24 march 2002

uti bank mulls second public issue
bangalore: uti bank may go in for its second public issue this year to mop up more than 15 per cent of its paid-up capital, which is rs 200 crore currently.

uti bank had made a rs 71-crore public issue in 1998.

nabard sanctions rs 26 cr for chhattisgarh roads
raipur: the nabard has sanctioned a loan of rs 26.03 crore to chhattisgarh for construction of roads and bridges in the state.

with this latest sanction of loan, the national agriculture and rural development bank has sanctioned a total of rs 46.79 crore to the new state from its rural infrastructure development fund.

23 march 2002

rbi lifts lock- in for repatriation
mumbai: the rerserve bank of india (rbi) has removed the lock-in period for repatriation of sale proceeds of the immovable properties purchased in india by non-resident indians (nris) and persons of indian origin (pio) through inward remittances.

the rbi, however, said the sale proceeds allowed to be repatriated should not exceed the foreign exchange brought in to acquire the property. this facility will also be available to nris and pios who have already made the payment for acquiring immovable properties in india, an rbi press release said.

currently nris and pios are permitted to repatriate the sale proceeds of immovable properties only after a lock-in period of three years from the date of acquisition or the payment of the final instalment for the purchase, whichever is later. the repatriation of sale proceeds is limited to the foreign exchange brought in to purchase the property.

uti bank considers public issue
thiruvananthapuram: uti bank is planning to come out with a public issue some time in the next financial year - that is, if the market conditions prove to be favourable.

the bank is already in the process of bringing down the equity holding of uti, the promoter, from 44.88 per cent to 40 per cent through the private placement route, says uti bank chairman and managing director dr p j nayak. this is in line with rbi guidelines.

earlier, the promoters stake had come down - to 44.88 per cent from 61.90 per cent - consequent to cdc financial services (mauritius) ltd and south asia regional fund taking up 26.01 per cent in the banks equity.

nayak told newspersons here that the bank is looking at the possibility of coming out with a public issue to expand the equity-base. but, if the market conditions turn out to be unfavourable, it may consider going in for private placement.

nayak, who was here in connection with the opening of the banks new branch in the city, its 107th in the country, said the branch network will be expanded to 140 during the next financial year. the number of atms will also go up to 800 from 470 as of now.

vysya banks new clearing facility
bangalore: vysya bank has launched its city centralised clearing process in bangalore. covering 40 of the banks outlets in the city, the process provides customers anywhere, anytime deposit of clearing instruments in the city.

the clearing process allows customers to deposit local instruments for clearing/collection in their branch or in any of the banks branches under the vysamulya project. the facility also provides customers drop in boxes at any of the banks vysamulya or atm centres in the city.

according to the bank, the clearing is so programmed that a customers cheque deposited or dropped before 2.30 pm on weekdays (1.30 pm on sundays) will hit the immediate next clearing - giving customers a whole days advantage in their account being credited.

bnp paribas brings in more capital
mumbai: the french bank bnp paribas, which had recently cut back its retail banking in india, said it has brought in rs 80 crore as additional capital for indian operations. of this, around 75 per cent will constitute tier-i, while the balance will be tier-ii capital, resulting in an increase of 43 per cent in its capital base.

on 28 february 2002, the bank had said it was in the process of re-evaluating its project of retail banking activity with the objective of repositioning its offer. last year, the bank had also shut down its securities brokerage arm.

the additional capital infusion will cover the statutory capital requirements stipulated by the reserve bank of india for foreign banks operating in the country, a bank press release said. the additional capital will further augment the banks thrust in developing its corporate banking, fixed income and private banking activities, the release added.

the focus of the bank will continue to be on liabilities and capital market programmes. it will also pursue the objective of becoming a substantial player in the asset management business.

bnp paribas has around 500 domestic and multinational corporates as its clients in india. currently, it provides working capital loans, trade finance, cash management, foreign exchange and specialised finance for its customers.

central bank reduces lending rates
mumbai: central bank of india (cbi) has decided to reduce its medium-term lending rates (mtlr) for term loans by 50 basis points. it has also cut its deposit rates by 25 basis points.

