Success in my Habit

Sunday, February 19, 2012

RBI to permit non-banking entities to set up ATMs

Mumbai: In a bid to accelerate the growth and penetration of ATMs in the country, the Reserve Bank of India on Tuesday said it plans to permit non-banking entities to set up, own and operate ATMs.

ATMs rolled out by non-banks will be like White Label ATMs (WLA) and will provide ATM services to customers of all banks, the RBI said in its Draft Guidelines for WLAs.

Non-bank entities proposing to set up WLAs have to apply to the RBI seeking authorisation under the Payment and Settlement Systems Act 2007. Such entities should have a minimum net worth of Rs. 100 crore at the time of making the application and on a continuing basis after issue of the requisite authorisation.

Being non-bank owned ATMs, the guidelines on five free transactions in a month for using other bank ATMs will not be applicable for transactions made on the WLAs. The charges for the transactions have to be displayed on the screen before the customer initiates the transaction.

'Sponsor Bank'
The WLA operator will have to declare one “Sponsor Bank”, which will serve as the Settlement Bank for the settlement of all the service transactions at the WLAs. The Sponsor Bank should be a member of one of the ATM networks authorised by the RBI and also be a member of the RTGS.

While the primary responsibility to redress grievance of customers relating to failed ATM transactions will vest with the Card Issuing Bank, the Sponsor Bank will provide necessary support in this regard.

The RBI's directives on the time-lines for resolution of complaints of failed ATM transactions will also apply to transactions at the WLAs.

The WLA operator can choose the location of the WLA. However, it will adhere to annual targets and the ratio of WLA between Tier I &II and Tier III-VI centres that may be stipulated by the RBI.

PM for speedy clearance of road projects

New Delhi: The government has decided to fast-track the clearance of roads and highways projects in the remaining months of the current financial year.

After a directive from Prime Minister Manmohan Singh, the ministry of road transport and highways has decided to award 15 major projects, totalling 1,547 kilometres of roads, this financial year. Another 11 road projects (1,731 km) would be considered by the public-private partnership approval committee next week. “This will ensure the target for the current financial year of 7,999 km is met on time,” said a release from the Prime Minister’s Office.

In a meeting attended by the member-secretary in the Planning Commission, the secretary in the department of economic affairs, the secretary in the ministry of road transport & highways, and principal secretary to the prime minister, Pulok Chatterjee, it was decided cabinet approvals for the exercise would be sought next week.

The cabinet committee on infrastructure would also consider the ministry’s proposal on the eastern peripheral expressway to clear the project in its meeting next week.

Tuesday, February 14, 2012

Consumer spending to rise 4 times by 2020, says a joint study by CII and Boston Consulting Group

umbai: Consumer spending in the country is likely to grow nearly four times in a decade to $3.6 trillion by 2020, driven by rising incomes and aspirations, widespread media proliferation and better physical reach across the country, says a study.

A joint report by Boston Consulting Group and industrial body Confederation of Indian Industry ( CII) says the overall consumer spending in 2010 was $977 billion. The study, 'The Tiger Roars - How a billion plus people consume and shop' , will be released on Thursday.

"The Indian consumer has shifted from forced denial to affordable indulgence," says Thomas Varghese, chairman of CII's national committee on retail and chief executive officer of Aditya Birla Retail. This "sensible consumption" has the potential to drive the economic growth of the country for years to come, he says.

Organised retail has developed an enabling environment to satisfy this consumption growth and allowing foreign retailers to invest in the country will boost it further, Varghese says. PepsiCo India Region Chairman & CEO Manu Anand, who is also the chairman of CII's national committee on FMCG, says that while the dramatic growth of the market is well known, the changing patterns of and attitudes toward consumption are not widely understood.

"It is critical for FMCG companies to understand the nature of this consumption demand and what is driving it," he says. "The Indian consumer pyramid is shaping into a diamond, but more importantly income is only one variable that is driving this consumption," he says. For instance, within the same income segment, attitudes and behaviours are dramatically different as consumers are trading up and down at the same time.

Mercedes to invest 350cr in India

Stuttgart: German auto major Mercedes Benz plans to invest Rs 350 crore by 2014 in its plant in Chakan near Pune and roll out about five compact premium cars in India over the next two years to regain its numero uno position from BMW.

