Mohan Jayaraman, MD, Experian Credit Information Co of India spoke on the role of a credit bureau, understanding credit rating and the consequences of a bad credit score
Moneylife Foundation conducted yet another successful and highly informative seminar on financial literacy. The event, which again witnessed a packed audience, was held at the International Centre, Goa. The first few sessions were conducted by the Moneylife Foundation trustees, Sucheta Dalal and Debashis Basu. Mohan Jayaraman, MD, Experian Credit Information Co of India spoke on the role of a credit bureau, understanding credit rating and the consequences of a bad credit score in a unique session titled ‘Credit Crossroads’.
Even today, many people are unaware about credit bureaus and the way they function. These organizations collate information on an individual's finances and assign a credit score to each person, and this consumer information is provided to banks and other financial agencies. The credit information report is an individual's loan repayment track record. Mr Jayaraman also emphasized the need to maintain a good credit history record by settling repayment matters with banks and lenders on time.
He stressed the importance of having a healthy credit score and how this is assigned. He explained what constitutes a credit history and how one can improve upon his score.
"If you regularly check your credit history, you could spot mistakes in case there are any, and you can contact your bank, or lender, to correct them," he added. He also busted some credit myths and clarified what is not included in a credit report.
In the session he identified several life events that we are likely to face as individuals and how to deal with our finances, especially our credit/ borrowings during those times—for example, if one plans to buy a house with a bank loan. He said one should check out the interest rates of the banks prior to applying and then when one has shortlisted a particular bank he should apply to avoid making multiple ‘enquiries, which could affect the credit score. Mr Jayaraman also focused on life events that are more likely to be faced by women. In the same way he spoke of other different life events like getting married, in case of a serious illness, divorce, etc.
For young students and the youth, he focused on the importance of a credit score when they plan to go ahead with further studies or in their first job. Many apply for an education loan and this becomes the foundation of their credit history; therefore they should manage it carefully.
In case one has been turned down for a loan they should stay calm and find out the reason for rejection. If the lender refuses a loan on account of a low credit score one should apply for a copy of their credit report to see where the fault lies and should try to rectify it immediately.
Mr Jayaraman pointed out that different credit bureaus had different ways of evaluating credit history and assigning scores, but it depended on the banks—how they used the information to grade the viability and reliability of the credit seeker. He underlined the need to settle all matters with banks and other lenders to ensure that the credit history is more accurate.
He said it was necessary to have a good credit history record, as it would help getting a loan easier and also prevent “identity theft”. In the session he also discussed on how one could manage the credit report and get it corrected in case of any error.
The RBI is expected to continue to buy bonds heavily in the coming fiscal year to help smooth the way for the government's increased borrowing
Mumbai: The Reserve Bank of India's debt purchases in the current quarter have come as a blessing for state-run banks, which are making large profits on the transactions, reports PTI.
The problem, analysts say, is that they are not using those profits to buy at government bond auctions. That, in turn, is keeping yields elevated and making it more costly for the government to fund its huge fiscal deficit.
The RBI has bought about 1.13 trillion rupees ($22.6 billion) of bonds in 12 rounds of bond purchases through open market operations since late November, aiming to ease tight cash conditions and make room for banks to buy the bonds the government is selling.
In theory the RBI's purchases should pull down yields. But this has not happened, in part because of the reluctance of state-run banks to load up on government paper ahead of next Friday's budget and the RBI policy announcement the day before.
"There is strong resistance for the 10-year bond yield below 8.20% as no buying is coming from public sector banks," said a dealer with a foreign bank in Mumbai. The yield on the 10-year government bond has risen 15 basis points since the start of February as rising oil prices dampened expectations of an interest rate cut in March.
Most of the bonds that the banks are selling to the RBI are less-liquid securities that are normally held to maturity. The fact the RBI is targeting these bonds has resulted in a windfall for the banks and will help banks avoid showing losses on these bonds when they close their books at the end of the fiscal year on March 31.
Banks can sell up to 5% of their held-to-maturity bonds without the need to declare it on their balance sheet. Bonds sold through an OMO do not need to be declared at all. "The net effect will be positive (for them)," said Anjan Barua, deputy managing director at government-controlled State Bank of India, the country's biggest lender.
In meantime, the banks are avoiding buying heavily at auctions to prepare for an expected jump in borrowing by the government to be announced in the 2012/13 budget. "The idea is to sit light before the budget because yields may be higher three months from now," said a trader with a state-owned bank.
A Reuters poll last week showed the government is expected to announce total borrowings of Rs5.3 trillion for the new fiscal year, up from Rs5.1 trillion in the current year.
However, many in the market expect that borrowing figure to rise over the course of the year, just as it did this year. Some traders expect the 10-year yield to rise to 8.50% by the end of March, a level last seen in early January, if the central bank does not cut interest rates next week.
The RBI is expected to continue to buy bonds heavily in the coming fiscal year to help smooth the way for the government's increased borrowing.
But it will be more difficult for banks to turn a profit in the months ahead because they will have to start buying bonds to meet statutory requirements for the new year and yields are likely to rise, dealers said.
What is happening on the west coast of India lately with the MV Enrica Lexie, in and around Kerala, defies all logical explanation. Except one big one—the crew in this case happens to be European, not third world
At a modest estimate, there will be over 120 ships of all sizes, shapes and flags “under arrest” for a variety of reasons on the Indian coast. There will be a full crew, or at the bare minimum, a skeleton crew with the essential seafarers onboard. Stranded, variously, often in terrible conditions.
Six crew members of the MV Cosco Busan, involved in an incident where the huge container ship slammed into the Bay Bridge connecting San Francisco to Oakland in November 2007, are still detained in the US only to give evidence despite the conviction of the American pilot and attribution of neglect to various authorities ashore. The ship itself was renamed the MV Hanjin Venezia and sailed out a month after the incident with a fresh crew, after repairs.
