10 April 2004

UCO Bank does Rs 60,000 crore business for '03-'04
Kolkata: UCO Bank's total business crossed the Rs 60,000-crore mark as at the end of the year, recording a growth of 26.4 per cent during fiscal 2003-04. UCO Bank added over Rs 12,500 crore to its business by clocking a 25.2 per cent increase in deposits, which now stands at over Rs 39,200 crore. Its advances portfolio have swelled 28.8 per cent to over Rs 21,350 crore against Rs 16,580 crore last year. The total business done was Rs 48,000 crore.

Dhanalakshmi Bank officers protest mass transfers
Kochi: Officers of Thrissur-based Dhanalakshmi Bank will strike work on Saturday protesting against the "mass transfer" of their union's office-bearers to branches outside the State. From April 12, the officers also propose to go on an indefinite hunger strike in front of the head office. The All India Bank Officers' Confederation has said that it proposes to organise an all-Kerala strike, unless the management agrees for a compromise.

SC validates Securitisation Act - Relief for borrowers as well
New Delhi: The Supreme Court today upheld the constitutional validity of the Securitisation Act thereby allowing banks and financial institutions to sell assets of defaulting borrowers that have been attached under the Act. The court, however, quashed as unconstitutional the provision that required aggrieved borrowers to make an upfront deposit of 75 per cent of the dues claimed in case they preferred to go in appeal on action initiated against them.

The judgment was delivered by a three-judge bench, which included the Chief Justice V.N. Khare, Justice Brajesh Kumar and Justice Arun Kumar. The 2002 Act was challenged in various courts on grounds that it was loaded heavily in favour of lenders, giving little chance to the borrowers to explain their views once recovery process is initiated under the legislation.

MSS paper oversubscribed
Mumbai: In the Rs 5,000-crore auction of the 6.18 per cent 2005 paper under the market stabilisation scheme the Central bank received 169 competitive bids amounting to Rs 6,220 crore.
The cut-off price for this security has been fixed at Rs 102.11 (4.59 per cent YTM).

Election of TMB directors challenged before CLB
Chennai: The legal tussle among the various groups of the Nadar community to take control of the Tuticorin-based Tamilnad Mercantile Bank Ltd continues unabated with a group challenging the election of the 10 directors at the annual general meeting held on March 12. In an application moved before the Company Law Board, Additional Principal Bench, Chennai, the group led by S. Ashok and 33 others, contend that on various grounds, the election of respondents (the 10 directors who are considered as associates of B. Ramachandra Adityan) 4 to 13 were invalid and was therefore to be set aside by the Company Law Board.

Canara Bank's first OBU starts operations at Noida
New Delhi: The Canara Bank has opened its first Offshore Banking Unit (OBU) in the special economic zone (SEZ), Noida. The OBU would accept foreign currency deposits from non-resident Indians (NRIs) by offering Libor-linked rates. According to the bank, the OBU would not only cater to units situated within the SEZ but also those in the domestic tariff area. It will commence operations with start-up funds of $10 million.

Citigroup fund for financial education
Mumbai: Citigroup and the Citigroup Foundation have announced a 10-year, $200 million commitment to financial education, which will include the 100 countries that Citigroup operates in around the world, including India. The Indian segment of the Citigroup team is yet to develop a model to identify deserving units. In India, Citigroup supports a financial literacy programme since 2001 for women in partnership with Ahmedabad-based, SEWA Bank for the members of their micro-credit programme.

8 April 2004

Rupee up 20 paise
Mumbai: The rupee gained by 20 paise to close at 43.5450, up from previous close of 43.74/75 in its value against the dollar.
Forwards Market - The six months premium closed at 0.52 per cent (0.42 per cent) while the one-year ended at 0.44 per cent (0.36 per cent).

G-sec prices - the 6.05 per cent 2019 paper opened at Rs 105.40 touched a high of Rs 105.78 and closed at Rs 105.60.
Call rates were flat at 4 per cent.

