Mutual Funds
UTI AMC shareholders demand appointment of Chairman, directors
During the AGM of UTI AMC, the All India UTI (AMC) Shareholder Association raised six issues, including appointment of a Chairman as the position has been lying vacant for over four years, appointment of woman directors and nominee directors on the Board
 
All India UTI (AMC) Shareholder Association, which has been formed to protect interests of non-institutional and small shareholders of the UTI Asset Management Company Ltd (UTI AMC) has insisted on enforcement of corporate governance, greater transparency and also full disclosures as prescribed under the new company law. 
 
According to Vishwas Utagi, Convener of the Shareholders’ Association, during the 12th Annual General Meeting (AGM) of UTI AMC, they raised six issues, including appointment of a Chairman as the position has been lying vacant for over four years, appointment of woman directors and nominee directors on the Board.
 
He said, the Association also insisted on disclosures which have been prescribed under the new Companies Act and the rules made thereunder, which are effective from 1 April 2014. The Shareholders have sought full disclosure on Remuneration Policy of this UTI AMC, which is mandatory under Rule 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014. Shareholders have also sought disclosure of the Performance Evaluation Report of Independent Directors that has to be disclosed before their re-appointment as mandated under the new Code for Independent directors which is prescribed under schedule IV (section 149(8) of Companies Act 2013, Mr Utagi added.
 
Another area, where even market regulator SEBI has been raising concerns, is increasing the cost of salary to the top management in AMCs. Mr Utagi said, the Association too raises concerns during the AGM on the rising costs of salary being paid to top management of UTI AMC during 2014-15.

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Bank union opposes payment bank license to private sector
According to AIBEA, if private payment banks are allowed to collect deposits, then the cost of banking services as well as interest rates on small and priority sector loans in public sector banks will go up
 
All India Bank Employees' Association (AIBEA) has opposed the licensing to payment banks in private sector, calling it an anti-public move. "The Government is trying to dilute public sector banks (PSBs) and boost private banks in the name of banking reforms," says CH Venkatachalam, General Secretary of AIBEA, in a release.
 
Earlier this week, the Reserve Bank of India decided to grant "in-principle" approval to 11 entities to set up payment banks. These includes, Aditya Birla Nuvo Ltd, Airtel M Commerce Services Ltd, Cholamandalam Distribution Services Ltd, Department of Posts, Fino PayTech Ltd, National Securities Depository Ltd, Reliance Industries Ltd, Dilip Shantilal Shanghvi (Sun Pharma), Vijay Shekhar Sharma, Tech Mahindra Ltd, and Vodafone m-pesa Ltd.
 
Mr Venkatachalam said, "At a time when Government wants to ensure that banking services reach everyone, the need is to strengthen and expand public sector banks which alone take care of the concerns of the common people and their banking needs; as such private banks are being encouraged. We know the history of such small private banks in the past which have cheated public savings and vanished from the scene. In India savings of the people is an import of the social capital and one cannot afford to play with this. Public savings should be fully regulated and controlled by the Government in the interest of our country and the common masses."
 
According to the bank employees' union, the move (to allow payment banks) is nothing but a direct attempt to boost private sector banking and to minimise the role of public sector banks as well as to reduce the market share of public sector banks. "Public sector banks in India have done yeoman services in changing the banking profile and transforming from class banking to mass banking. Our economy was saved from global financial and banking crisis only due to the reason that our banks were insulated by Government-controlled public sector banks. Our strong banking regulations helped in sparing the country from a major financial disaster. But in the name of banking reforms the Government is trying to dilute PSBs and boost private Banks," it said.
 
Raising the issue of increasing non-performing assets (NPAs) in PSBs, Mr Venkatachalam said, "Because of the colossal private corporate delinquency, public sector banks are saddled with huge bad loans of nearly Rs6 lakh crore. As on 31 March 2015, there are 7,035 cases of wilful defaulters, involving bad loans of Rs58,792 crore.  The bad loans in the banks as on 31 March 2015 has risen to Rs2,97,000 crore excluding another Rs4,03,004 crore of bad loans of 530 corporates shown as rescheduled and restructured loans under the corporate debt restructuring (CDR) scheme. Bad loans struck up in top 30 borrower accounts of PSBs as on 31 March 2015 is Rs1,21,162 crore." 
 
"All these are private corporate companies who had defaulted (PSBs) and it is strange that RBI and Government want to encourage the very same private sector to start banks? Further, because of the thinning of margins and profits, Banks are striving hard to fetch low cost deposits like savings and current account and every bank is concentrating on current account and saving account (CASA) deposits as the main route to improve their cost of funds and profitability."
 
"CASA Deposits/ Savings deposits of the common people are like oxygen to the Banks. At this juncture, giving license to such private companies to start payment banks whose main job is to collect savings and current account deposits will cut at the roots of the public sector banks," Mr Venkatachalam added.   
 
According to AIBEA, if these private payment banks are allowed to gather the savings and current deposits of the people which are of low cost, public sector banks will be deprived the same and hence the cost of banking services in PSBs will increase and rate of interest on small loans and priority sector loans will also go up. Allowing such Banks in the private sector is anti-public sector banks and in the long run anti-people, it said.
 
