5 july 2003

sisi, tata aig sign agreement to train insurance advisors
chennai: the small industries service institue (sisi), chennai, has inked a pact with private sector life insurance company tata aig to train unemployed youth as insurance advisors. the programme, 'creative intercrop career opportunity,' will ensure self-employment for youth ready to take up new ventures, sisi director vs karunakaran and tata aig zone head (south) sushanto mukerjee told reporters here on friday. under the mou, sisi will identify youth who could be trained to sell insurance in accordance with irda regulations and tata aig will train and recruit them as advisors after they get their licence from irda. to begin with, 60 candidates will be selected for training after an objective entrance test, karunakaran said. initially the programme will be confined to chennai and later extended to other parts of the state. sisi will launch a month-long programme to develop entrepreneurs ensuring self-employment in biotech ventures from 21st of this month, karunakaran said.

dena bank plans more tie-ups for atm sharing
chennai: dena bank plans to enter into tie-ups with banks to share atms, according to the bank's chairman and managing director a g joshi. dena bank has a similar tie-up with corporation bank. he said that the bank is one of the more technologically advanced public sector banks, with 99.8 per cent of the metro and urban branches computerised. also, 300 branches were interconnected, and customers could do 'multi-branch banking' in these branches, he said.

sbi's rib mop-up products to be named soon
thiruvananthapuram: the state bank of india (sbi) has worked out new security products to retrieve a chunk of the rs 25,000-crore resurgent india bonds (rib) as they get closer to maturity. after consultation with rbi, these will be named this month, according to sbi group chairman a k purwar. the bank targets recouping at least 35 per cent of the total rib outgo, purwar told reporters on the sidelines of an office-opening function, here, in reply to a question. the five-year ribs, targeting nris, are due to mature this year.

exim bank extends line of credit to absa bank
mumbai: exim bank has extended a line of credit of $10 million to absa bank, the largest commercial bank in south africa, to support india's exports to that country. an agreement to this effect was signed in pretoria on friday by p r dalal, general manager, exim bank and peter gordon, head-international banking, absa bank, said exim bank in a press release. exim bank's line of credit affords a risk-free, non-recourse export financing option to indian exporters. under the facility to absa bank, the importers from south africa are required to make advance payment of 10 per cent of contract value to the indian exporters and the balance 90 per cent of it would be reimbursed by exim bank to the indian exporters, upfront upon the shipment of goods, said the release. india's exports to south africa amounted to $351 million during the year 2001-02, registering a growth of 13.8 per cent over the previous year. agriculture and processed food products, transport equipment, cotton yarn, fabrics, ready made apparels, madeups, machinery and instruments and manufacturers of metal were the principal items in the export basket.

lichfl says it is open to interest rate cut
new delhi: indicating another cut in home loans, lic housing finance (lichfl) on friday said it was open to it, while aiming at a rs 2,500 crore mop up in 2003-04 from both domestic and overseas markets and 50 per cent rise in business. "if the market forces permit and cost of funds go down, there is always scope for it (cut in interest rates)," lichfl chief executive sc jain said here. addressing reporters after the opening of its property information centre, which gives information on properties and price range, he said at present the soft interest rate bias continues and is favourable for further cut. pointing out that the current cost of funds stood at 7.6 per cent, he hoped it would be brought down to 7.0 per cent. lichfl's interest rate ranges from 8.75 per cent to 9.75 per cent for floating rate schemes of different tenure and for the fixed rate option, it ranges between 9.75-11.5 per cent. he, however, said there had been poor response to the fixed interest rate scheme and added that a customer could shift from fixed to floating by paying one time payment of 0.5 per cent on the amount taken as loan. on borrowings, jain said "we have set a borrowing target of rs 2,500 crore this year, which could be mobilised from diverse sources, including external commercial borrowings (ecbs).

