13 september 2003

sbi plans two schemes for nris
mumbai: state bank of india will be launching two new deposit schemes for non-resident indians - pravasi vaibhav and pravasi samriddh - on 24 september for a limited period. pravasi vaibhav is a deposit scheme denominated in rupees with payment of maturity proceeds in us dollars. the foreign currency amount received from the customer will be converted into rupees by the bank, to issue an nre special term deposit receipt (nre-stdr) for one year. the yield on pravasi vaibhav will depend upon the interest rates on nre deposits and cost of forward cover prevailing on the date of issue. at present, sbi offers 3.90 per cent on nre deposits with a maturity of up to one year to less than two years.
the stipulated minimum amount for deposits is $10,000 or equivalent. the tenure is one year and the maturity proceeds will be paid in us dollars. the pravasi samriddhi deposit, which will be booked at the bank's off-shore banking units (obus) at bahrain, nassau and seepz (mumbai), offers nris opportunity for investment on floating or fixed rates of interest, on cumulative and non-cumulative basis. this deposit will be denominated in us dollars and euro. the stipulated minimum amount is $5,000 and the tenure of deposit will be 1, 2, 3 and 5 years.

ing vysya bank to raise rs 200 crore via bonds
bangalore: ing-vysya bank has placed its tier-ii capital bonds in the markets at 6.25 per cent amounting to rs 200 crore. banking sources were quoted as saying that the bonds, rated 'aa plus' by both fitch and crisil, have a 10-year maturity profile without any early exit options. banks with comfortable tier-i capital situation have opted for tier-ii bond issues to increase the risk-weighted assets.
under current guidelines banks are permitted to have up to 45 per cent of their capital in the form of tier-ii. ing had total capital funds equivalent to rs 779.5 crore or equivalent of 9.86 per cent of the capital to risk-weighted assets. of this, tier-i capital alone was in the region of about 7 per cent. this allowed it substantial flexibility to raise low cost tier-ii capital, the sources said. the pricing for ing vysya bond issue is under 100 basis points above the 10-year sovereign rate. besides, the ing offering for 10 years was also uncommon, the sources said.

oriental insurance, malda bank join hands
kolkata: oriental insurance company ltd has signed an agreement with the malda-based gaur gramin malda bank for marketing of general insurance products on friday. the agreement will help the company reach out to the rural market.

centurion bank gets court approval for sabre rejig plan
mumbai: the bombay high court (goa bench) on friday approved the recapitalisation and restructuring of centurion bank. the bank said the court's final hearing approved the scheme of arrangement submitted by sabre capital. the reserve bank of india's (rbi) permission had also been sought for the same, said a senior official of centurion bank, which has its registered office in goa. in april 2003, sabre capital worldwide submitted the proposal to revive the private sector bank.
the proposal was approved by the bank's board of directors and subsequently by its shareholders and creditors. the scheme consists of three major proposals: restructuring of capital by reducing the face value of the bank's share from rs 10 to re 1, infusion of fresh capital of rs 319 crore in two phases and takeover of management control by sabre capital and merger of bank muscat with centurion bank.

five psbs to share online atm network
mumbai: five public sector banks have come together for a new atm sharing arrangement. canara bank, central bank of india, indian overseas bank, uco bank and union bank of india, on friday co-branded their atm network tie-up as "cash online". the dismantling of the swadhan atm network effective from december 2003, has led banks, both in the public and private sector to enter into consortium tie-ups to form co-branded networks such as cashnet, cashtree, and mitr.
cashonline, the shared atm network, has been launched with a view to exploiting the sectoral strengths of the banks to the mutual advantage of their vast clientele, said top officials with the five banks while addressing a press conference here on friday. the current combined atm strength of the banks at 600 will be increased to 1,500 by march 2004 and 2,700 by march 2005, officials said.

kakinada co-op bank net at rs 2.14 crore
kakinada: the kakinada cooperative town bank earned a net profit of rs 2.14 crore during 2002-03. m v v satyanarayana, chairman, said the bank has been given the grade a audit certificate. it had 11 branches and one more would be shortly opened at rajahmundry. he said the bank would declare a dividend of 18 per cent to shareholders after the general body meeting on september 27.
the bank had lent rs 50.67 crore and the non-performing assets (npas) amounted to 6 per cent. all efforts would be made to reduce the npas and during the past four months rs 75 lakh had been recovered.

