IRDA panel on free pricing of own damage
Hyderabad: The Insurance Regulatory and Development Authority (IRDA) has decided to allow free pricing on the own damage portion of motor liability, a significant move that could pave the way for the de-tariffing regime in the insurance industry. The decision followed detailed examination of different views expressed on de-tariffing by the industry participants so as to enable the customers to have a choice in the products and also their pricing. Earlier, the problems relating to the own damage portion of the motor tariff were examined by a Committee appointed by IRDA under the chairmanship of Justice T.N.C. Rangarajan. The committee had furnished its report to the regulator by March 31, 2003. According to IRDA Chairman, N. Rangachary, the committee after examining various alternatives had concluded that the initial step with regard to de-tariffing of the premium structure could be undertaken in the case of own damage portion of the motor insurance.
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ICICI Bank to set up 65 new branches this year — To relocate unviable ones
Mumbai: ICICI Bank, the largest private sector bank in the country, will be more visible in the metropolitan cities. The bank has recently received 65 new branch licences for the year. "Most of the new branches will come up in the metropolitan cities, fourteen of them will be in Mumbai," said a senior official in ICICI Bank. The bank has a network of 450 branches and extension counters for the year ended March 2003. This financial year the private sector bank is focussed on developing its branch network and not so much the ATM network. Explaining how the locations for the new branches have been chosen the official said, "Several regional branch managers have been demanding a new branch in their area, we gave them a challenge. Double the business with an extra branch, the managers who accepted the challenge were mostly situated in the metro cities and therefore we shall increase penetration in these cities."
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SBBJ net rises 24 pc
Mumbai: A 13 per cent increase in both, non-interest income and other income, has enabled State Bank of Bikaner and Jaipur (SBBJ) to record a 24 per cent increase in net profit for the financial year ended March 31,2003 at Rs 203.28 crore, as compared to Rs 164.50 crore in the corresponding period the previous year. Addressing a press conference here on Friday, N.K. Puri, managing director of the bank, said the bank's board has proposed a 50 per cent dividend for its shareholders subject to RBI approval. On the bank's future business strategies, Puri said, "Our aim is to garner at least 50 per cent of business from outside Rajasthan. At present, around 70 per cent of the banks business is from Rajasthan itself." The bank has targeted a net profit of Rs 250 crore for the current fiscal and a deposit growth of Rs 2,500 crore and an increase in advances by Rs 1,450 crore.
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KSIDC to enter film financing
Thiruvanathapuram: The Kerala State Industrial Development Corporation (KSIDC) has decided to finance production of feature films in Malayalam by corporate entities, i.e. private or public limited companies. Announcing this here, a KSIDC spokesman said the board felt that film financing was a "good area" to venture into, especially in the context of the critical need of the industry for support at a time when it found itself right in the midst of a grave crisis. Representatives of the industry have been urging KSIDC to enter the field ever since filmmaking was accorded industry status by the Centre. KSIDC is following the lead of the Industrial Development Bank of India (IDBI) in this respect, the spokesman said. The amount of loan will be 50 per cent of the cost of the film subject to a maximum of Rs 50 lakh. The promoter's contribution should not be less than 15 per cent of the estimated cost of the film. The period of repayment is limited to a maximum of one year from the date of the first disbursement. The applicable interest rate will be 18 per cent per annum on a diminishing balance method. The securities to be provided will include: (a) Letter from the film processing laboratory conveying rights on the negatives of the film in favour of KSIDC. (b) Assignment of all agreements and intellectual property rights (IPR) in favour of KSIDC. (c) Maintaining of a Trust and Retention account for all capital as well as revenue inflows and outflows with KSIDC having the first charge on the same. (d) A hypothecation in favour of KSIDC on all tangible movables acquired for the project. (e) Personal guarantee of the directors of the corporate entity producing the film, and (f) assignment of existing rights like music, video, Internet, CD, DVD rights, old films etc.
