Under Arvind Mafatlal’s leadership, the group transformed into a conglomerate with interests in rubber chemicals, specialty chemicals and petro chemicals, besides the flagship textiles
Mumbai: Mafatlal Group patriarch and social reformer Arvind N Mafatlal passed away on Sunday at Chitrakoot in Madhya Pradesh after prolonged illness. He was 88, reports PTI.
He is survived by son Hrishikesh Mafatlal, who is the chairman of the Arvind Mafatlal Group, and daughter Maithili Desai.
A month ago, the ailing industrialist was flown in from Mumbai to Chitrakoot, as he wanted to spend his last days there.
The legendary industrialist played a prominent role in the post-Independence growth story of the country.
The Group, set up by his grandfather in 1905 in Ahmedabad as a textile mill, was primarily into textile business till Arvind took over in 1954.
Under his leadership, the group transformed into a conglomerate with interests in rubber chemicals, specialty chemicals and petro chemicals, besides the flagship textiles.
The rubber chemicals business NOCIL, set up in collaboration with Royal Dutch Shell and Hoechst Mafatlal at Thane is one of the largest rubber chemicals companies in the country and a leading exporter.
Another company Navin Flourine is the largest manufacturer of flouro chemicals in the country. In textiles, Mafatlal Denim is a leader.
To achieve his social vision of improved quality of life for the underprivileged, Mr Mafatlal worked closely with renowned Gandhian Manibhai Desai to set up the Bharatiya Agro Industries Foundation (BAIF).
BAIF used modern technology, and focused on research and development to improve the earning potential of tribal and landless population. BAIF also initiated animal health schemes for cattle development.
BAIF initiatives are benefiting over 4.4 million families spread over 16 states today.
Mr Mafatlal was also a supporter of women's empowerment.
He launched the Shri Sadguru Seva Sangh Trust in 1968 to carry out activities like health services in tribal and rural areas and relief and rehabilitation at the time of major natural calamities.
The Sadguru Seva Sangh has also set up many eye care hospitals and schools in the interiors of Uttar Pradesh and Madhya Pradesh and carried out over 1.1 million eye surgeries.
Mr Mafatlal received several awards including the Durga Prasad Khaitan Memorial Gold Medal (1966), Sir Jehangir Ghandy Gold Medal for Industrial Peace from Xavier Labour Relations Institute of Jamshedpur (1978), and the Lions’ Humanitarian Award by the International Association of Lions Clubs of the US (1993).
Kotak Bank becomes the second lender after another city-based mid-size bank Yes Bank announced 6% interest on savings deposits immediately after the RBI freed interest rates on savings accounts on 25th October
Mumbai: With the Reserve Bank of India (RBI) freeing interest rate on savings deposits, mid-size private lender Kotak Mahindra Bank on Sunday said it will offer 6% interest on savings deposits above Rs1 lakh and 5.5% on those below Rs1 lakh from 1st November, reports PTI.
The eight-year-old city-based lender with just 323 branches has also increased its base rate, or the minimum lending rate below which it cannot lend, by 25 basis points (bps) to 10%.
Kotak Bank becomes the second lender after another city-based mid-size bank Yes Bank announced 6% interest on savings deposits immediately after the RBI freed interest rates on savings accounts on 25th October.
“We have increased the interest rate on savings account deposit to 6% for deposits above Rs1 lakh, and to 5.5% to those below Rs1 lakh as against 4% now.
The new rates will be effective 1st November,” executive vice-chairman and managing director Uday Kotak told reporters here.
Terming the RBI move to free the last regulated interest rate as “a revolutionary and path-breaking decision”, Mr Kotak said, “Our asset liability committee met this afternoon and felt that we have to offer higher rates on savings accounts.”
Mr Kotak further said, “It has nothing to do with competition but it is just giving a fair deal to our customers. The RBI decision is the beginning of significant improvements in benefits for customers.”
To a specific query on whether service charges will also go up along with the hike in interest rates, Mr Kotak said, “There will be no changes in the product offerings or the prevailing charges at our bank. This is a standalone decision and is in public interest.”
About the incremental cost that the bank would incur following the rate hike, its consumer banking president KVS Maniyan said, “We expect 10 to 12 bps spike in our cost of funds due to this decision. However, we are confident that it will not impact our net interest margin (NIM), as we will be making savings by better operational efficiency.”
