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IIRM
was recommended by insurance cos: Rangachary
Chennai: The former chairman of the Insurance Regulatory
and Development Authority (IRDA), N. Rangachary, has said
that the establishment of the Institute of Insurance and
Risk Management (IIRM) was recommended by the insurance
companies and the members of the Insurance Advisory Committee.
The research activity carried on in the institute will
develop Indian insurance business. The institute will
act as the research facility of the IRDA. In a statement,
reacting to reports appearing in a section of the media
about the IIRM and his role in it, Rangachary has said
that Section 14 of the IRDA Act enables the authority
to set up a research organisation in the insurance and
re-insurance areas. For the purpose, the authority has
also been authorised to raise a levy from the insurance
companies. The IRDA's funds were wholly derived from insurance
companies and insurance intermediaries, and therefore
using part of the funds to reflect the needs of the insurance
industry for research in risk management was considered
worthwhile, he said. Rangachary said that in October 2002
a sum of Rs 10 crore was placed in endowment with the
IIRM and interest from this was to be used for research
activities at the institute. The endowment was supervised
by the board of trustees consisting of five persons including
two representatives of the IRDA. No prior approval of
any authority was required under the IRDA Act.
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Ministry
seeks report on LIC's health
New Delhi: The ministry of finance has asked the
Life Insurance Corporation of India to give a status report
on its financial health in view of the whispers doing
the round that the insurance monolith might be creating
a potentially explosive situation by not adhering to the
solvency and the capital requirements stipulated by the
Insurance Regulatory and Development Authority (IRDA).
The ministry, in a missive to LIC, has asked the corporation
to explain its financial position and place before the
government its plans to adhere to the regulatory requirements
within a stipulated timeframe. "We have asked the
LIC to give its reactions to us on the news doing the
rounds that is falling short of the capital norms and
the solvency requirements," a senior finance ministry
official said. The ministry is particularly concerned
since the bill to bring back the corporation to health
in case it is hiding its ailment might ultimately have
to be borne by the Centre.
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Bank
of Baroda open to acquisitions, alliances to beef up presence
New Delhi: Bank of Baroda is open to the idea of
growth by way of mergers and acquisitions or entering
into strategic alliances with other banks, the bank's
chairman and managing director, P.S. Shenoy, has said.
"We will definitely look at that (mergers) or forming
strategic alliances as long as it adds value to our bank,"
Shenoy said, here on Thursday. He, however, said that
no such proposal is pending before the bank. Shenoy said
that should proposals for alliances come about he would
prefer to look at those banks that are strong in the southern
and the eastern regions of the country. "We are quite
strong in the west and reasonably strong in the north,"
he said. The BoB chairman also said that bank is likely
to vastly expand its network of ATMs in the coming years
with around 500 such machines likely to be in place within
1-2 years. The bank would have a total of around 140 ATMs
in the coming few days with the inauguration of around
100 new sites soon. "We are also inclined to look
for entering into ATM sharing agreements with other banks,"
he said.
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Uco
Bank slashes interest rates for agri, SSI sectors
Kolkata: Uco Bank has brought about a reduction
in the rates of interest, with particular emphasis on
the small farmers and entrepreneurs to increase the flow
of credit to the agriculture and SSI sector. The new rates
will be effective from June 3, 2003.
According to a press statement issued by Uco Bank, the
revised rates of interest would be two per cent below
the prime lending rate (PLR) or prime terms lending rate
(PTLR) for limits up to Rs 25,000, equal to PLR or PTLR
for limits ranging from Rs 25,000 to Rs 2,00,000, one
per cent above the PLR or PTLR for limits above Rs 2,00,000
to Rs 10,00,000 and two per cent plus PLR and PTLR for
limits above Rs 10,00,000 to Rs 25,00,000. In case of
limits above Rs 25,00,000, the rates will be according
to the credit rating.