In the case of the MV Rena, which ran right onto the Astrolabe Reef in New Zealand at full speed a few months ago, the master and the second officer are being held in custody while the ship itself eventually broke up. Laws in the Antipodes, however, were rapidly changed to assign liability and responsibility to not just the ship’s complement but also the owners, operators, charterers, managers and agents.
And there are thousands of cases like this all over the world. Ships do suffer unfortunate incidents, loss of life does take place, and investigations continue. The criminalisation of seafarers is nothing new—and it is only getting worse.
(My own name shows up on some police records in a particular Far Eastern country only because I was the duty officer—at the ripe old age of 18—when all of about 75 litres of diesel overflowed from my ship into the sea. I was taken ashore, finger-printed, photographed, provided with dinner, posed for more photos for the local press, was suitably jeered at by some more local people for local television the next day who then posed for more photos with me and shook my hand and invited me to their homes, and was then brought back to the ship in a police car, with a small doll as a gift. Over 30 years later, in transit an airport in that country, in the course of the usual passport check, the immigration officer suddenly spotted this police record, froze for a moment, then let out a big smile, named the ship, the date, the port and all the other relevant details, asked me if I was the same person, showed me my own photograph taken 30 years ago, and then waved me through.)
But what is happening on the west coast of India lately with the MV Enrica Lexie, in and around Kerala, defies all logical explanation. Except one big one—the crew in this case happens to be European, not third world like in all the cases listed above.
Enough has already been written about the St. Antony/Enrica Lexie incident, but more facts emerge every day, which point towards behaviour which is at the very least, surprising. The not inconsiderable might of the Vatican, San Marino, Italy and the European Union (EU) itself is bearing down using a vast variety of pressure points in India in such a way that it is breath-taking for its brazen nature. All sorts of threats are being held out against people of Indian origin in Italy by not just the loony right-wing, but also by ministers and others, including suggestions of springing the accused free by means of a raid.
What is most amazing is the information that the armed mercenaries on board, who claim to be disciplined soldiers from Italy’s most prestigious San Marco regiment, were not just being paid a hefty per-diem for their services in addition to their salary, but were also assured a bounty for each documented and confirmed ‘kill’. Like standard issue contract killers out on ‘supari’. This writer, incidentally, has been referring to these armed guards as ‘mercenaries’ from the start for just this reason—soldiers are not promised cash awards for killing other people, civilians especially.
Unlike what the spin doctors would have us believe, this incident has nothing to do with international waters, UN resolutions or saving a ship from pirate attacks.
It is simply a crime committed on Indian territory—the MV St Antony. This had everything to do with, in the first case, a bounty to be collected and shared for killing anybody and then labelling them pirates. And in the second case, to establish a very sinister and colonial approach towards what the Italians have always called the “Mare Nostrum”, or domination of the seas at any cost. That’s what needs to be taken very seriously by those who are responsible for India’s military and economic security.
The subsequent case involving the mid-sea collision between another fishing vessel, the Don-1, and the MV Prabhu Daya, is also moving into territory that is simply unbelievable. But here are the logical explanations which are filtering through:
# The “night orders” specifically laid out that a course and distance well away from the Kerala coast was to be maintained. However, it appears as though the second officer, who hails from Trivandrum, quietly brought the ship closer to the coast to raise a mobile phone signal. If only more ship-owners would provide basic internet facilities on board ships, this risk would be reduced vastly.
# After the collision, it appears as though the bridge did inform the master, but then a decision to scoot away was jointly taken. The records of suspicious movements and course alterations have been variously sourced. This is where an accident or negligence becomes a crime.
# At some stage on the voyage back to Chennai, which in itself is not fully explained when Tuticorin or Kochi would have been more logical choices, the second officer was given what is known as a “blanket party”, trussed up, and thrown overboard.
# A missing/Man Overboard report was then filed, at which point a search and rescue operation was launched and some Sri Lankan fishermen found the second officer.
# The Prabhu Daya is technically flying under the Singapore flag for tax haven reasons, but is totally owned and controlled out of India, which is another aspect of Indian shipping that has to be explained separately.
There are much larger economic issues at play here, and some hard decisions will have to be taken, as far as protecting the Indian coast, Indian waters and Indian assets in Indian waters are concerned.
It is much beyond the ship and fishing vessel issues on the Indian Coast—that can be resolved to a large extent by directing all ships not specifically making Indian ports to stay far away, by imposing specific traffic separation schemes.
The larger issue is that a perception about how unsafe the Indian coast was is fast being sought to be shown as being a fact by way of these incidents, and the heavy publicity as well as pressure from developed countries is only accentuating matters, while India as a country chooses to sit back and not do anything. The issue of Gujarati fishermen being kidnapped in hundreds by Pakistani forces, or Tamilian fishermen being slaughtered by Sri Lankan forces are never brought up or resolved by the Indian government the way they should be.
In these cases, however, the fact that Kerala is a state where high literacy levels as well as evolved sentiments of what are human rights and what is simply incorrect, means that such issues shall be taken to logical conclusions.
The MV Enrica Lexie case must be approached as one which involves contract killing by mercenaries. Nothing less. Either that, or be forever marked as a weak economic power, unwilling to take a stand for itself in a world where of late, nothing is more important than that.
(Veeresh Malik started and sold a couple of companies, is now back to his first love—writing. He is also involved actively in helping small and midsize family-run businesses re-invent themselves. Mr Malik had a career in the Merchant Navy which he left in 1983, qualifications in ship-broking and chartering, a love for travel, and an active participation in print and electronic media as an alternate core competency, all these and more.)