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5 May 2002 Administrator for NDCC Bank
Nagpur: The board of Nagpur District Central Co-operative Bank has been dissolved and an administrator appointed to look after the banks affairs. The bank was involved in a Rs 150-crore government securities scam. Commissioner of co-operatives Ratnakar Gaikwad had served a notice on the bank and appointed district deputy registrar (Nagpur) SB Patil as the administrator.
Nabard set to launch new credit scheme
Ahmedabad: The National Bank for Agriculture and Rural Development is to launch a new credit linked scheme for creation of 18.50 lakh tonne storage capacity in the rural areas of the country. To be named Gramin Bhandaran Yojana, Nabard would provide 75 per cent of the capital investment, while Union government would provide the rest 25 per cent as credit-linked back ended subsidy. The main objective of the scheme is to meet the requirements of farmers for storing farm produce, processed farm produce, agricultural inputs, promotion of grading and standardisation and quality control of the agri-produce to improve their marketability and prevent distress sale immediately after harvest.
4 May 2002 G-Secs dealing through brokers barred
Mumbai: The Reserve Bank of India (RBI) has barred cooperative banks from dealing in G-Secs through securities brokers. The central bank said all state and district central cooperative banks will be required to maintain their investments in G-Secs only in statutory general ledger (SGL) accounts with the RBI or in constituent SGL accounts of banks, primary dealers, depositories and the Stock Holding Corporation of India. The RBI also warned that any violations of the instructions will be viewed seriously by it. The RBI norm stipulates that banks with deposits over Rs 25 crore have to hold G-Secs only in demat form, while those with deposits less than Rs 25 crore have the option of holding G-Secs either in physical or demat form. In its April 2001 credit policy, the RBI had asked cooperative banks to hold their entire statutory liquidity rations in the form of G-Secs. But some cooperative banks that have deposits of over Rs 25 crore were still holding securities in physical form, violating the RBI norm. There are around 52 cooperative banks and over 2,000 unscheduled cooperative banks in India. The state of Maharashtra has 29 district cooperative banks and 639 urban cooperative banks, and the state administration is now keeping a close watch on them. ICICI Bank Q4 net up 13% to Rs 57 crore
Mumbai: ICICI Bank has said its net profit for the fourth quarter of the financial year ended 31 March 2002 has increased 12.8 per cent to Rs 56.88 crore from Rs 50.40 crore for the quarter ended 31 March 2001. Even though the two figures are largely comparable, according to ICICI Bank, the profit for the quarter under review includes two days profit of about Rs 8 crore of ICICI Ltd, ICICI-PFS Ltd and ICICI Capital Services Ltd, which were merged with the bank with effect from 30 March 2002, says ICICI Bank managing director and CEO K V Kamath. Kamath says the bottomline of ICICI Bank will be under some pressure until the cost impact of the sudden cash reserve ratio and statutory liquidity ratio requirement is mitigated. "We raised about Rs 18,000 crore in five months. But the pressure will only be to the extent of the historic portfolios. The cost will be factored in incremental lendings." ICICI Bank executive director Kalpana Morparia says the average cost of deposits of the bank has declined to 7.3 per cent from 7.8 per cent and the net interest margin is currently 2.5 per cent. "The extra provisioning made for ICICIs assets are only for the current year. We do not expect any impairment in existing assets in the future." IOB launches Sanjivani scheme for doctors
Thiruvananthapuram: Indian Overseas Banks Sanjivani scheme, which seeks to provide loans to medical practitioners, has been launched here. Loans are given under the scheme for constructing hospitals, purchasing ambulances, vans and medical equipment, and modernising existing hospitals. The loan ceiling has been put at Rs 1 crore in urban areas, Rs 50 lakh in semi-urban areas and Rs 10 lakh in rural areas. The interest rate has been fixed at 12 per cent for loans up to Rs 2 lakh. Loans above this will attract 14 per cent in rural areas and 14.5 per cent in urban areas. Mortgage of property, National Savings Scheme certificates or Life Insurance Corporation of India policies may be furnished as security for loans above Rs 2 lakh. The margin has been fixed at 15-25 per cent for the purchase of medical equipment and 25-30 per cent for constructing hospitals. The repayment period is five-to-seven years. SIDBI to raise Rs 2,500 crore via debts
New Delhi: Small Industries Development Bank of India (SIDBI) plans to raise Rs 2,500 crore through domestic bonds issues and foreign loans this fiscal to increase credit flow to the small-scale sector. "We are expecting to raise a total Rs 2,500 crore through these domestic and foreign debts this fiscal," says SIDBI chairman P B Nimbalkar. "SIDBI has been allowed in the Budget to issue capital gains bonds under section 54 EC of the Income Tax Act. We are planning to raise Rs 1,000 crore through bonds issue this fiscal." The capital gains bond, which will be floated on an on-tap basis from June-July 2002 onwards, is expected to have a maturity period of minimum three-to-five years, he says. "The interest rate on these bonds will depend on market conditions."
