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Five PSU Bankers In Fray For RBI Deputy Governor’s Job

Five PSU Bankers In Fray For RBI Deputy Governor’s Job

FSMUMBAI: The Union government has decided to have five bankers, all from public sector lenders, interviewed for a deputy governor’s job at the Reserve Bank of India. Among the four such posts, one becomes vacant in June with K C Chakrabarty’s retirement; he came from the same route.

 

K R Kamath, chairman and managing director (CMD) of Punjab National Bank; Vijayalakshmi Iyer, CMD of Bank of India; S S Mundra, CMD of Bank of Baroda; R K Dubey, CMD, Canara Bank; and M Narendra, CMD, Indian Overseas Bank, will appear for the interview, at the end of the month.

 

Kamath has been a CMD the longest among these five; he was head of Allahabad Bank from August 2008 before his present charge from October 2009 at the Delhi-based lender. He is also chairman of the Indian Banks’ Association.

 

Iyer took charge of Bank of India in November 2012 and was earlier an executive director of Central Bank of India. Mundra was an ED of Union Bank of India and became Bank of Baroda’s head in January 2013. Narendra took charge of the Chennai-based lender in November 2010. He was ED at Bank of India before his present role. R K Dubey was made Canara Bank’s head in January 2013 and was an ED in Central Bank of India earlier.

 

A search committee headed by the RBI governor is typically formed to interview the candidates, also comprising eminent professors at management institutes and senior finance ministry officials.

 

The government has ignored RBI’s earlier recommendation of broadbasing the eligibility criteria by including bankers from the private sector.

 

A deputy governor can be appointed for a maximum of five years or till the age of 62. A candidate has to be below 60 years to be eligible. However, there have been instances when the criteria were relaxed.

 

Traditionally, among the four RBI deputy governors, two are promoted from within its ranks, one is an economist and the fourth a commercial banker. Apart from Chakrabarty, the other deputy governors are H R Khan and Urjit Patel. The governor is yet to announce a replacement for Anand Sinha, who retired in January (he came from within RBI). Khan’s three-year tenure ends in July, though he will be eligible for extension.

(Source: Business Standard, March 20, 2014)

 

FINANCE MINISTRY WANTS RBI INTERVENTION TO CURB RUPEE VOLATILITY

 

NEW DELHI: The finance ministry would like the Reserve Bank of India (RBI) to intervene more frequently in the currency market to smoothen volatility, build reserves when the rupee strengthens and use this to bolster the currency when it weakens. The rupee has strengthened from 63.11 to a dollar at the end of January going past the 61 level, triggering calls for the central bank to use the opportunity to buy dollars for building reserves. India’s exports contracted in February after seven months of expansion, which was partly blamed on the stronger rupee even as many of the country’s exporting rivals have seen their currencies depreciate. “We don’t want to target a level of currency. We would like the central bank to intervene to smoothen volatility,” said a senior finance ministry official. There should be more intervention by the central bank to smoothen the “rough edges” in the currency markets, this person said.

http://economictimes.indiatimes.com/news/economy/policy/finance-ministry-wants-rbi-intervention-to-curb-rupee-volatility/articleshow/32325480.cms

 

RBI WANTS GOVERNMENT TO CONSIDER OUTSIDERS AS PSU BANK HEADS

 

NEW DELHI: The Reserve Bank of India (RBI) has recommended that the government dissociate itself from the selection process involved in picking the heads of state-run banks. The central bank has also suggested that top executives of public sector banks (PSBs) be selected from a wider pool that includes private sector candidates, rather than be confined to those from the state-run lenders. It also recommended that such executives be paid salaries that are comparable with those in other industries. “The central bank has raised some issues on management in PSBs, which are being discussed,” said a senior government official, referring to the proposal. “One of the recommendations is that the selection process should be left to an independent panel of experts through open-market, global advertisements for the chairman’s post.” The RBI said State Bank of India, the country’s largest bank, and its associate banks could especially benefit from the infusion of outside talent as the current system, which is restricted to internal candidates, inhibits fresh thinking. The recommendations were made by the RBI in a paper, Management and Governance issues in PSBs.

