12 May 2002
Canara Bank net profit jumps 160%
Bangalore: Canara Bank reported an all time high 160 per cent jump in its profit at Rs 741 crore for the fiscal ended 31 March 2002, and said it would come out with an Initial Public Offer in August or September.
The Bank, which had recorded a net profit of Rs 285 crore in the previous year, said its operating profit for the financial year ended 31 March 2002, was Rs 1656 crore, up from Rs 1131 crore last year.
The IPO size would range between Rs 175 and Rs 225 crore.
11 May 2002
Care downgrades IFCI debt to speculative
Mumbai: Credit Analysis and Research Ltd (Care) has downgraded the ratings of Industrial Finance Corporation of Indias (IFCI) long- and medium-term debt to Care B from Care A - signifying high susceptibility to defaults.
Also, the ratings of IFCIs preference share issue has been downgraded to Care C from Care BBB+, and the ratings of the fixed deposit programme has been downgraded to Care BB from Care A-. The ratings are in the speculative grade and will remain on credit watch.
The downgrade follows the continued deterioration in IFCIs financial health with declines in total income and profitability and high provisioning requirements in the nine-month period ended December 2001.
The consequent strain on liquidity and an adverse asset liability mismatch have resulted in IFCI delaying payments on some of its debt obligations. IFCI is reportedly in dialogue with institutional lenders for restructuring its liabilities.
Lord Krishna Bank net up to Rs 19.71 cr
New Delhi: Lord Krishna Bank (LKB) has posted a four-fold increase in its net profit at Rs 19.71 crore in 2001-02. It has declared a 20-per cent dividend for the year.
LKB also plans to come out with an initial public offer for over Rs 100 crore. It had improved its net profit from Rs 5 crore in 2000-01.
LKB, which has a major presence in Kerala, has posted a 22-per cent increase in its deposits at Rs 1,502.38 crore in the last fiscal, while its loan advances was up by 41 per cent to Rs 846.5 crore in 2001-02.
LKB promoter-director Ashwani K Puri says LKB, which eyes a Rs 4,000-crore business in this fiscal, will soon foray into mutual funds and depository services. We are in talks with at least two private sector mutual funds; decisions in this regard will be taken within a month or two. LKB is also on the lookout for a primary dealer; it will soon start its depository services.
With a net worth of Rs 108.47 crore, LKB has a capital adequacy ratio of 16.50 per cent, a net non-performing assets ratio of 9 per cent and plans to bring it down to 3-to-4 per cent in this fiscal through better recovery management.
RBIs policy framework for co-op banks
Kolkata: The Reserve Bank of India (RBI) is now working on a comprehensive policy for more effectively monitoring the activities of state cooperative banks in the country, especially in the wake of the involvement of some cooperative banks in the gilts scam.
RBI governor Dr Bimal Jalan told newspersons here that the need for a transparent monitoring system has already been spelt out in the recently announced credit policy itself.
At the macro level, he said, such scams, which were nothing but frauds, will be dealt with separately in close coordination with state governments. "These scams will have no impact as such on the bond markets as a whole. These are nothing but sheer frauds, where rules have been blatantly violated."
Union Bank slashes housing loan rates
Mumbai: Union Bank of India has reduced the interest rates on its housing loans. The revised rates are 10.5 per cent (floating) for loans repayable within five years, and 11 per cent for loans that have a tenure of five years and above.
The borrowers have the option of locking into fixed rates as well, in which case the rates will be 11.5 per cent for loans up to Rs 10 lakh and 12 per cent for those above
The bank gives loans of up to Rs 25 lakh for the construction or purchase of houses and up to Rs 10 lakh for repair work.
LIC, UTI to sell IBP stake
Mumbai: The Life Insurance Corporation of India (LIC), General Insurance Corporation (GIC) and the Unit Trust of India (UTI) have decided to put up their entire holding for sale in Indian Oil Corporation's open offer for IBP.
The three institutions have a combined stake of about 20.5 per cent in IBP. IOC's offer for the 20 per cent additional stake is at Rs 1551.25 per share.
GIC has already sold its shares in the open offer, while LIC and UTI have taken the final decision to sell out in the offer which closes on 11 May.