SIDBI is also planning to mop up Rs 900-1,000 crore this fiscal through its priority-sector bond issue, which received overwhelming response mopping up about Rs 1,200 crore last fiscal against a target of Rs 1,000 crore, says Nimbalkar.
He says the bank is negotiating with German Development Bank for a 30-million deutsche mark (about Rs 65 crore) line-of-credit for providing loans to companies eager to adopt a clean technology. Investment Trust FDs put on ICRA watch
Mumbai: The Investment Information and Credit Rating Agency (ICRA) has placed the MA- rating assigned to the fixed deposit programme of the Investment Trust of India (ITI) on watch, with developing implications. The rating indicates adequate safety, said an ICRA news release. ITI has entered into a memorandum of understanding with Franklin Templeton investments for the sale of its 47.5-per cent stake in Pioneer ITI AMC. The sale is subject to a due diligence exercise, which is expected to take about three months.
Investment Trust FDs put on ICRA watch
Mumbai: The Investment Information and Credit Rating Agency (ICRA) has placed the MA- rating assigned to the fixed deposit programme of the Investment Trust of India (ITI) on watch, with developing implications. The rating indicates adequate safety, said an ICRA news release. ITI has entered into a memorandum of understanding with Franklin Templeton investments for the sale of its 47.5-per cent stake in Pioneer ITI AMC. The sale is subject to a due diligence exercise, which is expected to take about three months.
ICICI Bank makes provision for Rs 3,780 crore
Mumbai: ICICI Bank has written down assets of ICICI worth Rs 3,780 crore, following the reverse merger of ICICI with the bank. This means ICICI Bank has provided for Rs 3,780 crore in its balance sheet for 2002-03, making the largest ever provisioning by any Indian financial intermediary.
The writing down of the assets includes additional provisioning of Rs 1,953 crore. This will cushion any future impairment of ICICI's legacy assets.
The additional provisioning with regard to ICICI's non-performing assets (NPAs) is to the extent of Rs 902 Nagpur Bank chairman held
Nagpur: Nagpur District Central Co-operative Bank (NDCCB) chairman Sunil Kedar, an NCP MLA, has been arrested by the Maharashtra CID in connection with the Rs 150 crore securities scam. He was summoned by the CID and interrogated for nearly six hours and finally put under arrest. A request has been made to the Reserve Bank of India to check and stop transactions of Home Trade Ltd, dealing with other cooperative banks in the state. Kedar, a former state minister for energy, had allegedly invested Rs 149.82 crore in government securities, but failed to produce receipts from broking firms.
3 May 2002 ICICI Pru Life ties up with Federal Bank
Kochi: ICICI Prudential Life Insurance Company has entered into a strategic tie-up with Federal Bank for distributing life insurance products.
