The Reserve Bank of India released these details in its weekly statistical supplement. The government will be able to bring down the balance within the prescribed limit in a few weeks as over Rs 7,000 crore has come into the government’s kitty by way of advance tax collections.

Money supply grew Rs 4,039 crore to Rs 10,67,124 crore during the fortnight ended 3 December 1999, the supplement said. The total foreign exchange reserves, including gold and SDRs, rose $68 million during the week ended 17 December to $34,389 million.

SBT plans e-transfer from Gulf
Thiruvananthapuram: The State Bank of Travancore is launching an electronic fund transfer facility for its Middle East customers. The facility will allow expatriates from Kerala located in Middle East countries to remit money quickly to their families. The infrastructure for the system is ready, and the facility will initially be available at three new exchange houses at Al Faradan in Abu Dhabi in the UAE, Trust Exchange at Doha in Qatar and Al-Mozzanni in Oman. The foreign exchange department of the bank at Kochi will serve as the hub for the operations.

GIC plans new company
Mumbai: The General Insurance Corporation of India is setting up a management services company to oversee its savings-linked insurance products. The new company will market and process the tasks involved in introducing the new products. However, the premium income and the liabilities will be on the books of the four subsidiaries of GIC.

GIC has already received clearance from the government to set up a separate company for its managed healthcare products.

IDBI Bank plans credit card
Hyderabad: IDBI Bank is coming out with its credit card as a co-branded product with a foreign bank. The bank is also introducing in January 2000 'MoneyExclusive', a product offering banking and investment consultancy to high net worth individuals. A bank spokesman said the announcement about the credit card will be made jointly by the bank and its foreign associate. IDBI Bank will shortly add nine more bank branches, taking the total to 40.

No diesel price hike
New Delhi: The petroleum ministry is understood to have decided not to increase the price of diesel for the time being. The decision seems to have been taken in the light of an assurance from the finance ministry that the duty structure on petroleum products would be rationalised.

Petroleum minister Ram Naik has said discussions are going on with the finance ministry on the rationalisation of duties. The pressure to raise prices is owing to petroleum prices in the global markets moving up

Bank strike plan deferred
Mumbai: The proposed strike on 27 December called by three bank employees’ unions has been deferred following assurances from finance minister Yashwant Sinha that their demands will be looked into. The National Confederation of Bank Employees, the Indian national Bank Employees Federation and the National Organisation of Bank Workers had jointly announced the strike plan.
3 Taiwanese banks merge
Taipei: Three Taiwanese government-owned banks have merged in order to consolidate banking activities in the country, overcrowded by too many banks. The three banks are Bank of Taiwan, Land Bank of Taiwan and the Central Trust of China. All three banks are wholly-owned by the ministry of finance. They have combined assets of Taiwanese $3.712 trillion ($117.46 billion).

IFCI needs restructuring, says IDBI
Calcutta: The Industrial Development Bank of India, which is a 30 per cent equity holder in Industrial Finance Corporation of India, feels there is an urgent need for restructuring of IFCI. IDBI chairman G.P. Gupta says the proposed equity issue by IFCI will not solve the developmental finance organisation's problems as it has a high level of non-performing assets and a low capital adequacy ratio.

Mr Gupta indicated that one of the options could be a merger of the two organisations.

IDBI too plans insurance venture
Calcutta: The Industrial Development Bank of India is in talks with Principal Financial Group of the US and ING of the Netherlands for its proposed insurance venture. IDBI plans to enter the pension business initially and then other sectors. Plans are to set up a new company with the selected foreign partner to run the insurance business. Principal Financial Group is already IDBI's partner in its asset management company, IDBI Investment Management Company.

HDFC Bank to set up B2C system
Mumbai: HDFC Bank is aligning with BPL to offer  Internet-based business-to-business e-commerce services to companies. The bank has already installed facilities in Mumbai to enable its customers, including brokers, banks and stock exchanges to settle payments electronically. The link-up with BPL will also cover a supply chain management system under which dealers and vendors can transact business online.

Income tax collection up in Mumbai
Mumbai: Income tax collections from Mumbai have gone up 18 per cent during 1999 compared to 1998. However, there has been a three per cent decrease in corporate tax collections. Chief commissioner of income tax, Mumbai, B. Mishra, says the combined income tax and corporate tax collections from Mumbai during the year have increased by Rs 100 crore over last year's level. The year’s collection is in the range of Rs 20,000 crore, he added. Mumbai has 1.85 million tax payers, up by 2.5 lakh compared to last year.

