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13 Sep 2002

Old mutual open to higher OM Kotak pie
Mumbai: Old Mutual, the foreign partner of OM Kotak Mahindra Life Insurance Company, is ready to hike its stake in the joint venture if the Government of India so permits.

RBI okays Dhanalakshmi Bank rights shares allotment
Mumbai: The Reserve Bank of India has cleared the allotment of shares of the recently concluded rights issue of the Thrissur-based Dhanalakshmi Bank Ltd.

RoNW of old private banks is higher than new counterparts
Old private sector banks return on net worth is higher compared to that of new private sector banks during 2001-02.

SBBJ slaps notices to defaulters for Rs 41 crore
Mumbai: Taking advantage of the new debt Ordinance, the State Bank of Bikaner & Jaipur has issued 409 notices involving Rs 41 crore to wilful defaulters.

Vote for voting rights
For voting rights of shareholders in banks to change an entire set of Acts has to be changed by Parliament and the Finance Ministry is in no mood for it. Voting rights (as they stand now) vary with the organisational structure of the banks.

No pressure on profit margins, says HDFC
Hyderabad: Despite slashing interest rates on advances several times in the recent past, Housing Development Finance Corporation Ltd (HDFC), the market leader in the housing finance sector with over 50 per cent share, finds "no pressure on its profit margins and hopes to maintain the same level of growth rates in both top and bottomline even during the current fiscal year.

IDBI Bank gets BNP `merchant' portfolio
Mumbai: IDBI Bank has acquired a portfolio of over 2,500 merchants establishments from the French Bank, BNP Paribas.

ICICI Home Finance to hold property show
New Delhi: ICICI Bank Home Loans and ICICI Bank Home Search, the property search division of ICICI Bank, will hold a three-day property exhibition at Hotel Samrat in the Capital from September 14 to 16.

Much at stake for Govt in IFCI bail-out
New Delhi: Fears of a severe dent of the country's image abroad and the possibility of an adverse political fallout within is likely to force the Government to drop the option of closure of IFCI Ltd as part of the restructuring package that is being finalised for the institution.

Crunch in call money despite surplus liquidity
Mumbai: In the inter-bank call money market on Friday, the call rates went as high as 6.25 per cent. Said the chief dealer of a primary dealer, "Call rates have not crossed six per cent in several months.'

ICICI Home Finance to hold Housing Fairs
New Delhi:
ICICI Bank Home Loans and ICICI Bank Home Search, the property search division of ICICI Bank, will hold a three-day property exhibition at Hotel Samrat, New Delhi, from 14 to 16 September 2002.

The exhibition, styled ICICI Bank Home Utsav, will not only provide information on the various home loan schemes offered by ICICI but also has a virtual display of over 50,000 new and resale properties in and around Delhi such as Gurgaon, Noida and Ghaziabad, says ICICI Home Finance Company Ltd COO Rajiv Sabharwal.

"Around 20 leading developers such as DLF Universal, Unitech, Omaxe and Ansal Housing are going to participate in this exhibition, and on display will be more than 100 projects," he adds.

ICICI Bank Home Loans will offer a discounted interest rate of 9.75 per cent to those who opt for spot sanctions for a period between six and 10 years, and a 10.25-per cent rate of interest for a repayment period stretching between 11 and 20 years. Sabharwal says the bank will also reduce the total fee, originally 1 per cent of the loan amount, to 0.5 per cent during the exhibition.

"The unique selling point of this housing exhibition is that we have information on the properties as well as loan offers under one umbrella," says Sabharwal.

The company has already organised similar exhibitions in Mumbai, Chennai, Bangalore and Hyderabad. Sabharwal says the company has made around 1,000 sanctions in each of these cities during the exhibition and expect at least 10,000 walk-ins in Delhi.

"The Delhi market size is around 15 per cent of the total market in India, and we expect a good response," he adds. After the exhibition in Delhi, the company plans to hold a similar exhibition in Kolkata, followed by B category towns.

IDBI Bank acquires BNPs merchant portfolio
Mumbai:
IDBI Bank has acquired a portfolio of over 2,500 merchant establishments from BNP Paribas, the French bank.

This acquisition is in anticipation of the banks launch of its debit card. The banks Visa Electron Debit Card is to be issued to the banks over-6,40,000 customer accounts.

Following the French banks exit from retail banking a few months ago, the merchant-acquiring portfolio, spread across seven cities, was seen redundant.