Punjab & Sind Bank to audit performance
New Delhi: Punjab and Sind Bank (PSB) has set up an ad hoc committee on procedure and performance audit on public services.

The committee would comprise three general managers, who would look into ways to simplify the procedures and practices to ensure that the customer do not face any difficulties in their transactions with the bank.

RBI: Forex market is 'orderly'
New Delhi: The Reserve Bank of India Governor, Dr Y.V. Reddy, has said that the foreign exchange market was witnessing `orderly conditions'. The RBI Governor pointed out that though the rupee had appreciated by 9.5 per cent against the dollar since March 2003, it had at the same time depreciated by 3.1 per cent against the euro, 5.9 per cent against the pound sterling and 4.4 per cent against the Japanese yen. He said that significant depreciation of the US dollar against other major currencies had prompted adjustments in world currencies and this reflected in the exchange rate of the rupee as well.

'Finacle' in South Africa
Bangalore: According to an Infosys release, Comparex Africa has announced an alliance with Infosys Technologies to market the latter's universal banking solution, Finacle, in southern Africa.
Comparex will act as Infosys's business alliance partner for sales and services related to Finacle in South Africa, Namibia, Swaziland, Mozambique, Lesotho and Malawi, and will provide after-sales support for Finacle customers in the region as well.

Tata AIG Life launches unit linked schemes
Mumbai: Tata AIG Life Insurance Company Ltd (Tata AIG Life) has launched Unit Linked Insurance Plans (ULIP) for Superannuation and Gratuity schemes. Tata AIG ULIP Superannuation Scheme provides individual members the flexibility to decide on the allocation of their moneys based on their risk appetite, said a press release. In case of the ULIP Gratuity Scheme, the employer or trustee has the flexibility to decide the ratio of investment based on their risk taking appetite, the release said.

Now `Car Overdraft' with ICICI Bank
Mumbai: ICICI Bank has launched the `Car Overdraft' - an overdraft facility with the car as security. Under the scheme, the bank opens an ICICI Bank roaming current account in the customer's name with a pre-approved overdraft limit. According to a bank release, the limit of the overdraft is determined on the basis of the vintage and condition of the car.

The customer pays interest only on the amount withdrawn and for the period it is withdrawn for. They also get the flexibility of repaying only a minimum of five per cent of the total outstanding every month. The customer gets all the regular benefits of ICICI Bank Roaming Current Account, including multi-city chequebook, fund transfer facilities, ICICI Bank HPCL Visa Electron Debit card, Internet banking, phone banking, etc.

SBI Life to provide home loan cover for Union Bank
Mumbai: Union Bank of India has tied up with SBI Life Insurance Co Ltd to provide life insurance cover to the bank's home loan borrowers. Under the scheme, which is optional, in the event of the borrower's death, SBI Life will pay the entire balance loan directly to the bank. The insurance cover is available for a minimum loan of Rs 50,000 and a maximum of Rs 50 lakh, with the tenure of the loan extending from five to 20 years. According to the bank, the premium would be linked to the loan amount, tenure and age of the borrower,and will be included in the loan EMI.

7 April 2004

Rupee eases
Mumbai: The rupee eased seven paise to end the day at 43.74/75 in its value against the dollar. The currency opened at 43.6850/6950 and touched a low of 43.7750.
Forwards market - The six months premium closed at 0.42 per cent (0.56 per cent) and the one-year closed at 0.36 per cent (0.47 per cent).

Market Stabilisation Bonds - The Rs 5,000-crore auction received bids worth over Rs 12,000 crore.
G-Secs - the 8.07 per cent 2017 paper, opened at Rs 124.63/65 and closed at Rs 124.75 at an yield of 5.37 per cent. The 6.25 per cent 2018 paper opened at Rs 107.70 and closed at Rs 107.62.

