Maruti, General Motors hike vehicle prices by up to Rs17,000

The two auto majors have hiked prices to offset the impact of input costs and foreign exchange fluctuations

New Delhi: Auto majors Maruti Suzuki and General Motors India have increased the prices of various models by up to Rs17,000 to offset rising input costs and the impact of currency fluctuation, reports PTI.

Maruti Suzuki India (MSI) has hiked prices of its vehicles across models, except for entry-level sedan DZire, by between 0.3% and 3.4%. This translates into a minimum increase of Rs2,400 on the SX4 sedan and a maximum of Rs17,000 on the diesel variant of its Swift hatchback.

When contacted, a spokesperson of MSI said the price hike is effective from Monday. The company had stated it would hike the prices of its models to offset the impact of rising input costs and foreign exchange fluctuation.

Before the hike, the SX4 sedan was priced between Rs7 lakh and Rs9.11 lakh (ex-showroom Delhi), while the Swift diesel was available at prices ranging from Rs5.27 lakh to Rs6.47 lakh (ex-showroom Delhi) for different variants.

The company’s best-selling Alto model will also become dearer by Rs4,000 against the current price tag of between Rs2.32 lakh and Rs3.31 lakh (ex-showroom, Delhi).

Maruti sells a variety of models, ranging from the M800, which starts at a price of Rs1.97 lakh, to the top-end Kizashi, which comes with a price tag of Rs17.5 lakh (ex-showroom, Delhi).

The company has not touched the price of the DZire sedan as it will launch a new version next month.

GM India has also increased product prices by between 0.5% and 1.75% for models including the Spark, Beat, Cruze and Tavera, translating into an increase ranging from Rs3,000 to Rs15,000.

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Reduction of bank branch audits—a right step

The savings in costs by doing away with branch audits is one gain. The other is to put more responsibility on the main auditor, who now has to give his opinion without hedging that he has depended on another person to audit branches

A report in a leading business newspaper titled ‘CAs lobby against RBI plan to reduce audits’ mentions that the Reserve Bank of India (RBI) is likely to scrap the ‘branch audits’ for PSU banks. This is a long overdue move and should be welcomed. Branch audits have lost their relevance in the age of technology. Core banking ensures that routine checks like interest calculations, branch transfers, credits, etc, are captured at a centralised place. Credit decisions are also getting centralised. Thus, branch audits become totally redundant.

In any case, branch auditors were not very relevant in the scheme of things. They had no role to play in the accounts finalisation, where the main auditors (or a panel of auditors) were the prime movers. Of course, this hits the chartered accountancy (CA) firms which used to get this lucrative business from the PSU banks through a tender system rather than on competencies or merits. They will also raise objections saying that frauds will go undetected. In fact, rare is the fraud that has been unearthed by a branch audit. The auditors are under pressure of the bank managements at all times and have to give in to what the bank wants. If a bank is serious about finding/checking frauds, unless the bank is willing to bare its books, nothing can be found out. Maybe an RBI inspection could throw out something. However, in this era, documentation alone will never be a point to bring frauds out into the open. Technology helps in perfecting documentation. Banks will disclose what they want to, audit or no audit.

In any case, branch audits are never an annual feature for each and every branch. In any case, one branch used to get audited only once in two or three years. In most private sector banks, with total centralisation, the role of a branch is limited to accepting deposits and executing orders from the head office. All lending decisions are through a standard template controlled and supervised from the head office. The branch is merely an outpost and nothing more. The costs of branch audits far outweigh gains, if any.

There was also a ridiculous practice of having a credit panel with outside representatives. Fortunately that has been discontinued and credit panel is limited to bank insider representation alone.

The savings in costs by doing away with branch audits is one gain. The other is to put more responsibility on the main auditor, who now has to give his opinion without hedging that he has depended on XYZ to audit branches, etc.

Even branch advances can be audited by the main auditors sitting at the head office. Data transmission is a breeze. It would also help some PSU banks to get more centralised and remove discretion away from small branch managers or regional offices. Banks like ICICI have successfully centralised lending and it is indeed the global practice. This will iron out kinks in lending and make frauds less widespread.

