World Bank likely to double lending to India
Dubai: The World Bank is finalising a fresh deal with India to almost double its lending commitment from $1.2 billion now to $ 2.5-3 billion a year over the next four years. An informal memorandum of understanding might be signed with the finance ministry in due course, senior World Bank officials were quoted as saying. According to them, the series of meetings over the last few days here and earlier in New Delhi have identified infrastructure as the key sector to put India in the high growth orbit.

World Bank South Asia Region vice-president Praful Patel told the Bank had proposed a new strategy to address India's concerns on the debt build up in the government's own books. "The Bank will lend to the private sector and the Indian government only needs to provide the guarantee. This will mean that the debt on the government's own books will be reduced by a factor of 10," Patel said.
Back to News Review index page  

GTB to raise capital up to 49% via FDI route
Hyderabad: The board of directors of the ailing Global Trust Bank (GTB) has agreed, in principle, to enhance the capital up to 49 per cent using the foreign direct investment (FDI) route. GTB managing director Sudhakar Gunde said the board has constituted a 'special committee' with three of the bank's directors, to go into the modalities of offering equity to foreign investors. "The bank proposed to offer the equity under automatic route as permitted for a private sector bank."

Gunde said that the proposal would enable the bank to strengthen the financial position besides meeting the capital adequacy requirements stipulated by RBI. "This step will help steer the bank back to profitability and to take its rightful place among significant players in private sector banking." The bank said the special committee will meet regularly to evaluate the proposals received by the bank to find out the right partner with a unique combination of market intelligence and a proven track record and to make suitable recommendations to the board.
Back to News Review index page  

HDFC Bank, Tally join hands to launch EDI for SMEs
Mumbai: HDFC Bank in collaboration with accounting software provider Tally Solutions is planning to launch electronic data interchange (EDI) system for small and medium enterprises (SMEs). This will enable SMEs to have computer-to-computer real time exchanges of business transactions with the bank and their trading partners such as suppliers and buyers. Users of this system can forward purchase orders to suppliers, invoices to buyers and transfer funds to creditors' accounts electronically and on a real time basis to all the trading partners thereby reducing the operating cycle and cost of working capital, H Srikrishnan, country head-transactional banking and operations, HDFC Bank, was quoted as saying.

This will increase efficiency of their receivables portfolio management and collection system and will also ensure better cash management and decline in debt delinquency, he said. SMEs have become more responsive to changing business environment and there has been demand for a cost-effective and technology-based integrated business solution, Bharat Goenka, managing director, Tally Solutions Pvt Ltd.
Back to News Review index page  

Banks to be risk averse after Basel-II: FICCI
Mumbai: Indian banks are not prepared to implement Basel-II norms in total by 2006, and they need more than two years beyond 2006 to meet the norms, according to a survey conducted by the Federation of Indian Chambers of Commerce and Industry (FICCI). The survey also hinted at banks' discomfort with the additional pressure on their capital adequacy after the implementation of Basel-II norms. A whopping 87 per cent respondents of the survey feel that the additional capital burden could adversely affect the credit flow to industry as banks would become risk averse. The internal rating based approach would make Indian banks more resilient to risk and help them face competition better, feel 67 per cent of the respondents.

The survey with a sample size of 216 covered a wide spectrum of industry participants including banks, financial intermediaries, corporates and academia. The survey was released by FICCI secretary general Amit Mitra here on Tuesday. The survey has covered different areas in banking, like 74 per cent foreign direct investment (FDI) limit in private sector banks, the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act 2002 among others.
Back to News Review index page  

StanChart to expand corporate advisory team
Mumbai: Standard Chartered Bank (StanChart) has introduced corporate advisory services in India, which will advise clients mainly on M&As, acquisition financing and capital and finance structuring. The current team, which comprises V Anantharaman (from Deutsche Bank), Prahalad Shantigram (from DSP Merrill Lynch) and Topsy Mathew (from Pacific Century CyberWorks), will be expanded to around eight people in two months.

Said StanChart chief executive officer (India region) Christopher Low: "StanChart currently has around the same number of people (eight) in each of its other two corporate advisory services teams in Singapore and Hong Kong. This signifies the growing number of opportunities in the India region and our commitment to it." Currently, the corporate advisory services market in India is valued at around Rs 140 to 150 crore. StanChart will target 10 per cent of the market share in a span of two years in this area.
Back to News Review index page