21.11.2007

• Branch and ATM licensing to be liberalized
• Banks planning new branches and ATMs may no longer require a mandatory approval from RBI. The government is considering a proposal to de-license bank branches and ATMs in the country.
• The move is in tune with the likely findings of the committee on financial sector reforms headed by Raghuram Rajan.
• The opening of bank branches is governed by Section 23 of the Banking Regulation Act, 1949. Banks cannot open a new place of business in India or abroad unless RBI approves it.
• Romulus and Remus cave may have been discovered
• These are the twin founder of the city of Rome.
• Italian archaeologists believe that they found the cave where a she-wolf suckled Romulus and Remus.
• Carrefour’s entry into India
• The world’s second largest retailer and Europe’s largest has made an entry into India. It is expected to choose an Indian partner early next year and plans to launch a wholly owned Indian cash-and-carry business in 2009.
• Sortino Ratio
• Frank Sortino developed this ratio. Many global MF (Mutual Fund) rating agencies prefer this risk-adjusted return measure over the Sharpe ratio, because it is simple and easy. This classifies risk in terms of upside and downside risk. It arrives at a minimum acceptable return (MAR) for an investor. Whenever the fund return is less than MAR, it adds the underperformances, but does not add outperformances. This is a better measure of risk than volatility, used by Sharpe ratio. The latter tends to value consistency in the form of good or bad performances.
• Mastercard and mobile banking
• Mastercard plans to use the mobile phone customer base to reach the unbanked population. According to its estimates banking penetration is under 30%. There are more people in the country with mobile phones than with bank accounts.
• According to a recent BCG report there are about 135 mn households in India which do not have access to basic banking services and this constitutes about 65% of the total population.
• What are the factors that led to India getting exposed to the global shocks in food supplies?
• India was largely immune from global price fluctuations earlier due to tight government control on supply and prices and rising production. But increased integration with global markets, through export of value-added products such as processed foods, and recourse to imports due to stagnant production (of wheat, pulses and oilseeds in particular) has exposed India to global shocks.
• A bit about Vijay Kelkar’s background
• He was recently appointed as the Chairman of the 13^th Finance Commission. He is not an IAS officer, but an engineer by training and a Ph.D in economics.
• He headed the task forces on direct and indirect taxes, and also the one on implementation of the Fiscal Responsibility and Budget Management Act. He is largely credited with the drafting of the Goods and Services Act that is expected to be implemented all over the country from 2010.