The tie-up comes in the wake of ICICI Pru Life launching its operations in Kochi in February 2002. Over the past two months, the company has established a network of over 300 advisors and has seen widespread awareness and acceptance of its products, says ICICI Pru Life managing director Shikha Sharma. ICICI Pru Life financial service consultants can now approach Federal Bank customers, based on the referrals from the bank. This alliance expands ICICI Pru Lifes reach to around 2 lakh customers across 30 bank branches in Kerala and 30 in other cities, including a large number of non-resident Indian customers. The two companies have come together with a shared vision to increase awareness of life insurance and highlight its importance in the financial goods basket of the common man. The tie-up with Federal Bank throws open new opportunities, particularly in the vast southern market, says Sharma. Federal Bank chairman K P Padmakumar says the network of branches, for distributing insurance products, will be increased in due course and the bank will fix an individual target for each branch manager as soon the expansion of network is completed. This strategic alliance with ICICI Pru Life is an extension of our philosophy to provide a complete range of financial solutions to our customers. By tying up with Indias leading private life insurer, we can assure our customers of not only a complete, innovatively-designed product range, but also world-class service, says Padmakumar. Dabur CGU to operate under Aiva brand
Mumbai: Dabur CGU Life Insurance Company Pvt Ltd has said it will launch operations in India under the brand name Aviva Life Insurance. This follows the UK-based CGNUs (the parent company of CGU) decision to change its name to Aviva Plc. The re-branding and consolidation of the groups brands will facilitate the group to enter into new markets and will also mean better value for money in terms of advertising and sponsorships, says Aviva Life Insurance director (marketing and distribution strategy) Shah Rouf. The new brand, he says, will create a common internal culture for the company worldwide and will instil a greater sense of direction for the companys employees and policyholders. But Aviva will only be the trading name for the company in India and the legal entity continues to remain Dabur CGU Insurance Company Pvt Ltd, with no change in the shareholding pattern. Aviva Life Insurance, meanwhile, is all set to launch operations in India, pending approval from the Insurance Regulatory Development Authority for its first batch of products. In India, the company has entered into bancassurance agreements with ABN-Amro Bank, Lakshmi Vilas Bank, Canara Bank, and is in the process of finalising a similar tie-up with a multinational bank shortly. Syndicate Bank Q4 net profit at Rs 22.42 cr
Mumbai: Syndicate Banks net profit for the fourth quarter ended 31 March 2002 was at Rs 22.42 crore as compared to Rs 22.13 crore in the corresponding period previous year. The bank has declared a dividend of 12 per cent for the year on a par issue. The total income of the bank stood at Rs 817.40 crore (Rs 800.48 crore). This is inclusive of the interest earned at Rs 762.73 crore (Rs 744.31 crore) and the other income at Rs 54.67 crore (Rs 56.17 crore). The total expenditure of the bank was at Rs 753.20 crore (Rs 757.50 crore). The operating profit stood at Rs 64.20 crore (Rs 42.98 crore). For the year ended 2001-2002, the banks net profit grew to Rs 250.55 crore as compared to Rs 234.94 crore last year. The banks global business surpassed Rs 44,058 crore as at March 2002, comprising deposits of Rs 28,548 crore and advances of Rs 14,510 crore. The growth under deposits and advances were 13.76 per cent and 13.54 per cent, respectively. Investments rose from Rs 10,550 crore to Rs 11,910 crore. The non-performance assets (NPA) recovery during the year amounted to Rs 198.62 crore. The net NPA of the bank as a percentage of its net advances was 4.63 per cent. The banks capital adequacy ratio remained at 11.72 per cent. UTI Bank Q4 net jumps 51%
Mumbai: UTI Bank has reported a 51% increase in net profit to Rs 42.06 crore for the fourth quarter ended 31 March 2002 when compared with Rs 27.92 crore in the corresponding period last fiscal. Total Income has increased 34% to Rs 467.83 crore from Rs 348.73 crore.
The bank has posted a 56% rise in net profit to Rs 134.14 crore in the fiscal 2002 when compared with Rs 86.12 crore in 2001. Total income rose 51% to Rs 1595.4 crore from Rs 1052.62 crore.
The board has recommended a dividend of 20% for the year ended 31 March 2002.
Syndicate Bank Q4 net up 1%
Mumbai: Syndicate Bank has reported a 1% rise in net profit to Rs 22.42 crore for the fourth quarter ended 31 March 31, 2002 when compared with Rs 22.13 crore for the corresponding period last fiscal.
The total income has increased 2% to Rs 817.4 crore from Rs 800.48 crore.
The company has posted a 7% increase in net profit to Rs 250.55 crore in the fiscal 2002 when compared with Rs 234.94 crore for 2001.
The total income has increased 2% to Rs 3158.44 crore from Rs 3073.6 crore.
The board has declared a dividend of Rs 1.20 per share.
