08 november 2003

custom house agents licensing rules to be amended
new delhi: custom house agents (cha) licensing rules are to be amended by the government to streamline operations to boost exports and imports, according to the minister of state for finance, shripad naik.

addressing the custom house agents association, naik said that the ministry was in the process of building up a consensus for bringing about necessary changes in the cha licensing regulations of 1984. ``my vision is to install a truly faceless, yet humane system, where offices of the exporters, importers, custom house agents and customs department are electronically linked, and exports and imports grow by leaps and bounds,'' he said. customs department had taken up a conmputerisation drive and launched a new module `icegate' for registering shipping bills online.

four pvt banks can accept indirect taxes
mumbai: in addition to direct tax collections and pension disbursements, another pie where new age private banks have been permitted to dip their hands into indirect taxes - excise and service tax collections.

traditionally an area exclusive to state-run banks, the presence of new private sector banks is expected to usher in competition and ensure "all round better service'', possibly denting the share of the market leader, state bank of india.

the four institution-backed banks — icici bank, hdfc bank, uti bank and idbi bank — will commence indirect tax collections in 13 commissionerates on a pilot basis from november 15.

this permission is exclusive to the four institution-backed new private banks, which were permitted to collect direct income-tax, disburse pensions and handle expenditure related functions of all central government ministries/departments from october 1. these four banks may soon be permitted to gather customs duties, but there are some technical issues to be sorted out with relation to the collection mechanism.

banks are also in negotiations with various state governments to collect sales tax. private banks are enthusiastic about governmental business and say "it's a matter of pride to be recognised by and to be associated with the government,'' said a senior hdfc bank official. on the commercial front is the commission paid at rs 1.18 per rs 1,000 of turnover, which is quite attractive. negotiations are under way for increasing the commission fees, but reserve bank of india seems to be of the opinion that the present fees are too high and is unlikely to raise the same, said a banker.

sbi drops deposit rates
mumbai: state bank of india has decided to lower its deposit rates by 25 to 50 basis points across maturities with effect from november 10. interest rates on domestic term deposits with a maturity of 15-45 days have been lowered by 25 basis points to 4 per cent, for 46-179 days 4.50 per cent (5.00 per cent), for 180 days to less than one year 4.75 per cent (5.25 per cent), for one year to less than two years 5 per cent (5.50 per cent), for two years to less than three years 5.75 per cent (5.25 per cent) and for three years and above 5.50 per cent (6 per cent). interest rates on deposits with a maturity of 7-14 days remain unchanged at 4 per cent.

deposit rates for senior citizens have also been revised downwards by 50 basis points. rates on deposits with a maturity of one year to less than two years is 5.50 per cent (6 per cent), for two years to less than three years 5.75 per cent (6.25 per cent), for three years and above 6 per cent (6.50 per cent).

indusind plans 20 more branches
visakhapatnam: indusind bank is planning to open 20 more branches during the current financial year and the half-yearly net profit of the bank has gone up to rs 100.87 crore from rs 42.86 crore during the corresponding period last year.

this was stated by the assistant vice-president of the bank, k.s. sastry, at a press meet at the gajuwaka branch near here on tuesday. he said it translated into an annualised eps of 9.16 on an equity base of rs 220 crore. the capital adequacy ratio of the bank stood at 17.55 per cent (15.75 per cent). he said the bank had opened 15 new branches of late and four additional extension counters, taking the total to 56 branches and 12 counters in the country. the bank had set up 32 off-site atms during the year, taking the total to 77.

monsoon bonanza for farmers from banks
bangalore: buoyed by a good monsoon, several state-run banks are stepping up their rural credit disbursement initiatives in karnataka. most of the new schemes are floated to trigger farm equipment financing while canara bank has signed a pact with nabard to co-finance the agriculture sector.

