Companies & Sectors
Coal miners begin 5-day strike today

Unions including BJP-backed Bharatiya Mazdoor Sangh have joined together to go on strike for 5 days, affecting coal supply in many parts of India

 

7 lakh coal industry workers today joined together to go on a nationwide strike. In the biggest union action since 1977, this strike is being supported by all the major trade unions in the country, including the BJP-backed Bharatiya Mazdoor Sangh (BMS), Indian National Trade Union Congress (INTUC), All India Trade Union Congress (AITUC) and Centre of Indian Trade Unions (CITU) among others.
 
The strike has been called with a demand to roll back the process of denationalising the coal sector and to protest the proposed re-structuring and disinvestment of Coal India Limited.
 
India has had many coal supply shortages in the recent past, but the power sector has managed to scrape through. This strike will affect coal production of upto 1.5 million tonnes per day and is expected to hit power producers and cause blackouts.
 
Newly appointed Coal India Limited CMD Sutirtha Bhattacharya was quoted by PTI News as saying, "We are hopeful the situation would be resolved in an amicable manner. The precise impact of the strike would be known later and it would be premature to predict (the impact) at this juncture."
 
Power minister Piyush Goel is expected to meet union representatives to address their demands tomorrow. This meeting gains significance because as per reports, coal supply to the North and East of India are already stretched and being cash-strapped, these utilities would not be able to buy power, possibly causing wide-scale blackouts.

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Gyan Sangam: A well thought out plan but requires follow up action

Prime Minister Modi attended a retreat with India's top public sector bankers, we take a look at what came out of the two day event

 

Speaking at the bankers’ meet christened ‘Gyan Sangam’ at the National Institute of Bank Management at Pune on Saturday, Prime Minister Narendra Modi conveyed a his expectations from the banking sector. However, concrete steps to achieve the objectives put forth at the conclave are yet to be spelt out by the Government. 
 
The Prime Minister (PM) said that the banking sector of a country mirrors its economic rise. Japan and China had banks in the top ten banks of the world during their economic rise. He therefore called upon the banking fraternity to establish banks here which rank among the top banks in the world. 
 
Only one Indian bank figures among the 50 biggest banks of the world. SBI is ranked at 38, ICICI Bank is 99 and HDFC Bank 126, the second biggest among public sector banks (PSB) is Punjab National Bank, ranked at 189, followed by Bank of Baroda at 206. 
 
There were signs that a decision to merge some of the weak public sector banks with strong ones would be taken at the meeting. The Financial Services Secretary Sri Hasmuch Adhia said after the meeting, that each bank’s board would decide on consolidation and if it was commercially viable, the Government would respect such a decision. This means consolidation of banks appears to have been put on the back burner for the present.
 
The most important statement made by the PM was that banks would be run professionally and there would be no interference. He even said that the Govt. had no vested interest and that PSBs can derive strength from this fact. He made a distinction between interference and intervention. He said he was against political interference, but supports political intervention in the interest of the people. Political intervention would enable the voice of the common man to reach such institutions to ensure accountability, which was essential he said. Let us hope all this is put into practice by the political class and thus provide the banks with autonomy to function without any fear or favour. 
 
The PM also asked banks to develop dedicated teams to fight cybercrime. Though he did not elaborate on this subject, this is an area that calls for concerted action from all banks to ensure that customers of banks do not suffer for no fault of theirs. There is a need for the RBI to issue guidelines to limit the liability of banks’ customers in all internet frauds, which alone will create more confidence among the public to use technology in their day to day operations with banks. 
 
Without specifying how to improve the performance of banks, the PM said that with 81% of branches and 77% of deposits, the net profits of PSBs should improve from current levels of 45%. PSBs however have been reeling under the burden of bourgeoning non-performing assets that have affected their profitability to a considerable extent. In fact, Moneylife Foundation has already submitted a memorandum last month to the Prime Minister giving suggestions on how to improve the functioning of public sector banks.
 
 
Unfortunately, neither the Govt. nor the RBI had any immediate solutions to fight the menace of large value NPAs, except to say that big defaulters need to be booked quickly.
 
There is a need to provide a systemic cure to ensure that such large defaulters do not take banks for a ride by legally empowering the banks to remove the willful defaulters/ promoters from management of such companies, which alone can help the banks to quickly come to grips with recalcitrant borrowers. 
 
The PM in all earnestness exhorted the PSBs to be conscious of the directions in which the country is moving and work towards simplifying procedures to facilitate the common man. He also called upon banks to trust the common man. He asked the banks to take the lead in skill development for youth in a big way and to prioritize loans to students as this would be a very productive investment for the country. The Prime Minister called for an end to lazy banking and asked banks to take a proactive role in helping the common man.
 
