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Wednesday, September 05, 2012

Washington Post: India’s ‘silent’ prime minister becomes a tragic figure

India’s ‘silent’ prime minister becomes a tragic figure
By Simon Denyer, Published: September 4

NEW DELHI — India’s Prime Minister Manmohan Singh helped set his country on the path to modernity, prosperity and power, but critics say the shy, soft-spoken 79-year-old is in danger of going down in history as a failure.

The architect of India’s economic reforms, Singh was a major force behind his country’s rapprochement with the United States and is a respected figure on the world stage. President Obama’s aides used to boast of his tremendous rapport and friendship with Singh.

But the image of the scrupulously honorable, humble and intellectual technocrat has slowly given way to a completely different one: a dithering, ineffectual bureaucrat presiding over a deeply corrupt government.

Every day for the past two weeks, India’s Parliament has been adjourned as the opposition bays for Singh’s resignation over allegations of waste and corruption in the allocation of coal-mining concessions.


The story of Singh’s dramatic fall from grace in his second term in office and the slow but steady tarnishing of his reputation has played out in parallel with his country’s decline on his watch. As India’s economy has slowed and as its reputation for rampant corruption has reasserted itself, the idea that the country was on an inexorable road to becoming a global power has increasingly come into question.

“More and more, he has become a tragic figure in our history,” said political historian Ramachandra Guha, describing a man fatally handicapped by his “timidity, complacency and intellectual dishonesty.”

The irony is that Singh’s greatest selling points — his incorruptibility and economic experience — are the mirror image of his government’s greatest failings.

Under Singh, economic reforms have stalled, growth has slowed sharply and the rupee has collapsed. But just as damaging to his reputation is the accusation that he looked the other way and remained silent as his cabinet colleagues filled their own pockets.

In the process, he transformed himself from an object of respect to one of ridicule and endured the worst period in his life, said Sanjaya Baru, Singh’s media adviser during his first term.

Attendees at meetings and conferences were jokingly urged to put their phones into “Manmohan Singh mode,” while one joke cited a dentist urging the seated prime minister, “At least in my clinic, please open your mouth.”

Singh finally did open his mouth last week, to rebut criticism from the government auditor that the national treasury had been cheated of billions of dollars after coal-mining concessions were granted to private companies for a pittance — including during a five-year period when Singh doubled as coal minister.

Singh denied that there was “any impropriety,” but he was drowned out by catcalls when he attempted to address Parliament on the issue. His brief statement to the media afterward appeared to do little to change the impression of a man whose aloofness from the rough-and-tumble of Indian politics has been transformed from an asset into a liability.

“It has been my general practice not to respond to motivated criticism directed personally at me,” he said. “My general attitude has been, ‘My silence is better than a thousand answers; it keeps intact the honor of innumerable questions.’ ”

Singh probably will survive calls for his resignation, but the scandal represents a new low in a reputation that has been sinking for more than a year.

‘I have to do my duty’

Singh was born in 1932 into a small-time trader’s family in a village in what is now Pakistan, walking miles to school every day and studying by the light of a kerosene lamp. The family moved to India shortly before partition of the subcontinent in 1947, and Singh pleaded with his father to be allowed to continue with his studies rather than join the dry-fruit trade.

A series of scholarships allowed Singh to continue those studies first at Cambridge and then at Oxford, where he completed a PhD. Marriage was arranged with Gursharan Kaur in 1958; they have three daughters.

A successful career in the bureaucracy followed, but it was in 1991 that Singh was thrust into the spotlight as finance minister amid a financial crisis.

With little choice, Singh introduced a series of policies that freed the Indian economy from suffocating state control and unleashed the dynamism of its private sector.

More than a decade later, in 2004, Singh again found himself on center stage, becoming in his own words an “accidental prime minister.”

The Congress party led by Italian-born Sonia Gandhi had surprised many people by winning national elections that year, but she sprang an even bigger surprise by renouncing the top job and handing it to Singh.

In him she saw not only the perfect figure­head for her government but also a man of unquestioning loyalty, party insiders say, someone she could both trust and control.

“I’m a small person put in this big chair,” Singh told broadcaster Charlie Rose in 2006. “I have to do my duty, whatever task is allotted of me.”

From the start, it was clear that Sonia Gandhi held the real reins of power. The Gandhi family has ruled India for most of its post-independence history and enjoys an almost cultlike status within the Congress party. Sonia’s word was destined to remain law.