Maybe doing away with the branch audits is a good step to help focus on better systems and controls within the PSU banks.

The author can be reached at [email protected]

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COMMENTS

V C VENKATASUBRAMANIAN

5 years ago

THE AUTHOR HIMSELF HAS SAID THAT “The auditors are under pressure of the bank managements at all times and have to give in to what the bank wants. If a bank is serious about finding/checking frauds, unless the bank is willing to bare its books, nothing can be found out” THIS NEEDS CORRECTION AND NOT ELIMINATION. ELIMINATION IS NOT HELPFUL WHERE CORRECTION IS REQUIRED. ALSO THE BANKS ARE NOT SUBJECTED TO PROPRIETORY OR PERFORMANCE AUDIT BY INDEPENDENT AGENCIES. HAD THIS BEEN THERE THERE WOULD BE MORE SCAMS THAT WOULD HAVE COME TO LIGHT. WHAT CA’S ARE DOING IS ONLY BALANCESHEET AUDIT. HERE ALSO THE BANK AND RBI IS TRYING TO TAKE AWAY AUDITORS INDEPENDENCE. BECAUSE OF SCA AND BRANCH AUDITOR MORE NPA’S ARE COMING OUT AND MORE PROVISIONING IS REQUIRED. THIS PAVES THE WAYS FOR SYSTEMATIC INTRODUCTION OF FUNDS FROM FINANCE MINISTRY. OTHERWISE MANY BANKS WOULD START DISAPPEARING SUDDENLY LOSING CRORES AND CRORES OF PUBLIC MONEY. IF NO BRANCH AUDIT IS THERE THE SCA’S SHOULD NOT TAKE UP THEIR WORK. LET C&AG COMES AND AUDIT THE BANK. LET C&AG DO PROPREITORY, PERFORMANCE AND BALANCESHEET AUDIT FOR ALL THE BANKS. EITHER OF THESE SHOULD BE THERE AND CRORES AND CRORES OF PUBLIC MONEY SHOULD NOT BE LEFT TO THE DISPOSAL OF FEW EMPLOYEES OF THE GOVERNMENT WITH OUT ANY CHECK.

Milind

5 years ago

The author seems to be totally biased gainst CAs . He must be the bank employee who is hit by some auditor against something wrong doing. It seems that bank employees are lobbying to get rid of audits and make themselves free to do whaterver thaey like. Contrary RBI should insist on increasing the time span given to auditors to conduct the branch audit and make it more stringent .

Vinod Arora

5 years ago

Dear Author..RBI has never planned to dispense with branch audit of PSUs. It may be RBI's approach to attract audit of material accounts/areas that's why RBI is proposing to cover audit of at least 75% of advances and the same will anyways ensure audit of at least 50-60% branches. Even RBI may initiate audit of branches of private banks. If RBI go your way..then audit report of any PSU bank will be a fake report as no audit firm in India can conduct audit of any PSU bank on stand alone basis. To complete audit of large bank like SBI, Central Bank, etc. in a time bound manner..a CA firm with more than 500 CAs is required which is very rare to find. Even no CA firm will take this responsibility. Hedging of responsibility phrase is totally irrelevant and no person connected with CA profession will understand this. Centralisation of accounts or loan processing may be a support to audit but it does not exhaust audit process for any bank. Banking is a very vast industry and RBI knows all the implications of their decisions so please stay away from speculations and vague guesses. Rgds.

REPLY

Kekin

In Reply to Vinod Arora 5 years ago

Mr Vinod,
All Your comments seem quite logical considering the nature and scope of audit services in India.It seems the author is strongly biased generally against the CA profession.I feel he should not ignore the practical issues while highlighting the pros and cons of any changes passed recently or those being proposed currently.