However, the subject of improving the customer service and creating robust customer protection guidelines was conspicuous by its absence. Even the threat of bank employees going on an indefinite strike in the coming days, demanding wage settlement, did not appear to bother the powers that be. Let us hope that these sombre words of sympathy for the common man will be followed up by concrete action. 
 
Another important issue that the PM highlighted was the poor financial literacy in the country and called upon the banks to encourage competitions in schools on financial literacy, so that financial literacy is inculcated at an early age among the children as well. 
 
(The author is a banking analyst, writing for Moneylife under the pen-name ‘Gurpur’)
 

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COMMENTS

B. Yerram Raju

2 years ago

Private Banks have behaved no better and this has been proved when recession gripped the financial sector in 2008. US, UK and elsewhere, governments resorted to nationalisation of financial assets. If the public sector is not interfered with they have a good chance to perform as the trust can be leveraged for sound business and converting risk into business opportunity.
More importantly today, which Gyan Sangam did not choose to discuss is the machine taking over man in the financial sector. KYC is nothing but compliance with a set of documents to be kept on record. The Bank officers do not understand the customer or his needs. They today have become slaves of the computer. Every employee acts in absolute obedience to the instructions of the system because he has neither time nor interest in responding to the need of the customer/client.
Marketing officer markets the credit; System apprises the application and throws up the limit for sanction; laid down discretionary powers apply the sanction; the field officer/branch manager goes to the units to remind the due dates of installments; in desperate cases, they put up proposals to auction of assets under the SARFAESI Act. In regard to corporate entities, the proposals are discussed in cozy chambers; anticipated project returns as proposed by efficient chartered accounts are endorsed and the proposals go to the Boards for sanction. The boards have little time to go through the nitty gritty of things and they approve. When the monitoring reports are placed again before the Board, they hardly have time to scrutinise and raise relevant questions. The result is they get into the NPA group. When the NPA statement also reaches the Board, the one-day or half-day Board has little time to go into details of the voluminous papers before them and they fail to monitor them. When the NPAs touch the roof, everybody sheds crocadile tears as if the bank is a victim of circumstances in generating them.
Humanising banking is the need of the hour. The reforms should focus their attention here.

R.Asokkumar

2 years ago

Politics is always practice of tokenism. Even if two or three big deliberate defaulters are put behind bar or divested of control in their companies, you will see significant improvement in the NPA situation in PSBs.
-R. Asokkumar

Rajendra M Ganatra

2 years ago

Public sector banks (PSBs) are bust due to management moral hazard since the management exercises no control on the operations. Government interference though real, is more of an alibi. It is unlikely that a super board at the holding company level would fix the internal hemorrhage.

Today the young HDFC bank has higher market cap than the behemoth SBI. It is inconceivable that only the government interference is responsible for this.

Any entity to be efficient has to be controlled and run by people with stake in the entity. This is possible only with private sector, and privalisation of the banks is the only way forward keeping with the maxim that the government has no business to be in business.

Let the government operate special purpose institutions such as SIDBI and NABARD to meet the developmental needs. Let the commercial banks be in private sector domain.

When Medical Debts Become an Impossible Burden

Healthcare costs have become a major portion of everyone's expenditure and the proportion of savings it takes up as we age only goes up. At times these costs can become impossible to bear leaving few ways out.

 

When patients receive care at Heartland Regional Medical Center in St. Joseph, Missouri and don't or can't pay their bill, the nonprofit hospital uses its very own debt collection agency to file lawsuits against people and ultimately seize their wages.

 

Federal law allows creditors to garnish up to 25 percent of a person's paycheck to repay the debt, which for many is simply an impossible burden, ProPublica reporter Paul Kiel explains on the podcast. This is only exacerbated by the legal fees and interest tacked on after a suit is filed.

 

Listen to the special ProPublica Podcast here.

 

Nonprofits like Heartland comprise about 60 percent of American hospitals. They don't have to pay taxes -- essentially akin to a subsidy of several billion dollars -- and in return, these hospitals are supposed to care for those that don't have the means for insurance.

 

"What that means exactly is a little slippery," Kiel tells Editor-in-Chief Steve Engelberg. While these hospitals do have to offer reduced care, the law doesn't say how poor somebody has to be to get that care or how much the care has to be reduced. "So you see a large variation in the type of programs these hospitals offer."

 

And even though this process happens in the courts and is public, no one tracks how many hospitals sue their patients or how frequently, Kiel says. "That's one thing that we've been trying to bring to light ... hopefully that'll lead to more attention."

 

Courtesy: ProPublica.org

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