7 june 2003

hdfc bank, parent in home loan pact
mumbai: hdfc bank is all set to grab its share of the booming housing loan market. the bank will start selling the parent - hdfc's home loan product, by july-august this year. the loans sold will be through the joint effort of the two entities in which the private bank will help source the loans through its branches and direct sales force, while the credit assessment and processing will be handled by hdfc, the largest player in the home loan market, said a senior official in hdfc bank. "the asset will be present in the books of both the entities. if the bank sources say 100 loans, 60-70 per cent of it will be securitised into the bank's books, while the loan amount would be disbursed by the parent,'' said the official. the asset will be securitised as a `aaa' class asset into the books of the bank and npas if any will be the responsibility of the parent, hdfc.

no repo rate cut now, says rbi
mumbai: the reserve bank of india has said that no repo rate cut is expected immediately in the wake of the rate cut by the european central bank (ecb). "we do not expect to make a repo rate cut now for quite sometime, until the monsoon and inflation situation becomes clearer,'' said the rbi in a press release on friday. money market participants had been counting on a 25-50 basis points cut in the ready forward repo rate. the government securities prices fell by 15-20 paise as a knee jerk reaction to this statement. the repo rate currently pegged at five per cent is the overnight rate at which the rbi sucks out excessive funds from the government securities market.

uco bank to open 136 more atms
kolkata: uco bank proposes to open 136 atms at the cost of rs 10 lakh each during the current financial year, to bring the total number of atms to 150 by march 2004. v.p. shetty, chairman of uco, said all the atms would be interconnected. earlier on friday, he launched the diamond jubilee atm channel at the local india exchange branch providing for anytime banking access to the interconnected atms of the bank across the country. nine branches - two each in kolkata and delhi and one each in chennai , bangalore secunderabad , pondicherry and rourkela - have been brought under the inter-connected channel. a customer could register his request for retail loans using the bank's diamond or diamond plus atm card, shetty added.

birla sun life eyes rs 500 cr from premium
mumbai: birla sun life insurance has set itself a target of rs 500 crore for new premium collections thus year, up from rs 170 crore last year, according to the cfo and appointed actuary, peter j. akers. the insurer sold 75,000 policies last year. "we will increase our focus this year on corporates for the group life and superannuation plans,'' he said, adding that the insurer would double the number of life advisors to 10,000 this fiscal. "our focus is on unit-linked plans and we are communicating its benefits to potential customers," akers said. birla sun life individual life policies come with a guaranteed minimum return of three per cent over the life of the policy, akers said.

city union bank net up 17 pc
chennai: city union bank ltd has posted a net profit of rs 33.37 crore for the twelve months ended march 31, 2003, against rs 28.44 crore, registering a significant growth of 17.33 per cent over the corresponding period last year. the board has recommended a dividend of rs 4 per share (40 per cent) for 2002-2003 and "the recommendation of the same is subject to the approval of rbi". interest income improved by rs 21.37 crore to rs 233.51 crore from rs 212.14 crore earlier. other income amounted to rs 53.86 crore; interest expenses to rs 167.11 crore (rs 157.55 crore) and operating expenses to rs 39.93 crore (rs 37.55 crore). the bank has earmarked rs 46.95 crore towards other provisions and contingencies and provision for taxes as against rs 36.63 crore.

geojit to take part in mul bidding
kochi: geojit securities ltd will actively participate in the maruti udyog ltd's share bidding through its 12 centres in kerala and 17 centres outside the state. the application for the share bidding will be available in all 55 branches of geojit in kerala, a press release from the company has said. the union government is going to reduce their stake in maruti, the largest car manufacturer in india, by way of book building through nse and bse from july 12-19. through this process, the government expects to reduce its stake in the company from 45.8 per cent to 20.8 per cent. the government is slated to sell 7.22 crore shares with a face value of rs 5 each. the suzuki motor corporation of japan has signed an agreement to take over all the shares at a floor price of rs 115 each, if the minimum subscription cannot be fulfilled, the release added.

pay intermediaries well for better growth: irda chief
hyderabad: the chairman of insurance regulatory and development authority (irda), n. rangachary, has advised the insurers to adequately compensate the intermediaries to ensure the overall development of the industry. reacting to the submissions made by some of the insurance players on the poor quality of services being provided by the intermediaries, the irda chief said the regulator had taken note of complaints on insurance agents who were focussing more on new business as it yielded more commission and neglecting the service to old customers. rangachary was interacting with the chiefs of life insurance and non-life insurance companies and their representatives at the `round table on insurance sector' organised by the institute of chartered accountants of india (icai) here.

