Money & Banking
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 ( 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])


A new beginning in Beirut: Getting on with official business

Soon after settling down in Beirut, the writer got busy with an international trade fair in Zagreb. The 49th part of a series describing the unknown triumphs and travails of doing international business

The next couple of days were simply spent in reading the files and making my own notes of how we had been functioning in the office. During the first week we had a couple of visitors who were actually stopping over to look up the Casino de Luban and the Moula Rouge, rather than getting into serious business in the country itself.
The problem was not difficult to surmise; as even before I came I had done a little bit of home work and found that there were hardly any vessels that plied regularly between Indian ports and Beirut. Statistically, our export of engineering goods to Lebanon was small because of shipping difficulties and, more importantly, the merchants preferred European and Western goods in general. As for electronic goods, the only source they relied was Japan.
We were still making some headway in small items like diesel engines, hand tools, some building materials; most of these came on shipments to Aqaba, the Jordanian port from where they would be transhipped by trucks crossing Syria before reaching Beirut.
The first important thing that I did was to build up a strong and comprehensive library covering the widest range of products available, with all sorts of catalogues and leaflets. I needed the data of exporters and their experience in the Middle East. A format was designed and sent to the headquarters so that this could be circulated to all members and that they should respond directly to me. Our office, though operative for so many years, did not even have a post box for getting the mail, and postal delivery was very inadequate. As a first step, I persuaded Mr Parekh and his partner Suleiman if we could use their box number, and I could collect the mail at least twice a week from main post office.
Not being a strict vegetarian, it was possible for me to carry on till my family arrived, which they were scheduled in the first week of September.
It was during the Independence Day celebrations held in the Ambassador’s mountain residence I was able to meet a large number of Indians and became friendly with Casewa (STC), Pratap Goregaonkar, Anand Swaroop (Pest control) and a host of other Indian merchants from the community.
A large percentage of Indian merchants were involved in the jewellery trade; others were in general arts, antiques; some others like MS Dewan and Patel were regular importers and agents for Indian goods, some of which were engineering in character.
Visiting the market was done in the afternoon, which was spread over a wide area. It started with builders’ hardware, hand tools, cast iron pipes, fittings and manhole covers in which India had made headway even in UK and USA, but some of the merchants told me that they would rather pay more and buy from OK foundries in Beirut because of quality and quick deliveries. The communication problem was the language; either they spoke Arabic or were reasonably fluent in French. With a little help from Rozine and reading a self-taught book, I began my study of Arabic with rudimentary knowledge of commercial conversation!
The response from the Indian exporters was overwhelming and we had hundreds of letters with all sort of details, catalogues, etc that I had asked for to set up a good information base. This kept me extremely busy and I was working alone, several days a week till late in the evenings.
In the last week of August, I received a telegraphic reminder about the trip that I was to make to attend the Zagreb International Trade Fair, on which day itself, the mail arrived giving full details, saying that our Foreign Officer at Dusseldorf could not make it because of sickness and I should go there instead. I tried to collect some info on this fair, while struggling with my Arabic.
My family arrived in the first week of September; fortunately, my wife had brought most essential items, and after introducing her to the neighbours, particularly Padmaben (Mr Parekh’s wife) and showing her the basic routes, I left on my trip to Zagreb after I had phoned the commercial counsellor if he needed anything from Beirut. I was surprised to hear that there were hardly any oriental/Asian vegetables and they were getting fed with cabbage and potatoes so I carried a variety of with me.
From Beograde (Belgrade) airport, I took a coach to the embassy and was met by NP Alexander, an extremely knowledgeable and cooperative officer, with whose guidance I arrived in the Central railway station to take a berth, for my onward journey to Zagreb, where I arrived next morning.  From there I went straight to the fair grounds and met one Mr Gandhi and Mr Bhansali, both of whom were tea merchants. I met others like Rishi (from the Indian Fair Authority), Rama Sen from Calcutta who was a textile chemist and many others. With Mr Gandhi's help, I was able to get a sleeping accommodation in a family home, as hotels were full. The landlady gave me hot water for a bath; I mean a shower, for only three days a week!
The work was hectic in the Fair; I kept visiting various Yugoslavian companies, most of which were government-owned, and became friendly with Vasilka Bugonovic and her husband, both of whom worked in different organizations, but from whom I received a great number of enquiries.  Every night I would detail them and send them by airmail to my head office. It was here I was introduced to their national drink called Slivovitza, a kind of vodka; and it was Rama Sen who taught me the rudimentary principles of playing the roulette at the Zagreb Casino!
In those days, our daily allowance was seven English pounds a day (GPB 7) and we had to survive on this and save, if we could! But, as luck would have it, thanks to Rama Sen and my beginner’s luck, I generally made ten or twelve pounds a day, following which I would leave the casino, take a couple of friends and go out and eat.

We also befriended some of the fair visitors from India, who were lucky enough to have booked hotel rooms and we would take turns to go out and have a hot shower, as the weather was becoming bitter by the day and freezing by the evenings.
I returned back to Beirut and within the next twenty four hours a complete report was prepared and sent, courtesy of an Air India manager. Our Bombay office collected the same for onward despatch to the head office.
Though Rozine had done a good job of handling a few exporters who came to the office, we had literally tonnes of catalogues that were still being sorted out and indexed. I think, it took us three months more to say that our library had a good selection of catalogues, price idea and the range of products India could offer.
It was a satisfying experience. Meantime, my wife was able to arrange admission for our two sons to go to Silesian (Italian) school, which was at a walking distance from our residence; she took care to drop and collect them every day.

(AK Ramdas has worked with the Engineering Export Promotion Council of the ministry of commerce and was associated with various committees of the Council. His international career took him to places like Beirut, Kuwait and Dubai at a time when these were small trading outposts. From being the advisor to exporters, he took over the mantle of a trader, travelled far and wide, and switched over to setting up garment factories and then worked in the US. He can be contacted at [email protected].)


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