Karur Vysya to market ECGC risk products
Coimbatore: Export Credit Guarantee Corporation (ECGC) has signed a MoU with Tamil Nadu-based Karur Vysya Bank Ltd, to enable the former to route marketing of its export credit/risk insurance products through the latter under the concept of `bancassurance'. Karur Vysya is the fourth bank to enter into the tie-up with ECGC, after Corporation Bank, South Indian Bank and Federal Bank. The MoU was signed on Thursday by S. Prabhakaran, executive director of ECGC, and P.T. Kuppuswamy, chairman of KVB, at the bank's headquarters in Karur, according to an ECGC communication issued here.

The agreement would enable KVB offering the ECGC's export insurance covers to the exporting community serviced by the bank's various branches across the country. ECGC is offering six different export insurance risk covers including the three new additions - buyer-wise policy, turnover policy and maturity factoring - for the exporters. According to ECGC corporate office sources, the corporation is also likely to sign a similar agreement with Bank of Rajasthan Ltd next week.
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ICICI Bank's move flayed
Kochi: The United Forum of Bank Unions has expressed serious concern on the reported move of ICICI Bank to transfer the equities of Federal Bank and South Indian Bank, saying that it was against the interest of the State.

A meeting of the unions held here has requested the ICICI Bank to desist from the move and to maintain status quo in the operations of these banks. V.K. Prasad, Convenor of the United Forum, said the unions would strongly oppose any move aimed at transferring the shares to any outside parties.
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Exemption for RLF rupee funds to be phased out
Mumbai: The Reserve Bank of India has decided to phase out the exemption for rupee funds raised under the Reciprocal Line Facility (RLF) from the prudential limits specified for call, notice money transactions. It would be phased out from the fortnight beginning February 7. Accordingly, lending or borrowing in call and notice money market including transactions under the facility from the fortnight beginning February 7 should not exceed the prudential limits specified for this purpose, the RBI said in a circular to all commercial banks on Thursday.

Under the RLF , a foreign bank in India enters into a standing agreement with an Indian bank having branches abroad to draw specified amount of rupee resources from the latter in India against the equivalent amount of foreign currency sanctioned to the Indian bank by the former abroad. Last year, in a bid to provide greater flexibility in liquidity management by banks, the RBI had exempted the rupee resources drawn under the RLF from the prudential limits specified for the call and notice market transactions. The position was to be reviewed in a year.
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SBI, UTI Bank to share ATMs
Mumbai: State Bank of India (SBI) and UTI Bank have signed a memorandum of understanding (MoU) for mutual sharing of ATMs. This arrangement is aimed at offering the customers of both banks the facility of using the combined network of ATMs, both existing and proposed, of the two banks across India.

This will include the ATMs of the seven associate member banks of SBI, a release said.UTI Bank has a network of 210 branches and extension counters and 1,040 ATMs, spread across 92 cities and towns, covering 23 States and two Union Territories
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Om Kotak Life targets 186% growth in FPI this fiscal
Kolkata: Om Kotak Mahindra Life Insurance Co Ltd, has set an ambitious target to achieve an impressive growth of 186 per cent in its first premium income (FPI) during the current financial year, according to the Om Kotak Life managing director Shivaji Dam.
"Our total first premium income as of the last financial year of 2002-03 was Rs 35 crore and we have set a target to improve the figure to Rs 100 crore by the end of the current fiscal," he told reporters here late on Wednesday evening. He also said that the company management also expects to achieve a growth of around 400 per cent in the sum assured amount by the end of the current financial year. "The total sum assured at the end of the first six months of the current financial year was Rs 1,400 crore and we expect the figure to increase to around Rs 5,000 crore by the end of the current fiscal," he said.

Claiming that Om Kotak Life has been maintaining a sustained growth since its inception two years back, Dam said that from the first premium income figure of Rs 7 crore at the end of the first year of the commencement of operation, the company was able to increase the figure to Rs 35 crore at the end of the second year. He said that the current penetration level of Om Kotak Life, which is the fourth largest insurance company in India, stands at 0.5 per cent. "We are confident of improving our penetration level to 25 per cent during the next couple of years," Dam said.

