As per the requirement of the German central bank, Deutsche Bundesbank (DBB)-which had permitted payment in euros through EIH -each drop of oil bought from US-sanctioned Iran is being certified
New Delhi: Days after India put in place a mechanism to pay for Iranian crude oil, payments to the nation's second largest oil supplier are yet to begin as the tedious process for certification of the oil bought is still underway, reports PTI.
After the Reserve Bank of India (RBI) in December stopped the use of a long-standing clearing mechanism for payments, India had on 3rd February decided to pay for the Iranian oil using euros through Germany-based Europisch-Iranische Handelsbank AG (EIH Bank).
Sources said as per the requirement of the German central bank, Deutsche Bundesbank (DBB)-which had permitted payment in euros through EIH -each drop of oil bought from US-sanctioned Iran is being certified.
First, the oil companies are certifying the crude oil they bought from Iran and payments that are due. This is being counter-certified by the ministry of petroleum and natural gas.
Furthermore, State Bank of India-the banker which is to route the payments-is also affixing its seal on the transactions, sources said, adding these will be presented to DBB, which will then authorise the transfer of euros to the bank account of National Iranian Oil Co (NIOC).
SBI had refused to facilitate payments for Iranian oil after the RBI on 23rd December disallowed payments for Iranian crude using a long-standing clearing house system run by the central banks of nine countries-including India and Iran-dubbed the Asian Clearing Union (ACU).
However, Iran, which makes up for over 12% of India's oil needs, had continued to supply oil on credit despite the outstanding amount crossing a staggering $3 billion.
Sources said payments for crude oil bought since September are due. Currently, certification of the crude oil bought since September is being done and once the backlog is cleared, certification would be done on a monthly basis.
After the certification, oil companies like Essar Oil will transfer money to SBI, which in turn will use its Frankfurt branch to route payments to EIH.
Sources said import of crude oil from Iran has not been banned by either the UN or European Union.
India imported 21.3 million tonnes of crude oil from Iran in 2009-10 and imports in 2010-11 are expected to amount to around 18 million tonnes, as Reliance Industries has totally stopped using crude oil from the Persian Gulf nation.
The nation imports 12 million barrels of crude oil every month from Iran, which is the nation's second-largest supplier after Saudi Arabia.
Sources said regulations endorsed by the EU in October required deals involving Iran and the euro to be accompanied by a certificate outlining payment details for each and every transaction.
Under the ACU mechanism, payments for all trade deals between member countries are settled every two months, with individual transactions not being accounted for separately.
MRPL is the biggest importer of Iranian crude oil in the country, sourcing about 4 million barrels every month, which amounts to 7.1 million tonnes every year. Mumbai-based Essar Oil imports roughly 3 million barrels every month (about 5 million tonnes a year) and Indian Oil Corporation (IOC) and Hindustan Petroleum Corporation (HPCL) about 3 million tonnes each.
ACU, based in the Iranian capital of Tehran, settles trade transactions between Bangladesh, Bhutan, India, Iran, Nepal, Pakistan, the Maldives, Myanmar and Sri Lanka.
Till 2008, payments to Iran under the ACU mechanism were done in US dollars, but after the United States imposed sanctions against the Middle East country over its suspected nuclear weapons programme, the currency was switched to the euro.
United Nations' sanctions do not forbid buying Iranian oil and recently the European Central Bank (ECB) asked the RBI to provide certificates that the euro is being used to import products that are not on the US sanctions list.
Sources said while certification for crude oil imports was easy to provide and track, the RBI chose to scrap the system altogether.
With the communication sticking to pure emotions, SBI Life fails to register the ULIP product even after repeated exposures
SBI Life's promise has always been simple in its communication: Enjoy life to the fullest and the lastest. Nothing technically wrong with that, but the positioning works only at the thematic level and it must do more than that in the brand ads. Anyways, let's examine the creative first.
