RBI submits draft norms on new banking licences to finance ministry

The RBI, which brought out a discussion paper in August last year on dispensing banking licences to business houses and NBFCs, received comments from all stakeholders. Reliance Capital, IndiaBulls, Religare, IL&FS, IFCI and Aditya Birla Financial Services are among those seeking to enter the banking space

New Delhi: The finance ministry has received draft guidelines on the new banking licence from the Reserve Bank of India, which is expected to make it public by the end of this month, reports PTI.

The guidelines are at a draft stage and no firm view on the paid-up capital and other issues has been taken, sources said.

The RBI is likely to issue guidelines for new banking licences by the end of the current fiscal.

"The RBI is planning to issue the guidelines for banking licences before the close of this financial year," finance minister Pranab Mukherjee had said in the Budget speech last month.

After the finance minister's announcement in 2010-11 Budget, the RBI had brought out a discussion paper in August 2010 on dispensing banking licences to business houses and non-banking finance companies, besides regulations for the same to foster greater competition.

The RBI also sought to know "whether industrial and business houses could be allowed to promote banks." Further, it sought stakeholders' views on whether non-banking finance companies (NBFCs) should be allowed to convert into or promote banks.

The apex bank has received comments on its discussion paper from all the stakeholders.

Various entities like Reliance Capital, IndiaBulls, Religare, IL&FS, IFCI and Aditya Birla Financial Services are reportedly mulling entering the banking space.

At present, India has 27 public sector banks, seven new private sector banks, 15 old private sector banks, 31 foreign banks, 86 regional rural banks, four local area banks, 1,721 urban co-operative banks, 31 state co-operative banks and 371 district central co-operative banks.


Indian ship-owners make their own arrangements to fight piracy

Despite the Indian Navy’s success in combating the dreaded Somali pirates yesterday, leading players from both private and public companies are putting their security measures in place

Increasing intensity of Somali pirates' activities in the Gulf of Aden, one of the busiest trade routes in the world, and Indian waters has alarmed the government and ship-owners, and they have started taking various concrete steps to protect assets, and most importantly, save the lives of seafarers.

"Piracy is an international issue and it has been menacing the international shipping industry as well as the Indian shipping industry," S Hajara, chairman & managing director, Shipping Corporation of India Limited, told Moneylife.  

Now, Somalia pirates have spread their operations in the west coast of the Arabian Sea, making Indian ships more vulnerable to their piracy operations. In a major development which proves the extent of piracy, yesterday, the Indian Navy arrested 61 pirates and rescued 13 sailors from captivity in the Arabian Sea, about 600 nautical miles west of India.

However, the nationalities of the pirates have not been disclosed yet. According to a report, in 2009, Somali pirates collected around $600 million in ransom.

To tackle this issue, ship-owners are taking some small but concrete steps such as increasing speed of vessels and creating strong-rooms for sailors when they are attacked.

"Whatever best market practices we have got, we are putting it to protect ships such as putting barbed wires on ships. Another step is (creating a) 'safe house'. One of the engine rooms or bridges is designated as a safe house, where, in case pirates board the ship, crew members gather and lock themselves, out of the reach of pirates, and guide the Navy to undertake a rescue operation," Anil Devli, chief executive officer, Indian National Shipowners Association (INSA) told Moneylife.

"We are not seeing any drop in shipping activities through piracy affected areas," added Mr Devli.

The government is also taking some serious security measures to protect ships from pirates. However, some intensive actions are needed, feel industry experts.

"Various measures have already been discussed in the Ministry of Shipping," Dr Satish B Agnihotri, Director General of Shipping, told Moneylife. However, he refused to offer any further comments.

"The Indian Navy has become very active in patrolling the seas. The Indian government should set up a north-south corridor along the Indian coasts, which will ensure that the corridor and exclusive economic zones (EEZs) are manned by our security force," added Mr Devli.      

However, private owners' demand to allow guards with weapons has not been approved.
"The government is taking their own steps. We have asked the government for armed guards to be deployed on those ships which travel though piracy-affected areas, but nothing has come yet," Anjali Kumar, a spokesperson for Great Eastern Shipping Co Ltd, India's largest private sector shipping firm, told Moneylife.

"The company is also taking all safety measures for our ships," added Ms Kumar. However, she refused to share detailed information on the safety measures.

Piracy is not just a threat for the ship or its sailors; it is also proving expensive for companies as insurers are increasing premiums for insurance coverage.

"By taking safety and security measures on a large scale, we can demonstrate to the Joint Water Committee that the Indian Navy is extremely proactive and therefore, we can lower insurance premiums," said Mr Devli.   

As piracy is an international concern, all countries, which have been facing the problem, should come together and tackle the issue, say industry sources.

"We look forward not to our government, but all countries' governments (being involved). The United Nations should ensure that international navigational passages are safe and secured," said Mr Hajara.

Though piracy activities are increasing, Indian seafarers have not been discouraged from pursuing this profession.

"Despite threat to lives, seafarers are venturing into pirate infested areas on the back of the high patrolling by the Navy," Abdulgani Y Serang, general secretary, National Union of Seafarers of India told Moneylife.
India should also take some lessons from Israel. Israeli ships are usually not attacked as they are always prepared to face pirates.

"Israeli seafarers, at their young age, are taught how to fight with pirates with weapons and protect oneself," added Mr Serang.



Suresh Sadagopan

6 years ago

It is absolutely necessary to allow armed guards on the ships operating in the pirate infested waters. Israel & Russia are already doing it. We don't do anything proactively. But at least, we can follow the lead of these countries. Our government believes in fire fighting - it will consider acting probably after many more lives are lost - after all, these are the lives of common people - not the politicians... so, it does not matter...


6 years ago

It would have been good if some real seafarers could also have been asked to comment here on what they have to say about the whole thing. Sea mans club ballard estate, lbs college sewri , Or even on the various merchant navy egroups online.

WPI inflation likely to be about 8% in March: Dun & Bradstreet

The research firm stated that although food inflation has moderated in recent weeks, the ongoing surge in crude prices and the uptick in international food prices have increased the upside risks to inflation

New Delhi: India's wholesale price index (WPI) based inflation is likely to be around 8% in March on account of rising global crude prices, much above the government estimate of 7%, reports PTI quoting research firm Dun & Bradstreet.

The research firm "expects the WPI inflation to be around 7.9%-8.1% during March."

Overall inflation rose marginally to 8.31% in February, 2011, from 8.23% in the previous month. The government expects it to fall to 7% by March-end.

Food inflation has been declining for the past few weeks on account of a fall in prices of vegetables and fruits. It fell to a single digit for the week ended 26th February, after a gap of nearly three months, at 9.52%.

However, while international crude oil prices have softened recently, they are still hovering around $100 a barrel.

"Despite the moderation in food inflation in the past few weeks, upside risks to inflation have mounted, given the continuous surge in global crude oil prices and the uptick in international prices of food articles," the report noted.

The easing of food inflation, however, may not prompt the Reserve Bank of India (RBI) to halt monetary tightening as some essential commodities are still dearer and rising commodity and crude oil prices will have a bearing on the rate of price rise.

"The RBI is expected to continue with its current policy and hike short-term lending and borrowing rates by 25 basis points each in the next quarterly review later this month," according to an economist. The RBI will conduct its mid-quarterly policy review on 17th March.

The RBI has hiked short-term rates seven times since March 2010 to contain inflationary pressure.


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