with these cuts, cbi becomes the first bank to reduce its lending and deposit rates after the 50-basis points cut in the small savings rates in the budget 2002-03. the medium-term lending rate of the bank has been brought down to 12 per cent from 12.5 per cent, with effect from 1 april 2002. the prime-lending rate of the bank, however, remains unchanged at 12 per cent.

the bank has also trimmed its deposit rates by 25 basis points across the board. for deposits of less than rs 15 lakh for a tenor of 15 to 45 days, the rate is now 4.75 per cent; for a period of 46 to 179 days, the rate will be 5.5 per cent; for a period of 180 days to less than one year, the rate is 6.5 per cent; the rate is 7.25 per cent for deposits of one year to less than two years; 7.5 per cent for two years to less than three years; 8 per cent for three years and above.

a bank press release said the revised deposit rates will apply only to fresh deposits and renewals of maturing deposits.

canara banks laghu udhyami card
bangalore: canara bank has introduced the laghu udhyami credit card to provide free credit to small borrowers under the retail trade, small business, artisans, village and small industries and professionals.

a bank release said the credit limit on this card will be rs 2 lakh for meeting working capital requirements. all borrowers having three years of dealing with the bank will be eligible for the credit card.

the release said it will also work cheaper for the borrowers, as they have the liberty to credit their surplus cash and withdraw it later. this is because an interest is charged only on the outstanding portion in the credit card account.

andhra bank to merge finance arm
hyderabad: andhra bank proposes to merge its housing finance subsidiary, andhra bank housing finance ltd.

as part of this exercise, the bank plans to enhance its holding in the housing finance subsidiary by way of acquiring the shareholding of other equity participants at a valuation to be done by individual valuers.

a proposal to this effect will be considered by the bank at its ensuing board meeting, according to a communiqu to stock exchanges.

stanchart plans youth card
bangalore: standard chartered is planning to launch a youth card sometime this year.

with the launch of the co-branded card with mumbai-based cellular service provider orange scheduled for next week, and an international women's card called diva launched recently, stanchart is launching two products in quick succession.

diva is loosely modelled on a co-branded card stanchart has with fashion company esprit in hong kong which has close to 100,000 subscribers. stanchart has women's cards in singapore and thailand as well.

sbi home finance reports rs 7.25cr net loss
kolkata: the sbi home finance reported a net loss of rs 7.25 crore during the third quarter ended december, 2001 against a lower net loss of rs 6.31 crore in the corresponding quarter in the previous year.

net sales slipped to rs 9.20 crore from rs 10.20 crore during the quarter ended december, 2000 whereas total expenditure came down to rs 1.23 crore from rs 1.44 crore.

the cumulative net loss during the nine month of the current fiscal stood at rs 19.09 crore against rs 16.27 crore in 2000-2001. net sales during the period amounted to rs 28.09 crore against rs 29.74 crore last year.

sbi home finance reports rs 7.25cr net loss
kolkata: the sbi home finance reported a net loss of rs 7.25 crore during the third quarter ended december, 2001 against a lower net loss of rs 6.31 crore in the corresponding quarter in the previous year.

net sales slipped to rs 9.20 crore from rs 10.20 crore during the quarter ended december, 2000 whereas total expenditure came down to rs 1.23 crore from rs 1.44 crore.

the cumulative net loss during the nine month of the current fiscal stood at rs 19.09 crore against rs 16.27 crore in 2000-2001. net sales during the period amounted to rs 28.09 crore against rs 29.74 crore last year.

taib bank invests $ 4 million in india
bangalore: bahrain-based taib bank has pumped in around $15 million towards various technology-related initiatives of which its indian operation has received $4 million.

the banks objective is to be a partner to growth-oriented verticals and companies with a view to enhance value.

recently the company set up three online trading portals--indiadirect.com, usdirect.com and fxdirect.com-- as part of its online trading strategy. launched in association with financial portal myiris.com, these portals have enabled the bank to offer sophisticated online and research solutions while retaining the flexibility.

currently taib is working with investors from the middle east and assisting them to invest in the us and indian markets in portfolio markets.

the company recently picked up a majority stake in a kolkata-based technology firm, mindware.

