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6 July 2002 SBI Ahmedabad division posts Rs 267-crore net profit
Ahmedabad: State Bank of India's Ahmedabad circle, consisting of Gujarat and three Union Territories (Daman, Diu and Dadra and Nagar Haveli), has posted a net profit of Rs 267 crore during the year ended 31 March 2002, an increase of 63 per cent compared to Rs 164 crore in the last year.
StanChart to lure more consumers in China
Mumbai: Standard Chartered Bank said on Friday it hoped to use its profitable corporate banking business as a springboard to target more consumers in China, a massive market slowly opening to foreign banks.
PNB revises FCNR rates
Mumbai: Punjab National Bank has revised interest rates on its foreign currency non-resident scheme with effect from 8 July 2002.
Two Manipal group firms suspend transactions
Mangalore: Two months after the Ramesh Pai group decided to 'restructure' its non-banking finance business, two other units of the Manipal group have suspended their transactions, according to an official statement.
APSFC scouts for cheaper funds to slash lending rates
Hyderabad: The Andhra Pradesh State Financial Corporation is looking for cheaper sources of funds so that it could slash its lending rates. The corporation is exploring the possibility of getting access to the foreign as well as the domestic money markets.
SBI slashes housing loan rates
Mumbai: Housing loans have just got a little cheaper. State Bank of India has cut its rates by around 50 basis points to 10 per cent on its floating rate loans. This cut by SBI comes after recent rate cuts by HDFC and LIC Housing Finance.
Tube Investments infuses another Rs 76 cr in insurance arm
Mumbai: Tube Investments of India Ltd has additionally invested Rs 76.30 crore in Cholamandalam General Insurance Co Ltd, a company promoted by it. With this investment, Tube Investments' holding in Cholamandalam General Insurance aggregates Rs 78.75.
Huge reserves vital for curbing volatility: Jalan
Mumbai: RBI governor Dr Bimal Jalan has advocated building of safety walls by countries (by creating higher reserves) to check volatility in capital flows and external markets. "Let each country take measures to build its own safety walls," he said.
New Bill to be tougher on dishonour of cheques
New Delhi: Soon, a dishonoured cheque could land the issuer of the instrument in prison for a period of two years. And the processes of law would move overtime to ensure that the guilty is placed behind bars at the earliest.
Crisil assigns AA- for IPCL's NCD issue
Mumbai: Credit rating Information Services of India Ltd (Crisil) has assigned AA- and P1+ ratings to the Rs 1,200-crore non-convertible debenture issue and Rs 900-crore commercial paper programme respectively of Indian Petrochemicals Corporation Ltd.
IDBI Bank plans branches in Mysore, Belgaum
Mumbai: IDBI Bank has a current business portfolio of Rs 200 crore (deposit and advances) in Karnataka and hopes to increase the turnover through the new products. The bank is also planning to open branches in Mysore and Belgaum.
PSB lending to public sector companies up 36%
Mumbai: Public sector banks lent more money to those from their own ilk in 2001-02. Advances of 23 public sector banks to public sector companies rose by 36 per cent in the last fiscal. This was when the overall credit growth was up only 19 per cent.
BNP Paribas to wield axe
Mumbai: The French Bank BNP Paribas will retrench the remaining 60 employees in its Indian retail business by yearend. The bank had retrenched 80 in February following the decision to wind up its retail business.
Rally in mid-cap brings smile to US-64
Mumbai: India's single largest mutual fund scheme Unit Scheme 1964 (US-64) is beginning to realise value from its dud stocks thanks to the current bull run in old economy mid-cap counters.
5 July 2002 Amex out of red, posts net profit of Rs 10 crore
New York: American Express Bank is out of the red. The bank has posted a net profit of Rs 9.5 crore for the year ended 31 March 2002, against a net loss of Rs 22.5 crore in the previous year.
ECB leaves rates unchanged
Berlin: The European Central Bank left interest rates unchanged on Thursday as a stronger euro and doubts over the pace of the global economic recovery persuaded policymakers to stay put despite their inflation concerns.
