Rabo Bank and Goldman Sachs will have to wait a bit longer to start their banking operations in India as the Reserve Bank of India is expected to issue new banking licences only after it comes out with a discussion paper on the issue in September, reports CNBC-TV18 quoting sources. The RBI will review presence of foreign banks to operate in India as a branch or a subsidiary in the said month. The Reserve Bank is in favour of the subsidiarisation model as it feels it will give more regulatory control over foreign banks. As far as new licences are concerned, sources at the RBI said that they welcome banks like Rabo Bank to start operations in India. The Netherlands based bank is largely focussed on agriculture based activities, which is one of the pet projects of the RBI.
Source - http://www.moneycontrol.com/news/cnbc-tv18-comments/rbi-to-issue-new-banking-licences-post-sept_467225.html
Wednesday, June 30, 2010
Facebook, Twitter now powerful business tools: Nielsen survey
SINGAPORE: Social media such as Facecbook and Twitter or blogging sites have become powerful tools that influence what people buy, online researcher Nielsen said Wednesday, urging business to embrace the trend.
Nearly three in four people worldwide who use the Internet have visited a social networking or blog, spending an average of almost six hours a month on them, The Nielsen Company said in a report.
Of the seven biggest brands online globally, three are social media networking sites -- Facebook, Wikipedia and YouTube -- it said in its latest report on social media trends in the Asia Pacific region.
"Social media is having a larger and larger influence on purchasing decisions," said Charles Buchwalter, chairman and chief executive of Nielsen Online Japan.
"Everyone understands that social media is hot, it's growing quickly and in very unpredictable ways everywhere in the world," he told reporters in an online media briefing.
According to Nielsen's findings, online product reviews are the third most trusted source of information when consumers decide whether to purchase a product, coming after recommendations from friends and family.
From China and India to Australia, online reviews are a major influence in buying electronics items, cosmetics, cars and food, among other things, it said.
An average 32 percent access social media sites from their workplaces and 31 percent access them from the confines of their bedrooms.
"The findings we've uncovered in this social media report highlight, beyond a shadow of a doubt, that social media is here to stay and needs to be taken seriously by the broader business community," said Megan Clarken, managing director of Nielsen's online business in the Asia Pacific.
Clarken added that "businesses can no longer afford to simply observe the social media phenomenon, they need to embrace it."
Buchwalter said Facebook "is much more than a poster child for social media" as businesses increasingly use it. "Social media is for real. There's no turning back."
Source - http://economictimes.indiatimes.com/infotech/internet/Facebook-Twitter-now-powerful-business-tools-Nielsen-survey/articleshow/6110244.cms
Nearly three in four people worldwide who use the Internet have visited a social networking or blog, spending an average of almost six hours a month on them, The Nielsen Company said in a report.
Of the seven biggest brands online globally, three are social media networking sites -- Facebook, Wikipedia and YouTube -- it said in its latest report on social media trends in the Asia Pacific region.
"Social media is having a larger and larger influence on purchasing decisions," said Charles Buchwalter, chairman and chief executive of Nielsen Online Japan.
"Everyone understands that social media is hot, it's growing quickly and in very unpredictable ways everywhere in the world," he told reporters in an online media briefing.
According to Nielsen's findings, online product reviews are the third most trusted source of information when consumers decide whether to purchase a product, coming after recommendations from friends and family.
From China and India to Australia, online reviews are a major influence in buying electronics items, cosmetics, cars and food, among other things, it said.
An average 32 percent access social media sites from their workplaces and 31 percent access them from the confines of their bedrooms.
"The findings we've uncovered in this social media report highlight, beyond a shadow of a doubt, that social media is here to stay and needs to be taken seriously by the broader business community," said Megan Clarken, managing director of Nielsen's online business in the Asia Pacific.
Clarken added that "businesses can no longer afford to simply observe the social media phenomenon, they need to embrace it."
Buchwalter said Facebook "is much more than a poster child for social media" as businesses increasingly use it. "Social media is for real. There's no turning back."
Source - http://economictimes.indiatimes.com/infotech/internet/Facebook-Twitter-now-powerful-business-tools-Nielsen-survey/articleshow/6110244.cms
All government services to be at your mouse-tip soon
NEW DELHI: Citizens across the 28 states will be able to avail of all government services, including payment of utility bills and applying for a driving licence, through common Internet portals being developed as part of a Rs 2,000-crore state portal project, senior government officials told ET.
The government plans to develop portals for at least 10 states by October 2010, and the rest will follow. These state portals’ services will range from getting a birth or death registration certificate, to applications for pensions, to getting a domicile or residence certificate all online. The forms will be available electronically.
“We expect many states to go live within six months. It will reduce red-tapism and make delivery of services hasslefree ,” said a joint secretary-level official at the ministry of IT & communications.
“Citizen service centre kiosks in rural areas will help the technologicallychallenged submit these forms online,” the official added. The government plans to roll out almost 10,000 more CSC kiosks by December this year, taking the total to 90,000.
The portals will need Rs 50-Rs 60 crore each to be developed, said an egovernance business head of at one of the top Indian tech firms currently bidding for this business.
Already, five IT companies — Accenture, Infosys, HP, Wipro, and 3i Infotech — have been empanelled as agencies for implementation of the project at the state level. KPMG, Ernst & Young, PwC, IL&FS and UTITSL have been empanelled as the consulting firms. The states may pick any of these agencies for implementation of the project.
When the portals go live, citizens would be able to query the status of his/her application at any point. Response will also be conveyed through SMSs or email or even displayed on portals. Initially, it may be limited to notifications like a licence or permit being ready to be picked up. But with time, all emailed printouts of licences/tickets may also be made legally eligible.
