3 July 2004

Principal AMC enters alliance with PNB, Vijaya Bank
Mumbai: Principal Asset Management Company (AMC) has announced an alliance with Punjab National Bank (PNB) and Vijaya Bank. PNB has acquired a 30 per cent stake in AMC while Vijaya Bank has acquired a 5 per cent stake.

The company is now called Principal PNB Asset Management Company (in partnership with Vijaya Bank). AMC is targeting to breach the Rs10,000-crore assets under management figure over the next twelve months. Currently, the company manages Rs4,825 crore of assets. Norman Sorensen, president Principal International, Inc said the company is aspiring to be three times its current size in two years' time.

ADB increase rural disbursements
New Delhi: The Asian Development Bank (ADB) plans to double sanctions for the development of the rural sector for 2005-07 at Rs11,500 crore. A large chunk of the total sum will be directed towards completion of various projects, under the government's Accelerated Irrigation Benefits Programme (AIBP).

The spread coincides with the rural flavour in the United Progressive Alliance (UPA) agenda. The common minimum programme (CMP) driving the UPA government also emphasises on the AIBP. ADB chief economist and deputy country director Sudipto Mundle said the bank would focus on irrigation, rural finance, agriculture and water resource management projects.

ICICI Bank plans aggressive growth in retail banking
New Delhi: ICICI Banks is targeting to retain over 30 per cent of the retail loan mart, which includes housing loans, vehicle loans, personal loans and credit cards. The bank is planning to grow aggressively by opening 60 more branches, this fiscal and aims to increase its retail assets to Rs33,000 crore, in 2004-05. It recently received permission to open 60 more branches this fiscal and has 455 branches at present.

The bank recently launched a co-branded credit card with Punjab & Sind bank in New Delhi. The bank is looking at opening branches in urban and semi-urban areas to increase its customer base, now at 10 million. Apart from branch expansion, the bank would also open more ATM counters. At present it has 1,780 ATMs. ICICI Bank, listed on the New York stock exchange, has representative offices in US and branches in Canada, UK, UAE, China and Singapore.

LIC ups equity stake in ICICI Bank
Mumbai: State-owned Life Insurance Corporation of India (LIC), has raised its stake in private bank ICICI Bank, India's second-largest commercial bank, to 10.09 per cent from 7.86 per cent, the National Stock Exchange (NSE) said on Friday.

Centurion Bank to release Rs91 crore rights issue
New Delhi: Centurion Bank is planning to come out with a rights issue worth Rs 91 crore this July, which would raise its capital base to Rs288 crore by September-end this fiscal. According to bank officials the record date for the rights issue of Rs91 crore has been set at July 23, 2004 subject to necessary approvals and will be completed well before September 30.

Promoters Rana Talwar's Sabre Capital, Bank Muscat and others have infused Rs154 crore equity in the erstwhile ailing bank. After the proposed rights issue, the bank will have an additional capital of Rs 288 crore, the official said, adding the capital adequacy ratio will then increase to more than the Reserve Bank stipulated nine per cent. Centurion Bank turned around in the first quarter of this fiscal with a net profit of Rs3.15 crore after posting a net loss of Rs105.14 crore for the year ended March 31, 2004.

2 July 2004

Rupee moves up
Mumbai: The domestic currency appreciated for a second day in a row, closing six paise stronger on Thursday at 45.88/90 per dollar.

Forward Market: The six-month forward closed at 1.78 per cent (1.62 per cent), while the 12-month closed at 1.60 per cent (1.46 per cent).

G-Secs: The 8.07 per cent 2017 paper closed lower at Rs 116.25. The yield on the 7.37 per cent 2014 rose to 5.80 per cent from 5.76 per cent.

Meanwhile, the Rs 2,000-crore auction of the 6.13 per cent 2028 Government stock was subscribed at the cut-off price of Rs 93.20, below the market expectation of Rs 94.

The Rs 6,000-crore auction of the 11-year GoI FRB auction was subscribed at the cut-off spread of 0.19 per cent above the base rate for the first half-year at 4.52 per cent per annum.