indian overseas bank plans to offer m&a advisory services
chennai: with a view to strengthening its merchant banking activities, indian overseas bank (iob) will offer advisory services for mergers and acquisition (m&a) proposals. to begin with, it will offer these services to its existing customers and then extend it to the market. "mergers and acquisitions (m&a) is one area which is yet to be addressed by the bank. iob has been active in the primary market. we have been acting as bankers and managers to public issues. also, we do underwriting and provide depository services. our idea is to offer the entire range of services under the merchant banking umbrella. so, the bank is planning to extend services to m&a proposals by the end of this year," said iob general manager al chandramouli. m&a proposals require different set of skills and the bank will soon train its staff to facilitate the process. "we will start training four employees in the bank by july-august for the purpose and by the end of this year we will be able to offer the services," he said.

pnb east up zone scouts for panel to speed up recoveries
lucknow: armed with the securitisation act, punjab national bank's (pnb) east up zone, which comprises 301 branches, is turning aggressive on recoveries to bring down the npa level and is on the lookout for a panel of agencies to execute the same. the panel will take physical possession of the assets of defaulters, suggest their just valuation and look after them on pnb's till their final disposal. the agencies chosen will be from national and zonal levels. zone general manager vk nagar said that an aggressive campaign had been launched for effecting these recoveries by building social pressure and already the npa level in the zone had declined to 3.6 per cent. however, some lacunas had remained and problems had erupted during the campaign. he said that pnb is trying to make foolproof efforts and exert pressure on defaulters to return loans but before that it would like to offer them one more chance for one time settlement. agencies will be asked to come out with packages from valuation to realisation and their selection done shortly.

sbi sees total circle profit at rs 5,315 crore
kolkata: state bank of india (sbi) is likely to report a total circle profit of rs 5,315 crore during the financial year ended march 31, 2003. an sbi official said that the five corporate account group (cag) branches, which come under the central office (cag central), are expected to report a total profit of around rs 402 crore. the forex profit is likely to be around rs 887 crore, he said. sbi is yet to calculate the figure of profit from its domestic treasury operations. sources said that it is also yet to finalise the provisions during the fiscal under review. "during the fiscal ended march 31, 2002, sbi made a total provision of rs 3,613 crore and we expect the same figure this year," they said. sbi will announce its financial results for the fiscal ended march 31, 2003, on june 19. sources said that among the 14 circles of sbi, the new delhi circle tops the charts with rs 866 crore, followed by the mumbai circle with rs 796 crore and chandigarh with rs 475 crore.

ing on the prowl again for acquisitions
bangalore: the ing group is looking for bank acquisitions after having consolidated its holding in vysya bank ltd. the managing director and chief executive officer of ing vysya bank ltd, bart hellemans, said: "we will look forward to expanding our presence in india through acquisitions." but he added that any acquisition would be considered only if the "price is right". further, he ruled out acquisitions of any of the public sector banks. or for that matter, even old private sector banks. "we are aware of the problems of turning them around after the vysya bank experience." however, banking sources said that the group has already done due diligence on some of the new private sector banks for the purpose of valuation. acquisition is expected to help ing vysya bank widen the asset book of the bank. at the same time, it would be backed by capital, eliminating the need for large capitalisation.

abn-amro says six banks shortlisted
new delhi: abn amro is looking at various options including acquiring a private bank or setting up a subsidiary to expand its operations in india. "we are looking at all possible options of acquiring majority stake in an indian bank or setting up a subsidiary," jan peter schmittmann, senior executive vice-president, abn amro bank nv, said after the launch of the bank's private banking operations in the capital. schmittmann said the bank would like to have 51 per cent stake and management control if it went for acquisition. "we have shortlisted at least six banks," he said. he also added that abn amro bank would look for banks that have the spread where the dutch foreign bank would like to foray into. technology and other factors would not come in the way, he added. "once we select the right target, it will take couple of weeks to integrate," he said. the bank's presence in india is crucial as "india is the fourth major `home market' for us after us, netherlands and brazil," schmittmann said.

fis reject spgl's plea for debt rejig
mumbai: financial institutions (fis) and banks led by industrial development bank of india (idbi) have turned down spectrum power generation ltd's (spgl) plea for restructuring and rescheduling its debt of rs 820 crore and cutting the interest rate to 10.5 per cent from 17-19 per cent. however, the idbi-led consortium has asked spgl to follow the supreme court (sc) order of may 8 with regard to issuance of preference shares of rs 200 crore to clear dues of fis and banks by june 30. it has also asked spgl to follow the sc order concerning creation of securities related to a series of project contracts covering engineering procurement and construction of the plant, operation and maintenance contract, power purchase agreement (ppa) and fuel supply agreement with gail india. fi sources told that they had asked the company, through a nominee director, to convene its board meeting by june 16 to discuss the issues and review the implementation of the sc order passed on may 8. "it will not be possible for the fis/banks to accept spgl's request with regard to postponement of issuance of preference share till the process of restructuring and rescheduling of debt and reduction in interest rate is carried out," a source added.

