Seasonal Magazine - July 2013 by John Antony

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VOLUME 12 ISSUE 7 JULY 2013

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EDITORIAL

Vol 12 Issue 7 july 2013

5 Things Indians are Doing Right, Lately

Managing Editor Jason D Pavoratti Editor John Antony Director (Finance) Ceena Senior Editorial Coordinator Jacob Deva Senior Correspondent Bina Menon Creative Visualizer Bijohns Varghese Photographer Anish Aloysious Correspondents Bombay: Rashmi Prakash Hyderabad: Iqbal Siddiqui Delhi: Anurag Dixit Director (Technical) John Antony Publisher Jason D

Getting things right, the first time or even the tenth time, has never been India’s forte. Even when nations big and small provide numerous progressive examples, we have been loath to emulate. But if really pressed against the wall, India can start moving. And if and when we start moving, there can be serious momentum, as we are huge. But it is erroneous to think that a specific party or coalition is doing the good work, or not doing the good work. Politicians may claim many stuff, but in the Indian context, stuff happens because it can’t be delayed any further! So, here is a quick look at five things that have started happening!

#1. Yes, We Understand, Gold Can Hurt

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#2. Only Cricket Can Cure Cricket

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Finally, the realization has arrived. To quote an Indian proverb itself, even amrut can be lethal in excess. For decades, India and Indians glossed over eating gold for breakfast, lunch, & supper. But we forgot two realities. One, we can’t be greedy with something that needs to be imported. Secondly, it is always foolish to bet against the dollar. US not only controls 20% of world GDP, but its currency remains the foreign exchange of choice for economic leviathans including China & Japan. Euro has long back opted out of that race. The first reality finally forced P Chidambaram’s hand to squeeze gold imports to save CAD, while the second reality caused gold to crash against dollar’s rise, the moment America wished for it. But needless to say, a lot more can be done by India and Indians on the import front, if there is a will. What about Oil, which is a much larger and damaging import than gold?

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What can cure the ills that have besieged Indian cricket? From lowly spot-fixing to serious match-fixing to royal daylight robberies by the administration itself, things look un-cleanable for Indian cricket. At least as long as this opaque monster called BCCI controls it, whether it is headed by Srinivasan or Dalmiya. Or is it? Not when Captain Cool & Co finally decides to deliver, but mind you, only on being pushed against a wall. Then everything falls in place, including cloudbursts from Shikhar Dhawan’s bat. IPL might be evil by design, but it took the IPL to force Dhawan out of a partly imposed and partly self-imposed hibernation from Indian team. In the final reckoning, only playing pure cricket with full might can cure cricket. Not managing cricket or gossiping cricket or glamourising cricket or analysing cricket or even investigating cricket. But should that mean Dhoni should be pardoned unconditionally for conflict of interest? It shouldn’t be that way,

ideally. Anyway cheerleaders are gone for good, and it is a symbolic victory for pure cricket as well as the Indian culture.

#3. Justice Arrives Despite Delays If you buy assault rifles that can kill hundreds within seconds, in the name of self-defence, that too from terrorists that are plotting against the very fabric of India, you are in trouble. Irrespective of who you are. That is the simple message Indian judicial system delivered to Sanjay Dutt. The world might have laughed, as justice arrived 20 years late! But remember, this is India, where justice delayed is not fully justice denied. It takes time, as we are slow. But we will, one day. Not even the full might of Bollywood, politics, and the costliest lawyers could save Dutt from a 5-year term. Next on row, is a bigger superstar, who was DUI when he rammed his Toyota Landcruiser at 100 km/hour on to a bakery killing one and hurting three, all of whom were poor guys sleeping on the pavement. For years, Salman Khan evaded justice and almost went scot-free. But that is understandable, as this is India, but now his time has finally arrived, to be charged for culpable homicide and other charges. But the bad thing is that justice delayed is justice denied itself. And more than that, the cases of Dutt and Khan remain the exceptions, not the rule.

#4. We Understand Disaster Management We recently pulled off a neat one. Against a natural calamity that instantaneously took the life of more than a thousand, and which could have taken the life of tens of thousands more, we did a little bit of disaster management. That ‘we’ is a misnomer. None of us had anything to do with it, really. The unbelievable work at Uttarakhand was primarily done by Indo Tibetan Border Police. And it was no easy work, by any measure. Needless to say, there were no land routes or airstrips post the cloudburst. And no choppers either with them. So, what ITBP did was hire a small private chopper, make a small team land, who built multiple helipads, on to which more private choppers were flown in. But with these small chopper sorties, evacuation was slow, exposing nearly a lakh stranded citizens - many of them senior and junior citizens - to grave danger. So what ITBP did was create a new 2.5 feet ‘road‘. Not easy, as the gradient is 80 degree, which means hills had to be chipped deeply. And at many places in this track, the citizens had to be helped with ropes and ladders. Meanwhile, other defence

units like Army, Air Force, and National Disaster Response Force, were pressed into action, which also helped in distributing food and medicines. The toughest job before ITBP was to ignore dead people, console relatives of those who died, avoid hysteric stampedes, stay unemotional, and focus only on the alive. We can be proud that ITBP is a part of what we call India. We are still bad at many things. Our met guys are still not up to the mark. Not savvy enough to predict cloudbursts. Our leadership’s anticipatory measures are also poor. But Uttarakhand-2013 proved that we can rely on our disaster recovery teams.

#5. We Still Save This one is the queerest one in this list. Because, it is not a trait that we acquired lately. But still it should be very much here, because this has been the last Indian fort which still holds back against the onslaught of globalization. The West has been doing its very best to penetrate this stronghold of the Indian economy using varied lures including cultural tricks like consumption and overspending. After all why should anyone save the oldfashioned way? Aren’t everyone getting affluent? And can’t our kids fend for themselves? For a while, it seemed that India would be tempted, with our savings rate dipping drastically. But fortunately, India didn’t fall for the trap. Better put would be that Indians didn’t fall for it, as it was perhaps our nervousness with the country‘s state of affairs that refrained us. To put this in its right perspective, let us start with the savings rate of UK, our former ruler. Gross National Savings as a % of GDP stood at 10.75% in United Kingdom as of FY‘13 end. United States fared much better with the FY’13 savings rate coming in at 13.84%. Americans are obviously getting nervous with their own financial security. Brazil, which is often compared with India as part of BRICS, saved more, with this rate coming in at 16.15%. Compare all these with India, and we will begin to understand why this economy still ticks. India’s Gross National Savings as a % of GDP came in at a high 30.20%! Now, everyone knows why it is so difficult to compare savings rates across countries. Generally, high-tax regimes tend to have higher savings rates, to escape taxes. That is why China whose tax slabs range from 5%-45% has a higher savings rate than India whose slabs are from 033%. Ironically, low-tax high-income economies also tend to have high savings rate, because, well, what else to do with all that money! That is why countries like Kuwait and Qatar have high savings rate. But India’s case is uniquely impressive, considering where we stand - medium income and medium taxes. It has proved to be an insurance we created for ourselves. John Antony

Contents

UnCAGed! Soldier of Probity Who Walked the Talk

If Vinod Rai was a bird, he was never caged. No cage in the country could hold him. Unlike the allegedly “caged parrots” that Supreme Court recently found issue with, here was a top bureacrat that even the mighty SC found worthy of tracking. But if Vinod Rai was a lion, he was indeed caged. Not by anyone, but by himself. Never giving interviews and never replying to cheap taunts of the Manish Tewari type, but always maintaining the sanctity of the post and always remaining the

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Contents Our Banks: Will FM’s Rate Cut Idea Make Them Battle Ready, Or Bleed More?

FM first tried his luck with RBI Governor for rate cuts, and as he found the going tough, has turned his attention towards our public sector banks that account for 75% of all loans in this country. After all, it is wellknown that despite RBI cutting rates by 1.25% since January, PSU banks have cut their base rates by an average of only 0.30%. Chidambaram is not forcing anybody, nor forcing a full passing-over of RBI rate-cut benefits to loan customers, but suggesting that such a voluntary move by PSU banks would go a long way in reviving credit demand and therefore the economy. The reaction from PSBs have been mixed, with Bank of India immediately heeding his advice and cutting base rate from 10.25% to 10%, while the country’s largest lender SBI has opined that there is no room for further rate cuts as their base rate is already at 9.70%. But all banks have agreed that they will consider FM’s suggestion within a month’s time. Anyway, one thing is sure. With the average base rate of PSBs being 10.25%, pressure will be on all banks at the higher end of the base rate spectrum to come down to at least the current average level. But the big question before bankers is whether it will make them more battle-ready due to higher credit off-take or just compress their margins and make them bleed more?

page11 page 9

INTERVIEW

UnCAGed! Soldier of Probity Who Walked the Talk

+20 Additional

Vinod Rai was a bird, he was never caged. No cage in the country could hold him. Unlike the allegedly “caged parrots” that Supreme Court recently found issue with, here was a top bureacrat that even the mighty SC found worthy of tracking. But if Vinod Rai was a lion, he was indeed caged. Not by anyone, but by himself. Never giving interviews and never replying to cheap taunts of the Manish Tewari type, but always maintaining the sanctity of the post yet always remaining the newsmaker. Because from within that self-built cage, this lion did roar. More than a few times, sending chills through the spines of UPA and several state governments. The Harvard-educated man himself says that he roared only as much as former CAGs, but that a newly powerful media amplified his roars. But that is being modest. Nobody denies that Vinod Rai IAS reinvented the post of CAG, as much, if not more, as TN Seshan reinvented the role of EC. At the height of the media frenzy during 2G and Coal scams, BJP was not the second-biggest political party or the most feared opponent of Indian National Congress. It was a constitutional authority called Comptroller & Auditor General of India. Without reminding anyone, Vinod Rai reminded everyone that CAG is above a Supreme Court Judge in protocol, and that CAG is someone who can be removed from office only by impeachment in Parliament. Inside the Grand Old Party of India, lowly Congressmen wondered who in the world would have thought of an independent thinker like Vinod Rai for the post of CAG, which was often filled with good but tamed bureaucrats. The credit for that goes to Dr. Manmohan Singh, P Chidambaram, and Pranab Mukherjee, who were the guys obviously calling the shots back then. Forget lowly Congressmen, nobody can be blamed for speculating that even the allpowerful in the GOP, Sonia Gandhi, might have asked the trio from where did you find this great candidate! Such was the collateral damage that Vinod Rai inflicted upon UPA-2, by way of his scathing reports on 2G spectrum and coal mine allocation. Evidently, Dr. Singh and his team selected Vinod Rai for his excellent credentials. And, boy, didn’t he deliver? The PM can definitely feel proud of his selection. Thankfully, the likes of Ahmed Patel, Kapil Sibal, & Manish Tewari had not grown too powerful back then, to oppose his selection. Sibal’s famed ‘zero-loss’ theory in 2G went for a toss, when CBI itself claimed that the loss according to its assessment is in excess of Rs. 30,000 crore. The political fallout from Vinod Rai’s 2G report would have been much worse, if BJP had shown more spine to form an alternative government with new allies. Because, not only did Raja end up in jail, but Congress lost a key ally in DMK. It also goes to Sonia’s and Rahul’s credit that despite great temptation, they have not even once tried to discredit Vinod Rai. The CAG’s greatest test came when P Chidambaram and Dr. Manmohan Singh personally took it upon themselves to counter CAG’s Coal Allocation report point-bypoint, the former in media, and the latter in Parliament. Even when they appeared to succeed to a great extent, it was clear that both had no plans to discredit Rai. Because, the CAG had fully done its homework, and even when anyone vehemently fights his conclusions like presumptive loss in 2G and under-recoveries in coal, there is no denying that Vinod Rai is not entirely wrong in his assessments. Going a step further, even his detractors would admit in private that he is more right than wrong. In the final analysis, any impartial observer would find that Vinod Rai was just being a proactive CAG, who utilized the full mandate given to a CAG, to make decisive comments on even sub-optimal policy implementation that can cost the nation dearly. Thanks to Rai, the role of CAG will never ever be the same again.

+ 21 Additional

Seasonal Magazine caught up with Vinod Rai recently to quiz him about carrying out a national mission with courage, integrity, and dignity. Off to Seasonal Magazine’s exclusive interview with Vinod Rai: ourage has been a hallmark of your career, especially while you were CAG. Can courage be taught to children and youth? No, courage can’t be taught in the classical sense. But children and youngsters imbibe courage from their parents and teachers. Parents can teach courage at home by breaking stereotypes and letting the child pursue his dream or passion. Similarly, in schools, what is more important than subjects and formal teaching is that, teachers should help students identify and pursue their dreams. Courage will follow. You are an IAS officer who has benefited from overseas education. Is overseas education still relevant for our aspiring leaders? I don’t think I have benefited much from overseas education, as I have done only my post graduation abroad. But having said that, it can’t be denied that overseas education broadens our horizons and helps us become familiar with the very best standards in the world. That advantage still holds relevant. Your reports were perhaps more famous than your proposals. You have held a view that over 60% of government funding is now not audited by CAG, due to PPP and Panchayati Raj institutions not being audited, and that should be changed. Can you explain this proposal of yours? Yes, that has been one of our proposals. What prompted us to do that is pretty straightforward. The audit mandate that CAG presently has is from the CAG Act of 1971. A lot of new funding models of the government have evolved since then. Even after the 74th and 75th amendments to this Act, there have been significant new funding models like that to the Panchayati Raj Institutions (PRIs) and Urban Local Bodies (ULBs). Even more lately,

other models like Public Private Partnerships (PPP), and Government funded schemes like National Rural Health Mission (NRHM) and Mahatma Gandhi National Rural Employee Guarantee Scheme (MGNREGS), have evolved. Significant government funds pass to these schemes, often through societies and NGOs implementing these schemes. Today, the situation is such that around 50-60% of all government funds are spent through these new models, where CAG has no automatic mandate to audit. That means we can audit these schemes only if the government requests us for it. For example, the government had requested and CAG had audited NRHM. We had also done a performance audit on MGNREGS. But without automatic mandate, all these would be out of the regular purview of CAG. That is why CAG proposed that the 1971 Act should be suitably amended. Post your retirement, you have admitted that regarding the 2G report, only one thing can be debated which is the quantum of loss. Can you explain this view? Yes, the quantum of loss is definitely a subject of debate. It is not a new stand, as the original CAG report on 2G Spectrum Allocation details four different loss projections. The CBI has its own loss projection, which is something different. So, that is definitely a subject of debate. What the CAG had said is simple. Had the Government followed the 2010 policy for 3G and BWA, for the 2008 2G auction, significant revenues could have been generated. Since it was not done that way, the national exchequer suffered huge loss. Since the issue and its pricing was very complex, the CAG itself put across four estimates regarding the loss, and pointed out one as the most likely loss. That also means, it can’t be debated whether there was loss or zero-loss?

There are two aspects to such a debate. One is whether the first-come-firstserved policy was properly implemented and the loss due to a flawed implementation. CBI and the Courts have found fault with that implementation, and commented on the loss due to that. Secondly, and that is what CAG has given more weight, as that is the bigger issue, which is about whether the first-come-firstserved policy in itself was wrong as the subsequent 2010 policy of auctions proved that there is immense scope for revenue generation. Did you feel vindicated on your stand when many involved in the 2G scam including former minister A Raja was sent to jail, and all the 2G spectrum licences were cancelled by SC? No, you are mixing up two issues here. CBI didn’t accuse anyone including Raja because CAG said so. What they are doing is entirely different, which

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CAG is fully entitled to comment on what is called sub-optimal policy implementation. Such less-than-desired policies are a big way in which Governments lose money. SAIs the world over, including in India, have the mandate to comment on sub-optimal policies followed by the executive.

”

is pursuing the criminal aspect of it. Similarly, Supreme Court quashed the licences because of the criminal angle. CAG doesn’t have anything to do with those moves. How will you defend your presumptive loss of Rs. 1.76 lakh crore in 2G allocation? That are all in public documents and is widely debated in media. But the CAG thought that it was not enough. Who is there to audit the CAG? There is no one in India, as this is the country’s Supreme Audit Institution (SAI). Not even the Supreme Court can overrule a CAG report. So, CAG turned to SAIs in other countries, requesting for an audit of our reports, which is technically called a peer-review. The SAI of Australia agreed, and since they couldn’t spare the required personnel themselves, they constituted a 14member international team, comprising of audit professionals from

Australia, UK, US, Netherlands, Denmark, and Canada. This team went through not just the 2G report, but 33 of our reports. Apart from a few minor qualifications, they didn’t find any fault with any of our reports and loss assessments, including the 2G report. This international peer review together with the qualifications is also a public document available in the CAG website. How will you justify subsequent court-directed 2G auctions failing, and mobile companies steeply raising their rates? That is mainly attributable to the business environments prevailing in 2008 and now. If you remember, in 2007-08, the business mood and investment climate were definitely bullish, and it was reflected also in the Sensex highs. Then the global financial crisis happened, affecting Indian markets too, but still around 2010 it

seemed that the world including India would recover. That was when the 3G and BWA auctions happened. However, the situation has deteriorated further and the dull response for the 2G spectrum reflects the new economic environment. Regarding the coal mining report, the former Coal India Chairman while appreciating you for several points, had also remarked that not all types of coal mines should have been considered equal, and that maybe the only flaw in your report. How do you view this? We have indeed considered three different types of mines, and considered only extractable reserves as against coal in situ. CAG’s central viewpoint in the Coal Allocation Report is that despite the government agreeing in-principle that competitive bidding is the better route for revenue generation, they continued with the prevailing allocation scheme through a screening committee. The Government says executing that change was difficult in a time-bound manner for that round of auctions. CAG found that to be very inefficient on their part. Despite your firm stand that you didn’t meddle in policy matters, there has been a perception that it has been partly so, due to your integrity and aptitude for good policy. For example, both in the 2G and Coal reports, what you are really saying is that a different policy would have been better. How will you counter it? Where has the CAG proposed policy? Can anyone show it in any of our reports? I have been repeating this question to all those who question me on this. What the CAG has mentioned as a better policy is not our policy, but the own policy of the government. In the 2G report, what the CAG has basically said is that if you had followed your own policy of auctions as was subsequently done in 3G, a huge loss in potential revenue to the exchequer could have been avoided in 2G. Similarly, in the Coal report, what

CAG has said is that if the Government had followed its own decision to do competitive bidding, much more revenue could have been generated.

Information Commissioner (CIC) directed us to share even details in our reports to all RTI applicants. So, we raised this issue with PM and FM. But after consideration, they too felt that the whole of CAG including our audit process and reports should remain under RTI. So, they are not leakages at all, but what we have legally shared under the RTI Act.

But, still both are policy issues… Of course they are. The only difference is that the policy was not proposed by CAG. The auditor was referring to Government’s own policies, which were not implemented, which resulted in huge presumptive losses. Agreed. But can the CAG comment on policy issues? Why not? CAG is fully entitled to comment on what is called sub-optimal policy implementation. Such less-thandesired policies are a big way in which Governments lose money. SAIs the world over, including in India, have the mandate to comment on sub-optimal policies followed by the executive. Including, making assessments of presumptive losses? Yes. Presumptive loss is widely calculated the world over by SAIs. It is there in the international auditing parlance and is used even by the IMF. Even in India, the Direct Tax Code speaks about presumptive income and presumptive gains which are liable for taxation. So, this is not a new concept at all. The other allegation has been that your reports are only based on hindsight. How will you counter it? There is no need to counter it, because it is not an allegation, but a fact. Public Audits the world over are done postevent, and SAIs have only hindsight to rely on. Even if on hindsight, the CAG says there were losses due to suboptimal policy or its execution, what is wrong in that? You have noted that executiveauditor relations are adversarial in nature. But have you ever thought that, may be due to the sensational headlines of your reports, many Congress/UPA voters too have ended up suspecting you for a bias? The CAG has never put any sensational headlines. That is the role played by media. CAG reports are dense and very

“

“Presumptive loss is widely calculated the world over by SAIs. It is there in the international auditing parlance and is used even by the IMF. Even in India, the Direct Tax Code speaks about presumptive income and presumptive gains which are liable for taxation. So, this is not a new concept at all.”

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technical in nature. They are public documents that are dissected very minutely by all concerned. CAG can’t harbour a bias, and I am of the firm conviction that we have never been biased in our reports. How will you account for portions of CAG reports getting leaked, before getting tabled in Parliament? First of all, let me categorically assure you that those are not leaks at all. CAG too is under the Right to Information (RTI) Act. When journalists or activists started applying for specific information in our reports-underprogress through the RTI route, we resisted initially. There are basically two divisions at CAG, one involving the day-to-day working or administration of CAG, and the other our audit process with the final output being our reports. The CAG had no issues about sharing the former, but the latter we felt that it is a privilege of the Parliament. But the Central

Is there any fallout to this government decision? Well, not really. It is good for transparency. The only fallout is that sometimes finer details in the audit process can be quoted in media, outof-context. To give you a quick example, we might ask an officer 100 audit queries. He might give 100 answers too, and what happens if we are fully satisfied with 70 of his answers? As far as CAG is concerned, only 30 concerns remain, and only they will find their place in the final CAG report on that issue. But through RTI anybody can access all the 100 queries as well as their answers, and quote them out-of-context in media or elsewhere. That is the main risk. You have recently made an interesting observation that Government must be seen to be supporting enterprises, and not entrepreneurs. Can you explain this? Due to national interests, government should be supporting various sectors. Let us say automotive is one such sector now. There are various enterprises in it like Maruti Suzuki, Hyundai, Tata, Mahindra, Toyota, and lots more. When government decides to support such a sector, all enterprises in it should be equally supported without fear or favour. Problems start when some entrepreneurs are selectively favoured over others. You have gone on record stating that you didn’t face any covert political pressure. Are you being just politically correct, or can the nation believe that the PMO and FMO didn’t pressurize you at all? Or are you subtly referring to overt pressure?

No, I am not being politically correct at all. There was absolutely no covert political pressure from any quarters, including PMO and FMO. The government has been very fair towards CAG. But there was obviously overt pressure through media… I don’t consider it as overt pressure at all. The auditor-executive relation is always adversarial, and ideally should remain adversarial too. Because, basically auditors are trying to find faults in their strategy and execution. And it has always been adversarial the world over, and in this nation too. The only difference now is that media is much more active now, and so such things get highlighted. But didn’t JPC Chairman PC Chacko as well as Congress leaders like Manish Tewari clearly overstep basic protocols through media? CAG’s role is to place our reports before the Public Accounts Committee (PAC) of Parliament. Thereafter what PAC does with our report is not really CAG’s concern though we assist in their investigations, if we are requested for it. Similarly, we have also assisted the Joint Parliamentary Committee (JPC) in its investigations as per their request. We have clarified whatever we have been asked for by JPC. It is not right on my part to comment on JPC Chairman’s words outside of that role. Regarding the comments of other political leaders, well, they are exercising their freedom of speech. How do you assess the integrity of top executives like Dr. Manmohan Singh and P Chidambaram? No, I shouldn’t comment on them at all. It is not proper. Though you mention that CAG’s responsibility ends on submitting the report to PAC, do governments at both Centre and States, really take corrective measures based on CAG’s reports, or implement your recommendations? The answer is yes, to a large extent. Though it is not our duty to monitor whether changes are being made

according to our reports, we do see numerous changes happen. Even from the hotly contested telecom spectrum and coal allocation reports, Government did implement many suggested corrective measures. But in Uttarakhand it was being reported that the calamity happened because CAG’s reports were ignored… We can’t say that, as it is a natural calamity. It is true that through three of our reports, we had raised some concerns regarding the development model of the state that gave great thrust to power generation through hydroelectric projects as well as tourism promotion. CAG pointed out that it should be done with keeping ecology in mind. Some corrective measures were taken, but not all of the recommendations were implemented.

just one that readily comes to my mind. Suppose the CAG asks a senior officer in government regarding details of, say, his overseas tours for last year. He may give, or he may give only on repeated reminders, or he may not give at all. But if the same question is asked by any citizen of this country through RTI, within one month the citizen will get an answer. We have asked the government to give at least that kind of power to CAG in querying officers. You have kept your fans guessing by saying on one occasion that joining a political party is not a sin, and on another occasion that you have been apolitical all your life. Can the nation expect a political role from you? No, that comment was just a joke. I have always been apolitical in my life, and plan to remain so. Politics is not just my cup of tea.

Despite opposition’s stand, you have said that the process of appointing the CAG is a very fair and transparent process. How do you assess the selection and potential of Shashi Kant Sharma? The process of appointing the CAG is indeed a very fair and transparent process. I have high regard for Shashi Kant Sharma. He has got an impeccable track-record. He is well qualified and experienced for the job, and has high integrity. If someone had asked me to select a CAG, I would have chosen him.

So, that brings us to your future plans. Anything specific in mind? It has been less than two months since my retirement. Let me rest for a while! I think I have some strengths in finance and auditing. So, if anything interesting and challenging turns up in those fields in the private sector, I might give it a try.

Don’t you think the selection process of CAG can’t be further finetuned? Well, the government did ask for CAG’s opinion on this, sometime back. And what we replied is that the selection process can be made even more perfect if the collegium approach followed in the selection process of Central Vigilance Commissioner (CVC) is followed here too. I think that is the very best process in India.

How would you advise young people who look upon you as a role model? Always aim for the very best, the gold medal. Never aim for being the secondbest or third best. Whatever be your profession, plan and work hard to be the very best in that.

Any specific proposal that you would like to see implemented for bettering the functioning of CAG? There are many, but I would mention

What would be your advice to young IAS officers? Always play by the rules of the game. That is very important in this profession if any IAS officer wants to be a high achiever.

What radical change or development would you like to see in the country? I don’t think the country needs any radical change or development. All the necessary systems and processes are largely in place. What is needed is just all people walking the talk.

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UNCAGED! Soldier of Probity Who Walked the Talk

Is it Really Arundhati's Romance That Jairam Ramesh Hates?

Why Chasing Perpetual Economic Growth is Highway to Disaster

SECTOR WATCH

OUR BANKS:

BLEEDING

ne by one they came, the Q4 and annual numbers of Indiaâ&#x20AC;&#x2122;s mighty banking industry. While the outperformance of large private sector lenders were dulled by the systemic money laundering allegations, the public sector players continued to be besieged by asset quality concerns. While only a few PSU banks could post at least reasonable headline numbers, most had their net profits retreating if not plummeting, sending shockwaves across investor community. The general consensus on public sector banks from analysts is that market is yet to see the worst in performance and asset quality, and that it would take a couple of quarters more. But what is troublesome is that, market has been feeling like this for over a year now, and asset quality is indeed going down too. Market continues to believe that asset quality problems in public sector banks is aided by either forced lending to unviable PSUs like SEBs/discoms/Air India etc or to badly governed private sector enterprises like Kingfisher, and numerous others like it, on political compulsions. At the same time, PSU banks could outperform on fronts like priority sector lending to agriculture and power, which is not at all a priority for private players. Any observer could feel that giving greater autonomy to public sector banks would create a more level playing field, with private sector peers. Public sector banks are also going through a period of manpower crunch - thanks to the ongoing retirement decade - while courts are finding problem with banks recruiting from B-School campuses. RBI has recently skipped a chance to cut interest rate further, signalling that FYâ&#x20AC;&#x2122;14 is not going to be easy for the banking sector. Nothing short of battle-readiness would be needed from each bank. Seasonal Magazine probes banks in-depth to find those banks who are most likely to weather the ongoing economic blizzard.

Seasonal Magazine

OR BATTLE READY?

OUR BANKS: BLEEDING OR BATTLE READY?

Seasonal Magazine

“AS ECONOMY WE WILL BE ON A

Shubhalakshmi A Panse, CMD, Allahabad Bank

IMPROVES, STRONG FOOTING”

llahabad Bank has had an exceptionally weak quarter with performance down on almost all fronts, which is not really in sync with the economy’s recovery and rate cuts. Did the bank resort to a one-off cleaning up during this quarter? Yes, I do agree that we had a weak

quarter, but then, if you look into what really happened, our core performance has not been that bad. There was no one-off cleaning as such, but there were some occurrences in Q4 that are not routine. For instance, we had a provision for wage revision which comes to around Rs. 20 crores per month or 60 crores for the quarter. Other factors that dragged down profits were fresh provisioning for NPAs of

around Rs. 513 crore, and diminishing fair value of restructured accounts. If none of these were there, our bottomline would have been fine. On the NII front, what hit us was interest reversals due to accretion of fresh NPAs, and the reduction in the yield on advances. So, if you take a comprehensive look, what has affected us is also the economic environment around, that is squeezing many of our clients. When do you expect a recovery from this situation? Well, for Indian banking, Q1 and Q2 of any fiscal are relatively weak quarters, and even otherwise, I would expect recovery to take another couple of quarters. But make no mistake, as and when the economy improves, Allahabad Bank will be on a strong footing. The most alarming aspect has been the sharp deterioration in asset quality from the immediate preceding quarter. Gross and Net NPAs have spiked around 50% or even more on a QoQ basis. What contributed to this sudden spike? Many of our large corporate accounts were expecting to go in through the CDR route, and as such, though the hike in NPAs is significant on a QoQ basis, it is also technical in nature, as they are in the final stages of being accepted into the CDR route. So, there is nothing much to be alarmed about it. But yes, there are also a few accounts where we won’t permit CDR as mismanagement is very obvious. Another troubling aspect with

Seasonal Magazine

Allahabad Bank has had a difficult Q4 with net profit dipping by over 68% on a YoY basis, and over 59% on a QoQ basis. But CMD Shubhalakshmi A Panse is unfazed, as she explains that beneath the headline numbers, the core performance has been reasonably good. According to this veteran banker, who honed her skills at Maharashtra Bank during a 33-year long stint, the asset quality concerns of Allahabad Bank is not singular to this Kolkota based lender, but a side effect of what has been happening in the economy and banking sector since 2008. She should know, as she was in her previous assignment the only Executive Director at Vijaya Bank, which meant she had to handle all portfolios, which she did with elan as shown by Vijaya’s good performance during those two years. Panse, who is a Gold medalist in MSc from Pune University and an MBA from Drexel University, USA, passionately argues that public sector banks can’t be compared at all with the better performing private sector banks, as public banks have to support numerous priority public sector projects like in power and infrastructure, which are essential for nation building. At the same time, this CMD admits that many good lessons should be emulated from the private sector like higher employee accountability, long-term leadership tenures, and better recruiting processes, like from B-Schools. For someone who has had deep exposure to almost all operational segments of banking like recovery, credit, fund management, law, accounts, IT, and business process re-engineering, Panse traces the current problems in banking to the cash-flow problem in the economy, which should improve as the interest rates come down. Seasonal Magazine quizzes Shubhalakshmi Panse to unravel what is troubling Allahabad Bank and the industry as a whole, and to ascertain when is the expected recovery:

OUR BANKS: BLEEDING OR BATTLE READY?