Sidbi to set up technology bank
New Delhi: Small Industries Development Bank of India plans to set up India's first technology bank this fiscal.
The bank, which would be the first of its kind in the country would source technology and export technology.
The bank would be set up as a separate company under the Companies Act.
Lenders take over Spectrum Power board
Mumbai: IDBI-led lenders have taken over the reins of the Spectrum Power Generation board by infusing four additional nominee directors.
SPGL, which runs a 208 mega-watt project in Kakinada (Andhra Pradesh), has continuously defaulted in its interest and loan payments, forcing ECGD of UK to invoke guarantees.
UTI, IIBI, LIC and ICICI have got their nominees, M Sankaranarayanan, Narasimha Murthy, S Sathyanarayana and M Surendranath on the board.
With this, total number of FI nominees in the board has gone up to seven.
Godbole to head NHB
New Delhi: The Industrial Development Bank of India's senior-most executive director J N Godbole is set to be appointed as the new chairman of National Housing Bank (NHB), the regulator for housing finance companies.
Godbole's appointment has been cleared by the central vigilance commission and an order for his appointment will be issued shortly.
10 May 2002
SBI subscribes to Credit Info Bureau capital
Mumbai: State Bank of India (SBI) has informed the Bombay Stock Exchange that it has subscribed to the initial capital of the Credit Information Bureau of India Ltd (CIBIL) to the tune of Rs 3.5 crore of the issued share capital of Rs 25 crore.
This is the first call option that the bank has exercised. SBI is one of the promoters of CIBIL and, along with HDFC, holds 40 per cent in the company. Trans-Union International, Dun and Bradstreet Information Services India Pvt Ltd each hold 10 per cent in the venture.
The monetary and credit policy of October 2001 had said that in order to operationalise the process of collection and dissemination of the data on CIBIL, the Reserve Bank of India (RBI) will constitute a working group.
One of the recommendations of the working group was that the company should take on the RBIs role of collection and dissemination of information on suit- filed accounts from 1 April 2002. The group had stressed the need for a master legislation to establish the basic regulatory framework so that banks will provide all the credit information that CIBIL requires.
The basic thrust of the group is to examine the role CIBIL could play in the absence of a legislation and if the bureau could be made operational at least to a limited extent. According to some bankers, since the legislation required to get CIBIL in place would take some time, banks and the RBI should formulate guidelines to empower CIBIL to function without the legislation.
J&K Bank net profit up 55% to Rs 260 cr
New Delhi: Jammu and Kashmir Bank (J&K Bank) has registered a net profit of Rs 260 crore for the financial year ending 31 March 2002 - a 55-per cent growth over the previous year.
The total income of the bank increased by 39 per cent to Rs 1,610.86 crore. The credit portfolio of the bank grew by 35 per cent and deposits have increased by 16 per cent during the same period.
The net non-performing assets have reduced to 1.88 per cent against 2.45 per cent. The capital adequacy ratio of the bank stood at 14.76 per cent.
J&K Bank has achieved a business turnover of Rs 19,335 crore (Rs 15,931 crore). The capital and reserves of the bank have also witnessed an impressive growth, touching Rs 937 crore during the last financial year.
Insurance bill passed
New Delhi: The Lok Sabha approved a bill seeking to delink four subsidiary companies carrying on insurance business from the General Insurance Corporation (GIC).
The General Insurance Business (Nationalisation) Amendment Bill, 2001, was passed by a voice vote.
Replying to the discussion, minister of state for finance, Balasaheb Vikhe Patel said ever since the four companies were demerged, they have been doing well with their capital having increased to Rs 8,050 crore.
Allaying apprehensions of members that the four companies were not economically viable, he said they were progressing well and there was no question of retrenching any of the staff.
He said even the expert committee headed by former RBI Governor R N Malhotra had recommended that Life Insurance Corporation be demerged.
9 May 2002
Can Fin Homes cuts loan rates by 50 bps
Bangalore: Can Fin Homes Ltd has cut rates on home loans by 50 basis points for all repayment periods above five years. The new rate for the six-to-10-year-term is 10.75 per cent for loans up to Rs 2 lakh and 11.25 per cent for loans above Rs 2 lakh, according to a press release issued here.