state bank of india has tied up with vst tractors and tillers to finance purchase of power tillers. the company would offer a discount of rs 15,000 to farmers who buy tillers under this scheme and the bank would offer an interest of 10 per cent on the amount financed. margin money to be brought by the farmer would be five per cent of the cost of the tiller. the repayment period is pegged at nine years with one-year grace. close to 200 branches of the 310 branches in karnataka offer agriculture financingof rs 820 crore.

recently, same deutz-fahr signed a pact with state bank of mysore, wherein the bank would finance 90 per cent of the invoice value of tractors to farmers at 10.5 per cent on reducing balance. it would also extend finance up to 90 per cent on tractor-operated implements such as trailer, cultivator, rotovator, front-end dozer and loaders. collateral security needed to finance tractor is minimum of four acre of irrigated land or six acre of dry land. as part of this scheme, same dealers would bear the insurance cost of the tractor.

canara bank's joint effort with nabard aims to finance rural projects with large outlays. under this arrangement, the institutions will jointly entertain loan proposals for term loans as well as working capital.

07 november 2003

apsfc signs tripartite pact with govt, sidbi
hyderabad: the andhra pradesh state financial corporation (apsfc) has announced here on thursday that it has entered into a tripartite memorandum of understanding (mou) with the small industries development bank of india (sidbi) and the state government, as a part of the restructuring exercise of the corporation. according to an apsfc press release here, the mou was signed by the sidbi chief general manager, g.a. nayak, the andhra pradesh industries and commerce principal secretary, k.v. rao, and the apsfc managing director, ratan p. watal.

the mou complements the ongoing internal restructuring measures initiated by the corporation during the last two years and would provide added impetus to the improved performance of the corporation, the release said. according to the corporation, the pact was a result of the relief package announced by the central government and sidbi, the unequivocal financial and other support extended by the ap government and the determined efforts of the corporation to bring about a turnaround and become competitive.

the central government had earlier (during august this year) unveiled a relief package for restructuring of state financial corporations (sfcs) in the country. the package offers 2 per cent per annum interest rate concession on all existing refinance loans and 2 per cent interest rebate for prompt repayment of all future refinance loans availed by sfcs from sidbi.

according to the apsfc managing director, watal, the state government has already agreed to allocate rs 6 crore towards equity of the corporation for the current fiscal and to consider equity allocations for future years also based on performance review. the government has also agreed to extend guarantees to the slr and non-slr bonds and other borrowings required for funding the loans sanctioned by the apsfc, he said. watal said the corporation has agreed to initiate certain internal restructuring measures and show performance improvement in the areas of recovery, cost reduction and containment of non-performing assets in respect of fresh sanctions.

the mou with sidbi comes into effect from april 1 this year and would be in operation for a period of five years or till the corporation was fully restructured/recapitalised, whichever was later, watal said. stating that the validity of the mou might be extended by mutual consultations, he said the performance of the corporation would be reviewed once a year or at such intervals sidbi and the state government might direct as.

call to hike non-interest income
mangalore: efforts should be made to increase non-interest income as the demand for credit was not picking up and interest rate war was fierce, the chairman and managing director of karnataka bank ltd, ananthakrishna, has said. participating in the regional review conference of the bank in mangalore on thursday, he said the need of the hour is to safeguard the interest of advances by constant monitoring. judicious selection of parties and activities will help minimise risk and contribute to bank's profit, he said, and added that the soundness of a bank is judged by its profit and the health of advances. stating that past and present performance of the bank is a pointer to the future, ananthakrishna urged the regional heads to play a crucial role.

lord krishna bank keen to get strategic investors
new delhi: lord krishna bank is looking at all options, including offering a stake to a foreign partner, to increase its capital base by rs 35 crore - rs 50 crore this fiscal. ashwani k. puri, promoter-director of the kochi-based bank, said, "the first choice would be to offer fresh equity to strategic investors. two or three major foreign banks have evinced interest. we are considering it." the bank plans to offer fresh equity to the foreign banks in return for technology and expertise.

