Indian Bank to distribute HDFC insurance policies
Mumbai: HDFC Standard Life Insurance has entered into a memorandum of understanding (MoU) with the Chennai-based Indian Bank, for exclusive marketing of insurance policies of HDFC Standard Life.
As per the agreement, a few hundred of the bank’s 2,000 odd branches, which cover a wide spectrum of the market, would be selected and the bank will nominate one person each in these branches to persuade its customers to buy HDFC Standard Life’s policy.
Initially, HDFC Standard Life branded services would be promoted and later both the partners are looking forward to co-branding products. The Indian Bank is reputed for its customer service and has seen its deposits grow by 18-19 per cent, despite problems of bad debts, which has resulted in erosion of bank's networth.

The reduction achieved by the banks in the proportion of their NPAs has also raised a question about the method or approach being adopted by the banks.
Back to News Review index page  

BankAm plans a JV foray into securities mart
Mumbai: Bank of America is scouting for joint venture partner for setting up an Indian subsidiary for undertaking primary deals in the government securities market. The largest retail bank in the US also plans to enter the local debt market to raise loans for top rated corporates. The bank exited from the retail business in India after selling it to ABN Amro is now increasing its thrust on wholesale banking activities.

It has applied to the Reserve Bank of India (RBI) for primary dealership licence. BankAm will hold a majority 75 per cent stake in the subsidiary, with the remaining held by the JV partner.

The subsidiary vehicle was essentially to undertake primary deals in government securities.
Back to News Review index page  

IT, medical services may come under service tax ambit
New Delhi: The Finance ministry is reported to be planning to include information technology (IT) services and a host of others like medical and legal services within the ambit of service tax. Finance ministry is looking at service tax is one area, which needs to be tapped fully in a bid to improve the tax-GDP ratio. The government also plans to increase service tax collection from about 0.1 per cent of the GDP to 0.57 per cent in the next five to six years.

While the IT sector has been enjoying a lot of fiscal concessions, both on hardware and software, same is now sought to be brought under service tax net with even the Parthasarthi Shome committee favouring taxing the IT sector in a bid to widen the tax net. At present, service tax is imposed on 26 activities. They attract a nominal tax rate of 5 per cent. The collection from it is around Rs 3,500 crore.

The interim report of the Shome committee on Tax Policy and Administrative Reforms for the Tenth Plan is being considered by the finance ministry, is of the view that more than Rs 10,000 crore could be mobilised from service tax per annum. In addition to the IT, the other services, which may be included in the tax net, in the forthcoming Budget, include medical and legal services.
Back to News Review index page