13 september 2003
plans two schemes for nris
mumbai: state bank of india will be launching two
new deposit schemes for non-resident indians - pravasi
vaibhav and pravasi samriddh - on 24 september for a limited
period. pravasi vaibhav is a deposit scheme denominated
in rupees with payment of maturity proceeds in us dollars.
the foreign currency amount received from the customer
will be converted into rupees by the bank, to issue an
nre special term deposit receipt (nre-stdr) for one year.
the yield on pravasi vaibhav will depend upon the interest
rates on nre deposits and cost of forward cover prevailing
on the date of issue. at present, sbi offers 3.90 per
cent on nre deposits with a maturity of up to one year
to less than two years.
the stipulated minimum amount for deposits is $10,000
or equivalent. the tenure is one year and the maturity
proceeds will be paid in us dollars. the pravasi samriddhi
deposit, which will be booked at the bank's off-shore
banking units (obus) at bahrain, nassau and seepz (mumbai),
offers nris opportunity for investment on floating or
fixed rates of interest, on cumulative and non-cumulative
basis. this deposit will be denominated in us dollars
and euro. the stipulated minimum amount is $5,000 and
the tenure of deposit will be 1, 2, 3 and 5 years.
vysya bank to raise rs 200 crore via bonds
bangalore: ing-vysya bank has placed its tier-ii
capital bonds in the markets at 6.25 per cent amounting
to rs 200 crore. banking sources were quoted as saying
that the bonds, rated 'aa plus' by both fitch and crisil,
have a 10-year maturity profile without any early exit
options. banks with comfortable tier-i capital situation
have opted for tier-ii bond issues to increase the risk-weighted
under current guidelines banks are permitted to have up
to 45 per cent of their capital in the form of tier-ii.
ing had total capital funds equivalent to rs 779.5 crore
or equivalent of 9.86 per cent of the capital to risk-weighted
assets. of this, tier-i capital alone was in the region
of about 7 per cent. this allowed it substantial flexibility
to raise low cost tier-ii capital, the sources said. the
pricing for ing vysya bond issue is under 100 basis points
above the 10-year sovereign rate. besides, the ing offering
for 10 years was also uncommon, the sources said.
insurance, malda bank join hands
kolkata: oriental insurance company ltd has signed
an agreement with the malda-based gaur gramin malda bank
for marketing of general insurance products on friday.
the agreement will help the company reach out to the rural
bank gets court approval for sabre rejig plan
mumbai: the bombay high court (goa bench) on friday
approved the recapitalisation and restructuring of centurion
bank. the bank said the court's final hearing approved
the scheme of arrangement submitted by sabre capital.
the reserve bank of india's (rbi) permission had also
been sought for the same, said a senior official of centurion
bank, which has its registered office in goa. in april
2003, sabre capital worldwide submitted the proposal to
revive the private sector bank.
the proposal was approved by the bank's board of directors
and subsequently by its shareholders and creditors. the
scheme consists of three major proposals: restructuring
of capital by reducing the face value of the bank's share
from rs 10 to re 1, infusion of fresh capital of rs 319
crore in two phases and takeover of management control
by sabre capital and merger of bank muscat with centurion
psbs to share online atm network
mumbai: five public sector banks have come together
for a new atm sharing arrangement. canara bank, central
bank of india, indian overseas bank, uco bank and union
bank of india, on friday co-branded their atm network
tie-up as "cash online". the dismantling of
the swadhan atm network effective from december 2003,
has led banks, both in the public and private sector to
enter into consortium tie-ups to form co-branded networks
such as cashnet, cashtree, and mitr.
cashonline, the shared atm network, has been launched
with a view to exploiting the sectoral strengths of the
banks to the mutual advantage of their vast clientele,
said top officials with the five banks while addressing
a press conference here on friday. the current combined
atm strength of the banks at 600 will be increased to
1,500 by march 2004 and 2,700 by march 2005, officials
co-op bank net at rs 2.14 crore
kakinada: the kakinada cooperative town bank earned
a net profit of rs 2.14 crore during 2002-03. m v v satyanarayana,
chairman, said the bank has been given the grade a audit
certificate. it had 11 branches and one more would be
shortly opened at rajahmundry. he said the bank would
declare a dividend of 18 per cent to shareholders after
the general body meeting on september 27.
the bank had lent rs 50.67 crore and the non-performing
assets (npas) amounted to 6 per cent. all efforts would
be made to reduce the npas and during the past four months
rs 75 lakh had been recovered.
