Mumbai: Battered by rumours that cast doubts about its financial health, ICICI Bank on Sunday approached police alleging certain brokers with a Mumbai-based brokerage house were indulging in "malicious" rumour mongering.
Terming it has economic terrorism, an ICICI Bank spokesman said "we will be approaching all regulators including SEBI on this."
ICICI Bank scrips have suffered heavy looses including 20 per cent on Friday in the face of onslaught of rumours though the largest private sector lender has been maintaining that it was facing no crunch and its financial position was strong.
In its complaint filed before Economic Offences Wing of Mumbai police as also Coimbatore police, the bank said that a broker or sub-broker in Coimbatore was indulging in misinformation through sms and other means aimed at creating panic amongst the depositors causing withdrawal of deposits.
ICICI Bank Managing Director KV Kamath has already talked to Finance Minister P Chidmabaram about the vested interest who deliberately are hammering down the share prices and has also asked SEBI for a proper investigation.
"The concerted effort to spread malicious rumours could be new form of economic terrorism (akin to how counterfeit currency is put into circulation to lower the public faith and confidence, and cause national economic interests to be compromised), the complaint said.
According to the complaint one of the sms read, "kindly withdraw all your deposits and cash in account with ICICI Bank as ICICI bank already rushed to RBI for insolvency."
The rumours were also spread about top management selling shares of the bank leading to panic in the share market, the complaint alleged.
To emphasise on this, it cited an sms saying, "ICICI top officials r all sellng thr icici holdings in mkt 4 lst 2 wks. Thy knw that icici is going to annnce vry bad bankruptcy soon. This is confirmed news from1 of its board drctrs. exit all r holding in icici n all bnk stks. kamath also selling his binami holdings from 750 levels (sic)."
A bear cartel of certain high profile brokers in Bombay Stock Exchange, who have been selling the shares, stocks and securities of the bank for quite some period may also have been behind the circulation of the malicious rumours about the financial status, the private sector lender alleged.
The bank had conducted preliminary investigation utilizing its own machinery as regards the source of such misleading statements, e-mails and SMSs based on false, baseless information, it said.
The complaint further added that such message was found to be sent by a mass/group SMS sending website.
The bank has been maintaining that it is well capitalised. The capital adequacy of the bank is over 13 per cent against the regulatory requirement of nine per cent.
Besides, global rating agencies like Moody's and S&P have also said ICICI Bank's UK subsidiary has no high risk sub-prime securities and enjoys robust asset quality and liquidity.
These ratings assume importance in the wake of reports that it was over-exposed to risk caused by the global meltdown and that the bank's loan profile was not fully secured and credible.
Indian Economy: News and Discussion (June 8 2008)
Re: Indian Economy: News and Discussion (June 8 2008)
OT posts moved to global economy thread.
Re: Indian Economy: News and Discussion (June 8 2008)
Self-Deleted.
Re: Indian Economy: News and Discussion (June 8 2008)
Suraj, What does all this financial bailout effect the early 2000s RAND?Goldman Sachs projections about global economy? Thanks, ramana
Re: Indian Economy: News and Discussion (June 8 2008)
Ramana, the RAND folks are probably busy devising a bailout package for their predictions 
But seriously, things are moving so fast that it's hard to start making predictions yet. The question is not one of whether the US wanes a unipolar power, but how soon, based on how the other actors rise. The current deflationary low-liquidity phase is not a good portent for either the commodity exporters among the BRICs (Brazil and Russia) or the merchandise/services exporters like China and India.
However, there are persistent suggestions that the current deflationary phase will be followed by a hyperinflationary one, because of the nature of the bailout measures used to counteract the liquidity crisis. It remains to be seen how badly the deflationary phase plays out before the next step.
From an individual perspective the changes are fraught with risk. Commodities and precious metals are likely to do badly in a deflationary phase, when cash is the best option, but when the hyperinflationary phase presents itself, the opposite will be true.
But seriously, things are moving so fast that it's hard to start making predictions yet. The question is not one of whether the US wanes a unipolar power, but how soon, based on how the other actors rise. The current deflationary low-liquidity phase is not a good portent for either the commodity exporters among the BRICs (Brazil and Russia) or the merchandise/services exporters like China and India.
However, there are persistent suggestions that the current deflationary phase will be followed by a hyperinflationary one, because of the nature of the bailout measures used to counteract the liquidity crisis. It remains to be seen how badly the deflationary phase plays out before the next step.
From an individual perspective the changes are fraught with risk. Commodities and precious metals are likely to do badly in a deflationary phase, when cash is the best option, but when the hyperinflationary phase presents itself, the opposite will be true.
Re: Indian Economy: News and Discussion (June 8 2008)
Slowdown Suraj. You know its not my field so in layman terms what does that mean?
Also, How are the Swiss doing? Any chances of getting it in their shorts? And who is bailing them out?
Also, How are the Swiss doing? Any chances of getting it in their shorts? And who is bailing them out?
Re: Indian Economy: News and Discussion (June 8 2008)
Sorry, there are so many variables that it is difficult to put in clear terms. I won't even claim I understand it all.
Effectively, there's a rush to cash at present, both among banks and individuals. Banks have essentially stopped trusting each other to come good on interbank lending deals, because they no longer trust the others' books regarding their solvency, and they are concerned about being hammered by a rumour-led run on their own banks. That is one reason I tried to control speculation on ICICI and other banks in the discussion here. In present circumstances that is a very dangerous game to play.
As banks and other entities write down their losses (we're not anywhere close to done yet - wait till auto/credit card loans come in the next wave), they will continue to attempt to hoard cash to compensate for loss of confidence in the general solvency of the system. This is part of the reason governments across the world are guaranteeing deposits. They are not trying to pay, but to guarantee it so that trust is built up anew. The rush to cash means money leaves the recent darlings - commodities and precious metals. However, this does not solve problems - it just indicates everyone hoarding currency and not lending.
Governments will have to back deposits - the existing capital base, and recapitalize the system as required. They will have to provide the necessary backing for the system to start working properly again. The recapitalization will cost well over a trillion worldwide, and that will quite likely have to be a blanket effort, because governments are far more likely to be scared of a deflationary spiral - where banks stop lending, businesses stop buying and selling, and essentially the entire system grinds to a stop; such a massive unwinding did happen during the Depression era. As the recapitalize, it will stoke inflation.
