Green tea drinkers show less disability with age:study

Elderly adults who regularly drink green tea may stay more agile and independent than their peers over time, according to a Japanese study that covered thousands of people.Green tea contains antioxidant chemicals that may help ward off the cell damage that can lead to disease. Researchers have been studying green tea's effect on everything from cholesterol to the risk of certain cancers, with mixed results so far.
For the new study, published in the American Journal of Clinical Nutrition, researchers decided to examine the question of whether green tea drinkers have a lower risk of frailty and disability as they grow older.
Yasutake Tomata of the Tohoku University Graduate School of Medicine and his colleagues followed nearly 14,000 adults aged 65 or older for three years.
They found those who drank the most green tea were the least likely to develop "functional disability", or problems with daily activities or basic needs, such as dressing or bathing.
Specifically, almost 13 percent of adults who drank less than a cup of green tea per day became functionally disabled, compared with just over 7 percent of people who drank at least five cups a day.
"Green tea consumption is significantly associated with a lower risk of incident functional disability, even after adjustment for possible confounding factors," Tomata and his colleagues wrote.
The study did not prove that green tea alone kept people spry as they grew older.
Green-tea lovers generally had healthier diets, including more fish, vegetables and fruit, as well as more education, lower smoking rates, fewer heart attacks and strokes, and greater mental sharpness.
They also tended to be more socially active and have more friends and family to rely on.
But even with those factors accounted for, green tea itself was tied to a lower disability risk, the researchers said.
People who drank at least five cups a day were one-third less likely to develop disabilities than those who had less than a cup per day. Those people who averaged three or four cups a day had a 25 percent lower risk.
Although it's not clear how green tea might offer a buffer against disability, Tomata's team did note that one recent study found green tea extracts seem to boost leg muscle strength in older women.
While green tea and its extracts are considered safe in small amounts, they do contain caffeine and small amounts of vitamin K, which means it could interfere with drugs that prevent blood clotting.

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ISRO report does not bring out the facts: Madhavan Nair

Former Indian Space Research Organisation chief Madhavan Nair on Sunday said that the ISRO report on the Antrix-Devas deal is one-sided and claimed that the report does not bring out the facts.
"They have looked only at the papers and the answers to the questions. If they had seen some omissions, they should have sought clarifications. I will ask for the full report," he said while speaking exclusively to CNN-IBN.
"Speaking is not inquiry. The committee has not met many times to make the report. The report does not bring out the facts. The people who have made the report seems have not understood the issues and mechanism. Sad that bits and pieces of report are being put out like this and not the whole report," he added.
A committee set up by the Indian Space Research Organisation (ISRO) on Saturday night indicted former ISRO chief G Madhavan Nair and three other senior scientists, who were barred from holding any government posts, for acts of commission in Antrix-Devas deal.
The report prepared by a committee headed by Pratyush Sinha, former Chief Vigilance Commissioner, said Antrix-Devas deal lacked transparency and recommended that action needs to be taken against Nair, A Bhaskaranarayana, KR Sridhara Murthi and K N Shankara all of whom have retired.
Nair said, "The committee does not understand space business. I'll wait and then decide what needs to be done. The statements in public domain are highly distortrd. The full reports should be out to make any conclusion. what is in public domain shows the report is one sided. There is no such statement that speaks of specific violations."
The former ISRO chief also said that the deal was not to profit Devas. "The return to government was a respectable business. Our responsibility was to get a new technology in the country. We were in the regime of embargo at the time of the deal. At that time this was the only group left to move forward on the agreement. It was a declared policy of the government to go out and expand in the field of space," he added.
The Antrix is the commercial arm of ISRO and Devas is a private firm. The five-member high level team, which was set up to examine the deal and identify the acts of omission and commission by government officials, said in its report made that "...there have not only been serious administrative and procedural lapses but also suggestion of collusive behaviour on the part of certain individuals and accordingly, responsibilities have to be fixed for taking action".
The Pratyush Sinha committee, set up on May 31 last year to examine the deal and identify the acts of omission and commission by government officials, said choosing Devas for the deal "seems to be lacking in transparency and due diligence".
It said "the approval process (for the deal) was riddled with incomplete and inaccurate information given to the union cabinet and the Space Commission". While the Antrix-Devas agreement was signed on January, 28, 2005, "this fact was not disclosed to the Space Commission or in the Cabinet note dated November 27, 2005, in which approval was sought for the launch of GSAT 6, one of the satellites to be build under the agreement".
The report said the terms of Antrix-Devas contract "were heavily loaded in favour of Devas". It pointed out that terms of the agreement entail that while in the case of the failure of the satellite, the risk was entirely that of Department of Space, the success of of the satellite would commit the latter to substantial expenditure".
Secondly, it said "it is surprising that for the purpose of arbitration Devas has been considered an international customer even though its registered address in the contract is shown as in Bangalore".
The report also noted that no clearance was obtained from the legal cells of the Department of Space and the Finance Ministry for Antrix-Devas deal, as is mandatory for any international agreement by any department of Indian government. The report also said GSAT capacity was earmarked for Devas without consulting INSAT Corporation Committee (ICC), which recommends use of satellite capacities by non-government users authorized to provide telecom services, which is a "clear violation of the government policy".
The committee report said "there is evidence to suggest that the Antrix-Devas agreement was not disclosed to Technical Advisory Group (TAG) at the time of considering the experimental trials".
There is no indication of any attempt to identify other possible partners for providing the same service even though similar services were available in some other countries, said the report.
"Although SATCOM policy and ICC guidelines allow leasing of satellite capacity on first-come-first-served basis, this did not prevent Antrix-ISRO from following a transparent process of adequately publicising its intent of supporting such services..." it said.
"In the absence of such a declaration of intent, choosing Devas seems to be lacking in transparency and due diligence", added the report.