Seasonal Magazine

Allahabad Bankâ&#x20AC;&#x2122;s Q4 has been the large-sized NPA accounts - with around 9 accounts contributing Rs. 1600 crore - which shows that this is not really an issue with the economy but with the lending policies of the bank that were in force earlier. How would you explain this happening? There are also several more large accounts of ours that have managed to remain healthy. So, just because these 9 accounts turned NPA, how can you say that the lending policies were not good? That is something that you say in hindsight. Again, of these 9 accounts, we have high hopes on most of them getting upgraded eventually. Sterling Industries where we have Rs. 240 crore exposure and Orchid Chemicals where our exposure is around Rs. 230 crore are better accounts. Sterling is likely to go in through CDR and they can raise cash too for the turnaround. As far as Orchid is concerned, it is known that they have already brought in a new investor with funds, but the dispersal got delayed due to a technical reason. We expect significant recoveries from such accounts in this quarter itself. Another point is also worth mentioning. For most of these accounts, including Sterling and Orchid, we are not the sole lender. It is a consortium of 18 banks. Kemrock Industries where we have Rs. 471 crore exposure is again consortium lending. So, it is not just an issue with Allahabad Bank at all. So, do you also mean to say that there is no mismanagement involved from the part of these companies? Well, to an extent, no, it is not about mismanagement. It is more like calculations gone wrong. When interest rates were low, and credit was easy, all these companies took advantage of it by expanding and diversifying massively. But when the interest rates inched up, and stayed there for long, their cash flows got affected. That is why we are hopeful that when the interest rate comes down, these companies would recover and bounce back. But having said that, there is no doubt that there are also cases of gross mismanagement. An

example is Suryavinayak, where we suspect mismanagement and have asked for a forensic audit. What would be your exposure in that account? Do you have collaterals to cover it? It is again a consortium affair. Total exposure to the banking industry would be Rs. 2000 crore, and our exposure would be around Rs. 314 crore. Collaterals are also poor for this account, and so we will be initiating strict recovery steps. Speaking about recoveries, how did Allahabad Bank fair in that respect, during Q4? The intense recovery drives have resulted in total recoveries of Rs. 2300 crore in FY 12-13. In Q4 itself we made huge recoveries of Rs. 811 crore. Going forward, asset quality is the

prime concern. We have launched a recovery campaign with targets for each and everyone and we are monitoring the campaign on daily basis. We are expecting good recoveries in the current fiscal. The general consensus on public sector banks from analysts is that market is yet to see the worst in performance and asset quality, and that it would take a couple of quarters more for recovery. In fact, market has been feeling like this for over a year now, and asset quality is indeed going down too. So, do you subscribe to this view that the worst is yet to come? Recovery would take concerted efforts and time, there is no doubt about that. The basic problem in the economy is a cash-flow problem. Affecting the apex first, it hits large-caps, then it trickles

But can the same logic be applied to support Air India? Or to support Kingfisher? We donâ&#x20AC;&#x2122;t have exposure in Kingfisher Airlines. Coming to Air India, where we do have exposure, the problems are well known. Things could be better but the challenges are daunting. With continued efforts of all concerned, we are hopeful of Air India becoming healthy.

down to mid-caps, and then to smallcaps and MSMEs. It is a connected issue. The economy can tolerate a 90day payment cycle, but above that, it affects every segment, deep down. Do you think that much of the asset quality problems in public sector banks is caused by either forced lending to unviable PSUs like SEBs/ discoms/Air India etc or to badly governed private sector enterprises like Kingfisher, and numerous others like it, again on political compulsions? No, I donâ&#x20AC;&#x2122;t agree to that view at all. You are unfairly comparing public sector banks to private sector banks. It is like comparing apples and oranges. Public sector banks are not just there to make profits. We have a mission in nation building, which is to be carried out by assisting PSUs in their requirements, as well as by assisting

Do you think that giving greater autonomy to public sector banks - in fixing interest rates as well as for whom to lend and in other aspects too - would create a more level playing field, with private sector banks? As far as fixing interest rates is concerned, we are on a level playing field with private sector banks, as both are subject to the same RBI guidelines. Autonomy in that respect has considerably improved over the recent years. However, when it comes to other aspects like leadership, much more autonomy can be tried. In public sector banks, CMDs are now brought from outside, and they are also not getting a long tenure at the top either due to retirement or due to shuffling. When a Chairman is there for only a short tenure, his or her outlook can be for that short period only. Such CMDs would lack the initiative to attempt really radical innovations that bear fruits only after say, 5 or 7 or 10 years. In contrast, look at what Chanda Kochchar has been able to do at ICICI Bank. That is possible only because she

has been given a long-term mandate, which ensures continuity of powerful strategies. Any other lessons from private sector banks that you would wish to be emulated? Well, one that readily comes to my mind is the greater accountability there. If only a management has the ability to take the required corrective measures on erring or underperforming employees, can a bank hope to compete professionally with other banks and come up. That is a serious limitation in public sector banks. Public sector banks are going through a period of manpower crunch, while courts are finding problem with banks recruiting from B-School campuses. How are you addressing this issue? This is a very serious issue affecting most public sector banks, including Allahabad Bank. As you know, due to various circumstances, we are in a decade of retirement, a decade that will see more retirements in the public sector banking space, than any preceding or succeeding decades. We have been recruiting heavily to offset this, and the unprecedented nature of the problem has thrown in some difficult challenges to master. For instance, earlier our training department might have catered to 200 new recruits, but now they are being asked to train 2000 recruits. So, either we can outsource that training or we can recruit better trained personnel. Unfortunately, this second route involved direct recruitment from reputed B-Schools, which the court has temporarily stayed. Outsourcing is not very attractive due to various reasons, and that leaves us to deploy partially trained or under-trained candidates in livewire jobs, which affects quality. There are positive sides too to the retirement-decade, as our average employee age has come down from 55 years to 41 years now, which has its own strengths. But we can fully capitalize on it only when we solve the issue of getting already trained personnel.

Seasonal Magazine

in priority sector lending like that to farmers. Now, can anyone say, PSUs in the power sector can be ignored? They are perhaps the ones doing the most important work today, as everyone agrees that without adequate power for the future, growth in every sector is going to be affected. So, public sector banks are expected to support SEBs, discoms etc, and that is what we have been doing. We hope that with better strategies and with continuous improvement in management as well as in the economy, these PSUs indeed will turn around one day.

Seasonal Magazine

OUR BANKS: BLEEDING OR BATTLE READY?

VR Iyer, CMD

BANK OF INDIA TO IMPROVE PROFITABILITY, ON A WAR FOOTING

MS Raghavan, ED

many milestones during the full fiscal of 2012-13. Total Business has touched Rs. 6.75 lakh crore, registering a rise of 18.5% on YoY basis. Non-Interest Income is up by 13.40% on the same basis. Operating Profit for the fiscal is up by 11.42%. Book value per share has improved from Rs. 326.52 in March 2012 to Rs. 362.37 in March 2013. Rewarding its shareholders, including Government of India, Bank of India’s Director Board has also proposed a dividend

BP Sharma, ED

of 100% as against last year’s 70%. But the challenges facing the bank is not lost on Chairperson VR Iyer. Her biggest strength is the fact that she is a realistic leader. Iyer is candid enough to admit that Bank of India like most of its public sector peers faces an uphill task in both credit growth as well as in deposit mobilization. While everyone is anticipating that credit uptake will improve, she frankly admits that from her talks with some of BoI’s largest

Seasonal Magazine

ank of India has had a difficult Q4 like most of its peers. Quarterly net profit has fallen by over 20% on a year-onyear basis, and by nearly 6% on a sequential or quarteron-quarter basis. However, the performance is far from the nadir it hit in the last September quarter, when quarterly net profit was around 2.5 times lesser than the current level. The Mumbai based lender is definitely building on the turnaround it registered in the December quarter. That quarter also saw the large-sized bank get a new Chairperson, VR Iyer. She was formerly Executive Director at Central Bank of India, and even before that assignment, has had a sterling career spanning 33 years with Union Bank of India, where she last served as GM. That all these three banks are headquartered in Mumbai is sure to give an added edge to her turnaround plans for Bank of India as its Chairperson & Managing Director. Despite Q4 being difficult, the public sector lender did achieve

Seasonal Magazine

OUR BANKS: BLEEDING OR BATTLE READY?

page 56

clients, no one is talking about making fresh or massive investments, yet. At the same time, Iyer feels that mobilizing low-cost deposits would be a much bigger challenge for public sector banks including Bank of India. Obviously, understanding the challenge is half-way of solving the challenge. Another of her strengths that Bank of India is utilizing is that she is not wary about taking a contrarian position. While everyone is harping on retail loans to be the next game-changer in public sector banking sphere, she forecasts that retail loans alone won’t be enough to replace the volumes of large corporate loans that PSBs like BoI are known for. Chairperson VR Iyer has also proved that she can also take on difficult tasks that mean quite a bit of rework in the bank’s bureaucracy, if need be. Earlier, Bank of India had embarked on an ambitious program in which specialized branches were set up to address big-ticket corporate loans. Under this scheme, out of Bank of India’s 4290 branches, 10 were designated as corporate branches and 40 were designated as mid-corporate branches. But the move proved unpopular among clients, as many of them had to shift their accounts to these specialized branches. Sensing that this earlier move was not yielding the intended results, VR Iyer has made sure that any branch can do any business. Earlier, the majority of the branches could do only retail and agriculture loans, and designate the rest to corporate branches. The move by Iyer has now brought in a more level playing field among all branches, and heightened the competition among them. Bank of India has also created one of the most comprehensive recovery mechanisms for addressing defaulters. This includes appointing over 5000 Business Correspondents for communicating with and recovering from thousands of small rural defaulters, as well as more stringent methods for addressing wilful corporate defaulters. Under the leadership of Executive Directors,

MS Raghavan and BP Sharma, the bank had set up Debt Recovery Branches, and is actively pursuing even written-off accounts. Like a few of its peers, BoI has indicated that it won’t leave no stone unturned in its pursuit of recovery from large wilful defaulters, including methods like name-and-shame strategies. Bank of India is bullish on growing its international business too. BoI is now in operation across 20 countries with 51 offices outside the country. One more branch was opened in Tanzania during last fiscal, while the representative office in Johannesburg was upgraded to branch. The Bank now plans to open subsidiaries in

Despite Q4 being difficult, the public sector lender did achieve many milestones during the full fiscal of 2012-13. Total Business has touched Rs. 6.75 lakh crore, registering a rise of 18.5% on YoY basis. Non-Interest Income is up by 13.40% on the same basis.

Canada, Brazil, & Botswana, while a representative office will be set up in Myanmar. The fiscal also saw many awards being bestowed on the bank. BoI has been awarded as ‘The Best Bank for Excellence in AADHAR Related UIDAI Programme of Government of India’, from the hands of Prime Minister Dr. Manmohan Singh. The Bank has been conferred with National Award for implementing PMEGP scheme in East Zone. Bank of India has also been ranked Second Best by Ministry of MSME, New Delhi, based on its performance in lending to Micro Enterprises. Going forward, Chairperson VR Iyer’s strategies hinges on increasing the profitability of BoI. Towards this end, the credit/ deposit ratio is going to be improved to an ambitious 78%. For those who think that such an aim is easily said than done, the top management of BoI led by VR Iyer has chalked out a six-prong strategy that includes emphasis on CASA growth, expansion of SME, Retail and Rural Businesses, focus on Credit Monitoring and Recovery, inclusive growth through Financial Inclusion, progress on IT Enabled Services for better customer satisfaction, and focused attention on Human R e s o u r c e s . S u ch a n i n t eg r at e d a p p r o a c h i s w hy t h e m a r ke t believes that Bank of India stock too might outperform in the longterm.

OUR BANKS: BLEEDING OR BATTLE READY?

Seasonal Magazine

BANK OF BARODA TO BE BACK ON A GROWTH TRAJECTORY SOON hen the winds of asset quality pressure started hitting Indian public sector banking sector almost two years back, there was only one public sector lender that withstood that pressure for the maximum time. It was ‘India’s International Bank’, Bank of Baroda. There were many reasons for BoB’s superior asset quality. Overseas operations accounted for nearly 30% of their total business. Bank of Baroda is present in 24 countries, including high-volume destinations like UK, UAE, USA, Singapore, Hong Kong, and Belgium. And majority of their overseas credit is in the form of syndicated loans, ECBs, and buyer‘s credit. But the economic situation in

India continued to worsen during these past two years, and the asset quality pressure ultimately affected BoB too, starting in Q3 of FY’13. The huge responsibility of leading the bank through such difficult times fell on the shoulders of SS Mundra, who had taken over as CMD during that quarter. This veteran banker’s last assignment was as Executive Director of Union Bank of India. But the longest part of his career - of over 3 decades - was spent at Bank of Baroda itself, and that has come in as a huge advantage for BoB as well as its new Chairman, in navigating these tough times. He has held key leadership positions in both the domestic and international operations of the Bank. For example, he has been the Zonal

SS Mundra Brings BoB to a Realistic Plane, But Will His Strategies Deliver?

Overseas operations accounts for nearly 30% of their total business. Bank of Baroda is present in 24 countries, including high-volume destinations like UK, UAE, USA, Singapore, Hong Kong, and Belgium. And majority of their overseas credit is in the form of syndicated loans, ECBs, and buyer‘s credit. 70% of the bank’s overseas credit was to businesses related to Indian entities. And when the Indian situation became weaker and weaker, these overseas assets also started showing stress. However, such operational pressures have not prevented Bank of Baroda from generously rewarding its shareholders, by sharing from its still sizeable profits. The Bank’s Board has recommended a dividend of 215% or Rs. 21.50 a share for FY’13, which translates to a handsome yield of 3.30% at current prices. Chairman SS Mundra has indicated that though the asset quality pains will continue for one or two quarters more, they are now shifting gears to be in growth mode again. There are reasons why Mundra’s assertion seems believable. Around 70% of Bank of Baroda’s business is still domestic. And for the domestic NPAs, the gross NPA percentage has already come down on a quarter-onquarter basis, even under these difficult

economic situation prevailing in the country. What this means is that, if nothing unexpected happens, one can expect BoB’s NPAs to stabilize at the current levels during the first two quarters of this fiscal, and thereafter - from third quarter onward - the asset quality will start improving, leaving the bank free to pursue its growth trajectory, once again. And when that happens, the market expects BoB to outperform its peers like in the past. More often than not, the bank has grown over 2% above the industry averages in both credit growth and deposit growth. CMD Mundra knows it will be a difficult challenge to repeat that great track record, but he has put in definitive plans to pursue that traditional outperformance model in these new times. BoB’s new strategies revolve around an aggressive retail push that will eventually better the composition of the loan portfolio from a corporate dominated one to a retail dominated one. The bank’s recent offering of home loans at the base rate of 10.25% itself, irrespective of the ticket-size and tenure, is a step in this direction. Unlike similar offerings from its peers, BoB is even letting its existing customers migrate to this new interest regime with no extra cost. Focusing on home loans make immense sense for the bank, as its home loan portfolio is only 7% of its overall domestic portfolio, which means there is much room for improvement. The bank’s international operations too will be strengthened. The new overseas strategy revolves around shunning geographical expansion to new unrepresented countries, but strengthening its presence in countries and regions where it is already doing well. Tanzania, for example, is all set to have five new BoB branches. Such diverse strengths are the reason why most analysts feel that BoB stock might be the long-term outperformer among all public sector banking stocks. Even on its only weakness asset quality - it is to be noted that it is the best performing PSB.

Seasonal Magazine

Head of BoB’s largest Maharashtra & Goa Zone as well as heading its largest overseas operations as the Chief Executive of UK operations for over 3 years. The realistic banker that he is, Chairman Mundra correctly guided analysts during the Q3 results, that asset quality pressure would continue in Q4 and may be in Q1 of FY’14. The new CMD’s calculations were correct. One of the reasons of the jump in NPAs is due to the Bank’s proactive approach in treating the accounts as substandard even at the slightest sign of stress. But Mundra sees it as a oneoff event due to a few reasons. Firstly, these NPAs didn’t come in from any large lumpy accounts. Secondly, the regulations are more stringent for international operations, as BoB has to adhere to both home country regulations and local regulations. So at the slightest sign of stress in the system, BoB tried to be proactive with declaring overseas NPAs. What really happened is easy to explain. Nearly

OUR BANKS: BLEEDING OR BATTLE READY?

Corporation Bank Scores High in New Initiatives

Corp Bank has closed fiscal 2013 on a decent note, but the bigger story hidden beneath the modest headline performance is that profitability has been on an upswing. The mid-sized public sector bank is reaping rich dividends from a slew of initiatives that were started under the guidance of Chairman Ajai Kumar, and the good news for customers, shareholders, and employees, is that the momentum for launching new initiatives is gathering pace in fiscal 2014 too. Following up on the recent successes of value-added SB accounts like Corp Signature, Corp Super, and Corp Saral, the bank has now introduced another differentiated product - Corp Saral Plus SB Accounts. angalore headquartered Corporation Bank’s fourth quarter headline numbers were not highly impressive, even though it was better than many public sector peers’ whose profits slipped this past quarter. Corp Bank reported a marginal 1.2% rise in net profit at Rs 355.5 crore in Q4. But the headline numbers hid some solid progress the bank has made, especially on the profitability front. Much of the gains in the net interest income was offset by higher provisions, but which was also for wage revisions. Total income surged by 15.6% to Rs 4,635.49 crore during the March 2013 quarter compared to Rs 4,009.16 crore a year ago. While the bank's net interest income (NII) increased 11.6% to Rs 930.78 crore, non-interest income grew by around 34%, signalling that the bank had made good use of the progress it has made in fee based services, to survive the challenging economic environment prevailing in the country.

Seasonal Magazine

During the last financial year, while total deposits grew 21.94% to Rs 1.66 lakh crore, advances rose 18.16% to Rs 1.18 lakh crore - both of which are above RBI estimates for the banking industry. The quality of growth was also commendable, as Corp Bank showed progress in all the safer avenues - with agricultural advances rising 32.6%, SME loans rising 36.1%, and most importantly, retail loans rising by 39%.

Asset quality concerns remain much lower in Corporation Bank, than in many comparable public sector banks. The bank is reaping rich fruits from a slew of initiatives that had been unleashed by the top management led by Chairman & Managing Director, Ajai Kumar. Even in Q1 of this new fiscal, this mid-sized bank is continuing to roll out several new initiatives. Following up on the recent successes of value-added SB accounts like Corp Signature, Corp Super, and Corp Saral, the bank has now introduced another differentiated product - Corp Saral Plus SB Accounts. This new offering was launched by Narendra Narayan Yadav, Cabinet Minister – Law, Planning & Development, Government of Bihar, at a function organized in Patna on 25th May. The value proposition of Corp Saral Plus in enormous - as the theme is ‘simplicity with protection for family’. It is a variant of SB account where the customers can avail of a bouquet of features and add-ons along with personal accident insurance of Rs. 5 lakh for a meagre fee of Rs. 50/- per annum, without having to maintain a prescribed minimum or average balance in the account. Other features include free monthly email statements on request, free Demand Draft and Pay Order through Net Banking, free NEFT, and 20 free cheque leaves per year. Ajai Kumar, Chairman & Managing Director of the Bank, addressing the gathering on the occasion said that the new product is

designed as a combination of simplicity and security. The account holder is provided with the flexibility of maintenance of balance with a host of attractive add-ons and is also brought under the umbrella of personal accident cover. On the tech front, Corp Bank is at the very crest of innovations. Corp Bank has become one of the first public sector banks to introduce transaction-based banking in Tablet PCs and iPads, by launching apps for iPad and Android. The respective apps can be downloaded free from App Store for iOS and Google Play for Android phones and tablets. These apps are quite flexible and powerful in what they can do. The accountholder can check current balance of all his linked running accounts including details of last ten transactions. Funds can be transferred to own accounts, to third party accounts maintained at Corporation Bank, and even to other banks using National Electronic Funds Transfer (NEFT). Payments can also be made through immediate payment service to beneficiaries who have got mobile money identifier (MMID) of the bank, or to any other Bank by way of person to person using beneficiary's MMID and mobile number, and through person to account using beneficiary's account number and IFSC code. However, the tablet apps are just one of the tech innovations from this bank. Along with leading private banks like Citibank and Axis Bank, Corp Bank was recently allowed deployment of Mobile Point of

Corporation Bank launched a new product “Corp Saral Plus” Savings Account at a special function held in Patna on 25th May. Seen in the photograph are [L to R]: Sharad Jadhav, Deputy Zonal Head, Corporation Bank, Zonal Office, Patna; Mritunjay Tiwari, President, Bihar Players’ Association; Shivraj Mishra, Zonal Head, Corporation Bank, Zonal Office, Patna; K. Rama Murthy, General Manager, Corporation Bank, Head Office, Mangalore; Ajai Kumar, Chairman & Managing Director, Corporation Bank; Narendra Narayan Yadav, Cabinet Minister, Law, Planning and Development - Government of Bihar.

Corp Bank has also went in for an innovative scheme to promote solar home power, solar street light systems, and small solar power plants. It has tied up with a noted firm in this sector, ‘Solid Solar‘, and will extend microfinance loans to customers in all the southern states for installation of such solar units. Apart from expanding its credit reach to rural customers in off-grid areas, this partnership enables Corp Bank to do its part as a responsible corporate citizen in promoting sustainable living. The bank is also bullish on furthering agriculture credit growth, and towards that end, conducted rural expos across the country in May. The Bank has 31 zones across the country and each zone conducted a minimum of 10 such expos. Through this initiative, the Bank created village level awareness on various products and services offered by it, with a background of festive ambience to facilitate easy acceptance by rural citizens who form the backbone of India‘s economy.

Recognizing that a bank’s law officers have a much bigger role to play in banking’s future, Corp Bank recently held a high-profile two-day conference for all its law officers, where the bank’s Executive Directors’ Amarlal Daulathani and BK Shrivasthav educated the law officers about their twin roles in both the loan recovery process as well as in accepting agricultural property as security. Attended by former Chief Justice of Kerala, Justice Bannur Math, there were expert sessions on cyber laws as well as taxation issues too. Bringing on more accountability has also been a key initiative by Chairman Ajai Kumar. Under his guidance, Corp Bank has deployed a rating system for all its branches. Since different branches are not really comparable, a detailed scientific comparison scale and star-rating system has been drawn up, which seems very impressive and something to be emulated by all banks in the country. CMD Kumar is a big believer in the power of ‘Big Data’ and says that, “If your analytics are strong, it will give you real-time information where things are not happening and will help in taking corrective actions.” The branch ratings are monitored on a weekly basis.

Several of these innovations are based on the Project Sankalp initiative kickstarted in January. A business process reengineering and organizational transformation project, Sankalp is destined to have far reaching implications for customers of Corp Bank. The first proof has been the newly redesigned branch at Malleswaram, Bangalore. Automated and self-service kiosks have been installed for passbook printing, cheque and cash depositing. The layout of the new model branch includes convenient and simplified queue management system and sufficient customer waiting area. The SME loan centre is presently redesigned as part of the project. The centre has now been made 'standalone' which means the SME loans will be originated, processed and sanctioned at the same place. The workflow process has been made customerfriendly to reduce the turnaround time. Global consulting major McKinsey is assisting Corp Bank in this transformation. Says, Chairman Ajai Kumar, “Our aim is to build a digitally-enabled, customer centric operating model which will help the bank to embark on an accelerated growth path.”

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Sale Terminals. This technology takes payment using debit/credit cards to a new level, as it can be deployed even in taxis, as well as by smaller merchants like fruit vendors, grocery stores, & medical shops.

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“We are Undertaking Transformational Change for a Sound Tomorrow”

Despite a difficult FY’13, there are obviously some strong points to UCO’s Q4 as well as FY‘13. For instance, it was on the back of a remarkable 44.39% rise in Operating Profit in the last quarter of FY13, that the Bank registered 19.41% growth in Operating Profit during the fiscal, to reach a figure of Rs. 3357 crore. Q4’s Net Interest Income has increased by a robust 28.3% to mark Rs. 1348 crore from Rs 1050.6 crore in the year-ago period. Growth in Operating Profit and NII are reasonable indicators that the bank’s core performance is still healthy. There is also a marginal dip or containment in Net NPAs on a QoQ basis. The Capital Adequacy Ratio stood at 14.22% as against 12.35% on a YoY basis and 13.19% on a QoQ basis. What all these shows is that the top management headed by veteran banker Arun Kaul has been hard and smart at work, and that the chief promoter, Government of India, is backing his team’s efforts with the requisite capital backing. Though UCO is a relatively small bank by net profits - it is the 18th ranked among 24 listed PSU banks - it has several important contributions to the Indian economy. UCO is not only the lead-bank in 34 districts, but these districts are spread over 7 Indian states, thereby making UCO’s contribution to the Indian banking system very important. And even with its small size, UCO accounts for more than 2% of both Indian deposits and credit. And there are even more unique contributions from UCO’s part to the Indian economy. UCO has been handpicked by the Indian Government for maintaining the over Rs. 12,000 crore current account deposit for India’s oil payments to Iran. What this means is that UCO Bank’s funding profile is much more improved than peers, owing to the reduced cost of funds. And it helps not just the bank, but India’s economy too. India’s crude oil import from Iran by IOC under the mechanism facilitated by UCO was worth $7 billion during the last 13 months that this arrangement was in place. All of it was done in rupee-terms saving dollars during a period when the Indian currency saw a steep fall against the dollar. Though it is difficult to quantify the exact gains for the rupee from UCO‘s participation, currency experts feel that had the mechanism not been in place, the $7 billion outgo pressure could have pushed down rupee further during FY‘13. Strategy-wise too, CMD Kaul’s initiatives have delivered. The bank recorded stable operating costs in FY’13, as reflected in lower cost-to-income ratio of 39.3%. UCO Bank has also taken the pioneering first-step in being stringent with apparent wilful corporate loan defaulters. In an unprecedented move that took even the biggies of PSU banking, like SBI, by surprise, UCO published in leading dailies the defaulting status of Nitin Kasliwal of S Kumar’s in what is obviously a ‘naming and shaming’ strategy towards a big shot. S Kumar’s and its Reid & Taylor clothing brand, are well-known in the country thanks to its endorsement by Bollywood superstar Amitabh Bachchan, but owes over Rs. 100 crore to UCO Bank as a defaulted loan, even while it remains a reasonably profit making company. The move is now widely regarded as not only a first step by any Indian bank against corporate bigwigs, but as a follow-up to Finance Minister P Chidambaram’s extortion to PSU banks to go after the prosperous promoters behind sick companies. Such firm convictions from the part of Arun Kaul is what makes the market believe that UCO Bank would be one of the first beneficiaries when the economy improves.

UCO Bank’s FY’13 net profit is down sharply. What were the issues contributing to it? During the year 2012-13, banking industry faced various critical challenges with stress building up in the corporate sectors, infrastructure projects getting stalled, and exports declining. The Net Profit of the Bank for FY’13 was Rs. 618 crore as against Rs.1109 crore last year. The decline was mainly because of rise in Gross NPA percentage that reached 5.42%, due to this challenging economic environment in the country, and because of some legacy issues that are being addressed with full vigour. From Rs. 756 crore in FY’12, Bank’s Provisions towards NPA surged 135% in FY’13 to touch Rs. 1779 crore. Apart from these two issues, were there any other factors affecting profits? Yes, Bank’s provision towards pension and other employee benefits rose 29.11% to reach Rs. 757.94 crore. But despite all these, what I would stress is that on an operational and strategic level, we performed very well.

Arun Kaul, CMD

Can you explain the operational aspects of your performance in FY‘13 as well as Q4? Definitely. Despite the backdrop of a very challenging environment, UCO Bank posted a higher Operating Profit growth of 19.41% YoY during FY’13 against 4.32% growth during the year FY’12. This yearly growth was significantly contributed to by Q4. It was on the back of a remarkable 44.39% rise in Operating Profit in the last quarter of FY13, that the Bank registered 19.41% growth in the fiscal, to reach a figure of Rs. 3357 crore. This not only reflects UCO’s strong operating efficiency, but the fact that this improved situation has been most recent.

That definitely also means that you are experiencing growth on the income front. How did NII and total income grow in FY’13? Bank’s Total Income clocked a growth of 13.5% YoY at Rs. 17,704 crore on the back of 14.5% increase in interest income that reached Rs. 16,752 crore. The Net Interest Income of Rs. 4,582 Crore registered a handsome gain of 17.42% YoY during FY13. Apart from the rise in income, what all contributed to the operational improvement? There were two major factors aiding operational excellence. Firstly, UCO Bank’s Cost-to-Income Ratio declined from 42.24% in FY12 to 39.33% in FY13, reflecting continued improvements in operating efficiency. Secondly, during FY13, UCO Bank’s Business-per-Employee grew by 7.70% to reach Rs 13.43 crore. In the ultimate analysis, any Bank’s results depends to a large extent on the productivity of its employees, and the full team of UCO has delivered on that front. Coming back to bottomline issues, you mentioned the impact of rising NPAs and provisions. How are you strategically battling it? We are focusing on Cash Recoveries as well as prudent handholding in deserving cases so that potential accounts are upgraded. With macro forces badly impacting the banking industry’s asset quality during FY13, the Gross NPA percentage of UCO Bank reached 5.42%. Nonetheless, focused and persistent recovery efforts resulted in 25.8% YoY increase in Cash Recovery that reached Rs. 828 crore. In FY13, Bank could also upgrade accounts involving Rs. 673 crore to standard category, up from Rs. 417 crore during the last year. Margins are under pressure in almost all banks including UCO. What have been your strategies, and how far have they delivered? Regarding margins, our strategies are mainly about upping CASA deposits

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eToday,

Seasonal Magazine in conversation with Chairman Arun Kaul to find out the prospects of the Kolkota headquartered lender:

and growing our retail business. And these strategies are already showing results. The domestic CASA deposits registered a YoY growth of 63.50% and Bank’s CASAdeposits-to-domestic-deposit ratio stood at 34.96% as on Mar’13, up from 23.85% a year ago. During FY13, UCO Bank also took some major initiatives in the Retail Banking space. The Bank launched several new deposit products and mobilized around Rs. 13,500 crore of deposits through these schemes. Can you provide details about some specific products that were successful? A current account scheme christened ‘UCO Care’, having special features like 90% OD facility against liquid collaterals, free NEFT, account statement, debit card & other facilities, was launched during the FY and is getting good response from public at large. Every PSU bank is said to be focusing on retail, but what are the specific strategies for the same at UCO? And how far has been the delivery? Our specific strategies have been to increase our reach, as well as to leverage technology. During the year, 220 branches were opened, 698 new Ultra Small Branches were started, and the ATM network of the Bank was also expanded with the installation of 698 new ATMs during the year. Regarding delivery from these strategies, in FY’13, new client acquisition i.e. those who had no relationship with UCO Bank before 1st Apr’12, stood at 29.35 lakhs, which translates to a rate of almost two and half lakhs new customers per month. And regarding tech, how is UCO Bank leveraging on it? UCO Bank uses technology to the optimum level for efficient service

Strategy-wise too, CMD Arun Kaul’s initiatives have delivered. The bank recorded stable operating costs in FY’13, as reflected in lower cost-to-income ratio of 39.3%. UCO Bank has also taken the pioneering firststep among all PSU banks in being stringent with apparent wilful corporate loan defaulters, through a ‘naming-and-shaming’ strategy to address the mysterious issue of prosperous promoters and sick companies.

delivery, fast product launches, improving visibility and outreach, cutting costs, having incisive data analysis, and in ensuring better control and monitoring. Leveraging technology, the Bank has been introducing new customer centric products and facilities at regular intervals.

How is UCO Bank faring on the Capital Adequacy front? As on 31st March, 2013, UCO Bank’s Capital Adequacy Ratio stood at a high level of 14.15% under Basel II as against 12.35% a year ago. The Tier I Capital also rose to 9.06% from 8.09% last year. Public sector banks are going through a period of manpower crunch, while courts are finding problem with banks recruiting from B-School campuses. How are you addressing these issues? In order to tackle the twin issues of superannuation of large number of employees on one hand, and growth of business and branch network on the other, UCO Bank has been consistently recruiting employees at all levels for the last three years. During FY13 itself, 1874 officers in different levels and 592 clerks were recruited. Thereafter too, Bank has issued appointment letters to 1000 Probationary Officers and 1000 clerks. The Bank also conducts roundthe-year trainings and workshops to ensure all-round development and grooming of officers as well as new recruits. From a shareholder point-of-view, how would you assess growth at UCO’s core metrics in FY’13? Despite the difficult environment prevailing, with the help of sound financial management, UCO Bank’s Net Worth grew by 12.15% y-o-y to touch Rs 8,869.17 crore. The Bank’s Book Value per Share improved from Rs 94.72 in FY12 to Rs 97.19 in FY13. Based on all the strategic planning you described, and hard work from the UCO team, how will you assess the anticipated performance in FY’14? UCO Bank is set to become one of the prominent turn-around stories in the banking sector, with FY14 performance expected to be much better than the preceding year.

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WHY CANARA FACES BANK FACES AN UPHILL TASK IN FY’14

hat Canara Bank had a difficult Q4 as well as FY’13, need not be underscored. The Bangalore headquartered lender’s quarterly bottomline that hit a rock bottom during this past fiscal precisely in Q2 - didn’t recover much in Q3, as well as now in Q4. Both sequential quarters showed YoY dips in net profit. Like a few of its public sector peers, Canara Bank is bogged down by serious asset quality concerns. But while many PSU banks are at least showing a glimmer of hope beneath the headline numbers, Canara’s numbers and other operational stats show that nothing short of a miracle should happen in the economy as well as inside the bank, for it to climb back to a growth trajectory. But before delving into it, here is a quick look at the headline numbers at this mid-sized PSB. Canara Bank’s fourth quarter net profit fell nearly 13% at Rs 725 crore, on a YoY basis. Net Interest Income (NII) grew just 2.5% at Rs 2,091. Loans grew at what is perhaps the slowest pace among all banks in Q4, at just 4%. Asset quality concerns were obvious with Gross Non Performing Assets (GNPA) ratio spiking to 2.57% from 1.73% percent a year back. Provisions and contingencies surged by nearly 63% to touch Rs. 752 crore from Rs 462 crore in the year-ago period. What was more alarming was that despite

Counting in also the dismal performance of credit growth in Q4, the bank’s C/D ratio stands at just 65%. This dimension needs to be deeply introspected by Canbank, as upping the C/D ratio is one of the few fundamental ways in which any bank‘s profitability can be improved.