central bank of india cuts mtlr by 0.5 per cent
mumbai: central bank of india has announced a reduction in its medium term lending rates by 50 basis points to 12 per cent with effect from 1 april.

the rate would be applicable for loans of one year and above.

the bank also revised its domestic term deposit rates by 25-50 basis points for various slabs.

the new rates on domestic term deposit of less than rs 15 lakh has been fixed at 4.75 per cent (for 15-45 days), 5.5 per cent (46-179 days) and 6.5 per cent (180-to less than one year).

for loans above one year and less than two years it would be 7.25 per cent and 7.5 per cent for two years to less than three years and eight per cent for three years and above.

uti bank plans ipo
thiruvananthapuram: uti bank is planning to come out with a public issue some time in the next financial year.

the bank is already in the process of bringing down the equity holding of uti, the promoter, from 44.88 per cent to 40 per cent, in line with the rbi guidelines, through private placement, according to the banks chairman and managing director p.j. nayak.

nayak told reporters here that the bank was looking at the possibility of coming out with a public issue to expand the equity base.

22 march 2002

remittance limit for nris, pios hiked
mumbai: non-residence indians (nris) and persons of indian origin (pios) will now be able to remit up to $1,00,000 per calendar year out of assets in india, acquired through inheritances or legacies, without the approval from the reserve bank of india (rbi). earlier this limit was $30,000.

an rbi press release said the move is aimed at liberalising the exchange-control regulations and providing additional facilities to nris and pios.

ceiling in goi relief bonds lifted
new delhi: finance minister yashwant sinha has offered some relief to retiring employees in private and public sectors by announcing the lifting of the rs 2-lakh investment ceiling in government of india (goi) relief bonds.

this announcement was made during sinhas reply to the debate on the 2002-03 union budget here.

a ceiling of rs 2 lakh per year on investment in goi relief bonds was proposed in the 2002-03 union budget along with the 50-basis-point reduction in the interest rate applicable on these bonds.

new stanchart bank card for women
mumbai: standard chartered bank has launched an international credit card, exclusively designed for women.

a press release issued by the bank said: "the diva credit card has been customised for the indian woman who seeks to balance home and work, and therefore has several features revolving around the woman her home and her family."

services such as entertainment, travel services, errands, home services, gifts and information services are available to the cardholder.

bob staff calls for strike on mar 30
mumbai: bank of baroda employees have called for a one-day strike on 30 march 2002.

the bank has received a notice from a section of its employees, from four employee associations and unions, namely all-india bank of baroda officers association, all-india bank of baroda employees federation, all-india bank of baroda employees coordination committee and eastern regional council of bank of baroda employees association.

according to a notice filed at the bombay stock exchange, the regional labour commissioner is kept informed in the matter and the bank is initiating other necessary actions in this regard.

20-m credit line to exim bank iran
mumbai: exim bank has extended a $20-million credit line to exim bank of iran to finance indias exports to iran.

an agreement in this regard was signed by exim bank executive director r m v raman and bank markazi (central bank of iran) director a erfan and area manager n falahatchian.

the facility, involving a credit period of one year, will cover a 100-per cent value of exports from india to iran. under the arrangement, any of the designated iranian banks bank mellat, bank melli iran, bank sepah, bank saderat and bank tejarat can open letters of credit that will be advised and negotiated by indian banks designated by exim bank.

exim bank has designated bank of maharashtra, union bank of india and uti bank as the advising/negotiating banks in india, which will be reimbursed by exim bank.

visa, hdfc bank launch kerala card
kochi: visa international, the worlds largest payment system, and hdfc bank, indias leading private sector bank, has launched the kerala card acceptance programme.

the programme will run from march to july 2002 and will involve the deployment of an acceptance framework that will increase the number of visa cards issued and the number of merchant acceptance locations in cites, including ernakulam, thiruvananthapuram, thrissur, kottayam and kollam.

under the programme, hdfc bank will sign up new merchants and provide merchants with electronic terminals to accept visa cards. the number of visa cards-accepting merchants is expected to increase by 50 per cent (from 1,000 to 1,500) after the programme.

visa will also conduct several promotions and provide exclusive benefits and rewards as incentives to cardholders to use their cards. this is a payment industry initiative driven by visa international to grow card-acceptance. hdfc bank will be the lead acquirer for the project and all visa card-issuing banks will jointly run usage programmes to offer an additional value to their cardholders.

