iffco inks insurance jv with japanese giant
mumbai: indian fertiliser cooperative
iffco, will shortly sign an agreement with japans largest non-life insurance
company, tokio marine & fire insurance to enter the non-life insurance business
in india. iffco will pick up 74 per cent in the non-life insurance joint venture
company, tokio marine will hold the rest.
the joint venture is the first
of its kind this is the first tie-up agreement by a japanese insurer in
india. also, its the first time that a co-operative, namely iifco, is entering
the insurance business.
main promoter is a co-operative the insurance venture will be a company
and will be governed by the companies act. according to sources, the venture could
possibly require clearance from the registrar of co-operative societies, as insurance
is an entirely different line of business for the fertiliser co-operative. however,
with the government backing the venture, this is unlikely to be a problem.
in the non-life area, iffcos captive business will come in handy. the
fertiliser cooperative will use its network of societies as one of the main distribution
channels for its insurance products. the company is also looking at introducing
a special package for the fertiliser industry. further, iffco is active in rural
areas and this will help the venture to respond to the governments drive
to optimise involvement in that area.
insurance is a capital-intensive
business, and it is necessary that the promoters have strong financials. for,
over the years they should be able to contribute to the growth and margin requirements.
besides tokio marine, three other japanese insurers have set up liaison offices
in india. they include mitsui marine & fire, yasuda marine & fire, sumitomo
marine & fire.
sources said that the japanese companies had been slower
in finalising their entry plans in the country thanks to the changes going on
in the japanese financial markets.
hsbc to launch a range of products & services
calcutta:given the change that is driving
the indian banking industry in recent times, the hongkong and shanghai banking
corporation (hsbc) has carved out a three-year strategy encompassing launching
a whole range of products and services.
to mr. zarir j cama, the banks chief executive officer in india, the parent
company is to soon set up a wholly owned subsidiary in india to help in back-end
operations in india. to be set up in hyderabad, the new entity named hsbc data
processing will shortly employ about 250 people to run its operations in india.
the bank also plans to set up an asset management company and launch its
own mutual funds, shortly. it may also set up a nbfc to handle the banks
consumer finance portfolio, which is stated to be worth almost rs. 700 crore.
is another area where hsbc is likely to focus on. mr cama said that talks were
on with global insurance majors including royal & sun alliance, aig, commercial
cgu to market their products in india.
banking and credit cards are next on the priority list of the bank.
may offload 50 per cent in new infotech company to shareholders
the countrys leading development
bank, industrial development bank of india (idbi), is planning to spin off nearly
50 per cent of its shareholding in idbi intech (itech), its newly formed infotech
subsidiary, to the shareholders of idbi and divest the balance to a strategic
partner after about three months of commercial operations.
this is being
done to help idbi realise better value from its holding in itech which was incorporated
as a 100 per cent subsidiary of idbi. simultaneously, idbi shareholders will benefit
from a larger holding in the it company.
idbi has already inducted three
idbi officials -- mr. s k chakrabarti, deputy managing director, mr. t m nagarajan
its executive director and mr. b d ushir, legal advisor -- into the board of the
it company. apart from these three independent directors, mr sadagopan, director
of indian institute of information technology, bangalore, mr. s swaminathan, chief
executive officer of iris, and a management expert from chennai are to be inducted
at the next board meeting of the company in may, 2000. ultimately the board of
the company is expected to have a total strength of 10 members.
has also decided to appoint s s godbole, advisor in its information technology
department, as the chief executive officer of the company. key officials in different
vertical segments are to be hired in addition to 25-30 outside staff to enable
the company to start off with a base of 100 employees.
six to seven companies including domestic software majors and global it giants
have evinced interest in picking up idbis stake in itech which has a paid-up
equity capital of rs 50 crore, idbi officials feel that roping in a partner after
the company gets going, will fetch a better valuation.
company has already begun to start rendering services to other idbi group companies
like the mutual fund and the capital markets company and has received enquiries
with respect to informix services from usa and australia.
hdfc cuts housing loan rate to 13 per cent
housing finance major, hdfc, today announced
that it has reduced its retail prime lending rate by 0.25 per cent to 12.50 per
cent and as a result housing loans up to rs 1 crore are now available at a floating
rate of 12.5 per cent and at a fixed rate of 13 per cent. these rates will become
applicable for all loans disbursed from may 8.
rate cut comes close on the heels of the government increasing the tax exemption
for interest on housing loans to rs 1 lakh. the lower rates coupled with higher
exemption level means that a borrower who avails of a rs 750,000 15-year loan
will get the full benefit of the exemption. earlier, a loan of rs 600,000 was
enough for a borrower to exhaust the tax exemption limit. while the higher exemptions
increase the borrowers annual income by rs 8,000 (assuming a tax liability
at 33 per cent), the lower interest rates reduce the equated monthly instalment.
