Mexico City, November 5
India's economic growth could slow to as little as 5.5% this fiscal year, Finance Minister P. Chidambaram said, signalling the possibility that Asia's third largest economy will expand at its slowest pace in a decade.

"I'm looking forward to this year ending with 5.5 to 6% growth, barring any unexpected shocks, and next year getting back to 7% growth, and in 2014-15 getting back to 8% growth," he said on the sidelines of a G20 meeting in Mexico.

The last time full-year growth fell below 6 per cent was in 2002-03 when the economy expanded 4 per cent. A slump in industrial activity because of slow policy-making and the global slowdown, combined with a drought, have dragged on India's performance this fiscal year, which ends in March 2013.

Until now, the government had estimated growth this year at around 6%. The International Monetary Fund last month slashed its 2012 calendar year economic growth forecast for India to 4.9% from 6.1%.

Chidambaram said India had the wherewithal to again reach its economic potential.

"In 2004-2008 we had 9 per cent plus growth. It's not as though we have not done it before," he said. "We have slowed down thanks to the world and some domestic factors, but we are absolutely confident that we will get back to the higher-growth path."

Chidambaram said he was concerned about inflation, which hit a 10-month high of 7.8 per cent in September.

Hyderabad, November 5
After unveiling a slew of pro-active policies recently to revive the sagging economy, the Centre is now set to take "more such measures" to boost investor confidence.

The Deputy Chairman of Planning Commission, Montek Singh Ahluwalia, made this statement today. While sounding optimistic about the impact of the reforms initiatives, he, however, did not elaborate on the forthcoming measures.

"We are doing a number of things which, I think, will lead to revival of investor confidence. And the effect of these things always take a few months," Ahluwalia said.

Pointing out that the economic deceleration had "bottomed out", he exuded confidence that the second half of the current financial year would be better in terms of growth. The planning commission chief, however, was unwilling to make any prediction on GDP growth.

"The deceleration has bottomed out. Making a prediction may not be right. However, the effects of changes brought about will be felt over time," he said. "Lot of examples can be given on the steps the government has taken to get rid of impediments in movements of large projects," he said. His optimism comes in the backdrop of a warning by Standard & Poor's that it would lower India's credit rating in 24 months to 'junk' grade, if the country failed to carry out requisite economic and fiscal reforms.

London, November 5
A US fine for anti-money laundering rule breaches could cost HSBC significantly more than $1.5 billion and is likely to lead to criminal charges, Europe's biggest bank said on Monday.

HSBC said the US investigation had caused "considerable reputational damage" and had forced it to set aside a further $800 million to cover a potential fine to cover breaches in anti-money laundering controls in Mexico, adding to $700 million put aside in July.

"It could be significantly higher," chief executive Stuart Gulliver said, saying the latest provision was based on discussions with the various US authorities involved in the probe. The timing of any settlement is in the hands of regulators. "The resolution of at least some of these matters is likely to involve the filing of corporate criminal as well as civil charges and the imposition of significant fines, penalties and/or monetary forfeitures," the bank said in its results.

A US Senate report in July said HSBC had let clients shift potentially illicit funds from countries such as Mexico, Iran, the Cayman Islands, Saudi Arabia and Syria. "The report undoubtedly caused considerable reputational damage to HSBC. The extent to which that has resulted in loss of business is hard to measure, but it has undoubtedly damaged our brand," Gulliver said.

The issue marks another blow for the reputation of British banks, after rival Barclays was fined $450 million in June for rigging Libor interest rates and the industry has had to set aside more than 10 billion pounds to compensate UK customers for mis-selling insurance products.

HSBC reported an underlying profit—after stripping out the impact of disposals and changes in the value of its own debt — in the July-September quarter of $5.0 billion, up from a revised $2.2 billion a year earlier. HSBC has reduced its number of staff by almost 30,000 in the last two years and said more job cuts are likely across the bank to achieve its cost efficiency targets.— Reuters 

New Delhi, November 5
The government is contemplating tightening norms for use of surplus funds by cash-rich PSUs by restricting their investments to debt schemes of mutual funds with a minimum corpus of Rs 1,000 crore.

"Besides, CPSEs would have another option to park their funds in term deposits with any scheduled commercial bank and with a net worth of Rs 500 crore," an official said.