The merchant acquiring business is estimated at Rs 10,000 crore

per annum and is expected to grow at 25-30 per cent annually.

13 Sep 2002

IFCI eyes strategic partnerships
New Delhi: IFCI Ltd is on the lookout for strategic partners for itself and its asset reconstruction company. IFCI via its ARC is also in talks with a few players to sell its NPA portfolio either in selected or a bundled form.

HDFC, SBI set to dilute stakes in Cibil
Mumbai: HDFC, and SBI which hold 40 per cent each in the Credit Information Bureau of India Ltd, will divest their stakes to make way for other market participants.

New Basel pact to be multi-formated
Mumbai: The new Basel Capital Accord Committee is unlikely to force all countries and banks to adopt a single format of norms irrespective of their specific circumstances, but will offer an option to choose from three models, according to BIS GM, Andrew Crockett.

Geojit Securities to shift client a/cs to UTI Bank
Kochi: In a bid to expedite settlement pay-out in a more efficient manner, Geojit Securities has decided to shift all its personal and client accounts to UTI Bank.

LIC announces bonus rates
Mumbai: Life Insurance Corporation (LIC) has declared a bonus of Rs 100 per thousand sum assured for Whole Life policyholders. For endowment type policies, the corporation has announced a bonus in the range of Rs 49 to Rs 71 per thousand sum assured.

Oriental cleans up motor cover losses; still in red
New Delhi: In a major clean-up exercise, Oriental Insurance Company Ltd (OIC) has made total provisions of Rs 246.4 crore during 2001-02 to cover up its losses in its motor portfolio, resulting in the company showing a net loss of Rs 235.66 crore during the the year compared to a net profit of Rs 74.18 crore in the previous year.

RBI directs Global Trust to change auditors
Mumbai: The Reserve Bank of India has rejected the request of Global Trust Bank (GTB), the Hyderabad-based private sector bank, for reappointment of Lovelock & Lewes, Chartered Accountants, as the statutory auditors of the bank for the financial year 2002-2003.

Injunction on Federal Bank vacated
Kochi: The interim injunction granted by the sub-court of Alappuzha restraining Federal Bank from declaring the results of the director board elections held on August 29 has been lifted by the court.

SBI interaction with CAs
Mangalore: The branches of State Bank of India in Mangalore organised a `Chartered accountants' meet' to highlight the bank's various personal and commercial segment products available to individuals, industrialists and the trading community.

Banks halt IFCI support plans pending revival package
New Delhi: Banks have also decided to hold back any further decision on rollover of their investments in IFCI's instruments that have come up for redemption recently.

IFCI in talks for asset recast venture partner
Mumbai: In a bid to select an equity partner for its asset reconstruction venture, IFCI has initiated talks with Deutsche Bank and a few other foreign companies.

ICICI Bank files prospectus for Safety Bonds
Mumbai: ICICI Bank is likely to hit the retail debt market with the erstwhile ICICI's popular series of bonds called `Safety Bonds'. The bank has filed an umbrella prospectus with the Securities and Exchange Board of India (SEBI) to raise Rs 2,500 through retail issues of bonds.

Andhra Bank cuts rates on term deposits
Hyderabad: Andhra Bank, the public sector bank, has announced a revision in its interest rates on both domestic and NRE term deposits.

Better show by banking sector, says Fitch
Mumbai: Indian banks have, over the past few years, improved their capital adequacy ratios. On an average, the reported capital adequacy ratio of public sector banks improved by a percentage point to 11.43 per cent for fiscal year 2002 from 10.43 per for fiscal year 2002 from 10.43 per cent for the previous year, according to Fitch Ratings India.

Om Kotak plan for non-tobacco users, women
Mumbai:
Om Kotak Mahindra Life Insurance Company has announced the launch of its latest product Kotak Preferred Term Plan (KPTP). The plan is a one-of-a-kind pure risk product that aims to cover preferred lives at a nominal cost.

The plan offers special benefits of lower premium rates to people who meet the "preferred lives" criteria non-tobacco-consuming men over the age of 25 and women over the age of 25. This plan is also ideal for covering outstanding debts like mortgages, home loans due to its low-premium rates.

