The clamour may have been for Sachin Tendulkar but the sports ministry has recommended hockey legend Major Dhyan Chand’s name for the Bharat Ratna
The sports ministry has recommended hockey legend Major Dhyan Chand’s name for India’s highest civilian honour - the Bharat Ratna. By doign so, the ministry seems to have ignored demand from several quarters to recommend name of Sachin Tendulkar, the cricket legend.
Sports Secretary PK Deb said, “The letter recommending the Bharat Ratna for Dhyan Chand has already been sent to the Prime Minister. The Ministry has only recommended Dhyan Chand’s name for the highest honour".
Earlier, in 2011, the Government had ignored the plea of 82 Members of Parliament, who recommended Dhyan Chand’s name for the Bharat Ratna. However, in January 2012, the ministry itself forwarded Dhyan Chand's name along with Olympic gold medallist shooter Abhinav Bindra and mountaineer Tenzing Norgay for the award.
However, Tendulkar’s name was not given by the ministry as the Board of Control for Cricket in India (BCCI) had not recommended him for the highest award in the country.
The recommendation sent to Prime Minister Manmohan Singh, will be studied further before it goes for approval by President Pranab Mukherjee, for the hockey wizard to get the award posthumously.
With attention of the RBI offices diluted into thousands of non-descript companies, the big fish continue to have a field day right under the nose of the RBI
Unable to save lakhs of investors from losing thousands of crores, the Reserve Bank of India (RBI) has started fishing for non-banking finance companies (NBFCs). It has recently shot thousands of notices to companies asking to send their annual reports, for the RBI to examine whether the company is an NBFC or not. The same RBI slept over the years as Sahara collected in excess of Rs20,000 crore.
All this, surprisingly, comes just in the backdrop of the Usha Thorat Panel Report, which sought a major recast of NBFC regulation. RBI itself has published an advanced notice of rule-making, seeking to exempt companies, except those very large, from registration requirements. As of March 2012, RBI was monitoring some 12,385 companies registered as NBFCs. As if this was not enough, RBI has sent roving mailers to all those companies bearing registration with the Registrars of Companies (ROC) under a “financial code” asking them to send their annual reports and details of other companies in same group, so that the banking regulator could ensure that the company is not an NBFC.
In other words, by default, every company is an NBFC, unless the RBI concludes otherwise, or at least, every company with a financial code registration. A ‘financial code’ is a vast code and includes all financial intermediation, except insurance and pension funding (division 65 as per National Industrial Classification -NIC code 2004) and all activities auxiliary to financial intermediation (division within its ambit).
Financial intermediation activities include loan, hire purchase, investment, mutual fund, housing finance, chit funds, leasing and other related financial activities. However, it is pertinent to note that division 67 ‘Activities auxiliary to financial intermediation’ includes financial and mortgage advisory, brokers and security-dealing activities on behalf of others. Thus, the companies proposing to render financial advisory have no other option but to select the financial code at the time of incorporation.
As per the annual report of Ministry of Corporate Affairs (MCA), 31.57% of total companies which got registered during the year 2012-13 (till December 31, 2012) were registered under ‘Finance, Insurance, Real estate and Renting, Business Services’ head forming the largest chunk among all other categories. Last year also maximum companies were registered under the said head aggregating to 41.83% of the total. It is quite apparent that there will be some lakhs of companies registered under ‘financial code’. Is RBI intending to send notices to all such companies?
The efficiency of any regulation lies in relevance of the regulation and not its expansiveness. The more expansive, the shallower. Hence, Usha Thorat Panel recommended the RBI to focus on the big fish.
Apparently, the move of the RBI to send fishing letters is deplorable. If all that the RBI needs to know, by looking at the balance sheets of the companies, is to find out whether the company is a financial company or not, the balance sheets of the companies are on the website of the ROC, and they are available for download.
In addition, the RBI instituted a system of auditor’s report in terms of Non Banking Financial Companies Auditors’ Report (Reserve Bank) Directions, 2008. In this system, every auditor of a company is also supposed to report, both to the Board of Directors and the RBI, as to whether the company is carrying a financial activity and the company has registration with the regulator to do so. The auditor is required to make an exception report to the RBI if the company is carrying on a financial business, and is not registered with the central bank.
As if throwing the obligation of registration with the respective companies coupled with a secondary check by the auditing professionals was not sufficient, the RBI now wants to get into action directly by instructing all companies to communicate to the RBI their financials. It is almost like the local police office calling all citizens to be examined by the police to ensure that they have not done any crime.
It is this expansive regulatory attitude that is largely responsible for the present plight of millions of depositors in the country. With attention of the RBI offices diluted into thousands of non-descript, companies, the big fish continue to have a field day right under the nose of the RBI.
(Vinod Kothari is a chartered accountant, trainer and author. He is an expert in such specialised areas of finance as securitisation, asset-based finance, credit derivatives, accounting for derivatives and financial instruments and microfinance. The writers can be contacted at [email protected] and [email protected])
HDFC reported 17% growth in its first quarter net profit on healthy loan book growth and stability witnessed on the spreads
Housing Development Finance Corp (HDFC), the country's largest home loan provider reported a a 17% higher net profit for the first quarter due to strong demand for loan in tier-II and tier-III cities.
For the quarter to end-June, the lender said its net profit rose 17% to Rs1173.1 crore from Rs1001.9 crore while total revenues increased to Rs5,564.9 crore from Rs4,942.3 crore same period last year.
HDFC said its income from operations stood at Rs5,556.94 crore in the first quarter compared with Rs4,914.72 crore a year ago period.
Total income of HDFC was the same as income from operations as there was no profit from sale of investments compared with Rs20.24 crore during the first quarter last year. As the company reported nil profit on sale on investments during the quarter, non-interest income came in at mere Rs8 crore as compared with Rs117 crore in previous (March 2013) quarter and Rs28 crore in the quarter ended June 2012.
As on June 2013, HDFC said its loan book (net of loans sold) stood at Rs1.77 lakh crore compared with Rs1.48 lakh crore in the same quarter last year.
HDFC shares closed Friday 2.4% down at Rs803.5 on the BSE while the benchmark Sensex ended marginally up at 20,149.