If the RBI’s circular dated 22 February 2010 is implemented, cheque-bouncing cases will increase dramatically
If a recent Reserve Bank of India’s (RBI) circular is implemented, bank customers will have to be extra careful whenever they issue a cheque. If customers have made any correction like change of amount (numerically or in words), or the name on the cheque issued, then it would be returned by the clearing branch. The only correction that would be allowed is the date of the cheque. The circular is designed to prevent fraudulent cheque alterations.
“We are in the process of implementation of the circular issued by Reserve Bank of India. As this will have an impact on customers, we have already commenced the exercise of informing them about this change. This communication will continue throughout the first quarter of this financial year. Simultaneously, notices are also being put up in all the branches. This will come into effect from 1st July 2010, by which time adequate notice would have been given to all customers,” said S. Ramakrishnan, Head - Retail Liabilities Product Group,HDFC Bank.
In its circular dated 22 February 2010, RBI states, “No changes/corrections should be carried out on the cheques (other than for date validation purposes, if required). For any change in the payee’s name, courtesy amount (amount in figures) or legal amount (amount in words), etc., fresh cheque forms should be used by customers.” If there are any alterations on the cheque, except the date, customers will have to issue a fresh cheque. RBI believes that this would help banks to identify and control fraudulent alterations.
Chequebooks carry a standard tip wherein customers are requested to refrain from carrying out any alterations in amount and payee name. But usually banks clear cheques if there are any minor corrections. Currently banks clear a cheque if it is counter-signed by the issuer in case of any corrections.
“There is no rule as such. If one or two corrections are made and if it is countersigned then the cheque can be cleared,” said an official from a private bank.
“As of now we have not fixed any date for implementation of this circular. Somebody who is in a state of readiness can implement it. It is for the benefit of the customers,” said a top official from RBI.
“Frauds do not only happen because of cheque alterations. This is only one modus operandi. Some people change the cheque’s page name; remove account payee and amount etc. Some people also print fake cheques. This one circular is not going to reduce such fraud cases,” said Ramavatar Singh, general manager, Bank of India.
The ratings agency believes that the worst is over for the Indian economy, and present trends indicate that upgrades will outnumber downgrades in 2010-11
Ratings agency CRISIL has said that in a reversal of a three-year trend, it has upgraded more companies than it downgraded in the second half of 2009-10 as against 108 rating upgrades, there were 95 downgrades. The number of defaults too declined during the second half of the year to 20 from 29 in the first half, it said in a release.
Roopa Kudva, managing director and chief executive officer, CRISIL, said, “We believe that the worst is over for the Indian economy, and present trends indicate that upgrades will outnumber downgrades in 2010-11. However, the degree to which the credit cycle turns will depend on the sustainability of demand growth, and the impact of fresh capital expenditure on players’ balance sheets.”
This reversal resulted in CRISIL’s modified credit ratio (MCR; the ratio of upgrades plus reaffirmations to downgrades plus reaffirmations) increasing 0.93 times for the entire 2009-10 period from 0.86 times for 2009-09, snapping a four-year trend of decline that had begun in 2005-06, it said.
With this, the credit cycle seems to have turned after the recent global economic slowdown. These trends were observed on a portfolio of almost 4,000 CRISIL-rated entities; of these, 75% are mid-sized entities, each having an annual turnover of less than Rs5 billion, the ratings agency added.
CRISIL, a Standard & Poor's unit, said that companies in the real estate and real-estate-dependent industries account for 18% of the ‘negative’ outlooks, while those in the textile business account for 12%. Both these industries are still highly leveraged, and will require strong demand revival or large equity infusions for their credit profiles to stabilise. Textile players will also need to contend with exchange rate volatility, it added.
Construction players, on the other hand, are witnessing robust demand, arising from the government’s increased focus on infrastructure spending, account for almost 20% of the ‘positive’ outlooks, CRISIL said.
The ratings agency said that it believes that the outlook for credit quality in 2010-11 is positive. While present trends indicate that upgrades are likely to outnumber downgrades in 2010-11, a global credit event on sovereign debt, a build-up of inflationary expectations, and exchange rate volatility may yet disrupt the trends over the near to medium term.
“The credit fallout of these events can be significant because governments have limited room to address them through further fiscal and monetary measures,” cautioned Ajay Dwivedi, director, CRISIL Ratings.
CRISIL said that infrastructure and infrastructure-related industries (including power equipment, steel, cement, healthcare, and education) and the financial services sector are likely to witness high demand growth over the medium term. Export-dependent industries, such as gems and jewellery, textiles, and information technology (IT) and IT-related services, are likely to grow moderately on the back of revival in the global economy. Commercial real estate and leisure industries are likely to face severe demand-supply imbalances.
The brand will now focus on Indian youth and rural markets
Emami Ltd has earmarked Rs20crore as the marketing budget for its healthcare product, Zandu Balm, for the current fiscal. It recently signed up cricketers Virender Sehwag, Amit Mishra and Dinesh Karthik as brand ambassadors for the Zandu Balm brand.
The company is also planning to come up with a new ad film for the balm by June 2010 which will involve all the brand ambassadors. The film will be directed by Prahlad Kakkar and the script will be written by Adi Pocha.
“The size of the pain-relieving market in India is estimated to be about Rs1,500 crore and Zandu Balm holds the pole position in this category. We intend to popularize the Zandu Balm brand among Indian youth. Our objective is to make the brand more acceptable to the young generation in India,” said Mohan Goenka, director, Emami Group.
Zandu Balm is currently a Rs200-crore brand and is expected to maintain an annual growth rate of 15%. The company is planning to launch low-unit packs to penetrate rural markets.
Founded in 1974, Emami is a Rs3,000-crore diversified business group. It has activities in FMCG, newsprint, hospitals, edible oil and realty sectors.