12 september 2003
inflows: rbi act may be amended
mumbai: the reserve bank of india (rbi) is planning
to issue special securities to mop up the rupee liquidity
from the market resulting from the sterilisation of the
forex deluge. an internal rbi group is examining the issue
and may suggest amending the rbi act to enable the central
bank to issue securities on its book. the rbi act 1934
does not permit the central bank to issue securities on
the principal instrument for managing capital inflows
in the country has been sterilisation. but as the recently
issued rbi annual report for 2002-03 indicated, the rbi's
management is also mooting other ideas to tackle this
'problem of plenty'.
redemption may help solve dollar shortage issue
mumbai: the forex market is planning a dollar shortage
in the cash market between september end and middle of
october in the wake of resurgent india bond (rib) redemptions.
according to forex dealers, the forward premium to be
paid for booking dollars during the end of september has
gone up to 3.4 per cent. on the contrary, forward premiums
on all other maturities from one month to one year are
ranging between 1.90 per cent and 1.23 per cent respectively
in that order.
dealers were quoted as saying that while the demand for
forward dollars is increasing with the rising premium,
demand for forward dollars of other maturities is virtually
stagnant. the demand for booking september-end dollar
is emerging from corporate as well as banks. dealers explained
that the dollar demand during the period has risen on
account of the redemption of the bonds.
outsourcing become effective
mumbai: banks are eyeing alternatives to owning
and operating their own atms. the india switch company
(isc), an independent payment systems provider, is planning
to tap into this outsourcing opportunity by establishing
1,500 atms over the next three years for the recently
formed 'cashtree' atm networking sharing alliance of five
public sector banks - bank of india, union bank of india,
indian bank, united bank of india and syndicate bank.
in its capacity as service provider for enabling transaction
switching among banks, isc had signed a service level
agreement in july with the five banks for establishing
interconnectivity with their atm switches. mani mamallan,
chief operating officer, isc, said a capital expenditure
of about rs 100 crore is envisaged for setting up the
1500 atms for 'cashtree'.
11 september 2003
settlement system: rbi seeks us fed clearance
mumbai: the first-ever continuous linked settlement
(cls) system for cross currencies, proposed to be set
up by the clearing corporation of india ltd (ccil), has,
reportedly, been referred to the us federal reserve by
the reserve bank of india for clearance. under the system,
ccil will be one of the members of cls banks which works
under the jurisdiction of federal reserve and hence the
need for the mandatory approval.
sources were quoted as saying that if the ccil gets fed
approval, it will be the world's first agency to offer
third- and even fourth-party counter-guarantee backed
settlement service in cross-currency as a settlement agency
with no trading position of its own. at present, only
one or two banks in europe offer cross-currency settlement.
but this is done for their own banks with inter-bank trading
announces bonus for policyholders
mumbai: life insurance corporation of india (lic)
has declared a total valuation surplus of rs 9,733 crore
for the financial year 2002-03 as against rs 8637.50 crore
in the previous financial year. lic has also announced
bonus for its policyholders for the year 2002-03 pursuant
to the actuarial valuation as on 31 march 2003.
the bonus rates declared by lic shows a marginal adjustment
over the last year because of the fall in average yield
on investments owing to overall declining interest rate
scenario. out of the surplus declared, 95 per cent, which
is rs 9,246 crore (rs 8,205.62 crore in 2001-02), is distributed
as bonus to the holders of 'with profit policies' which
were in-force as on 31 march 2003 and 5 per cent of the
surplus, which is rs 487 crore (rs 431.88 crore in 2001-02),
is to be given to the indian government as yearly dividend.
rakes in rs 52-crore from wgsrl share sale
new delhi: ifci ltd has raked in over rs 52 crore
by selling 3.03 crore shares of welspun gujarat stahl
rohren ltd (wgsrl) in the secondary market at a price
of rs 27-28 per share on tuesday. these shares constitute
21.75 per cent of the paid up capital of wgsrl.
sources were quoted as saying that the shares worth rs
82 crore were picked up by a clutch of foreign institutional
investors on a day when over 4-crore shares of wgsrl were
transacted. ifci's total holding in wgsrl was about 4-crore
shares, which has now been reduced to 1-crore shares.