says hdfc bank country head (retail branch banking and credit card) uma krishnan: "as the lead acquirer, hdfc bank will play a significant role along with visa in signing on new merchants, training them, providing electronic acceptance terminals and opening new categories of payment, including basic telephony, hospitals and clinics and petrol stations. this will raise the merchant acceptance base in the state and enable cardholders to experience the safety, simplicity and convenience associated with a payment card."

says visa international country manager (south asia) santanu mukherjee: "acceptance is a key driver of growth for the payment-card industry and visa realises that apart from issuing cards to consumers, it is also important to increase the merchant-base that accepts these cards. we are confident that the acceptance framework developed by visa will be successful and will benefit cardholders in kerala, and we are happy that hdfc bank is partnering with us in developing the payment-card industry in this state."

as the payment industry leader in india and the world, visa has taken the initiative, in partnership with its member banks, to grow card-acceptance, he says. "we are committed to rolling out this project in several other tier-ii cities in india in the coming days." visa conducted the first pilot project on acceptance in vadodara in june 2001 and this six-month pilot project helped build awareness for both credit as well as debit cards.

it also achieved an overwhelming 79 per cent increase in transaction volume year-on-year and a 70 per cent increase in merchant sales volume (msv) over the six-month period, as against the india msv growth of 30 per cent. during the programme, 280 new merchant establishments and 200 new merchants with electronic data capture terminals were added.

vijaya bank's npa comes down
dhagamandalam: the non performing assets of vijaya bank has come down from 6.2 per cent to 5.4 per cent this year.

the bank had been performing well in all spheres, with net profit during the third quarter of this fiscal going up by 173 per cent.

stanchart plans corporate advisory services
mumbai: standard chartered bank plans to offer corporate advisory services for its corporate clientele in india.

the bank already has syndications, fixed income and bullion desks and now wants to offer a whole range of services.

stanchart has about 1,200 clients on the wholesale banking side out of which 200 are top-tier companies.

new stanchart card for women
mumbai: standard chartered bank has launched an international credit card exclusively for women.

a bank release said that the diva credit card was customised for the indian woman who seeks to balance home and work, and therefore has several features revolving around the woman, her home and her family.

services such as entertainment, travel services, errands, home services, gifts and information services are available to the cardholder.

exim bank pact with iranian bank
mumbai: exim bank has signed an agreement with bank markazi jomhouri islami iran (bank markazi - central bank of iran) for extending a line of credit to the latter for $20 million to finance india's exports to iran.

according to a press release, the facility involves a credit period of one year and will cover 100 per cent value of exports of goods from india to iran.

rbi moots gold exchange
new delhi: reserve bank has mooted a gold exchange for trading in gold and a self-regulatory agency as part of efforts to develop a market for the precious metal and integrate it with the financial market.

establishment of a gold exchange would help in efficient price discovery and emergence of healthy and transparent practices in the market, rbi's deputy governor y v reddy said at a conference organised by the world gold council here.

he said a formal move towards gold exchange would be made once banks start trading among themselves along with mmtc, stc and other big traders in accordance to the demand-supply dynamics.

investment limit in rbi relief bonds lifted
new delhi: the government has lifted the rs two lakh investment limit for investing in rbi relief bonds but kept the interest rate on the bonds at a lower 8 per cent.

the move is part of government's effort to provide some relief to small investors and retired persons in earning high returns on their savings even after the 0.5 per cent cut in small savings rates.

the ceiling of rs two lakh per investor will not apply to relief bonds, which were purchased prior to 1 march 2002 but are yet to mature.

icici bank to raise rs 1,000 cr
mumbai: icici bank ltd proposes to raise rs 1,000 crore through an unsecured bond issue, having a maturity of 10 years with market-related coupon rates.

credit agency care has assigned the issue a triple a rating due to its focus on the top end of the credit spectrum which is reflected by the low npa level, comfortable liquidity position and high profitability parameters, adequate risk management and controls systems.

gande takes over as gtb's md
hyderabad: sudhakar gande has assumed charge as the new managing director of global trust bank (gtb).