Loans of the 11-to-15-year-term will carry 11 per cent for loans up to Rs 2 lakh and 11.5 per cent for loans above Rs 2 lakh. Loans in the 16-to-20-year-term will carry 11.75 per cent and 12 per cent for loans up to and above Rs 2 lakh, respectively.
The company has also introduced variable rate schemes at 11.5 per cent for all repayment periods and amounts subject to changes in time. Existing customers on fixed loan schemes, too, can opt for variable schemes on payment of a conversion fee, the release stated.
SBM strikes deal with West Asia exchanges
Bangalore: State Bank of Mysore (SBM) has entered into a rupee-drawing arrangement with the following exchange companies in West Asia: Bahrain International Exchange Co BSS, Manama, Bahrain; Mustafa Sultan Exchange Co LLC, Muscat, Sultanate of Oman; Trust Exchange Co WLL, Doha, Qatar; Asia Exchange Centre, Dubai.
Non-resident Indians can now send remittances from these countries by means of demand drafts payable at select SBM branches, a press release said.
Andhra Bank cuts 25 basis points in PLR
Mumbai: Andhra Bank has announced a reduction of 25 basis points in its prime-lending rate (PLR). But the bank said the reduction in PLR to 11.75 per cent from the existing 12 per cent will come into effect from 15 May 2002 only for those advances which were repayable up to three years period.
The bank has decided to retain the existing PLR at 12 per cent for all those advances beyond three years. In a press release the bank said the spread will be based on the credit rating of the borrower with a maximum spread of 4 per cent.
Another co-op bank affected in gilt scam
Mumbai: The Mumbai-based Raghuvanshi Cooperative Bank has suffered losses in government securities transactions with the brokerage firm Home Trade. Top Mumbai police officials say Raghuvanshi Bank has lost about Rs 8 crore in its dealings with the dubious firm.
Investigations are on, even as the police froze the brokerage firms bank accounts. The economic offences wing of the Mumbai police is continuing its search for the six absconding directors of Home Trade.
Asked whether any other Mumbai bank is involved, assistant commissioner of police (crime branch) R M Sarnaik, who is in charge of the investigation, said: As of now Raghuvanshi is the only Mumbai-based bank known to us. The others are outside Mumbai. About any other bank is involved, we will find out as investigation progresses.
The other banks involved in the multi-crore securities scam are Nagpur District Central Cooperative Bank, Wardha District Central Cooperative Bank, Satguru Jungli Maharaj Cooperative Bank and Osmanabad District Central Cooperative Bank.
SBI goes tech-savvy to serve customers well
Vishakapatnam: State Bank of India has set in motion a programme for massive technological upgradation to ensure better customer services.
SBI managing director Y Radhakrishnan says the bank is implementing a slew of technology upgradation projects, which is expected to change the face of the bank within two to three years. While one of the projects involves increasing the banks ATM network from 1,020 to 1,500 by the end of this financial year, another project aims at increasing its Internet-banking services to cover the retail segment.
We are also launching a new product for providing interest banking for corporates, he says. SBI is also implementing a programme for technological upgradation for asset/liability and treasury management. Also, the bank is changing its core-banking facilities - including deposits, advances, international banking and mutual fund - by using special software.
Supersede Sadguru Junglee co-op bank: RBI
Mumbai: The Reserve Bank of India has asked the Registrar of Cooperatives of Maharashtra to supersede the board of the Pune-based Sadguru Junglee Maharaj Cooperative Bank.
This is the fourth cooperative bank - after Nagpur District Central Cooperative Bank, Wardha District Cooperative Bank and Osmanabad District Cooperative Bank - whose board has been scrapped after the gilts fraud involving the securities brokerage firm Home Trade.
Around 20 cooperative banks are understood to have lost over Rs 400 crore in the current scam.
ABN-Amro is adviser in Nalco sell-off
Mumbai: ABN-Amro-Rothschild has been selected as global adviser for the strategic sale of the governments equity in Nalco.
The inter ministrial group will forward the proposal to the cabinet committee on disinvestment for approval.