6 june 2003

banks to set their own lending targets for ssis
mumbai: banks will set individual lending targets to small scale industries (ssi) to boost growth in this sector. the target will be fixed keeping in view the outstanding credit to this sector, the previous year's achievement and overall trends in growth of net bank credit. this was decided at a review meeting on ssi credit, held at rbi's mumbai office on june 2. the meeting chaired by deputy governor vepa kamesam, was attended by the secretary and additional development commissioner of the ministry of ssis and top-level officials of major public sector banks, small industries development bank of india and the national bank for agricultural and rural development. at the meeting, it was proposed that banks should double their limits for composite loans. in order to meet the term loan and the working capital requirements of ssis, the bank officials present at the meeting were also agreeable to enhance, on merits, the limit for composite loan from rs 25 lakh to rs 50 lakh on usual terms. further, several banks felt that the procedure for creation of charge on fixed assets of ssi units should be considerably simplified, especially where such assets were already charged to state finance corporations/state industrial development centres.

om kotak mahindra premium collection jumps 400 per cent to rs 40 crore in 2002-03
kolkata: om kotak mahindra life insurance company limited, a joint venture between kotak mahindra and old mutual plc., said on thursday that it has registered more than four times growth in premium collection to rs 40.32 crore in 2002-03 as against rs 7.65 crore in the previous fiscal. it declared a return of 7.50 per cent as against eight per cent last year adjusting to the falling interest rate scenario. md shivaji dam, said 38 per cent of their total business came from gujarat and maharashtra.

idbi bank's new product group account by august
bhubaneswar: idbi bank, whose products are getting a good response from the market, is planning to introduce a slew of new products in the second half of the current fiscal. "the group account is being given finishing touches and will be ready for launch by august, 2003," bank regional head - east (retail banking) gautam gan, said. he said that under the scheme, a group of people would be able to operate through a single account. the marketing division in mumbai is designing several other products, he added. mr gan said that the bank would go in for an expansion programme sometime after september, this year. "we are looking at opening as many as 11 new branches in the eastern region. four of these would be located in orissa. cities like cuttack, sambalpur and berhampur are preferred locations for new branches. besides, a semi-urban branch either at paradip or angul, would be opened as part of the expansion programme," he added.

united bank net rises 256 per cent to rs 305 crore in 2002-03
new delhi: till recently dubbed as weak, kolkata-based united bank has clocked a staggering 256 per cent increase in its net profit during 2002-03. from just rs 19 crore in 2000-01, the post-tax profit went up to rs 119 crore the next year and stood at rs 305 crore at the end of march this year. said bank chairman and managing director madhukar: "the turnaround of a bank whose closure had been strongly recommended has been an all-round surprise, even for me." the revival has also been possible without any recapitalisation, public issue or by raising tier ii capital. he asserted that the bank, constituted when four private banks of west bengal "united" in 1950, made a total profit of rs 80 crore in 52 years. madhukar took charge in mid-2001, when the bank had shown a profit of only rs 19 crore for 2000-01. having managed to reconcile accounts in its 1,300 branches that had not been attended to for years, the bank released rs 1,200 crore of blocked capital. now the bank has effective capital reserves of rs 1,000 crore, from just rs 200 crore in july 2001. accumulated losses that stood at rs 1,600 crore have been nearly halved now.
capital adequacy ratio improved in 2002-03 to 15.17 per cent from 12.02 per cent the previous year. return on assets increased to 1.37 per cent from 0.54 per cent and return on equity to 32.89 per cent against 20.4 per cent, the previous year

sbi life posts 4-fold rise in premium income
mumbai: sbi life insurance company has recorded a jump of 391.6 per cent in premium income at rs 72.75 crore for the financial year ended march 31, as compared to rs 14.8 crore in the corresponding period of the previous year. r. krishnamurthy, managing director, sbi life, ascribed the growth to the large untapped potential for life insurance in the country. the company has settled 8 individual policy claims, which amounted to an outgo of rs 5.5 lakh and settled 200 claims on the group insurance segment, amounting to an outgo of rs 2.4 crore. total sum assured has crossed rs 4,000 crore and over 5 lakh lives have been covered. according to krishnamurthy, the company has cornered a 30 per cent share of the aggregate premium income of rs 35 crore that private players generated.