http://economictimes.indiatimes.com/news/economy/policy/rbi-wants-government-to-consider-outsiders-as-psu-bank-heads/articleshow/32325134.cms

 

POLL PANEL RAISES RED FLAG ON BANK LICENCE TIMING

 

NEW DELHI: The Election Commission (EC) has expressed its reservations on the timing of the Reserve Bank of India’s (RBI) proposal to grant new banking licences to two of the 25 applicants. “There are certain issues for which we need more clarity and are writing to the RBI,” an EC official said on the condition of anonymity, adding the poll panel would take a decision by the end of this month. EC received the RBI proposal in the first week of this month, soon after the model code of conduct came into force on March 5. “The RBI had asked for our permission to clear two banking licences. The reason it cited was that the government had already announced giving new bank licences before the elections were notified. The central bank also said the relevant banking rules were notified way in advance,” said another high-ranking EC official. The official didn’t want to be named because of the sensitivity of the matter. The official said if everything was planned and announced in advance, there was no reason why the licences could not have been allotted earlier. “Why did the RBI have to wait for the electioneering process to begin? We are also considering whether this can wait for another two months, by when the election results would be out,” he added.

http://www.business-standard.com/article/elections-2014/poll-panel-raises-red-flag-on-bank-licence-timing-114032000016_1.html

 

BANK-PROMOTED ARCs CAN’T BUY STRESSED ASSETS FROM SPONSORS

 

MUMBAI: The Reserve Bank of India (RBI) has barred asset reconstruction companies (ARCs) from acquiring bad loans from sponsor banks on a bilateral basis. However, it has allowed such transactions if the asset is auctioned in a transparent manner, on an arm’s-length basis and if prices are determined by market factors. To tackle the increasing number of bad loans, the central bank had unveiled fresh guidelines in January, making the sale of loans to asset reconstruction companies easier. Apart from allowing banks to sell standard assets, the regulator had also allowed them to reverse the excess provision on the sale of bad loans if the sale was for a value higher than the net book value to its profit in the year the amount was received. While asset sales to ARCs were encouraged, RBI on Wednesday laid out norms to ensure transparency in such transactions. It said promoters of the defaulting company were allowed to buy back their assets from ARCs or securitisation companies if such settlements helped minimise the cost of litigation.

http://www.business-standard.com/article/finance/bank-promoted-arcs-can-t-buy-stressed-assets-from-sponsors-114031901029_1.html

 

BANKS’ DEPOSIT GROWTH BEATS RISE IN CREDIT, SAYS RBI

 

The banking system’s deposit growth continues to be higher than the growth in credit, owing to slow economic growth. Reserve Bank of India (RBI) data show for the fortnight ended March 7, credit grew 14.65 per cent year-on-year, while deposits rose 15.55 per cent. During the fortnight, credit grew 1.29 per cent, while deposits rose 1.15 per cent. After declining for three consecutive months, industrial production increased 0.1 per cent in January, even as manufacturing woes continued, official data showed on Wednesday. High interest rates also contributed to the sluggish credit growth. In the pre-monetary policy meeting between representatives of the central bank and market participants, it was suggested the regulator consider a rate cut, as Consumer Price Index (CPI)-based inflation had seen a fall. In February, retail inflation eased to a 25-month low of 8.1 per cent year-on-year, against 8.79 per cent in January. RBI will announce the monetary policy for 2014-15 on April 1. Most economists believe it will keep a status quo on key policy rates.

http://www.business-standard.com/article/finance/banks-deposit-growth-beats-rise-in-credit-114031900895_1.html

 

BANKS MUST PROTECT SYSTEMS, ATMS WITH WINDOWS XP: RBI

 

MUMBAI: The Reserve Bank of India (RBI) on Wednesday said banks must take steps to protect systems and ATMs working on Windows XP from attacks as Microsoft will stop giving updates and solutions for bugs in the operating system. “It is learnt that Microsoft will stop issuing updates and patches for bugs in its Windows XP operating system (released in 2001) from April 8,” RBI said in a statement. The probability of attacks on such a system may increase and it may be difficult to defend such attacks in the absence of Microsoft support, RBI added. The central bank said as some of the systems, including ATMs, may still be working on Windows XP, banks are advised to take immediate steps to implement appropriate systems and controls in this regard. In February, the Indian Banks’ Association (IBA), the banking industry lobby group, had issued an advisory banks to ensure business continuity after Microsoft ends support for its popular Windows XP operating system on April 8.