The commercial features an elderly couple enjoying a ride on their ancient scooter. The wifey wants to know why the two are riding a rundown scooter, instead of enjoying in their car (a reference to Nano?). The zinda dil hubby, whose romantic streak hasn't died yet, suddenly applies the brakes and the missus falls all over him. A clear message that this sort of mischief isn't possible in a car. The voice-over reveals the reason behind their ageless lives. SBI Life's 'Saral' and 'Smart' ULIPs. 'Kyunki zindagi hai jeene ke liye' is the message.
Two very serious issues with the ad. The first, as I mentioned earlier, is that for brand campaigns, it's not going to be enough for SBI Life to use pure emotions, as in, simply feature joys of life. While that can work as an umbrella positioning, brand-centric ads for stuff like ULIPs have to tell the consumers a lot more, specifically in terms of why they must invest in these particular products.
On what makes the brand unique and interesting. In fact, with the communication sticking to pure emotions, I failed to even register ULIP even after repeated exposures. Clearly, the ad agency has been unable to come up with exciting ideas for brand communications, and so the client hasn't bothered to go beyond the corporate. Dangerous, I say.
Secondly, an aged couple living a rocking life is a route that's now been done to death, especially in the financial products category. Every other advert these days features them oldies behaving like juvenile teens. In this scenario, brand recall becomes extremely tough, as all the ads appear to be like carbon copies of each other. So, even the emotional route doesn't work out here.
Net net: A huge problem for SBI Life. No branding, no distinctiveness, no memorability. I seriously think all ad agencies that handle financial corps need to take a long weekend brainstorm break at a holiday resort. This busy business sector is screaming out for are-think in terms of communication strategies.
The need to set up the task force arose in view of overwhelming evidence that the current subsidy policy has resulted in waste, leakage, adulteration and inefficiency
New Delhi: Concerned over leakage and wastage of public funds, the government on Monday constituted a task force under Unique Identification Authority of India (UIDAI) chief Nandan Nilekani to suggest ways to provide kerosene, cooking gas and fertiliser subsidies to intended beneficiaries directly, reports PTI.
The inter-ministerial task force to streamline the subsidy distribution mechanism comes within three weeks of a brutal incident of burning alive an additional district collector Yashwant Sonawane in Maharashtra while he was trying to check illegal hoarding of kerosene and petrol.
The Centre provided a subsidy of Rs14,257 crore on LPG and Rs17,364 crore on kerosene during 2009-10. It had spend Rs53,000 crore towards fertiliser subsidy. However, it is feared that only a fraction of these amounts reached the intended beneficiaries.
The task force, which has been asked to submit its interim report within four months, will suggest "a model of direct transfer of subsidies ...by re-engineering existing systems, processes and procedures in the implementation process", said a finance ministry release.
The need to set up the task force arose in view of "overwhelming evidence that this (current) policy is resulting in waste, leakage, adulteration and inefficiency. Therefore, it is imperative that the system of delivering the subsidised kerosene be reformed urgently," it added.
The committee is headed by former Infosys chief Mr Nilekani, who at present is the UIDAI chairman. The panel will include secretaries from ministries of finance, chemicals and fertilisers, agriculture, food, petroleum and rural development.
Besides designing the IT framework, the task force will align the systems with the issuance of the UID numbers and suggest changes in the administration and supply chain management.
The recommendations of the task force, the statement said, will be implemented on pilot basis by the concerned ministries and the final report would include the results of such projects.
At present, the government provides kerosene at subsidised rates through the public distribution system (PDS) to families living below poverty line (BPL). LPG is provided a subsidised rate to households.
As regards fertilises, the government provide subsidy to companies so that farm inputs, which include urea and imported fertilisers, can be provided to the farmers at cheaper rates.
"It is not possible to differentiate the segments for which the subsidy should be given in this (fertiliser) sector.
There is a need to evolve a suitable mechanism for direct subsidies to individuals who are entitled to them," it said.