Clinton wants labour, environment in trade
Davos: US president Bill Clinton, addressing the World Economic Forum,
raked up the issue of including the controversial labour and environmental standards in
the new round of trade negotiations, which saw the collapse of the Seattle round of the
World Trade Organisation conference in late 1999. He, however, advocated the need for a
political consensus to facilitate an early start of a new round of trade negotiations.
Present at the Davos meet is a strong Indian delegation,
including the chief ministers of Andhra Pradesh and Karnataka, and members of the
Confederation of Indian Industry.
The meeting faced demonstrations by anti-free trade
protestors, who broke police lines to disrupt the conference, smashed windows of shops,
cars, and a restaurant. The demonstrators carried placards naming the conference as a
"meeting of murderers".
GDP grows 6.8% in 1998-99
New Delhi: The Central Statistical Organisation has revised the growth in
gross domestic product to 6.8 per cent against an earlier estimated 5.8 per cent for
1998-99. At 1993-94 prices, the GDP at factor cost is now estimated at Rs 9,49,525 crore
in 1998-99 against Rs 8,89,102 crore in 1997-98.
The estimates reveal that this upward revision is due to a
sharp recovery in the agriculture and services sectors. The statistics also showed that
there is a deceleration in the manufacturing sector. The upward revision is said to have
been made on account of the implementation of the Fifth Pay Commissions
recommendations, which substantially increased the salary levels of government employees.
SBI plans two lending schemes
Mumbai: The State Bank of India is all set to launch two lending schemes
mortgage lending and metal lending for retail customers. Under the mortgage
lending scheme, the bank will lend funds against the customers existing properties
such as houses. These loans may have a repayment period of five years at interest rates
linked to the banks prime lending rate.
Under the metal lending scheme, SBI will lend gold to
jewellers and the repayment will be in the form of gold. The details of this scheme are
being worked out, and the bank will seek permission from the Reserve Bank of India. The
scheme will have an interest component, which will be payable in cash. The SBI has secured
deposits of gold for on which it is paying interest at around three to four per cent.
Uco Bank officers seek premature retirement
Calcutta: Nearly 600 officers of Uco Bank, identified as a "weak
bank" by the Verma Committee, are understood to have opted for premature retirement.
It is reported that most of these officers are in the 52-58 age group and fear they may
not a good deal under the banks voluntary retirement scheme. They are also not
certain that officers will be eligible for the scheme. Hence they prefer premature
retirement, with whatever benefits they know it offers.
Uco Bank has 32,000 employees, of which 8,000 are in the
Metlife picks up stake in First
New Delhi: Metropolitan Life Insurance Company of the US, or Metlife, is
picking up a 34 per cent holding in First Asia Asset Management, an asset management
company promoted by First Leasing Company of India. First Leasing Company of India has
another foreign partner, the Guinness group.
Metlife is investing Rs 3 crore in the asset management
company, which will issue it equity through share transfers and a rights issue. Metlife is
one of the big insurance players wanting to enter India.
SBI may have record profit this year
Mumbai: State Bank of India chairman G.G. Vaidya expects that the bank
will record its highest ever profit from operations in 1999-2000. He estimates that the
net profit will be around Rs 1,500 to Rs 1,600 crore. Mr Vaidya admitted that the
banks performance in certain areas, like foreign exchange, has not been
satisfactory, but it has covered up with better performance in other areas like
Exim Bank proposes dilution of govt stake
Calcutta: The Export Import Bank of India has proposed to the government
that it should divest over 50 per cent of the public sector bank's equity. This would give
the bank greater freedom in its operations.
The banks managing director Y.B. Desai says this
plan is still at the conceptual stage, but the disinvestment is not far off. He told a
seminar that the government has stopped funding the bank for the last three years, and the
bank now raises funds from the market. He said a number of export credit banks abroad are
Bank of Scotland hikes offer
London: The Bank of Scotland has improved its offer for National
Westminster Bank in its fight for control of the British bank. The offer, which replaces
an earlier special dividend with a special stock unit offer, is worth 24.3 billion or
14.56 per share. The rival offer by Royal Bank of Scotland is around 22 billion. Both
the banks have time up to 31 January to increase their offers.