Local private banking market set to consolidate: PwC
Mumbai: PricewaterhouseCoopers, in its first private banking management survey carried out in India, has recommended that players in this industry have to know their clients better.
G-sec trades cautious on OMO hopes
Mumbai: Despite ample liquidity in the banking system, trades in government securities have been in a cautious mode in anticipation of open market operation sales.
NOBW demands 25% hike in special pay
New Delhi: The National Organisation of Bank Workers has demanded a 25-per cent hike in special pay for the clerical staff and 30 per cent for the sub-staff, apart from a 100-per cent neutralisation and merger of DA in the basic pay.
Cooperative Bank wins performance award
Thiruvananthapuram: The Kerala State Cooperative Agriculture and Rural Development Bank has been selected for the Best Performance Award for 2000-01 instituted by the National Bank for Agriculture and Rural Development.
ICICI Bank's Home Utsav in Chennai
Mumbai: ICICI Home Finance Co Ltd, a subsidiary of the ICICI Bank, will organise Home Utsav in Chennai, where home loans will be spot sanctioned at a slightly lower rate. Over 100 builders with more than 300 different housing projects will participate in it.
HDFC Standard begins Kochi operations
Mumbai: HDFC Standard Life Insurance Company on Thursday launched its operations in Kerala at Kochi by offering a variety of products to suit the diverse requirements of its customers. The products offered by the company included endowment assurance.
Insurance JV: Chubb to pay HDFC Rs 47-cr premium for 26% holding
Mumbai: The US-based insurance major, Chubb Corporation, which is entering the Indian insurance sector by setting up a joint venture with domestic housing finance major, Housing Development Finance Corporation, will pay a 180-per cent premium.
Andhra Bank opens more ATMs
Hyderabad: Andhra Bank, the Hyderabad-based premier public sector bank, opened eight off-site and 16 onsite ATMs in Hyderabad and Secunderabad here on Thursday. These ATMs with interconnectivity would provide the customers anywhere and anytime banking.
Ministry seeks help on IFCI's PF default issue
New Delhi: The ministry of labour has sought the ministry of finance's intervention in sorting out IFCI Ltd's recent defaults in the repayments of the interest and principal on investments made by the Employees Provident Fund Organisation.
Bankers not inspired by securitisation ordinance
Mumbai: The ordinance, which was expected to help banks in recovery and reduction of their bad debts, may fall short just where it was required, bankers said.
Lord Krishna, Western Union join hands
Mumbai: Western Union Financial Services Inc (www.westernunion.com), one of the worlds leading money transfer companies, has signed an agreement with Lord Krishna Bank to provide inward money transfer services in 51 locations of Lord Krishna Bank. This alliance will significantly expand Western Unions network in Kerala. Lord Krishna Bank has strong a presence in Kerala with over 80 per cent of its branches located throughout the southern state of India. Western Union is aggressively in the process of enhancing their network across India. In the last six months alone, it has witnessed nearly 100-per cent growth in their locations. Currently, Western Union has over 6,000 locations across 600 towns and cities in the country. "Western Union caters to more than 5 million non-resident Indians in the Gulf region, most of them belong to Kerala. Hence, it is extremely important that we serve our customers in Kerala to the best of our abilities. We will now have more than 520 locations in Kerala, so that customers can receive money sent by their family quickly, safely and reliably. We are also in talks with other banks and financial institutions to provide safe, secure and reliable money transfer services," says Western Union director-general (India) Anil Kapur. Lord Krishna Bank executive director V K Gupta says: "Western Unions inward money transfer service will be a tremendous value-addition to both our existing client-base and potential customers. We are pleased to be associated with Western Union."
