RBI's guidelines on CCCB are credit positive for banks, says Moody's
According to the ratings agency, the CCCB guidelines provide RBI with a tool to compel banks to conserve capital and moderate their balance sheets during periods of fast credit growth

The recent guidelines issued by Reserve Bank of India (RBI) on countercyclical capital buffer (CCCB) are credit positive for the domestic lenders though the norms are unlikely to be activated in the current year, says Moody's.


In a report, the ratings agency said, "The guidelines are credit positive for Indian banks because they make clear that banks will be required to hold the additional capital amid periods of rapid credit growth".


Last week, the central bank had issued guidelines on when it would require Indian banks to maintain a CCCB, an additional layer of loss-absorbing capital on top of banks' increased minimum capital requirements under Basel III.


According to the RBI's guidelines, the key trigger for activating the CCCB will be when the credit/GDP ratio has risen relative to its long-term trend.


The RBI said it would require banks to hold the full 2.5% buffer when the gap between the credit/GDP ratio and the long-term trend exceeds 15 percentage points.


The central bank would implement a CCCB of less than 2.5% when the gap is between three and 15 percentage points, with the size of the required CCCB increasing on a graduated scale.


"Although the credit/GDP ratio will be the key trigger, the RBI said it will maintain its discretion when reducing the CCCB, and will also look at other indicators, including banks' ratios of loans to deposits, non-performing assets and interest coverage," Moody's said.


CCCB-activation guidelines from other countries such as Hong Kong, Switzerland and Norway focus not only on the level of credit/GDP, but also on household debt indicators such as banks' mortgage assets and property prices.


In contrast, corporate loans, which account for about 80 per cent of Indian banks' loan exposure, have negatively affected banks' asset quality owing to high corporate leverage, while the asset quality of loans to households have been relatively stable.


"Thus, RBI has focused its triggers on overall domestic credit and the health of banks and corporates to sustain the increase in credit," Moody's said, adding it does not expect the CCCB norms to be activated in 2015.


India's domestic credit/GDP ratio has consistently gone up over the years to touch at 80.2% at the end of March 2014.


"Nevertheless, these guidelines provide the RBI with a tool to compel banks to conserve capital and moderate their balance sheets during periods of fast credit growth, which would benefit the banks' credit quality," Moody's said.



Misleading Pricing Issues Focus of Target Settlement
Retail giant agrees to pay out close to $4 million in California for allegedly overcharging consumers
Ever leave a store feeling somewhat befuddled about why you ended up spending so much money? Target customers in California will have more protections against products ringing up higher at the cashier than they should have under a $3.9 million settlement agreement reached this week with state officials.
The Minnesota-based retail giant agreed to strengthen its price controls and oversight after prosecutors alleged in a lawsuit filed in Marin County Superior Court that the company charged customers higher prices on items than their lowest advertised price, misrepresented how much products actually weighed and didn’t ensure its price scanners were accurate, thus violating a previous 2008 injunction.
Now, Target, which is the second largest retailer in the U.S., will have to post signs in its California stores stating:
If an item scans at a price higher than the lowest currently advertised or posted price, please advise your cashier immediately of the corrected price and we will charge you the lowest advertised.
It also has to designate a pricing compliance officer to oversee accuracy in stores in the state, conduct frequent pricing audits, including a once a week review of price and sale signs posted in each store to make sure they are up to date, better train its employees and hire a third-party auditor to ensure the weights of products are what the labels and signage say they are.
That’s all great. But the downside of the settlement is that none of the almost $4 million in penalties will go directly to consumers who were overcharged. The agreement stipulates that it is “impractical and impossible to identify or provide direct restitution to consumers who may have unknowingly been overcharged.” Instead, $200,000 will go to the state’s Consumer Protection Prosecution Trust Fund, and the rest will be split among five district attorney offices in California, as well as some other state agencies.
Let’s hope Target, whose slogan is “Expect More. Pay Less” doesn’t pass along the cost of increasing its pricing accuracy to consumers who are already peeved about being overcharged. 