During deflation it is good to hold cash, and perhaps quality bonds. But stocks and commodities will probably suffer. On the other hand during inflation, holding cash is a bad thing, because its value is being rapidly eroded.
Effectively, there's a rush to cash at present, both among banks and individuals. Banks have essentially stopped trusting each other to come good on interbank lending deals, because they no longer trust the others' books regarding their solvency, and they are concerned about being hammered by a rumour-led run on their own banks. That is one reason I tried to control speculation on ICICI and other banks in the discussion here. In present circumstances that is a very dangerous game to play.
As banks and other entities write down their losses (we're not anywhere close to done yet - wait till auto/credit card loans come in the next wave), they will continue to attempt to hoard cash to compensate for loss of confidence in the general solvency of the system. This is part of the reason governments across the world are guaranteeing deposits. They are not trying to pay, but to guarantee it so that trust is built up anew. The rush to cash means money leaves the recent darlings - commodities and precious metals. However, this does not solve problems - it just indicates everyone hoarding currency and not lending.
Governments will have to back deposits - the existing capital base, and recapitalize the system as required. They will have to provide the necessary backing for the system to start working properly again. The recapitalization will cost well over a trillion worldwide, and that will quite likely have to be a blanket effort, because governments are far more likely to be scared of a deflationary spiral - where banks stop lending, businesses stop buying and selling, and essentially the entire system grinds to a stop; such a massive unwinding did happen during the Depression era. As the recapitalize, it will stoke inflation.
During deflation it is good to hold cash, and perhaps quality bonds. But stocks and commodities will probably suffer. On the other hand during inflation, holding cash is a bad thing, because its value is being rapidly eroded.
Re: Indian Economy: News and Discussion (June 8 2008)
So when is the inflexion point when deflation moves to inflection or rather how can we spot it?
You note I am using derivative language
You note I am using derivative language
Re: Indian Economy: News and Discussion (June 8 2008)
Suraj agru>> allow me butt in.
This cash crisis is is a crisis of confidence and over leveraging of the purchasing power of the US house holds. Somebody did make money.
as
1) Money is neither created or destroyed it only changes hands.
2) Debt is neither created nor destroyed it is only passed on ( even only dead clear all debt is not completely true because that debt is written off or absorbed hence there is no Mort (g) age for debt
)
Ramana garu>> The current crisis is being attacked on two fronts, one use every tool that a moneterist can summon, which are interest rate cuts, reserve ratio cuts, buying and insuring the bad debt assets as if they are not bad (by assuming a position).
These are all small tactical nukes with least interest being 5Kt, RR being 45KT and pumping money by monetising the debt is like boosted fission.
All of these are macro economic tools which have a lag to show up on our richter scale to register, the shock front takes a while (1 year to two years) to hit the street.
Imagine the mushroom cloud sucking the nearby atmosphere which is like the bad debt coming out of books to street when the debt was called, it instantaneously created collection of all air and the fire got ignited, now the Govts are cutting rates ( overnite rates for banks to borrow that means cost of capital for banks comes down, there fore temprorily they can show books to be green,) but alas the bad debt is so much hidden like needle in a stack no body has the confidence in the numbers of good assets, so a blanket freeze of money changing or wide call back of money is happening. that means cash has been sucked out by virtue of no confidence.
Now because the central banks of US EU UK etc have started to pump money, the first thing that will happen is production will stagnate and money will chase fewer goods (as banks with more cash want to lend again), that will cause inflation and stagnation for a period, then because the price has risen the production will ramp up but will lag behind the money, so there will be super inflation ( because of maney expansion) and as production is being increased the employment will go up with money even in more in circulation so hyper inflation.
Next government will start pulling money out of circulation by virtue of increase interrest rates, RR Inter bank lending etc. so the cycle starts. Just like in our Hindu mythology of yugas and kalpas (epochs). Meanwhile what happens is that Dollar and Euro will lose value ( because of supply is rushed to fill void) so the third world and exporting countries especially commodities will have to cut prices to make importers import ( if the commodity price goes up the importers may cut back there by demand falls and supply exceeds and the price will drop)
so the commodity exporters will correspondingly will devalue their currency or may have to resort to dumping. Hence World Bank report that poor countries will foot larger bill for this crisis of affluent.
In nut shell Stagflation, super inflation ( Zimbabwave Argentina style) contraction stability and again....
Inflation like entropy will ever increase
Spinsters economic axioms.
Debt is neither created nor destroyed it is only passed on (only dead clear all debts is not true completely as it si absorbed by debtee
)
Money is neither created nor destroyed it only changes hands.
A person is wealthy if he can generate lot of debt, a person is rich if he retains his ability to generate debt at all times.
The democrats by quoting Rosevelt are always talking about Keynesian economics which beleives in govt actively involving in markets by nudging through its policies of spending and taxing.
While republicans are monteriest who beleive in regulation money supply to keep the hidden hand of market going. All the current activities so far for this crisis has been through Monetarism policies.
The latest package by house lead by democrats is a classic (nearly) classic Keynesian approach, and the Republicans are calling it dangerous and suggest moneterist policy. Look up CNN. latest news.
Milton Friedman
Tie monetary policy to rules
Economy is inherently stable.
Fiscal policy is not useful.
Keynesians Resembles Theory X of behaviour
Economy can be unstable.
Give policymakers discretion.
Fiscal policy may be useful.
Obama keeps talking about education, infrastructure, health care which are all Franklin Roosevelt solution of govt intervention.
Macain and Sarah (yehan whan sarah jahan may ter nam hain Jawanio Diwanio zindabad)
say let people chose.....
Sorry for the rumbling, and typos.
( ps Rahul and Suraj believe in Keynesian policy as they intervene in the threads left right and center oops I will get banned )
Yes
While Gentlemen prefer Bonds
Blondes attract Gentlemen.
Its just matter of ups and downs.
This cash crisis is is a crisis of confidence and over leveraging of the purchasing power of the US house holds. Somebody did make money.
as
1) Money is neither created or destroyed it only changes hands.
2) Debt is neither created nor destroyed it is only passed on ( even only dead clear all debt is not completely true because that debt is written off or absorbed hence there is no Mort (g) age for debt
)Ramana garu>> The current crisis is being attacked on two fronts, one use every tool that a moneterist can summon, which are interest rate cuts, reserve ratio cuts, buying and insuring the bad debt assets as if they are not bad (by assuming a position).
