Today's Hot Stories - February 27, 2013 - PT education

Today's Hot Stories - February 27, 2013

10 Headlines for Today

(1) 18 killed, many injured in devastating Kolkata market fire
(2) Upgraded IRCTC website to handle 120,000 users at a time
(3) US Senate confirms Hagel for defense secretary
(4) Cyber fraud costs banks Rs 130 crore in 3 years
(5) Investors move SC for refund from Sahara
(6) Cognizant to cut bonuses this year
(7) Ronaldo razes Barca, Madrid enter final
(8) Football: Everton curtail Oldham's Cup adventure
(9) NBA: Indiana Pacers go past Warriors 108-97
(10) NRI Sugata Mitra wins $1 million TED Prize

5 Stories for Today

(1) Child Marriage Act overrides Muslim Personal Law: Karnataka high court
(2) Almaty talks start high on hope
(3) Govt mulls new price formula for patented drugs
(4) JPMorgan to cut up to 17,000 jobs by end of 2014
(5) Realtors, brokerages free to run banks if they meet norms: RBI

(1) Child Marriage Act overrides Muslim Personal Law: Karnataka high court


The Karnataka high court on Tuesday ruled that the Prohibition of Child Marriage Act (PCMA) has overriding effect over the provisions of the Muslim Personal Law, where the marriage of a girl child is allowed once she attains puberty.

Justice Ashok B Hinchigeri, sitting at the Dharwad circuit bench, dismissed a petition in this regard while upholding the state government's contention that PCMA provisions had far-reaching and overriding power vis-a-vis personal laws.

Additional advocate general K M Nataraj, who appeared on behalf of the state, told the court that the personal laws of any religion should make way for the statutory provisions under the PCMA. He said the girl (the petitioner) could not be permitted to marry as she had not completed 18 years of age, a requirement under the PCMA.

Seema Begum, a 17-year-old girl represented by her father, had filed a petition seeking a declaration that the PCMA was not applicable to Muslims. Her contention was that the Muslim Personal Law permitted the marriage of a girl after she attained puberty. She had also complained against Koppal district authorities who prevented her marriage ceremony citing PCMA provisions.

Source: The Times of India

(2) Almaty talks start high on hope


After completing one round of nuclear talks, Iran and the six global powers have decided to meet again on Wednesday, in the hope of starting a process that would build on a show of greater transparency by Iran in return for a phased lifting of sanctions.

Delegates from Iran and the six global powers — United States, Russia, Britain, France, China and Germany (P5+1) — met for three hours on Tuesday in Almaty, the former capital of Kazakhstan.

The state-run Islamic Republic News Agency (IRNA) reported that “there is no news about [the] outcome of step-by-step strategy inching toward a breakthrough” during the first round of talks. The report was referring to a proposal by Russia that Iran has endorsed, which recommends that every confidence building measure taken by Iran that demonstrates the peaceful nature of its nuclear programme should be met by an incremental lifting of sanctions.

Iran has been subjected to harsh international and unilateral sanctions by the U.S. and its allies on suspicions that it may be running covert nuclear weapons programme — allegations that Tehran has vehemently denied and a stream of inspections by the International Atomic Energy Agency (IAEA) are unable to confirm.

Comprehensive package

Without going into details, Iran’s English language Press TV reported that the Iranian delegation has prepared a new “comprehensive package” for ending the crisis. “The Iranian negotiators said the comprehensive package could change based on the proposals the 5+1 group is going to make.”

Revealing little in terms of concrete ideas, Iran’s interlocutors also did not say anything beyond the expertly crafted sound bite that they were ready with a new offer.

“The offer addresses the international concern on the exclusively peaceful nature of the Iranian nuclear program, but it is also responsive to Iranian ideas,”' said European Union (EU) spokesman Michael Mann. “We’ve put some proposals forward which will hopefully allow Iran to show some flexibility.”

Ahead of the talks, the leader of the Iranian delegation Saeed Jalili said that the world powers should provide “constructive, logical and reliable answers to Iran’s comprehensive proposals presented during the Moscow meeting”.

Mr. Jalili was referring the June 2012 meeting in the Russian capital, where Tehran spelled out a five point proposal to end suspicions about the military content of its nuclear programme.

Iran’s top negotiator also stressed that Tehran’s would never forego its “nuclear rights” — words that are meant to convey Iran’s ingrained refusal to give up uranium enrichment, which the western powers emphatically demand.

