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EXPERT OPINION ABOUT CURRENT STOCK MARKET SCENARIO

During this time of turbulence in the markets, I must congratulate you for taking the wise decision to remain patient. At this time I also wanted to share with you some facts from the history of the markets in India.

It is important for all investors who invest or tend to invest in equities to take a trip down memory lane, particulary during times when the investor feels tired and let down by the market. We need to be aware that this kind of despair is not new in the market but public memory being short, one tends to forget the days of despair.

Let me take some of your precious time to draw your attention to the table below depicting the peaks and bottoms of the Sensex in the recent past. Only the recent past is given here because it is relatively easier to connect to it.

SENSEX HIGH DATE SENSEX LOW DATE

4546 02.04.1992 1980 27.04.1993

4643 12.09.1994 2713 04.12.1996

6150 14.02.2000 2156 03.10.2001

6249 09.01.2004 4227 17.05.2004

12671 11.05.2006 8799 14.06.2006

14723 09.02.2007 12316 16.03.2007

21206 10.01.2008 8701 24.10.2008


I hope that you remember the historic bull phase of early 1990s charging to 4546 points from below 1000 points during the Iraqi invasion of Kuwait, in April 1992. The most interesting development of this period was the amazing growth of investor population in the country and stock investing becoming fashionable for the first time, with new Stock Exchanges mushrooming in every nook and corner of the country. When the hero (or villain?) of the great bull market, Harshad Mehta was caught by the law enforcing agencies, the market collapsed like a pack of cards crushing millions of new investors who had entered the market during the peak time, leaving them in utter agony. The pain was much more than what we are seeing these days. The market mood was incredibly low and many investors along with doomsayers predicted the end of the market and the end of an asset class called equities. As the table shows, in a short span of one year from April 1992 to April 1993, investors found their wealth coming down by more than 55%. Many fortune seekers who borrowed and invested and many others who had invested their life time savings for the marriage of children to retirement life, saw their wealth disappearing in one year’s time. The painful part was that though the index came down by only 55%, many of the shares manipulated by operators came down to zero value. This tragedy occurred at a time when market regulations were weak and SEBI had no effective punitive power.

At some point of time you must have felt disappointed and angry at the way the market has been moving. Now look at the table again. In a matter of seventeen months the very same market bounced back to touch 4643 points. Think of all those who sold in disappointment during April 1993 when the index was at 1980 points! The market went up by more than 100 percent in 17 months! Just have a look at the market peaks alone. The next peak was at 6150 (in 3 years 2 months), the next at 6249 (in 2 years 3 months), then at 12671 (in 2 years), then at 14723 (in 8 months) and then at 21206 points (in 10 months). My intention is not to predict when and to where the Sensex will bounce back in the days to come, but to point out that all those who courageously got into the market in each of the troughs and waited patiently made incredible wealth as the market always peaked above the previous peak.

Now what happened to those who invested during the peak time in each of the market peaks – you know many new investors tend to start investing at the peak – they saw their wealth going down by 40 to 60 percent! Compare this to the wealth of all those who got into the market when the market touched bottom every time! Indeed, it requires courage to invest when every other investor leaves the market.

In this backdrop we must also analyse what is happening in the market that is pulling the Sensex down to 8700 points. Many foreign institutions and hedge funds have become bankrupt in their home countries forcing them to sell Indian assets at throwaway prices pulling our market down. One serious difference is that this time we have a global magnitude to this crash in relation to liquidity.

The one who can invest now, particularly in companies which are sitting with lots of cash in their balance sheet will make extraordinary returns when the dust settles down.

I felt that it is my duty to share with you some facts to enable you to look from a better perspective at the current events. Of course it is difficult to predict market tops and bottoms, but I wish to assure you that this is not the end of equity markets, and it will never be.

An article by Mr.George Geojit Securities

This Week's Honest Truth - Flowers for Dr. Reddy

It is time to send a bouquet of roses to Dr. Y. V. Reddy.
A really large one.

As a gesture of "Thank You" from all of us for keeping India afloat at a time when the world is reeling under the weight of a scary global financial crises.

Dr. Reddy retired as the Governor of the Reserve Bank of India on September 5th, 2008 but his acts - and actions - while at the helm of the RBI has, in my opinion, saved India from a total meltdown. The meltdown that we are witnessing in the US and Europe and in countries like Iceland which got carried away with access to low-cost easy money.