Established in Kerala in 1940, Lord Krishna Bank today has a widespread network, with presence in more than 10 states across the country. Western Union Financial Services, a subsidiary of First Data Corp, is an international leader in consumer money-transfer services. Consumers can quickly, safely and reliably pay bills and transfer money around the globe using the companys proprietary money transfer network. Western Union and its subsidiary Orlandi Valuta together make up one of the worlds largest money-transfer networks with a total of approximately 124,000 agent locations in more than 194 countries and territories. Famous for its pioneering telegraph service, the original Western Union dates back to 1851 and introduced electronic money-transfer service in 1871. 4 July 2002 Tata AIG unveils full-life cover
Mumbai: Tata AIG Life Insurance on Wednesday launched a new policy MahaLife a whole life insurance cover that doubles up as an annuity plan, and generates guaranteed annual tax free income.
HDFC subscribes to 6.9% preference shares of RIL
Mumbai: HDFC Ltd has subscribed to 6.9-per cent redeemable preference shares of Reliance Industries Ltd, aggregating Rs 200 crore. The coupon of 6.9 per cent is perhaps the lowest-ever offered by an Indian company on preference shares.
Indian Bank NPA: Top eight defaulters account 45%
Chennai: Indian Bank financial woes have been caused by just eight defaulters who owe Rs 1,000 crore to the Indian Bank.
Geojit assurance on site security
Kochi: Geojit Securities Ltd has assured all its customers that the company has implemented world-class security systems and that its website and database are fully safe.
Cauvery Grameena Bank shows micro-credit as growth catalyst
Mysore: As a successful demonstration that the poor are bankable and micro-finance-sustainable, Cauvery Grameena Bank, Mysore, has become a role model for micro-credit in rural development.
Panel for reducing government stake in RRBs
New Delhi: The committee on restructuring of regional rural banks is understood to have suggested that the government holding in these banks should drop to 33 per cent from the existing 50 per cent while the sponsor banks should increase their stake.
NRIs hail decision on repatriation of funds
Kochi: The non-resident Indians in the United Arab Emirates are pleased with the decision of the Reserve Bank of India to permit repatriation of funds for specific purposes from the non-resident ordinary rupee denominated accounts in Indian banks.
Margadarsi aims at Rs 2,000-crore turnover
Hyderabad: The Hyderabad-based Margadarsi Chit Fund expects to achieve a business turnover of Rs 2,000 crore in the current year, as against Rs 1,750 crore in 2001-02, the company's managing director Sailaja Kiron said on Wednesday.
Kotak Mahindra issue gets Crisil's AAA (SO)
Mumbai: Credit Rating Information Services of India Ltd (Crisil) has assigned a AAA (SO) rating to Kotak Mahindra Finance Ltd's Rs 83-crore securitisation programme.
ICRA downgrades IDBI's long-term ratings
New Delhi: ICRA has announced a downward revision of the long-term rating of IDBI from LAA+ to LAA. The revised ratings also indicate high safety as earlier, but at a lower level.
RBI may shift to risk-based supervision of banks
New Delhi: The system of annual inspection of banks by the Reserve Bank of India may soon be a thing of the past. The central bank is expected to follow a system of random and more frequent inspections based on the risk profile of individual banks.
Good response to APSFC campaign
Hyderabad: The one-day business development campaign organised by the Andhra Pradesh State Financial Corporation on Wednesday elicited good response from entrepreneurs, with 32 projects involving an investment of Rs 34 crore having been okayed.
IDBI seeks Rs 45 crore for selling stake in AMC
New Delhi: Industrial Development Bank of India has reportedly sought close to Rs 45 crore to sell about 21 per cent stake in IDBI Principal AMC to its joint venture partner, the US-based Principal Financial Group.
Govt to introduce put, call option in market borrowings
New Delhi: The government has taken a decision to introduce a put-and-call option in the next tranche of its market borrowings. An in-principle decision to introduce this has been taken and the Reserve Bank of India, the government's debt manager.
HDFC Bank launches gold card
Mumbai: HDFC Bank launched its International Gold Credit Card on Wednesday. The gold card has higher limits over the silver card that was launched in February. The gold card enables one to withdraw cash up to 40 per cent of the credit limit.
3 July 2002 SBT appointed operating agency for Alind revival
Mumbai: The efforts to rehabilitate the ailing Aluminium Industries Ltd have taken another turn, with the State Bank of Travancore being appointed as the new operating agency.