FIR against Pune bank
Pune: Criminal proceedings against 15 members of the board of directors of the Rs 272 crore Shree Sadguru Jangli Maharaj Cooperative Bank, three directors of the controversial brokering firm Home Trade Ltd, one present and past general manager of the bank and one officer have been launched by state cooperative department.
The district audit officer of Pune has filed a police complaint against the accused charging them with misuse of power, falsification of account, misapropriation of funds, cheating and other offences under section 420, 406, 408, 409, 465, 467, 477 and 34 of the IPC.
Investigations by the audit conducted by state cooperative department has clearly established that the accused have misappropriated funds to the tune of Rs 48.53 crore.
The cooperative department which carried out special audit had indicted 19 persons including the board of directors, former chairman, present and former general and internal auditors.
Amravati bank under a cloud now
Pune: Suspecting the Amravati Peoples Bank to be involved in a Rs 9.5 crore scam, similar to scams unearthed recently in cooperative banks in the state, the commissioner of cooperative has issued a notice to the bank asking as to why its board of directors should not be dissolved.
The bank is suspected to be involved in a scam similar to that of co-op banks in Nagpur and Pune, whose face value is to the tune of Rs 9.5 crore, commissioner Ratnakar Gaikwad told reporters here, adding that an enquiry into the functioning of this bank which has an asset base of Rs 96 crore will start.
8 May 2002
Bank Muscat to float Indian arm
Bangalore: Bank Muscat would soon float an Indian subsidiary, and also has plans to come out with a debit card besides setting up a call centre in the country, senior bank officials said.
Bank Muscats chief executive, India, Samit Ghosh, told reporters here that with the recent Union Budget allowing foreign banks to incorporate locally, his bank was awaiting detailed RBI guidelines in this regard, which was expected to come in the next two months.
Once the guidelines came, the bank would apply to the apex bank for setting up an Indian subsidiary.
New nominees to IMF, World Bank
New Delhi: The government has nominated economic affairs secretary C M Vasudev as Indias executive director in the World Bank and RBI deputy governor Y V Reddy as executive director in the International Monetary Fund (IMF).
Vasudev will take over from B P Singh who is completing his three-year term as executive director in the World Bank on 31 July.
Reddy has been named in the place of Vijay Kelkar who too is completing his term in IMF on 31 July.
7 May 2002
UBI sets Rs 73,500-cr target for 2002-03
Kolkata: Union Bank of India (UBI) has set a target to achieve an overall business growth of Rs 73,500 crore for 2002-03 from the Rs 62,000-crore-mark set in 2001-02. The over-18-per cent projected growth is expected to come through an increase in its business mix of deposits and advances in the current year.
The bank projects a 19-to-20-per cent increase in its deposits and advances, respectively, in the current year. Union Banks deposits and advances at the end of the last fiscal stood at Rs 39,100 crore and Rs 22,850 crore, respectively.
Retail banking will continue to be a thrust area, which has contributed nearly 30 per cent to the credit growth last year. According to the bank, housing loans will be a major product where competitive pricing and add-on features will support the cutting edge.
The bank also proposes to expand its loan features to professionals as well as self-employed, and widen the scope of its health scheme for medical practitioners, besides covering other professionals like software consultants and architects. Retail lending is expected to bring in Rs 1,500 crore in the current year.
Two more co-op banks to be superseded
Mumbai: The Registrar of Cooperatives of Maharashtra will supersede the boards of Wardha District Cooperative Bank and Osmanabad District Cooperative Bank and appoint administrators for the banks as per Reserve Bank of India recommendations, following the government securities scam.
The economic offences wing (EOW) of the Mumbai police has, meanwhile, registered yet another case against the directors of Home Trade, a broking firm, on charges of cheating Raghuvanshi Cooperative Bank for around Rs 6 crore.
The EOW had earlier registered a case against Home Trade following a complaint by Osmanabad bank chairman Pawanraje Nimbalkar of duping the bank for G-secs worth Rs 30 crore.
The Wardha bank has been allegedly deceived to the tune of Rs 25 crore in the G-secs scam. "This is just the tip of a huge iceberg. We expect more cooperative banks to have fallen prey to this Home Trade fraud," says a senior EOW official.