RK Dubey, Chairman

provisions surging, Net NPA ratio also went up sharply to 2.18% from 1.46%. Though Canara Bank is in no way alone in posting such bad numbers this quarter, the performance should be noted for some extremes. Firstly, the extremely poor credit growth at 4%, as against RBI’s estimate which is nearly four times higher. Many of the poorly performing PSU banks in this quarter, on a bottomline basis, are however noted for keeping pace with RBI estimates for credit growth or going even higher in Q4. This situation is particularly harmful to Canara Bank, as already it has been suffering from one of the lowest credit/deposit ratios in the industry. Counting in also the dismal performance on this front in Q4, the bank’s C/D ratio stands at just 65%. This dimension needs to be deeply introspected by Canbank, as upping the C/D ratio is one of the few fundamental ways in which any bank‘s profitability can be improved. It has not been long since Chairman & Managing Director, RK Dubey, has assumed charge here. Dubey who moved in here from Central Bank as its Executive Director during early Q4, has identified the

problem as a high risk-aversive nature prevailing in the public sector lender. While this is partly understandable as PSBs have been reeling under asset quality concerns, Canara seems to have taken this fear to unreasonable limits. There are only two possibilities for such a fear, one being that the top management has turned unnecessarily cautious at the economic situation prevailing in the country. More chances are for the second possibility, which is that the rank and file of Canara Bank is expecting more asset-quality skeletons to tumble out from the closet in the coming quarters, and in case of such a scenario, don’t want to take more risks which would affect NPA ratios and provisioning requirements drastically. Since assuming charge, and faced with this situation, CMD Dubey has created a new set of strategies to improve credit growth. He has introduced cash incentives to encourage growth in four fronts viz. retail loans, fee income, CASA, and recovery of dues. It remains to be seen whether the incentive scheme would be successful, especially on improving the C/D ratio. Though Canara Bank has

declared FY’14 as the ‘Year of Retail’, even if it succeeds, retail loans are not expected to have the potential to replace the volumes lost in corporate loans, which are the bread-and-butter of all PSBs, including Canara. The evidence for this is obvious in the Q4 numbers itself, as Canbank has relied on more infrastructure loans, despite being troubled by bad infra loans already. Meanwhile, news from abroad hints that Canara’s $1 billion dollar denominated bond has run into rough weather, despite high profile road shows conducted in London, Singapore, & Hong Kong. All eyes will anyway be on the new strategies of Chairman RK Dubey, who is one of India’s most experienced bankers, having a career spanning 33-years at PNB, behind him. Dubey has studied law, management, HR, English, & banking as part of his higher education and training, and has been exposed to all aspects of banking at the highest possible level. Whether he can pull out Canbank from the trouble it is in, is the billion dollar question facing all stakeholders including shareholders, clients, & employees.

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Meanwhile, news from abroad hints that Canara’s $1 billion dollar denominated bond has run into rough weather, despite high profile road shows conducted in London, Singapore, & Hong Kong. All eyes will anyway be on the new strategies of Chairman RK Dubey, who is one of India’s most experienced bankers, having a career spanning 33-years at PNB, behind him.

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Preserving Traditions, Embracing Modernity, Thinking Big

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arur Vysya Bank has managed to deliver yet another quarter, as well as year, of good performance. Unlike public sector banks whose struggles were apparent in their Q4 headline numbers itself, it is admirable that KVB held its fort in the last quarter, thereby winding up FY’13 admirably. Though it can be argued that more private sector banks had outperformed than underperformed, especially when compared with public sector lenders, the sheen of KVB’s performance is not lost, for various reasons. Firstly, Karur Vysya is not a new generation private sector bank like ING Vysya or IndusInd, which follow the urban focused strategies of bigger players like ICICI Bank & HDFC Bank. KVB is headquartered in the town of Karur, which is not yet a city, and as such has been a traditional private sector bank that has always catered to the needs of the traders and small and medium enterprises wholeheartedly. And that has never been a small cause. It is to KVB’s credit that in its nearly a century of existence, it has never shied away from extending banking support to such industries. And that is a far cry from some large private players who

won’t even touch project finance or term loans. KVB’s Q4 net profit rose by 8% yearon-year to about Rs 160 crore, driven by non-interest and interest income. Net interest income increased about 19% to Rs. 310 crore. Other income surged 41% to Rs. 158 crore. Net interest margin (NIM) fell only marginally to 3.03% as against 3.08% during the corresponding period of the previous year. The bank’s business crossed the Rs. 68,000 crore mark at the close of the fiscal. Loans expanded 23% YoY to about Rs. 29,500 crore, while Deposits grew a little more than 20% YoY to Rs. 38,650 crore. Some of these are clearly above RBI’s industry estimates. The bank which is famed for its supportive stance towards its genuinely beleaguered clients also started showing asset quality issues this quarter, though. Total provisions against loans and investments surged to Rs. 89 crore as against Rs 7 crore a year back. Still, KVB is waging a winning battle, as evident from gross nonperforming assets (GNPA) ratio improving to 0.96% compared with 1.33% a year ago. Net NPA ratio was almost steady, rising only marginally to 0.37% from 0.33% during the same time in previous fiscal.

Under the visionary leadership of MD & CEO, K. Venkataraman, the bank is also fast transforming itself into a large sized bank. Venkataraman, a veteran banker who was earlier with SBI, is guiding KVB to pursue an allpervasive Business Process Reengineering initiative in consultation

KVB’s leadership continues to be a strong point for the lender. K. Venkataraman has always come across as a leader who has original ideas to survive the storm, that banking sector is facing now. And he is a leader who always tries to see the bigger picture and doesn’t believe in stopgap or ad hoc measures to tide over crises.

with the Boston Consulting Group (BCG). KVB has set its eye on crossing total business level of Rs. 1,25,000 cr. and branch network of 700-800 branches by 2016, its Centenary Year.

KVB has, in association with Y-Cash Software Solutions Pvt. Ltd, launched ‘YPayCash’ a first of its kind pre-paid mobile wallet, supporting various kinds of payments including payments at retail shops, mobile/DTH recharge, and fund transfer to customers and merchants throughout the state of Tamil Nadu. Recently, KVB has opened its state-ofthe-art Contact Centre in Chennai. The bank which believes in blending

The bank which believes in blending tradition with latest technology to serve its customers, has become one of the few banks amongst its peers to assist customers in six languages - English, Hindi, Tamil, Telugu, Kannada and Malayalam through IVRS as well as Voice. tradition with latest technology to serve its customers, has become one of the few banks amongst its peers to assist customers in six languages - English, Hindi, Tamil, Telugu, Kannada and Malayalam – through IVRS as well as Voice on non financial services like

K Venkataraman, MD & CEO

account balance, transaction enquiry, account / debit card related requests and stop payment instructions. The technological prowess of KVB is, thus, comparable to that of new generation private banks. On the brick and mortar front too, Karur Vysya Bank is on an expansion drive. After adding 100 branches to its network in FY’13, it is now planning to open around 75 more branches this fiscal. KVB added around 450 ATMs to take the total count to around 1,300 ATMs in the just ended fiscal. 500 more ATMs are proposed to be added this year. KVB has been focusing on improving the in-branch experience of the customers by sprucing up the lay-out and ambience of its high footfall branches. The bank has already started the work of redesigning select branches to create best-in-class ambience in the branches and make the service more customer-friendly, which would later be adopted in all branches. KVB’s leadership continues to be a strong point for the lender. K. Venkataraman has always come across as a leader who has original ideas to survive the storm, that banking sector is facing now. And he is a leader who always tries to see the bigger picture and doesn’t believe in stop-gap or ad hoc measures to tide over crises.

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One of the early birds in the Indian banking industry to have migrated 100% of its branches to CBS (Core Banking Solution) as far back as in 2005, KVB has always been harnessing technology to provide value-added services across the alternate delivery channels such as ATM, net banking, mobile banking and point-of-sale (POS) terminals.

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“IOB’s FY’13 Performance High Morale & Teamwork ndian Overseas Bank’s CMD M Narendra clearly expected a better Q4 while announcing Q3 results. But he is not unduly worried, as despite Q4 bottomline tanking by 89%, on most fronts the Chennai headquartered lender has kept its pace with its peer banks, if not the whole banking sector. For example, on metrics like Non Performing Assets, Net Interest Income, NII / Total Assets Ratio etc, the bank has fared equal to or nearly equal to its peer group. That is why Chairman Narendra emphatically states that most of the asset quality problems faced by IOB reflects the challenging economic environment persisting in the country. At the same time, on some fronts like Operating Profit, IOB performed much better than many peers. IOB’s Operating Profit growth came in at 8.01% as against peer banks’ average of 3.78%, which reveals the improved operating efficiency at IOB. This Chairman feels that economy is going to positively turnaround by Q3 or Q4 of the current fiscal, and that the green shoots of that impending change is already visible. But until then, under his guidance, IOB has created one of the most comprehensive strategies for managing NPAs, recoveries, and upgradations. A hands-on leader, this Chairman as well his Executive Directors and Board are directly supervising each and every NPA above Rs. 5 crore. However his biggest bet is on the high morale and teamwork of all IOBians, which ironically was an offshoot of these tough times, when the whole staff became a close-knit and result-oriented group, which made their recent campaigns like ‘Walk-in Bank’ and ‘IOB Smile’ huge successes in aspects like mobilising CASA deposits and boosting recoveries. And Team IOB is continuing on its manpower expansion spree, thereby fully offsetting the ‘retirement decade’, and enabling itself to deploy trained personnel for its branch expansions. The bank which added 6000 personnel during the last 3 years, is adding another 3000 employees in this fiscal itself. Under Narendra’s leadership, IOB has also renewed its vision of becoming one among India’s Top-5 nationalised banks in the near future.

Inline with Peers, will Help in Bouncing Back” Post Q3 results you had indicated that the main aim in Q4 was bringing down slippages. But in Q4, IOB has shocked the market with a steep decline in net profit of 89%. Why couldn’t the bank give a proper guidance for the same during the last quarterly results? Yes. During Q3, we had posted an operating profit of Rs. 1017 crore with a YoY growth of 23.6%. However, due to higher provisions, we showed a subdued Net Profit of Rs. 116 crore in Q3 with a growth of 7.41%. With this, we expected the market would pick up and in reality we focused more on NPA recovery and CASA deposits by exclusive campaigns apart from supervision of healthy Credit Monitoring and massive branch expansion during this last quarter. As the market forces are driven by the slower economy, the NPAs surged for the system as a whole. Constraints on NPAs and restructured advances continued throughout the year. As such, most of the nationalised banks have shown increased NPAs affecting their bottom-line profits substantially. Although growth in NPAs for IOB increased by 68.5% in 2012-13, it is still largely in line with the peer banks’ average of 61.28%. On the other hand, the bank’s operating efficiency has really increased when you compare the Bank’s growth in operating profit at 8.01%, though marginal with that of 19 banks’ average of 6.20%, is significant with peer banks’ average of 3.78% during the full year. Even the NII is on a decline in Q4, while provisions have surged over three-fold. How do you account for both? The growth in NII for the year 2012-13 as a

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On most fronts the Chennai headquartered lender has kept its pace with its peer banks, if not the whole banking sector. For example, on metrics like Non Performing Assets, Net Interest Income, NII / Total Assets Ratio etc, the bank has fared equal to or nearly equal to its peer group. That is why Chairman Narendra emphatically states that most of the asset quality problems faced by IOB reflects the challenging economic environment persisting in the country.

Seasonal Magazine in conversation with Chairman M Narendra on IOB‘s prospects in FY‘14:

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whole was marginal at 4.70%, but comparable to 19 banks’ average of 7.72% and peer banks’ average of 5.55%. Of course, as said earlier, the growth in NII was lower in Q4 due to more interest reversal on NPAs and restructured advances. In fact, IOB’s performance stands good in business growth, CASA growth, Branch Expansion, and Non Interest Income, and thereby overall operating profit. Since the total provisions constituted more than 85% of the operating profit, there was a sharp fall in Net Profit. Further, the bank reduced the share of bulk deposits substantially and share of card plus deposits to total deposits has come down to 14.95% in March 2013. There was a reduction in base rate in two phases by 25 basis points each during the last year which has reduced the yield on advances. However, Bank’s NII as a % to Total Average Assets was satisfactory at 2.22%, and comparable with 19 banks’ average of 2.48% during last year. You have gone on record recently that you expect NPAs to come down substantially, from now on. According to you, what all are the unique strengths of IOB as well as your strategy, in achieving this objective? Many measures have been taken up during the year. We are confident of having improved results due to these measures. I will mention some of these steps. High Value Slippages of Rs. 5 Crore and above are reviewed by the Board of Directors in each of the Board meetings and the specific directions given by the Board of Directors are carried out and followed up. Top NPA accounts of Rs. 1 Crore and above are monitored from the corporate office on a regular basis and the borrowers are personally met by the General Manager (Law & Recovery) wherever necessary. Top Executives including the Chairman and Managing Director, the Executive Directors, and the General Manager (Law & Recovery) review all high value NPA accounts individually on a regular basis with field functionaries through video conference or direct reviews. All Corporate GMs are allotted Regions for intensive follow up of NPA accounts and they periodically follow up with

“

The unique strength of IOB is the high morale of its entire workforce. Many specialised campaigns, like ‘Walk-in Bank’ campaign and ‘IOB Smile’ campaign, organised for mobilising CASA deposits have brought IOBians as a close-knit, cohesive, and result-oriented group. These campaigns have manifested the effectiveness of teamwork with focussed targets. Campaigns are also organised for recovery.”

”

Regions and discuss with Borrowers for repayment/settlement. What are the strategies for addressing lower value NPAs, as these are much higher in client volumes? For all NPAs of less than Rs. 5 lakhs, there is a special campaign and Branch Managers are empowered to accept One Time Settlements in such small value NPA accounts. One time settlement being a hassle free recovery process, Regional Heads/Branches are advised to contact the borrowers for submitting OTS proposals as per the recovery policy of our Bank or as per the special scheme launched for small value NPAs. What other measures would constitute your comprehensive recovery strategy, as this has become pivotal for all banks in this tough environment? Action under SARFAESI act is initiated in all eligible accounts and properties brought for sale. Frequent Lok Adalats / Recovery camps are conducted especially in respect of small value NPA accounts. Regional Heads/Branches are advised to focus on recovery of Technical / Prudentially written-off accounts as any amount of

The general consensus on public sector banks from analysts is that market is yet to see the worst in performance and asset quality, and that it would take a couple of quarters more for recovery. In fact, market has been feeling like this for over a year now, and asset quality is indeed going down too. So, do you subscribe to this view that the worst is yet to come? The recessionary trend in our economy has a direct bearing on the quality of assets of the banks. Due to the strong corrective measures taken by Government of India, green-shoots have started appearing in our economy. The adverse effect of the economic trend on the assets may linger for a few more quarters. However, by the third or fourth quarter of this FY 2013-14, I am hopeful that the asset quality will start improving, as the economy would have also shown the upward trend in terms of growth.

What would you rate as Team IOB’s greatest strength? The unique strength of IOB is the high morale of its entire workforce. Many specialised campaigns, like ‘Walk-in Bank’ campaign and ‘IOB Smile’ campaign, organised for mobilising CASA deposits have brought IOBians as a close-knit, cohesive, and resultoriented group. These campaigns have manifested the effectiveness of teamwork with focussed targets. Campaigns are organised for recovery. More such campaigns will be organised with the focus on recovery of NPAs.

Do you think that much of the asset quality problems in public sector banks is caused by either forced lending to unviable PSUs like SEBs/ discoms/Air India etc or to badly governed private sector enterprises like Kingfisher, and numerous others like it, again on political compulsions? As said earlier, the quality of assets has been affected by the trend in the economy. There is no forced lending to any unviable unit. Lending by banks is done after analysing the proposal from all fronts by the appropriate authority, and only after the viability of the unit appears convincing. Besides viability, the repayment capacity is also taken into consideration while fixing the repayment schedule. I categorically state that political compulsions do not figure in any of our lending, and all lending is need-based and on stated merits.

What caused the recent recruitment scam in IOB, and what all are the steps you have taken to prevent a further occurrence? This is only an aberration in regularising the sweepers and messengers and wherever such aberrations are found, action has been taken to remove such messengers / sweepers and file FIR as well. As far as those concerned and responsible for the same, necessary disciplinary action is taken. There is no such scam and the Bank will not tolerate any irregularity in any area.

The individual bank’s Asset Liability Management Committee decides on the interest rates, based on the cost of deposits / borrowings and maturity buckets. The loans are granted as per the Loan Policy of the Bank, along with the Business Plan for the financial year. In such aspects, there is a level playing field with private sector banks. However, public sector banks also take up the responsibility of fulfilling socioeconomic commitments, which the private sector banks set aside. Public sector banks are going through a period of manpower crunch, while courts are finding problem with banks recruiting from B-School campuses. How are you addressing this issue? IOB has been adding to its manpower, with around 6000 people inducted in the last 3 years. We plan to add 3000 more personnel during this fiscal. Earlier, we had recruited directly from campuses for Marketing Officers, Financial Analysts, and Agriculture Officers, and similar recruitment will be done as and when such needs arise. The services of Institute of Banking Personnel Selection are also utilised for filling the vacancies in general and specialist categories. Succession Planning is also in place. By mapping skill matrix and by ensuring proper manpower deployment, we are able to ensure the right person in the right job. Necessary training is imparted to build specialised skill-sets. Due to the massscale recruitment in recent years, the average age profile has come down substantially. What would be your outlook for IOB in FY’14? Indian Overseas Bank is all geared to take up the challenges head-on and show better results during the year 2013-14. IOB has also renewed its vision to be among the top-five nationalised banks in the country in the near future. With the loyal support and patronage of over 2.8 crore customers, IOB marches ahead, ‘touching hearts and spreading smiles‘ among all its stakeholders.

Seasonal Magazine

recovery under this head will improve the bottom line of the Bank. Bank has appointed Nodal Officers at various centres and they are directed to take up all RC issued cases for bringing the securities for sale. Bank has been coordinating with Presiding Officers/ Recovery Officers of various DRTs and this kind of one-to-one discussions / deliberations help the Bank to identify the issues and to speed up recovery. Our bank has opened 16 specialized Asset Recovery Management Branches (ARMB) for effective follow up so as to improve the recovery of NPA accounts. To expedite recovery, bank has identified recovery officers within its cadre strength for field level operations under OTS / Upgradation of NPA accounts especially in small value accounts. And lastly, our bank is utilizing the services of Recovery Agents for effective follow up and recovery of NPA accounts.

OUR BANKS: BLEEDING OR BATTLE READY?

SBI Continues to Shock With its Large NPA Accounts tate Bank of India’s fourth quarter net profit fell 19% to Rs 3300 crore on higher provisions and marginal other income growth. Higher provisions against nonperforming assets (NPAs) and marginal growth in other income dented the bank’s profit margin. Net interest income slipped more than 5 percent y-o-y to Rs 11,080 crore. Provisions against NPAs shot up 40 percent y-o-y to about Rs 4,000 crore. Total provisions increased 33 percent to Rs 4,180 crore during the same period. Gross NPA ratio rose to 4.75 percent as compared with 4.44 percent a year back. Net NPA ratio stood at 2.10 percent as against 1.82 percent during the same time. SBI restructured Rs 8,669 crore loans during the January - March period on incremental basis. SBI had a credit exposure of

PNB Hurts as Growth Gets Muted to Salvage Asset Quality

Union Bank’s Performan Reasonable, Despite Cha

unjab National Bank’s fourth quarter net profit declined nearly 21 percent to Rs 1131 crore on higher provisions that spiked 44 percent y-o-y to Rs 1,478 crore. Total provisions were inclusive of all components like loans, investment and gratuity of Rs 166 crore. During the quarter, gross non-performing asset ratio increased to 4.27 percent compared with 2.93 percent a year back suggesting the stress in credit quality. Net NPA ratio too rose to 2.35 percent versus 1.51 percent a year back. Deposit growth was muted just a little more than 3 percent Y-o-Y to Rs 3.91 lakh crore for year ended March 31, 2012-13. The bank expanded its loan book at a muted pace just at 5 percent Y-o-Y to Rs 2.94 lakh crore. However, the net interest income (NII) or the difference between interest earned and paid out, rose 14 percent Y-o-Y to about Rs

umbai headquartered Union Bank of India reported growth of 2 percent year-on-year in its fourth quarter net profit to Rs 789 crore, and would have posted sharply better results if not for higher provisions. Provisions and contingences shot up 27 percent Yo-Y to Rs 656 crore. The rise was primarily on account of RBI’s revised guidelines on different provisioning norms, and not due to a significant erosion in asset quality. Provisions of nonperforming assets, standard assets, standard derivative exposure and investment depreciation has been made on the basis of extant guidelines issued by the Reserve Bank of India on prudential norms

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around Rs 3,500 crore in Pune-based Suzlon Energy, which was referred by its lenders for restructuring. During the quarter, the bank provided fully on account of this. The only saving grace in Q4 was Upgrades and Recoveries

which together stood Rs 5718 crore as against Rs 2,797 crore in the October December quarter. Other Income also inched up 3 percent to Rs 5,547 crore. The yearly numbers were much better.The bank’s standalone net profit rose 20 percent y-o-y to Rs 14,105 crore for the year ended March 31, 2013. Consolidated net profit increased 16 percent y-o-y to Rs 18,323 crore. The bank expanded its loans by 21 percent to Rs 10.46 lakh crore on standalone basis, surpassing the industry credit growth at around 14 percent in 2012-13. Its consolidated credit (including its group banks) increased 20 percent y-o-y to Rs 13.93 lakh crore. Deposits grew a little more than 15 percent y-o-y basis to Rs 12.03 lakh crore. Consolidated deposit book too rose at a similar pace to Rs 16.27 lakh crore. But domestic net interest margin stood at 3.66 percent in FY13 as against 4.17 percent a year back. During the year SBI provided around Rs 945 crore cumulatively on account of wage revision.

3,780 crore during the quarter. The only hope for the bank is revealed in its Gross NPA ratio improving to 4.27 percent from 4.61 percent in October December quarter. Net NPA ratio too improved to 2.35 percent as against 2.56 percent. But the ratios are still way too high to be of long-term comfort.

yndicate Bank surprised the street with fourth quarter net profit rising 91.4 percent year-on-year to Rs 592.3 crore. However, the boost in profit was partially due to a tax writeback of Rs 104 crore during the quarter. Net interest income increased marginally to Rs 1,344 crore from Rs 1,336.6 crore Y-o-Y. Meanwhile, gross non-performing asset (NPA) dropped 32 basis points quarter-on-quarter to 1.99 percent and net NPA went down 9 basis points Q-o-Q to 0.76 percent in March quarter. Capital adequacy ratio improved 121 bps Q-o-Q to 12.59 percent. Provision coverage ratio stood adequately at 83.41 percent as on March 31.

ce Continues to be llenging Environment

for income recognition, asset classification and provisioning,” the bank clarified in a press release. Net interest income rose more than 5 percent to Rs 1,980 crore. Other income rose 8 percent to Rs 875 crore. The bank expanded its loan book 17 percent Y-o-Y to Rs 2.08 lakh crore, while Deposits grew more than 18 percent to Rs 1.78 lakh crore, with both figures largely in line with RBI’s sectoral targets. Gross non-performing asset ratio improved to 2.98 percent compared with 3.01 percent a year back. Net NPA ratio improved to 1.61 percent as against 1.70 percent during the same period. The bank recommended a dividend of Rs 8 per share for the financial year 2012-13.

Indian Bank’s Profits Slip, Despite Help From Significant Tax Writeback ndian Bank’s fourth quarter net profit stood at Rs 292 crore, down 15.5 percent year-on-year. This was despite the bank having received a tax writeback of Rs 203 crore during the quarter, which means the actual fall in profits is much steeper. Net interest income increased just marginally to Rs 1,107.4 crore from Rs 1,082.6 crore Y-o-Y. Gross non-performing asset (NPA) went up 15 bps quarter-on-quarter and 130 bps Y-o-Y to 3.33 percent and net NPA rose 9 bps sequentially and 93 bps Y-o-Y to 2.26 percent in March quarter, signalling that asset quality is continuing to worsen at the Chennai headquartered lender. Provisions and contingencies jumped 15.5 percent Q-o-Q, but improved 15 percent year-on-year, to Rs 475.6 crore in fourth quarter. However, provision coverage ratio stands low at 60.14 percent, hinting that more shocks might follow in the coming quarters.

Seasonal Magazine

Syndicate Bank Posts Good Performance in Q4, With Help From Tax Writeback

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OUR BANKS: BLEEDING OR BATTLE READY?

Central Bank Does an Emphatic Positive Turnaround Lower provisions, robust net interest income and non-interest income helped Central Bank turn profitable at Rs 169 cr in Q4, 2012-13, as against a net loss of Rs 105 cr in the year-ago period. Its net interest income increased more than 21 percent to about Rs 1,500 crore. The net interest margin (NIM) went up to 2.68 per cent from 2.59 per cent last year. Other income jumped 47 percent to Rs 636 crore. The improvement in credit quality led to fall in provisions, which along with other and core interest income added to the net profit spike. During the quarter, provisions plunged to Rs 445 crore compared with Rs 860 crore a year back during the same

period. Gross NPA ratio stood at 4.80 percent as against 4.83 percent. Net NPA ratio improved to 2.90 percent from 3.09 percent a year ago. Loans expanded nearly 17 percent Y-o-Y to Rs 1.76 lakh crore. Retail loans increased substantially by 28 percent to around Rs 21,400 crore. Deposits grew 15 percent Y-o-Y to Rs 2.26 lakh crore. The current and savings account deposits (CASA), source of cheap money, rose 13 percent Rs 73,600 crore. Currently, the share of CASA stood at 34 percent of total deposits. The bank added around Rs 1,500 crore loans to its outstanding restructuring book, which stood at Rs 22,681 crore. The lender has a pipeline of about Rs 1,000 crore loans for restructuring in April - June quarter. Central Bank is expecting to improve its good performance much further in FY’14 on all fronts. Objectives include 18 percent growth in loans and deposits, reducing the share of bulk deposits below 15 percent, net interest margin to be in the range of 2.75 - 3 percent, improvement in CASA, reduction in gross NPA ratio to below 4 percent, and net NPA ratio to below 2.5 percent.

OBC Puts Up Reasonable Performance, As Asset Quality Concerns Linger riental Bank of Commerce reported 16 percent year-on-year growth in its fourth quarter net profit at Rs 308 crore. While the results would have been better if not for higher provisions, a one-off tax writeback component of Rs 120 crore too helped the bank in showing a net profit of Rs. 308 crore. Net interest income increaed nearly 14% to Rs 1,214 crore Y-o-Y. During the March quarter, provisions and contingencies rose sharply by 40 percent Y-o-Y to Rs 759 crore. The gross non-performing asset ratio (NPA) rose to 3.21% as against 3.17 percent a year back. Net net NPA ratio stood at 2.27 percent compared with 2.21 percent during the same time. Loans expanded 15 percent Y-o-Y to Rs 1.29 lakh crore, which was largely in line with RBI’s industry targets.

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Andhra Bank’s Asset Quality Worsens

ndhra Bank’s fourth quarter net profit stood at Rs 345 crore, up marginally compared to Rs 340 crore in a year ago period, helped by other income and lower tax expense. Net interest income grew by 4.3 percent to Rs 953.4 crore from Rs 913.8 crore Y-o-Y. Meanwhile, tax expense dropped significantly to Rs 4 crore from Rs 170 crore quarteron-quarter. Other income increased quite sharply to Rs 354 crore from Rs 238 crore during the same period. Gross non-performing asset (NPA) moved up to 3.71 percent versus 3.66 percent and net NPA went up to 2.45 percent versus 2.29 percent Q-o-Q. Provisions against bad loans too jumped to Rs 365 crore in March quarter versus Rs 285 crore in previous quarter.

Punjab & Sind United Bank Would Have Been in Serious Loss, If Not for Tax Writeback Bank’s NII Improves, nited Bank of India’s fourth 68,909 crore. Deposits grew 13 percent net profit plunged 79 y-o-y to about Rs 1.01 lakh crore. Bottomline Slips Uquarter percent year-on-year to Rs 31 During the quarter, gross noncrore, squeezed by higher provisions. Excluding the favourable tax component, United Bank of India reported net loss of Rs 248 crore in the Q4, FY13 as against profit of Rs 171 crore in Q4, FY12. Its net interest income (NII) or the difference between interest earned and paid out, fell 8 percent y-o-y to Rs 564 crore. Other income rose 47 percent to Rs 351 crore. Net profit dropped 38 percent y-o-y to Rs 392 crore for the year ended March 31, 2013. On account of writing back tax provisions, the public sector bank got Rs 279 crore during the quarter as compared with net tax expenses of Rs 219 crore a year back. Excluding the tax component, United Bank of India reported net loss of Rs 248 crore in the Q4, FY13 as against Rs 171 crore in Q4, FY12. The bank expanded its loans a little more than 9 percent y-o-y to Rs

performing asset (NPA) ratio rose sharply to 4.25 percent as against 3.41 percent a year back. Net NPA ratio stood at 2.87 percent compared with 1.72 percent in the corresponding quarter of the previous year.

unjab & Sind Bank has reported Standalone Net Interest Income (NII) for the quarter at Rs 1,905.00 crore and net profit at Rs 124.44 crore. Other income for the quarter was Rs 138.90 crore. For the quarter ended Mar 2012 the Standalone Net Interest Income (NII) was Rs 1706.09 crore and net profit was Rs 147.80 crore., and other income Rs 125.47 crore.

ena Bank’s Q4 net profit dropped 51 percent yearon-year to Rs 126 crore, dented by higher provisions that shot up 17 percent y-o-y to Rs 342 crore. Without a tax writeback, net profit would have tanked 77 percent. Net interest income fell 6 percent y-o-y to Rs 562 crore during the quarter. The fall was mainly due to higher provisions and contingences. Higher provisions are on non-performing assets of Rs 143 crore as against Rs 106 crore Y-o-Y and depreciation on investment at Rs 98 crore as against Rs 38 crore a year back. A reversal of excess provision at Rs 89 crore from the

earlier year (FY12) also saved the lender from reporting further erosion of profit. Tax expenses, net of previous years reversal, stood at a negative of Rs 67 crore. This means, net profit

without the net tax write-back would have plunged more than 77 percent to just Rs 58 crore in Q4, FY13. Loans expanded 16 percent y-o-y to around Rs 66,000 crore. Deposits grew at a faster pace by 26 percent to Rs 77,167 crore. Gross non-performing asset (NPA) ratio sharply rose 2.19 percent compared with 1.67 percent a year back. During the same period, net NPA ratio stood at 1.39 percent as against 1.01 percent. For the full year (2012-13) also, the bank reported a dismal growth of just 1 percent y-o-y to Rs 810 crore. NII however put up a better show by rising 13 percent to Rs 2,383 crore.

Seasonal Magazine

Dena Bank Fails to Save Bottomline, Despite Reversals in Tax and Excess Provisions

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OUR BANKS: BLEEDING OR BATTLE READY?

J&K Bank Q4 Reasonable, But Provisions Shoot Up ammu and Kashmir Bank Q4 net interest income (NII) was up 23 percent at Rs 633 crore versus Rs 516 crore, Year-on-Year. Its Q4 net profit was up by 20 percent at Rs 250 crore versus Rs 208 crore, a year ago. Its gross NPA at 1.62 percent versus 1.61 percent; net NPA unchanged at 0.14 percent, on a squential basis. Its provisions was up at Rs 176.6 crore versus Rs 22.4 crore, quarter-on-quarter. The company’s capital adequacy ratio at 12.83 percent versus 13.82 percent, Q-o-Q

Yes Bank’s Performance Reasonable, But Struggles with CASA, Family Feud es Bank’s fourth quarter net profit rose by 33 percent yearon-year to about Rs 360 crore, driven by interest income and other income. The net interest income increased a litte over 42 percent to Rs 638 crore during the same period. Net interest margin (NIM) remains unchanged at 3%. Other income increased more than 42 percent y-o-y to Rs 379 crore. For the year ending March 31, FY13, net profit rose almost at a similar pace of 33% y-o-y to Rs 1,300 crore. The bank’s loans expanded nearly 24% y-o-y to about Rs 47,000 crore. Including the credit substitute - which is a form of indirect credit wherein the bank underwrites bond issues of rated companies - total book rose 31% to about Rs 60,300 crore. During the three month period, the gross non-performing asset (NPA) ratio increased marginally to 0.20 percent as against against 0.17 percent in October-December quarter. However, net NPA ratio declined from 0.04 percent to 0.01 percent. The bank has increased its specific provisioning cover to 92.60% as at March 31, 2013 and has further added to the counter cyclical provisions during the quarter. Provisions increased significantly to about Rs 98 crore from Rs 57 crore a

Federal Bank’s Profit Falls, Provisions & Net NPAs Rise ederal Bank’s fourth quarter net profit fell by 6.6 percent year-on-year to Rs 221.9 crore. Net interest income (NII) declined 2.3 percent to Rs 479.8 crore from Rs 491.2 crore Y-o-Y. Provisions against bad loans increased to Rs 98.2 crore in March quarter FY13 as against Rs 74.4 crore December quarter. Meanwhile, gross non-performing assets (NPAs) improved 41 basis points Q-o-Q to 3.44 percent. But net NPAs went up by 6 basis points Q-o-Q to 0.98 percent in March quarter. Capital adequacy ratio stood at 14.73 percent in fourth quarter as against 14.92 percent in third quarter. Federal Bank’s gross NPAs were Rs 1,554 crore as against Rs 1,564 crore and net NPAs at Rs 431.9 crore versus Rs 362 crore Q-o-Q.

