20 April 2002

IMF, World Bank meetings in Washington

New Delhi: The role of the International Monetary Fund (IMF) in crisis management, combating money laundering and financing of terrorism are some of the major issues for discussion at the annual spring meetings of the World Bank and the IMF beginning in Washington on 20 April 2002.

Finance Minister Yashwant Sinha, who will also attend the G-24 ministers meet and the extended session of G-7 group of countries, leads the Indian team. India will play a leading role in articulating the concerns of the emerging economies at the three-day meet, which will deliberate upon global economic outlook, and risks and vulnerabilities in the world economy.

While the policy responses to the emerging challenges in the global economy will dominate the agenda of the International Monetary and Financial Committee, the development committee of the World Bank will take up the issue of enhancing the effectiveness of development assistance and ensuring that resources are available to meet the millennium development goals. Sinha will hold discussions with World Bank president

James Wolfensohn on national and global economic issues and participate in several bilateral meetings. Sinha will also address business leaders and interact with US industry captains and financial institutions.

19 April 2002

IDBI Bank Q 4 net up
Mumbai: IDBI Bank has reported a marginal rise in net profit for the fourth quarter ended March 2002 at Rs 10.54 crore as compared to Rs 10.14 crore in the corresponding period in the previous year.

Total income rose to Rs 69.10 crore (Rs 55.19 crore).

Bank chairman M.S. Verma told newspersons that the delay in raising capital hampered growth plans during the last quarter and may affect the growth prospects during the first quarter of the financial year 2002-03.

Verma said the bank was expected to raise its capital by last September but the process was delayed due to some uncertainties.

He said the uncertainties about IDBI Bank being able to raise capital have since been removed.

IDBI-Principal AMC launches monthly income series
Mumbai: IDBI-Principal Asset Management Company Ltd has launched the monthly income plan series. The open-ended income fund, IDBI-Principal Monthly Income Plan Series will initially have three investment plans namely a Dividend plan, Auto Earnings Payout (AEP) option and a Growth Accumulation Plan.

The Monthly Income Plan Series will be open for subscription from 22 April to 10 May.

The minimum investment amount in the dividend and Auto Earnings Payout Plans are Rs 10,000, which is among the lowest in the industry, and the minimum investment amount for the growth accumulation plan is Rs 5,000.

ICICI media account goes to WPP
Mumbai: WPP Marketing Communications has bagged the entire media planning and buying account of ICICI limited. This account was worth around Rs 125 crore. In addition, ICICI has also awarded its international business to WPP.

Earlier, the account was handled by Ogilvy & Mathers media buying wing.

Dabur CGU Life to launch in three weeks
New Delhi: Dabur CGU Life will launch its product in the next three weeks, following clearance from the Reserve Bank of India.

The life insurance company is expected to capitalise its account shortly with Rs 110 crore. The company already has operational offices in six Indian cities and a sales force of 500 agents.

It has also tied up with ABN Amro Bank, Canara Bank and Lakshmi Villas Bank as channel partners for selling its policies.

The life insurance company is yet to get the operational licence from the insurance watchdog IRDA.

18 April 2002

HSBC launches Internet merchant services
Mumbai: The Hong Kong and Shanghai Banking Corporation Ltd (HSBC) has launched Internet merchant services, facilitating a secure means to process credit card payments online through its Internet payment gateway.

The payment gateway will enable straight-through processing of online payments as well as a secure environment for the processing of credit card transactions over the Internet, say bank officials.

The service will enable merchant establishments to process payments faster and safer and also enable customers to make purchases through the Internet.

Says HSBC country head (personal financial services) Vivek Kudva: "We have to strike the right balance between security protocols, technology and consumer friendliness for the service to be used effectively."

The Internet payment gateway is based in Hong Kong and processes Internet card transactions for six countries Hong Kong, India, the Philippines, Sri Lanka, Brunei and Singapore. Cardholders paying by credit card for goods and services bought at a merchant site using HSBCs Internet payment gateway will be forwarded directly to HSBCs service for payment processing.

