46 FDI proposals cleared
New Delhi: On 16 March industry minister Murasoli Maran cleared 46 foreign direct investment proposals worth Rs 802 crore. Of these, 19 proposals involving aggregate investments of Rs 494.55 crore are from the information technology sector.

The companies whose applications have been cleared include SSI, whose Rs 435-crore global depository securities has been approved, and Nestle SA, whose application for raising its holding in its Indian subsidiary by five percentage points has been passed. Caltex has been allowed bring in Rs 180 crore for various infrastructure projects for import, storage and distribution of LPG.

Others include:

• Universal ABB Power Cables, for issue of 13 per cent cumulative redeemable preference shares worth Rs 30 crore for expanding activities into insulated power cables with accessories.
• Dana Corporation, to create a wholly-owned subsidiary with an investment of Rs 30 crore, for the design, manufacture, contract for buying and selling, export and import of highway components.
• Chaitime, for setting up a wholly-owned subsidiary for creating and designing of websites for Indian ethnic population worldwide with an investment of Rs 22 crore.
• Asia Online, Hong Kong, for a wholly-owned subsidiary with an investment of Rs 21.5 crore to develop, promote, engage and undertake business of providing various information technology related services.
• Citicorp Finance (India), to acquire 74 per cent equity in an unnamed downstream venture by bringing in Rs 14 crore.
• ABB Holdings (South Asia), for acting as a holding company for ABB Switzerland's investments in India.
• Schenectady India, which is into manufacturing of wire enamels and insulation varnishes and phenolic resins, to increase its foreign holding.
• Taib Capital Corporation, engaged in underwriting, distribution and research functions in the capital markets, to increase its holding in the Indian venture to 74 per cent from the current 51 per cent by bringing in an additional Rs 16.35 crore.
• Carlsberg for manufacture, distribution and sale of beer.
  Sembawang Shriram Integrated to increase the foreign holding from 97 to 100 per cent by bringing in Rs 7.59 crore.
• Thermax Energy Performance Service Ltd, to dilute its holding by one per cent to 49 per cent.
• MTL Instruments, to increase its foreign holding from 74 per cent to 100 per cent by bringing in Rs 4 crore.
• H2mG, to set up a wholly-owned subsidiary for providing IT-enabled Internet and e-commerce related back-end services and content provider.

Prudential norms for housing finance cos
New Delhi: The government has, prescribed prudential norms for housing finance companies, which it has issued through the National Housing Bank. The aim is to keep non-performing assets in check.
The NHB guidelines relate to issues like income recognition, accounting standards, asset classification, risk weighted assets, capital adequacy and investments by HFCs. They prevent a housing finance company from lending against its own shares.

Sidbi Act amendment approved; $500-million line
New Delhi: On 16 March the Lok Sabha approved changes to a bill seeking to amend the Small Industries Development Bank of India Act, 1989, which provides for establishment of a principal financial institution for promoting, financing and development of industrial concerns in the small-scale sector. The amendments, moved by minister of state for finance Babasaheb Vikhe Patil, have already been approved by the Rajya Sabha.

Meanwhile, the US Exim Bank will extend a $500-million line of credit to the Small Industries Development Bank of India for financing the sourcing of capital goods and technology by the domestic small-scale industry.

Rs 20,000 crore lost power theft
New Delhi: According to Union power minister PR Kumaramangalam, India is losing around Rs 20,000 crore annually on account of theft of power. He says ‘technical losses’ account for a much lower part of the transmission and distribution losses than theft.

FMO invests in Sundaram Home Fin
Chennai: FMO-Netherlands, a development finance company, is investing Rs. 7.5 crores in the equity capital of Sundaram Home Finance Ltd. Sundaram Finance will hold 65 per cent of the equity and International Finance Corporation 20 per cent.