http://www.business-standard.com/article/finance/banks-must-protect-systems-atms-with-windows-xp-rbi-114032000018_1.html

 

CBI DID NOT HAVE ENOUGH FACTS ON C. B. BHAVE, SAYS P. CHIDAMBARAM

 

NEW DELHI: Finance Minister P. Chidambaram on Wednesday said the Central Bureau of Investigation (CBI) did not have the entire facts yet when it registered a preliminary enquiry against C. B. Bhave, former chairman of the Securities and Exchange Board of India (Sebi). “I have been briefed in the case. I don’t think the entire facts are yet before the CBI. The original licence granted to MCX-SX was only to deal in currency futures. It was not a licence to deal in equity. I think the distinction is important,” Chidambaram told FE in an interview. The CBI had last Thursday registered a PE against Bhave and former Sebi full-time member KM Abraham for granting permission to MCX-SX to start trading in currency futures in 2008, and renewing it in 2009 and 2010, despite income tax raids on the Jignesh Shah-promoted Financial Technologies India (FTIL) and MCX, the commodities exchange promoted by FTIL, in June 2007. These two entities are the promoters of MCX-SX. According to sources close to Bhave, the permission to MCX-SX was granted at a time when the derivatives market was completely dominated by the National Stock Exchange. “The finance ministry did provide Sebi information on the tax raids. It needs to be mentioned here that MCX, at that point, was running a full-fledged commodity exchange. Subsequently, there was an update on the closure of the income tax case. Anyway, Sebi could not have denied them permission based merely on information that there were tax raids,” the source said.

http://www.financialexpress.com/news/cbi-did-not-have-enough-facts-on-bhave-says-fm/1234379

 

RBI WANTS TRADE RECEIVABLES & CREDIT EXCHANGE FOR FINANCING MSMEs

 

MUMBAI: The RBI has proposed setting up of a trade receivables and credit exchange (TCE) for financing micro, small and medium enterprises (MSMEs). In a concept paper, the central bank detailed the model through which TCE would function and alleviate some concerns over financing for MSMEs. The proposed model outlines two stages for trade receivables, the primary segment where MSME bills are dematerialised and discounted through the electronic platform through the mechanism of reverse factoring and the secondary market segment where the already factored or discounted invoices are further traded. In the primary segment, once an MSME delivers goods as per requirement to a corporate buyer along with a bill, the buyer on acceptance of the goods posts the bill on the TCE. These receivables of the MSME from the buyer become available to third parties for bidding. The MSME can access fresh funds through the bidding process. While the MSME gets funds ahead of the actual payment by the buyer, the buyer can directly pay to dues to the financier of the MSME.

http://www.financialexpress.com/news/rbi-wants-trade-receivables-credit-exchange-for-financing-msmes/1234347

 

MAHILA BANK TO START INTERNET BANKING FROM JUNE

 

BHUBANESWAR: Bharatiya Mahila Bank (BMB) Limited, the first women’s bank and a wholly-owned government institution, plans to start internet and mobile banking services from June this year. “We have started ATM services from day one. We can expect the internet banking from June onwards,” said Usha Ananthasubramanian, chairman and managing director of the bank. She had come to inaugurate the bank’s 18th branch here today. Priority is to have critical number of masses to use the services, she added. BMB will recruit around 200 employees in 2014-15 while 300 odd more employees will come from other banks as it plans to open 55-60 more branches in the country in the next fiscal. The bank, at present, is present at Mumbai, New Delhi, Bengaluru, Chennai, Kolkata, Guwahati, Lucknow, Ahmedabad, Indore, Chandigarh, Dehradun, Raipur, Thiruvananthapuram Goa, Jaipur, Ranchi and Shimla. We will add six more branches by March end, she said. The bank is tying up with self help groups (SHGs) and NGO (non governmental organisations) for identifying the women beneficiaries. “We are trying to offer collateral free loans up to Rs 1 crore by covering it under Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE),” the CMD said. The bank has also tied up with Tata Motors for extending car loans to women at lower interest.

