Verma committee submits report
Mumbai: Verma committee, a working group appointed by the Reserve Bank of India for restructuring the weak public sector banks, has submitted its report.

The panel has recommended a conditional bailout amounting to Rs.5,500 crore for Indian Bank, United Bank of India and Uco Bank. These banks have been identified as weak banks. The panel has identified six more banks categorised as distressed, which are Allahabad Bank, Central Bank of India, Indian Overseas Bank, Punjab & Sind Bank, Union Bank of India and Vijaya Bank. These banks are on the threshold of becoming weak.

The three weak banks should go for a voluntary retirement scheme for 25 per cent of their staff and if that fails to remove excess staff, they should go in for a 25 per cent wage cut across the board. A wage freeze also is suggested for the next five years with retrospective effect from November 1997. It has also recommended that the capital adequacy for weak banks should be one per cent above the minimum requirement.

Indian Bank has been recommended to sell its associate companies and the United Bank of India has been asked to sell its foreign branches. The unviable branches of the weak banks should be merged.

An asset reconstruction company will buy Rs.3,000 crore of non-performing assets from the three weak banks as part of the Rs.5,500 crore package

The panel has stated that the financial projections made by the three weak banks for the next five years are too rosy. The banks’ plans do not reflect a steady growth in income and control of costs.
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Sebi set to win battle with RBI
New Delhi: The ministry of finance has rejected the Reserve Bank of India’s demand to regulate the entire debt market. It favours the Securities and Exchange Board of India’s control over listed debt instruments, which means that the government securities will come under RBI’s purview.

RBI’s contention is that since it has control over interest rates, it will be in the best position to regulate the debt market. Currently, the private placement market is untouched as it is under nobody’s control.
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MTNL stops new registrations
New Delhi: The government-owned telecom operator in New Delhi and Mumbai, Mahanagar Telephone Nigam Ltd., has put a temporary halt to new registrations for its cellular services. It has done so since it could not handle the crowd at its New Delhi office on 4 October 1999. About 5,000 applications have poured into MTNL so far.

The company is coming out with the cellular service using the wireless in local loop,or WILL, technology with 1,000 lines. Currently, MTNL has a capacity to handle about 14,000 customers.

In the meantime, the Telecom Regulatory Authority of India has said that it has not yet approved MTNL’s cellular tariffs. MTNL is offering the services currently at Rs.1.4 per three-minute call.

Acording to S Ramani Iyer, chief general manager, MTNL, the WILL is not a cellular service. People have to use these instruments in a 3-km radius from the base station. WILL follows the analog mode while the other cellular operators use the global satellite mobile technology, called the GSM standard. WILL has a frequency of 800 mhz while GSM has 900 mhz.
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New closing low for Rupee
Mumbai: On 4 October 1999, the rupee closed at Rs.43.59 to the dollar a shade lower than the close on 1 October 1999. Sources say that the buying up of dollars by the State Bank of India towards the end of the day, caused the fall in the rupee.
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RBI’s new NBFC accounting format
Mumbai: A Reserve Bank of India panel has recommended a new format for maintaining the accounts of non-banking finance companies. It has prescribed additional disclosures regarding the tenure of assets held, the exposure in various sectors, overdue loans, non-performing assets, etc…The new format should be adopted by finance companies from financial year 1999-2000. Only those companies that have 40 per cent of their tangible assets in the form of financial assets will be called finance companies.
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RBI to auction Rs.5,000 crore
Mumbai: The Reserve Bank of India will auction two government securities on 7 October 1999. The 11.9 per cent 2007 paper will be reissued for Rs.3,000 crore and the 2018, 12.6 per cent paper will be auctioned for Rs.2,000 crore. In view of this, the call rates are expected to firm up in the next week.
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SC for tougher emission norms
New Delhi: The Supreme Court has stated that it would be better to implement modified versions of Euro I and Euro II norms on the two and three wheelers plying in Delhi. On 29 April 1999, the court laid out the norms for passenger cars.

The auto industry has made a commitment to the Delhi government that all two-wheelers sold in the Delhi region from 1 January 2000 will be ‘India 2000’ compliant.
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Govt. will hike petro prices
New Delhi: In view of the rise in international prices of petroleum products, the government will increase domestic prices so as to restore parity. International prices have doubled since April 1999.

IFCI’s rights issue merchant banker is SBI Caps
New Delhi: The Industrial Finance Corporation of India has appointed SBI Capital Markets as its merchant banker for its forthcoming Rs.353 crore, at par, rights issue. The issue is slated for December 1999, the proceeds of which will be used by IFCI to meet the nine per cent capital adequacy requirement, by March 2000.
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