The e-service delivery will have three main steps — selecting and filling the eform and submitting it electronically. She will also get a unique ID generated by the system, to follow the status via email or SMS. The portals would be available in local languages and English.
The Madhya Pradesh government has already gone live with its MPOnline portal, a joint venture with Tata Consultancy Services. The state has tied up with Bajaj Allianz, Tata AIG and LIC, to enable their customers to pay insurance premiums online. Citizens can also recharge their mobile prepaid accounts online for Airtel, Tata Docomo, Tata Indicom and BSNL phones. They can also book private tours of state national parks like Kanha and Bandhavgarh online. Victims of the Bhopal gas tragedy can apply for free medical facilities, and state incentives online.
Source - http://economictimes.indiatimes.com/infotech/internet/All-government-services-to-be-at-your-mouse-tip-soon/articleshow/6109024.cms
The government plans to develop portals for at least 10 states by October 2010, and the rest will follow. These state portals’ services will range from getting a birth or death registration certificate, to applications for pensions, to getting a domicile or residence certificate all online. The forms will be available electronically.
“We expect many states to go live within six months. It will reduce red-tapism and make delivery of services hasslefree ,” said a joint secretary-level official at the ministry of IT & communications.
“Citizen service centre kiosks in rural areas will help the technologicallychallenged submit these forms online,” the official added. The government plans to roll out almost 10,000 more CSC kiosks by December this year, taking the total to 90,000.
The portals will need Rs 50-Rs 60 crore each to be developed, said an egovernance business head of at one of the top Indian tech firms currently bidding for this business.
Already, five IT companies — Accenture, Infosys, HP, Wipro, and 3i Infotech — have been empanelled as agencies for implementation of the project at the state level. KPMG, Ernst & Young, PwC, IL&FS and UTITSL have been empanelled as the consulting firms. The states may pick any of these agencies for implementation of the project.
When the portals go live, citizens would be able to query the status of his/her application at any point. Response will also be conveyed through SMSs or email or even displayed on portals. Initially, it may be limited to notifications like a licence or permit being ready to be picked up. But with time, all emailed printouts of licences/tickets may also be made legally eligible.
The e-service delivery will have three main steps — selecting and filling the eform and submitting it electronically. She will also get a unique ID generated by the system, to follow the status via email or SMS. The portals would be available in local languages and English.
The Madhya Pradesh government has already gone live with its MPOnline portal, a joint venture with Tata Consultancy Services. The state has tied up with Bajaj Allianz, Tata AIG and LIC, to enable their customers to pay insurance premiums online. Citizens can also recharge their mobile prepaid accounts online for Airtel, Tata Docomo, Tata Indicom and BSNL phones. They can also book private tours of state national parks like Kanha and Bandhavgarh online. Victims of the Bhopal gas tragedy can apply for free medical facilities, and state incentives online.
Source - http://economictimes.indiatimes.com/infotech/internet/All-government-services-to-be-at-your-mouse-tip-soon/articleshow/6109024.cms
Tuesday, June 29, 2010
TDS returns under I-T department scrutiny
NEW DELHI: Entities required to deduct tax while making payments could face a close scrutiny of their returns by the income-tax department as it gears to check payment defaults and boost collections.
The I-T department is contemplating scrutinising TDS returns on the lines of income tax and corporate tax returns to ensure that those required to deduct tax at source are complying with the rules and depositing due taxes.
“Enhancing collections from TDS is one of the focus areas for the I-T department,” a department official said. The fact that collections rose to more than Rs 1,50,000 crore in 2009-10 as compared to Rs 70,689 crore in 2006-07 and now contributes nearly 40% of the total tax collections itself explains why the tax authorities are eyeing it as a focus area.
The proposal, a part of the road map to strengthen the regime for TDS, figured at the annual conference of the chief commissioners and director generals.
Scrutiny assessment usually involves a detailed examination of the returns filed so as to check the veracity of the claims, while normal assessment is cleared on the face value of the assessments. At present, selection of returns for scrutiny is computer-based.
A closer scrutiny of the returns could help the department catch hold of those who have failed to deduct tax while making payments.
The tax authorities have already begun to carry out extensive surveys to catch TDS offenders. A total of 8,828 surveys and inspections were carried out last fiscal.
The I-T department had found a number of organisations, including some within the state sector as well, that deducted tax but did not deposit it with the department. In some cases it was also found that deductors were deducting tax at a lower rate.
Source - http://economictimes.indiatimes.com/news/economy/finance/TDS-returns-under-I-T-department-scrutiny/articleshow/6103680.cms
The I-T department is contemplating scrutinising TDS returns on the lines of income tax and corporate tax returns to ensure that those required to deduct tax at source are complying with the rules and depositing due taxes.
“Enhancing collections from TDS is one of the focus areas for the I-T department,” a department official said. The fact that collections rose to more than Rs 1,50,000 crore in 2009-10 as compared to Rs 70,689 crore in 2006-07 and now contributes nearly 40% of the total tax collections itself explains why the tax authorities are eyeing it as a focus area.
The proposal, a part of the road map to strengthen the regime for TDS, figured at the annual conference of the chief commissioners and director generals.
Scrutiny assessment usually involves a detailed examination of the returns filed so as to check the veracity of the claims, while normal assessment is cleared on the face value of the assessments. At present, selection of returns for scrutiny is computer-based.
A closer scrutiny of the returns could help the department catch hold of those who have failed to deduct tax while making payments.
The tax authorities have already begun to carry out extensive surveys to catch TDS offenders. A total of 8,828 surveys and inspections were carried out last fiscal.