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CWG scam: Delhi HC grants Kalmadi on a surety of 5 lakh

The Delhi High Court on Thursday granted bail to former Commonewealth Games (CWG) OC Chief Suresh Kalmadi on a surety of Rs 5 lakh after nine months who is an accused in the case pertaining to the mega-sporting event held in New Delhi in 2010.
The HC also granted bail to former director general of CWG VK Verma.
Kalmadi, Verma and nine others have been accused of allegedly awarding a contract to a Swiss firm to install a Timing-Scoring-Result (TSR) system for the Games at an exorbitant rate, causing a loss of over Rs 90 crore to the state exchequer.
Congress leader Digvijaya Singh commented on Kalmadi's bail and said, "Bail is the right of every accused. If a chargesheet has been filed and investigations are complete, then it is the right of every accused to get a bail."
Kalmadi had earlier moved the High Court seeking bail citing the Supreme Court's judgement in 2G spectrum case and said it has been held that "bail is rule and jail is exception".
The CBI, however, opposed the bail pleas of Kalmadi and Verma saying the trial is to begin soon and would be held on a day-to-day basis.
The CBI alleged Kalmadi was the key accused in the case.

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HC cancels land acquisition of 3 Greater Noida villages

In a major setback for the Uttar Pradesh government, the Allahabad High Court on Friday cancelled the land acquisition of three villages in Greater Noida.

The land acquisition of Abdullahpur, Devla and Saberi villages were cancelled by the court.
As per the order, the farmers who have already taken the compensation, can return the amount and claim back their land.
The farmers in the villages, where planning has already taken place, will get 64% additional compensation and 10% of developed land.
The High Court further said that an officer of the Principal Secretary level would be appointed to look into the functioning of Greater Noida authority.

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Monetary policy preview: GEPL Capital

GEPL Capital has come out with a report on Monetary policy preview.
Economic Indicators:

• The wholesale price index (WPI), rose 8.31 percent in the year to February, well above the RBI's comfort zone of 6.5 percent.
• Indian overnight indexed swaps (OIS) were lower on Tuesday tracking U.S. yields as well as a drop in oil prices.
• The benchmark five-year swap rate was down 6 basis points on the day at 7.84 percent, after touching a low of 7.82 percent in early deals.
• The one-year swap rate was down 6 basis points at 7.32 percent, after falling to 7.30 percent, it’s lowest since Jan. 14.
• Safe-haven U.S. Treasury yields fell on reports that the explosions at the stricken Fukushima nuclear power plant in Japan were leading to
  higher levels of radiation near Tokyo.
• Brent crude fell by as much as 1.9 percent to below $112 after explosions rocked an earthquake-stricken Japanese nuclear plant on
  Tuesday after touching a high of $118.
• The spread between the 1-year and the 5- year OIS has narrowed to 52 basis points from 66 basis points at the start of the year, bearflattening
  the OIS curve as tight cash conditions as well as rate hike expectations kept the shorter-end elevated. The market is factoring a
  higher probability of a 25 basis points rate hike and therefore the curve is flattening.

RBI Steps So Far:

• The RBI raised its main lending rate or the Repo rate by 175 bps to 6.50 percent and its main borrowing rate (Reverse Repo Rate) by 225
  bps to 5.50 percent through seven rate increases since 2010.

REPO RATE	REVERSE REPO RATE	CASH RESERVE RATIO (CRR)	SLR
6.50	5.50	6.00	24.00

• Eased SLR by 1% in the last Monetary Policy Review.
• Purchased Government Securities worth Rs.37,067.959 Crore against an amount of Rs.48,000 crore through an Open Market Operations
  (OMO) to ease liquidity in the system till December 2010.

Expectations From January Policy Review:

• The Reserve Bank of India (RBI) can hike Repo Rate by 50 bps & Reverse Repo Rate by 25 bps to contain price pressures. The
  corridor can be widen from 100bps to 125bps.
• Can revise Inflation forecast from 6.5 – 7 to 7 to 7.5 per cent by March end.

Impact:
Economy:

• The central government will not oppose this move as spiraling food and fuel prices have damaged voter confidence in the government,
  causing a headache for the multi-party ruling coalition ahead of key state elections
• Inflation (WPI) may fall to 7.50 levels by March end.

Markets:

• 25bps hike is being priced in by Bond Market / Money Market / Equity Market. If Repo Rate goes up by 50bps, the Yield will be under
  pressure and 11 Year G-Sec can climb to 8.17 level.
• Equity Market may see some sell – off, if rate goes up by 50bps.

Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management.Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

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Citibank fraud: Puri and family had 18 bank a/cs

After two days of investigations in the multi-crore financial fraud at Citibank, the Gurgaon police have found that the main accused, Shivraj Puri, who was working as the relationship manager, had opened 18 bank accounts in his and his family members' name.

Police said they had managed to get all the documents related to the transactions of the 18 accounts and were studying them before taking any actions against Puri's family members.

"Most of the family members are very old and Shivraj Puri was the one who was handling their bank accounts, so we can't say what was their extent of involvement in the fraud," Gurgaon Police Commissioner S S Deswal said.

Deswal further said the cops had not yet found any evidence to suggest that some other members of Citibank had helped Puri in the fraud in any way.