21 march 2002

rbi liberalises shares issue norms
mumbai: the reserve bank of india (rbi) has liberalised the norms for issuing and pricing the shares by private sector banks. under the revised norms all these banks, listed or unlisted, will be free to issue bonus and rights shares without the apex banks prior approval.

also, the bonus issue will now be delinked from the rights issues, the rbi said; its approval will be necessary for initial public offerings and preferential shares. banks will also be free to price their subsequent issues once their shares are listed on stock exchanges.

while detailing the pricing norms, the rbi has stated that the price should be based on the merchant bankers recommendation. the pricing of preferential issues by listed banks may be as per the formula of the securities and exchange board of india (sebi), while for unlisted banks a chartered accountant or a merchant banker may determine their fair value.

in the case of pricing of issues, where rbi approval is not required, the pricing should be as per sebi guidelines. in cases where the prior approval of the apex bank is required, pricing should take into account both sebi and rbi guidelines, an rbi statement said.

banks will, however, have to meet sebis requirements while issuing bonus shares.

lic to terminate childrens policy
mumbai: life insurance corporation of india (lic) is terminating its childrens money back policy from 31 march 2002.

says lic managing director n c sharma: we have decided to discontinue the childrens plan, which assured returns of rs 80 per rs 1,000. but the scheme will be relaunched later in a different form.

lic has been discontinuing many of its high-return schemes due to the falling yield on investments. earlier this month it discontinued its jeevan sanchay and childrens growth schemes.

the life insurer, however, has recorded a tremendous growth in its business with sales of 1.78 crore policies as on 15 march 2002. the public sector giant has collected rs 13,349 crore in the first premium income in the current year so far, as compared to about rs 6,600 crore for the entire last year.

birla sun life insurance raises capital 
mumbai: birla sun life insurance has augmented its capital to rs 150 crore from rs 120 crore. its joint venture partners - the aditya birla group and sun life financial - have infused the additional capital of rs 30 crore. the fresh capital will be used to increase the pace of its growth on national distribution and new products infrastructure. birla sun life currently has 12 branches in nine cities and is expected to double this in the next fiscal and possibly expand it into other cities as well, says birla sun life associate director (business development) anjana grewal. the joint venture partners, as per their share-holding pattern, will share the increase of rs 30 crore. under this pattern the aditya birla group contributes 74 per cent and sun life financial 26 per cent, in keeping with irda regulations.

lic to discontinue children's policy
mumbai: life insurance corporation of india (lic) is terminating its children's money back policy from the end of the month.

the children's plan, which assured returns of rs 80 per rs 1,000 would be discontinued after 31 march. the scheme would be re-launched later in a different form.

birla sun life increases capital by rs 30 cr
mumbai: birla sun life insurance has augmented its capital to rs 150 crore from rs 120 crore. the additional capital of rs 30 crore has been infused by the joint venture partners the aditya birla group and sun life financial.

the fresh capital will be used to increase the pace of growth on national distribution and new products infrastructure. birla sun life currently has 12 branches in nine cities and is expected to double this in the next fiscal.

il&fs to merge 3 subsidiaries
mumbai: infrastructure leasing & financial services has decided to merge its three subsidiaries - investsmart, debtonnet and il&fs merchant bank.

investsmart was promoted as a web-enabled equity brokerage for retail investors. it has a net worth of around rs 40-45 crore. it has 21 full-fledged branch offices across 11 cities including mumbai, chennai, pune, bangalore, delhi and kolkata.

debtonnet is a web-based platform for issuers and investors in the wholesale debt market to buy and sell bonds. the paid up capital is rs 5 crore, with il&fs and the national stock exchange holding 50 per cent each in the joint venture.

il&fs merchant bank is a wholly owned subsidiary of il&fs. its activities merchant banking in fixed income, equity and loan syndication and placement of money market instruments.

rbi eases norms for share issue
mumbai: the reserve bank of india has liberalised norms for issue and pricing of shares by private banks.

all private sector banks, listed or unlisted, under the revised norms would be free to issue bonus and rights shares without its prior approval.

moreover, the bonus issue would now be delinked from the rights issues, the rbi said, adding its approval would be necessary for initial public offerings and preferential shares.

banks would also be free to price their subsequent issue once their shares are listed on the stock exchanges.

