New economic advisory panel
New Delhi: Prime minister Atal Behari Vajpayee has reconstituted the Economic Advisory Council. Four new members have been inducted while three have been dropped. The new members in the 12-member Council, headed by the prime minister, are Jagdish Shettigar, Bharatiya Janata Party’s economic cell chief, Rakesh Mohan of National Council for Applied Economic Research, Ashok Gulati and M. Narasimham. The members who are dropped are Arjun Sengupta, Ashok Desai and G.V. Ramakrishna.

The other members of the Council are I.G. Patel, P.N. Dhar, Montek Singh Ahluwalia, Kirit Parikh and Amresh Bagchi. Brajesh Mishra, principal secretary to the prime minister will be a member of the council, while N.K. Singh, secretary to the prime minister, will be the member-secretary.

Meanwhile, the task force on infrastructure has been reconstituted to accommodate new civil aviation minister Sharad Yadav in place of Anant Kumar, who is now minister for culture, youth affairs and sports. The reconstituted task force will have Nitish Kumar, surface transport minister, Deepak Parekh, HDFC chairman, Anand Mahindra, industrialist, and the secretaries of the ministries of surface transport, civil aviation and the department of expenditure as members.

Impressive industrial growth
New Delhi: Industrial growth has registered an impressive uptrend of 6.4 per cent in the first half of 1999-2000 against 4 per cent in the corresponding 1998 period. This has been possible as a result of growth in electricity and manufacturing sectors. Electricity sector alone recorded a high 16.5 per cent growth in the preiod under review comapred to a lowly 0.5 per cent growth in the comparable period last year. The index of industrial production data indicates that industrial output spurted by 7.6 per cent in September alone.

Other areas where significant growth has been achieved are mining and consumer durables. Capital goods and consumer non-durables sectors posted lower growth rates of 9.2 per cent and 1.6 per cent during April-September 1999.

ECB norms eased
New Delhi: The finance ministry has eased the norms for external commercial borrowings. The procedures have been simplified both at the automatic clearance window of the Reserve Bank of India and at the discretionary clearance window of the finance ministry. The ministry said this is a move towards an ultimate single window clearance.

At present, ECB clearances up to $10 million are handled by the RBI. The government is likely to double the threshold in the policy to be announced for 2000-2001. Under the automatic clearance system, companies will now be allowed to seek clearances from the RBI’s regional offices, against the present system of clearances by RBI Main office in Mumbai. The clearances at the finance ministry level will be simplified. There will be only three stages thereby limiting an applicant’s visit to the North Block to three.

CARE gives lower rating to IFCI plans
Mumbai: The Credit Analysis & Research has assigned A-plus (adequate safety with relatively higher standing within the category) rating to the debt programmes of the Industrial Finance Corporation of India and an even lower A (adequate safety rating) to its proposed preference share issue of Rs 350 crore. CARE"s A rating is three notches below the one assigned by IFCI-promoted rating agency Icra and two notches below that assigned by Duff & Phelps Credit Rating India.

Analysts say the lower rating by CARE will force IFCI to pay a premium of 0.35 to 0.40 per cent for its debt programmes compared with other financial institutions.

HDFC Bank plans debit card
Kochi: HDFC Bank is launching an international debit card. The card will be launched in tie-up with Visa in  few weeks. The facility will enable customers of the bank to use the card in the ATMs installed in the branches of the bank spread all over the country and at the ATMs of three major multinational banks, Citibank, Stanchart and Amex in any part of the world.

Portuguese bank comes back
Mumbai: Portuguese bank Banco Nacional Ultramarino, which left India in 1961, is coming back. The bank has opened a representative office in Mumbai and an extension office in Goa. The bank intends to provide offshore trade financing to Indian companies and liaisoning for facilitating trade between India and Portugal. It will expand its activities in due course of time.

The bank is an international banking arm of the government-run Caixa Geral de Depositors Group, which is the largest bank of Portugal with net assets of about $45 billion.

Softbank plans acquisition
Tokyo: Internet investor Softbank Corporation says it hopes to take over a large failed Japanese bank. The news comes after Softbank has announced it had slipped deeper into red for the second straight interim period, due to losses from the sale of a US subsidiary. Softbank said it has filed a proposal to acquire one of Japan’s biggest problem banks, Nippon Credit Bank with a team of major Japanese firms. Joining Softbank in the bid are Ito-Yokado, a retailing group, and its consumer financing company Orix Corporation as well as casualty insurer Tokio Marine & Fire Insurance.

