GSPC is the lead promoter for the Rs 560-crore project. Apart from IDBI, Power Finance Corporation, banks and other financial institutions will prove another Rs 200 crore as debt. The balance Rs 160 crore is expected to raised through equity.

Bank deposits fall
Mumbai: Bank deposits have fallen by Rs 1,048 crore in the fortnight ended on 10 September compared to a growth of Rs 6,929 crore in the previous fortnight. The cash-deposit ratio has gone up during the fortnight to 10 per cent from 9 per cent of the previous fortnight.

Analysts attributed the reason to heavy withdrawals during the election period.

HSBC network in India set to rise
Mumbai: With the merger of HSBC Bank Middle East and the Hongkong and Shanghai Banking Corporation, the HSBC network in India will increase to 26 branches. HSBC has received approval for the merger from the Reserve Bank of India.

HSBC Bank Middle East has a staff strength of about 120 employees; HSBC has around 2,700 employees. The merger means an exit for the British Bank of the Middle East, which has been in India for the past 60 years.

Hermes withdrawing insurance cover
Mumbai: According to a report in The Economic Times, Hermes is reconsidering the withdrawal of insurance cover to Shree Maheshwar Hydel Power Corporation’s 400 mw power project. S Kumars is denying any such moves by Hermes.

The power project is being set up by the S Kumars group in Madhya Pradesh. Hermes is the political risk insurance agency of the German government.

New govt. paper at 12.32%
Mumbai: The Reserve Bank of India has announced the auction of 12.32%, Rs.2,500 crore, 2011 government security. This is a re-issue of the paper, whose outstandings are currently Rs.8,500 crore. On the secondary market, the paper traded in the range of Rs.103.48 and Rs.103.52.

Post-auction, the central government would have raised Rs.62,630 crore during the fiscal year 1999-2000. This would mean that about 75 per cent of the government’s gross borrowing programme for the fiscal 1999-2000 would be complete already.

ICICI plans another Safety Bonds issue
Mumbai: ICICI Ltd., which recently concluded a Rs.2,165 crore issue is planning to come out with its fourth Safety Bonds issue by 15 October 1999. The interest rate for the issue has not yet been fixed.

The issue size is expected to be around Rs.300 crore, with a greenshoe option of Rs.300 crore. The company has already mopped up Rs 840 crore from the three previous Safety Bond issues. A final decision will be taken once the company directors return from the US, after their recently concluded successful American depository receipts issue.

SBI Caps to be Syndicate Bank’s issue lead manager
Mumbai: Syndicate Bank’s Rs.125-crore maiden public issue will be lead managed by SBI Capital Markets Ltd. The issue, which has received permission from the Securities and Exchange Board of India, will be launched in end-October 1999.

Of the total issue, 10 per cent has been set aside for employees. The bank has an equity of Rs.347 crore.

Syndicate Bank is planning to redeploy its surplus staff in recovering loans, to do door-to-door marketing and also to work in boutique branches. These branches will be opened in metropolitan cities.

State Bank of Mysore to lower NPAs
Bangalore: The State Bank of Mysore intends to pare its non-performing assets to Rs.500 crore by March 2000. As of July 1999, its NPAs were Rs.602 crore. It has about 293 cases worth Rs.242 crore with the Debt Recovery Tribunal.

It also plans to do better asset-liability management. It has already started doing asset-liability management in 100 of its major branches. The bank will undertake such asset-liability management exercises every quarter.

Output-linked wages for insurance staff
Calcutta: Once the Insurance Regulatory Authority bill is passed, the staff in the public insurance companies will receive wages based on their output. The plan for the switchover is ready.

The remuneration that insurance employees are currently getting will be low once the sector is opened for private competition. The state-owned insurance companies realise that in order to survive in a liberalised regime, the insurance staff should get pay based on productivity.

AMP bids for GIO
Sydney: AMP Ltd. has launched a A$3.05 per share bid on the beleaguered GIO Australia Holdings. In end 1998, AMP had made a bid for GIO at A$5.35 per share. Since then GIO’s market value has declined 43 per cent to touch A$1.92 billion.

Nippon Life, Sakura to tie-up
Tokyo: Nippon Life, a giant in the insurance field, will join hands with Sakura Bank in the consumer finance and online banking areas. Sakura Bank will now be able to enhance its domestic retail business.

Nippon Life, which has about 15 million individual clients, will take a 10 per cent stake in the joint venture.
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SBI Caps, JM Morgan to manage Sidbi issue
Mumbai: The Small Industries Development Bank of India will appoint SBI Capital Markets and JM Morgan Stanley to lead manage its Rs.1,500-crore debt issue. The co-lead managers to the issue will be Kotak Mahindra Capital and DSP Merill Lynch. Sidbi is raising funds in order to achieve its larger disbursement target for 1999-2000.