HSBC to launch three MF schemes
Mumbai: HSBC is set to foray into mutual funds, courtesy three open-ended schemes equity, income and liquid. It has lodged the offer documents with the Securities and Exchange Board of India for approval. The schemes were by HSBC Mutual Fund.
Canara Bank slashes home loan rates
Bangalore: Canara Bank has reduced the interest rate on housing loans up to five years tenure by 50 basis points and it will now cost 10.50 per cent to the customers irrespective of the quantum of the loan.
United India to float Rs 100-crore arm
Mumbai: United India Insurance Company Ltd, the largest insurer in rural insurance business and a subsidiary of General Insurance Corporation, has drawn ambitious plans to set up a separate subsidiary company with a paid-up equity of Rs 100 crore for exclusively dealing with per-sonal line products. It has appointed A F Ferguson for providing con-sultancy services for the new project.
PSU general insurance firms: Third party administrators' shortlisting soon
New Delhi: The panel of third party administrators prepared by the General Insurance Public Sector Association for working on behalf of the public sector general insurance companies is under threat of being scrapped.
NRIs can repatriate more from Re funds
Mumbai: The Reserve Bank of India on Tuesday enhanced limits for repatriation of funds by non-resident Indians and persons of Indian origin out of balances held in their non-resident ordinary rupee account.
IDBI Bank to focus on retail segment
Mumbai: Thrust in the retail segment and expansion in the number of branches seem to be the keyword for IDBI Bank for the current financial year, according to Shridhar Iyer, cluster head (retail banking), Pune.
SBI draws up strategy for retail segment
Mumbai: State Bank of India has drawn up a fresh strategy to boost its retail business through mass marketing and of corporate tie-ups. So far, the bank, the largest in the country, has been mainly leveraging its large network to promote its operations.
SBI opens personal loans cell in Hyderabad
Hyderabad: In a move towards greater thrust on retail finance, State Bank of India has inaugurated a Personal Loans Cell at its Hyderabad zonal office here.
Debit card from UTI Bank
Mumbai: UTI Bank has launched the Visa Electron International Debit Card, which will be issued free of cost to its entire savings and current account holders. The debit card, launched on Monday, will be accepted at 2,500 ATMs and 32,000 merchant bankers.
Sundaram Finance to buy out Stewart stake in JV
Chennai: Sundaram Finance Ltd will buy out the 39-per cent stake held by Stewart Newton Holdings (Mauritius) Ltd in the joint venture Sundaram Newton Asset Management Company for Rs 18 per share, according to the board of directors of Sundaram Finance.
Gujarat persuades co-ops to invest in Narmada Nigam
Ahmedabad: The Gujarat government, at a meeting convened by Chief Minister Narendra Modi, on Monday persuaded the state co-operative banks to park Rs 300 crore in the Sardar Sarovar Narmada Nigam Ltd.
Dhanalakshmi Bank net rises 49%
Thrissur: The Thrissur-based Dhanalakshmi Bank has registered a 49-per cent growth in its net profit at Rs 10.07 crore for the fiscal ended 31 March 2002.
Western Union to launch Direct-to-bank service
Mumbai: Western Union Financial Services International, one of the leading money transfer service providers, is planning to launch direct-to-bank service in India shortly.
Insurers unfazed by Pak conflict: ICICI Lombard CEO
Mumbai: Indias simmering border conflict with Pakistan and its struggle to quell religious riots has not deterred insurance companies in their quest to explore a largely untapped market, a new entrant has said.
ICRA revises long-term IDBI debt rating to high safety
Mumbai: The rating agency ICRA has revised the rating assigned to the long-term borrowing programme of the Industrial Development Bank of India from LAAA+ to LAA, indicating high safety albeit at a lower level.
IDBI Bank appoints filemyreturns.com
New Delhi: IDBI Bank customers can now avail of comprehensive tax management services such as planning, computing and filing of income tax returns with www.filemyreturns.com.