PF trustees for higher rate of interest
New Delhi: The Central Board of Trustees of the Employees Provident Fund is wanting a hike in the minimum yield from the present 12 per cent per annum to 13 per cent per annum. The Central Board of Trustees, an autonomous body, is about to convene a meeting to discuss the matter and to make a recommendation to the government.

The yield rate on provident fund is a benchmark for a number of investments, The Central Board of Trustees wants to provide a higher rate of interest as a labour-friendly measure.

Insurance venture needs more than Rs 100 cr capital
Mumbai: Companies wanting to set up insurance companies in the private sector will need to bring in much more than the stipulated Rs 100 crore, says B.K. Chaturvedi, special secretary for insurance in the finance ministry. He said the initial capital would be utilised in the first couple of years on account of the stringent solvency margins.

With a start-up capital of Rs 100 crore, a life insurance company will be in a position to underwrite business of up to Rs 3,000 crore only. If this was the size of the business, it will be an unprofitable proposition, he said.

Health insurance venture
New Delhi: General Insurance Corporation of India and its four subsidiaries, Oriental Insurance Company, New India Assurance, National Insurance Company and United India Assurance are to have 20 per cent stake each on the proposed management services company for health and medical insurance schemes. The heads of the five companies are meeting shortly to finalise the plans for the new company.

It is set to be launched in April-May 2000 and will start operating from Mumbai. Later it will launch centres in other cities and towns. The company will enter into tie-ups with various hospitals in the country.

Play by rules, foreign insurers told
New Delhi: Insurance Regulatory and Development Authority chairman N. Rangachary has warned foreign insurance companies wishing to enter India in the wake of privatising the insurance sector to abide by the rules, especially the 26 per cent cap on  investment by foreign companies. "The law has been kept simple and clear. It will provide a maximum 26 per cent stake to foreign insurers and 74 per cent to an Indian company. And the Indian company must bring down its stake to 26 per cent within 10 years," Mr Rangachary told a seminar arranged by the Federation of Indian Chambers of Commerce and Industry.

Mr Rangachary also said a company registered and listed in India would be treated as an Indian company. He, however, admitted that this is a grey area and the the issue would be decided if and when a proposal is put forward.

AIG plans stake in Tata Asset Management
Mumbai: US insurance major American International Group is learnt to have initiated talks with the Tata group to acquire a stake in Tata Asset Management. It is also understood that the Tata group will buy out the 20 per cent stake held in Tata Asset Management by Dresdner RCM Global Investor Holdings in order to help AIG come in.

AIG had signed a memorandum of understanding with the Tata group for the life insurance business in India. AIG had earlier planned to have a strategic partnership with Infrastructure Leasing & Financial Services for the mutual fund business and the Tatas for life insurance.

Cigna ends ties with IL&FS
New Delhi: The three-way partnership between US insurance company Cigna, Infrastructure Leasing & Financial Services and the late Parvinder Singh of Ranbaxy has ended with the expiry of the memorandum of understanding. The MoU has not been renewed as Cigna has decided to sell its global property and casualty business.

Meanwhile, Cigna has already set up a health management services company in Bangalore and has an insurance representative in India.

New trademarks law coming
New Delhi: The government will bring in a new trade mark law through the Trade Marks Act. The cabinet has approved the decision to repeal the Trade and Merchandise Marks Act, 1958. The proposed amendment s will make the law on trademarks simpler, more effective, flexible and transparent, a government official said.

Allianz wants more allies in India
Singapore: Munich-based insurance major Allianz is in search of more joint venture partners in India for its non-life insurance business. The company has an agreement with Alpic Finance, a non-banking finance company, for the non-life insurance business. It has also said it is talking to at least three regional private banks for life insurance business.

The company’s director and chief executive officer for Asia Pacific Michael Diekmann said Alpic will be an equity partner in both ventures.

Govt acts to make CAs accountable
New Delhi: The finance ministry has set up a monitoring mechanism to make chartered accountants acting as auditors accountable for any lacunae in the tax audit reports submitted by an assessee. The income tax department will now be referring all cases of irregularities in audit or shoddy audits to the Institute of Chartered Accountants of India, which will take action against the chartered accountant auditors if the complaints are found valid.

Capitalisation norm must for foreign equity
New Delhi: The government has clarified that the minimum capitalisation norm of $0.5 million is a must for non-banking finance companies having foreign equity for all permitted non-fund-based activities undertaken by them.

The earlier guidelines provide for a minimum capitalisation norm of $0.5 million for certain activities, which were non-fund-based and only advisory or consultancy in nature irrespective of the level of foreign equity participation.

