19 july 2003
up reforms, world bank tells india
mumbai: the world bank says india's economic growth
is slowing down and the government needs to provide fresh
impetus to fiscal adjustment along with other reforms
to achieve the targeted 8 per cent growth rate.
bank says that at current trends, india's rate of progress
is insufficient to meet its tenth plan targets as well
as the international community's millennium development
goals," according to the world bank's first india
development policy review.
the bank says that development progress in india has been
uneven as a result of which poverty is getting concentrated
in the less developed states. for example, more than half
of india's poor now live in four states: uttar pradesh,
bihar, madhya pradesh and orissa.
india development policy review says economic growth has
been the key driver of poverty reduction in the country
and its recent slowdown is a cause for concern.
from an annual average of 6.7 per cent between 1992-93
and 1996-97, growth fell to 5.5 per cent between 1997-98
and 2001-02 and then slipped to 4.4 per cent in 2002-03
partly because of the drought.
17 july 2003
reverses earlier order on insurance brokerage
hyderabad: the insurance regulatory and development
authority (irda) has decided to reverse an earlier decision
regarding insurance brokerage.
irda under its new chairman, mr c.s. rao has suspended
a notification dated may 30, 2003 issued by the earlier
chairman mr n. rangachary, which gave a special discount
up to 5 per cent on the face of the policy to businesses
directly placed with the insurers and emanating from non-public
sector entities for tariff lines of general insurance
in a circular
v reddy to be new rbi governor
new delhi: y venugopal reddy, currently executive
director of international monetary fund, will be the new
governor of the reserve bank of india, succeeding bimal
name of reddy, a former deputy governor of rbi, has been
cleared by the appointments committee of the cabinet chaired
by prime minister atal bihari vajpayee, official sources
said on friday.
mumbai: the rupee slid on thursday after the rbi
move to set an upper limit on the interest offered by
banks to non-residents on repatriable rupee deposit scheme
sparked some anxiety, the dealers said.
rbi announces minimum discount for buyback of gilts.
mumbai: the reserve bank of india on thursday announced
a minimum discount of 7.5 per cent of market price for
acceptance of government securities offered by eligible
institutions under the centre's buyback scheme. auction
under the scheme is scheduled for july 19.
clamps ceiling on interest rate on nre deposits
mumbai: in what is seen as an attempt to eliminate
arbitrage opportunities, reserve bank of india today clamped
a ceiling on the rate of interest on nre deposits. this
is expected to bridge the wide difference in interest
rate being offered to nri depositors in india and the
prevailing rates overseas.
sbi to expand global operations
mumbai: state bank of india chairman ak purwar
said on thursday that the bank is planning to expand its
global presence by having operations in 40 countries by
march 2005, with a focus on the middle-east and africa.
the bank also proposes to retain at least 30-35 per cent
of the resurgent india bonds redemption proceeds in the
form of a new deposit scheme for the nris to be announced
bank to set up office in dubai
mumbai: the approvals have been cleared for icici
bank to set up a representative office in dubai, with
the board of central bank of uae approving the proposal.
the representative office will enable the bank to increase
its participation in india's trade transactions with uae
and in exploring other commercial possibilities such as
loans and joint ventures.
bank chairman's term extended
mangalore: the term of the karnataka bank chairman,
mr ananthakrishna, has been extended for a further period
of three years, according to a press release from the
bob expects to enter insurance business this year
mumbai: bank of baroda has short listed three-four
foreign players for its plan to foray into life insurance
business. the approval from the reserve bank of india
for its insurance venture however, is still pending.
bank of india signs pact with m&m subsidiary
mumbai: the union bank of india has entered a tie-up
with mahindra shulabh services ltd , a wholly-owned subsidiary
of mahindra & mahindra to provide crop finance to
the farmers who are undertaking contract farming with
16 july 2003
icici infotech join hands for core banking tool
hyderabad: aimed at joining the elite group of
banks offering online banking conveniences to the customers,
lakshmi vilas bank ltd (lvb) has entered into an agreement
with icici infotech for developing core banking solution.
at present, lvb and icici infotech are jointly developing
such a solution by integrating the front end of the existing
lbs 2001 software with icici infotech's newton software,
the lvb chairman and chief executive officer, a. krishnamoorthy,
informed the shareholders through the bank's latest annual
he said: "this venture will enable the bank to offer
a gamut of new generation online banking convenience to
the customers. a wide area network will be established
to connect the branches and offices and this network will
enable the facility of anywhere anytime banking."
the bank has also appointed kpmg as its information technology
consultant to offer consultancy services and to also enable
the bank chart a detailed strategy. during last fiscal,
the bank has increased the number of automated branches
to 56 by porting the lbs 2001 software in 29 more branches.