The I-T department had found a number of organisations, including some within the state sector as well, that deducted tax but did not deposit it with the department. In some cases it was also found that deductors were deducting tax at a lower rate.
Source - http://economictimes.indiatimes.com/news/economy/finance/TDS-returns-under-I-T-department-scrutiny/articleshow/6103680.cms
ULIPs get makeover leaves insurance industry divided
The new guidelines for unit linked insurance plans (ULIPs) have evoked a mixed reaction dividing the life insurance industry, with insurance giant Life Insurance Company of India (LIC) on one side and the private companies on the other. CNBC-TV18 learns that the industry is also likely to voice its concerns on some of the guidelines to the insurance regulator on two accounts. CNBC-TV18’s Avni Raja reports.
The insurance industry is a divided lot. The 4.5% minimum guarantee on pension products seems to be a sticky issue. While the largest players, LIC says that offering a 4.5% guarantee on pension products is not difficult.
But private players insist that it is just not possible.
Kamesh Goyal, Managing Director and Chief Executive Officer of Bajaj Allianz Life, says “If you look at interest rate scenarios which we had in our country about a year back, wherein you had to give 4.5% returns for 30 years, from our company’s perspective, I would never ever be able to justify the risk which the company will have to take for offering such a high guarantee.”
Experts say that this guaranteed return will mean that majority of the corpus will have to invested largely in debt, which will result in reduction in yield over the long term.
Sanjiv Bajaj, Joint Managing Director, Bajaj Capital, says, “What that will do is that a lot of pension money which could have also gone into equity and if a person is planning to have a pension after 30 years it makes more sense for him to be invested in equity, will now be invested more in debt. So that will result in reduction in his yield over a long period.”
CNBC-TV18 learns that the life insurance council is likely to take up this issue on behalf of the industry and will also seek an extension of the September-1 deadline that it currently has to adhere to, because two months is not enough time for a complete overhaul of the ULIP portfolio.
Source - http://www.moneycontrol.com/news/cnbc-tv18-comments/ulips-get-makeover-leaves-insurance-industry-divided_467002.html
The insurance industry is a divided lot. The 4.5% minimum guarantee on pension products seems to be a sticky issue. While the largest players, LIC says that offering a 4.5% guarantee on pension products is not difficult.
But private players insist that it is just not possible.
Kamesh Goyal, Managing Director and Chief Executive Officer of Bajaj Allianz Life, says “If you look at interest rate scenarios which we had in our country about a year back, wherein you had to give 4.5% returns for 30 years, from our company’s perspective, I would never ever be able to justify the risk which the company will have to take for offering such a high guarantee.”
Experts say that this guaranteed return will mean that majority of the corpus will have to invested largely in debt, which will result in reduction in yield over the long term.
Sanjiv Bajaj, Joint Managing Director, Bajaj Capital, says, “What that will do is that a lot of pension money which could have also gone into equity and if a person is planning to have a pension after 30 years it makes more sense for him to be invested in equity, will now be invested more in debt. So that will result in reduction in his yield over a long period.”
CNBC-TV18 learns that the life insurance council is likely to take up this issue on behalf of the industry and will also seek an extension of the September-1 deadline that it currently has to adhere to, because two months is not enough time for a complete overhaul of the ULIP portfolio.
Source - http://www.moneycontrol.com/news/cnbc-tv18-comments/ulips-get-makeover-leaves-insurance-industry-divided_467002.html
IRDA increases lock-in period for ULIPs to 5 yrs
The much awaited guidelines for Unit Linked Insurance Plans or ULIPs are finally out. These guidelines come on the back of the ordinance that brought ULIPs under the jurisdiction of the insurance regulator Insurance Regulatory and Development Authority or IRDA, and put an end to the dispute between markets regulator SEBI and IRDA, reports CNBC-TV18’s Avni Raja.
The most important thing coming out of the guidelines is that the lock-in period for ULIPs have been increased from three to five years. This has largely been done because IRDA wants to ensure that ULIPs are treated as a long term insurance product and not as any short term product. All ULIPs, except pension, are annuity products and have to have either a mortality cover or a health cover.
Any top up on insurance premiums will be treated as a single premium, which means that every top up that one makes will have to have an additional insurance cover backing it as well.
As far as pension and annuity products are concerned, there will be no partial withdrawals allowed. However, these pension annuity products need not have either a life or a health cover but it compulsorily will have to be turned into an annuity on maturity.
Also, these pension annuity products will have to offer a minimum guarantee of 4.5% per annum or as the regulator suggests going forward. As far as loans are concerned, up to 40% of the NAV can be taken as a loan but it has to be an equity oriented ULIP where more than 60% is equity oriented.
The charge structure is a little complex as the insurer has to distribute the charges evenly across the entire tenure of the products. A lot of frontloading of charges has existed till now. But now that will no longer be the case and one will be able to frontload only to the extent of the first four years. After that the regulator has set out for each year how much the charge will be levied. For example for the fifth year it will be 4%, for the sixth year it will be 3.75% and so on. This will ensure that no consumer gets affected if they surrender the policy after the fifth year.
The new guidelines will be effective from the September 1 to give the companies enough time to adhere to them.
Source - http://www.moneycontrol.com/news/cnbc-tv18-comments/irda-increases-lock-in-period-for-ulips-to-5-yrs-_466745.html
The most important thing coming out of the guidelines is that the lock-in period for ULIPs have been increased from three to five years. This has largely been done because IRDA wants to ensure that ULIPs are treated as a long term insurance product and not as any short term product. All ULIPs, except pension, are annuity products and have to have either a mortality cover or a health cover.
Any top up on insurance premiums will be treated as a single premium, which means that every top up that one makes will have to have an additional insurance cover backing it as well.
