Sundaram Mutual Fund new issue closes on 26th August
Sundaram Mutual Fund has launched Sundaram Fixed Term Plan-BH, a close-ended income scheme.
The investment objective of the scheme would be to generate income with minimum volatility by investing in debt and money market securities, which mature on or before the maturity of the scheme.
The new issue closes on 26th August. The minimum investment amount is Rs5,000.
CRISIL Short term Bond Fund Index is the benchmark index. Dwijendra Srivastava is the fund manager.
Reliance Mutual Fund new issue closes on 29th August
Reliance Mutual Fund has launched Reliance Fixed Horizon Fund-XX-Series 11, a close-ended income scheme.
The investment objective of the scheme is to seek to generate regular returns and growth of capital by investing in a diversified portfolio of central and state government securities and other fixed income/debt securities maturing on or before the date of maturity of the scheme with the objective of limiting interest rate volatility. The tenure of the scheme is 369 days.
The new issue closes on 29th August. The minimum investment amount is Rs5,000.
Crisil Short Term Bond Fund Index is the benchmark index. Amit Tripathi is the fund manager.
Dr D Subbarao emphasises difference between corporate governance in general and corporate governance for banks, saying both cannot be motivated by measurable performance indicators only
Reserve Bank of India (RBI) governor Dr D Subbarao has emphasised the need for more effective and enlightened corporate governance to improve banking productivity, saying that the ideal of 'dharma' which is so much a part of Indian heritage and culture should guide corporate governance in Indian banks.
Speaking at a banking conference hosted by the Federation of Indian Chambers of Commerce and Industry (FICCI) and the Indian Banks' Association (IBA) today, Dr Subbarao said, "This conference is jointly organised by FICCI, which pursues the interests of corporates, and IBA which looks after the interests of banks. I have simply inserted the Reserve Bank's area of interest, 'governance', between corporates and banks, so that all our collective interests are covered. And importantly, I believe more effective and enlightened corporate governance of Indian banks can be a vital avenue for improving banking productivity."
"We had instances of poor governance in the banking sector as well-erosion of standards in forex derivative transactions and fraud in wealth management schemes-reminding us that we need to work hard to get to best practices in every area of corporate governance," the RBI governor said.
While admitting the role of effective regulation for ensuring robust corporate standards in banks, Dr Subbarao said, "Regulation can establish principles and lay down rules, but the motivation to implement these principles and rules in their true spirit is a matter of organisational culture."
Some big corporates like Reliance, Tatas, Mahindra & Mahindra, the Reliance Anil Dhirubhai Ambani group (R-ADAG) as well as Religare, have shown interest in entering the banking business. The RBI, which is opposed to the entry of corporates into banking, is schedule to publish draft guidelines for new banking licences soon. "As we contemplate allowing corporates to promote banks, there is need for changes in statutes and regulations to address these concerns," the RBI governor said.
He, however, cautioned that while there are statutory and regulatory checks available against self-dealing, there are still gaps. For instance, if a corporate has an interest in a bank as a promoter or a shareholder, but has no position on the board, then there is no prohibition on the bank lending to the corporate. This opens up opportunities for self-dealing.
Another apprehension that has been raised in the debate on the (RBI) discussion paper is that it is not easy for supervisors to prevent or detect self-dealing, because banks can hide related party lending behind complex company structures, or by lending to suppliers of the promoters and their group companies.
On the subject of compensation in the banking sector, particularly since the slowdown, Dr Subbarao said, the central bank is in the process of finalising guidelines relating to compensation of whole-time directors/CEOs/risk-takers and control staff. "Taking into account the feedback received on the draft guidelines (issued in July 2010), the result of the impact studies and the final prescription issued in the matter by the Basel Committee in May 2011, the Reserve Bank is in the process of finalising the guidelines relating to compensation. The guidelines are scheduled to be implemented from the financial year 2012-13, and banks have already been advised to start preparatory work in this regard," he said.
On the issue of accountability, transparency and ethics, the RBI governor said, "While over the years, we have tried to align our transparency and disclosure standards to global best practices, we need to address critical questions like whether the voice of independent directors is always independent. Also, do bank CEOs countenance criticism from the board? Are boards succumbing to 'group think' and abandoning their responsibility of independent judgement? It is only through such soul-searching that corporate governance in banks can improve in effectiveness."
The RBI governor pointed out that while the Shyamala Gopinath Working Group has recommended that the financial holding company model should be pursued as a preferred model for the financial sector in India, "We must recognise that regardless of the corporate structure, banks cannot be totally insulated from the risks of non-banking activities of their affiliates. In moving to a new regime, we must also contend with legacy issues relating to existing conglomerates. Any framework to harmonise them under the FHC model will require a new legislation and new regulatory architecture." (FHC is the abbreviation for financial holding companies.)