Alberto Nisman and Argentina’s History of Assassinations and Suspicious Suicides
Whether the crusading prosecutor's death is found to be a suicide or homicide, many Argentines probably won't believe it. The past has taught them to always look for the sinister explanation
A year and a half ago, I talked to Alberto Nisman, the Argentine special prosecutor whose mysterious death has made international headlines.
I didn't know Nisman, but I knew the case he was investigating: the terrorist bombing that killed 85 people at a Jewish community center in Buenos Aires in 1994.
As a foreign correspondent, I had done a lot of reporting on the deadliest anti-Semitic attack in the history of the hemisphere. I interviewed survivors, investigators, diplomats, spies and shady characters from Latin America, the U.S. and the Middle East about an investigation plagued by corruption and cover-ups. Years later, I had watched from afar when Nisman succeeded in indicting Iranian officials and Hezbollah terrorists and securing Interpol warrants for them.
Nisman's startling death last month left Argentina, a country for which I have great fondness, in turmoil. Sadly, that's not unusual. The history of Argentina, and much of Latin America, is a chronicle of skullduggery: assassinations, massacres, scandals, frame-ups, convenient "accidents," staged "suicides." The Nisman case grows out of a labyrinth of lies and intrigue where almost everything seems possible except establishing facts, and almost nothing is what it seems.
Describing the elusive, chaotic reality of a South American nation, a U.S. law enforcement chief once told me: "The lights are going out in the house of mirrors."
Although he wasn't talking about Argentina, the image applies.
In the summer of 2013, I interviewed Nisman by phone and email. I agreed to meet him in Washington, D.C., where a congressional committee had invited him to testify about Iran's spy network in Latin America and its alleged role in a plot to bomb John F. Kennedy Airport in New York. At the last minute, though, the Argentine government blocked his trip. President Cristina Fernández de Kirchner had agreed months earlier with Iranian leaders to set up a joint "truth commission" about the case, part of a geopolitical shift toward Iran and Venezuela.
Nisman and many others feared his own government intended to scuttle his prosecution. In an email to me on July 10, 2013, he wrote: "I followed the [Congressional] hearing on the web and I was very sorry I couldn't be there."
His troubles got worse. Last December, the government fired a powerful spy chief who was Nisman's lead investigator. The prosecutor retaliated with a bombshell: He accused the president, her foreign minister and other political figures of conspiring to absolve the accused Iranians in exchange for commercial deals. Iranian diplomat Mohsen Rabbani, a top suspect in the 1994 attack, participated in secret talks, according to Nisman's criminal complaint.
Argentine spies "negotiated with Mohsen Rabbani," an indignant Nisman said in a television interview on Jan. 14. "Not just with the state that protects the terrorists, but also with the terrorists."
The Argentine government denied his allegations.
Four days later, the prosecutor's police bodyguards found his corpse in the bathroom of his high-rise apartment, shot in the head at point blank range with a .22-caliber pistol. He had borrowed the gun from an aide the previous evening, saying he was worried about threats. His death came the day before he planned to testify in the Argentine National Congress about his 290-page complaint.
Suicide remains a possibility. Authorities say there was no sign of a struggle or intruders. The workaholic 51-year-old was under great pressure. But Nisman's family, colleagues and others, including political opposition leaders, say he was murdered. There was no suicide note. He spent his last days preparing his legislative testimony and talking about it with associates, politicians and journalists.
Why would Nisman kill himself at a landmark moment? If he did, was he driven to it by blackmail and threats, or a devastating revelation that hurt his case? If it was murder, did it result from feuds in the intelligence community pitting presidential loyalists against spies aligned with Western agencies? Which faction would benefit from his death?

Enduring Tradition: the 'Liberated Zone'

The persistence of state-connected violence and intrigue in Argentina goes way back. As in other Latin American nations, criminal mafias flourish. They often have links to security forces and roots in the military dictatorship that ended in 1983.
Manipulation reaches extremes capable of causing paranoia. Consider the practice known as an "operetta:" Police team up with hoodlums for robberies, split the loot, then ambush their partners and claim a victory against crime. During a wave of robberies of upscale nightspots in Buenos Aires in 1998, stick-up men killed a police officer guarding a restaurant. It turned out the killers were serving prison sentences. Guards ran a scheme in which they sneaked inmates out long enough to commit robberies, then return with the perfect alibi: They were officially behind bars.
Tactics and terminology of the "dirty war" linger. During the dictatorship, uniformed police assisted death squads by withdrawing from the area around a target and establishing a perimeter to create a "liberated zone." Argentines still use that phrase to describe police involvement in mafia activity. Breakdowns in Nisman's security – it took his bodyguards 10 hours to enter his apartment after he failed to answer phone calls – have led to talk of "a liberated zone."
Looking back two decades, the phrase could describe the landscape in which the terrorist attack that Nisman investigated took place.
After President Carlos Menem, the son of Syrian immigrants, was elected in 1989, he had friendly relations with Middle Eastern governments that included Syria and Iran, launching a nuclear cooperation venture with Tehran. A whirl of scandal soon engulfed Menem's government. Mafias with Middle Eastern links infiltrated government ministries, the judiciary, security forces, border agencies and transport firms to launder money and smuggle arms, drugs, contraband and people. 
The notorious Monzer al-Kassar, a Syrian arms trafficker now serving a 30-year sentence in the United States for terrorism, illegally received an Argentine passport in record time and, according to Kassar's testimony to a Spanish judge, wore a jacket and tie for the photo borrowed from President Menem himself. Presidential relatives and top officials fell in corruption cases in the 90s involving Kassar and a shadowy Argentine tycoon of Syrian descent named Alfredo Yabrán.
A "suicide" in 1990 has gotten new attention after Nisman's death. Police found Brigadier General Rodolfo Echegoyen, a customs chief who investigated Yabrán, with a bullet in his head and a suicide note nearby. Police forensic experts eventually determined that someone else fired the .38-caliber pistol that killed the general. Yabrán later shot himself (though some people don't believe it) as police prepared to arrest him for ordering another death that shocked the country: the killing of a news photographer by corrupt cops who tried to pin it on a band of petty criminals.


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