These are all small tactical nukes with least interest being 5Kt, RR being 45KT and pumping money by monetising the debt is like boosted fission.
All of these are macro economic tools which have a lag to show up on our richter scale to register, the shock front takes a while (1 year to two years) to hit the street.
Imagine the mushroom cloud sucking the nearby atmosphere which is like the bad debt coming out of books to street when the debt was called, it instantaneously created collection of all air and the fire got ignited, now the Govts are cutting rates ( overnite rates for banks to borrow that means cost of capital for banks comes down, there fore temprorily they can show books to be green,) but alas the bad debt is so much hidden like needle in a stack no body has the confidence in the numbers of good assets, so a blanket freeze of money changing or wide call back of money is happening. that means cash has been sucked out by virtue of no confidence.
Now because the central banks of US EU UK etc have started to pump money, the first thing that will happen is production will stagnate and money will chase fewer goods (as banks with more cash want to lend again), that will cause inflation and stagnation for a period, then because the price has risen the production will ramp up but will lag behind the money, so there will be super inflation ( because of maney expansion) and as production is being increased the employment will go up with money even in more in circulation so hyper inflation.
Next government will start pulling money out of circulation by virtue of increase interrest rates, RR Inter bank lending etc. so the cycle starts. Just like in our Hindu mythology of yugas and kalpas (epochs). Meanwhile what happens is that Dollar and Euro will lose value ( because of supply is rushed to fill void) so the third world and exporting countries especially commodities will have to cut prices to make importers import ( if the commodity price goes up the importers may cut back there by demand falls and supply exceeds and the price will drop)
so the commodity exporters will correspondingly will devalue their currency or may have to resort to dumping. Hence World Bank report that poor countries will foot larger bill for this crisis of affluent.
In nut shell Stagflation, super inflation ( Zimbabwave Argentina style) contraction stability and again....
Inflation like entropy will ever increase
Spinsters economic axioms.
Debt is neither created nor destroyed it is only passed on (only dead clear all debts is not true completely as it si absorbed by debtee
)Money is neither created nor destroyed it only changes hands.
A person is wealthy if he can generate lot of debt, a person is rich if he retains his ability to generate debt at all times.
The democrats by quoting Rosevelt are always talking about Keynesian economics which beleives in govt actively involving in markets by nudging through its policies of spending and taxing.
While republicans are monteriest who beleive in regulation money supply to keep the hidden hand of market going. All the current activities so far for this crisis has been through Monetarism policies.
The latest package by house lead by democrats is a classic (nearly) classic Keynesian approach, and the Republicans are calling it dangerous and suggest moneterist policy. Look up CNN. latest news.
Milton Friedman
Monetarists Resembles Theory Y of behaviourThe challenge to the traditional Keynesian theory strengthened during the years of stagflation following the 1973 and 1979 oil shocks. Keynesian theory had no appropriate policy responses to the supply shocks. Inflation was high and rising through the 1970s and Friedman argued convincingly that the high rates of inflation were due to rapid increases in the money supply. He argued that the economy may be complicated, but stabilization policy does not have to be. The key to good policy was to control the supply of money.
Tie monetary policy to rules
Economy is inherently stable.
Fiscal policy is not useful.
Keynesians Resembles Theory X of behaviour
Economy can be unstable.
Give policymakers discretion.
Fiscal policy may be useful.
Obama keeps talking about education, infrastructure, health care which are all Franklin Roosevelt solution of govt intervention.
Macain and Sarah (yehan whan sarah jahan may ter nam hain Jawanio Diwanio zindabad)
say let people chose.....
Sorry for the rumbling, and typos.
( ps Rahul and Suraj believe in Keynesian policy as they intervene in the threads left right and center oops I will get banned
)Yes
While Gentlemen prefer Bonds
Blondes attract Gentlemen.
Its just matter of ups and downs.
Re: Indian Economy: News and Discussion (June 8 2008)
India: Market Antics At Their "Best"
http://seekingalpha.com/article/99547-i ... their-best
There is enough evidence in history that an investment during a bear market has led to some of the biggest wealth creation over a period of 5-6 years. But these returns have come with their fair share of pain. Someone has rightly said that in investing, one does not need great intelligence. An average intelligence supported by an iron stomach will do the trick.
The imperative for you, the long-term investor, is to arm yourselves against the hubris that too much of money creates. The idea is to stay away from greed and get over the fear factor. Invest within your means. Keep saving - and investing. When the cycle turns, and it will, you will be glad to have pulled the trigger.
http://seekingalpha.com/article/99547-i ... their-best
There is enough evidence in history that an investment during a bear market has led to some of the biggest wealth creation over a period of 5-6 years. But these returns have come with their fair share of pain. Someone has rightly said that in investing, one does not need great intelligence. An average intelligence supported by an iron stomach will do the trick.
The imperative for you, the long-term investor, is to arm yourselves against the hubris that too much of money creates. The idea is to stay away from greed and get over the fear factor. Invest within your means. Keep saving - and investing. When the cycle turns, and it will, you will be glad to have pulled the trigger.
Re: Indian Economy: News and Discussion (June 8 2008)
all ICICI bank account holders were sent this mail yesterday
Dear Customer,
We are aware that you are being misled by numerous malicious and baseless rumors. Many of these are via SMSes. Many of our customers have written in to us expressing solidarity and confidence in our relationship, and have mentioned they have dismissed these rumors, for which we are grateful. Still we know that these rumors may cause you distress and doubts. You are our valued customer and we would not like you to have any of these feelings. So we have now chosen to write to you directly to allay your concerns if any.
You would have seen the categorical endorsement of the soundness of Indian banking as well as ICICI Bank's sound financial health from the RBI and the Finance Minister. You would have also read about the unequivocal certificate of confidence reposed on us by S&P an independent rating agency of repute. We have categorically and in a transparent manner disclosed that
* We have ZERO exposure, directly or indirectly, to US sub-prime
* We have 150% more capital than what Banks are required to have,
and we are one of the highest capitalized banks in the country
* We have a AAA rating
* We have sound liquidity to meet your needs whenever you need and in what
ever amounts you may need
Your bank has grown and achieved its status of pre-eminence due to the patronage and trust you have reposed thus far in us. We have made many an Indian smile with a house, car and every banking need dreamed of by Indians. I am sure nothing factually or otherwise has changed in our relationship that we should let baseless rumors cast doubts in your mind. We once again want to reaffirm to you that the bank you have built and assisted to grow to pre-eminence will be with you day and night. We take pride in serving you and being the bank of your first choice.