4 july 2003

kerala banks sweat it out
thiruvananthapuram: kerala banks have sweated out 2.74 per cent haul-up in their credit deposit ratio in the state over the last ten months. at the same time, its investment-linked cd ratio (worked out factorising investments to bank advances) has hit an all-time high of 51.45 per cent. according to the report made to the state level bankers committee (slbc) meeting, convened by canara bank, here, the cd ratio has climbed to 45.47 per cent in march 2003. this was 42.73 per cent in june 2002, and 44.6 per cent in december 2002. the priority sector lending (psl) was feared to go slack since as on december 2002, only rs 6,674 crore could be achieved. however, amply crossing the rs 8,912-crore target, psl has hit rs 11,867 crore on march 2003. in the march 2002-march 2003 period, deposit growth was only 14.99 per cent. the growth of nri deposits has been at 16.96 per cent. advances, meanwhile grew at an appreciable 22.41 per cent, explaining the progress in cd ratio. as on march 2003, the total deposits in kerala banks is rs 59,399 crore. of this nri deposits account for rs 28,695.5 crore. the advances total to rs 27,006.5 crore. in addition, the banks have invested rs 30,559 crore in securities. from 42.71 per cent in march 2001, the cd ratio had gone up a tad to 42.73 per cent in june 2002. for the last 10 years, the sagging cd ratio had been a sore spot between banks and the successive governments in power in the state.

rbi dates for line of credit on exports to sri lanka
mumbai: the reserve bank of india (rbi) has fixed the terminal dates for opening letters of credit and utilisation of credit by indian exporters under the line of credit (loc) of $5 million to hatton national bank of sri lanka as november 19, 2004 and may 19, 2005, respectively. the credit became effective from may 20, 2003 and is available for financing export from india of capital goods, plant and machinery, industrial manufactures, consumer durables and other items which are eligible for being exported under the exim policy and related services to buyers in sri lanka, rbi said in a notification to the authorised dealers (ads) in foreign exchange on thursday. export-import bank of india (exim bank) has concluded an agreement with hatton national bank ltd (hnb), sri lanka on february 12, 2003, making available to the latter, a loc up to an aggregate sum of $5 million.

nhb sells entire stake in vysya bank housing finance
mumbai: national housing bank (nhb) has sold its entire stake in vysya bank housing finance (vbhfl) to the promoters of dewan housing finance corporation ltd (dhfl). nhb has around 5.30 per cent holding in vbhfl, which is now under the management control of kapil wadhawan-led dhfl, following its acquisition of 85.91 per cent stake in vbhfl. however, sources in the housing finance sector believe that the nhb sold off the stake for a consideration of nearly rs 1.50 crore, at the rate which dhfl bought out stakes in the vbhfl. dhfl managing director kapil wadhawan declined to comment on this issue. dhfl has acquired the total stake in vbhfl for rs 23.20 crore.

sbi home loan package for kerala varsity staff
thiruvananthapuram: state bank of india (kerala circle) has entered into a memorandum of understanding with the university of kerala, under which the bank proposes to extend housing loans under special package to the university staff (both teaching and non-teaching) with immediate effect. the scheme is similar to the package extended by the bank to employees of the mahatma gandhi university, kottayam, last month. all employees who have put in two years of permanent service are eligible for these loans. the maximum amount of loan that the staff can avail themselves of has been fixed at the equivalent of 60 times the monthly basic pay or 90 per cent of the project cost. loans are available for construction/purchase of new houses/flats, repairs/renovation and for takeover of existing loan accounts from other institutions. they are repayable over a maximum period of 18 years. the interest rate applicable would be 8.75 per cent per annum (fixed) for loans up to rs 5 lakh and 9 per cent for loans above rs 5 lakh.

new india to extend cover to sbi loanees
mumbai: new india assurance company and state bank of india have joined hands to provide accident insurance cover to all loanees of the bank availing housing and car loans. the insurance scheme has been designed such that the premium will be entirely borne by sbi, instead of the loanees, said a press release. housing and car loans disbursed from all the branches of sbi will come under the scope of the agreement from 1 july 2003. if the loanee dies due to accident, the entire outstanding loan with interest as on date of death will be paid by new india assurance to the bank and the account squared off, the release said. an mou to this effect has been signed by a v purushothaman, director and general manager of new india assurance, and t s bhattacharya, chief general manager, sbi.