Dr. Reddy's caution was typified by the old-fashioned suits that central bankers wear. His old-cut and boring grey and dark suits were reminiscent of a visit to the house of a disapproving uncle. An uncle who always wanted to know why the child's hands were dirty and the clothes stained with mud.

The never-ready Dr. Reddy was constantly criticised for not allowing India to dance with the winds of change that had overtaken the global financial markets. The policies of the RBI were often at loggerheads with what the new-age economists wanted. Free markets - they urged - free up banking - free up everything.


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But Dr. Reddy worked with one goal in mind: how to keep India and the Indian financial system as immune as possible from the lack of risk control that had enveloped the world. His more well-known peers had succumbed to pressures from the "real" world: The world of unreal financial engineering. The world ruled by the financial geniuses who influenced global economic policy for their personal gain. And pursued it under the guise of "free-markets".

The International Herald Tribune reported that Gordon Brown, now the Prime Minister of UK and the cheerleader of the rescue pack for the European financial markets, was vehemently opposed to tighter regulation while Mr. Brown was UK's financial representative. Mr Brown's agenda – the article suggests – was to see that London remained the capital for financial transactions and any regulation would threaten that objective. So, lax regulation it was – and the UK public is paying the price for financial innovation.

Alan Greenspan, the Chairman of the Fed, had long ago given up his conservative view of the world. He wore the ragged suits and the old fashioned glasses of the central bankers but his actions of bailing out anyone in trouble and printing money wore little resemblance to the characteristics associated with a central banker. His successor, Helicopter Ben, seems to have surpassed the Master in a short period of time.

But Dr. Reddy did not budge.
And today India can sleep well because – despite what you hear on the idiot box or read in print – Dr. Reddy's job of being a central banker has kept India from being part of the crisis that has kept central bankers – globally - awake throughout the night as they try to figure out what to do.
A crisis that has forced leaders of governments to work on weekends as they huddle together to find band-aid solutions to this crisis of confidence.

India's problems are really of little significance relative to the global crises. Our economy is not crumbling. Our banks are not leveraged. Our consumers are not in debt the way they are in other parts of the world. The problems we have – and we do have them – are of the "Made in India" kind because Dr. Reddy did not allow us to import – duty free – the "Made in Everywhere Else" problem. As a country we still get confused between making policy for the sake of making policy' or making policy with an end objective in mind. Our political leadership, with an election around the corner, looks hesitant and seems to have lost confidence in all the PR stuff they churned out about India Shining, Resurgent India, or !ncredible India.

A few weeks ago, Bloomberg news reported that Chinese Premier Wen Jiabao told a gathering of bankers and corporate executives at a World Economic Forum gathering in Tianjin, "When economic and financial crisis occur, economists and entrepreneurs, people and politicians, should be confident," Wen said. "At the moment, confidence is more precious than gold."

Ahead of the curve
Dr. Reddy had loads of confidence. And acted with determination.

Central bankers have a tough job. They have to protect the value of their country's currency; they need to ensure that inflation does not get out of control; they need to support economic policies that help create jobs.

Politicians get elected by promising the impossible. "Don't worry", the politicians tell the voters, "We will make sure you get jobs at great salaries - and that the prices of essential good will not increase. We will make India a great economic power."

While on the election campaign trail the politicians also promise things like free loans, free rice, or some guaranteed employment schemes. To make life more interesting the politicians may burn a few places of religious worship along the election trail. Occasionally, they will hassle people from some other state who seek a job in their "mother" state. Having left their voters a bagful of candies, the politicians tend to disappear for five years till the next elections.

And once the politicians are gone for five years, the central bankers are left to do the dirty work.

The central bankers are left to worry about the effects of a generation of diabetic patients overstuffed with sugar-coated sweets and chocolates – sometimes laced with adulterated ingredients.

The jobs the politicians promised need to be paid with currency notes.

The handouts the politicians declared and the promises they made - to build roads, bridges, factories - need to be paid for in currency notes.

In most instances, what the government collects by way of taxes is not good enough to meet the costs of all the promises. The RBI has to print the notes to plug the gap, the deficit. The RBI has to print paper currency to pay the bills.

