Chief Economic Advisor Kaushik Basu said, “you cannot beyond a point, shelter the population from the global phenomena—which is increase in oil price”
New Delhi: Cautioning the Indian government against a roll-back of hike in petrol prices, Chief Economic Advisor Kaushik Basu on Friday pitched for increasing prices of diesel, kerosene and cooking gas, reports PTI.
In an interview to Karan Thapar’s television programme “Devil’s Advocate” on CNN-IBN, Mr Basu said increasing the prices of these three items should be done in line with the trend of global prices.
“Professionally in people’s interest, the answer is yes (diesel price deregulation). In fact for diesel, all the three items which you are talking about the under recoveries are now huge which means the government is subsidising to keep the price down,” he said.
When asked about the possibility of government rolling back petrol price hike in the view of widespread protests, he said: “Things can happen, but I hope it won't happen.”
More importantly, he added, the failure of the government to contain fiscal deficit to 5.1% of the GDP (gross domestic product) would have adverse implications on inflation.
“There will be a damage, if we make moves where there is risk that we will breach our fiscal deficit target... which means in the long run (there will be) higher prices in general”, he added.
The oil marketing companies (OMCs) on Wednesday increased the price of petrol by over Rs7.50 per litre in view of rising prices in the international market and falling value of the rupee.
On raising prices of other petroleum goods like diesel, kerosene and cooking gas, Mr Basu said, “you cannot beyond a point, shelter the population from the global phenomena—which is increase in oil price”.
Although the government has taken an in-principle decision to free diesel prices, it has not been able to implement it fearing political implications.
“Certain defaults including insider trading, front-running, failure to make an open offer, redress investor grievances and respond to the summons issued by SEBI, are excluded from the consent process,” the market regulator said on Friday
Mumbai: Taking a tough stand on insider trading and other serious offences, market regulator Securities and Exchange Board of India (SEBI) no Friday decided to exclude these violations from the consent order, a window available for settling disputes on payment of a fee, reports PTI.
The modified guidelines, issued by SEBI, also said that this window will only apply for offences committed two years prior to submission of application to SEBI for a consent order.
“Certain defaults including insider trading, front-running, failure to make an open offer, redress investor grievances and respond to the summons issued by SEBI, are excluded from the consent process,” SEBI said.
Besides, serious fraudulent and unfair trade practices, which have caused substantial losses to the investors, will also be kept out of the consent order.
“The new guidelines will give more clarity and transparency to consent order mechanism,” SMC Global Securities research head Jagannadham Thunuguntla said.
SEBI introduced consent settlement system in April 2007 with a view to cut down on its costs, time and efforts in taking up the enforcement actions. So far, the regulator has passed more than 1,000 consent orders.
According to the new guidelines, if an applicant has obtained more than two consent orders, he will not be eligible to file consent application for three years from the date of the last order.
As per the new guidelines, consent application would not be entertained before the completion of an investigation or inspection, SEBI said.
Besides, for pending proceedings, consent application would be considered only if filed after 60 days from the date of the service of the show cause notice, it added.
“All consent applications shall be accompanied with a non-refundable processing fee of Rs 5,000 per applicant...” SEBI said.
It further said that the High Powered Advisory Committee (HPAC) on consent orders will have the power to enhance or reduce the settlement amount according to the merit of the case or refuse to consider the case under the consent process.
It may also issue directives like disgorgement of ill-gotten profits, among others.
Prior to the new guidelines, SEBI could impose a penalty higher between Rs25 crore and an amount equivalent to three times the profit allegedly made by the suspected entity through insider trading or other manipulative activity.
The HPAC would consist of a chairman who shall be a retired judge of a high court and three other external experts, as may be decided by the board from time to time.
SEBI further said that in case of rejection of the consent application, no subsequent application with respect to the same default would be considered.
“The consent application shall be disposed of expeditiously, preferably within a period of six months from the date of registration of the consent application,” SEBI said.
The credit cards industry is showing revival signs with a spate new cards being launched and delinquencies written off by banks
The credit cards industry which was in doldrums since 2008 global economic crises is showing signs of revival, with a spate new cards being launched and delinquencies written off by the banks. SBI Cards, the country’s third largest issuer of credit cards, is targeting addition of one million credit cards to its current portfolio by 2014-15. According to the company, the rise of the credit bureaus is factoring its growth rate and tracking the recovery phase.
“The delinquencies are coming down mainly because customers are conscious about their credit card usage owing to credit bureau records. People are aware about the usage of credit cards. The average industry delinquency is about 4%-5%. We are lower than that. There is lot of consolidation in the industry. There is significant reduction in the issuance of the cards from past three years. Though from our perspective we have continued the issuance of cards and are bullish on the market,” said Kadambi Narahari, chief executive officer, SBI Cards—a joint venture between State Bank of India and GE Capital.
Recently, the HSBC Credit Card Monitor Survey revealed that the number of credit card holders in India declined to 21% from earlier 23% but the number of premium card-holders rose to 29% from 18% in 2011. According to a media report, HDFC Bank, has increased its credit card business to Rs14,259 crore during March 2012 quarter from Rs11,490 crore in same period last year. Kotak Mahindra Bank’s new cards acquisition has grown by 30%-40% in past three to four years. Earlier this week Citibank India launched its “Citibank PremierMiles Credit Card”, an airline agnostic card to tap the credit card business in the growing air travelling space.
Besides relying on credit bureaus on verification before issuing cards and reducing delinquency, SBI Cards also encourages people to convert their card spend into EMIs (equated monthly instalments) with attractive interest rates. “People feel comfortable to pay the amount in EMI. This helps us to reduce delinquency. Today our EMI portfolio is growing. It’s close to 30% of our total outstanding payments,” explained Mr Narahari.
According to the company, change in the customer attitude, emergence of retail and Internet, mobile commerce, rapid increase in terminalisation, which is expected to rise four times by 2014, will together result in increase in the number of credit cards and average spend on it. Currently SBI Cards has a total customer base of 2.1 million, out of total 17 million customers in the industry, with asset size of Rs2,300 crore and foot print in 50 Indian cities. It has around 13% of the current market share.
The company has various cards to its portfolio. It includes SBI Platinum Card, SBI Gold Card and SBI Secured Card, which is offered to SBI’s fixed deposit customers. It also had co-branded cards SBI Railway Card, in association with IRCTC, SBI SpiceJet Card and co-branded cards with Oriental Bank of Commerce, Karur Vyasa and Bank of Maharashtra. It offers 14 payment options to the customers.
SBI Cards is also aiming to expand in Tier II and III cites. Mr Narahari says that, “We have identified 50 such cities. Once we complete detailed verification. We will be ready to roll out, which could be similar to the expansion of FMCG companies. Three years from now we think Tier II and III cities would be about 20% of our total portfolio. This is will outpace Tier I in terms of growth rate.”
He also said that the currently the Indian credit card market interpenetrated. SBI Cards has adopted a 360 degree approach on grievance redressal. It is focusing on the usage of social media such as Twitter, Facebook and SMS channel apart from the traditional call centre based system of handling customer complaints. Mr Narahari says that, “On an average we resolve 30-40 consumer complaints posted on our Twitter handle and Facebook page.”