The working group, which met recently to review the Y2K preparedness, said it is necessary to interact on an individual basis with each of the non-compliant entities.

Moody's predicts liberalisation in banking sector
Mumbai: Moody's Investors Services feels that financial pressure would herald a process of banking sector liberalisation in India. Moody's cites that the government has injected Rs 20,046 crore towards capitalising public sector banks and has allowed banks to write off Rs 3,978 crore since the banking reforms were initiated in 1991.

It says profitability has become a valid objective for public sector banks and bank managements are becoming sensitive to the need for growing quality business.

Federal Bank plans to phase out NRNR deposits
Kochi: Federal Bank is planning a new asset liability management strategy, which involves phasing out of the high cost NRNR deposits this year-end. Concurrently the bank will increase the savings and current deposit portfolio and achieve an overall reduction in the cost of deposits.

The bank has set a target of Rs 86 crore in the current year for recovery of non-performing assets and proposes to bring down the cost of deposits from 11.56 per cent to 10.5 per cent. It will also retire Rs 680 crore worth of high cost NRNR deposits by September-October.

Indian Bank seeks Rs 1,200 cr recap aid
Chennai: Indian Bank has sought a recapitalisation assistance of Rs 1,.200 crore from the government to stem the huge losses in its books and achieve a capital adequacy ratio of eight per cent.

T.S. Raghavan, chairman and managing director of the bank, said the bank has made good progress on the recovery front, but to strengthen its financial position it needs additional capital infusion.

The bank has recorded a total loss of Rs 3,181.87 crore as on 31 March 1999 against a capital base of Rs 2,500 crore. It has overdues of Rs 3,000 crore.

Associates plans new focus
New Delhi: Associates India Financial Services, formerly Avco Financial Services, has decided to focus on construction equipment finance and home equity segment in tune with the global strategy of its parent Associates Capital Corporation.

Avco Financial Services was acquired by Associates Capital Corporation, the $90-billion home equity, construction equipment finance and credit card company. Avco has been bought over from Textron for $3.9 billion,

Associates India Financial Services has set up four branches in Delhi, Jaipur, Pune and Bangalore. By the end of this year, it will set up four more branches.

Credit Suisse arm loses licence in Japan
Tokyo: Credit Suisse Financial Products, the London-based derivatives arm of the Swiss banking group, became the first bank to have its local banking licence withdrawn by Japan's banking regulatory authorities.

An investigation by the Financial Supervisory Agency concluded that Credit Suisse Financial Products had conducted systematic evasion and obstruction of inspections, and sold products that deeply undermined the soundness of the Japanese financial markets and financial institutions.

Sanctions are being imposed on four other Credit Suisse subsidiaries, including Credit Suisse First Boston, which will be prevented from initiating new private banking businesses for 12 months.
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FIs okay ICICI equity plan
New Delhi: Financial institutions, which have a combined stake of 30 per cent in ICICI, have decided to support the company's proposal to raise fresh equity through a $500 million domestic-cum-international offering.

The institutions will subscribe to the domestic preferential offering in order to ensure that there is no dilution in their equity.

The decision was conveyed by UTI, LIC and GIC to E.A.S. Sarma, secretary in the economic affairs department, who had convened a meeting to discuss the working capital arrangements proposed by ICICI. The financial institutions had earlier expressed some reservations about ICICI's plans to increase the equity capital.

SBI net comes down
Mumbai: The State Bank of India has reported an 18 per cent dip in its net profit at Rs 347.85 crore for the three month period ended 30 June 1999. This compares with Rs 426.60 crore for the corresponding period in 1998-99.

The bank has made provisions of Rs 549.41 crore for this quarter compared to Rs 477 .60 crore for the same quarter last year. The provisions have been made for non-performing assets, salary revision arrears, and exchange loss on its corpus of Resurgent India Bond funds and shortfall in the redemption value of Magnum Triple 1991.
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LIC, GIC against dilution of stake in ICICI
Mumbai: ICICI's main shareholders, the Life Insurance Corporation of India and the General Insurance Corporation of India, feel that the financial institution should not dilute the shareholding of the three investment institutions -- LIC, GIC and Unit Trust of India. This view has been put forth in response to ICICI's plans to raise capital in the overseas market.

LIC has a stake of 12.2 per cent in ICICI, GIC 11.2 per cent and UTI 5.7 per cent, enough to block any special resolution. ICICI's equity base expanded to Rs 35 crore on 9 July after certain conversions, and this has marginally reduced the stake of the three institutional investors 27.1 per cent

The ICICI management has decided to raise about Rs 2,000 crore in fresh equity through a $400 million overseas issue -- either GDR or ADR -- and through a preferential allotment of shares to the investment institutions. The heads of LIC and GIC are meeting to discuss the matter.

Indian Bank losses at new high
Chennai: Indian Bank has declared a loss of Rs 788 crore for the year ended 31 March 1999. This is the second highest loss suffered by the bank after the Rs 1,336-crore loss it recorded in 1995-96.

The bank is to announce the financial results for the year 1999-2000 on 30 July.

RBI waives interest surcharge for petro imports
Mumbai: The Reserve Bank of India has waived the surcharge on interest on bank credit for import of crude oil by private refineries and all imports against the duty entitlement pass book scheme in the Exim policy for 1997-2000.