He also said that Om Kotak Life is operating through 21 branches in 21 cities at present. "By the end of the current fiscal, we will operate from 19 more cities by opening up 19 additional branches," Dam said. He claimed that the management is also planning to increase its number of agents to 10,000 by the end of the current financial year, from the existing 5,500
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Rabo, Maharashtra may team up for life sciences, entertainment
Mumbai: Rabobank has offered to actively associate with the Maharashtra government for the development of a world class life sciences park, agri-business park and media and entertainment park in Mumbai and around. In its recent presentation to the state’s principal industries secretary Vishwas Dhumal, the bank has proposed to involve in the development of the project concept, techno economic viability of each individual project, project management and financial advisory. Dhumal confirmed that such a presentation took place and told that the state government would consider Rabobank’s proposal, especially on the development of the life sciences park in and around Mumbai and the world class agri-business park on the very prestigious Mumbai-Pune express way.

According to the bank, Mumbai is the ideal location for all three projects, for, being the financial capital, having good quality infrastructure and its pre-eminent position as an investment destination, has been acknowledged by private investors. The bank has pointed out that around 2,400 hectare of salt pan land would be available to the state government. This land situated largely in north-east Mumbai can directly be used for development or slums can be relocated to the salt pan land and then land released from that could be used for development of these projects. Rabo India has called upon the state government to set up a working group for the development of these three projects comprising government representatives and specialists from individual sectors and professionals from the bank. It has also suggested for the formation of a steering committee with powers to take decisions on behalf of government for speedy project development by the working group.

The objective of life sciences or biotechnology parks can become a one stop source for providing research and support services, finding partners for collaboration research, structuring financial and contractual management of projects, providing product development capability on a commercial basis and helping with patent and licensing development. The life sciences park can focus on Enzymes, biological and stem cell research, CRO and clinical trials services to pharma industry. It can also house the specialised downstream facilities. On the development of the agri-business park, the bank has suggested that it would function throughout the year except for a brief period when it would be closed for maintenance, cumulatively for four weeks in a year. The park will have sector pavilions with permanent stalls of government organisations, leading companies, cooperatives, trade associations across sectors showcasing their product offerings. It could be developed at the cost of Rs 60 crore.
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SBI to recast top brass - Associates, arms to come under MD
Mumbai: The subsidiaries and associates of State Bank of India will soon be brought under the charge of a managing director. According to informed sources, the deputy managing director (DMD) of SBI, who heads the associates and subsidiaries business of the bank, Chandan Bhattacharya, might soon be elevated to the position of the second managing director of the country's largest bank, as part of a restructuring plan for the bank's top brass. Significantly, with this promotion, the Corporate Banking Group may no longer have an MD at its helm, as the SBI Act has provision only for one chairman and two managing directors. The move, if implemented, will be a departure from the bank's tradition of having two managing directors, one heading the Corporate Banking Group and the other the National Banking Group. Sources said, Bhattacharya, the senior-most DMD in the bank, took over the associates and subsidiaries portfolio last month, perhaps as a precursor to his impending promotion.

In fact, the position of managing director of the Corporate Banking Group has been lying vacant, ever since the retirement of A.K.Batra, fuelling speculation about who will be his successor.
Last year, P.N. Venkatachalam and Batra were appointed as the managing directors of SBI and Venkatachalam continues to be the managing director of the National Banking Group. Venkatachalam is due to retire next year, when Mr Ashok Kini, DMD, Information Technology, is tipped to step into his shoes. Sources contend SBI's plan is motivated by the consistent performance of its associates and subsidiaries, which has in large part contributed to the parent's growth in the recent past. There is also an anomaly in the hierarchical structure of the bank, which will be corrected when the new plan is implemented. A source close to SBI confided, " the anomaly lies in the fact that the DMD of SBI's associates and subsidiaries group, has some other DMDs reporting to him, i.e, among the managing directors of the associates and subsidiaries, some are technically DMDs in the parent bank. Therefore, there is a need to promote the DMD in charge of associates and subsidiaries in SBI to a higher position". In 1994-95, the international consulting group McKinsey worked out a restructuring programme for SBI. At that time, in keeping with the firm's recommendations, the bank split up in different business units headed by the chairman and two managing directors..

More recently, the consultant was awarded the project of the major business process re-engineering plans of SBIAccording to sources, the consultant found that the Corporate Banking Group, which was set up in the early nineties to expedite large value credit delivery to corporates, has not kept pace with the initial projections, while the associates and subsidiaries have exceeded expectations in terms of performance. Sources said, " the Corporate Banking Group has helped the bank in achieving certain milestones. However, in the last three years, interest rates have gone down and corporates are raising funds from the market. Even corporates with large funds at their disposal have not been expanding". According to bankers, the Corporate Banking Group operations has stabilized over the years and does not necessarily need an Managing Director to lead it, and once the economy picks up, so will the business. If SBI's new managing director heads associates and subsidiaries, it is also indicative of the chairman, A.K. Purwar's focus on `group synergies', sources said.
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