similarly, the number of partially automated branches
was augmented to 126 by porting the legacy software in
40 more branches. the bank has also extended tele-banking
facilities to five branches.
bank offers new home loan rates
bangalore: syndicate bank has announced new rates
for housing loans - for both fixed and floating rate schemes.
a bank release said here that the for loans up to 5 years,
the rates have been fixed at 8.25 per cent under the fixed
rate scheme and a spread of 3.25 per cent above the plr
for the floating rate scheme. for tenors between 10-20
years, the rates have been fixed at 9.25 per cent up to
rs 10 lakh and 9.50 per cent for amounts above rs 10 lakh,
under the fixed rate scheme. under the floating rate scheme,
the spreads over the plr have been fixed at 2.5 per cent
and 2.25 per cent respectively, the release added.
bank to introduce two retail products
chennai: the state bank of india (sbi) is planning
to introduce two new retail products 'sbi shop' and 'sbi
dairy farm' shortly. the bank intends to disburse nearly
rs 1,000 crore under these products across the country.
addressing a press conference here on tuesday, sbi chairman
ak purwar said the bank is looking at enhancing its lending
considerably. "we want to enhance our lending by
a couple of notches during the coming years. within the
next couple of months, sbi will introduce 'sbi shop,'
a scheme for financing construction, renovation and modernisation
works of shops. it will also come out with another product
to finance farmers in the dairy farming segment,"
he said adding, "we intend to fund nearly 10 shops
per branch initially. we will be disbursing nearly rs
1,000 crore under these two products."
on the other side, the bank is focussed on improving its
credit quality by upgrading assets, improving recoveries.
"the bank is targeting to reduce its net non-performing
assets (npas) to 3.2 per cent by march 2004 and two per
cent by march 2005 from the level of 5.63 per cent in
march 2003," he said. "with the change in the
provisions, the bank is expecting its npas to go up by
rs 1,000 crore. however, it has chalked out plans to ensure
that it achieves the npa target," he added.
icici pru first premium income rises 132% to rs 70 crore
mumbai: the largest domestic private sector life
insurance company icici prudential life insurance has
maintained its lead over other players by posting a 132
per cent rise in first premium income at rs 70 crore for
the quarter ended 30 june 2003. to meet rising business,
the company has infused an additional capital of rs 100
crore, taking the equity base to rs 525 crore. a joint
venture of icici bank and the uk-based prudential plc,
the company has issued 51,000 new policies in the first
quarter of the current fiscal, said icici prudential life
insurance managing director and ceo shikha sharma.
the total premium income, including renewal premium, stood
at rs 97 crore for april-june 2003. the company has sold
about four lakh policies till june 2003. average premium
on the regular premium policies has grown to rs 16,000
from rs 13,000, said sharma. "the current high growth
rate, overtaking industry growth rate, will continue for
five to six years. we expect it to slow down beyond that
to align with the sectoral trend," she added. icici
and prudential have brought in additional capital in the
ratio of their respective holding in the joint venture
(74:26), taking the total capital base to rs 525 crore,
borrowings up to rs 64,030 crore, says pnb gilts
new delhi: the centre's gross borrowings rose marginally
to rs 64,030 crore till july 12 as compared to the year-ago
period level, according to pnb gilts, which said the resurgent
india bond (rib) redemption may not put pressure on forex
and domestic money markets. "the expected pressure
on the forex and domestic money markets on account of
rib redemptions in october is not likely to materialise
in view of adequate forex purchases by the reserve bank
in the forward market," pnb gilts said in the latest
review. with the gross mop up of rs 64,030 crore so far,
against rs 64,028 crore in the corresponding period in
2002-03, the government has completed 38.5 per cent of
budgeted borrowings of rs 1,66,230 crore in this year,
pnb gilts said on tuesday.
inc seeks better monsoon for recovery: d&b survey
mumbai: according to the business expectation survey
conducted by dun & bradstreet india, business confidence
has improved significantly compared to the previous quarter.
the overall positive outlook has resulted in the composite
business optimism index for q3 (jul-sep), 2003 improving
by 6.3 per cent to 126.5 from 119 in q2 2003. five out
of the six optimism indices including net sales, net profit,
new orders, inventory levels and employees have shown
improvement while index for selling prices has declined
compared to the previous quarter, the survey said.
