24 august 2001

non-life premia to go up
new delhithe provisions of the proposed insurance (amendment) bill, currently open in parliament, seeks to push up non-life premiums by as much as 12.5 per cent.
senior insurance officials say that formerly in a regulated insurance market, no room was left for intermediaries. however, at present with brokers getting a foothold in the indian insurance framework, public sector general insurers will have to add on the additional cost of selling through an intermediary to the premiums and unless they do so, they will not be in a position to attain profits and survive in the
competitive market.
moreover, almost all these psu insurers are in red as a result of underwriting losses. with fire premia down by 30 per cent and ending of cross subsidisation, the companies have no option but to pass the buck on to the consumers.

rbi clears way for 3-tier corporate debt revamp plan
mumbaithe reserve bank of india (rbi) has set the stage for the creating a three-tier corporate debt restructuring system (cdr) in the country, which will apply to all multiple banking accounts, syndicates, and consortium accounts with outstanding exposure of rs 20 crore and above with the banks and financial
institutions (fis).
the cdr system will comprise of the following: standing forum, empowered group and cdr cell. one of the salient features is that reference to cdr system could be triggered by: (a) any or more of the secured creditor who have minimum 20 per cent share in either working capital or term-finance, or (b) by the
concerned corporate, if supported by a bank or fi having stake as in (a).
the objective of the cdr framework is to ensure timely and transparent mechanism for restructuring corporate debts of viable entities facing problems, outside the purview of board for industrial and financial restructuring, debt recovery tribunals, and other legal proceedings.

21 august 2001

rbi to come out risk-based supervision system
mumbai--the reserve bank of india (rbi) plans to come out with a bank-specific risk-based supervision (rbs) system from the last quarter of the financial year 2002-2003.