SBT to have own
exchange house in Gulf
Thiruvananthapuram: State Bank of India subsidiary State Bank of
Travancore is planning to set up its first directly-managed exchange house in Muscat,
Oman, in the Gulf. The bank has identified Global Exchange Company in Muscat as its
potential business partner.The bank is also considering setting up a second exchange of
its own, in Dubai, by firming up its arrangements with City
Exchange, which handles the bank's work in Dubai.
The banks branches receive some 1.3 lakh drafts from the Gulf region every month. It
had conducted a trial run of an electronic transfer system to enable customers to withdraw
money just a day after it is remitted from a Gulf country. At present, the bank has
arrangements with three Gulf-based exchange houses in Abu-Dhabi, Qatar, and Oman.
NatWest may be forced for
London: National Westminster Bank will be forced to decide to be taken
over by one of its bidders -- Bank of Scotland or Royal Bank of Scotland -- even if there
is no clear winner in the present takeover battle, according to newspapers in London.
Reports said if a split vote allowed NatWest to remain independent, the bank will be under
pressure to recommend one of the bids. If the majority of shareholders voted in favour of
a change, the banks board could find itself under pressure to recommend one of the
bidders, the reports said.
A split vote -- where 40 per cent of NatWests
shareholders vote for either of the bidders and 20 per cent for neither -- would allow the
bank to escape the Scottish banks clutches. But the vote would also show that 80 per
cent of the banks shareholders had voted for a change of management. The UK takeover
code could allow a recommendation of an offer even after the end of the 60-day bid
timetable. Normally if a bid is unsuccessful after 60 days, it lapses and the predator is
not permitted to re-bid for 12 months. If NatWest decides to recommend one of the bidders
after the end of 60 days, the takeover code would allow the rival bidder to make a fresh
The bank has reiterated its rejection of the two bids, saying it is an excellent business
with outstanding prospects.
Strong Indian team at Davos
New Delhi: India will have a strong presence at the annual meeting of the
World Economic Forum at Davos, Switzerland, from 27 January to 1 February. The Indian
speakers at the Forum will include finance minister Yashwant Sinha, chief minister of
Andhra Pradesh Chandrababu Naidu, chief minister of Karnataka, S.M. Krishna and president
of CII, Rahul Bajaj. A number of industry leaders and economists are part of the Indian
delegation to the Forum meeting.
Stanchart, BNP launch co-branded card
Mumbai: Standard Chartered Bank and Banque Nationale de Paris are
launching a co-branded card the Standard Chartered BNP Card. The card is meant for
private banking customers of BNP. It will carry the logo of Stanchart and BNP and offer
all benefits of a global Stanchart gold card.
Govt may publish name of bank defaulters
Calcutta: The government is working out a mechanism to publish names of
top bank loan defaulters, according to minister of state for finance Balasaheb Vikhe
Patil. He said the figures will be published by the Reserve Bank of India. At present
basic facts of outstandings of over Rs one crore are available on the RBI website. Since
there are legal snags in revealing the names of borrowers or the amount involved in
non-performing accounts, the government is considering legislative and other changes to
eliminate these obstacles, Mr Patil said.
VRS for banking sector coming
New Delhi: The government is understood to have finalised a voluntary
retirement scheme for the banking sector. The scheme offers 45 days salary for every year
of service or salary for the balance period of service, whichever is lower. At present,
there is no VRS permitted for the banking sector. The scheme is targeted at the workforce
in the 48-58 age group, while it is less attractive to employees in the 35-45 age group,
according to sources in the government. The scheme is also understood to incorporate a
compulsory retainment scheme, which empowers bank managements to offer VRS at its
Higher commission for insurance agents
Mumbai: The Insurance Regulatory and Development Authority of India
will permit insurance companies to pay higher agency commission of up to 15 per cent in
the non-life sector. It is also proposing combined agency licences to agents, whereby an
agent can sell products of one non-life and one life insurance companies. The
authoritys chairman N.I. Rangachary says the authority has decided to do away with
the different slabs in the commission and fix a maximum limit of 15 per cent.
