FM asks micro-finance institutions to continue as intermediaries
New Delhi: The Finance Minister, P. Chidambaram, has advised micro-finance institutions (MFIs) to take up intermediation between banks and self-help groups (SHGs) rather than looking to avail themselves of tax concessions or access foreign equity/debt funds.

Addressing a SIDBI Sa-Dhan conference on Regulatory Framework for MFIs here, Chidambaram said that access to foreign equity and changes in tax laws are ideas that should be put in backburner.

"I do not see any compelling arguments for MFIs to become credit institutions and accept deposits. There is enough lendable resources with banks. What is lacking is proper intermediation. You must examine whether intermediation could be your predominant role," the Finance Minister said.

He held that MFIs should generally desist from accepting deposits.
Stating that the United Progressive Alliance Government is deeply committed to strengthen the SHG and micro-finance movement, Chidambaram asked Sa-Dhan and others in the micro-finance sector to spell out the purpose of a micro-finance fund, whose creation is being advocated by several MFIs.

On the suggestion of Sa-Dhan Chairperson, Ms Ila Bhatt, that there should be a Micro-Finance Development and Regulatory Authority, Chidambaram said that he supported this idea with "great degree of caution".

`We are already an overregulated society. Some regulations may be necessary. It's my opinion that MFIs that do not take deposit need not be regulated".
Back to News Review index page  

IDBI Bank Q3 net up at Rs.55.8 crore
Mumbai: Driven by a significant growth in net interest income, IDBI Bank recorded a 53.7 per cent jump in net profit for the third quarter ended December 31, 2004, at Rs55.8 crore as against Rs36.3 crore in the year ago period.

Total income of the bank grew to Rs188.6 crore (Rs 138.9 crore). Net interest income rose to Rs106.9 crore (Rs88.8 crore).

The growth in income was largely driven by a strong growth in assets. Customer assets grew by 48.3 per cent on a year-on-year basis to Rs11,266 crore, said a press release.

Retail assets grew to Rs5,132 crore and constituted 46 per cent of total customer assets, while total assets stood at Rs16,408 crore compared to Rs11,612 crore in the corresponding period, the previous year.

Total deposits of the bank were at Rs11,636 crore as on December 31, 2004 as against Rs8,431 crore in December 2003.
Loan loss provisions, write offs and depreciation on investments were lower at Rs10.3 crore (Rs 17.4 crore). Net non-performing assets were lower at 0.1 per cent (0.4 per cent).
Back to News Review index page  
UCO Bank to place bonds for Rs.250 crore
Kolkata: UCO Bank proposes to privately place bonds aggregating Rs250 crore, including a greenshoe option of Rs50 crore.

The issue, rated CARE AA and AA (Ind) by CARE and Fitch Ratings respectively, will close on January 29. The bonds will have a tenor of 111 months and bear a coupon of 7.25 per cent, a press release issued by the bank has mentioned.
Back to News Review index page  
IDBI and IDBI Bank share swap ratio fixed
Mumbai: The shareholders of IDBI Bank will get 100 shares of IDBI for every 142 shares held by them. The boards of IDBI and IDBI Bank approved the share swap ratio for the merger on Thursday.

IDBI will transfer 2.5 per cent of its shareholding in IDBI Bank to a trust in order to give value to IDBI's shareholders, M. Damodaran, Chairman, IDBI has said.

IDBI will extinguish the balance shares held by it in IDBI Bank. The central Government holding in the merged entity will be at 51.4 per cent, he told presspersons, on the sidelines of the board meetings here.

IDBI's holding in the bank at the end of December 2004 quarter was 55.33 per cent, while SIDBI holds 13.83 per cent. The amalgamation will be with retrospective effect from October 1, 2004, and the process is due to be completed by March 31, 2005.

The business model of the bank, post-merger will be along two strategic business units. While one SBU will focus on development finance (corporate banking), the other will cater to commercial banking needs such as retail etc.

On issues related to the statutory liquidity ratio liabilities, Damodaran said that IDBI Bank was fully compliant with SLR requirements, and while IDBI had a five-year regulatory forbearance on meeting its SLR requirements, the merged entity will continue to honour the SLR commitments now being fulfilled by IDBI Bank.

The scheme for amalgamation of IDBI and IDBI Bank is subject to the approval of the RBI and the shareholders of the two entities. IDBI has convened an EGM on February 23.
Back to News Review index page  
Syndicate Bank and Shell Foundation set up venture fund
Bangalore: The public sector Syndicate Bank has set up a venture capital fund along with Shell Foundation International.

The venture fund would have a corpus of Rs12.5 crore. Shell has contributed about half million dollars for the venture fund. The fund would be specifically targeted at rural India, in sectors such as agro products, small-scale industries and biotechnology sectors.

Top Syndicate Bank officials said the fund would extend margin money support to all these sectors including equity funds. The fund would not be regional in character, the officials said and added, depending on the off take, the bank was prepared to enlarge the corpus, by involving more public sector banks or create a second region or sector-specific funds.

The fund, the officials said, was targeting a return of at least 15 per cent in its assistance for investments in such venture.
Back to News Review index page