Month: August 2019

Corporate governance tightened, “chalta hai” attitude plugged: Finance secretary Rajeev Kumar

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Finance and banking secretary Rajeev Kumar on Saturday said the government has tried to clean the entire financial system and sustained efforts are made to get rid of loose corporate governance in the country.

In an exclusive interview to CNBC-TV18’s Sapna Das, Kumar said the government will fix the effective date of bank merger after consultations with bank boards.

Edited excerpts:

Corporate Governance Tightened

Be it public sector banks (PSBs), private sector banks, rating agencies, debtors, auditors, there was a system which required everyone to be responsible. The entire ecosystem is getting cleaned and it will get cleaned. Now, one has to be responsible and we have just tried to join the dots and so much has been done. This has been happening with the entire space of non-banking financial companies (NBFCs), housing finance companies (HFCs) and Infrastructure Leasing and Financial Services (IL&FS). There was loose corporate governance and everyone can get away by a Chalta Hai attitude. Now, this has been stopped, this has been plugged and that was a very sustained effort.

No Disruption in Merger Process

Results are now very visible, NPAs are declining, special mention accounts (SMAs) are lower, PSBs are fully provisioned, 14 state-run banks are in profit and this is the foundation. We have tested it with Bank of Baroda merger and there was no disruption. So, we were confident that you need the banks with a clear roadmap, in size and scale and freeze it for once. Allow them to grow. So we have created six big banks, in terms of size, employees and they can now have global aspirations.

Timing of the Merger 

We thought of the timing of the mergers. The timing is decided that if we have to reach that stage, it’s cyclical. Where when the time comes, banks should be ready and the credit expansion has to take place so you make them robust. The energy of the banks is not lost in the process of merger and this we realised very well in the case of Bank of Baroda, Dena Bank and Vijaya Bank merger. The result is there is no disruption. Banks are very strong and they will go to the market now. The anchor banks will continue to focus and monitor, and the processes are also well known.  We have fixed a conference of all these banks on September 5 so that they learn from the case of Bank of Baroda, Dena Bank and Vijaya Bank merger. We have a chartered path now.

Growth Capital to Bank of Baroda

We have given Rs 7,000 crore to Bank of Baroda. Bank’s fundamentals are above the regulatory cap requirement. Don’t look at pieces, look at the broad holistic picture. We have given Bank of Baroda growth capital and we were very clear that we will infuse more money into them when they are ready. The roadmap is you have defined the size, scale and the entire space. You have cleaned them up, made them robust, given them capital and you have given them governance reforms. The department of financial services (DFS) should not be interfering into anything. We would have been late had we not done the mergers now as in 6-7 months’ time, they will take shape to support the economy.

Effective Date of Merger

We will fix the effective date after consultations with bank boards. It could be like the Bank of Baroda, but it will be a smooth process. We will take time, give time to the boards so that nothing is pushed. It’s smooth, it’s seamless and therefore, we have taken care only to merge those banks which have the same technology platform so that there is the least disruption. Banks, which are on the same technological platform, will have a whole lot of efficiencies like cash management, passbooks and printing.

Merger Time

Merger process should not take more than 12 months as we have experience with us. This can be January 1 or April 1 or whatever and this will be in consultation with the bank boards. We also have to take the Reserve Bank of India (RBI) nod and consult them and this will be a two-way consultation. So, we will take the time and one thing we will ensure that there is no disruption.

Additional 0.25% Capital Norm

For all the big anchor banks, we have taken extra care of introducing 0.25 percent extra regulatory norm to meet its capital and this is for systematically important banks. So, we will talk from the position of strength as we have that moment now.

Capital Infusion in 10 days

Recapitalisation amount of Rs 55,000 crore is going to be almost same as we announced. But, boards may come up with some additional requirement and this amount will be infused in the next week to 10 days.

Recapitalisation Amount Sufficient, Additional Not Required

Buffer is not needed now. Actually, every bank is meeting the regulatory requirement, even the capital given to weak banks will help them come out of the prompt corrective action (PCA) framework. It does not seem that it will need more than Rs 70,000 crore of recapitalisation in FY20.

Recapitalisation to Aid Weak Banks Out of PCA

I have worked at everything very minutely. We have capitalised all banks, we have enabled the weak banks to come out of the PCA and they also have to work. There will be writebacks from the Insolvency and Bankruptcy Code (IBC). Imagine the kind of profit that will come from the write back. All the regulatory parameters have been met.

75% is the Provisional Coverage Ratio

Many of the banks are in the IBC mandated resolution process and they are working on everything, so it’s only a story of financially clean, sound and responsible banks.