And printing too many notes can lead to a situation where inflation gets out of control.
And if inflation gets out of control, the value of the currency falls. If currencies lose value, it can lead to inflation.

Sometimes, with a view to generating quick growth – another wonderful point to discuss when an election is on the horizon – the policy makers in the government want "growth at any cost". Usually that means asking the central bank to lower interest rates in the country. This allows people to buy what they really cannot afford to buy – but now can afford to buy because the cost of borrowing (the famous EMI) is lowered.

We witnessed the debate played out in the media over the past two years. The Ministry of Finance wanted interest rates to be reduced and the RBI said "no".

Lowering interest rates, felt the RBI, would lead to a lack of pricing discipline and risk assessment by the banks. The RBI was under tremendous pressure to reduce interest rates. They did not. Since 2006 they raised interest rates. The RBI raised the amount of capital that banks had to keep aside against loans given for homes, loans given against real estate projects, and receivables against credit cards. They controlled the borrowings of Indian banks from international sources. The RBI was not keen to see India hostage to an unfriendly world. They, like a true central bank, were concerned about what could go wrong when and if the world turned. Not about the rewards of being a friendly central banker.

(And by the way the RBI has been saying "no" to P-Notes since December 2003. Remind me to send Dr. Reddy a bouquet for that, too.)

Saving India from financial catastrophe.



This chart shows the India 10 year Bond Yield (dotted orange line) and the Repo Rate (the rate at which banks borrow from the RBI). The period between the two red vertical lines was when Dr. Reddy was the RBI governor. Dr. Reddy was making money expensive to control a super-fast economy.

From default to choice
India has been witness to many crises in the past. And some pretty big ones after we began on our own economic reforms in 1991.

There was the Tequila crisis when Mexico went bust in 1994.

There was the Asian Crisis when the magical Asian Tigers went bust in 1997.

There was the LTCM collapse which led to South Korea and Russia going bust in 1998.

In each of these crises, the central bankers of these countries had set themselves up for the fall. They had allowed the companies and banks under their jurisdiction to borrow excessively and rely on foreign capital. While the world was greedy and no one priced risk correctly, all these countries enjoyed boom years. When risk got re-priced – as is being done now – and capital was in short supply, all the Salsa dancers and Tigers sunk into disaster.

But, during those crises, India was still a relatively closed economy. Our total trade with the free world was less than 10% of GDP for a long time. Today it is over 25% of GDP. India is now a more open economy.

The RBI has allowed Indian individuals to invest overseas; they have allowed us to use Indian credit cards anywhere in the world; they have allowed Indian companies to buy companies overseas.

The uncle has had no problem letting the child play in the mud – but he has first used a stick to ensure that the mud is not quicksand.

But that did not make our finance companies happy. Like the finance companies monitored by Mr. Gordon Brown during his tenure, our "Made in India" finance companies wanted India to have access to any and all capital. The colour of money is green, they said, why should the RBI care where it came from.

Thank god, the RBI did care.

Thank god, Dr. Reddy did care.

Unlike the central bankers in Iceland, who must have been so enthralled by that classic line from "Gone with the Wind": "Frankly, my dear, I don't give a damn"

The top 3 banks in Iceland borrowed US$ 60 billion from the global financial markets. The value of their liabilities is 12x the size of Iceland's GDP. Their foreign currency reserves are only US$ 3.7 billion.

Now the top 3 banks in Iceland are bust.

And so is Iceland.

It is seeking US$ 8 billion from the IMF, Russia, and some Nordic countries. CLICK HERE to read what my colleague had to say about Iceland in 2006).

If Dr. Reddy had not done what central bankers are supposed to do – the Indian banks would have all been in an Icelandic mess.

Remember: financial geniuses – in India and overseas - have generally been rewarded for some mythical annual profit and have left the mountains of debt to be cleaned up by tax payers' money from bailout programmes. Their rewards stay with them. And they live in prime health. Sub-prime is the problem of the public.


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A new era, a new response
But despite all the great work that Dr. Reddy has done, India still got hit a bit. Some cracks have appeared in the system.

The stock market continues to show its true colours as a casino rather than a place where savers (like you and me) provide capital to companies to build long term businesses. The P-Notes are the mysterious Phantoms who have left the Opera – and us wailing as we see a meltdown in the Indian stock markets.