12 september 2003

capital inflows: rbi act may be amended
mumbai: the reserve bank of india (rbi) is planning to issue special securities to mop up the rupee liquidity from the market resulting from the sterilisation of the forex deluge. an internal rbi group is examining the issue and may suggest amending the rbi act to enable the central bank to issue securities on its book. the rbi act 1934 does not permit the central bank to issue securities on its own.
the principal instrument for managing capital inflows in the country has been sterilisation. but as the recently issued rbi annual report for 2002-03 indicated, the rbi's management is also mooting other ideas to tackle this 'problem of plenty'.

rib redemption may help solve dollar shortage issue
mumbai: the forex market is planning a dollar shortage in the cash market between september end and middle of october in the wake of resurgent india bond (rib) redemptions. according to forex dealers, the forward premium to be paid for booking dollars during the end of september has gone up to 3.4 per cent. on the contrary, forward premiums on all other maturities from one month to one year are ranging between 1.90 per cent and 1.23 per cent respectively in that order.
dealers were quoted as saying that while the demand for forward dollars is increasing with the rising premium, demand for forward dollars of other maturities is virtually stagnant. the demand for booking september-end dollar is emerging from corporate as well as banks. dealers explained that the dollar demand during the period has risen on account of the redemption of the bonds.

atm outsourcing become effective
mumbai: banks are eyeing alternatives to owning and operating their own atms. the india switch company (isc), an independent payment systems provider, is planning to tap into this outsourcing opportunity by establishing 1,500 atms over the next three years for the recently formed 'cashtree' atm networking sharing alliance of five public sector banks - bank of india, union bank of india, indian bank, united bank of india and syndicate bank.
in its capacity as service provider for enabling transaction switching among banks, isc had signed a service level agreement in july with the five banks for establishing interconnectivity with their atm switches. mani mamallan, chief operating officer, isc, said a capital expenditure of about rs 100 crore is envisaged for setting up the 1500 atms for 'cashtree'.

11 september 2003

continuous settlement system: rbi seeks us fed clearance
mumbai: the first-ever continuous linked settlement (cls) system for cross currencies, proposed to be set up by the clearing corporation of india ltd (ccil), has, reportedly, been referred to the us federal reserve by the reserve bank of india for clearance. under the system, ccil will be one of the members of cls banks which works under the jurisdiction of federal reserve and hence the need for the mandatory approval.
sources were quoted as saying that if the ccil gets fed approval, it will be the world's first agency to offer third- and even fourth-party counter-guarantee backed settlement service in cross-currency as a settlement agency with no trading position of its own. at present, only one or two banks in europe offer cross-currency settlement. but this is done for their own banks with inter-bank trading positions.

lic announces bonus for policyholders
mumbai: life insurance corporation of india (lic) has declared a total valuation surplus of rs 9,733 crore for the financial year 2002-03 as against rs 8637.50 crore in the previous financial year. lic has also announced bonus for its policyholders for the year 2002-03 pursuant to the actuarial valuation as on 31 march 2003.
the bonus rates declared by lic shows a marginal adjustment over the last year because of the fall in average yield on investments owing to overall declining interest rate scenario. out of the surplus declared, 95 per cent, which is rs 9,246 crore (rs 8,205.62 crore in 2001-02), is distributed as bonus to the holders of 'with profit policies' which were in-force as on 31 march 2003 and 5 per cent of the surplus, which is rs 487 crore (rs 431.88 crore in 2001-02), is to be given to the indian government as yearly dividend.

ifci rakes in rs 52-crore from wgsrl share sale
new delhi: ifci ltd has raked in over rs 52 crore by selling 3.03 crore shares of welspun gujarat stahl rohren ltd (wgsrl) in the secondary market at a price of rs 27-28 per share on tuesday. these shares constitute 21.75 per cent of the paid up capital of wgsrl.
sources were quoted as saying that the shares worth rs 82 crore were picked up by a clutch of foreign institutional investors on a day when over 4-crore shares of wgsrl were transacted. ifci's total holding in wgsrl was about 4-crore shares, which has now been reduced to 1-crore shares.

