WTO talks end in failure
Seattle: Attempts to start a new round of global trade negotiations collapsed as the World Trade Organisation failed to hammer out any agreement on the ministerial declaration that would have acted like a launch pad for the next round. The conference ended without any declaration being issued. It entrused WTO director general Mike Moore with the task of starting a process of consultations with member countries to arrive at a new negotiating process. This will be transparent for all members, and he will look for creative ways to bridge the differences between the countries.

Representatives of non-government organisations present at the venue cheered the failure. Murasoli Maran, India’s commerce minister, who headed the country’s delegation at the talks, said he is disappointed at the failure. India always wanted a multilateral, rule-based and non-discriminatory trading system, he added.

Meanwhile, the US and the European Union said they will push farm trade talks next year despite the failure of efforts to launch broader negotiations.

Singapore bank to pick up stake in UTI Bank
Mumbai: The Development Bank of Singapore is about to pick up some 20 per cent of the equity of the private sector UTI Bank. Senior officials of the Singapore bank were in India for talks in this regard recently. The Unit Trust of India is understood to be planning to dilute its stake in UTI Bank, and therefore does not want to fresh equity to be issued to a new partner. UTI holds 61 per cent of the total equity in the bank now.

IDBI for stakes in companies
Mumbai: The Industrial Development Bank of India has decided in principle to offer advances between 10 per cent and 25 per cent to infrastructure projects as equity. The bank is modelling its plan on the lines of similar initiatives by the Commonwealth Development Corporation and the Industrial Bank of Japan, which pick up equity  in companies to compensate for the risk of investing in doubtful markets. IDBI will divest the stakes thus picked up once the projects become operational.

The bank has also announced that it has sold shares it owned in Aftek Infosys for Rs 43 crore. The divestment has been made in favour of the promoters of the company. The shares were sold at a price of Rs 477.75 per share. IDBI owned 17.5 per cent  in the equity of the company.

HDFC Bank pact with Bennett, Coleman
Mumbai: HDFC Bank, which has acquired Times Bank recently, has also reached an informal agreement with Bennett, Coleman & Co, the original promoters of Times Bank, to ensure that it will have the first right of refusal if and when the Times promoters decide to sell their seven per cent stake in the merged bank. The bank does not want this share to land in the secondary market, Aditya Puri, managing director of HDFC Bank, said.

HDFC Bank’s other major shareholders are Indocean Chase Capital, which owns 15 per cent, and Housing Development Finance Corporation, which owns 20 per cent.

Panel moots CAR for coop banks
Mumbai: A Reserve Bank of India committee on urban cooperative banks has recommended that scheduled urban cooperative banks should achieve a capital adequacy ratio of 8 per cent by March 2001. The committee’s report said it is in favour of urban cooperative banks being brought under the purview of capital to risk assets ratio norm in a phased manner.

The committee was headed by K. Madhav Rao, former chief secretary of the Andhra Pradesh government. It has recommended that non-scheduled urban cooperative banks should reach a six per cent capital to risk assets ratio by 31 March 2001, seven per cent in the following year, and nine per cent by 31 March 2003.

The RBI has identified 293 urban cooperative banks as weak. Of these, 112 do not comply with the minimum capital norm of Rs 1 lakh. The committee has also suggested merger of sick banks with healthy ones and creation of a rehabilitation fund by the RBI or the government.

Corporation Bank for non-life insurance first
New Delhi: Corporation Bank is planning a foray into the non-life insurance business first, which will be followed by an entry into the life insurance business. The bank will have a joint venture with a foreign partner for this propose.

The bank's chairman and managing director R.S. Hugar said the bank has shortlisted four multinational insurance companies, and one of them will be selected for the joint venture.

S&P improves Bank of Baroda ratings
Mumbai: Standard & Poor’s has revised its rating outlook for Bank of Baroda from negative to stable. The rating reflects that the bank is now comfortably placed in its rating category. The BB long-term and B short-term foreign currency counterparty credit ratings of the bank too have been affirmed by the international rating agency.

Panel to study labour-trade link
Seattle: The World Trade Organisation has set up a new working group to go into the issue of linkage between labour standards and trade. The group will discuss proposals for creating either a labour standards working group or a body operated jointly by a number of international organisations to look at these issues. This will be the sixth working group set up by the ministerial meet.

The announcement evoked strong reactions from the Indian delegation as well as from other developed countries. Discussions were continuing among the participating countries. India has made it clear that the working group suggestion is not acceptable to it.

The WTO members also reached a basic agreement to deal with anti-dumping regulations and made progress on the agricultural issue that brought the European Union in direct conflict with the 18-member Cairns group of countries backed by the US.

Meanwhile, India has assured China that it will sign an agreement to facilitate Beijing’s entry into the WTO. The US and China had signed a bilateral agreement after five yeas of protracted trade negotiations to pave way for Beijing’s entry into the WTO. China is lobbying with other WTO members for similar support.