Yes, some companies were over extended and some banks did not have great pricing models for the risks they took. Many banks focused on market share, rather than profits. They will stay solvent and they will not fail – but these banks are not likely to see the profit growth the investors in their shares had expected. A minor crisis. But an expensive one if you own shares in these "market-share" banks.

This is a new era and it requires a new response.

The new Governor of the Reserve Bank of India, Mr. Subbarao, has responded firmly. He has thrown money back into the system and started the process of lowering interest rates.

Dr. Bimal Jalan, who was the RBI Governor till 2003, lowered interest rates in India as a response to the technology bubble, UTI going bust, 9/11, and SARS. The situation needed some money pumping. The plumber was there to turn on the faucet.

Dr. Reddy, who took over as the Governor of the RBI in September 2003, inherited a weak economy but began to see significant capital inflows and solid economic growth since 2004. Once the plumber sees the tap flowing fully, he reduces the pressure of the water flow. Sometimes he shuts down the tap. Dr. Reddy set forth the appropriate response and began the long journey of increasing interest rates and slowing the pace of financial innovation (see Chart 1).

Dr. Reddy had stalled the introduction of the Credit Default Swap markets, one of the root causes of the global financial crisis. If CDS was allowed in India, we would have been an Iceland by now! Why am I so sure? Look around you and see what the "market-share" banks have done – would they not have enjoyed an opportunity to make another quick quarterly profit – and leave the garbage for someone else to clean up? That is the DNA of the current financial reward-me-now generation of market-share bankers.

On October 20th Prime Minister Manmohan Singh read out a statement in Parliament to confirm that India is quite safe from the turmoil. "Our banks", said the Prime Minister, "both in the public sector and in the private sector, are financially sound, well capitalised, and well regulated."

We believe that – and we know we have the RBI and Dr. Reddy to thank for that.

Thank you, Dr. Reddy, and I hope you get more flowers from the bankers whose very banks you have saved.


Courtesy: Equity Master Home page

Tax free wealth

LATELY, I have been thinking a lot about the Lehman crisis . Spending money that they didn't have and going beyond their means is one of the main reasons for their situation today. In fact that is the cause for the current economic crisis in the US.

When I see all this happening, I can only remember the good old days. Then, karz was bad. People looked down upon those who took loans. Parents would not give their daughter's hand in marriage to a man with loans.

But of course, the times have changed now. Everyone I know has a loan. The buzz word is EMI (equated monthly installment). Today, you can buy everything on EMI - a house, a television, even an i-Pod. In fact I know of someone who just bought a fancy BMW 3 series on EMI, instead of buying a cheaper car outright with cash. I mostly prefer to take public transport, but then I am an old man with old thoughts!

Anyway, coming back to what caused the crisis. Imagine having Rs 2 lakh in your bank account, no regular income, yet buying a house worth Rs 65 lakh, in the hope of selling it for a higher price. Even if the price of the house fell by just 5 per cent (that is Rs 3 lakh), you will go bankrupt. This is what Lehman Brothers did; with around USD 20 billion they went and bought assets worth over USD 600 billion. Isn't it suicidal and simply foolish?

I am sure things would have been different, had I been the head of Lehman brothers. But who wants an old conservative man like me to head a complex financial institution.

But there are a few lessons that we can learn:

1.Live a balanced life and avoid overspending.

2. Don't buy things we don't need.

3. Don't buy Branded goods.

4. Don't buy excess Food, Cloths, Cosmetics, Footwear, electronics and Fashion accuracies
just think before you buy.
Tip: World still has a lot of growth ahead and the future holds immense opportunities for us. Let us make the most of it and save and invest it wisely instead of wasting our precious little on things we don't need.

5. Try to balance life with work (No one is happy to work in their professions).

6. Don't stress out yourself, after work try to do some extra activities like swimming, yoga, walking, running where you can divert your mind from stress.
A thumb rule: Health is more important than money.

7. Try to understand each other (Wife and Husband) in financial matters and help each other.

Tip: As soon as you get your monthly salary, set aside a fixed amount, usually 35 per cent, for insurance, savings and investments. You can then spend the rest.

8. Not all loans are bad. Loans that are 'need based' (home loans, education loans) can always find a place in your finances against those that are largely 'want based' (Credit cards, personal loans, car loans).