other options include a rights issue or an initial public offer. currently, the puris of mohan exports and the burmans of dabur india hold about 65 per cent stake in the bank. "we are planning either a tier-ii bonds issue or a rights issue of about rs 35 crore - rs 50 crore this fiscal," the bank's managing director, r.m. nayak, said. the bank's capital adequacy ratio is at about 13 per cent now, but the bank may require fresh capital to sustain its business, which is slated to grow by 100 per cent to about rs 5,000 crore this fiscal. puri said the bank aimed at rs 20,000-crore business by march 2007.

the bank had also applied to the reserve bank of india for opening branches in afghanistan and planned foray into ghana, sudan and mozambique, he said. it planned to open 14 new branches and 20 extension counters across the country by may 2004. the bank also has a tie-up with visa to offer debit cards. to offer mutual fund products, it has tied up with lic mutual fund, sbi mutual, prudential icici and some others.

icici bank gets uk licence, opens arm in london
mumbai: icici bank ltd has gained a uk banking licence to set up its first subsidiary overseas, icici bank uk ltd. with its first branch abroad located at knightsbridge, london, icici bank uk is currently the only locally incorporated banking subsidiary among indian banks in the uk, said a press release from the bank.

the bank has also formed a partnership with uk-based lloyds tsb plc; thereby customers of icici bank can open and access their current and savings accounts through the 2,200 branches of the uk bank. non-resident indians and persons of indian origin customers can also transfer funds to icici bank accounts in india.

icici bank uk will initially be targeting three commercial business areas: commercial banking support for small and medium corporates in the uk, trade finance in support of trade flow between the uk and india, corporate finance and syndication.
as part of its international banking division, the bank inaugurated its overseas offshore branch in singapore and an obu in mumbai in addition to representative offices in shanghai, dubai and new york and has received approval for opening a wholly-owned subsidiary in canada.

06 november 2003

bajaj allianz h1 premium income touches rs 218 cr
mumbai: bajaj allianz general insurance has earned a premium income of rs 218 crore for the half-year ended september 30, 2003, a 70-per cent increase over the corresponding period of the previous year at rs128 crore. net profit grew to rs15.3 crore (rs 7..1 crore). the company achieved this growth by balancing the portfolio in terms of retail and corporate business, said a press release. bajaj allianz plans to widen its distribution network and invest in the latest it platforms.

rbi trims rates on ridf deposits, loans
mumbai: the reserve bank of india has rationalised the interest rate structure under the rural infrastructure development fund (ridf) and revised lending and deposit rates in respect of the undisbursed amounts of ridf-iv to ix effective from november 1, 2003.

pfc plans to float rs 500-cr venture capital fund
new delhi: power finance corporation (pfc) is planning to float a venture capital fund, india power fund, with a corpus of rs 500 crore. "we plan to raise the monies from financial institutions, banks and central power sector undertakings like national thermal power corporation, etc, by the middle of 2004," a senior pfc official said. sbi capital markets ltd has been hired to draw up the business plans for the ipf and is expected to submit its report in a week's time.

royal sundaram joins hands with ing vysya financial
bangalore: royal sundaram alliance insurance company ltd has tied up with ing vysya financial services ltd,for distribution of non-life risk cover products. the venture would need to be approved by the insurance regulatory and development authority. however, the tie-up would not imply any cross distribution of financial products. this was because the regulatory still did not permit such arrangements in the country. ing vysya bank has close to about 500 branches in the country and almost 200 of them fully networked.

icici prulife premium income up 170 per cent
mumbai: icici prudential life insurance recorded a premium income of rs 184 crore, during the half year ended september 30, clocking a growth of 170 per cent over rs 68 crore in the corresponding period of the previous year.

