At the post-policy interaction with the media RBI governor D Subbarao had also said that the bankers had told him that there were no systemic risks as of now for banks, as the interest rate gets tightened
Mumbai: Reserve Bank of India (RBI) deputy governor Anand Sinha today said though bad loans are rising in the system, the central bank does not see it a systemic risk as yet, reports PTI.
Talking to reporters on the sidelines of the Ficci-IBA summit here, the deputy governor said, "We don't see any systemic risks from the current trend of rising non-performing assets. But, there could be some sectoral risks going forward."
He was responding to a question in the wake of the rising interest regime as the central bank has jacked up its key lending rate by a whopping 425 basis points in the past 15 months to batten down inflation and the result measures by banks to pass on the cost to consumers.
He further said, "I would not say we are particularly worried about retail loan segment, but yes, the retail segment is the one that is likely to feel the pressure."
Banks have been witnessing rising risks from small and medium scale industries as well as in their unsecured portfolios, which primarily consist of personal loans and credit cards business apart from the home loans front.
At the post-policy interaction with the media RBI governor D Subbarao had also said that the bankers had told him that there were no systemic risks as of now for banks, as the interest rate gets tightened.
Yesterday, the chief financial officer of the nation's largest lender Diwakar Gupta had said that his bank's Rs7,000 crore education loan has been witnessing pressure and the level of the stressed assets have reached 4% of this exposure.
The Kolkata-based United Bank chairman and managing director Bhaskar Sen, too, said that there are rising risks to his assets, especially from the small and medium enterprises (SMEs) and the retail sector and that he may look at increasing in the tenor of the loan than increasing the equated monthly instalments (EMIs).
On the impact of the Basel III on the domestic banks, especially on the state-run banks, which control over 70% of the banking assets in the domestic system, Sinha said, the government will have to infuse funds into the banks to ensure that they are adequately capitalised so that banks can continue to fuel the economy.
Meanwhile Crisil Ratings director Ramaraj Pai said the 26 public sector banks would need a whopping Rs8 trillion in core capital by 2019, when the Basel III norms will be implemented. As of FY09-10, these banks had a core (Tier I) of capital of only Rs70,000 crore, which is well above the Basel II requirement.
Bharti, which paid Rs755.22 crore in licence fees and Rs422.26 crore as spectrum charges for the quarter ended 30 June, was followed by Vodafone Essar which paid a combined amount of Rs702.34 crore toward spectrum charges and licence fees
New Delhi: Bharti Airtel, the country's largest private telecom operator paid Rs1,177.48 crore to the government in the April-June quarter toward licence fees and spectrum usage charges, more than any other service provider, reports PTI.
Bharti paid Rs755.22 crore in licence fees and Rs422.26 crore as spectrum charges for the quarter ended 30 June of the 2011-12 financial year, data compiled by the Telecom Regulatory Authority of India (TRAI) said.
Meanwhile, new players like Etisalat, Unitech Wireless, Loop, STel and Sistema Shyam Teleservices-who got the spectrum (radio waves) in 2008-paid Rs80.78 crore in spectrum charges and licence fees to the government.
Bharti was followed by Vodafone Essar, which paid a combined amount of Rs702.34 crore toward spectrum charges and licence fees during the quarter.
In addition, the two state-run firms BSNL and MTNL paid a total of Rs612.23 crore in spectrum charges and licence fees during the quarter.
Other private operators that paid spectrum charges and licence fees to the government include Tata Teleservices (Rs308.38 crore), Idea Cellular (Rs497.94 crore) and Reliance Communications (Rs263.27 crore).
Even as Anna’s movement against corruption gathers more and more steam, we need to put things in proper perspective and understand what measures are needed to tackle this multi-faceted phenomenon
First, we have to define corruption . In my opinion, it is a very complex phenomenon and its roots lie deep in the functioning of political, bureaucratic, commercial institutions involving a variety of stakeholders encompassing individuals in the public and private sectors.