20 march 2002

ifci plans spv for asset securitisation
new delhi: ifci ltd is planning to set up a special purpose vehicle for securitisation of assets.

the financial institution has already generated around rs 800 crore through the securitisation route in the current financial year.

a pool of assets would be transferred to the spv which would be then securitised with other banks and financial institutions. another option is to transfer the receivables - interest and principal - into an escrow account.

icici chair at iim-b
bangalore: icici will institute a chair in "change management'' at the indian institute of management, bangalore. announcing this at the iim-b convocation, icici md and ceo k.v. kamath said the new economy has handed the baton to us after almost 1,000 years and if we drop it now, it may be after 1,000 years before we get another opportunity.

rbi cancels sj shares & stock brokers licence
new delhi: reserve bank of india has cancelled the licence of delhi-based money-changer sj shares & stock brokers.

the ffmc (full-fledged money changer) licence of sj shares & stock brokers, which was issued on 23 march 1999, and valid till 22 march 2002, has been cancelled, rbi said in a statement.

lord krishna bank plans ipo
new delhi: lord krishna bank is considering an initial public offering (ipo) and listing on leading stock exchanges.

the bank's rights issue, which concluded on 9 march, garnered rs 35.77 crore pushing up its net worth to rs 109.55 crore, lkb said in a statement. shareholders were offered the rights issue at a premium of rs 2 per share, in the ratio of 10 equity shares for every nine equity shares held.

the bank's capital adequacy ratio has improved from 12.90 per cent at the end of 31 december 2001, to 14.87 per cent on 15 february 2002, which is higher than the stipulated level of 9 per cent.

it posted a net profit of rs 15.37 crore in the first nine months of current fiscal compared with rs 94 lakh profit in the same period last fiscal.

19 march 2002

sbis tn customers suffer due to strife
chennai: the officers of the state bank of indias (sbi) tamil nadu cadre have resorted to the work-to-rule protest path as a reaction to the management initiating criminal proceedings against some officers.

the officers commence business transactions only around noon everyday, although the bank is open to the public from 10 am onwards.

further, the systems administrators run the end-of-day (eod) transaction only the following morning, instead of reconciling the same on the very day of the transaction. fresh entries cannot be keyed in until the eod transaction and the stock-of-the-day transaction (for the day) are complete.

as a result, the banks customers in all its computerised branches in tamil nadu and pondicherry wait for hours in a row every morning to encash their cheques, or get a demand draft or even to remit cash.

out of the 600-odd branches of the bank in the state, 260 branches have been computerised.

aaa(so) rating for citibank mbs issue
chennai: the credit rating information services of india (crisil) has assigned a aaa(so) rating to the issue of mortgage-backed pass-through certificates (ptc), backed by mortgages originated by citibank.

this is the sixth rating assigned by crisil to a mortgage-backed securitisation (mbs) programme of citibank in the last one year, said a press release.

banking to remain public utility service
new delhi: banking services will continue to be part of the public utility service under the industrial disputes act for a period of another six months. a notification for the purpose has been issued aiming to check the frequent strikes resorted to by the industry.

the services of the banking industry was earlier declared as a public utility service on 19 march 2001 and was subsequently extended for another six months from 19 september 2001.

the move means that bank employees will be required to give a notice to their employers at least six weeks in advance before going on strike, so that conciliatory proceedings can be started. also, bank employees cannot go on strike during the conciliatory proceedings and seven days after its completion.

hdfc bank starts net-banking service
mumbai: hdfc bank has launched a new online account aggregation service, oneview, which will enable its net-banking customers to take stock of the balances in their accounts across several banks - all on one web page.

oneview is protected by encryption-based security measures, and to begin with customers can view account balances in hdfc bank and citibank, say bank officials.

the new service is expected to help customers get a quick comprehensive display of their account balance summary, transaction history, fixed deposit summary, account balance and fd summary across the various account providers on a single screen.

with the launch of oneview, not only can our customers get a whole range of products and services under one roof, they can also view their relationships with many other banks at one site, says hdfc bank managing director aditya puri.