As far as pension and annuity products are concerned, there will be no partial withdrawals allowed. However, these pension annuity products need not have either a life or a health cover but it compulsorily will have to be turned into an annuity on maturity.
Also, these pension annuity products will have to offer a minimum guarantee of 4.5% per annum or as the regulator suggests going forward. As far as loans are concerned, up to 40% of the NAV can be taken as a loan but it has to be an equity oriented ULIP where more than 60% is equity oriented.
The charge structure is a little complex as the insurer has to distribute the charges evenly across the entire tenure of the products. A lot of frontloading of charges has existed till now. But now that will no longer be the case and one will be able to frontload only to the extent of the first four years. After that the regulator has set out for each year how much the charge will be levied. For example for the fifth year it will be 4%, for the sixth year it will be 3.75% and so on. This will ensure that no consumer gets affected if they surrender the policy after the fifth year.
The new guidelines will be effective from the September 1 to give the companies enough time to adhere to them.
Source - http://www.moneycontrol.com/news/cnbc-tv18-comments/irda-increases-lock-in-period-for-ulips-to-5-yrs-_466745.html
Monday, June 28, 2010
World's 1st dual-touch-screen laptop
The PC Division of Toshiba India, a wholly owned subsidiary of Toshiba Corporation on Friday launched the world's first dual-touch-screen Windows mini-notebook PC - Libretto W100 - and its thinnest and lightest full-function 33.8cm (13.3 inch) laptop Portege R700 to celebrate the 25th anniversary for Toshiba Laptop business.
The Libretto (W100) runs on Microsoft Windows 7 that offers the consumer an enriched ultra-mobile computing experience. The Libretto W100 showcases Toshiba's engineering skill and ingenuity, creating a unique pocket-sized companion that can be used to create and consume any content.
The Libretto W100 has two 17.8cm (7 inch) touch-sensitive screens.
It can mimic both 'traditional media', opening like a book, or 'high-tech' media, like lifting the lid of a laptop. That means users could hold the Libretto W100 vertically to read the double-page spread of a newspaper, or could hold it horizontally, reading a document on the upper screen, while using the lower screen to capture clippings and ideas.
The lower screen can also display a virtual keyboard, enabling the device to function in the same way as a laptop. The user can easily drag and drop content, files or icons from one screen to another with a simple sweep of the finger.
Lighter and smaller than even a netbook, people can carry the Libretto W100 with them nearly everywhere. Its wireless connectivity can provide convenient web access on the move.
The Portege R700 is Toshiba's thinnest and lightest full-function 33.8cm (13.3 inch) laptop with an impressive blend of mobility, performance and features for business users.
A well-specified business machine, it combines a lightweight, ultra-slim chassis with innovative computing technologies. Airflow Cooling Technology, co-developed by Intel and Toshiba, allows the latter to integrate the latest Intel Core family processors in the Port g R700's slim casing.
A honeycomb structure in the palm-rest area makes the Port g R700 highly durable against flexing - protecting the electronic and mechanical components from being damaged, considerably prolonging the life of the product.
By innovatively stacking the memory slots vertically, the Port g R700 can accommodate up to 8GB RAM for even more powerful performance. Portege R700 doesn't compromise on battery life - it can run for an entire working day of up to eight hours on one battery charge.
The new model offers even more useful features to enhance its portability and appeal for business people; e.g. a durable yet very elegant black magnesium-alloy cover with a matt finish, a 3D sensor for hard disk protection against drops and shocks , a broad range of connectivity options, a Clear Super View Technology LED Backlit screen and a docking station connector.
The docking station supports HDMI and USB 3.0 for fast data transfer.
The Libretto (W100) runs on Microsoft Windows 7 that offers the consumer an enriched ultra-mobile computing experience. The Libretto W100 showcases Toshiba's engineering skill and ingenuity, creating a unique pocket-sized companion that can be used to create and consume any content.
The Libretto W100 has two 17.8cm (7 inch) touch-sensitive screens.
It can mimic both 'traditional media', opening like a book, or 'high-tech' media, like lifting the lid of a laptop. That means users could hold the Libretto W100 vertically to read the double-page spread of a newspaper, or could hold it horizontally, reading a document on the upper screen, while using the lower screen to capture clippings and ideas.
The lower screen can also display a virtual keyboard, enabling the device to function in the same way as a laptop. The user can easily drag and drop content, files or icons from one screen to another with a simple sweep of the finger.
Lighter and smaller than even a netbook, people can carry the Libretto W100 with them nearly everywhere. Its wireless connectivity can provide convenient web access on the move.
The Portege R700 is Toshiba's thinnest and lightest full-function 33.8cm (13.3 inch) laptop with an impressive blend of mobility, performance and features for business users.
A well-specified business machine, it combines a lightweight, ultra-slim chassis with innovative computing technologies. Airflow Cooling Technology, co-developed by Intel and Toshiba, allows the latter to integrate the latest Intel Core family processors in the Port g R700's slim casing.
A honeycomb structure in the palm-rest area makes the Port g R700 highly durable against flexing - protecting the electronic and mechanical components from being damaged, considerably prolonging the life of the product.
By innovatively stacking the memory slots vertically, the Port g R700 can accommodate up to 8GB RAM for even more powerful performance. Portege R700 doesn't compromise on battery life - it can run for an entire working day of up to eight hours on one battery charge.
The new model offers even more useful features to enhance its portability and appeal for business people; e.g. a durable yet very elegant black magnesium-alloy cover with a matt finish, a 3D sensor for hard disk protection against drops and shocks , a broad range of connectivity options, a Clear Super View Technology LED Backlit screen and a docking station connector.