Vote-on-account on general, railway budgets passed
New Delhi: On 16 March Parliament passed the vote-on-account on the general Budget and the Railway Budget for 2000-01, completing the first phase of the budgetary exercise. The second phase will commence on 17 April after a month.

Voluntary retirement schemes for PSUs
New Delhi: The Union cabinet has cleared a new voluntary retirement scheme for public sector undertakings, which takes into account the years of service of an employee and the years of service left. While profit-making units have greater flexibility in offering severance schemes, The latest decision will enable loss making units to offer more attractive VRS plans than they could in the past.

BankAm’s ATMs for the blind
New York: Bank of America will install automated teller machines that talk. The ATMs, to be deployed in California and Florida initially, have been developed by NCR Corp and Diebold Corp. They will give spoken recorded instructions to people who are unable to read messages on screens. To ensure privacy, they will be equipped with audio jacks.

Foreign, domestic banks now equal in US
Washington DC: America’s Federal Reserve has modified its rules bringing foreign banks on par with domestic banks.

16 March 2000

Indian stalwarts set up cruise company
New Delhi: They are the best known Indian names in the global corporate world. Citigroup’s Victor Menezes, Stanchart’s Rana Talwar, McKinsey’s Rajat Gupta and Yash Nagpal, a London based software industrialist, have joined hands to set up a cruise company with a capital of Rs. 40 crore.

While the cruise business is booming worldwide, the Indian Ocean region is the only region that is not an established cruise destination. Named Indian Ocean Cruise Lines, the company seeks to generate traffic in the virgin Indian Ocean region, west of Singapore. They have already appointed another noted Indian, Jaswant Lalwani, formerly of Cunard Lines, as the chief executive officer of the company.

The company, which plans to start with one cruise liner, will kick off its operations in November this year. It plans to start the first cruise from Athens to Colombo. It has secured the requisite RBI clearance to set up a liaison office in India.

Trai bill finally passed
New Delhi: The revised Trai bill has been finally passed by the Parliament. The new bill seeks to strengthen the regulatory body by bifurcating it into a tribunal and a regulator. If the bill had not been passed, the ordinance it sought to replace would have lapsed as a result of which the old Trai bill would have come into force once again.

The Parliament passed the bill on the assurance from the minister that the new bill in no way sought to reduce the powers under the old bill. The new bill only sought to separate the functions of the regulator by setting up a tribunal for adjudicating disputes.

15 March 2000

PwC sees cost of capital declining
Mumbai: PricewaterhouseCoopers, the consulting firm, believes that the cost of capital for domestic firms would decline over the next three years because of several factors, including lower interest rates and the maturity of the stock market. A PWC study, released in Mumbai on 14 March, says Indian companies generally feel that business risk, management quality and shareholder-value orientation, cash flows, and debt-equity ratios are the key factors influencing their cost of capital.

Bank rate may be down 1%, CRR too
Mumbai: It is reported that the Reserve Bank of India is considering reducing its ‘bank rate’ and trim the CRR requirement of banks too. The bank rate is currently 9 per cent.

Rs 471-crore loss on RIBs
New Delhi: The government has provided for an exchange rate loss of Rs 471 crore on its Resurgent India Bonds in 1999-2000. This provision has been made in its second supplementary budget for the year. The government had issued these bonds when the rupee was valued at Rs 42.5 to a US dollar.

Inflation marginally up
Mumbai: India’s annual rate of inflation moved up marginally to 2.14 per cent during the week ended 26 February. The rate is measured in terms of the wholesale price index on a point-to-point basis.

ICICI Bank’s net card
Mumbai: ICICI Bank will expand its credit card business to eight cities soon. In addition to Delhi, Mumbai, Calcutta, and Chennai, the bank will cover Hyderabad, Bangalore, Pune, and Ahmedabad. The bank, which has launched its credit card with internet access, offers the facility in three categories, with the lowest-end card requiring an entrance fee of only Rs 300.