insurance cover for rickshaw pullers in ap
hyderabad: life insurance corporation of india (lic) has announced that the andhra pradesh government has remitted a premium of rs 2 crore to the insurance company for providing insurance coverage for two lakh rickshaw pullers across the state. the chief minister, n. chandrababu naidu, had recently announced free life insurance coverage for the welfare of rickshaw pullers in the state during the telugu desam party conference held at tirupati last month. according to lic, a group insurance for one year through its lic janashree bima yojana scheme would be implemented shortly. the benefits under the scheme include rs 20,000 sum assured for natural

dhanalakshmi bank net up 49 pc
kochi: the net profit of the thrissur-based dhanalakshmi bank has grown by 49 per cent to touch rs 15.02 crore for 2002-2003, up from the rs 10.07 crore recorded last year. the board of directors has recommended a dividend of 15 per cent. total income grew to rs 259.38 crore (rs 239.86 crore), while the total expenditure was rs 195.86 crore (rs 189.27 crore). reduction in the cost of deposits and growth in other income enabled the bank to sustain the growth in profits, an official statement from the bank said. operating profits touched rs 63.52 crore (rs 50.59 crore).

tata cos to merge auto finance biz
mumbai: two tata group companies, tata engineering and locomotive company ltd and tata finance ltd, are working on an `organisational merger' of their auto finance divisions in a bid to increase their market share in this business. as per the proposed plan, the bureau of hire purchase and credit (bhpc) of tata engineering and the asset finance division of tata finance ltd would be merged. the new entity would be christened as tata auto finance (taf), a tata engineering source said. when contacted, a tata engineering official said details of the merger were being worked out but "it will be only an organisational merger and not a legal merger.''

syndicate bank loans for dakshina kannada shgs
mangalore: syndicate bank, which has chalked out its targets for priority sector lending in the current fiscal, has decided to disburse a sum of rs 5 crore to around 900 women's self-help groups in the dakshina kannada district by the end of september.
according to a press release issued here, this is to make credit available to women's groups, the bank's regional manager, m.m. mallya, said. mallya was speaking after inaugurating a one-day workshop on credit to women's self-help groups organised by the mangalore regional office of syndicate bank and the department of women and child welfare at the bank's regional office here.

i-flex solution for brunei bank
bangalore: i-flex solutions, provider of technology solutions to the financial services industry, said on thursday that its flagship product, flexcube, had been selected by brunei's baiduri bank as its new core banking system. "flexcube will provide the technology platform for baiduri bank, thus enabling it to ramp up retail banking operations while consolidating its corporate banking functions. in addition to flexcube, baiduri bank will also implement the revenux crm and profitability analytics solution," said a company press release.

hsbc arm may exit debt broking
mumbai: hsbc securities & capital markets (india) pvt ltd, a wholly-owned subsidiary of hongkong and shanghai banking corporation ltd, is likely to discontinue its debt brokerage business. company officials said that thin margins and low volumes were responsible for the likely closure of this business. the company has intimated several of its clients, banks and primary dealers of this development. said naina lal kidwai, vice-chairman & managing director, hsbc securities & capital markets, onfirming the development, "we may not continue in debt brokerage since it is too small a business compared to the scale of our operations. there are low volumes and marginal profits in this area. therefore you will see no banks in this business and we are also considering an exit."

irda okays web-based training
hyderabad: the insurance regulatory and development authority (irda) has accorded approval to web-based training for insurance agents developed by the hyderabad-based c&k management ltd (ckml). disclosing this in a press release here, ckml said so far the irda approvals were given to the institutes providing offline or traditional classroom-based training. ckml said the classroom model was not sufficient to cover large numbers, especially in a scenario where each new insurance company would need at least 5,000 agents to be trained. the company claimed that its web-based model - www.themanagementor.com - offered a very cost-effective learning solution for the insurance companies.

5 june 2003

prudential sets up offshore service centre in mumbai
bangalore: prudential plc, uk, announced on wednesday that it has set up its fully owned subsidiary - prudential process management services (ppms) in india with an investment of $10 million. the new offshore service centre in mumbai is set up to improve customer contact service levels for the group's uk insurance operations, said a company press release. the mumbai centre is expected to start operations by this end june with about 200 employees to begin with, while it has a capacity of 850 employees, which it expects to fill up by mid-2004. a third of the operations will comprise call centre services and two thirds will be business process related. "ppms india is a logical extension of the ongoing customer service transformation strategy, outlined by prudential in november 2001. we are working to re-engineer our business and strengthen the prudential plc brand in the uk through a customer service focus that is driven by quality, productivity and cost efficiency," said philip broadley, group finance director of prudential plc.

state govt loans under debt swap
mumbai: innconnection with the first tranche of the debt swap scheme this fiscal, all state governments will offer rs 7,000 crore of state development loans on june 12. the maturity of the loans is pegged at 10 years with a coupon rate of 6.35 per cent, said an rbi press release.

