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RBI
okays direct investment in overseas listed cos
New Delhi: The Reserve Bank of India (RBI) has
now operationalised a slew of big-bang measures that were
announced by the Finance Minister, Jaswant Singh, in January
this year to bring about further flexibility in capital
account transactions and further integrate the Indian
financial market with the global capital markets. These
measures related to direct investments in equity of overseas
companies listed in recognised stock exchanges abroad.
Sources said a listed Indian company could, effective
from May 14, invest in the shares of an overseas company
that is listed on a recognised stock exchange and has
a shareholding in its name of not less than 10 per cent
in any listed Indian company as on 1st January of the
year of investment. The only condition in case of investment
by the listed Indian company is that the investment should
not exceed 25 per cent of its networth shown in its latest
audited balance sheet.
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Industrial
strike today, banking to be badly hit
New Delhi: Five of the nine leading bank unions
have extended support to Wednesday’s nationwide industrial
strike called by the Left parties-led trade unions to
protest against the Centre’s economic and labour
policies. The strike is expected to bring the banking
operations to a grinding halt across the country. Clearing
operations involving Rs 70,000-80,000 crore are likely
to be hit by the stir, according to one estimate. All-India
Bank Officers Confederation’s Delhi unit president
T N Goel said here on Tuesday that the unions are expressing
their opposition to the government’s moves on privatisation,
disinvestment, opening up of the financial sector to multinationals,
etc, measures that they perceive to be “anti-people
and against the interests of the common man”.
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Irda’s
standard pension scheme gets mixed response from insurance
firms
New Delhi: The standard pension plan drafted by
the N Shinkar committee may not find unreserved acceptance
in the life insurance industry. Players reacted somewhat
cautiously to the plan. While some dubbed it as a ‘workable’
proposal, others were sceptical about the practicability
of a standardised product in a competitive market. The
plan was unveiled at the Life Insurance Council meeting
in Hyderabad on May 5, by Insurance Regulatory and Development
Authority (Irda) chairman N Rangachary. He has sought
feedback on the proposed plan within a month. “Standardised
pension plans may have a limited role to play in entry-level
positions. However, they are normally not used for the
mainstream market where the benefits of product providers
competing against each other in terms of pricing and product
features are more in the consumers’ interest. We
must remember that the whole point of liberalisation was
competition and choice, not homogeneous offerings,”
CEO of Aviva Life Insurance Stuart Purdy pointed out
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Resona
raises tax reform urgency- Akio Okuyama
Tokyo: The head of Japan’s peak accounting
body said on Tuesday there was an urgent need for tax
reform to prevent capital shortages that forced Resona
Bank to seek a government bail-out from affecting more
of the country’s banks. Akio Okuyama, president of
the Japanese Institute of Certified Public Accountants,
said Japan’s “big four” banks were unlikely
to suffer the fate of fifth-ranked Resona Bank, which
was forced to seek a government bail-out at the weekend.
But he said all banks, including megabanks, would face
a tough time maintaining the quality of their capital
if the economy stayed weak.
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Rabo
India scouts for energy fund investors
Mumbai: The non-banking finance company Rabo India
Finance and BTS, a Swiss Government-affiliated entity,
is setting up a $30-million private equity fund dedicated
to renewable energy projects in the country. The company
is in the process of scouting for both domestic and overseas
investors for the `Indian Renewable Energy Equity Fund'
(IREED), as it is called, for the present, said a senior
official with Rabo India Finance. Rabo India Finance will
be the `country advisor' for the private equity fund.
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Crisil
upgrades Tata Fin NCD
Mumbai: Crisil has upgraded the rating on Tata
Finance Ltd's Rs 260-crore non-convertible debenture programme
to `BBB' from `BBB-'- earlier. The rating upgrade is based
on the successful execution of the company's recapitalisation
plan which has restored its capital adequacy levels to
above the regulatory requirements, as on March 31, 2003.
The upgrade is also based on the improvement in its core
vehicle finance business.
