Apparel exporters to get 2% interest subsidy

Press Trust Of India / New Delhi October 13, 2009,

Following a rise in garment exports in
September for the first time
since April this year, the government
has decided to give
exporters 2 per cent interest subsidy
on shipments.



The government had earlier announced a 2 per cent interest
subsidy to certain labour-intensive sectors like handicraft,
marine and textiles. However, garment exports were not
included in the list for the fiscal benefit.

Following a communication from the finance ministry, t
he Reserve Bank of India (RBI) in a notification said:
“Banks may pass on the benefit (2 per cent interest subsidy)
to all eligible (garment) exporters....”

It said the benefit would be
effective retrospectively from December 1, 2008,
and would remain in force till March 31, 2010.

Garments exports, which
had seen a decline since April 2009, managed to
register an annualised
growth of 1.39 per cent, to $876 million, in August.

“We are getting orders for the summer season. We are hopeful that
the positive trend will continue in the current financial year as the
exporters are now giving orders,” Apparel Export Promotion Council
Chairman Rakesh Vaid said.

President of the Federation of Indian Export Organisations
A Sakthivel said lowering of interest rate through subvention
would give respite from recent appreciation of rupee against the
dollar, which had lowered exporters’ realisations.

Garments exports declined by an average of 9.5 per cent in the
first four months of 2009-10 due to a slump in demand from
the US and European markets.

The US and Europe collectively account for 70 per cent of India’s
apparel exports, which are close to $10 billion.

The $63-billion Indian apparel and textiles industry is the
second-largest employment generator after the agriculture sector,
which employs about 35 million workers.

Secure your password, protect your privacy

My eyes widened when I read the news earlier last week.
At least 30,000 user passwords of popular Web mail services
like Hotmail, Yahoo and Gmail had been stolen and posted
on the Internet.

Mine could have been one of them, and the prospect of losing
a huge part of my life sent a shiver down my spine.

No, I am not exaggerating.

Information on who I am, who my friends are, what
I do and what I own, is on the Internet, and all it takes
to figure me out and take over my life is to know my e-mail
address and password.

E-mail accounts started off as individual repositories of online mail,
but today they have become the very essence of our online identities.

There are 35,060 e-mail messages in my Gmail account now,
accumulated since I joined the beta in June 2006, and all my
e-mail messages from my Yahoo, Hotmail and office Lotus Notes
accounts are forwarded there.

I have never deleted a single attachment since I started on Gmail
and busted my free 8.2 GB of Gmail space in June, only to sign up
for another 10 GB for US$20 (S$28).

Every Google Talk chat I have ever made is also there. Scanned
images of my IC and passport are there as well, as attachments in
my Sent folder, the first for my bank relationship manager to open
an account and the second sent to a travel agent to apply for a visa.

Since I started using Google phone last month, I have also linked
my SMS messages to my Gmail account, so all my sent and received
SMSes are stored there like Gmail message threads.

I have a unified phone and PC contacts database of about 2,000 people,
some duplicates, and they are all stored online under Google Contacts
(the default address book in Gmail).

You will also be able to find in seconds my credit card’s number and
expiry date, PayPal number, Krisflyer number and more by simply
typing the right keyword under the top-notch search bar in Gmail.

I have never touched Internet banking but if you are like my friend
who sends all his statements to his Gmail account, your net worth is
up there as well.

Knowing so much about a person is just the tip of the iceberg.
Any Web service – from World Of Warcraft to Facebook to Krisflyer –
will ask you for an e-mail address when you sign-up.

If you have forgotten your password to that service, you just need to
click a link on that service’s website and it sends you an e-mail with
a new password. The hacker who has access to your e-mail can do
that too, and even change your password for those Web services to
assume your identity.

Many online services also contain valuable digital property.
World of Warcraft (WOW) players who spent six years of their
lives accumulating virtual loot are huge targets of hackers, simply
because the slay-six-orcs-in-one-stroke swords are worth real money on eBay.

There are hundreds of “WOW moneychangers” online who will
willingly trade your virtual gold for real hard cash.

Online game download sites like Steampowered.com and GOG.com
let you buy video games through your credit-card and if you switch
computers, you can download them again. Anyone who knows your
username and password can simply steal all of those.

And there are definitely people out there trying to. In the last month,
I have received a dozen e-mail notifications from Blizzard
(the makers of WOW) confirming that I have tried to reset my password at the WOW website. I never sent a single one of the 12.

