Finance minister Pranab Mukherjee's statement comes at a time when the political turmoil in places like Libya and Bahrain has taken global crude prices to over $100 dollar per barrel. India imports nearly two-third of its oil requirements from the region, he added
New Delhi: Finance minister Pranab Mukherjee today said the country was concerned over the ongoing turmoil in Middle East and North Africa as it imported two-third of its oil imports from the region, reports PTI.
"If you look at our oil requirement...out of 100 million tonnes imported last year, 67 million tonne or two-thirds came from Middle East alone," he said in the Rajya Sabha while replying to a debate on the Finance Bill.
"If the situation remains unstable there, it is quite natural for anyone to express concern and to hope and to try, if possible, to restore normalcy, peace and stability in the region because our vital interests are linked to that."
He also pointed out that there were six million Non-Resident Indians (NRIs) in the Middle East.
Mr Mukherjee's statement comes at a time when the political turmoil in places like Libya and Bahrain has taken global crude prices to over $100 dollar per barrel.
Crude prices had touched a 30-month high of $120 per barrel last month following unrest in Egypt and Tunisia.
In his reply, the finance minister also said that increase in global commodity prices was a reality to be lived with.
"...Why did I refer to the crisis in Middle East or Japan...? Not to find a cover to have some excuse that the prices will go up. It is not that. Today my primary concern is about the availability... it is not an excuse," he said.
Experts are apprehensive about disruption of supplies from Libya, a major oil exporter and OPEC member, on account of fighting between government forces and rebels.
India imports almost two-thirds of it oil requirement and state-run firms have been suffering losses on account of the huge subsidy bill.
While the government deregulated petrol prices last year, diesel continues to be on the regulated list. If the current spurt in oil prices continues, the government may be either forced to pass on the burden to consumers or risk inflating its deficit.
According to experts, the government is expected to take a decision on diesel price deregulation after assembly elections in four states and one Union Territory, scheduled for April-May, are over.
The committee, chaired by M Damodaran, has prepared the report. But members of the panel (a few top banking luminaries are on its board) are not aware of when the report will be finalised and whether there are any changes. Mr Damodaran, however, says that he is in the process of redrafting the report and that “it should be out in the next ten days”
A committee set up by the Reserve Bank of India (RBI) to look into the issues of customer services, has prepared its report and has been waiting for the final take from Mr M Damodaran, head of the committee.
Despite the report being ready, it has not been finalised for reasons best know to Mr Damodaran, say informed sources.
In fact, because of the long silence, the committee members are not even aware if there will be further meetings and modifications to their recommendations.
According to sources, the report has apparently been submitted in late January to Mr Damodaran and the committee is waiting for his final go-head.
"After submitting the report to Mr Damodaran in January, we are also waiting for the report to be released and we are not aware when it will be released," one of the members of the committee told Moneylife.
Ashok Rawat, one of the members of the committee and Hon Secretary of the All-India Bank Depositors' Association (Mumbai) had earlier confirmed to Moneylife that the report was supposed to be released in mid-February.
"The Damodaran Committee will table the report on customer services by the 15th of this month. If the logistics are properly taken care of, we may even see the report being released earlier-before the 10th of this month," Ashok Rawat had told Moneylife on 7th February. (See: Damodaran Committee may release final report on customer service in banks by mid-February )
However, a senior RBI official informed that "the report is being finalised."
"The committee is preparing the report and it will be finalised within the next one month," P J Mathkar, assistant general manager, customer service department (from RBI's central office, Mumbai), told Moneylife.
Kaza Sudhakar, chief general manager, customer service department, RBI and member-secretary of the committee refused to offer any comments, and asked Moneylife to speak to the head of the committee (Mr Damodaran).
In response to our query, Mr Damodaran said "All we have just now is a draft report, or working paper. This is the first important report on the customer services after the MN Goiporia report. Our committee met a lot of stakeholders and we want to make sure that their views are properly represented in the report. I am in the process of redrafting it and the report should be out in the next ten days."