10 september 2003
refunds interest slashed to 6%
new delhi: corporates and high net worth individuals
are not likely to find it attractive to park their surplus
funds with the taxman, with the finance ministry slashing
the interest rate on refunds to 6 per cent per year from
the existing 8 per cent, reports have said.
it may not be all that profitable now for corporate treasurers
to deploy surplus cash by way of making liberal advance
tax payments in the hope of obtaining a high return through
subsequent refunds. simultaneously, the government has
also reduced the interest chargeable by assessees on their
overdues. the interest on such overdue amounts would be
charged at 12 per cent against 15 per cent.
coverage to include pre-existing illnesses
mumbai: government-owned insurance companies have
proposed to extend mediclaim coverage to include pre-existing
illnesses. those suffering from diseases when buying the
policy will now get coverage for the treatment of these
diseases under the new cover. at the same time, the overall
sum assured, currently capped at rs 5 lakh, will be raised.
national insurance company chairman and managing director
h s wadhwa was quoted as saying: "we plan to waive
the clause that excludes coverage of pre-existing diseases.
at the same time, we intend to enhance the cover to more
than rs 5 lakh." some private insurance companies
already offer coverage of pre-existing illnesses at a
higher premium or after a couple of years. royal sundaram
allows for pre-existing illnesses after five "no-claim"
fourth atm sharing alliance soon
mumbai: the fourth announcement of atm network
sharing alliance will happen soon. canara bank plans to
form an atm network sharing association with four other
public sector banks - central bank of india, indian overseas
bank, union bank of india and uco bank.
there has been a spate of atm network sharing announcements
off late. banks are entering into strategic alliances
with a view to provide their customers the convenience
of a countrywide atm network. this allows customers to
conduct transactions such as cash withdrawal, balance
inquiry, mini-statement, pin change, statement and chequebook
requests at more locations across the country.
9 september 2003
v reddy takes charge as new rbi governor
mumbai: dr y v reddy has taken charge as the new
governor of the reserve bank of india (rbi) on monday.
calling on dr reddy in office were state bank of india
chairman a k purwar and securities and exchange board
of india chairman g n bajpai.
reddy also had a luncheon meeting with his a-team - deputy
governors rakesh mohan, vepa kamesam and k j udeshi along
with the executive directors (eds). later in the day,
reddy also met up with office-bearers of the rbi officers'
association and employees' unions.
effect for bank credit
mumbai: banks, which so far had confined their
lending to the top tier companies, finally being forced
to lend to companies that are not the top-rated ones.
as a result, credit is at last beginning to become available
to companies down the line, reports say.
faced with three problems (surplus liquidity, a decline
in credit offtake, and lack of lucrative investment avenues)
banks are now being forced to offer loans at below prime
lending rates (7-8 per cent) to even companies that have
ratings a notch or two lower (aa and a).
plan to tap rib outflows
mumbai: the state bank of india (sbi) is reportedly
coming out with two products to tap redemption proceeds
of resurgent india bonds (ribs), which mature from 1 october.
market sources were quoted as saying that while one product
is meant for deposits received in india, the other is
for deposits received at overseas centres.
both the products mature in a year. the indian rupee deposit
comes with an in-built hedge for exchange rate risk. under
the scheme, dollar deposits will be converted into rupees
and a exchange rate risk provided for the entire period.
the depositor will get rupee interest rates, as applicable
on nre deposits, with the entire exchange rate risk covered
by the bank, on maturity.
financeraises $20 million
mumbai: idbi homefinance has raised $20 million
via external commercial borrowings to diversify its portfolio
even as idbi today formally took over tata home finance
ltd (thfl), a subsidiary of tata finance (tfl). thfl will
now be renamed idbi homefinance. "the company has
a bank borrowing of rs 400 crore. in order to diversify
the portfolio we will avail of refinance from national
housing bank (nhb) of around rs 75-100 crore. we will
also go in for an ecb of $20 million. we will also look
at accessing the primary debt market," said melwyn
rego, managing director & ceo of idbi homefinance.
the idbi-thfl deal was initiated on may 30 with the signing
of a share purchase agreement with tfl. icra advisory
services conducted the due diligence on behalf of idbi.
tfl had a 63 per cent in the company, while the uk-based
abbey national held the balance stake. tfl took over abey'
stake in the company. the sale, also marks abbey's exit
from india. idbi home finance will also look at opening
satellite offices. "the first priority will be to
set up offices in places where idbi has its own offices,"
rego added. idbi has 38 branches across the country. thfl
has 16 branches in 12 cities and its home loan portfolio
is around rs 450 crore.
8 september 2003
plans cell to deal with bank, securities fraud
kolkata:cbi is in the process of setting up a new
cell specifically meant for investigations into bank and
mr p.c. sharma, director of cbi, stated here on sunday
that rbi already has a cell for bank frauds.
poverty aid needs to double: world bank
washington:rich countries need to more than double the
$16 billion a year they have pledged in aid to help cut
poverty around the world by 2015, and poor asian countries
and some african countries are most in need of the funds,
according to a new world bank study.
list of reports
on finance diary