GIC finalises on consultant
Mumbai: The General Insurance Corporation of India has finalised on the consultancy firm to advise it on restructuring. GIC has appointed a board sub-committee to oversee the restructuring so that it and its four subsidiaries can function effectively after the insurance sector is opened up.

JM Mutual, Centurion Bank in tie-up
Mumbai: JM Mutual Fund and Centurion Bank have entered into a marketing tie-up. Under the arrangement, Centurion Bank will market JM Mutual’s various schemes to its customers. The arrangement is, however, non-exclusive, and JM Mutual Fund intends to tap other banks.

Newbridge Capital buys Korea First
Seoul: Newbridge Capital, a US investment firm, will buy Korea First Bank. An agreement has been signed to this effect under which Newbridge will pay $442 million to take a 51 per cent equity holding in Korea First, which is one of Korea’s top five banks. Newbridge will assume operational control of the bank.

While the state-run Korea Deposit Insurance will retain a 49 per cent holding in the bank and the bank’s stocks will be listed on the Korean Stock Exchange, there will not be any trading in the shares. The bank will have a new chairman, Robert Barnum, a former president of American Savings Bank.

Sikkim Bank to be merged with Union Bank
Calcutta: The government has approved the Reserve Bank of India’s proposal for amalgamation of Sikkim Bank with the Union Bank of India. The amalgamation will take effect from 22 December. The RBI, in a press statement, said all the branches of Sikkim Bank will function as branches of the Union Bank of India.

Sikkim Bank is a non-scheduled bank registered in Gangtok, with Ratan Singh Chowdhury holding nearly 60 per cent of its equity through a non-banking financial company. It is  not covered by the Banking Regulation Act. The RBI had stepped in to stem what it found mismanagement in the bank, stripped the bank’s former chief executive officer of his powers and appointed its own nominees to run the bank. The bank’s shareholders and depositors have legally challenged the RBI’s action, including the proposal of amalgamation and the appointment of its nominees.

Reacting to the RBI action, Mr Chowdhury said it is illegal, and the matter is sub judice.
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Hubli-Dharwad bank’s application rejected
Mumbai: The Reserve Bank of India has rejected an application from the Hubli-Dharwad Urban Cooperative Bank of Dharwad, Karnataka, for a licence to carry on banking business. The bank cannot transact the business of banking and it will not be able to accept deposits from the public or allow withdrawals by cheque, draft order or other such instruments.

Allahabad Bank postpones float
Calcutta: Allahabad Bank is understood to have postponed its initial public offering. The bank’s management feels that it will fetch better returns if it enters the market in financial year 2000-2001, as it will be able to show improved results during 1999-2000.

The government has been insisting that the bank go in for a float in the current financial year as its capital to risk weighted asset ratio is nearly 13 per cent, against the Reserve Bank of India's stipulated rate of 9 per cent. The bank had recently floated a subordinate debt issue, which was over-subscribed, enabling the bank to collect Rs 125 crore.

GIC plans catastrophe bonds
Mumbai: The General Insurance Corporation of India is planning catastrophe bonds as an alternative to transferring risks through re-insurance. These bonds provide investors with a return in case there are no specified catastrophic events like cyclone. The investors will not run a risk on their principal investment. GIC intends to raise nearly Rs 2,000 crore from these bonds.  

CII admits it has made a mistake
New Delhi: The Confederation of Indian Industry has admitted that it has made a mistake in recommending the closure of  three weak banks. CII’s director general Tarun Das said CII is not backtracking on its recommendation as a result of pressure imposed by any member or due to the threat of release of a list of defaulters.

The confederation says it has made a mistake by underestimating the emotion and reaction that the recommendation would trigger off among employees and the management. Mr Das added that the decision to withdraw the recommendation was taken jointly by CII president Rahul Bajaj and chairman of the task force K.V. Kamath after consulting some past presidents. He also said CII has no problem if the list of corporate defaulters is made public

RBI advises banks to maintain hard copies
Mumbai: The Reserve Bank of India has advised all the banks to maintain hard copies of all customer accounts, right from 1 December 1999 as a precautionary measure in order to avoid any problems on account of the Y2K bug. The entire banking sector has reported full Y2K readiness at the end of November 1999.

The RBI said the Indian Banks’ Association and the banks are ready to provide statements of accounts to account holders before 1 January 2000 from all the branches of the banks at any time. This will serve as documentary evidence in case of any problems later. The RBI has also ensured that a core staff of banks will supervise the rollover to year 2000, and this exercise will begin from 27 December 1999. Customer support will be available round the clock.

