New economic advisory panel
New Delhi: Prime minister Atal Behari Vajpayee has reconstituted the
Economic Advisory Council. Four new members have been inducted while three have been
dropped. The new members in the 12-member Council, headed by the prime minister, are
Jagdish Shettigar, Bharatiya Janata Partys economic cell chief, Rakesh Mohan of
National Council for Applied Economic Research, Ashok Gulati and M. Narasimham. The
members who are dropped are Arjun Sengupta, Ashok Desai and G.V. Ramakrishna.
The other members of the Council are I.G. Patel, P.N.
Dhar, Montek Singh Ahluwalia, Kirit Parikh and Amresh Bagchi. Brajesh Mishra, principal
secretary to the prime minister will be a member of the council, while N.K. Singh,
secretary to the prime minister, will be the member-secretary.
Meanwhile, the task force on infrastructure has been
reconstituted to accommodate new civil aviation minister Sharad Yadav in place of Anant
Kumar, who is now minister for culture, youth affairs and sports. The reconstituted task
force will have Nitish Kumar, surface transport minister, Deepak Parekh, HDFC chairman,
Anand Mahindra, industrialist, and the secretaries of the ministries of surface transport,
civil aviation and the department of expenditure as members.
Impressive industrial growth
New Delhi: Industrial growth has registered an impressive uptrend of 6.4
per cent in the first half of 1999-2000 against 4 per cent in the corresponding 1998
period. This has been possible as a result of growth in electricity and manufacturing
sectors. Electricity sector alone recorded a high 16.5 per cent growth in the preiod under
review comapred to a lowly 0.5 per cent growth in the comparable period last year. The
index of industrial production data indicates that industrial output spurted by 7.6 per
cent in September alone.
Other areas where significant growth has been achieved are
mining and consumer durables. Capital goods and consumer non-durables sectors posted lower
growth rates of 9.2 per cent and 1.6 per cent during April-September 1999.
ECB norms eased
New Delhi: The finance ministry has eased the norms for external
commercial borrowings. The procedures have been simplified both at the automatic clearance
window of the Reserve Bank of India and at the discretionary clearance window of the
finance ministry. The ministry said this is a move towards an ultimate single window
At present, ECB clearances up to $10 million are handled
by the RBI. The government is likely to double the threshold in the policy to be announced
for 2000-2001. Under the automatic clearance system, companies will now be allowed to seek
clearances from the RBIs regional offices, against the present system of clearances
by RBI Main office in Mumbai. The clearances at the finance ministry level will be
simplified. There will be only three stages thereby limiting an applicants visit to
the North Block to three.
CARE gives lower rating to IFCI plans
Mumbai: The Credit Analysis & Research has assigned A-plus (adequate
safety with relatively higher standing within the category) rating to the debt programmes
of the Industrial Finance Corporation of India and an even lower A (adequate safety
rating) to its proposed preference share issue of Rs 350 crore. CARE"s A rating is
three notches below the one assigned by IFCI-promoted rating agency Icra and two notches
below that assigned by Duff & Phelps Credit Rating India.
Analysts say the lower rating by CARE will force IFCI to
pay a premium of 0.35 to 0.40 per cent for its debt programmes compared with other
HDFC Bank plans debit card
Kochi: HDFC Bank is launching an international debit card. The card will
be launched in tie-up with Visa in few weeks. The facility will enable customers of
the bank to use the card in the ATMs installed in the branches of the bank spread all over
the country and at the ATMs of three major multinational banks, Citibank, Stanchart and
Amex in any part of the world.
Portuguese bank comes back
Mumbai: Portuguese bank Banco Nacional Ultramarino, which left India in
1961, is coming back. The bank has opened a representative office in Mumbai and an
extension office in Goa. The bank intends to provide offshore trade financing to Indian
companies and liaisoning for facilitating trade between India and Portugal. It will expand
its activities in due course of time.
The bank is an international banking arm of the
government-run Caixa Geral de Depositors Group, which is the largest bank of Portugal with
net assets of about $45 billion.
Softbank plans acquisition
Tokyo: Internet investor Softbank Corporation says it hopes to take over
a large failed Japanese bank. The news comes after Softbank has announced it had slipped
deeper into red for the second straight interim period, due to losses from the sale of a
US subsidiary. Softbank said it has filed a proposal to acquire one of Japans
biggest problem banks, Nippon Credit Bank with a team of major Japanese firms. Joining
Softbank in the bid are Ito-Yokado, a retailing group, and its consumer financing company
Orix Corporation as well as casualty insurer Tokio Marine & Fire Insurance.