9. Borrow only if repayment is financially comfortable.
A thumb rule: Keep EMIs within 35 to 45 per cent of your monthly income

In that respect, there is one American who I really respect - Warren Buffet. He has lived in the same ordinary house for over three decades, drives his own medium sized car and leads an extremely regular 'middle class' life. If that's all it takes for the richest person on earth to be happy, why do all of us need to take extra stress just so that we can get things which aren't even essential?

Health is Wealth Its Tax Free...

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Be prudent in fixed income investments

As stock markets world-over witnessed declines, Indian investors while focusing on their equity portfolio should also take a re-look at their fixed income investments and restructure it according to the changes.

The income tax rate slabs for the current financial year have been revised thoroughly for individuals. The marginal rate of 30% of income is applicable only for individuals with income above Rs 5 lakh, while the basic exemption limit has been raised substantially upwards for male, female and senior citizen assesses.

If this year’s income was the same as the last financial year, then the tax payable will be substantially lower—mainly because the rate of tax at lower levels of income has been reduced drastically.
Secondly, the interest rates on options like bank fixed deposits , fixed maturity plans (FMPs) of mutual funds, corporate fixed deposits among others have gone up by more than 2-3 % per annum.

But the interest rate on schemes like PPF, National Savings Certificates , Kisan Vikas Patra, Post Office Monthly Income Scheme as well as taxable government bonds and Senior Citizen Savings Scheme, has remained static at 8-9 %.

Thirdly, inflation, which has risen lately, has started showing signs of tapering off. It may come down over the next few months, which will mean that the interest rates too will start falling. If interest rates fall, it makes sense to commit to fixed income schemes offering higher rates of interest for a longer term.

Premature exit options and withdrawals before maturity are not available in National Savings Schemes and 8% taxable government of India (GOI) bonds. In respect of all other fixed income options, an investor can withdraw or close prematurely the lower yielding investments and invest at current high rates.

We should find out whether it would be beneficial to withdraw from these options and invest in higher yielding options available. The important factor that would influence this decision is the rate of taxation on one’s income. We will bifurcate the investors as those who are required to pay tax at the rate of 10% or lower and others at the rate of 20% or more.

Withdraw the maximum amount from your PPF account and invest in bank FDs and FMPs of longer maturities of two years or more. If you can close the account and withdraw the entire amount, then it’s recommended.

Before maturity, withdraw your investments from the Senior Citizen Savings Scheme, even if you need to pay a penalty of 1%, and invest the amount in bank FDs offering 10% or more. Tax deduction at source (TDS) on a Senior Citizen Scheme, besides the interest rate of just 9% per annum, is a big irritant for senior people.

Hence, avoid this hassle and invest in different branches of banks. If you ensure that the interest on your FDs with a bank does not exceed Rs 10,000 in a financial year per branch, then TDS on interest can be avoided.

Consider premature renewal of your old bank FDs earning a lower rate of interest . Banks consider this without any penalty and roll over your FDs with them at the current interest rate. Long-term deposits of say three years or more are preferable.

FMPs are the best option for this category of investors. With draw your money from FDs postal schemes among others before maturity and invest in FMPs. The expected yields are even higher than the interest rates on FDs. The tax adjusted yields on FMPs of more than one year is much higher compared to FDs.

The difference between the amount received and the amount invested is considered as long-term capital gains and it is taxed at a rate of 10% without indexation of cost of acquisition or 20% with indexation benefit—under the growth option. As inflation is ruling high, the application of double indexation benefit to a 19-month FMP which will mature after March 31, 2010, will mean a taxfree income at the rate of more than 10% per annum.

Investors who will pay tax at 20% or more
Long-term FMPs should be preferred to short-term ones as the interest rates are likely to go down after a few months. The growth option would be a better one compared to the dividend pay-out option as the fund will be required to pay a Dividend Distribution Tax which is currently 12.5% plus a surcharge and education cess among others (effectively 14.1625%).

For investors parking funds in monthly and quarterly interval FMPs, the dividend pay out option will be better. FMPs do not guarantee a fixed rate of return and there is a risk of getting lower yields compared to indicated yields.

RBI cuts CRR by 100 basis points

The Reserve Bank of India on 15/10/2008 Wednesday cut the Cash Reserve Ratio (CRR) further by 100 basis points to 6.5 per cent of NDTL with effect from the current reporting fortnight that began on October 11, 2008. This measure will release additional liquidity into the system of the order of Rs.40,000 crore.

