Byapaar.com -The Indian Business Blog

As usual, this is one of those personal posts which I do from time to time on this blog. As there is election just round the corner, there is hyper activity in the field of politics and business has taken a back seat. The effect of politics is such in India that, even media – all types at that are focusing on it, rather than highlight the economic problems that is engulfing us slowly but surely.
I can think of only one recent business news that caught my attention and that is Forbe’s latest list of shamelessly rich people though they have not been left untouched by the global market crash. Bill Gates returns as numero uno richest persona despite loosing $18 billion during last year. His buddy Warren Buffet lost $25 billion, but it is still enough for him to occupy number two position. India’s Anil Ambani and last year’s 6th richest man lost a whopping $32 billion during last 12 months and slipped out of top 10. The saving grace for India is Laxmi Mittal at number 8 and Mukesh Ambani at number 7.
Over-all, hundreds of people lost their billionaire tag from last year’s list and only few joined the list this year which is not very surprising. Interesting Communist ruled China has over taken India as home to most numbers of billionaires in Asia.
Now lets proceed to the main story.

Visa Credit Card

Billionaires or millionaires, India is a land of great diversity – literally in everything. Even last year, there was EDC machine to process payment by credit cards in my entire state (It now has two merchant establishments accepting payment by credit cards in our state capital 185 kms away from where I live). So there were no banks or agencies that issued them. Now there is one bank Union Bank of India) which is issuing the plastic cards to clients.
Due to my involvement in the web and being a webmaster for sometime now, I have been having great difficulty in paying for my domains, hosting and other services that I need to avail regularly. So I can say easily that, the non-availability of a credit card was hampering my online business and more than anybody else in my state, I felt the absence of plastic money to great extent.
When the bank opened a branch in our big village (with more than 100,000 population), I took the first opportunity to open an account with them in the first week of December, 2008 and immediately applied for the card. One fine day at the end of January, someone called me from Mumbai to verify information and documents that I put with my application form. I was hoping to receive it by 3rd week of February. But it never came. Finally, today I received my long cherished VISA credit card. :p
After carefully checking the envelop, I discovered that the card was issued on 25th February and posted via EMS Speed Post service offered my Indian Postal Department on 28th February. Today is 13th March. So it took 13 days to reach my address from Mumbai by Speed Post! Ideally, it is supposed to take maximum of 72 hours from any place in India to any corner of the country. So much so is for the service of an important public service department of India. I am jut wondering how long would it have taken had it been posted via normal post.

This is not an isolated case if you are wondering. One of my savings policies has Read the rest of this entry »

Amidst global economic turmoil and financial crisis caused by US subprime lending crisis that caused havoc in markets around the world, Indian nationalized banks in consultation with the government have announced reduction of interest rates on home loans of up to Rs. 2 million that could lead to partial impetus in the realty sector. Just last week industrial production in India contracted for the first time in 14 years.

According to the new rates set by the banks, housing loans of up to half a million Rupees will now have interests of 8.5 percent and that of loans between half a million to two million will have interest rates of 9.25 percent. Presently, interest for home loans is 9.75 to 10.5 across various sectors in the banking industry.

This brings very good news for millions common people who can not afford to think of a house or flat beyond Rs. 2 million. Another additional feature of the new housing loan package is that interest rates will remain frozen for 5 years which means clients will not have to worry about increased equated monthly installments (EMIs) during this period. Also they will enjoy the benefit of rate cuts in between while banks will take the burden if rates rise. After five years, consumers could choose either fixed or fluctuating rates according to their choice. This makes debt management a lot easier for the common person.

Not only this, but banks have also reduced the margin requirements for loans. While previously, borrowers were required to pay between 20 to 25 percent of the total amount as margin money, it has been trimmed down to 10 percent for loans up to half a million and 15 percent for loans between half a million to 2 million.

According to bankers, this move will see around Rs. 150 to 200 billion being released over next few years and help the common men who constitute eighty percent of nationalized banks’ housing loan book. Read the rest of this entry »

In the midst of warning by the International Monetary Fund (IMF) of developing economies being toppled in the ongoing financial crisis, guardians of the Indian economy are working overtime to ensure India did not suffer much due to the global phenomenon. There is already signs from everywhere about an imminent slowdown of economies all over the world including the USA which reported a contraction of .1 percent of its economy last week.

It is really heartening to see that the Government of India is doing its best and working with leaders of the industry to see off the crisis. Last week the Prime Minister of India, Dr. Manmohan Singh held a meeting with business leaders like Anil Ambani, Sunil Mittal and others to hear their views on tackling the problem. According to the captains of the industry, the government must relax the credit policy without worrying too much about inflation so as to pump in money in the cash strapped financial sector. They opined that there is already signs of slowdown and if liquidity crunch is not addressed immediately, the economy would suffer more. They urged the government to lower interest rates and release more cash in the market to shore up the already nervous financial sector and thus bring the much needed confidence back in the market.

It seems it is lucky last few weeks in the office for the Manmohan Singh led NDA government as inflation dipped below 11 percent last week for the first time for 5 months and as a result the Reserve Bank of India announced a cut in CRR (Cash Reserve Ration) rate by one percentage point to 5.5 and REPO rate by 50 point basis to 7.5. This will release Rs. 700 billion in the market. Both the government and industry hope that the latest action is a step in the positive direction and it will boos liquidity in the system, stimulate growth and stabilize the financial market. The governor of RBI while announcing the news hoped that the credit requirements would be met through this action and effect the industry positively by picking up growth momentum.

But as always, while welcoming the move, industry leaders hoped the government and the Apex Bank would take more measures to tide over the global financial crisis.  They are asking more reforms in sectors including government debt market to tap new class of buyers and thus bring in more money in the market.

The stock market has responded positively to all these steps as it has been gaining continuously for last 4 trading days. The BSE Sensex has gained a credible 293.44 points today and have crossed the psychological barrier of 10,000 for the first time after it sank few weeks back.