Indian Bank slashes home loan rates
Chennai: Indian Bank has revised its home loan scheme with a reduction in interest rate, processing fees and extension of repayment period. This special offer is valid between 15 April 2002 and 15 August 2002, says a bank press release.

The bank has revised the loan repayment period to 20 years as against 15 years now. For loans up to Rs 25 lakh, the interest rate is HPTLR minus 1.75 per cent (10.75 per cent floating) for a loan period up to five years, and HPTLR minus 1.50 per cent (11 per cent floating) for a loan period of more than five years.

The upper age limit has been relaxed up to 55 years against 53 years in deserving cases. A one-time option to convert floating into a fixed rate after the account has run for five years has also been introduced (the rate will be decided at a future date). A prepayment charge of 2 per cent on outstanding balance or DL, whichever is higher, will be levied for the pre-closure of accounts.

Indian Bank is also levying a processing fee at a flat rate of Rs 1,000 up to Rs. 5 lakh and Rs 2,500 if the loan amount exceeds Rs 5 lakh.

The revised scheme provides for the automatic eligibility of a fresh loan up to 10 per cent of the original loan or Rs 1 lakh, whichever is higher, for the purpose of painting or renovation and the like after the expiry of four years of availing the original loan for borrowers with a regular repayment track record and a repayment capacity for the additional loan.

16 April 2002

HDFC Bank to up foreign investment limit
Mumbai: The board of directors of HDFC Bank, have proposed to raise the limit for foreign fund investments in the company to 49 per cent from 40 per cent. They also recommended a dividend Rs 2.5 per share.

HDFC Bank earlier announced a 37.7 per cent rise in January-March quarter earnings over the year earlier period.

Kotak Mahindra enters banking
Mumbai: Kotak Mahindra Finance Ltd will convert itself into a bank by the end of 2002.
Kotak Mahindra, which has assets totaling more than 10 billion rupees, will be the first private Indian bank to come into existence in eight years.

As a bank, Kotak Mahindra, which has a tie-up with U.S. investment bank Goldman Sachs for its investment banking and broking activities, will be able to tap low-cost, short-term deposits, which it cannot do as a financial services company according to Indian regulations.

Kotak will now have to win final permission from the central bank before starting to operate as a bank.

The company has a capital adequacy ratio of 35 per cent and a net worth of five billion rupees.

The company will have to set aside funds to meet additional reserve requirements applicable to banks, but the amount required would be relatively small.

UWB Terminates ties with Sicom
Mumbai: United Western Bank has snapped its memorandum of understanding (MoU) with Sicom Ltd. The pact provides sharing of business and line of credit to Sicom up to Rs 125 crore at 1.5 per cent below PLR.

The bank has apprised the RBI of the developments.

HDFC net up 37.7%
Mumbai: HDFC Bank reported its January-March net profit rose 37.7 per cent from the same period a year ago.

HDFC Bank posted a fourth-quarter net profit of Rs 902.4 million, up from Rs 655.4 million a year earlier.

Net profit was estimated at Rs 821.46 million.

Total income rose 34.8 percent to Rs 5.66 billion, boosted by strong loan growth and a surge in bond trading income.

15 April 2002

SBI has 1,017 ATM centres in India
Mumbai: The State Bank of India (SBI) has put in place 1,017 ATMs, the largest number of installed ATMs by any single bank in India, the bank said in a press release.

SBI had installed 764 ATMs in one year while in the last five weeks, 541 ATMs were installed across the country. With these ATMs in place, the bank aims to provide ATM facilities where it is convenient for the customer to operate, the release added.

SBI started implementing its ATM networking project in May 2001 and has networked 541 ATMs. The bank has procured Compaqs Tandem Switch and ACIs Base 24 software. Networked ATMs are now available in 60 centres.