ICICI, ICICI Bank merger complete
Tirumala: The technology and human resources integration between ICICI and ICICI Bank is "complete". The employees of both organisations have been informed about their role and duties in February. On the technology front also, since the hardware and software components were identical, there were no glitches in integrating them. ICICI Bank has obtained necessary approvals for starting operations in New York and London. Work is also on to get into West Asia, Singapore and Chinese markets.
2 May 2002 Kotak Mahindra posts Rs 20-cr Q4 profit
Mumbai: Kotak Mahindra Finance Ltd (KMFL) has ended the last quarter of the fiscal year 2001-02 with a net profit of Rs 19.96 crore. KMFL had made a net profit of Rs 12.86 crore in the last quarter of the previous year.
In a press release issued here, KMFL said for the whole year its financing portfolio grew more than 50 per cent, riding mainly on auto loans, which individually grew 90 per cent year-on-year, with new disbursements crossing Rs 500 crore. The company posted a total income of Rs 58.5 crore in January-March 2002 - 21.5 per cent less than Rs 74.53 crore in January-March 2001. Other income has dropped by about Rs 8 crore to Rs 25.70 crore (Rs 13.45 crore). The company has, however, said the two are not comparable because the Q4 2001-02 figures are derived from audited numbers. The total expenditure during the period was Rs 11.44 crore (Rs 12.08 crore) and interest and bank charges amounted to Rs 16.04 crore (Rs 16.58 crore). Depreciation was Rs 8.15 crore (Rs 9.46 crore), while provision for taxation was Rs 4.15 crore (Rs 18 crore). For the year ended 31 March 2002, KMFL has made a net profit of Rs 55.18 crore compared to Rs 49.59 crore for the year ended 31 March 2001. The company said due to a change in accounting standards, it has a deferred a tax liability of Rs 21.70 crore and it will be adjusted from reserves while presenting audited accounts. Tata AIG exceeds rural insurance target
Mumbai: Tata AIG Life Insurance Companys rural programme has accounted for around 11 per cent of all life policies sold by the company for the year ended March 2002, as against the stipulated minimum of 5 per cent. The company has undertaken a pilot programme for rural insurance in Tamil Nadu, which has also been extended to rural markets in Kerala and Karnataka. Plans are also under way to cover Andhra Pradesh and the entire region of four southern states in the months ahead. "Our rural life insurance programme is targeted at all income levels in the rural sector. The myth that the rural poor are not insurable is being challenged with the introduction of affordable products specifically designed to meet the needs of the target market," says Tata AIG Life managing director Ian Watts. The rural programme of Tata AIG was targeted to create an asset for the rural poor in the form of hedging their economic loss in the event of an untimely loss of an earning member. S&P ratings for ICICI Bank post-merger
Mumbai: Standard & Poors (S&P) has that it has assigned its BB long-term and B short-term rating to ICICI Bank following the final Reserve Bank of India (RBI) approval for its amalgamation with ICICI Ltd. S&P said the outlook is negative and the BB/negative/B ratings on ICICI Ltd have been withdrawn. "The RBI also has given ICICI Bank some concession with respect to compliance with priority-sector lending requirements and with the equity exposure ceiling of 5 per cent on advances," says Financial Services Ratings director Peter Sikora. The bank, however, will be required to adhere to all other regulatory requirements. "ICICI Bank has adopted fair valuation of ICICIs assets under the purchase method of accounting for mergers (under Indian GAAP), with the fair value review of the loan portfolio being completed by an external valuer. "Additional provisioning will be made to cover non-performing loans and restructured assets following completion of the fair valuation process. Additional provisioning against standard assets will also be raised as a precautionary measure," says Sikora. APSFC ahead in performance criteria
Hyderabad: The Andhra Pradesh State Financial Corporation (APSFC) has climbed back to the top spot among similar corporations in India during the financial year 2001-02, after a gap of nearly a dozen years. Its top performance was in all the three key operational areas of sanctions, disbursements and recoveries. While its sanctions surpassed Rs 400 crore, disbursements and recoveries reached a new high of Rs 309 crore and Rs 340 crore, respectively, for 2001-02. Buoyed by this impressive showing, the corporation has set a target of sanctioning Rs 410 crore, disbursing Rs 310 crore and a recovery figure of Rs 400 crore for the financial year 2002-03, says APSFC managing director Dr J C Mohanty. The corporation has been able to reduce its non-performing assets to 41 per cent, or an estimated value of Rs 400 crore. Similarly, its outstanding dues are also around Rs 1,000 crore. ICICI Bank to focus on retail, agriculture
Tirupathi: The biggest post-merger challenge for ICICI Bank will be to keep the momentum going, according to ICICI Bank managing director K V Kamath.