The Stuttgart-based company will also introduce 10 new models in India, quickly after their global launches by 2015. "India is an important growth market for us. We see high demand for our A and B Class segments in India. We plan to enlarge our dealer network and ramp up production capacities," said Dieter Zetsche, chairman of the board of management of Daimler AG and head of Mercedes-Benz Cars. He, however, refused to divulge the exact investments in India. The company has so far invested Rs 650 crore in India . The additional investment will take the figure to Rs 1,000 crore.

The company may introduce A Class, B Class, a new SUV, a small coupe and one more product, which could be assembled at its plant in Chakan . The company also plans to set up a new in-house paint shop and two more assembly lines here. With the entry of more compact models, Mercedes Benz may double its sales in India to up to 20,000 in the next couple of years, said officials. Mercedes Benz India sold 7,089 cars in 2011, a growth of 22.7%.

"It is important to start local production for A and B Class. We hope to double our volumes with these models ," said Matthias Luhrs, chairman of the Mercedes Benz India board and vice president, global sales, at the company's annual results conference.

Daimler AG posted its best ever annual results in 2011 with net profit of over 6.0 billion and group revenues worth 106.5 billion. As part of its Vision 2020, Daimler aims to be the largest premium car-maker in the world with India and China being at the core of its future strategy.

Govt wants its divestment sum assured, dials LIC

Mumbai: The government has allowed the Life Insurance Corporation (LIC) to increase stake in public sector entities beyond the 10 per cent cap. The move will help the insurance behemoth to meet the investment target for the financial year and support the government's efforts to fast-track disinvestment.

This has been a long-standing demand from the largest domestic institutional investor in the country. So far, LIC was allowed to pick up a maximum of 10 per cent stake in a company.

LIC has been seeking a relaxation to this norm, arguing that it is limiting its investment options as the insurance behemoth has already exhausted that limit in most blue-chip companies.

As part of this plan, first LIC will pick up five per cent stake in more than a dozen public sector banks, including Canara Bank, Allahabad Bank, Syndicate Bank and Andhra Bank through a preferential allotment of shares. Second, the insurance company will be allowed to acquire 5-10 per cent of the government's stake in public sector units that will be put on the block before the financial year ends.

Funds would not be a problem for LIC, as it has enough headroom in equity investment this year. Given the choppy equity market and lower sales of unit-linked products, the insurance company had only invested around Rs 25,000 crore in equities during April-December of this year’s target of Rs 40,000 crore.

During 2010-11, the total investment of LIC stood at Rs 1.96 lakh crore, of which Rs 43,000 crore was invested in equities.

According to sources, LIC has already set aside Rs 1,800-2,000 crore for investing in these banks and another Rs 10,000 crore to participate in the disinvestment process.

“The process has already started. Dena Bank and Bank of Maharashtra have allotted shares to LIC on a preferential basis. After the completion of the deal, in both these banks LIC's share will go up to 11 per cent,” said a source.

In 2010-11, the government raised Rs 22,763 crore by divesting stake in six companies — SJVN, Engineers India, Coal India, Power Grid, MOIL and Shipping Corporation of India. LIC had invested close to Rs 8,000 crore for buying shares in these companies.

“Whenever state-owned companies came up with issues, we had invested and picked up stakes as these are always a good strategic investment,” said an LIC official.

Innovation, efficiency key for export growth

Mangalore: Innovation and efficiency are keys to boost the growth of exports from the country, according to Mr M. Veerappa Moily, Union Minister for Corporate Affairs.

Inaugurating the ‘Karnataka: Export Vision 2020', an exporters' convention, in Mangalore on Monday, he said that exporters need to re-invent themselves.

In such a situation, innovation and efficiency play the major role in boosting exports from any region.

Develop Innovation Centres
He also suggested that there is a need to develop innovation centres at the district levels to boost exports.

He said that there is also need to diversify on the export front.

Mr Moily assured the meeting that he will follow up the decisions taken at the convention at the Central level for further action.

He hoped that in the years to come, rupee will play a major role in the world economy.

To achieve this, the export sector should play a major role, he added.

Speaking on the occasion, the Karnataka Higher Education Minister, Dr V.S. Acharya, the sectors such as information technology (IT) and biotechnology (BT) are doing good in export sector in Karnataka.

Nearly 50 per cent of BT companies in the country are based in Karnataka.

Exports
The Government is taking a step forward to boost the growth of nano-technology in the State. He hoped that the coastal Karnataka would play a major role in improving exports significantly in the next two-three years.

Mr Walter D'Souza, Chairman of the Southern Region of FIEO (Federation of Indian Export Organisations), said that most of the States have two offices of the DGFT (Director General of Foreign Trade). However, Karnataka has only one office. He requested that the DGFT consider setting up another office of the Joint Director of DGFT in Karnataka. The convention was organised by the FIEO.

