liberia and Macau.

Interest rate of small saving schemes increased

The Finance Ministry has increased the rates of small saving schemes such as Post office time deposits, National Saving Certificates (NSC) or Public Provident Fund (PPF) by up to half a percentage point for 2012-13.

Strong growth in India despite global slowdown: IMF

India along with Indonesia showed strong growth despite a global economic slowdown in the financial quarter of 2011, according to the International Monetary Fund (IMF).

World Bank’s financial sector report likely by April

The World Bank is likely to complete by the end of March, a full fledged assessment of India’s financial sector. India had in May 2010 requested the World Bank/IMF to conduct a full fledged Financial Sector Assessment Program (FSAP).

Economic survey 2011-12 in brief

·         GDP growth rate pegged at 6.9% this fiscal; forecasts for 2012-13 is 7.6% and for 2013-14 is 8.6%.
·         Agriculture forecast at 2.5%. services sector grows by 9.4%; its share in GDP rises to 59%.
·         Industrial growth pegged at 4-5%, expected to improve.
·         Inflation to tone down by year end.
·         Fiscal consolidation on track – savings and capital formation expected to rise.
·         Exports grew at 40.5% in the first half of current fiscal and imports grew 30.4%. Forex reserves rise to nearly cover the entire external debt stock.
·         Central spending on social services hiked to 18.5% this fiscal.
·         MNREGA coverage rises to 5.49 crore households in 2010-11.
Sustainable development and climate change concerns high on priority.

The chief author of the survey – Mr. Kaushik Basu, Government’s Chief Economic Advisor.

Asia overtakes Europe in defence spending

Asian defence spending is set to exceed that of Europe as economic woes force EU to slash military budgets, while China plans to boost spending by 11% in 2012, pushing it above $100 billion for the first time.

Mukesh Ambani is the richest Indian

Business tycoon Mukesh Ambani has retained his title of being the world’s richest Indian despite an erosion of $4.7 billion in his wealth in the past year as he beat 47 billionaires from Indian in Forbes magazine’s annual list of the world’s richest people. Mexican tycoon Carlos Slim retains his position as the world’s richest person.

Terms of the day

DII – Domestic Institutional Investors
ETF – Exchange Trade Fund
CII – Confederation of Indian Industry
CII President – B Muthuraman
HRW – Human Rights Watch
NIMZ – National Investment and Manufacturing Zone. 
NIMZs are a key tool for the growth of manufacturing sector by facilitating the availability of land for industrial and infrastructural use.
NBC – Net Bank Credit
FSAP- Financial Sector Assessment Program
NSC- National Saving Certificates
PPF- Public Provident Fund
NPCI- National Payment Corporation of India
MTFP – Medium Term Fiscal Plan 


RuPay: India's answer to Visa and Mastercard

The National Payment Corporation of India (NPCI) has charted out a three year growth plan to expand base of its newly launched first-ever indigenous payment gateway - Rupay. This in turn, is likely to give a good run for money to the multinational biggies like Visa or MasterCard. It now plans to use its just-launched debit cards for online transactions.
"RuPay market share is currently not so significant. However, our growth plan will make it a major rival force to other two existing players in next three-five years," A P Hota, Chief Executive Officer told.
We have crossed initial two levels of growth for RuPay. In September, we will add internet acceptability to our existing RuPay debit card. We have already closed a deal with a US based IT-solution provider. Later in March 2013, we will issue RuPay-enabled international debit cards. Finally, we will launch RuPay credit cards in March, 2015," said Hota.
NPCI, promoted by 10 banks under the aegis of Indian Banks Association (IBA) had introduced RuPay enabled ATM cards in June, 2011. Two lakh ATM cards are already in the market. On March 26, 2012 it launched debit cards, which can be used in ATMs and different point of sales (PoS). So far, four banks including Union Bank of India, Bank of India, State Bank of India and Axis Bank have joined the network of RuPay debit cards. This means, a customer of any of those banks can use such debit cards.
NPCI, according to Hota, is in talks with ICICI Bank and HDFC Bank , the lenders with majority of PoS terminals. Together these two entitites own more than half of India's 6 lakh total PoS terminals. At present, RuPay is accepted in 2.10 lakh PoS terminals enabled by Axis Bank and SBI . Such terminals are kept in different merchant outlets wherein you can swipe your debit or credit card.
"Both ICICI Bank and HDFC Bank are in the process of rebuilding the system. They have indicated joining the network in July. So, RuPay card's acceptance in all 6 lakh terminals is a time-taking affair," Hota said.
So, what lure banks to RuPay?
Answer: It is cost effective.
Banks have to pay less to the payment gateway provider. For example, banks have to pay nearly Rs 2 for a customer's transaction size of Rs 1,600 in RuPay network while the same is around Rs 2.80 with Visa or MasterCard.
Secondly, there is no entry fee for banks to enter RuPay network while lenders would have to pay around Rs 25 lakh each in case of other two providers.
Finally, banks need not pay a minimum quarterly fee in the RuPay network. However, the same fee would be in the range of Rs 10-30  lakh for other two major gateways. 
Moreover, RuPay helps in financial inclusion as many co-operative banks and regional rural banks (RRBs) are included in its network.
"RuPay has just issued the debit card. They will have to build the customer base on this. We are looking at all options to join any payment network. Once the Rupay's commercial operation get fully functional, we will be able to compare the cost structure of different gateways," said a retail head of a large private sector bank, who does not wish to be named.

Seoul Nuclear Security Summit (NSS

Pakistan- wants access to technology
India- stress safety- security interface
NAM- for disarmament
Visit for more insights...

Govt to borrow Rs 3.7 lakh crore in Apr-Sept: Economic Affairs Secretary

The union government will borrow a gross Rs 3,70,000 crore in the first half of the fiscal year that begins on April 1, Economic Affairs Secretary R Gopalan said on Tuesday, which is 65% of the full-year target.
Traders largely expected borrowing for the period to be in the range of 3,60,000 crore to Rs 3,80,000 crore.
Earlier this month, New Delhi announced a gross market borrowing of Rs 5,70,000 crore for the 2012-13 fiscal year, higher than an expected Rs 5,30,000 crore, to help bridge its fiscal deficit that is forecast to be 5.1% of the GDP.

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