RBI wants tabs on hedge, private equity funds
Mumbai: RBI wants to monitor hedge funds and private equity funds that currently dominates international financial markets, and are outside the purview of know your customer (KYC) norms.

RBI Governor, Dr Y.V. Reddy, speaking at a seminar organised by the FICCI said hedge funds were opaque and information about their portfolio infrequent but from the policy perspective, transparency for investors is important. Monetary authorities, therefore, need to maintain database of positions held by hedge funds, he added.
Back to News Review index page  

President asks LIC to provide policies in demat form
New Delhi: The President of India, A.P.J. Abdul Kalam has asked the Life Insurance Corporation of India (LIC) to consider providing dematerialised policies in electronic form to its policyholders as this would enable easy storage of policies by the policyholders. The president asked the Government to consider necessary legal changes for enabling LIC to introduce dematerialised policies. This suggestion formed part of the seven missions that the President outlined for the consideration of LIC, which is now doing business in a competitive environment.

The President also urged LIC to penetrate to enter the rural and unorganised sector on a large scale so as to increase the total policyholders of the corporation from the existing 190 million to 380 million within the next five years. The President also said that LIC should consider increasing the awareness of insurance products among rural people through the Village Knowledge Centre being established in each of the Panchayats.
Back to News Review index page  

NBFCs given month's deadline for Fair Practices Code
Mumbai: The Reserve Bank of India has given a one-month deadline to Non-Banking Finance Companies (NBFCs) to come out with a Fair Practices Code. The central bank has released guidelines to help NBFCs in writing the code.

According to the code the RBI said NBFCs cannot use muscle power in recovery of loans and are also supposed to respond (consent or reject) to borrowers' requests for transfer of borrowal account within 21 days from the date of receipt of the request. Changes in interest rates should be effected only prospectively and NBFCs should also give notice to the borrower of any change in the terms and conditions about disbursement schedule, service and prepayment charges.

Also the RBI wants a grievance redressal mechanism to be set up within the organisation.
Back to News Review index page  

SBI raises Rs5,500-cr from debt raising programme
Mumbai: State Bank of India (SBI) has raised Rs5,500 crore as subordinate debt from the private placement market. This is more than half of its annual debt-raising programme for the current year.
The bank planned to borrow about Rs10,000 crore this year and nearly 55 per cent of this has been raised in several tranches. The money raised as subordinate debt would reflect in the bank's capital adequacy ratio.

On Thursday, SBI raised Rs500 crore for 15 years and the entire amount was placed with the government-owned Life Insurance Corporation. The tranche was raised at 8.85 pc for 15 years with a put and call option at the end of 10 years.

Analysts estimate that banks in India will have to raise an additional sum of Rs20,000 crore for operational risk alone this year if the Basel II norms become effective in FY07.
Back to News Review index page  

IOC liquidates Rs1,450-cr bonds
New Delhi: Indian Oil Corporation Ltd (IndianOil) has liquidated Rs1,450-crore worth of oil bonds of six years and nine years maturities in the secondary market trade. The company said that the liquidation of the bonds was concluded on Tuesday through the book-building route. The issue size was Rs250 crore with a green shoe option and generated a good response, the company said.

The Government of India had issued the bonds to Indian Oil in March 2006 in lieu of the under-recoveries suffered by the company on the sale of liquefied petroleum gas (LPG) and kerosene. In April, Indian Oil had liquidated Rs860 crore worth of bonds in the three-year and nine-year category.
Back to News Review index page