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
Representatives of non-government organisations present at
the venue cheered the failure. Murasoli Maran, Indias commerce minister, who headed
the countrys 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
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
HDFC Banks 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 committees 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
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 & Poors 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
Meanwhile, India has assured China that it will sign an
agreement to facilitate Beijings entry into the WTO. The US and China had signed a
bilateral agreement after five yeas of protracted trade negotiations to pave way for
Beijings entry into the WTO. China is lobbying with other WTO members for similar
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
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
SBI to seek RBI nod for
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
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,
Europes 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
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
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
Poor, developing nations may concede on
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 banks 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 companys 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
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 Indias 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
At the ministerial meeting, which began behind schedule,
Indias commerce minister Murasoli Maran reiterated the countrys 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 Indias 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 governments
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 RBIs 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 companys 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 banks
chairman T.M. Venkataraman said.
Ceat Fin allowed to liquidate statutory
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
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 funds
commitments. The bank has, in turn, sought funds from the government, but the request has
been turned down.
Disagreements to the fore at
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
companys 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 banks plan to restructure and refocus its operations.
Hudcos 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 Indias 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 Dantais client base and AXAs
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, AXAs 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
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
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
Banks 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.