"the recovery appears to be on a firm footing. a
good monsoon should provide an impetus to the fortunes
of india inc in the coming years," dun & bradstreet
- south asia vice-president and managing director rajesh
mirchandani said. the d&b optimism index measures
the pulse of the business community and is based on a
quarterly survey conducted on a sample of companies randomly
selected from d&b commercial credit file. according
to a release issued by dun & bradstreet, 75 per cent
respondents in the business community expect sales volume
to pick up while only nine per cent expect a decline.
among the segments interviewed, manufacturers of capital
goods are most optimistic about their volume of sales
followed by consumer non-durable producers, the release
15 july 2003
bank q1 net profit up 30%
mumbai: hdfc bank has registered an over 30 per
cent increase in net profit for the first quarter ended
june 30, 2003 at rs 107.28 crore, up from rs 82.41 crore
in the corresponding period of the previous year. rise
in interest earned and other income enabled the bank to
post higher profit. interest earned leapt by 22 per cent
to rs 584.46 crore in q1 fy04 from rs 479.16 crore in
q1 in the previous fiscal. other income - which includes
commission fees, foreign exchange earnings, earnings from
derivative transactions and profits from debt securities
- increased by 63 per cent to rs 132.73 crore (rs 81.32
crore), said the bank in a press release on monday.
total income jumped by 28 per cent to rs 717.19 crore
(rs 560.48 crore), while total expenditure jumped by 20
per cent to rs 492.92 crore (rs 410.85 crore). income
on investments went up by 17 per cent to rs 306.85 crore
(rs 262.12 crore). the bank saw its net interest margin
cross 3.5 per cent for the quarter. other provisions and
contingencies increased to rs 66.50 crore from rs 34.62
crore. total deposits grew 32.6 per cent to rs 23,340
crore as compared to rs 17,602 crore in the first quarter
of the previous year, while the bank's core customers
assets (including advances, corporate debentures cps etc.)
increased by 43.1 per cent on a year-on-year basis to
rs 14,113 crore (rs 9,865 crore), said the release. retail
loans grew 132.9 per cent on a year-on-year basis to rs
3,790 crore and now form 30.8 per cent of gross advances
as against 21.7 per cent of gross advances as at june
bank launches dnets
bangalore: deutsche bank on monday announced the
launch of deutsche network services pvt ltd, (dnets) in
bangalore, marking its first step into business process
outsourcing (bpo) in india. a wholly-owned subsidiary
of deutsche bank, dnets will initially commence a pilot
processing centre in bangalore for global cash operations
and electronic payment processing.
dnets will process payment transactions for deutsche bank
entities around the world including those located in new
york, frankfurt, london and several asian countries. initially,
electronic payments processing will be undertaken in dollar
and euro and will eventually broaden to include other
currencies, the release said. operating from the international
tech park, bangalore, dnets will commence initially with
approximately 50 employees, which is likely to increase
by several folds by end-2004.
south indian bank eyes rs 12,480 crore turnover
kochi: south indian bank, which is in its platinum
jubilee year, plans to achieve a total business turnover
of rs 12,480 crore, with the deposit base growing to rs
8,040 crore and an advance portfolio of rs 4,440 crore.
addressing the 75th agm at thrissur today, the bank's
chairman and ceo, a. sethumadhavan, said that the bank
proposed to open about 13 more branches during the year,
taking the total network of customer outlets to 454, comprising
of 404 branches and 50 extension counters.
as of march 2003, the bank had a total capital and reserves
of rs 320.98 crore and a total business of rs 10,474 crore.
the gross profit of the bank had touched rs 216.47 crore
at the end of last year, while the net profit grew to
rs 72.33 crore. as a part of platinum jubilee celebrations,
it is proposed to introduce a range of new products and
services to suit the various segments of the bank's clientele.
to mark this occasion, a new scheme called `focus on village'
aiming at all round development of a village in coordination
with self help groups was launched at a village in kochi,
couple of days back.
bank scheme to attract rib depositors
mumbai: state bank of india, reports suggest, has
framed a special deposit scheme to attract a portion of
the resurgent india bonds (rib) redemptions back into
its coffers. the special deposit scheme will have two-dollar
deposit products, which will offer rates, which are higher
than the prevailing rates on fcnr deposits (libor minus
25 basis points.) the products are believed to be designed
in a way, which will appeal to the nri customer, especially
in the wake of the wide differentials in interest rates
between the domestic and international financial markets.
the bank is reportedly gearing up to shortly embark on
international road shows to market the deposit scheme
from end-july. the rib's raised $4.2 billion from nris
in 1998, and when it matures on october 1, 2003, the total
amount due, inclusive of interest amounts to $5.5 billion.
the reserve bank of india has already made arrangements
with sbi, for the redemption of the bonds and to ensure
that there is no impact on the domestic liquidity in the
money and foreign exchange markets. the apex bank will
sell the foreign currency required by sbi for the payment
of investors at the prevailing market rates, in exchange
for rupee resources. a large portion of the redemption
requirements in foreign exchange will be met out of rbi's
forward foreign exchange assets.