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quarter back. On the deposit front, Yes Bank recorded more than 36% growth in its total deposits at Rs 67,000 crore. The share of current and savings account (CASA) rose close to 19% compared with 15% a year back. The bank is offering 6-7% in its savings deposits. However, the sustainability of CASA growth needs to be seen in a falling interest rate regime expected in the coming days. The bank has incorporated a retail broking subsidiary and has hired key top management to roll out a retail broking platform. Though it has been a sorely missinglink in its retail portfolio, the move is not expected to contribute much to its bottomline due to the lacklustre nature of the broking business since 2008.

ING Vysya’s Asset Quality Stable, But CASA & Credit Growth Poor reasonable growth in interest income and lower provisions against bad loans helped ING Vysya Bank to report nearly 34 percent spike in its fourth quarter net profit at around Rs 170 crore. Net interest income (NII) rose by 33 percent Y-o-Y to Rs 424 crore. Gross non-performing asset (NPA) ratio improved to 1.76 percent versus 1.92 percent a year back and net NPA stood at 0.03 percent as against 0.18 percent during the same period. Provisions against bad loans decreased to Rs 33.6 crore as compared with Rs 57 crore in the corresponding quarter of the previous year. Total loans expanded 11 percent Y-oY to Rs 32,000 crore. Deposits grew 17 percent Y-o-Y to Rs. 41,334 crore. Cost of deposits improved from 7.27 percent to 7.14 percent Y-o-Y. However, the share of low cost current and savings account deposit fell to 32.50 percent as against 34.28 percent.

outh Indian Bank’s fourth quarter net profit rose by 26.23 percent year-onyear to Rs 154 crore led by other income that improved by 46 percent Y-oY to Rs 121 crore. Net interest income increased 17 percent Y-o-Y to Rs 334 crore. Loans expanded about 17 percent Y-o-Y to Rs 31,816 crore. However, the rise in credit book came at the cost of some dent in asset quality. Gross nonperforming asset (NPA) ratio rose to 1.36 as against 0.97 percent a year back. Net NPA ratio worsened from 0.28 percent to 0.78 percent during the same period. Consequently, total provisions including loans, investments and others, swelled significantly to Rs 66 crore compared with Rs 12 crore during the corresponding quarter of the previously year. The bank recorded 21 percent Y-o-Y growth in its deposits, which currently stands at Rs 44,262 crore. A sizable chunk of its deposits generally comes from non-resident Indian customers. Capital adequacy ratio stood at 13.91 percent versus 13.85 percent in the October-December quarter.

Karnataka Bank’s Bottomline Down, But Asset Quality Better Karnataka Bank’s Q4 net interest income (NII) was up at Rs 221.4 crore versus Rs 214.2 crore, in the same quarter last year. The Bank’s fourth quarter net profit down by 19 percent at Rs 67 crore compared with Rs 83 crore, a year ago. Its gross NPA at 2.5 percent versus 3.3 percent; net NPA at 1.5 percent versus 2.19 percent, on a sequential basis. The provisions was at Rs 54.3 crore versus Rs 37 crore, quarter-on-quarter. Its capital adequacy ratio was at 13.2 percent compared with 12.93 percent, Q-o-Q.

Seasonal Magazine

South Indian Bank Bottomline Saved by Other Income, Asset Quality Worsens

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OUR BANKS: BLEEDING OR BATTLE READY?

HDFC Bank Keeps Pace, But Cost-to-Income Rises, Changes Accounting Norms ndia’s second largest private sector lender, HDFC Bank, which is facing serious money-laundering allegations, continued to maintain its pace of growth. It reported 30 percent year-on-year rise in its fourth quarter net profit at about Rs 1,890 crore, aided by reasonable interest income and other income. Net interest income rose nearly 21 percent to Rs 4,300 crore during the quarter. Other income increased about 30 percent Y-o-Y to Rs 1,800 crore. The bank’s net profit for the full year too rose a little more than 30 percent to about Rs 6,730 crore. Net interest margin stood at 4.5% as against 4.4% a year back. Loans expanded about 23 percent Y-o-Y

Axis Bank’s Bottomline Grows, But NPAs and Provisions Soar ided by higher interest income and other income, Axis Bank, the third largest private sector lender, which is facing serious moneylaundering allegations, reported a 22 percent year-on-year rise in its fourth quarter net profit at Rs 1,555 crore. Net interest income (NII) rose 24 percent YoY to Rs 2,665 crore. Axis Bank expects Some loan restructuring in the coming quarters. Despite recording higher growth in low cost current and savings account deposits, Axis feels it is always a challenge to sustain CASA growth. Other income including fees, trading profit and miscellaneous income rose 26 percent to about Rs 2,010 crore. Trading gains shot up 63 percent to Rs 240 crore. The bank restructured Rs 790 crore loans during the quarter. Outstanding restructured book stood at about Rs 4,370 crore compared with Rs 3,060 crore a year ago. Bank loans expanded 16 percent YoY to nearly Rs 1.97 lakh crore. Retail loans grew at faster pace of 44 percent to Rs 54,000 crore. Home loans accounted for 65 percent of the retail

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book. Net interest margin (NIM) stood at 3.70% as against 3.55% a year back. Axis Bank’s gross non-performing asset (NPA) ratio rose to 1.06% as against 0.94% a year ago. Net NPA ratio stood at 0.32% compared with 0.25%. Its provisions increased significantly from Rs 139 crore to Rs

to Rs 2.40 lakh crore. HDFC Bank expects a little churn out in wholesale loan book, going forward. If the economy picks up, there will be some incremental growth for corporate loans. Gross non performing asset (GNPA) ratio marginally improved to 0.97 percent as against 1.02 percent a year back. Net NPA ratio remains unchanged at 0.20 percent. Total deposits grew 20% to Rs 2.96 lakh crore. The share of current and savings account (CASA) improved from 45.4% to 47.4% as on March 31, 201213. HDFC Bank however posted higher cost to income ratio, which could affect profitability going forward. The bank also went in for an unexpected reclassifcation of accounting norms. Earlier, the bank used to net off the income from recovery of written off (bad) assets from loan provisions. Now, it is showing as a part of other income component. 595 crore YoY. During the year, the bank created a contingency fund of Rs 375 crore. The lender has set aside contingency funds for those additional loan accounts that show some stress on repayments. Deposits rose nearly 15 percent YoY to Rs 2.53 lakh crore while the share of low cost CASA deposits grew 23 percent while it constituted 36 percent of total deposits. For the full year 2012-13, Axis Bank’s net profit rose 22 percent YoY to about Rs 5,200 crore. NII increased 21 percent to Rs 9,700 crore.

City Union Bank’s Growth Not Befitting a Century Old Bank, Asset Quality Gets Degraded outh-based City Union Bank reported 15 percent year-on-year rise in its fourth quarter (January - March) net profit to Rs 83 crore, aided by other income, which increased 32 percent to Rs 81 crore. Net interest income or the difference between interest earned and paid out, rose 27 percent to Rs 137 crore. Total provisions increased to Rs 44 crore compared with Rs 30 crore, an accretion of 48 percent y-o-y. Gross non-performance (NPA) ratio rose to 1.13 percent as against 1.01 percent a year back. Net NPA ratio too increased 0.63 percent compared with 0.44 percent during the same period. The bank expanded its loans by 26 percent y-o-y to about Rs 15,250 crore during the full year. Deposits grew more than 24 percent y-o-y to Rs 20,305 crore.

Dhanlaxmi Bank Back Into Profit Aided by Other Income, But Net Interest Income Declines tandalone Net Interest Income (NII) for the quarter was Rs 325.63 crore and net profit was Rs 28.66 crore. Other income for the quarter was Rs 43.62 crore. For the quarter ended Mar 2012 the Standalone Net Interest Income (NII) was Rs 347.70 crore and net loss was Rs 86.51 crore., and other income Rs 17.72 crore.

evelopment Credit Bank’s fourth quarter net profit doubled from about Rs 17 crore to Rs 34 crore year-on-year driven by higher interest income. Net interest income

improved by 44% to Rs 82 crore. DCB is one of the smallest listed banks, having crossed Rs. 10,000 Cr. Balance Sheet size, now only. The bank expanded its loan book about 25% Yo-Y to Rs 6,590 crore. However, DCB’s higher loan growth is due to its lower base. Net interest margin stood at 3.52% as against 3.12% in the corresponding quarter of the previous year. Provisions and contingencies stood at Rs 24 crore compared with around Rs 29 crore a year back. For the full year 2012-13, the bank’s net profit improved from Rs 57 crore to Rs 102 crore Y-o-Y. On bad assets front, the gross non-peforming asset (GNPA) ratio improved to 3.18% as against 4.40% recorded in FY12. However, the net NPA ratio rose from 0.57% to 0.75% suggesting that provisions for bad loans were less compared to previous year. Deposits

grew 32% y-o-y to about Rs 8,360 crore. Retail deposits including current and savings accounts and term schemes constitued a majority share of 77% out of total deposits. The CASA ratio however, fell to 27.2% in FY13 compared with 32.10% recorded a year ago. Even in a falling interest rate regime, the small bank is offering 9.30% and 9.80% for deposits to general and senior citizens respectively, which are somewhat better when compared with the industry average.

Seasonal Magazine

DCB Performs Reasonably, Though on a Small Base

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OUR BANKS: BLEEDING OR BATTLE READY?

Mahabank Puts Up a Good Performance, Though on a Low Base tate-owned lender Bank Of Maharashtra surprised the street with the fourth quarter net profit rising 3.5 times year-on-year to Rs 259 crore. Net interest income increased 34.6 percent to Rs 871 crore from Rs 647 crore Y-o-Y. Gross non-performing asset of Pune-based bank improved 22 basis points quarter-on-quarter to 1.49 percent and net NPA improved 14 basis points Q-o-Q to 0.52 percent. Provisions against bad loans slipped to Rs 124.5 crore in fourth quarter FY13 as against Rs 144 crore in third quarter. Capital adequacy ratio improved significantly to 12.59 percent versus 10.7 percent quarter-on-quarter.

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ndia’s largest private sector lender ICICI Bank, which is facing serious moneylaundering allegations, reported 21 percent year-on-year rise in its fourth quarter net profit at about Rs 2,300 crore on standalone basis, driven by reasonable growth in net interest income (NII), which grew 22 percent to Rs 3,800 crore. ICICI Bank restructured Rs 788 crore during the quarter. ICICI Bank’s outstanding restructured book was at Rs 5,315 crore as on March 31, 2013; in comparison with Rs 4,554 crore recorded in the corresponding quarter of the previous year. Bank loans expanded 14 percent year-onyear to Rs 2.90 lakh crore. Currently, the share of retail loans stood at 37 percent while corporate loans was at 32.50% of the total credit book. SME loans formed more than 5 percent. ICICI Bank achieved only 90 percent of its priority sector lending target mandated at 40% by RBI. Gross nonperforming asset (NPA) ratio improved to 3.22 percent compared with 3.62 percent a year back. Net NPA ratio stood at 0.77 percent as against 0.73 percent during the same time. Provisions against bad loans decreased marginally from Rs 470 crore to Rs 460 crore Y-o-Y. For the year ended March 31, 2013, The bank posted 29 percent rise in its net profit to Rs 8,325 crore. Net interest margin (NIM) rose by 38 basis points to 3.11 percent Y-o-Y. Deposits grew 15 percent Y-o-Y to Rs 2.93 lakh crore. The share of low cost current and savings account (CASA) improved from 37.4 percent to 38.10 percent quarter-on-quarter.

Vijaya Bank’s Bottomline Swells, Despite Provisions More Than Doubling tate-owned Vijaya Bank’s fourth quarter net profit grew 24 percent year-on-year to Rs 224 crore, aided by a tax writeback of Rs 41 crore and boosted by a spike in other income component that surged from Rs

ICICI Bank Puts Up Reasonable Performance, But Restructured Book Continues to Expand

138 crore to Rs 277 crore. Net interest income rose at a slower pace by 5 percent to Rs 517 crore during the quarter. The bank expanded loans about 19 percent to Rs 69,700 crore while deposits grew about 17 percent to a little more than Rs 97,000. On the both cases, it has surpassed the average industry growth. Meanwhile, the gross non-performing asset (NPA) ratio improved to 2.17 percent as against 2.93 percent a year back. Net NPA ratio stood at at 1.30 percent as against 1.72 percent during the same time. Provisions and contingences more than doubled to Rs 205 crore compared with Rs 87 crore.

IndusInd Bank’s Net Profit Kotak Mahindra Bank’s Rises, GNPAs Inch Up Bottomline Improves, But CASA Retreats, Provisions Surge Multifold otak Mahindra Bank’s fourth quarter standalone net profit grew 47 percent year-on-year to Rs 436 crore, aided by robust net interest income which grew 31 percent to Rs 903 crore. The consolidated net profit rose 19 percent Y-o-Y to about Rs 2,190 crore. The bank expanded its loan book by 24 percent to about Rs 48,500 crore as on March 31, 2013. Its loan book is almost evenly distributed between corporate (Rs 24,041 crore) and retail loans (Rs 24,428 crore). Gross non-performing ratio rose to 1.30 percent as compared with 1.20 percent. Net NPA ratio remains unchanged at 0.60 percent. During the year, provisions against loans and other receivables increased to Rs 206 crore as against Rs 73 crore a year ago. Deposits grew 32 percent Y-o-Y to Rs 51,030 crore. Savings deposits rose 44 percent to Rs 7,268 crore. The lender has been running a campaign to promote its savings bank product offering 6-7 percent rate of interest. However, the share of low cost current and savings account deposits (CASA) stood at 29 percent as against 32% a year back.

ided by higher interest as well as core fee income, private sector lender IndusInd Bank’s fourth quarter net profit grew by 38 percent year-onyear to Rs 307 crore. Net interest income rose 42 percent y-o-y to about Rs 660 crore in January-March quarter in 2012-13. Core fee income increased 31% yo-y to Rs 345 crore. IndusInd is a relatively small bank, which even after expanding its branch network, stands at just 500 branches. The bank’s loan book expanded 26% y-o-y to about Rs 44,320 crore. IndusInd Bank mainly lends to corporates for working capital requirements. Currently, corporate loans constitute 49% of total loans while the rest 51% is for consumer financing. Net interest margin improved to 3.70 percent as against 3.46 percent a quarter back. Net nonperforming assets (NPA) ratio was little changed at 0.31 as compared to the October-December quarter. Gross NPA ratio however inched up from 0.99% to 1.03% quarter-on-quarter. Deposits grew 28% y-o-y to about Rs 54,100 crore. The share of current and savings account deposits too improved from 27.30% to 29.32%. The bank is offering 6% on its savings account deposits.

Seasonal Magazine

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Rs. 50

VOLUME 12 ISSUE 7 JULY 2013

KERENG/2002/6803

Bahrain BD 1.50 Kuwait KD 1.50 Oman OR 1.50, Saudi Arabia SR 12.00 UAE DH 10.00 UK £ 3.00, US $ 3.00

WHY CHASING PERPETUAL ECONOMIC GROWTH IS HIGHWAY TO DISASTER

POWER TIPS FOR CREDIT CARDS

FACEBOOK COULD MAKE YOU MENTALLY ILL BANKS: BLEEDING OR BATTLE READY? JOBS NOW

OUR

THE HOTTEST

WORLD’S TOP-13 AUTOMOTIVE BRANDS

ARUNDHATI’S ROMANCE THAT JAIRAM RAMESH HATES

Malaysia Rs. 2909 Cr Italy Rs. 3375 Cr Bahrain Rs. 4071 Cr Singapore Rs. 6567 Cr Australia Rs. 7346 Cr Qatar Rs. 12,296 Cr Oman Rs. 14,001 Cr Kuwait Rs. 15,771 Cr Nepal Rs. 17,311 Cr Canada Rs. 18,556 Cr Bangladesh Rs. 21,924 Cr United Kingdom Rs. 23,034 Cr Saudi Arabia Rs. 44,964 Cr United States Rs. 63,980 Cr UAE Rs. 84,105 Cr

INDIA ABROAD

Rupee Falling and its Aftermath 1 US Dollar

= Rs. 59.70

1 British Pound = Rs. 91. 80 1 Euro

= Rs. 78.35

Seasonal Magazine

1 UAE Dirham = Rs.16.30

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INDIA'S Rs. 4 LAKH OVERSEAS

CRORE ECONOMY

Seasonal Magazine

There are few things in which India leads a global list. Even in population, China is ahead of us. But when it comes to overseas remittance, no country is match to us. An overseas remittance is a transfer of money by a foreign worker to his or her home country. It seems that no other race loves their family back home, or trusts their mother country, as much as Indians do. India is the largest recipient of global remittances in the world, receiving $69 billion or nearly Rs. 4 lakh crore, in 2012, according to a World Bank report titled, 'Migration and Development Brief 2012' from the World Bankâ&#x20AC;&#x2122;s Migration and Remittance Unit. To put this figure in perspective, India attracted only around Rs. 1.5 lakh crore in FDI during 2012, according to stats by United Nations Conference on Trade & Development (UNCTAD). And on the FDI front, inflows had declined by 13.5% in 2012, while remittances have been growing steadily. And that was in 2012 while the 2013 devaluation in rupee is surging remittances further. Which are the countries and economies from which NRIs and PIOs sent in such huge remittances? If Indians can be so productive abroad in these countries, why can't India learn from these economies? What makes them tick? Here is a look at 16 top countries from where Indian workers and businessmen sent in these mammoth funds. There are also some surprises in this list, which is sorted from the 16th largest to the very largest. So, are you guessing, who tops this list? Is it the USA? Find out soon:

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Malaysia

Indians based in Malaysia sent back $493 million to India in the form of remittances. Malaysia has its origins in the Malay Kingdoms present in the area which, from the 18th century, became subject to the British Empire. Since its independence in 1957, Malaysia has had one of the best economic records in Asia, with

GDP growing an average 6.5% for almost 50 years. The economy has traditionally been fuelled by its natural resources, but is expanding in the sectors of science, tourism, commerce and medical tourism.

Rank 16

Rs. 2909 Cr

Seasonal Magazine

Bahrain

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Indians based in Bahrain sent $690 million to their home country. In the late 1800s, following successive treaties with the British, Bahrain became a protectorate of the United Kingdom. Following the withdrawal of the British from the region in the late 1960s, Bahrain declared independence in 1971. Bahrain today has a high Human Development Index (48th highest in the world) and the World Bank has identified it as a high income economy. Oil was discovered in Bahrain in 1932, the first in the Arabian side of the Gulf. In recent decades, Bahrain has sought to diversify its economy and be less dependent on oil by investing in the banking sector and tourism. The country's capital, Manama, is home to many large financial structures, including the Bahrain World Trade Center and the Bahrain Financial Harbour.

Rank 14

Rs. 4071 Cr

Italy

Rank 15

Rs. 3375 Cr Indians based in Italy sent $572 million to their home country, India. After a humilating and devastating defeat in World War II, Italy was rapidly transformed from an agriculture based economy into one of the world's most industrialized nations and is a leading country in world trade and exports. It is a developed country, with the world's 8th highest quality of life and the 25th highest Human Development Index. In spite of the recent global economic crisis, Italian per capita GDP at purchasing power parity remains approximately above to the EU average, while the unemployment rate (8.5%) stands as one of the EU's lowest. The country is well known for its influential and innovative business sector, an industrious and competitive agricultural sector (Italy is the world's largest wine producer), and for its creative and

high-quality automobile (Ferrari, Fiat), industrial, appliance and fashion design sectors.

Singapore

Rank 13

Rs. 6567 Cr

Singapore has the third highest per capita income in the world. The population is highly diverse; the majority are Chinese with almost 75% of the total population, while Malays and Indians forming significant minorities. Reflecting this diversity, the country has four official languages: English, Chinese, Malay, and Tamil.

Seasonal Magazine

Singapore-based Indian expats remitted $ 1,113 million to India. Occupied by the Japanese in World War II, Singapore declared independence, uniting with other former British territories to form Malaysia in 1963, although it was separated from Malaysia two years later. Since then, it has had a massive increase in wealth, and is one of the Four Asian Tigers. Singapore is the world's fourth-leading financial centre, and its port is one of the five busiest ports in the world. The economy depends heavily on exports and refining imported goods, especially in manufacturing, which constitutes 26% of Singapore's GDP. In terms of purchasing power parity,

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Australia Australia-based Indians remitted as much as $1,245 million back home. After discovery by Dutch explorers in 1606, Australia's eastern half was claimed by Great Britain in 1770 and settled through penal transportation to the colony of New South Wales from 1788. The population grew steadily in subsequent decades; the continent was explored and an additional five selfgoverning Crown Colonies were established. For a country, originally populated with exiled convicts, Australia has come a long way. A highly developed country and one of the wealthiest, Australia is the world's 12th-largest economy and has the world's fifth-highest per capita income. With the second-highest human development index globally, Australia ranks highly in many international comparisons of national performance, such as quality of life, health, education, economic freedom, and the protection of civil liberties and political rights.

Rank 10 Rs. 12,296 Cr

Qatar

Rank 12

Rs. 7346 Cr

The remittances from Qatar to India had been $2,084 million, according to the report. Qatar has been ruled as an absolute and hereditary emirate by the Al Thani family since the mid-19th century. Formerly one of the poorest Persian Gulf states, the mainly barren country was noted mainly for pearl hunting. It was a British protectorate until it gained independence in 1971. Since then, it has become one of the region's wealthiest states due to its enormous oil and natural gas revenues. Beginning in 1992, Qatar has built intimate military ties with the United States, and is now the location of U.S. Central Commandâ&#x20AC;&#x2122;s Forward Headquarters and the Combined Air Operations Center. Qatar tops the list of the world's richest countries by Forbes. In 2010, Qatar had

Seasonal Magazine

the world's highest GDP per capita, while the economy grew by 19%, the fastest in the world.

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The main drivers for this rapid growth are attributed to ongoing increases in production and exports of liquefied natural gas, oil, petrochemicals, and related industries. Qatar has the highest human development in the Arab World. With a small citizen population of fewer than 250,000 people, foreign workers outnumber native Qataris. Foreign expatriates come mainly from other Arab nations (20% of population), the Indian subcontinent (India 24.5%, Nepal 13%, Pakistan 7%, Sri Lanka 5%), Southeast Asia (Philippines 10%), and other countries (5%).

Rank 11

Rs. 7570 Cr

Sri Lanka Indians based in Sri Lanka sent $1,283 million back to India. Sri Lanka's geographic location and deep harbours made it of great strategic importance from the time of the ancient Silk Road through to World War II. Sri Lanka is a diverse country home to many religions, ethnicities and languages. It is the land of the Sinhalese, Sri Lankan Tamils, Moors, Indian Tamils, Burghers, Malays, Kaffirs and the aboriginal Vedda. The country's recent history has been marred by a thirty-year civil war which decisively but controversially ended in a military victory in 2009. The capital, Sri JayawardenapuraKotte, is a suburb of the largest city, Colombo. An important producer of tea, coffee, gemstones, coconuts, rubber and the native cinnamon, the island contains tropical forests, and diverse landscapes with high biodiversity. It is also the only

country in South Asia that is currently rated 'high' on the Human Development Index.

Rank 9

Rs. 14,001 Cr

most-improved during the preceding 40 years. According to international indices, Oman is one of the most developed and stable countries in the Arab world. As with other Arab States of the Persian Gulf, oil is the mainstay of the economy, providing a large proportion of GDP, although compared to its neighbours Oman is a modest producer. Agriculture and fishing are also important sources of income. A diversification drive includes tourism.

Seasonal Magazine

Oman

Oman-based Indians remitted $2,373 million to India. Oman has long-standing military and political ties with the United Kingdom and the United States, although it maintains an independent foreign policy, and has never come under direct British rule. Oman is an absolute monarchy in which the Sultan of Oman exercises ultimate authority, but its parliament has some legislative and oversight powers. In November 2010, the United Nations Development Programme (UNDP) listed Oman, from among 135 countries worldwide, as the nation

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Kuwait

Rank 8

Rs. 15,771 Cr

Indians based in Kuwait remitted $2,673 million to their home country. After Kuwait gained independence from the United Kingdom in 1961, the state's oil industry saw unprecedented economic growth. In 1990, Kuwait was invaded and annexed by neighboring Iraq. The seven month-long Iraqi occupation came to an end after direct military intervention by United States-led forces. Around 773 Kuwaiti oil wells were set ablaze by the retreating Iraqi army, resulting in a major environmental and economic catastrophe. Kuwait's infrastructure was badly damaged during the war and had to be rebuilt. Twelve years later, Kuwait saw another massive foreign military presence as it served as a springboard for the US-led campaign in 2003 to oust Iraqi leader Saddam Hussein. Kuwait City serves as the country's political and economic capital. The country has the world's fifth largest oil reserves and petroleum products now account for nearly 95% of export revenues and 80% of government income. Kuwait is the eleventh richest country in the world per capita and, in 2007, had the highest human development index (HDI) in the Arab world. Kuwait is classified as a high income economy by the World Bank.

Nepal Indians in Nepal remitted $2,934 million to India. Nepal is located in the Himalayas and bordered to the north by the People's Republic of China, and to the south, east, and west by the Republic of India. Specifically, the Indian states of Uttarakhand, Uttar Pradesh, Bihar, West Bengal, and Sikkim border Nepal, while across the Himalayas lies the Tibetan Autonomous Region. Kathmandu is the nation's capital and largest metropolis. Nepal has a rich geography. The mountainous north has eight of the world's ten tallest mountains, including the highest point on Earth, Mount Everest, called Sagarmatha in Nepali. It contains

Seasonal Magazine

more than 240 peaks over 20,000 ft (6,096 m) above sea level. Hinduism is practised by

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about 81% of Nepalis, making it the country with the highest percentage of Hindu followers. A long-standing economic agreement underpins a close relationship with India.Nepal's major exports are carpets, clothing, leather goods, jute goods and grains. Recently, the European Union has become the largest buyer of Nepali ready made garments.

Rank 7

Rs. 17,311 Cr

Bangladesh

Rs. 18,556 Cr

Canada Canada-based Indians sent home as much as $3,145 million. Canada is the world's second-largest country by total area, and its common border with the United States is the world's longest land border shared by the same two countries. Canada's advanced economy is one of the largest in the world, relying chiefly upon its abundant natural resources and well-developed trade networks, especially with the United States, with which it has had a long and complex relationship. Canada is a developed country, with the ninth highest per capita income globally, and the 11th highest ranking in human development. Subsequently, Canada ranks among the highest in international measurements of education, government transparency, civil liberties, quality of life, and economic freedom. Canada is one of the few developed nations that are net exporters of energy. The vastness of the Athabasca oil

sands and other assets results in Canada having 13% of the global oil reserves, the world's third-largest, after Venezuela and Saudi Arabia. Canada is additionally one of the world's largest suppliers of agricultural products; the Canadian Prairies are one of the most important global producers of wheat, and other grains.

Rs. 21,924 Cr

Indians working in Bangladesh remitted $3,716 million back home. Bangladesh's economy has been identified as one of the 'Next Eleven', a group of 11 countries identified by Goldman Sachs and economist Jim O'Neill in a research paper as having a high potential of becoming, along with the BRICs/BRICS, the world's largest economies in the 21st century. Dhaka and Chittagong, the country's two largest cities, have been the driving force behind much of the recent growth and are among the world's fastestgrowing cities. Bangladesh has seen a dramatic increase in foreign direct investment. In order to enhance economic growth, the government set up several export processing zones to attract foreign investment.

Bangladesh government is planning for construction of the largest deep sea port in South Asia at Sonadia Island and a new international airport costing $7.5 billion is being modelled on Thailandâ&#x20AC;&#x2122;s Suvarnabhumi Airport in size and capacity. To ease the chaotic traffic congestion in the capital Dhaka the government plans to construct more expressways, freeways, and flyovers as well as an overhead Rapid transit called Dhaka Metro.

Seasonal Magazine

Rank 6

Rank 5

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Rank 4

Rs. 23,034 Cr

United Kingdom UK-based Indians remitted $3,904 million to their home country. British Empire which, at its height in the late 19th and early 20th centuries, encompassed almost a quarter of the world's land surface and was the largest empire in history. British influence can be observed in the language, culture and legal systems of many of its former colonies. Today's United Kingdom has the world's sixth-largest economy by nominal GDP and eighth-largest economy by purchasing power parity. It was the world's first industrialised country and the world's foremost power during the 19th and early 20th centuries. The UK remains a great power with considerable economic, cultural, military, scientific and political influence internationally.

Seasonal Magazine

London is one of the three command centres of the global economy (alongside New York City and Tokyo),

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is the world's largest financial centre alongside New York, and has the largest city GDP in Europe. Tourism is very important to the British economy and, with over 27 million tourists arriving every year, the United Kingdom is ranked as the sixth major tourist destination in the world and London has the most international visitors of any city in the world.

Rank 2

Rs. 63,980 Cr

Rank 3

Rs. 44,964 Cr

world's most ethnically diverse and multicultural nations, the product of large-scale immigration from many countries. The geography and climate of the U.S. is also extremely diverse, with deserts, plains, forests, and mountains that are home to a wide variety of species. The United States has the world's largest national economy, with an estimated 2012 GDP of $15.6 trillion â&#x20AC;&#x201C; 19% of global GDP at purchasing-power parity, as of 2011. The per capita GDP of the U.S. was the world's sixth-highest as of 2010, although America's income inequality was also ranked highest among OECD countries by the World Bank. The economy is fueled by an abundance of natural resources, a well-developed infrastructure, and high productivity; and while its economy is considered postindustrial it continues to be one of the world's largest manufacturers. USA is a leading economic, political, and cultural force in the world, as well as a leader in scientific research and technological innovation.

Saudi Arabia Workers in Saudi Arabia remitted $ 7,621 million to India, according to the report.

Saudi Arabia has the world's largest oil reserves which are concentrated largely in the Eastern Province. Oil accounts for more than 95% of exports and 70% of government revenue, although the share of the non-oil economy has been growing recently. This has facilitated the transformation of an underdeveloped desert kingdom into one of the world's wealthiest nations. Vast oil revenues have permitted rapid modernisation, such as the creation of a welfare state. It has also the world's sixth largest natural gas reserves. Its population is estimated to consist of 16 million citizens and an additional 9 million registered foreign expatriates and 2 million illegal immigrants.

Seasonal Magazine

United States

Indians working, based or settled in the United States sent back whopping $10,844 million to India. USA is one of the

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Rank 1

UAE

Rs. 84,105 Cr

Seasonal Magazine

India received as much as $14,255 million in remittances from United Arab Emirates. The UAE is a federation of seven emirates - Abu Dhabi, Ajman, Dubai, Fujairah, Ras al-Khaimah, Sharjah, and Umm al-Quwain. The capital is Abu Dhabi, which is also the state's center of political, industrial, and cultural activities. Since 1962, when Abu Dhabi became the first of the emirates to begin exporting oil, the country's society and economy were transformed. The late Sheikh Zayed, ruler of Abu Dhabi and president of the UAE at its inception, oversaw the development of all the emirates and directed oil revenues into healthcare, education and the national infrastructure. UAE oil reserves are ranked as the world's seventh-largest. It also possesses the world's seventeenth largest reserves natural gas resources and it is one of the most developed economies in Western Asia. Per capita income is the world's seventh-

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highest. Today, Dubai has emerged as a cosmopolitan metropolis that has grown steadily to become a global city and a business and cultural hub of the Middle East and the Persian Gulf region. Although Dubai's economy was historically built on the oil industry, the emirate's

Western-style model of business drives its economy with the main revenues now coming from tourism, real estate, and financial services. Dubai has recently attracted world attention through many innovative large construction projects and sports events. The city has become symbolic for its skyscrapers and high-rise buildings, such as the world's tallest Burj Khalifa, in addition to ambitious development projects including man-made islands, hotels, and some of the largest shopping malls in the region and the world.