But Singh made his mark during his first term in office, standing up to opposition from his coalition partners and from within his own party to push through a civil nuclear cooperation deal with the United States in 2008, a landmark agreement that ended India’s nuclear isolation after its weapons tests in 1974 and 1998.

It was a moment that almost brought his government down, an issue over which he offered to resign. While no electricity has yet flowed from that pact, it marked a major step forward in India’s relations with the United States.

The Congress-led coalition went on to win a second term in 2009, in what many people saw as a mandate for Singh.

The 2009 election “was a victory for him, but he did not step up to claim it — maybe because he is too academic, maybe because he is too old,” said Tushar Poddar, managing director at Goldman Sachs in Mumbai. “That lack of leadership, that lack of boldness, lack of will — that really shocked us. That really shocked foreign investors.”

‘He suffers from doubts’

In a series of largely off-the-record conversations, friends and colleagues painted a picture of a man who felt undermined by his own party and who sank into depression and self-pity.

His one attempt in 1999 to run for a parliamentary seat from a supposedly safe district in the capital, New Delhi, had ended in ignominious defeat. His failure to contest a parliamentary seat in 2009, making him the only Indian prime minister not to have done so, further undermined both his confidence, his friends and colleagues say, and his standing in the eyes of the party.

Congress, insiders say, never accepted that the 2009 election was a mandate for Singh and jealously resented the idea that he could be seen to be anywhere near as important as a Gandhi. Rahul, Sonia’s son, was being groomed to take over from Singh, and the prime minister needed to be cut down to size.

He soon was openly criticized by his own party over attempts to continue a peace process with Pakistan despite the 2008 attack on Mumbai by Pakistani militants.

Singh became even more quiet at his own cabinet meetings, to the point of not speaking up for the sort of economic changes many thought he ought to be championing.

“His gut instincts are very good, but sometimes he suffers from doubts about the political feasibility, about getting things done,” said Jagdish N. Bhagwati, a Columbia University professor who has been friends with Singh since their Cambridge days.

Singh will go down in history as India’s first Sikh prime minister and the country’s third-longest-serving premier, but also as someone who did not know when to retire, Guha said.

“He is obviously tired, listless, without energy,” he said. “At his time of life, it is not as though he is going to get a new burst of energy. Things are horribly out of control and can only get worse for him, for his party and for his government.”

Monday, September 03, 2012

கூடங்குளம் அணு உலையை மூடு என்ற பிற்போக்கு முழக்கத்தை முறியடிப்போம்! - சமரன்




கூடங்குளம் அணு உலை குறித்த எமது முழக்கங்கள்:

அணுசக்தி, மனிதகுல ஆற்றல் பற்றாக்குறை எனும் இருளைப் போக்கும் அற்புத விளக்காக, இயற்கை உயிரியல் துறையில் சாகசங்கள் புரியும் உயிர் சக்தியாக, கடவுள் படைப்பு எனும் மாயையைக் கட்டுடைத்து இயற்கை உண்மையை உலகுக்குக் காட்டும் மாபெரும் சக்தியாக திகழ்கிறது. அந்த அற்புத சக்தியை மனிதகுலம் தம்வசப்படுத்தி வளம் பெற்றிட கீழ்க்கண்ட முழக்கங்களின் அடிப்படையில் அணிதிரள்வோம்.

* இந்திய - அமெரிக்க இராணுவ, மற்றும் அணுசக்தி ஒப்பந்தங்களை ரத்துசெய்!

* ஏகாதிபத்தியங்கள்,உள்நாட்டுத் தரகுப் பெருமுதலாளிகளின் இலாப வெறிக்காக இயங்கும் பழைய காலாவதியான அணு உலைகளை மூடு,
புதிய தொழில்நுட்ப ரீதியிலான, பாதுகாப்பான அணு உலைகளை அனுமதி!


* மக்களுக்கு உரியபாதுகாப்பு வழங்கி கூடங்குளம் அணு உலையைத் திற!

* அணுசக்தி “காலாவதியாகிவிட்டது” என்று கூறி , அணு உலையை மூடு என்ற பிற்போக்கு முழக்கத்தை முறியடிப்போம்!

* அனல், புனல், காற்று,சூரிய ஒளி, அணுசக்தி உள்ளிட்ட தேசிய மின் திட்டத்திற்காகப் போராடுவோம்!

