document.writeln("

RBI to unveil Tier-III hybrid capital instruments
Chennai: The Reserve Bank of India (RBI) has said that it would soon announce the new hybrid capital instruments that could be tapped by commercial banks under Tier III capital for complying with Basel II prudential norms.

While Indian banks have already complied with Basel I norms, they now have to conform with Basel II norms with effect from March 31, 2007. While Indian banks are able to tap Tier I and Tier II capital for meeting Basel I norms, Tier III capital has not yet been introduced.

In a couple of weeks the RBI will ask the banks to introduce non-frill accounts without insisting on minimum balance to be maintained by customers.

The deputy governor of RBI said the foremost challenge before the banks was to customise their service offering products as one stop shop. He stressed on the need for banks to design more products rather than levying higher charges on customers.
Back to News Review index page  

ICICI Bank: China, a business rather than investment opportunity
Hong Kong: ICICI Bank prefers cooperative agreements with mainland lenders rather than direct investments, chief executive K.V. Kamath said.

ICICI Bank opened a branch in Hong Kong branch on Tuesday and says it foresees great opportunities in greater China, which is expected to have trade with India of up to US$18bn this year.

Before opening the Hong Kong branch ICICI had only a representative office in China. Foreign lenders are flocking to take advantage of Chin's strong economy and US$1.7trillion in personal savings. ICICI Bank also has branches in London, Canada and Singapore.

Kamath feels that China is a business opportunity, rather than an investment opportunity.

While private foreign banks like the Bank of America Corp, HSBC Holdings Plc and others have spent billions of dollars investing in Chinese lenders, ICICI Bank would prefer to spend money on its own operations, Kamath said.

The bank's Hong Kong branch will focus on serving its Indian clients with operations in the territory.d ICICI Bank has just signed a business cooperation agreement with the Bank of East Asia Ltd to provide its clients with service through the bank's China branches.
Back to News Review index page  

ICICI Prudential posts 66 per cent growth in premiums
Mumbai: At Rs668 crore, ICICI Prudential Life Insurance has registered a growth of 66 per cent in its first premium income during the first half of 2006 as against the same period last fiscal.

The company sold 2,83,818 policies in H1 for a total sum of Rs7,131 crore while its income from other premiums in the same period grew by 176 per cent to Rs493 crore according to Shikha Sharma, CEO and MD, ICICI Prudential.

Of the total of Rs668 crore of premium income, the bank earned Rs403 crore in the second quarter (July- Sept 2005), posting a growth of 73 per cent over the same quarter last year.
Back to News Review index page  

UTI's pension scheme qualifies for Sec 80 C exemptions
New Delhi: The Government has notified the mutual fund scheme, 'Retirement Benefit Pension Fund' of the UTI Asset Management Company, to be henceforth eligible for the provisions of Section 80 C of the Income Tax Act for the financial year 2005-06 onwards.

Contributions made under this scheme will be eligible for deduction of the whole amount paid or deposited subject to a maximum of Rsone lakh under section 80 C of Income Tax Act, the company informed the press.

The scheme, that invests minimum 60 per cent and maximum 100 per cent in debt and balance in equity, provides pension in the form of periodical income flow to the members to the extent of redemption value of their holding after they attain the age of 58 y ears.
Back to News Review index page  

MoneyGram to set up office in Mumbai
Mumbai: MoneyGram International, the global payment services company, has applied to the government for setting up an office in India.

MoneyGram's office in India would support its agents in expanding the money transfer business in India, the company said in a release here.

The company feels that with two crore Indians overseas MoneyGram can play an important role in connecting them to their families in India by providing money transfer service.

The company has also announced a festive offer under which non-resident Indians (NRI) in the US can send money to their families in India through MoneyGram agent at a flat fee of US$5. The offer is open for all transactions.
Back to News Review index page  

Chidambaram: 3Cs to drive banking sector
Chennai: Finance minister P Chidambaram says that the 3 Cs; competitiveness, consolidation and convergence will drive the banking industry in the future.