sanmar offers bonus for life insurance plans
chennai: the board of directors of amp sanmar assurance
co announced a bonus for four of their life insurance
plans on monday. policyholders in three of the plans would
receive simple reversionary bonus. nithya shree (whole
life plan) holders would receive 7 per cent simple bonus
on their sum assured. dhana shree (money back plan) and
yuva shree (child protection plan) policyholders would
receive a bonus of 3.5 per cent.
policyholders in subha shree (special endowment plan)
would receive a compound bonus of 3.5 per cent. the bonuses
are payable to the policies that were in force as on march
31, 2003. through a media release, s.v. mony, vice-chairman,
amp sanmar, said that the company expects to insure 60,000
lives and earn a first year premium of rs 30 crore in
shifts to linux operating system
chennai: life insurance corporation (lic) has shifted
to a linux operating system on the heels of pinpricks
experienced with a unix system. at a media gathering to
introduce lic's new pension policy, r.r. nair, additional
zonal manager, said "we are shifting over to linux;
almost 75 per cent of the branches have shifted".
lic officials said that all the branches in the south
zone (tamil nadu, kerala and pondicherry) have just completed
the transition to linux operating system, and other zones
would do the same in a couple of months. at present, lic
sources linux from a vendor who has customised the same
lic pension scheme gets tremendous response
kochi: the introduction of the new lic scheme,
varishta pension bhima yojana, in the ernakulam division
has evoked tremendous response from the market with over
1,000 applications received on the first day of the launch
itself. the confidence of the people in getting high returns
from other pension schemes of lic such as jeevan dhara,
jeevan suraksha and jeevan akshaya has motivated them
towards the new scheme, m.r. kumar, senior divisional
manager of the ernakulam division, said.
earlier, the former judge of the kerala high court, justice
k. narayana kurup, handed over the policy documents to
11 policyholders at a simple function held in the lic
premises. for investors looking for safety and at the
same time an assured return above the market rates, the
new scheme is very attractive as it offered a minimum
rate of return of 9 per cent, mr kumar said. the new scheme
also offered an opportunity to existing policyholders
aged above 55 years to receive the maturity amounts from
lic policies to reinvest their money at the attractive
to repay last series of slr bonds in august
mumbai: the industrial development bank of india
(idbi) is all set to repay the last of the slr bonds -
13.5 per cent idbi slr bonds 2003 - issued about 10 years
back resulting in a saving of at least rs 13 crore of
interest outgo a year. the principal amount of the 66th
series bonds are scheduled to be repaid on august 25,
2003, along with interest accrued till august 24, 2003,
idbi said. an idbi official said: "the 10-year bonds
issued in august 1993, were the last in the series of
bonds qualified for statutory liquidity ratio (slr) issued
by the developmental financial institution after which
the scheme of allowing fis to raise funds through issue
of slr paper was discontinued."
"the cost of funds was at around seven per cent last
year. considering this, there will be a saving of a minimum
of 6.5 per cent per year of interest on the total value
of bonds of rs 200 crore by replacing the amount at present
rates," the sources added. the issue of slr paper
by fis was allowed to enable them to raise cheaper funds
for developmental activities till the norms were amended
under the new economic policy initiated in 1991. the sources
also said that this was the only 10-year bond issued by
the idbi, and earlier the tenor of these bonds used to
be 15 years - 20 years. thus, the book closure of the
66th series has been fixed from july 25 and no requests
for transfer would be entertained from july 24, 2003,
puts off tmb case hearing till 8 august
chennai: the company law board (clb) has impleaded
that all the 10 directors of the tamilnad mercantile bank
(tmb) as respondents and have asked them to file their
reply to the union government petition by july 25. the
case is slated to be heard on august 8. in its recent
order dated july 9, the bench has asked the central government
to serve a copy of its amended petition immediately to
all the 10 directors of the bank excluding the two directors
appointed by the government recently.
14 july 2003
to examine norms for business via brokers
new delhi: the insurance regulatory and development
authority (irda) plans to examine the reasoning behind
the change in guidelines for business through brokers.
the move comes following 'big' representations from non-life
insurers and large industrial houses. the psu insurers
had objected to the withdrawal of the 5-per cent discount,
since this would mean forgoing rs 100 crore that they
can save on brokerage.
the associated chambers of commerce and industry (assocham),
for instance, had stressed that the move implied a steep
increase in the cost of premium by the equivalent percentage.
in a letter to the authority, it has recalled the 30 may
notification, which was to come into effect from 15 june,
that scrapped the discount, contravened the earlier guideline
of 27 march. in that, irda had stipulated that in case
of companies with rs 1 crore or more of paid-up capital,
cooperative societies with rs 5-lakh-plus paid-up capital,
public charitable trusts that were exempt from income
tax and any business that was under the direct control
of the government, insurers could extend a 5 per cent
discount on the face of the policy placed directly with
list of reports
on finance diary