"This is the first product of its kind in the Indian insurance industry that rewards consumers for not consuming tobacco," says Om Kotak Mahindra Life Insurance Company chief marketing officer Treman Ahluwalia. "Apart from the affordability of the product as demonstrated by the low premium applicable to preferred lives, this product also reinforces the OMKM philosophy of jeene ki azaadi by helping consumers maximise their life cover."

"The plan will help working women over the age of 25 who have financial responsibilities to cover themselves at a lower cost. We hope that women in India benefit from this plan especially since we have designed the plan to be affordable as well as flexible for our consumers," says Om Kotak Mahindra Life Insurance Company managing director Shivaji Dam.

The plan, besides offering a lower premium to preferred lives, also differs from the existing Kotak Term Assurance Plan with respect to the maximum term, which has been increased from 20 to 30 years. It is also ideally suited for those wanting to take a sum assured of greater than 10 lakh, as there is no restriction on the amount of sum assured in Kotak Preferred Term Plan.

The plan is available with options for regular premium payment or single premium payment. In the case of the regular premium payment option, premiums may be paid in either annual, half yearly or quarterly instalments.

The term for regular premium ranges from 10 to 30 years and five to 30 years for single premium. The minimum age eligible for this plan is 18 years and the maximum age is 60 years. The maximum age that the plan can provide cover for is 70 years.

The plan can be converted into any other plan offered by OMKM (except for another term plan) provided at least five years remain before the cover ceases. In case of a missed premium by the due date, the customer is entitled to a grace period of 30 days from the date of unpaid premiums. In a financial emergency, the policy may be surrendered in the case of the single premium payment option.

The plan also offers riders like the accidental death benefit, permanent disability benefit and critical illness benefit for a nominal premium. OMKM, launched in Mumbai in May 2001 with three products, now offers a total of nine products, including six individual plans, two group insurance products and one product aimed at the rural market. These products are available with combinations of six attractive riders.

OMKM is currently operational from 27 cities across India, with a strong distribution force of over 2,200 life advisors and over 25 corporate agents to distribute its policies. The company has its own state-of-the-art training centre at Mumbai and has also received accreditation from Insurance Regulatory Development Authority to conduct its own training for its life advisors. An ORG-Marg survey named Om Kotak Mahindra Life Insurance Company the third most recognised private life insurance brand in India.

Om Kotak Mahindra is a joint venture between Kotak Mahindra Finance Ltd (KMFL) and Old Mutual plc. KMFL is one of Indias leading diversified financial services companies, with operations covering auto and consumer finance, asset management, investment banking, securities trading and research and has group net worth of over Rs 900 crore.

Old Mutual plc is an international financial services group based in London with 157 years experience in life insurance, asset management and banking. It has a total asset under management to US $208 billion as on 31 December 2001.

Life insurers go easy on catastrophes: Mony
Chennai: In a short and snappy telephonic interview, former chairman of General Insurance Corporation of India (GIC) and now CEO, AMP Sanmar Life Assurance Company, S V Mony discusses the after-effects of 9/11 on the Indian insurance industry.

Prior to his stint as GIC chairman (1991-95) Mony, a mathematics / statistics graduate and a fellow member of the Chartered Insurance Institute, London, headed Indias largest non-life insurance company, the New India Assurance Company.

On the Indian public sector general insurers reaction to the Mumbai bomb blasts in 1993.
At that time, neither GIC nor its four subsidiaries thought about escaping the liabilities; in fact, such a thought never occurred. We only discussed the nomenclature of damages under the policy conditions. The only discussion we had was whether the bomb blasts damage should be classified as terrorist or civil commotion risk.

Looking back, what impact did the 9/11 attacks in New York have on Indian insurers?
Catastrophic losses are not new to general insurance. But the risk of aircraft damage of this magnitude was never in the horizon. General insurers worldover have gone back to their drawing boards to redraw their risk cover strategies. Already the effects are visible. Earlier, the risk of terrorism was offered as an add-on cover. Now it is not so. Similarly, Indian general insurers have decided to form catastrophe reserves with their contributions. How far the corpus will be sufficient to meet a major loss is a question.

On the insured.
The insuring population, unlike earlier times, is going in for full insurance rather than trying to save few thousand rupees by cutting on risk coverage.

The impact on life insurance sector.
On the life insurance side, the risk of urban agglomerate was underestimated, and the risk continues. And on the catastrophic loss potential, the life insurers are taking it easy.

On the lessons for reinsurers.
The lessons will never be learnt. But consolidation will happen in the reinsurance industry.