Opposing the move, the bank employees union has urged the government to stop this policy. AIBEA said it will write letters to the RBI Governor and Finance Minister requesting them not to go ahead with the policy.  

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COMMENTS

Anurag

2 years ago

Banks have been looting general public while creating cartel and keeping Savings Interest at lower. The new step might help general public.

Meenal Mamdani

2 years ago

It is funny that the union opposes a sound financial move simply to assure the primacy of their employers, the PSBs. This is a very short sighted stand.

The new payment banks will not be giving any loans, unless it is in the form of an overdraft on the accounts. Yes, eventually many years down the line, they may make links with existing banks to offer loans for their consumers. Even then, the size of the loan could be capped so there would be less risk.

The need of the hour is greater financial inclusion for the masses. Bank employees cannot ask for continued protection for their jobs by damping down competition.

Innovation in business is overrated: Indian-origin researcher
Innovation in business is overrated: Indian-origin researcherDrawing an analogy between how Formula One (F1) racing teams and businesses function, a new study co-authored by an Indian-origin researcher has found that big changes usually do not deliver as much value for businesses as incremental changes.
 
"The conventional wisdom that companies need to embrace change is often wrong," said co-author Jaideep Anand, professor of strategy at the Ohio State University's Fisher College of Business.
 
Using data from 49 teams over the course of 30 years of F1 racing, the researchers found that the teams that innovated the most, especially those that made the most radical changes in their cars, were not usually the most successful on the race course.
 
"We found that it was not always good to be the aggressive innovator," Anand, an alumnus of Indian Institute of Technology (IIT), New Delhi, said.
 
According to Anand, F1 racing is a very good venue to take lessons on innovation in business.
 
The innovation-intensive industry's teams of engineers, drivers and sponsors work together to succeed, which is comparative to the environment in which businesses function.
 
Moreover, Federation Internationale de l'Automobile (FIA), the independent governing body of F1 racing, imposes changes to racing teams' environments by releasing a new set of rules each year, which is similar to changes in the regulatory and business environment that businesses face on a regular basis.
 
Analysing the degree of freedom FIA gave the teams to incorporate technological innovations, the researchers found that "incremental improvements were often better than big changes".
 
The reason: Formula One cars -- like many businesses -- are complex, interconnected systems.
 
"There is a risk when you make some kinds of changes that you won't be able to make the whole system work together again," Anand said.
 
The best path, according to the researcher, is usually to make changes on the margins, where you can gain some efficiency without disturbing all the other parts of the system.
 
However, Anand cautioned that the study results do not mean innovation, even radical ones, are not sometimes needed in business.
 
"But we are pushing back at the conventional wisdom that innovation is always good, and is always the right choice for business. Sometimes there is value in going slow," he said.
 
The study appeared in the current issue of the journal Organisation Science.

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COMMENTS

vswami

2 years ago

To attempt and dilate:
According to a renowned legal legend, in no less a competent expert than the retired CJ, Kapadia, the objective of having besides, tests, etc., the so called/devised ‘standards’, for inter alia administration of the legal regime- of which one specific area made a mention of, is ‘valuation methods’. The intent is to ‘restrict the discretion’ of any authority in exercise of his vested powers in his related realm of affairs. Might be so, provided any ‘ standard ‘ prescribed and expected to be adopted / followed by one and all concerned is quite so simple and straightforward; clear-cut, with no or the least ambiguity, as to be amenable to doing so, with no impediment, such as any need for an interpretation, but with ease. Now, consider , for sampling, any of those ‘Standards’ in place; for instance, in the rules book of ISI, concerning marketed ‘goods’ ; or those concerning ‘service’ – e.g. a profession - say, law, or accounting and audit, or any other like supposed-to-be-sophisticated field of activity. Also consider, and form independent but impartial common-sense-based opinion as to whether anyone or more of the applicable standards – as prescribed by the legal or regulatory authorities and in place, for decades now, are so foolproof and safe proof, as to leave no or the least scope for any sort of the most dreaded factor of ‘discretion’ coming into or a role to play.
*Recommend to carefully view / mindfully listen to, what he has to say, - Justice Kapadia: Jurisdiction First, Doctrines Later
Left open to Edit; and invited to ponder and add value!

vswami

2 years ago

IMPROMPTU (commoner’s reaction)
As broadly viewed, innovative ideas, purely from a theoretical point of view, are needed or a must for business, (equally so, for profession); more so, in today’s constantly changing scenario hence requiring to be given due importance. In deciding to be given a final shape and being implemented , however, if were to be closely viewed from the angle of consumers/customers, the primary objective must be to further improve the quality of goods or service ; certainly not to impair or sacrifice it, even if regarded to be justified , wrongly so, on the ground of ‘cost cutting’ or balance of convenience. This is one essential aspect, which, going by common experience, does not appear to have been given much thought, instead remain merrily over sighted, even by the empowered authorities in governance of the so called ‘standards’.
No wonder, the avenues open for fighting for remedies,let alone long lasting protection, - that is, consumer and other courts, are increasingly overburdened; and groaning under the enormity /volume of litigation.
In a nut shell, the ‘standards’ prescribed, modified from time to time though, have miserably failed to cope up with and match or meet anywhere the ever changing actual needs of the hour.

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