Banking
RBI wants customer-friendly savings bank deposit rate policies

While seven relatively small private banks have introduced customer-friendly interest rate policies, the big banks have yet to respond to it, says the RBI governor

 

Chennai: The Reserve Bank of India (RBI) wants larger banks to come out with customer-friendly interest rate policies following the deregulation of savings bank rate like their smaller counterparts in the private sector, reports PTI.

RBI Governor D Subbarao said, since the deregulation of the rate last year seven relatively small private banks have raised it (deposit rates) and expectedly improved their share of this market segment.

"The big banks have yet to respond to this...Reserve Bank looks forward to more active play in the saving bank segment with banks coming out with some customer friendly innovations especially aimed at attracting low income households, presently outside the banking sector," he said.

Subbarao stated this at IOB Platinum Jubilee Oration Series in Chennai.

While the banks were allowed to decide interest rate on deposits and lendings in early 1990s, the saving bank segment continued to be regulated as there were apprehensions that deregulation would hurt the asset-liability management of banks and also militate against financial inclusion.

However, Subbarao said belying earlier apprehensions, the adjustment to the deregulation has been fairly smooth.

He said it is expected that whenever big banks respond to the deregulated regime, "...the adjustment will be smooth".

While deregulating the rate in the segment, RBI mandated the banks to provide a uniform rate for accounts upto Rs1 lakh while enjoying flexibility in the rates and charges for accounts over Rs1 lakh.

This was done to protect small customers whose knowledge levels and bargaining power are low, Subbarao said.

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UK bans Indian Mujahideen

British MPs voted unanimously last night to ban IM, placing it on the list of 47 organisations that have been banned from functioning in the UK

 

London: The UK has banned Indian Mujahideen (IM), citing the 'indiscriminate mass casualty attacks' carried out by the Lashkar-e-Toiba-linked terror group in India and the threat it posed to British nationals there, reports PTI.

British members of parliament (MPs) voted unanimously last night to ban IM, placing it on the list of 47 organisations that have been banned from functioning in the UK.

Setting out the reasons for proscribing IM under the Terrorism Act 2000, Home Office Minister James Brokenshire told the House of Commons that the decision was "not taken lightly" but after thoroughly reviewing all the available information and evidence about the India-based terror group.

"IM has been engaged in indiscriminate mass casualty attacks in India... They use violence to achieve their stated objectives of creating an Islamic state in India and implementing Sharia law," Brokenshire said.

He added: "The organisation has frequently perpetrated attacks against civilian targets such as markets with the intention of maximising casualties..."

"The organisation has also publicly threatened to attack British tourists, so they clearly pose a threat to British nationals in India."

The minister noted that IM was also banned in other countries, including the United States and New Zealand.

India had banned IM, which is linked to the Pakistan-based LeT, in June 2010 after it was suspected of involvement in the attack on a Pune bakery.

Brokenshire recalled some incidents in which IM was involved, such as the serial blasts in Jaipur in May 2008 in which 63 people were killed, and the September 2011 explosion outside the High Court in New Delhi that claimed 15 lives.

"IM has sought to incite sectarian hatred in India by deliberately targeting Hindu places of worship such as an attack during a prayer ceremony in Varanasi which killed a child in December 2010," he said.

Supporting the motion to proscribe IM, shadow home office minister Diana Johnson noted that IM had "strong links" with the Student Islamic Movement of India (SIMI), and asked why the government had not banned SIMI as well?

To questions about evidence of IM operating in the UK, Brokenshire said he could not respond due to security issues, but added that the Home Secretary decides to proscribe an organisation only after thoroughly reviewing all available information and evidence.

Senior Labour leader Keith Vaz said his constituency (Leicester East) had the highest number of Indian origin people in the country, and added that he was not aware of IM functioning in the United Kingdom.

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Volkswagen to buy remaining 50% stake in Porsche by August

In August 2009, the two car makers agreed to merge by the end of 2011 but since have been facing legal and tax hurdles

 

Berlin/New Delhi: German carmaker Volkswagen AG has reached an agreement to acquire remaining 50%stake in sports car manufacturer Porsche by early next month, reports PTI.

Under the deal, Volkswagen, which owns 49.9% of Porsche, would acquire the remaining 50.1% stake under the deal. It would pay 4.46 billion euros ($5.6 billion) in cash, plus one ordinary share in Volkswagen to acquire the stake, it said in a late night statement Wednesday.

A merger was agreed to in 2009 after Porsche's disastrous takeover bid failed and left the sports car maker with huge debt. The two companies had agreed in August 2009 to merge by the end of 2011 but has since faced legal and tax hurdles.

Volkswagen had bought 49.9% stake in Porsche in late 2009 as part of the merger plan.

The German company said that deal, which is expected to finalise by 1st August would boost Volkswagen's earnings.

"The accelerated integration will allow us to start implementing a joint strategy for Porsche's automotive business more quickly, to realise key joint projects more rapidly, and hence to leverage additional growth opportunities in attractive market segments.

"It will also enable Volkswagen AG and Porsche AG to concentrate fully on their operating business by making day-to-day cooperation much simpler," Volkswagen CFO Hans Dieter Potsch said.

Volkswagen said full consolidation of Porsche's operations in its balance sheet would boost its' full-year financial earnings by more than 9 billion euros alongwith its net liquidity would decline by about 7 billion euros.

The German firm said the deal would produce synergies worth 320 million euros, which would be shared equal between the two groups.

According to media reports, if it bought the remaining stake before 2014, the two companies may have had to pay more than one billion euros in taxes, making the deal less attractive.

The reports said the deal has been structured in way which allows Volkswagen to avoid paying the hefty taxes.

The deal "is Good for Volkswagen, good for Porsche and good for Germany as an industrial location," Volkswagen and Porsche Head Martin Winterkorn said in the statement.

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