"The investigations are still on. If we find that there was help provided to him by any member of the bank, we will take action," he added.

According to the FIR filed by Citibank against Puri, he had duped high-networth clients of the company of more than Rs 300 crore.

The police had earlier said Citibank had come to know of the fraud almost a month ago, but it conducted thorough internal investigations before informing the police about the case.

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Claris Lifesciences down 8 pc on BSE

MUMBAI: Drug firm Claris Lifesciences listed at 224.4 rupees on the BSE on Monday, down 1.57 percent from its issue price of 228 rupees a share.

Claris sold 10.78 million shares through its initial public offer (IPO) issue to raise 2.46 billion rupees.

Enam Securities , Edelweiss Capital , JM Financial Consultants and ICICI Securities were the arrangers to the issue.

At 9:28 a.m., shares were trading at 210.7 rupees rupees, down 7.58 percent in a weak Mumbai market.

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CBI searches Nira Radia in telecom graft case

The Central Bureau of Investigation (CBI) investigating a telecoms licence scandal that may have cost India $39 billion and has engulfed its corporate and political elite searched the home and offices of one of the country's most powerful lobbyists.
The government has struggled to contain the fallout from the sale of lucrative mobile phone licences at below-market prices in 2007-08. The scandal has already brought down a telecoms minister and kept parliament deadlocked over demands by the opposition for a full inquiry into what could be the country's biggest graft case.

CBI searched the premises of lobbyist Nira Radia on Wednesday, spokesman R.K. Gaur told Reuters.
The CBI is looking at whether bribes were paid during the licensing process and is investigating Radia, who secret tapes suggested lobbied on behalf of her clients for Andimuthu Raja to stay on as telecoms minister after 2009 federal polls.
The coalition government is not at risk of collapsing but the widening case, which saw Prime Minister Manmohan Singh forced to explain to the top court why he did not act earlier, is a major setback, with analysts and politicians expecting more difficult times ahead and few reform bills passed.
Raja resigned after a state audit report said several rules were flouted when the licences were sold on his watch.
The former minister has not been charged and has said he is innocent and was only following norms. Radia, who was questioned by tax authorities, has said she is cooperating.
While the scandal may not deter investor interest in the rapidly expanding market, analysts say delays could see India fall behind in accelerating its economic growth to levels seen in China, keeping several hundred million Indians in poverty.
The Federation of Indian Chambers of Commerce and Industry said on Tuesday it was worried that corruption among a few in Asia's third-largest economy could damage the country's image.
The standoff has pushed policymaking into limbo, delaying long-awaited reforms such as simplifying the tax code and easing land acquisition for mining, industry and infrastructure.

Tape Recordings
The telecoms scandal is the biggest of a series of corruption cases that have battered Singh and his Congress party, straining relations with coalition allies and giving the main opposition Bharatiya Janata Party (BJP) a shot in the arm.
It comes along with the publication of several hours of conversations between Radia and Raja, leading industrialists, politicians and journalists, where they speak of swinging deals, granting favours and ministers taking bribes.
Her influence across corporate India is well known and stems largely from the fact that her firm represents tycoons Ratan Tata and Mukesh Ambani and their respective companies. Tata is among India's most powerful and respected businessmen and Ambani is the world's fourth richest man, according to Forbes magazine.
The recordings do not suggest wrongdoing by Tata or Ambani.
CBI's Gaur also said agents were searching the homes and offices of former telecoms regulator Pradip Baijal, who is now associated with Radia's firm.
The uproar has sparked fears of a witchhunt against Indian industry, which the prime minister on Tuesday sought to calm when he told a conference that his government would provide a "level playing field for private businesses, free from fear or favour".
Singh called on Indian firms to address an "ethical deficit".
Singh also faces trouble from the BJP's threat of blocking the February budget session of parliament if the government does not set up a special parliamentary committee to investigate the 2G telecoms case, which will make it tough to pass legislation.

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Land scam: Raid at LIC; Central Bank manager held

New Delhi, Nov 24: Shocking bribery and land scam cases have been unearthed as CBI on Nov 24 informed that they conducted raid at LIC offices in Mumbai, Delhi, Kolkata and Chennai and arrested 8 officials of public sector banks and financial companies

including General Manager of the Central Bank.

Sources informed that Chief Executive Officer (CEO) of LIC Housing Finance; the General Manager of Central Bank of India; and the Deputy General Manager of Punjab Bank in Delhi are among the eight top detained officials.

Following the news, Indian markets once again crashed drastically as NSE Nifty lost 69 points while closing on Nov 24.

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Sensex down 21 pts; Astra Microwave jumps 5% on bonus news

The market, which showed some signs of a recovery, has drifted down a bit again this afternoon following a fresh round of selling in some blue chip stocks. The Sensex is down 21 points or 0.1% at 20,911.48, while the Nifty is down with a loss of 14.70 points or 0.23% at 6286.85.
Among Sensex stocks, Tata Motors rules firm with a sharp gain of 3.2% with impressive quarterly numbers keeping investor sentiment upbeat. Mahindra & Mahindra has also gained over 3% on sustained buying at the counter.