Rupee under pressure
Mumbai: The rupee plunged to a 16-month low of 43.66 against the dollar
on 24 January. The main reason, money market players say, was frantic dollar buying in the
earlier part of the day by the State Bank of India on behalf of its clients. The bank
later turned seller along with Bank of Baroda and Bank of India, which helped the rupee to
stabilise a little. The selling process is said to have been initiated at the instance of
the Reserve Bank of India. The rupee closed at 43.6050/6150.
RBI prescribes norms for take-out finance
Mumbai: The Reserve Bank of India has announced norms to be followed by
banks and financial institutions while taking recourse to take-out finance. In the case of
unconditional takeover, a risk weight of 20 per cent is applicable to the lending
institution where the full credit risk is assumed by the taking over institution. In case
partial credit risk is assumed by the taking over institution, the risk weight will be 20
per cent on the amount taken over and 100 per cent on the amount not to be taken over. For
the taking over institution, the risk weight will be 100 per cent on the amount taken
over. The credit conversion factor will be 100 per cent. In the case of conditional
takeover, both the lending and taking over institutions will have to assign a risk weight
of 100 per cent. The credit conversion factor for the taking over institution will be 50
The central bank feels the norms are necessary as banks
and financial institutions are adopting the new product of take-out finance for meeting
the financial requirements of infrastructure projects.
365-day banking by Grindlays
Mumbai: ANZ Grindlays Bank will introduce 365-day banking in six of its
branches located in Delhi, Mumbai and Chennai. The bank has already introduced extended
banking hours, phone banking and doorstep banking as part of its efforts to enhance the
value of the "banking experience".
Anuroop "Tony" Singh, country head, ANZ
Grindlays Bank, India, says these facilities and services form an integral part of the
banks overall business plan to offer all customers a range of banking services and
products for satisfying their personal financial service needs.
Federal Bank plans Internet-based services
Bangalore: The private sector Federal Bank is entering Internet banking
and e-commerce in a big way. The new services will be available to the banks
customers by April 2000 and will cover metro and large cities initially, says the
banks chairman K.P. Padmakumar. The bank is tying up with Infosys Technologies to
introduce these new services. It will be using Infosys Technologies BankAway
software for the new services, which will mainly be targeted at its non-resident Indian
NatWest consolidates its defences against
London: National Westminster Bank of Britain has reported profits of
2.305 billion in 1999, which is above its expectations and this is forming one of its
defences against the two hostile takeover bids by Bank of Scotland and Royal Bank of
Scotland that is currently on. The banks share price also went up by 3.6 per cent to
1223 pence. The bank has announced a share buyback scheme through a tender for 1.5
billion worth of shares and announced that it will return further 2 billion worth of
capital to its shareholders later this year.
Government not to dilute holdings in LIC,
Mumbai: The government is not going to dilute its holdings in the General
Insurance Corporation of India and the Life Insurance Corporation of India, says Union
minister of state for finance Balasaheb Vikhe Patil. And it will continue to have a say in
their policy decisions, he says.
Mr Patil told a seminar on challenges faced by the
insurance industry that the emergence of new players in the insurance sector will require
a change in the work culture in the industry. The state-owned corporations, however, have
no need for worry about a level playing field as the guidelines for private insurance
companies will have social objectives compliance similar to those applicable to the public
sector insurance companies.
Corporation Banks plan for insurance
Mumbai: The Corporation Bank is interested in picking up the entire 74
per cent holding in its proposed insurance subsidiary despite the Reserve Bank of India's
stipulation that Indian banks wanting to set up insurance subsidiaries can have holdings
up to a maximum of 30 per cent. Corporation Bank is approaching the RBI with this
proposal, says R.S. Hugar, chairman of the bank.
The government has approved foreign partners taking a
maximum of 26 per cent holding in insurance ventures and Indian companies picking up the
Inflation crosses 3% mark
New Delhi: The inflation rate rose to 3.1 per cent in the week ended 8
January 2000. The rate had hovered below the three per cent level for about two weeks.
The increase has been attributed mainly to increases in
the prices of various food and non-food items during the period under review. Official
sources said there has been a rise in the indices of primary articles and manufactured
products. The inflation rate was 4.52 per cent in the corresponding week in 1999.