Call Rates: In the range of 3.50- 4.40 per cent.

PNB introduces Expo Gold Card for exporters
Kolkata: The Punjab National Bank has said that it has come out with the PNB Expo Gold Card for its exporter clients. The scheme proposes to ensure easy availability of export credit to exporters with a good track record. The card, to be issued for three years, would be renewed automatically for a further period of three years unless there were adverse features in the account.
Apart from relaxation in interest rates up to 0.25 per cent on rupee- export credit, the concessional rate of interest, applicable upto 90 days on post-shipment rupee-export credit, would also be extended to 365 days, a bank statement said. The bank will also offer discount of 10 per cent in charges and fee structure for various services apart from providing export credit in foreign currency on priority basis at LIBOR+ 0.75 per cent with service charges at the flat rate of 0.1 per cent for each disbursement.

IDBI Bank to double business in FY '05
New Delhi: IDBI Bank plans to double its balance sheet this year, as well as make an entry in the Gulf region. The balance sheet of the bank currently stands at about Rs 13,000 crore of which 40 per cent was in retail assets. Bank officials have indicated that the IDBI, which is slated to convert itself from development financial institution to a commercial bank this year, was also exploring various options - merging with a big PSU bank or a reverse merger with IDBI Bank or a stand alone entity.

The bank has plans to open offices in Dubai, Singapore and Malaysia. IDBI Banks deposits crossed Rs 10,000 crore in the last fiscal from Rs 6,032 crore in 2002-03, while advances grew by over 60 per cent to Rs 8,438 crore from Rs 5,021 crore. Its net profit was up by 86 per cent to Rs 132.45 crore last fiscal from Rs 71.10 crore in 2002-03.

LIC targets Rs11500 crore as premium income
Mumbai: The Life Insurance Corporation of India (LIC) is targeting a premium income of Rs 11,565 crore during the current financial year, from the sale of three crore and ten lakh policies.

LIC officials said that the insurer had recorded a growth of over 52 per cent in first premium income during this period, on a year-on-year basis, while the growth in sale of policies had been 27.64 per cent and growth in sum-assured was 31.33 per cent. Both the insurer and the Allahabad bank have signed a memorandum of understanding, according to which, the latter will market LIC's insurance products through its branch network, acting as its corporate agent. Allahabad bank has a network of 1,900 branches catering to around 20 million customers.

RBI reshuffles industrial and export credit departments
Mumbai: The Reserve Bank of India (RBI) has decided to merge various functions of the industrial and export credit departments of the bank with other departments of the RBI with effect from today.

All matters relating to industrial and export credit including inter-bank guarantees, housing finance, bank lending to NBFCs, infrastructure financing and industrial rehabilitation and progress reports on relief packages for tea, coffee, tobacco and marine products will be handled by the RBI Department of Banking Operations and Development. While all matters relating to food credit will come under the monetary policy department, returns relating to industrial and export credit, housing finance, infrastructure financing and industrial rehabilitation will be taken care by the department of banking supervision of RBI.

Matters relating to Commercial Paper returns and data on sectoral deployment of credit will be looked after by the RBI monetary policy department. Matters relating to National Housing Bank (NHB) and Infrastructure Development and Finance Company (IDFC) including the nodal functions relating to RBI's shareholding in these institutions and the secretarial services rendered to the RBI's nominee directors on their boards will come under the department of banking supervision (financial institutions division).

All correspondence relating to IECD may, therefore, hereafter be addressed to the respective Departments, a RBI notification here said.

Geojit launches wealth management services in Qatar
Kochi: Geojit Financial Services Ltd in association with the Doha Bank has launched the India Wealth Management Services for non-resident Indians living in Qatar. The service will provide the complete wealth management services include equity-trading services, mutual funds and investment consulting. There are over 1,60,000 NRIs living in Qatar alone. Doha Bank offers mutual funds with an outstanding record of money management and professional service. Equity trading is offered through a strategic association with Geojit. Customers are offered trading and settlement through the NSE and the BSE.

