28 april

PAC on 2G: Manmohan gets clean chit, PMO  A parliamentary panel in its draft report on the 2G spectrum case has given a clean chit to Manmohan Singh but criticised the Prime Minister's Office (PMO) for delaying a letter to A. Raja asking him to consult senior ministers before selling the scarce and expensive telecom radiowaves.

Approving the findings of the Comptroller and Auditor General (CAG), the Public Accounts Committee (PAC) report blames 'systematic failure' in the government and severely indicted Raja, the then IT and communications minister, for allegedly selling second generation telephony spectrum licences to private firms at throwaway prices despite a letter from Manmohan Singh asking him to consult others, according to a panel member.

'Prime Minister's Office's role is under scanner but prime minister (Manmohan Singh) is not,' the member told IANS on condition that he not be named.

The member said the panel in its six-month investigation has found that the prime minister was kept out of the loop on 2G spectrum allocation even as he had advised Raja to consult a group of senior ministers over how to allocate the spectrum and how much to charge for it.

'The committee has brought it to the notice that there was a delay in sending the prime minister's letter to Raja. Raja took advantage of the delay and sold the spectrum at cheap rates,' the member said, adding the delay was from the PMO.

Asked if the report gives clean chit to Manmohan Singh, the members said: 'Yes, to some extent.'

Raja and eight others, including top corporate honchos and bureaucrats, are in jail for conspiring to sell the 2G airwaves to select companies at throwaway prices. Five others, including DMK Rajya Sabha member Kanimozhi, have been named as co-accused in the case.

The report has also criticised the role of P. Chidambaram who was the finance minister in 2008 when the spectrum was sold.

'It was Chidambaram who pleaded with the prime minister to close the matter despite some ministers wanting stringent action against those responsible for the losses,' the member said quoting the report.

The report is likely to be adopted by the 22-member panel Thursday in its last meeting before its term ends April 30.

The report is to be tabled in parliament's next session before being made public officially.

Ironically, the 22-member panel headed by Bharatiya Janata Party's Murli Manohar Joshi has a sharp division within.

'The Congress and the DMK (Raja's party) are opposing the report. Let's see what happens,' said another member.

It is likely that the DMK and the Congress members in the panel will write a note of dissent. However, their views are unlikely to be incorporated in it.

PM should have been named as witness in 2G case:Balwa

 Swan Telecom Promoter Shahid Usman Balwa, chargesheeted in the 2G spectrum scam, today told a Delhi court that the CBI should have named

Prime Minister Manmohan Singh as one of the witnesses in the case.

He cited the correspondence between former Telecom Minister A Raja and the Prime Minister relating to the 2G spectrum, which has been annexed with chargesheet, for demanding that

Singh be made a witness.

"CBI is producing letters of Raja and the Prime Minister as evidence. They (CBI) should have made the Prime Minister a witness in the case," Advocate Majid Memon, appearing for Balwa, told Special CBI Judge O P Saini while arguing his bail plea.

Memon along with advocate Vijay Agrawal said that CBI has produced letters written by Raja to Prime Minister Manmohan Singh and his response as a evidence in the case.

Memon said that Raja was in touch with the Prime Minister and he regularly apprised him (PM) about the development in the department (DoT).

They said the agency, in its first chargesheet, has said that Raja misled the Prime Minister but instead of CBI, the PM should tell this.

"CBI is saying Raja misled the PM. If it is so, then it should be the PM who should say this, not the CBI," Agrawal said.

During the arguments, Memon also pointed out to the letters written by Raja to the Prime Minister

on November 2, 2007 and the subsequent letters to Raja from the Prime Minister.

He said when Swan Telecom applied for the licenses, neither Raja was the telecom minister nor his personal secretary R K Chandolia, who has named as accused in the chargesheet, was there.

Pressing for Balwa''s bail, Memon said that the offence under which his client has been charged does not fall under the category of grave offences punishable upto life imprisonment or death penalty.

He alleged that CBI is enjoying that Balwa is behind the bars.

"CBI says that Balwa cannot come out of jail as if they are enjoying my (Balwa''s) sufferings behind the bars," he said.

"CBI may be feeling a sense of shame

if they will not oppose the bail plea in such a high magnitude case and so they are opposing it." .

