Indian Current Affairs: 11.09.2007

Basel norms are about bolstering banks’ capital in accordance with the supervisory standards and guidelines formulated by the Basel Committee. Look at what we noted on the various types of capital that will be counted towards capital adequacy.
Banks have so far focused only on three types of risks – operational, capital and market risks. The other types of risks include – legal, policy, environmental, regulatory, compliance, brand and reputation risks. Technology obsolescence and number of ageing employees are also other risks.
While conducting an annual audit of the banks, RBI can direct them to assign a higher capital, if it feels that the capital provided by the banks is not adequate to cover all the risks. This process is known as ICAAP – Internal Capital Adequacy Assessment Process.

The UPA government introduced the bill in Parliament. But the Left parties have rejected this as mere tokenism and demanded that separate legislation for agricultural and non-agricultural workers be introduced in line with the Arjun Sengupta committee report.

The government is toying with the idea of levying a cess on the big retail to fund cheaper credit to the smaller mom & pop stores. The idea is based on the notion that non-availability of cheap credit to them is the reason behind their unrest.
But I have my own doubts about such a move. Cesses only complicate life further and are too costly to administer. Will the cesses reach the intended beneficiaries?

Closing a company is as tough as setting up one in India. The Industrial Disputes Act provides for closure of industrial undertakings employing more than a certain minimum number of people, after seeking government’s permission. In most cases it never comes by. This encourages lock-outs and illegal closures, leaving no winners. According to a recent World Bank report, closing a business in India can take up to 10 years.
Industry mavens say that making closures easy encourages hiring. This leads to more employment opportunities.

This is an excellent debate that appeared in today’s ET. Recommend reading it once.
To get a grip over the subject, two reports are good enough:

A local development tax on minerals. Let the village panchayats own this money to be used collectively for their own programmes. If this does not work, let the money be distributed, to each head, falling within its jurisdiction. One can work on the concept to develop, build a system that delivers efficiently. This will in the first place help the local population and secondly, reduce the scope for the mafia extortions. Extortionists will face a collective resistance from legitimate collectors of funds for own development. Resistance to investment at least will drop.

These are designed to provide early signals of turning points between the expansion and slowdown of economic activity. Constructed by OECD, it is an aggregate time series displaying a reasonably consistent leading relationship with the reference series for the macroeconomic cycle in a country.

These are a combination of a currency option and an equity forward contract.
If the exchange rate works in favour of the investor under the option contract, the total payout from the option is dependent upon the performance of the equities underlying the contract. Otherwise, the investor does not receive a payout.

This is a very good article that gives us the basics of nuclear reactors. Written by our famed scientist MR Srinivasan in today’s Hindu.

He won the US Open for the 4^th successive time beating the Serb Novak Djokovic. Four successive wins in US Open were recorded only in 1920’s by Bill Tilden.
He has now a total of 12 Grand Slams to his credit. Just two short of the 14 that Pete Sampras has recorded.

Indian Current Affairs