1 July 2004

Rupee recovers 4 paise
Mumbai: The rupee closed stronger by about four paise to end at 46.04/06 on Wednesday against its previous close of 46.08/10.
Forward Market: The six-month forward closed at 1.64 per cent (1.62 per cent) while the 12-month closed at 1.46 per cent (1.45 per cent).

G-Secs: The 7.38-per cent 2015 paper closed at Rs 111.30. The ten-year benchmark 7.37 per cent closed at Rs 111.20.

RBI releases forex reserves investment details
Chennai: According to information disseminated by the Reserve Bank of India, about 25% of India's forex reserves of $114 billion as on May 31, 2004 or $28.40 billion was held abroad in the form of currency and deposits with foreign commercial banks.

This is up from about 15% of forex reserves invested in this category, a year ago. About $16 billion have been added to this form of investment over the past year. About 34% of reserves is held in the form of securities (US treasury bills and other securities) while 40% is held with central banks in other countries as well as with institutions, such as the International Monetary Fund and BIS.

Forex reserves: Rise in capital investment inflows
Mumbai: According to the latest data released by the Reserve Bank of India, there has been a significant rise in net inflows through the capital account heads at $22.7 billion against $12.8 billion in 2002-03. Capital account heads include: Foreign investment, which increased by $14.5 billion ($4.6 billion), short-term credit $1.6 billion ($1 billion), external assistance $-2.7 billion ($-2.5 billion), external commercial borrowings $-1.9 billion ($-2.3 billion), other items $5 billion ($3.6 billion) while banking capital decreased to $6.2 billion ($8.4 billion).

The reserves as a whole surged by $36.8 billion in 2004 fiscal compared to $21.3 billion in the previous fiscal. Major sources of accretion to foreign exchange reserves during the year have been foreign investment (39.4 per cent); comprising FDI (8.5 per cent) and portfolio investment (30.8 per cent), non-resident deposits (9.8 per cent) and short-term credit (4.4 per cent), said a press note from the central bank. The valuation gain in reserves was to the extent of $5.4 billion up from $4.4 billion in the previous year.

Current account surplus doubles
Mumbai: India's current account was in surplus at $ 3.44 billion in the fourth quarter of January-March 2004, according to the latest Reserve Bank of India figures on the country's balance of payments. The surplus for the financial year to March 2004 grew to $8.72 billion from $ 4.13 billion a year ago. With Merchandise exports and imports rising in tandem in January-March 2004, the trade deficit at $ 4 billion remained stable at the level recorded in October-December 2003, but well below that of the first quarter of 2003, according to RBI.

A steady expansion in net earnings from invisibles occurred through 2003-04, peaking in the third quarter (October-December). Software exports weathered the global IT slowdown and protectionist pressure in major international markets and rose by 27.1 per cent in 2003-04 with the maximum increase recorded in the fourth quarter. According to the central bank, private transfers comprising mainly remittances from Indians working abroad rose steadily through the year with a surge in the third quarter.

External debt up with dollar depreciation
Mumbai: The country's external debt rose by $7.7 billion to Rs 112.6 billion in the fiscal ended March 2004, according to figures released by the Reserve Bank of India. The major portion of this 7.4 per cent rise in the external debt is due to the currency valuation on account of the depreciation of the US dollar against other major currencies. Adjusted for valuation effects, the stocks of external debt at the end of March 2004 was broadly at the March 2003 level.

In fact, measured in rupees, the stock of debt recorded a decline of 1.9 per cent over March 2003, stated RBI. In terms of components, NRI deposits were the key driver of the increase in external debt during the lat fiscal. This essentially reflects the flow of discontinued non-resident non-repatriable deposits scheme into the repatriable NRE scheme. Among the other debt components, bilateral debt and short-term trade credits recorded an increase during the year.