We desire and request the continuance of your unwavering trust and relationship. We promise to you that not only your deposits but all your interests are safe and secure with us. In case you need to reach us, kindly write to us at [email protected].
Sincerely
V. Vaidyanathan
Executive Director
ICICI Bank Ltd
Dear Customer,
We are aware that you are being misled by numerous malicious and baseless rumors. Many of these are via SMSes. Many of our customers have written in to us expressing solidarity and confidence in our relationship, and have mentioned they have dismissed these rumors, for which we are grateful. Still we know that these rumors may cause you distress and doubts. You are our valued customer and we would not like you to have any of these feelings. So we have now chosen to write to you directly to allay your concerns if any.
You would have seen the categorical endorsement of the soundness of Indian banking as well as ICICI Bank's sound financial health from the RBI and the Finance Minister. You would have also read about the unequivocal certificate of confidence reposed on us by S&P an independent rating agency of repute. We have categorically and in a transparent manner disclosed that
* We have ZERO exposure, directly or indirectly, to US sub-prime
* We have 150% more capital than what Banks are required to have,
and we are one of the highest capitalized banks in the country
* We have a AAA rating
* We have sound liquidity to meet your needs whenever you need and in what
ever amounts you may need
Your bank has grown and achieved its status of pre-eminence due to the patronage and trust you have reposed thus far in us. We have made many an Indian smile with a house, car and every banking need dreamed of by Indians. I am sure nothing factually or otherwise has changed in our relationship that we should let baseless rumors cast doubts in your mind. We once again want to reaffirm to you that the bank you have built and assisted to grow to pre-eminence will be with you day and night. We take pride in serving you and being the bank of your first choice.
We desire and request the continuance of your unwavering trust and relationship. We promise to you that not only your deposits but all your interests are safe and secure with us. In case you need to reach us, kindly write to us at [email protected].
Sincerely
V. Vaidyanathan
Executive Director
ICICI Bank Ltd
Re: Indian Economy: News and Discussion (June 8 2008)
You can't - at least not to the day when it turns. It's like asking when the bottom/top of a market cycle is reached. The only way to do so is in retrospect, or due to luck. Of course one can use a combination of investing strategies and market news to determine a general trend.ramana wrote:So when is the inflexion point when deflation moves to inflection or rather how can we spot it?
John Snow: as long as you're on topic you're welcome to use your own inimitable style
-
vina
- BRF Oldie
- Posts: 6046
- Joined: 11 May 2005 06:56
- Location: Doing Nijikaran, Udharikaran and Baazarikaran to Commies and Assorted Leftists
Re: Indian Economy: News and Discussion (June 8 2008)
Oh.. Speak with your astrologer, soothsayer, witch doctor , quack , toss a coin.. All work equally well when you want to call..Suraj wrote: You can't - at least not to the day when it turns. It's like asking when the bottom/top of a market cycle is reached. The only way to do so is in retrospect, or due to luck
You can also trust 'ol vina's spidey sense too, of course
-
vina
- BRF Oldie
- Posts: 6046
- Joined: 11 May 2005 06:56
- Location: Doing Nijikaran, Udharikaran and Baazarikaran to Commies and Assorted Leftists
Re: Indian Economy: News and Discussion (June 8 2008)
Whatever the outcome, ICICI has taken body blows in this crisis. Kamath might finesse and say that the CDS spread widening is of no consequence. Not true. It is exactly how you would measure and use probability of default in modeling it. You use the spread from a comparable company that you can observe trading in the market. The CDS spread is usually a pretty good indicator of what the market things about credit risk.
That aside, the more serious problem ICICI has is in the depositor base side. I think it might have taken hits there. Lots of folks I know of took money out of ICICI, some even breaking term deposits. The Indian Express had a story on how folks with salary accounts withdrew their entire salaries the day it got credited. That is dangerous. ICICI cash managment would have some statistical model saying.. oh.. on the 1st week around Rs xxxx crores get credited and historically Rs yy gets withdrawn leaving us the remaining to play with.. Well, that math just went out of the window and with it a major source of cash for money market opereations. Hence the e-mail posted by Singha.
Everyone knows that NPAs are going to rise for ICICI. Real estate meltdown is going to be a big deal for ICICI. The bank is solvent and will ride out the liquidity crisis. But the going ahead is going to be tough. The profitability is going to get beaten badly, it is going to find it difficult to raise deposits, the past "sins" in the free wheeling days are going to come home to roost. All in all , doesnt look like a very pretty picture going forward.
That aside, the more serious problem ICICI has is in the depositor base side. I think it might have taken hits there. Lots of folks I know of took money out of ICICI, some even breaking term deposits. The Indian Express had a story on how folks with salary accounts withdrew their entire salaries the day it got credited. That is dangerous. ICICI cash managment would have some statistical model saying.. oh.. on the 1st week around Rs xxxx crores get credited and historically Rs yy gets withdrawn leaving us the remaining to play with.. Well, that math just went out of the window and with it a major source of cash for money market opereations. Hence the e-mail posted by Singha.
Everyone knows that NPAs are going to rise for ICICI. Real estate meltdown is going to be a big deal for ICICI. The bank is solvent and will ride out the liquidity crisis. But the going ahead is going to be tough. The profitability is going to get beaten badly, it is going to find it difficult to raise deposits, the past "sins" in the free wheeling days are going to come home to roost. All in all , doesnt look like a very pretty picture going forward.
Re: Indian Economy: News and Discussion (June 8 2008)
http://www.mercurynews.com/ci_10706169? ... ost_viewed
Bangalore's new glass-walled airport, he added, puts Cisco executives within a five-hour flight from 70 percent of the world's population.
More than half of Cisco's nearly $40 billion in revenue last year came from North America. The United States, Europe and Japan represent 75 percent of its business. But if the company is to reach Chambers' aggressive growth targets of 12 to 17 percent a year, India and other parts of the world will be critical. Cisco's revenue from emerging markets reached $4.5 billion last year.
Re: Indian Economy: News and Discussion (June 8 2008)
The govt could show it isn't asleep for once by prosecuting the culprits who started rumour mongering.
It really isn't fair to ICICI.
It is the govt's responsibility to police the market.
It really isn't fair to ICICI.
It is the govt's responsibility to police the market.