On Tuesday, October 14, 2008, the RBI decided to conduct a special 14 day Repo at 9 per cent per annum for a notified amount of Rs 20,000 crore with a view to enabling banks to meet the liquidity requirements of mutual funds. Rs 3,500 crore of this facility was utilised by banks yesterday.

Further, the Reserve Bank announced this morning that this 14 day repo facility will now be conducted every day until further notice upto a cumulative amount of Rs 20,000 crore for the same purpose. Banks obtain liquidity from the Reserve Bank under the Liquidity Adjustment Facility (LAF) against the collateral of eligible securities that are in excess of their prescribed Statutory Liquidity Ratio (SLR).

It has been decided, purely as a temporary measure, that banks may avail of additional liquidity support exclusively for the purpose of meeting the liquidity requirements of mutual funds to the extent of up to 0.5 per cent of their NDTL. This additional liquidity support will terminate 14 days from the closure of this special term repo facility announced on October 14, 2008. This accommodation will be in addition to the temporary measure announced on September 16, 2008 permitting banks to avail of additional liquidity support to the extent of up to 1 per cent of their NDTL.

Interest Rates on FCNR (B) Deposits

Currently, the interest rate ceiling on FCNR(B) deposits of all maturities has been fixed at Libor/Euribor/Swap rates for the corresponding maturities minus 25 basis points for the respective foreign currencies. In view of the prevailing market conditions, RBI has decided to increase, with immediate effect, the interest rate ceiling on FCNR (B) deposits by 50 basis points, i.e., to Libor/Euribor/Swap rates plus 25 basis points.

Interest Rate on NR(E) RA Deposits

Currently, the interest rate ceiling on NR(E) RA for one to three years maturity should not exceed the Libor/Euribor/Swap rates plus 50 basis points for US dollar of corresponding maturity. In view of the prevailing market conditions, RBI has decided to increase, with immediate effect, the interest rate ceiling on NR(E)RA deposits by 50 basis points, i.e., to Libor/Euribor/Swap rates plus 100 basis points.

Banks will be allowed to borrow funds from their overseas branches and correspondent banks up to a limit of 50 per cent of their unimpaired Tier I capital as at the close of the previous quarter or $10 million, whichever is higher, as against the existing limit of 25 per cent.

The above measures will be reviewed on a continuous basis in the light of the evolving liquidity conditions.

The Reserve Bank is monitoring developments in the financial markets closely and continuously and would respond swiftly and even pre-emptively to any adverse external developments impinging on domestic financial stability, price stability and inflation expectations. The Reserve Bank is committed to maintaining financial stability and active, and flexible liquidity management using all policy instruments is an integral part of this objective.

ICICI Bank: Fear psychosis comes to rest

After a series of damage control measures, the ICICI Bank authorities seem to have dispelled all the negative impact of the malicious rumours
against it.

The stock which was down 20 per cent last week, is now up by 20.91 per cent on the NSE. Around 1pm, the volume of trading for ICICI in the F&O market is 1 crore 46 lakh while it is 2 crore 5 lakh in cash market.

If volumes are any indication (on Monday), investors are reposing faith on the bank once again. In the derivative market, the stock is being traded at a premium to the spot.

“Both volumes are good. In view of research reports by global agencies, the fear psychosis is over. It is worth investing in the stock. Buy at every decline,” said Alex Mathew, head – research, Geojit Financials.

In a press note, Standard & Poor's Ratings Services said today that credit fundamentals of ICICI Bank continue to be sound, backed by strong market position in the domestic banking industry, adequate financial profile, which is supported by its healthy capitalization, satisfactory loan quality, and diversification.

The overseas loan and credit derivative portfolio of the bank, including its overseas subsidiaries, is predominantly to Indian companies for their Indian and overseas operations and hence its quality is largely dependent on corporate credit quality and economic conditions in India, S&P Ratings Services adds.

The bank through its UK-based subsidiary also has a sizeable US$3.5 billion investment portfolio. This includes about $80 million exposure to Lehman Brothers.

According to S&P, likely credit or marked-to-market losses on its overseas exposure can be easily absorbed within its financial profile, considering the size of its balance sheet of about $100 billion and capital base of about $10 billion.