taken together both these would increase the eligibility limits for borrowers.
interest on loans for non-resident
indians have also been reduced with loans up to five years available at 11.5 per
cent and loans between 6-10 years at 12.5 per cent. floating rate loans for the
same tenors are available at 11 per cent and 12 per cent, respectively.
financial institutions however feels that going by what one can see in the horizon
the huge government borrowing programme and the drought interest
rates have bottomed out and are unlikely to go down further.
oil prices slip in asia
as norways biggest labour dispute since 1986 threatened oil exports and
us crude stocks fell, oil prices in asia slipped on thursday. the crude market,
although not weakening by much, was consolidating after strong mid-week gains
drew some profit-takers. oil companies operating onshore terminals in norway on
wednesday said that about 1.1 million barrels-per-day (bpd), or a third of national
oil exports, might be suspended because of a workers strike.
around 0740 gmt, front-month june crude was traded at $26.60 a barrel, down 15
cents from its new york close and near the asian days low of $26.57. june
crude had settled 14 cents lower in new york on wednesday at $26.75 per barrel,
after prices had pushed as high as $27.39 earlier in the day.
rallied a dollar a barrel on tuesday, on the back of opec comments and sharp gains
in the gasoline market. now in the absence of fresh bullish factors, traders said
prices might continue to correct downwards.
latest data from the us department of energy (doe) on wednesday showed us crude
stocks fell 3.3 million barrels in the week ended april 28 painting a less
bullish picture than the american petroleum institute (api).
oil cartel organisation of petroleum exporting countries (opec) had also lent
some support earlier in the week by saying it was likely to cap its current oil
supply when it next meets in june.
ministers from three leading opec producers have indicated that this was the best
course of action given current market conditions, despite expectations that oil
demand would start to rise in the third quarter.
members raised the cartels production ceiling in late march, sparking a
downturn in prices. prices are now 20-25 percent lower than the nine-year peak
of more than $34.00 a barrel in early march.
take: sinha repackages budget with large tax sops
new delhi: despite the initial harsh stance
taken by the finance minister, mr. yashwant sinha, he announced a series of industry
and market-friendly amendments on direct and indirect tax proposals while moving
the finance bill 2000 for consideration in the lok sabha.
one of the
key areas where there was tax relief, is the area of stock options. bowing to
immense pressure from all sections of industry, the finance minister has finally
conceded to tax esops not as perks but as one-time capital gains tax at the time
of their sale. the other incentives finally given in the budget include, changes
include a 10-year tax holiday for software exports from stps, providing tax-free
status to venture capital funds, handsome sops for housing loans and doubling
the rebate on investment in infrastructure bonds to rs 20,000.
in a bid
to give impetus to exports, the finance minister announced that the cut-off for
the 10-year tax holiday will continue until 2010 for units in stps and ftzs. this
means units registering up to that point would be eligible for a tax holiday up
to 2010, as compared to the originally planned date of march 31, 2000. this tax
holiday has been extended to all r&d companies in knowledge-based industries,
thus helping the pharmaceutical and biotechnology industries.
indirect taxes front, mr sinhas focus has been on providing protection to
domestic industry by hiking customs duty on a host of commodities like tea, coffee,
poultry, meat and their preparations, marble slabs and tiles and non-coking coal.
the expected rollback on dividend tax and subsidies has not come, though.
surcharge on non-corporate assesses having an income above rs 1,50,000 will continue
at 15 per cent. but for purposes of tds, the surcharge would be 10 per cent to
avoid operational complications. simultaneously, farmers have been exempt from
tds on compulsory acquisition of land. charitable companies set up without any
profit motive have been exempt from mat.
vysya bank gets ifc to take stake in it
bangalore: world bank affiliate, international
finance corporation (ifc), which already has significant stakes in two other private
sector banks in india, namely, centurion bank and global trust bank, has agreed
in principle to take a 10 per cent stake in vysya bank at a price of rs 150 per
share. parallely, bank brussels lambert (bbl) will also increase its stake by
2.50 per cent at rs 150 per share to maintain its holding at 20 per cent of the
post-issue capital of the bank. the above two proposals will increase the bank's
share capital from current rs 19.82 crore to rs 22.66 crore and would result in
an inflow of rs 39.7 crore by way of share premium.
bank meets the recently declared norms of reserve bank of india (rbi) for entering
the insurance sector as a majority partner. with ing group being able to take
only 26 per cent stake in the new insurance venture, vysya bank is expected to
have a significant stake. a third partner may also be brought in due to rbi stipulations.
