ADB not to reduce interest rates
The ADB has rejected finance minister P Chidambaram's demand to reduce its lending rates to pre-2000 level. It says its interest rates are "extremely low".

Chidambaram has asked Manila-based ADB to reduce its loan charges to the levels prevailing before year 2000, saying financial parameters of the bank had been robust and cost of funds were critical to its business.

Chidambaram, who is also the chairman of the ADB's board of governors, said the commitment fee should either be eliminated or substantially reduced through improvements in operations and internal efficiency of the bank.
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AP Grameena Bank to set up more branches
Visakhapatnam: Andhra Pradesh Grameena Vikas Bank, formed as a result of the the merger of five regional rural banks (all sponsored by the State Bank of India), is planning to add 35 branches to its present network of 489, according to A. Anantha Krishna, the chairman of the bank.

Nagarjuna Grameena Bank, Sri Visakha Grameena Bank, Sangameswara Grameena Bank, Manjeera Grameena Bank and Kakatiya Grameena Bank were merged to form AP Grameena Vikas Bank.

Sri Visakha Grameena Bank, with 168 branches in the three districts of Visakhapatnam, Vizianagaram and Srikakulam, is the biggest of the five banks.
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IA, ICICI Bank ink $152mn funding pact
Mumbai: Indian Airlines (IA) has signed a memorandum of understanding (MoU) with ICICI Bank for pre-delivery payments (PDPs) funding for acquisition of aircraft from European aircraft manufacturer Airbus Industrie.

The funding arrangement for PDP would be a syndicated external commercial borrowing (ECB) of $152 million, with ICICI Bank as a sole arranger and underwriter, and would be spread over from June 2006 to January 2010.

ICICI Bank has also agreed to assist Indian Airlines in applying to European Credit Agencies (ECA) for tie-ups to get long term funds.

ICICI Bank was shortlisted in a competitive bidding process. The pact was inked by Vishwapati Trivedi, chairman & managing director, Indian Airlines and Kalpana Morparia, joint managing director, ICICI Bank, Mumbai.

Significantly, the airline got this funding without any guarantee from the government and it would get long-term funds from ECA's support to complete the acquisition.

Earlier, Indian Airlines had signed an agreement with Airbus Industrie for the purchase of 43 Airbus A320 family aircraft - comprising 19 A319, 4 A320 and 20 A321 - at an estimated $2 billion. The first aircraft is scheduled to arrive in October 2006 and the entire delivery is expected to be completed by March 2010. All 43 aircraft will feature two-class cabin layouts and will be powered by CFM engines.

This acquisition would allow Indian Airlines to step up growth, expand its market and further improve the quality of its product besides replacing some of its existing Boeing 737 and Airbus A300 aircraft. Indian Airlines becomes the first carrier to select the Airbus A321 aircraft, which will have a capacity of 171 seats.
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