cidc, sidbi sign agreement for loans to small contractors
new delhi: the construction industry development council (cidc) and the small industry development bank of india (sidbi) on wednesday announced a new bills discounting scheme for contractors engaged in construction activity. "we will discount bills raised by a sub-contractor on the main contractor. that would enable the sub-contractors to get instant payment for their work and take care of their working capital needs. all they would need will be an approval for their bill from the main contractor. the bigger contractor would then pay back the amount with interest to us," said a senior sidbi official, explaining the scheme. while making the payments, sidbi would take into consideration the rating awarded to the contractor by cidc and his standing in the industry, apart from the tenure of the bridge loan being sought. "the facility would be available at an interest rate that would be in the band of 2 per cent plus or minus our prime lending rate, which for such short-term loans, is about 10.5 per cent as of now," the sidbi official said.

oriental insurance targets rs 250-cr premium income
bangalore: the public sector oriental insurance company ltd has targeted a premium income of rs 250 crore for the current financial year. s. gopalkrishnan, assistant general manager, who heads the karnataka zone of the company, said during last year, the company had earned a premium of rs 197 crore. bangalore, he said, had emerged as the lead region for the company displacing chennai in the southern region, in terms of premium income earned. he said low claim segments such as fire insurance recorded an 18 per cent increase over 2001-02. he also said medical insurance also showed big increases, mostly driven by corporate covers.

bob housing fin aims to disburse rs 350 cr
mumbai: bob housing finance ltd is all set to get back into shape and is targeting disbursements of around rs 350 crore for the current fiscal, according to anil k. khandelwal, executive director, bank of baroda. speaking to the pressperson about the future plans for the bank's subsidiary, khandelwal said although the bank would probably merge its housing subsidiary with itself sometime in the future, the immediate plan was to restore the health of bob housing finance (bob hf). bob hf, which is jointly owned by bank of baroda and national housing bank, has declared a 12 per cent dividend for 2002-2003. it has received the necessary sanctions for a rights issue, but doesn't plan to go in for it in the immediate future. according to khandelwal, there is no immediate requirement to go in for a rights issue, as the subsidiary's present capital position is quite comfortable, with the capital adequacy ratio at 25.15 per cent, higher than the stipulated norm of 12 per cent laid down by national housing bank.

nhb lowers refinance rate
new delhi: national housing bank on wednesday announced a 0.25-per cent reduction in its refinance rate for rural housing loans of up to rs 5 lakh. as against refinance of rs 1,024 crore from july 2001 to june 2002, nhb hopes to disburse close to rs 2,500 crore in the same period in the current year, an official release said here. the release did not specify the new rates of interest.

tatas hike stake in tata finance
mumbai: the tata group has increased its stake in tata finance ltd to 71 per cent, from 63 per cent. the group's stake has increased following conversion by tata group companies of cumulative convertible preference shares (ccps) issued by tata finance in 2001. according to a notice to the stock exchanges, the conversion has been done at a price of rs 45 per equity share (at a premium of rs 35) for each ccps of rs 100. the conversion has been effected on may 25. following the conversion, the stake of tata industries ltd in tata finance has gone up to 37 per cent from 26 per cent while the stake of tata engineering has come down to 21 per cent from 22 per cent.

individual money transfers capped at $2,500
mumbai: the reserve bank of india has capped the amount for individual transactions under the money transfer services (mts) scheme at $2,500. the apex bank has also said that under this scheme, amounts up to rs 50,000 may be paid in cash and any amount exceeding this limit shall be paid by means of cheque, demand draft, postal order, etc. or credited directly to the beneficiary's account only. indian parties (agents) who wish to apply for rbi approval to enter into the money transfer services scheme, must be authorised dealers, or full fledged money changers, or registered non-banking finance companies or an iata approved travel agent with a minimum net worth of rs 25 lakh.

idbi slaps notices on 41 defaulters
new delhi: industrial development bank of india (idbi) has cracked the whip on 41 defaulters. it has issued notices to them for recovery of rs 1,459 crore under the securitisation act. idbi has already seized the assets of suman motels and ganesh benzoplast under the act. idbi's non-performing assets (npas) stood at rs 4,287 crore as on march 31, 2003. confirming that assets of the two companies had been seized under the securitisation and reconstruction of financial assets and enforcement of security interest act (securitisation act) 2002, an idbi official said: "however, pending the supreme court decision on disposal of assets, no recovery has been made from these assets till date." "idbi has also issued notices to other defaulting borrowers under the securitisation act and is planning similar action," the source said. idbi is planning to take action against 31 borrowers, involving principal amount of rs 822 crore. "of these, 20 borrowers have approached for amicable settlement of dues and a few of them have submitted one-time settlement (ots) proposals," it added.