as the third partner will have to be an indian company, market sources speculate
that vysya bank might take a majority stake of around 50 per cent in the insurance
ministry may yield on taxation of esop
new delhi : the pressure being brought on it from all sides
on the relaxation of the tax treatment on stock options, finally seems be bearing
fruit. the finance ministry is on the verge of proposing that, stock options be
taxed only for capital gains arising at the point of actual sale of shares by
employees. apparently, a proposal to this effect has been forwarded to the law
ministry for vetting.
the employee exercises the stock option, the difference between the offer price
of the stock and the market value at the time of allotment is taxed as a perquisite.
besides, any capital gains arising out of subsequent sale of this stock are also
the change -- withdrawal of
the impost on perquisite at the time of exercising the option and only taxing
any capital gains arising out of the sale of shares -- is likely to be incorporated
in the amendments to the finance bill 2000, scheduled to be moved for passage
in parliament on wednesday.
industry has been consistently lobbying for relaxation in the tax treatment on
stock options saying that unless this is done, companies, which have a competitive
edge, will be unable to retain their employees.
on, tax authorities were considering alternative proposals, which included permitting
deferment of the incidence of taxation arising at the time of allotment of shares
by a stipulated period or allowing employees to meet their tax liability by staggering
payments. however, none of the proposals of the revenue department cut ice with
the ministry of information technology (mit) or the software industry.
premier economic institute predicts
6-7 per cent gdp
new delhi : the
national council of applied economic research (ncaer), the countrys premier
economic institute, has forecast the country's real gross domestic product (gdp)
growth for the current fiscal to range between 6.4 and 7.2 per cent in view of
the presence of ``both positive and potentially adverse factors that will affect
the economy's performance in the year that has just commenced''.
its latest review of the economy, conducted by the council's macro-monitoring
& forecasting division, it said that on the positive side, the expectations
of improved output and trade performance at the global level with expected moderation
in crude oil prices provide some stability to the economy and its external balance.
the overall inflation rate (reflecting the consumer price index) is projected
to be about 4.5 to five per cent. the trade and current account deficits are projected
at 2.5 and two per cent of gdp respectively.
the negative side, the adverse risk factors are led by the vagaries of the monsoon
since despite its declining share in gdp agriculture continues to affect the course
of the economy significantly. the second factor that could stymie the fast pace
in the manufacturing growth is the crucial infrastructure sector. the foremost
among these is the power generation capacity, which would have to increase quickly
to sustain the escalating demand for energy. it warned that slowdown in reforms
in fiscal correction and power sector reforms could act as dampeners on investment
the report also warned that
continued large fiscal deficits on the part of the central and state governments,
will affect the investment climate adversely directly by reducing government's
ability to make investments in the infrastructure sector and indirectly by raising
the cost of funds needed for private investment.
economy has also witnessed emergence of ``new economy'' sectors. as the growing
integration of indian markets with the global markets pose a greater challenge
to both the policy-makers and the entrepreneurs, the council said that at the
micro level, upgradation of technology, efficiency in production and marketing
and high standards of quality would be the key to growth.
grindlays, its a public sector bank now for stanchart
it has just completed the largest bank acquisition in the asian region, but its
clearly looking for more. in a report appearing in the economic times,
standard chartered bank (stanchart) is said to have informed rbi governor, bimal
jalan, that it would be keen on acquiring a public sector bank as and when regulations
in his first media interaction
after the grindlays takeover, mr. john filmeridis, general manager, middle east/south
asia & ceo (india) at stanchart, said that the bank is looking to make "two
and two equal to twenty-two and not four". mr. filmeridis also stated that
stancharts acquisition of the grindlays business was driven largely by the
australian banks attractive indian operations.
which has received the go-ahead from the reserve bank of india (rbi), says that
over the next two to three months, the two banks will go through a planning process,
following which the integration process will begin. the implementation will follow
after that. the bank will set up integration teams for every function and business
at both the banks, to ensure smooth transition as a unified organisation. however,
stanchart and anz grindlays will be run as separate entities at least for a year
to overcome certain tax and regulatory issues. the entire integration process
in the region is expected to take at least two years to complete. after this is
complete, the bank will be called standard chartered grindlays, to take advantage
of the brand equity the grindlays name commands in the region.
stated earlier, the acquisition has catapulted stanchart to the number one position
among foreign banks in india, giving it a base of 1.65m retail customers and 1.1m
corporate customers. the network also stands increased to 58 branches and though
there is the possibility of a rationalisation, it might not ultimately happen.
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