Wipro has notched up a gain of 1.3%. Infosys Technologies ,ONGC, Reliance Infrastructure, NTPC and HDFC Bank are up with modest gains. Hero Honda, Reliance Industries and Tata Consultancy Services are up marginally.
Nifty stocks BPCL, Reliance Capital, Reliance Power, GAIL India, Sun Pharmaceuticals and Cairn India are up in positive territory. Suzlon Energy and SAIL are trading flat.
Hindalco remains deep down in negative territory with a sharp loss of 3.3%. IDFC, Ambuja Cements, Punjab National Bank, Cipla, Bharti Airtel, Kotak Bank, BHEL, State Bank of India, ACC, Hindustan Unilever, ICICI Bank and Axis Bank are trading lower by 1% - 2%.
Jindal SAW Ltd has received Letter of Awards aggregating to more than Rs 600 crores (around $35 million) for supply of Large Diameter Pipes for domestic and export markets. The major order is from South East Asia market. With these orders, the total order book of the company stands at Rs 4,000 crores ($ 900 million). The metal stock is currently trading 1.8% down at Rs 219.
Va Tech Wabag Ltd has received an Letter of Intent worth Rs 290 crores to provide complete water systems for Kakatiya and Rayalaseema Thermal Power Project under Balance of Plants package as a part of consortium. The total cost of the project is Rs 290 crores. The scope of the work includes complete water system for Kakatiya Thermal power project and complete water system for Rayalaseema Thermal Power Projects, which includes recycling system. The tenure for implementation of the project is 30 months. Despite the order win, the Va Tech Wabag stock is down 1.35% at Rs 1685
Shares of Astra Microwave Products Ltd are up nearly 5% at Rs 74 following the company's board approving the Issue of Bonus shares in the ratio of 1:2.


Coal India continues to trade weak. The stock, which made a strong debut last Thursday and extended its gains the next session, has been struggling since Monday with investors going in for some profit taking. At Rs 323.60, the stock is now down by about 0.75% Over 15.5 million shares have been traded so far at the Coal India counter on the National Stock Exchange today.
Jet Airways has moved up by 2.6% on strong volumes. On NSE, the Jet Airways counter has recorded a turnover of nearly Rs 220 crore on a volume of 2.4 million shares.

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Hold Infosys Technologies; target of Rs 3125: Nirmal Bang

 

Nirmal Bang has recommended hold rating on Infosys Technologies with a target of Rs 3125 in its October 15, 2010 research report.

“Infosys Technologies, Q2 FY11 results reflect the improvement in the recovery of demand from the US and the Europe. The company is seeing an improved traction in Retail, BFSI and Energy & Utility verticals among its US clients. Also, Europe is witnessing an uptick in demand with an incremental spending in Manufacturing, BFSI and Retail segments. In Europe, manufacturing has shown a healthy growth particularly in Switzerland, Germany and France as companies attempt to achieve cost efficiency through better systems. During the quarter, growth was led by Retail segment where in Infosys caters to 8 out of the top 10 retailers in US and 5 out of the top 10 retail companies in Europe.”

“The company has won 9 transformational which few are in excess of USD 100 million. Attrition has declined on a sequential basis, but it still remains a concern and Infosys plans to hire around 40,000 employees during FY 2011 to build up capacity in expectation of an increased demand in future. Overall, the Management remains optimistic in short term and have a cautious view over the long term as budgets for FY 2012 are yet to be finalized. The exchange rate remains a major concern as the recent appreciation of rupee will impact the company’s profitability in near term.”

“Infosys Technologies Q2 FY11 revenues grew 12.1% QoQ to Rs 6947 crore beating its guidance of Rs 6626 on the back of improving demand. Revenue was above our estimates because of higher volumes & an increase in pricing during the quarter. EBITDA margin improved to 33.3%. (+167 bps QoQ) The increase in topline was reflected in the improved EBITDA margins. PAT increased by 16.7% QoQ to Rs 1737 in Q2 FY11 because of improvement in the EBITDA margin and foreign exchange gains. PAT exceeded our estimate reflecting higher-than-expected revenues.”

“At the current price of Rs 3076, Infosys is trading at a PE of 25.34x on FY 2011 EPS & 21.66x on FY 2012 estimated EPS. Based on our estimated EPS of Rs 142.02 for FY 2012 and our target PE multiple of 22.0x we arrive at a target price of Rs 3125 per share for Infosys. Therefore, the company looks fairly valued at current levels and doesn’t offer much upside from current levels in near term. Considering the improved scenario for the IT sector, we recommend to HOLD the stock Infosys,” says Nirmal Bang research report.

Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management.Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

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Indian millionaires zoom by 42,800

India added more than 42,800 US dollar millionaires last year, taking the total number in the country to more than 127,000 — and the phenomenon is only going to grow further as high economic growth is sustained.

What’s more, India, China and other Asia-Pacific regional economies are collectively set to outpace developed countries in spawning high net-worth individuals (HNIs), wealth manager Merrill Lynch and consulting firm Capgemini said in a report released on Tuesday.
“Moving forward, China and India will lead the way in the region with economic expansion and HNI growth likely to keep outpacing more developed economies” it said.
The Asia-Pacific Wealth Report 2010 noted that the total amount held in assets by Indian millionaires accounted for more than $477 billion last year, up 53.6 per cent on the year. That is R21.5 lakh crore.
“The increasing confidence by Indian HNIs facilitated by the strength of the underlying economy which grew 6.8 per cent in 2009 has resulted in a surge in HNI wealth in the region,” said Pradeep Dokania, chairman, Merrill Lynch, Wealth Management, India.
Asia-Pacific as a whole outpaced Europe in the amount of wealth on play as the invested/investible corpus totalled $9.7 trillion, compared with Europe’s $9.3 trillion, it added.
“Asia-Pacific’s HNI population matching Europe’s for the first time highlights the region’s growth potential, with China and India at the forefront and Japan remaining an important market,” said Dokania.
The share of real estate dropped in 2009, while fixed-income investments went up. Equities and cash assets remained stable.