Meanwhile, ICICI Bank has also launched mobile commerce services through a tie-up with Orange and Airtel, the cellular service providers in Mumbai and New Delhi. The facility allows subscribers to these phone services who are also account holders or credit card holders with ICICI Bank to track their personal finances over their mobile phones.

Vijaya Bank write-off
New Delhi: The government has permitted the public sector Vijaya Bank to write off accumulated losses of about Rs 290 crore against capital. This action will help the bank improve the look of its balance sheet before it goes for a Rs 100-crore public issue.

Konkan Railway may raise RORO charges
New Delhi: The Konkan Railway Corporation is reportedly talking to truckers with a view to raising the rates for the roll-on-roll-off services it offers along the 750-km Panvel-Mangalore corridor. The Konkan Railway currently charges Rs 5,000 for its RORO services along the entire stretch, allowing fully laden heavy commercial vehicles with axle weights up to 17 tonnes to be loaded on to railway wagons for transportation along the route.

Weak bank NPAs
New Delhi: Finance minister Yashwant Sinha said on 14 March that the government will create a financial reconstruction authority to deal with the non-performing assets of weak public sector banks. He stated that the statutes governing such banks would be amended to provide for even supercession of the board of directors and formation of a financial reconstruction authority with special powers, including those already present with the boards.

Tata group may enter venture capital
Mumbai: It is reported that the Tata group may enter the venture capital business in a big way. The group, which has invested $2.5 million in an India-focussed venture fund, Infinity, is said to be in negotiations with a European fund and a US-based fund to participate in their venture capital activity.

Karnataka Bank’s thrust in the north
New Delhi: The Mangalore-based Karnataka Bank will open its northern regional office in New Delhi as part of a expansion plan to expand operations to the north of the country. The bank plans to open many branches in Delhi, Madhya Pradesh, and Uttar Pradesh.

Asahi, Tokai, Sanwa merging to form third largest bank
Tokyo: Sanwa Bank, Asahi Bank and Tokai Bank, three of Japan’s biggest banks, have announced that they will merger next year to form the world's third-largest bank in asset terms.

14 March 2000

Sitting fees for directors increased, managerial remuneration norms eased
Mumbai: The central government has marginally hiked the sitting fees for board meetings from its current level of Rs. 2,000 per board meeting to Rs. 5,000 per board meeting. This revision becomes effective from April 1.

The government has also initiated another amendment to the Companies Act, which allows companies to pay remuneration to their managerial personnel even in the event of inadequacy of profits. The new rule allows for remuneration in the band of Rs. 75,000 to Rs. 200,000 per month depending on the effective capital of the company.

Mega merger in Japanese banking sector in the offing
Tokyo: The beleaguered Japanese banking industry, that is in the process of consolidation, is seeing yet another mega merger that will, it is hoped, bring about some stability in the industry.

Sanwa Bank, Tokai Bank and Asahi Bank, are likely to come together in a merger that will form the third largest banking group in Japan, with assets over JY 57.5 trillion. This merger follows similar merger attempts by large Japanese banks to bring in a modicum of stability in their operations.

13 March 2000

Centre still open to ideas on ESOPs
New Delhi: While the finance minister let down the IT industry by refusing to give any sops on the vexed issue of taxation on ESOPs, the government has stated that it is willing to look at alternatives for ESOPs that make it revenue neutral.

The government is stated to be keen on resolving the issue on ESOPs fast enough if the industry comes up with an acceptable alternative to the existing taxation structure. Currently, ESOPs suffer a dual taxation -- first at the point when the employee exercises the option, where they are treated as perquisites, and second at the point when the shares are sold, where the gains are taxed.

The industry has been arguing that the tax at the point of exercising the option creates unnecessary hardships to the employees in terms of cash flows. The industry has been suggesting the US example, where tax is deferred selectively, on a case-by-case basis, to the point of sale. However, many experts question this model by stating that to introduce a discretionary element in the regime at a time when such discretions are being phased out, is not correct.