Can life insurers load their premium if their policyholders work or live in trophy buildings and constructions that are potential terrorist targets?
Theoretically it is possible. But competition will see that such prudent underwriting does not take place.

IFC to invest Rs 120.5 crore in Usha Beltron
Mumbai:
International Finance Corporation (IFC), the private sector financing arm of the World Bank, is investing Rs 120.5 crore in Usha Beltron Ltd (UBL), a steel wire ropes and wires manufacturer.

The financial package drawn up between the IFC and UBL consists of Rs 17.5 crore in the form of equity participation. This entails a fresh issue of up to 5.35 million equity shares at a price of Rs 33 per share (a premium of Rs 28 for each share with a face value of Rs 5 each). On an increased equity of Rs 35 crore, IFC will hold 14.5 per cent of the paid-up capital. The balance of Rs 103 crore will be extended as a loan to the company.

This infusion of the funds is part of UBLs Rs 252-crore investment plan over the next three years to strengthen its balance sheet, reduce the operating costs and increase the capacity utilisation from 72 to 80 per cent. This capital expenditure will include setting up a direct reduced iron plant for backward integration and building a captive co-generation power plant to produce power using cost-efficient and environment-friendly technology.

"IFCs global expertise in manufacturing has benefited us immensely in focussing on our core business of steel wire ropes and wires. In this long-term partnership with IFC, we look forward to maintaining the best international standards in corporate governance and environmental and social responsibilities," says UBL chairman B K Jhawar.

UBL has two main steel manufacturing facilities in Ranchi and

Jamshedpur. It also has manufacturing subsidiaries in the UK and Thailand.

IFC may invest in Indian housing, IT sectors
Mumbai:
The International Finance Corporation (IFC), the private sector funding arm of the World Bank, is looking for new avenues for investment in India. IFC has identified housing finance, information technology (IT) and infrastructure as the key sectors for financing this fiscal.

IFC is already in talks with several IT companies, and is also evaluating housing finance and infrastructure sector companies for investment. "Housing finance seems to be growing rapidly in India and presents an attractive opportunity for us to invest. We will like to extend both debt and equity support to this sector," says IFC director (South Asia region) Dimitris Tsitsiragos.

Tsitsiragos says the absence of venture capital funds for the IT sector provides them enough room to fund the sector, which is on the threshold of revival. "Though we will like to fund infrastructure projects, there are several bottlenecks in doing so. We are still evaluating prospective funding in this sector."

He adds that IFC is bullish about its India operations and intends to pump in over $200 million this fiscal (1 July 2002 to 30 June 2003) in various projects. This is a substantial jump over the last fiscal financing, which was to the tune of $110 million.

About IFCs increased focus on India, Tsitsiragos says the corporation, at its board meeting recently, had cleared the funding of several corporates, including Telco, Apollo Tyres, Escorts Telecom, Mahindra and Mahindra and Cifco. "We want to develop a local financial market here and bring the commercial banks parallel with us. We will also facilitate foreign institutions to increase their exposure in the Indian market."

IFC has also decided a number of new products for the Indian market. It has already guaranteed bonds of Ballarpur Industries and the Bharti group and has also disbursed a number of rupee loans. "We are talking with the electricity distribution companies in New Delhi to provide them with soft finances," says Tsitsiragos.

12 Sep 2002

Old mutual open to higher OM Kotak pie
Mumbai: Old Mutual, the foreign partner of OM Kotak Mahindra Life Insurance Company, is ready to hike its stake in the joint venture if the Government of India so permits.

RBI okays Dhanalakshmi Bank rights shares allotment
Mumbai: The Reserve Bank of India has cleared the allotment of shares of the recently concluded rights issue of the Thrissur-based Dhanalakshmi Bank Ltd.

RoNW of old private banks is higher than new counterparts
Old private sector banks return on net worth is higher compared to that of new private sector banks during 2001-02.

SBBJ slaps notices to defaulters for Rs 41 crore
Mumbai: Taking advantage of the new debt Ordinance, the State Bank of Bikaner & Jaipur has issued 409 notices involving Rs 41 crore to wilful defaulters.

Vote for voting rights
For voting rights of shareholders in banks to change an entire set of Acts has to be changed by Parliament and the Finance Ministry is in no mood for it. Voting rights (as they stand now) vary with the organisational structure of the banks.

