Bharti to enter insurance sector by June end
New Delhi: Bharti Enterprises said it would initiate its life insurance venture with French major Axa by June end. The Foreign Investment Promotion Board has cleared Axa's proposal to infuse Rs24.55 crore for its 26 per cent stake in the proposed joint venture last week.

Bharti said the licence from the insurance regulator IRDA was awaited.

An agreement to set up Bharti AXA Life Insurance Company Ltd was signed in August last year between the two companies.
Back to News Review index page  

Indian equities overvalued - a closer look required: Rubin
Mumbai: Robert E Rubin, chairman, executive committee of Citigroup and former US Treasury Secretary, said he feels that analysts and policy makers should take a close look at the sharp rise in indices.

Addressing the Citigroup's India Equity Conference in Mumbai, Rubin said: "Despite India's favourable probabilistic prospects, these sharp recent stock market and capital flow phenomena call for analysis by investors and by policymakers - whatever the conclusions might be."

According to analysts the Indian stock market has risen by 250 per cent over the past three years, and portfolio investment inflows from abroad have grown six-fold in that period.

If markets are overvalued, this could create a greater vulnerability if other risks materialise, he added.

Rubin said he was in favour of opening up of the Indian financial system as it would benefit the system by making the local banks more competitive.
Back to News Review index page  

PSU banks likely to oppose FM plan of farm credit at 7 per cent
Mumbai: Finance Minister P Chidambaram may face opposition from public sector banks on the Budget proposal to provide short-term credit to farmers at 7 per cent and on the proposal to remove tax exemptions on interest and capital gains on infrastructure investments.

Bankers fear that farm lending at 7 per cent will worsen the credit risk profile of banks as it is much lower than the banking industry's average yield on advances of about
8.5 per cent.

The government plans to implement the 7 per cent farm credit scheme through a special refinance package via National Bank for Agricultural and Rural Development (Nabard). Banks normally tap the refinance window only in times of liquidity crunch.

Farm credit is expected to increase to Rs1,41,500 crore by the end of March 2006 from Rs1,25,309 crore in March 2005. The finance ministry has proposed to ask banks to increase the level of farm credit to Rs1,75,000 crore in 2006-07 — an increase of about Rs33,500 crore. In addition, banks are being asked to bring into the banking fold 50 lakh more farmers.

Bankers said the government should go in for direct subsidy on interest rates to farmers as it has done in the case of crop loans for the 2005-06 Kharif and Rabi seasons.
Back to News Review index page