Rs. 50

KERENG/ 2002/6803

VOLUME 12 ISSUE 7 JULY 2013

Bahrain BD 1.50 Kuwait KD 1.50 Oman OR 1.50, Saudi Arabia SR 12.00 UAE DH 10.00 UK £ 3.00, US $ 3.00

VINOD RAI

INTERVIEW

ONCE DARLING OF INVE NOW FORSAKEN, CAN MANAPPURAM BOUNCE BACK? rom Rs. 0.15 in 2003, it went to Rs. 94.95 by 2010. Which makes Manappuram Finance stock a 633X bagger within 7 years, qualifying it among India’s best performing wealth creators. Initially, the investors were largely people who knew this business and its promoter, ex-banker VP “What has thrived the most in this Nandakumar. But when the growth pace accelerated around sector is a mono-line focus. And it is not just about gold loans. You take any 2007-08 onward, and Manappuram became a wellasset class, and you can see this in researched company, some of the largest and most action. We see it in HDFC which does only home loans, we see it in Shriram celebrated PE funds like Sequoia - of Apple-Google fame Transport Finance that does only came in to support, and exited soon with more than 5X commercial vehicle finance. Shriram’s returns. That was the time when Manappuram was featured big break had come in an even narrower niche, which is used-truck financing. even in New York Times and Wall Street Journal as the poster Such players have clearly outperformed boy of the new wonder business - organized gold loans - in jack-of-all-trades NBFCs in sheer growth momentum. Same is the case India. But times have changed. The growth and rise of with a gold loan company like Manappuram was not just the product of Nandakumar’s Manappuram Finance Ltd that has a sharp mono-line focus.” visionary leadership and wealth-sharing attitude, but of the unprecedented rise in the value of gold between 2007 and 2012. It goes to his credit that he made the best use of this rare window of opportunity to expand Manappuram’s branch network at a blistering pace, across India. Under his guidance, Manappuram also went in for a mammoth QIP at the peak of this bull run in gold and gold loan stocks. But times

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ESTORS, have changed too much. Starting in 2011, the regulator of the sector, RBI became extremely cautious regarding an impending fall in gold price, and the impact it would have on all gold loan operations in the NBFC and banking space. They put in place several restrictions on the unbridled growth in the sector, including a severe cap on Loan-to-Value, as well as on caps on how much banks are allowed to lend to gold loan companies. The sector went in for a toss. And has not quite fully recovered ever since. Manappuramâ&#x20AC;&#x2122;s stock started correcting from Rs. 94.95 and recently went as low as Rs. 9.90, which is nearly a 90% erosion in value from the peak. The fall was dramatic, only falling short of the spectacular rise, just a few years back. Meanwhile, gold corrected much more than anyone had anticipated, before finding support from the physical demand in India and China. The recent stability of gold is inevitably bringing up the question - Can Manappuram, the gold loan stock with the longest listed history, bring back the wealth-creation magic? Because, here is a promoter who has once proven that he has no issues sharing immense wealth with all kinds of investors, from retail to high-profile institutional investors. Even today, the kind of foreign institutional investors betting on Manappuram reads like a who-is-who of bluechip investors - GMO, Bric II, Baring, Sanlam, Wellington, Morgan Stanley, HSBC, Smallcap World Fund, Beaver, AA Development Capital, and Hudson Equity Holdings. Seasonal Magazine caught up with VP Nandakumar to find out how authentic is the hope all stakeholders still have in this organization.

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Seasonal Magazine in conversation with VP Nandakumar, MD & CEO, Manappuram Finance:

Are you shocked at the way things have panned out in the gold loan sector? Was any of these issues anticipated 1 or 2 years back? Not really shocked at the developments. While I don’t deny the developments during the past twoyears have been dramatic, Manappuram is a very old company to be affected fundamentally by such cyclical issues. Manappuram, which was founded by my father VC Padmanabhan, has been in gold loans since 1949. Like many businesses, gold loans too have some cyclical issues, may be not annual problems, but occurring every few years. Ever since I was a small boy, often visiting my father’s office, I have been witness to some of these issues. But they keep changing, of course. And it has been 27 years since I directly took over the leadership role at Manappuram Finance, and we have seen many ups and downs. We have survived all those, and still grown dramatically, especially during the last 10 years. Coming to your question of whether all this was anticipated, well, some issues like gold price correction was anticipated as it had kept on appreciating, outperforming all other assets. So, some correction was indeed anticipated. But nobody can ever claim to have an accurate handle on the extent of correction. Was last quarter’s loss a one-off affair? What really contributed to it? Didn’t it show that apart from sectoral woes, Manappuram had some unique issues? No, we didn’t have any unique issues other than the one with Manappuram Agro Farms, which has been sorted out long back. It was done in good faith, but since RBI opposed it on technical grounds, we complied. There are no other such issues pending. What happened in Q4 was that we went in for cleaning up and strengthening our balance sheet. It was an inevitable step

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“

I think Manappuram Finance Ltd still has one of the best and most diverse foreign institutional investor profile among all NBFCs. Coming to the second part, well, of course gold loans will continue to be a viable business in India forever. Some sections of the financial media mistakenly think that we are doing less brisk business now. In fact, going by the number of transactions, we are doing more than ever, but due to gold price correcting and the lower LTV in place, the total value or volumes have come down.

” for any gold loan company, given the dynamic changes in the industry like the gold price correction and change in LTV norms. Due to this bold and transparent move, what I can vouch for is that Manappuram Finance has got the strongest and cleanest balance sheet among all gold loan companies. On whether it is a one-off affair, yes that has been our intention and hope. I feel that our competitors might not have yet taken such a step, and that is why that loss appears unique in the industry. One problem with Manappuram seems to be the funding crunch. How are you planning to address this issue? We have no funding crunch as such. Today, we are the most well capitalized gold loan company. This is partly thanks to our visionary capital raising around two years back through a QIP.

Secondly, despite a media perception to the contrary, banks are still positive towards the gold loan companies even under the new RBI guidelines. And lastly, most gold loan companies including Manappuram have moderated their growth plans in FY’14. So, there is no funding crunch whatsoever. That is why we are not currently looking at NCDs either. Coming back to the issue of gold prices correcting. Do you think the correction is almost over now, and that Indian and Chinese demand for physical gold would act as a support? Unfortunately, no one including me can be a prophet regarding gold prices. What you mention, that is, Indian and Chinese demand for physical gold acting as a support, is precisely what we are witnessing now. Nothing more can be said. Gold is so very much a part of global economy and heavyweight nations’ monetary policy, that it is next to impossible to predict its price trajectory. The recent correction in gold was partly due to dollar strengthening. But from a purely Indian context, I feel that rupee weakening substantially is something that is going to help gold

prices. But having said all these, I personally feel that gold wouldn’t correct much from this level. It might remain at the current level for longer than expected, before eventually moving up. The issues faced by gold loan companies have highlighted the problem of focusing on just one asset class. Do you now think that Manappuram Finance should have a diversified portfolio? No, not at all. And I don’t think anybody who takes an objective look at the NBFC sector would disagree with me. What has thrived the most in this sector is a mono-line focus. And it is not just about gold loans. You take any asset class, and you can see this in action. We see it in HDFC which does only home loans, we see it in Shriram Transport Finance that does only commercial vehicle finance. Shriram’s big break had come in an even narrower niche, which is used-truck financing. Such players have clearly outperformed jack-of-all-trades NBFCs in sheer growth momentum. Same is the case with a gold loan company like Manappuram that has a sharp mono-line focus. In fact, we grew

dramatically only because of our mono-line. But haven’t there been exceptions like L&T Finance Holdings? L&T Finance is not the rule, but the exception. And if you look deeply, it is really a holding company of many niche or mono-line NBFC operations. Despite their significant size, in most of their segments, I think they won’t be in the top-three. That is because, it is much more challenging to scale up a multi-line operation. Still, don’t you think diversification from a single asset class would have been more risk-free? Well, it is really all about a trade-off. Between growth and short-term risk. Mono-line NBFCs are much easier to scale up. There is tremendous growth potential that can be rapidly executed. The flipside of it, the so-called risk, is only cyclical or short-term in nature. Just because gold is currently going through a corrective phase, we can’t come to the conclusion that gold loans as a mono-line business is risky. Such cyclical issues crop up in every sector. Would HDFC diversify from home loans, or Shriram from truck finance,

Central Minister KV Thomas inaugurating Manappuram Founder’s Day, where awards for excellence were given to Vinod Rai, Madhav Gadgil, Madhu, VD Satheesan, and Jose Dominic.

“

What has thrived the most in this sector is a mono-line focus. And it is not just about gold loans. You take any asset class, and you can see this in action. We see it in HDFC which does only home loans, we see it in Shriram Transport Finance that does only commercial vehicle finance. Shriram’s big break had come in an even narrower niche, which is used-truck financing. Such players have clearly outperformed jack-ofall-trades NBFCs in sheer growth momentum. Same is the case with a gold loan company like Manappuram Finance Ltd that has a sharp mono-line focus.

”

if those sectors enter a trough? No, in my opinion. They would simply wait it out. This is not something that I am saying hypothetically. It has happened in those sectors, and they have waited, and they have thrived subsequently. I think gold as a loan asset is even more well-poised for recovery. So, we will focus on the prudent mono-line model, and simply wait it out. Do you think that some in the regulatory bodies like RBI unnecessarily focused on gold loan companies and their funding banks, thereby crippling the sector? Not really. I think the limit on LTV and some other changes brought forth by RBI has been good for the sector. At least now there is a level playing field. Earlier, some companies were giving 90% or even 100% LTV on gold loans,

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which was clearly not sustainable. It was not only the small firms, but even big banks like HDFC Bank was reportedly doing it. So with regard to changes like in LTV, the regulator’s move has been beneficial to the industry. But having said that, there have been some other moves from the regulator which are aimed at all NBFCs, and which have been imposed on gold loan NBFCs too. I think those changes are not fair, considering that the average tenure of gold loans are around three months. It doesn’t make sense when a regulation intended for 5-year car loans or 15-year home loans are imposed on three-month gold loans. The sector has been hurt to that extent. How far have you trimmed your employee base? Do you subscribe to the view that you expanded too fast, especially into less understood markets like North India? We have trimmed our employee base by less than 15%, and that was solely due to Sunday being made a holiday for all our branches. Under the new circumstances that the gold loan business is operating, we came to the conclusion that it would be better if Sunday is kept a holiday. Coming to the second part of your question, no, I don’t ever think that we expanded too fast into markets like North India. As I said before, gold loans are also of a cyclical nature. There will be some window of opportunities when we can expand fast, and some other timeperiods when we should be lying low or consolidating. So, if we hadn’t utilized that opportunity, we would have lost out. And there has been absolutely no problem with any of our geographical expansions. Regarding North India, maybe an organized gold loan sector was new to them, but our services are still very much in demand there. What all are the other issues faced by NBFCs like Manappuram? It is said that you have issues with excise and service tax…

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Well, I too heard the media rumours. All I can say is that we have not received any communication regarding any fresh tax claims. Whatever taxes are applicable, we have paid, and we are up-to-date. I don’t know whether any other gold loan companies have such pending issues. What I feel is that when gold loan stocks get corrected, media invents these rumours on hearsay. The market correction might have more to do with the tapering off of QE3. How would you guide for Q1 and the whole of FY’14? We don’t usually provide guidance. All I can say is that we expect a bounce back to profit, sooner rather than later. The business just has to adjust to the new norms regarding the gold price correction and lower LTV. It won’t take more than a couple of quarters for Manappuram Finance, as the difficult

clean-up of the balance sheet is behind us now. Branch wise, we won’t be expanding much during this fiscal, but in FY’15, we plan to add around 400 to 500 branches more to the Manappuram network. How are your other diversifications panning out, like Riti and MAcare? Both are doing well, but we are not hurrying up things. Riti as you know is again in the gold business, and the current changes affecting gold retailers are applicable. Regarding MAcare, we are performing well, but we are executing the expansion judiciously, as we will wait for each major branch to break even, before launching a new one. Being in the medical diagnostic business, it is a very capital intensive operation. How would you assess the gold import situation in India, and

business find itself in. Many of the smaller deals go unreported immediately as it is not necessary. We have to wait for the quarterly shareholding to get an updated picture.

government’s unsuccessful efforts so far to curb imports? Do you have any holistic alternatives to suggest? There are two aspects to this issue. One is the newer speculative demand for gold as seen during the last 4 to 5 years, which is reflected in the demand for bars, coins, e-gold, ETF etc. For controlling Current Account Deficit, the government might be able to control such demand to a large extent, by restricting imports and banning sale of gold coins by banks etc. But the other conventional aspect of gold demand is fully socio-cultural in nature as far as India is concerned. Gold remains one of the foremost assets of Indian households, together with land and bank deposits. Even if one doesn’t have any land or deposits, he is likely to have gold. Gold is not only an integral part of Indian family formation through marriage, but it is bequeathed across generations. No amount of

government efforts can curb this demand, which is largely a demand for gold jewellery. Similarly, no amount of awareness-building regarding gold as a locked-up asset is going to work. Because, gold loan companies like Manappuram have proved that gold jewellery is as liquid as cash. We are proud that we could unlock this treasure and bring it to productive work. Have any large institutional investors bought into Manappuram stock in recent months? Most probably, yes. Manappuram as you know is known for high FII stake. So, some churn is inevitable. We had Hudson paring their stake a bit and GMO coming in during January. Some funds like Baring, which clearly understand the potential of gold loan business, might have averaged at lower prices to account for the new norms the

Are you hopeful of reigniting investor interest? Is gold loan here to stay as a viable business? And can it stay as a listed business? There is no need to reignite investor interest. It will happen automatically. In fact it has already started happening. It is a function of the market plus a function of the sector plus a function of how well we are strategically performing in it. I think Manappuram still has one of the best and most diverse foreign institutional investor profile among all NBFCs. Coming to the second part, well, of course gold loans will continue to be a viable business in India forever. Some sections of the financial media mistakenly think that we are doing less brisk business now. In fact, going by the number of transactions, we are doing more than ever, but due to gold price correcting and the lower LTV in place, the total value or volumes have come down. That is why I remarked earlier that it would take a couple of quarters more for the business to adjust to new norms. And answering the last part of your question, Manappuram was the first listed gold loan company, and therefore has the longest listed history, and we don’t find any reason why gold loans can’t be a listed business anymore. Do you have any plans for QIP like issues? And are promoters planning to up their stake substantially? No QIP is in the horizon for one or two fiscals, as we are more than adequately capitalized. I would definitely like to up the promoter stake, as I had to pare some stake last year to raise some money and repay investors in some promoter group companies. But all that is behind us now, and I would be mulling the ways and means to up the promoter stake in Manappuram Finance in the coming quarters.

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VINOD RAI

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DEVELOPMENT

Seasonal Magazine

WHY CHASING PERPETUAL ECONOMIC GROWTH IS HIGHWAY TO DISASTER

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urning any capital at a deficit, without accounting for it, is an accounting sacrilege. But that is exactly what we are doing in our quest for unsustainable growth, argues, Mansoor Khan. We are not assigning the true value to our natural resources that are being depleted at an alarming rate. An alumnus of IIT Mumbai, Cornell University, and M.I.T, Boston, Mansoor Khan directed hits like 'Qayamat Se Qayamat Tak' and 'Jo Jeeta Wohi Sikander'. He is now settled in Coonoor, Tamil Nadu, and into organic cheese making at his farm Acres Wild. Khan is set to release his first non-fiction book called `The Third Curve â&#x20AC;&#x201C; The End of Growth as we know it` that examines the crisis our economic model of perpetual economic growth faces in the context of limits of energy and resources imposed by Nature.

odayâ&#x20AC;&#x2122;s reality is governed by the laws of economics and accounting has therefore become a key discipline in developing and maintaining our modern industrial world. Balance sheets, ledgers, costs and sales all lead to the final profit and loss statement that is supposed to tell us whether an enterprise was worthwhile or not. We constantly need to make sure that we have accounted for all input costs and that their sum is less than the output price. Or else we would have to use some of our savings to run the show. And spending your capital is a taboo in economics. So accounting has a responsibility towards the very survival of the enterprise. Let us see how accounting has fared through history. To trace this history we will start with fire. Sometime in the distant past one of our ancestors lit the first intentional fire,

thereby releasing a burst of heat and light. This act was to mark our species as the dominant one the power was undeniable and Homo sapiens came to rule the world. Soon fire was celebrated as our most glorious achievement, a techno-evolutionary leap. By setting fire to a piece of wood we could now release a hundred years of sunlight in a flash. No other animal has the ability to light a fire intentionally and then use it to heat, cook, corner animals on a hunt, clear undergrowth, melt, smelt and modify the world. Actually we dipping into a savings capital by using wood to create a fire, but the obvious advantages of releasing and using this source of stored energy were

irresistible. Then again, the first accountant was not born yet. So no one paid any attention to the deficit being created by this action the four letter word for which is ‘burn’. And burning was to become the defining trait of our culture called Civilization.

Burning any capital at a deficit, without accounting for it, is an accounting sacrilege.

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So starting with burning hundreds of years of sunlight capital, we later made the leap to coal, which opened the door to thousands of years of more capital burning at a go. The fire burned higher and a stunning surge of projects became possible, changing lifestyles and landscapes. Trumpeted as the beginning of the modern industrial world, this new trend changed the very landscapes of our minds. And unknowingly we became devotees of a new religion Growth. Thousands of years of sunlight capital combined with irreplaceable NATURAL CAPITAL like iron, copper, stone, sand, minerals etc. bloomed into the machines, railways, bridges and factories glibly called ‘fixed assets’ on our balance sheets. No substantial entries were made to account the real cost of these inputs.

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Yet it was permitted as the perks were stunning. We added unimagined comfort to our lifestyles and simultaneously accrued a deficit of hundreds of thousands of years of unaccounted sunlight capital, burnt at the altar of growth. This became an acclaimed habit. We dubbed it progress. And the fire rose higher.

exponential concepts, we were compelled to fuel the fire and make it rise ever higher, ever faster.

But the star of this combustion show was yet to arrive. In 1859, we found the keys to a sunlight capital account that had been accruing for hundreds of millions of years. It was oil. With oil we graduated from burning hundreds to thousands to millions of years of sunlight capital at a go. Burning this density of sunlight capital was like firing a thruster rocket for our industrial world. The fire was now an inferno and economic growth took an exponential curve up towards the sky. Along with it went our heads, into the clouds, as we lost the connection between value and measure, natural capital and money, reality and concept, body and mind. We convinced ourselves that it was not the stored solar energy capital of our Earth’s body, burnt at a huge deficit, that was making growth possible, but our ideas mere constructs of our mind.

Seasonal Magazine

The most lethal of these ideas was a symbolic construct called money. A representation of value but not value in itself. A lubricant for growth at best. We blinkered our accounting practices accordingly. We established that the price of the sunlight capital should only be what it cost to extract it”? We never accounted for what the real cost would be if we ever needed to replace the burnt capital”? This, anyway, was impossible. Burning 1,000 years of sunlight capital per minute for a drive to the grocers and showing it as a viable expense against even an eight digit salary is a serious accounting fraud. But then, were we accounting?

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What we were in fact performing was a neat sleight of the mind. We had swapped real capital for a symbolic concept called money. So all we had to do was account for the money and

Soon fire was celebrated as our most glorious achievement, a technoevolutionary leap. By setting fire to a piece of wood we could now release a hundred years of sunlight in a flash. No other animal has the ability to light a fire intentionally and then use it to heat, cook, corner animals on a hunt, clear undergrowth, melt, smelt and modify the world. not the real and irreplaceable capitals used which are energy and resources. Even worse, concepts have a tendency to morph into more concepts to form new economic laws. So ‘money represents value’ morphed into ‘money has time-value’ therefore the statement ‘money must grow’ became a law. And again this law morphed into ‘this growth must compound’. So money MUST grow exponentially although even a child knows that on a finite planet the supporting energy and resources don’t behave that way. But who was asking children anyway? Having committed ourselves to

New forms of capital were needed to do this. What got sucked into the flames this time was the irreplaceable ECOLOGICAL CAPITAL of the wild the fertility of soils, life-sheltering forests, life-supporting rivers, the magical web of species and biodiversity at large. They all disappeared into the funnel of the economic engine, running on borrowed solar capital, only to emerge with triumphant aplomb on waiting spreadsheets as Gross Domestic Product. Had anyone made an entry in any balance sheet for these ecological input costs? Certainly not, because voicing this was considered an anti-establishment act. You would be deemed a luddite, an obstructionist, a doomer, a treehugging environmentalist or even worse a mere resentful failure. Yet, reality maintains its own balance sheet way beyond Excel. It painstakingly and non-numerically tallies the accumulating deficit. And that deficit made itself evident through drying rivers, degraded soils, disappearing forests, dipping aquifers, diminishing bio-diversity, species extinction and other signs of fading life. This was the loss of a unique aspect of the universe called QUALITY that we never bothered to account for, in our obsession to account only for QUANTITY. In fact, the realisation that quality is beyond conventional accounting became clear when we made desperate attempts to include this loss in conventional balance sheets under the guise of environmental studies and ecoeconomics. Meanwhile, the economic flames were licking the clouds and demanding to be fed. Trapped in our tenets of compounding the time-value of money, we were obliged to find new kinds of capital to throw into the fire to keep it rising. The new kind of capital that was burnt was SOCIAL CAPITAL the bonds

community? No because communities don’t keep ledgers, only companies do.

But the star of this combustion show was yet to arrive. In 1859, we found the keys to a sunlight capital account that had been accruing for hundreds of millions of years. It was oil. with our family and place it as a number on a spreadsheet. Let us just say we accounted for it with a suitable raise in the salaries or annual bonuses. Immeasurable quality compensated by finite quantity. Once more, the deficit popped its ugly head in the form of overworked, depressed workers, highrates of suicides, dysfunctional families, rampant divorces, and untended, wayward youth.

Mansoor Khan and wife Lisa Fonseca

The inferno moved relentlessly to engulf the next kind of capital, called COMMUNITY CAPITAL. Stories, ideas, words, phrases, songs, tunes and other community intellectual property were snatched from the public commons to be converted and privatised into financial capital. Once shared and enjoyed by all, they were now out of bounds. For none to use or you would be sued. Impoverishing all for the gains of a few. And did we account for that loss to the

And finally, in the last rounds of keeping the fire from flagging, we burnt SPIRITUAL CAPITAL virtues like honesty, faith, integrity and trust between people and communities. And suddenly, telling half lies to sell a product was a fine art called advertising. Coercing unwilling workers to stick to their job at a low salary was dubbed management. Statesmanship was reborn as politics. Raping everything in sight was now masquerading as the euphemism ‘exploiting’, echoed proudly in boardroom meetings as ‘exploiting markets’ and ‘exploiting resources’. Did any spreadsheet account for the price paid to lose these virtues of spiritual capital? This is a silly question because, in fact, the spreadsheets were achieving record profits based on the very loss of these virtues. The number of scams these days bear ample evidence to the loss of this form of capital. And now, it is time to tally our accounts. We find that the fire we started 10,000 years ago has consumed just about every form of EARTH CAPITAL we could imagine. Nothing left to burn and the flames of our economic growth are flagging. The evidence is in the unravelling of the multiple crises that we wilfully bred in our hollow accounting systems. The 2008 global financial collapse, the Euro crisis, the energy crunch, the high food prices, the collapsing industries, the disappearing jobs, the resource wars, the falling water tables, the poisoned soils, the melting glaciers, the drying rivers and above all, a warming globe they all stem from the same root cause: the deficit caused by burning real Earth capital, powered by the pseudo-accounting of a symbolic capital called money. And that, dear readers, is not accounting at all. Modern Economics with its false tenet of perpetual growth is the culprit. However, its strongest ally has been accounting. It is time to do some real accounting before the fire consumes us all.

Seasonal Magazine

between family members, friends and local acquaintances. Everyone had to sacrifice their personal bonds, relationships and leisure to attend 9 to 5 jobs and punch the clock on single-day weekends. ‘Time is money’ was an immutable law by now. No more football with the boys in the evening, a casual game of rummy at the club, the unexpected drop-in at the neighbour’s house. The burning of these social bonds was more urgently needed by our office or enterprise to stoke the ever rising fire of profitability and growth. And what did that cost us? Well we could answer that if only we knew how to account a relationship, a smile, a quiet evening

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BEAUTY

Celebrity secrets are not just cosmetics

Celebrities love to flaunt their flawless translucent skin. Be it those perfectly arched brows, the long and curly lashes or the flush on their cheeks, it looks like they were born with it. aintaining perfect looks becomes a part of their lives and a prerequisite for their career. When celebrities flash that million dollar smile, little do they reveal about all the slogging hours of hard work and willpower that goes into getting those picture-perfect looks. If you want to look like a celeb, you need to spend more time at home and in the gym, rather than at cosmetic stores. Celeb beauty secrets are not skin deep.

Shetty swears by her power yoga. Ever noticed how her skin glows even without makeup. Megan Fox, the Hollywood beauty, goes horseback riding and swimming for that stunning flawless skin. Exercise is not just for the body. It makes you healthy from within, which shows on your face. Every celeb slogs in the gym, although they love to say, "I've got a great metabolism naturally."

Exercise, sleep, low-fat balanced meals, and generous amounts of fluids bring a nice glow on the skin.

Sleep For celebs, sleep comes on top of their priority list, despite their crazy shooting schedules. They make it a point to catch quality sleep because it helps them counter the ill effects of chemical makeup that they apply every day. When you sleep, your body repairs its damaged tissues and reinstates your health quotient. Make it a point to get at least 6 to 8 hours of sleep everyday if you want the celeb kind of glow on your skin.

Diet Did you know that celebs carry lunchboxes to the sets where they shoot? Although they slurp with pleasure as they lick the sauce on that sinful burger in commercials; celebs actually stay away from such foods in real life. Most of the celebs, including the ones in Hollywood, are known to carry lunch from home. A celeb's diet depends on the kind of regime they are on. Since they put on a new look for every movie, they follow different diet regimes accordingly. For instance, when Kareena Kapoor was working to get a size zero, she followed a strict low-fat five meals per-day routine which not only helped her lose weight, but also brought the glow and firmness on her skin. Low-fat balanced meals and generous amount of fluids bring a nice glow on the skin.

Exercise improves metabolism, and improves blood circulation. Collectively, these activities make your skin glow with a renewed sheen. Shilpa

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Exercise

Our Banks: Bleeding or Battle Ready?

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WHY CHASING PERPETUAL ECONOMIC GROWTH IS HIGHWAY TO DISASTER INDIA’S RS. 4 LAKH CRORE OVERSEAS ECONOMY THE HOTTEST JOBS NOW FACEBOOK COULD MAKE YOU MENTALLY ILL WHY PROMOTER PAYCUTS IS A JOKE POWER TIPS FOR CREDIT CARDS HTC ONE VS. SAMSUNG S4 IS FORD ECOSPORT WORTH THE HYPE? ARUNDHATI’S ROMANCE THAT JAIRAM RAMESH HATES

Chemmanur International Jewellers is soon teaming up with Diego Maradona and Lionel Messi to launch branded jewellery internationally in their name, through a franchising route.

WHY BOBY CHEMMANUR IS LIKE NO OTHER

Seasonal Magazine

INTERVIEW

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hen we met him, he was relaxing at a spa near Kochi International Airport. It has been only days since he returned from Hong Kong and that day he was flying again, first to Chennai. When quizzed about his favourite brand, he would only smile and point to his own attire - a white mundu or dhoti worn with ankles showing and a simple white very short sleeved top, saying, “this is the brand I am carrying now since the last few years”. Yes, Boby Chemmanur has surely evolved, from his meticulous suites a decade back, to classy ethnic wear that he sported around 5 years back, to something stunning for its simplicity. This tall youthful looking man hails from a family synonymous with traditional jewellery business in Kerala, but comes across as symbolizing everything untraditional. He has brought in none other than Diego Maradona as his Chemmanur International Jewellery’s brand ambassador, and is now teaming up with Maradona and Messi for another venture. He is a kung fu fighter, a sharp shooter, a high jumper, a former footballer, and a fitness freak who runs 10 kms every day. Under his dynamic leadership, Chemmanur International has grown into an international jewellery chain with 27 branches in India, UAE, & Kuwait, clocking Rs. 3000 crore in turnover. And despite all this, he wants to be remembered for his philanthropy rather than his business achievements. Seasonal Magazine in conversation with Boby Chemmanur regarding the achievements and ambitions of the jewellery chain he heads.

et us start with what is latest from Chemmanur International Jewellers. Is it a new showroom overseas or are you planning any new initiatives? Well, the latest is that Chemmanur International is teaming up with Diego Maradona and Lionel Messi to launch branded jewellery internationally in their name. Another unique feature of this venture is that it will be largely offered on a franchising route. The modalities are being worked out with them, and the franchise framework is being set up now. You can soon expect a formal announcement. Chemmanur International Jewellers seems to have accelerated much in the last few years. Can you take us through a brief history? Our family, Chemmanur hails from Varanthirappilly in Thrissur District. We have been in the gold business there, since 1863, from the days of my greatgrandfather. The faster growth that you mention is more than a few years old, maybe around a decade old when I took over the reins from my father. I decided to expand much faster than before, by bringing in several innovations, and it clicked.

How many showrooms do you presently have? And how many of them are abroad? Chemmanur International has 27 showrooms presently, including 4 abroad. We have two showrooms in Dubai and two in Kuwait. We are present in some of the largest Indian cities like Mumbai, Chennai, & Coimbatore, as

Seasonal Magazine

Chemmanur as a brand name is shared by two or more gold retailing groups. Are they in any way connected with Chemmanur International? We are relatives, some of them are my uncles and cousins, and their presence is more in Karnataka. Business-wise there is no connection, and Chemmanur International is fully owned by me.

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well as in key Kerala cities like Kozhikode, Thrissur, Kannur, & Palakkad. Chemmanur International also has a showroom in the tourist town of Ooty. All our other showrooms are in tier-2 towns of Kerala like Chavakkad, Chemmad, Kalpetta, Koyilandy, Kuttyadi, Manjery, Mannarkad, Nilambur, Ottapalam, Bathery, Thalassery, Tirur, & Vadakara. That shows a very broad targeting strategy. Can you elaborate on it? Yes, our target group is wide, and specifically speaking we address customers from upperclass to lower middleclass. We can’t rely fully on upperclass customers, as their brand loyalty is low and they can be quite fickle in opting for a showroom. In contrast, middleclass and lowerclass customers are much more loyal to good products and good services.

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How do you select which all cities to put up your new showrooms? We study the cities and their gold markets in depth. If we are convinced about a particular city or town, that we can derive long-term value from it, we might start looking for space there. For example, all the tier-2 towns in Kerala where we have presence are booming towns for one reason or the other. There are hundreds of such towns across Kerala and South India, and they figure prominently in our vision for 2020. As you are aware, the perfect space is also very important in this business. There are also cities that are traditionally our strongholds like Kozhikode and Thrissur, where we already have two showrooms each. Our Kozhikode showrooms are at Mavoor Road and MM Ali Road.

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Which are the cities that are currently in your horizon, where you are scouting for space? Currently, we are actively pursuing an overseas expansion spree. We have made multiple visits and zeroed in on

Malaysia and Hong Kong. In fact, I am just back from a visit to Hong Kong. Negotiations regarding space is going on there.

“

There is only one secret to success, and that is follow-up or perseverance. And without knowing this secret most ordinary people fail to fulfil their ambition. But only if they had followed it up again and again endlessly, they too would have been successful. Successful people who have once cracked this code, on the other hand, apply this principle in all their subsequent endeavours and achieve tremendous success.

”

Which is your largest showroom presently? Well, our Kozhikode showroom at Mavoor Road and our showroom at Kannur that Diego Maradona inaugurated are among our largest around 20,000 sq ft each. Our Kannur showroom is an independent fourstorey building. Earlier in this interview you mentioned several innovations that you brought in. Can you walk us through some of these? Yes, definitely. Most of these innovations was about ensuring quality. We were the first jewellery group in Kerala to have both ISO for customer service and BIS Hallmark for product quality. We were the first to introduce Karat Meter to assure customers about the purity of gold we sell. Until then gold quality offered by many retailers was doubtful, if not spurious. Both these innovations were widely

Speaking about brand ambassadors and celebrities, you do have an edge, being associated with so many leading celebrities. What is the motivation or rationale?

â&#x20AC;&#x153;

Chemmanur International is teaming up with Diego Maradona and Lionel Messi to launch branded jewellery internationally in their name. Another unique feature of this venture is that it will be largely offered on a franchising route. By 2020, we are planning to go from 27 showrooms to 100 showrooms, and from Rs. 3000 crore turnover now to Rs. 25,000 crore.

â&#x20AC;?