Syria's Assad under pressure as hundreds of Baathists quit

DAMASCUS: Foreign pressure mounted on Syrian President Bashar al-Assad on Wednesday and hundreds of members resigned from his party, as troops kept their grip on the flashpoint town of Daraa.

Syria's opposition warned Assad that he would be toppled unless he ushered in democratic reforms, although the UN Security Council failed to agree on a condemnation of the violence.

And in a fresh blow to the regime, 233 members of Syria's ruling Baath party announced their resignation in protest at the deadly crackdown on protesters, according to lists seen by AFP.

"The security services have demolished the values with which grew up. We denounce and condemn everything that has taken place and announce with regret our resignation from the party," they said in a signed statement.

Baath party signatories from the Banias region, which covers Daraa, condemned "the house raids and the indiscriminate use of live fire against people, homes, mosques and churches."

On the international scene, influential US Senator John McCain said Assad has "lost his legitimacy" and called for UN sanctions to force him to halt attacks on his people.

"I obviously think he has lost his legitimacy. He has ordered his army to fire on his own people, and yes I think he should leave," the senator told AFP in Paris.

The Security Council, however, failed to agree on a statement condemning the killing of Syrian protesters, diplomats in New York said. After talks ended in deadlock, Western nations called for an immediate open meeting.

Russia and China blocked the statement proposed by Britain, France, Germany and Portugal that would have condemned the violence and backed calls for an independent investigation.

Germany's defence minister earlier demanded that the Council send a "strong signal" to show international alarm over the unrest in Syria.

The European Union, meanwhile, is mulling sanctions and the UN human rights body has called for a special session in the wake of the Syrian regime's bloody crackdown on pro-democracy protesters.

Five EU countries are also summoning Syria's ambassadors over the violent crushing of dissent, France said, adding it was joined by Britain, Germany, Italy and Spain.

According to human rights activists, the military assault on Daraa, 100 kilometres (62 miles) south of Damascus, has left more than 30 people dead since Monday, with at least 453 civilians killed across Syria since protests first erupted in mid-March.

A military source, meanwhile, said soldiers on Wednesday confronted "terrorist armed groups" who had cut off roads and opened fire on passers-by in a Daraa drive-by shooting.

"One member of the armed forces was martyred and five others were wounded," said the source, quoted by the official media, adding that several of the gunmen were also killed.

He denied satellite television reports of a rift in army ranks.

As the assault on Daraa, an agricultural town near the Jordanian border, entered its third day, the newly formed National Initiative for Change (NIC) warned Assad to institute real democratic reforms or risk "violence, chaos and civil war."

"Either the ruling regime leads itself in a peaceful transition towards democracy ... or it will go through a process of popular protests that will evolve into a massive and grassroots revolution," an NIC statement said.

"If the Syrian president does not wish to be recorded in history as a leader of this transition period, there is no alternative left for Syrians except to move forward along the same path as did the Tunisians, Egyptians and Libyans before them," added the NIC, an umbrella group of more than 150 opposition activists in Syria and abroad.

Syrian protesters took to the streets in even greater numbers after Assad scrapped nearly five decades of draconian emergency rule and abolished the repressive state security court a week ago.

Testing his promised reforms, they staged protests across Syria on Friday, demanding the end to the Baath's grip on political power, the release of political prisoners and the right to protest freely.

However, the security forces cleared demonstrations with tear gas and live rounds, with scores reported killed and hundreds arrested.

On Monday, between 3,000 and 5,000 troops backed by tanks and snipers swept into Daraa, the epicentre of the protests killing at least 25 people, according to rights activists. At least another six people died on Tuesday.

The army said troops entered Daraa "in response to calls for help" from citizens to rid them of "extremist terrorist groups" behind a spate of killings and sabotage.

Security forces also deployed in the northern Damascus suburb of Douma on Monday.

Austria said steps were being taken to evacuate its nationals from Syria, while Syrian ally Turkey said it is sending envoys Thursday to Syria to press for reform.

US ambassador to India Timothy Roemer to resign

IDBI to push RBI on 'White-label' ATMs

Plans joint venture with private ATM service providers.

IDBI Bank is planning to create a separate entity in partnership with private ATM service providers for running ‘White-label ATMs’ — not tied to any bank — in the country.

“We will soon approach RBI (Reserve Bank of India) with our plan,” R M Malla, chairman and managing director, told Business Standard.