The scary thing is this: A recent report from security firm
Sophos states that four in 10 people use the same passwords
for their different online services. So all the bad guy needs to
do is to figure out your weakest link.
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To complete the takeover of my life, the hacker now only
needs to log in to Account settings of my Gmail and change my
password to his favourite tagline.

I know what you are thinking – the hacker still needs to answer
the secret question correctly to be able to change passwords,
maybe like the name of my first dog or my mother’s maiden name.

That information could be out there if you are a highly social
networking butterfly who shares personal information on Facebook
and Twitter without a second thought.

For hackers, they have other ways.

Maybe they know your phone number?
They can try to pretend to be your bank and
call you to get personal particulars and see if
your answers match those secret questions.

There is a buzzing underground economy that trades just
about anything. According to security firm Symantec’s
recent research, credit card numbers go for as much as
US$30 each and e-mail accounts for up to US$100 each.

There are two main ways that hackers try to get your personal
information – by infecting your computer with a virus that has
a keystroke logger (it records every letter you type and sends
the information back to the hacker) and by “phishing”.

Phishing (which sounds like fishing) is a social engineering
strategy to get innocent chaps like you and me to divulge
our personal information.

The most common method is when the culprits pretend to
be your bank and send you an e-mail asking you to click
on a link there to a website to key in your account details
and password, often ironically on the pretext that they need
to “verify” that your account has not been compromised.

Thankfully, there are defences against these attacks by making
use of what is called a second-factor authentication, often used
by banks here for Internet banking. The usual method is to provide
you with a security token.

Whenever you log in to your account online, you also need to press
a button on the token which generates a random number which you
need to key into the website along with your password.

Since that random number is only valid for a limited time, say one
minute, the thief needs to have that token to break into your account.
This is not foolproof, but it is a lot better than just relying on passwords.

Unfortunately, this added security layer has not been widely adopted
outside the Internet banking sphere.

The only exception is World Of Warcraft, where the hardcore player
can pay extra for the security token.

I say it is time for it to be extended, particularly among the Web mail
services like Gmail, Yahoo and Hotmail.

Make it an option for those, like me, when so much of our lives is in that
e-mail account. Naturally, we will have to fork out extra for it.

But for peace of mind, and to be able to continue to enjoy the convenience
of having all my information stored in my Gmail, I am more than happy
to do so.

Meanwhile, if you haven’t done so, do reset your e-mail account
passwords immediately. Because you could have been one of the
30,000 whose passwords were posted at online forums and if the
hackers haven’t had the time to change your password, you can
still save yourself.

Zero per cent schemes: How consumers get fooled ?

Ashish M



As a child when my first milk tooth fell, I was
told to keep the tooth under my pillow at night.
When I woke up the next morning, I was delighted
to discover a one rupee coin instead of my tooth
under the pillow. When I asked my parents about it,
they told me that a tooth fairy had switched my tooth
for a rupee coin during the night.

As a child the story had lots of appeal for me.
Of course as I grew older I realised that there was
no 'tooth fairy' and my parents placed that one rupee coin.

The stories surrounding zero per cent finance schemes
are perhaps of the same genre. The old adage that
'there is no such thing as free lunch' aptly describes
the zero-percent-interest schemes.

These schemes were widely popular till a few years back.
RBI regulations advising banks to refrain from offering
such schemes as well as the general withdrawal of major
banks from consumer durables financing has meant that
such schemes have not been in vogue for the last 2 to 3 years.

However there are several NBFCs (Non-banking financial
companies) that continue to finance consumer durables purchase
and also have zero per cent schemes. The main attraction of
such schemes is that they influence you to purchase consumer
goods that could be more expensive than your wallet size.

The lure of zero percent interest is an added attraction that
makes you feel that 'YES' I am getting something free and
thus I am able to buy a 'bigger and better' product.

But that is just a smart way in which such schemes fool you. Here's how................................



Unlike their names, most zero percent schemes have

other costs in built. The biggest cost is that you
forfeit the cash discount that you would have got
otherwise from the retailer. Also you will be paying
some processing/transaction fees and/or advance EMIs
(equated monthly instalments).

So let us see how the costs stack up in a so called
zero percent scheme.

Example: An LCD colour television costs Rs 48,000
and is available on zero percent EMI scheme for
six months (thats is, there is a EMI of Rs 8,000
per month for six months). The consumer needs to
pay a processing fee of Rs 1,000. If the customer
had bought the same TV by making a full payment s/he
could have availed of a cash discount of Rs 2,000 which
s/he is not getting if s/he opts for the zero percent
scheme.