The docking station supports HDMI and USB 3.0 for fast data transfer.
Source - http://business.rediff.com/slide-show/2010/jun/25/slide-show-1-tech-libretto-w100-worlds-1st-dual-touch-screen-laptop.htm#contentTop
Volatility: BSE, NSE asked to pull up socks
The committee members from the ruling and Opposition parties, in separate interactions with BSE and NSE, termed the volatility as 'clueless' and wanted both the exchanges to pull up their socks.
Senior members, on condition of anonymity, told Business Standard: "We want to know from BSE and NSE whether they have volatility indices.
"If yes, to what extent these have helped predict volatility in the market."
However, a senior member of the United Progressive Alliance said the committee chaired by former finance minister Yashwant Sinha was not satisfied with the replies from either stock exchanges. The members also insisted that both the exchanges need to do more to protect small investors.
Further, the members criticised the presence of entities or persons banned by the Securities Exchange Board of India in the stock markets.
A member from the Opposition bench said: "The committee wants to know how the banned entities or persons are still playing an active role in the stock markets.
"Despite a ban on him, it was found that Harshad Mehta, who is no more, was quite active. Similarly, the committee wanted to know how (fomer stock broker) Ketan Parekh, despite being banned by Sebi, was calling shots in the stock markets."
He added that the committee had sought a written explanation from both the exchanges on this issue.
On the entry of illegal money into exchanges through participatory notes, the members sought explanation from BSE and NSE on what precautionary measures they had taken.
"General experience is that some action is taken only when some accident takes place. The committee wanted stock exchanges to be vigilant so that illegal money does not enter into the stock markets and ultimately in India," a ruling UPA member said.
Meanwhile, the committee also held separate deliberations with the officials of the Bank of India and Bank of Maharashtra.
"The committee was quite disappointed over the rise in non-performing assets of these banks. The explanation that it was due to the global meltdown was not acceptable to the members.
However, the committee has asked these banks to play an active role in containing the NPAs," an Opposition member added.
Source - http://business.rediff.com/report/2010/jun/24/volatility-bse-nse-asked-to-pull-up-socks.htm
Sunday, June 27, 2010
Sebi sets about making MFs safer
Investors in mutual funds have a lot of positives to look forward to. In the past three months, the Securities and Exchange Board of India has announced reforms that make MFs better investment vehicles and is working to curb mis-selling, too. A summary:
An example. Assume an investor enters an existing scheme that has a net asset value (NAV) of Rs 18. For accounting purposes, an MF breaks this NAV into parts. Of the amount, Rs 10, the face value of the scheme, goes to an account called unit capital. The remaining Rs 8 goes to a separate account called a unit premium reserve.
Sebi has said the MF cannot use the money in the unit capital account, Rs 8 in the example, to pay dividends. Rather, dividends should be declared only when the NAV appreciates. In our example, say the NAV moves to Rs 20. Fund houses can only use Rs 2 to declare dividends.
Experts feel this step will curb MF mis-selling. "Agents have been pitching the dividends declared to mis-sell schemes. Many investors still don't realise that an MF dividend is different from dividends received on a stock. In an MF, an investor gets back his own money," said Manoj Kumar Vijai, executive director, KPMG.
"We will need to trade shares every time the dividend would need to be declared. Despite this drawback, there is no way we can look away from the fact that dividend payment itself is a much questioned practice," said the head of a fund house.
MF houses use this dividend to woo customers in its monthly equity-linked savings schemes and hybrid funds like monthly income plans.
Further, the regulator has directed the fund houses to mention the dividends in rupee terms, rather than a percentage of the face value. Funds usually declare dividends as a percentage to the face value, mostly Rs 10, of the scheme.
That's why dividends seem magnanimous when a scheme declares it. For example, if a fund declares a dividend of Rs 10, it means 100 per cent dividend.
Derivatives exposure: To make investors aware of the risk involved in a fund, Sebi has also mandated fund houses to declare their exposure in equity derivatives. Futures and options are risky and can lead to unlimited losses if the bets go wrong. This will force MFs to take lesser exposure to equity derivatives.
Sebi's Mutual Fund Advisory Committee has also proposed to cap the exposure of any scheme to derivatives at 100 per cent of its actual holding in stocks. This will not allow a fund house to excessively play in the futures and options market.
The requirement of only margin money in derivatives allows them to have a much higher exposure.
Making agents responsible: MFAC has also come up with recommendations that would make agents more responsible for their advice to investors.
The committee has proposed that agents categorise investors based on their risk profile, investment objective and affordability before selling funds. Among other recommendations, the committee suggested that distributors maintain written records of all recommendations and transactions.
The committee has also proposed that while advertising, fund houses should present the entire picture of the scheme's performance. This is because ads invariably talk only about the period in which a scheme had outperformed, not the reverse. The committee want funds to give both.
Source - http://business.rediff.com/report/2010/jun/24/sebi-sets-about-making-mfs-safer.htm
Will cheques with alteration be dishonoured? RBI clarifies
Clearing the confusion over honouring cheques with corrections, the Reserve Bank of India said this will be applicable only for cheques cleared under the image-based cheque truncation system (CTS).
According to a RBI notification, this has been introduced to curtail cheque frauds on account of alterations in cheques and protect customers as well as banks.
"Collecting banks should ensure, that such cheques are not accepted for presentment in CTS," RBI said.
Currently, the cheque truncation project is being run only in the Delhi.
This is not applicable to cheques cleared under other clearing arrangements such as MICR clearing, non-MICR clearing, over the counter collection (for cash payment) or direct collection of cheques outside the Clearing House arrangement .