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RBI permits corporations to work as rural agents of banks

New Delhi/Mumbai: The Reserve Bank of India (RBI) on Tuesday allowed firms to play the role of an intermediary to spread banking in rural areas, in a move aimed at making banking services available to the unbanked.
RBI, in its guidelines for business correspondents (BCs), allowed individuals, non-governmental organizations, cooperative societies, post offices and companies with “large and widespread retail outlets” to become BCs, but kept non-banking financial companies (NBFCs) out of it.
One reason behind the move, according to people familiar with how NBFCs work, could be that these firms, including microfinance institutions, lend money in rural India. If they are allowed to mobilize deposits on behalf of banks and at the same time continue with their business of lending money, there could be a conflict of interest.
Telecom companies, fertilizers and oil marketing companies, and fast moving consumer goods makers with exposure to rural markets are likely to take the plunge following RBI’s move.
According to the guidelines, BCs will raise deposits; disburse tiny loans; recover bad loans; sell micro insurance, mutual funds, pension products and other third-party products; and receive and deliver small value remittances.
Their activities will be “within the normal course of banking business”, but conducted at places other than the bank premises and automated teller machines.
The distance between the BC and the base bank branch should not exceed 30km in rural, semi urban and urban areas, and 5km in metropolitan areas, RBI said.
RBI’s guidelines did not specify the fee structure, but noted the banks may pay “reasonable commission, which may be reviewed periodically”.
“Commission structure, or incentive mechanism, should be devised in a manner that mere increase in the number of clients served or the transaction volume does not drive the commission,” it said, adding that the remuneration should combine fixed and variable parts.
Experts familiar with BC activities are not very excited about the model as yet.
Bindu Ananth, president of IFMR Trust, a non-profit organization promoted by ICICI Bank Ltd, said the big challenge for BCs in India is to find a product mix that makes business sense.
“I think it will move the needle only if NBFCs and people who specialize in this business are allowed. Manufacturing companies have long stopped taking public deposits and will continue to concentrate on their core business,” said D. Muthukumaran, head (group corporate finance) at Aditya Birla Management Corp. Pvt. Ltd.
Abhishek Sinha, chief executive officer (CEO) of Eko India Financial Services Pvt. Ltd, a BC for the country’s top two banks—State Bank of India and ICICI Bank—said this move will bring in investments and expand scale of operations of BCs.
Currently, about 36,000 BCs are being employed by banks, besides less than a dozen institutions such Eko India and Financial Inclusion Network and Operations Ltd (Fino). Banks manage the individual BCs on their own. Once corporations are allowed to enter this space, they will be able to organize them better and take care of the security aspects as the job involves collection and disbursement of money.
The banks will, however, continue to be “fully responsible for the actions of the BCs and their retail outlets/sub agents”, the RBI guidelines said.
Access Development Services, a not-for profit organization that provides technical assistance to microfinance firms, had some time back carried a survey on viability of BCs and found them struggling.
“It was because of high operating costs,” Vipin Sharma, CEO of Access, said.
“Banks also need to look at ways to make the whole BC model more viable. The recent move to free up lending rates for small ticket sizes can serve as a catalyst to make the BC model more viable by allowing correspondents to cover costs,” he added.
About 50% of India’s population does not have bank accounts. In rural India, the coverage among the adult population is 39% against 60% in urban India. This doesn’t necessarily mean that 60 out of every 100 Indian adults in cities have bank accounts as many people operate multiple accounts.
Only 5.2% of the country’s 650,000 villages have bank branches even though 39.7% of the overall branch network of Indian banks, or 31,727, are in rural India.
Only 34% of people with annual earnings less than Rs. 50,000 in urban India had a bank account in 2007. The comparative figure in rural India is even lower, 26.8%.
To handle this, banks have been aggressively opening “no-frill accounts”, that require very low or zero minimum balance.
However, a 2009 study by Skoch Development Foundation, a strategy and management consultancy, says only 11% of 25.1 million such basic banking accounts, opened between April 2007 and May 2009, are operational.

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Rupee at 4-and-a-half month high on robust inflows

The rupee strengthened to its highest level in four-and-half months on Monday, riding a wave of foreign buying in local stocks. The dollar's losses against major currencies also helped.
At 10:43 a.m. (0513 GMT), the partially convertible rupee was at 45.085/095 per dollar after hitting 45.08, which was its highest since May 14, and firmer than 45.25/26 at close on Friday.