Re: Indian Economy: News and Discussion (June 8 2008)
Something funny happened today morning in one of the ICICI Branches...
I was waiting to take a token for a new cheque book. The customer ahead of me kept on pressing the machine for token, but nothing was coming out..he wanted to go to a counter for loans. I tried to help him but the machine displayed "This service is not available"! I wanted to tell him that when the bank itself is taking loan from others, How they could possibly offer loan to customers...Contrary to whatever the management says, there IS some problem with the bank. I also see lot of staff reduction taking place.
No wonder - I personally feel they are facing the Indian version of the 'sub-prime crisis'. One of the persons I know has taken six credit cards and each bank has given him at least Rs 25-30000/- loan. he says he has no intention to pay. He wonders when there is so much credit problems (he is aware) and many banks are collapsing in US, he genuinely feels that none of these banks have time of resources to chase him for their money!
I was waiting to take a token for a new cheque book. The customer ahead of me kept on pressing the machine for token, but nothing was coming out..he wanted to go to a counter for loans. I tried to help him but the machine displayed "This service is not available"! I wanted to tell him that when the bank itself is taking loan from others, How they could possibly offer loan to customers...Contrary to whatever the management says, there IS some problem with the bank. I also see lot of staff reduction taking place.
No wonder - I personally feel they are facing the Indian version of the 'sub-prime crisis'. One of the persons I know has taken six credit cards and each bank has given him at least Rs 25-30000/- loan. he says he has no intention to pay. He wonders when there is so much credit problems (he is aware) and many banks are collapsing in US, he genuinely feels that none of these banks have time of resources to chase him for their money!
Re: Indian Economy: News and Discussion (June 8 2008)
one of the ways in which the "manage costs" is keep very few permanent staff but
more and more contractors.
- all direct sales agents for stuff like loans and insurance are contractors
- people in branches for customer service (those who stand in customer seating
area), demat a/c opening, loan counter look like contractors to me and quite
low end ones
the only "real" staff seem to be the manager, and the tellers who handle the cash.
and the peon maybe. security guard looks outsourced. the ATM machine upkeep
looks outsourced.
increasingly the retail front end of banks will be outsourced and bank will only
run backend cash management, C4I, policy, account mgt from back end.
with the ITvity tower tumbling this might be a "greenfield" area for the Fab-3
to get into I am already forseeing ambitious middle managers preparing
ppts on this.
I believe TCS is already into the passport issueance business now.
http://www.hindu.com/2008/10/14/stories ... 441100.htm
The software company would provide only support functions such as improving citizen interface, managing the technology backbone, call centres, training and change management. The government would continue to exercise all sovereign and security-related functions in the issuance process. Security aspects were fully taken care of in the project with the government owning all strategic assets including the data centre, database and the application software, Mr. Menon said.
more and more contractors.
- all direct sales agents for stuff like loans and insurance are contractors
- people in branches for customer service (those who stand in customer seating
area), demat a/c opening, loan counter look like contractors to me and quite
low end ones
the only "real" staff seem to be the manager, and the tellers who handle the cash.
and the peon maybe. security guard looks outsourced. the ATM machine upkeep
looks outsourced.
increasingly the retail front end of banks will be outsourced and bank will only
run backend cash management, C4I, policy, account mgt from back end.
with the ITvity tower tumbling this might be a "greenfield" area for the Fab-3
to get into
I am already forseeing ambitious middle managers preparingppts on this.
I believe TCS is already into the passport issueance business now.
http://www.hindu.com/2008/10/14/stories ... 441100.htm
The software company would provide only support functions such as improving citizen interface, managing the technology backbone, call centres, training and change management. The government would continue to exercise all sovereign and security-related functions in the issuance process. Security aspects were fully taken care of in the project with the government owning all strategic assets including the data centre, database and the application software, Mr. Menon said.
Re: Indian Economy: News and Discussion (June 8 2008)
with the common backend SPY3 radar architecture on DDX21 ships, banking will see the
reverse - common frontend and separate back end processors(banks).
so for costcutting as airlines share ground handling, fuels, code shares, gates and counters.
you could see multiple banks like ICICI, HDFC and Kotak share a single branch premises
with common staff but based on customer they can access everything.
the branch premises would be shared on a opex basis and staff could be a third party
who handles this front end.
also each bank need not setup its own ATMs but co-brand and co-operate. no 3rd
party withdrawal fees because 15 banks share one ATM.
reverse - common frontend and separate back end processors(banks).
so for costcutting as airlines share ground handling, fuels, code shares, gates and counters.
you could see multiple banks like ICICI, HDFC and Kotak share a single branch premises
with common staff but based on customer they can access everything.
the branch premises would be shared on a opex basis and staff could be a third party
who handles this front end.
also each bank need not setup its own ATMs but co-brand and co-operate. no 3rd
party withdrawal fees because 15 banks share one ATM.
-
Nayak
- BRF Oldie
- Posts: 2552
- Joined: 11 Jun 2006 03:48
- Location: Vote for Savita Bhabhi as the next BRF admin.
Re: Indian Economy: News and Discussion (June 8 2008)
Pre-placement offers grim at IIMs
Priyanka Golikeri / DNA MONEY | Tuesday, 14 October , 2008, 12:33
Mumbai: That the global meltdown triggered by the collapse of top investment banks would have a direct impact on business school placements was predicted by recruitment experts a long time ago. Now, this prediction seems to be coming true.
September-October is the time when the country’s premier management institutes, the Indian Institutes of Management (IIMs), release figures on the pre-placement offers (PPOs) made to their students. The second week of October has ended and yet, the IIMs have maintained silence over their PPO figures.
Pre-placement offers are those that companies make to second-year management students depending on their performance during summer internships. At the IIMs, PPOs are made somewhere around September, six months before the final placements that happen in March. Last year, towards the last week of September, the PPO numbers had peaked at the IIMs, with IIM Ahmedabad (IIM-A) and IIM Bangalore (IIM-B) getting over 70 and 79 such offers, respectively.
At IIM-A, did they know it was coming?
At IIM Lucknow last year, five students received PPOs with an average salary of Rs 1 crore per annum from top investment banks.
After the bloodbath on Wall Street triggered by the US subprime crisis, the scene has changed. We’re well into the middle of October but there has been no official announcement from any of the six IIMs on their pre-placement season. No consolidated figures have been released over the number of PPOs so far. When contacted, the only response that spokespersons of these institutes have to offer is that pre-placements are on and “we will release our official numbers in a few days”.
