Sucheta Dalal :Widening agitation
Sucheta Dalal

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Widening agitation  

May 21, 2006

After the Satyendra Dubey and Jessica Lal murders, the government of the day is again in danger of failing to recognise the depth of public anger over increased reservations. Contrary to what a few opportunistic politicians are saying, the sentiment is not against backward classes, but one for a merit based system. Competition for admission to the best schools and colleges and professional courses already requires absurdly high scores and is driving students to suicide. Yet, the very politicians who manipulate the political system to extract the best and most expensive education or health facilities for themselves and their progeny are attempting to create a cynical pro-reservation platform which could only end up with blood on the streets. The contrast between the two groups is clearly captured by television cameras. The anti-reservation activists are all bright young students, while the pro-reservation group is packed with people in their 30s and 40s who can hardly be in the race for professional seats. While the pro-reservation lobby is herded together by failed politicians seeking a cause, the anti-reservation group is smart, networked and often acts spontaneously without a clearly identifiable spokesperson or leader. They are now putting in place forums in cyberspace and blog spots such as to formulate action plans and share opinions. This may make them more organised and effective in future.


Resolving Conflict


Over the last few weeks, Sebi has been agitating the issue of conflict of interest situation that may arise, when stock exchanges decide to go public and list on the same exchange (self-listing) or on a rival bourse. It is also worried about conflicts that could arise out of one exchange holding equity in another exchange. In order to encourage a public debate, Sebi even requested the ISOCO chairperson Jane Diplock to speak on the subject when she visited India last month, so as to sensitise Indians to the issue. Strangely enough, it then chose to address the issue through the committee to decide the fate of Regional Stock Exchanges. The last paragraph of the report on Regional bourses recommends that — an exchange, insurance company, bank depository, multilateral agency or clearing corporation can hold upto 26 per cent of the capital and voting rights of an exchange either individually or with persons acting in concert. All others will be allowed to hold upto 15 per cent, so long as they meet Sebi’s criteria of ‘fit and proper person’. Foreign shareholders will have to comply with prevalent rules on foreign direct investment. Ironically, the report says that ‘‘The regulatory conflicts which are likely to arise can be dealt through suitable provisions in the listing agreement of the stock exchanges’’. This breezy dismissal of an important issue is rather surprising because Sebi may in fact have to modify the regulatory and supervisory structure of bourses rather significantly if they plan to self-list or have a 26 per cent holding by another listed entity. But as we said before, the public discussion has not even begun.


Games bankers play


The Reserve Bank of India has set up a committee to look into the transparency and fairness of charges levied by banks in India. Will the committee also look at the fairness of tricks that the banks employ to wangle extra money from the customer? For instance, A.K.Bahl says that his credit card company bundled an insurance policy along with the card and began adding the premium to his monthly bill. The customer noticed the Credit Shield deductions after a few months and questioned the bank. He was stunned at the reply. The foreign bank official said that he had a two month free ‘look-in’ period when he should have rejected the Credit Shield? Why should a consumer put up with such coercive policies? What if he was ill and had no time to study his bills for a couple of months? Or, as the consumer says, ‘‘Did I ever inform them that I needed the Credit Shield? Must I respond to their each and every unsolicited and unwarranted message/action, failing which I end up paying something to someone? Who has given them authority to impose such onerous obligations on the card holders?’’ Will the RBI or its committee for once look at the issue of compensating those who are victimised and harassed by such actions or goof-up on the part of banks?


Advance warning


‘‘When the shoe-shine guy gives you stock tips, it’s time to get out,’’ said Joseph Kennedy, father of John F.Kennedy and he made a pile of money by getting out just before the legendary stock market crash of 1929 that was followed by the great depression in America. Our reader, V.Malik says, ‘‘When the barman and waiters at the frequent flyer’s lounge for a new airport complain that their investments had turned negative on May 15, as compared to two months ago, it means something is very wrong with the stock market ...’’ Those who heard them and did a Joe Kennedy would have saved themselves a lot of grief last week.


-- Sucheta Dalal