Canara Bank cuts PLR by 25 basis points
Bangalore: Canara Bank has slashed its prime lending rate (PLR) by 25 basis points to 11.50 per cent from 11.75 per cent, following the recent cut announced by the Reserve Bank of India.
The banks prime-term lending rates remain unchanged at 12 per cent.
ICICI Bank joins hands with BPL Mobile
Mumbai: ICICI Bank and BPL Mobile have tied up to allow recharge of BPLs prepaid cellular service facility (branded mots) at any of the banks 1,000-plus ATMs across India. A subscriber will also have to hold an account with ICICI Bank.
The prepaid service will be recharged against payment, which will be debited from the customers bank account. "This facility will be introduced in the BPL cellular circles of Maharashtra, Mumbai and Goa; it will soon be extended to cover the circles of Tamil Nadu and Kerala," says BPL Mobile president and CEO F B Cardoso.
Over 50 per cent of BPLs subscribers, numbering nearly 1 million, are in the prepaid category. ICICI Bank has over 5 million customers. The bank will, of course, earn an identified commission out of this arrangement.
ICICI Bank already has a facility with Bharti Cellular in New Delhi for recharge of the prepaid facility at its ATMs. "We will shortly have such an arrangement with Bharti in Kolkata as well," says ICICI Bank executive director Chanda Kochhar.
Ashok Leyland Fin improves performance
Chennai: The board of Ashok Leyland Finance, a non-banking finance company, has given the green signal to issue redeemable preference shares totalling Rs 100 crore. The decision was made at the meeting held to consider the companys results for the financial year 2001-02.
Fifty crore shares will be subscribed by its parent Ashok Leyland, and the balance by other investors. The funds infusion will improve the companys capital adequacy ratio to 14 per cent from the current level 13.15 per cent.
The company, in the last fiscal, posted a net profit of Rs 37.64 crore on an income of Rs 292.92 crore, as against Rs 16.18 crore for the nine months ended March 2001 on an income of Rs 187.92 crore. The other income stood at Rs 14.84 crore as against Rs 8.70 crore for the previous years nine months.
The improvement in the companys profitability for the period ended March 2002 was achieved through a change in the product mix and a lower borrowing cost achieved through proactive treasury management.
The company increased its disbursements to Rs 1,850 crore against the Rs 1,013 crore made during the previous years nine months. As a result, the companys asset-base went up to Rs 3,000 crore-gross of securitisation deals.
During the year under review, Ashok Leyland Finance became the largest financier of commercial vehicles, with a disbursement of Rs 960 crore. The other segments to which the company has lent are: construction equipment (Rs 135 crore), LMV/LCV and multi-utility vehicles (Rs 360 crore), and the two-wheeler and personal product segment (Rs 380 crore).
The performance should be viewed in the light of the sluggish automobile industry - barring the two-wheeler segment - and also the heightened competition from financial institutions, and foreign and domestic banks.
The volume of bills discounted stood at Rs 112 crore (Rs 133 crore during the nine months ended March 2001). The company installed and commissioned 19 wind turbine generators valued at Rs 15 crore during the year ended March 2002.
Provisions and write-offs amount to Rs 17.07 crore (Rs 15.49 crore during the nine months ended March 2001). Ashok Leyland Finance was able to contain non-performing assets to 0.85 per cent of the total assets as against 1.11 per cent last year (net of provision), which is among the lowest in the industry. The board, which has recommended a final dividend of 20 per cent for the year under review, had earlier declared an interim dividend of 30 per cent.
Additional resources to the extent of Rs 1,205 crore (asset securitisation: Rs 575 crore; term-loans: Rs 435 crore; debenture: Rs 195 crore; public fixed deposits: Rs 240 crore) were raised during the year. The company had issued commercial paper worth Rs 835 crore during the year under review and the total amount outstanding at the end of the year was Rs 245 crore.
During the year, the company availed an FCNR(B) loan aggregating to Rs 474 crore (Rs 297 crore last year) from bankers at competitive rates. Ashok Leyland Finance managing director S Nagarajan says his company is working on new products to finance working capital needs of truck operators. The total amount the company hopes to disburse is around Rs 150 crore at an interest rate of 1.5 per cent per month as against 3 to 4 per cent charged by private financiers.