4 june 2003

state bank completes networking 1,600 atms
kolkata: the country's biggest public sector commercial bank, state bank of india (sbi), on tuesday announced that it has completed its project of networking 1,600 automated teller machines (atm) as well as its seven associate banks. sbi's seven associate banks are state bank of patiala, state bank of travancore, state bank of hyderabad, state bank of bikaner & jaipur, state bank of mysore, state bank of indore and state bank of saurashtra. the new facility has become perative from june 1, 2003, an sbi spokesman said. "the facility will bring in added convenience to the customers of the entire state bank group as they can transact at any atm of the sbi and its associate banks," he said. he said that the sbi atm network now covers over 460 cities across india and sbi has further plans to offer higher value addition to the atm-cum-debit card, such as payment of utility bills through atms and filling up of mobile prepaid cards through atms. sbi also intends to add another 200 atms by march 31, 2004, taking the total number of atms to 3,600. "this is a part of the technology mission of the bank encompassing core banking and multi-delivery customer channels," he said.

hc stays drt order attaching maharashtra govt assets, a/cs
mumbai: the maharashtra government on tuesday heaved a sigh of relief after the bombay high court stayed, till june 13, an order passed by the debt recovery tribunal (drt) attaching immovable properties of the state government and its two accounts maintained by the reserve bank of india and state bank of india to recover rs 91 crore dues from six spinning mills in the cooperative sector. hearing a writ plea by the state government, chief justice ck thakker and justice vijaya tahilramani, in an ad-interim ruling, had stayed the order and posted the matter for substantive arguments on that day. advocate general goolam vahanvati contended that the money lying with the rbi belonged to the consolidated fund and hence could not be attached. the closing balance, as on may 28, of rs 124.88 crore in the account no 6102002003 with rbi has been frozen/blocked. he argued that no money out of the consolidated fund be appropriated except in accordance with law and in the manner provided in constitution, which provides that the legislative assembly of the state can pass money bills. he submitted that the drt does not empower attachment of public monies and funds, that too the consolidated fund of the state government in custody of the rbi and sbi. further drt could have directed the concerned officials to prohibit any withdrawals and report any deposits made.

drt recoveries rise by 51 pc
new delhi: recoveries made through debt recovery tribunals (drts) touched rs 3,252 crore during the year 2002-03 as against a level of rs 2,153 crore during the previous year. for the first time, the number of cases disposed of exceeded the number of fresh cases registered, an official release said hereon tuesday. at a meeting held to review the performance of drts, the minister of state for finance (banking & insurance), anandrao v. adsul, advised the banks and financial institutions not to seek adjournments unless there are compelling circumstances to do so.

birla sun life eyes 165 per cent growth in first premium income in '03-04
kolkata: birla sun life insurance co ltd hopes to achieve 165 per cent growth in its first premium income during the fiscal 2003-04. birla sun chief financial officer peter akers said: "we have recorded a first premium income figure of rs 170 crore in last fiscal and hope to increase it to rs 450 crore this fiscal. birla sun life is a joint venture between aditya birla group and sun life financial. birla sun had sold 75,000 policies in the last fiscal, akers said, adding: "we hope to increase it to 1,80,000 in the current year." total sum assured had stood at rs 6,018 crore last fiscal. "we will substantially increase it by the end of this fiscal," he said. he added: "currently we have a rs 200 crore capital and we may go in for further capital infusion as and when the need arises." last year birla sun was able to elevate its rank to the number two position amongst private life insurers following its emphasis on unit linked life insurance plans, he added.

rbi to internally adopt new repo a/c norms
mumbai: the reserve bank of india (rbi) will internally follow the new repo accounting norms when such transactions are done on the negotiated dealing system (nds). it is already in the process of moving towards the new accounting format. "it is just a technological issue. once repos transactions become nds-enabled, the rbi will also follow the repos accounting norms to maintain uniformity," a source close to the development said. the rbi will hold a workshop on june 21 with market participants to address the initial problems on adhering to the new norms. it had recently issued the standardised accounting norms for repos transactions to create uniformity in market practices. as of now, these norms apply only for repos between market players; and are not applicable to the repos under rbi's liquidity adjustment facility (laf). at present, only the rbi regulated entities follow the new repos guidelines. mutual funds (mfs), major counterparts in the repos market and essentially lenders in the market, do not follow the guidelines. some quarters feel that mfs should also follow the same norms as differences in accounting practices between them and other rbi-regulated players do not hamper such transactions. sources in state-run banks pointed out that "when counter-parties (read mfs) are not executing the new norms, we cannot follow these too because there will be problems in documentation."

