Government allows further export of cotton

“A decision has been taken to remove suspension of cotton exports registration. Registration of cotton exports will be allowed by the government,” commerce and textiles minister Anand Sharma told reporters

New Delhi: The government on decided to allow further cotton exports in 2011-12 marketing year ending September as production estimates have been revised upwards, reports PTI.

“A decision has been taken to remove suspension of cotton exports registration. Registration of cotton exports will be allowed by the government,” commerce and textiles minister Anand Sharma told reporters after meeting agriculture minister Sharad Pawar.

Last month, the government had lifted the ban on exports but decided not to issue fresh registration of certificates (RCs). It only allowed shipments for which RCs were already issued before the ban was imposed on 5 March 2012.

Congress MPs from Gujarat led by Ahmed Patel, political secretary to UPA chairperson Sonia Gandhi, and state pradesh congress chief Arjun Modhwadia recently met prime minister Manmohan Singh, finance minister Pranab Mukherjee and Sharma and sought the removal of restrictions on cotton exports.

The decision also comes against the backdrop of Mr Pawar writing to the prime minister objecting to the government's export policies towards certain farm items like cotton, sugar and milk.

Mr Sharma said there would not be any quantitative restrictions on registration for exports, but the group of ministers (GoM) would review the situation in two-three weeks.

“We have accepted agriculture ministry’s data on cotton production. Based on revised estimates of the Cotton Advisory Board (CAB) as well as the agriculture ministry, we have decided to remove suspension on registration of cotton exports,” he added.

Earlier this month, the Cotton Advisory Board had revised production estimates upwards to 347 lakh bales from 345 lakh bales for the current season. It has also revised domestic consumption estimates downwards to about 250 lakh bales from 260 lakh bales earlier.

The agriculture ministry has revised upwards cotton output to 352 lakh bales from 340.8 lakh bales.

Before the ban was imposed, the government had issued RCs for about 130 lakh bales.

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RBI moots higher FDI cap in insurance sector

“There may be a need to relook at the sectoral caps (especially in insurance) and restrictions on FDI flows (especially in multi-brand retail),” RBI said in a study

New Delhi:  The Reserve Bank of India (RBI) has said there is a case for hiking foreign direct investment (FDI) cap in insurance and some other sectors in view of India's growing integration with the global economy, if local economic and political scenario permits, reports PTI.

“... as the economy integrates further with the global economy and domestic economic and political conditions permit, there may be a need to relook at the sectoral caps (especially in insurance) and restrictions on FDI flows (especially in multi-brand retail),” RBI has said in a study, released earlier this month, on FDI flows to India.

The study said there are certain sectors, including agriculture, where FDI is not allowed, while sectoral caps in some sectors such as insurance and media are relatively low compared to the global patterns.

“In this context, it may be noted that the caps and restrictions are based on domestic considerations and there is no uniform standards that fits all countries,” it added.

RBI said the demands for raising the present FDI limits of 26% in the insurance sector may be reviewed taking into account the changing demographic patterns as well as the role of insurance companies in supplying the required long term finance in the economy.

Commenting on the need for a higher FDI limit in the insurance sector, Monish Shah, senior director of consultancy giant Deloitte in India, told PTI that insurance is a high gestation, capital intensive business and the sector needs fresh capital to fund its existing businesses and expansion.

“Increased capital will benefit the industry as a whole by increasing the insurance access and penetration in the country. Increase in FDI in insurance from a strategic minority to a dominant minority is one of the reforms which are being eagerly awaited by several industry players; as despite the slowdown, Indian insurance sector remains attractive in the long term,” he added.

Noting that life insurance industry is long-term in nature and requires years of capital infusion, MetLife India’s managing director and country manager Rajesh Relan said: “Capital infusion through FDI will help grow the industry by increasing customer coverage with a range of innovate products that are clearly focused on today’s uninsured.”

He further said that growth of insurance sector would also help in developing other sectors and providing capital to the government for long-term infrastructure projects.

 The RBI study found that sectoral cap was higher than India even in China for insurance and a few other sectors, while countries like Brazil and Russia have higher sectoral caps than India across most of the sectors.

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Economy & Nation Exclusive
HDFC Bank clocks better results than ICICI Bank and Axis Bank

A Moneylife research compares three banks and finds out that HDFC Bank has come out at the top while Axis Bank has more work to do to get ahead of its key rivals

A comparison between Axis Bank, HDFC Bank and ICICI Bank shows that Axis Bank leaves a lot to be desired while HDFC Bank has trumped both Axis Bank and ICICI Bank. The table below shows the comparison of the three banks, using key parameters. The green bars indicate the best in that category, while red indicates the opposite. 

Axis Bank’s loan growth was slower than HDFC Bank, at 19% growth (Rs1,69,760 crore). ICICI Bank recorded the slowest credit growth, clocking only an increase of 17% (total advances at Rs2,53,728 crore) partly because it has the largest  advances portfolio. From the table above we see that HDFC Bank is the healthiest of the lot, topping in three out of five categories, while Axis Bank was worse in four out of five categories.

HDFC on the other hand recorded the highest Current Account-Savings Account (CASA) ratio (48.4%) indicating that it continues to find ways to access low cost funds to ramp up its growth. Due to higher CASA ratio and a robust 22% increase in advances, it had consolidated net profit of Rs5247, which is higher by 31.4% over last year. It also had a higher net interest margin (for the March 2012 quarter) of 4.2%, compared with 3.55% and 3.01% for Axis Bank and ICICI Bank, respectively. Net interest margin is the difference between interest earned and interest expended and is considered a key measure of a bank’s profitability. Only ICICI had highest net profit (Rs7,643 crore) than the other two, but it came at an expense of higher bad debts.