No pressure on profit margins, says HDFC
Hyderabad: Despite slashing interest rates on advances several times in the recent past, Housing Development Finance Corporation Ltd (HDFC), the market leader in the housing finance sector with over 50 per cent share, finds "no pressure on its profit margins and hopes to maintain the same level of growth rates in both top and bottomline even during the current fiscal year.

IDBI Bank gets BNP `merchant' portfolio
Mumbai: IDBI Bank has acquired a portfolio of over 2,500 merchants establishments from the French Bank, BNP Paribas.

ICICI Home Finance to hold property show
New Delhi: ICICI Bank Home Loans and ICICI Bank Home Search, the property search division of ICICI Bank, will hold a three-day property exhibition at Hotel Samrat in the Capital from September 14 to 16.

Much at stake for Govt in IFCI bail-out
New Delhi: Fears of a severe dent of the country's image abroad and the possibility of an adverse political fallout within is likely to force the Government to drop the option of closure of IFCI Ltd as part of the restructuring package that is being finalised for the institution.

Crunch in call money despite surplus liquidity
Mumbai: In the inter-bank call money market on Friday, the call rates went as high as 6.25 per cent. Said the chief dealer of a primary dealer, "Call rates have not crossed six per cent in several months.'

11 Sep 2002

OIC makes Rs 246-crore provision for third party claims
New Delhi: In a brave decision to identify and rectify its weaknesses, city-based Oriental Insurance Company has decided to take a Rs 246.4-crore hit on account of third party motor liability provisioning and clean up its 01-02 balance sheet.

Allahabad Bank, ICICI Prudential in bancassurance tie-up
Kolkata: Allahabad Bank, which is headquartered here, announced Tuesday it had entered into a strategic bancassurance tie-up with ICICI Prudential Insurance Co Ltd.

Bank of Americas Japan unit faces penalty
New Delhi: Japans securities watchdog said on Tuesday it had urged punitive administrative action against the Tokyo branch of a Bank of America unit for alleged illegal business practices involving exchangeable bonds.

Experiment in LAB unsuccessful
Mumbai: The RBI has set up a committee to review the working of Local Area Banks (LABs) as the experiment, introduced by P. Chidambaram, former Finance Minister, has not been particularly a success.

Forex release norms relaxed
Mumbai: The Reserve Bank of India (RBI) has permitted banks to release up to $500 worth of foreign exchange on the basis of a simple letter from resident individuals.

Corpn Bank to expand home loan portfolio
Mangalore: Corporation Bank has decided to push its home loan schemes on the basis of its "attractive interest rates'. The bank expects to record good volumes in the home loan segment during the remaining part of the current fiscal.

Reinsurance rate hike may drive up project premiums
Bangalore: Domestic project insurance premiums are likely to face further rise with a hardening of reinsurance rates worldwide. Industry sources said here that this was a direct result of the large underwriting losses suffered by the world's largest reinsurers, Munich Re and Swiss Re.

Godrej & Boyce CP gets `P1'
Mumbai: Crisil has assigned a rating of `P1' for the Rs 60-crore commercial paper (CP) programme of Godrej & Boyce Manufacturing Company Ltd.

South Indian Bank `privilege card'
Kochi: Blending tradition with technology, the South Indian Bank has introduced a multi-purpose card named `SIB Privilege Card' for its customers. The card will not only serve as an ATM card but also for anywhere banking at networked on-line branches all over the country.

Bank of India corporate banking branch at Coimbatore

Coimbatore: Bank of India has embarked on a project of establishing `corporate banking' branches to cater to the needs of its corporate clientele. It has established such exclusive boutiques in eight places New Delhi, Kolkata, Chennai, Mumbai,Nagpur, Ahmedabad, Pune and Bangalore.

Bank wage talks to kick off soon
New Delhi: The battle lines have been drawn for the eighth bipartite wage settlement in the public sector banking industry. The Indian Banks' Association (IBA) and the unions under the umbrella United forum of Bank Unions (UFBU) are preparing to initiate negotiations in the coming days that would determine the new wage structure over a five-year period for the 7,57,000-odd employees working in the 27 public sector banks, which include officers, clerical cadre and other staff.

Central Bank spots `excess manpower'
Coimbatore: There is an air of unease among the staff. They perceive this study as a prelude to the second VRS in the bank.