"In order to maintain the momentum, the bank will, this year, focus more on retail liabilities and agricultural financing," Kamath said. He and other officials of the bank were here in connection with the inauguration of the first online ATM at the temple town of Tirumala, Andhra Pradesh. This is the 1,005th ATM of the bank in India. Kamath put the size of the retail sector at around Rs 60-70,000 crore, which is growing at a rate of around 40 per cent. "ICICI Bank, with the entire suite of products for the retail customer, will benefit most by the burgeoning growth in the retail sector." About the banks immediate plans, Kamath said the bank will focus on lending to the agriculture sector, making use of service centres like krishi and other cooperatives. The bank will give loans to farmers, with help from cooperatives or other village bodies, for credit appraisal and recovery. "I need six more months to put the platform in place," Kamath said. The new ATM has one unique feature: pilgrims can use the ATM to make offerings to the deity online. Offerings can be made at the ATM in denominations of Rs 51 to Rs 10,001. The amount will be transferred from the customers account to Tirumala Tirupathi Devasthanams account and the customer will receive a transaction receipt from the ATM.
Eventually, the facility will be extended to all the 120 cities where ICICI Bank has ATM centres. At these ATMs the banks customers can make offerings to the Tirupathi god. Today more than half of the transactions at the ICICI Bank take place electronically, as against 5 per cent just two years back, Kamath said. ICICI PruLife unveils 2 pension plans
Mumbai: ICICI Prudential Life Insurance Company has launched two pension products -- LifeTime Pension and LifeLink Pension -- which offer flexibility, for the first time in the country. The plan offers tax benefit under section 80 (CCC), wherein a policyholder gets a reduction in his taxable income to the extent of Rs 10,000 per annum.
The unit-linked pension plans allow the customer to decide on where the funds will be invested, very much like mutual fund plans. The Insurance Regulatory and Development Authority (Irda) has come out with less stringent investment norms in the case of pension plans as opposed to insurance plans. Policyholders can thus decide whether they wish to invest in equity (growth plan), debt (income) and a combination of both (balanced).
Centurion Bank seeks Rs 150-cr capital infusion
Mumbai: Centurion Bank has told Bank Muscat, the only suitor keen on 26 per cent equity stake in the private bank, that it is looking at fresh capital infusion of around Rs 150-160 crore from a strategic investor. A strategic investor would acquire the 26 per cent stake in the bank for Rs 40 crore, and bring in the balance Rs 160 crore through a combination of preferential allotment and rights issue of equity. Bank Muscat has not yet made a commitment, but has told the bank that it would consider picking up equity only after there is clarity in norms on foreign direct investment (FDI) in banking.
ICICI Bank plans new agri products
Chennai: ICICI Bank will target agriculture financing as one of the new growth areas in the future. The bank is currently in the process of developing few innovative products for the agriculture sector. The schemes would be perfected in the next six months. To cater to the agri-business industry ICICI might not prefer the traditional banking channels; instead it would try to develop a cost-effective mechanism. The banks plan is to create service centres through independent business organisations which already have access to the agriculture and farmers. ICICIs thrust on agriculture is seen as part of its de-risking strategy and widening its financing portfolio.
Srei takes 8.7% stake in Feedback
Kolkata: Srei International Finance Ltd has taken a stake of 8.70 per cent in Feedback Ventures Private Ltd (FVPL), through its wholly-owned subsidiary, Srei Capital Markets Ltd. The New Delhi-based FVPL is an integrated infrastructure development group, with special focus on project development, financial advisory services, engineering and project management of core, urban and social infrastructure projects.