மக்கள் ஜனநாயக இளைஞர் கழகம், தமிழ்நாடு
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முழு விரிவான குறு நூலைப் படிக்க:

படியுங்கள்!                           பரப்புங்கள்!!                       பங்களியுங்கள்!!!

Thursday, August 30, 2012

காலியில் தாக்கப்பட்ட தமிழ்க் கைதி: தலையில் பலத்த அடி, மூளையில் இரத்தக் கசிவு!


காலியில் தாக்குதலுக்குள்ளான தமிழ்க் கைதியின் நிலை மோசம் நேற்று கொழும்பு தேசிய வைத்தியசாலைக்கு மாற்றப்பட்டார்

மகஸின் சிறைச்சாலையில் தடுத்து வைக்கப்பட்டிருந்த தமிழ் அரசியல் கைதியான சுந்தரம் சதீஸ் நேற்று கொழும்பு தேசிய வைத்திய சாலைக்கு திடீரென மாற்றப்பட்டார்.

வழக்கு விசாரணை ஒன்றுக்காக காலி நீதிமன்றுக்கு அழைத்து வரப்பட்ட சதீஸ் வழக்குத் தவணையின் பின்னர் சுயநினைவற்ற நிலையில் காலி, கராப்பிட்டிய வைத்தியசாலையில் அனுமதிக்கப்பட்டிருந்தார். இந்த நிலையிலேயே அவர் நேற்று கொழும்பு தேசிய வைத்திய சாலையின் 50 ஆவது விடுதிக்கு மாற்றப்பட்டுள்ளார்.

அரசியல் கைதியான சதீஸின் மனைவி தனது கணவரை கொழும்பு தேசிய வைத்தியசாலைக்கு மாற்ற நடவடிக்கை எடுக்குமாறு ஜனநாயக மக்கள் முன்னணித் தலைவர் மனோ கணேசனிடம் கோரிக்கை விடுத்திருந்தார்.

இதனையடுத்து சிறைச்சாலைகள் மறுசீரமைப்பு அமைச்சர் சந்திரசிறி கஜதீரவுடன் மனோ கணேசன் நடத்திய பேச்சின் அடிப்படையில் சதீஸ் கொழும்பு தேசிய வைத்தியசாலைக்கு மாற்றப்பட்டுள்ளார்.

இதேவேளை, கொழும்புக்கு மாற்றப்பட்ட தழிழ் அரசியல் கைதியை மனோ கணேசன் குழுவினர் மற்றும் நாடாளுமுன்ற உறுப்பினரான ஜயலத் ஜெயவர்த்தன ஆகியோர்  நேரில் சென்று பார்வையிட்டுள்ளனர். இதன்போது அரசியல் கைதியான சதீஸின் தலையில் கட்டுப் போடப்பட்டுள்ளதுடன் கண் விழித்திருந்தாலும் வருபவர்களை அடையாளம் காணக்கூடிய நிலையில் அவர் இல்லை எனவும் அவரது கால்களில் சங்கலிப் பூட்டுப் போடப்பட்டுள்ளதையும் அவதானிக்க முடிந்தது.

இதன்போது கடமையில் இருந்த வைத்தியர் ஒருவரிடம் சதீஸின் நிலைமை குறித்துக் கேட்டபோது தலையில் கடுமையாக அடி பட்டுள்ளது. மூளையில் இருந்து இரத்தக் கசிவு ஏற்பட்டுள்ளது. இதனால் மூளை தொழிற்பாடு குன்றியுள்ளது எனத் தெரிவித்தார் என்று ஜனநாயக மக்கள் முன்னணித் தலைவர் மனோ கணேசன் உதயனுக்குத் தெரிவித்தார்.
===========  யாழ் உதயன்

Debrief 30 08 2012



சீனத்தலைமையே உன் செங்கொடியில் இருப்பது ஈழத்தமிழர் சிந்திய இரத்தமே!


Sunday, August 26, 2012

ஈழத்தமிழர் நிலத்தில் சிங்கள இராணுவமயமாக்கலுக்கு துணை நிற்கும் திருத்தல்வாத சீன ஆளும்கும்பல்.

Inside Norochcholai: Chinese engineers were yesterday desperately trying to repair the machine component which had forced the shutdown of the Norochcholai power plant that authorities say led to the three-hour daily power cuts. Officials said they were hoping to get the plant working within a day or two ahead of the visit to Sri Lanka by China’s Defence Minister.