This tie-up will also enable IDBI Bank to offer bulk filing of returns for its corporate salary account customers, under the Suvidha scheme offered by the income-tax department. This service will be offered jointly by IDBI Bank and Filemyreturns in six cities Mumbai, New Delhi, Bangalore, Chennai, Ahmedabad and Pune.
The services are being offered with special discounts for IDBI Bank customers in the range of 25 per cent. Corporate customers will have an added advantage with help-desks and seminars with experts for personal counselling on tax planning. Filemyreturns will also provide advice and assistance in filling any tax-saving instruments and in application for PAN.
IDBI Bank head (retail banking) Ajay Bimbhat says: "This tie-up is in keeping with our pursuit to offer value-added services to our customers. This is a step towards fulfilling a gap between banking and non-banking services and we will now be able to provide our customers with the best of both services."
www.filemyreturns.com is Indias premier citizen-to-government (C2G) payroll and tax management services organisation that offers customers the advantage of convenient banking, online tax consultancy and facilitation in filing tax returns.
"We intend to bridge the gap between the government and citizens by acting as a catalyst that takes care of all the tax-related worries of a citizen at the same time assisting the government in transparent tax administration, says Filemyreturns managing director Prasad R.
"With the recent notification from CBDT allowing bulk filing of returns by salaried employees Filemyreturns is uniquely poised to offer these services to the corporates. Our endeavour is to bring the Aaykar Bhavan to the doorstep of the citizen and thereby helping the income-tax department to widen the tax base of salaried individuals and individuals coming under the one by six scheme," he adds.
The tie-up with IDBI Bank, he believes, "will help us to make the Suvidha scheme a success and assist the government in their endeavour to simplify the tax process. We are proud to be associated with IDBI Bank, whose mission is to become technology-led and service-driven company marketing financial services with integrity."
Filemyreturns is the first in a series of services launched by Fin-e-ssential Infotech India Pvt Ltd (FIIPL) whose vision is to become a comprehensive IT-enabled financial services provider and be a prominent leader in business process outsourcing. Their payroll solution, MyPayrollManager, both ownership and outsourcing model, has been well received by the industry. The companys future plans include launching new IT-enabled financial services and entering marketing and distribution of a wide range of financial products offered by other suppliers.
A process-driven company with a professional approach, FIIPL is working towards an ISO-9000 certification. The company uses modern tools and techniques like Failure Modes & Effects Analysis proactively at the design stage itself to failure-proof products and services 2 July 2002 Insurers implement revised motor tariffs
New Delhi: General insurance companies have started giving effect to the revised motor tariffs from Monday despite uncertainty over the impact of the stay granted by the Calcutta High Court on the implementation on the new tariff structure.
Munich Re warns insurance industry of risks
Mumbai: The global reinsurance major Munich Reinsurance Company has warned the insurance industry against ignoring "hitherto underestimated risks and unidentified loss potentials," including the insurance risk emanating from meteorites
ICICI merger adds to higher credit growth this fiscal
Mumbai: Although competition in the banking sector has escalated, the merger of ICICI and ICICI Bank has proved to be a boon to the industrial sector which witnessed over Rs 51,500-crore additional credit flow during the first quarter of this fiscal.
Corporate confidence highest in June: BoJ report
Mumbai: Japanese corporate confidence showed its strongest rise on record in June 2002, beating even the most optimistic forecasts as strong exports cheered big manufacturers, but a surging yen cast a shadow over the outlook.
Dollar slips a shade against euro
Mumbai: The dollar slipped within half acent of the psychologically-important parity level with the euro on Monday, dogged by continued investor disillusionment with US asset markets.
PacificCentury dollar bonds tighten
Mumbai: Dollar bonds of PacificCentury CyberWorks tightened five basis points on Monday after PCCW said it would sell its 40-per cent stake in its wireless joint venture for $614 million to partner Telstra Corp.
Cooperatives lack banking discipline: MoF report
New Delhi: A report prepared by the financial sector division of the ministry of finance has observed that managements and boards of several cooperative institutions, which continue to reflect political interest rather than genuine cooperative spirit, have not been amenable to normal banking discipline in their operations.
