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Fitch cuts rating outlook of SBI, ICICI, PNB to negative

Fitch said while banks continue to have reasonable customer deposit base, domestic franchises and adequate capital, the NBFCs lack the funding advantage, which puts them more at risk during times of increased market volatility


New Delhi: Ratings agency Fitch on Wednesday cut credit rating outlook of 11 financial entities including State Bank of India (SBI), ICICI Bank, Punjab National Bank (PNB) and Axis Bank to negative from stable. The action follows the revision earlier this week of India's outlook to negative, reports PTI.

"The outlook revision of the financial institutions reflects their close linkages with the sovereign by virtue of their high exposure to domestic counterparties and holdings of domestic sovereign debt," Fitch said in a statement.

Separately, Fitch said it is also of the opinion that pressures are building generally on the stand-alone credit profile of these institutions which will negatively impact viability ratings (VRs), given India's weakening economic and fiscal outlook, slowing business reforms and inflationary pressures that in turn could put further pressure on their future asset quality. VRs of banks with concentrated exposures to problematic sectors could be impacted more, it added.

The list of downgraded entities include six government banks (including an international banking subsidiary of a government bank), two private banks. These include Bank of Baroda, Bank of Baroda (New Zealand) Ltd (BOBNZ), Canara Bank, and IDBI Bank.

Besides two wholly owned government institutions -- Export-Import Bank of India (EXIM) and Housing and Urban Development Corp Ltd (HUDCO) have also been similarly downgraded. In addition, the outlook of IDFC Ltd and Indian Railway Finance Corp Ltd (IRFC) outlook has also become negative.

However, Fitch said the banks continue to have reasonable customer deposit base, domestic franchises and adequate capital.

The non-banking financial entities, meanwhile, lack the funding advantage, which puts them more at risk during times of increased market volatility, it said.
Fitch also said sovereign support for both the large banks and 'policy-type institutions' is expected to remain strong, with the former benefiting from their large share of system assets and deposits and the latter from their association with the government.

According to analysts, the cut in the rating outlook may raise the cost of overseas borrowings for such institutions.

Earlier this week, Fitch lowered India's credit rating outlook to negative, citing corruption, inadequate reforms, high inflation and slow growth.

India faces an "awkward combination" of slow growth and elevated inflation, Fitch had said, adding that the country "also faces structural challenges surrounding its investment climate in the form of corruption and inadequate economic reforms".

Standard and Poor's (S&P) had in April lowered India's rating outlook to negative from stable. It also warned on 11th June that the country may be the first in the BRIC grouping to falter and its sovereign credit rating may slip below investment grade.


Chandigarh is the latest to have RTI library after Pune

An RTI library simplifies the process of seeking information and the citizens need not run from one department to another. Pune was the first city to have its own RTI library, now Chandigarh also has one

Although it is binding on the public authorities under Section 4 to put up maximum information in the public domain on the website; earmark a special visitors' cell where they can have access to information through the files stacked here; institute a Right to Information (RTI) library, they have been mostly indifferent to this crucial exercise, so important to a participative and pro-active democracy. Instead, it is citizens and RTI groups which have been striving to co-work with the local municipal corporations and inspire them to put information in the public domain.

Pune is a sterling example in the country, wherein campaigning for the suo moto disclosure by all government departments under Section 4, has been taken up vociferously by RTI activists. Leading RTI activist Vijay Kumbhar had relentlessly pursued the opening of the RTI library since 2009. He corresponded and interacted with the municipal administration as well as the city fathers to convince them of the benefit to citizens through a library (Section 4 b XV). His efforts resulted in India's first RTI library that has been named after one of the pioneers of RTI movement in India, Late Prakash Kardaley, on his third death anniversary in July 2010. Thereafter, the Pune Municipal Corporation (PMC) also became the first local self government body in the country to keep all its departments open for file inspection by citizens every Monday between 3pm to 5pm.

So, what is the utility of a RTI library in this age of the Internet? Firstly, not everyone is familiar with the Internet and secondly, the files you would like to see would not necessarily be those that have been uploaded on the website of the relevant public authority. Thirdly, you would have to necessarily apply under Section 6 of the RTI Act if you would like to have copies of any civic project and pay Rs2 per page. A library simplifies the process of seeking information and the citizen need not run from one department to another to get the information. The Prakash Kardaley RTI Library in Pune has copies of all resolutions passed in civic general body meetings and standing committee meetings, copies of various administrative decisions, copies of project reports and proposals, concessions, grants, copies of the Development Plan, maps, copies of the BPMC Act, etc. So, the library serves as a first hand resource for any curious citizen who may not want go through the RTI process and would like to mull over the details. It will also help researchers to get vital references for their analysis. While the dream of the RTI digital library as a consequence to this library has yet to be realised, around 300-400 citizens use it every month. Mr Kumbhar states that if such libraries are made in every government department, there would be lesser number of RTI applications, thus saving the extra headache to the Public Information Officers.