So it works out like this:

Cost of television set: Rs 48,000

Amount paid/Cost incurred in advance:

Processing fees: Rs 1,000
Cash discount foregone: Rs 2,000
Total: Rs 3,000
Net finance received: Rs 45,000

Payment made by six instalments of Rs 8,000 each
(aggregating in all to Rs 48,000 against finance
received of Rs 45,000).

The effective interest cost works out to 23 per cent per annum......................




However the popularity of such schemes with consumers
particularly in festive season cannot be denied. Market
sources say that despite being costlier in some ways,
consumers prefer to go for these staggered payment schemes
and have been highly successful in pushing sales and
expanding the market for the durables. This is primarily
because of the fact that purchasing through credit
cards is very expensive as compared to purchasing
through these schemes.

Also, the success of these schemes can be attributed
to the availability of credit at the point of purchase,
minimal paper work, small ticket size and hence a
not-so-stringent eligibility criteria.

So are there any true zero per cent schemes? Yes there are.

Some of them are available on the much-maligned credit cards.
The credit card that I have allows me to convert specific
spends greater than Rs 5,000 into three-month EMIs without
any cost or fees. This is the closest that hard-nosed bankers
come to offering true zero per cent schemes. Some other major
credit card issuing banks also have similar schemes.

All said and done, the best way to check if a zero per cent
scheme is really
worth it ask the following questions:

Any fees or charges?

If I pay full amount do I get a discount that I am not getting
if I take the zero per cent scheme.

If answer to both the question is no then you have a true
zero per cent scheme! So you can now zero in on your zero
per cent schemes and spare yourself from being fooled.

Central Bank kicks off separate retail section

By Abhishek Anand

In an effort to increase its focus on retail business, Central Bank
of India has started a separate retail banking division.
S Sridhar, chairman and managing director of Central Bank of India,
said the bank plans to launch a series of products on the retail portfolio.
“During the past few years, Central Bank has veered away from retail
customers. But, we have decided to do a course correction.

We would be launching several prepaid cards, including travel,
payroll and student cards, among others. By launching these cards,
we hope to regain our hold among retail customers,”
Sridhar said while launching the bank’s prepaid gift card,
‘Cent gift cards’.

The newly launched gift cards can be loaded with
any value between Rs 500 and Rs 50,000 and could be
used at any outlet displaying MasterCard signage.
The bank would focus a lot on mobile banking services
and would utilise this platform for financial inclusion purpose
as well.

Asked about the performance of the bank during the first half
of the present financial year, Sridhar said, “The credit growth
has been sluggish all throughout the period with the exception
of last two weeks of September. Overall, the credit growth has
been to the tune of 18 per cent year-on-year.


As far as deposits are concerned, the growth
has been to the tune of 23 per cent.”

On the interest rate front, Sridhar said, “During our customary
meeting with RBI, most of the bankers favoured status quo and
the banking regulator has to wait for some more time before
concluding whether a recovery is well and truly underway or not.”

India may lead global private equity recovery: KPMG

The domestic and international private equity players
see India as the second most attractive destination
after China and feel that the country may lead the
global PE recovery, according a survey.

As many as 33 per cent of investors, who participated
in the survey, ranked China as the most attractive market,
followed by India (29 per cent), other emerging markets
(19 per cent) and developed markets (20 per cent).

"India offers immense opportunities for PE investments
and India will likely be at the forefront of a global
PE recovery," said a survey by research firm KPMG.

It said investors find India attractive as a PE destination
because of its robust economic growth, tax environment,
corporate governance and investment structuring.

"The next 12 months should be viewed as an opportunity
to build value in portfolio terms and show that
PE is an integral part of India's future," the survey added.

It projected 2010 to be the year of consolidation with
focus on portfolio nurturing, fewer new deals or
fund raising, smaller investment sizes and fewer exits.

The KPMG survey, conducted along with Stanford University's Shorenstein
Asia-Pacific Research Center, covered 40 General partners
(GPs) and Limited Partners (LPs). Broadly, GPs handle investment
operations directly for PEs, while LPs invest in them.

KPMG said Indian public markets have recovered significantly
since August 2009, and initial signs are indicating that
there is considerable amount of liquidity in the market from
institutional investors for IPOs.

Exit options for PE funds include initial public offering,
public market or strategic sale.

On India's hurdle rates (the rates of return above which
the GP starts to earn the carried interest, about 8 per cent),
the survey said they were in line with developed country averages.

"This is unexpected; because Indian PE should earn higher returns
for developing country risks than developed country PE.
We would, therefore, expect hurdle rates to be higher
than developed country rates." it added.

Source: ET