Menswear market in India fastest growing apparel segment

In 2010, GQ's annual best-dressed 50 in Britain had the then PM-in-waiting David Cameron at No. 8. Simply for knowing "the importance of a good suit and tie". Apparently a good suit, and tie, makes you successful, gains you an in into coveted lists and heck, even wins you the elections.

Since then, Cameron might have slid on the subsequent lists but was lauded, by what many people treat as a style Bible, as the ambassador for suits. For the record, the man has a proclivity for £3,500 Saville Row suits.

The Mecca of bespoke might not be here in India but the experience is, courtesy the luxury menswear brands that are catering to the Indian man's newfound zeal to be dapper. The men's ready-to-wear gets a new sheen and spin thanks to a host of luxury brands available.

Gucci, Hugo Boss, Salvatore Ferragamo, Armani, Versace, Brioni, Ermenegildo Zegna, Canali, Corneliani, Alfred Dunhill, Cadini, are all in the race to clothe the new sartorially savvy Indian man.

The Men are Buying
According to Technopak Advisors, a retail consultancy, the entire textile and apparel industry (2010 estimates), including domestic and exports, is pegged at Rs 3,27,000 crore and is expected to grow by 11% to Rs 10,32,000 crore by 2020. Currently menswear is the major chunk of the market at 43% (Rs 72,000 crore) and is growing at a compounded annual growth rate (CAGR) of 9%.

The menswear market in India is the fastest growing apparel segment. The India Menswear Market Analysis 2010-2014 by Venn Research found that total revenue from menswear was $11.8 billion in 2009, representing a CAGR of 8.6% from 2005 to 2009. Industry estimates peg the formal suits, jackets and blazers segment at Rs 4,500 crore. Clearly the men want to look dapper.

The fact that it's the fastest growing luxury segment is no surprise, points out Pinaki Ranjan Mishra, partner & national leader, retail & consumer products at Ernst & Young, a consultancy. "The men's apparel is more westernised unlike women where even in the high-end you would see many of them opting for Indianwear. Hence, standardisation of products is simpler and easier," he says.

Then again, the men have always been the prime spenders and are now finding avenues to explore. Mishra says: "Even in case of equal spending power, by nature women might buy more jewellery while men show a preference for technology and apparel."

As the man about in business Abhay Gupta, executive director of Blues Clothing Company that promotes exclusive menswear brands like Cadini, Corneliani, Versace Collection and operates in four cities (Delhi, Mumbai, Hyderabad and Bangalore), agrees with Mishra, but adds that men are fundamentally quick shoppers.

"They take faster decisions and have more brand loyalty," he says. Then again, he adds, the fact that westernised wear does offer more standardisation for men than women, not only for style but for colours too. "In terms of sizes and specifications, men's ready-to-wear is simpler and unlike womenwear, there are fewer attributes to customise," he says.

Twenty-five-year-old Delhi businessman Vikram Sawhney is the type of customer Gupta and others are looking at. Sawhney was introduced to the impeccable Italian cut by his Dubai-based friends. And as the saying goes, "Once you go Italian, you can't go back", he was shopping for luxury ready-to-wear on his trips abroad.

Image consultant and grooming coach to various corporates Yatan Ahluwalia notes that over the past few years, men under 25 and over 35 have become a major consumer base for luxury ready-to-wear. There's a marked shift from tailoring to ready-to-wear brands. "With an increase in disposable income and a greater brand consciousness, the market is set to double over the next few years," he says.

London-based designer brand Paul Smith, which is planning to open its third store in Mumbai's Palladium Annexe in June 2012 in addition to its existing two in Delhi and Bangalore, has noticed the demand shifting from simple businesswear to lifestyle space with occasion-based formalwear.

"A lot of young customers are now interested in dressing up more formally. While earlier a majority of the demand for high-end tailoring came from senior management and business owners. Now a lot of young men are treating a good suit or jacket as an investment, essential for a work wardrobe," says a spokesperson of Paul Smith India.

Gupta says there's not one type of luxury buyer. He classifies them into four categories: the old money brought up in the lap of luxury and needs no introductions to the brands; the new professionals who have made money, are well-travelled and developing some brand loyalty; the entry to luxury category that will start with the lesser-priced brand and will move up the value chain and the aspiring class that waits for the end of season sales to get an in into luxury.