The RBI had earlier stated that, "No changes or corrections should be carried out on the cheques (other than for date validation purposes, if required). For any change in the payee's name, courtesy amount (amount in figures) or legal amount (amount in words), etc., fresh cheque forms should be used by customers. This would help banks to identify and control fraudulent alterations."
Source - http://business.rediff.com/report/2010/jun/24/perfin-rbi-clarifies-on-dishonouring-cheques-with-alteration.htm
ATM security flaws could be a jackpot for hackers
EDTBOSTON: A security expert has identified flaws in the design of some automated teller machines that make them vulnerable to hackers, who could make the ubiquitous cash dispensers spit out their cash holdings.
Barnaby Jack, head of research at Seattle-based, security firm IOActive Labs, will demonstrate methods for "jackpotting" ATMs at the Black Hat security conference in Las Vegas that starts on July 28.
"ATMs are not as secure as we would like them to be," Jeff Moss, founder of the Black Hat conference and a member of President Obama's Homeland Security Advisory Council said. "Barnaby has a number of different attacks that make all the money come out."
Jack declined to discuss his techniques before the conference. The world's biggest ATM manufacturers include Diebold Inc and NCR Corp. Officials with those companies could not be reached for comment.
Banks may cringe when he speaks, fearing would-be crooks will adopt his methods. But Moss said that going public will raise awareness of the problem among ATM operators and prompt them to tighten security.
One potential route of attack is via communications ports that are sometimes accessible from outside an ATM, Moss said.
"You want everybody to know there are possible ways to jackpot these machines, so they will go and get their machines updated," he said.
Joe Grand, a hardware security expert, said he was not surprised to learn of Jack's research.
"People are starting to realize that hardware products do have security vulnerabilities. Parking meters, ATMs, everything that has electronics in it can be broken," Grand said. "A lot of times a hardware product is just a computer in a different shell."
Source - http://economictimes.indiatimes.com/news/news-by-industry/banking/finance/banking/ATM-security-flaws-could-be-a-jackpot-for-hackers/articleshow/6093099.cms
Barnaby Jack, head of research at Seattle-based, security firm IOActive Labs, will demonstrate methods for "jackpotting" ATMs at the Black Hat security conference in Las Vegas that starts on July 28.
"ATMs are not as secure as we would like them to be," Jeff Moss, founder of the Black Hat conference and a member of President Obama's Homeland Security Advisory Council said. "Barnaby has a number of different attacks that make all the money come out."
Jack declined to discuss his techniques before the conference. The world's biggest ATM manufacturers include Diebold Inc and NCR Corp. Officials with those companies could not be reached for comment.
Banks may cringe when he speaks, fearing would-be crooks will adopt his methods. But Moss said that going public will raise awareness of the problem among ATM operators and prompt them to tighten security.
One potential route of attack is via communications ports that are sometimes accessible from outside an ATM, Moss said.
"You want everybody to know there are possible ways to jackpot these machines, so they will go and get their machines updated," he said.
Joe Grand, a hardware security expert, said he was not surprised to learn of Jack's research.
"People are starting to realize that hardware products do have security vulnerabilities. Parking meters, ATMs, everything that has electronics in it can be broken," Grand said. "A lot of times a hardware product is just a computer in a different shell."
Source - http://economictimes.indiatimes.com/news/news-by-industry/banking/finance/banking/ATM-security-flaws-could-be-a-jackpot-for-hackers/articleshow/6093099.cms
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Noel likely to succeed Ratan Tata
MUMBAI: The Tata group may have moved a step closer toward finalising an imminent successor to current overall chairman Ratan Tata, by announcing the appointment of Noel Tata as non-executive chairman of Tata Investment Corp.
Tata Investment Corp approved the appointment of Noel Tata after its incumbent chairman N A Soonawala retired having attained the mandatory age limit of 75 years. The board also appointed FN Subedar as the non executive vice chairman of Tata Investment.
Noel Tata, who currently oversees the group’s retail venture, Trent, is widely seen as one of the successors to Ratan Tata. Ratan Tata is scheduled to retire in 2012. However, a liberal application of the conglomerate’s rules on the age cut-off may also allow Mr Tata, 73, to continue as chairman of the group, till a suitable successor is found.
Noel Tata is managing director of Trent which was set up by the group in 1998 to cash in on then growing potential of the retail sector. Trent operates lifestyle chain Westside, one of India’s largest and fastest growing chain of lifestyle retail stores, Star Bazaar, a hypermarket chain, Landmark, a books and music chain, and Fashion Yatra, a family fashion store.
Although Noel Tata comes from the same family – he is half-brother to Ratan Tata – the Mumbai-headquartered group has made it clear on different occasions that it is not compulsory for the new chairman to be a member of the family. In fact, Ratan Tata himself said that the top post could also go to an expatriate. “It would certainly be easier if that candidate were an Indian national. But now that 65% of our revenue comes from overseas, it could also be an expatriate
sitting in that position with justification now that we are a company that has global reach and global presence,” he had said in a media interaction in 2009.
Source - http://economictimes.indiatimes.com/news/news-by-company/corporate-announcement/Noel-winner-to-bag-Tata-top-slot/articleshow/6096444.cms
Tata Investment Corp approved the appointment of Noel Tata after its incumbent chairman N A Soonawala retired having attained the mandatory age limit of 75 years. The board also appointed FN Subedar as the non executive vice chairman of Tata Investment.
Noel Tata, who currently oversees the group’s retail venture, Trent, is widely seen as one of the successors to Ratan Tata. Ratan Tata is scheduled to retire in 2012. However, a liberal application of the conglomerate’s rules on the age cut-off may also allow Mr Tata, 73, to continue as chairman of the group, till a suitable successor is found.