Call rates- the lowest rate was at 3.5 per cent. Through the seven-day repo, funds worth Rs 19,455 crore were absorbed at the repo rate of 4.5 per cent.

Exemption for Centurion Bank on subscribed capital norms
Mumbai: Centurion Bank has received exemption till December 31, 2004 from the Finance Ministry and the Reserve Bank of India on meeting the minimum requirements of subscribed capital in proportion to the authorised capital as prescribed by the Banking Regulation Act. The bank's previous rights issues in February 2001 were not adequately subscribed.

Meanwhile, the bank has incurred a net loss of Rs 26.33 crore for the over 10-month period ended February 2004, according to the draft prospectus field with the Securites and Exchange Board of India for the proposed rights issue of Rs 90.80 crore. The bank has not yet received approval from RBI for the appointment of Mr Rana Talwar as its Chairman. The bank will have to comply with the regulations by December 31.

Centurion Bank cuts deposit rates
Mumbai: The Centurion Bank announced a cut on its domestic term deposit rates by 0.25 percentage points for various maturities with effect from April 5. The deposit with a term of above one year and up to 2 years will come at 5.75 per cent (6.00 per cent). The deposit with a term of above two years and up to five years will also come at 5.75 per cent (6.00 per cent).

Syndicate Bank business crosses Rs. 62,000 crore mark
Thiruvananthapuram: Syndicate Bank's total business has crossed Rs 62,000 crore in 2003-04, marking an increase of about 40 per cent over the previous year. According to the bank the business comprised deposits of Rs 41,000 crore and advances of around Rs 21,000 crore. The bank said that its business has been going up by an average of Rs 1,000 crore per month over the last one-and-a-half years. With higher provisions for net non-performing assets, the net NPA was expected to come down to 3.5 per cent from 4.5 per cent in the previous year.

6 April 2004

Rupee gains six more
Mumbai: The rupee gained six paise at 43.67/68 in its value against the dollar on Monday. It opened at 43.73, touched a high of 43.65/66 and a low of 43.7750.

Forwards Market- The six-month premium closed at 0.56 per cent (0.69 per cent) and the one year closed at 0.47 per cent (0.56 per cent).

Call Money- The rates moved in a wide range of 3-4.35 per cent to close at 3.5 per cent.

G-Secs- the 7.46 per cent 2017 paper ended at Rs 119.55. The 6.72 per cent 2014 paper closed at Rs 112.05.

RBI: Rupee rise due to huge capital flows
Mumbai: According to Dr Rakesh Mohan, Deputy Governor, Reserve Bank of India, the recent surge in the value of the rupee against the US dollar is mainly due to the sharp increase in capital flows. He said there was no change in terms of the operational procedure on the thinking of forex management. The rupee has been steadily and sharply appreciating since March 22.
On the new liquidity adjustment scheme, Dr Mohan said, "We would like to operate LAF purely for liquidity management and not for sterilisation purposes."

SBI Frankfurt switches to Flexcube
Bangalore: i-flex Solutions has announced that the State Bank of India, Frankfurt, has selected Flexcube as its core banking solution. Flexcube will replace the bank's existing system that has been operational for the last eight years. SBI Frankfurt, is one of the largest branches of SBI abroad.

Dhanalakshmi Bank to expand at a national level
Kochi: Thrissur-based Dhanalakshmi Bank has chalked out an expansion plan, which aims at achieving a business of Rs 10,000 crore by March 2007. The Bank has said in a statement here that it is expanding operations in other States, and intends to open in metros and mini metros with online connectivity in a phased manner. Apart from a hundred ATMs that will come up in other centres, the bank says that Internet banking and anywhere banking will also become operational soon.

Canara Bank business up 19 pc in 2003-04
Bangalore: Canara Bank has said its global business for 2003-04 was close to Rs 1,33,900 crore, up 18.92 per cent from a year ago. While deposits grew 19.70 per cent to Rs 86,300 crore, advances shot up by 17.61 per cent to Rs 47,600, a bank statement said. Retail lending, that accounted for 16.39 per cent of total credit was the driver for the last fiscal.