“We should enjoy all our rights and we do not accept more obligations and less rights”, asserted Mr. Jalili.

The website iranreview.org reported that in Moscow, Iran had asked the six global powers to publicly recognise Tehran’s right to uranium enrichment in return for a solemn commitment by Iran that it would “never pursue any kind of military nuclear projects as per the religious edict [fatwa] issued by the Leader of the Islamic Revolution Ayatollah Seyyed Ali Khamenei”.

On Parchin

Iran had also proposed that the IAEA be allowed to clear all doubts about the Possible Military Dimension (PMD) of Iran’s atomic programme, which included access to the Parchin military complex. In return all “unilateral sanctions” imposed against Iran should be lifted in a phased manner.

Finally, Iran would be ready to halt 20 per cent uranium enrichment in return for the abrogation of all sanctions imposed by the United Nations Security Council.

Source: The Hindu

(3) Govt mulls new price formula for patented drugs


The Department of Pharmaceutical (DoP) has come up with a formula to price patented drugs in order to end a constant irritant for global drug makers, but given the complexity its implementation may be tricky.

A formula-based pricing of expensive drugs will eliminate the uncertainty associated with the discretionary approach followed by the government currently, which disturbs earnings expectations of companies.

The formula will take the price of drugs in five advanced countries such as the UK and France, and their per capita income, the draft guidelines said.

The final price will be arrived on the basis of Indian purchasing power. The government's move to control the prices of patented drugs is based on the argument that Indian administrators do not posses the strength like the UK or France which have more bargaining power since they contribute substantially to healthcare.

"These countries have a wide coverage of health insurance by their government and therefore have high bargaining power in deciding the price of patented drugs through negotiation,'' said the draft. Firms such as PfizerBSE -1.96 %, BayerBSE -0.68 % and Roche are holding back from launching patented drugs to escape indiscriminate controls by government.

In March 2012, the Indian patent office directed German drug maker Bayer's kidney cancer drug Nexavar-—sold at Rs 2 lakhs, to be sold at Rs 8,880. The government mulled to control prices of three cancer drugs manufactured by Roche and Bristol-Myers Squibb. Prices in the UK, Canada, France, Australia and New Zealand will form the base of the calculation.

The government will then take into account the ratio of per capita income of these countries to the per capita income of India. The Indian price will be fixed by dividing the price of a particular medicine in those countries by the income ratio, and the lowest of the prices would be the local price.

"This policy is in the right direction as we know that Compulsory License (CL) cannot address the need of price control for all patented drugs, so this policy takes care of that issue of a uniform regulation of price control for all patented drugs", said D G Shah of Indian Pharmaceutical Alliance (IPA) the lobby group of Indian drug makers. The Organisation of Pharmaceutical Producers of India (OPPI), the lobby group of multinational companies, did not respond to the email query sent by ET.

The intention to do away with uncertainty may be correct, but the formula complicates the mechanism given that negotiations between drug makers and those governments are secretive.

In most cases, neither the companies, nor the governments disclose their pricing to retain the advantage. The DoP has suggested that once the patented drug policy starts, the issuance of Compulsory License may be done away with. Compulsory License is a mechanism under the trade related intellectual property rights that allows a generic company to manufacture copies of patented drugs by offering royalty to innovator companies.

The committee is of the view that once patented drugs go under price regulation it won't be possible for the government to permit copycats on the ground of high prices. But it has suggested that CL can be issued on other grounds apart from price like un-affordability or during emergency situations. In case of drugs that are launched first time in India, the committee has noted that it will examine the drugs and their input cost before fixing a price.

Source: The Economic Times

(4) JPMorgan to cut up to 17,000 jobs by end of 2014


JPMorgan Chase & Co said on Tuesday that it plans to cut 17,000 jobs by the end of 2014, representing about 6.6 percent of the company's overall workforce, as the bank sheds staff that helped it deal with bad home loans.

The bank is optimistic that it can generate record income this year and is planning to add 4,000 employees in commercial and investment banking and credit cards to help it win business, bank executives said at an investor conference.

That hiring will be more than offset by job cuts in areas like mortgage servicing and retail banking, where the bank is positioning for a recovering housing market and new forms of branch banking. The net impact of the additions and cuts will be 17,000 fewer employees on the bank's payrolls.