10 september 2003

tax refunds interest slashed to 6%
new delhi: corporates and high net worth individuals are not likely to find it attractive to park their surplus funds with the taxman, with the finance ministry slashing the interest rate on refunds to 6 per cent per year from the existing 8 per cent, reports have said.
it may not be all that profitable now for corporate treasurers to deploy surplus cash by way of making liberal advance tax payments in the hope of obtaining a high return through subsequent refunds. simultaneously, the government has also reduced the interest chargeable by assessees on their overdues. the interest on such overdue amounts would be charged at 12 per cent against 15 per cent.

mediclaim coverage to include pre-existing illnesses
mumbai: government-owned insurance companies have proposed to extend mediclaim coverage to include pre-existing illnesses. those suffering from diseases when buying the policy will now get coverage for the treatment of these diseases under the new cover. at the same time, the overall sum assured, currently capped at rs 5 lakh, will be raised.
national insurance company chairman and managing director h s wadhwa was quoted as saying: "we plan to waive the clause that excludes coverage of pre-existing diseases. at the same time, we intend to enhance the cover to more than rs 5 lakh." some private insurance companies already offer coverage of pre-existing illnesses at a higher premium or after a couple of years. royal sundaram allows for pre-existing illnesses after five "no-claim" years.

fourth atm sharing alliance soon
mumbai: the fourth announcement of atm network sharing alliance will happen soon. canara bank plans to form an atm network sharing association with four other public sector banks - central bank of india, indian overseas bank, union bank of india and uco bank.
there has been a spate of atm network sharing announcements off late. banks are entering into strategic alliances with a view to provide their customers the convenience of a countrywide atm network. this allows customers to conduct transactions such as cash withdrawal, balance inquiry, mini-statement, pin change, statement and chequebook requests at more locations across the country.

9 september 2003

y v reddy takes charge as new rbi governor
mumbai: dr y v reddy has taken charge as the new governor of the reserve bank of india (rbi) on monday. calling on dr reddy in office were state bank of india chairman a k purwar and securities and exchange board of india chairman g n bajpai.
reddy also had a luncheon meeting with his a-team - deputy governors rakesh mohan, vepa kamesam and k j udeshi along with the executive directors (eds). later in the day, reddy also met up with office-bearers of the rbi officers' association and employees' unions.

trickle-down effect for bank credit
mumbai: banks, which so far had confined their lending to the top tier companies, finally being forced to lend to companies that are not the top-rated ones. as a result, credit is at last beginning to become available to companies down the line, reports say.
faced with three problems (surplus liquidity, a decline in credit offtake, and lack of lucrative investment avenues) banks are now being forced to offer loans at below prime lending rates (7-8 per cent) to even companies that have ratings a notch or two lower (aa and a).

sbi plan to tap rib outflows
mumbai: the state bank of india (sbi) is reportedly coming out with two products to tap redemption proceeds of resurgent india bonds (ribs), which mature from 1 october. market sources were quoted as saying that while one product is meant for deposits received in india, the other is for deposits received at overseas centres.
both the products mature in a year. the indian rupee deposit comes with an in-built hedge for exchange rate risk. under the scheme, dollar deposits will be converted into rupees and a exchange rate risk provided for the entire period. the depositor will get rupee interest rates, as applicable on nre deposits, with the entire exchange rate risk covered by the bank, on maturity.

home financeraises $20 million
mumbai: idbi homefinance has raised $20 million via external commercial borrowings to diversify its portfolio even as idbi today formally took over tata home finance ltd (thfl), a subsidiary of tata finance (tfl). thfl will now be renamed idbi homefinance. "the company has a bank borrowing of rs 400 crore. in order to diversify the portfolio we will avail of refinance from national housing bank (nhb) of around rs 75-100 crore. we will also go in for an ecb of $20 million. we will also look at accessing the primary debt market," said melwyn rego, managing director & ceo of idbi homefinance.
the idbi-thfl deal was initiated on may 30 with the signing of a share purchase agreement with tfl. icra advisory services conducted the due diligence on behalf of idbi. tfl had a 63 per cent in the company, while the uk-based abbey national held the balance stake. tfl took over abey' stake in the company. the sale, also marks abbey's exit from india. idbi home finance will also look at opening satellite offices. "the first priority will be to set up offices in places where idbi has its own offices," rego added. idbi has 38 branches across the country. thfl has 16 branches in 12 cities and its home loan portfolio is around rs 450 crore.

8 september 2003

cbi plans cell to deal with bank, securities fraud
kolkata:cbi is in the process of setting up a new cell specifically meant for investigations into bank and securities fraud.
mr p.c. sharma, director of cbi, stated here on sunday that rbi already has a cell for bank frauds.

poverty aid needs to double: world bank
washington:rich countries need to more than double the $16 billion a year they have pledged in aid to help cut poverty around the world by 2015, and poor asian countries and some african countries are most in need of the funds, according to a new world bank study.

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