EC castigates government over telecom package
New Delhi: The Election Commission is of the view that the government is withholding information on the telecom package to private telecom operators.

The commission clearly indicated that it did not favour the package, coming as it did from a caretaker government on the eve of the elections. It felt that the announcement of the package vitiated the level playing field in the electoral arena.

Expressing its views in a release, the commission said it was deeply concerned with the implications of changes in policies during this period.

The commission did not take a final view on whether the package violated the model code of conduct since the issue was pending before the Delhi high court, which is hearing a public interest litigation. The matter is to come up before the court on 3 August.

The commission said it is not impressed by the clarifications provided by the government and the cabinet secretary, in his response, did not answer vital questions.

In pronouncing its reservations, the commission has also drawn the attention of the Delhi high court to the fact that polls were round the corner and the matter should be seen in that context.

The government has reacted to the commission's observations with a press release denying that it had withheld any information. The note also accuses the commission of trying to influence the court and hence committing contempt.
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Rs 1,000 cr recap plan for Indian Bank
Mumbai: The government is formulating a Rs 1,000-crore recapitalisation plan for the ailing Indian Bank. The plan involves infusion of capital, and bringing the bank under a committee of top banking experts. The present management of the bank is likely to change, government sources say.

However, the plan will have to wait till the elections are over and a new government is in place.

The bank had reported a phenomenal net loss of Rs 788.50 crore for 1998-99 and its accumulated losses have touched Rs 3,180 crore, wiping out its entire net worth of Rs 2,899 crore as on March 1999.
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Crisil foresees key role for international banks in India
Mumbai: Credit rating agency Crisil has said in a report that international banks and financial companies are entering into the retail business area in India in a big way.

These banks and financial companies are expected to perform a key role in the medium to long term as they have competitive funding costs, support of international parents and sophisticated mechanisms to control and monitor risks, says Crisil. These organisations are coming through joint ventures with domestic partners or through subsidiaries and the non-banking finance companies sector in the country is bound consolidate in the next two years.
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MFs will overtake banks: Moody's
Mumbai: Moody's Investor Service has forecast that mutual funds in India will give banks a run for deposits as the insurance and mutual fund business grows in the country.

Deposits of scheduled commercial banks have grown at an accelerated pace of 16.5 per cent in financial year 1996-97, revving up 19.7 per cent in 1997-98 before slowing down marginally to 18.5 per cent in 1998-99, Moody's said.

However, in the period of April-July 1999, the rate of growth in bank deposits has dropped to a marginal 3.2 per cent, even while gross collections by mutual funds registered a spectacular year-on-year growth. Gross mobilisation of funds by mutual funds in India during April-June 1999 has grown by 115 per cent as compared to the corresponding period in the previous year, Moody's said.
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FIPB relaxes rule on equity holding
New Delhi: The Foreign Investments Promotion Board has permitted foreign companies using proprietary technology to retain their equity and not divest it in favour of Indian entities.

Earlier, the industry ministry had imposed conditions under which 100 per cent foreign-owned companies had to divest 26 per cent equity to Indian partners or public within three or five years, depending on the case.

The first case under this category that has been cleared by FIPB is that of El Dupont, which it had rejected earlier. Sources said since Dupont has been using patented technology, divestment of equity could lead to violation of secrecy on patented technology.

FIPB also cleared 39 cases from a list of proposals totalling investments of Rs 175 crore. The list includes approval to Total of France for setting up a technology supply unit, specifically for resins, Hewlett Packard for setting up another wholly-owned subsidiary for equipment measurement services and Tenaga BK Power to set up a 11 MW power plant.
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RBI directive to chit funds, NBFCs
Mumbai: The Reserve Bank of India has directed all nidi companies, chit funds and non-banking financial companies holding public deposits to submit annual statutory returns on deposits before 30 September.

The central bank has also said that residuary non-banking finance companies should furnish their returns irrespective of whether they have been granted certificate of registration or whether their applications are pending with the RBI or has been rejected.
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SBI hikes CP limit by Rs 500 crore
Mumbai: State Bank of India has increased its commercial paper investment limit by Rs 500 crore from Rs 2,000 crore.

The bank has adopted this strategy as companies have been found to be not willing to avail of cash credit and insist that short-term funds be extended to them at sub-prime lending rates.

G.G. Vaidya, chairman of the bank, confirmed that the bank has approved the increase in outstanding commercial paper exposure.
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