But recruitment consultants paint a pretty bleak picture for the hiring season at the institutes. Sandeep Chaudhary, business leader (consulting) at human resources firm Hewitt India, said, “There won’t be any crore-plus salaries being offered anymore.”
Rajeev Mehrotra, the country manager of HR solutions company Kelly Services India, added that the offers this time are likely to decline by 8-12 per cent.
The sentiments are not unfounded. Investment banks have been top recruiters at B-schools and now, they themselves are struggling to stay afloat amid the economic crisis that’s unfolding globally. Lehman Brothers became the first casualty and fears of other following are looming large.
IIM-A holds interactive sessions to deal with US crisis
Last year, about 21 per cent of the total offers made during the final placement in March at IIM-B came from investment banks. At IIM-A, the figure was 10.98 per cent of the total offers.
The delay in the PPOs this time reflects the changing metrics due to the global turmoil. However, the mood at the institutes is still optimistic. A placement official at IIM-A said that though there is anxiety lacing the pre-placement season, firms from other sectors such as FMCG and consulting could fill the vacuum created by investment banks that have gone bust.
More India business stories | Get the latest Sensex update
But there is no denying that the speed with which PPOs are generally made has decreased, and chances are that the situation will be remain the same during the time of final offers as well.
Under license from www.3dsyndication.com
http://sify.com/finance/fullstory.php?id=14776397
Re: Indian Economy: News and Discussion (June 8 2008)
some details from a current IIMB student and parent of a IIMB recent alum:
- earlier mostly you could be sure of an offer after summer internship and then
juggle other offers. now that is not the case. some are not being offered.
- one topper had got offer from lehman in london but its vapour now.
imo none of the famous investment banks are in a position to hire anyone
this year. tier2 banks and large "normal" banks like deutsche bank or citiabank
may still hire. consultants like mckinsey will surely see a erosion of business
and will hence hire less.
desi cos are mostly ok but they seem to be persona-non-grata in IIM "day -3"
or whatever its got to now. some might rediscover their love for the matrubhumi
this year.
just like realty, stock prices and M&A, the placement offers had also got
way out of line in the iims/wordwide top schools....time for a haircut.
atleast the desis only have a 10L student loan to payoff, bideshi's coming
out of haavad could be looking at a $100k+ tab and no immediate payoff.
- earlier mostly you could be sure of an offer after summer internship and then
juggle other offers. now that is not the case. some are not being offered.
- one topper had got offer from lehman in london but its vapour now.
imo none of the famous investment banks are in a position to hire anyone
this year. tier2 banks and large "normal" banks like deutsche bank or citiabank
may still hire. consultants like mckinsey will surely see a erosion of business
and will hence hire less.
desi cos are mostly ok but they seem to be persona-non-grata in IIM "day -3"
or whatever its got to now. some might rediscover their love for the matrubhumi
this year.
just like realty, stock prices and M&A, the placement offers had also got
way out of line in the iims/wordwide top schools....time for a haircut.
atleast the desis only have a 10L student loan to payoff, bideshi's coming
out of haavad could be looking at a $100k+ tab and no immediate payoff.
Re: Indian Economy: News and Discussion (June 8 2008)
and anyway with goldman and jp morgan all set to be Govt owned PSU banks
they might as well read newspapers and swat flies locally in our friendly
SBI-Mysore and Canara bank branches.
US congress & public mood will not tolerate the robber baron M&A fees/bonus/hedging
era of the 1995-2008
equal-equal 50:50
they might as well read newspapers and swat flies locally in our friendly
SBI-Mysore and Canara bank branches.
US congress & public mood will not tolerate the robber baron M&A fees/bonus/hedging
era of the 1995-2008
equal-equal 50:50
Re: Indian Economy: News and Discussion (June 8 2008)
famous investment banks like Bear Stearns, Lehman Brothers etc.? last I heard they were struggling a little weren't they?Singha wrote:imo none of the famous investment banks are in a position to hire anyone
this year. tier2 banks and large "normal" banks like deutsche bank or citiabank
may still hire. consultants like mckinsey will surely see a erosion of business
and will hence hire less.
desi cos are mostly ok but they seem to be persona-non-grata in IIM "day -3"
or whatever its got to now. some might rediscover their love for the matrubhumi
this year.
just like realty, stock prices and M&A, the placement offers had also got
way out of line in the iims/wordwide top schools....time for a haircut.
where is the place for IIM grads when job fairs for top5 b-school types are pitching retail banking jobs in HongKong and PE funds in Middle-East as the next big happening thing.
Re: Indian Economy: News and Discussion (June 8 2008)
tv ticker says US treasury is going to outlaw golden parachutes for execs and there is talk of a
$500K cap on exec compensation.
thats going to visit the boys hard in the hamptons.
Re: Indian Economy: News and Discussion (June 8 2008)
Not true actually they are witnessing a spurt/spike in business as lots of firms are re structering or right sizing. This is like a glow before the oil in the lamp is over and wick itself starts burning!consultants like mckinsey will surely see a erosion of business
and will hence hire less.
Re: Indian Economy: News and Discussion (June 8 2008)
Will side with Singha on this one (what he speculates is actually happening). And may I add that my view is not speculation (please don't ask me how).John Snow wrote:Not true actually they are witnessing a spurt/spike in business as lots of firms are re structering or right sizing. This is like a glow before the oil in the lamp is over and wick itself starts burning!consultants like mckinsey will surely see a erosion of business
and will hence hire less.
Re: Indian Economy: News and Discussion (June 8 2008)
^^^ to add to above, while MBB do offer generic restructuring services, for most firms the scale and impact of current crisis requires the services of specialized restructuring firms (since the issue is not just one of capital structure restructuring, but also has legal and transnational underpinnings). And yes these firms will have a bonanza in the near to mid term.