PF trustees for higher rate of interest
New Delhi: The Central Board of Trustees of the Employees Provident Fund
is wanting a hike in the minimum yield from the present 12 per cent per annum to 13 per
cent per annum. The Central Board of Trustees, an autonomous body, is about to convene a
meeting to discuss the matter and to make a recommendation to the government.
The yield rate on provident fund is a benchmark for a
number of investments, The Central Board of Trustees wants to provide a higher rate of
interest as a labour-friendly measure.
Insurance venture needs more than Rs 100 cr
Mumbai: Companies wanting to set up insurance companies in the private
sector will need to bring in much more than the stipulated Rs 100 crore, says B.K.
Chaturvedi, special secretary for insurance in the finance ministry. He said the initial
capital would be utilised in the first couple of years on account of the stringent
With a start-up capital of Rs 100 crore, a life insurance
company will be in a position to underwrite business of up to Rs 3,000 crore only. If this
was the size of the business, it will be an unprofitable proposition, he said.
Health insurance venture
New Delhi: General Insurance Corporation of India and its four
subsidiaries, Oriental Insurance Company, New India Assurance, National Insurance Company
and United India Assurance are to have 20 per cent stake each on the proposed management
services company for health and medical insurance schemes. The heads of the five companies
are meeting shortly to finalise the plans for the new company.
It is set to be launched in April-May 2000 and will start
operating from Mumbai. Later it will launch centres in other cities and towns. The company
will enter into tie-ups with various hospitals in the country.
Play by rules,
foreign insurers told
New Delhi: Insurance Regulatory and
Development Authority chairman N. Rangachary has warned foreign insurance companies
wishing to enter India in the wake of privatising the insurance sector to abide by the
rules, especially the 26 per cent cap on investment by foreign companies. "The
law has been kept simple and clear. It will provide a maximum 26 per cent stake to foreign
insurers and 74 per cent to an Indian company. And the Indian company must bring down its
stake to 26 per cent within 10 years," Mr Rangachary told a seminar arranged by the
Federation of Indian Chambers of Commerce and Industry.
Mr Rangachary also said a company registered and listed in
India would be treated as an Indian company. He, however, admitted that this is a grey
area and the the issue would be decided if and when a proposal is put forward.
AIG plans stake in Tata
Mumbai: US insurance major American International Group is learnt to have
initiated talks with the Tata group to acquire a stake in Tata Asset Management. It is
also understood that the Tata group will buy out the 20 per cent stake held in Tata Asset
Management by Dresdner RCM Global Investor Holdings in order to help AIG come in.
AIG had signed a memorandum of understanding with the Tata
group for the life insurance business in India. AIG had earlier planned to have a
strategic partnership with Infrastructure Leasing & Financial Services for the mutual
fund business and the Tatas for life insurance.
Cigna ends ties with
New Delhi: The three-way partnership between US insurance company Cigna,
Infrastructure Leasing & Financial Services and the late Parvinder Singh of Ranbaxy
has ended with the expiry of the memorandum of understanding. The MoU has not been renewed
as Cigna has decided to sell its global property and casualty business.
Meanwhile, Cigna has already set up a health management
services company in Bangalore and has an insurance representative in India.
New trademarks law coming
New Delhi: The government will bring in a new trade mark law through the
Trade Marks Act. The cabinet has approved the decision to repeal the Trade and Merchandise
Marks Act, 1958. The proposed amendment s will make the law on trademarks simpler, more
effective, flexible and transparent, a government official said.
wants more allies in India
Singapore: Munich-based insurance major Allianz is in search of more
joint venture partners in India for its non-life insurance business. The company has an
agreement with Alpic Finance, a non-banking finance company, for the non-life insurance
business. It has also said it is talking to at least three regional private banks for life
The companys director and
chief executive officer for Asia Pacific Michael Diekmann said Alpic will be an equity
partner in both ventures.
Govt acts to
make CAs accountable
New Delhi: The finance ministry has set up a monitoring mechanism to make
chartered accountants acting as auditors accountable for any lacunae in the tax audit
reports submitted by an assessee. The income tax department will now be referring all
cases of irregularities in audit or shoddy audits to the Institute of Chartered
Accountants of India, which will take action against the chartered accountant auditors if
the complaints are found valid.
Capitalisation norm must for foreign equity
New Delhi: The government has clarified that the minimum capitalisation
norm of $0.5 million is a must for non-banking finance companies having foreign equity for
all permitted non-fund-based activities undertaken by them.