3 june 2003

sbp targets rs 450-crore net profit in 2003-2004
new delhi: the state bank of patiala (sbp) has projected a 40 per cent growth in net profit to rs 450 crore in this fiscal, having registered a rs 322-crore profit in 2002-03. the capital adequacy ratio has risen to 13.57 per cent last fiscal from 12.55 per cent in 2001-02. "our roadmap is that in all parameters, we want to achieve global standards. we are targeting a 40 per cent growth in net profit, 30 per cent growth in business and less than 1.0 per cent non-performing asset (npa) ratio this fiscal," sbp managing director ak das said here on monday. sbp posted a 38 per cent growth in net profit at rs 322.02 crore during the fiscal against rs 232.94 crore in 2001-02. it has decided to offer a hefty dividend of 110 per cent. sbp is also targeting a 30 per cent growth in business at over rs 37,000 crore, das said. sbp's business in 2002-03 stood at rs 29,000 crore. deposits rose 28 per cent to rs 17,585 crore and advances 23 per cent to rs 11,120 crore last fiscal.

maharashtra govt files writ petition against drt move
mumbai: the maharashtra government on monday filed a writ petition in the bombay high court challenging the debt recovery tribunal's (drt) move to attach the immovable properties of the state government in pune and its two accounts maintained by the reserve bank of india (rbi) and the state bank of india (sbi) to recover rs 91 crore dues from six spinning mills in the cooperative sector. the petition would come up for a mention before the division bench led by the chief justice on tuesday. drt had acted upon the petition filed by the financial institutions. rbi has not remitted any money from its accounts till the high court order. the state textile secretary ap sinha told that the government has argued that attachment on consolidated fund of india (cfi) can be made only under the authority of legislature. the government has claimed that the drt's move was not only irresponsible but also illconsidered. the government has questioned the very propriety of drt's action. a section of the state government termed the drt action as "political and sensational."

jammu and kashmir bank net up 30 per cent
new delhi: with an increase of 30 per cent in its net profit to rs 338 crore for 2002-03, jammu and kashmir bank has declared a 60 per cent dividend. its total income rose by over 6 per cent to rs 1,714.56 crore in 2002-03 as compared to rs 1610.86 crore in the previous year. aggregate deposits grew by almost 14 per cent to rs 14,674.9 crore as on march 31, 2003, against rs 12,911.11 crore in 2001-02. capital adequacy ratio stood at 16.48 per cent in 2002-03, much higher than the rbi mandated 9 per cent and the capital and reserves grew by around 33 per cent to rs 1,242 crore in the last fiscal compared to rs 937 crore in 2001-02. the bank was able to contain its net non-performing assets to 1.58 per cent of net advances and aims at lowering it to below 1 per cent in this fiscal

irda directive on commission to boost brokerage industry
hyderabad: in a move that was expected to provide a major impetus to the brokerage segment of the rs 15,000-crore indian insurance industry, the insurance regulatory and development authority (irda) has directed the insurers on monday to stop providing the five per cent brokerage commission directly to their clients. as a result of this, the clients would now prefer to approach the insurers only through the insurance brokers wherein they would get the professional services of brokers free-of-cost.
even through the public sector entities, with a size of around rs 7,500 crore, still permitted to offer five per cent brokerage directly to their clients, the brokerage industry would be now left with a volume of around rs 7,500 crore, enabling them to earn brokerage of over rs 900 crore.

hdfc bank plans to add 100 branches
mumbai: hdfc bank ltd plans to increase its branch network by 100 branches over the next two years and stage a 25 per cent growth in its balance sheet. in the current financial year, the bank plans to increase the number of branches from 237 to 290, said mr jagdish capoor, part-time chairman, hdfc bank, at the annual general meeting held here on monday. in the previous year, the branch network of the bank grew from 171 to 231 outlets, while the atm network increased from 479 to 732.

icici prudential life to double agents force
chennai: icici prudential life insurance ltd intends to double its fleet of 18,500-odd financial advisors (agents), in the next 12 months. so large is the potential for life insurance in india that ``we could have half a million agents and we still would not have scratched the surface,'' bill lisle, chief agency officer, icici prudential, said. lisle said the company was on a ``pretty big recruitment drive'' right now. about 70 per cent of icici prudential's premium income (rs 364 crore) last year came from the financial advisors, who include self-employed professionals, housewives, retired people and students too. icici prudential has so far sold 246,827 policies for a sum assured of rs 8,700 crore.

lic beginning to feel the heat
hyderabad: life insurance corporation of india (lic), the public sector life insurance major, has suffered an all-round fall in its business performance for the fiscal year ended march 31, 2003. the issue assumes significance in the backdrop of the new entrants coping well with the challenges of setting up operations, building up the agent force and spreading to rural and semi-urban areas and at the end of the fiscal, thereby garnering a market share of 8 per cent as against 2 per cent in the previous fiscal. according to the latest life premium amounts announced by the insurance regulator, lic recorded a negative growth of 23.58 per cent.