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PSBs' deposit growth slows
Chennai: Deposit growth for 15 public sector banks grew by around 12.4 per cent during the past fiscal ended March 2003. This was marginally lower than the 13.1 per cent growth recorded by them in fiscal 2002. Deposit growth rates have been slowing down during the past few years. Deposit growth rates for public sector banks were of the order of 14 per cent in fiscal 2001 and around 15.5 per cent in fiscal 2000. Interestingly the deposit growth rates in the past fiscal have ranged between various banks from as low as 5 per cent for Oriental Bank of Commerce to a high of 18 per cent growth for Punjab National Bank. Over the past four years, interest rates have dropped by nearly 400 basis points. This has not, however, impacted banks to the extent that was once feared by them. Absence of alternate investment avenues, indifferent performance of mutual funds, the general dullness in the stock markets, and the reduction in non-banking finance companies have provided banks a fairly conducive environment for unabated flow of deposits.
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KNNL bonds issue gets `adequate safety' rating
Bangalore: Credit rating agency, ICRA, has assigned LA+ (SO) rating indicating "adequate safety" with regard to timely payment of interest and principal to Karnataka Neeravari Nigam Ltd (KNNL)'s proposed Rs 500-crore bonds issue in the current financial year.

According to an ICRA report, the State utility had earlier indicated its intention to raise Rs 350 crore either through the sale of bonds or as term loans in the current financial year. The State Government will provide guarantee up to Rs 250 crore in the case of bond issue. "Depending upon the market conditions, KNNL could mop up the entire amount in different tranches through bonds", the Government sources said. During last year, the utility had received a similar rating from ICRA for its Rs 500-crore bonds issue but it did not mop up the stipulated amount. In its first tranche, it raised Rs 174.20 crore through private placement of bonds at a coupon rate of 10.66 per cent. In the second round, it raised Rs 75 crore.
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Cisco to network Federal branches
Kochi: Cisco will implement a multi-location voice ready wide area network (WAN) solution, interconnecting all the 421 branches of Federal Bank in India by December 2003. Cisco has already networked 250 Federal Bank branches to date. The bank has also implemented Cisco security for confidentiality of data over the network, a fax from the company has said. The bank's plan is to link its branches via a network of leased lines with a secondary network of ISDN and VSAT links, providing backup in case of disruptions.
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Cholamandalam Q4 net up at Rs 8.5 cr
Chennai: Cholamandalam Investment and Finance Company Ltd has reported a net profit of Rs 8.48 crore for the fourth quarter of 2002-03, compared to Rs 6.02 crore in the corresponding quarter of the previous year. For the full year, the company made a net profit of Rs 28.14 crore, compared to Rs 18.78 crore in 2001-02. The board of directors has recommended that the interim dividend of Rs 5 per share (50 per cent) be declared as the final dividend. However, a change in the accounting policy contributed Rs 4.44 crore to the post-tax profits. Earlier, the company used to recognise revenue on securitised agreements over the tenure of the agreement. But, consequent to the `Guidance note on accounting for securitisation' issued by the Institute of Chartered Accountants of India, the company has begun to recognise revenue fully in the year of securitisation. During 2002-03, the company's disbursements in vehicle finance grew 45 per cent, to Rs 1,008 crore.
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DCA help sought to educate investors
Kolkata: The Association of Financial Planners (AFP) has made its case before the Department of Company Affairs in an effort to create awareness of financial planning. For starters, the association hopes to secure DCA's co-operation in organising programmes on investor education. The events could range from interaction between various interest groups to dissemination of information to investors through the electronic medium. The idea was to tap the resources available with the authorities, who were also keen to communicate with investors more effectively, observed Mr Ranjeet Mudholkar, CEO of AFP. The association's latest initiative is in keeping with the efforts made recently by the Financial Planning Standards Board, which oversees the global development of the CFP (Certified Financial Planner) certification programme. AFP is the licensing authority for the CFP trademark in India.
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