China to build military housing in North-East
Aid for Defence Services College in Colombo

China is expanding its economic, trade and military ties with Sri Lanka providing US$ 100 million (Rs. 13.2 billion) for army welfare projects initiated by the Ministry of Defence, official sources said.

Plans are afoot to set up accommodation and infrastructure facilities in army camps in the north and east with Chinese assistance.

The maintenance of military camps in strategic locations throughout the country is essential for national security, the Government has long argued despite pressure from some western nations and India to reduce the military presence in the north and east.

The establishment of military camps in locations such as Mannar, Palaly, Elephant Pass, Pooneryn, Thalladi, Karainagar, and Mullaitivu began in the 1950s with a view to enhancing internal security.

Infrastructure and accommodation facilities in these camps will be built for the benefit of security forces personnel, a senior Finance Ministry official said.

The Chinese financial assistance to the military in the north and east comes ahead of a five-day visit starting next Wednesday (August 29) �by Chinese Defence Minister Liang Guanglie together with a high-powered defence delegation. The high ranking minister was Chief of Staff of the People’s Liberation Army from 2002-2007 and later a State Councillor and member of the Central Military Commission of China.

The official said the role of the military in the North and East was to maintain national security and ensure that any remnants of pro-LTTE elements among the resettled population or who were based in other countries did not have the opportunity to destabilise peace and harm Sri Lanka,.

China has also announced a grant of US $1.5 million (Rs. 198 million) for modernisation of the Defence Services College in Colombo for children of security forces personnel and the police.
The college has classes from Grade 6 to 12. This modernization project was part of the army welfare initiative of the Ministry of Defence, he said.

Meanwhile, the government recently signed an agreement with China to buy six MA-60 aircraft at US$ 105.4 million (Rs. 13.8 billion), he revealed, in a deal that is yet to be made public.

Chinese assistance to Sri Lanka is divided into buyer’s credit, preferential buyer’s credit and loans. These are offered via the Export-Import (Exim) Bank of China. China also provides limited grant aid under the Chinese government’s economic and technical cooperation programme, the senior Finance Ministry official said.

The Chinese Defence Minister will visit the Sapugaskande Defence Staff College, the Panagoda army cantonment, Galle and possibly Hambantota, during his stay in the country.

China is financing the Hambantota port development project as well.

Another high-powered delegation here next month

The Chinese People’s Congress’ Vice President U. Bango will arrive in Sri Lanka next month, leading a 96-member delegation, an External Affairs Ministry spokesman said.The delegation will arrive on September 15 and visit Hambantota and the Northern and Eastern provinces.

They will also visit Chinese-funded ventures including road construction projects.

அந்நிய நிதிமூலதனப் பாதையில் எகிப்து.

Egypt seeks $4.8 billion IMF loan for stricken economy

She said the IMF would look at fiscal, monetary and structural issues, promising that the IMF would be a partner in "an Egyptian journey" of economic reform.

 
IMF Managing Director Christine Lagarde (L) talks with Egypt's Prime Minister Hisham Kandil
during their a news conference at the cabinet headquarters in Cairo, August 22, 2012.
Credit: Reuters/Asmaa Waguih

By Yasmine Saleh and Patrick Werr     CAIRO | Wed Aug 22, 2012 6:34pm BST

CAIRO (Reuters) - Egypt has requested a $4.8 billion (3 billion pounds) loan from the
International Monetary Fund and hopes for a deal by the end of year, officials said during a
visit on Wednesday by IMF chief Christine Lagarde to discuss helping the ailing economy.
Egypt said last week it would discuss a bigger-than-expected loan from the fund, whose support
could help to stave off a balance of payments crisis and rebuild confidence among investors who
fled during 18 months of political turmoil.

Egypt's military-appointed interim government had been negotiating a $3.2 billion package before
it handed power to President Mohamed Mursi on June 30. The deal was not finalised.

"We have officially requested a $4.8 billion loan from the IMF," presidential spokesman Yasser
Ali told Reuters as Lagarde met the president. An IMF official confirmed the request.

During earlier talks, army officials had voiced concerns about extending Egypt's foreign debt
under their watch, while the IMF insisted any accord receive "broad political support".
Mursi's group, the Muslim Brotherhood, at the time declined to support any deal, saying the
government had not shared enough information on how the money would be used. The Brotherhood at that point had nearly half the seats in parliament.