Co-op banks in Gujarat - A crumbling edifice
Ahmedabad: The customer would not be too interested in the post-mortem that invariably follows a particular bank collapse. What is of paramount importance is how another debacle like the one that hit the Surat Urban Co-operative Bank, can be averted.

AP co-op bank licence cancelled
Mumbai: The Reserve Bank of India (RBI) has cancelled the licence of Andhra Pradesh-based Armoor Co-operative Urban Bank Ltd, to carry on banking business.

US-64 to get 2002 sibling under UTI-II
New Delhi: The Unit Trust of India plans to split its flagship scheme US-64. UTI plans to slice off assets which have accrued in the scheme since January 1, 2002, and form a separate scheme christened US-2002.

Punjab National Bank to pocket Nedungadi Bank
Kochi: Punjab National Bank will take over the Nedungadi Bank that was up for sale after RBI initiated the move to weed out the broker promoter Rajendra Bhantia from the bank. The Bhantias hold 32 per cent stake in the Kochi-based bank.

Allahabad Bank to sell ICICI Pru products
Kolkata:
Allahabad Bank has entered into a strategic bancassurance tie-up with ICICI Prudential Insurance Co Ltd.

Allahabad Bank CMD B Samal says under the tie-up, his bank will distribute ICICI Prudentials life insurance products in Kolkata. ICICI Prudential will offer its entire bouquet of life insurance products to the customers of Allahabad Bank through its financial service consultants.

ICICI Prudential managing director Shikha Sharma says the bancassurance arrangement model is based on the Referral Model. Under this model, ICICI Prudential will be offering its entire bouquet of life insurance products to the customers who walk into Allahabad Banks branches, she says.

Samal says at the initial stage, Allahabad Bank will offer ICICI Prudentials insurance products from its retail banking boutiques, which are the banks dedicated retail lending outlets. Our retail banking boutiques have a customer base of 1.8 lakh and we expect to sell 5,000 insurance policies in the first six months.

He further says that after the initial launch from Kolkata and Delhi, arrangements will be extended to other cities in Uttar Pradesh, Madhya Pradesh and Bihar.

PNB all set to take over Nedungadi Bank
New Delhi
: Punjab National Bank (PNB) is set to take over Nedungadi Bank .The banking division under the ministry of finance is currently processing the application on the part of PNB. The Reserve Bank of Indias (RBI) approval for the takeover has already been obtained.

The acquisition will be as per the internal valuation done by the RBI recently. After the internal valuation, the central bank had restricted the Bhantias - the majority equity-holders of the bank - from being on the banks board.

Both the banks are listed following PNBs listing after its maiden initial public offering in March 2002. PNB closed at Rs 43.7 on the Bombay Stock Exchange (BSE) on 9 September while Nedungadi Bank closed at Rs 30.5 on the BSE. PNB had a volume of 25,125

shares on the BSE and 80,502 on the National Stock Exchange (NSE) while a total of 5,425 shares had traded on the NSE in the case of Nedungadi Bank and 949 shares on the BSE.

09 Sep 2002

The rupee story: a winner all the way
Mumbai: "We have no set limit for the rupee to appreciate." This is the message that the Reserve Bank of India has been sending whenever the question is asked about an appreciating rupee.

Micro-finance gets a leg-up from Sa-Dhan
New Delhi: The apex federation of micro-finance institutions in the country, Sa-Dhan has drawn up an action plan to enhance the flow of funds to 250 million poor below the poverty, who do not have access to formal banking institutions.

UTI approaches SEBI to reset returns for assured schemes
New Delhi: Unit Trust of India has informed the Government that it has moved the Securities and Exchange Board of India (SEBI) to re-set the returns in several of its Monthly Income Plan (MIP) schemes, in which both the principal and the annual dividends are assured.

PSU insurers turn active treasury players on underwriting losses
New Delhi: The four public sector insurance companies have decided to desist from purchases of equities and debt securities that they have already sold. Sources said here that the decision was not permanent.

Bank of Tokyo officers accept package
Kolkata: As many as 16 out of a total 19 officers of the closed branch of Bank of Tokyo-Mitsubishi in the city have accepted the compensation package offered by the bank management.

RBI Annual Report for 2001-02 - Creditable financial management
Mumbai: The RBI's Annual Report for 2001-02 tells a credible and creditable story of an economy well-managed, both on the domestic and external fronts, with reasonable price stability and a rate of growth that exceeds that of many other similarly placed countries.