3 july 2003

tata aig gives rs 1,865-crore life cover to ge group staff
mumbai: tata aig life insurance company has provided life insurance cover to 17,226 employees of ge group of companies in india for a total sum assured of rs 1,865 crore. under this arrangement, tata aig life will provide group term life cover and presently this cover encompasses 21 group companies (operating in india) in the ge fold with few more expected to partake. ge has opted for the graded sum assured option whereby the sum assured of the insurance policy was based on an employee's grade in the company, it added. ge india president and chief executive officer scottbayman says: "at ge, employee care is important to us. the tie-up with tata aig is one more initiative in this direction as it seeks to provide a comprehensive and innovative life insurance package to our employees that will help meet the financial needs of their families and secure their future." tata aig life insurance company managing director ian j watts says: "employee care is the time-tested mantra to ensure employee loyalty and one of the best ways to do this is through group life insurance cover." in two years of operations, tata aig life has extended group life insurance cover to over 100 companies in india, including 16,000 employees of wipro for a sum assured of rs 876 crore. tata aig general insurance company has posted more than 200 per cent rise in premium income at rs 240.8 crore in the financial year ended 31 march 2003, compared to rs 81.6 crore recorded during the previous fiscal. the rise is due to a 'robust topline growth through a combination of consumer and corporate insurance sales' during the year under review. the company posted a 100 per cent increase in the number of policies at 1.88 lakh, of which 8,114 policies were issued to the corporate sector, the release said. tata aig settled over 23,000 claims, totalling rs 59 crore during the year under review, it added.

bank of america reports 2% drop in profit
mumbai: bank of america (boa) has reported a close to 2 per cent drop in profit to rs 85.19 crore for the year ended 31 march 2003 from rs 86.63 crore in the previous year. the boa franchise in india, which includes the primary dealership arm (banc of america securities india pvt ltd), increased its profits to rs 93.44 crore (rs 92.66 crore). the bank, which is essentially focussed on corporate banking, scaled up its advances by 12 per cent during the year to rs 3,298.14 crore (rs 2932.58 crore). the net interest income of the bank was pegged at rs 127.23 crore while other revenue added up to rs 79.33 crore, said the bank in a press release.

syndicate bank revises educational loan scheme
bangalore: syndicate bank has come out with revised educational loan scheme which has waived the third party guarantee.

the loans will be given at the bank's prime lending rate of 11.5 per cent to meritorious students to pursue higher studies in india and abroad. the scheme under the brand name, syndvidya, offers a maximum loan of rs 4 lakh. in addition, students can avail a second loan to meet the specific increase in tuition and hostel fees, which they might not have anticipated while availing of the primary loan. as a special gesture, students will also be permitted to take the loan from any branch of the bank, says michael bastian, chairman and managing director of the bank. he said the scheme has been restructured as part of the larger commitment of the bank for social and corporate responsibility and aimed at increasing the portfolio by 100 per cent this year from the existing rs 70 crore. as part of the campaign, branch managers have been asked to contact the educational institutions in their areas and market syndvidya as an attractive loan product structured for the students.

canara bank to start 10 more branches in kerala
thiruvananthapuram: canara bank, which is set to commission its fourth regional office in kerala, will open around 10 more branches and five extension counters in the state during the current year. the bank already has four reserve bank of india licences and these will be utilised for opening branches at pettah and kazhakkottam in thiruvananthapuram district, angamaly in ernakulam district and at kozhikode. these apart, 25 more atms will also be put in operation in the state during the year, says n. kanthakumar, executive director. an exclusive all-woman branch in thiruvananthapuram is also on the agenda of the bank. the bank, which has 238 branches in kerala, is opening a new regional office at kollam, taking the total number of regional offices to four in the state. the office will cover 48 branches in thiruvananthapuram, kollam, kottayam and pathanamthitta districts. kanthakumar says the commissioning of the new regional office would usher in more effective and efficient financial intermediation that would catalyse further growth and progress in the region.