Noel Tata is managing director of Trent which was set up by the group in 1998 to cash in on then growing potential of the retail sector. Trent operates lifestyle chain Westside, one of India’s largest and fastest growing chain of lifestyle retail stores, Star Bazaar, a hypermarket chain, Landmark, a books and music chain, and Fashion Yatra, a family fashion store.
Although Noel Tata comes from the same family – he is half-brother to Ratan Tata – the Mumbai-headquartered group has made it clear on different occasions that it is not compulsory for the new chairman to be a member of the family. In fact, Ratan Tata himself said that the top post could also go to an expatriate. “It would certainly be easier if that candidate were an Indian national. But now that 65% of our revenue comes from overseas, it could also be an expatriate
sitting in that position with justification now that we are a company that has global reach and global presence,” he had said in a media interaction in 2009.
Source - http://economictimes.indiatimes.com/news/news-by-company/corporate-announcement/Noel-winner-to-bag-Tata-top-slot/articleshow/6096444.cms
Investing in ETFs
Exchange-traded funds (ETFs) have been gaining investor interest. ETFs are essentially index funds that are listed and traded on exchanges like stocks.
They enable investors to get a broad exposure to the stock markets in different countries, and specific sectors, with relative ease, on a real-time basis. This also comes at a lower cost than many other forms of investments.
An ETF represents a basket of stocks that reflects the composition of an index, like metals index, BSE Sensex or the banking index. An ETF's trading value is based on the net asset value (NAV) of the underlying stocks that it represents.
It is similar to a mutual fund that one can buy and sell in real time at a price that changes during the trading session. In India, the two popular ETFs are index ETFs and commodity ETFs. Most ETFs in India are index funds that hold securities. They try to mirror the performance of a stock market index.
As the ETFs are listed on the exchanges, distribution and other operational expenses are significantly lower as compared to investing in a commodity. ETFs can be easily bought and sold like stocks during trading hours using your demat account with no additional paperwork. They have a lower expense ratio and the minimum investment is one unit.
To buy and sell ETFs you need a trading account. ETFs are bought through a broker. So, every time you trade you also end up paying brokerage for your transaction. However, ETFs allow investors to take the benefits of intra-day movements in the markets, which is not possible with open-ended funds.
Unlike regular open-ended mutual funds, ETFs can be bought and sold throughout the trading day like any stock. These funds rely on an arbitrage mechanism to keep the prices at which they trade roughly in line with the NAVs of their underlying portfolios.
In order to let the mechanism work, the potential arbitragers need to have full, timely knowledge of a fund's holdings. ETF units are continuously created and redeemed based on investor demand.
Investors may use ETFs to invest, trade or arbitrage. The price of the ETF tracks the value of the underlying index. This provides an opportunity to investors to compare the value of an underlying index with the price of the ETF units prevailing on the exchange.
If the value of the underlying index is higher than the price of the ETF, the investors may redeem the units. In case the price of the underlying securities is lower than the ETF, investors may create ETF units by depositing the lower-priced securities. This arbitrage mechanism eliminates the problems associated with close-ended mutual funds - the premium or discount to the NAV.
The number of outstanding ETF units is not limited, as with traditional mutual funds. It may increase if investors deposit shares to create ETF units, or it may reduce on a day if some ETF holders redeem their ETF units for the underlying shares. These transactions are conducted by sending creation or redemption instructions to the fund.
ETFs provide investors with exposure to broad segments of the equity markets. They enable investors to build customised investment portfolios in line with their risk-taking ability and time horizon.
Moreover, as ETFs are liquid, they provide investors an avenue to park their funds while taking investment decisions.
Also, ETFs can be used as hedging vehicles because they can be bought and sold short.
The smaller denominations in which ETFs trade relative to most derivative contracts provides a more accurate risk exposure match, particularly for small investment portfolios.
Source - http://economictimes.indiatimes.com/quickiearticleshow/6096789.cms
They enable investors to get a broad exposure to the stock markets in different countries, and specific sectors, with relative ease, on a real-time basis. This also comes at a lower cost than many other forms of investments.
An ETF represents a basket of stocks that reflects the composition of an index, like metals index, BSE Sensex or the banking index. An ETF's trading value is based on the net asset value (NAV) of the underlying stocks that it represents.
It is similar to a mutual fund that one can buy and sell in real time at a price that changes during the trading session. In India, the two popular ETFs are index ETFs and commodity ETFs. Most ETFs in India are index funds that hold securities. They try to mirror the performance of a stock market index.
As the ETFs are listed on the exchanges, distribution and other operational expenses are significantly lower as compared to investing in a commodity. ETFs can be easily bought and sold like stocks during trading hours using your demat account with no additional paperwork. They have a lower expense ratio and the minimum investment is one unit.
To buy and sell ETFs you need a trading account. ETFs are bought through a broker. So, every time you trade you also end up paying brokerage for your transaction. However, ETFs allow investors to take the benefits of intra-day movements in the markets, which is not possible with open-ended funds.
Unlike regular open-ended mutual funds, ETFs can be bought and sold throughout the trading day like any stock. These funds rely on an arbitrage mechanism to keep the prices at which they trade roughly in line with the NAVs of their underlying portfolios.
In order to let the mechanism work, the potential arbitragers need to have full, timely knowledge of a fund's holdings. ETF units are continuously created and redeemed based on investor demand.
Investors may use ETFs to invest, trade or arbitrage. The price of the ETF tracks the value of the underlying index. This provides an opportunity to investors to compare the value of an underlying index with the price of the ETF units prevailing on the exchange.
