Denying that the move is a recall, Tata Motors said it is changing the old starter motor with a new and ‘better’ one, an exercise that will reportedly to cost the firm around Rs110 crore
New Delhi: In the biggest-ever replacement exercise in the Indian automobile history, Tata Motors has asked an estimated 1.40 lakh Nano owners to bring back their cars for change of the starter motor free-of-cost, reports PTI.
Vehemently denying this is a recall, the company said it is changing the old starter motor with a new and ‘better’ one, an exercise that will reportedly to cost the firm around Rs110 crore.
“We have devised a better starter motor and so we are upgrading it in our old Nanos for improved performance. We have not received any complaint for this and this is not a recall,” a Tata Motors spokesperson said.
The company started the exercise in October and has already replaced the starter motor in about 50,000 Nano units, he added.
When asked about the total number of cars that will be covered under this replacement activity, the spokesperson said: “We will change the part in all the old Nanos that were sold before launching the Nano 2012 in November.”
According to Society of Indian Automobile Manufacturers data, Tata Motors has sold a total of 1,40,428 Nano units till November 2011, since the car’s launch in 2009.
On 21st November this year, Tata Motors introduced an upgraded Nano with a facelift, a more powerful engine, better fuel efficiency and new features, while keeping the price the same, in a bid to boost sales.
Asked about the cost of replacing the starter motors, the spokesperson declined to comment. However, as per reports, the company is likely to incur a total outgo of Rs110 crore for replacing the key component, which is responsible for starting the engine.
Prices of pulses, like yellow peas, chana, tur, urad, moong are falling since June due to adequate supply from the domestic market and imports. The trend would remain stable till monsoon next year, say experts
Despite dip in the production, the prices of essential pulses such as yellow peas, chana, tur, urad, moong- are expected to remain stable. The prices have been of the declining trend since June due to adequate supply from the domestic market as well through imports.
“We won’t see any reason for the prices of pulses either to rise or go down, further. Despite the depreciation of rupee, prices have been stabilized. There has been decline in the production, but it is marginal. There are no reasons to worry. Rabi and Kharif together declined by 5-7%. There is dip in Rabi acreage due to weather condition,” Bimal Kothari, vice-president, India Pulses and Grain Association (IPGA), told Moneylife.
According to IPGA, in the wholesale market, the prices have come down by around 40% compared to 2009 and 20% as compared to 2010. In Mumbai’s wholesale market, chana is sold at Rs32-Rs33, tur dal at Rs45, urad at Rs32, yellow peas at Rs21.
There is slight dip in the production. For 2010-11, the total production was around 18.3 million tonne, though for the current year government estimates it to be at around 17.5 million tonne.
The current demand is also met through imports. India is a net importer of pulses mainly from countries such as Canada. “Even if there is marginally dip in the production, the gap is been fulfilled by importer. Last year India imported around 2.73 million tonne of pulses. We expect the same importers for this year as well,” Mr Kothari says.
He added, “Out of the total import basket, 50% is yellow peas, which has been imported from Canada, Ukraine, Russia and France. Others pulses such as tur, moong etc have also been imported.”
A Vashi-based trader told Moneylife, “The prices have been in affordable to a common man mainly due adequate supply. Generally in winter season there is availability of fresh vegetables at cheaper prices. This also helps in holding the prices of the pulses at same level.”
Experts point there is scope for improving the yield and productivity. “Lot of research in require in the area of modified and new seeds. Government has already hiked the minimum support price, making pulses growing remunerative for the farmers’. With help of research and sound usage of technology, yield could be increased, making India a self-sufficient pulses growing nation,” Mr Kothari explained.
With 2011 turning out to be a mixed bag for microfinance sector, players are likely to keep fingers crossed in the New Year as they await a new set of regulations
Hyderabad: The Rs30,000 crore microfinance industry grappling with allegations of charging usurious rates, saw their fortune dwindling in 2011 with the Reserve Bank of India (RBI) capping the interest rates for small loans, reports PTI.
The story of SKS Microfinance’s bombastic market debut in 2010 was overshadowed in 2011 as a reported management tussle in the company hogged the limelight through the year. This was followed by the exit of its founder and executive Chairman Vikram Akula.
SKS, which brought the MFI (microfinance institution) sector into limelight in 2010 with a Rs1,650 crore (around $350 million) initial public offer (IPO), had raised hopes of other players to tap the capital market.
But the series of low moments faced by the sector, including concerns of corporate governance and strong-arm tactics for loan recovery, pushed it into the dark.
Microfinance—the business of doling out small loans at high interest rates to poor people unable to access conventional lending instruments—has come under intense regulatory scrutiny following farmers suicide in Andhra Pradesh in late 2010.
The spill-over effect of the 2010 crisis was seen in 2011 when the RBI came out with regulations capping interest rates charged by MFIs from small borrowers at 26%.
In order to help the sector, RBI brought the cash-starved MFIs within the priority sector lending category. The decision allowed them to access credit from commercial banks. It also created a separate category of NBFC-MFI.
Now, the loan by banks to MFIs for on-lending to small borrowers fall under ‘priority sector’ category and fixed the loan amount for an individual borrower at Rs35,000 from an MFI.
The central bank said the loans could be disbursed to rural families with an annual income of Rs60,000 or urban and semi-urban households with income up to Rs1.20 lakh.
The RBI, however, left it to the borrowers to decide on the repayment period either weekly, fortnightly or monthly.
It has also asked the MFIs to ensure that 75% of the loan extended is utilised by the borrowers for income generation purpose.
The sector had come under criticism for multiple lending, inscrutable business models and high interest rates of over 30% reaching a peak and coercive recovery tactics used by the lenders.
Most microcredit firms lend money through self-help groups (SHG) or women’s groups and reach out to borrowers.
Interest rates charged by these MFIs usually run up to 36%, mostly due to the cost of administering millions of such loans in remote areas.
Against this backdrop, the Andhra Pradesh government had promulgated an ordinance that sought to control the interest rates charged by MFIs, as well as check their alleged use of coercive recovery tactics.
This dried up source of bank funding for the MFIs as many banks either stopped lending or trimmed their exposure to the sector.
With time, banks resumed lending only to those MFIs which did not have presence in Andhra Pradesh.
Faced with funding problems, MFIs had to resort to other fund raising measures like institutional placement. The RBI further went ahead and opened the External Commercial Borrowing (ECB) window for them to tap the markets.
The country’s only listed MFI—SKS—has already announced it would raise about Rs500 crore through the sale of shares to institutional investors.
The RBI allowed MFIs to raise ECBs up to $10 million (about Rs53 crore) during a financial year, higher than the earlier limit of $5 million, and the funds would have to be utilised for lending to small borrowers.
Analysts however feel that the move would help large MFIs but not the medium to small size MFIs.
With 2011 turning out to be a mixed bag for microfinance sector, players are likely to keep fingers crossed in the New Year as they await a new set of regulations.
The problem started for the sector started after the Andhra Pradesh government issued an ordinance to regulate the MFIs in the state.
The total loan of all MFIs to borrowers in Andhra Pradesh, which account for 25% of the total industry, fell to Rs6381 crore, from Rs10,386 crore extended before the Act.
Fresh disbursals in the state have come to a standstill.
While all MFIs put together had proposed 73,592 new loans to borrowers, the government had rejected as many as 71,309 applications citing non-compliance of MFI Act.
As many as 24 MFIs of the total 44 recognized by the RBI are operating in AP.