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RBI
taps UCBs for details of loans to directors
Mumbai: The Reserve Bank of India on Wednesday
asked all primary (Urban) co-operative Banks to submit
details of loans granted to directors, their relatives
and the firms/concerns/companies, in which they are interested.
The details should be submitted fortnightly from July
15, 2003 and up to September 30, 2003. From October 1,
2003, the prohibition on granting of loans and advances
- both secured and unsecured - to the directors etc, will
become effective, RBI said. The RBI has also asked UCBs
not to deviate from the guidelines on granting of loans
as it would invite penalty as per the provisions of the
Banking Regulation Act, 1949. It has said that loans to
directors should also strictly and scrupulously comply
with all the guidelines for extension of loans and advances
by UCBs, including, careful assessment of requirement
of finance based on proper credit appraisal in detail,
documentation, and supervision over end-use of funds,
etc. Proper safeguards should also be observed in regard
to account opening procedures, custody of documents, loans
against deposits, issue of guarantees/ letters of credit,
prevention of diversion of funds, sanctioning of loans/
other credit facilities, etc, the RBI said adding that
loans granted by UCBs to directors etc should also confirm
to the prudential ceiling of 5 per cent of its demand
and time liabilities.
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RBI
increases notified amount for
auctions
Mumbai: As part of its efforts to mop up excess
liquidity from the inter-bank system, the Reserve Bank
of India has increased the notified amounts for the next
two scheduled government borrowing programmes. The market
viewed this as a move to correct the long-term yield curve,
which became extremely flat with yield falling in the
longer-dated maturities. The auction will be held on July
1. The notified amount for auction programme has been
increased to Rs 12,000 crore from Rs 9,000 crore as mentioned
in the auction calendar. The RBI has also announced the
dated stocks for which auctions will be conducted. These
are the 7.37 per cent 2014 paper for Rs 5,000 crore, the
6.05 per cent 2019 for Rs 4,000 crore and the 6.13 per
cent 2028 for Rs 3,000 crore. The auction programme scheduled
between July 14 and 21 will be held for Rs 9,000 crore,
increased from the earlier notified amount of Rs 4,000
crore.
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RBI
gives GTB more time to announce FY03
results
Hyderabad: Global Trust Bank , which is currently
in the process of recovering dues to significantly bring
down its non-performing assets has arrived at the conclusion
that it requires some more time for finalisation of accounts
for the year ended March 31, 2003, in view of the need
to have a comprehensive assessment of the NPAs and provisions
required thereof.
Accordingly, the bank has sought permission from the RBI
for extension of time for a period of three months for
publishing the accounts for the fiscal 2002-03. Responding
positively to this, the RBI has permitted the bank to
have time till September 2003 for a thorough review of
the NPAs and provisions so as to ensure a proper representation
of the actual position, GTB said in a press release. The
GTB board, which met here on Thursday, has taken on record
the RBI approval and decided to publish the financial
results only after a thorough review of NPAs and provisions.
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Syndicate
Bank plans 150-200 branches
Bangalore: Syndicate Bank plans to open 150 to
200 new branches in the current year with no additional
overheads by redeploying staff in core banking solution
branches (CBS) and swapping excess premises surrendered
in the CBS branches. Addressing the fourth AGM of the
bank in Manipal, Syndicate Bank chairman and managing
director Michael Bastian said the bank is also giving
fresh thrust to marketing by setting up marketing teams
at zonal and regional levels. He said with this the bank
hopes to increase its customer base by 10 per cent in
the current fiscal. It has registered a net profit of
Rs 344.13 crore in FY03 as against Rs 250.55 crore in
FY02. The cost of funds is 4.96 per cent and the cost
of deposits 5.97 per cent. It has declared a dividend
of 15 per cent in FY03 as against 12 per cent last fiscal.
It is targeting a global business of Rs 57,000 crore this
fiscal. In FY03 it’s global business stood at Rs
47,687 crore.
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