Lagarde's visit signals a fresh determination on both sides to seal a long-awaited accord after
Mursi, who appointed his first government last month.

She said the IMF would look at fiscal, monetary and structural issues, promising that the IMF
would be a partner in "an Egyptian journey" of economic reform.

BROAD POLITICAL SUPPORT

Asked if the IMF wanted any loan accord to be approved by an elected parliament, Lagarde
indicated that an elected president might alone satisfy the condition of broad political
support.

"It's going to take a bit of time and we feel that we have perfectly competent authorities to
negotiate with," she said at a joint news conference with Egyptian Prime Minister Hisham Kandil.
She added that talks would continue on Thursday and an IMF team would make further visits to
Egypt.

Kandil said he expected the IMF loan would be for five years with a grace period of 39 months
and interest rate of 1.1 percent, but said details were still being discussed.

"God willing there will be an agreement on a map for work extending to November or the beginning
of December during which the loan will be signed with the IMF," he said.

During 18 tumultuous months since the overthrow of autocratic leader Hosni Mubarak, successive
Egyptian governments negotiated with the IMF to secure emergency funding. An army council took
charge after Mubarak fell on February 11, 2011.

Foreign investors have largely avoided Egypt since the uprising, waiting for the political
situation to stabilise and for the government to get its finances under control.

"The visit of Christine Lagarde to Egypt today is perhaps the clearest signal yet that the
country is close to signing a deal with the IMF," Said Hirsh, an economist with Capital
Economics, wrote in a note on Wednesday.

"If this materialises before the end of the year ... it would mark a turning point for Egypt's
economy - and should pave the way for a period of decent growth over the next five years or so,"
he wrote.

RUNNING OUT OF OPTIONS


Egypt's fiscal and balance of payments problems have worsened. The exodus of foreign investors
have left local banks shouldering much of the lending to the state.

The government in the 12 months to end-June also borrowed nearly $12 billion, or about 4.5
percent of GDP, directly from the central bank, an unusual measure indicating it was running out
of options to finance its budget deficit.

Since last year's popular uprising against Mubarak, Egypt also spent well over half its foreign
reserves to support its currency, allowing the pound to weaken only by about 5 percent despite a
sharp drop in tourism and foreign investment, two of Egypt's main sources of foreign exchange.
Egypt as of the end of July had reserves of $14.4 billion, of which only about half were in
liquid cash or negotiable securities, economists say.

Many investors believe the currency is overvalued and have been reluctant to return partly
because they fear a sharp currency devaluation could wipe out any returns.

An IMF deal would help Egypt to add credibility to economic reforms needed to restore investor
confidence.

These include reducing subsidies on energy, which accounted for about 22 percent of all
government spending in the fiscal year to June. The government is also expected to introduce a
value-added tax in the next few months.

Based on government figures, the 2012/13 budget deficit will represent 7.9 percent of gross
domestic product (GDP), down from 8.2 percent a year earlier. But most economists forecast lower
GDP growth than the government's estimate of 4-4.5 percent.

Aid promised by foreign donors last year was largely absent until June, when Saudi Arabia
transferred $1.5 billion as direct budget support, approved $430 million in project aid and
pledged a $750 million credit line to import oil products.

Qatar also promised $2 billion in support this month.

(Writing by Edmund Blair and Patrick Werr; Editing by Stephen Nisbet)

British banks face scandal over toxic insurance products

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Special Report - British banks face scandal over toxic insurance products
By Matt Scuffham and Myles Neligan LONDON | Wed Aug 22, 2012

"I'm angry day and night," said Reynolds of City Estates Midland about his experience with banks. "To put it in plain English, I hate them."

British banks face scandal over toxic insurance products

 
Special Report - British banks face scandal over toxic insurance products
 By Matt Scuffham and Myles Neligan
LONDON | Wed Aug 22, 2012 7:06pm BST

LONDON (Reuters) - When businessman Colin Jones approached his local bank for a loan in 2007, he had little idea what an "interest rate swap" was, let alone a "structured collar".
Jones wanted 400,000 pounds to buy a small hotel in North Wales and Royal Bank of Scotland said
he could have the money if he also took out a swap - a form of insurance designed to protect him
from a rise in interest rates.