http://www.business-standard.com/article/finance/mahila-bank-to-start-internet-banking-from-june-114031900806_1.html

 

BANK OF INDIA PLANS TO FLOAT CREDIT CARD ARM

 

MUMBAI: Bank of India plans to open a credit card subsidiary in an effort to lure young customers at a time when most banks are trying to reduce their exposure to potentially risky loans. This is part of the bank’s push towards retail banking, which the bank hopes will drive growth in the coming years. The bank is likely to float a separate subsidiary to sell Bank of India cards, but a joint venture with an experienced credit card business vendor could also be explored, the bank’s chairperson V.R. Iyer, said in an interview. The country’s largest lenderState Bank of India has such a joint venture with GE Money, the financial arm of General Electric Co., called SBI Card. “We are still evaluating the right business model but I do have it in mind to explore a differentiated strategy and may consider floating a subsidiary or collaborate with technical partners with relevant expertise and experience,” Iyer said. The bank has started working on the project in the last month or so. “I do see cards playing a significant role in consumer transactions in the future and our large and extensive consumer base provides a captive market. While we are deliberating our product suite, our first priority, however, is to develop a proper risk management and monitoring system for the business.” Iyer said.

http://www.livemint.com/Industry/N5eIEm2wtGHJPClaqzZJsK/Bank-of-India-plans-to-float-credit-card-arm.html

 

SYNDICATE BANK SETS UP TEAM FOR RECOVERING BAD LOANS

 

BANGALORE: “We have begun to effectively outsource the work relating to recovery by hiring agents. Have also begun to sell some stressed assets to asset reconstruction companies and gone in for immediate recovery under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 as well,” said Sudhir Kumar Jain, Chairman and Managing Director, Syndicate Bank. The bank is also focused on tackling soft NPAs, initiated special one-time settlement schemes and created a dedicated special monitoring department (SMA) at the corporate office. Without disclosing the amount that the bank has recovered, Jain said: “The bank conducted four country-wide Bruhat Synd Adalats during 2013-14 and were successful in recovery.” The main reason for higher slippage is the ban on mining activity in Karnataka. Borrowers involved in retail, transport and mining segments have been the worst affected. Since the third quarter of this financial year (2013-14), the bank has taken various steps to recover bad loans and arrest the deterioration in asset quality, he said. The slippages have begun to slow down from the third quarter. “In Q3, the slippage stood at Rs. 691 crore compared to Q1 and Q2 slippages of Rs. 1,303.84 crore and Rs. 1,740.59 crore, respectively,” said Jain.

http://www.thehindubusinessline.com/todays-paper/tp-money-banking/syndicate-bank-sets-up-team-for-recovering-bad-loans/article5807411.ece

 

IRDA WARNS CUSTOMERS AGAINST FRAUD CALLS

 

MUMBAI: The Insurance Regulatory and Development Authority (Irda) has issued a series of advertisements to inform customers that the regulator does not announce bonuses for policyholders. Insurance companies have also been told to include these warnings in all their current and future advertisements. “Irda hereby urges the public to remain alert and not to fall prey to frauds or scams perpetrated by miscreants who impersonate to be employees / officers of Irda or other insurance companies,” said the regulator. According to a senior Irda official, several policyholders had complained that some individuals claiming to be Irda employees had contacted them offering policies with unviable returns including a “bonus” from Irda if they bought an insurance policy and wait for a few months. “We wanted to make it clear to customers that Irda is neither involved in the sale of any kind of insurance nor announces any bonus for policyholders or insurers,” the official added. Insurance companies have also been told to send across this message to all customers. Accordingly, all existing insurance advertisements have been modified to include a warning that Irda does not offer bonus and that customers should not surrender their existing policies or buy new policies falling prey to false promises.

http://www.business-standard.com/article/finance/irda-warns-customers-against-fraud-calls-114031901028_1.html

 

NON-LIFE INSURANCE PREMIUM INCREASES 5% DURING FEBRUARY

 

