RBI launches Financial Education Site

Reserve Bank of India (RBI) & its initiative on Financial Education
Press Release : 2007-2008/663
To commemorate Children's day, the Reserve Bank of India today launched a financial education site. Mainly aimed at teaching basics of banking, finance and central banking to children in different age groups, the site will soon also have information useful to other target groups, such as, women, rural and urban poor, defence personnel and senior citizens.
To explain complexities of banking, finance and central banking in a simple and interesting way, the Reserve Bank has used comic books format for children. It has created two special created characters for this purpose – 'Raju' who learns all about banking and 'Money Kumar' who explains subjects dealt with by the Reserve Bank of India, such as monetary policy, bank regulations and currency notes. Two comic books are already available on this site – 'Raju and the Money Tree' explains basic banking and 'Money Kumar and Monetary Policy!' explains the role and relevance of the Reserve Bank's monetary policy for the common person.
The site has films on security features of currency notes of different denominations and an educative film to persuade citizens to not to staple notes. Interestingly, the site also has games section. This section aims at educating children through entertainment. The games currently on display have been especially designed to familiarise school children with India's various currency notes.
The site will soon be available in Hindi as well as in 11 regional languages.
The site can be accessed at http://rbi.org.in/financialeducation/Home.aspx or from the quick link provided on the home page of the main RBI website at http://rbi.org.in/home.aspx

SEBI Order - Ketan Parekh

PR No.295/2007
Order against Shri Ketan V. Parekh and his associated entities by Securities and Exchange Board of India (SEBI)

SEBI conducted investigations into the buying, selling and dealings in the scrips of Himachal Futuristic Communications Limited, Zee Telefilms Limited, Adani Exports Limited, Global Tele-Systems Limited, Ranbaxy Laboratories Limited, Shri Adhikari Brothers Television Network Limited, Shonkh Technologies International Limited, Padmini Technologies Limited and Aftek Infosys Limited during the period October 1999 to March 2001.

The investigations revealed that Shri Ketan V. Parekh and 17 other entities who were directly/indirectly related/associated to him were involved in market manipulation in the aforesaid scrips in violation of SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 1995 and/or SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997. The modus operandi adopted by all the above mentioned entities in manipulating various scrips was, by and large, the same and Shri Ketan V. Parekh was found to be the master mind behind all the acts of omission or commissions by these entities.

In view of the above, Dr. T.C. Nair, Whole Time Member, SEBI, has passed an order dated November 12, 2007:

a. Restraining Shri Ketan V. Parekh and his 10 associates namely Shri Kartik K. Parekh, Classic Credit Ltd., Panther Fincap and Management Services Ltd., Luminant Investment Pvt. Ltd., Chitrakut Computers Pvt. Ltd., Saimangal Investrade Ltd., Classic Infin Ltd., Panther Investrade Ltd., Goldfish Computers Pvt. Ltd., and Nakashtra Software Pvt. Ltd. from accessing the securities market and also prohibiting them from buying, selling or otherwise dealing or associating with the securities market in any manner whatsoever, whether directly or indirectly, for a period of fourteen years.

b. Restraining Shri Navinchandra N. Parekh, Shri Kirtikumar N. Parekh, Shri Jayant N. Parekh and Shri Vipul D. Parekh, from accessing the securities market and also prohibiting them from buying, selling or otherwise dealing or associating with the securities market in any manner whatsoever, whether directly or indirectly, for a period of one year.

c. Restraining Triumph International Finance India Ltd., Triumph Securities Ltd., and NH Securities Ltd. from accessing the securities market and also prohibiting them from buying, selling or otherwise dealing or associating with the securities market in any manner whatsoever, whether directly or indirectly, for a period of five years.

In regard to the entities namely, Shri Ketan V. Parekh, Shri Kartik K. Parekh, Classic Credit Ltd., Panther Fincap and Management Services Ltd., Luminant Investment Pvt. Ltd., Chitrakut Computers Pvt. Ltd., Saimangal Investrade Ltd., Classic Infin Ltd. and Panther Investrade Ltd., which were covered under SEBI order dated December 12, 2003 (debarring them from securities market), this order shall run concurrently and shall be deemed to be effective from December 12, 2003.

As regards the remaining entities, the order shall come into effect from the date of the order.

