Govt makes hallmarking of gold compulsory

The Cabinet on Wednesday cleared the proposal by approving amendments to the Bureau of Indian Standards (BIS) Act, 1986, that aims to expand the ambit of mandatory hallmarking to include more products, including gold

New Delhi: To protect consumers from unscrupulous jewellers, the government on Wednesday approved a proposal making hallmarking of gold mandatory, reports PTI.

The hallmarking of gold, which is voluntary in nature at present, is a purity certification of the precious metal. The Bureau of Indian Standards (BIS), under the consumer affairs ministry, is the administrative authority of hallmarking.

The Cabinet, headed by prime minister Manmohan Singh, cleared the proposal by approving amendments to the Bureau of Indian Standards (BIS) Act, 1986, that aims to expand the ambit of mandatory hallmarking to include more products, including gold, sources said.

The BIS (Amendment) Bill, will empower the government to bring in compulsory certification regime any article and/or process that it considers necessary from the point of view of health, safety, environment and prevention of deceptive practice, they said.

At present, about 77 items, including cement, mineral water and milk products, are certified through mandatory hallmarking under the BIS Act for conformity with expected quality levels.

The BIS hallmark, a mark of conformity widely accepted by the consumer, bestows the additional confidence to the consumer on the quality of products like gold jewellery.

Besides mandatory hallmarking, the amendments moved by the consumer affairs ministry also seek to introduce registration of relevant standards as an alternative mechanism to the compulsory certification regime to facilitate growth of sunrise sectors like IT and biotechnology and protect consumers from spurious and substandard imports.

It also aims to strengthen the penal provision for better and effective compliance with the provision of BIS Act.

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Govt approves RIL’s $1.5 billion KG-D6 satellite field plan

The investment plan, which will help boost falling output in the Krishna-Godavari Basin KG-D6 block, has been pending with the authorities for two years and it took some prodding from top government functionaries for it to be cleared

New Delhi: The government on Tuesday approved Reliance Industries’ (RIL) $1.529 billion investment plan for developing four satellite fields in the flagging KG-D6 block after sitting on the proposal for months, reports PTI.

The investment plan, which will help boost falling output in the Krishna-Godavari Basin KG-D6 block, has been pending with the authorities for two years and it took some prodding from top government functionaries for it to be cleared.

The KG-D6 block oversight committee, which includes officials from the oil ministry and its technical arm, the Directorate General of Hydrocarbons (DGH), met for the third time in three months on Tuesday to finally approve the proposal, sources privy to deliberations at the so-called Management Committee (MC) meeting said.

The MC approval, which is the final approval an operator needs before beginning work, however, puts a cap on the cost of developing the four fields that surround the currently producing Dhirubhai-1 and 3 (D-1 & D-3) fields in the KG-D6 block.

The cost cannot vary by more than 15%, they said, adding that the investment proposal was signed by the three partners in the block—RIL, UK’s BP Plc and Niko Resources of Canada—and the DGH representative, while the oil ministry official is likely to sign it in the next couple of days.

The MC had at its two previous meetings in November and December refused to approve the field development plan (FDP) for the Dhirubhai-2, 6, 19 and 22 (D-2, D-6, D-19 and D-22) fields after the government representative raised certain objections.

Sources said BP chief executive Bob Dudley last month wrote to oil minister S Jaipal Reddy stressing on the need for early approvals for the plan, without which one full year would be lost as the fair weather window in the Bay of Bengal only permits field developmental work between December and March.

The four fields can produce 10 million cubic metres of gas per day by 2016, which will help shore up output from the block, which has seen a 35% decline in production in the past 15 months.

The MC had in its last meeting on 2nd December refused to approve the investment plan, saying the proposal made in December 2009 was based on the prices of that year and new rates needed to be worked out at the current prices.

Sources said RIL and its partners, UK’s BP Plc and Niko Resources of Canada, felt reworking the rates would require several months and would lead to the loss of the weather window.

As a compromise, RIL agreed to cap spending on the four fields at $1.529 billion, plus or minus 15%.

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Banks to require up to Rs2.7 trillion under Basel III: Crisil

Crisil Ratings director Pawan Agrawal said public sector banks will account for bulk of the requirement and will need regular infusion from the government. As per the financial services firm’s report, domestic banks are comfortably placed to migrate to the new guidelines by March 2013

Mumbai: If the Basel III guidelines are implemented as per the proposed deadline set by the Reserve Bank of India (RBI), banks will require up to Rs2.7 trillion in fresh capital, reports PTI quoting a research by the leading financial services firm Crisil.

The report notes that the implementation of the new prudential norms will massively strengthen the domestic banks as it would entail capital requirements of banks to be increased significantly going up to 8%.

“Banks will need to raise equity capital of Rs1.4 trillion till March 2017 to meet their growth requirements, while complying with the guidelines. This requirement can turn out to be higher (by another Rs1.3 trillion) in case the investor appetite is low for non-equity Tier-I capital instruments,” Crisil Ratings director Pawan Agrawal said in a report here on Tuesday.

He further said public sector banks will account for bulk of the requirement and will need regular infusion from the government. As per the report, domestic banks are comfortably placed to migrate to the new guidelines by March 2013.

Last week, the RBI issued the final draft guidelines for a staggered implementation of the Basel III regulations beginning March 2013 through March 2017.

According to the proposed guidelines, the capital adequacy ratio will increase by 2.5% to 11.5% by March 2017. Also, for the first time, banks have to maintain a leverage ratio, which will determine the extent of leverage of a bank.

“The RBI norms are stricter than those proposed by the BCBS (Basel Committee on Banking Supervision), with respect to stipulated capital and leverage ratios being higher by 1% and 2% respectively, and the implementation period being shorter by two years,” the report notes.

Referring to profitability, Crisil Ratings director Ramraj Pai says higher quantum of equity capital and higher cost of non-equity capital can reduce banks’ return on equity over the long-term.

The report also notes that the banks are well placed to migrate to the Basel III requirements by March 2013 and comply with the minimum equity capital requirement of 4.5% as banks have a common equity capital ratio which is above the prescribed requirements.

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