NEW DELHI: The premium income of non-life insurance companies, including that of four public sector entities, grew 5% in February to R6,066.30 crore. The four PSU entities – National Insurance, New India Assurance, Oriental Insurance and United India Insurance – saw their gross premium collection rise by 2.6% year-on-year to R3,394.83 crore in February. During the month, these four entities accounted for about 56% of the total premium collected by general insurance companies. The gross premium of 28 players in the general insurance market during April-February period of 2013-14 rose by 12.84% to R69,833.07 crore, according to data available with Insurance Regulatory and Development Authority (Irda). For April-February period, the premium collected by public general insurance companies grew by 10.9% from a year earlier to R39,069.61 crore, Irda data showed. Amongst the private sector players, L&T General witnessed a rise of 37% in its premium income to R21.40 crore in February.

http://www.financialexpress.com/news/nonlife-insurance-premium-increases-5-during-february/1234353

 

GENERAL INSURERS MAY SEE CLAIMS OF ABOUT RS 100 CRORE: AIC

 

State-run Agriculture Insurance Company of India (AIC) on Wednesday said the general insurers may see claims ranging from Rs 85 crore to Rs 100 crore arising from the massive crop damages, spanning over 8 lakh hectares, following hailstorms in Maharashtra earlier this month. “As per our initial estimates, claims may be to the tune of Rs 85-100 crore from this event,” AIC general manager Rajeev Chaudhary said. The public sector insurer, which specialises in providing weather and crop insurance, has one of the largest presence in this region of the Western state. As per the company, 10 crops are insured of which three are cereals and rest are horticultural crops. While cereals include wheat, jowar and Bengal gram; horticultural crops include oranges, grapes, guavas, pomegranates and cashews among others. Interestingly, while farmers from all states have to compulsorily take a crop insurance while taking a crop loan from banks, it is voluntary in Maharashtra.

http://www.business-standard.com/article/current-affairs/general-insurers-may-see-claims-of-about-rs-100-crore-aic-114031901191_1.html

 

INSURANCE MAJORS ANCHOR CPSE EXCHANGE-TRADED FUND

 

NEW DELHI: Insurance majors weighed in with big investments as the CPSE Exchange Traded Fund opened on Wednesday for anchor investors. Even as foreign institutional investors stayed away, as many as six of the seven institutional investors that put in aggregate bids of Rs. 835 crore for the anchor investor portion were domestic insurers. The CPSE ETFs for the anchor portion was open for a day on Tuesday. The insurance biggies were taking full advantage of the recent IRDA decision to allow insurers to invest in ETFs. Till the Insurance Regulatory and Development Authority in early March opened the doors to insurers to invest in ETFs, with some riders, insurers could invest only in passively managed schemes of mutual funds registered with SEBI. Also, the ETFs had to be listed and the overall expense ratio had to be under 0.50 per cent. Most state-owned insurance majors — Life Insurance Corporation, General Insurance Corporation, National Insurance Company, The New India Assurance and United India Insurance — participated in a big way in the CPSE ETF’s anchor investor portion. “We think investing in the CPSE exchange-traded fund is a good proposition for us in the medium to long term. We have long-term funds and our regulator recently allowed us to park funds in ETFs,” G Srinivasan, Chairman & Managing Director, New India Assurance, told Business Line.

http://www.thehindubusinessline.com/todays-paper/tp-markets/insurance-majors-anchor-cpse-exchangetraded-fund/article5807447.ece

 

PE-BACKED JANALAKSHMI FIN PLANS TO RAISE RS 1.5K-2K CR

 