The main beneficiaries of this will be Reliance Petroleum and Mangalore Refineries and Petrochemicals, which are the only private sector importers of crude. The savings have been pegged at around Rs 56 crore.

Record loan approvals by World Bank
Washington: The World Bank has said it has approved a record $29 billion in loans in financial year 1999 with Argentina, South Korea, Indonesia and China securing the largest portion. Of this amount, $24 billion has already been disbursed. The previous record was $28.6 billion in 1998.

Argentina was the single largest borrower in 1999, with commitments of $3.23 billion, followed by Indonesia at $2.784, China at $2.1 billion, South Korea at $2.05 billion and Russia at $1.9 billion.

India secured $1.05 billion in loans and stood at eighth position.
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ICICI Bank plans more internet banking products
Mumbai: ICICI Bank is planning to add more products to internet banking. These will include corporate banking products and online account facilities for non-resident Indians.

The bank will launch the online account facility for NRIs in August, which will be followed by web-based banking products for companies, ICICI officials said

The products will help companies implement different functions via the web, including establishing letters of credit and forward contracts and submitting stock statements.

IFCI to revoke fund sanctions for power projects
Mumbai: The Industrial Finance Corporation of India is understood to be considering revocation of sanctions worth over Rs 550 crore for six power projects with a combined capacity of about 2,800 MW.

IFCI is saying these projects have been delayed. The list includes the Hinduja-promoted project in Visakhapatnam, the AES-promoted project in Orissa and two RPG group- promoted projects in Rajasthan and West Bengal.

Stanchart to take over Bank of Bali
London: Standard Chartered has finalised a deal to take control of Bank of Bali, one of Indonesia's largest private sector banks.

The deal, Standard Chartered says, will give the international bank a substantial consumer banking franchise in Asia.
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Hudco to securitise loan assets
New Delhi: The Housing and Urban Development Corporation will securitise Rs 1,000 crore of its loan assets in the current financial year. Announcing this, chairman V Suresh said Hudco is now in the process of selecting an investment bank for the securitisation mandate.

A portion of the revenues will be assigned to a special purpose vehicle, which could be a company or a trust, through an escrow account, Mr Suresh said. The SPV could then place this security with investors for seven to 10 years through a debenture or a pass-through certificate.

ANZ Grindlays taps debt markets
Mumbai: ANZ Grindlays Bank has raised Rs 120 crore of funds from the debt market for companies like Lurgi and Crompton Greaves, and substantial amounts by way of securitisation of rent receivables in the last three months.

The bank's officials said it has been involved in syndicating domestic rupee funds for companies like Siemens, Tisco, Whirlpool and Lurgi with ticket sizes of between Rs 30 and Rs 125 crore each.

New HDFC scheme receives response
Calcutta: The Housing Development Finance Corporation says it has received a fairly good response to its floating rate interest loans. The company had announced the new scheme, adjustable retail home loan, which facilitates a changeover from the higher (fixed) interest rate scheme to a lower (flexible) interest rate scheme.

HDFC had introduced the scheme in order to retain its clients who have been wooed by multinational banks through loan transfer schemes.

Sakura Bank to offer online banking
Tokyo: Sakura Bank and Fujitsu unveiled a plan to establish an online banking joint venture in Japan. This will be the first company specialising in online banking. The venture is designed to help Sakura Bank expand its retail banking operations, which offer higher profit margins than the highly competitive banking services for corporate clients.

Fujitsu has a strong presence in internet-related technologies.
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ICICI plans entry into new areas
Mumbai: ICICI is seeking its shareholders' approval to enter commodities trading, the courier business and event management, apart from businesses connected with its current activities, that is securitisation, e-commerce, housing loans, smart card business, trading in financial derivatives and managing offshore funds.

The company, in a notice to shareholders, has explained that the business of securitisation, which commenced a couple of years ago, is likely to accelerate in future.

ICICI has recently started providing retail finance in the form of auto loans, home loans and consumer durable loans. It is also planning to add new activities such as credit card, debit cards and charge cards.

The notice says: "With the moving into retail business, the company undertakes/may undertake a number of related businesses such as marketing and distribution, e-commerce, software technology development, fund management, printing, courier services, etc. The derivatives and insurance markets are being opened up and the company proposes to avail of such emerging opportunities." 

SBI largest arranger of forex loans
Mumbai: The State Bank of India was the largest arranger of syndicated foreign currency loans in the first half of calendar year 1999, according to the bank.

The bank has participated in four of the five foreign currency loans arranged for the Dabhol Power Company, Industrial Development Bank of India and National Thermal Power Corporation, amounting to $981.60 million. Of this the bank's share is $881.60 million, ranking it first.

ABN Amro Bank is ranked second for participating in three deals amounting to Rs 761.60 million. 

IDBI to enter universal banking
Mumbai: The Industrial Development Bank of India has hired Mritunjay Athreya, management consultant, to chart out a plan for the bank's movement towards universal banking.

Four IDBI directors, Deepankar Basu, Besant Raj, Tarun Das and S.K. Gupta, will interact with Mr Athreya to draw up the course of action for the financial institution to move from its current position to a universal bank.
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