Govt Will Protect Interest of Senior Citizens, Small Savers

Interest rates have to be linked to various parameters and you also have to take care of small investors, senior citizens and everybody, which is also very critical. Inflation being low interests of the senior citizens have to be protected, so it’s a very calibrated call that government will take at the appropriate time.

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NRC final list out, excludes over 19 lakh people

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Over 19 lakh people have been left out of the final list of National Register of Citizens (NRC) of Assam, which was released on Saturday morning.

Some 19,06,677 people have been excluded from the final list, which names 3,11,21,004 people as Indian citizens.

The NRC has immense significance for the people of Assam as the state witnessed a six-year-long movement between 1979 to 1985 seeking detection and deportation of illegal Bangladeshis.

The process of updation of NRC is being carried out by the Registrar General of India, and is being monitored by the Supreme Court.

The draft NRC, which was published last year, excluded names of 40,07,707 people from the document due to some discrepancies in their documents. Over 36 lakh of them applied afresh to get their names included in the final NRC.

The government has assured that the people left out of the final NRC will not be detained and they can appeal against their exclusion in the Foreigners` Tribunals (FT) and subsequently move higher courts.

The Assam government will establish 400 Foreigners` Tribunals in the state to deal with such appeals.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Lakhs in Assam lived in anxiety since NRC exercise began 6 years ago

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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It was six years ago that a mammoth exercise was started to update the National Register of Citizens (NRC) of 1951 by identifying illegal foreigners living in Assam and since then lakhs of people have been living an anxiety.

The government set March 25, 1971, as the cutoff date to consider the India citizenship, which implies that those who came before the midnight of March 24, 1971 are Indian citizens, while those who came after that have to be detected and deported.

Last year, the Assam government published the draft NRC from which names of 40,07,707 people were excluded due to `some discrepancies` in their documents submitted to prove their Indian citizenship. Over 36 lakh of them applied afresh to get their names included in the final NRC.

The NRC authorities, working under the supervision of the Supreme Court, also arranged for claims and objections process to enable the excluded people to attempt once again to prove their Indian citizenship.

For those who fail to make it to the final list, a long legal battle awaits. The excluded people will have 120 days to prove their Indian citizenship through the Foreigners` Tribunals across the state.

Ahead of the publication of the final list on Saturday, tension was palpable in Khutamari village in western Assam`s Goalpara district. More than 100 people in the village had not found their names in the draft NRC. Most of them filed fresh applications to prove their Indian citizenship.

Located around 170 kms west of Assam`s capital town Guwahati, Khutamari is a village inhabited by multi-religious people, including Muslims, Bodos, Rabhas and Koch Rajbongshis. Although Muslims have been living in the village since generations, some of them failed to find their names in the draft NRC.

“I was born here and have lived here. I have all my school certificates and everything to prove my Indian citizenship. However, I was categorised as a `D` voter in 1997 by the election authorities. I had to pursue the case first in the Foreigners` Tribunal and then again in the Sessions court here. In 2012, the court ruled that I am a genuine Indian citizen. Still my name was not included in the draft NRC,” said 55-year- old Saheb Ali, a resident of the village, on Friday.

Like Saheb, his mother`s name was also left out of the draft NRC. “My mother`s name was there in the 1966 voters` list. When I was categorided as `D` voter, the court considered the testimony of my mother, who is a voter of 1966. However, her name did not figure in the draft NRC. I don`t know what to do,” said Saheb.

The names of 26-year-old Akbar Hussain and four of his siblings were also missing from the draft NRC. “Our father`s name was there in the NRC. We have submitted legacy document of our father, but the draft NRC did not include our names. We don`t know what is going to happen tomorrow,” Akbar said while talking to this correspondent on the eve of the publication of the final NRC.

He said they gave “valid documents”, but those were rejected. “We are genuine Indian citizens. How can they term us as foreigners? There are over 100 such cases in our village. They are all genuine Indian citizens,” Hussain said.

Saheb Ali and Akbar Hussain are among over four million people in Assam living in anxiety for the past several months since the draft NRC came out.

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NRC: 400 Foreigners’ Tribunals to deal with cases of excluded people

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The Assam government will establish 400 Foreigners Tribunals in the state to deal with the cases of people who are excluded from the final National Register of Citizens (NRC).

Additional Chief Secretary (Home Political) Kumar Sanjay Krishna said the process is already on to set up 200 such tribunals and 200 more will be set up soon for the benefit of the excluded people.

The Foreigners` Tribunals are Quasi judicial courts mandated to hear appeals of those excluded from the NRC.

“The tribunals will be established in convenient locations to ensure that filing and hearing of appeals is smooth and efficient,” said Krishna.

