Indefinitely postponed?

Secondly, if Sebi were serious about creating an audit trail by setting a Rs 1 lakh investment bar, then a Permanent Account Number PAN of the Income Tax ought to have been mandatory, especially since bank transaction above Rs 10,000 require PAN numbers to be quoted. However, the PAN number was just one of four options for identification permitted by Sebi.

Thirdly, despite repeated questions, Sebi has never been able to explain how MAPIN for individuals would make it easier to catch market manipulators or insider traders when in the past it let off the most blatant offenders if they were powerful and politically connected. And finally, at a practical level, brokers complained that a shortage of service points for MAPIN led to long queues, confusion and frayed nerves.

A new face

At a time when cooperative banks continue to go under almost everyday, there is a quiet but spectacular turnaround happening in a bank that used to be a byword for all that was possibly wrong in the cooperative banking sector. All through the 1990s, Bombay Mercantile Cooperative Bank BMC 8212; a multi-state cooperative bank 8212; used to operate as though it was above the law. There were thick files of complaints against its senior management and it openly flouted Reserve Bank of India RBI instructions. Finally, its performance degenerated to the point when the government was forced to appoint Dr. M. Rehman as administrator in August 2002. At that time the bank had a net loss of Rs 255 crore and non-performing assets of Rs 508 crore and over 1200 surplus employees. The former chief secretary of the Jammu 038; Kashmir government has since been pushing an aggressive and ruthless clean-up, in the face of powerful opposition and threats.

And new numbers

The antagonism that Dr. Rehman provoked is understandable. In his first year in office 2002-03, he asked 250 people to go. A special recovery team was constituted in each branch, which got back Rs 67 crore of NPAs, allowing it to declare a net profit of Rs 37.5 crore it had a net loss of Rs 102 crore loss in 2001-02.

In 2003-04, the bank recovered another Rs 63 crore and announced a net profit of Rs 40 crore; another 260 people were also persuaded to leave, or face inquiry. It expects to announce another Rs 25-30 crore profit this year and another recovery of Rs 50 crore. Unfortunately, running a tight ship alone will not get the bank out of the woods, while accumulated losses remain a high Rs 185 crore. Even if BMC mobilises fresh deposits based on its improved performance, they would only eat into its profit unless it is allowed to expand business and make fresh advances.

The RBI must handhold the bank while it has a competent management in place, or look for buyers who would be willing to infuse fresh capital. It will be to RBI8217;s credit too, if BMC gets back on its feet with a much-improved reputation.

No small stars

In the early 1980s, when the Taj Group was developing Goa as a destination, it set up the Riverview Chiplun, a spectacularly located halfway destination that was needed when flights to Goa were few and largely unaffordable. Cheaper air travel is clearly changing the profile and locational factors for large hotel chains across market segments. For instance, the Taj8217;s Chiplun property that changed hands sometime in early 2004, wasn8217;t acquired by its associate hotel chains such as Piem Hotels which acquired Taj Blue Diamond in Pune and Taj Residency in Lucknow or Oriental Hotels. Instead, it was sold to one Riaz Mama. Mama is reportedly a director of the Choice Group of Hotels that owns a national chain of three star hotels under the Quality Inn and Comfort Inn brands. But Choice did not buy Riverview. Clearly, road-linked destinations like Chiplun, deprived of the steady occu pancy provided by large projects such as Dabhol Power Company or the Konkan Railway while it was under construction are no longer of interest to the larger hotel chains.

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