1 May 2002 Kotak Mahindra profits up 11%
New Delhi: Kotak Mahindra Finance reported a 11.3 per cent rise in net profit for the year ended March 2002 at Rs 55.19 crore, as compared to Rs 49.60 crore in the previous year. The company has also intitiated steps towards its conversion into a bank, following in-principle approval by Reserve Bank of India, a company release said here. The financing portfolio grew in excess of 50 per cent over the previous year, the release said. Of this, the comercial vehicle financing business was up 90 per cent over the previous year with new disbursements crossing Rs 500 crore, it said, pointing out that this was significant as financing business had a long term growth opportunity on the future banking platform.
South Indian Bank net up 50%
Kochi: The net profit of South Indian Bank has climbed to an all-time high of Rs 62.4 crore growing at a rate of 50.4 per cent. The profit stood at Rs 41.5 crore last year. The board of directors of the Bank has recommended a dividend of 25 per cent. Addressing a press conference here A Sethumadhavan, chairman and CEO of the Bank said the overall business growth rate of 91 per cent achieved by the bank in the last three years is phenomenal by industry standards. SIB's gross profit increased by 61.6 per cent to Rs 172.9 crore. The total business grew by 28.2 per cent to Rs 9,151 crore. Deposits grew 26.8 per cent to Rs 5,920 crore and advances increased by 30.9 per cent to Rs 3,231 crore.
IDFC net up 33%
Mumbai: Infrastructure Development Finance Company has posted a net profit of Rs 186.6 crore for the year ended March 2002. This is an increase of 33 per cent over the previous years profit of Rs 140.4 crore. The board of directors has recommended a dividend of 10 per cent as against 7 per cent last year. The board of IDFI also cleared the proposal of float an AMC for managing Rs 1,000-crore equity capital aimed funding infrastructure projects as proposed in the Union Budget. The fund will be operational by August this year.
Exim Bank net up 11%
Mumbai: The Export-Import Bank of India has recorded a 11 per cent growth in its net profit for the fiscal 2001-02. Profit after tax amounted to Rs 171 crore during 2001-02 as compared to Rs 154 crore in the previous year. The bank would pay a higher dividend of Rs 42 crore to the central government as compared to Rs 38 crore it paid in the previous year. This works out to a payout of 24.6 per cent of the post tax profit of the bank for the year 2001-02. Loans sanctions went up 95 per cent to Rs 4241crore as compared to Rs 2174 crore in the previous year. Disbursements went up 82 per cent to Rs 3453 crore as compared to Rs 1896 crore in the previous year.
30 April 2002 Insurers seek financial enhancement ratings
Chennai: In addition to the normal credit rating, insurers in the US and other western countries are now opting for financial enhancement ratings (FER) introduced by Standard & Poors (S&P) in mid-2000.
FER was designed to show and clarify to capital markets not only how able, but also how willing and likely insurers are to pay claims that they have received, and thereby to show investors that a given bond or transaction is truly enhanced. "FER ratings give capital markets an indication of an insurance companys willingness to pay on structured transactions wrapped by the insurer," says S&P Insurance Rating Group managing director Bob Mebus. "This is especially relevant now given the degree of uncertainty associated with insurance companies willingness to pay quickly and with the rise in the complexity of structured transactions." Today, when structured financial transactions and guarantees are becoming more and more complex, some insurance companies are now providing transparency and a willingness to pay claims as a value-added benefit for their investors. This is the trend now among insurance companies that offer credit enhancement underwritten through an insurance policy where the insurer accepts specified transaction risks, which affect the financial performance of a transaction. What is credit enhancement? Consider this. A municipal authority is selling a bond for a bridge somewhere in the US. The municipal bond, on its own, may be rated rather low, but the issuer may purchase financial guarantee insurance on the bond from a higher rated insurance company. This acts as a guaranty in that the insurance company then takes on some of the risk and in a sense, lends its rating to the municipal bond. These types of transactions were the domains of mono-line bond insurers, who paid claims immediately when called upon. But as the complexity of transactions increased, multi-line insurers entered the fray. These new entrants looks at claims on a denied-first basis and may not always be prepared to settle claims as readily as the investor and bond issuer may believe. "Often it is only those close to the insurance industry are in the know that insurance companies approach claims with a denied-until-proven-otherwise manner, as opposed to a pay-first-no-matter-what basis," says Mebus. So the actual enhancement of the bonds rating may be misrepresented in borrowing the insurance companys own financial strength rating, depending on the willingness of the insurer to pay claims on such transactions. Insurers financial strength ratings do not take willingness to pay into account. "If the bridge has a problem, and the insurance company denies the claim, or takes a long time to pay out, then the bond really is not enhanced at all. For the credit support supplied by insurers, as with other types of guarantors, capital markets want a high degree of assurance, that their claims will be paid if it comes to it," sums up Mebus. HSBC to set up processing centre in Noida