lakshmi general finance raises rs 35 crore
chennai: lakshmi general finance (lgf) has raised rs 35 crore of its proposed fund-raising programme of rs 100 crore through a debenture issue. the remaining rs 65 crore will be issued shortly. company officials say the funds were arranged at rates below 6.5 per cent. the funds are being raised for its working capital requirements. the company has retained the maaa rating given by rating agency icra. lgf had disbursed rs 406.16 crore in 2002-03 under hire purchase/loans against hypothecation of assets, registering a growth of 21.17 per cent. it clocked a net profit of rs 16.65 crore.the company's capital adequacy ratio was at 17.9 per cent, while the net npa ratio was 1.42 per cent in march 2003

2 july 2003

rupee gains by 2 paise
mumbai: the rupee closed higher by two paise against the dollar at 46.4550/4650 on tuesday. the domestic currency got support from the central bank, which enabled the rupee to strengthen. on monday, the domestic currency lost 8 paise due to mopping up of dollars by the reserve bank of india and closed at 46.47/48.

nhb posts 164% growth in refinance disbursements
mumbai: national housing bank (nhb) has registered a 164-per cent growth in refinance disbursements that reached rs 2,710 crore during the financial year ending june 30, 2003. the housing refinance institution had disbursed rs 1,024 crore during the same period last year. the sharp increase in disbursals was mainly on account of a liberalised refinance scheme for housing finance companies and commercial banks. "in view of its competitive interest rate structure and flexible terms of lending, the scheme found favour with many housing finance companies and scheduled banks," a company release said here. the new scheme, introduced last year, gives the borrowing institution greater flexibility in interest rate on fixed and floating rate basis and shorter repayment period. besides, the institutions are also allowed to convert interest rate on loans from fixed to floating and vice versa and are charged minimal penalty for repayment, the release said. the nhb charges interest ranging from 7.10-7.95 per cent on fixed rate loans and 6.90-7.75 per cent on floating rate basis for a five-year tenure. it has announced a further cut of 25 basis points for loans from june. during the recently closed financial year, nhb raised rs 1,940 crore through capital gains bonds and rs 575 crore through tax-free bonds besides arranging tier ii capital of rs 400 crore. the incremental cost of borrowing for the institution has come down to 6.03 per cent, it said.

syndicate bank campaigns in dakshina kannada
mangalore: as part of the ongoing campaign to popularise its syndnivas housing loan scheme, syndicate bank conducted another awareness programme in the sullia taluk of dakshina kannada. according to a press release, the bank offers housing loans under `attractive reduced interest rates' under the syndnivas scheme. branch managers from various branches in sullia taluk attended the programme, the press release has added.

indusind bank forays into lucrative gold trading
mumbai: indusland bank is entering into bullion trading business across 9 centres. being a business of thin margins, few banks are optimistic about it. the private sector bank aims to capture a 15-20 per cent of rs 25,000 crore per annum gold import market in the first year of its operation, said the bank in its press release. gold is brought into the country mainly through designated banks or through nris returning home. the role of an intermediary between the overseas suppliers and the domestic buyers without itself stocking the yellow metal is what indusind bank plans to do. the bank, which has set a minimum lot size of 10 kilogram plans to do the business in ahmedabad, bangalore, chennai, coimbatore, jaipur, kolkata, mumbai, new delhi and secunderabad, according to the release.

iob adds rs 800-crore fresh advances in two months
chennai: indian overseas bank (iob) has added fresh advances of nearly rs 800 crore during the first two months of the current fiscal, s.c. gupta, chairman and managing director, said on tuesday. the advances portfolio was now around rs 200 crore over the march 2003 level of rs 17,450 crore, after a dip of around rs 600 crore in april 2003. he said that the bank had targeted an incremental growth in advances of rs 2,750 crore for the current fiscal. this was around rs 500 crore more than the growth of around rs 2,200 crore in the last two years. gupta said that a major part of the growth in advances would come from the retail and trade advances portfolio. housing loans segment, which saw disbursements of the order of rs 591 crore in the last fiscal are expected to generate rs 700 crore of new business in this fiscal. to achieve the increased credit target of rs 2,750 crore, gupta said, the management had identified 200 "thrust" branches which would be expected to deliver 5 per cent more growth than the average growth for the bank.