About Rs.300-400 crore of the issue will be raised through a public issue of bonds. The rest of the amount will be raised through private placement. The funds will be raised through vanilla bonds, priority sector bonds and structured instruments.

IFCI plans to reduce its NPAs
New Delhi: The Industrial Finance Corporation of India is planning several measures towards paring its non-performing assets. Currently, over 20 per cent of the total outstanding loans are non-performing assets. IFCI has identified 32 large non-performing loans amounting to Rs.2,004 crore.

Stopping the growth in new non-performing assets will be one of the measures, apart from the maintenance of a ceiling on exposure to individual companies and groups. For an individual group, the ceiling has been fixed at 30 per cent though the Reserve Bank of India has permitted a single group’s exposure to go up to a maximum of 50 per cent. The cap on loans to a single company has been kept at 15 per cent, compared to the RBI permitted level of 25 per cent.

The Industrial Finance Corporation of India will also shorten its name to IFCI Ltd. Also, in about two to three years, it may apply for listing on the New York Stock Exchange.

Genco provides escrow cover to PFC
New Delhi: Genco has provided escrow cover to Power Finance Corporation for a Rs.70-crore loan. The loan will be used by Genco, an Andhra Pradesh state-owned company, for funding its working capital requirements.

This is the first time Power Finance Corporation has provided working capital loans to Andhra Pradesh.

High court asks govt. to postpone decision on Sikkim Bank-UBI merger
Calcutta: According to a report in the Business Standard, the Calcutta High Court has asked the central government not to take any decision on the merger of Sikkim Bank and Union Bank. The Reserve Bank of India had formulated a scheme of amalgamation of the two banks.

Non-life insurance to get new life
Calcutta: Changes will be made in the commission structure for insurance agents working in the non-life insurance industry as part of a new marketing strategy.

According to A N Poddar, chairman and managing director, National Insurance Corporation, the non-life insurance sector will get more balance with the shift towards personal and retail insurance. He said the present commission structure does not enthuse agents.

NIC made a net profit of Rs.80 crore for the year ended 31 March 1999, compared to the Rs.147.5 crore it made during the 1997-98. The decline was mainly due to underwriting losses rising from Rs.92.8 crore in 1997-98 to Rs.212.9 crore in 1998-99.

ANZ fined in London
London: The Investment Management Regulatory Organisation Ltd., the British market regulator, has fined the Australia and New Zealand Banking Group for 2,50,000. The regulator felt that ANZ had breached some of its regulations during the period between January 1997 to May 1999.
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Maharashtra state and Hudco sign MoU
Mumbai: The Housing and Urban Development Corporation and the Maharashtra state government have signed a Rs.500 crore memorandum of understanding for building a convention centre at Bandra. The centre will be built on 7.5 acres of land near the Leelavati Hospital.

The MoU will be for the state government to bring in the land required through the Maharashtra Housing and Area Development Authority, which owns the land. Hudco will prepare feasibility reports and also undertake the implementation of the project. The convention centre will be built according to international standards.
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Panel  moots changes in venture capital norms
Mumbai: A committee appointed by the Securities and Exchange Board of India will suggest major changes in the venture capital guidelines. The committee’s US-based members are Hotmail fame "Sabeer Bhatia" and K B Chandrasekhar of Exodus Communications.

According to a report in the Business Standard, the minutes of the panel's meetings have been sent to the Sebi through e-mail. The committee has suggested making Sebi the nodal registrar for venture capital funds. Currently, various aspects of venture capital guidelines are specified by the Sebi, the government and the Central Board of Deirect Taxes.

The committee has suggested making all these guidelines compatible with each other. It has also been suggested to allow mutual funds and pension funds to invest in venture capital funds.

RBI wants more subscription from Relief Bonds
Mumbai: The Reserve Bank of India is calling a meeting of bankers on 28 September 1999 for raising  subscription through the government’s Relief Bonds. These are 9 per cent tax free bonds, which form part of the government’s borrowing programme.

The RBI and the government are quite concerned that the relief bonds are not finding too many takers. The meeting of bankers that has been called for, is towards propping up subscriptions of the bonds.

Canara Bank subsidiary to pay 10% dividend
Mumbai: Gilt Securities Trading Corporation, a subsidiary of Canara Bank, has made a net profit of Rs.25 crore for the year ended 1998-99, unchanged from that of the previous year. It will pay a 10 per cent dividend.

