Bank staff strike work to protest consolidation

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MUMBAI (Reuters) - About 400,000 bank employees went on strike on Wednesday to protest merging state-owned banks, partially affecting cash transactions and clearing operations, a bank union official said.

Employees were also protesting the ongoing move to merge State Bank of Indore with its founder State Bank of India, the country's largest bank.

"We are going ahead with strike as conciliation talks with bank management last evening failed," C.H. Venkatachalam, general secretary of All India Bank Employees Association (AIBEA) told Reuters over telephone.

"Merger of banks is in nobody's interest. We need more banks in the country," he added.

The government has been urging state-owned banks to merge with each other to benefit from synergies and create fewer bigger players in the sector. The government and central bank have said that any such moves have to be voluntary on the part of banks.

Operations in branches and clearing may be partially impacted owing to the strike, B.A. Prabhakar, executive director, Bank of India.

Options like automated teller machines (ATMs) to meet immediate cash requirements will minimise the impact in clearing operations, said M.D. Mallya, chairman and managing director at state-run Bank of Baroda.

Treasury operations remained unaffected, said traders.

"Clearing activity is affected on account of this strike, it will therefore affect retail business but the overall market activity is brisk. Even money market activity is normal," said R.K. Gurumurthy, head of treasury at ING Vysya Bank.

All India Bank Officers' Association and AIBEA, earlier, served a notice to Indian Banks Association, the apex banker's body, informing its members working in state-owned, private and foreign banks would strike work on Dec. 16.

Earlier on Aug. 6 and 7, unions representing about 900,000 employees in state-owned banks went on strike for higher wages and pension, impacting cash transactions and foreign exchange trading volumes for two days.

Following several rounds of negotiations Indian Banks Association and United Forum of Bank Unions (UFBU) have reached an understanding for a 17.5 per cent wage hike for the employees in banks, IBA officials said.

(Reporting by Tamajit Pain and Swati Bhat; Editing by Ramya Venugopal)

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Protest erupts in parliament over inflation

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NEW DELHI (Reuters) - Lawmakers walked out of parliament on Wednesday protesting against inflation, as the opposition piled up pressure on the government to curb rising prices and threatened to carry out street protests.

The speaker adjourned proceedings for the day after lawmakers from the Bharatiya Janata Party (BJP), the main opposition, as well as from other parties walked out of parliament with many shouting:"The government needs to be changed."

The food inflation was at 16.7 percent in November as the worst dry spell in nearly four decades and annual floods in some states slashed farm output.

Higher prices paid by government agencies to buy grains from farmers have pushed the headline inflation to 4.78 percent.

Rising food prices have given a political boost to the BJP, which has been riven by internal feuding after losing the May national election.

Inflation and a high fiscal deficit, projected to rise to 6.8 percent of the gross domestic product, are major risks to the government's ambitious plan to ratchet up economic growth back to 9 percent level seen between 2005/06 and 2007/08.

In parliament, demands from sugar cane farmers last month asking higher prices and issues like formation of a new state have disrupted proceedings on a regular basis.

Many bills, including one on land acquisition and on the pension sector to allow entry of private players are likely to be now taken up in the next session.

(Reporting by Bappa Majumdar; Editing by Alistair Scrutton and Sanjeev Miglani)

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India says Kyoto climate pact in "intensive care"

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By Krittivas Mukherjee

COPENHAGEN (Reuters) - The Kyoto Protocol which binds nearly 40 rich nations to limit carbon emissions is in "intensive care" and global negotiations to extend the pact have stalled, India's environment minister said on Wednesday.

More than 190 countries are meeting in Copenhagen to agree the outlines of a new global deal to combat climate change, hoping to seal a full treaty next year to succeed the Kyoto Protocol.

Developing countries want rich nations to be held to their Kyoto obligations, and sign up to a second round of tougher commitments from 2013.

But Jairam Ramesh said many developed countries were "vehemently opposing" the protocol and some of them wanted a single new accord obliging all nations to fight global warming.

