All those vanished cos

Institutions8217; penchant

Given that Finance Minister P. Chidambaram forgot to take credit for the hurriedly launched Indonext a project announced in his previous budget and did nothing to sort out the mess in the debt market, it was curious to find that the Securities and Exchange Board of India8217;s Sebi plan to set up 8216;8216;a National Institute of Securities Markets for teaching and training intermediaries in the securities markets and promoting research8217;8217; came in for special mention. Like the MAPIN database for unique identification numbers, the institute was another of those ambitious but secret projects pursued by former Sebi Chairman G.N. Bajpai, and with an equally vague utility. The difference is that Bajpai was looking at an 8216;international8217; institute for capital markets with an international board of directors, rather than the 8216;national8217; institute mooted by the FM. M. Damodaran, who has been with the Unit Trust of India and Industrial Development Bank of India, is now the Sebi chairman. UTI had set up the Indian Institute of Capital Markets and the IDBI-funded the Jawaharlal Nehru Institute of Development Banking JNIDB. The former is struggling to become a separate profit centre and could easily meet Sebi8217;s training needs 8212; there is no for another institute. And with development banking losing its relevance, the JNIDB8217;s spectacular campus at Hyderabad can be surely accommodate any other training needs that Sebi may envisage. It remains to be seen if the new chairman also shares the usual public sector penchant for building lofty sounding training institutions at taxpayers8217; expense.

No ATM payments

The finance minister FM seems to believe that tax-paying investors will not object to paying a 0.1 per cent cash withdrawal tax, if they want to continue drawing Rs 10,000 of cash at a time because this category of people are already used to paying hefty chargers to banks for using ATMs, for demand drafts, outstation cheques etc. Clearly, someone is misleading the FM. None of the banks charge any money for cash withdrawals from ATM machines, unless the account holder has failed to maintain a minimum balance 8212; and even then some withdrawals are free. The only time that ATM users pay for cash withdrawals is when they use a shared ATM of another bank and not the one in which they have an account 8212; they then pay a switching charge. As for other services 8212; such as demand drafts etc 8212; private banks charge much higher rates and this has in fact pushed some depositors back to public sector banks. In fact, if the finance minister wants audit trails to peoples8217; spending then he can create incentives for the use of plastic money. He must also target jewellery shops and consumer durable sellers who either do not accept credit/debit cards or charge a higher fee for card payments.

Assurance of action

A few weeks ago, Oriental Bank of Commerce OBC said it had filed complaints against five companies to recover loans by the defunct Global Trust Bank GTB. These are in addition to five others where it had earlier filed complaints with the Central Bureau of Investigation. They are PEPCO, Pearl Distilleries, Shonkh Technologies, Unitel Software, Business India Publication. Curiously enough, the remaining five are being kept a secret. However, informed sources say they include Himachal Futuristic, Zee Telefilms, Pentamedia, the Balaji group and Lloyd Steel, which collectively owe GTB around Rs 400 crore. Three of these formed a part of what were known as the K-10 scrips in 2000. Interestingly, despite an assurance by the FM to Parliament that action will be launched against Ramesh Gelli and the promoter group of GTB 8212; were responsible for its collapse, there is no move to initiate any such action by the Centre or RBI. Instead, a former GTB auditor PriceWaterhouse has been made scapegoat, and the matter is sought to be buried.

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