IDBI to be full fledged bank
New Delhi: The Ministry of Finance has issued a notification allowing Industrial Development Bank of India (IDBI) to convert itself into a full-fledged bank with effect from July 1. The notification allows the transferring and vesting of the undertaking of the IDBI that was earlier functioning as a development financial institution into a new company registered under the Companies Act. It also paves the way for the institution to formally seek the approval of the Reserve Bank of India to function under its regulatory framework for banks.

The Finance Ministry notification comes barely days after Law Ministry's clearance was obtained late last week. The new entity would be the only scheduled bank in the country that would be required to maintain its development financial institution (DFI) characteristic by continuing to provide term finance to industry as it had been doing earlier. By converting itself into a bank IDBI would get a major relief by being able to access cheaper funds through retail deposits that it was barred from raising as a DFI.

IOB to raise Rs 200 crore through bonds
Chennai: Indian Overseas Bank has informed the stock exchange that it intends to raise Rs 200 crore by way of a bond issue on a private placement basis. This would be reckoned with the Tier II Capital of the bank, for calculating the capital adequacy ratio, the notification to the stock exchange says.

30 June2004

Rupee falls 13 paise to cross the 46 marker
Mumbai: The domestic currency closed 13 paise lower at 46.08/10 on Tuesday, as against its previous closing at 45.95/97 on Monday.

Forwards Market: The six-month annualised forward premia closed at 1.62 per cent (1.56 per cent) and the twelve-month forward closed at 1.45 per cent (1.29 per cent).

G-Secs: The 8.07 per cent 2017 paper closed at Rs 116.25. The 7.38 per cent 2015 paper closed lower at Rs 111.20/30. The ten-year bench mark 7.37 per cent closed at Rs 111.20.

Call rates: At 4.25 - 4.35 per cent.

Post-merger IndusInd Bank net at Rs 262 crores
Mumbai: IndusInd Bank has reported a manifold jump in its net profit to Rs 48.73 crore for the fourth quarter ended March 31, 2004 thanks to the merger with group company, Ashok Leyland Finance Ltd (ALFL).

For the full year, the combined entity posted a net profit of Rs 262.07 crore, up from Rs 90.17 crore earlier. The merged entity has a total asset base of Rs 15,000 crore with Rs 4,200 crore coming in from ALFL. Net NPAs as a percentage to net advances stood lower at 2.72 per cent from 4.25 per cent earlier. Net NPAs in terms of numbers stood at Rs 220 crore.

BNP Paribas trims net loss to Rs 13 cr
Mumbai: BNP Paribas has posted a lower net loss of Rs 13 crore for the year ended March 2003-04 compared to a net loss of Rs 14.3 crore in the previous year. The net losses are due to the provisioning for the bad assets in the bank's books and lower lending margins. The bank has made provisions of Rs 48 crore this year (Rs 16 crore).

The net NPA as a percentage of net advances stood at 2.7 per cent (3.77 per cent). The net NPA in terms of numbers decreased to Rs 35 crore (Rs 53 crore). The total income of the bank decreased to Rs 222 crore from Rs 281 crore in the previous year. During the year, operating profit stood at Rs 35.29 crore as against Rs 1.74 crore for the financial year ended March 2003.

ABN-Amro launches its asset management company
Mumbai: ABN-Amro has launched its asset management company in India, ABN-Amro Asset Management (India) Ltd.
The fund house has applied to the Securities and Exchange Board of India for clearance on the offer documents for its five funds - Equity Fund, Monthly Income Plan, Dynamic Debt Fund, Floating Rate Fund and Cash Fund. These funds are expected to have their initial public offer by the end of July. ABN-Amro has mutual fund operations across 25 countries and assets under management of $200 billion as on March 31, 2004. Of this, $18 billion are invested in the emerging markets.

ABN-AMRO to invest $1billion in Indian banking operations
Mumbai: The Dutch banking major ABN-Amro Bank N.V has proposed to invest as much as 1 billion euro into banking operations in India. The money committed will go solely into the banking operations. It will be utilised for conversion into a subsidiary model and for acquisitions, it was revealed at the sidelines of a press conference.