Foreigners have pumped USD 4.5 billion into Indian shares this month, taking net investment so far in 2010 to USD 17.4 billion. The inflows had lifted the rupee 1.3 percent last week, its best rally in three months.
Vikas Chittiprolu, a senior foreign exchange trader with state-run Andhra Bank, said foreign interest was expected to stay robust with a slew of initial public offerings (IPOs) lined up this week.
Sea TV Network, Bedmutha Industries and Ashoka Buildcon that together aims to raise up to $82 million are among the IPOs lined up this week. State-owned Coal India Ltd, the world's largest coal miner, is expected to hit the market in October to raise up to USD 3 billion.
"But since it's the month-end, we will see bidding from oil and importers keeping the gains momentum checked," he said.
Oil is India's biggest import and refiners are the largest buyers of dollars in the local currency market with their demand tending to peak at the end of each month when they make payments.
Indian shares climbed more than 1 percent to a fresh 32-month high as economic data in the U.S. bolstered sentiment across Asian markets.
The dollar hovered near five-month lows on the euro and eight-month lows against a basket of currencies on Monday, pausing after steep losses last week and keeping the euro from pushing to new highs above USD 1.3500.
Most Asian units too rose versus the dollar.
"By and large exporters have not yet hedged beyond 3 months and so technically the market is still not hedged enough. If stocks remain bid, then some day this week, we expect rupee to touch 45," said Hitendra Dave, head of global markets at HSBC India.
One-month offshore non-deliverable forward contracts were quoted at 45.30, weaker than the onshore spot rate.
In the currency futures market, the most traded near-month dollar-rupee contracts on the National Stock Exchange, MCX-SX and United Stock Exchange were at 45.10, 45.0975 and 45.10 respectively, with the total traded volume on the three exchanges at about USD 2.2 billion.

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Volkswagen spends Rs 6cr on 'talking newspaper': Sources

A talking newspaper woke up 25 lakh readers of The Times of India and The Hindu across metros on Tuesday. We're talking about Volkswagen's latest media innovation for its luxury sedan, the Vento. Sources told CNBC-TV18’s Animesh Das and Sweta Sriram that the company has spent close to Rs 6 crore on the exercise.
Volkswagen has done it again. The German automaker, which has been making a lot of media noise since October 2009, has managed to get everyone talking with this new campaign. 25 lakh readers across five cities were either fascinated or taken aback this morning, when their newspaper spoke to them, telling them about the Vento.

We hear each device costs around Rs 5. Add that to the base price of a full page ad on the ToI, along with other ancillary costs, and the price per paper comes out at around Rs 40. By these calculations, it appears that Volkswagen has spent around Rs 6 crore on just one day.
But people in the know including Divya  Gururaj, MD, MediaCom, which is the media agency for Volkswagen India disagree.
The bottom line is that no one is talking about the exact spend. However, one thing is clear: The company has been stepping on the gas in terms of advertising campaigns—from its first-ever newspaper roadblock in October 2009 to tricks like a hole in the paper in March 2010 to a talking newspaper—each to drive towards firmly blipping on the Indian consumer's radar.

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MFs' AUM jumps as equity funds put up better show

The Indian mutual fund (MF) industry witnessed an increase of 3.3% in its average assets under management (AAUM) to around Rs 6.87-lakh crore by the end of August ’10, from Rs 6.65-lakh crore in July ’10.

In fact, this rise in the AAUM of the industry is amidst concerns of a fall in valuations of the liquid plus (ultra short-term) category of schemes; post-Sebi diktat on new valuation norms for these schemes that came into effect last month.


With new valuation norms requiring ultra short-term plans to value their debt securities with a maturity of more than 91 days to be marked-to-market, there were considerable concerns over the rise in volatility and valuations of these schemes by corporate houses that invest into these schemes.

However, a month down the line, ultra short-term plans have reported an average increase of around 0.43% in their net asset values (NAV) for August ’10, regaining the corporates’ confidence on these schemes.

As such, despite the new valuation norms having hit the floors, many fund managers have begun to realign their portfolios, incorporating debt with less than a 91-day maturity in their ultra short-term plans, in order to tone down the concerns of prospective rise in volatility in the returns of these schemes.

Thus, many prominent debt-dominated fund houses have witnessed a healthy rise in their AAUM for the month. These include Axis, Baroda Pioneer, JM Financial, JP Morgan, L&T and Peerless which have reported a double-digit rise in AAUM.


On the equity front, while most fund houses, dominated by equity assets, have shown an increase in their asset base, the rise can be mainly attributed to an increase in the valuation of equity assets held by these schemes over last month.

While the Sensex and the Nifty have returned around 2% gains over the past one month, the category of diversified equity schemes has clocked in an average of around 3.4% returns for this period.

With the market having gained significantly over the past month, most diversified equity schemes are currently commanding NAVs, almost nearing their 52-week highs. In fact, this marked improvement in the performance of equity mutual fund schemes can be used as a catalyst by fund houses to bring back their lost as well as prospective investors.

As far the AAUM race amongst fund houses is concerned, while Reliance, HDFC and ICICI continue to rule over as the top three fund houses in the country, Birla Sun Life has moved a notch up to bag the fourth position, pushing UTI to number five. Similarly, Franklin Templeton has moved up to grab the sixth position, pushing down SBI Asset Management to a seventh place. Again, DSP Blackrock has also moved a notch up to bag the ninth position pushing LIC down to number 10.

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AIG posts 2Q loss of $538M on restructuring costs

The insurance giant AIG on Friday reported a $538 million loss in the second quarter due to charges related to selling assets to repay the federal government bailout it received during the financial meltdown.

AIG's adjusted results excluding the charges beat Wall Street expectations as its insurance business improved. Its CEO also said discussions are under way regarding a government exit from its huge stake in the company. Its shares rose in midday trading.

American International Group Inc. said its net loss attributable to common shareholders amounted to $3.96 per share. It had a profit of $311 million, or $2.30 per share, a year ago.

The net loss attributable to AIG was a larger $2.66 billion. That is much bigger than the $538 million loss attributed to its shareholders, because it includes the portion that the government is shouldering. The government owns 80 percent of AIG.

Removing the charges, AIG earned $1.99 per share, up from $1.71 per share last year. That reflected improved performance in its insurance business, despite heavy claims related to the Gulf of Mexico oil rig explosion and subsequent spill, storms and flooding in the U.S. during the quarter and the Icelandic volcano.