Gilt Securities’ dated securities turnover in the secondary market increased to Rs.11,152 crore in 1998-99 from Rs.1997-98. Treasury bills turnover in the secondary market was Rs.1,769 crore, up from Rs.1,683 crore during the same period.

In the primary market, the dated securities turnover of Gilt Securities was Rs.2,554 crore, nearly doubling from Rs.1,306 crore in 1997-98. Treasury bills turnover was Rs.1,651 crore, up from Rs.1,342 crore in 1997-98.

2 Lloyd’s group units plan to merge
London: SVB Holdings Plc and CLM Insurance Fund Plc, both group companies of the Lloyd’s group, will merge to form one of the group’s largest companies. The shares of the companies are listed on the London Stock Exchange. The merger will take place in the ratio of 1.185 new SVB shares for every share held of CLM.

The merged entity will have an aggregate managed capacity of 383 million pounds.

Jefferson to buy Guarantee Life
Greensboro(North Carolina): Jefferson Pilot Corp, an insurance underwriter will buy Guarantee Life for around $296 million, plus debt. Jefferson-Pilot would pay $32 per share for the acquisition. The debt that will be taken up by Jefferson is around $115 million. This will make the total worth of the deal around $411 million.
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Fedai decides on management committee
Mumbai: The Foreign Exchange Dealers Association of India has decided at its annual general meeting that it will not have permanent invitees on its management committee. Currently, the management committee consists of 24 members, of which 11 are permanent invitees meant to observe proceedings of the committee.

The Fedai management committee is formed out of 14 public sector banks, six foreign banks, three private banks and one financial institution.

Andhra Bank targets Rs.14,500 crore deposits
Ahmedabad: Andhra Bank will target deposits of Rs.14,500 crore and advances of Rs.7,000 crore for the financial year-ended 1999-2000. For the first quarter ended June 1999, the bank’s deposits and advances grew 4.9 per cent and 5.6 per cent respectively. The bank plans to earn a gross profit of Rs.224 crore and a net profit of Rs.120 crore for the 1999-2000 fiscal.

For the financial year ended 1998-99, Andhra Bank had deposits of Rs.10,439 crore and advances of Rs 4,777 crore. The bank has a capital adequacy ratio of 11.5 per cent, well above the banking sector average of 9 per cent.
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Dena Bank to retail gold
Mumbai: Dena Bank will retail gold in India. It has signed an agreement with UBS and CommerzBank International, for supplying gold consignments.

The bank has designated six of its branches – Karol Bagh branch (New Delhi), Soni Bazar (Rajkot), Ashram Road (Ahmedabad), T Nagar (Chennai), Zaveri Bazar (Mumbai) – for retailing gold.

Banks see fall in deposits
Mumbai: Banks’ reluctance to aggressively push for increased deposit mobilisation has resulted in a fall in the growth rate of deposits during the first half of the financial year 1999-2000. Deposit growth during the period April to August 1999 was Rs.26,692 crore compared to Rs.30,139 crore during the same period in 1998. These figures are as per a J P Morgan research report.

The report states that the reason for the fall in growth rates of deposits is the emergence of mutual funds as strong competitors to banks. Not only have the capital markets been booming, the 1999-2000 budget had also given various benefits to investors in mutual funds. Mutual funds raised Rs.7,376 crore during the period April to August 1999.

Exim Bank to raise Rs.500 crore
Pune: The Export Import Bank of India is planning to raise Rs.500 crore through a private placement during the financial year 1999-2000.

The bank may also revive its hitherto dormant agreement with Templeton for providing venture capital assistance to the software sector. The agreement was for financing venture capital projects to the tune of $10 million, which Templeton had put on hold earlier.

In the meantime, the bank has sanctioned advances worth Rs.800 crore during the first six months of fiscal 1999-2000. Exim Bank has also disbursed Rs.400 crore during the same period compared to the Rs.500 crore disbursed during the first half of 1998-99.

Newbridge acquires Korea First Bank
Seoul: US-based Newbridge Capital has acquired over a 51 per cent stake in Korea First Bank for $415 million.  Korea First Bank is a nationalised bank. According to the deal, the government has the option to buy back 5 per cent of Korea First Bank after three years, which would mean a return of government control over the bank.

The agreeement is also significant because only recently the government failed in its plans to sell another nationalised bank -- Seoulbank -- to HSBC Holdings of the UK.

Negotiations for the deal have been on between the two banks since December 1998. But the government and Newbridge disagreed on the valuation of the bank’s assets.
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