New Delhi: HSBC has decided to relocate its regional processing centre and credit card operations for India from its Connaught Place branch to its newly opened branch in Noida, Uttar Pradesh. The Noida branch, which is the 31st branch of the bank in the country, was inaugurated on 29 April by HSBC chief executive officer (India) Zarir J Cama. Moodys confirms Ba2 rating for IFCI
New Delhi: Moodys Investors Service has confirmed the Ba2 foreign currency issuer rating (the ceiling for such debt in India) of Industrial Finance Corporation of India (IFCI). In confirming the issuer rating, Moodys has relied on the governments support, which was made available to the institution when it wanted to meet its foreign currency obligations. The rating agency has said a possible default on IFCIs commitments to its foreign lenders would seriously impair international confidence in India, a scenario it believed the government would like to avoid at all costs, according to a press release issued here. But Moodys has pointed that despite the recent Rs 1,000-crore recapitalisation, IFCI still faces severe liquidity problems, resulting in at times finding it difficult to repay principal amounts on its local currency bonds. Nagpur bank chairman under CID probe
Mumbai: Nationalist Congress Party leader and Nagpur District Central Cooperative Bank chairman Sunil Kedars passport will be impounded and a central intelligence department probe will be conducted into the alleged embezzlement of Rs 150 crore by the bank, Maharashtra Chief Minister Vilasrao Deshmukh told the state legislative assembly on 29 April.
The cooperation department, in tandem with the home department, will conduct a thorough investigation within a month to detect any irregularities in other district and urban cooperative banks across the state, Deshmukh said. Catholic Syrian Bank net up to Rs 37 cr
Thrissur: The city-based Catholic Syrian Bank has announced a three-fold growth in its net profit for the year 2001-02. The net profit of the bank grew by 330 per cent to touch Rs 37.12 crore (Rs 11.25 crore). This is the highest profit posted by the bank, says bank chairman N R Achan. The return on net assets has also grown beyond the 1-per cent level.
Total capital funds of the bank have grown to Rs 121.26 crore. The capital adequacy ratio (CAR) has also grown to 9.57 per cent, as against the 9 per cent stipulated by the Reserve Bank of India, says Achan. The bond issue of the bank was oversubscribed, and hence closed early on 10 April 2002, as against the planned closing date of 15 April 2002. With the allocation of bonds worth Rs 12.45 crore, the capital base of the bank grew to Rs 133.71 crore, taking the CAR further to 10.53 per cent. Total deposits of the bank grew by 14.97 per cent to touch Rs 3,191 crore (Rs 2,776 crore). As an exercise of prudence and also due to the cautious stand taken towards expansion of risk assets, gross advances were contained at Rs 1,409 crore (Rs 1,419 crore). IFC loan to Sundaram Housing Finance
New Delhi: International Finance Corporation will give a Rs 50-crore loan to Sundaram Housing Finance to help expand its housing loan portfolio.
IFC's loan to Madras-based Sundaram Housing Finance, a subsidiary of Sundaram Finance, will be its first rupee loan in India, according to a press release.
The loan by IFC, the private sector arm of the World Bank, is a part of its broader strategy to give its Indian clients much-needed longer-term finance without imposing currency risk.
Finance Bill passed
New Delhi: The Lok Sabha passed the Finance Bill, 2002 after finance minister Yashwant Sinha rejected the demand for further rollback of tax proposals.
Replying to the two-day debate on the bill, which seeks to give effect to the direct and indirect tax proposals contained in the Budget, he also ruled out tinkering with income tax rates in future saying tax-GDP ratio will be improved through better compliance and administration.
With the passage of the bill by voice vote after adopting all official amendments moved by the minister and rejecting the opposition amendments, the House has completed the third and last stage of the budget process.
Now the bill as amended will go before the Rajya Sabha which returns it before Presidential assent is sought.