"The sense we get is that Kyoto is in intensive care if not dead," Ramesh told reporters.

The protocol obliges nearly 40 industrialised nations to limit emissions by at least 5.2 percent below 1990 levels by 2008-12. It does not impose curbs on poorer nations.

Talks on a pact to succeed Kyoto have been sluggish since they started two years ago, largely because rich nations want to merge Kyoto into a single new accord obliging all nations to fight global warming.

Industrialised nations want a single track largely because the United States, the world's second biggest carbon emitter, never ratified Kyoto. They fear signing up for a binding new Kyoto while Washington slips away with a less strict regime.

Ramesh said Danish Environment Minister Connie Hedegaard, host of the Dec 7-18 U.N. talks, had told him that the conference was unlikely to produce a second commitment period for Kyoto Protocol.

"By trying to shake Kyoto, they (rich nations) are trying to shake one of the basic pillars on which the world had resolved to fight climate change," Ramesh said.

Developing economies such as India have virtually ruled out a single legal undertaking, saying the main mandate of global talks on climate change was to agree the extension of Kyoto.

Negotiators have not been able to agree yet on whether to extend Kyoto and add extra national commitments under a separate pact, or end Kyoto and agree one new treaty which specifies actions by most countries.

Ramesh said rejecting Kyoto was not acceptable to developing countries and that it would be "very very detrimental to a consensus approach".

"This would certainly create problems for long-term action goals," he said, adding talks on Kyoto could still be revived with a helping hand from the United States.

"Kyoto needs a number of oxygen cylinders. One of them is in the White House."

(Editing by Dominic Evans)

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Chicago man Rana knew of Mumbai attack beforehand - U.S.

Tue Dec 15, 2009 9:25am IST

 

CHICAGO (Reuters) - Pakistani-born Chicago businessman Tahawwur Rana, charged with helping plan an attack on a Danish newspaper, knew about the assault on Mumbai in advance and discussed other potential targets in India, prosecutors said on Monday.

In arguing against releasing Rana from jail on bond, federal prosecutors in Chicago gave more details about a conversation authorities recorded earlier this year between Rana and accused conspirator David Headley.

In the Sept. 7 conversation during a long car drive, Rana, 48, and Headley, 49, discussed Rana's meeting in Dubai days before the November 2008 attack on Mumbai with an associate referred to as "Pasha," the nickname for Abdur Rehman Hashim Syed, a retired major in the Pakistani military, prosecutors said.

Rana also asked Headley to pass his compliments on to the coordinator of the Mumbai attacks, which killed 166 people, the court filing said.

"Rana was told of the attacks before they happened and offered compliments and congratulations to those who carried them out afterwards," prosecutors said.

Travel records showed Rana, a Canadian citizen, was in Dubai days before the Mumbai attack, they said.

Headley, a U.S. citizen with Pakistani-American parentage, is accused of making five scouting trips to Mumbai on behalf of militant Pakistani groups including Lashkar-e-Taiba, which is blamed for the Mumbai assault. Headley allegedly used Rana's travel and immigration business as a cover during his trips.

Syed has been accused by U.S. authorities of being Headley's contact with Ilyas Kashmiri, described as "one of Pakistan's most wanted terrorists and a direct link to al Qaeda," in court documents.

Headley and Rana also discussed four other potential targets -- the Danish newspaper that published cartoons offensive to Muslims in 2005; Bollywood; Somnath temple; and Shiv Sena, a political party with roots in Hindu nationalism.

Prosecutors said Rana later lied to investigators after he was arrested, saying his conversation with Headley was about potential business ventures.

Asked about Mumbai, Rana told investigators he was vaguely aware of the attacks but that he and "Pasha" had discussed the fighting in the disputed territory of Kashmir.

His lawyer said Rana was "duped" by Headley, who is cooperating with authorities, and that Rana was a peaceful man and a member of the Iqbal Society, which adheres to a non-violent philosophy.

Rana's case is 09 CR 849.