The following article will give you a flavor for these firms.
http://www.bloomberg.com/apps/news?pid= ... refer=home
The following article will give you a flavor for these firms.
http://www.bloomberg.com/apps/news?pid= ... refer=home
-
vina
- BRF Oldie
- Posts: 6046
- Joined: 11 May 2005 06:56
- Location: Doing Nijikaran, Udharikaran and Baazarikaran to Commies and Assorted Leftists
Re: Indian Economy: News and Discussion (June 8 2008)
Yup, Mickinsey, Bain , BCG and the big 4 do have restructuring practices. However, the specialist guys like FTI and Alix Partners are the ones who will rake it in ,especially in areas like manufacturing, retailing, general industrials etc...they and their funds like Questar and the other vulture funds investing in distressed companies.malushahi wrote:^^^ to add to above, while MBB do offer generic restructuring services, for most firms the scale and impact of current crisis requires the services of specialized restructuring firms (since the issue is not just one of capital structure restructuring, but also has legal and transnational underpinnings). And yes these firms will have a bonanza in the near to mid term.
The following article will give you a flavor for these firms.
http://www.bloomberg.com/apps/news?pid= ... refer=home
Re: Indian Economy: News and Discussion (June 8 2008)
amen.vina wrote:Yup, Mickinsey, Bain , BCG and the big 4 do have restructuring practices. However, the specialist guys like FTI and Alix Partners are the ones who will rake it in ,especially in areas like manufacturing, retailing, general industrials etc...they and their funds like Questar and the other vulture funds investing in distressed companies.malushahi wrote:^^^ to add to above, while MBB do offer generic restructuring services, for most firms the scale and impact of current crisis requires the services of specialized restructuring firms (since the issue is not just one of capital structure restructuring, but also has legal and transnational underpinnings). And yes these firms will have a bonanza in the near to mid term.
The following article will give you a flavor for these firms.
http://www.bloomberg.com/apps/news?pid= ... refer=home
Re: Indian Economy: News and Discussion (June 8 2008)
question for the management gurus -
what kind of work is given to newbies in the management (biz school grad) line say with 3-4 yrs of
prior work exp after they pass out of Mba and join a consulting co like mckinsey or deloitte.
I have never had a friend in that field to ask so I will ask it here. I know of certain people like
one in mckinsey who seem to travel during the week to meet/work at client sites in US and is
home on the weekends.
do they have some books/formulas used to process data on client business and generate
advice on how to restructure or its a case by case basis?
how do they keep track of conditions in every industry such that they can advice what
will work?
do the newbies get to go out and decide on the lives of people or they report back to
a senior group who make the final report?
suffice it to say after knowing a few people in a certain IIM now preparing to graduate
next yr, I am afraid of them roaming around re-structuring large swathes of the world
economy. there was a distinct lack of humanity in these people, a fact my relative
readily agreed with.
what kind of work is given to newbies in the management (biz school grad) line say with 3-4 yrs of
prior work exp after they pass out of Mba and join a consulting co like mckinsey or deloitte.
I have never had a friend in that field to ask so I will ask it here. I know of certain people like
one in mckinsey who seem to travel during the week to meet/work at client sites in US and is
home on the weekends.
do they have some books/formulas used to process data on client business and generate
advice on how to restructure or its a case by case basis?
how do they keep track of conditions in every industry such that they can advice what
will work?
do the newbies get to go out and decide on the lives of people or they report back to
a senior group who make the final report?
suffice it to say after knowing a few people in a certain IIM now preparing to graduate
next yr, I am afraid of them roaming around re-structuring large swathes of the world
economy. there was a distinct lack of humanity in these people, a fact my relative
readily agreed with.
Re: Indian Economy: News and Discussion (June 8 2008)
Guru ji>> All that is taught in B school while doing case studies. Like in Landscaping there is nothing bad or good , the strategies are only judged a long time after the High Power consultants leave to Bhamas!
Re: Indian Economy: News and Discussion (June 8 2008)
Associate level job - analytical evaluation of client firm from an operational efficiency standpoint while doing cost and capital structure due diligence, in order to ascertain, strengthen/broaden competitive advantage (phew.. hope i got all that right)Singha wrote:question for the management gurus -
what kind of work is given to newbies in the management (biz school grad) line say with 3-4 yrs of
prior work exp after they pass out of Mba and join a consulting co like mckinsey or deloitte.
personally, i won't count mbb and say deloitte in the same breath.
anyone who knows and tells you - will have to kill you.Singha wrote:I have never had a friend in that field to ask so I will ask it here. I know of certain people like
one in mckinsey who seem to travel during the week to meet/work at client sites in US and is
home on the weekends.
do they have some books/formulas used to process data on client business and generate
advice on how to restructure or its a case by case basis?
how do they keep track of conditions in every industry such that they can advice what
will work?
do the newbies get to go out and decide on the lives of people or they report back to
a senior group who make the final report?
Last edited by malushahi on 14 Oct 2008 21:52, edited 1 time in total.
Re: Indian Economy: News and Discussion (June 8 2008)
Prepare powerpoints, take notes at meetings involving head honchos (PYTs preferred).what kind of work is given to newbies in the management (biz school grad) line say with 3-4 yrs of
prior work exp after they pass out of Mba and join a consulting co like mckinsey or deloitte.
I am fortunate enough to have one of them report to me.
But they are on the fast track for promotion as PMs as the senior partners at Deloitte, IBM, ACN etc. prefer to deal with them than a balding, paunchy, middle aged guy.
Re: Indian Economy: News and Discussion (June 8 2008)
GDSingha wrote: suffice it to say after knowing a few people in a certain IIM now preparing to graduate
next yr, I am afraid of them roaming around re-structuring large swathes of the world
economy. there was a distinct lack of humanity in these people, a fact my relative
readily agreed with.
Lack of humanity can be selectively applied if you are core interests are clear and have the power to make the call.
I do that whenever i can. Remember wolf pack analogy.We removed one PM ( Brit) and bought Desi in ofcourse in the interest of project and in safe gaurding company' stategic vision.
Indians in management positions needs to learn this. They are .We will get there.
Re: Indian Economy: News and Discussion (June 8 2008)
Deccan Chronicle, 15 Oct., 2008Singha wrote:with the common backend SPY3 radar architecture on DDX21 ships, banking will see the
reverse - common frontend and separate back end processors(banks).
so for costcutting as airlines share ground handling, fuels, code shares, gates and counters.
you could see multiple banks like ICICI, HDFC and Kotak share a single branch premises
with common staff but based on customer they can access everything.
the branch premises would be shared on a opex basis and staff could be a third party
who handles this front end.
also each bank need not setup its own ATMs but co-brand and co-operate. no 3rd
party withdrawal fees because 15 banks share one ATM.