05 november 2003

pnb launches two deposit schemes
new delhi: punjab national bank (pnb) has launched two new deposit products - pnb smart roamer and pnb prudent sweep. current account holders under the pnb smart roamer will now get fd interest rate automatically whenever their balance exceeds rs 1 lakh in multiples of rs 10,000. under the pnb prudent sweep, customers would get fd rate of interest on a balance of over rs 50,000 in multiples of rs 10,000.

canara bank debit card for accountholders
bangalore: the public sector canara bank has launched its debit card for its account holders in the country. r.v. shastri, chairman and managing director of the bank said the bank was targeting a customer base of one million before the end of the current fiscal year. the debit card is offered free of charge to its depositors.
the debit card, he said, could be used to draw cash from any of the banks atm (automatic teller machines) in the country. itcould also be operated from any of the visa-affiliated atms across the country. the bank simultaneously launched its branded group insurance cover savings suraksha. the cover is being provided by its bancassurance partner, aviva life insurance company ltd.
the cover would be offered to the bank's savings and term deposit holders. this value-added service comes to all depositors' in the age group 18-55 at their option and cost. the scheme assures rs 1 lakh for individual savings bank/term deposit account holders, with additional cover of rs 1 lakh for accidental death.

fis should invest only in rated securities, says rbi
mumbai: financial institutions should invest only in rated securities, which carry a minimum investment grade rating from a credit rating agency registered with sebi, according to the draft guidelines issued by the rbi on tuesday. the fis should not invest in unrated securities.

according to the guidelines for fis on investments in non-government debt securities, the investment grade rating should have been awarded by an external rating agency, operating in india, as identified by the iba or fimmda. the list of such agencies would also be reviewed by the iba and fimmda at least once a year.

the fis should not invest in debt securities of original maturity of less than one-year other than commercial paper and certificates of deposits, which are covered under the rbi guidelines and should undertake usual due diligence in respect of investments in debt securities. the fis must ensure that all fresh investments in debt securities are made only in listed debt securities of companies, which comply with the requirements of the sebi.

boi to set up more atms in vizag zone
visakhapatnam: bank of india, visakhapatnam zone, is planning to set up two more atms, one here and the other at guntur, by the end of the financial year. this was stated by the zonal manager, j.r.v prasad, at a press meet here on tuesday. he said the zone's business turnover touched rs 849 crore during the past six months and earned a net profit of rs 16.92 crore.

the priority sector advances amounted to rs 265.56 crore and per-employee business had risen from 1.36 crore last year to rs 1.60 crore.

uti bank to open captive call centre
mumbai: uti bank is to open a captive call centre to be operational in the next financial year.
the call centre will have a staff strength of between 50 and 75 people and be based in mumbai.
the bank has also decided to open six rural branches by this fiscal-end — three each in andhra pradesh and punjab.
according to s. bhattacharya, senior vice-president (human resources), the bank discovered that despite having an interactive voice recording system, employees spent a great deal of time answering calls from customers regarding the bank's services. the call centre will handle "inward services" manning the service centre and helplines. the setting up of the centre will likely lead to greater productivity among the sales staff, it is believed. the bank is also on an expansion spree. it opened two branches in october.

birla sun life, kvb in agreement
chennai: birla sun life insurance has entered into an agreement with karur vysya bank (kvb) here on tuesday, under which the bank will sell birla sun life's insurance policies. officials said that the bank was expected to earn a premium income of rs 1.5 crore this fiscal year. in the next year, first full year of partnership, birla sun would earn a premium of rs 5 crore through the kvb sales channel.

04 november 2003

key interest rates left unchanged in credit policy
mumbai: the rbi helmsman, dr y. venugopal reddy, on monday left key interest rates untouched.
the mid-term review of monetary and credit policy 2003-04 has left unchanged the bank rate, cash reserve ratio and the overnight repo rate while gdp for the current year has been pegged higher at 6.50-7 per cent "with an upward bias". the policy, perceived to be cautious and non-populist, has forecast a stable interest regime for quite some time though for the common man there is nothing on offer.