Bank officers also plan to join strike
Kochi: Bank officers have also decided to participate in the all-India strike called by the All-India Bank Officers Confederation (AIBOC) on 16 April 2002.

The strike has been called by AIBOC and allied trade unions among bank employees, against moves of privatising public sector undertakings and against anti-labour laws, a press release issued here has said.

The strike call has been given based on some of the most fundamental issues facing the economy, which have a direct bearing on the future of India, the release said.

Meanwhile, unions representing nearly 24,000 clerical and petty workers in the Reserve Bank of India have also joined the nationwide strike, a central bank spokesperson said. We will try to maintain normal cheque-clearing operations.

IDBI Bank-Rediff online shopping tie-up
Mumbai: IDBI Bank and Rediff.com have tied up to provide online shopping facility. The service will enable customers to choose what they want from the rediff.com pages and make payments through their IDBI i-net banking accounts, said a press release.

The system has been audited and implemented by Ernst and Young using internationally accepted standards and practices, added the release.

UWB board asks RBI to review decision
Mumbai: The United Western Bank (UWB) board of directors has asked the Reserve Bank of India (RBI) to reconsider its decision asking the banks managing director, S T

Gadre, to step down.

A bank press release said: The board has decided to request the RBI to reconsider its proposition. The board meeting was convened to consider the RBI directive and the future course of action for the bank.

Assocham recommends cut in Bank Rate
Mumbai: Reduction in the Bank Rate by 1 per cent, proper surveillance by the Reserve Bank of India (RBI) to ensure the statutory liquidity ratio (SLR) at 25 per cent and moral suasion by the central bank on commercial banks to adopt the soft interest rate policy are some of the recommendations made by Assocham for the ensuing monetary and credit policy.

In a note submitted to the RBI, chamber president K K Nohria called for renewed efforts from the RBI to promote a term-money market that will act as a benchmark for various derivative products. Assocham held that the domestic money market has essentially remained an overnight call-money market.

The RBI needs to take steps to promote the corporate repo market segment. Corporates with excess short-term surpluses should be given an opportunity for short-term investments with reverse repo facility, the chamber said.

HDFC Bank Q4 net profit at Rs 902 million
Mumbai: HDFC Bank Ltd has posted a net profit of Rs 902.40 million for the quarter ended 31 March 2002 as compared to Rs 655.40 million for Q4 ended 31 March 2001. The total income has increased from Rs 4198.80 million for Q4 ended 31 March 2001 to Rs 5660.20 million for Q4 ended 31 March 2002.

The net profit for the financial year ended 31 March 2002 is Rs 2,970.40 million as compared to Rs 2,101.20 million for the corresponding period last fiscal. The total income has increased from Rs 14,449.90 million for the financial year ended 31 March 2001 to Rs 20,362.40 million for the financial year ended 31 March 2002. The board has recommended a dividend of 25 per cent for the year.

HDFC Bank had recently launched its international credit card. The bank had a pilot launch in Chennai last year, and has issued around 2,000 cards there. The bank has a tie-up with Visa for the credit cards, and plans a launch with MasterCard in two-three months.

HDFC Bank is also gearing itself to become an applications services provider (ASP) in a joint venture with iFlex Solutions. They floated a company called Flexcel International, as a 50:50 joint venture with an initial equity of Rs 6 crore, to offer old-generation private banks, regional banks and cooperative banks the ASP model as a cheap alternative to setting up their own banking software infrastructure.

Apex financial intelligence agency soon
New Delhi: The finance ministry will set up an apex intelligence agency to monitor external and internal financial transactions in the country. The agency will be the central think-tank and gather information on its own and also from the existing agencies.

The unit, to be headed by a senior official, will report to the finance minister. It will have a full-fledged dossier on important areas of the economy.

The proposed agency will also take the help of the Reserve Bank of India and the Securities and Exchange Board of India.