Customers from any bank can deposit or withdraw money from ‘white-label ATMs’. Their banks then pay for the service. Also, such ATMs are invariably owned by a third-party, not a bank.

At present, under RBI guidelines, ATMs can only belong to a particular bank. Transactions of customers from other banks are settled by paying Rs 14 as the charge per transaction by the bank in which the customer has his account. RBI has been reluctant to allow white-label (or no name) ATMs by non-banking entities. Malla said RBI felt only banks should own ATMs so that the flow of funds can be accounted for, regulated and monitored.

“However, with a new entity created jointly and handled by a bank, the situation would be different and RBI’s concerns can be taken care of. If globally this has happened with proper precautions, why should it not work in India with strict due diligence?” asked Malla.

Many services in the banking domain were common, he noted. Obviously, it was difficult for banks to create a common platform for these services. “There could be some entity, however, whose proper due diligence has been done and which specialises in this area. We want to be a major player in this,” he said.

IDBI has started working towards this goal. It has 1,400 self-managed ATMs across the country. “In the next 12 months, we have planned to raise the number to 2,500, with a strong focus on low-cost ATMs,” said Malla. The bank has decided to tie up with ATM service providers for this. Of the 1,100 ATMs to be added during this period, 500-750 ATMs will be outsourced.

“This will save us the cost of setting-up and running ATMs, as we will have to pay the service provider a specified amount per transaction. It will be the service providers’ responsibility to create the infrastructure and run the ATMs,” said Malla.

Adding: “We are evaluating proposals of various ATM service providers. We will set up ATMs with them. Then, at some point of time, we will partner with them for starting the white-label ATMs venture if RBI permits.”

MFIs need fixed regulations: Fitch

A common and consistent set of regulations from a single regulator is necessary to revive Indian microfinance institutions (MFIs). According to a report by rating agency Fitch, different sets of regulations imposed by different regulators may result in an uneven playing field.

The Reserve Bank of India (RBI) and the Andhra Pradesh government seeking to regulate the sector in the state can be seen as an example of multiple regulators vying for control. Such instances would only lead to harmful consequences, the report said

“The experience of cooperative banks in India suggests multiple regulators may not be as effective as a single, strong regulator. MFIs may also find it difficult to comply with different sets of guidelines. A common and consistent set of regulations would add stability to MFIs’ operations and enhance creditor comfort”, said Ananda Bhoumik, senior director (financial institutions), Fitch.

MFI loans in Andhra Pradesh were the worst hit in the country, owing to uncertainty over regulation of the industry in the state. Collection efficiencies dropped from 99 per cent in September 2010 to below 50 per cent in December 2010. Andhra Pradesh accounts for about 29 per cent of the total MFI loans in the country, and the deterioration in portfolio delinquency in the state resulted in many large MFIs seeking to restructure their own borrowings from banks, the report said. Rising delinquencies in Andhra Pradesh could also spill over to the adjacent states of Karnataka and Tamil Nadu, it added.

RBI recommendations on interest rates and margin caps on lending, together with tighter loan-loss provisions and general provisioning norms, may lead to consolidation, since smaller players would be forced to re-examine their business models. Under the new guidelines, debt and equity funding may be constrained, since investors would reassess their risks. “From a creditor’s perspective, the lower pace of growth is good news. While lower margins would somewhat erode the defence against shocks to asset quality, the minimum core Tier 1 ratio of 15 per cent provides comfort,” Bhoumik said

RBI creates two more ED posts

The Reserve Bank of India (RBI) has decided to increase the number of its executive directors from seven to nine. The two additional executive directors would be appointed in May. Since one of the executive directors would replace deputy governor Shyamala Gopinath, who would retire in May, RBI would conduct interviews to select a total of three executive directors. The move follows a review of the various important posts in RBI.

Among the eligible candidates P Vijay Bhaskar, regional director of Bangalore, is the most senior chief general manager, followed by B Mahapatra and G Padmanavan. A candidate requires three years of residual service to be eligible for the post of executive director. The retirement age for RBI employees is 60 years.

Of the seven RBI executive directors, V K Sharma is the most senior, followed by V S Das. G Gopalakrishna, HR Khan, D Mohanty, S Karuppasamy and R Gandhi are the other executive directors.