fall in interest rates; bank credit growth continues
mumbai: notwithstanding a significant fall in interest rates, the growth in bank credit has decelerated in the past one year. as per the latest data available with the reserve bank of india, the rate of growth of gross bank credit dropped to 13.4 per cent as on june 2003 compared with 24.68 per cent growth in the corresponding period in the previous year. the growth in non-food credit has dipped sharply to 16.47 per cent (24.76 per cent) and growth in food credit has slowed down to 24.28 per cent (40.11 per cent). according to analysts, although banks have dropped the lending rates post-monetary policy (in april 2003), the outstanding gross bank credit in the system has dipped by around 1.5 per cent over the past three months alone, from rs 7,41,770 crore in march 28 to rs 7,30,653 crore as on may 30. again, in the first fortnight of june, gross bank credit has dipped by rs 524 crore to touch rs 7,70,130 crore.

stanchart securitises part of car loan portfolio
mumbai: standard chartered bank has securitised a portion of its car loan portfolio aggregating rs 105.72 crore by way of issue of senior pass through certificates. the foreign bank, which was the originator of the auto loans, will continue to service these loans, according to a stanchart press release. the first asset-backed issuance by standard chartered in the indian market opened on june 25. it received favourable response from several mutual funds and was fully subscribed in two days of being in the market, said the release. the underlying assets for the asset-backed securitisation programme are auto loan receivables from a pool of 4,630 loan contracts with cash flows totalling rs 113.36 crore with a weighted average tenure of 33.10 months.

oscar investment debenture is high safety: icra
kolkata: icra has assigned a conditional laa (so) rating to the rs 75-crore share-backed debenture programme of oscar investments ltd, a company promoted by the ranbaxy group. this is the first share-backed programme of its kind announced by the rating agency. the rating is based on a pledge of ranbaxy laboratories ltd (rll) shares, value & volume triggers and funding mechanism of the debt servicing reserve account to ensure timely payment of obligations. it indicates high safety.

arcil likely to start operations in mid-july
new delhi: the asset reconstruction company of india ltd (arcil), promoted by the state bank of india (sbi), icici bank, idbi and other banks, is planning to start operations by the middle of this month. sbi is also awaiting the amendments in the banking secrecy laws to flag off the credit information bureau of india ltd (cibil), arcil chairman ak purwar said. while cibil will provide vital information about companies approaching banks for loans and reduce the risks of defaults, arcil will assist in the speedy recovery of sticky assets and clean up the balance of banks and fis. "arcil will start operations in july," purwar said, adding the company is awaiting the reserve bank's approval. initially, sbi along with idbi and icici bank decided to promote arcil with 24.5 per cent stake each. but they have decided to recast the equity holding structure and are likely to hold a little less than 20 per cent in acril, slated to start operations with non-performing and stressed assets worth rs 7,000 crore. icici bank, sbi and idbi decided to shed a portion of their pies in order to rope in more number of banks including the bank of india, bank of baroda and uti bank. arcil was registered last fiscal with an initial capital of rs 10 crore. it will create a trust which will float mutual funds after getting the necessary nod from the securities and exchange board of india. the legal documents for transfer and identification of assets to be taken up and other things have been put in place.

karur vysya bank seeks rs 100-cr from nhb
chennai: karur vysya bank (kvb) is planning to procure refinancing facility from national housing bank (nhb) to the tune of rs 100 crore. the bank is also planning to reduce interest rates on housing loans by about 0.5 per cent from the present level of 11-11.5 per cent. the proposal is still under discussion and is yet to be placed before the board. the bank will also develop new home loan products for effective deployment of nhb funds, he said adding refinance is now given at around six per cent. the bank will soon be reducing interest rates on housing loans by another 0.5 per cent to be more competitive in the market. kvb has dispersed about rs 150 crore under its housing loan portfolio since april. during the current fiscal, kvb is targeting deposits of rs 6,500 crore and advances of rs 4,400 crore. the bank is looking at a profitability of rs 165 crore during the year.

vajpayee to launch lic varishtha on 14 july
mumbai: indian prime minister atal bihari vajpayee has decided to launch life insurance corporation's (lic) varishtha pension scheme on 14 july in new delhi. the central government's subsidised pension scheme offers 9 per cent return. the scheme, which finance minister jaswant singh had announced in the budget, was originally to be launched nationwide on june 17 by lic's zonal offices. but last-minute intervention from the big bosses of the ministry of finance forced lic to postpone the launch. ''we are happy that things now stand clear and we will be able to sell the much-awaited product soon. we are not bothered about the political angle to the scheme,'' says a source in lic. targeting over rs 2,000 crore, lic had completed all formalities and received clearances from the ministry of finance and the insurance regulatory and development authority (irda) for the scheme.