The job cuts reflect the pressure that banks are under, even as the US housing market and overall economy show signs of recovery. Many banks are looking to automate more of their businesses to make their staff more productive and improve profits.

For example, at JPMorgan's branches, where it plans to cut about 6,000 tellers and other employees, the bank hopes customers will use automated teller machines for every day transactions and that remaining staff can focus on higher-margin activities like selling wealth management services.

JPMorgan is one of the few big US banks that is still adding branches to its network, but it is hoping to staff the branches with fewer workers. The bank's 5,614 branches have 63,500 employees, representing about a quarter of JPMorgan Chase's total. Chase's branch network is second to Wells Fargo & Co's in size.

For overall staffing levels, JPMorgan Chase had 258,965 employees globally at the end of 2012. Its headcount rose following the financial crisis to 262,882 in the second quarter of 2012 from 219,569 in the first quarter of 2009. Since last year's second quarter, staffing levels have drifted lower.

JPMorgan Chase overall earned $21.9 billion last year, excluding accounting charges linked to changes in the value of its debt. The bank said it has the potential to earn about $27.5 billion, thanks in part to efficiency gains. It aims to cut overall expenses by $1 billion in 2013.

To reach the $27.5 billion profit figure, the bank is also counting on costs for lawsuits to fall as disputes over bad mortgages are resolved, as well as seeing a one percentage point rise in interest rates, said Chief Financial Officer Marianne Lake.

The profit scenario also depends on the bank not being hit by another trading debacle like the $6.2 billion loss last year on derivatives trades placed by the London Whale, the nickname given a London-based JPMorgan trader for the size of the positions.

Chief executive Jamie Dimon acknowledged that many of his top lieutenants who spoke to investors on Tuesday were in new jobs after changes he made last year in his management team and the bank's divisions.

"It is a little bit too much change in one year," Dimon said. "Some of it was the Whale. Some of it was the re-org" to better align product divisions with customer interests, he said.

All of the top executives, however, have been at the company several years and know its businesses, Dimon said.

JPMorgan Chase shares were down 0.2 percent at $47.60 at the close of trading on Tuesday on the New York Stock Exchange.

Source: The Times of India

(5) Realtors, brokerages free to run banks if they meet norms: RBI


Reserve Bank Deputy Governor K. C. Chakrabarty on Tuesday said the Reserve Bank of India (RBI) is open to let realty and brokerages run banks if they meet the “fit and proper criteria” as detailed in the final guidelines.

“These are all legitimate businesses if they can demonstrate that they satisfy all the requirements, all the concerns how can you deny them. Definitely, if this is not in the guidelines, then it is open,” Mr. Chakrabarty said when asked whether real estate and brokerage firms would be allowed to start banks as final guidelines were silent on the issue.

He was talking to reporters on the sidelines of an event and this was the first official reaction from the regulator after it released the final guidelines for new banking licences last Friday.

The final guidelines by the RBI made a climb-down from the initial stance, which in the draft norms issued in August 2011, had virtually barred Realtors and brokerages from its eligibility criteria. “There are certain activities, such as real estate and capital market activities, in particular broking activities, which apart from being inherently riskier, represent a business model and business culture which are quite misaligned with a banking model,” the draft guidelines had said.

When asked about the number of licences that may be issued, the senior official said the number of new banks will depend on the eligible candidates and it is too premature to give a specific count now. “First, let’s see how many people are eligible, how many are fit and proper. If no body is fit and proper, then what is the use of giving licences? This is all too premature to talk about the number of licences to be issued,” Mr. Chakrabarty said.

He also said the proper guidelines are any regulator’s master stroke. “It is any regulator’s master stroke, why only RBI. And that is why fit and proper guidelines have been evolved...,” he said.

Last Friday, the central bank released the final guidelines for new banking licences which said an applicant should be “fit and proper” for getting a licence and have a 10-year impeccable track record.

It has allowed business houses, state-run enterprises and non-banking finance companies (NBFCs) to apply for licences to set up banks.

Mr. Chakrabarty also said the new banks will have to find businesses in rural areas and SME space, among others, as the priority sector lending norms will be the same for them like others.

On consolidation in the banking sector, Mr. Chakrabarty said the RBI may come up with a paper addressing the concerns. “If we are talking of new banking licences, then don’t talk of consolidation. These are two contradictory things. Consolidation is a defined issue. Some paper will come out that may be addressing some of these issues,” he said.

Source: The Hindu

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