19 july 2003

speed 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.

the 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.

the 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

irda reverses earlier order on insurance brokerage
hyderabad: the insurance regulatory and development authority (irda) has decided to reverse an earlier decision regarding insurance brokerage.

the 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 business.
in a circular

y 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 jalan.

the 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.

rupee at 46.2150/46.2250
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.

rbi 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 shortly.

icici 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.

karnataka 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 bank.

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.

union 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 them.

16 july 2003

lvb, 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 report.
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.

syndicate 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.

state 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 in q1
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, sharma added.

gross 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.

india 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 said.

15 july 2003

hdfc 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 30, 2002.

deutsche 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.

state 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.

amp 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 2003-04.

lic 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 for lic

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 interest rate.

idbi 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, idbi said.

clb 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

irda 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 the insurers.

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