(Reporting by Andrew Stern; Editing by Cynthia Osterman)

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Govt to take steps to tame inflation - Pranab Mukherjee

Tue Dec 15, 2009 8:10pm IST

 

Manoj Kumar and Rajkumar Ray

NEW DELHI (Reuters) - The government will take steps to tame rising prices and enable the economy to recover faster, the finance minister said on Tuesday, as concerns about inflationary pressures spilling over to the broader economy mount.

Pranab Mukherjee also said the government intends to push tax reforms and cut its already-bloated fiscal deficit to 3 percent of gross domestic product after 2001/12 fiscal year, from 6.8 percent estimated for the current financial year ending March 2010.

Inflation and high fiscal deficit are major risks to the government's ambitious plan to ratchet up economic growth back to 9 percent level seen between 2005/06 and 2007/08.

"Prices are a major area of concern and we shall have to address it," Mukherjee told lawmakers in parliament.

"Whatever steps are needed, we will take those steps," he said, but did not elaborate.

Higher prices paid by government agencies to buy grains from farmers and supply shortage following the worst dry spell in nearly four decades and flooding in parts of the country have fueled food inflation.

Latest government data shows food inflation at 16.7 percent in November, which have pushed the headline inflation to 4.78 percent.

RETURN TO FISCAL PRUDENCE

Analysts say inflationary pressures and faster economic recovery could prompt the central bank to start raising cash reserve ratio of banks and interest rates from next year.

The central bank has cut its policy lending rate by 425 basis points between October 2008 and April 2009, slashed CRR and pumped in liquidity in financial markets to revive the economy hit hard by the global slowdown.

The government offered fiscal stimulus in the form of tax cuts and higher spending, which widened the fiscal deficit that has to be funded by a record borrowing of 4.51 trillion rupees ($96.6 billion) in 2009/10.

Mukherjee said the deficit was "unsustainable", and the government would reduce it to 5.5 percent in fiscal year 2010/11 and to 4 percent in 2011/12. "And thereafter, we shall have to come back to 3 percent."

(Editing by Malini Menon)

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FACTBOX - Five political risks to watch in India

Tue Dec 15, 2009 2:14pm IST

NEW DELHI (Reuters) - Hopes that India's Congress-led government would swiftly move ahead with economic reforms have been dampened this month, and the likely pace of reform remains the main political risk issue for the country.

Following is a summary of key India risks to watch:

* ECONOMIC REFORM

While the government had appeared to be in a strong position to press forward with an ambitious economic reform agenda, progress has been much slower than some investors had hoped. Opposition from various interest groups -- like a protest by sugar farmers that delayed the opening of parliament's winter session -- is likely to mean the pace of reform remains fairly sluggish. The 2009/10 budget disappointed those who hoped for swift progress on reform, and expectations of early action on foreign direct investment have also proved over-optimistic.

Key issues to watch:

-- Markets will watch for moves to privatise some state firms, relax restrictions on foreign direct investment, ease restrictions on foreign banks, and reform labour laws. The government has also pledged to reform India's tax laws, which markets would regard positively.

TRADE AND PROTECTIONISM

India will play a central role in determining whether the Doha round at the WTO can finally be concluded. The government's strong mandate and relatively secure position may allow it more flexibility in reaching agreement even if this is opposed by some powerful interest groups. But India continues to show an ambivalent attitude towards freer trade. Though New Delhi has pushed ahead with bilateral agreements and favours an ambitious timetable for sealing a Doha deal, it has raised protectionist barriers on some imports this year.

Key issues to watch:

-- Any sign India -- and the United States -- are more prepared to make concessions. Progress will require compromise on all sides.

EXTERNAL SECURITY

Relations with Pakistan have recovered from the depths plumbed in the aftermath of the November militant attack on Mumbai, and India made the important concession in July of delinking the resumption of bilateral talks from Pakistan's progress in cracking down on terrorism. But further militant attacks or confrontations at the border still have the potential to cause a sudden spiralling of tensions. Military conflict remains only a very slim possibility but cannot be ruled out.

