Election results

Results of parliamentary elections are pleasantly intriguing. They are a tribute to maturity of Indian voters. There is certainly a 'goldilocks' attribute to the final tally. UPA is tantalisingly close to a simple majority. Voters have been decisive enough to keep the UPA in power, but also sceptical enough not to make the alliance unbridled. Prakash Karat has paid for his intellectual hubris and BJP for its flop-flop fundamentalism. Congress should be sane enough to ensure good governance so that it can face the next elections confidently.

Stress tests on American banks

The Fed has released details of stress tests conducted on American banks and its own conclusions. In its view, there is need for additional common equity to the extent of $75 billion as against the requirement of $185 bn as on 31st December 2008. Apparently, the situation is improving.

What is causing concern is that there continues to be understatement of risk and capital requirement. Fed is targetting only 4% of risk-weighted assets as common equity requirement which is 50% of total capital requirement. Actual assets are 160% of risk-weighted assets. (Common equity requirement is stated as 2.5% of actual assets and hence this derivation.) In other words, a typical asset carries a risk-weight of 62.5% only. Fed continues to have total trust in risk-management capacity of the banks! Some institutions never seem to learn!

European banks have nearly 7% of risk-weighted assets in the form of common equity, that is way above the American banks.

Financial Sector Assessments--India and the US

Federal Reserve has released the Design and Implementation Note on Supervisory Capital Assessment Programme conducted by it recently. It is provided below:
http://documents.nytimes.com/how-to-design-and-conduct-a-bank-stress-test

Findings of the study will become public on 4th May. The Design indicates that the study must have been rigorous. In contrast, the Committee on Financial Sector Assessment headed by Dr.Rakesh Mohan which studied the results of stress tests on Indian banks has apparently been less rigorous and more pragmatic. Its findings are:
http://www.rbi.org.in/scripts/BS_PressReleaseDisplay.aspx?prid=20428

Satyam fraud -- Copy of chargesheet

Copy of chargesheet published in NewYork Times is given below:
http://graphics8.nytimes.com/packages/pdf/business/22SatyamDoc.pdf
It remains to be seen if TechMahindra has taken the right decision to bid for the company. Will TechMahindra reap the Winners' Curse?

Axis Bank --- A.T.Pannir Selvam

ATP was a Director in Axis Bank and was one of the three members of Management Committee. He passed away yesterday when about to catch a flight from Mumbai to Chennai.

The marathon Board Meeting which decided on next CEO of the bank has apparently taken a toll. Some of the Board processes are dysfunctionally stressful for the participants.

New CEO for Axis Bank

Selection of a new CEO for Axis Bank makes interesting reading particularly because of the existing CEO's action and reaction.
Mr.P.J.Nayak, the present Chairman cum CEO was the lone dissenter in the Board Meeting against the recommendation favouring Ms.Shikha Sharma. He is supposed to have favoured an internal candidate who is presently an executive director. This part is understandable; one is entitled to one's opinions. But what he did soon after the Board's decision to recommend the name of Ms.Shikha Sharma does not add to his credit. He submitted his resignation from the Board to be accepted forthwith. Is he trying to show that he has immense faith in Axis Bank's employees and therefore there is no need to look outside. Or is he trying to avoid an outsider's objective focus on his decisions as Chairman cum CEO.
Another note-worthy development is thev likely appointment of Mr.K.N.Prithviraj as Chairman of Management Committee. His modest roots and incorruptible ways are an oasis in the desert of extravagance and corruption in the banking world.

Misinterpretation of Bhagavad Gita {II}

That Mr.BS Raghavan's interpretation is skewed becomes more evident if we read Swami Ranganadananda's explanation. Says the Swami: "Everyone has his or her own dharma, or way of life and work and human relations. According to one's psychological disposition, a person has a particular bent of mind and work capacities. That is one's dharma. Sri Krishna says, better to die in one's own dharma, than to live in somebody else's dharma. That dharma is good for that person, this is good for you. Find out your own dharma based on your own mental disposition. Sreyaan svadharmo vigunah {this is how the 35th sloka begins}, 'even though one's own dharma is not of high quality, still it is the best for oneself'. This is a teaching based on the individual identity of every human being, like the individuality of one's thumb impression. Similarly, there is a psychic individuality. Let one respect it and not imitate somebody else."

It is obvious that the sloka contains excellent psychological insight and to say that it lends itself to devious interpretations betrays one's spiritual ignorance.