Ahluwalia contends the label is still the deciding factor. "Indian men base their buying decision on exclusivity and brand recognition and very rarely on design innovation," he says. Agrees Mishra, who says that branding is critical in shaping buying decisions. For instance, if an Armani shirt with a visible logo was sold along with one where the branding is not clear, Indians by nature would pick the one with the obvious branding.

The Price is Right
According to Technopak, the luxury market in India is set to reach $30 billion by 2015. Little wonder then that the men are being wooed by the western sartorialists. The latest cuts, colours, fabrics are here, fresh from the foreign runways. But a luxury suit comes at a price.

The suits start at Rs 70,000 with the likes of Paul Smith and can go up to Rs 1,60,000 and above for brands like Corneliani, Versace Collection and Canali. The entry to luxury brands like Boggi Milano and Cadini can come for Rs 25,000. But if you are looking to go bespoke, then we are talking `20-25 lakh for a suit.

But then you just don't buy the brand, you buy into the philosophy. Brioni, the Italian suitmakers favoured by the likes of Pierce Brosnan, Bill Clinton and Lakshmi Mittal, has been around since 1945. Each Brioni suit is cut and stitched at a factory in Penne, Italy. In fact, the company claims that no one can cut a Brioni suit without undergoing training for at least four years with one year of specialisation.

Ermenegildo Zegna, retailing for Rs 11,000 for a tie to Rs 1,50,000, was founded in 1910. In fact, Zegna owes nearly 49% of its 2010 revenue of s963 million to the Asia-Pacific region. At Zegna you can choose from 800 exclusive fabrics that are a blend of linen, cashmere, wool and silk.

Even their summer suits are a natural fabric blend that makes them breathable for the season. Paul Smith offers quirky aside to each of their design. Expect surprising lapel details or a contrast cuff, the brand likes to keep things surprising.

"The real challenge for luxury brands starts after opening the first store. There's a dearth of premium malls and scaling up becomes a problem as real estate becomes difficult to come by," says Mishra of E&Y.

The Way They Shop
With premium tag comes premium service. To build loyalty, all luxury brands offer services that will make any man feel like a king. After all, relationship management and personalised services are the only ways to maintain stickiness as the competition intensifies.

Most brands from Salvatore Ferragamo to Paul Smith to Canali to Corneliani offer personal shopping. Your personal shopper is your very own stylist who will take you through the new line, suggest what will suit you and in some places also offers colour consultancies.

While you'd usually be dismissive of a salesman, a personal shopper is a status symbol. Some like Ferragamo also offer exclusive previews of their forthcoming range to special clients. Zegna has launched an exclusive service called Su Misura, which is their custom-tailored service making it possible to produce tailor-made suits, leather garments, jackets, pants, coats, shirts, ties shoes and belts, according to the customer's size and needs. The delivery time is four weeks in any Zegna store.

Paul Smith and Canali offer home shopping. It's the delivery at the doorstep aimed at on-the-go professionals. In addition, Canali organises a made-to-measure event where their master stylist comes to India, once or twice a year for consultation. According to industry estimates, personal shopping service contributes 15% of the total sales in India.

Value-added services aside, Ahluwalia says, for luxury brands to stay relevant in India, they should make India-specific clothes, using fabrics and materials suited to our climate, and styles, cuts and colours that cater to the average Indian built and skin tone. "What works in Paris or Milan, can't always be worn in New Delhi or Mumbai," he says. Maybe the brands are listening. Zegna has already launched its Indian bandhgala jacket and Canali too has added Indian influences to its designs.

Going Indian is a fair strategy to address the market, as formalwear goes beyond offices in India. But the brands have to be cautious and not become fuddy-duddy. And if you are paying a packet to buy Italian, you can't end up looking too Indian. That would be a fashion faux pas.

Luxury Lexicon
If you are shopping for luxury menswear, know these terms or be branded a boor.

Bespoke: In simpler English, it means customised tailoring. It is the height of exclusivity. Bespoke is an English term and an English tradition. Here the clothes are made according to the customer's specifications and request.

Made-to-measure: The difference from bespoke, besides the price, is that it has some standardisation. It's what you call a tailored suit. Fit is better than the ready-to-wear variant and more expensive.

Off the Shelf: It's what you would call off the rack. Basically you walk in, pick your size and walk out to a dinner party or the typical workday, no nip-tuck required. For most it's the entry-into-luxury clothing.

Personal Shopping: Your personal shopper is the showroom assistant. They are the ones who tell you what's in, will it look good on you, help you pair it and also keep in touch with you regarding new lines, offerings, etc.