Outstanding retail advances grew by 40.14 per cent to reach Rs 7,800 crore from Rs 5,566 crore. Within retail portfolio, housing loans shot up by 76.54 per cent to reach Rs 2,800 crore from Rs 1,586 crore. Priority sector advances also rose by 26.68 per cent to touch Rs 18,500 crore, accounting for 41.78 per cent of the bank's net credit.

UTI-MF ties up with Allahabad Bank
Kolkata: UTI Mutual Fund has tied up with Allahabad Bank for distributing its schemes, the fourth bank in the country with which it has entered into a strategic arrangement.

The Kolkata-based bank will offer the entire range of funds managed by UTI MF. Allahabad Bank, which has about 15 million depositors, will use 150 branches for distributing UTI products. The 140-year old Allahabad Bank, has turned around in recent times after being in trouble in the early 1990s.

Stabilisation Bonds to absorb FDI-induced liquidity
Mumbai: According to RBI officials, with the recent introduction of the seven-day repo and dismantling of the one-day repo facility, the amounts absorbed through LAF should come down. According to the officials, LAF should work as an instrument to absorb the residual liquidity in the system and be the last resort to deploy funds. It is expected that the market stabilisation bonds (6.18 per cent 2005 paper of Rs 5,000 crore to be floated on Tuesday) will be easily subscribed given the level of liquidity in the system.

RBI is expected to float bonds worth Rs 60,000 crore in this fiscal. These funds will not be invested, either in the domestic markets or in the international ones, since investments would defeat the purpose of stabilisation. According to Dr Rakesh Mohan, Deputy Governor, Reserve Bank of India, "Market stabilisation bonds will be used to take away the enduring liquidity created due to the excess dollar inflows while the LAF window will be used to manage day-to-day liquidity."

I-T clarification on tax holiday benefits
New Delhi: The Finance Ministry has clarified that the income-tax provision (Sec 10A(9)) requiring denial of Section 10A tax holiday benefits on account of the transfer of ownership in an undertaking should not be applied for those cases where the transfer has taken place prior to April 1, 2000. Section 10A(9) of the Income-Tax Act, 1961, provides that where during any previous year, the ownership or the beneficial interest in the undertaking is transferred by any means, the deduction under Section 10A would not be allowed to the assessee for the assessment year relevant to such previous year and subsequent years.

"Since Section 10A(9) has been brought on the statute prospectively with effect from April 1, 2001 i.e from assessment year 2001-02, the provision will operate only if there is a change in the beneficial ownership during the previous year 2000-01 relevant to assessment year 2001-02 or in subsequent years", a circular issued by the Central Board of Direct Taxes (CBDT) circular has said.

5 April 2004

IOB maintains pace on priority sector lending
Thiruvananthapuram: Indian Overseas Bank, the lead bank for Thiruvananthapuram district, has decided to enhance lending to the priority sector, especially by financing self-help groups and issuing Kisan Credit Cards (KCCs). The bank said that as much as 45 per cent of the bank's advance portfolio was directed to the priority sector, while lending to direct agriculture amounted to more than the prescribed 18 per cent, and that these percentages have been maintained for the last three years. During the last two years, the bank has assisted 32000 SHGs all over the country.

Prudential Co-op Bank depositors to go on hunger strike
Hyderabad: Depositors of the beleaguered Prudential Co-Op Bank have now decided to go on a hunger strike to seek revival of the bank and the payment of their dues including interest on deposits. According to the President of the Depositors Association, K. Srinivasulu, deposits have not been handed over to the depositors for more than 12 months. About 2.8 lakh depositors have their money locked up in the bank. After the co-operative bank closed operations, the management had stepped up efforts to recover their loans, particularly from corporate defaulters. According to the management this has yielded results and recoveries have crossed more than Rs 100 crore.