The earlier guidelines provide for a minimum
capitalisation norm of $0.5 million for certain activities, which were non-fund-based and
only advisory or consultancy in nature irrespective of the level of foreign equity
Lakshmi Vilas Bank plans
Coimbatore: The Lakshmi Vilas Bank, one of the private banks, plans to
issue bonds aggregating Rs 30 crore on a private placement basis, with a greenshoe option
of Rs 20 crore. The bond issue is likely to have a coupon rate of around 12.75 per cent
and is expected to hit the market within the next one month. The funds will strengthen the
banks tier II capital and will help it to shore up its capital adequacy ratio.
list for divestment
Mumbai: Leading financial institutions have prepared a paper listing
nearly 12 public sector units in which the government can disinvest its stake. The
government proposes to meet a disinvestment target of Rs 10,000 crore in 1999-2000.
The companies identified are said to include Indian Oil Corporation, Oil and Natural
Gas Corporation, National Aluminium Company, Gas Authority of India and Computer
Maintenance Corporation. The institutions are understood to have suggested that the
government may try a combination of domestic issues, warehousing of shares with the
institutions and overseas issues as the modes for the disinvestment.
The institutions, comprising Industrial Development Bank
of India, ICICI, Life Insurance Corporation of India, Unit Trust of India and
Infrastructure Development Finance Corporation, had prepared the paper at the instance of
finance minister Yashwant Sinha.
to raise funds for Gujarat expressway
Mumbai: SBI Capital Markets has bagged the mandate to advise, structure
and raise funds for the Ahmedbad-Mehsana highway project, coming up in Gujarat on a
build-operate-and-transfer basis. The estimated cost of the four-lane 63-kilometre
stretch, which will employ the toll system, will be Rs 300 crore. The Industrial
Development Bank of India will extend debt fund for the project and SBI Caps intends to
raise additional funds from commercial banks.
Bank plans insurance company
New Delhi: Public sector Corporation Bank is planning to enter the
insurance business once the sector is privatised. The bank is holding discussions with
foreign insurance companies and it has drawn a basic framework for the plan. The bank may
float a subsidiary for the purpose.
The bank has also announced that it is seriously
considering entering the e-commerce business.
from Karur Vysya Bank
Chennai: Private sector Karur Vysya Bank is launching its speed
collection and payment services for corporate customers. The bank is also introducing
instant funds transfer using its own Intranet.
The bank plans to introduce a slew of products in order to
enhance value addition to customers and increase its own business growth. The products
will include special savings scheme for depositors and offering retail loans and housing
loans at competitive rates.
Mumbai: Duff & Phelps Credit Rating India has rated the Industrial
Finance Corporation two notches below the rating accorded to it by Icra for its long and
medium term rupee debt obligations. Duff & Phelps Credit Rating India is the first
agency apart from the IFCI-promoted Icra to rate IFCIs debt obligations.
Duff & Phelps Credit Rating India has assigned an Ind
AA- (high safety with relatively lower standing within the category) rating to the Rs
1,500-crore long-term debt instruments, the Rs 1,500-crore medium-term debt instruments,
the Rs 350-crore worth of preference shares and a fixed deposit programme of IFCI. Its
short-term instruments have been given an Ind D-1+ rating.
Bank formalises bid on NatWest
London: Royal Bank of Scotland Group made it public that it is seriously
considering to bid for the National Westminster Bank by submitting a merger notice to
Britains Office of Fair Trading.
National Westminster is already subject of a $35.71
billion acquisition bid by Royal Banks archrival Bank of Scotland. Royal Bank of
Scotland is reported to be in parleys with Spanish bank BSCH, which owns nearly 10 per
cent stake in Royal Bank, for a united bid for NatWest. Meanwhile Italian bank Sanpaolo
IMI is also holding talks with BSCH and Royal Bank of Scotland for a planned $40.56
billion bid for NatWest.
New Delhi: The inflation rate rose to 2.95 per cent for the week ended 23
October. The recent increase in diesel prices is said to be one of the reasons for this
increase. The annual rate of inflation, based on the wholesale price index, rose for the
fourth consecutive week.
Mumbai: The Industrial Development Bank of India has drawn a plan to
restructure its non-performing assets and high interest costs, the factors that pulled
down its profits in the first half of the current financial year. IDBIs chairman and
managing director G.P. Gupta said the financial institution will do a stringent reworking
of the non-performing loans, involving extending of maturity in cases which are deemed
The institution is also considering reducing interest
rates for some of its borrowers as they find repayment difficult due to high rates. The
condition will be that they pay 50 per cent pre-payment premium.
Bank, Spanish bank in bid for NatWest
London: Royal Bank of Scotland is talking to BSCH of Spain about a joint
effort to bid for National Westminster Bank of Britain. Royal Bank said it is monitoring
the situation but added it "never commented on speculation".
The Sunday Times said the counter-bid will come
next month and will be a cash and share offer valuing NatWest at $42.20 billion.