• National protection court authority
    • The government is proposing to set up this authority with a view to deliver speedy justice to consumer grievances.
    • It is a quasi-judicial body based on the Federal Trade Commission of the US.
    • It will deliver justice within 10 days.
    • Misleading ads, e-commerce and credit card frauds, other consumer grievances will be covered under this.
    • Its ruling can be challenged only in the Supreme Court.
  • Details about new pension scheme effective from 1st January 2004
    • It envisages the employee contributing 10% of the basic salary with a matching contribution coming from the employer.
  • Understanding FDI (Foreign Direct Investment) in aviation
    • At present FDI limit allowed in domestic airlines is 49%.
    • 100% FDI is allowed in airports through automatic route.
    • The government is considering a proposal to raise the FDI limit to 74% for non-scheduled airline operations, helicopter services and regional airlines using small aircraft.
    • The key point to be noted is that there is a difference in non-scheduled airline operations and scheduled airline operations.
  • Cost of ad spends in TV media
    • A 10 second spot for popular soap would cost Rs. 1.5 lk
    • The same would cost Rs. 1.3 lk on an average cricket series
    • And Rs. 50,000 for a film on TV.
  • Volkswagen finally comes to Pune with about 410 mln Euro plant.
  • Per capita steel consumption
    • In India it is about 30 kgs per annum
    • In developed markets it is about 100 to 300 kg.
  • Foreign submarine cables to access local cable landing stations
    • The DoT (Department of Telecom) has decided to make it mandatory for the cable landing stations to be shared in a bid to restrict the monopolistic practices of the incumbents and provide a level playing field to new entrants.
    • But what is a cable landing station? See the extract below from wikipedia:
      • A cable landing point is the location where a submarine or other underwater cable makes landfall. The term is most often used for the landfall points of submarine telecommunications cables and submarine power cables.
      • Cable landing points are usually carefully chosen:
        • to be in areas that have little marine traffic to minimise the risk of cables being damaged by ship anchors and trawler operations;
        • to be in areas with gently sloping, sandy or silty sea-floors so that the cable can be buried to minimise the chance of damage;
        • to be in areas without strong currents that would uncover buried cables and potentially move cables.

Frequently, there will be a nearby cable landing station, or cable termination station, which may well be shared between multiple cable systems, but in some cases, the cable may be laid many miles inland before reaching its termination point.

A cable landing station may or may not be required, depending on whether, for example, the submarine cable requires power to power submarine repeaters or amplifiers.

A cable termination station is the point at which the submarine cable connects into the land-based infrastructure or network.

  • A country’s innovation capability is usually measured by the number of patents that are filed in the country.
    • The Indian Patent Office has received about 24,500 patent applications last year.
    • This year the figures is expected to touch about 30,000.
  • Should oil prices be left alone?
    • With the fiat coming from Mrs. Gandhi, the expected had happened. The PM has dictated that oil prices should be reduced and promptly the Union Minister of Petroleum has announced in the Parliament that the price of petrol will go down by Rs. 2 and that of diesel would go down by Rs. 1.
    • How does such price fixation by ‘diktat’ affect reform?
      • As the oil companies will keep incurring losses, they will have to resort to unscheduled borrowings.
      • This will result in tighter liquidity and dearer cost of funds for everybody.
      • The spiraling under-recoveries will necessitate the Centre issuing oil bonds to oil companies to stem the runaway losses. But these bonds would need to be redeemed from the budgetary sources, often at the expense of the other important social sector requirements.
      • Such artificially induced low prices will also jack up the cost of alternatives like bio-fuel.
  • Financial inclusion:
    • In his inimitable style, Prof. T.T. Ram Mohan of IIM, Ahmedabad today came up with a better solution for achieving financial inclusion.
    • The RBI has tried to achieve this by giving branch licences in under-served areas and re-working the priority sector lending mandates.
    • The truth is -- banks need to mobilize more deposits, given the flight of deposits to other areas.
    • A better way to achieve this financial inclusion is by prodding banks to putting in place systems for measuring risk adjusted return on capital for every borrower. This is because many of the best borrowers have already left the banking system and those that stay are getting better bargains by the day. This is evidenced by the fact that about 75% of the loans today are being made at sub-PLR (Prime Lending Rate) rates. So the best strategy for banks would be to find borrowers who are willing to pay more by way of interest. And that body of borrowers comprises of the SME and rural segments. Put simply the greater is the risk of lending money to a borrower, the higher the rate of interest chargeable.
  • Perhaps the most common definition of RAROC is simply ROC (Return on Capital) with an adjustment for expected loss:

    RAROC =(revenue – expenses – expected loss + income from capital) / capital


Anonymous said...

Ramakrishna Nice to see a person disseminating the knowledge. Good.. Keep it up.If possible give links to the news.. So we can get the detailed information.

Anonymous said...

I request the worthy disseminator to please provide details regarding FDIs and FIIs (in an easy language to have full grip over the subject) and their effects on the economic reforms of India

T T Ram Mohan said...

Thanks, Ramakrishna, for highlighting the main points in my last ET column in your blog. I have a blog on banking and the Indian economy that may be of interest to you. http://ttrammohan.blogspot.com/