Currently, this limit for commercial banks is Rs 100 crore.

The present guidelines do not specify any corpus size of mutual fund company for investments by PSUs.

A committee of the Department of Public Enterprises (DPE) headed by Shaktikanta Das, additional secretary in the Department of Economic Affairs, has held many meetings to discuss various options available with regard to investments by Central Public Sector Enterprises (CPSEs).

The panel is in the process of rationalising and consolidating the existing investment norms for CPSEs, the official said.

"Under the new guidelines, the government is expected to offer a number of options like mutual funds, term deposits, treasury bills and government securities to CPSEs for investing their surplus funds," the official added.

Cash-rich PSUs like GAIL, Coal India and ONGC would be allowed to invest in mutual funds debt scheme with a corpus amounting to at least Rs 1,000 crore for the scheme, he added.

At present, there are various norms issued by the DPE on investment of excess funds available with such PSUs.

In a meeting convened by Prime Minister Manmohan Singh, on October 23, he had asked 25 cash-rich central PSUs to invest their surplus fund of Rs 2.5 lakh crore to accelerate economic growth.

The meeting was attended by Finance Minister P Chidambaram and Planning Commission Deputy Chairman Montek Singh Ahluwalia besides heads of 25 PSUs, including ONGC, Coal India, BHEL, NTPC, SAIL, NMDC.

Heavy Industries and Public Enterprises Minister Praful Patel had said : "If the PSUs do not deploy the investible surpluses in their own growth and expansion, that money should not lie idle and it must be paid back to the government by way of special dividend".

Besides, he had said the government would form a committee of secretaries, to be headed by Cabinet Secretary Ajit Kumar Seth, to look into the issues of PSUs regarding like autonomy, regulatory clearances and investment of surplus funds, among other 
things. — PTI

New Delhi, November 5
State Bank of India (SBI) today said it will from January 1 accept only those cheques which conform to new standards. The step has been taken as per the direction of the Reserve Bank of India.

To meet the objective, SBI has asked all its branches to issue only with uniform features conforming to CTS 2010 standard cheques to their customers. All other banks including private sector and foreign banks have also started the process of phasing out of non-CTS cheques for migration to this system.

For standardisation and enhancement of security features in cheque forms and its migration to CTS 2010 standard, all branches of the bank will now issue only CTS 2010 standard cheques to their customers, SBI said in a public notice.

"Non CTS cheques will be out of circulation with effect from December 31, 2012 and will not be acceptable in clearing system also," it said.

All the customers of the bank are requested to contact their branches immediately to submit their requisition for issuance of CTS 2010 standard cheques and surrender their existing non-CTS cheques for cancellation, it added.— PTI

BRIEFLY

Tech Mahindra profit rises 23% at rs 296 cr
Bangalore:Tech Mahindra Ltd, the IT outsourcing business of India's $15 billion Mahindra Group, beat expectations with a 23.3% rise in second-quarter profit, boosted by increased client spending and a good performance at its unit Satyam Computer Services Ltd. Profit for the September quarter rose to Rs 2.96 billion from Rs 2.4 billion in the year-earlier period, Tech Mahindra said. — Reuters

India inks $320 mn pact with World Bank
New Delhi: India today signed an agreement with the World Bank for $320 million in aid for road projects in Assam. The objective of the project is to enhance the road connectivity in Assam by assisting the Public Works Road Department to improve and effectively manage its road network. Another pactwas signed for a loan of $106 million for phase-I of the World Bank assistance for the ICDS Systems Strengthening and Nutrition Improvement Project. — TNS

Rupee falls 1.47% to 54.60 against dollar
Mumbai: The rupee today plunged by 80 paise to close at more than 8-week low of 54.61 on massive dollar demand from banks and importers amid a sharp rise in the American currency in global markets ahead of US Presidential polls. This is rupee's second biggest loss in 2012. The rupee's biggest daily loss was on June 22 when it fell 85 paise. — PTI

TRAI moves to check pesky SMSes
New Delhi:The telecom sector regulator Telecom Regulatory Authority of India (TRAI) today came out with new guidelines which would limit the sending of concessional messages to 100 per day per SIM. The new guideline have also been put in place whereby the new pre-paid and post-paid connections would only be issued after physical verification of subscribers. — TNS