RIL may be unable to avail of insurance amount
Mumbai: The Jamnagar refinery of Reliance Industries, a portion of which was affected by a fire on Wednesday, is insured for Rs50,000 crore. The insurance was renewed for a higher premium of Rs180 crore on October 1, 2006, as against Rs130 crore last year.

According to an insurance company, the property cover, which insures the plant against fire and other perils, is worth Rs28,000 crore, while the loss of profit (production loss due to interruptions) cover has a sum assured of around Rs22,000 crore.

The business interruption cover provides for the reimbursement of lost income and necessary standing expenses. They have a deductible period of 15-30 days after which insurance starts. This means that the company will not be reimbursed for the said period as in the case of Reliance, the deductible period was fixed at 30 days.

While New India Assurance is the lead insurer of the plant with a stake of 60 per cent, other companies which have co-insured include Oriental Insurance company (15 per cent), ICICI Lombard (10 per cent), Bajaj Allianz General (5 per cent), United India Insurance (5 per cent) and National Insurance Company (5 per cent).
Back to News Review index page  

Mahindra Finance Q2 net up 8.4 pc
Mahindra Finance has reported an 8.4 per cent rise in net profit at Rs30.32 crore (Rs27.97 crore) for the second quarter of the current fiscal ended September 30, 2006. Total income rose 37 per cent to Rs196.52 crore from Rs142.93 crore.

The company attributed its growth largely to its recent financial tie up with Maruti in which it has been financing the sale of around 3,000 Maruti vehicles every month. Also, the company recently expanded its retail network to 380 branches from 315, enabling the company to fund sales of over 15,000 vehicles per month as against 9,000 vehicles last year. Of the 15,000 vehicles, 65 per cent are M&M models, while the rest are non-M&M models.

The finance company has been financing a low but steady volume of commercial vehicles as well. It has also conducted pilot projects on financing of two-wheelers with select M&M dealers who also sell two-wheelers.
Back to News Review index page  

Public banks' non-priority NPAs rising says RBI
Mumbai: Public sector banks' (PSB) NPAs have risen in the non-priority sector whereas bad debts related to priority sector advances have declined over the past 25 years according to a paper titled, `Banking Sector Developments in India, 1980-2005: What the Annual Accounts Speak?' released by the Reserve Bank of India.

This effectively demolishes the commonly-held belief that the problem of NPAs in the banking system is mainly due to credit allocation to priority sectors, stated the paper.

The paper said that there has been a significant change in the composition of deposits with a clear shift in favour of term deposits. While the share of savings bank deposits remained more or less constant, demand deposits witnessed a decline.

The paper points out that MNC banks attracted more funds of short-term nature in the form of demand deposits, and this could be because "the business class is attracted toward better service offered by foreign banks".

PSBs by and large, still prefer to invest a large portion of their investments in approved securities, even though the SLR (statutory liquidity ratio) requirements have been reduced to the statutory minimum of 25%, the reasons being their risk-free nature and the assured returns the lenders get.
Back to News Review index page  

Loan mortgages may attract uniform stamp duty of 0.5 pc
New Delhi: The government plans to introduce a uniform 0.5 pc stamp duty on the typical mortgages enforced by banks and financial institutions for loans against houses and land.

Currently, the stamp duty for simple mortgage is 1-4 pc from state to state. Under the new rules, the maximum cap on the registration fee will be fixed at a nominal amount of Rs200, which at present is Rs5,000.

Currently this rate is as high as 4 pc in Bihar, Jharkhand and Orissa and 1 pc in Delhi. In states like Maharashtra, Madhya Pradesh and Gujarat, the rate is already 0.5 pc.
Back to News Review index page