royal sundaram premium income jumps to rs 184 cr
chennai: royal sundaram alliance insurance company ltd earned a premium income of rs 184 crore in 2002-03, compared to rs 71 crore in the year before. according to a press release, the company's personal insurance premium has increased threefold to rs 98.8 crore from rs 30 crore achieved in the previous year. royal sundaram's portfolio consists of over 3,00,000 policyholders and over 2 million lives covered, the release says. the introduction of the cashless health insurance policy has been extremely well received by both corporates as well as individuals. according to royal sundaram, the company was the first to introduce cash-less health cover in india, with medicare as its third party administrator.

state bank of indore net jumps 60 pc
mumbai: state bank of indore has recorded a 60.13-per cent jump in net profit for the fiscal 2002-03 at rs 200.32 crore as compared to rs 125.10 crore recorded in the previous year. the net worth improved to rs 583.66 crore (rs 412.60 crore) and the capital adequacy has gone up to 13.9 per cent (12.78 per cent), said a press release. deposits increased to rs 9,216.81 crore during the year ( rs 7,918.45 crore). net advances went up to rs 5,182.95 crore (rs 4,284.99 crore), the release said. advances to priority sectors increased by rs 540.69 crore to rs 2,410.80 crore, forming 46.47 per cent of net bank credit. gross npas came down to rs 295.25 crore (rs 320.10 crore). the ratio of net npas to net advances came down to 2.66 pc (3.58).

2 june 2003

lic housing fin q4 net up 32 pc
mumbai: lic housing finance ltd has registered an increase of 31.6 per cent in net profit for the quarter ended march 31, 2003 at rs 75.95 crore, up from rs 57.68 crore in the corresponding period of the previous year. the net profit for the full financial year increased by 22 per cent to rs 180.11 crore (rs 147.66 crore). the board of directors of the company has proposed a dividend of 55 per cent. loans disbursed for the full year jumped by over 62 per cent to rs 3,190.83 crore (rs 1,962.82 crore). income from operations for the fourth quarter increased to rs 277.52 crore from rs 228.24 crore. other income came down to rs 5.22 crore (rs 22.99 crore). interest expenses of the company dipped to rs 151.34 crore from rs 164.71 crore. mr s.c. jain, director & chief executive, lic housing finance ltd, said in a press release, "we are confident of achieving a growth of 50 per cent in disbursals and substantial reduction in the level of non-performing assets."

bank of maharashtra plans to go global
pune: the chairperson of bank of maharashtra (bom), s.k. basu, has said that the management is seriously thinking of `going global.' the bank, which has a domestic consumer base of 90 lakh people and net worth of rs 980.27 crore in 2002-03 has set sights on tapping businesses overseas. "it might not be just expanding in terms of opening branches abroad. we are looking at all the possibilities, but the rationale is that with indian industry now doing business in the global market place, it is important for the financial intermediary to be there for them,'' basu said. the chairperson's announcement about going global is significant in the wake of the fact that the bank has decided to adopt the us generally accepted accounting principles (gaap) in addition to its existing accounting system, so that it is on par with the other banks in the global banking space.

sbh net at rs 301 cr; to pay 100 pc
hyderabad: state bank of hyderabad (sbh), an associate bank of state bank of india, has posted an income of rs 2,529 crore and a net profit of rs 301.40 crores during 2002-03. the bank's total business during the year had increased by 16.85 per cent to rs 30,755 crore while its net non-performing assets (npas) declined from 4.97 per cent to 3.25 per cent. it has declared a dividend of 100 per cent for the year. announcing the annual results of the bank here on sunday, sbh managing director, rajendra kakker, said that it was targeted to bring down the net npas to 1.5 per cent in the current fiscal and wipe out the entire net npas of the bank by 2005-06. the gross npas had declined from rs 899 crore (10.08 per cent) in 2001-02 to rs 740 crores (7.28 per cent) in 2003-04. plans were afoot to bring npas further down to rs 525 crores (5.25 per cent).

bob plans corporate service branches in chennai, hyderabad
chennai: bank of baroda has decided to open two branches dedicated for corporate financial services (cfs) - one in chennai and the other in hyderabad. all major corporate accounts, where the relationship with the bank is at least rs 10 crore, would be moved to these two branches, m.b. samant, general manager, bank of baroda, said here. in chennai alone, the bank has about 50 corporate customers, with rs 10 crore relationship with the bank. eventually, the two cfs branches would also handle accounts of corporates with less than rs 10-crore relationship with the bank, samant said. the setting up of the cfs branches would happen soon after the bank puts through a `core banking solutions' software, interconnecting at least some of the branches. the bank has shortlisted three systems integrators, one of whom will be mandated for implementing the core banking solution.

list of reports on finance diary