Currently, the bank has a capital adequacy ratio of 13.9 per cent as against SBI’s 12.6 per cent and HDFC’s 13.6 per cent. As per RBI norms, it is 9 per cent only.

In a press statement the CEO and MD of ICICI Bank said, "We (ICICI Bank) have evidence of organised attempts to destabilise the bank. But our bank, India's largest in the private space, is over-capitalised and is one of the strongest financial institutions in the world. We have not seen any drastic decline in deposits in the past few weeks

Sensex tumbles below 12000 - Rupee closes at 47.80 per dollar

The rupee slid to its lowest in more than 5-½ years on Monday as local shares dived nearly 6 percent, closing at 11801.70, triggering fears of an accelerated outflow of foreign funds, while dollar demand from importers and oil firms weighed. The partially convertible rupee ended at 47.80/81 per dollar, 1.5 percent weaker than its 47.0750/0850 at close on Friday. It slumped to 47.85 during the session, its lowest since Feb. 14, 2003.

The rupee has lost 17.6 percent so far this year. "The rupee was very volatile today, the Sensex was down. The dollar is stronger overseas. Importers and oil firms were buying dollars and there are no dollar inflows," said K.N.Reghunathan, a currency trader at state-run Union Bank of India.

"If this trend continues then we may see the rupee touch 49 against the dollar in the near-term," he added. India's main share index or Sensex ended down 5.8 percent as concerns grew of an acceleration in foreign fund withdrawals amid fears the credit crisis could lead to a global recession.

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You can invite your friends with Indafon's referral system. When your invited friends signs-up, for each new member you will get 10 minutes of free international calls. The invited person gets 10 minutes free at the same time.

That means the more friends you bring under your invite, you will get 10 mins of free international call credit.

Indafon is purely a PC to Phone calling service and you have to use the flash phone they have under the account page.

Combine both Callsdiscount and Bezecom‏ for Free Voip Calls

Now we will discribe how to combine two sites Callsdiscount and Bezecom.

We added a new Bezecom account with the phone number 0033176722656, which is the French phone number for using Callsdiscount free countries. The bezecom number is: 531833 .

When I live in Peru I need to call the local bezecom access number in Lima: 1-7185055 and then the bezecom number is: 531833

Now you have access the all Free countries for the french version of Callsdiscount.

Later I will list all these free countries but you can find them on the french version of the callsdiscount site.

Of course you can use all countries which have a Bezecom access number.

25 extra free voip destinations with combination of Voipbuster and Callsdiscount‏

You want more then 25 extra free destinations with Voipbuster?
You dial the Swiss access number for Calldiscount (+41-445050790) and dial your wanted number ending with #.
See for instructions: http://www.callsdiscount.com/
Choose Switzerland

Extra free countries:
- Turkey
- Switzerland - Mobile
- Romania + Romania - Mobile
- Sweden
- Slovakia
- Poland
- Luxembourg - Mobile
- Mexico
- Greece
- Germany
- Brazil
- China + China - Mobile
- Austria - Mobile
- Australia - Mobile

and many more!

Free Voip calling with Bezecom

Bezecom (www.bezecom.com) is global supplier for international call services between communities. Bezecom is currently in beta. With Bezecom you can make free international calls to USA, Canada, Isreal.

Lets see how this VOIP Phone service works:

You will receive a global number – through access numbers that cover main destinations in the world (at this stage they have access numbers in 25 countries).

People can call you by dialing a local call. You can either forward your call or receive calls on your softphone.

You can receive your calls free of charge to the following destinations:

a. Israel, Britain, and France – landlines
b. USA and Canada – landline and cellular phones
c. PC or IP phone that connected to the internet

That means you can forward call to one of those destinations. You can actually convert this service into a totally free VOIP Phone service.

Lets see how we do this.

1) You are in Isreal, Britain (UK), France or USA/Canada. Forward your calls to landline/Mobile.
2) Ask your friends or relatives to dial the access number in their country.
3) Then they should enter your Bezecom number.
4) You and your friend are now connected.

You can even use this service with your being on PC and other party using access number. Unfortunately, this service doesn't work in India. I hope they add more asian numbers to the list.

Remember, There is no limit to the limit of the calls but the duration of the call the limited to 10 minutes and included infomercials. We guess you can call the same number again and again.