Tisco threatens to take AIBEA to court
Calcutta: Tata Iron & Steel Company says it will take the All India Bank Employees Association to court for declaring that the company’s managing director J.J. Irani is one of the loan defaulters among members of the Confederation of Indian Industries. Tisco clarified that Dr Irani is not a director on the board of any companies that is a loan defaulter. No Tata group company, including Tisco, is a defaulter.

The AIBEA had released a list of loan defaulters who are members of the CII, claiming that Dr Irani, along with N.N. Kampani, had defaulted on a loan of Rs 25.4 crore from the Industrial Development Bank of India availed of for Powmex Steel of Orissa. Tisco has clarified that Dr Irani has never had any connection with Powmex Steel.

NHB comes out with priority bonds
Mumbai: The National Housing Bank is coming out with a Rs 300-crore worth priority sector bond issue in the private placement market. The bonds will have an eight-year tenor at a coupon rate of 11.70 per cent payable annually. They will have an average maturity of six years and 11 months and will be partially redeemed in the ratio of 40 per cent, 30 per cent and 30 per cent at the end of sixth, seventh and eight year respectively.

RBI wants to cut CRR to 3%
Mumbai: The Reserve bank of India will seek to reduce the cash reserve ratio to 3 per cent. This was stated by Y.V. Reddy, the central bank’s deputy governor, at a seminar. The RBI has been wanting to cut the cash reserve ratio to this level to conform to banking sector reforms of the government. As part of this policy, it had reduced the cash reserve ratio from 10 per cent to 9 per cent earlier as a result of which nearly Rs 7000 crore was released into the banking system.

Federal Bank plans e-com, insurance foray
Kochi: Federal Bank, one of the old generation private banks, is entering e-commerce and insurance marketing businesses. The bank’s chairman, K.P. Padmakumar, said the bank will interconnect its branches and introduce "any-where" banking in Bangalore sometime in the second week of January 2000. The facility will then be extended to branches in all the metros and some of the major cities later in the year, he added. The Alwaye, Kerala-headquartered  bank has also taken steps to introduce Internet banking and enter e-commerce once the government’s policy in this regard is in place. The bank is also talking to some leading insurance companies abroad to distribute their insurance products in the country.

Mr Padmakumar said the financial services subsidiary of the bank, FedBank Financial Services, will be merged with the bank as part of the consolidation programme.

3 professional institutes form apex body
Mumbai: Three professional institutions in India, the Institute of Chartered Accountants of India, the Institute of Company Secretaries of India and the Institute of Cost and Works Accountants of India, have decided to come together to function under a common roof. The three institutions have set up a coordination committee to evolve a method under which they will function in a unified manner. The three institutes will prepare individual approach papers and a common approach paper will be presented to the government sometime in April 2000. The three institutes are set up under different acts of Parliament. A multi-disciplinary practice, where partnerships between members of the three institutes would be permitted, had been agreed earlier.

Inflation rate down
New Delhi: The inflation rate has come down to 2.44 per cent for the week ended 4 December, 0.2 per cent less than the previous week. The fall has been mainly on account of continuous fall in the prices of major food products.

CII withdraws advice on banks’ closure
New Delhi: The Confederation of India Industry is withdrawing the recommendation made by its task force on non-performing assets that three weak banks, Uco Bank, Indian Bank and United Bank of India should be closed down. CII is learnt to be writing to finance minister Yashwant Sinha on this. The decision comes in the wake of the managements of these banks questioning the propriety and competence of the task force to arrive at such a conclusion. CII has issued a statement saying it understands and respects the sentiments and views of the management and employees of these banks and is, therefore, asking the government no to consider this particular proposal. The task force, headed by ICICI’s managing director and chief executive officer had in all made 26 recommendations.

Private insurance to take off by end-2000
Bangalore: Chairman of Insurance Regulatory and Development Authority of India N. Rangachary says private sector insurance operators will be able to start full-scale activity by the end of 2000. The regulations will be in place by March 2000, applications from intending players will be invited in April, and by end-September the processing of applications will be completed, Mr Rangachary told newsmen after a seminar on emerging scenario on insurance regulation and management. It will be made mandatory for selected insurance companies to maintain solvency position on a daily basis and there will be actuaries to interact with consumers and the regulator in order to protect consumers’ interests, he added.

DBS eyes stake in UTI Bank
Mumbai: Singapore-based DBS Group Holdings is keen on acquiring a 20 per cent stake in UTI Bank. The company, considered Southeast Asia’s largest banking group, is reported to have held preliminary talks with UTI Bank recently. However, both the sides did not elaborate on the talks.