24 may 2003
foreign
banks setting up obus in sezs not to get i-t benefits
new delhi: the government has denied branches of
foreign banks operating in india the benefit of tax exemption
under section 80la of the income-tax act, 1961, and the
facility to make investment overseas. this is expected
to 'discourage' them from setting up overseas banking
units (obus) in special economic zones (sezs). a commerce
ministry proposal for granting banks this exemption has
been shot down by the finance ministry. however, eight
applications from indian banks to establish obus have
been approved so far with 24 more expected next month.
of those cleared, four are from the state bank of india
and one each from the central bank of india, punjab national
bank, icici bank and oriental bank of commerce. one of
the obus will be located in the sez coming up in indore
(mp).
iob net at rs 416 crore
new delhi: indian overseas bank (iob) has clocked
a net profit of rs 416.10 crore in 2002-03, against rs
230.21 crore earned in the previous fiscal. it would take
a decision on the timing and premium for its rs 100-crore
initial public offer (ipo) by the end of july, chairman
and managing director sc gupta said. the bank also proposes
to return rs 50-70 crore to the government so that servicing
costs can be reduced, but the plans are at a very preliminary
stage, he added. the government at present owns 75 per
cent of the bank's equity at present. regarding the government's
decision to buy back high-cost securities from banks,
he said iob held rs 843 worth of g-secs in 19 of the identified
24 categories. in case it were to dispose of them all,
it would stand to gain about rs 225 crore. however, it
would finalise its response in about a week.
bank of maharashtra prefers compromise deals on npas
hyderabad: bank of maharashtra (bom), the rs 28,500-crore
public sector bank that is planning to tap the capital
market shortly with its initial public offer, is not keen
on taking advantage of the securitisation act and attach
the assets of its defaulters for early recoveries. the
bank is of the view that it does not have adequate expertise
in managing or disposing of those attached assets to recover
its dues from the defaulters. instead, it prefers to utilise
the provisions of the securitisation act to bring its
defaulters to the negotiations table and execute compromise
deals towards early recovery of non-performing assets,
the bom chairman and managing director, sukmal chandra
basu, said.
irda seeks more penal powers
new delhi: the insurance regulatory and development
authority (irda) has sought more powers since existing
penalties that can be levied on offenders are "paltry".
an appellate forum to redress appeals against the authorities
is also being considered.
speaking to newspersons, n. rangachary, chairman, irda,
said: "what, perhaps, the insurance act of 1938 lacks
is sufficient penal machinery to take action against defaulters."
currently, penalties are very low and insignificant, ranging
between rs 100 and rs 1,000, depending on the nature of
the offences.
iob plans second public issue in sept
new delhi: indian overseas bank (iob) will be hitting
the capital market around september with its second public
issue of equity shares, aggregating rs 100 crore. the
issue would result in pruning the government holding in
the bank to 61 per cent from the present 75 per cent.
iob had come out with its initial public offer (ipo) in
september 2000. at a press conference here on friday,
the iob chairman and managing director, s.c. gupta, said
the details of the issue would be finalised by end-june.
he said going by the share's current market price, which
is hovering around rs 24, he would expect the premium
to be around rs 10 on a share of rs 10 face value.
sidbi sanctions up 21 pc
mumbai: even as long term re-finance has become
redundant in a soft interest rate regime, small industries
development bank of india (sidbi) for the financial year
ended march 31, 2003 grew its aggregate sanctions by 20.8
per cent to rs 10,904 crore from rs 9,025 crore in the
previous year. the refinance institution has declared
a dividend of 10 per cent. the growth in disbursements
is mainly attributed to the introduction of short-term
loans with tenors between 6 and 12 months at 6.75 per
cent. however, the long-term refinance for above rs 2
lakh at 10.25 per cent finds no takers in today's falling
interest rate regime.
rbi fiat on currency handling
chennai: the reserve bank of india on friday exhorted
banks to speed up currency handling automation. at a meeting
with the top brass of the south-based public sector banks,
rbi's deputy governor, vepa kamesam, told the banks to
quickly install enough of `currency verification and processing
systems' and `notes banding, bundling and counting machines'.