Like a growing number of small business owners in Britain, Jones now regrets signing up. His
hotel was repossessed in July last year after a sharp drop in rates during the financial crisis
pushed charges on the deal to an unaffordable 30,000 pounds a year, the same as the repayments
on his loan.

"I've lost my house, my wife and I have separated, I lost my self respect and I lost the respect
of my local community because they don't see what's going on in the background. People just
assume that you've done something wrong," Jones said.

The 48-year-old is caught up in what could become the UK banking industry's next big scandal. An
increasing number of firms that bought the disputed insurance products are claiming compensation
and their advisers say the bill could run into billions of pounds. UK banks already face paying
8.8 billion pounds in compensation for disputes over other insurance.

Leading lenders Barclays, HSBC, Lloyds and RBS agreed to review their interest rate swap sales
in June after the Financial Services Authority (FSA), Britain's banking regulator, said it had
found "serious failings" in the way the instruments were sold to small firms. Seven smaller
banks have also agreed to review their swap sales.

But so far the banks have made provisions for only modest sums: Barclays and RBS, the country's
biggest small business lenders, have set aside 450 million pounds and 50 million pounds
respectively. Others are not so sanguine.

"The banks are underplaying the scale of the problem," said Stuart Brothers, a solicitor at
Newport-based law firm SRB Legal whose clients include firms seeking compensation. Small firms
say the banks did not properly explain the complex products or warn of the risks involved.

Reuters has spoken to banks, former bank employees and small business owners, and been shown
bank emails and phone conversation details. They paint a picture of an aggressive sales culture
where bank staff under pressure to hit targets fell short of their obligation under FSA rules to
provide "clear, fair and not misleading" information about their products.

The disputes threaten to tarnish further the reputation of banks. While UK lenders are now being
accused of starving small businesses of funding in the aftermath of the credit crunch, the swap
claims show some banks were previously only too happy to make loans if they could sell
profitable insurance at the same time.

"A DEAD CERT"

Interest rate hedging products are supposed to protect bank customers against rates going up by
making their future repayments more predictable. They come in many flavours, some called swaps
and others "caps", with the more exotic structured collars allowing the repayment rate to
fluctuate within a specified band.

The more complex products, especially structured collars, had an important catch: if the Bank of
England (BoE) base rate fell significantly, borrowers could suddenly find themselves paying far
more than they expected.

This was to prove costly for businesses that took out such hedges in the run-up to the credit
crunch, which triggered a dramatic 1.5 percentage point cut in base rates in October 2008 as the
BoE scrambled to prop up the economy. Four further cuts brought the base rate down to 0.5
percent, where it has remained.

The accusation that banks did not make clear the consequences of a drop in rates lies at the
heart of many cases of alleged mis-selling among the 28,000 swaps sold to small businesses
between 2001 and 2008. Many aggrieved borrowers also allege that banks did not reveal the size
of the break fees they would have to pay to terminate their hedge contracts early.

Jones says that in April 2007 he verbally agreed to his deal during a telephone call with an RBS
salesman who told him "pretty much the quote has to be done over the phone" because it was a
"live market", according to a transcript of the conversation, made from a recording by the bank
and seen by Reuters.

During the five-minute call the salesman told him a rise in interest rates was "looking like a
dead cert" because of high inflation data published that morning. The salesman told Jones the
swap would "essentially" fix the rate on his loan for five years, without spelling out what
would happen if rates fell instead. He also failed to give Jones a proper indication of how much
it would cost to break the swap early.

Jones is pursuing RBS for redress under the process launched by the FSA in June. RBS declined to
comment on his claim.

Rate swap products were marketed most aggressively between 2005 and 2008, before the base rate
fell sharply. In the final years of the long credit boom, banks were keen to sell more products
to a debt-saturated corporate sector, and the logical next step was to extend lucrative hedging
contracts, previously offered mainly to bigger firms, to small businesses.

"I think the loans were used as loss leaders," said Abhishek Sachdhev, a former Lloyds Banking
Group salesman who left to provide independent advice to businesses through his firm Vedanta
Hedging. "If the bank knows every loan it makes has some sort of hedging attached to it,
profitability goes up."

In the drive to grow the market for rate swaps, bank managers came under pressure to refer small
business clients to their treasury departments, which would try to sell borrowers rate swaps to
hedge their loans. They were pitched as providing security, and in some cases presented as a
condition of getting a loan.