In definitional terms, corruption is any action (or set of actions) where institutions/people abuse their (public/private) office for a private gain. It requires two or more parties acting in concert—parties who are misusing the office and parties who benefit from such misuse. Such an abuse of office for private gain happens when the individuals/institutions concerned accept, solicit, and/or extort a bribe. It is also abused when intermediaries/agents actively offer bribes to circumvent policies and processes for competitive advantage and profit. The office can also be misused for personal benefit even if no bribery occurs at all—for example, through patronage and nepotism based on family/other relationships, the theft of state/private institutional assets by people in positions of power, and/or the diversion of state/institutional revenues to private parties. Corruption can further be categorised as either spectacular corruption (like in the case of the 2G or Commonwealth Games or Bellary Mines or Adarsh Housing Society) or regular corruption (bribes to get things done on a day-to-day basis). Of course, one must also not forget fraud and associated evils that can and do take place in the private/public sector, often with disastrous and costly results. Weakly regulated financial systems permeated with fraud can undermine savings of people, increase transaction costs, enhance indebtedness and impose very high economic costs when they collapse.
This, in many ways, suggests the broad context of corruption in India and the key question is how can this multifaceted phenomenon of corruption be fought? Can one institution like the proposed Lokpal help fight this menace? What then are the implications for the design of the Lokpal?
First, let us clearly recognise the fact that the Lokpal is perhaps but one crucial step in the fight against corruption. More importantly, the RTI (Right to Information) Act was perhaps the first step in this process and the Lokpal Bill, if and when it gets through, could be the second crucial step.
Second, that said, to be effective, the Lokpal must be appropriately designed. Specifically, the scope of the Lokpal must be clearly thought out in terms of whom it will cover and for what kinds of corruption. Careful thought must be provided to this and a proper balance needs to be achieved, keeping in mind practical feasibility: (a) A very large (bureaucratic) organisation could become unwieldy and perhaps even counterproductive; and (b) A very narrow scope for the Lokpal could reduce its effectiveness, especially from the perspective of tackling corruption at the aam admi level. Therefore, deciding on the scope of Lokpal is a very critical issue and it would be prudent to have wider country-wide consultations on the same and ensure that it has the proper scope to be an effective institution on the ground in terms of tackling country wide corruption.
Third, the Lokpal must be truly independent and also seen to be independent in terms of the process of selection of its members as well as its larger accountability as an institution. Without question, the Lokpal must therefore be established as a fully autonomous body capable of fulfilling its mandate. And under no circumstance, should the Lokpal be under the tutelage of the people/institutions who are to be investigated (by it) in the first place. Thus, there should be no conflicts of interest what-so-ever and the Lokpal must be made accountable to people/institutions who do not fall under its jurisdiction. All of the above would have to apply to the Lokayuktas as well. This is a very tricky issue and must be addressed suitably—if indeed, the Lokpal is to be effective in rooting out corruption.
Last, many aspects of corruption (like bribery) call for a giver of the bribe and that calls for significant attitude change across wide sections of society in India. I hope that the Lokpal and the associated Lokayuktas, therefore, also have provisions for awareness campaigns that emphasise to the public, the need to refrain from giving bribes. This, in my opinion, is perhaps the toughest task for the Lokpal as without this attitude change among the people, very little can be achieved in fighting corruption. This issue should not be underestimated because people must then be prepared to wait in line to access various goods/services—in other words, they must be ready to not jump the queue. This is certainly a huge ask in a country of over a billion people, many of whom are in a tearing hurry. To help catalyse this on the ground, the demand supply gap in delivery of goods/services would also have to be reduced and unnecessary bureaucratic approvals/procedures (which are perhaps the cause of bribery in the first place) eliminated. Of course, India could also look at the United Kingdom and Bhutan which have just enacted an anti-bribery act, which also provides disincentives and penal punishments to the bribe-giver… let us not forget them in this whole matter as without them, much of the corruption would not exist.
iThe definitions draw on various sources including documents and papers by Civil Society Organisations, The World Bank and others
(The writer has over two decades of grassroots and institutional experience in rural finance, MSME development, agriculture and rural livelihood systems, rural/urban development and urban poverty alleviation/governance. He has worked extensively in Asia, Africa, North America and Europe with a wide range of stakeholders, from the private sector and academia to governments).