in an interactive session with the media here today following his maiden credit policy, a jovial dr reddy said, "dr jalan's measures in the april policy have all served the economy well there is no need to tinker with it... there is every reason to continue the same stance." he said a review of the economy indicated all "very, very positive developments" compared to the trends in april 2003, like an upward gdp, downward inflation, improvement in the investment climate, strong sentiment in the financial markets, expectation of credit growth and strength in the external sector.

in the last policy of april 2003, dr bimal jalan had reduced the bank rate to 6 per cent from 6.25 per cent and in february 2003, the repo rate had been snipped to 4.5 per cent (5 per cent).
the cash reserve ratio has been left untouched this time at 4.5 per cent in view of the current liquidity situation although the objective to reduce the same to 3 per cent continues, states today's policy.
the central bank is upbeat on the gdp growth rate; it has upped its projection to 6.5-7 per cent, with an upward bias, over the earlier number of 6 per cent. the policy rationale: "it is reasonable to expect higher gdp growth based on the growth prospects across the sectors of the economy, and assuming the continuance of good performance in industry and some acceleration in exports reflecting the anticipated global economic recovery."

inflation rate, on a point-to-point basis is expected to be lower at 4-4.5 per cent, with a downward bias, down from previous projections of 5 to 5.5 per cent. lower inflation rate figures could fuel hopes for rate cuts in the future, say bankers.

on unhedged exposures in the foreign exchange market, which has been a nagging concern, the rbi has mandated banks to hedge all foreign currency loans to corporates above $10 million except for exporters who have a natural hedge.

a timeline has been laid out for the implementation of the real time gross settlement system (rtgs), with the fully functional rtgs system expected to be operational by june 2004 with the stand-alone system being operationalised in january 2004.
the rbi is putting up for public debate a "report of the internal group on liquidity adjustment facility (laf)." it could see modifications to laf and the open market operations of the central bank. the suggestions, the policy said would be taken into consideration in finalising the guidelines on this liquidity-modulating instrument.

hedging made compulsory for foreign currency loans over $10 m
mumbai: corportes will have to hedge all foreign currency loans above $10 million. in its mid-term review of the credit policy, the rbi has made hedging mandatory for all foreign currency loans. according to the rbi, unhedged corporate borrowings have been a cause for concern over the past couple of years. aside from the significant risk entailed to corporate balance sheets, it is also likely to impact the asset quality of banks in some cases.

however, banks are allowed not to insist on a hedge, in cases where forex loans are extended to finance exports, and the borrower has uncovered receivables to cover the loan amount. hedging is also not insisted upon, in cases where forex loans are extended for meeting forex expenditure.

speaking to presspersons here on monday, dr y.v.reddy, rbi governor, said, "earlier we were urging and exhorting, but now we are making it amply clear.''

the apex bank's latest measure has evoked mixed reactions from bankers. while a section of bankers have already been insisting on borrowers hedging their foreign currency loans, some others are of the opinion that such a measure from the rbi will impede corporate liberty to act on its own view on the currency.

03 november 2003

ifci scouting for strategic partner; may enter pension funds
new delhi: ifci ltd is getting back on its feet and could be up and running soon. with renewed confidence backed by steady improvement in financials, the institution has commenced talks with foreign and domestic entities for induction of a strategic partner. the development financial institution is also exploring the possibility of foraying into the pension market as a pension fund manager (pfm). "we are keenly watching the pension reforms process.

we would like to bid for one of the slots that would be on offer for pension fund managers," the chairman and managing director of ifci, v.p. singh, said. singh said that talks with others institutions for entering a strategic partnership has been initiated recently since there was a feeling within ifci that there could now be sufficient interest in partnering ifci in view of the improvement in its financials. "we have started talks with a few foreign and domestic institutions. the tie-up could be equity partnership or by way of liquidity support. this financial year could be crucial for this," singh said, hinting that the tie-up could be finalised within the next few months.