ABN-Amro Bank's Group Chairman had earlier in the month said that the investment would be made for organic growth and also for selective acquisitions. The 1-billion euro, according to him, is to be used to build its franchise and enhance its brand name. The bank, which is soon to announce its annual results for the financial year 2004, has a balance sheet size of Rs 10,000 crore. The bank has applied to the Reserve Bank of India for conversion of its branch set up into a subsidiary so that it can operate like a local company.

Govt announces sale of floating rate bonds for Rs 6,000 crore
Mumbai: The Government of India has announced the sale of 'Floating Rate Bonds, 2015' for an aggregate amount of Rs 6,000 crore by auction using the uniform price format. It has also announced the sale (re-issue) of '6.13 percent Government Stock 2028' for a notified amount of Rs 2,000 crore (nominal) through a price-based auction using the multiple price auction method.

Up to 5 per cent of the notified amount of the sale of the bonds/ stock will be allotted to eligible individuals and institutions as per the Scheme for Non-Competitive Bidding Facility in the Auction of Government Securities. The Reserve Bank of India, Mumbai, on July 1, will conduct the auctions. The bids should be submitted by July 1. On the basis of the bids received, the RBI will determine the maximum spread, for the floating rate bonds at which offers will be accepted.

29 June2004

Rupee down 12 paise
Mumbai: The domestic currency closed at 45.95/97 on Monday, weaker by 12 paise than the previous close of 45.83/84 on Friday.

Forwards Market: While the one year forward closed at 1.56 per cent against the previous close of 1.45 per cent, the six month forward closed at 1.29 per cent against 1.20 per cent.

G-secs: The 8.07 per cent 2017 paper closed higher that the opening levels at Rs 116.65.

Call rates: Steady at 4.25 to 4.50 per cent.

HDFC bond plan gets AAA rating
Mumbai: The Housing Development Finance Corporation Ltd's (HDFC) Rs 500-crore subordinated bond programme has been granted `AAA/Stable' ratings by Crisil. The ratings reflect HDFC's strong market position in the housing finance business, its well-diversified, stable and low-cost resource base and its good asset quality.

Indian Bank to provide direct credit to farmers
Chennai: The Indian Bank has entered into an agreement with tractor manufacturer Mahindra & Mahindra in an attempt to by pass the middle men which afflict rural economy. More such deals with other tractor and fertiliser companies are being negotiated, according to the bank.

Under the new plan, Indian Bank supplements the traditional role of credit disbursal by training select SHGs. Subsequently, the corporates which have entered into a deal with Indian Bank would use the SHGs to sell agricultural inputs. Among the SHGs Indian Bank deals with are Perumanur Magalir Sangam and Periyagoundarpuram Magalir Sangam, based in Tamil Nadu.

PNB begins implementing agriculture policy initiatives
New Delhi: The Punjab National Bank has started implementing the recently announced policy initiatives for doubling flow of credit to agriculture within the next three years with an aim to achieve at least 30 per cent growth in disbursement under agriculture credit.
The bank had initiated steps to identify farmers who had suffered due to natural calamities, to reschedule or offer fresh finance as per RBI guidelines. The bank has also adopted 70 villages for providing community TV, solar energy-based streetlights and water coolers/fans to schools. PNB has also set up the PNB Farmers' Welfare Trust for establishing farmers' training centres.

28 June2004

Nabard and Regional Rural Banks to hike farm credit
Hyderabad: A meeting of Regional Rural Banks from several States was convened by the National Bank for Agriculture and Rural Development (Nabard) here today to address issues on enhancing credit flows to the farm sector. The meeting was convened in the wake of Union Government's directive on doubling the flow of agricultural credit in three years.

The meeting was attended by chairman of RRBs of Andhra Pradesh, Karnataka, Tamil Nadu, Kerala and Orissa, and the senior officers of their respective sponsor banks and the RBI.
Following the meeting, the RRBs agreed to increase credit for agriculture by 40 per cent as desired by the Government and provide necessary relief to the distressed farmers.