Kotak Bank’s savings account size is just under Rs32,000 crore as of end Q2, which is about 6% of its balance sheet and under 10% of its total deposit base, Mr Maniayan said.
On the base rate increase, Mr Kotak said “The bank revised its base rate upwards by 25 basis points from 9.75% per annum to 10% in line with the hike announced by the regulator last week and the new rate will be effective 1st November. Accordingly, the old BPLR loans will also be costly by a similar amount.”
After the RBI deregulated the savings rates last week, only Yes Bank and Kotak Bank have increased their SB rates but so far no major bank has bitten the bullet.
Over the weekend, the chairman of SBI Pratip Chaudhuri had admitted that the industry would need to offer more to savings customers and expected 125-175 bps increase in the savings rates shortly.
Savings bank rate was the last of the regulated rates in the domestic banking industry. It was raised by 50 bps in May to 4% after being unchanged for eight long years.
Against this, term deposit rates are as high as 8%-10%.
While RBI for long has been keen on freeing it, the industry body IBA was opposing it saying any such move would push up the costs of banking services like ATMs charges, money transfers and cheque books to protect margins.
The second largest private lender HDFC Bank head Aditya Puri was categorical in stating that “whether banks increased the SB rates or not, the cost of banking services would definitely go up following the RBI move”.
The RBI move is not good news for larger banks with high savings account balances like SBI, HDFC Bank, ICICI Bank, PNB and Axis Bank or any other state-run banks, Deutsch Bank said in a note.
According to global research firm Macquarie, consolidated fiscal deficit of the country including off-budget items like food, oil and fertiliser is likely to be around 8.6% amid slowing revenue growth and “lack of expenditure management by the government”
New Delhi: India’s combined fiscal deficit—of both the Centre and states—during 2011-12 could be as high as 8.6% of the gross domestic product (GDP) and any further slippage could risk a credit downgrade and loss of business confidence, reports PTI.
According to global research firm Macquarie, consolidated fiscal deficit of the country including off-budget items like food, oil and fertiliser is likely to be around 8.6% amid slowing revenue growth and “lack of expenditure management by the government”.
Macquarie further warned the country’s fiscal deficit already remained high and any further slippage can increase the risk of “credit rating downgrade and loss of business confidence”. It said the Indian government needs to adhere to the path of fiscal correction.
“We believe that the government needs to stick to its commitment of fiscal consolidation and curtail expenditure growth to create a room for private investments,” the report said.
The overall fiscal deficit in financial year 2010-11, excluding the third generation (3G) spectrum receipts stood at 9%, it said.
“This, in an environment of weak global capital markets, could result in higher cost of capital and further crowding out of private investments and thus slower growth,” it said.
Moreover, high fiscal deficit is also the main culprit responsible for high inflation, Macquarie said.
Empirical estimates suggest that a 1% increase in level of fiscal deficit could cause about a quarter of a percentage point increase in the WPI.
Inflation has remained above the RBI’s comfort zone of 5%-5.5% over the last 22 months and has averaged over 9% during this period.
As per the report, the states’ fiscal deficit, excluding the huge losses of state electricity boards (SEBs), is likely to improve from 2.8% of GDP in FY09-10 to 2.3% of GDP in FY11-12.
However, after incorporating the SEBs losses, fiscal deficit of states would widen from 2.3% of GDP to 3% of GDP in FY11-12, Macquarie said.
India’s consolidated fiscal deficit more than doubled from 4.8% of GDP in FY 07-08 to 10% of GDP in FY08-09. In FY10-11, it was 9% of GDP if revenue from allocation of telecom licence and Broadband Wireless Access (BWA) spectrum is excluded.
Before the credit crisis, India managed to achieve a consolidated deficit level of 4.8% of GDP in FY07-08, the lowest in the past two decades, largely owing to buoyant tax collection growth.
During the credit crisis, the government pursued an expansionary fiscal policy to raise domestic demand and hence there was a slowdown and a widening fiscal deficit, it said.
Besides, populist measures like—wage hikes for central government employees, pre-election spending, farm loan waivers and expansion of social security schemes like rural employment —were announced ahead of parliamentary elections in May 2009, further deteriorating the fiscal condition, Macquarie said.