Hence, it is good news that last week, Chandigarh too followed suit by instituting the Dwarka Das RTI Library. In this case, the municipal administration was not in the picture. It has been formed purely with the laborious efforts of the members of the Servants of People's Society, Citizen's Voice and RTI Users' Association. Onkar Chand, chairman of the Servants of the Peoples' Society told the media that the objective was to make data available at one place for purposes of research and study. The next step was to make the entire data online, so that citizens in any part of the world can see them at the click of the mouse. The citizen groups have appealed to the people to deposit any documents they may have as a result of having used the RTI Act.  Information would be categorized as per the subject matter and department.

Indeed, more and more RTI libraries would surely enhance interest in citizens to seek information. Any queries for starting a RTI library anywhere in the country can be addressed to Vijay Kumbhar at [email protected] or Vinita Deshmukh at [email protected].

A rewind of the contents of Section 4 of the RTI Act

4. (1) Every public authority shall-
a) maintain all its records duly catalogued and indexed in a manner and form which facilitates the right to information under this Act and ensure that all records that are appropriate to be computerised are, within a reasonable time and subject to availability of resources, computerised and connected through a network all over the country on different systems so that access to such records is facilitated;  

b) publish within one hundred and twenty days from the enactment of this Act-
(i) the particulars of its organisation, functions and duties;  
(ii) the powers and duties of its officers and employees;
(iii) the procedure followed in the decision making process, including channels of supervision and accountability;
(iv) the norms set by it for the discharge of its functions;
(v) the rules, regulations, instructions, manuals and records, held by it or under its control or used by its employees for discharging its functions;  
(vi)  a statement of the categories of documents that are held by it or under its control;  
(vii) the particulars of any arrangement that exists for consultation with, or representation by, the members of the public in relation to the formulation of its policy or implementation thereof;  
(viii) a statement of the boards, councils, committees and other bodies consisting of two or more persons constituted as its part or for the purpose of its advice, and as to whether meetings of those boards, councils, committees and other bodies are open to the public, or the minutes of such meetings are accessible for public;  
(ix) a directory of its officers and employees;  
(x) the monthly remuneration received by each of its officers and employees, including the system of compensation as provided in its regulations;  
(xi) the budget allocated to each of its agency, indicating the particulars of all plans, proposed expenditures and reports on disbursements made;  
(xii) the manner of execution of subsidy programmes, including the amounts allocated and the details of beneficiaries of such programmes;  
(xiii) particulars of recipients of concessions, permits or authorisations granted by it;  
(xiv) details in respect of the information, available to or held by it, reduced in an electronic form;  
(xv) the particulars of facilities available to citizens for obtaining information, including the working hours of a library or reading room, if maintained for public use;  
(xvi) the names, designations and other particulars of the Public Information Officers;  
(xvii) such other information as may be prescribed; and thereafter update these publications every year;

c) publish all relevant facts while formulating important policies or announcing the decisions which affect public;

d) provide reasons for its administrative or quasi-judicial decisions to affected persons.

(2) It shall be a constant endeavour of every public authority to take steps in accordance with the requirements of clause (b) of sub-section (1) to provide as much information suo motu to the public at regular intervals through various means of communications, including internet, so that the public have minimum resort to the use of this Act to obtain information.  

(3) For the purposes of sub-section (1) every information shall be disseminated widely and in such form and manner which is easily accessible to the public.

(4) All materials shall be disseminated taking into consideration the cost effectiveness, local language and the most effective method of communication in that local area and the information should be easily accessible, to the extent possible in electronic format with the Central Public Information Officer or State Public Information Officer, as the case may be, available free or at such cost of the medium or the print cost price as may be prescribed.  

Explanation-For the purposes of Sub-sections (3) and (4) 'disseminated' means making known or communicated the information to the public through notice boards, newspapers, public announcements, media broadcasts, the internet or any other means, including inspection of offices of any public authority.

(Vinita Deshmukh is the editor of Life 365 (www.life365.in). She is also the consulting editor of Moneylife, an RTI activist and convener of the Pune Metro Jagruti Abhiyaan. She is the recipient of prestigious awards like the Statesman Award for Rural Reporting which she won twice in 1998 and 2005 and the Chameli Devi Jain award for outstanding media person for her investigation series on Dow Chemicals. She co-authored the book "To The Last Bullet - The Inspiring Story of A Braveheart - Ashok Kamte" with Vinita Kamte. She can be reached at [email protected])


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