At the same time, sales staff were offered substantial bonuses to encourage them to hit rising
targets.

"The carrot was bonuses. The relationship managers would be incentivised," Sachdev said. "The
stick was that if the relationship manager gave a client a loan for a million pounds, and didn't
introduce anyone to treasury, they would say you haven't hit your target this month, you'll lose
your bonus."

A spokesman for Lloyds disputed that view and said: "Interest rate derivative products were not
products that we sold widely to our SME (small and medium size enterprise) customers." He said
over 90 percent of Lloyds' SME customers chose simple fixed rate loans.

The spokesman added: "We are fully engaged and participating in the review of interest rate
derivative products, which will provide redress to certain customers, as set out by the FSA."

INCOME TARGETS

A sense of the pressures at work is evident in an email chain, seen by Reuters, which shows a
regional sales director at one bank (not Lloyds or RBS) celebrating a deal struck in August 2008
by one of his relationship managers, earning the lender an immediate windfall of 180,000 pounds.
The emails were shown to Reuters on the condition that those involved remain anonymous.
"Could everyone please go and hug (name redacted) because this deal just got us to our full
 year income target!" the sales director says, expressing relief that a deal was done after a client
unexpectedly proved to be a "particularly strong negotiator".

Another executive writes: "This has been one of my more challenging deals to get executed - and
also a very profitable one - all credit to (name redacted) as I know he must have had as many
challenges in getting this client across to (name redacted) bank as I have in engineering the
final combination of cashflows."

The client is seeking compensation, alleging the product was not properly explained to them.
James Ducker, another former Lloyds salesman who now advises small businesses on hedging, said
banks were mesmerised by the high profits they could make on rate swaps, and responded by
ratcheting up sales targets.

"If in year one I made a 200,000 pound profit and in year two my target was 500,000, how do I
make the extra money? And the answer was penetration, i.e. you need to sell more products to
more people, and you need to increase the margins," he said.

"I used to ask on a regular basis where would my individual targets stop. The targets just went
up and up."

A spokesman for Lloyds noted that Ducker and Sachdev have an interest in advising claimants in
swap disputes and said: "We would always suggest that customers with any concerns come to us
direct, as we are keen to resolve them wherever possible."

It is not just former salesmen taking the banks to task. Conservative lawmaker Guto Bebb, who
represents businessman Jones in the UK parliament, first became aware of interest rate swaps
when Jones approached him during his weekly meeting for constituents in Aberconwy, north Wales.
Bebb has since campaigned vigorously on behalf of small businesses who claim they were mis-sold
the products.

"There was a drive to get these products sold, and sold to businesses where I would say the
banks knew full well they were not sophisticated enough to understand what was being offered,"
Bebb told Reuters.

Another unhappy customer is Paul Reynolds, general manager of Birmingham-based property
developer and estate agent City Estates Midland Limited, who says a hedge his firm bought from
HSBC alongside a 4.3 million pound loan has turned into a financial straitjacket.

The cost of the swap soared after the unexpected drop in interest rates in 2008; the company has
so far paid 1.2 million pounds, according to Reynolds. The financial burden has forced the firm
to shed staff and sell property at "firesale prices", he says.

City Estates was not explicitly warned about the consequences of rates falling, and was not told
clearly how much it would cost to exit the arrangement early, alleges Reynolds.

"We've had to make two people redundant and we had planned to hire another nine - that's 11
people claiming (welfare) benefit instead of working," he said.

HSBC declined to comment on the case, citing customer confidentiality, but said it hoped to find
a satisfactory resolution through the FSA review process.

It added: "We believe that interest rate protection products are appropriate tools to help
businesses to manage the impact of interest rate fluctuations, a view shared with the Financial
Services Authority and the UK Government, in a recent white paper on banking reform."

SCALE OF EXPOSURE

Britain's battered banks already face paying 8.8 billion to compensate customers who were
encouraged to buy insurance covering repayments on mortgages and other loans if borrowers lost
income through unemployment or illness. The banks sold the insurance to many people who were
ineligible for it - the policies often did not cover the self-employed, for example - or who did
not realise they were getting insurance along with a loan.

The industry is also reeling from investigations into claims that it rigged Libor, the London
interbank rate, a scandal that has cost Barclays 290 million pounds.