this is in furtherance of rbi's `clean note policy'. the
rbi's regional director (south), b. ghosh, said that since
september 2001, when rbi began large scale lifting of
soiled notes, in tamil nadu and pondicherry alone 2.3
billion pieces of notes were destroyed.
banks told to take over currency chests
chennai: banks have been asked to take over the
currency chests which are at present managed by the various
state government treasuries, sources in the rbi said on
friday. this, it is understood, is part of the rbi's `clean
note policy'.
sources said that there were 311 currency chests with
the banks in the southern region (the four southern states)
and 65 more with state governments' treasuries. actually,
there were 90 currency chests with the state governments,
but recently the state bank of india took over 25 of them.
23 may 2003
stern
spots 3 focus issues to achieve 8 per cent gdp growth
bangalore: world bank chief economist nicholas
stern has said that india's increasing public debt may
hamper the country's goal of achieving eight per cent
gdp growth in the tenth plan period by squeezing out investments.
making his presentation on 'opportunities for india in
a changing world' on the second day of the three-day world
bank's annual bank conference on development economics
(abcde) on thursday, stern said india needs to hasten
the reform process to reach the targeted eight per cent
growth rate. stern also said that rich countries should
back their pledges to help reduce poverty by removing
trade barriers on exports from developing countries and
increase aid. rich nations should "ease trade restrictions,
increase aid flows to countries engaged in fundamental
reforms and support enhanced capital flows to developing
countries", he said.
abn amro to offer home loans
kolkata: dutch banking major abn amro will take
two major initiatives in 2003. first, it will launch its
housing loan business. second, its newly formed asset
management company will offer a public issue. the announcements
were made by ramesh sobti, executive vice-president and
country representative of abn amro bank nv (india), at
a press conference here. he was in the city for the opening
of abn amro's new branch which has a ``bancafe''.
time to review fci funding norms
mumbai: the first moves to alter the style and
substance of bankrolling the food corporation of india
have been made with the reserve bank of india and the
finance ministry setting up teams to look into details.
perhaps, the best way to trim the financial load on banks
is to get over the habit of a yearly mark-up in minimum
support prices for rice and wheat. this has distorted
price trends; but bankers know it will not happen as politicians
have to keep farmers in good humour. the alternative,
which can be made to work, could be to go for differential
pricing of funds given to fci for conducting food security
operations. banks could be told by rbi to price funds
at around 10 per cent for fci to run a minimum buffer
stock operation. for holding stocks anything above the
minimum, banks could be given the freedom to mark up the
price of money, which could force fci to turn a bit more
efficient. reluctant banks could be given the freedom
to opt out.
abn amro to expand chennai back office
chennai: abn amro bank is all set to expand its
back office operations based in chennai by taking an additional
30,000 sq ft of space and hiring 300 more persons. this
decision has been taken after the success of the global
support centre (gsc), which the bank established a year
ago, douglas maclean, global head of cash & payment
operations, said on thursday.
lic entry may change card business rules
coimbatore: the report that lic is toying with
the idea of entering the credit card business offering
low interest rate for carried forward balance has come
as a boost to millions of cardholders groaning under the
impact of high interest levied by most of the card issuers
in the country. lic's plan, once it materialises, is set
to re-write the way the credit card business is run in
the country with the highest interest rate being charged
despite the liberalised interest rate scenario.
ministry halts irda move on motor tariffs
new delhi: dealing a potentially debilitating blow
to the plans to detariff motor insurance, the ministry
of finance has asked the insurance regulatory and development
authority (irda) to put a halt to the ongoing process.
the ministry has suggested that in view of the serious
disagreements over the issue, irda should instead initiate
a fresh round of discussion by preparing a `consultation
paper' to evolve a wider consensus before concrete steps
are taken towards dismantling the present system.
the finance ministry has backed its suggestion citing
the serious disagreements within the committee on detariffing
that had recently submitted its report to irda. though
the finance ministry did not find a representation in
the 20-member detariffing panel headed by justice t.n.c.
rangarajan, the final report had been forwarded to it
for its comments.
22 may 2003