earlier, the institution has kept such talks in abeyance fearing that the massive losses on its balance sheet would frighten possible partners. ifci cut its losses in the first quarter of the current fiscal to rs 86 crore against rs 221 crore in the corresponding period in the previous fiscal. the net loss for fiscal 2002-03 was rs 260 crore against a loss of rs 880 crore in the previous year. singh said the process of prioritising the institution's bad assets that would be progressively handed over to the asset reconstruction companies (arcs) promoted by ifci - asset care enterprise (ace) - is in an advanced stage.

the ifci chief said that the institution plans to restrict its future lending activity to "brownfield projects" instead of "greenfield" start-ups. "we would also like to concentrate on non-fund based activities," singh said. on the ongoing voluntary retirement scheme, he said that it was primarily aimed at weeding out non-professionals from the institution. "we have a small staff strength of about 850 people. what we are aiming at is not a reduction of staff but an increase in the percentage of skilled and professional staff," he said.

central bank h1 net rises 107 pc
mumbai: central bank of india has recorded a 107.27 per cent growth in net profit for the half-year ended september 30, 2003, at rs 273.33 crore, as compared to rs 131.87 crore in the same period last year. total income of the bank during this period grew to rs 3,027.85 crore (rs 2,746.83 crore) which is inclusive of interest earned at rs 2,493.33 crore (rs 2,523.98 crore) and other income at rs 534.52 crore (rs 222.85 crore). total expenditure of the bank was at rs 2,271.95 crore (rs 2,341.69 crore), which was inclusive of interest expended at rs 1,492.40 crore (rs 1,602.10 crore) and operating expenses at rs 779.55 crore (rs 739.59 crore).

centurion bank eyes coimbatore region for expansion
coimbatore: centurion bank is eyeing salem, tiruchy and erode in coimbatore region as potential centres for establishing its presence. having established a branch in coimbatore, the bank is now contemplating to open a few extension counters here very soon, bank sources said. at present, the bank has 6 branches, 8 asset-marketing offices, 5 extension counters and 26 atms in tamil nadu.

the credit deposit ratio of the bank in tn is said to be 98 per cent with a business mix of rs 484 cr. bank sources said that the coimbatore branch alone recorded an operating profit of rs 21 cr during the current year.

repco home finance to open 9 branches
coimbatore: repco home finance ltd, a subsidiary of repco (the repatriates cooperative finance and development bank ltd) bank, plans to open nine new branches during the current fiscal.

at present, it has a network of 13 branches in south india and an additional 11 repco home centres operating at its bank branches. the home finance arm of the bank is targeting at disbursing rs 150 crore towards home loans in the 2003-04 fiscal. the sanctions till end september were rs 116 cr, while the disbursements touched rs 100 cr. repco offers special schemes for employees of government or blue chip companies, working women and professionals, repatriates, in addition to 50 plus and super loan schemes.. government employees on the verge of retirement would be able to avail loan under 50 plus scheme. under super loan scheme, the legal heirs could construct house on their parental properties.

monsterindia to handle uti bank recruitments
mumbai: uti bank has teamed up with monsterindia.com, the online recruitment network, to handle its recruitment needs. according to s. bhattacharya, senior vice-president, human resources, uti ank, the bank was rapidly expanding and found it increasingly difficult to handle the sheer volume of applications for various openings. the tie-up was a "smarter way to handle" the recruitments. applicants apply via an online format, and the applications are sorted out through a predetermined set of criteria specified by uti bank.

the jobs will be posted on uti bank's web site, and simultaneously on monsterindia's as well. for the bank, the benefits are two-fold. while the system has only come alive in the last two months, costs have fallen, and are expected to fall by about 80 per cent annually, mainly due to the reduced dependence on print advertisements and related costs. the tie-up would ensure a sufficient number of applicants and the quality desired. bhattacharya estimated that the bank' s `time'-costs involved in processing the applications would be halved. however, uti bank will still rely on head hunters for specialised positions. the web site is designed, hosted and maintained by monster india pvt ltd.

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