The final cost of compensation for interest rate swap mis-selling is hard to quantify. Although
small firms bought just 28,000 of the contracts, while millions of consumers bought payment
protection insurance (PPI), the average cost of settling swap mis-selling cases is likely to be
far higher.

Compensation payouts for PPI policies typically run to hundreds or a few thousand pounds; but
payouts on interest rate swaps can run to millions. Bebb said he is aware of one firm in his
constituency that received an out-of-court settlement worth 16 million pounds after claiming it
had been mis-sold a swap.

Chris Hale, a solicitor at Bracewell Law, another legal firm advising small businesses which
bought the products, estimates the affair will cost the banks between three and six billion
pounds, citing steady growth in his client list.

"The last month has been our busiest in terms of new clients and approaches to us," he said.
If small businesses pursue lenders through the courts rather than the FSA process, the banks'
costs could rise substantially if courts make awards for "consequential losses" - business
opportunities missed as a result of being locked into expensive swap contracts. The bill could
also be pushed up by claims management companies, which carry out legal paperwork in return for
a cut of any compensation payout. Such firms are widely seen as encouraging more claimants to
come forward.

Against this, payouts on swaps could be mitigated by the process instituted by the FSA. Only
"non-sophisticated" customers who bought structured collars qualify for automatic compensation
under the scheme. They are defined narrowly as businesses with less than 6.5 million pounds of
sales, fewer than 50 employees, or assets worth less than 3.26 million pounds.

Companies deemed to be "sophisticated" and those sold products other than structured collars
must have their cases assessed in a process monitored by an independent reviewer. If they don't
agree with the eventual decision, they can challenge it in court.

The FSA has also said banks will be allowed to compensate wronged customers by offering them
replacement products, a cheaper option than reimbursing them.

Some experts say those measures explain why banks are making relatively modest provisions; they
also warn that the FSA process could delay cases coming to court.

The hedging contracts were generally subject to a six-year statute of limitation, leaving a
closing window of opportunity for companies to contest rate swap deals through legal channels.
As most of the hedges were sold before the base rate began its steep fall in 2008, businesses
which believe they were misled only have until 2014 to lodge their claims.

In the meantime, thousands of small business people may be left to rue the day they allowed
their banks to talk them into transactions they didn't properly understand.

"I'm angry day and night," said Reynolds of City Estates Midland about his experience with
banks. "To put it in plain English, I hate them."

(Editing by Richard Woods, Simon Robinson and Sara Ledwith)

Sri Lanka's foreign reserves had risen to 7.1 billion US dollars

 
பக்சபாசிஸ்டுக்களின் சிங்களத்தை ஊட்டி வளர்க்கும் அந்நிய நிதி மூலதனம்!
 

Reserve Track
25 Aug, 201209:06:38

Sri Lanka forex reserves US$7.1bn by July 2012
Aug 25, 2012 (LBO) -
Sri Lanka's foreign reserves had risen to 7.1 billion US dollars by end July 2012 from 6,045 million US dollars in June, helped by a loan from the International Monetary Fund and other inflows, the Central Bank said.
 
 Sri Lanka received 414 million US dollars as final tranche under a 2.5 billion US dollar loan, which goes directly into the country's foreign reserves by passing the domestic monetary system.
 The state also sold a billion US dollar sovereign bond of which about 500 million US dollars have to be retained to repay an earlier loan maturing in September.

A part of the rest was purchased by the Central Bank for rupees, which when used by the domestic monetary results in the eventual loss of the foreign reserves, unless the monetary authority is prepared to accept further weaknesses in the currency peg.

The central bank said earnings from tourism grew 24.3 percent to 460 million US dollars, worker's remittances grew 12.1 percent to 17,4 percent to 2.94 billion US dollars.

Foreign direct investments were estimated at 452 million US dollars in the first six months and portfolio inflows were 187 million US dollars.

Foreigners had also bought 842 million US dollars of government securities while capital inflows to the state, was 1,084 million US dollars.

When remittances, tourism receipts and foreign borrowings are spent by those that receive then a trade deficit is created as services and capital account inflows are greater than inflows through the goods account (merchandise exports).
 In the first six months of the year Sri Lanka has recorded a trade deficit of 4.7 billion US dollars.

Last year's trade deficit was also worsened by nearly 200 billion rupees of printed money poured into the economy to sterilized foreign exchange sales by the central bank triggering a one off unsustainable 'stimulus' of imports.

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