Bank Muscat to start retail operations
Bangalore: Bank Muscat will launch its retail banking operations in India
in mid-2000. The bank began its corporate banking and treasury businesses in 1999. The
company will appoint a retail banking head by May 2000, and start offering personal loans
and loans against shares by June.
The bank will also enter vehicle financing and consumer
10 March 2000
Legal anomalies in debt
New Delhi: On 9 March the Union
government introduced the Recovery of Debts Due to Banks and Financial Institutions
(Amendment) 2000 Bill, to replace an ordinance issued on 17 January. The bill seeks to
correct certain legal anomalies pointed out by the Supreme Court and, inter alia, empowers
tribunals to distribute sales proceeds among secured creditors in accordance with
Companies Act provisions.
Frankfurt: Germanys Deutsche Bank AG and Dresdner Bank AG are merging to
create the world's largest bank. One fallout of the merger will be the retrenchment of
over 16,500 employees from 2001.
The merger will be effected through a share swap. With the
merger, the combined entity is expected to gradually exit mass retail banking and focus on
asset management and wholesale banking.
8 March 2000
HDFC cuts rates
Mumbai: The Housing Development Finance Corporation has interest rates on its lending
by 25 to 175 basis points. It has effected this by merging five slabs into one unified
slab of 13.25 per cent effective 8 March.
All fixed rate home loans will attract interest at 13.25 per cent and adjustable rate home
loans will attract 12.75 per cent per annum. The HDFC has also increased the loan ceiling
to Rs 1 crore from Rs 50 lakh earlier.
HSBC building data
processing centre in Hyderabad
Hyderabad: HongKong and Shanghai Banking Corporation Holdings of the UK plans to
build a data processing centre at the Hitec City in Hyderabad. The group, which will use
the centre to support its overseas work, has applied to the Foreign Investment Promotion
Board for permission.
The HSBC processing centre is expected to commence
operations in the second half of 2000 from an area of about 30,000 square feet allotted to
it in the L&T Infocity on the sixth and seventh floors of the Cyber Towers.
Centre injects Rs 50 cr into Exim Bank
Mumbai: The Union government has given the Export Import Bank of India a fresh Rs 50
crore as equity, taking the banks paid-up capital to Rs 550 crore.
Deutsche, Dresdner may merge
Frankfurt: Two major German banks, Deutsche Bank AG and Dresdner Bank AG are
expected to merge to create the world's largest bank in terms of assets. Negotiations for
the merger are said to be at an advanced stage.
As and when it happens, the merger will create a group with combined assets of over $1.2
trillion. The talks began last year over the possibility of merging the banks retail
operations. This was an area that had been affected by the growth of internet banking.
Later the banks decided to widen the scope of the merger.
7 March 2000
BJPs NDA allies want subsidy cuts revoked
New Delhi: The Bharatiya Janata Party-led coalition government is under
pressure from its National Democratic Alliance partners to roll back the cuts in
fertiliser and food subsidies proposed in the Union budget for 2000-01. They presented a
list of demands to prime minister Atal Bihari Vajpayee, who asked them to talk to finance
minister Yashwant Sinha.
The finance ministry may have to reckon
with an additional subsidy burden of Rs 3,000-4,000 crore on fodgrains subsidy alone if
the political pressure prevails. The dissenting partners include the Telugu Desam Party,
the Janata Dal (United), the DMK, and the Akali Dal.
Finance ministry refuses to
remove ESOP tax
New Delhi: The finance ministry has reportedly ruled out a removal of tax
at the time of exercise of employee stock options. The reason: fears of misuse and revenue
The ministry will consider the exercise of a stock option as a perquisite, which will be
taxed as a salary component.
Supreme Court ruling on DA,
CCA and HRA
New Delhi: A division bench of the Supreme Court has ruled against
employees plea that income under the heads of dearness allowance, city compensatory
allowance, and house rent allowance be excluded from the definition of incomes for the
purpose of calculation of tax.
HDFC may cut rates soon
New Delhi: The Housing Development Finance Corporation is expected to
reduce the interest rates it charges for housing finance. The Housing and Urban
Development Corporation, the apex agency body housing finance, recently announced a two
percentage points cut in rates.
Any cuts by HDFC, the biggest provider of housing finance in India, will compel other
housing finance companies to follow suit.
RBI questions ICICI
Mumbai: The countrys central bank and banking industry regulator,
the Reserve Bank of India, has sparked off a controversy over ICICI Ltds finances.
In its financial inspection report for 1998-99 the RBI has said ICICI has understated its
non-performing assets by around 3.8 percentage points and also shown a net profit that is
Rs 403-crore higher than it should be.
It is believed that one reason for the discrepancies could be the RBI guidelines being
open to several interpretations. The dispute arose over treatment of several key areas of
reporting, including income recognition, asset classification, provisioning, investment,
fund management, post-sanction supervision and follow-up of advances, etc.
According to ICICI, the institution has submitted its detailed reply, and there has not
been any further comeback from the RBI. News reports have quoted unnamed RBI officials as
having said that the central bank is satisfied with ICICIs responses.
Weak banks may have to close foreign operations
New Delhi: The government may ask three weak banks, Uco Bank, United
Bank, and Indian Bank, to shut down their foreign operations as part of their revival
plans. They will also have to quickly rationalise their branches in India, for which the
banks have already started negotiations with for the introduction of voluntary retirement
Vijaya Bank plans IPO
Bangalore: Vijaya Bank plans to make a Rs 100-crore public issue in the
last week of June or first week of July 2000. The bank will also set off Rs 300 crore of
accumulated losses against its equity capital of Rs 550 crore.
The Vijaya Bank management wants to charge a nominal
premium on its share.
UTI Bank plans private placement
Mumbai: UTI Bank will make a private placement of its shares during the
week to raise Rs 100 crore to shore up its tier-II capital. Also, the holding of its main
promoter, the Unit Trut of India is likely to reduce to 40 per cent of the banks
equity in the next six months from 72 per cent on 31 March 1999.
6 March 2000
Trai ordinance may lapse
New Delhi: The new Telecom Regulatory Authority of India
(Trai) ordinance which was introduced on January 24 this year and which had to be ratified
by the Parliament may become an unintended victim of the current RSS imbroglio.
If this happens, the implementation of the new
telecom policy will face undue delays and the new appellate body that would have been set
up for the redressal of disputes will also fall through. This would also mean that the old
Trai Act, which the new ordinance was to replace, would come into effect once again.