state bank of mauritius cuts rates
chennai: state bank of mauritius has cut its interest rates on domestic term deposits. the bank has cut its rates by 100 basis points to 8 per cent for deposits of one year and above.

it has cut rates by 25 basis points to 8.25 per cent in the 181 days to one-year time period. the bank has, however, revised upwards its interest rates for the 91-to-180 days deposit by 50 basis points to 8.50 per cent. the revisions take effect from this week, says a bank press release.

sbt hikes rates on fcnr deposits
thiruvananthapuram: state bank of travancore (sbt) has raised its interest rates on foreign currency non-repatriable (fcnr) deposits in us dollars with effect from 18 march 2002.

the revised rate for deposits of one year to less than two years is 2.75 per cent, above two years to less than three years 3.5 per cent and above three years 4.25 per cent.

rbi sells remaining stake in stci
new delhi: reserve bank of india has sold its remaining 14.41 per cent stake in securities trading corporation of india (stci) to infrastructure development finance company (idfc).

rbi, which initially had 50.18 per cent stake in stci, brought its holding down to 14.41 per cent in 1997. now it has sold the remaining stake to idfc.

currently, bank of india has the largest share of 28.15 per cent in stci, which is the country's largest primary dealer in government papers.

bob offers schemes for riot victims
ahmedabad: bank of baroda has announced two special schemes for rehabilitating victims of violence in gujarat.

these schemes are specially designed by the bank and expected to help the affected people in the state to pursue their normal life and business activities.

under the special scheme for business community, loans up to rs 1 lakh will be sanctioned to enterprises like retail trade, small business, professionals and self-employed persons and activities allied to agriculture with no margin.

for small scale units affected in the violence, loans will be sanctioned up to rs 5 lakh.

no collateral/third party guarantee will be taken for loans up to rs 1 lakh in case of small businesses and up to rs 5 lakh for small-scale units with repayment moratorium of six months.

the second scheme was for housing, designed to meet credit needs of repairs and renovation of houses units damaged in the riots.

rbi to allow floating rates on td schemes
new delhi: reserve bank of india is likely to allow floating interest rates on term deposit scheme of banks.

there will, however, be options for depositors to opt for either fixed or floating interest rates.

rbi had allowed banks to lend at floating or flexible interest rates to corporates a few years ago but deposit rates are still rigid.

while savings bank account offers a 4.0 per cent return to depositors, a term deposit scheme of three-year maturity offers a higher 8.0 per cent interest rate.

the proposed floating rate schemes are likely to attach a premium or discount depending on the long-term movement of the bank rate at which rbi lends funds to the banks.

rbi would allow banks to revise the floating rate every six months.

pnb offers first public issue
jaipur: punjab national bank has announced its first public issue of rs 5.31-crore equity shares of rs 10 each for cash at a premium of rs 21 per share to be opened on 21 march.

the public issue will augment the long term resources of the bank and the capital base to meet its future capital adequacy requirements.

18 march 2002

icici info mulls jv for china
mumbai: icici infotech services ltd is looking for a local partner to set up a joint venture in china to target financial services sector.

the company is currently in talks with four-five local players.

ifci in talks with lic for strategic pact
new delhi: the industrial finance corporation of india (ifci) has initiated talks with the life insurance corporation (lic) for a strategic alliance.

lic may substantially increase its stake in the financial institution from the existing level of around 8 per cent and route a part of its premium income through ifci for further investments.

as per insurance regulatory and development authority (irda) guidelines, lic can acquire up to 20 per cent stake in ifci.

ifci had earlier approached lic to raise rs 2,500 crore in long-term loans. but the plan was put on hold because lic had already reached the exposure cap.

nabard sanctions rs 1,037cr for rural infrastructure
mumbai: nabard has sanctioned loans totalling rs 1,037.14 crore under the rural insfrastructure development fund to 16 states.

nabard's project sanctioning committee approved these loans for various projects pertaining to flood rescue centres cum primary schools and power sector in west bengal, rural drinking water schemes in andhra pradesh and mizoram, secondary schools in tamil nadu and rural market yards in kerala.

world bank to shift it jobs to india
chennai: the world bank is exploring the possibility of shifting its information technology-dependent activities to india.

