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World Bank report finds India better at protecting minority investors than US, Japan

India is ahead of the US, Japan, France and Germany when it comes to protecting minority investors. India, Canada and Albania have jointly been placed at the No. 7.

Mail Today Bureau   New Delhi     Last Updated: October 30, 2014  | 11:21 IST
India ranks 7 in protecting minority investors
(Photo: Reuters)

India is a much better destination for protecting minority investors and credit availability, but its position in terms of doing business has worsened to 142 globally this year, according to a World Bank report titled 'Doing Business 2015: Going Beyond Efficiency'.

In South Asia, the report said that India implemented the largest number of regulatory reforms in June 2013-June 2014 with 20 followed by Sri Lanka with 16. In terms of protection of minority investors and credit availability, India is at 7th and 36th places respectively compared to 34th and 28th last year. These are the only two categories (out of ten considered by World Bank) where India is ranked among top 50 countries-a target set by Prime Minister Narendra Modi for the overall ranking.

"India strengthened minority investor protections by requiring greater disclosure of conflicts of interest by Board members increasing the remedies available in case of prejudicial related party transactions and introducing additional safeguards for shareholders of privately held companies," the report states.

India is ahead of the US, Japan, France and Germany when it comes to protecting minority investors. New Zealand has topped the list and is followed by Hong Kong, Singapore, the UK and Malaysia. While Ireland has been ranked sixth place, India, Canada and Albania have jointly been placed at the seventh position.

Major countries ranked below India include France (17th), Korea and Italy (21st), the US (25th), Japan (35th), Germany (51st), Australia (71st) and Switzerland (78th). On ease of getting credit in India, the report said, "... in India a little over a decade ago, an entrepreneur seeking a loan to grow his business would have had little luck because financial institutions lacked access to information systems to assess creditworthiness. Today, thanks to the creation and expansion of a national credit bureau offering credit scores and coverage on par with those in some high-income economies, a small business in India with a good financial history is more likely to get credit and hire more workers."

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