Holding up

Mark-ed down

Remember Rebecca Mark? She is the famous lady from the now bankrupt Enron Corporation, who charmed, threatened, cajoled, educated and induced India8217;s politicians and bureaucrats into signing away a sweetheart deal to purchase electricity from her company at an unaffordable tariff. Ms. Mark now Rebecca Mark-Jubasche left Enron even before its Dabhol project in Maharashtra was shut down. She then made some headlines in America for being one of the senior employees who sold their Enron stock before the company collapsed and bankrupted other investors. Last week, 18 Enron directors entered into a settlement with shareholders to pay them 168 million. Of these, 10 directors will cough up 13 million, which is the profit earned by selling their shares before the company collapsed. Rebecca Mark is reportedly one of the select 10 who are being forced to disgorge their profit from Enron shares.

The list does not include former CEO Kenneth Lay or CFO Andrew Fastow, who are facing criminal charges. Interestingly, this is the second biggest payout by directors in just one week, after WorldCom8217;s former directors entered a similar settlement in a class action suit without admitting or denying any wrongdoing.

Behind times

It is common knowledge that the capital market8217;s attempt to push ahead with further automation is hampered by the backwardness of the banking system. For instance, an attempt to automate the application process for Initial Public Offerings IPOs led to the discovery that a couple of decades after they were introduced, all banks in India still do not use MICR cheques. Even more astonishing was the revelation that many nationalised bank branches, which compete with aggressive private banks, have an 8216;informal understanding8217; not to clear more than 1,000 cheques a day. The absence of a Real Time Gross Settlement RTGS was a big hindrance to shortening the settlement cycle to T2 trade plus two days and further to T1. Even after it has been introduced, RTGS is making little headway at the retail level because banks are charging a hefty Rs 25 per transaction to all customers. Finally, banks especially nationalised ones credit foreign remittances to individual savings account only six weeks after the overseas account is debited and enjoy the float.

Sad surrender

When the RBI and the Indian Banks8217; Association IBA evolve a code of conduct for credit card issuing banks, our credit card holding readers want some clear rules about the process of surrendering cards too. For instance, most people know that in order to surrender a card, you cut it up in four, mutilate the number and return it along with a letter to the bank. However, many cardholders discover that it is no so easy to get rid of a credit card and their accounts continue to be debited long after the surrender. It requires persistent follow-up to stop the harassment. Secondly, the IBA and the RBI may want to convince state and Central governments to remove all disincentives and taxes to the use of credit cards and cheques. After all, in countries which are sloshing with unaccounted cash income, people must be encouraged to use plastic, which creates clear audit trails to bank accounts and customers.

Forgotten jubilee?

ICICI was set up on 5th January 1955 as a development finance institution due to the efforts of George Woods who later went on to become President of the World Bank. This year is its golden jubilee year. Despite its radical transformation over the past five years into a retail bank, one would still have expected ICICI to mark the occasion with celebration and fanfare.

It had been preparing for the event by commissioning a biography of the institution through historian Sharada Diwedi. However, a fortnight into 2005, ICICI Bank is being curiously silent about this important milestone.

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