Insurers may have to meet quotas
Mumbai: The Centre is contemplating to fix a quota for private insurance companies in a bid to ensure that they fulfil commitments in offering services in the hitherto avoided sectors such as motor vehicle insurance, and a minimum share in rural business by each company, Union minister of state for finance Anandrao Adsul said.
Back to News Review index page  

RBI ban on loans to urban co-op directors draws flak
New Delhi: Urban co-operative banks (UCBs) have criticised the Reserve Bank of India's recent move banning them from extending any loans and advances to directors, their relatives and associated concerns. "It is a knee-jerk reaction to isolated cases of bank failures caused by flagrant violation of lending norms laid down by the RBI. What is needed is proper enforcement of these norms, not an outright ban on loans to directors, which goes against the fundamental principles of co-operation", D. Krishna, chief executive, National Federation of UCBs and Credit Societies (NAFCUB), said.
Back to News Review index page  

GIC sees growth abroad
Chennai: The General Insurance Corporation of India intends to expand its operations overseas, for growth. The present domestic and international conditions provided the national reinsurer with both a need and an imperative, to go abroad for business, according to P.B. Ramanujam, managing director, GIC. GIC, with a net worth of around Rs 3,000 crore, can do business of Rs 10,000 crore (sum assured). Against this, it does around Rs 3,500 crore, of which Rs 500 crore comes from its overseas operations. GIC therefore has capacities, at a time when there is a shortage of capacities globally. Krishna said that the RBI had in its directive, dated May 26, 1994, fixed a cap on aggregate loans and advances (both secured and unsecured) to all directors, their relatives and concerns in which they were interested at 10 per cent of the UCB's net demand and time liabilities (NDTL). Through a subsequent directive, dated December 4, 2002, this ceiling was brought down to five per cent. It was also prescribed no single borrower could avail himself of loans exceeding 25 per cent of the bank's net-owned funds (share capital and reserves).
Back to News Review index page  

KFC top priority to cut NPAs to 40 pc
Thiruvanathapuram: As part of its efforts to refurbish the balance sheet and ramp up the performance, the Kerala Financial Corporation (KFC) is giving top priority to reducing the non-performing assets (NPAs) level and improving the customer service. The corporation has targeted to pare down the NPA from 56 per cent as of now to 40 per cent in the current year, according to Subrata Biswas, managing director. While the provisioning for NPA was at Rs 29 crore in 2001-02, it came down to Rs 6 crore last year. He told that KFC, which enjoyed a good credit rating, was in line to get a package from the Small Industries Development Bank of India (SIDBI). This would be in the form of a reduction in interest rates on future loans. The interest on outstanding loans was also likely to be brought down, he said and added that the package was being extended to only select State Financial Corporations (SFCs). He said the corporation maintained a very good track record in repayments to IDBI and SIDBI. If required, it can go to the market or commercial banks to raise funds. Last year, the tourism and hospitality sector got 45 per cent of the total sanctions made by the corporation. This included loans of up to 90 per cent extended for modernisation and expansion of hotels and resorts. A "revolving fund" was also devised to give short-term assistance to the clientele.
Back to News Review index page  

Netravati bank programme on self-help groups
Mangalore: Netravati Grameena Bank, one of the regional rural banks sponsored by Syndicate Bank, recently conducted a `sensitisation programme' on self-help groups (SHGs) for its branch managers. The programme was organised in collaboration with Syndicate Institute of Rural Entrepreneurship Development of Manipal. According to a press release, the Netravati Bank Chairman, Mr N. Srinivasan, stressed the need to increase the credit linkage of SHGs in tune with `national priorities' and called upon branch managers to promote SHGs. Dr Venugopal Arikeri of Nabard, Mangalore, also participated in the programme and is said to have explained in detail issues related to SHG financing. According to Dr Arikeri, SHGs should be viewed not only as means to uplift the poor but also as `viable business opportunities'.
Back to News Review index page