NEWS IN A NUTSHELL

Losses in clearing cheques: Rs 600 cr daily!

Here’s a bit of strange-but-true kind of statistic that you will find hard to believe: Guess how much, delays by banks in clearing cheques causes every day to consumers? More than Rs 600 crore daily! The National Consumer Commission is hearing a petition alleging that delays by banks in clearing cheques caused a loss of over Rs 600 crore every day to consumers.

The commission has asked the RBI to clarify its stand regarding the time taken by banks to clear outstation cheques to reduce losses for consumers due to such delays. In its reply, the RBI has produced on record a chart indicating that banks take approximately 14 days for collection of cheques and a few banks take more than 14 days time.

The commission has countered that during this period, the question arises with regard to giving credit to the amount to the person in whose favour the cheque is issued and to reduce or avoid delay in giving such credits. The court sought to know what steps could be taken.

Earlier, the RBI furnished a revised cheque collection policy, submitted to it by 35 banks, along with a chart clarifying that local cheques were cleared to the named persons as soon as the debit entry was made.
The RBI, which frames guidelines for all nationalized and private banks, was asked by the apex consumer commission to frame policies to minimize losses caused to consumers by the banks in clearing local and outstation cheques.

During an earlier hearing, the RBI had informed the commission that steps would be taken to ensure that cheques get cleared within 24 hours of their presentation. The commission noted that “perusal of the cheque collection policies reveal that while for local cheques a time limit has been set, for outstation cheques, many of the PSBs have specifically put a maximum period of 14 days for collection of cheques.
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New indices for measuring growth
A new set of indices for measuring growth in industrial production, performance of SSI sector and calculation of consumer prices in urban areas are on the cards.

The reason behind the Government’s plan to introduce new indices is said to be the fast paced change in income and consumption patterns.

The new index of industrial production (IIP) is likely to be the first off the block and may cover 800 items. The current IIP has 1993-94 as its base year and covers about 400 items.

According to reports, the new IIP is under examination and has been sent to renowned economists for their comments. They will be released soon after receiving the feedback from the experts and making necessary changes.
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Steel sector to get Rs 3 lakh cr investment in 5 years
Steel sector seems to have overtaken all other sectors when it comes to investments, both domestic and foreign. The sector is set to attract about Rs 3 lakh cr investment within the next five years, and has emerged as a key investment decision for multinational steel giants like Mittal Steel and Korea-based Posco. According to reports, the investment promised by these companies alone total to more than Rs 1.3 lakh crore with others making a beeline to invest in the country. Steel ministry officials say an investment of Rs 2,76,880 crore is expected by 2011-12 and Rs 8,70,640 cr by 2019-20.

The optimism of the steel ministry can be understood as consumption of steel during the last three years has grown by 12.5% per annum against 6.9% envisaged in the national steel policy.

As per a recent report by an international investment banker, consumption of steel in India is set to grow by 16% per annum during the next five years and 100 mn tonne of steel will be consumed by India by 2012, according to steel ministry officials.