Analysts polled by Thomson Reuters, on average, expected profit of 99 cents per share.

Keefe, Bruyette & Woods analyst Cliff Gallant said the results were confusing because the company is undergoing so many changes. But he saw positive signs in the results, most notably that the insurance operations continue to be profitable.

"There has certainly been enough damage to the reputation that there was a risk that insurance operations would start to fall apart, and there's no sign of that," Gallant said.

The company's overall loss included $3.42 billion in charges related to the sale of its American Life Insurance Co. unit, or Alico, and its Nan Shan Life Insurance Co. Both are in the process of being sold to help pay back some of the $180 billion in federal bailout funds received in late 2008. The Alico sale to MetLife Inc. should close by the end of the year.

The company said in July it will conduct an initial public offering of AIA, its Asian life insurance unit, on the Hong Kong Stock Exchange, after the sale of the company to Britain's Prudential PLC fell through.

AIG also reported $755 million in interest and other charges on its emergency line of credit from the Federal Reserve Bank of New York. That was down from $1.4 billion last year, due mainly to a reduction in the balance of the loan, which stood at $26.5 billion on June 30.

When the sale of Alico and the AIA IPO are completed, President and CEO Bob Benmosche said in a recorded statement, "We believe we will be well within striking distance of completing our repayment of the Fed.The total amount of outstanding government assistance fell slightly during the second quarter to $132.1 billion, not including the emergency line of the credit. Benmosche said in the recording that, over time, the company expects to fully repay taxpayers.

The value of the two units that hold investment assets pledged to the government rose during the quarter.

KBW's Gallant said the talk about a government exit is ahead of his expectations. There's still a lot of uncertainty about how the government will sell off its holdings, but once it's resolved, the value of the company to investors will rise, he said. "I think that's critical to the stock."

AIG no longer holds a conference call to discuss quarterly results. Benmosche said in the recording that the company's insurance businesses were "solid," posting income of $2.2 billion for the quarter.

When the restructuring is complete, the CEO said, the company will have two main businesses, Chartis, its main general insurance unit, and SunAmerica Financial Group, its U.S. life insurance and retirement unit.

Chartis posted operating income of $955 million. Chartis incurred about $287 million in catastrophe losses during the quarter, with claims related to floods in the southeastern U.S., Hurricane Alex and other storms, the Icelandic volcano and $23 million related to the Deepwater Horizon explosion and oil spill in the Gulf of Mexico.

Net written premiums declined 1.6 percent to $7.8 billion.

SunAmerica posted operating income of $1.1 billion, up from $254 million last year.

Lower delinquency rates on mortgages backed by United Guaranty Corp. helped that unit post income of $225 million, reversing a loss of $488 million last year. Benmosche pointed to this unit's second straight quarterly profit as a sign of the company's turnaround.

AIG shares rose $1.03, or 2.6 percent, to close at $40.93 Friday, after earlier bouncing as high as $42.19. The stock has changed hands between $21.30 and $55.90 in the past 52 weeks.

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BNP Paribas sees India as fastest growing economy ahead

In an exclusive interview with CNBC-TV18, Brian Fabbri, Chief Economist, BNP Paribas (North America), speaks about the global markets and gives his outlook going forward.

He says, it looks like India is probably going to be the country that grows the fastest and perhaps has maybe the best, at least in terms of consistency, track record, going forward.

Here is a verbatim transcript of the exclusive interview with Brian Fabbri on CNBC-TV18. Also watch the accompanying video.

Q: We have slew of not so encouraging data come out of the US and we saw the S&P going down all the way to 1,020, do you think we are going to see more such disappointing data, it will not be a double-dip, but just kind of slow data?

A: Certainly, the US is still in a growing mode, the expansion is continuing, in fact it’s broadening, it’s reaching into different areas, but there is no question in my mind that the financial markets have become much more worried about Europe in particular rather than about America. And it’s this disappointment about European economic growth that I think is created a great deal of caution.

We see it in stock prices, we see it in the treasury yields for example. There has been a rush to safety, away from credit risk taking and consequently it’s probably creating more caution on the part of businesses hiring practices, investment practices and maybe even beginning to start to show up in terms of individuals because if there is any secession of hiring then certainly they are going to save money instead of spend it.

Q: Are you saying that the kind of jobs data, retail sales data, all that came in June and to which markets reacted with some kind of scare was more because of American businesses being worried about what might be the European outlook? Would you say the US pace of growth would therefore not flag off too much from here on?

A: The European crisis started to affect US financial markets basically in April and May and by June we began to see economic data reflect what had already been in financial markets. I think the financial market reaction to Europe was immediate and consequently it took a little bit of time before it began to seep into American data.

Yes, I do think American economic growth will slow relative to what we saw in the second half of last year. Some of it has to do quite naturally with the transition of an expansion from a rebound from very low levels to a more sustainable path. But indeed Europe’s crisis has affected stocks and bonds and its effective risk taking and that too will slow things down in America.

Q: How much of a slowdown do you see? Over the last couple of weeks, we have heard couple of voices on double-dip, are you also in that camp or do you think those fears are overdone?

A: I think they are overdone the risk story. I think America goes from having 3% plus growth to having something like 2% plus and I think that is much more consistent with the kind of data flow and the expansion of things. It is not just Europe, it is also the exhaustion of the fiscal stimulus package that took place last year. We have gone through it, we have spent that money, there doesn’t seem to be any new packages being created in Washington. So, therefore, all we have then is monetary stimulus and remember that interest rate is still zero in America, money is free and eventually banks will feel much more comfortable making new loans and consequently that should keep economic growth going. But it’s a 2% growth rather than a 3% plus growth rate.