1 july 2003

federal bank unveils global visa debit card
kochi: federal bank has launched its international debit card in association with visa international. bank chairman kp padmakumar said it is the first kerala-based bank to provide such a facility to its customers which was part of the its effort to enable them have a convenient and secure mode of payment across the world. the cards would be offered free of cost enabling the customers to withdraw cash at any of the over 8,10,000 visa-enabled atms across 150 countries and also pay for their purchases at over 120 lakh retail outlets globally by direct debit to their bank accounts in india. he felt that the nri segment which accounts for the majority depositors would be the most beneficial.

rbi one-time settlement schemes a failure
new delhi: the reserve bank of india devised one-time settlement (ots) schemes are turning out to be major flop shows. latest figures available with the government and the rbi on the public sector banks' (psbs) performance on the ots front shows that while the `powerful' big borrowers merrily continue cocking a snook at the banks, the smaller and the less influential ones too are steadfastly refusing to fall into the trap laid down for them. details of the four categories of ots schemes listed out in a consolidated form in a paper available with the authorities shows that the only moderately successful scheme to be the banks' own negotiated settlement efforts, with the three other rbi/government schemes hardly evoking any response from the target categories. the three other schemes are the one for non-performing assets (npas) up to rs 10 crore, for npas of loans up to rs 50,000 for small and marginal farmers and the scheme for small loans with limit up to rs 25,000.

frbs 2017 to fetch 5.26 pc
mumbai: the rate of interest on the floating rate bonds (frbs) 2017, applicable for the half-year 2 july 2003- 1 january 2004 shall be 5.26 per cent per annum. the interest rate on frbs 2017 was set at a mark-up (as decided in the auction held on july 1, 2002) over and above the variable base rate, said the reserve bank of india in a press release. the variable base rate based on the average rate of the implicit yields at cut-off prices of the last six auctions of government of india 364-day treasury bills held up to june 25, 2003 works out to 4.92 per cent. the mark-up decided in the auction held on july 1, 2002 was (+) 0.34 per cent. the coupon rate has been fixed accordingly. the variable base rate for payment of interest is the average rate (rounded off up to two decimal places) of the implicit yields at cut-off prices of the last six auctions of government of india 364-day treasury bills held up to the commencement of the respective half-yearly coupon period.

30 june 2003

nhb places tier-ii bonds of rs 400 crore
mumbai: the national housing bank says it has privately placed tier-ii bonds of rs 400 crore. the bonds carry a coupon rate of 5.77 per cent per annum and have a maturity of five years and three months. the bank refinanced primary lending institutions in the housing finance sector. during the period july 2002-june 2003, it released refinance of rs 2,700 crore, an nhb release said. it added that the tier-ii issue would help leverage refinance operations and increase lending limits to housing finance institutions.

state co-op bank plans rs 400-crore loans
thiruvanathapuram: the kerala state co-operative agricultural and rural development bank has programmed to extend loans to the tune of rs 400 crore for various schemes in the current year. of this, rs 164 crore will be made available for new agricultural development projects and land development schemes, while rs 100 crore has been earmarked for starting industrial ventures and for buying of vehicles under the non-agriculture head. k. sivadasan nair, president, told newspersons here on saturday that the bank, which had become one of the frontline housing finance agencies in the state, would disburse rs 146 crore in this sector during the current year. the bank will introduce a gold loan scheme this year for the benefit of the farmers who are members of the primary agricultural and rural development banks in the state. with a ceiling of rs 50,000, the loan will be available for periods of three and six months and one year and depending on the duration of the period, the interest rates will vary between 10 and 11 per cent. nair said the interest on interest levied on the arrears due to the agricultural and rural development banks would be fully waived from july 1.


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