BJP-led govt. will allow PF funds into stock markets
New Delhi: The National Democratic Alliance, led by the BJP, formally pledged on 19 August 1999 to allow pension funds and insurance companies to be allowed to invest in the stock markets, in the event of its coming back to power. This was stated in the charter of commitments of the NDA.

The provident fund corpus is put at around Rs.60, 000 crore. Currently, PFs are prohibited from investing in the stock markets. They can invest only in government securities.

The NDA has also made indications of creating a separate tribunal for the creation of an exit policy, which will work on winding up of companies.
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Banks changing rate structure
Mumbai: The State Bank of India plans to come out with a new rate structure for long term deposits of tenures of five to ten years. This, the bank feels, will create a solution for any asset-liability mismatch that may occur in future.

This move is significant since banks have so far been looking at fixing rate structures for deposits of over five years on a case by case basis.

The interest rates are expected to be in the region of 11.5 per cent for 10-year deposits, which is similar to the yields on government paper.

Bank of India revised its interest rates on FCNR (B) US dollar deposits, applicable from 21 August 1999. The bank will pay 4.75 per cent interest on foreign currency non-resident-B accounts for deposits with maturities between six months and one year. For deposits between one and two years, the rates will be 5 per cent, and those between two and three years 5.25 per cent. Three-year deposits will yield 5.50 per cent interest.
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US sets visa cap
Mumbai: The US, which depends on Indian software professionals, will issue 1.15 lakh visas for 1999. The country requires more than 3.5 lakh software experts per year. For the year 2000 also, the number of visas issued will be 1.15 lakh.
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ICICI board decides on equity issue
Mumbai: ICICI Ltd. will make three equity issues aggregating Rs.2,165 crore ($ 500 million) to help its institutional shareholders retain their percentage holdings in the company while it goes for overseas funds.

• a Rs.500-crore ($115 million) issue to Unit Trust of India, Life Insurance Corporation of India, and General Insurance Corporation at Rs.73 per share

• the second, a Rs.275-crore ($70 million) issue at Rs.73 per share with a 10 per cent greenshoe option, and

• an overseas issue for $315 million.

This was decided at the ICICI board meeting that took place on Thursday.
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Govt. allows banks to do forward deals in gold
New Delhi: The government has allowed banks to enter into forward trading in gold, so as to complement the gold deposit scheme that was announced in the 1999-2000 budget.

This was stated in a government. The Reserve Bank of India and the authorised banks will be allowed to trade freely in gold within the country. So far, gold was not included in the list of commodities permitted to be hedged.
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RBI: Banks should file global asset details
Mumbai: The working group on international statistics set by the Reserve Bank of India has asked banks to file details of their global assets and liabilities. This, the bank feels would ensure effective monitoring of the banking systems, and also provide banking statistics to the outside world.

The data will be required to be submitted on a quarterly basis and will be in the five major currencies of the world, viz., the US dollar, the yen, the deutsche mark,  the pound sterling, and the euro.
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VSNL will launch cellular e-mail
Mumbai: Videsh Sanchar Nigam Ltd. will launch short messaging service, which will enable its subscribers to access the e-mail through cellular instruments. This service will be launched in the next three weeks. The charges for subscribers will be close to Rs.1, 000 per annum. This service of VSNL is similar to that offered by Graycell of Bangalore.
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IDBI-assisted companies fare well: study
Mumbai: A study reported in The Economic Times has state that the companies that the Industrial Development Bank of India has lent to, have performed well in the first quarter of the current fiscal. Sales rose 11 per cent, while profits have risen 13 per cent during the period. The study covers a sample of 333 companies and does not include finance companies.
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Rabo Bank selects Lucknow
Lucknow: Rabo Bank, the Netherlands-based agri finance institution, has selected Lucknow as its base in India. It is the world’s largest agri-finance institution, with global lending to the tune of $154.2 billion and income of $6 billion.
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IDBI selling out AMC to US company
Mumbai: Principal Group of the US will be offered a majority stake in the IDBI Investment Management Company, a wholly-owned subsidiary of the Industrial Development Bank of India. Principal Group has already made an offer at a premium, for the majority stake.

The Indian financial institution is considering issuing fresh shares or divesting its holding in the company.

IDBI is also seeking government sanction to hike salaries for its employees. It has asked the government to delink its pay scales from those of the Reserve Bank of India.
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CAR – reason enough to come out with a public issue
Mumbai: Vijaya Bank is planning a Rs.100 crore equity issue, after the Union budget for the year 2000-2001. The aim is to help the bank maintain its capital adequacy ratio. Before the end of 1999, the bank is planning a Rs.60-crore tier-II bond issue.

Vijaya Bank has net owned funds of Rs.407 core, more than the Rs.100 crore needed for claiming autonomy.

Canara Bank subsidiary Canfin Homes will also expand its equity base by 30 to 40 per cent over the next year, in order to maintain a capital adequacy ratio of 12 per cent. The subsidiary may come out with a rights or preferential issue, or offer a stake to a UK-based mortgage firm.
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Software exports jump
New Delhi: During the first quarter of the 1999-2000 financial year, software exports grew 55 per cent. According to Nasscom, exports were over Rs.3, 500 crore in April-June period this year.

The association feels that software exports will touch Rs.16,700 crore by fiscal year ended 1999-2000. During the first quarter of 1998-99, exports were Rs.2,270 crore.
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IDBI Flexibonds garner Rs.1700 crore
Mumbai: The Industrial Development bank of India’s Flexibond VII issue has netted Rs.1,700 crore. The issue closed on Thursday, 19 August 1999. The issue had a target of Rs.1,500 crore, including a greenshoe option of Rs.750 crore.
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World’s largest bank being formed
Tokyo: The merger of the Industrial Bank of Japan, Fuji Bank and Dai-Ichi Kangyo Bank could create a bank with assets of US$1.3 trillion. This is more than the world’s largest bank at present, Deutsche Bank AG.

The banks are yet to come to a final agreement on the issue.
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