Full order in http://www.sebi.gov.in/cmorder/ketanorder1.pdf

Insurance & its Concepts

The PRINCIPLES of Insurance include,

1. UGF – Utmost Good Faith: A duty to disclose accurately & fully ALL material facts whether requested or not. It is a Reciprocal Duty;

2. II – Insurable Interest arises out of LEGAL/FINANCIAL relationship; The striking feature being,

- BENEFIT (from existence) from safety, well being, freedom from liability;

- PREJUDICED (by loss) by damage or existence of liability;

LI: Uberrima Fidei i.e., Utmost Good Faith & Insurable Interest;

GI: UGF + II + Indemnity & Proximate clause.

TIME WHEN INSURABLE INTEREST SHOULD BE PRESENT:

I. FIRE & MISCELLANEOUS INSURANCE: EXIST @ the time of taking policy; CONTINUE during the currency (period) of policy; EXIST @ the time of loss for a valid claim;

II. MARINE CARGO INSURANCE: ONLY @ the time of loss.

III. MARINE HULL & MOTOR INSURANCE: EXIST @ the time of taking policy; EXIST @ time of loss.

INDEMNITY: To place the insured after a loss in the Same Financial Position as far as possible as he occupied immediately before loss, Neither better Nor worse. The measurement of Indemnity based on Intrinsic Market Value of property @ the time & place of damage/loss;

SUBROGATION – Corollary to Indemnity: "The transfer of rights & remedies of insured to insurer who has indemnified the insured in respect of loss". Insured does not receive more than actual amount of loss & any recovery effected from III-party goes to insurer.

CONTRIBUTION – Corollary to Indemnity: NOT for personal/accident insurance. Using "several insurance", to make profit out of loss. It is the right of insurers who have paid a loss under a policy, to recover a proportionate amount from other insurers, who are liable for the same loss. The pre-requisites include,

1. Common Peril (all policies) 2. Common interest & insured

3. Policy in force 4. Policy is legally enforceable.

PROXIMATE CAUSE: To provide indemnity for such losses as are caused by insured perils. The loss may be the result of two or more causes acting simultaneously or one after other; the most important, the most effective, the most powerful cause that has brought the loss. Otherwise, it will be a remote cause

POLICY CONTRACT:

A Policy Document as an evidence of contract. The policy document has,

1. Preamble: Proposal & declaration form part of policy.

WARRANTY = Truth of Statement.

2. Operative Clause: Mutual Obligation; Pay Premium & Pay Benefits.

3. Provisio: Subject to conditions (printed on back of the policy).

4. Schedule: Identifies the proposal referred in Preamble. Have contents like FPR.

5. Attestation: @ the end of first page – the signature & date.

6. Condition & Privileges: Explanatory/Restrictive/Privileges/Benefits.

RIDERS – Additional Covers: Helps to increase the clarity of policy; It defines the fate of policy in case of certain defined circumstance.

NOMINATION: (advisable)

1. Nominee does derive a right to sue only after Policy Proceeds become payable.

2. One can change nominee without consulting previous nominee/insurer.

3. Liable to legal heirs of deceased having proof of right to claim.

GUARANTEES:

1. Guarantee additions: Sum Assured get enhanced each year.
2. Guaranteed Surrender Value (SV): On payment of premium for 3 full years, Minimum SV = 30%[Premium paid (-) 1 ^st year Premium (+) Bonus additions].

ASSIGNMENT = Legal Transference – "passing interest in policy": Assignment cannot be altered; Assignee has the right to sue only after giving Notice to Insurer & receiving acknowledgement. It may be,

1. By endorsing Policy Document which is exempt from Stamp duty;
2. By separate Assignment Deed which is liable to be stamped.

ASSIGNMENT OF,

SNO.	ASSIGNMENT OF	CONDITION
1.	Fire & Marine Insurance	ONLY with the consent of Insurer & subject to conditions.
2.	Marine Cargo	Freely assignable.
3.	Marine Hill or Motor Policy	With the Consent of Insurers.

I think this will help Company Secretary, CS Final, friends when preparing for their Banking & Insurance paper (BILP).

THE MINIMUM WAGES ACT, 1948

Objective of the minimum wages act - To provide for fixing of minimum rates of wages

WAGES = all remuneration capable of being expressed in money & INCLUDES HRA but DOES NOT INCLUDE supply of light, amenity, etc… excluded by order, contribution to PF, expenditure in the nature of employment, & gratuity on discharge.