IFC to invest $2 mn in Webdunia
New Delhi: World Bank's private sector lending arm, International Finance Corporation, will invest $2 million in media content provider Webdunia India.
Of the $3 million capital requirement, $1 million would be brought in by Walden International and Times Internet Limited, a unit of Bennett, Coleman & Company, an IFC release said.
Webdunia, launched in 2000, provides Internet-based media content and operates portals in four major Indian languages-- Hindi, Malayalam, Tamil and Telugu.
G-secs investments should be in demat: RBI
Mumbai: Reserve Bank of India has directed all state co-operative banks and district central co-operative banks to maintain their investments in government securities (G-secs) only in a dematerialised form.
This decision follows the recent Rs 150 crore G-sec scam of Nagpur District Central Co-operative Bank (NDCCB) involving five broking firms, including Home Trade Ltd.
RBI, in its recent circular, said all state co-operative banks and district central co-operative banks should maintain their investments in G-secs only with subsidiary general ledger (SGL) accounts with the apex bank.
World Bank to provide $315 mn loan to India
New Delhi: The World Bank has signed agreements for providing $315 million in loans for two projects in India aimed at improving transport system in Mizoram and Kerala.
The Bank would provide $255 million loan for Kerala State Transport Project and another $60 million for Mizoram State Roads Project aimed at supporting physical and management improvements of transport networks.
World Bank loan is payable in 20 years and carries an interest rate of 2.5 per cent.
The Mizoram State Roads Project would improve road capacity, quality and safety through rehabilitation and maintenance.
It aims at expanding or rehabilitating over 700 km of the state's core road network over the next five years.
The Kerala State Transport Project would address the rapid increase in demand for road services.
The project would enhance road capacity and provide targeted safety programs designed to boost both safety and efficiency of Kerala's roads.
An estimated 1,600 km of roads would be rehabilitated or expanded under the project over the next five years, the release said.
6 May 2002
FleetBoston Financial eyes 16% ICICI Bank stake
Mumbai: FleetBoston Financial of the US is negotiating with the ICICI to buy a part of the 16 per cent equity stake held by ICICI in the ICICI Bank.
The 16 per cent equity stake was parked in a trust, set up through a special purpose vehicle (SPV) prior to the merger of the financial institution with its banking subsidiary.
ICICI Banks CEO, K V Kamath, has already said the bank would sell this stake by the end of the year.
FleetBoston Financial is the seventh largest financial holding company in the US.
GTB cuts down exposure to KP firms
Mumbai: Global Trust Bank has managed to bring down its exposure to companies related to Ketan Parekh by close to Rs 20 crore.
The private banks total exposure to KP linked firms now stands at Rs 160 crore, against the earlier level of Rs 180 crore.
The dues were recovered by the bank by liquidating fixed deposits, deposited with it by the concerned firms, but were pledged with various stock exchanges by the broking firms as guarantees towards margin obligations. These guarantees lapsed during March-April this year, which enabled the bank to encash them.
Indusind Bank posts Rs 10-cr net
Mumbai: Indusind Bank has posted a net profit of Rs 10.2 crore during the quarter ended 31 March 2002, against a net loss of Rs 21.9 crore during the corresponding period in the previous year.
The banks board has declared a dividend of 14 per cent for 2001-02, compared to 13 per cent in the previous year. During the year ended 2001-02, the net profit rose by 25.2 per cent to Rs 50.8 crore, against Rs 40.5 crore in the previous year.
The operating profit rose by 46.2 per cent to Rs 252.5 crore, from Rs 172.7 crore. During the fourth quarter, provisioning and contingencies rose to Rs 127.1 crore, from Rs 77.3 crore. During the year, it increased to 174.4 crore, from Rs 117.2 crore. Interest income fell to Rs 710.1 crore, from Rs 728.7 crore. Fee based income rose to Rs 184.4 crore, from Rs 116.6 crore.
ABN AMRO to launch credit cards
New Delhi: ABN AMRO Bank India said it will launch credit cards in June.
The bank has also lined up aggressive expansion plans for its branches and ATMs in 2002.
Besides, ABN AMRO would also enter the domestic mortgages market within the current year.