Q: There is the huge debate and we hear so much written by Paul Krugman about necessity of another fiscal stimulus package, without getting into ideology of where people stand and the package itself, what is your sense? Can growth keep growing, only if there is a further stimulus? Secondly, what will be the downside, if there is such a stimulus? Is there enough investor appetite to buy so many more US treasuries, it seems to be flagging for other government bonds?

A: So that is two parts, the first part, I do think that the economy can continue growing without more fiscal stimulus, but I do think it will be at a much slower pace and maybe this 2% pace stays the pace into the future, which is well below what we have experienced in past business cycle expansion. So, I think we just have to live with it.

As far as political scene is concerned, politicians in America became concerned about US Budget deficits not because of the Budget deficit itself, but because of investors reactions globally to the European situation. And suddenly American politicians woke up and say that maybe there really are limits to how big deficits can become and consequently America is probably not going to because of Congress’ response, reaction to the European situation, probably going to decide not to spend more money. Therefore, the arguments that Paul Krugman are making that you need more money, probably you are going to go on deaf ears.

Now, as far as American investment or investors into America are concerned, keep in mind that what we have seen is this rush to quality or rush at least to safety out of Europe and into America and I do think that continues. So it’s not about how much debt America creates, but rather where else can people invest? For the time being that still is going to be the dominating theme. Some day Europe gets past its current crisis and may become a much more attractive place for investment, but I think that is two-five years from now.

Q: Do you track India because recently we have seen an upward revision from IMF (International Monetary Fund), as far as growth forecast are concerned, what about you?

A: I think the funny part of India is that one they escaped all the problems that the rest of the world faced during the mortgage crisis in America and the subsequent recessions. Clearly, you [India] weren’t really the big exporter to America or to the rest of the West and therefore you did not suffer much from it.

Now, it looks like you [India] are probably going to be the country that grows the fastest and perhaps has maybe the best, at least in terms of consistency, track record, going forward. China ofcourse had been growing faster, but now we know that China is having some internal problems, they need to exercise more constraint on their banks and on their stock market. Consequently, there are some risks to the Chinese growth story.

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Upside capped in Infosys Technologies: Nilesh Shah

Shah told CNBC-TV18, "Infosys Technologies has to some extent participated in the recent rally and it had a reasonably good run. My sense is that the real upside from here would be capped. I think in a best case situation we could probably go to Rs 3000 which would be more driven because of the beta factor rather than any kind of an alpha kind of a situation. So if there is strong liquidity coming in, it would be very natural for the Infosys stock to edge up towards that level of Rs 3,000."
He further added, "If the market does correct it could go down to a level of about Rs 2,600-2,700 also if the market were to correct another 5-7% from here. So I think you are going to see very limited outperformance on the Infosys stock from here, there could be minor absolute returns but if the market were to correct it would also participate on the way down."

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Base rate war: Leading PSBs set base rate at 8%

All the big public sector banks announced their base rate—their benchmark rate below which they can't lend. The base rate replaces the opaque benchmark prime lending rate (BPLR). This base rate will include the bank's cost of funds and cost of running the bank.

State Bank of India (SBI) said its base rate is 7.5% while Punjab National Bank (PNB), Bank of Baroda (BoB), Union Bank, Central Bank of India, Bank of Rajasthan, Indian Bank,UCO Bank, IDBI Bank and Indian Bank announced that their base rate will be 8%. Dhanlaxmi Bank has set base rate at 7% while Federal Bank has set it at 7.75%.

So how this new rate going to impact banks and customers? CNBC-TV18’s Latha Venkatesh and Gopika Gopakumar report.

Banks announce base rates; do you think this will bring about transparency in home loan rates? Tell us.

Starting July 1, SBI will price all its new loans above 7.5%. This will be the new reference rate or base rate, which will replace the existing benchmark prime lending rate, which stands at 11%. So does it mean rates change for existing customer? Chairman OP Bhatt says the bank will work out the impact on various borrowers in a day but said he expects only marginal changes for customers.

But what if rival banks announce lower base rates? As of now the big PSUs like Punjab National Bank, Bank of Baroda, Union and Central Bank have refrained from undercutting and announced a base rate of 8%. All the private banks have decided to announce their base rate on Wednesday. So will those with lower base rates snatch customers from those with higher rates, not so says ICICI Bank’s Managing Director and Chief Executive Officer Chanda Kochhar.

SBI's Bhatt said hasn't taken a call on whether he will continue their popular 8% home loan scheme. But added that banks can offer home loan schemes at lower invitation prices, even under the base rate regime.

The fun may start if some private banks like HDFC announce a rate below 7% and try and tempt away some customers. OP Bhatt points out that SBI even now has only 3% of its loans at below 7.5% and adds that the banks can lend to these borrowers through the commercial paper route. PNB sources say that even now they don't lend below 8%. Despite these brave words observers don't rule out a rate war after July 1.

RBI had directed all the banks to switch over to the base rate system from the existing BPLR system with effective from 1 July.

All new loans sanctioned after 1 July and those falling due for renewal from 1 July, (except exempt categories as per RBI Guidelines) will now be priced with linkage to base rate.

The RBI introduced the new lending rate system or the base rate to ensure that larger borrowers do not bargain for cheaper rates from banks, distorting their asset liability management.

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