S-3 à Fixing Minimum Wages (an administrative act) by the Appropriate Government following prescribed procedure & revised periodically based on time/piece work and ensures a guaranteed rate; also gives overtime rates;

It may be based on hour/day/month/larger period; It will be different for different scheduled employment or class of work or adults/adolescents/child/apprentice.

S-4 à RATE: Consist of Basic Wages +/- Allowances based on ‘cost of living index number’ or an all-inclusive rate can be fixed.

S-5 à PROCEDURE:
STEP1: Appoint Committee;
STEP2: Publish proposals as by means of Notification;
STEP3: Give opportunity of being HEARD;
STEP4: Notify Minimum Wages > 3 months.
MAY NOT be in Scheduled Employment, if < wage =" mean">They can't ask anything more than this in IR. Be thorough with everything in this. Prepare the Notes this way for all subjects of Company Secretary exam study, u can win easily. See, this is the only act in Industrial Relations, that u r studying new, the rest is all what u did in CS Inter.
Enjoy Passin...

DGFT Toll Free

Yes, Government Departments are doing great, eager to see 2020 India now...

Director General of Foreign Trade (DGFT) & its Toll-Free facility.

While filing applications and making payments online, it has been observed that exporters/ importers face technical problems on account of non-availability of relevant documents, malfunctioning of system etc. For attending to these technical problems, DGFT has set up a Helpdesk. The trading community can access the Help Desk by dialing the toll free number 1800 111 550 or by e-mail at http://us.f505.mail.yahoo.com/ym/Compose?To=dgftedi@nic.in.
The help desk will be available between 10.00 AM to 7.00 PM on all working days. A complaint number may be provided by helpdesk if issues remain unresolved. The complaint number may be quoted for all future reference. For e-mails complaint Numbers may be conveyed on next working day if complaint is unresolved.

Direct Receipt of Import Bills / Documents - Liberalisation

RBI/2007-08/181 A.P. (DIR Series) Circular No.18

Attention of Authorised Dealer Category - I (AD Category - I) banks is invited to item i.a. of A.P. (DIR Series) Circular No.66 dated February 6, 2004 in terms of which AD Category - I banks are permitted to make remittances for imports, where the import bills / documents have been received directly by the importer from the overseas supplier and the value of import bill does not exceed USD 100,000. Further, in terms of i.c. of the Annex to the aforementioned circular, status holder exporters, as defined under the Foreign Trade Policy are permitted to receive import bills / documents directly from the overseas supplier irrespective of the value of the import.

Continued in http://www.rbi.org.in/scripts/NotificationUser.aspx?Mode=0&Id=3927

Fit and proper criteria for elected directors on the boards of nationalised banks

Fit and proper criteria for elected directors on the boards of nationalised banks
RBI/2007-08/178DBOD. No. BC.No.47/29.39.001/2007-08

'Fit and proper' criteria for elected directorson the boards of nationalised banks
It has been decided to lay down specific 'fit and proper' criteria to be fulfilled by the persons being elected as directors on the Boards of the nationalised banks under the provisions of Section 9(3)(i) of Banking Companies (Acquisition and Transfer of undertakings) Act 1970/80. The authority, manner/procedure and criteria for deciding the 'fit and proper' status etc. are as under http://www.rbi.org.in/scripts/NotificationUser.aspx?Id=3916&Mode=0

Thanks & Regards
-- Alagar

Labour Laws

Credits to the author. It can be viewed in http://thisisvj.googlepages.com/LabourLaws.pdf
This PLUS http://www.dateyvs.com/ (Labour Primer) can make you the master of Labour Laws.

Enjoy referring...

Stamp Duty, QIP,

Ready Referencer Series... Credit to the Authors...
1. Stamp Duty Chart
http://thisisvj.googlepages.com/STAMPDUTYCHART.pdf
2. QIP... from Chartered Secretary
http://thisisvj.googlepages.com/Qualified20Institutions20Placement20.pdf

Enjoy referring...