Kingfisher, Jet tie up
Mumbai, Oct. 13: In a path-breaking move two giant rival airlines, Kingfisher and Jet, came together on Monday to share seats, ground-handling facilities and cross-selling of flights to meet the challenges of a market ridden with high fuel prices and over-capacity.
Talking to reporters after a two-session meeting, the Kingfisher Airlines chairman, Dr Vijay Mallya, said, “We are one and have a common appreciation and commitment. It is a path-breaking alliance.” The Jet chairman, Mr Naresh Goyal, said, “It is not a cartel.” This sharing happens at the international level, but such an alliance is a first for Indian aviation.”
Dr Mallya said the issue of equity and other details would be announced in Hyderabad in a few days in the presence of the civil aviation minister, Mr Praful Patel. Dr Mallya said the two airlines would also use each others’ crews on similar aircraft. The alliance will include reciprocity in Jet Privilege and King Club frequent flier programmes and joint fuel management to reduce fuel expenses.
The two airlines have 65 per cent share of the passenger traffic. They have 189 aircraft and run 920 domestic flights and 82 international flights daily. Kingfisher has put on hold its Bengaluru-London flight, which was inaugurated recently but had a load factor of just 20 per cent.
Re: Indian Economy: News and Discussion (June 8 2008)
Jet laid off 850 cabin crew yesterday night.
Deccan laid off 300 last month.
Deccan laid off 300 last month.
-
Nayak
- BRF Oldie
- Posts: 2552
- Joined: 11 Jun 2006 03:48
- Location: Vote for Savita Bhabhi as the next BRF admin.
Re: Indian Economy: News and Discussion (June 8 2008)
TCS is cutting variable pay. That is gonna hurt the packet of the IT abduls.
Expect other cos to follow suit. Not a good time to be a family abdul. The jam to be spread on the bread keeps getting thinner and thinner.
Keep the kids happy, meet Ayesha's demands for new stuff, tend the goats, dream about a DSLR with wide-angle lens.
Expect other cos to follow suit. Not a good time to be a family abdul. The jam to be spread on the bread keeps getting thinner and thinner.
Keep the kids happy, meet Ayesha's demands for new stuff, tend the goats, dream about a DSLR with wide-angle lens.
Re: Indian Economy: News and Discussion (June 8 2008)
atleast in INFY few were getting the full extent of the variable pay earlier. my friend with 10+ yrs
in the trenches there was saying he used to get 65-75% of it. but in salary offers they would
mention it in the gross? most MNCs do not mention that in gross but do give a sample target
bonus % outside of the gross.
now if they are cutting the 100% theoritical amt itself, take home will be impacted as you said.
another TOI report says attrition in IT has slid very low. INFY reports 8% down from 17%.
sea state5, beaufort scale going wild and ugly green cross swells driving in from the south-west.
big black cumulo nimbus clouds building up as the sun shines fitfully in the afternoon...oily big
raindrops spatter on the fwd deck as the crew scurry to batten the hatches and check the
lifeboat davits. the kent clearview screen spins up to full rpm as the bridge watch is doubled
and lookouts posted to both wings to watch for the tell tale whitewater of reefs.
HMS Ulysses ploughs on through the heavy swells to the sunda straits
imint sweeps of hainan and sanya report atleast 6 SSKs are absent from their moorings.
a french govt message passed on via embassy in delhi confirms that their Le Croissant
rorsat has detected the submerged wakes of 2 SSKs passing through the molucca channel.
down in the CIC, fitful sonar contacts are reported of prowling submarines but nobody
is sure - could just be the monsoon roiling up the shallow sea bottom.
the helicopters are secured with the beartrap hauldown system and locked inside the
hanger as furious waves crash over the rear deck.
100 miles to the west in the andaman sea between car nicobar and penang, the INS Delhi
launches two big NH90 helicopters to patrol position on a bearing due south after a
chetak UAV from its accompanying INS Shivalk reports a radar periscope contact.
a lone P8I launched from car nicobar base flies like a grey condor over the lonely
sea, shaken and buffeted by the storm and banks of cumulo nimbus cloud.
war is here.
in the trenches there was saying he used to get 65-75% of it. but in salary offers they would
mention it in the gross? most MNCs do not mention that in gross but do give a sample target
bonus % outside of the gross.
now if they are cutting the 100% theoritical amt itself, take home will be impacted as you said.
another TOI report says attrition in IT has slid very low. INFY reports 8% down from 17%.
sea state5, beaufort scale going wild and ugly green cross swells driving in from the south-west.
big black cumulo nimbus clouds building up as the sun shines fitfully in the afternoon...oily big
raindrops spatter on the fwd deck as the crew scurry to batten the hatches and check the
lifeboat davits. the kent clearview screen spins up to full rpm as the bridge watch is doubled
and lookouts posted to both wings to watch for the tell tale whitewater of reefs.
HMS Ulysses ploughs on through the heavy swells to the sunda straits
imint sweeps of hainan and sanya report atleast 6 SSKs are absent from their moorings.
a french govt message passed on via embassy in delhi confirms that their Le Croissant
rorsat has detected the submerged wakes of 2 SSKs passing through the molucca channel.
down in the CIC, fitful sonar contacts are reported of prowling submarines but nobody
is sure - could just be the monsoon roiling up the shallow sea bottom.
the helicopters are secured with the beartrap hauldown system and locked inside the
hanger as furious waves crash over the rear deck.
100 miles to the west in the andaman sea between car nicobar and penang, the INS Delhi
launches two big NH90 helicopters to patrol position on a bearing due south after a
chetak UAV from its accompanying INS Shivalk reports a radar periscope contact.
a lone P8I launched from car nicobar base flies like a grey condor over the lonely
sea, shaken and buffeted by the storm and banks of cumulo nimbus cloud.
war is here.
-
sugriva
- BRFite
- Posts: 318
- Joined: 15 Jun 2005 20:16
- Location: Exposing the uber communist luddites masquerading as capitalists
Re: Indian Economy: News and Discussion (June 8 2008)
India highly prone to global credit crisis
http://www.business-standard.com/india/ ... ono=336891
Citigroup cites India’s very high ratio of total external finance to forex reserves and high level of mobile capital compared to the reserves as the main drawbacks, making the country highly vulnerable to the global financial crisis.
http://www.business-standard.com/india/ ... ono=336891
Citigroup cites India’s very high ratio of total external finance to forex reserves and high level of mobile capital compared to the reserves as the main drawbacks, making the country highly vulnerable to the global financial crisis.