After Pratip Chaudhuri succeeded OP Bhatt at the country’s largest lender SBI, its profit plunged 99% for the quarter ended 31 March 2011. Its profit was just Rs20.88 crore against Rs1,866.60 crore for January-March quarter of 2010
New Delhi: Concerned over the unusual steep fall in State Bank of India’s (SBI) profit for the March quarter after a change of guard at the helm, the finance ministry has said it is in the process of putting in place a mechanism to ensure continuity in accounting practices in banks, reports PTI.
The finance ministry is addressing the issue and is planning to lay certain guidelines, Department of Financial Services secretary DK Mittal said, adding that “the change of top management should not lead to rewriting of books and there has to be some continuity”.
“There is a need to have more scrutiny by somebody,” he said, adding that the change in guard should not lead to a significant change in the bank's balance sheet.
After Pratip Chaudhuri succeeded OP Bhatt at the country’s largest lender SBI, its profit plunged 99% for the quarter ended 31 March 2011. Its profit was just Rs20.88 crore against Rs1,866.60 crore for January-March quarter of 2010.
“If accounts are prepared wrongly then auditor is held responsible apart from officers. There has to be some accountability. It’s not that you rewrite the accounts and you are scot free...same chartered accountant is re-appointed and officers rewrite,” he added.
Earlier the Reserve Bank of India (RBI) deputy governor KC Chakrabarty had also said that there was a need for banks to improve the standards of financial reporting.
“See our banks, I see when the chairman retires the profits go down,” Mr Chakrabarty had said.
There is a need to improve both the standard of reporting as well as that of examination of account books, Mr Chakrabarty had said.
Mr Mittal said, “One decision which has been taken and implemented is that executive directors and chairmen of banks should join the respective banks at least 15 days before (the expiry of incumbent chairman’s or executive director's term) so that they are aware of the bank. They (designated person) know the bank’s policy and direction.”
“Many times these changes (discontinuity in the financial numbers) happen because they are not aware,” Mr Mittal said.
To begin with, last week, the finance ministry had directed executive director of Indian Overseas Bank (IOB) Nupur Mitra to join Dena Bank as the chairman and managing director (CMD) 15 days ahead of schedule.
She will take over as the CMD from DL Rawal, who will be retiring this month end.
The NSE, along with the Small Industries Development Bank of India (Sidbi), is planning to set up this exchange and has received approvals from the Securities and Exchange Board last week
Mumbai: The National Stock Exchange (NSE) plans to operationalise the proposed SME Exchange in the next few months, after getting the approval from the regulator last week, reports PTI.
“We may start the proposed SME Exchange in the next few months,” NSE joint managing director Chitra Ramkrishna told PTI. But she did not divulge further details.
The NSE, along with the Small Industries Development Bank of India (Sidbi), is planning to set up this exchange and has received approvals from the Securities and Exchange Board (SEBI) last week.
The SME Exchange will be a separate exchange within the NSE.
Earlier, the premier bourse BSE had received SEBI approval for its proposed SME Exchange on 28th September. The BSE is likely to start the operations next month.
The idea of SME exchange has been mooted as small and medium enterprises are not able to raise funds from primary market as investors are less inclined to invest in their issues along with the higher charges of listing. Also, scrips of many of the listed SME entities are illiquid due to poor volume.
The idea got rolling after a task-force set up by the Prime Minister’s Economic Advisory Council has recommended setting up such exclusive platforms for the SMEs. Globally, every major bourse has separate SME platforms.
The finance ministry has also asked the market regulator to consider reduction in the mandatory period prescribed for market-making from three years to six months to encourage liquidity, minimum trading lot and reduction in time period for initial public offering.
Taking into account a total 239 days of trade since last Diwali on 5 November 2010 and six-and-half hours of trade every day, the average per-hour loss works out to be Rs1,094 crore for the market
New Delhi: As the stock market gears up for Diwali, the investors would desperately look for a turnaround of fortunes after losing more than Rs1,000 crore in every hour of trade on an average since the festivities last year, reports PTI.
People celebrate Diwali in India as a festival of lights and prosperity and worship Lakshmi, the goddess of wealth. However, the stock market trends have not been encouraging since last Diwali and the total investor wealth, measured in terms of cumulative market value of all listed stocks, has fallen by a whopping Rs17 lakh crore.
Taking into account a total 239 days of trade since last Diwali on 5 November 2010 and six-and-half hours of trade every day, the average per-hour loss works out to be Rs1,094 crore for the market.
Market analysts expect this Diwali, which also marks the beginning of a new Samvat (Hindu calendar year) 2068, to bring some good luck to the Dalal Street.
This year, Diwali would be celebrated on Wednesday, 26 October 2011, when the markets would conduct a muhurat trading to mark the beginning of a new Samvat.
Taking into account the 20% fall in the benchmark Sensex during the current Samvat, the investors have lost one-fifth of value in their holdings since last Diwali.
The 30-share benchmark index currently stands at 16,785.64 points—down 4,219.32 points or over 20% since last Diwali, when the Sensex had scaled its record closing level of 21,004.96 points during its muhurat trade.
In the process, the total investor wealth, measured in terms of cumulative market valuation of all the listed stocks, has fallen to around Rs60,00,000 crore—a huge dip of close to Rs17,00,000 crore since 5 November 2010.
“Markets have had one of the worst performances. In this dull patch, many stocks have hit 52-week low and some of them hit multi-year lows. For investors, the experience till date is tumultuous,” Ashika Stock Brokers research head Paras Bothra said.
Experts believe that a host of issues, such as high inflation, soaring interest rates, deteriorating corporate performance, slowing of economic growth and political upheaval, have dented market sentiments in past one year.
The first quarter of Samvat year 2068, which would commence from 26th October, is still expected to be muted primarily due to the aforesaid factors and lingering doubts over a resolution to the Eurozone debt crisis.
Experts said investor sentiments are likely to improve after the first quarter of Samvat 2068 and the year could be good second quarter onwards.
“The Sensex should be around 18,500 to 18,700 by next Diwali,” Kejriwal Research and Investment Services director Arun Kejriwal said.