SBI's credit pick-up at Rs 3,000 cr
State Bank of India has registered Rs 3,000-crore pick-up in credit in the first five months of the current fiscal, according to the Chairman, Mr Janki Ballabh.

SBI aims to increase farm credit
Kochi: State Bank of India plans to increase its share in the agricultural lending (AGL) market in Kerala from 10.3 per cent during the current fiscal.

Traders shy away from State Govt papers
Mumbai: Interest in State Government securities appears to have completely vanished with spreads for most of them rising to as high as 600 basis points over sovereign yields.

Asset recast co alone will not do to resolve NPAs, says IMF
New Delhi: The International Monetary Fund (IMF) has described it as "nave" to expect that the setting up of the asset reconstruction company (ARC) alone would be the "panacea" for the resolution of the non-performing asset (NPA) problem of the Indian banking system, even as "the ARC provides a potentially useful tool to facilitate bank and corporate restructuring".

SBIs credit off-take at Rs 3,000 cr: Ballabh
Mumbai: State Bank of India has registered Rs 3,000-crore off-take in credit in the first five months of the current fiscal, says SBI chairman Janki Ballabh.

Ballabh says the credit pick-up is encouraging unlike the same time last year when the bank was actually recording a negative growth in credit. We are confident that we will be able to meet our target of disbursing Rs 7,000 crore through our retail segment by the end of this financial year.

Despite cutting interest rates on housing loans twice in a span of two months, Ballabh says there might be room for further reductions in housing loan rates. Cost of funds and transactions are coming down and the benefits can be passed on to customers.

RBI cut its housing loans by 50 basis points across the board last month. Apart from the rate cuts, the bank also waived its processing charges of half a percentage for a limited time.

Bank of Tokyo officers compensation package
Mumbai: As many as 16 out of a total 19 officers of the closed branch of Bank of Tokyo-Mitsubishi in Mumbai have accepted the compensation package offered by the bank management.

A bank spokesperson says the package offers, among other things, 20 times the gross monthly salary upfront. The monthly salaries of officers ranged from a low of Rs 35,000 to a maximum of Rs 77,000 each. The management is retaining some of the officers to expedite the winding up process and they are being paid separately for it.

Other components of the package include carry-forward of the housing loans on same terms and conditions, mediclaim insurance premium for the officer and his family for the future, pension irrespective of whether or not s/he is eligible in terms of the banks pension policy and other terminal benefits such as provident fund, gratuity and leave encashment.

The spokesman, however, makes it clear that the closure decision is final and not negotiable. He concedes that none of the 47 workmen of the closed branch had yet accepted the package offered by the bank.

The package includes, among other things, 48 months gross salary upfront. If any workman wishes to opt for the package bypassing the diktat of the union, s/he within his or her rights can do that, he observes.

SBI Life, co-op banks tie up for rural market
Mumbai: SBI Life, State Bank of Indias (SBI) life insurance subsidiary, will go aggressively rural to sell its new life insurance products. The insurance provider has already tied up with various urban cooperative banks in different states to sell its group insurance products to rural India.

Says SBI and SBI Life chairman Janki Ballabh: We have sold around 80 per cent of our insurance products in rural India. The strong network of SBI will help SBI Life to focus more in the rural market. SBI Life has launched an endowment life insurance policy, Sudarshan, and a home loan insurance policy that provides life insurance to home loans.

Ballabh says Sudarshan is an endowment policy designed to provide policyholders with dual benefits of protection as well as savings for the future. The product has a host of flexible features and can be tailored to meet specific needs of the policyholder.

SBI Life managing director and CEO R Krishnamurthy says the endowment policy is available under two different plans. Plan A is where a fixed sum assured is receivable by the policyholder at the end of the term and plan B is where the policyholder can opt for an annual increase of 5 per cent of the sum assured, which would keep pace with the probable inflation trend.

The term offered for this policy is five to 30 years and the sum assured limits are Rs 25,000 to Rs 1 crore in multiples of Rs 1,000. The policy also provides a 30-day money-back guarantee facility to the customers.

SBI Life has also launched a group insurance scheme for home-loan borrowers, providing life insurance cover, accidental death and total permanent disability benefit to those who have availed of home loans.

The scheme will cover customers of SBI to start with and will be extended to cover home loans given by other housing financing agencies. The home-loan policy provides life insurance cover, accidental death and total permanent disability benefit to those who have availed of home loans.


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