CHENNAI: Janalakshmi Financial Services Pvt Limited (Janalakshmi), an urban microfinance institution (MFI), and one of the two MFIs in India to have applied for a banking licence, said it would increase its book to Rs 10,000 crore in the next three years. The company said it would require Rs 1,500-2,000 crore equity to achieve its target of Rs 10,000-crore mark. On Wednesday, the International Finance Corporation (IFC) said it would invest Rs 120 crore in the company in the form of senior debt investment. V S Radhakrishnan, managing director and CEO of Janalakshmi Financial Services, said: “The company has been growing at around 100 per cent year-on-year and, in the next two-three years, we could touch the Rs 10,000-crore mark. The market is huge and large and the opportunity for customers to access finance is also huge.” The company might go for one round of fund-raising this year. “Giving our track record, attracting investors shouldn’t be an issue,” Radhakrishnan added. He noted that MFIs had stored some 130 million records in the Credit Bureau in the past 20-22 months. Janalakshmi, promoted by Ramesh Ramanathan, a former managing director and European head of corporate derivatives at Citibank, is backed by Citigroup Venture Capital, Morgan Stanley Private Equity, Tata Capital, Treeline, India Financial Inclusion Fund, GAWA Capital and QRG Enterprise. The company is a leading urban MFI, headquartered in Bangalore with a borrower base of a million women and a loan portfolio of Rs 2,000 crore. Going forward, Janalakshmi will look at rural opportunity and the “experiment” has already started in Karnataka.

http://www.business-standard.com/article/companies/pe-backed-janalakshmi-fin-plans-to-raise-rs-1-5k-2k-cr-114031900186_1.html

 

SEBI TO CONSIDER ADDING TWO MORE DIRECTORS TO STRENGTHEN MANAGEMENT

 

MUMBAI: In its budget for FY15, capital market regulator SEBI is likely to seek resources for strengthening its top management by adding a couple of executive director positions, sources said. This is aimed at the enhanced future responsibilities that the regulator would be taking up. The SEBI board is expected to take this up when it meets on Thursday to finalise its annual budget for FY15. At present, there are seven executive directors at SEBI. Sources indicated an increase in SEBI fees in the coming year. However, this has to be done while simultaneously ensuring that transaction costs in the securities market does not become prohibitive. The penalty collected by SEBI goes to the Central Government’s coffers and the regulator has to manage its budget using the fees it collects from its regulated entities. SEBI had estimated a capex of Rs. 121.61 crore and an extraordinary expenditure of Rs. 145 crore as corpus contribution to the National Institute of Securities Market for FY14.

http://www.thehindubusinessline.com/todays-paper/tp-markets/sebi-to-consider-adding-two-more-directors-to-strengthen-management/article5807448.ece

 

SEBI NOTIFIES NORMS TO MAKE KYC PROCESS EASIER FOR INVESTORS

 

MUMBAI: Making the know-your-client process easier for investors, Sebi has notified a net set of norms that allow various market entities such as brokers and MFs to get details from centralised KYC agencies, rather than carrying out a fresh KYC verification procedure. An option available to a market intermediary is that it may access the centralised KRA (KYC Registration Agency) system in case of a client, who is already KYC compliant. “When the client approaches another intermediary subsequently, the intermediary shall verify and download the client’s details from the system of KRA,” the Securities and Exchange Board of India (Sebi) said in a notification dated March 13. This norm is subject to the “receipt of information on change in KYC details and status of the clients by the intermediary or when it comes to the knowledge of the intermediary, at any stage, the intermediary shall be responsible for uploading the updated information on the system of KRA and retaining the physical documents.”

http://www.financialexpress.com/news/sebi-notifies-norms-to-make-kyc-process-easier-for-investors/1234351

 

INVESTORS EXPAND CAPITAL FUNDS TO SUPPORT STARTUPS

 

BANGALORE: Two of India’s top early-stage investors, Kae Capital and Blume Ventures, are raising new funds within two years of inception with an aim to create new pools of capital to support fledgling ventures. These funds are looking to bridge the gap between abundant seed funding and slightly scarcer venture capital in India’s booming startup ecosystem. The two Mumbai-based firms will begin the process of raising new funds by June. “The larger fund will primarily help invest in follow-on rounds,” said Sasha Mirchandani, founder of Kae Capital. “The new fund will certainly be larger than the current $25 million,” he said. Blume Venture, which raised Rs 100 crore from domestic investors in July 2012, expects to raise $50 million for its second fund, this time around the fund will also raise money from foreign institutional investors. “You can only go deep when you have the money and do not have to sit on the sidelines,” said Karthik Reddy, cofounder of Blume Ventures which has invested in companies such as car-rental service Taxiforsure, robotics services provider Grey Orange Robotics and cleantech firm Carbon Clean Solutions. In the past two years there is a sharp increase in the number of seed-funded startups looking for the next round of funding in India with the proliferation of angel networks and accelerators. There are about a dozen active accelerators and about six major angel network groups in the country.