The reason is simple - people are always interested in celebrities. For a new shop, it is also very important to get the location registered in peopleâ&#x20AC;&#x2122;s minds. That is why almost all our showroom inaugurations and relaunches after renovations were done by celebrities, from our very start, years ago. We started this trend in Kerala, and now this has become the in-thing, and many celebrity-friends privately appreciate me for starting this trend that has given them an additional income apart from shooting. We have used celebrities of all statures depending upon the city and the intended target customers. Some of them are Diego Maradona, Salman Khan, Mammooty, Mohanlal, Suriya, Asin, Kavya Madhavan, Fahadh Fazil, Tamanna, Anushka Shetty, Samvrutha Sunil, Jayam Ravi, Priyamani,

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followed by large retailers, later. Then there were innovations we brought in that facilitated and empowered customers. We were the first to introduce gold purchase scheme, advance booking, diamond purchase scheme, credit facility on gold purchase etc. On the marketing front, Chemmanur International was the first to use brand ambassadors, at a time when using celebrities for even showroom inaugurations was not considered by any jewellery or retail groups. We think that all our innovations have made lasting transformations to this industry.

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Kunchacko Boban, Parvathy Omanakuttan, Emraan Hashmi, Navya Nair, Prithviraj, Jyotirmayi, Rima Kallingal, Namitha, and Shwetha Menon. We have also used famous cricketers including Yuvraj Singh, Sreesanth, and Pak player Abdul Razzaq. Your biggest catch has been Maradona, who is also your brand ambassador. What led to that? Despite his towering stature, is he a real fit for a jewellery chain? Well, the real reason is that sports, especially football, has been very close to my heart, having been a state-level player myself. I enjoy playing and watching most sports, and adept in high-jump, long distance running, shooting and kungfu. I am also a fitness freak who runs 10 kms everyday. I even ran the recent Mumbai Marathon. So, getting somebody like Maradona to

represent my brand came naturally to me. It is also a good fit as we are both a local jewellery chain in Kerala as well as an international jewellery chain with presence in Middle East, and opening soon in Hong Kong and Malaysia. Coming to a totally different aspect of the business, how do you view the recent reversal from the long running bull run in gold? I think it is only a short-term correction. Any commodity be it gold, or stock, or even land, will experience such a correction during extended bull runs. The long-term story is intact. In fact, it is not just my opinion, but that is how the gold market has been behaving after the fall.

“

My objective in life is pure love which is nothing but service to the downtrodden and unfortunate, with no expectations in return. Also, with no kind of partiality or considerations like religion, cast, creed, or affiliations. All our CSR and all my philanthropy springs from that pursuit of pure love. Mother Theresa has been a huge inspiration for me.

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”

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But hasn’t it affected your NBFC business? You have a sizeable gold loan business… Some impact is there, of course. But even that business is not going away, just because gold has corrected. Demand for gold loans is still there, will always be there. Margins there are much higher than in gold retailing, and therefore there is room to absorb changes. Besides that, our NBFC is into other businesses too. We are already into money transfer business, and will be starting forex services soon. This NBFC now has around 105 branches, all in Kerala. Design is a major aspect of your business. How do you cater to market’s ever changing design needs? Chemmanur International is one among the few jewellers who still has major manufacturing facilities. We have two manufacturing units, one in Kuwait, and the other in Thrissur, Kerala. We are also in constant touch with the pulse of the market, and that enables us to deliver designs that customers are looking for. But having said that, let me also admit that as the market matures and matures, a greater portion of every jeweller’s portfolio is being dominated by the same suppliers and the same designs. So, the business is differentiated by not just design, but on aspects like low making charges, excellent customer service, gold

purchase schemes etc. From our very beginning, we have been faring well on all these aspects.

Boby Chemmanur is today as much known for his jewellery chain as he is known for the Group’s CSR or philanthropic activities. What is the motivation? I have been fortunate enough to see and experience what the world has to offer, at a much younger age than most of

my peers. And having gone through all that, one’s conviction changes. One starts looking for what is really enduring, and my search took me to the concept of pure love. It is nothing but service to the downtrodden and unfortunate, with no expectations in return. With no kind of partiality or considerations like religion, cast, creed, or affiliations. All our CSR and all my philanthropy springs from that pure love. Mother Theresa has been a huge inspiration for me. We have established Chemmanur LifeVision Charitable Trust that runs ambulance services, blood bank, free rice supply, educational scholarships, farmer assistance etc. We are also very active in building homes for the needy, with an objective of building at least one home for every showroom w e launch. I have reached a particular stage of life where philanthropy has

become the real objective, and business has become the required resource or means for that. You are a very successful person. Any success secrets to share with our readers? There is only one secret to success, and that is follow-up or perseverance. It is a closely guarded secret by the successful. And without knowing this secret most ordinary people fail to fulfil their ambition. But only if they had followed it up again and again endlessly, they too would have been successful. Instead, they change their goals midway or look elsewhere, eventually failing there too as they haven’t understood this secret. Successful people who have once cracked this code, on the other hand, apply this principle in all their subsequent endeavours and achieve tremendous success. I don’t think there is anything more to success.

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You mentioned a vision for 2020. What would be that for Chemmanur International? And any diversifications on the anvil? Currently we are doing Rs. 3000 crore turnover from 27 showrooms. By 2020, we want to scale that up to 100 showrooms across India and the world, with a turnover of around Rs. 25,000 crore. Regarding diversifications, real estate development is something that I might look at in the future.

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HIGHER EDUCATION

Why B-Schools are Getting Ineffective

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Their curricula are increasingly out of step with the corporate demand for innovation-led, creative thinkers

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ecent news reports indicated that 5 to 15 per cent of the class of 2013 had not been placed until mid-March across the Indian Institutes of Management (IIMs), old and new, as a result of the economic downturn and increased batch sizes. The economic downturn and bigger batch sizes have undoubtedly contributed to this problem, but the question is whether this is a historic first. It is probable that the IIMs have never had such an experience before, even though they have faced economic downturns and progressively increasing batch sizes over the years. They find themselves in this predicament despite the fact that they call a larger number of companies to campus. Prudence suggests that these numbers be treated as a warning signal. Therefore, it's time for deeper introspection. One would do well to ask, "What is making a difference now?" Are India's business schools out of step with the realities of business? Arguably, in an environment in which companies are on the lookout for innovation-led growth, it is quite challenging to prepare students for appropriate careers in today's increasingly complex organisations. Testing and crafting new solutions have become the new needs, which require

that capabilities, tools and processes are constantly evolved to stay ahead. In such an environment, how relevant is the age-old model of a curriculum that starts with disciplines, moves to functions and ends with broad, integrated topics? Times have changed, but the tenor of B-school programmes has not. A plethora of compulsory courses taught during the first year which recruiters often consider the backbone of the programme - continues to assume a state of equilibrium. The curriculum of yesteryear, despite some tinkering, remains grounded in the belief that economies and markets are inherently stable and have no internal "weather". This has resulted in the propagation of ideologically inspired theories, rejecting corporate behaviour in terms of choices, actions and achievements of individuals. A scientific approach is adopted to try and discover patterns and laws, replacing all notions of human intentionality, with a firm belief in causal determination for explaining all aspects of corporate performance. In other words, students are led to believe that business is reducible to a kind of physics. That is to say, even if individual managers play a role, it can safely be taken as determined by the economic, social and psychological laws that inevitably shape people's actions. The message that it conveys is human action is, or should be, rational in the sense of being derived

The ideologically inspired theories and model-based anticipation of consequences are increasingly coming into question. The systems one tries to model and analyse today, using the technology of rationality, are substantially more complex than can be comprehended by either analytical tools or the analyst's understanding.

practices and lack of effectiveness of management education in the business performance of students.

What are the reasons? First, the economic and market equilibrium assumed in a majority of business curricula has become insupportable. A series of interrelated forces have combined to transform business environment. These include: rapid advances in information technology, emerging technologies, deepening of globalisation, shifting industry boundaries, changing customer demands, regulatory changes, rapid shifts in business practices, increasing complexity and uncertainty and so on. These and related changes are placing new stresses on organisations and changing the paradigm of success. The

focus on large corporations is now lopsided since entrepreneurial start-ups and small businesses have become the hidden champions of the modern economy. Second, the ideologically inspired theories and model-based anticipation of consequences are increasingly coming into question. The systems one tries to model and analyse today, using the technology of rationality, are substantially more complex than can be comprehended by either analytical tools or the analyst's understanding. Also, the consequences are often obscure - they are confounded by inadequacies of information and biases introduced by desires, prejudices and limitations of experience. Therefore, the old organisational and strategic models that were once staples of education no longer apply in today's environment.

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from a model- based anticipation of consequences. This technology of rationality is propagated in the schools with the help of three components: abstraction, data capture and decision rules. In abstraction, the focus is on models of situations that identify sets of variables, their causal structures and sets of action alternatives. Data capture involves capturing histories of organisation and the world in which it acts. Decision rules consider alternatives in terms of their expected consequences from the point of view of the organisation's values, desires and time perspective. Many have voiced their concern over this approach, raising questions about the utility of current management research and education. They point to the lack of impact of management research on management

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CEO WATCH

How Google Founder Lost His Voice to a Cold! For the first time in nearly a year, Google Chief Executive Officer Larry Page is publicly addressing a question about his personal health: why he lost his voice and continues to speak more hoarsely than is normal. n a post to his page on the social network Google+, Page recounts his 14-year history with vocal cord nerve strain and says that he is slowly recovering and able to “do all I need to do at home and at work, though my voice is softer than before.” Page also writes that he is making a personal donation to fund a “significant research program” into vocal cord nerve function at the Voice Health Institute, based in Boston.

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The revelations come almost a year after Google Executive Chairman Eric Schmidt told investors that Page would miss several company events, including annual meetings for shareholders and developers, because of his voice condition. Doctors have ruled out cancer (which can in rare instances develop in patients with Page’s type of thyroid disorder) as a cause for Page’s vocal condition, according to people at Google familiar with his treatment. (They asked not to be named because the details aren’t public.) One of them says Page uses a microphone, even for small staff meetings of a dozen people.

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The Google CEO’s hoarse voice emerged as a serious problem after he came down with a cold last summer. In his post, Page writes that the cold limited the movement of one of his vocal cords; the other cord had been similarly paralyzed when he caught a cold 14 years ago. Page adds that his ability to exercise strenuously has also

been “somewhat reduced” because vocal cord nerve issues can affect breathing. “That said, my friends still think I have way more stamina than them when we go kitesurfing,” he writes. “And Sergey says I’m probably a better CEO because I choose my words more carefully. So surprisingly, overall I am feeling very lucky.”

It can alter the sound of a person’s voice, causing hoarseness, and also lead to difficulties breathing and swallowing.

Page is not revealing the size of his donation to the Voice Health Institute, but a person familiar with the donation says it exceeds $20 million. The project he is funding will be led by famed surgeon Steven Zeitels, from the Harvard Medical School and the Massachusetts General Hospital Voice Center, who operated on the vocal cords of singer Adele. Here’s Page’s post in its entirety:

About 14 years ago, I got a bad cold, and my voice became hoarse. At the time I didn’t think much about it. But my voice never fully recovered. So I Page says doctors still do not know the went to a doctor and was diagnosed with exact reason for the lasting damage to left vocal cord paralysis. This is a nerve his voice, though in his post he discloses problem that causes your left vocal cord that he also has Hashimoto’s to not move properly. Despite extensive Thyroiditis, a rare autoimmune disorder examination, the doctors never that causes chronic inflammation in the identified a cause-though there was thyroid. “It is possible that has speculation of virus-based damage from something to do with it, or that it is just my cold. It is quite common in cases virus related, or some other like these that a definitive unknown cause,” Page writes. Sergey says cause is not found. Hashimoto’s, which typically I’m probably a While this condition never better CEO really affected me-other than affects middle-aged women, because I can be treated with hormonehaving a slightly weaker choose my replacement pills such as voice than normal which Abbott Laboratories’ (ABT) words more some people think sounded a Synthroid. Very rarely, thyroid carefully. little funny—it naturally cancer may develop, according raised questions in my mind to the U.S. National Institutes of Health. about my second vocal cord. But I was Vocal cord paralysis occurs when one told that sequential paralysis of one or both of the elastic bands of muscle vocal cord following another is tissue in the voice box fail to open or extremely rare. close properly. Vocal cords normally Fast forward to last summer, when the function by opening when somebody same pattern repeated itself-a cold breathes, closing when they swallow, followed by a hoarse voice. Once again and vibrating to enable speech. The things didn’t fully improve, so I went condition can be caused by an injury to in for a check-up and was told that my the head, neck, or chest; by lung or second vocal cord now had limited thyroid cancer; or by a viral infection.

movement as well. Again, after a thorough examination, the doctors weren’t able to identify a cause. Thankfully, after some initial recovery I’m fully able to do all I need to at home and at work, though my voice is softer than before. And giving long monologues is more tedious for me and probably the audience. But overall over the last year there has been some improvement with people telling me they think I sound better. Vocal cord nerve issues can also affect your breathing, so my ability to exercise at peak aerobic capacity is somewhat reduced. That said, my friends still think I have way more stamina than them when we go kitesurfing! And Sergey says I’m probably a better CEO because I choose my words more carefully. So surprisingly, overall I am feeling very lucky. Interestingly, while the nerves for your vocal cords take quite different routes through your body, they both pass your thyroid. So in searching for a cause for both nerves that was an obvious place to look. I was diagnosed with Hashimoto’s thyroiditis in 2003. This is a fairly common benign inflammatory condition of the thyroid which causes me no problems. It is unclear if this is a factor in the vocal cord condition, or whether both conditions were triggered by a virus.

Finally, we’ve put together a patient survey to gather information about other people with similar conditions. As it’s fairly rare, there’s little data available today—and the team hopes that with more information they can make faster progress. If you have similar symptoms you can fill it out here: voicehealth.org/ip

Larry Page

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In this journey I have learned a lot more about voice issues. Though my condition seems to be very rare, there are a significant number of people who develop issues with one vocal nerve. In seeing different specialists, I met one doctor—Dr. Steven Zeitels from the Harvard Medical School and the Massachusetts General Hospital Voice Center— who is really excited about the potential to improve vocal cord nerve function. So I’ve arranged to fund a significant research program through the Voice Health Institute, which he will lead. Thanks a bunch to my amazing wife Lucy, for her companionship through this journey and for helping oversee this project and get it off the ground. Also, thanks to the many people who have helped with advice and information many of whom I have not had a chance to thank yet.

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CAREERS

The Hottest Jobs Now

If you want a fat pay cheque, specialise in these particular fields of work.

henever it is possible, a boy should choose some occupation which he should do even if he does not need money," said William Lyon Phelps, an American author and scholar. However, few will agree with this today because the cost of education is increasing manifold. And, there is no denying that money is a big motivator for employees. Therefore, it is not surprising that job seekers use salary or pay as a benchmark before picking and applying for jobs. Jobiness, a job portal, says a number of IAS officers have left their jobs for higher pay scales in the private sector. "Right now, salary scale is the biggest motivator driving the youth in India," adds the portal. After salary, job stability is the next most important parameter to look for. Recently, a media report stated mutual fund managers were preferring job security over fat pay cheques. So, which are some of the best paying jobs in India? E Balaji, managing director and chief executive officer of Ma Foi Randstad, says professions like investment banking, technicians, analytics, social media specialist, and mobile technology are currently the top-paying jobs.

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"The roles offer good potential to learn and grow. Nascent fields like analytics and social media specialist help candidates set a strong foundation for growth in future," adds Balaji. If you switch to any of these professions, you can expect a premium or a pay rise in the range of 30 to 40 per cent on an average, say experts. If the job-change is at a mid or senior level position, then the increase can be as high as 60-70 per cent.

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TECHNICIANS Profile: A technician's job is the most preferred and popular job among this category. Factory floor workers and

technicians for automobile and manufacturing units are in demand. Additionally, one doesn't require experience before applying for this job.

Qualification Required: While not every person can be a B-school passout or a double graduate, there are good paying jobs for diploma and HSC pass candidates, too. Experts say women candidates, too, prefer these jobs. Reason: Some women have to leave their education half way, but can still find a job here, as the qualification requirements are not tall.

Why it is in demand: Many automobile and manufacturing companies, especially multinational companies, are recruiting women for their manufacturing units. In addition, some of these companies are expanding their manufacturing capacity, which automatically creates more demand in this sector.

Salaries: A senior level ITI (industrial training institute)/diploma technician can expect around Rs 5 lakh annually. "Of the roles mentioned above, ITI technicians witness maximum attrition. This is because the rate of growth for ITI technicians is slower when compared to other roles. Hence, there is an inclination to shift jobs to grow faster," adds Balaji of Randstad. It is observed that candidates monitor their growth path for two years on an average, and switch jobs accordingly.

ANALYTICS Profile: Analytics goes beyond analysing data and the primary goal here is to take business decisions based on data. Job profiles such as actuarial in insurance and fraud detection, which are part of analytics, are in demand. Here, one needs to understand the gaps in the business and use this knowledge as a guide to derive insights and make necessary recommendations to the company.

Qualification Required: Graduation in arts - any specialisation such as economics, statistics - or a bachelors in science or a postgraduation in statistics. Graduates in mathematics, statistics or economics are also preferred.

Why it is in demand: Within this broad definition, actuaries in insurance and managers from the e-commerce or online sectors are in demand as of now. The online sector is growing at 35 per cent annually due to more number of start-ups across segments such as travel, auction, fashion, lifestyle and home needs. Middle management professionals are attracted as it provides exposure to modern retailing and competitive compensation.

Salaries: A candidate at the entry level on an average can draw around Rs 5 lakh a year, whereas a mid-level candidate gets around Rs 9-12 lakh annually. The sector is much sought and the jobs offer salaries up to 50 per cent higher than, say, a software engineering job. Engineering graduates are preferred because of

MOBILE TECHNOLOGY Profile: Any job related to the mobile

Hence, more of such jobs are getting created with companies that can provide technology to access it through smartphones and tablets.

increasingly taking peer-review seriously. So, monitoring the social media and online space will be a key area for businesses to build products and tweak their services.

technology platform is hot. These can be jobs to do with mobile architecture or development of apps or other valueadded services.

Salaries: A candidate who has experience of four to six years can expect something in the range of Rs 15 lakh and upwards.

Salaries: A mid- and senior-level

Qualification required: Both hardware

SOCIAL MEDIA SPECIALISTS

INVESTMENT BANKING

Profile: With social networking sites like Facebook, LinkedIn, and Twitter in vogue, there is lot of scope for jobs in this sector. The jobs on offer range from content management to sales and marketing specialists to software and hardware related jobs.

Profile: Investment bankers advise their clients on issues of financial organisation. They recommend and execute strategies for mergers and acquisitions. "The work also requires lots of financial analysis. And the demand for this profession in India has taken off tremendously in 8-10 years. It is regarded as a top-notch job and a lot of B-school pass-outs eye this profession," says Sangeeta Lala, vicepresident at TeamLease.

and software skills are required. While there are no specific courses, there is software one can learn, such as MySQL, the back-end for database programming, or PHP, a programming language. "It's possible that in one or two years, colleges could offer courses and programmes catering to those interested in such jobs," says V Suresh, executive vice-president and national head, sales, Naukri.com.

Qualification required: Candidates with

Java will also help those interested in learning how to develop apps. However, having a technical background will help in such jobs. But creativity also helps. For instance, if you are in the construction industry and have an interest in vastu, you can create an app that will allow people to know the right kind of vastu for their homes.

experience in managing digital community and social media platforms, web analytics tools and digital advertisement programs would be preferred. Graduation or postgraduation from any field could help. Technology, finance, media, e-commerce, automobile, fast-moving consumer goods, and lifestyle product companies are a few sectors open to hiring specialists for social media.

Why it is in demand: Right now, there

Why it is in demand: Globally, brands

are not too many people with expertise in this field. The next generation will want to access everything through smartphones or tablets and the use of desktops and laptops will come down.

are going social and customers and stakeholders are also openly expressing their views about brands. Consumers prefer taking the online route for suggestions and buying and are

employee can easily draw salaries staring from Rs 6 lakh.

Qualification required: Personal and strategic skills are vital to investment bankers as well, as they serve as strategists for their clients helping them develop their financial plans. "Usually, someone who has specialised in or holds a masters in finance. A chartered accountant and certified financial analyst are also preferred for this job profile. While it demands long working hours, a person who has just started in this field can easily get anything in the range of Rs 12-15 lakh per annum," adds Lala of TeamLease.

Why it is in demand: While the job profile and the compensation looks very attractive, every job has its own challenges. One common challenge across all roles in the current environment is to stay above the crowd. Reason: "The market is flooded with 'me too' candidates and this is leading to people becoming 'commodities', without any premium. To overcome this challenge, it is highly recommended for candidates to qualify and specialise in a particular field of work," adds Balaji of Ma Foi Randstad.

Salaries: Salaries paid for these professions and positions in metros will be comparatively higher than in other tier II and tier III cities. However; the deviation in the base salaries offered isn't much. Salaries are in the range of Rs 12-15 lakh at entry level.

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their problem solving skills.

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WAR

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IS JOE GLENTON INSPIRED BY ORWELL AND MENEN?

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The troubling questions ex-soldier Joe Glenton raises are centuries old. At least as old as the rise of the British Empire that was ironically democratic and aggressive - to countries like India - at the same time. From what Joe Glenton has shared in recent interviews and in his just-released book, 'Soldier Box', it looks like he is raising the same questions raised satirically by celebrated thinkers George Orwell and Aubrey Menen during the last century.

By Carl Jaison

Typical of any extraordinary character hogging the limelight, Glenton marshalled his military experiences and acts in an autobiographical account titled ‘Soldier Box‘, which hit the bookstores recently , in which he questions the humanitarian obligation of the Crown to the people of Afghanistan. He mustered the courage and audacity to oppose his former employer, the British Government, for their unethical ideology of sending unwilling troops to seize control of an already terror-stricken nation. The war resistor launched anti-war demonstrations after his jail release demanding that the troops be brought back home. Though he created quite a positive stir among a section of civilians to support the conscripted soldiers’ cause, Glenton is being viewed by the government as a ‘conscientious objector’ who faces serious charges of going AWOL (absence without official leave) and briefing media during press conferences without prior permission. Joe Glenton was disenchanted both by the objective of exercising military supremacy over a war-ridden state and the continuance of the war which the government conveys, as he puts it, was “to help young girls get education and build infrastructural facilities” in

Taliban-dominated regions. However Glenton smelled an imperialistic plot. “Let’s look at probability. Does the US, with Britain in tow, go to Afghanistan to help women go to school or is it because there is, for example, 90 billion barrels of oil in the Caspian?” Such remarkable revelations coming from a former British soldier implicates a possible conflict of interest between what a soldier is expected to do and what a soldier wants to do. What Joe Glenton wishes to trash away is the hackneyed and clichéd justification of conquering economically and socially deprived lands by imperial powers. Glenton maintains with surety that soldiers on duty too have a mind of their own, rather than blindly following the commands of their superior officers. There is a misconception that once an imperial soldier dons the role of a law enforcer in a lesser-progressive society, he sells his personalized liberty and free-thinking ability and is thus conditioned to executing his duties under the garb of a stereotypical justification ie to bring law and order to lawless lands. This is precisely the reason why Joe Glenton is not a rebel, but a self-manumitted individual. The underlying notion of an imperialistic imperative couldn’t hijack the psyche of a person like Glenton, who goes by what his heart says. As defenders of the Crown, British soldiers are handsomely appreciated for their foreign assignments but Glenton believes that serving as guardians of the Queen’s sanctity is simply a veil masking a jingoistic underpinning. He also commented recently on Thatcher’s funeral saying “war is not a fit theme for a funeral”, recalling how the Iron Lady used Falklands war for winning the elections. What Joe Glenton is saying is nothing new. Great minds like George Orwell and Aubrey Menen had interesting takes on this same vexing issue that has always faced soldiers. Two short-stories written during the height of imperial rule over the Indian sub-continental regions - one of them set in India -‘Dead Man in the Silver Market’ by Aubrey Menen - and the other written by George

Orwell as a British officer posted in Burma - ‘Shooting an Elephant‘ - show great parallels with what Glenton has been daringly saying. At conflict is longheld imperial views and the commendable and innate desire of certain officers to relinquish their position of bondage-labour exploited by the regal government. Aubrey Menen is well-known for his satirical and humorous approach to writing which is testified by the first sentence of Dead Man in the Silver Market - “Men of all races have always sought for a convincing explanation of their own astonishing excellence and they have frequently found what they were looking for." The story is an ironical masterpiece in which the protagonist, a young British officer, justifies the “overpowering of the native population directed towards empowering their senses”. He feels that it was only in their good interest that they were subjected to imperial rule as they didn’t possess the natural capability for governing themselves. The irony however lay in the fact that this officer, in his childhood days, was a mischievous kid who often broke the rules thereby entailing police action but

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he story of Joe Glenton is a refreshing detour from the normal state of affairs. From serving as a British Army Officer stationed at Afghanistan to being labeled as a “coward” and “malingerer” by his senior military officers and countrymen alike, Glenton has witnessed mind-boggling setbacks and adversities in a short career spanning close to only half a decade in service. The 31-year old attracted widespread attention when he publicly refused to render military service in the war-torn Kandahar in Afghanistan, where he earlier discharged his duties as a logistics specialist and driver since 2006. His anarchist stance resulted in him being jailed for 5 months in a military prison after he refused to serve a second tour to Afghanistan on moral grounds.

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TECHNOLOGY

What Joe Glenton is saying is nothing new. Great minds like George Orwell and Aubrey Menen had interesting takes on this same vexing issue that has always faced soldiers. Two short-stories written during the height of imperial rule over the Indian subcontinental regions - one of them set in India -‘Dead Man in the Silver Market’ by Aubrey Menen - and the other written by George Orwell as a British officer posted in Burma - ‘Shooting an Elephant‘ - show great parallels with what Glenton has been daringly saying.

Seasonal Magazine

due to the compulsory military conscription he was required to render by virtue of the government’s order that all able-bodied men be summoned for immediate military obligation. And he is posted in India to maintain law and order. The officer is clearly driven by an imperial understanding of how governance and administration is “bred in yer bones“, which according to him the natives lack.

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In ‘Shooting an Elephant’, Orwell takes a completely different stand as opposed to the above British officer’s ‘ideology‘. He too works as a law-enforcing officer

but he condemns the British suzerainty and is longing to return back home from this forceful occupation. He awaits the day when the British Empire is coerced to reinstate indigenous rule over the conquered regions stemming out of nationalist struggles. However, the perspective of Orwell is quite prudent unlike his contemporaries. He feels that the “aim of British control was a wholehearted effort not to be laughed at“, an intention which finally undermines his authority as an officer.

as he puts it, “was what he would have done if not in uniform“. To put it plainly, what the subjects want from him and what he is permitted to do as an officer is the very same thing - the act of shooting the elephant. And he succumbs to the crowd-pressure owing to his requirements as an ‘officer’ which ultimately prompts him to shoot the elephant. Orwell later explains that when an officer assumes responsibility of maintaining ‘law and order‘, it is his own freedom which he parts with.

An elephant runs amok after it experiences the ‘musth’ (sexual urge) leading to the death of a native man. Orwell is faced with the task of containing the mad mammal. He is followed by a large crowd as he approaches the location where the elephant had been spotted. Orwell realizes that the elephant had calmed down and turned virtually harmless, as it stood at a distance munching on foliage. Orwell encounters a dilemma. The crowd followed him eagerly expecting that he would certainly shoot down the elephant. As an officer, he had every right to fire a shot at it because a human death had been recorded.

Neither does Glenton justify British parentage over Afghanistan nor does he allow his mind to remain chained in an imperial lock. Joe Glenton has indeed taken the world by surprise. It is by no means an anarchistic tactic, but an attempt to peel off and expose the longconcealed imperial basis of domination which in a rhetorical sense sounds benevolent.

However, his conscience beckons him to refrain from killing the beast, which

The loud cries of calling back the troops are fast gaining momentum, which has put Britain and USA in a fix. Joe Glenton has rightfully understood the futility of just following orders, and it is about time that these imposing powers contemplate on their rightful intentions rather than getting exposed for their dubiousness.

HEALTH

Solve Common Skin & Hair Problems Now

Over the last decade, skin problems have become very common. Most of us succumb to hectic schedules, lead stressful lives and live in polluted environments. What you need to remember is that each of us is different, so our susceptibilities tend to differ. Dr Rekha Sheth is a leading cosmetic dermatologist in Mumbai. She is founderpresident, Cosmetology Society of India and runs Yuva, a successful chain of skin clinics. Here she answers common questions: f you're going through skin problems, the most important thing you can do to tackle these problems is to give yourself time and maintain a healthy lifestyle. Simply put, exercise regularly and eat healthy.

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PROBLEM: DULL SKIN AND PIGMENTATION

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Pollution and stress combined with hormonal imbalance can lead to patchy skin. Most often, dull or patchy skin progresses to pigmentation or dark brown patches on any part of the face. TACKLE IT: Start by using a mild face wash, instead of soap. If your skin feels dry or stretched after using a cleanser, it's possible that you're not using the right product. You may consult a dermatologist to determine your skin type and choose products better. Dry skin is always more susceptible to darkening as well as to developing rashes. Use a sunscreen with SPF 30 as well as green tea or pomegranate extracts to tackle UVB rays. In the summer months, use a broad-spectrum sunscreen even if you're indoors since UVA rays can penetrate the dermal layer of the skin easily. Rub on a moisturiser at bed time as our skin cells repair and regenerate when we sleep. Look for liquorice extracts, arbutin, mulberry extracts and aloe vera as they help soothe and brighten skin.

PROBLEM: ACNE AND PIMPLES These occur due to a hormonal

imbalance and one of the most common signs is sprouting of excessive whiteheads and blackheads. While this imbalance is normal in the teenage years, in later years it may signal an underlying medical issue. The commonest cause is polycystic ovarian syndrome (PCOS), where your ovaries get swollen leading to pimples, acne and hirsutism. It's essential to start treating acne as early as possible in order to avoid scars, blemishes and marks. TACKLE IT: Cleanse your face thoroughly with a product containing salicylic acid or glycolic acid. Use a water-based sunscreen since pimples and acne tend to leave marks as blemishes tend to get worse due to sun damage. Apply a gel containing salicylic acid or benzoyl peroxide on the affected areas, after consulting a dermatologist. Remember, anti-acne products can lead to excessive dryness. Give them a break from time to time and use a mild, oilfree moisturiser once a day.

PROBLEM: HAIR-FALL

Dr Rekha Sheth and Genelia D'souza

If you're going through skin problems, the most important thing you can do to tackle these problems is to give yourself time and maintain a healthy lifestyle. Simply put, exercise regularly and eat healthy.

On an average, our scalp has about 1,00,000 strands. Each of these grow for 3 to 5 years, rest for 3 to 5 months and are then shed off and replaced with a new strand. We normally tend to shed 30 to 60 strands of hair every day. If you are losing 100 to 200 hair each day for more than 8 weeks, consult a dermatologist. In 98% of cases, the hair-fall is due to internal causes such as deficiencies, bowel and urinary infections and hormonal (like thyroid) imbalances. Rapid weight loss, diabetes and iron deficiency can also lead to hair fall and breakage. TACKLE IT: Start by eating right-load up on proteins like skimmed milk or yoghurt, (2 to 3 bowls). Eat green veggies, salads and tofu regularly. Choose hair care products based on your hair type. Shampoo your mane at least thrice a week. Make sure you rinse the shampoo from your hair thoroughly. Check with your GP for iron and Vitamin B12 deficiency so that she can advise adequate supplements.

Oommen Chandy Surprises With His Proactive Mom

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Into his third year in the current term as Chief Minister, Oommen Chandy is surprising practically everyone with his proactive stance. From tourism to transportation to water management to lowcost housing to financial inclusion to sheer development on almost all fronts, Chandy has been taking active interest, and chipping in with his decisive style wherever and whenever needed to cut through the flab and make things happen, with the best recent example being the Kochi Metro itself. No wonder then that the world is sitting up and taking notice. Apart from the prestgious UN award that he bagged for his record-breaking mass contact program, United Kingdom had recently sent in a high-power business delegation to explore possibilities in co-operating with Kerala in its development.

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Everyone entum Oommen Chandy is also taking head-on Kerala’s biggest drawback till date, which is poor transportation infrastructure. The government has recently decided to construct 28 major roads in the State at a cost of Rs.10,000 crore. A Kerala Maritime Board, which would act as a single window for facilitation for investors and operators in the port, shipping and logistics sector, would be established immediately for the operation of the funds envisaged for this. The Government is also fully behind Kochi Metro and the efforts of Metro Man E Sreedharan’s plans to achieve the dream within the stipulated time itself.