Sinha had a tough time
New Delhi: Over the last four years, Finance Minister Yashwant Sinha, and his staff have been used to reports about the minister's exit each time a cabinet reshuffle was around the corner or when a scam broke out in the financial sector.
IDBI Bank to woo clients in local networks
Mangalore: IDBI Bank plans to extend its "customer-centric philosophy" to all customers in its local networks.
IDBI Bank representatives, who addressed a press conference here on 1 July 2002, primarily to attract businessmen to their new schemes, said the bank now covers 61 cities across India, operating 82 branches with a network of 244 ATMs. The number of customers holding retail accounts in the bank are said to have risen to over 6 lakh with more than 30,000 accounts being added every month, according to the representatives. As for Karnataka, the bank has four branches at different locations in Mangalore, Hubli and Bangalore. Revealing details regarding the banks new "current account products" that are expected to "help businesses save," the representatives said Business Premium Current Account and Business Special Current Account schemes offer free fund transfers, free cheque collections and free inter-branch banking, which results in businesses saving substantially on transaction fees. Businesses can now save more than Rs 12 lakh per year with the Business Premium Current Account and over Rs 6 lakh per year with the Business Special Current Account by knocking off transaction costs from their expenses. Dhanalakshmi Bank net up 49% to Rs 10 cr
Kochi: The net profit of the Thrissur-based Dhanalakshmi Bank has grown by 48.74 per cent to touch Rs 10.07 crore for the year 2001-02 as against Rs 6.77 crore recorded for the previous year. The operating profit shot up 105 per cent to touch Rs 50.59 crore (Rs 24.72 crore), a release from the bank has said. The total business of the bank during the year grew by Rs 200 crore to Rs 2,575 crore (Rs 2,375 crore). The average cost of deposits came down from 8.92 per cent to 8.53 per cent, while the cost of average working funds fell from 8.16 per cent to 7.54 per cent. The other income of the bank grew by 127 per cent to Rs 58.76 crore (Rs 25.94 crore). The operating spread also registered a significant increase of 154 per cent. The total non-resident Indian deposits held with the bank increased to Rs 271.42 crore, showing a growth of 16 per cent. The ratio of operating profits to average working funds improved from 1.01 per cent to 2.75 per cent and the return on assets grew from 0.4 per cent to 0.53 per cent. While the business per employee improved from Rs 1.84 crore to Rs 1.99 crore, the earnings per share moved up from Rs 4.57 to Rs 7.07. The capital adequacy of the bank grew to 11.23 per cent as against the Reserve Bank of India-stipulated 9 per cent. The bank recently went in for a rights issue, which was fully subscribed and yielded Rs 27.48 crore. SBT net up 24%, to focus on retail banking
Thiruvananthapuram: State Bank of Travancore (SBT) has recorded a 24-per cent increase in net profits in 2001-02. The bank has projected its total business, excluding investments, to reach Rs 25,000 crore in the current year. The bank had logged a total business of Rs 21,000 crore in 2001-02, earning a net profit of Rs 120.93 crore as against Rs 97.49 crore in the previous year. SBT managing director Amitabh Guha says the banks focus in the current year will continue to be on retail banking and credit deployment in housing, personal and education segments. He says this will help the bank improve its market share as also its credit-deposit (CD) ratio in Kerala. "As of now, the CD ratio is around 46 per cent and efforts will be made to take it to the level of at least 50 per cent during the current year."