world banks chennai back office will process a part of the activities of the banks accounting division that includes payroll processing, accounts receivables and payables and country office accounting.

the office would also act as a help desk providing data requirement on a real-time basis.

the chennai office employs around 90 consultants and many of them had received training in washington.

world bank may fund vrs for public sector
new delhi: the disinvestment ministry has asked for the world banks support to fund voluntary retirement schemes in various public sector units.

the world bank has funded various voluntary retirement schemes for companies at the state level. it is interested in increasing funding for reform-related programmes like vrs at the central level.

the world bank has funded vrs for companies slated to be closed or liquidated under the andhra pradesh economic restructuring projects.

idbi drops reform-based finance plan
mumbai: the industrial development bank of india (idbi), which has a large presence in power projects, has dropped its plans to adopt a reform-based financing pattern for independent power projects.

instead, it is planning to continue with its traditional three-tier payment security mechanism - escrow cover, letter of credit and state guarantee - for financing new power projects. indias leading financial institutions, including idbi, were pursuing a reform-based approach in the power sector financing, as the concept was projected as an economically feasible mode for financing power projects.

under the reform-based financing, state governments, state electricity boards and other lenders to the projects have to enter into a memorandum of agreement. the state and its seb also have to undertake obligations to achieve reform milestones in a time-bound manner as prescribed by the lenders.

also, the lenders will enjoy a charge over the revenues of sebs along with the banks that provide capital. moreover, the escrow cover will have to be made available to the lenders 31 days before the commercial operation of the project. but the idbi board recently decided that the security mechanism has to be ensured before financing any new project and, under the given circumstances, idbi feels escrow is the most viable security mechanism.

"the payment risks continues to be the most important impediment to financing power projects, as the financial health of the sebs is deteriorating day by day. besides, problems of lack of tariff rationalisation, high transmission and distribution losses are the other major hurdles in the indian power sector," says a top idbi source.

the industrial development financial corporation was the first financial institution that implemented the reform-based financing in the karnataka state for the karnataka power trading corporation two years ago. the outcome of this new experiment is yet to be known.

following this, the andhra pradesh government had introduced this concept for financing around six projects with an installed capacity of over 2,500mw last year. but an fi source say the process did not go any further from the preliminary levels.

aptransco, a party to the agreement, had failed to provide escrow cover to two projects even after their successful commissioning. these projects together generate over 550mw (300mw from the kondappally project and 250mw from the spectrum project). andhra then promised to evolve a business plan for the transmission companies by february 2002. but, so far, no headway had been made, the source say.

hdfc standard life in rajkot, nagpur
mumbai: hdfc standard life insurance has launched its operations in rajkot (gujarat) and nagpur (maharashtra). in both the cities the insurer will operate from the premises of its parent company, hdfc ltd.

hdfc standard life has also indicated that 60 per cent of its customer-base has opted for an extra rider on the base policy, moving forward the customisation of its products.

sbi life ties up with sundaram finance
mumbai: in an arrangement between two insurance companies, sbi life and sundaram finance (the promoter of royal sundaram alliance, a non-life insurer) have come together to ink an arrangement to market insurance products.

under the pact, sundaram finance will exclusively distribute sbi lifes life insurance products through its 110 branches, while sbi life will customise products for customers of the various arms of sundaram finance under group insurance schemes.

sbi life has also unveiled super suraksha, a group insurance scheme for sbi accountholders. according to the plan, customers in the age group of 20-60 will get a cover of rs 50,000-rs 1 lakh.

tata aig, thomas cook join hands
mumbai: tata aig general insurance has tied up with thomas cook india to sell insurance products for overseas travel through the latters wholly-owned subsidiary, india alive tours ltd.

under this alliance, thomas cook will focus on providing travel-related insurance along with other travel services such as air tickets, foreign exchange and travellers cheques.

india alive tours has been given the status of preferred corporate agent for procuring all general insurance business for tata aig.

rbi nod for bob capital dealership
mumbai: the reserve bank of india has granted the final approval to bob capital markets ltd to operate as a primary dealer in the government securities market.

with this the number of primary dealers in the government securities market has gone up to 18, said a press release.

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