Do your homework early, Wikipedia shutting its site for 24 hours

SOPA and PIPA, the proposed laws make it easier for American copyright holders to cut off access to foreign websites hosting unlicensed copies of films, music and television programs

Online encyclopaedia and the world’s sixth most visited website—Wikipedia—said it would shut down its English version in a protest against the proposed internet piracy laws in the US.

In a statement, Sue Gardner, executive director, Wikimedia Foundation said, “My hope is that when Wikipedia shuts down on 18th January, people will understand that we’re doing it for our readers. We support everyone’s right to freedom of thought and freedom of expression. We think everyone should have access to educational material on a wide range of subjects, even if they can’t pay for it. We believe in a free and open Internet where information can be shared without impediment."

According to a Reuters report, Google has repeatedly said the Bill goes too far and could hurt investment. Along with other Internet companies such as Yahoo, Facebook, Twitter and eBay, it has run advertisements in major newspapers urging Washington lawmakers to rethink their approach, the report says. Micro-blogging site Twitter, however, has slammed Wikipedia's plan to shut its site, reports the Guardian.

The blackout by Wikipedia and Reditt, a popular link-sharing service, is in protest against proposed legislation—the Stop Online Piracy Act (SOPA) in the US House of Representatives, and the PROTECT IP Act (PIPA) in the US Senate—that, if passed, would seriously damage the free and open Internet, including Wikipedia. The SOPA aims to crack down on online sales of pirated American movies, music or other goods by forcing Internet companies to block access to foreign sites offering material that violates US copyright laws.
 
“We believe that new proposed laws like SOPA and PIPA and other similar laws under discussion inside and outside the United States don’t advance in the interests of the general public. Moreover, SOPA and PIPA are just indicators of a much broader problem. All around the world, we're seeing the development of legislations intended to fight online piracy and regulate the Internet in other ways that hurt online freedoms. Our concern extends beyond SOPA and PIPA; they are just part of the problem. We want the Internet to remain free and open, everywhere, for everyone," said Ms Gardner in a statement.

Jimmy Wales, the co-founder of Wikipedia, estimated that 100 million English-speaking Wikipedia users will be affected by the blackout and also warned students to “do your homework early”. On Twitter, he posted, “Student warning! Do your homework early. Wikipedia protesting bad law on Wednesday!”

Wikipedia and several other sites are calling on US lawmakers to block the SOPA and PIPA. They are concerned the laws will “hold website owners liable for links to sources of illegal music and movie downloading, with a detrimental effect on free speech online,” The Financial Times reports.

Reddit and the Cheezburger network, which includes such sites as The Daily What and Fail Blog, also plan to shut down to protest SOPA, The Washington Post reports. The document service Scribd already made a billion pages vanish in protest, the Post says. Craigslist posted a message to all its users explaining it and other website's opposition to the bills.

The SOPA and PIPA, however have created rifts between technology companies like Wikipedia, Google, Facebook and media production companies, including Hollywood studios and music labels. The bills’ supporters are saying that the legislation is needed to protect intellectual property rights and jobs.

Last week, US president Barack Obama's Internet advisors, in a statement, said that the provisions for blocking foreign websites 'pose a real risk to cyber-security'. “Any effort to combat online piracy must guard against the risk of online censorship of lawful activity and must not inhibit innovation by our dynamic businesses large and small,” a White House spokesman said.

Commenting on the White House’s statement, Rupert Murdoch, chief executive, News Corp, which owns vast array of media properties from Fox TV, the Wall Street Journal to Twentieth Century Fox studios, said, “So Obama has thrown in his lot with Silicon Valley paymasters who threaten all software creators with piracy, plain thievery”.

Coming back to India, Google and Facebook told the Delhi High Court that it is not possible for them to control content posted by billions of people on their sites. The high court was hearing a case related to allegedly objectionable content on 21 sites, including Google and Facebook.
 
Earlier, metropolitan magistrate Sudesh Kumar summoned these companies to face trial for allegedly committing offence punishable under the Indian Penal Code (IPC) section 292 (sale of obscene books and material and section 293 (sale of obscene objects to young person).

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