In future, Chidambaram said, competitiveness of the banks would depend on the service they provide and the service capability would largely be dependant on their size. He said banks should give importance to credit disbursement, as, "Credit is the driver of the economy."
Back to News Review index page  

Saudi nod for SBI to open branches in kingdom
Dubai: The State Bank of India and nine other foreign banks have been given permission by the Saudi government to open branches in the Kingdom. The banks have also been authorised to open branches in the country, according to Muhammad Al-Jasser, deputy governor of Saudi Arabian Monetary Agency (SAMA), the country's central bank.

Apart from the SBI, the newly licensed foreign banks are BNP Paribas, J.P. Morgan, Deutsche Bank, the National Bank of Kuwait, the National Bank of Bahrain, Emirates Bank, Gulf International Bank, and National Bank of Pakistan.

BNP Paribas was the first European bank to enter the Saudi market as a 100 per cent foreign bank.
Back to News Review index page  

Extra bonus for LIC policy holders
Mumbai: Union Finance minister P Chidambaram has enhanced the bonus for policy holders of the Life Insurance Corporation of India.

Under the whole life scheme of LIC, policy holders will enjoy a bonus of Rs71 per Rs1,000, he said while launching the LIC web portal for customers and agents in Chennai.

The policy holders of the endowment scheme will now get a bonus to the tune of Rs34-54 per Rs1,000 and for the money back scheme, it has been increased to Rs32-45 per Rs1,000.

Apart from this there is also the special bonus announced by the Prime Minister during the golden jubilee year of LIC, earlier this year.
LIC had earlier increased the bonus for pension policyholders and retained terminal bonuses, wherever applicable.
Back to News Review index page  

FM to undertake a review of PSU banks' capital needs
New Delhi: Finance minister P Chidambaram said the government is planning to discuss various options including dilution of government equity, hike in FII limits and issuance of preference capital in his meeting with heads of state-owned banks on November 18.

According to finance ministry sources, there was a sense of urgency to take a call on these issues since banks have to meet stringent capital adequacy norms in the Basel II regime, beginning 2007.

At present the FII limit in PSU banks is capped at 20 per cent. A hike in the limit together with a flexibility to dilute the government's stake in banks would help them raise further capital. Weaker PSU banks like Dena Bank, Punjab and Sind Bank and United Bank may be pushed into a corner if they fail to stick to their growth projections for the current fiscal.
Back to News Review index page  

LIC may get into health insurance
Mumbai: Life Insurance Corporation of India is keen to enter the area of health insurance although it is the "most risky all over the world," mainly because of the synergy existing between health and life insurance.

The insurer is waiting for proper health regulations to be put in place. The insurance company feels that since the healthcare sector does not have a regulator, cost of treatment tends to vary widely between hospitals.

The Insurance Regulatory and Development Authority (IRDA) has constituted a committee to look into the regulation of health services in India. LIC is awaiting the outcome of the committee.
Back to News Review index page  

SFCS should enter market: P Chidambaram
Hyderabad: Finance minister P Chidambaram has asked the State Financial Corporations (SFCS) to enter the capital market in order to raise funds and go under the credit rating system for improving their contribution to the country's overall economic growth.

Frankly appraising the performance of SFCs, Chidambaram said a large part over Rs40,000 crore disbursed by the SFCS were non-performing loans. He said SFC should adhere to prudent fiscal practices and improve the quality of credit appraisal.

He appreciated the performance of the Andhra Pradesh State Finance Corporation for its turn-around and emerging as a leader in the market in terms of performance and profitability.
Back to News Review index page  

Government mulls pension fund with assured return
New Delhi: To appease the expectation of the Left parties the government is planning a scheme that would offer subscribers a minimum rate of assured return. The subscribers will have to pay a fee for this risk-free option. The government will soon circulate a cabinet note in which the scheme is proposed. This is after the parliamentary standing committee on the NPS gave its views on the controversial issue.

Official sources say that the proposed scheme would have an underlying market mechanism to mitigate the risk that would solely fall on the employer. The ministry's note also proposes allowing up to 26 per cent FDI in the pension sector.

The Pension Fund Regulatory and Development Authority would be empowered to determine the portfolio composition with regard to the schemes to be offered under the NPS, officials said.
Back to News Review index page