Lok Sabha passes insurance bill
New Delhi: The Lok Sabha passed the insurance bill with support from the Congress, thus ending the impasse for the last six years in the efforts to privatise the insurance sector in the country. The bill will come up in the Rajya Sabha next week.

The passage of the bill also signified the start of the second phase of the reforms. The Communist Party of India (Marxist) made a last-minute effort to have the bill referred to a joint committee of the Parliament but the proposal was rejected by 331 votes to 82. An amendment to the bill moved by finance minister Yashwant Sinha provided for preference in registration to companies offering health insurance. Mr Sinha assured the house that there will be no flight of capital from the country.

The passage of the bill has been welcomed in general by foreign insurance companies now waiting on the wings to enter the insurance sector in the country once it is formally opened up.

The house also gave assent to the Money Laundering (Prevention) bill and the Foreign Exchange Management Act bill. The  bills provide for penalties to offenders and facilitate external trade by removing hurdles in foreign exchange transactions.

SBI to seek RBI nod for insurance foray
Mumbai: The State Bank of India will be the first to set up an insurance company in India as the sector has now opened up for private participation, the bank's chairman G.G. Vaidya said. The bank will formally seek permission from the Reserve Bank of India to appoint consultants for the insurnace business, he added.

Mr Vaidya said the bank is yet to finalise on a foreign ally.

Standard Life to hike stake in HDFC
Mumbai: Standard Life Assurance Company of the UK will increase its stake in HDFC by 10 per cent. It already holds five per cent stake in the company. The company, Europe’s largest mutual insurance venture, will, however, have to take the secondary market route for hiking the stake. It also plans to pick up stakes in HDFC Bank and the asset management company being floated by HDFC.

No lay-off of Times Bank staff
Mumbai: HDFC Bank does not intend to cut off or lay off staff at  Times Bank following the merger of the latter with the former. It has also told the members of staff of Times Bank that salary structure of the junior staff, which is a little higher compared to that in HDFC Bank, will be protected.

Meanwhile, Mandeep Maitra and Rama Sridhar of Times Bank have been nominated to handle human resources-related functions and direct banking functions respectively of the merged entity.

Banks to share information in defaulters
Calcutta: Banks in Calcutta will circulate among themselves a list of loan defaulters. Under an understanding initiated by the local chapter of the Indian banks Association, 30 commercial banks in the region will disclose non-performing assets between Rs five lakh and Rs 50 lakh. Calcutta becomes the second city after Bangalore to introduce such a system in the banking industry.

Bank strike on December 17
Calcutta: All India Bank Employees Association, the largest banking sector trade union, has called for a stroke on 17 December over pending wage settlement issues.

FIs pick up stake in Global Trust
Mumbai: Financial Institutions have picked up stakes in Global Trust Bank. Ramesh Gelli, chairman and managing director of the bank, confirmed this but did not disclose the identity of the institutions. Bank sources said the shares were acquired by members of the promoters’ group who then placed them directly in the market where the financial institutions picked them up.

Two foreign strategic partners of the bank, Hambrecht & Quist of the US and TA Enterprises of Malaysia have recently divested their stake in the bank.

Poor, developing nations may concede on labour
Seattle: The poor and developing countries, which have put up stiff resistance to issues like labour and environment being made part of trade at the World Trade Organisation meeting, may be forced to evolve a compromise formula by which they will gain better market access and possibly a review of the anti-dumping laws.

According to sources in the Indian delegation, the developing and poor countries are likely to adopt this strategy. The market access provision relates to products of export interest. They feel this stand may gain for the poor and developinjg countries right to increase tariffs beyond the bound levels in respect of specific products.

The developing countries are also likely to allow setting up of a working group on biotechnology, a suggestion made by Canada.

On a larger plane, the European Union and the US appeared to be unanimous on the issue of linking trade with labour and environment under the WTO. Both president Bill Clinton of the US and Pascal Lamy, European trade commissioner, pursued a common goal of including the issue at least in the declaration. They also appeared to be having identical views on including non-governmental organisations in WTO.

Global Trust in search of partner
Hyderabad: Global Trust Bank wants a foreign partner. It is prepared to give away 20 per cent of its equity to a foreign bank with a sound technological base.

The bank’s current technical partners, Hambrechst & Quist of the US and TA Enterprise of Malaysia, have divested their stakes in the bank recently. It is rumoured that the bank is in talks with Standard Chartered Bank. Global Trust Bank has an equity of Rs 104 crore and reserves of Rs 225 crore.

RBF Nidhi closes branches
Chennai: RBF Nidhi of Chennai has closed down all its branches in the city, which has created confusion among the finance company’s 1.5 to 2 lakh investors. Senior police officials said all five branches of the company have been closed down and complaints have been registered against the company.