In 2001-02, SBTs deposits had increased by 16.30 per cent to Rs 13,460 crore, while the advances grew by 16.22 per cent to Rs 7,436 crore. During the year, the gross non-performing assets (NPA) came down to 9.41 per cent from 11.38 per cent, while the net NPA declined to 5.72 per cent from 7.75 per cent. The bank has declared a dividend of 30 per cent for the year, same as the previous year. HSBC introduces free EDCA for exporters
Mumbai: The Hong Kong and Shanghai Banking Corporation Ltd (HSBC) has introduced an electronic documentary credit advising (EDCA) system for exporters in India free of charge. EDCA is a quick and easy way for exporters to receive copies of export documentary credits in their favour, direct to their office by e-mail or fax, say HSBC officials. LIC introduces Bima Nivesh Triple Cover
Mumbai: Life Insurance Corporation of India (LIC) has launched a new life insurance plan: Bima Nivesh Triple Cover. This is a short-term (10-year), single premium scheme which envisages payment of thrice the basic sum assured in the event of the death of the policyholder during the term of the policy. As against this, the basic sum assured along with guaranteed additions and loyalty addition will be payable to the policyholder at the end of the term of the policy, an LIC spokesman says. Guaranteed additions will be made at a compound rate of Rs 60 per 1,000 sum assured per year accruing at the end of each policy year. Loyalty additions will depend on LICs experience with regard to interest, mortality and expenses. The minimum and maximum sum assured under the plan is Rs 25,000 and Rs 10,00,000, respectively, and it is open to those in the age group of 18 to 50 years. LIC managing director and current-in-charge A Ramamurthy says unlike LICs other triple cover high-risk policies like Jeevan Mitra Triple Cover and Jeevan Griha Bima Nivesh Triple Cover provides for payment in the single-premium mode. IDFCs MoU with Tami Nadu government
Chennai: It can be called a surprise memorandum of understanding (MoU) that has been signed between the Tamil Nadu government, known to practice populism instead of economic pragmatism, and the Infrastructure Development Finance Company (IDFC), a financial institution that is embracing private capital by entering infrastructure projects.
As per the MoU, IDFC will advice the Tamil Nadu government on policy frameworks and strategies to attract and accelerate investments in infrastructure projects in the state. The agreement is to help the state government to expedite orderly development of power, ports, roads, water, agriculture, tourism, health, education, industrial parks and telecommunications sectors.
The state government expects IDFCs financial participation in projects to be taken up through public and private partnerships. Some of the projects identified include the second IT park and Dr MGR Knowledge City in Chennai, and projects in roads, transport, tourism and agriculture sectors.
The funding by IDFC will be project-specific while the Tamil Nadu Industrial Development Corporation will be the nodal agency for implementing the MoU. Initially IDFC will be advising the state government on its own, and based on the progress it will form a 51:49 joint venture (JV) company with the state.
IDFC has a similar JV with the Karnataka government called iDeCK. The company is also advising the Kerala government. Plans are afoot to float a separate JV for a better focus plan, as Kerala is now on a progressive mood to attract investments.
Says IDFC managing director and CEO Nasser Munjee: "In Tamil Nadu we will review the existing policy and regulatory framework to attract private participation. We will also analyse the reasons for some private projects coming to an halt and take measures to complete them."
Munjee says Tamil Nadu Chief Minister J Jayalalithaa is interested in solving the drinking water problem faced by Chennai. "She talked about setting up small desalination plants along the coastline to solve the water problem. The issue of special economic zones (SEZs) in Tamil Nadu was also discussed in a meeting with her."
"One has to have two strategies for that one for SEZ and another for the city in which the zone is located. Both the strategies should sync," says Munjee. Surprisingly, the prospect for a SEZ in Chennai, where the civic infrastructure is extended beyond its limits, is also under consideration.
The other Chennai-specific proposal is building a sky-bus project (costing Rs 40 crore per kilometre) or introducing high-capacity buses (Rs 6 crore) for urban transport. "IDFC is looking at a sky-bus pilot project in Mumbai, too," he says.
On the agriculture front, IDFC will help the state in building post-harvest infrastructure like cold storage, markets and wasteland development.
The MoU is expected to increase the state governments interaction with the only financial institution based in Chennai. Earlier IDFC was given a cold shoulder by the state government as the companys top brass operated out of its corporate office in Mumbai.
This was despite the fact that Mumbai is Indias financial capital and it makes economical and financial sense for any CEO of a financial institution to be based there. But its well known that populism and economic pragmatism do not sync.
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