9 February 2001

Centurion Bank to enter factoring services
Hyderabad: Centurion Bank is embarking upon massive expansion plan setting up as many as 15 branches and is planning a foray into factoring services.

The bank proposes to enter the factoring business by purchasing and selling debt receivables and claims including invoice discounting, rendering bill collection, debt collection, and other factoring services.

The bank is coming out with a rights issue to the tune of Rs 128.08 crore fore the purpose.

7 February 2001

CII pegs 9 percent growth target in financial sector
New Delhi: The Confederation of Indian Industry (CII) has expressed the view that the financial sector has to be made vibrant in order to finance infrastructure projects and thereby attain a 9-per cent growth rate. Mr. Arun Bharat Ram, CII president has said that the present state of the financial sector is a serious constraint on nine-per cent economic growth. He has called for measures to quickly create a vibrant market for trading in medium to long-term debt instruments for financing infrastructure projects. Expressing his concern over the sustainability of nine-per cent growth, Mr. Arun Bharat Ram has said for the growth trend to persist, there was need for higher and sustained investment in physical and social infrastructure.
The CII president has said the economy cannot afford the quantum jump in the infrastructure investment, unless it stepped up the savings rate that had been stagnating around 19 per cent.
Stressing the need to introduce new financial instruments to increase household and corporate sector savings for channeling these savings into infrastructure projects, Mr. Arun Bharat Ram said that government must actively encourage foreign direct investment in infrastructure.

UTI to take 49% stake in UTI Global's insurance foray
Kolkata: UTI Bank will hold 49 per cent of UTI Global Bank's planned new insurance company. UTI Bank and Global Trust Bank, which merged to create India's largest private sector bank - UTI Global Bank- will be the first new private sector bank to directly enter the liberalised insurance sector in India.
Mr. Ramesh Gelli, co-founder of Global Trust Bank and his associates will have 15 per cent of the insurance venture, the Unit Trust of India 10 per cent and a foreign partner the remaining 26 per cent. Mr. Gelli would head UTI Global Bank's foray into insurance.

6 February 2001

Sidbi to set up $500-m overseas VCF
Mumbai: The Small Industries Development Bank of India (SIDBI) will set up an overseas venture capital fund of $50 million focussing on information technology and knowledge-based sectors. As per a memorandum of understanding (MoU) signed with IVG of Mauritius, Sidbi will put in $20 million, while IVG would contribute $10 million.

The central government and the Reserve Bank of India have approved the setting up of fund and the fund is expected to be operational in the next two to three months. The fund will have a three-tier strategy at the regional, national and international levels. Sidbi has 12 regional funds operating in ten states in the country.

5 February 2001

Sebi rejects demand for valuing investments in unlisted firms
Mumbai: The Securities and Exchange Board of India (Sebi) has rejected the demand for formulation of norms for valuation of investments made by MFs in unlisted companies. Sebi however, has norms in place for valuation of thinly traded, illiquid and other listed securities.
As per Sebi rules, the sum of unlisted, thinly traded and illiquid investments by a MF can account for 15 per cent of the net assets of the scheme in valuation terms. Any exposure above this level is to be valued at zero.

While listed investments are to be valued at the last-traded market price, an elaborate formula involving market values, book values and price earning ratios has been prescribed for valuation of thinly-traded and illiquid securities.

A section of the mutual fund industry had written to the Sebi asking the regulator to prescribe norms for valuation for such investments, as there is no standard policy being followed by the fund houses.

Inflation shoots up to 8.29 per cent
New Delhi: Annual inflation rate shot up by 0.13 percentage points to 8.29 per cent in the week ended January 20, due to costlier primary and manufactured items. The inflation rate based on wholesale price index for all commodities (base: 1993-94 = 100) moved up to a new high after remaining static at 8.16 per cent during the previous three weeks and was only 3.92 per cent a year ago.

The WPI meanwhile has risen by 0.1 per cent to 158 as against 157.8 in the previous week. The index was 145.9 a year ago. The final WPI stood at 158.2 during the week ended November 25 as against the provisional figure of 157.6. The inflation rate based on final index was higher at 7.84 per cent as against the provisional figure of 7.43 per.

The rate of inflation based on consumer price index for industrial workers (base: 1982 = 100) also increased to 3.48 per cent during December from 2.47 per cent in the previous month and 0.47 per cent a year ago. Although prices of fuel, power, light and lubricants remained unchanged, prices of primary items rose by 0.2 per cent while manufactured products' prices were up by 0.1 per cent during the week.

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