The management has notified that the branches have been closed due to unavoidable circumstances. RBF Nidhi has a deposit base of around Rs 405 crore.

Real time cheque clearance coming
New Delhi: The Reserve Bank of India is planning to introduce real time clearance of cheques. It is talking to consulting firm PricewaterhouseCoopers for the project.

The system will take about a year to be in place and will be initially used for high value cheque clearances. RBI sources said this will mark the beginning of a new regulatory regime in the area of payment systems. At present high value cheques are cleared twice a day.

RBI seeks details of Sebi order
Mumbai: The Reserve Bank of India has sought details of the Securities and Exchange Board of India’s order against Indian Bank Mutual Fund to pay investors their dues on account of redemption of the IndPrakash scheme. Meanwhile, the members of the board of Indian Bank will meet the Deepak Parekh Committee and its auditors to discuss the fallout of the Sebi order.
Protests mar WTO inaugural meet
Seattle: Protestors won the inaugural day at the World Trade Organisation meeting as they disrupted the opening function for a considerable period of time. Protestors belonging to various groups, including trade unions and environmental organisations, surrounded the area, preventing the host, US trade representative Charlene Barshefsky, from reaching the venue.

The mayor of Seattle declared a state of emergency in the city and imposed a curfew in downtown Seattle. On several occasions the police had to intervene and use sticks, teargas shells and rubber bullets to disperse violent demonstrators.

At the ministerial meeting, which began behind schedule, India’s commerce minister Murasoli Maran reiterated the country’s strong opposition to the inclusion of non-trade issues in the agenda. He told the meeting that the multilateral system has been designed to deal with issues involving trade alone. He said India "resolutely rejects" any attempt to introduce labour standards in the WTO in one form or other. He was also equally firm on India’s rejection of any effort to provide a greater role for environmental issues.

Meanwhile, in Delhi, prime minister Atal Behari Vajpayee allayed apprehensions over opposition allegations of a clandestine deal with the US on trade issues. The prime minister said India remained in its stated position of opposing a new round of trade negotiations. Mr Vajpayee told the Lok Sabha about the salient features of the Indian stand at the meet and said it is essentially opposed to a new round of negotiations, and to linking labour and environment and social clauses with trade.

Derivatives bill passed
New Delhi: The Lok Sabha passed the bill amending the Securities and Contracts Regulations Act, thus clearing the way for derivatives trading. It also passed a bill shifting the appellate authority and its functions out of the finance ministry, to make it part of a tribunal.

Finance minister Yashwant Sinha said the measures will "facilitate market operations, regulate markets, make them deeper and equipped and protect the interests of small investors". Derivatives trading will lead to a complete change in trading, as it will pave the way for index-based futures and options.

Govt. examining bank panel report
New Delhi: The government is going through the recommendations of the Narasimham Committee II report, which has suggested reduction of the government’s holdings in private sector banks to below 51 per cent. It is also considering reduction of the Reserve Bank of India's stake in the State Bank of India to below 55 per cent.

Minister of state for finance B.S.V. Patil said in Parliament that it is necessary to reduce RBI’s holding in SBI to below 55 per cent to enable the bank to raise equity in the market in order to enhance its capital.

IOC mandate for ABN Amro to get funds
Mumbai: Indian Oil Corporation has engaged ABN Amro Bank to arrange a $200-million six-month loan for financing its crude imports. The coupon on the loan has been fixed at 24 basis points over the London Inter-Bank Offered Rate.

ABN Amro is expected to form a consortium of 10 banks to handle the loan. Indianoil had raised $150 million in July 1999 through a bankers’ acceptance facility at 19 basis points over Libor. The funds were arranged by Bank of America. The company’s import bill is likely to go up from Rs 27,000 crore in 1998-99 to Rs 52,000 crore in the current year.

Web plans of   Dhanalakshmi Bank
Bangalore: The Thrissur-based private sector Dhanalakshmi Bank is all set to introduce web-based banking services in the new year. It will create an active website, which will enable customers to get information about the status of their accounts, requisition cheque books, order demand drafts, and perform other such functions.

The bank is also planning to totally computerise its business dealings and its branches. This will be accomplished by 2005, the bank’s chairman T.M. Venkataraman said.

Ceat Fin allowed to liquidate statutory holdings
Calcutta: The Reserve Bank of India has allowed the RPG group's non-banking finance company, Ceat Financial Services to liquidate its statutory security holdings to repay fixed deposit holders. The company has given an undertaking that it will neither accept fresh deposits nor renew existing deposits. It has stopped expanding its deposit liabilities since 1 November, and aims to bring down outstandings to Rs 100 crore by 31 March 2000.

The company is planning to secure loans of over Rs 100 crore from commercial banks and financial institutions to retire some of its high cost debts.