“People left out of the final NRC are not be detained under any circumstances till Foreigners Tribunals declare their decisions. These people can first approach the Foreigners` Tribunals (FT) and subsequently move higher courts if not satisfied with the FT ruling,” he said adding that the state government will also make necessary arrangements to provide legal aid to those exclude from NRC by providing all assistance through the District Legal Services Authorities (DLSA).

He said the process of updation of NRC is being carried out by the Registrar General of India and the entire process is under the direct monitoring of the Supreme Court.

“Under the provisions of Foreigners Act, 1946 and Foreigners Tribunal Order, 1964, only Foreigner Tribunals are empowered to declare a person as a foreigner. Thus, non-inclusion of a person`s name in the NRC does not by itself amount to him/her being declared a foreigner,” Krishna clarified.

“The Government of India has also extended the time-limit for filing of appeals from 60 days to 120 days, and necessary amendment in this regard has been made in the Foreigners (Tribunals) Amendment Order, 2019,” he added.

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NRC: Sonowal asks people not to panic; govt to provide legal aid to poor

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Ahead of the publication of final NRC, Assam Chief Minister Sarbananda Sonowal on Friday asked people not to panic and said the state government will take all possible steps to help genuine Indians prove their citizenship and provide legal assistance. Sonowal also said exclusion of anyone’s name from the final list of the National Register of Citizens (NRC) to be published on Saturday, does not mean that he or she has become a foreigner as such a decision can be taken only by a Foreigners Tribunal (FTs) after following proper legal process.

“No one should be worried. No one should panic. Government is here to take care of everyone. Even those who will be excluded from final list will get enough opportunity to prove their Indian citizenship,” he told PTI in an interview.

When the draft NRC was published on July 30 last year, there was a huge controversy over the exclusion of 40.7 lakh people from it.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

For those wanting NRC, it has been a long journey

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Thirty four years after the Assam Accord was signed, there is euphoria over the publication of the final list of National Register of Citizens (NRC) among those who have been demanding it.

“It has been a long journey for the people of Assam. We are expecting an illegal foreigners-free correct NRC,” said Chief Adviser of the All Assam Students` Union (AASU) Dr. Samujjal Bhattacharyya.

He said the NRC has immense significance for the people of Assam as the state witnessed a six-year-long movement between 1979 to 1985 seeking detection and deportation of illegal Bangladeshis.

“The state has seen 855 young men and women sacrificing their lives and embracing martyrdom due to this six-year-long anti-foreigner movement,” he said.

The NRC is a process being monitored by the Supreme Court.

“The process has given ample time and opportunity to everyone to prove their Indian citizenship. The people of Assam had taken enough burden of illegal infiltrators till 1971. The massive influx threatened the rights of indigenous people by changing the demography,” said Bhattacharyya while adding that the NRC is definitely the first step to make Assam free of the illegal foreigners.

The All Assam Minority Students` Union (AAMSU) also welcomed the NRC and said a correct NRC is the need of the hour.

“There has been harassment of people, particularly one religious minority community, in the name of updation of the NRC. However, we want a correct NRC so that the Bengali-speaking Muslims, who are often branded as Bangladeshis in Assam, get relief once their names are there in the NRC,” said AAMSU General Secretary Abdur Rahma Biswas ahead of publication of the final NRC.

He, however, appealed to the people not to be scared. “Those people whose names do not figure in the NRC will neither be arrested and branded as foreigners. Those people have to approach the Foreigners` Tribunals within 120 days and claim their citizenship again,” Biswas said.

There is also a difference of opinion among the Assam government and the state`s ruling BJP over the NRC. While Assam Chief Minister Sarbananda Sonowal recently termed the to-be-published final NRC as a historic document, state BJP President Ranjit Kumar Dass said the party does not believe that the NRC is going to be an error-free document.

Dass said the party is not happy with the way the NRC is being updated. “We do not believe that the NRC is going to be an error-free document. NRC coordinator Prateek Hajela has been working as per his whims and fancies and this is the reason why we are getting an NRC full of names of illegal foreigners and with exclusion of names of genuine Indian citizens,” he said.

The draft NRC, which was published last year, excluded names of 40,07,707 people from the document due to some discrepancies in their documents. Over 36 lakh of them have applied afresh to get their names included in the final NRC.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Gold heads for fourth monthly gain on slowdown, trade worries

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Gold prices fell on Friday on a slight recovery in equities markets and Treasury yields but was on track for a fourth-straight monthly gain as fears of a global recession and uncertainty on US-China trade relations drove investors to safe havens.

Spot gold <XAU=> fell 0.5% to $1,520.40 per ounce at 1:29 p.m. EDT (1729 GMT) and has gained 7.4% so far this month.