Lakshmi Vilas Bank plans bond issue
Coimbatore: The Lakshmi Vilas Bank, one of the private banks, plans to issue bonds aggregating Rs 30 crore on a private placement basis, with a greenshoe option of Rs 20 crore. The bond issue is likely to have a coupon rate of around 12.75 per cent and is expected to hit the market within the next one month. The funds will strengthen the bank’s tier II capital and will help it to shore up its capital adequacy ratio.

FIs prepare list for divestment
Mumbai: Leading financial institutions have prepared a paper listing nearly 12 public sector units in which the government can disinvest its stake. The government proposes to meet a disinvestment target of  Rs 10,000 crore in 1999-2000. The companies identified are said to include  Indian Oil Corporation, Oil and Natural Gas Corporation, National Aluminium Company, Gas Authority of India and Computer Maintenance Corporation. The institutions are understood to have suggested that the government may try a combination of domestic issues, warehousing of shares with the institutions and overseas issues as the modes for the disinvestment.

The institutions, comprising Industrial Development Bank of India, ICICI, Life Insurance Corporation of India, Unit Trust of India and Infrastructure Development Finance Corporation, had prepared the paper at the instance of finance minister Yashwant Sinha.

SBI Caps to raise funds for Gujarat expressway
Mumbai: SBI Capital Markets has bagged the mandate to advise, structure and raise funds for the Ahmedbad-Mehsana highway project, coming up in Gujarat on a build-operate-and-transfer basis. The estimated cost of the four-lane 63-kilometre stretch, which will employ the toll system, will be Rs 300 crore. The Industrial Development Bank of India will extend debt fund for the project and SBI Caps intends to raise additional funds from commercial banks.

Corporation Bank plans insurance company
New Delhi: Public sector Corporation Bank is planning to enter the insurance business once the sector is privatised. The bank is holding discussions with foreign insurance companies and it has drawn a basic framework for the plan. The bank may float a subsidiary for the purpose.

The bank has also announced that it is seriously considering entering the e-commerce business.

New products from Karur Vysya Bank
Chennai: Private sector Karur Vysya Bank is launching its speed collection and payment services for corporate customers. The bank is also introducing instant funds transfer using its own Intranet.

The bank plans to introduce a slew of products in order to enhance value addition to customers and increase its own business growth. The products will include special savings scheme for depositors and offering retail loans and housing loans at competitive rates.

IFCI gets lower rating
Mumbai: Duff & Phelps Credit Rating India has rated the Industrial Finance Corporation two notches below the rating accorded to it by Icra for its long and medium term rupee debt obligations. Duff & Phelps Credit Rating India is the first agency apart from the IFCI-promoted Icra to rate IFCI’s debt obligations.

Duff & Phelps Credit Rating India has assigned an Ind AA- (high safety with relatively lower standing within the category) rating to the Rs 1,500-crore long-term debt instruments, the Rs 1,500-crore medium-term debt instruments, the Rs 350-crore worth of preference shares and a fixed deposit programme of IFCI. Its short-term instruments have been given an Ind D-1+ rating.

Royal Bank formalises bid on NatWest
London: Royal Bank of Scotland Group made it public that it is seriously considering to bid for the National Westminster Bank by submitting a merger notice to Britain’s Office of Fair Trading.

National Westminster is already subject of a $35.71 billion acquisition bid by Royal Bank’s archrival Bank of Scotland. Royal Bank of Scotland is reported to be in parleys with Spanish bank BSCH, which owns nearly 10 per cent stake in Royal Bank, for a united bid for NatWest. Meanwhile Italian bank Sanpaolo IMI is also holding talks with BSCH and Royal Bank of Scotland for a planned $40.56 billion bid for NatWest.

Inflation up
New Delhi: The inflation rate rose to 2.95 per cent for the week ended 23 October. The recent increase in diesel prices is said to be one of the reasons for this increase. The annual rate of inflation, based on the wholesale price index, rose for the fourth consecutive week.

IDBI to restructure NPA
Mumbai: The Industrial Development Bank of India has drawn a plan to restructure its non-performing assets and high interest costs, the factors that pulled down its profits in the first half of the current financial year. IDBI’s chairman and managing director G.P. Gupta said the financial institution will do a stringent reworking of the non-performing loans, involving extending of maturity in cases which are deemed viable.

The institution is also considering reducing interest rates for some of its borrowers as they find repayment difficult due to high rates. The condition will be that they pay 50 per cent pre-payment premium.

Royal Bank, Spanish bank in bid for NatWest
London: Royal Bank of Scotland is talking to BSCH of Spain about a joint effort to bid for National Westminster Bank of Britain. Royal Bank said it is monitoring the situation but added it "never commented on speculation".

The Sunday Times said the counter-bid will come next month and will be a cash and share offer valuing NatWest at $42.20 billion.