ICICI Bank had the highest Net Non-Performing Assets (NNPA) of 0.62% compared with just 0.25% and 0.20% for Axis Bank and HDFC Bank, respectively. Despite this, its Capital Adequacy Ratio (CAR) was a healthy 18.52%, compared to a measly 13.66% for Axis Bank and 16.5% for HDFC Bank.

It is interesting to note that Axis Bank’s bottomline was boosted by a 153% rise in trading profits, signifying increased risk taken to earn profits. Indeed, despite this, Axis’ profits would have stagnated but for a 10% decline in provisions, from Rs1,280 crore to Rs1,143  crore which helped the bank’s bottomline. However, fees—the jam for a bank—has increased by 25% year-on-year, to Rs4,727 crore. On the other hand, ICICI Bank’s fee income had declined from Rs6,707 crore in FY10-11 to Rs6,419 crore in FY12, a decline of over 4%. While HDFC Bank’s fees are not known from the latest filings, its “non-interest” (or “other income”) income stood at Rs5,243 crore, up 21% year-on-year.

Axis Bank restructured loans on its books stood at Rs3,060 crore, much of it from large and mid-sized companies (79% of restructured assets). It also provided for higher provision coverage ratio of 80.91%, higher than ICICI (80.4%), but lower than HDFC Bank (82.4%). ICICI Bank’s net restructured assets stood at Rs4,256 crore which is higher than Axis Bank thanks to its larger base. In HDFC Bank’s case, the quantum of restructured assets stood at 0.4% of the gross advances.

The banking industry is perceived to be going through difficult times due to low credit off-take in face of high interest rates and inflation. However, this perception could be incorrect given the extremely robust performance of HDFC Bank and ICICI Bank. The message from Axis’ performance is less clear since it is undergoing a transformation under the current CEO.
 

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COMMENTS

R KRISHNAN

5 years ago

Service level of all the banks are bad.Having dealt with many banks, service wise I think HDFC Bank is best among the worst. They at least
respond and take some steps to redress the problem.

Govind Shanbhag

5 years ago

Respected Shri Kumar Jee- I am extremely sorry I beg to differ from your views regarding HDFC bank. I have been visting all the three bank branches in Borivali -Mumbai and also other places. Customer service, body language of the officials, waiting time at the bank, courtesy I rate HDFC as the best. Axis used to be best, now they have started drifting like ICICI who were the victim of mass banking. Even in mutual funds, HDFC have scored better.

REPLY

Deepak R Khemani

In Reply to Govind Shanbhag 5 years ago

I'm sure you will get people who have different experiences with different banks, so an individual having a bitter experience with a branch of a particular bank is possible, I agree with you that Axis is now going the ICICI way after the wholesale import of top people who shifted from ICICI to AXIS.

R Nandy

In Reply to Deepak R Khemani 5 years ago

I am customer of both HDFC bank as well as ICICI Bank.My experience has been mixed with both of them.But,IMO HDFC has more robust systems and processes.They give higher importance to security. e.g Intenet Banking doesn't give NEFT/bill pay facility by default. ICICI also has major Internet banking security issues with phising/vishing
attacks.I can't elaborate on it here,but they seem to have major organizational lacunae with employee involvement due to which
these things happen.ICICI has massive online complaints for Netbanking fraud compared to HDFC.

HDFC also has higher accountability for customer service.Call back from Bank in case a call is disconnected in between.On the
contrary, I have experienced ICICI call centre agents disconnecting themselves.

KUMAR

5 years ago

HDFC BANK DOES LOT OF COVERT THINGS WHICH CUSTOMERS ARE UNAWARE OF & ARE TAKEN FOR A RIDE.
THEY TAKE OUT FIFO METHOD IN SB SWEEP ACCOUNTS. THEY LEVY ALL SORTS OF CHARGES FOR THEIR GAIN WHIC OTER BANKS DONT!

THEIR MODUS OPERANDI IN MANY THINGS AND FOR CUSTOMER GRIEVANCES ISNT IN GOOD STEAD.
THEIR NETBANKING IS A CONSTANT PAIN! IT DOENST EVEN SHOW YR OVERALL BALANCE!

THEY ARE A GLITTER/SHINE WITH NO REAL STUFF!

GIVEN THE OPTION, I PREFER NOT TO BE THEIR CUSTOMER!


REPLY

paresh

In Reply to KUMAR 4 years ago

I agree with Kumar's Point about the HDFC net banking, Its the most worst of all. To add a beneficiary,they take 12 hours, which is ridiculous at the time of urgency, even if for inter bank transfers. Best is CITI bank. much better than all.

paresh

In Reply to KUMAR 4 years ago

I agree with Kumar's Point about the HDFC net banking, Its the most worst of all. To add a beneficiary,they take 12 hours, which is ridiculous at the time of urgency, even if for inter bank transfers. Best is CITI bank. much better than all.

paresh

In Reply to KUMAR 4 years ago

I agree with Kumar's Point about the HDFC net banking, Its the most worst of all. To add a beneficiary,they take 12 hours, which is ridiculous at the time of urgency, even if for inter bank transfers. Best is CITI bank. much better than all.

paresh

In Reply to KUMAR 4 years ago

I agree with Kumar's Point about the HDFC net banking, Its the most worst of all. To add a beneficiary,they take 12 hours, which is ridiculous at the time of urgency, even if for inter bank transfers. Best is CITI bank. much better than all.

paresh

In Reply to KUMAR 4 years ago

I agree with Kumar's Point about the HDFC net banking, Its the most worst of all. To add a beneficiary,they take 12 hours, which is ridiculous at the time of urgency, even if for inter bank transfers. Best is CITI bank. much better than all.

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