CM Chandy’s performance is such that he facilitates grass-roots level development. For instance, while most states are chided for poor financial inclusion, CRISIL recently adjudged that Kerala leads the country in financial inclusion. Even former CAG, Vinod Rai, recently remarked in a press meet at Thrissur that Kerala’s audit standards are one of the best in the country. The state, led by Oommen Chandy, has no plans to squander away the headstart it has attained in tourism promotion among all Indian states. On the Chief Minister’s direct support, Kerala recently became the first state in the country to launch an amphibian seaplane service — to be performed by a vehicle that can fly and move on water and land — for tourism purposes. Chief minister Oommen Chandy inaugurated the six-seat aircraft’s maiden journey in Astamudi Lake in Kollam. Seaplanes will be allowed to run only during the day and six persons, including the pilot, can travel at a time. The aircraft will fly at a low height below clouds, giving travellers a panoramic view. The tentative rate is Rs. 6,000 for an hour, though it is not final. By the end of this year, four more companies will be launching their seaplanes and will operate them from the Thiruvananthapuram, Kochi, Kozhikode and Mangalore airports to the backwaters in Kollam, Alappuzha,

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ommen Chandy is not counting the days to Kochi Metro’s completion in years, months, or weeks, but in days. He has extracted an assurance from E Sreedharan that work would be completed within 1095 days. And the CM is fully behind Kochi Metro and the efforts of Metro Man Sreedharan’s plans to achieve the dream within this stipulated time itself. Chandy has directed that not a single work day should be lost in this raceagainst-time countdown, which is already on, with work now in full swing despite heavy rains. CM can be proud that Kochi Metro is also a green project, in a state which is sensitive to ecological issues. For the nearly 467 trees in various parts of the city that have to be cut for the project, Kochi Metro will be planting 5000 trees in various parts of the city. This is part of Kochi Metro Rail Ltd’s plan to make the city greener. KMRL will launch a three-layered environment conservation programme soon with the support of green groups, NGOs and big corporates. Attending to the grievances of Ernakulam’s business community, work has been planned so that minimum business days are affected in each location. And Kochi’s business community understands as ultimately Kochi Metro would benefit them immensely.

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Ernakulam and Kasargode districts. Good works rarely go unnoticed, and in this connected world, recognition can often come from a global stage. Oommen Chandy has recently won the United Nation’s Public Service Award for his Mass Contact Programme, which saw him directly engaging with people in the state to address their grievances. The awards, instituted through a UN resolution, are announced after a three-tier scrutiny and detailed examination. The shortlisted candidates are examined by a seven-member sub-committee of UN’s Committee of Experts in Public Administration. Chandy’s mass contact programme has been widely lauded as a unique democratic experiment in which the Chief Minister of an Indian state met thousands of people directly without any intermediaries. He received upto 5.5 lakh petitions working relentlessly for up to 18 hours at a stretch - of which around 3 lakh were resolved, and distributed financial assistance of Rs. 22.68 crore as part of the programme. The award assumes significance as the runner-up to Chandy was from the highly efficient nation of South Korea.

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Addressing a problem that won’t go away with easy steps, Oommen Chandy has now promised that Kochi

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Chandy’s mass contact programme has been widely lauded as a unique democratic experiment in which the Chief Minister of an Indian state met thousands of people directly without any intermediaries. He received upto 5.5 lakh petitions - working relentlessly for up to 18 hours at a stretch - of which around 3 lakh were resolved, and distributed financial assistance of Rs. 22.68 crore as part of the programme.

city will get an additional 100 MLD water by December 31 which would go a long way in tackling the current crisis. Chandy has had to personally deploy his negotiating and win-win skills with the people of neighbouring Piravom before making this promise, as the water has to come from there. Ernakulam has always been on the top of his mind, owing to the city’s natural strengths. Noting that Ernakulam city was taking giant strides in development, the Chief Minister said his government had taken a special interest in the city and that was why Rs 137 crore was allotted for its development in the last two years. For a person who has too much to handle day in and day out, Chandy recently surprised everyone with his awareness about the up-to-date developments in the city. He has promised that the main projects identified like Pachalam RoB, Thammanam-Pullepady Road, Vytilla Mobility Hub and the like would be completed in a time-bound manner. Chandy is also taking active interest in the Smart City project, and disclosed that work on the Smart City project would begin in June and that the Dubaibased company has agreed to cut short the project completion period to 18 months. On the vexing issue of waste management in Kochi, he has announced new plant using the latest

technology would be set up at Brahmapuram in 18 months. Tenders have been invited for the latest technology at his insistence, as the plant should be able to tackle foul smell, disease concerns etc. On the crucial NRK front, which is pivotal to Kerala’s interests, the CM has worked in tandem with Union Ministers Vayalar Ravi and E Ahamed, to find an amicable solution to the Saudi Nitagat issue. Due to their persuasion, the Saudi government has decided to allow expatriates who were staying illegally to return to homeland without facing penal action. They could also get a new job through sponsors and continue to stay there without facing any hardship.

Oommen Chandy is also taking headon Kerala’s biggest drawback till date, which is poor transportation infrastructure. The government has recently decided to construct 28 major roads in the State at a cost of Rs.10,000 crore. Each road would be constructed as a special project and talks were on to finalise the details of the new roads, half of which were coming up in the relatively backward Malabar region. The new roads would be constructed after ensuring that the requisite funds were mobilised by availing loans at cheaper rates, and the government would not levy toll for the newly constructed roads, which is a big change for the state. The CM recently inaugurated the reconstruction of the 26-km Kasaragod-Kanhangad Coastal

State Highway, being undertaken by the Kerala State Transport Project (KSTP). The reconstruction of the coastal highway would be completed in 24 months. The state government has also decided to give administrative sanction for the first stage of the Thiruvananthapuram Monorail project that will link a distance of 22.20 km from Techno City to Karamana in the capital. The Edappally flyover at Ernakulam has been given administrative sanction for DMRC to take up the works. The state will give Rs 95 crore for the Rs 135 crore project. However, the practical person that he is, the CM has realized that roads and rail won’t be enough for Kerala. In Kerala, density of population was high, highways were inadequate to contain the increasing number of vehicles, the rail network was unable

to cope with the demand and the only solution was to shift from road and rail to coastal shipping and inland water transport. A Kerala Maritime Board, which would act as a single window for facilitation for investors and operators in the port, shipping and logistics sector, would be established immediately for the operation of the funds envisaged for this. The world is indeed looking up and noticing CM Oommen Chandy’s efforts. Apart from the UN award, the UK Government had sent in a highpowered business delegation led by the British cabinet minister, Eric Pickles, to explore opportunities in infrastructure and water management in Kochi. It is notable that the high-profile “Best of British” delegation had only two stopovers in India, and one was in Kerala.

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The CM had a big win, when Indian Government recently accorded ‘Classical’ status to Malayalam language, that enables it to get a Rs. 100 crore fund for its promotion. However, the Chief Minister has said that the government does not propose to rest on the attachment of ‘classical’ status for Malayalam. He has said that the government’s efforts now would be to ensure that the limitless possibilities of the language were realised. Malayalam, he said, had the potential to rise to higher levels of global recognition.

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Road Test and Review:

FORD ECOSPORT

REASONABLE SPORT, UN-SPORTIVE PRICE? The Ford EcoSport has been an object of anticipation since it broke cover at the Delhi Auto Expo in 2012. It basked in the limelight for a year and a half for three reasons – a radical design, the 1-litre EcoBoost petrol engine, and due to inordinate delays. Finally EcoSport has arrived. know most of you have already seen the EcoSport inperson as part of Ford’s prelaunch campaign and formed an opinion about its design and features. But does the 1-litre EcoBoost engine pack enough punch to take this urban SUV to the top of its game? Read on to find out.

DESIGN

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In appearance, the EcoSport is unmistakably avant-garde. The front end features a large, ‘gaping fishmouth’ grille flanked by slim headlamps and big fog lamps, reflecting Ford’s global design language. Two bold lines on the bonnet flow onto the roof, highlighting the car’s aerodynamic prowess. I particularly liked the muscular fenders, tailgate-mounted spare tyre and the sleek roof-rails that enhance the vehicle’s SUV stance. The tailgate handle is beautifully integrated within the tail lamp and that’s a nice touch. The only thing missing is a pair of sidesteps that could greatly accentuate the SUV’s ruggedness. Overall, the EcoSport has a quirky design - love it or hate it, the car certainly makes a statement on the road.

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Step inside and you’ll discover a welcoming combination of contemporary design and intuitive technology. Dials and knobs are ergonomically appointed and the Ice Blue dashboard illumination looks cool, too.

However, I was less enthused about the hard-plastic dashboard and door panels.

SP ACE SPA CE,, COMFORT AND CONVENIENCE Frankly, the EcoSport doesn’t look as big in flesh as it does in pictures. It can comfortably seat five but going by the SUV standards, the fifth person wouldn’t be really happy. However, those upgrading from a hatchback would find ample head, shoulder and

leg room in the EcoSport. The boot that Ford claims could accommodate even a washing machine is expandable up to 705 litres, with the rear seats tumbled. The driver seat offers a commanding position and excellent outward visibility. Ford seems to have employed a wide range of sound-deadening features in the EcoSport - there’s very little noise intruding on your comfort. The EcoSport is the first vehicle in its segment in India to feature Ford SYNC® connectivity platform, which provides customers with the convenience and flexibility to control their media players and mobile phones with voice commands. SYNC takes safety to new heights with a life-saving feature called Emergency Assistance. When an airbag is inflated or the fuel pump is shut off following

an accident, SYNC sends a voice message to 108 (emergency phone number) from the paired mobile phone. SYNC also sends the GPS co-ordinates of the accident location and lets the occupants speak to the emergency operator. How clever is that!

PERFORMANCE PERFORMANCE,, RIDE AND HANDLING The EcoSport’s strongest selling point is certainly the 1-litre EcoBoost engine. It is hard to imagine a 999cc three cylinder engine under the hood of an SUV, but guess what, this engine delivers the power and performance of a naturally aspirated 1.6-litre engine. Helped by a turbocharger, direct injection and variable valve timing, the EcoBoost motor develops 123 bhp of power at 6000 rpm and 170 Nm of torque from 1,400 to 4,500 rpm.

diesel. The diesel EcoSport will have more takers and I’m sure, be more funto-drive. Fords are generally regarded as great handlers and the EcoSport is no exception. Dampers and springs achieve an optimal balance between handling and ride comfort. The car stays absolutely pinned to the tarmac even at a close corner. I didn't think twice about rolling over big potholes or pesky curbs, thanks to the all-absorbing suspension and the 200mm ground clearance. The light steering is a blessing in city, yet precise enough at high speeds and around tight corners. Ford's Electric Power Assist Steering (EPAS) system is equipped with ‘Pull Drift Compensation’, which automatically makes imperceptible steering corrections when it notices a pull caused by wind, potholes or even differences in tyre pressure.

MILEA GE MILEAGE Ford has quoted an ARAI certified mileage of 18.7 kmpl for the 1 litre EcoBoost variant. However, I rarely

saw a double digit figure on the realtime fuel consumption monitor; blame it on the performance tests and aggressive driving. Otherwise, the engine is definitely capable of returning an average of 13-14 kmpl in normal conditions. The 1.5-litre petrol and diesel variants return 15.8kmpl and 22.7 kmpl respectively (ARAI figures).

CONCLUSION If I were to sum up the EcoSport in one word, it would be: intriguing. It has got all right ingredients to stay true to what Ford calls it – the urban SUV. Although the long wait of almost 17 months has led to an inevitable loss of interest, I’d dare to say that the EcoSport is indeed worth the wait. The vehicle enjoys tax benefits of a sub-4 metre car, but the 1-litre engine will be available only in the top Titanium variant, making it an expensive option. Ford really needs to price the EcoSport wisely to take it to the top of the charts. By Clint Thomas for Full Throttle

Seasonal Magazine

Dip the clutch and press the start button, the engine fires up smoothly and idles without clatter. It has enough low-end grunt to nip in and out of traffic but once you floor the pedal, there’s detectable turbo lag. However, once past 1800rpm mark, the engine revs happily and displays good power delivery. On the flipside, it becomes very audible at higher rpms. Overall, the 1-litre EcoSport is more of a practical cruiser than a fun-to-drive car. The engine is mated to a five-speed manual gearbox that offers slick gearshifts. Two other engine options will be available, too - a 110bhp 1.5 petrol and a 90bhp 1.5

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AUTOMOTIVE

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THE WORLD O AND THE TOP 13 AUTOM

rand equity is a phrase used in the marketing industry which describes the value of having a well-known brand name, based on the idea that the owner of a well-known brand name can generate more money from products with that brand name than from products with a less well known name, as consumers believe that a product with a well-known name is better than products with less well known names. Many marketing researchers have concluded that brands are one of the most valuable assets a company has, as brand equity is one of the factors which can increase the financial value of a brand to the brand owner. Elements that can be

included in the valuation of brand equity include changing market share, profit margins, consumer recognition of logos and other visual elements, brand language associations made by consumers, consumers' perceptions of quality and other relevant brand values. Consumers' knowledge about a brand also governs how manufacturers and advertisers market the brand. Brand equity is created through strategic investments in communication channels and market education and appreciates through economic growth in profit margins, market share, prestige value, and critical associations. Generally, these strategic investments appreciate over time to deliver a return on investment. This is directly related to

F BRANDING WORLDâ&#x20AC;&#x2122;S OTIVE BRANDS

Brand valuation is the job of estimating the total financial

value of the brand. The ISO 10668 standard sets out the appropriate process of valuing brands and sets out six key requirements, transparency, validity, reliability, sufficiency, objectivity and financial, behavioural and legal parameters. There are three main types of brand valuation methods. The 'Cost Approach' measures the value of a brand as the cost invested in its creation and development. The idea being that an investor would not pay more for a brand than it would cost to recreate or replace it. However, since this approach is based on retrospective data it does not consider a company's future earnings. As per the 'Market Approach',

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marketing ROI. Brand equity is strategically crucial, but famously difficult to quantify. Many experts have developed tools to analyze this asset, but there is no universally accepted way to measure it. As one of the serial challenges that marketing professionals and academics find with the concept of brand equity, the disconnect between quantitative and qualitative equity values is difficult to reconcile. Quantitative brand equity includes numerical values such as profit margins and market share, but fails to capture qualitative elements such as prestige and associations of interest.

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the brand is valued based on what others in the market have paid for similar assets. With so few brands being bought and sold, using this method may be as difficult as finding a recent sale of another brand with a similar awareness, strength, or economic and legal situation against which to benchmark. Thirdly, the 'Income Approach', measures the value by reference to the present value of the economic benefits received over the rest of the useful life of the brand. There are 6 recognised methods of the income approach. Price premium method estimates the value of a brand by the price premium it generates when compared to a similar but unbranded product or service. This must take into account the volume premium method. Volume premium method estimates the value of a brand by the volume premium it generates when compared to a similar but unbranded product or service. This must take into account the price premium method. Income split method values the brand as the present value portion of the economic profit attributable to the brand over the rest of its useful life. This has problems in that profits can sometimes be negative, leading to unrealistic brand value, and also that profits can be manipulated so may misrepresent brand value. This method uses qualitative measures to decide the portion of economic profits to be accredited to the brand. Multi-period excess earnings method requires a valuation of each group of intangible assets to calculate the cost of capital of each. The returns for each of these are deducted from the present value of future cash flows and when all other assets have been accounted for, the remaining is used as the value of the brand. Incremental cash flow method identifies the extra cash flow in a branded business when compared to an unbranded, and comparable, business. However it is rare to find conditions for this method to be used since finding similar unbranded companies can be difficult. Royalty relief method assumes theoretically that a company does not own the brand it operates under, but instead licenses the use from another. The royalty relief method uses available data of similar arrangements in the industry and assigns the value of the brand as the present value of future royalty payments.

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The Automotive industry is respected as one of the worldâ&#x20AC;&#x2122;s most important sectors in terms of revenue. While some people consider the automotives as an important mode of transportation, others are very particular and cautious when it comes to the brand they drive. The industry includes designs, development, manufacturing, marketing, and selling of motor vehicles, towed vehicles, motorcycles and mopeds. This list is based on the rankings of Interbrand, the worldâ&#x20AC;&#x2122;s biggest brand consultancy which has listed companies in the automotive sector in terms of their brand value.

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Interbrand has refined its brand valuation into a five-step Economic Value Added methodology. Interbrand releases an annual ranking of the best global brands, which valuates each brand's financial performance, role, and strength. The annual report, "Best Global Brands," was published in BusinessWeek until 2009; Interbrand assumed sole authorship since 2010.

To qualify, brands must have a presence on at least three major continents, and must have broad geographic coverage in growing and emerging markets. Thirty percent of revenues must come from outside the home country, and no more than fifty percent of revenues should come from any one continent. So here are the auto brand rankings from Interbrand:

Toyota

Toyota has a brand value of $30,280 million. This Japanese based automaker is considered as one of the worldâ&#x20AC;&#x2122;s largest companies by revenue. As of July 2012 the company reported that it had manufactured its 200 millionth vehicle.

BMW

Mercedes Benz has a brand value of $30,097 million. This brand is usually associated with luxury automobiles, buses, trucks and coaches. Besides its native Germany, Mercedes-Benz vehicles are also manufactured or assembled in several other countries.

BMW has a brand value of $29,052 million. It is reported that about 56% of the companyâ&#x20AC;&#x2122;s vehicles produced are powered by petrol engines and the remaining 44% are powered by diesel engines. In 2010, the BMW group produced 1,481,253 automobiles and 112,271 motorcycles across all its brands.

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Mercedes Benz

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5 4

Volkswagen

Volkswagen has a brand value of $9,252 million. The company is credited to be one of the most important brands in the world. The introductions of the New Beetle and the fifth-generation Passat were a major boost to the brand.

Honda

Honda has a brand value of $17,280 million. Primarily known for its automobile and motorcycle, the company has consistently proved itself to be one of the worldâ&#x20AC;&#x2122;s remarkable brands. Honda was the first Japanese automobile manufacturer to release a dedicated luxury brand, Acura, in 1986.

â&#x20AC;&#x201C;

Hyundai

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Hyundai has a brand value of $7,473 million. Hyundai branded vehicles are manufactured by Hyundai Motor Company which is headquartered in Seoul. The company operates as one of the world's largest integrated automobiles which are sold in 193 countries through some 6,000 dealerships and showrooms worldwide.

Ford

Audi

Audi has a brand value of $7,196 million. The company designs, engineers, manufactures and distribute automobiles and motorcycles under the Audi, Ducati and Lamborghini brands. The Audi emblem symbolises the amalgamation of Audi with DKW, Horch and Wanderer.

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Ford has a brand value of $7,958 million. This American multinational automaker sells automobiles and commercial vehicles under the Ford brand. The company introduced methods for largescale manufacturing of cars using elaborately engineered manufacturing sequences typified by moving assembly lines.

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Porsche

Porsche has a brand value of $5,149 million. The company is considered as one of the prestigious and successful brands in the world. Porsche is currently the world's largest race car manufacturer.

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10 Nissan

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11 Kia Kia has a brand value of $4,089 million. Headquartered in South Korea, Kia Motors is established as one of the popular brands in the automotive sector. Kia Motors Corporation's brand slogan is "The Power to Surprise".

Nissan has a brand value of $4,969 million. The Japanese multinational automaker has its own distinct corporate culture and brand identity. Along with its normal range of models, Nissan also produces a range of luxury models branded as Infiniti.

Harley-Davidson has a brand value of $3,857 million. The brand is known to have attracted loyal brand community. Harley-Davidson motorcycles have long been associated with the sub-cultures of the biker, motorcycle clubs, and outlaw motorcycle clubs.

Ferrari Ferrari has a brand value of $3,770 million. The Italian sports car manufacturer is popular for its race cars. Ferrari road cars are generally seen as a symbol of luxury and wealth.

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Harley-Davidson

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PROMOTER WATCH

Why Promoter Paycuts is Such a Joke am sure you would come across the following headlines in the last few days:

Mukesh Ambani forgoes Rs 24 crore in salary Infosys CEO and MD takes 26 percent pay cut in FY13 Well, to be very frank, this is all eyewash. Let's see how! As declared by Reliance Industries in its annual accounts for the FY 2012-13 "The Chairman and Managing Director's compensation has been set at Rs.15 crore as against Rs.38.93 crore he is eligible as per shareholders' approval reflecting his desire to continue to set a personal example in managerial compensation levels". Accordingly, the media has widely reported that by taking only Rs.15 crore Mukesh Ambani is forgoing Rs.24 crore as salary. What a 'cruel' joke to play on the unsuspecting public! As per the results declared for FY 201213, Reliance will pay out Rs.2628 crore as dividend. As per the shareholding pattern as on Mar 31, 2013, promoter and promoter companies hold 45.35%. This works out to Rs.1192 crore that Mukesh Ambani and his family and family-owned companies would receive as dividend.

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So the seemingly huge sum of Rs.24 crore forgone by Mukesh Ambani works out to a mere 2%.

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To put the numbers in perspective: Suppose your salary is Rs.50,000 p.m. i.e. Rs.6 lakh per annum. Then forgoing 2% would mean an amount of mere Rs.12,000. I guess you too can afford to forgo this petty amount (especially if

you get this kind of publicity). Moreover, these numbers pertain to Reliance Industries Ltd. only. What about salary/dividends from the other group companies in the Reliance Group? Of course, there are absolutely no issues with Ambani taking a Rs.1000+ crore payout. He fully deserves it. He has built one of the finest industrial groups worldwide. However, trying to take a moral high ground, on such an insignificant amount, is not in the right spirit. Similarly, in case of Shibulal, CEO and MD of Infosys, last year his salary was USD 162,990 (approx. Rs.88 lakhs). This year he takes home only USD 119,774 (about Rs.65 lakhs). However, what no one has reported is that his family members and he own

around Rs.1.26 crore shares in Infosys. The dividend announced for FY 12-13 is Rs.42/share. Hence, Mr. Shibulal and his family will receive Rs.53 crores as dividend. So does it really matter if he receives Rs.23 lakhs lesser salary than last year? Again, there are absolutely no issues with Shibulal being rewarded for creating such an iconic organization. However, again, focusing on nominal pay cuts is not in the right spirit. I am sure the so-called 'informed media' could have reported the dividend numbers too to give a right perspective to these news items. By the way, as you may be aware, on salary the income tax is 30%, whereas dividend is taxed at 15% only. (By Sanjay Matai, Author & Promoter of 'The Wealth Architects')

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FASHION

Why Go Linen

Linen is a textile made from the fibers of the flax plant, Linum usitatissimum. It is the only textile fibre that grows in Europe. Linen probably came to Ireland in early Christian times. It was the Irish, who popularized linen worldwide. Linen is also the oldest fabric woven on earth. Linen symbolizes a regal elegance that defines the erstwhile royal fabric, once widely worn by the monarchs of the world. It is a very durable, strong fabric, and one of the few that are stronger wet than dry. The fibers do not stretch and are resistant to damage from abrasion. However, because linen fibers have a very low elasticity, the fabric will eventually break if it is folded and ironed at the same place repeatedly. Today Linen is not just only a symbol of royalty but a part of lifestyle too.

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BENEFITS OF LINEN:

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HEAT REGULATING: Linen is highly absorbent, hence cool to touch. It absorbs body heat and perspiration and keeps the wearer cool all day long. Linen is less likely to cling to the skin. In summer it dissipates heat, while in winter it retains body heat and creates a great microclimate for skin. ANTI-ALLERGENIC: Linen is an ideal fabric for skin. It has a natural pH balance. It is nonirritant, does not attract dust, detergents or limestone residue. ANTI-STATIC: Linen does not accumulate static electricity and permits healthy transpiration of the body. RESISTANT: It is strongest natural textile fiber. It lasts a long time without deforming and it doesn’t molt. With frequent use and washing it becomes softer to

touch and its flowing movement increases, enhancing the elegance of the garment. Enough to amplify its wearers’ distinctive style statement lending them a mesmerizing appeal. ECOLOGICAL: Linen is animal friendly and made from flax plant, which requires less water than other crops and minimal use of chemical fertilizers and pesticide. In condition to the textile fiber, it provides a number of other side-products and does not generate waste that needs special disposal measures.

12 LINEN CARE TIPS: Regular washing is actually good for pure linen, as it softens and beautifies it, giving it a lovely ‘lived-in’ look, and you don’t need to store it away ‘for best’. Linen fabric gets rid of dirt more easily than other textiles, and if rinsed thoroughly it comes up just as

new every time. White pure linen items without special finishes such as hemstitched borders can be laundered at temperatures of up to 95°C. We normally recommend using 60°C setting, as higher temperatures tend to wear linen out faster. Before washing, separate dark, coloured linens from white or offwhite linens. You can use stain remover on stains before laundering, but avoid using bleach since it weakens fibres and may affect the colour of dyed linens. It’s worth noting that bleaching particles in conventional washing powder make natural linen colour fade. Try to rinse the stains immediately, when still fresh, and use natural stain soaps if needed. Linen garments normally do not need the pre-washing (or soaking). However, if you are washing a linen item for the first time, it can be soaked briefly in lukewarm water before the wash to avoid creasing. A conventional machine wash and fast spin is recommended. Use hot iron while the linens are still slightly damp. Linen has a distinctive crispness which you should be able to achieve with a hot iron – no need to use starch. Wash linen articles separately from other materials, especially during the first wash, as natural fibres tend to loose lint (nap), which you don’t want ending up on your other items. To reduce creasing, load your washing machine half-way. This will also ensure linens get plenty of water while rinsing.

Straighten out the linen after the wash before hanging it on the washing line.

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Do not tumble dry your linens, as it may leave permanent creasing and it definitely shortens the life of linen.

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PERSONAL FINANCE

Power Tips to Use Credit Cards Wisely vidence is mounting that, sooner or later, everyone who uses credit cards regularly is going to fall into the debt trap. But it needn't be so. We can use the credit cards wisely if several myths about them are debunked and the basics of the product are well understood. Let us now proceed to unravel the mysteries and debunk these myths.

Understanding Interest Calculation Calculating the interest is the most challenging task because of the following reasons. The interest is calculated on a daily basis but charged on a monthly basis. Customer spending changes from day to day, and thus the principal amount is not same throughout the month. The grace period allowed adds a twist to it. But before getting into further details, let us get familiar with the following key concepts. Billing Cycle: It is the period within which all purchases and repayments are accounted and billed. Normally it consists of 30 days.

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Grace Period: This is an additional period of 15 or 25 days added to the total number of days in a billing cycle. The payment of the full outstanding amount before the grace period incurs no finance charges, provided that the previous monthâ&#x20AC;&#x2122;s balance is paid in full.

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Minimum Balance or Amount: It is the minimum amount that a customer pays to avoid the penalty charges for not paying the total outstanding amount for a billing cycle on the payment due date. It is usually around 5% of the total balance.

Now we are off to debunk the myths and provide tips to spend wisely:

1. The Myth of Minimum Balance: Many people assume to have offloaded

Never take the bait, knock off your balance before the grace period.

their debt burden on the payment of minimum balance, but always bear in mind that the unpaid balance remains intact and the interest is compounded. Apart from this, the concept of grace period comes to a halt and your credit score takes a beating. The agenda of the banks is to keep spending without paying the penalty charges, and thereby increase the total debt owed to them. Tip 1: Never take the bait, knock off your balance before the grace period.

2. The Myth of Uniform Interest Rates: Many customers have a notion that uniform interest charges are applied to different kinds of borrowing, but cash withdrawals attract very high interest rates that are exorbitant by any standards.

Anchor your score points on prompt repayments.

Tip 2: Never opt for cash withdrawals.

3. The Myth of Grace Period: Grace period applies only if there is no carryover from the previous month, and the current balance is paid in full within the grace period. This interest free period ceases to exist even if one rupee is carried forward from the previous month. The customers who use the grace period wisely and pay no interest at all are branded as convenience users. They aren't only availing interest free short term loan but also end up with good credit scores and reward points. Tip 3: Become a convenience user.

4. The Myth of Credit Score: The myth that credit scores are based only on spending is baseless. All credit scores are based not only on the frequency and the amount of spending but also mainly on prompt repayments. Tip 4: Anchor your score points on prompt repayments. An ounce of prevention is worth a pound of cure. Now, let us look at a few preventive measures to ensure that things don’t get out of control. Just to increase credit scores and reward points, people have a tendency to use credit cards for all purchases. It is better to use credit cards for high value transactions rather than low value ones. When credit cards are used indiscriminately for low value purchases, we lose track of our transactions. Your credit card should supplement your debit card or cash, not the other way around. Always stick to a single card rather than having too many cards. Always go through the terms and conditions of the credit card to thoroughly understand the hidden charges and benefits. Convert your outstanding amount into EMIs if you are unable to repay the whole amount; this option is akin to a personal loan, and the interest rate applied is lower than the normal card rollover interest rate. Reward points are discounts in disguise and never forget to use them wherever necessary. There isn’t anything called free lunch, but when used wisely, your credit card becomes one.

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Average daily balance method (ADBM): ADBM is a common method employed to tackle fluctuating balances by charging interest on the average of the daily balances throughout the month. The weighted average method is used rather than the straight average method. The straight average method uses the monthly average balance, but the weighted average method assigns different ‘weights’ to different balances that changes over a month. Here, the weights used are the number of days assigned to each balance.

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GADGETS

The Curious Case of Underdog HTC, And What Most Companies Can Learn From Samsung xperts are almost undivided in their opinion that 'HTC One' is the best smartphone out there now, ahead of Samsung Galaxy S4, and of course iPhone 5. But when it comes to marketing and sales, success is consistently eluding HTC, which has even some smart positioning to its credit like being both in the Android and Windows space. Unfortunately for the company, on almost all points it fails, Samsung has winning strategies. Here are those sales and marketing lessons that HTC and many such brilliant companies have never mastered yet. By most accounts, the HTC One is a better phone than the Samsung Galaxy S4. But HTC’s phone lacks in the one spec that matters most: Sales have totaled about 5 million during the first month on the market. Samsung (005930) has sold twice that number over roughly the period. Some argue that selling half as many phones as Samsung is actually a victory for HTC. But if the company is going to break the cycle of making great phones that no one buys, it can learn a few things about the respective launches of the S4 and the One. Here are four lessons:

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1. Don't Aim for Perfection

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While David Pogue and the people who comment on articles on the Verge can spot the differences in quality between the S4 and the HTC One, most people who buy phones cannot. Most people don’t come close to taking full advantage of their device’s capabilities, which means that factors other than subtle superiority are going to be the deciding factors about which phones

Apple at the top of the smartphone world. Even HTC employees felt the need to come, hanging out with folks in line and passing out coupons for discounts on phones. The free publicity that a big launch event brings doesn’t come without a price: The bigger the marketing budget, the better the event. And HTC’s marketing team has never had the power of its major competitors; in the last quarter of 2013 Samsung’s sales and marketing budget was 13 times the size of HTC’s. The small company’s marketing budget has actually dropped 40 percent from year to year, writes Benedict Evans, a mobile analyst, “and given their operating profit was zero in Q1, they can’t afford to spend much more.”

3. Develop the Capacity to Scale Up

become big hits. “Product performance is not a strong indicator of sales performance when the product is deemed to have reached a point of being ‘good enough’,” wrote Horace Dediu, a mobile analyst, in an e-mail. ”Arguably, the S4 and HTC One (and iPhone 5) have functionality beyond what most consumers need or can absorb.”

2. Throw a Mega Launch Party Phone manufacturers have increasingly moved away from introducing new products at trade shows and toward throwing their own events. Call it the Steve Jobs effect. By throwing themselves a party, phone makers can dominate the day on the technology blogs and the business press. HTC got into the act in February when it launched the One, which was better than getting lost in the scrum at the Mobile World Congress held the following week. This was nothing compared to Samsung, whose hype machine managed to get people talking about the S4 in the same breath as the iPhone. It didn’t matter that the event was weirdly offensive or that reviewers quickly walked past speculation of Samsung’s impending displacement of

Making a good phone is one thing. In order to succeed, a company actually has to make millions of them on time and then ship them out reliably. This has eluded HTC so far. The release of the One ended up having to be “rolled out” in different areas at different times because of a shortage of camera components. The delays led HTC to post its lowest quarterly profit on record and raised questions about its ability to deliver on promises. The company also lost the chance to have a phone on the market before Samsung started selling its own. ”For smartphones, timing is everything and the delay means they lose that timing,” said Dennis Chan, an analyst at Yuanta Securities in Taipei told Bloomberg News.