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Central
Bank net up 88 pc
New Delhi: Central Bank of India has declared a
net profit of Rs 305.52 crore for the year ended March
31, 2003, an 87.73 per cent rise over the previous year's
net of Rs 163.30 crore. The operating profit for the year
has gone up by 31.25 per cent to Rs 924 crore as against
Rs 704 crore in the previous year. The total business
increased to Rs 74,324 crore at the end of fiscal 2002-03,
a rise of 8.62 per cent over the previous year. While
total deposits grew by 8.55 per cent to Rs 51,165 crore,
gross advances increased by 8.2 per cent to Rs 24,851
crore. The bank has said that low-cost deposits constitute
43 per cent of the aggregate deposits. The total income
rose to Rs 5,626.54 crore (Rs 5258.12 crore).
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Centurion's
public issue likely in Q3
Bangalore: Centurion Bank expects its proposed
Rs 65-crore rights-cum-public issue to hit the market
by the third quarter of the current financial year, the
chairman and managing director, V. Janakiraman, said.
Post-issue, the capital adequacy ratio of the bank is
likely to be 10 per cent, he added. However, he did not
detail current figures citing regulatory restrictions.
The recapitalisation plan for the bank was currently proceeding
as per schedule, he said. The merger of Bank Muscat and
Centurion will take effect as soon as the Goa Bench of
the Mumbai High Court approves of it, he added.
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Andhra
Bank in talks to hedge high-cost deposits
Chennai: Andhra Bank is working on entering into
a rupee-dollar swap arrangement, for covering about Rs
800 crore of preferential rate (high-cost) deposits, the
bank's chairman and managing director, B. Vasanthan, said
on Tuesday. He said the bank had received quotes from
a few counter-parties. This is the second time that Andhra
Bank is entering into a hedging arrangement. The first
time was with the Hong Kong & Shanghai Banking Corporation
(HSBC) late last year, when the bank covered Rs 175 crore
of its Tier-II capital.
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SBI
Capital net up 50 pc; to pay 35 pc
Mumbai: SBI Capital Markets has recorded a 50 per
cent rise in net profit at Rs 28.36 crore for the year
ended March 2003 as against Rs 18.81 crore in the previous
corresponding period. The company has declared a dividend
of 35 per cent for the year, which is the highest dividend
it has ever declared, a press release quoted D.P Roy,
chairman of SBI Capital, as saying. During this period,
the company has registered a gross income of Rs 120.62
crore (Rs 103.08 crore). Fee income from merchant banking
and advisory services grew to Rs 41.04 crore (Rs 24.21
crore).
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IFCI
offers 9 pc coupon to EPFO for roll-over
New Delhi: In what could provide the trigger for
the restructuring of its pending provident fund liabilities,
IFCI Ltd has offered an interest rate of nine per cent
to the Employees Provident Fund Organisation (EPFO) for
rolling over its investments in the various instruments
floated by the institution in the past. The offer is nearly
300 basis points above the average rate of six per cent
at which banks and institutions have recently agreed to
roll over their investments in the institution. "We
are offering a very attractive rate to the EPFO. The coupon
offered is nearly 250 basis points above the prevalent
coupon rate of similar debt paper. Moreover, other institution
recently rolled over their investments in our paper at
around six per cent," V.P. Singh, chairman and managing
director, IFCI, said.
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SIDBI
bonds issue opens today
Mumbai: Small Industries Development Bank of India
(SIDBI) plans to launch its capital gains bonds through
the private placement route on May 21. The issue will
be available on tap. SIDBI will offer three instruments
for tenures of 3 years and 5 years at a coupon rate of
5.25 per cent, with put-and-call options at the end of
the three-year lock-in period. The bonds have been assigned
a credit rating of "CARE AAA" by CARE. Instruments
carrying this rating are considered to be of the best
quality carrying negligible investment risk. No tax will
be deducted at source on the interest payable on these
bonds.
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ICICI
Bank cuts deposit rates
Mumbai: ICICI Bank Ltd has reduced interest rates
on retail domestic deposits, by 25 to 100 basis points,
across various maturities effective May 22, 2003. For
deposits up to Rs 15 lakh and with a maturity of 15-45
days the new rate is 3 per cent from 3.50 per cent previously.
For 46-60 days the rate is now 4.50 per cent (3.50 per
cent), for 2 to 3 months, 4 per cent (4.50 per cent),
for 3 to 6 months, 5.25 (5.50 per cent), for 6 months
to one year, 5.50 per cent (5.75 per cent), for one to
two years, 5.75 per cent (6 per cent), for two to ten
years, 6 per cent (6.25 per cent).
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