The draft MFIs (Micro Finance Institutions - Development and Regulation) Act, 2011, circulated for public comments by the finance ministry has a provision that allows MFIs to collect small savings from Self Help Groups (SHGs) known as thrift
Mumbai: Reserve Bank of India (RBI) deputy governor Anand Sinha on Monday indicated the central bank was not in favour of allowing micro-finance institutions (MFIs) to take deposits from public, reports PTI.
“After all, whatever legislation passes, we have to work with that. But, RBI’s position has been that deposit-taking should be limited to banks,” he told reporters in reply to a question on whether MFIs should be allowed to take small deposits.
The draft Micro Finance Institutions (Development and Regulation) Act, 2011 circulated for public comments by the finance ministry has a provision that allows MFIs to collect small savings from Self Help Groups (SHGs) known as thrift.
Finance minister Pranab Mukherjee in his Budget speech had said the government proposed to introduce the Bill in the ongoing Budget Session.
Earlier also the government had introduced a Micro Financial Sector Bill in the Lower House of Parliament in March, 2007. However, it lapsed when the term of the 14th Lok Sabha ended in 2009.
Mr Sinha further said that MFIs will have to take care of issues like concentration risk, reduction of operational costs and corporate governance to overcome problems of the fledgling industry.
“Southern region has seen major concentration of MFIs, both in terms of borrowing and number of clients. I think, they have to go to other regions of the country in order to diversify,” he said.
He further said that MFIs must reduce the operational costs for long-term sustainability.
The deputy governor said MFIs have to balance between financial and social objectives and maintain appropriate corporate governance for customer protection.
The MFIs must measure and disclose performance apart from changing the governance practices, he added.
On Basel III norms, the deputy governor said earnings of banks are likely to come under pressure due to the higher capital requirements for the implementation of new global risk mechanism.
“There is going to be pressure on banks’ earnings, not only in India but across the world. That’s why, Basel-III implementation has been made longer, so that there will be least disruption”, he said.
“However, if you have to do the same activity with significantly higher capital, there will be pressure on return on equity (RoE),” he said adding the banks would have to increase productivity in order to protect their RoE.
Basel-III norms, proposed to be implemented from the beginning of 2013 till 2017, require the equity capital of a bank to be not less than 5.5% of risk-weighted loans, as per the draft guidelines issued by RBI.
TRAI has recommended base price of Rs3,622 crore for a megahertz of spectrum at pan-India level which is around 10 times higher than the price for 2G licences in 2008 when A Raja was the telecom minister
New Delhi: The Telecom Regulatory Authority of India (TRAI) proposed a steep minimum price for auction of 2G telecom spectrum, setting off fears of a hike in mobile phone tariffs which are at present among the cheapest in the world, reports PTI.
TRAI recommended base price of Rs3,622 crore for a megahertz of spectrum at pan-India level which is around 10 times higher than the price for 2G licences in 2008 when A Raja was the telecom minister.
According to TRAI recommendations, a minimum of 5 Mhz should be allotted which would mean that a pan-India spectrum in 1800 MHz band will cost Rs18,000 crore. The reserve price is five times the base price of Rs3,500 crore for 3G auction.
Operators slammed the recommendations saying they are “arbitrary, regressive and inconsistent” and will hurt further investment in the sector and expansion in rural areas.
New operator Uninor whose licences has been cancelled by the Supreme Court, said, “... some of these recommendations will create severe negative impact on the entire industry. It is up to the political leadership of India to now ensure that gains of the past few years of affordable phone calls for India's people are not undone.”
“The industry was looking forward to reasonable spectrum reserve price recommendations from TRAI in the light of the government’s own articulated policy directions on affordability and rural penetration,” telecom associations COAI and AUSPI said in joint statement.
TRAI chairman JS Sarma said the recommendations should not lead to a hike in tariff and if warranted take necessary action will be taken. “We have already issued consultation paper on forbearance of tariff,” he added.
When asked Mr Sarma said, “Auction is open for all.”
Telecom secretary R Chandrashekhar said the industry should not look at just the initial price. There are many relaxations too, he added
“TRAI has relaxed payment condition. Only 33% payment has to be made on winning of spectrum initially. Rest of the payments has to be made over years. Also TRAI has relaxed spectrum usage charge to 1% which ranges between 3% and 8%,” Mr Chandrashekhar said.
TCS has become the first Indian IT company to cross the ten billion dollar milestone posting annual revenues of $10.17 billion in 2011-12
Mumbai: India’s largest software exporter TCS (Tata Consultancy Services) posted a healthy 21.9% rise in net profit for 2011-12 at Rs10,638.2 crore and said it is on track to outperform the industry revenue growth of 11%-14% set by industry body Nasscom for 2012-13, reports PTI.
The company also became the first Indian IT company to cross the ten billion dollar milestone posting annual revenues of $10.17 billion in 2011-12.
The IT major said its net profit for the fourth quarter of the last fiscal rose by 22.6% to Rs2,932.4 crore on the back of a 30.5% rise in revenues at Rs13,259.3 crore.
Analysts said TCS performance was particularly encouraging in a challenging environment. It follows bellwether Infosys’ rather poor show wherein it missed its own revenue guidance for the March quarter and gave a muted 8%-10% guidance that had dampened investor sentiment.
Unveiling the numbers, TCS CEO and MD N Chandrasekaran said: “Our order book is very healthy. We don’t give numbers; it continues to see improvement... Our intention is to remain ahead of the Nasscom target for 2013.”
Buoyed by good momentum, TCS said it will hire 50,000 people in FY 12-13 and will also raise wages for its existing employees in India by 8%.
In contrast, Infosys had said wages would be frozen till there was more clarity on the economic environment.
HCL Technologies, fourth in the tally, reported 29% increase in net profit, while Wipro will report its March-quarter earnings on 25 March 2012.
Mr Chandrasekaran said the company has carried its strong momentum through the fourth quarter to close out a year of strong growth.
“We have kept our focus on profitability and consolidated our market leadership. North America and UK delivered excellent growth while Europe grew by 40%. However, Indian market continued to be volatile,” he said.
With the customers’ IT budgets almost flat, there is expected to be further pressure on Indian software service vendors, who are facing stiff competition from global giants like IBM and Accenture.
“TCS is well prepared to achieve balanced growth across the industries and markets it operates in, given its holistic portfolio of services which are now achieving significant scale across markets,” Mr Chandrasekaran said.
Kotak Securities head of fundamental research Dipen Shah said TCS results were in line with estimates on revenue and profit front.
“The 3.3% volume growth was encouraging in a tough macro environment. Management is also pretty confident of growing above the Nasscom average growth rate for FY12-13,” Mr Shah added.
TCS posted revenues of Rs48,893.8 crore ($10.17 billion) in 2011-12, up 31% as compared to Rs37,324.5 crore in 2010-11.
“We have grown very well during 2011-12 and also been able to exit the year at the right margin levels, despite the marked increase in volatility during the past 12 months,” TCS chief financial officer and executive director S Mahalingam said.
He added the company remains focussed on opportunities in the market. “So, while maintaining our cost discipline at an operational level, we continue to invest in capacity and capability as we prepare for growth ahead,” Mr Mahalingam said.
During the January-March quarter, the company made a net addition of 11,832 employees, taking its total headcount to over 2.38 lakh.
The company has recommended a final dividend and a special dividend of Rs8 each per equity share of Re1.