If the value of the underlying index is higher than the price of the ETF, the investors may redeem the units. In case the price of the underlying securities is lower than the ETF, investors may create ETF units by depositing the lower-priced securities. This arbitrage mechanism eliminates the problems associated with close-ended mutual funds - the premium or discount to the NAV.
The number of outstanding ETF units is not limited, as with traditional mutual funds. It may increase if investors deposit shares to create ETF units, or it may reduce on a day if some ETF holders redeem their ETF units for the underlying shares. These transactions are conducted by sending creation or redemption instructions to the fund.
ETFs provide investors with exposure to broad segments of the equity markets. They enable investors to build customised investment portfolios in line with their risk-taking ability and time horizon.
Moreover, as ETFs are liquid, they provide investors an avenue to park their funds while taking investment decisions.
Also, ETFs can be used as hedging vehicles because they can be bought and sold short.
The smaller denominations in which ETFs trade relative to most derivative contracts provides a more accurate risk exposure match, particularly for small investment portfolios.
Source - http://economictimes.indiatimes.com/quickiearticleshow/6096789.cms
Wednesday, June 23, 2010
Google to launch music service
NEW YORK: Google Inc is planning to launch an online music downloading service tied to its search engine, according to a newspaper report, a move that would pit it against Apple Inc and its popular iTunes site.
Google's plans are still vague, but it has been "stepping up conversations" about offering music services online as well as over mobile phones that use its Android operating system, the Journal said, citing people familiar with the company's talks with the music industry.
It was unclear whether Google had signed deals with record labels, the report said, adding that the launch of a music downloading store was still months away.
Google and Apple have become competitors since the launch of Google's Android operating system, a rival to Apple's iPhone.
Source - http://ow.ly/17QoBE
Google's plans are still vague, but it has been "stepping up conversations" about offering music services online as well as over mobile phones that use its Android operating system, the Journal said, citing people familiar with the company's talks with the music industry.
It was unclear whether Google had signed deals with record labels, the report said, adding that the launch of a music downloading store was still months away.
Google and Apple have become competitors since the launch of Google's Android operating system, a rival to Apple's iPhone.
Source - http://ow.ly/17QoBE
Now, compensation for delayed, cancelled flights
New Delhi: Air travellers would now be compensated for cancellation or delays in flights which have not been caused by situations like fog or any reason beyond the control of the airlines, if a new draft rule is implemented.
New rules detailing the conditions of compensation have been drafted by the aviation regulator Directorate General of Civil Aviation, which has invited comments from the public before finalising them.
The decision came in the wake of rapid expansion of air services on domestic and international routes and the necessity for the government to ensure appropriate protection for air travellers in case of flight disruptions, denied boarding, cancellations and delays without due notice to the passengers, an official spokesperson said.
As the distinction between scheduled and non-scheduled services was coming down, such protectionary measures would also be provided to passengers travelling on non-scheduled flights, like charters, also.
The new rules or the Civil Aviation Requirement (CAR) would bring the Indian aviation law in tandem with the Montreal Convention in regard to the liabilities of the airlines.
The operating airline would, however, be under no obligation if the cancellations and delays are caused by events beyond its control, like natural calamities or political instability.
Under the draft CAR, the financial compensation would be given only if the amount of tickets cost is higher than the compensation amount.
It would be Rs 2,000 or the value of the ticket whichever is less for flights having a block time of upto and including one hour. Till two hours, the compensation would be Rs 3,000 or the value of the ticket whichever is less.
Similarly, if the delay is more than two hours, the amount would be Rs 4,000 or the value of the ticket whichever is less.
The draft rule provides that alternatively, the passenger would be offered the choice of a refund at the price it was purchased, a flight to the first point of departure and alternative transportation to the final destination wherever applicable.
Besides, the passengers shall be offered free of charge meals and refreshments and hotel accommodation, including transfers, when necessary.
New rules detailing the conditions of compensation have been drafted by the aviation regulator Directorate General of Civil Aviation, which has invited comments from the public before finalising them.
The decision came in the wake of rapid expansion of air services on domestic and international routes and the necessity for the government to ensure appropriate protection for air travellers in case of flight disruptions, denied boarding, cancellations and delays without due notice to the passengers, an official spokesperson said.
As the distinction between scheduled and non-scheduled services was coming down, such protectionary measures would also be provided to passengers travelling on non-scheduled flights, like charters, also.
The new rules or the Civil Aviation Requirement (CAR) would bring the Indian aviation law in tandem with the Montreal Convention in regard to the liabilities of the airlines.
The operating airline would, however, be under no obligation if the cancellations and delays are caused by events beyond its control, like natural calamities or political instability.
Under the draft CAR, the financial compensation would be given only if the amount of tickets cost is higher than the compensation amount.
It would be Rs 2,000 or the value of the ticket whichever is less for flights having a block time of upto and including one hour. Till two hours, the compensation would be Rs 3,000 or the value of the ticket whichever is less.
Similarly, if the delay is more than two hours, the amount would be Rs 4,000 or the value of the ticket whichever is less.
The draft rule provides that alternatively, the passenger would be offered the choice of a refund at the price it was purchased, a flight to the first point of departure and alternative transportation to the final destination wherever applicable.
Besides, the passengers shall be offered free of charge meals and refreshments and hotel accommodation, including transfers, when necessary.
Rail Enquiry Website.
Just came across a good website for PNR status alert. It is http://railenquiry.in/
The special attraction in this website is that, it sends you periodical alerts on your waiting list tickets either until the ticket is confirmed or till the chart is prepared.
Also, this is the only website which can be accessed from mobile.
The special attraction in this website is that, it sends you periodical alerts on your waiting list tickets either until the ticket is confirmed or till the chart is prepared.
Also, this is the only website which can be accessed from mobile.
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