[aaykarbhavan] Business standard updates

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At AGM, Kapur questions YES Bank governance

BS REPORTERS Mumbai, 14 June The resolution on re- appointing Rana Kapoor as managing director and chief executive officer ( MD & CEO) of YES Bank, along with the appointment of other directors, for which voting was conducted at the bank's annual general meeting ( AGM) on Saturday, is likely to see smooth passage. At the AGM, Madhu Kapur, widow of YES Bank co- founder Ashok Kapur, made an emotional address to shareholders on how she had been treated shabbily by the management, a charge dismissed by the bank. Kapur is likely to file a revised petition against the appointments next week. At the AGM, several proposals, including on the adoption of a financial statement for FY14 and approval of dividend, came up for shareholder approval. Resolutions pertaining to financial aspects and those related to the appointment of independent directors and the re- appointment of Rana Kapoor as MD & CEO with a revised remuneration have to be passed by voting. The results of the voting by shareholders are likely to be announced on Monday. Early last year, Kapur had moved court, claiming her right as the bank's co- promoter was violated and she wasn't consulted before the bank had appointed a few directors on its board. In May this year, Kapur moved the high court here, challenging YES Bank's proposal to re- appoint Rana Kapoor as MD & CEO, Srinivasan as chairman and Ravish Chopra as independent director. Shagun Kapur Gogia, Madhu Kapur's daughter, said her faction would continue to challenge the appointment of directors. In her address at the AGM, Madhu Kapur said she was fighting for the rights she had inherited from her late husband (Ashok Kapur), which had been denied to her. These rights, she said, were enshrined in the Articles of Association and approved by the Reserve Bank of India. " If we want our bank to be sustainable, it will have to be trustworthy at all levels, with corporate governance and transparency being truly observed at all times," she said in her address. " In the end, Ican say confidently Rana, my husband Ashok would not have treated your wife Bindu in the manner in which you have treated me," she added. Madhu Kapur and Bindu, Rana Kapoor's wife, are sisters. Non- executive chairman MR Srinivasan said, " The second ​ ​ largest shareholder who has raised some issues about governance has recommended the approval of resolutions pertaining to the finalisation of the books of accounts, and for payment of dividend, which is an all- time high of 80 per cent and the highest among any peer banks in their 10th years. The said shareholder has not challenged this. Under these circumstances, the intent behind such allegations is clearly mala fide, and to pursue vested interest." He added this was despite the fact that the Bombay High Court had already rejected an application for the grant of adinterim relief against passing resolutions at the ensuing AGM, as sought by Kapur. Srinivasan said the bank's board " has always acted in a manner which is in accordance with law and has upheld the principles of corporate and management governance". The court had said the appointments would be subject to its final ruling on the matter. Bank says her intent mala fide; resolutions likely to be passed, but will be challenged in court "… the intent behind her allegations is clearly malafide, and to pursue vested interest." MR SRINIVASAN Non- executive chairman, YES Bank "In the end, I can say confidently Rana, my husband Ashok would not have treated your wife Bindu in the manner you have treated me." MADHU KAPUR

 

Is EMI on credit card helpful? YOUR MONEY >RAJIV RAJ Every time you swipe your credit card for a big amount, you get a message from your bank asking if you want to pay through Equated Monthly Instalment ( EMI). But how hasslefree and attractive is this option? While the use of credit cards as amode of payments has caught on well, most people don't realise the perils of reckless use of credit cards. If you spend beyond your repaying capacity and do not pay your bill on time, most credit cards charge prohibitively high interest rates in the range of 36 per cent and 45 per cent. So, how does one deal with this? One way is to opt for the EMI route that comes at lower rate of interest. Let us find out how to go about it. It is important to know whether your card has an EMI facility. Most of the large banks that are active in the credit card segment offer this facility. Banks permit an outstanding of up to ₹ 5 lakh for EMI facility and the rate of interest charged is in the range of 16 to 22 per cent. So, check with your card- issuing bank whether it offers the facility or not. If your credit card does not offer the option to repay through EMI, then you can either opt for a personal loan or transfer your balance to some other credit card to ensure timely repayment of the outstanding amount, failing which you have to bear high interest rate on the credit card. This may pull down your credit score if you fail to repay time. On the other hand, if your bank does offer the facility to repay your through EMI, there are some factors you need to be aware of. Credit limit is reduced The moment you opt for an EMI repayment arrangement, the credit limit is reduced to the extent of the principal outstanding. As you keep repaying through EMI, the credit limit is freed. To put it simply, opting for EMI can block your spending capacity in the subsequent months. This can be a big issue if you are dependent on your credit card either to fund your future expense or for some routine payments. A bank may offer EMI facility for as up to two years. This means for two years the credit card holder has to bear with lowered credit limit. Banks do not increase credit limit of a credit card when outstanding amount on that card is being paid through EMI. You have to be careful that you don't exceed the credit limit while using your card throughout the tenure of the EMI facility. Processing fee Another factor you need to bear in mind is the one- time processing fee that banks charge to initiate EMI option. This fee is charged upfront and adds to the costs to be paid by you. The fee is generally expressed as a percentage of the loan availed on EMI option. Usually, it does not exceed ₹ 5,000. You can negotiate this amount, and if you are a loyal customer of the bank for a long time, the bank may even choose to waive it. In some cases, the bank may partly waive the processing fee and ask the credit card holder to pay the remaining up- front. Insurance option Some banks also offer insurance option to a cardholder. For an extra charge towards premium, insurance companies offer to pay the outstanding principal in case of an eventuality. The premium is added to the outstanding amount and the credit card holder is intimated accordingly. The EMI amount takes care of both – the outstanding bank. It is a win- win situation for all three parties involved– the cardholder, the bank and the insurance company. Besides this, opting for an EMI option can help an individual save his/ her credit score from falling. Given these advantages of paying acredit card bill through an EMI option, a question that merits attention is: Is this the right and profitable way of repaying your credit card bill? The answer is no. You should spend when needed. You must remain within the limits defined by your monthly income. EMI facility is not to be seen as an enabler and a source of leverage when one is on the shopping spree. You must think of EMI option if and only if you are on the verge of defaulting a payment. While it is useful to tide over a temporary cash crunch and can save your credit score from going down, it can be a burden on your finances for a prolonged period of time. Also, too many EMI arrangements also impact credit score adversely. The author is, Director and Co- Founder, www. creditvidya. com SPENDING While this might reduce your spending capacity for some time, it could prevent your credit score from falling TO OPT FOR EMI OR NOT |Credit limit is reduced to the extent of the principal outstanding and is freed as you keep repaying |Keep an eye on credit limit during the entire EMI period, which could extend up to two years |The one- time processing fee will add to your cost |Do not use EMI facility as a source of leverage |Use it only if you are on the verge of defaulting on a payment

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A.Rengarajan

Company  Secretary

Chennai

93810  11200

"Positive belief in yourself will give you the energy needed to conquer the world and this belief is the power behind all creation." 
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Posted by: CS A Rengarajan <csarengarajan@gmail.com>

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