http://economictimes.indiatimes.com/news/emerging-businesses/startups/investors-expand-capital-funds-to-support-startups/articleshow/32322135.cms

 

SEBI ORDERS FTIL TO SELL SHARES IN MCX-SX AND OTHER BOURSES

 

MUMBAI: Capital markets regulator Sebi on Wednesday directed Jignesh Shah-led Financial Technologies India to sell its shares in MCX-SX and other exchanges within 90 days on the ground that it did not meet the ‘fit and proper’ criteria required for a shareholder of an exchange. The basis for Sebi’s ruling is an earlier order by commodity market regulator Forward Markets Commission (FMC), declaring FTIL not ‘fit and proper’ to hold more than 2% in commodity exchange MCX, because of its actions in managing troubled commodity spot exchange NSEL, which is facing a .`5,500-crore payment crisis. FTIL is the promoter of MCX and holds a 26% stake in it. The Sebi order comes days after the CBIA (CBI) initiated a preliminary enquiry against former Sebi chief CB Bhave and former member KM Abraham alleging irregularities in granting MCXSX a licence. In his order against FTIL, Sebi wholetime member Rajeev Agarwal noted that “..as FMC has held FTIL not ‘fit and proper’ person, in terms of provisions of regulation 20(1)(b)(v) of the SECC Regulations, it is not a ‘fit and proper’ person to acquire or hold shares of a recognised stock exchange or clearing corporation. The very reference to regulation..in the notice indicates that the FMC order against FTIL has a bearing on the securities market”.

http://economictimes.indiatimes.com/markets/regulation/sebi-orders-ftil-to-sell-shares-in-mcx-sx-and-other-bourses/articleshow/32326580.cms

 

PSU FUNDS MAY BE A BETTER BET THAN PUBLIC SECTOR ETF

 

Investors may be better off investing in existing Public Sector Undertaking or PSU funds than the Central Public Sector Enterprises (CPSE) Exchange Traded Fund (ETF) launched by the government on two counts. The fund’s high concentration on the energy sector, whose finances are impacted because of subsidies and the resultant volatility in earnings besides the passive nature of the ETF could weight it down. The CPSE Index has close to 60% of a sector weightage to energy, which makes the ETF vulnerable to the earnings prospects of the energy sector, which is regulated by the government. The ETF portfolio will have a 26% weightage for ONGC, 18% for GAIL and 7% for Oil India. The cumulative contribution of these companies to fund under-recoveries has varied between 20% and 45% in the past five years, which implies huge volatility in earnings. In FY14, total under-recoveries or the burden of selling products below cost is projected to be Rs 1.41 lakh crore, and of this, nearly Rs 64,500 crore will be absorbed by ONGC, GAIL and Oil India.

http://economictimes.indiatimes.com/markets/stocks/views/recommendations/psu-funds-may-be-a-better-bet-than-public-sector-etf/articleshow/32323651.cms

 

FIIs HIGH ON INDIA, BUYING CROSSES $2-BILLION MARK

 

MUMBAI: Foreign institutional investors’ (FIIs) buying spree, which began on February 12, has crossed the $2-billion mark. As per the latest Sebi data, FIIs have bought $2.3 billion over the last 24 sessions, taking their year-to-date purchases to $1.97 billion. According to the provisional data on the BSE, FIIs bought another $175 million on Wednesday. Domestic institutional investors (DIIs) have been net sellers at $1.3 billion since February 12. DIIs selling crossed the $1-billion mark on Wednesday. Experts remain bullish on the markets and expect the rally to continue. “The rally is likely to sustain as long as there is no challenge to the expectations that Modi will come to power in the elections. From current levels, Nifty can be trading between 6,800 and 6,900 on the eve of the election results,” said Raamdeo Agrawal, joint MD, Motilal Oswal Financial Services.

http://www.financialexpress.com/news/fiis-high-on-india-buying-crosses-2billion-mark/1234340

 

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