29 April 2002
Srei picks up 9% in Feedback Ventures
Kolkata: Srei International has picked up nearly 9 per cent equity in Feedback Ventures for an undisclosed sum.
The shares have been purchased by Srei Capital Markets, the wholly-owned subsidiary of the group's flagship Srei International Finance.
This is the third time in the last few months that Feedback Ventures has placed equity with an investor. In January last, the Thapars of Ballarpur Industries Ltd had picked up 15 per cent stake in Feedback Ventures. Earlier, in November 2001, Westport of Malaysia picked up 10 per cent stake in the company.
Feedback Ventures Private has as its partners HSS Integrated, Malaysia's leading integrated engineering design company. The two Malaysian firm together hold nearly 20 per cent of the company's equity.
SBI board promotes three CGMs
Mumbai: The board of State Bank of India has promoted three chief general managers as deputy managing directors while four general managers have been promoted as CGM.
The three new DMDs include Rajendra Kakkar, A K Kini and B D Sumitra.
The four new CGMs include K C Raute, D Sun-derashyam, S Krishanmurthy, and D Dasgupta.
RBI cuts banks CRR to 5% from 5.5%
Mumbai: Reserve Bank of India (RBI) governor Dr Bimal Jalan, in a meeting with the chief executives of banks, has presented the annual Monetary and Credit Policy for 2002-03.
The statement covered a review of macroeconomic and monetary developments, stance of monetary policy and a wide-ranging package of measures to strengthen the financial system and for development of markets and institutional infrastructure. The governor also dealt with some analytical and practical issues concerning monetary policy, exchange rate and reserves management.
Domestic developments
The governor mentioned that due to the better performance of agriculture and a reasonable growth in the services sector, CSO placed the GDP growth for the year 2001-02 at 5.4 per cent against 4.0 per cent in the previous year. The annual rate of inflation during 2001-02 was highly favourable at 1.4 per cent as against 4.9 per cent in the previous year.
Referring to monetary developments during 2001-02, the governor mentioned that the growth in money supply was in line with the projected trajectory, and lower than 16.8 per cent a year ago. The growth in aggregate deposits of scheduled commercial banks at 14.3 per cent was lower than that of 18.4 per cent in the previous year. The governor mentioned that the increase in reserve money during 2001-02 at 11.4 per cent (Rs. 34,514 crore) was higher than that of 8.1 per cent (Rs 22,757 crore) in the previous year.
The expansion in reserve money is attributed entirely to the increase in net foreign exchange assets of the RBI. Non-food credit registered a lower growth of 12.8 per cent (Rs 60,411 crore) as against an increase of 14.9 per cent (Rs 61,176 crore) in the previous year, reflecting slackness in industrial production.
The governor mentioned that although the combined slippage in the market borrowing programme of the centre and the states did not put undue pressure on interest rates due to the availability of ample liquidity and depressed credit demand, he reiterated the urgent need to contain fiscal deficit, as also emphasised in the Budget speech of 2002-03.
Jalan said this will improve the task of monetary and debt management from a medium-term perspective. A reduction in fiscal deficit will impart flexibility to the interest rate regime and, in turn, release government resources for the much-needed investment in physical and social infrastructure. Fiscal consolidation will also have a favourable effect on inflationary expectations in the economy.
The governor mentioned that despite the high level of government borrowing programme during 2001-02, in view of low credit demand from the commercial sector, it was possible to maintain adequate liquidity and a softer interest rate environment, as reflected in the perceptible shifts in the yields across maturity spectrum, without engendering inflationary conditions in the economy.
Highlighting that easy liquidity conditions and softer interest rate environment made the present overall monetary conditions reasonably comfortable, the governor, however, cautioned that as the experience of recent years confirms, monetary management has now become much more complex because of several factors, such as the ongoing integration of financial markets across the world, the phenomenal increase in financial turnover, liberalisation of the economy, and the rapidity with which unanticipated domestic and international tremors get transmitted to financial markets across the world because of the new technology.
It is important to emphasise that changes in economic circumstances may again make it necessary to take appropriate monetary measures, which may not be in consonance with the present easy liquidity conditions. He said keeping these realities in view, it was particularly important for banks and financial institutions to make adequate provisions for unforeseen contingencies in their business plans, and fully take into account the implications of changes in the monetary and external environment on their operations.
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