According to our sources, banks do not want the report to be released as it has recommended many pro-consumer suggestions, which will increase pressure on banks for better customer services.
The committee is expected to undertake a strict review of the existing system of the Banking Ombudsman Scheme and attending to customer service in banks, including the approach, attitude and fair treatment to customers from retail, small and pensioners segments. The committee was also asked to evaluate the existing system of grievance redressal mechanism prevalent in banks, its structure and efficacy and recommend measures for expeditious resolution of complaints.
The committee may also lay down a suitable timeframe for disposal of complaints including the last escalation point within that timeframe.
M Rajyalakshmi Rao, former member, National Consumer Disputes Redressal Commission, New Delhi; MV Nair, chairman, Indian Banks Association and CMD, Union Bank of India, Mumbai; BM Mittal, CEO, BCSBI, Mumbai; MS Sundara Rajan, former CMD, Indian Bank, Chennai and S Gopalalakrishnan, former Banking Ombudsman, Chennai, are the members of the committee.
Reliance Communications (RCom) is one of the stocks that are probably most widely held by retail/HNI investors. They should give up hope now
From a high of Rs844 that it hit in January 2008, Reliance Communications (RCom) has crashed to below Rs75 in March 2011. A lot of retail investors are holding shares in this stock, bought at different levels, hoping that it would come back some day. For it to reach its previous high, the stock would have to rally by 673%. This is a pipe dream.
Given the fact that it belongs to the media-hyped ADAG group, high competition in the telecom markets, regulatory probes which never seems to end and poor financial performance, the chances of RCom coming back to anywhere near its previous high is remote.
If one is holding RCom in anticipation that it will come back to its previous highs and rise some 673%, only a miracle could possibly lead to a 673% rise in a company's profitability whose profits over the last trailing 12 months have fallen by over 54%.
Moreover, it is perhaps one of the most talked-about stocks across all the business news channels and there exists a support and resistance theory at every Rs15-Rs20 level, just trapping investors at every fall and compelling them to average more and more.
Why RCom Should Be Shunned
• Starting at the same level as Bharti Airtel, RCom's net profit has gone up by only around 30% in the past four years compared to a more than a 100% rise for Bharti.
• The reason for the fall in RCom's share price, which has fallen a lot faster than profits, is that the company has being in continuous news for a number of years in relation to some or the other probe. Whether it be the 2G scam probe, tax evasion probe from the I-T Department, probe from the DoT (Department of Telecommunications) for misrepresenting its revenues, etc.
A Google search with the keywords "RCom, probe and news" will give you a lot of interesting hits.
• The company has complained regarding bear cartels which are "hammering its share price" and often cries foul, approaching SEBI (the Securities and Exchange Board of India) and other regulatory authorities. However, one should understand that even that market is far superior to any bull or bear cartels and cannot allow a good company's stock to go down from Rs844 to Rs75 unless there is some structural problem in the company.
• In terms of corporate governance, ADAG group's stocks are by far among the worst in India, and this leads to absolutely no interest by foreign or domestic institutions in RCom. Their holding over the last three years have also come down and are expected to come down with every rally in shares.
• Its total debt in its books have grown up from around Rs17,000 crore to around Rs30,000 crore as on March 2010 (excludes debt for 3G spectrum).
• Return on Capital Employed (ROCE) of a pathetic 8% for FY10 in the same industry where the biggest competitor Bharti Airtel operates at an ROCE of over 28%.
• With Mobile Number Portability coming in, most of its CDMA customers who were somewhat stuck with an ageing technology and somewhat disappointing network and customer service can now switch to a plethora of GSM service providers.
To summarise, RCom is like a dead stock in an industry whose growth is gone. It's better to avoid such a stock; the market offers far better investment opportunities rather than buying or even continuing to hold RCom.