Redeem IndPrakash, Sebi tells Indian Bank MF
Mumbai: The Securities and Exchange Board of India has directed the Indian Bank Mutual Fund to redeem its IndPrakash scheme at the prevailing net asset value. Sebi has also asked the fund to submit a proposal on its plans for meeting the commitments within a month.

IndPrakash will have to find Rs 40-crore worth of funds to redeem the scheme, and it will require another Rs 70 crore to meet dividend payment commitments. The fund has another scheme, Indjyothi, which also requires Rs 2.75 crore to cover payment dues. IndPrakash has not paid dividends in 1996-997, 1997-98 and 1998-99.

Indian Bank, one of the banks recently identified as 'weak', which is the promoter of the fund, has offered to make good the fund’s commitments. The bank has, in turn, sought funds from the government, but the request has been turned down.

Disagreements to the fore at WTO
Seattle: The US, Japan and the European Union clashed over the shape of a new round of global trade talks even as activists took to the streets protesting against free trade at the World Trade Organsiation meeting which got under way on 30 November.

Member-states remained divided over the agenda for the new round, which almost threatened the launch of the negotiations. A major point of disagreement appeared to be agriculture, although there were disputes over anti-dumping laws and labour standards. The US and the European Union said they would press members to give labour a bigger voice in future trade deals. But, developing countries have rejected the move already.

Canada Life wants stake in Centurion Bank
New Delhi: Multinational insurance company Canada Life is exploring the possibility of acquiring a stake in Centurion Bank. Canada Life has already tied up with Centurion Bank for life insurance business. The company’s chief marketing officer, international division, Jim Connolly, said discussions are on with Centurion Bank.

Sakura-Sumitomo to close down Delhi office
New Delhi: Sakura-Sumitomo Bank, the second largest bank in the world following the merger of two different entities recently, will cut down its presence in India. It has decided to operate from Mumbai only and is closing down its office at New Delhi. This is part of the bank’s plan to restructure and refocus its operations.

Hudco’s securitisation plan
New Delhi: The Housing and Urban Development Corporation is planning a Rs 1,000-crore securitisation programme. The programme will be broken into two separate tranches of Rs 500 crore. Hudco will appoint a nodal agency to be supported by four others to handle the programme, V. Suresh, chairman cum managing director of Hudco, said.

Kirloskar Investment changes name
Mumbai: Kirloskar Investment and Finance Ltd, which was in the news following its failure to honour investment refunds and its change of management, is all set for a new identity. It has changed its name to KIRF Investments and Finance and will enter the information technology sector for hardware and software manufacture. It has a new board of directors comprising Hari Singh Champavat, as chairman, Keshav Singh Rathore and Manohar Singh Rathore as directors. The company is to hold its annual general meeting in Bangalore on 14 December.

WTO plans to set up 4 groups
Seattle: The World Trade Organisation meeting is expected to set up four working groups – on agriculture, new issues, market access and implementation of the Singapore declaration – to resolve the deadlock in trade negotiations. WTO director-general Mike Moore told the Indian delegation about this development and has sought India’s support for this purpose.

AXA to take over Japanese insurer
Tokyo: AXA of France is taking control of a Japanese insurer, Nippon Dantai Life Insurance Company. The alliance is aimed at creating a leading life insurance company in Japan, taking advantage of Nippon Dantai’s client base and AXA’s strong credit standing and global expertise. AXA and Nippon Dantai will set up a joint holding company, which will acquire full ownership of Nippon Dantai and AXA Life Insurance Company, AXA’s wholly-owned Japanese unit. AXA will invest $1.96 billion in the new venture, amounting to 95 per cent stake in the proposed company, AXA Nichidan Insurance Holding Company.

Inflation at 3.12%
New Delhi: The annual rate of inflation has risen for the sixth consecutive week to touch 3.12 per cent for the week ended 13 November. The rise has been in spite of marginal fall in the wholesale price index.

NHB act may be amended
New Delhi: The government is understood to be considering amendment to the National Housing Bank act to vest the organisaiton with quasi-judicial powers. The amendment is expected to open up a Rs 20,000 crore to Rs 30,000 crore securitisation market, facilitate insurance mortgage, provide security to lenders, reduce non-performing assets, speed up loan recovery and enhance lending capacity. With quasi-judicial powers, NHB will be able to recommend attachment of property in case of default in loan repayments.

NatWest rejects Royal Bank bid
London: National Westminster Bank has rejected a friendly takeover bid by Royal Bank of Scotland as it prepared itself to ward off a hostile bid by Royal Bank’s rival, Bank of Scotland. NatWest waited until the last hour of key deadline before making its decision known. It now plans to cut costs and buy back shares. The English bank held back the documents as talks with Royal Bank of Scotland over its possible $42.19 billion bid dragged on.