Ties between India and China have soured with the resurgence of a long-festering border dispute over the Indian state of Arunachal Pradesh. Reports of border incursions sparked unease. India also balks at Beijing's support for projects in Pakistan-controlled Kashmir and a separate visa policy for Indian Kashmiris, which New Delhi sees as undermining its claim over the region. There is little chance of war between the two countries but further disputes could sour their booming trade relationship.

Key issue to watch:

-- Progress on resuming substantive talks with Pakistan. A meeting of foreign ministers in New York did not lead to any announcement of renewed wide-ranging peace talks, with India still reluctant to make any concessions until more is done in Pakistan to deal with those behind the Mumbai attacks. But any sign of rapprochement will be greeted positively by investors.

INTERNAL SECURITY

The risk of violent attacks in India by domestic insurgent groups or foreign militants remains high. Al Qaeda and affiliated groups see India as a key battleground, and Pakistan is likely to remain a haven for militants seeking to launch attacks in India. Indian security forces are also grappling with a Maoist insurgency spreading across large swathes of countryside, much of it rich in minerals.

Key issues to watch:

-- The danger of new attacks. Investors have already priced in the threat level in India, as the muted market reaction to the Mumbai attacks showed, but attacks that caused a serious deterioration in relations with Pakistan would be market-negative.

-- India plans to launch a large scale offensive against the Maoists soon -- a key test of the government's ability to tackle the insurgency and unlock potential investment in rebel-occupied territory.

MONETARY POLICY DISAGREEMENTS

India's central bank has maintained an accommodative monetary policy to help the country weather the global economic crisis, but a conflict may be brewing between the bank and the government about the appropriate timing of a policy tightening. The central bank has shown increasing concern about inflation, while the government insists policy should continue to focus on growth.

Key issues to watch:

-- Comments by leading officials. The central bank governor and key ministers have weighed in to the argument in public several times. Markets will be watching for signs of further disagreement or emerging compromise.

(Compiled by Andrew Marshall; Editing by Jerry Norton)

© Thomson Reuters 2009 All rights reserved

Sehwag smashes career-best 146 in first Sri Lanka ODI

Tue Dec 15, 2009 1:36pm IST

 

RAJKOT (Reuters) - Virender Sehwag blazed to a career-best 146 to steer India to their highest one-day total of 414 for seven in the opening game against Sri Lanka on Tuesday.

The opener hit his 12th one-day hundred off 66 deliveries and smashed 17 fours and six sixes to leave Sri Lanka gasping after skipper Kumar Sangakkara put India into bat hoping to exploit early life on the pitch.

Sehwag, 31, looked good to surpass the one-day record score of 194 until he edged a full toss from paceman Chanaka Welegedara to be caught at point in the 36th over.

He dominated a 153-run first wicket partnership with Sachin Tendulkar (69) and added 156 for the second with skipper Mahendra Singh Dhoni to demoralise the bowling attack.

Dhoni hit 72 with seven fours and three sixes after promoting himself to number three but was caught in the next over after Sehwag's dismissal to give the visitors some respite.

The total bettered India's record of 413-5 set against Bermuda at Port of Spain in the 2007 World Cup. It is also the highest notched against Sri Lanka, surpassing the 373 India made in the 1999 World Cup.

At 311 for three in the 37th over, India looked set to surpass Sri Lanka's ODI record of 443, but were checked by some tighter bowling.

Sehwag, whose previous highest one-day score was 130, raced to 50 off just 34 deliveries before easing off slightly as Tendulkar took over with a flurry of shots.

The record-breaking batsman notched his 92nd one-day fifty until he missed the line to be bowled by Fernando.

Pace bowlers Nuwan Kulasekara, Chanaka Welegedara and Dilhara Fernando took two wickets each.

Sri Lankan spinner Muttiah Muralitharan and Indian batsman Yuvraj Singh missed out due to finger injuries.

(Reporting by N.Ananthanarayanan, editing by Ian Ransom; To query or comment on this story email sportsfeedback@thomsonreuters.com)

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