22 april 2000

hong kong bank launches private banking in bangalore
bangalore: the hongkong & shangai banking corporation (hsbc) on thursday launched its private banking services, `private clients', at bangalore. this service is targeted at clients with a minimum portfolio of rs 75 lakh, offers investment advice, transaction execution, custodian and administration services, in addition to the existing personal banking services provided by hsbc in india. the service will be extended to calcutta in may of this year and will be followed by chennai and hyderabad.

hsbc's global internet banking, set up in association with ibm, is being test marketed at new jersey, usa. in november 2000, it is going to be launched in india. the global internet banking service will connect all countries where hsbc has its operations, according to sources in the bank. internet banking will be followed with e-commerce services and in second quarter of 2001, hsbc plans to offer b2b services for exporters and importers.

21 april 2000

india may repay $1 billion of world bank loans
new delhi: buoyed by the turnaround in the external sector outlook, the indian government is poised to approve prepayment of about $1 billion in outstanding world bank loans.

the government is toying with two alternatives -- either utilise part of the burgeoning foreign exchange reserves to retire the debt or alternately float fresh borrowings — at considerably lower cost — through a nominated agency and thereby refinance the borrowings. the proposal, which is being perceived as efficient treasury management, is presently awaiting the approval of finance minister yashwant sinha.

this will be the second time that the government has taken recourse to the option of prepaying outstanding debt from multilateral bodies. in 1993-94, the government had prepaid $1.4 billion in loans owed to the international monetary fund. this was done as there was a sharp turnaround in the external sector outlook and the reserve bank of india was being forced to resort to sterilisation to mitigate the inflationary impact of huge purchases of foreign exchange by the central bank.

it had also in the same period permitted private sector players to prepay past debts, especially those raised around the crisis years of 1991 when interest rates were higher.

however, in the present context with foreign exchange reserves rising by nearly $1 billion a month since january, it looks as though foreign currency reserves would touch $40 billion. therefore, one view in government is to utilise these reserves to prepay some of the outstanding debt.