US gold futures <GCcv1> settled down 0.5% at $1,529.40.

The market is awaiting news on the trade front, said Suki Cooper, precious metals analyst at Standard Chartered Bank.

“At the moment, gold market is focused on impact in terms of global growth and whether we’ll continue to see central banks around the world easing monetary policy,” Cooper added.

Chinese and US trade negotiating teams are maintaining effective communication, a day after both sides discussed the next round of in-person negotiations in September, China’s foreign ministry said on Friday.

On Thursday, China’s commerce ministry said a September round of meetings was being discussed by the two sides, but added it was important for Washington to cancel a tariff increase.

Positive signs on the trade front also lifted world stocks to a one-week high, limiting bullion’s upside.

“Gold will have a very high beta to any reduction in trade tensions given that they have driven so much of its rally,” OANDA analyst Jeffrey Halley wrote in a note.

Escalation in the trade war between the world’s biggest economies and heightened fears over a global downturn contributed to a rise of more than $100 for gold in August.

A recent inversion of the US yield curve, where short-dated yields are running above long-dated ones, has also unsettled investors as it often precedes a recession.

Meanwhile, the US Federal Reserve and the European Central bank are widely expected to cut rates next month to stimulate their economies.

Elsewhere, silver <XAG=> fell 0.2% to $18.21 per ounce, on track for its biggest monthly percentage gain since June 2016, gaining 12% so far in August.

“Silver will be volatile going forward and is more likely to come under pressure when we see prices rising given that the industrial picture looks a little bit weak going forward,” Standard Chartered’s Cooper said.

Meanwhile, consumers in top Asian hubs sold physical gold holdings this week to cash in on high prices, with many opting for cheaper silver.

Spot platinum <XPT=> rose 1.3% to $928.05 per ounce, after hitting a near 16-month high, while palladium <XPD=> jumped 4.1% to $1,535.45 per ounce after hitting a one-month peak of $1,504.71 earlier.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

China to exempt Tesla cars from 10% purchase tax

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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China will exempt Tesla Inc’s electric vehicles from its purchase tax, the Ministry of Industry and Information Technology (MIIT) said on Friday, a concession made amidst trade tensions with the United States.

Tesla sees China as one of its most important, growing markets, and the exemption from a 10% purchase tax could reduce the cost of buying a Tesla by up to 99,000 yuan ($13,957.82), according to a post on Tesla’s social media WeChat account. Sixteen variants – all the Tesla models sold in the country – are listed on a document issued by MIIT on its website, including Model S, X and 3.

No reason was given for the decision to exclude the cars from the tax, but it comes as Tesla is expanding in China, with a new factory and visits by Chief Executive Officer Elon Musk.

Tesla’s plant in Shanghai will be its first overseas factory, and the company is gearing up for a major Chinese sales push by promoting racing events, showroom parties with DJs and a line of Chinese Tesla stickers for chat apps.

Musk has met with senior leaders, including China’s Vice President Wang Qishan, and the transportation minister.

He also has publicly praised China in the midst of tensions with the United States, thanking the Shanghai and national governments for support, calling national leaders “very thoughtful” and describing China’s “amazing” progress in sustainable energy, transport and space.

“This year they did more orbital launches than the USA for the first time,” Musk, who also is the chief executive of rocket maker SpaceX, tweeted in December. (https://bit.ly/2ZBgVzR)

“It is pretty clear Tesla is committed to China, with the investment in the Shanghai Gigafactory. Those relationships probably helped Tesla lobby for a successful exemption from the tax,” Roth Capital analyst Craig Irwin said.

“Now we need to closely watch the build out of the Shanghai Gigafactory and Model 3 volume ramp in China,” Irwin added.

Tesla did not respond to a Reuters request for comment.

While the company does not disclose sales by country, consultancy firm LMC Automotive estimates sales of 23,678 Tesla vehicles in China in the first seven months this year, nearly double the number of cars it sold a year earlier.

Shares of the company were up 1.5% at $225.01 in early afternoon trading.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

IndiGo chief financial officer Rohit Philip quits

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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InterGlobe Aviation on Friday said its chief financial officer Rohit Philip has put in his papers.

Aditya Pandey would replace him from September 16, the company said in a regulatory filing. Philip’s resignation is effective September 15.

InterGlobe Aviation is the parent company of the country’s largest airline IndiGo.

The resignation has come at a time when two promoters of the airline are engaged in a feud.

The feud between IndiGo co-promoter Rahul Bhatia and Rakesh Gangwal came into the public domain after Gangwal wrote to market regulator Sebi in July and sought its intervention to address the alleged corporate governance lapses at the company, charges that have been rejected by the Bhatia group.

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow