Mumbai/Bangalore/ Pune, May 12
The Indian government's cyber watchdog is investigating how the computer systems of two companies that are part of the country's vast IT services industry were breached in a global ATM heist that saw $45 million stolen from two banks in the Middle East.

EnStage Inc, which operates from Bangalore, and ElectraCard Services, based in the Indian city of Pune, processed card payments for the two banks that were hit in the theft, several people familiar with the situation said.

"We are investigating the technical aspect," Gulshan Rai, director general of the Indian Computer Emergency Response Team (CERT), part of the department of electronics and information technology, told Reuters by phone on Sunday.

"What kind of breach has happened in the system, how did it happen, what processes are in place, and the entire technical aspect we will look at," he said, adding that the agency had started its investigation on Saturday.

U.S. prosecutors said on Thursday that hackers broke into two card processing companies, raising the balances and withdrawal limits on accounts that were then exploited in coordinated ATM withdrawals around the world. The prosecutors did not name the two companies but said one was based in India and the other in the United States.

According to a U.S. official and a bank employee, who both spoke on condition of anonymity, ElectraCard Services was the company that processed prepaid travel cards for National Bank of Ras Al Khaimah PSC (RAKBANK). The bank suffered a $5 million coordinated heist at ATMs around the world on Dec 21 last year, according to the U.S. indictment.

Ramesh Mengawade, the chief executive of ElectraCard Services and its parent company, Opus Software Solutions, could not be reached through his assistant or by email on Saturday.

ElectraCard is based in a plush office park near the airport on the outskirts of Pune, a hub for the IT and auto industries and home to several universities. A security guard at the office park, where tenants include IBM, would not allow in a Reuters journalist without an appointment on Sunday.

Unlisted ElectraCard had a net loss of Rs 90.2 million (US $1.65 million) on net sales of Rs 535.4 million for the fiscal year that ended in March 2012, a sales decline of 1.6%, according to a report by ratings agency Crisil.

MasterCard bought a 12.5 percent stake in ElectraCard in 2010, ElectraCard has said. MasterCard, the network under which the cards used in the heist were issued, has said its security was not compromised.

EnStage, which is incorporated in Cupertino, California, but has operations based in Bangalore, is the company that processed card payments for Bank of Muscat of Oman, according to a source close to Bank of Muscat. Bank of Muscat lost $40 million in a coordinated heist on February 19, according to Thursday's indictment.

"Our customers were adversely affected by this sophisticated crime," EnStage CEO Govind Setlur said in a statement.

ENTIRE FLOOR: A statement obtained by Reuters from a company spokesman said: "Since the time the incident occurred, EnStage has retained independent security experts to analyze the intrusion and to recommend enhancements to its information security infrastructure. EnStage has implemented both these enhancements as well as additional monitoring capabilities."

The firm appears to occupy an entire floor in an office in central Bangalore. An employee who did not want to be identified said that about 250 people work in the office but did not give further details.

The breach in security at Indian operators is a blow to the country's multibillion dollar information technology industry, which received about half of all outsourcing contracts in the world in 2011, according to industry data. India-based IT vendors, who rely on the trust of global clients to handle sensitive data, are dominated by companies providing support services to the global financial industry. — Reuters

New York City, May 12
Because the sums were large and such attacks are relatively new, the two Middle East banks hit in a US $45 million ATM heist face an uncertain path in trying to recover their losses, financial, insurance and legal experts say.

Oman-based Bank of Muscat lost $40 million and United Arab Emirates-based National Bank of Ras Al Khaimah PSC (RAKBANK) lost $5 million in the global heist, U.S. prosecutors said on Thursday. Hackers gained access through third-party companies that processed transactions for prepaid debit cards issued by the banks, the prosecutors said.

While details of what happened are still sketchy, experts said the banks could bring claims against the processing companies in court, or they could file claims with their own and the processing companies' insurers.

"There's no hard and fast rule," said Dan Karson, the Americas chairman of Kroll Advisory Solutions. "We're in very much a new cybersphere of finance, and allocating liability is still very much evolving."

Any claims by banks against the processing companies would depend on the contracts between the two parties, Karson and other experts said. Those contracts include industry security standards, which are required by the major credit card payment networks, in this case MasterCard.

In most security breach cases, the processing company in question did not fully comply with the standards, said Doug Johnson, vice president for risk management policy at the American Bankers Association.

However, even if the processor failed to comply with security standards, banks may still be unable to get back their money. That is because the contracts between processors and banks, under terms set by credit card companies like MasterCard or Visa, typically limit the processor's liability.

"They can't make everybody whole, or they'll be out of business," said Michael Klaschka of Integro Insurance Brokers, which has many financial institutions as clients. "The bank may have very little recourse against the credit card processor."

In the hit against Bank of Muscat, the processor is enStage Inc, based in Cupertino, California, a source close to the Bank of Muscat said. Bank of Muscat has not commented on the attack.

Officials at enStage did not respond to requests for comment on Saturday. EnStage CEO Govind Setlur said in a statement his firm had implemented security enhancements since the attack.

In the RAKBANK case, the processor is India's ElectraCard Services, according to people familiar with the situation. RAKBANK has not confirmed that ElectraCard Services is the payment processor and ElectraCard Services has not commented.

MasterCard has said it cooperated with law enforcement in the investigation and said its systems were not compromised in the attacks.

The banks can still try to sue the processors for negligence or other claims, but their success may be limited by their contracts, which include regulations that lay out specific fines and dispute resolution procedures mandated by the credit card companies.

Such lawsuits have proven difficult to win, according to Joseph Burton of the law firm Duane Morris in San Francisco, an expert in financial litigation. U.S. federal courts have generally, but not unanimously, found that banks are restricted to contractual remedies.

Bank of Muscat and RAKBANK could also seek payment from their insurers under their general policies. — Reuters

Tata Housing is launching a slew of residential real estate projects in several cities across the country in the affordable and luxury segments. In an interview to Sanjeev Sharma, Brotin Banerjee, managing director & CEO of Tata Housing, talks about the adverse impact of TDS on property on home buyers, the outlook for the sector, fund raising plans and the demand for affordable homes.

Q: What is your outlook for India’s real estate sector?

With the Indian economy getting back on track, real estate sector is expected to stabilize in the next two to three quarters. We would anticipate this sector to grow, albeit at a slightly lower pace, as the demand for housing still appears to exceed supply, and the weakening rupee makes India an attractive real estate investment destination for NRIs. According to recent industry reports, the sector is expected to grow at the rate of 30% over the next decade. Further, the industry is set for robust inflows of US $4-5 billion from overseas investors in the next couple of years, with Bangalore, Delhi and Mumbai emerging as the favourite destination investments, as per Jones Lang LaSalle, a global real estate consultancy giant. Furthermore, FDI in multibrand retail will also give a push to the growth in the real estate sector.

Q: What are the company's fund raising plans in 2013-14 and for which projects?

We have raised private equity investment by Portman Holdings for our luxury housing project, The Promont in Bangalore which is valued at Rs 240 crore. Additionally, we also raised Rs 300 crore by issuing nonconvertible debentures (NCDs). We are evaluating several options for raising funds such as setting up a real estate fund, and will also consider some mix of other options like equity, internal accruals, mezzanine and debt financing for its new ventures. We also plan to access the debt capital market to meet some of our funding requirements next year.

Q: What are the upcoming projects in the pipeline for Tata Housing?

Both Tata Housing and its subsidiary Smart Value Homes have launched new projects across all consumer segments. A couple of weeks back, we launched GatewayCapital, a luxury project in Gurgaon. Recently we also launched Ariana, a premium integrated residential complex in Bhubaneswar, and launched the second phase of our luxury projects Primanti in Delhi and Amantra in Mumbai. Under Smart Value, we recently launched New Haven Peenya in Bangalore. We also introduced a new business initiative by launching Riva Residences, one of India’s largest integrated residential senior living complex in Bangalore. In 2013-2014, the firm will be launching around 15-20 million square feet of projects and will continue to expand its presence across the 10 metros and emerging cities. Tata Housing expects to launch projects across its consumer segments in Maharashtra, NCR, Bhubaneswar, Himachal Pradesh, Bangalore and Kolkata.

Q: What are your views on the impact of TDS on sale of property?

The last budget suggested proposing TDS of 1 per cent on land deals in excess of Rs 5 million. This move is expected to have ramifications on developers of affordable homes in urban cities, making it expensive and thereby difficult for them to provide affordable housing. This will also negatively impact home buyers, particularly those purchasing from the secondary market. The finance minister’s objective of bringing transparency into land deals cannot be met through fiscal measures like imposition of TDS. However, such a move will also discourage frequent transactions in property. This measure will help curb speculative transactions where a high-value property changes hands many times. So pure investment-linked trading may be checked.

Q: Which consumer segment — luxury, premium, affordable or low-cost — do you expect the highest demand coming from?

We will continue to focus across all consumer segments and expect all consumer segments to grow at a healthy pace. The data clearly points out that there is a huge shortage of affordable home in India, it is this shortage and the need for a home for the first time buyers will continue to sustain the demand in the value and affordable segments. On the other hand, the demand for luxury housing in India is growing due to the change in lifestyle and aspirations in young India. With rapid urbanization and influx of global lifestyle trends more and more affluent home buyers are looking for homes to reflect the financial and social standing. Apart from large cities, there is an increasing demand from emergent and tier II and tier III cities.

Mumbai/ New Delhi, May 12
Stock markets will track the wholesale and consumer price based inflation data this week for near-term direction, besides foreign fund inflows will also be a key trigger for the indices, say experts.

"Investor confidence has risen as FIIs continue to pump in liquidity into the stock market. Buoyed by the liquidity, markets have seen spectacular rally recently," Rakesh Goyal, senior vice president at Bonanza Portfolio, said.

Foreign institutional investors (FIIs), the key driver of Indian markets, have poured in over Rs 68,000 crore (US $12.7 billion) since the beginning of 2013.

"Indian markets have shown remarkable recovery during last one month led by global surge in liquidity. So far, Q4 FY2013 results has been broadly in-line with the expectations with no major disappointment.

"Going ahead investors will keep an eye on further reforms to bring back economy on growth path," said Vivek Mahajan, head of research at Aditya Birla Money.

Among key earnings announcements this week are ITC Ltd, Dr Reddy's Laboratories, Bajaj Auto and Reliance Capital.

Oil and auto stocks will also be in focus as last week diesel prices were hiked by Rs 1.02 per litre.

According to Dipen Shah, head of private client group research at Kotak Securities: "The markets have been moving up at a fast pace in the past few weeks on the back of supportive global markets, consistent FII flows and better-than-expected quarterly results."

Markets will look forward to domestic factors like initiation of further fiscal reforms, interest rate cuts, monsoons and the remaining quarterly results, to move up from the current levels on a sustainable basis. Global markets and FII flows will be the other important factors to watch out for, he added.

The BSE benchmark 30-scrip Sensex gained nearly 3 per cent last week. The stock exchanges conducted a special trading session for a short duration on Saturday as the Bombay Stock Exchange tested its disaster recovery software. — PTI

Washington DC, May 12
From corporate America to Indian techies to Indians residing in the United States with family ties to their native land — all are lobbying hard to influence changes in the proposed immigration law that has started moving through the US legislative labyrinthine.

Concerned that some "aggressively protectionist" provisions in the bipartisan legislation proposed by the so-called Senate gang of eight would adversely affect US-India trade ties, a leading association of over 300 US firms doing business with India is engaging a lobbying firm as it once did to push the landmark India-US nuclear deal.

The US-India Business Council (USIBC) argues that the proposed ban and restrictions on client site placement of H1B and L1 workers respectively and a limit on their total percentage in a company's workforce in the US would disproportionally affect Indian-born, highly-skilled workers.

The proposed caps on H1B visas will instead put a cap on economic growth in both the US and India, USIBC officials argue, and place the US at a relative disadvantage in the global marketplace driving away skilled workers elsewhere, including to Canada and Europe.

Noting that US-India two-way trade has crossed $100 billion, they suggest that the bill would drive a wedge between the two countries with "irrevocably intertwined economies" undermining economic growth for both nations.

The bill proposes raising the current base cap for H-1 B visas from 65,000 to 110,000 and eventually to 180,000 based on a formula that includes whether the cap is met each year and the number of unemployed high-skilled workers. But it also imposes a hard limit of 50% on H-1B and L-1 workers that could make up a company's workforce in the US from October 2016 onwards and increases the visa application fee from the current $2,000 to up to $10,000 for employers with more than 50% and less than 75% such workers.

Both USIBC and the Confederation of Indian Industry (CII), both argue that thus essentially targeting Indian firms operating in the US with restrictions or fees is contrary to the spirit of the US-India strategic partnership.

Concerned about the potential to apply new rules in a discriminatory manner against Indian companies, the National Association of Software and Services Companies (Nasscom) too is planning to engage a lobbying firm to make its case on the Capitol Hill, the seat of the US Congress.

But in a dog bite dog business world, top US tech firms are waging a sophisticated lobbying campaign to make it harder for Indian consulting companies to provide temporary workers and instead "allow them to fill thousands of vacant jobs with foreign engineers," according to a report in the New York Times.

With an advertising blitz bankrolled by senior executives from Silicon Valley, like Mark Zuckerberg of Facebook and Reid Hoffman of LinkedIn, "they have managed to secure much of what they want in the landmark immigration bill now pending in Congress," the influential US daily said. "Facebook's lobbying budget swelled from $351,000 in 2010 to $2.45 million in the first three months of this year, while Google spent a record $18 m last year," it noted. — IANS

An option gives you the right to buy or sell the underlying asset . A call option gives you right to buy the underlying asset while a put option gives you the right to sell. An option contract specifies the strike price, that is, the price at which you can buy or sell the underlying asset. In Futures, you buy a contract which will have a specific lot size of shares. When you buy a Futures contract, you don’t pay the entire value of the contract but just the margin. Open interest is the the total number of contracts not closed or delivered on a particular day.