The Payment of Bonus (Amendment) ordinance, 2007

Credits to Mr. Dattari, CS Mysore

On 27th October, 2007 the President has promulgated the Payment of Bonus (Amendment) ordinance, 2007 containing the following amendments:-i) Amendment to clause (13) of Section 2 of the Payment of Bonus Act, 1965 to raise the eligibility limit for payment of bonus from the salary or wage of Rs. 3500/- per month to Rs. 10000/- per month.ii) Amendment to section 12 of the Payment of Bonus Act, 1965 to raise the ceiling for calculation purpose from the salary or wage of Rs. 2500/- per month to Rs. 3500/- per month;iii) Deletion of clause (vi) of section 32 of the Payment of Bonus Act, 1965 so as to cover the employees employed through contractors on building operations.Thus the employees, including those employed through contractors on building operations will be entitled to receive bonus as per the revised ceilings, for the year 2006-07 and onwards.
The Ordinance shall be deemed to have come into force on 1st April, 2006.
For further details, kindly refer http://labour.nic.in/

The Online Companies Act

V will always make things more & more easier.

Access Companies Act (& also many more files too - soon) just by the click of your mouse from here, http://spreadsheets.google.com/pub?key=pJv0NBbfYdGAiQNUFtuTPVg

Enjoy referring...

RBI - Mid term review of Annual Policy - Hike in CRR to 7.5%

The RBI Governor, YV Reddy announced the credit policy in Mumbai today.
RBI has hiked the CRR by 50 bps to to 7.5% from 5%. However, the other key rates including the repo and reverse repo rates have remained unchanged. CRR hike may impact in the Indian Capital market.
The RBI's has raised the cash reserve ratio given the persistent rise in capital flows, but has otherwise left other policy rates unchanged. The central bank's main message is that the economy is in fine shape – agriculture is above trend, industry and services may slacken just a bit. So the GDP target remains at 8.5% and inflation at 5%

But the main threat is from global capital flows, which may only increase given easing by global central banks. Inflation, which has been successfully controlled so far, is also under threat from oil and food tightness. But the biggest threat is from capital flows, especially from unregulated private entities who invest in equities and real estate. These, with a lag, can increase aggregate demand and impact inflation.

The central bank's thrust therefore is to control and sterilise flows. Hence the hike in CRR.

Is it more hawkish? It is certainly more alarmist.
The bank rate remains unchanged at 6% while the RBI has kept its inflation target for FY08 at 5%. RBI's GDP forecast too remains unchanged at 8.5%.

The RBI has said that the surplus liquidity needs priority attention. It needs to check bank credit risk from faulty derivative record, it added. Oil companies can hedge forex exposure up to 50% of inventory, it added.

The central bank said that money supply is expanding well above 17-17.5%. There is evidence of stability in real estate prices, it revealed. However, it informed that there are irregularities seen in banks' real-estate exposure.

The RBI has said that 10 banks have high exposure to real estate and stocks, adding that it will continue to manage liquidity through reins like CRR, MSS and LAF (liquidity adjustment facility). RBI said that credit growth is in line with 24-25% target. It confirmed that the credit policy stance has been more hawkish than July; the emphasis being on capital flows.
The Reserve Bank said that that authorised dealers have been allowed to run cross currency options. The total credit growth of 23.3% as on October12 stood at Rs 3.81 lakhs crore, it informed. Managing liquidity arising from forex flows posed a key challenge, it said. The Consumer Price Index (CPI) inflation has been up at 7.3% in August 2007 Vs 6.3% (YoY). The deposit growth is ahead of FY08 target of Rs 4.9 lakhs, the central bank informed.

Companies with forex need can write covered call and puts, the RBI said, adding that excess money supply needs 'intensified monitoring.' It has concerns on strong growth in lending to real estate. Asset prices remain at elevated levels, RBI feels. It finds that currency markets have seen a tentative return to stability.

The global economy is still strong and inflation environment is benign, the RBI has observed. The high oil prices are a concern and food and metal prices will feed inflation, the RBI senses.

Press Release: 2007-2008/589 can be accessed from http://www.rbi.org.in/scripts/BS_PressReleaseDisplay.aspx?prid=17429

-- Alagar
Asst Manager - Merchant BankingKarvy Investor Services Limited G-1 Swathi Court22, Vijayaraghava RoadT.Nagar, Chennai - 600 017Tel: 044-28151034/3445/3658 Moble: 919884731993e-mail: alagar.muthu@karvy.comwebsite: karvy.com