SBI may get MoF nod to hedge gold overseas Jayanthi Iyengar New Delhi 5 May The State Bank of India (SBI) will be permitted to hedge the gold raised through the gold bond scheme in the international market. Currently, only entities which trade in commodities are permitted to hedge in markets abroad. According to finance ministry officials, SBI would be considered a commodity trader for the purposes of hedging the gold raised by it through the bond scheme. The government has so far not permitted others to hedge in the international market fearing that it would lead to speculation. While freed commodity trading is new to the country, hedging in the global markets is of even newer origin. The government allowed companies to hedge in the international market following the recommendations, and acceptance, of the R V Gupta committee on hedging. Initially, when the Unit Trust India (UTI) had sought government permission to come out with gold-linked units, finance ministry officials had maintained that it was not necessary to hedge in the international market. They felt it was sufficient to do so domestically. Since then, new guidelines for hedging through international commodity exchanges have been announced by the government. Officials now say that this facility would now also be extended to the SBI. Hedging in the international market was permitted in order to make Indian producers more efficient, thereby enabling them to compete in the international markets. Hence, the facility was made available to Indian companies having genuine underlying exposures, through authorised dealers. According to the norms, hedging on the recognised international exchanges is permitted only through brokerage firms which are clearing members of exchanges. Currently, all standard exchange traded future, options contracts (purchase) are permitted. The tenure of the contract is usually six months, beyond which the RBI's approval is required. Only crude and petroleum products have been excluded from the scope of this facility. Since SBI will be trading in gold abroad — exchanging jewellery for pure gold with foreign banks, as also selling and investing some of the proceeds abroad — the hedging facility will permit it to guard against unexpected losses on account of unforeseen price movements.
JANET RENO DEVELOPS AGENCY THAT WILL DEAL WITH Y2K CRISIS
Attorney General Janet Reno has quietly created a small agency within the FBI that will deal with Y2K repercussions.
The agency, The National Domestic Preparedness Office, is now up and running -- and preparing -- despite the fact it does not officially exist! Congress has not yet approved its budget.
A mission statement from the NDPO: "To coordinate all Federal efforts, including those of the Department of Defense, Federal Emergency Management Agency, Department of Health and Human Services, Department of Energy, and the Environmental Protection Agency, to assist State and local first responders with planning, training, equipment, and exercise necessary to respond to a conventional or non-conventional weapon of mass destruction incident."
But investigative legend Jack Anderson is set to report in his syndicated column that the NDPO will be the federal authority for any national Y2K repercussions.
Anders also reports: Later this month, the Federal Emergency Management Agency will hold a national "table top" simulated scenario drill -- similar to the "war games" played out in the military.
The drill "will pull together all emergency and military resources. FEMA, along with the National Guard, is responsible for coordinating state and local responses to Y2K problems while the State Department will cover international social problems," Anderson reports.
The U.S. military is quietly planning a sophisticated social-response network in case civil unrest should erupt.
Military types are denying a newspaper story that captured Marines in a "civil unrest exercise" at Quantico.
"They told me what the exercise was about and then asked me not to report it," says Dave Ellis of the POTOMAC NEWS.
The reporter filed a Page One story that ran with a photo apparently showing the Marines in "Y2K riot training".
"[The Marines] were worried that people would think they were painting helicopters black and training for a huge government crackdown at the millennium," he explains.