4. Make Others Sell Your Product This point is mainly an issue in the US, but it is really a winning strategy anywhere in the world. While a company like HTC can make a phone, the main vehicle for selling phones in the U.S. is the wireless carriers. With devices as lures to get customers into two-year contracts, carriers pay a hefty portion of the cost and help with marketing. (Adapted from Bloomberg Businessweek)

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Facebook could make you mentally ill

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Microsoft developing

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Scientists claim social networking sites like Facebook can affect mental health. Facebook and other social networking sites can affect your mental health, scientists have claimed. They have linked psychotic episodes in patients to internet addiction and delusions related to virtual relationships, the Daily Express reported. While all the participants in a study had social problems such as loneliness, none had previous episodes of psychosis or drug abuse. Got a question on women's health? Ask our expert! "As internet access becomes increasingly widespread, so do related psychopathologies," Lead researcher Dr Uri Nitzan said. "Some patients are harmed by these social networking sites, which can attract those who are lonely or vulnerable in their day-to-day lives or act as a platform for cyber-bullying and other predatory behaviour," Nitzan said. Focusing on Dr Nitzan's patients, researchers found they had all sought refuge from a lonely situation and found solace in intense virtual relationships. Although these relationships were positive at first, they eventually led to feelings of hurt, betrayal and invasion of privacy. Dr Nitzan, of Tel Aviv Univers-ity's Sackler Faculty of Medicine and the Shalvata Mental Health Care Centre, said: "All the patients developed psychotic symptoms related to the situation, including delusions regarding the person behind the screen and their connection through the computer." The study is published in the Israel Journal of Psychiatry and Related Sciences.

7-inch Surface tablet

Microsoft Corp is developing a new lineup of Surface tablets, including a 7-inch version expected to go into mass production later this year, the Wall Street Journal reported, citing people familiar with the company's plans. Microsoft executives felt they needed to keep pace with the growing popularity of smaller tablets like Google Inc's 7inch Nexus and the 7.9-inch iPad Mini introduced by Apple Inc last October, one person told the paper. Microsoft declined to comment to the Wall Street Journal. The company could not immediately be reached for comment by Reuters outside of regular U.S. business hours. A 7-inch tablet will be key to bridging the gap between the Surface Tablet world that runs Windows 8 - where Microsoft has managed a small but firm foothold - with that of the Windows Mobile 8 world, where it is seriously lagging.

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SOCIETY

By Carl Jaison

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IS IT REALLY ARUNDHATI'S ROMANCE THAT JAIRAM RAMESH HATES?

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aoist-Naxals are terrorists. They resist developmental activities in rural areas initiated by democratically elected bodies; be it the panchayat or gram sabhas or the ruling party. They advocate tribal warfare, not welfare.” Jairam Ramesh, Union Minister for Rural Development, didn’t mince words when asked to remark on the recent bloodshed caused by the naxals, in which top Congress leaders and security officers lost their lives after being brutally massacred in a well-planned ambush. He swore that all possible measures will be taken to curb the Naxal menace, which has severely dented the domestic security in the Red Corridor regions.

The biggest setback for a peaceful agreement is their continued refusal to organize themselves into political entities and contest in democratic elections. They have repeatedly claimed to have received support from the tribal population to carry out their activities. If this is to be believed, the Maoists possess the impetus to fight in the elections, being already in an advantageous position. Jairam Ramesh believes that the terror outfit should take a leaf from Arvind Kejriwal by challenging the government through election face-offs and winning democratic support. There is a need for a long-term solution

to tackle the Maoist insurgency by a holistic approach. While the Maoists have taken to arms in the name of the welfare of the adivasis, there is too little to substantiate that their recent attacks were directed towards the liberation of tribal population from social and legal injustice as they have stated through a video-release that the prime aim was to target the perpetrators of the Salwa Judum (an anti-Naxalite movement spearheaded by slain Congress leader, Mahendra Karma) atrocities. The latest developments prove beyond doubt that the Maoist focus has been on toppling the government in the guise of tribal benevolence. The Salwa Judum movement, however, involved the active participation of both tribals and trained police forces, which was eventually scrapped by the Supreme Court owing to its inhumane conduct and the very idea of civilians (especially the youth) being trained to handle guns and grenades. Does the Maoists always don the role of the villain while the state plays the role of the protagonist, who will eventually prevail over the ‘bad guys’? If Indian movie scripts are the standard of assessment, then the climax is pretty much hero-oriented, giving little detail to the historical context of the villainous acts of the antihero. The

ruling

governments

Chhattisgarh, over the past 13 years since its recognition as an Indian state, have largely adopted an exploitative policy, capitalizing on the mineral-rich areas. The illegal seizure of forest lands for commercial expansion has deprived the tribal people of their source of livelihood. Due to the presence of large forest belts in the states of Chhattisgarh, Jharkhand, Orissa, Andhra Pradesh etc, the governments realized the prospect of clearing these lands for developmental projects as a tool for appeasing the electorate. But it is the tribal populace which has been gravely affected by the ‘Doctrine of pre-eminent domain’ whereby the state enjoys automatic and unilateral access to land and resources. This has been cited by renowned columnist Vinod Sharma as the "major reason for spread of Left Wing Terrorism (LWT) in India." The government has failed on two fronts, barring the security lapses. The mining policy has accounted for large scale erosion of the topographical splendor and restricted access of the forest-dwellers to these areas for gathering food resources. The government should focus on implementing an environment-friendly mining mechanism, which would meet the requirements of the raw-materials industry and at the same time leave the essential resource-base untouched and unaffected by illegal encroachments.

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The Naxals are ideologically anarchistic which assumes the form of armed struggle for accomplishment of economic development and liberation from oppressive rule. They have always adhered to a hardliner stance, giving little room for diplomatic dialogues and political engagement. Therefore, in light of the recent events, the Minister's comments are indeed void of the usual Congress-BJP blame game, even though he suggested that tackling the Maoist insurgency is the responsibility of the respective state governments. While it has been overwhelmingly accepted that such kind of internal terror needs to be countered collectively, the measures in place as of now seem to suggest that the burden is entirely of the state policing units.

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The Mines and Minerals Development and Regulation (MMDR) Act is pending approval in the assembly. Another area where the government has fared poorly is on the recognition of tribal rights through the fair execution of the Enforcement of Forest Rights Act, 2006, which acknowledges the tribal communities’ first right over forest land. There is clinching evidence to prove the denial of land deeds to rightful claimants belonging to the tribal communities. Thus before the government envisages on the gallant proposal to implement the Integrated Action Plan (IAP), it must look into the aforementioned legislations which require an unprejudiced and righteous application. The Maoists are steadily taking advantage of the governments’ failure to accommodate tribal interests. Therefore, the support of the tribal population is crucial for the government’s political existence as well as for the success of the counterterrorism strategy. Deploying more troops in Maoist-dominated zones will only further incite violence from their side. The Maoists enjoy an upper-hand geographically in these regions and this can be effectively tackled by strict monitoring by the existing forces, which need to be properly armed with ammunition and weaponry.

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All forms of tangible developmental structuring is facing stiff backlash from the Maoists. Thus it needs to be reiterated that government should improve the living conditions of the

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hastily to provide for industrial space to these MNC’s, which in turn has negatively impacted the forest environment. The excessive exploitation of the voiceless tribal population is being facilitated by a lack of grievance redressal system and dispossession of resources, which has significantly highlighted the absence of equitable justice. There have been cases where the forest officials conspired with the timber mafia to extract the vegetative cover of these vast tracts of land.

It was a tragic day for tribal people. The Constitution ratified colonial policy and made the State custodian of tribal homelands. Overnight, it turned the entire tribal population into squatters on their own land. It denied them their traditional rights to forest produce; it criminalized a whole way of life. In exchange for the right to vote, it snatched away their right to livelihood and dignity. tribal populace by sheltering their longheld beliefs and practices and to avoid serving the interests of foreign associates itching to drive in international capital. Sources have suggested that the ‘domain doctrine’ at the government’s behest has increasingly benefited large mining companies at the cost of tribal prosperity. Communities have been relocated

India cannot wait until Minister for Home Affairs, Sushil Kumar Shinde, returns from holidaying in the USA. The Law ministry and the Home minister of the state need to make the first intelligent move of considering the problems faced by the tribal population, which is definitely not logistical development, but by ensuring that they gain their traditional access to economic resources, some of which are venerated. The government must act fast if it wants to prevent the emergence of tribal insurgents in Central India, similar to the Naga insurgents in the North-East, who off late remain subdued owing to an ease in relations with the government after the latter’s concerted effort to realize their demands. Arundhati Roy, who was recently criticized by Jairam Ramesh for making attempts at trying to ‘romanticize’ Maoist rebellion, in a detailed report written in 2010 titled ‘Walking with the comrades’ voiced her inclination towards the justification of Maoist insurrections: “This legacy of rebellion has left behind a furious people who have been deliberately isolated and marginalized by the Indian government. The Indian Constitution, the moral underpinning of Indian democracy, was adopted by Parliament in 1950. It was a tragic day for tribal people. The Constitution ratified colonial policy and made the State custodian of tribal homelands. Overnight, it turned the entire tribal population into squatters on their own land. It denied them their traditional rights to forest produce; it criminalized a whole way of life. In exchange for the right to vote, it snatched away their right to livelihood and dignity.”

CONTROVERSY

By Carl Jaison

HERO OR TRAITOR? he world watched in horror as Edward Snowden who just turned 30, disclosed to major US & British newspapers, the immense depth of the worldwide surveillance program by the formidable National Security Agency (NSA). Land calls, mobile, Google, Facebook, Email, nothing has been spared by NSA, in its pursuit to ostensibly build a safer America. NSA’s prowess has been long known, dating back to 1983 when the mystery of the downed Korean Airlines Flight

007 was solved by the agency when it disclosed ground-to-air talk of Soviet air force that had secretly and mercilessly shot down the passenger aircraft killing all 269 on board. But post 9/11 by Laden & Co., then President George W Bush gave sweeping powers to NSA to do surveillance on much more than Soviet or Chinese fighter jets. The result is that nothing, absolutely nothing, that you do on your phone or computer or tab is a secret any more. If NSA wishes for it, it is within their reach. But the bigger shock for liberals around the world was that Obama had continued

to endorse and back this Bush era program, despite publicly being all gung-ho about government whistleblowers! The current US President has tried to downplay the Snowden episode claiming that not voice data or message data, but call records were accessed by NSA. But he will be fooling only himself if he thinks the world would buy that. Each country is fiercely protective of its intelligence agencies, for obvious reasons. For example, Indian Government recently sided with Rajendra Kumar, a senior officer of its Intelligence Bureau (IB) who has been accused of a principal role in the shocking Ishrat Jahan fake encounter case of 2004, for which the investigating agency CBI has recently filed a charge sheet. In India, protecting IB assumes added significance as it is often alleged that the agency has been used by the governments for gathering political intelligence. Anyway, Obama further explains that what NSA does is like monitor who all called Laden, and that many terrorist attacks across the world were thwarted by the NSA program that Snowden just exposed. While sworn enemies of America like Iran were the most keenly spied on, neutral countries like India, and even allies like Arab and European Union countries figure among the most spied by NSA, according to Snowden’s revelations. The world is today enraged. But no nation including India is willing to grant asylum to the man who proved that America is spying on us all, for fear of US wrath. The Americans themselves are a divided group on Snowden as recent public polls show, with approximately equal number of people believing that he is a hero or that he is a traitor. So, who really is Edward Snowden?

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An American just destroyed America’s sacrosanct image regarding international fair dealing with other countries.

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It’s almost like watching a hair-raising Hollywood flick in which the protagonist is on the run, escaping from the clutches of his national government who were also his former employers, after having landed them in a spot of bother. Edward Snowden, the 29 year old American national formerly employed with the NSA, who leaked top-secret US surveillance documents to the world, has lambasted the government for having snooped on the cyber activities of millions of Internet users, including American citizens. He claims that the NSA’s espionage activities have eavesdropped into the personal details of the social media populace as well as entire targets countries, on the pretext that they pose grave threats to America’s national security. But this time movies follow reality. Already, four Hong Kong filmmakers Edwin Lee, Jeff Floro, Shawn Tse, and Marcus Tsui, have already turned the Snowden-NSA saga into a 5-minute thriller film currently uploaded on YouTube dramatizing the events that unfolded in the international news during the last few weeks. There is little doubt that the Snowden heroics will now find itself marshalled into nonfiction novels and professionally shot full-length movies, after having dominated much of the Internet discourse and daily print media. To decide on the intention of the globetrotting Snowden’s marvellous disclosures are a subjective issue thereby promising interested spectators a high-voltage stand-off between the government and the fink. Until such a verdict forms, Snowden hopes to flee from destiny just so that the script prolongs and concludes in a jubilant ending. Currently, his whereabouts are unknown amidst reports that he is in the Moscow airport seeking political asylum in several countries including India, by staying in a country that isn’t regarded as any kind of ally of the USA. Less than 3 months ago, Snowden had been working for Booz Allen Hamilton, a private consulting firm owned by The Carlyle Group, which basically provides security services to the US watchdog agencies. The

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company, based in Hawaii, conducted massive electronic spying programmes for the security interests of the US government. Snowden’s primary work involved mining or hacking data from Internet servers and tele-communication systems all over the world. By uncovering and releasing classified documents regarding surveillance methods of the NSA into the public domain, Snowden has exposed the US Government’s paltry regard for the sovereignty of nations and basic democratic rights of people around the world. Now, how did Snowden make these revelations public? Under the codename Verax (in Latin which means ‘truthteller’), the young systems operator sent encrypted e-mails containing US security files to two leading journalists - Barton Gellman of The Washington

PRISM a.k.a. the officially code-named US-984XN is an extensive US governmental security tracker which spies on the Internet usage and phone call records of its civilians. Snowden alleges that the mass surveillance not only radars the US Internet users but also of the cyber activities undertaken by the embassies of foreign nations in their own country.

Post and Glenn Greenwald of The Guardian, both of whom published their exclusive news-pieces about the spywork on the 6th of June. If not leaked, these documents would have remained classified till 2038 after which it is discarded. PRISM a.k.a. the officially code-named US-984XN is an extensive US governmental security tracker which spies on the Internet usage and phone call records of its civilians. Snowden alleges that the mass surveillance not only radars the US Internet users but also of the cyber activities undertaken by the embassies of foreign nations in their own country. Verizon, the leading US broadband and telecommunication agency, has been providing detailed data on every single call that went through its system to the intelligence agency including phonetapping services, acquiring call-record of duration, and place of communication between two parties. The disclosures didn’t stop there. Snowden then revealed that the NSA routinely captured material from the Internet that went through the servers of 9 leading US Internet portals or resources viz. Apple, AOL, Facebook, Google, Microsoft, PalTalk, Skype, Yahoo, and YouTube. However, all of these widely used websites have denied giving authorization for data-mining. Another big-data analysis and data visualization system used by the NSA to collect World Wide Web information is the ‘Boundless Informant’ which maintains a top secret global heat map displaying the extent of surveillance made on countries using colour-ranges - with green colour representing least coverage while red colour indicates intensive snooping . A snapshot of the ‘Boundless Informant’ data, contained in a top secret NSA global heat map seen by the Guardian, shows that in March 2013 the agency collected 97 billion pieces of intelligence from computer networks worldwide. Iran was the country where the largest amount of intelligence was gathered, with more than 14 billion reports in that period, followed by 13.5 billion from Pakistan. Jordan, one of America’s closest Arab allies, came third with 12.7 billion, Egypt was fourth with 7.6

billion, and India fifth with 6.3 billion. “I do not want to live in a society that does these sorts of things”, says Snowden while commenting on the purpose of the PRISM programme. “I do not want to live in a world where everything I do and say is recorded,” added the whistleblower on a televised interview from Hong-Kong, where he immediately flew to just before the revelations were published. Actually, the NSA whistleblower, accompanied by documentary-maker Laura Poitras and Glenn Greenwald, initially sought protection from the authorities of the Special Administrative Region of China in Hong Kong, which raised quite a few eyebrows. From there he took the flight to Moscow, along with WikiLeaks legal advisor Sarah Harrison and since then has avoided any kind of public appearance. The Russian President, Vladmir Putin has so far dismissed US demands for extraditing the fugitive-on-the-run saying that Snowden is a “free person on Russian soil” and that “there is no rendition treaty with the USA”. In later developments, WikiLeaks’ legal advisor in the Edward Snowden matter, Sarah Harrison, submitted by hand a number of requests for asylum and asylum assistance to many countries on behalf of Edward J. Snowden. The requests were delivered to an official at the Russian consulate at Sheremetyevo Airport in Moscow. The countries that have been approached for political immunity include the People’s Republic of China, the Republic of India, and the Russian Federation, all three of which share a history of ideological differences with the US. The Ecuadorian embassy in London, which shields Wikileaks founder Julian Assange, has backtracked from its earlier stand that it would render diplomatic protection to Snowden. The President of Ecuador, Rafael Correa has stated that the government isn’t considering Snowden’s asylum application and that it never intended to facilitate his flight to South America. He also said that Snowden was currently Russia’s responsibility and that he would have to reach Ecuador before his request is assessed. The whistleblower nevertheless has sent a personal plea to

Snowden then revealed that the NSA routinely captured material from the Internet that went through the servers of 9 leading US Internet portals or resources viz. Apple, AOL, Facebook, Google, Microsoft, PalTalk, Skype, Yahoo, and YouTube. However, all of these widely used websites have denied giving authorization for data-mining. Quito requesting assistance. The country had received widespread flak from major NATO powers for helping Assange seek asylum in their London embassy. Thus, Ecuador remains skeptical about lending any form of assistance lest they could harm their trade prospects with the powerhouses. Their President has successfully transferred the burden onto the shoulders of the Kremlin, thereby washing their hands off this issue. Russia, on the other hand, does not want to severe their improving ties with the United States by granting him political asylum and at the same time avoid giving in to Washington’s demand for Snowden’s extradition. Putin has said that Snowden was welcome to stay in Russia as long as he stopped publishing classified documents that could compromise the security of America. Snowden had arrived on an Aeroflot flight from Hong Kong to Moscow, apparently intending to board a

connecting flight headed for Latin America. However, soon the United States announced that his American passport had been revoked, leaving him in a geopolitical limbo, stripped of any valid identification and unable to leave Sheremetyevo’s transit zone. As things stand now, both Russia and Ecuador have taken a neutral position refusing to openly come out in favour of granting asylum to the whistleblower. Putin is wary of the increasing pressure from anti-American forces wanting the Soviet power to rub cold shoulders with the USA by granting asylum to the whistleblower. Sergei A Markov, a proKremlin analyst, said that if Snowden received asylum, he could acquire a Russian transit document and leave the country, or else remain in the country as a public figure, which he said would be “very good for public relations, as he will be like Gérard Depardieu.” Depardieu, the French actor, sought Russian citizenship to avoid taxes in his home country. But with the Cold war diplomatic boundaries having disappeared more or less, Russia will look to avoid brewing up a storm by aiding Snowden. Vladmir Putin is seemingly aware about the consequences his country may face if it shelters Snowden, which is evident from his press statement that “he didn’t want to hamper relations with their US business partners”. Recent reports reveal that Snowden has withdrawn his asylum request to Russia after Putin made it clear that he can stay only if he stopped harming US interests. Speaking to Reuters in Moscow recently during a two-day visit, Nicolas Maduro, the Venezuelan President, said Snowden “deserves the world’s protection”. He said that Venezuela has not yet received any asylum request from Snowden. Asked whether he would take Snowden back to Venezuela with him, Maduro answered wryly, “What we’re taking with us are multiple agreements that we’re signing with Russia, including oil and gas.” But he added his support for the US whistleblower, “Edward Snowden is a 29-year-old, young, brave man who didn’t kill anyone, didn’t give any reason for the start of war.” Maduro said Venezuela would examine the asylum

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request once it was received. “We think this young person has done something very important for humanity, has done a favour to humanity, has spoken great truths to deconstruct a world that is controlled by an imperialist American elite,” he added. Thus Snowden can hope for realistic support from a socialist country that chastises US dominance. All his hopes for a secured future will be pinned on the Communist giant once their executive think-tank begins weighing their options and measuring domestic public opinion. India, a long-time US partner has quickly snubbed Snowden’s asylum request concluding that it has no reason to accede to the whistleblower’s plea. MEA spokesperson Syed Akbaruddin rubbished reports of India seriously processing his asylum request after Snowden revealed that the Indian Embassy in the US is among the list of 38 diplomatic missions which were being spied upon by American intelligence agencies. Though India’s stand was hardly unexpected, critics believe that the Indian legislators should have reviewed the leaked US intelligence reports more earnestly, if not provide aid to Snowden. Each country is fiercely protective of its intelligence agencies, for obvious reasons. For example, Indian Government recently sided with Rajendra Kumar, a senior officer of its Intelligence Bureau (IB) who has been accused of a principal role in the shocking Ishrat Jahan fake encounter case of 2004, for which the investigating agency CBI has recently filed a charge sheet. In India, protecting IB assumes added significance as it is often alleged that the agency has been used by the governments for gathering political intelligence. Despite Delhi Police clarifying that the attempt to access the Call Data Record (CDR) of BJP leader Arun Jaitley was done by four persons including a policeman for personal gains, doubts are bound to linger. Meanwhile, 8 European states including Germany and Spain have downplayed Snowden’s request saying that asylum applicants had to be on their soil. They include Austria, Finland, Ireland, Norway, Poland and Switzerland.

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Each country is fiercely protective of its intelligence agencies, for obvious reasons. For example, Indian Government recently sided with Rajendra Kumar, a senior officer of its Intelligence Bureau (IB) who has been accused of a principal role in the shocking Ishrat Jahan fake encounter case of 2004, for which the investigating agency CBI has recently filed a charge sheet. In India, protecting IB assumes added significance as it is often alleged that the agency has been used by the governments for gathering political intelligence. “Delivering an application for asylum from abroad is in principle not allowed,” Norwegian deputy justice secretary Paal Loenseth told the country’s state TV. Polish Foreign Minister Radoslav Sikorski said it would have been rejected even if it was valid. As Snowden’ refuge option narrows down, there has not been any visible mass support for Snowden’s actions since the Hong Kong demonstrations. He has been charged with criminal acts including espionage and theft of government property by the US Justice Department. Each of these charges carry a maximum 10-year prison sentence. Even with the extradition request to Russia having been dismissed, USA is vehemently engaging in diplomatic dialogue with countries to which Snowden has sought legal protection. Julian Assange has blasted the US administration for “spying on each and every one of us” and “then charging Snowden with espionage for tipping us off”. A letter identified as being from the NSA leaker is slamming President Barack Obama for “using citizenship as a weapon.” The letter however could not be independently authenticated as being from Snowden himself as it is the anti-secrecy group, Wikileaks that has adopted his cause. The statement with Snowden’s name at the bottom said the Obama administration “has unilaterally revoked my passport, leaving me a

stateless person.” He also said that Obama had declared before the world that he would not permit any diplomatic “wheeling and dealing” over his case but has gone against his own word by ordering his Vice President Joe Biden to pressure the leaders of nations from which he has sought cover. “This kind of deception from a world leader is not justice, and neither is the extralegal penalty of exile. These are the old, bad tools of political aggression. Their purpose is to frighten, not me, but those who would come after me,” said the NSA whistleblower who feels defeated and demoralized by the recent turn of events. While many doubt the authenticity of the statement, which uses odd syntax and grammar, it is almost certain that the current script is going against the liking of the young tipster. It remains to be seen how his only real chance for asylum - Venezuela- would deal with the issue. Time is running out for Snowden. Can the former NSA systems operator negotiate a mutually gratifying understanding with his country or will he remain adamant on seeking political refuge, which at present has not yielded any results. Either way, deep down in his mind, Snowden may recount and contemplate on his action which eventually has landed him in a soup. Irrespective of the outcome of his actions, surely the movie scripts may romanticize and sympathize with the international hero.

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Bo ene Botttega V Vene enetta pr esen pre sentts Men’s Spring-Summer 20 14 C ollec tion 2014 Collec ollection For Spring-Summer 2014, Bottega Veneta presents a tailored collection that explores the effects of visual contradiction. The possibilities of balance and proportion play out through the overall form, for a look that is clean, contemporary, and precise. A new silhouette illustrating the refined techniques of tailoring and shirting juxtaposes a full top, emphasized by a prominently sloped shoulder and generous sleeve, with a narrow pant that is slim from the hip down. The palette incorporates both refined neutrals and saturated colors. Black, various tones of grey, milk white, and papyrus white, as well as deep aubergine, admiral blue and military green define this collection.

Burberr esen wear Burberryy pr pre sentts Mens Mensw Spring/Summer 20 14 ccollec ollec tion 2014 ollection

Luxury fashion brand Burberry presented its Spring/Summer 2014 collection for men, titled ‘Writers and Painters’. Capturing their relaxed, intellectual style, Chief Creative Office, Christopher Bailey, showcases a collection which personifies effortless chic. “A celebration of artistic and intellectual spirit, with a

So fit el opens the Sofit fitel fit el Sofit fitel stunning So Mon Monttevideo Casino C arr asc o& Carr arra sco Spa in South Americ a America Taking over the historical Hotel Casino Carrasco, which has been visited by personalities like Albert Einstein, Federico García Lorca, Getúlio Vargas, Felipe González and François Mitterrand, Sofitel Hotels & Resorts has restored it to create the stunning, new Sofitel Montevideo Casino Carrasco & Spa. Declared a listed national heritage building in 1975, the

nod and a wink to Alan Bennett and David Hockney. Easy, relaxed tailoring sits alongside lightweight pieces in linen and slouchy cashmere, while accessories add bright pops of colour among the painterly tones. Weatherproof cagoules and sou’westers take the whole collection outdoors and into the British summer,” he says. Municipality of Montevideo (IM) acquired the Hotel Casino Carrasco in 1915 and decided to close it down in 1997. In 2009, after an open call for tenders, the IM entrusted Carrasco Nobile, an investment group, and Sofitel, as a hotel operator, with the challenging task of bringing the building back to life. After a complex process that involved the expenditure of more than 75 million US dollars, on March 7, 2013, the Hotel Casino Carrasco has reopened its doors. A residential mood

Blancpain ina ugur inaugur uguraates ititss thir thirdd boutique in Shanghai, the lar ge st large gest in the w orld world Watch manufacturer Blancpain has opened a boutique in the Xintiandi district in Shanghai, which is now the brand’s eighth boutique in China. The watch brand is also one of those with the longest historical presence in the land of the Forbidden City. Thus, through this new flagship store, the Manufacture in Le Brassus intends to pay tribute to the loyalty of the Chinese people. The largest of the brand’s 30 boutiques, for the first time, offers an integrated customer service centre as well as a lounge bar, and this inauguration is being marked by the presentation of a unique version of the Calendrier Chinois Traditionnel. The moon-phase, which serves to determine the months of the Chinese calendar and has been an integral part of Blancpain’s complete calendars for 30 years, symbolises the closely interwoven parallels between Chinese culture and the world’s oldest watch brand. The new over 600 squaremetre Blancpain store welcomes visitors into a decor pervaded by its horological heritage and expertise. The pure, elegant area spread over two floors presents the brand’s finest creations and for the first time offers a range of additional services.

Est ée LLa auder stée in tr oduc es intr troduc oduce Revit alizing vitalizing Supr eme Global Supreme An ti-A ging E Anti-A ti-Aging Eyye Balm

Skincare brand Estée Lauder has now developed Revitalizing Supreme Global Anti-Aging Creme to address woman’s desire for an advanced multi-tasking skincare creme. Estée Lauder brings the benefits of this face creme to the eye area, with the introduction of the new Eye Balm, a multi-action treatment with the power to respond to skin’s changing needs and reduce multiple key signs of ageing for eyes that look firmer, brighter, more beautiful. The new product leverages the unprecedented combination of Estee Lauder’s proprietary IntuiGen Technology™ to revitalize skin from within, an exclusive NEW Triple Nourishing Complex to nourish the eye area and an advanced SIRT-1 Technology to rejuvenate the look of skin. Revitalizing Supreme Global Anti-Aging Eye Balm significantly reduces the look of multiple key signs of ageing around the eye area.

Guc ci announc es fir st men’s flagship Gucci announce first opening in Milan’s Br er a distric Brer era districtt Gucci has announced the opening of its first men’s flagship in the heart of Milan, the historic Brera district. The new shopping destination is surrounded by the Milanese art district’s prestigious galleries, design boutiques, and antique shops. The Gucci

men’s store spans more than 500 square meters across three floors and features a dedicated area for the Made to Measure program: a personalized, luxury sartorial offering for the modern day gentleman. The store employs open space, warm luxurious

Clinique la unche launche unchess High Impac Impactt Waterpr oo sc ar a erproo ooff Ma Masc scar ara Providing dramatic lashes that last all day, despite humid weather, busy schedules, or vigourous workouts, Clinique introduces new High Impact Waterproof Mascara. Tailoring the technology of the award winning High Impact Mascara, Clinique delivers a dynamic way to waterproof your style for 12 hours of fresh lashes. With a lash lengthening base of polymers that immediately build volume and a brush design made of solid, stiff fibers that help comb through lashes, High Impact Waterproof Mascara quickly and easily creates a wide-eyed dramatic look. The High Impact Waterproof Mascara is available in black, will be available across Clinique stores and counters for INR 1350.

Guc ci pr esen Gucci pre sentts it itss Men’s Cruise Collec tion 20 14 ollection 2014 Gucci’s Men’s Cruise Collection, much like the women’s collection, depicts sunset and the peak of a bohemian spirit with a sartorial sensibility. No stranger to exotic escapes, the Gucci man coasts freely to Rio de Janeiro’s ebb and flow. Creative Director Frida Giannini explored deconstructed lines, weightless materials, and euphoric print pairings. The silhouette is fluid and conducive to impromptu excursions. Deconstructed shapes have been given to low-rise, tapered pants with aviator bombers and cardigan-style blazers which are as light as shirts. Feather-weight cocktail jackets are inspired by foulards while lightly padded Safari jackets and a Chesterfield sport coat for new outerwear complete this collection. The collection introduces the reinvented Signoria suit with a shorter jacket and slimmer pants. The colour palette takes its cue from dusk in the tropics – for hues of tangerine, pomegranate, ochre,

Damiani pr esen pre sentts ne w ccollec ollec tions a new ollections att Ba selw orld Baselw selworld Presenting precious metals and stones in various scintillating avatars, Damiani has launched four new collections at Baselworld 2013. The D.Lace collection, handmade by the Damiani goldsmiths, consists of rings, bracelets, pendants and earrings whose clean shapes combine with gold and semiprecious stones. The collection re-works part of the D, Damiani’s iconic symbol, and weaves it with gold and semi-precious stones. Pink gold and white agate for two rings of different sizes, each with a little diamond laterally, a pendant and a necklace, a bracelet with chain and lastly a beautiful pendant earring add to the collection. Hammered yellow gold has been used for a pendant and

Viller oy & Boch st ar illero star artts retail oper ations with opera Gene sis LLuxur uxur Genesis uxuryy in India Villeroy & Boch AG has announced a joint venture with Genesis Luxury Fashion Pvt. Ltd. with operations starting from in June 2013. The joint venture with Genesis will exclusively manage the distribution of Villeroy & Boch tableware products in India. The partnership ensures the establishment of a distribution network through the opening of Villeroy & Boch's own exclusive retail stores in India. “Our aim is to develop the Indian market qualitatively with the new partner. The Indian market for luxury products has been growing continuously in recent years. This

Jaque oz la unche wE clipse ccollec ollec tion aquett Dr Droz launche unchess the ne new Eclipse ollection Jaquet Droz has launched the Eclipse collection of watches which were showcased at Baselworld 2013. The Éclipse Mother-of-Pearl and The Éclipse Ivory Enamel, traditionally presented in 43 mm case with the brand’s emblematic complication, are now presented in 39 mm models. The Éclipse Mother-of-Pearl offers exceptional beauty and great delicacy with mother-of-pearl being skillfully worked by the Jaquet Droz master craftsmen. Apart from the date, day, month and time display, a gold moon is subtly revealed at six o’clock by a white mother-of-pearl racquet. Like a spectacle in a night sky studded with eight stars – the watchmaker’s lucky number – the moon unveils or covers its face from full to total eclipse. The fire of the diamonds set on the white gold case light up the refined architecture of this new version of The Éclipse. The Éclipse Ivory Enamel reflects aestheticness with a dial that has Grand Feu enameling.

Guc ci TTimepiec imepiec es & Gucci imepiece welr unche Je Jew elryy la launche unchess Bamboo timepiec es in timepiece black & whit e vver er sions white ersions Gucci Timepieces & Jewelry has introduced two new extensions to its popular Bamboo range of women’s timepieces in black and white versions. These Swiss made quartz watches depict Gucci’s iconic bamboo styling, featuring a painted bamboo bezel and bangle. Particularly feminine and available in medium size (35mm), these

Kiehl’s la unche ower ful launche unchess P Po erful Wrinkle and P or e Por ore Reducing Cr eam Cream To counteract the effects of age and harsh environment, Kiehl’s has now launched the Powerful Wrinkle & Pore Reducing Cream. With top concerns of women being fine lines, wrinkles and pores, the new cream boosts elasticity, which helps in minimizing the appearance of fine lines, wrinkles and pores. This effective wrinkle-fighting, pore-reducing formula is clinically demonstrated to significantly improve elasticity by 32 per cent and texture by 26 per cent within four weeks. Utilizing powerful micronutrients, the formula works to boost elasticity, reduce wrinkles, smooth texture and improve the appearance of pores, all the while