Casa Grande enters Coimbatore market

Coimbatore: The high-end real estate market in Coimbatore city, which already has seen some of the big guns of the industry like Sobha Developers and Ceebros giving competition to local players, is set to witness increased competition with the Chennai-based Casa Grande announcing the launch of a luxury villa project in the city.

The company looks at Coimbatore as a lucrative market and expects to garner a turnover of about Rs 200 crore over the next two years.

Speaking to newsmen in Coimbatore, Mr M. Arun Kumar, Managing Director, Casa Grande Private Ltd, Chennai, said starting from 2004, the company has so far built about 1.2 million sq.ft of residential space across twenty four projects. The turnover this year is expected to be about Rs 100 crore-110 crore and the goal is to take the turnover to Rs 1,000 crore by 2016-17. The company has about Rs 700 crore-800 crore worth projects in the pipeline.

He said the company was also focussing on helping its customers maintain their properties through a separate division for leasing and maintenance. These services would be offered not only to the customers of Casa Grande but buyers of properties from other builders as well.

Mr D.Senthil Kumar, partner, Coimbatore Region, Casa Grande Pvt Ltd, said the Coimbatore project, coming up on the Kalapatti-Kurumbapalayam road about 7 km off the Coimbatore airport, would have 90 independent and semi-independent villas of 1,600-2,000 sq ft. The villas would be priced in the range of Rs 50- Rs 70 lakh and the project would be completed in 12-15 months.

He said more potential properties have been identified in Coimbatore and he was hopeful of notching up a turnover of Rs 200 crore by 2014-15 from the Coimbatore region itself.

Mr Arun Kumar said while the company would look at other cities like Tiruchi, it would rather prefer to focus on limited markets for solid performance.

Canali, Genesis form JV to sell products in India

New Delhi: Italian luxury major Canali has entered into a 51:49 joint venture with Genesis Luxury Fashion, which currently has distribution rights of Canali-branded products in India. The company also plans to invest Rs 7.65 crore in India. The joint venture company will now sell Canali branded products in India exclusively.

Canali had sought approval from the Foreign Investment Promotion Board (FIPB), which gave its clearance last week.

"India is a market with a remarkable potential still to be exploited. By teaming up with Genesis Luxury we are confident we will be in a better position to strengthen our leadership in Indian luxury menswear market," said Stefano Canali, general manager and third generation of the Canali family in business.

The Italian brand, which currently operates five exclusive stores in India through a marketing and distribution arrangement with Genesis Luxury, has had a successful business association with Genesis Luxury for over four years now and the joint venture was the next logical step, said Sanjay Kapoor, managing director, Genesis Luxury. The JV will now accelerate the brands growth in India by opening 10-15 stores over the next three-four years.

Canali is the first luxury brand to invest in India since 100% FDI in single brand retailing was allowed by the government earlier this year. Genesis, a franchise for several global luxury brands, has been operating five Canali stores in India-two in the National Capital Region, at the DLF Emporio Mall and at the Oberoi hotel in Gurgaon, and one each in Mumbai's Palladium mall, Hyderabad's Taj Krishna hotel and Bangalore's UB City mall.

Now, ATMs can advertise financial products

New Delhi: Banks with a large network of automated teller machines (ATM) will now be able to generate additional revenue by advertising financial products offered by other institutions.

With an eye on financial inclusion and to incentivise banks for opening ATMs in remote areas, the finance ministry has allowed bank-owned as well as outsourced ATMs to display advertisements of other financial products. RBI will soon issue guidelines in this regard.

There are about 80,000 ATMs in the country today and the State Bank of India, which has the largest share in these ATMs, is likely to benefit most. Among private players, Axis Bank and HDFC could also gain. Banks with a small ATM network would benefit by getting more visibility for their products at large bank ATMs.

These products carry the approval of various regulators like the Reserve Bank of India, Securities & Exchange Board of India, Pension Fund Regulatory Development Authority and the Insurance Regulatory Development Authority.

A finance ministry official said it had been a long standing demand of the industry to allow outside vendors to advertise financial products of other banks and financial institutions apart from the products of the sponsoring bank for a fee. The official added that the advertising revenue would enable banks to reduce transaction costs of ATMs.

Currently, banks work on a outsourced model based on per transaction basis for ATM deployment. The cost of setting up of an ATM is about Rs 5-6 lakh. Advertising revenues can offset a part of this cost and make the proposition more viable for banks.