Verma panel recommendations on NPAs
Mumbai: The M S Verma Committee, set up to restructure Uco Bank, United Bank of India and Indian Bank has recommended the takeover of sticky assets by an asset reconstruction company, set up for the specific purpose.

The government may be asked to participate in the equity of the asset reconstruction company. The committee feels that further recapitalisation of these banks is no solution.

The Verma panel is also in the process of studying ways of stopping further increase in non-performing assets, and banks’ internal credit assessment skills.
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ICICI move on NPAs
New Delhi: As per a report in the Business Standard, India’s premier financial institution, ICICI Ltd. will recall loans of Rs.1,467 crore made to over 700 borrowers. ICICI feels this would bring down its net non-performing assets from 7.6 per cent as of June 1999 to 4.5 per cent. ICICI has identified these borrowers from a category called ‘recovery cases’.
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GDP, fiscal deficit shoot up
New Delhi: The good news first. India’s gross domestic product is likely to see an increase of around 1 per centage point, or Rs.18,000 crore. This is on account of the increase in the value-addition estimates of the information technology sector, as part of the current GDP estimates. The amount for this sector had earlier been pegged at just 500 crore, which will now go up to Rs.18,000 crore, as per estimates of the department of electronics.

Now, for the bad news. As of July 1999, the fiscal deficit has gone up to Rs.54,354 crore, which is an increase of more than 28 per cent, compared to 42,300 crore during 1998-99. For 1999-2000, the government had estimated the fiscal deficit, which includes savings, at Rs.1,04,955 crore.

This figure is higher from the revised estimates for 1998-99 of Rs.1,03,737 crore. Total expenditure of the government in the first four months ended July 1999 stood at Rs.90,232 crore, up around 16 per cent.
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United Western Bank to tie-up
Mumbai: United Western Bank is planning to enter an equity tie-up with a foreign bank. P N Joshi, chairman of the Satara-based bank said that for the bank to survive and remain fighting fit such a tie-up is be the only solution.

In 1998-99, United Western Bank saw a growth of 28.7 per cent in deposits and 22.4 per cent growth in credit. The banking industry average is around 18.5 and 12.9 per cent for deposit and credit growth respectively. The bank’s non-performing assets increased from 5.7 per cent in 1997-98 to 8.3 per cent in 1998-99.
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VSNL plans Rs.400 crore investment
Mumbai: Videsh Sanchar Nigam Ltd. is planning to install voice and data enabled networks at a cost of Rs.400 crore. At each of the centres in Mumbai, Kochi, Delhi, Calcutta and Chennai, VSNL has leased 34 megabits per second of cable band width and 8 megabits per second of satellite bandwidth.

It is also installing an eight-node asynchronous transfer mode network, which it will use once it moves into the domestic long distance telephony market. On 1 January 2000, the department of telecommunication’s monopoly on domestic long distance telephony is scheduled to end.
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IPCL, Guj Inds Power, Kirloskar Electric ratings down
Mumbai: Indian Petrochemicals Corporation Ltd. has been downgraded from AA (high quality) to A+ (adequate safety) by Credit Analysis and Research. This rating has been assigned to the company’s Rs.750-crore outstanding non-convertible debentures, and to its fixed deposit scheme up to Rs.500 crore.

Care has also downgraded Gujarat Industries Power and Kirloskar Electric from A to A- and BBB to C- respectively.
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Centurion Bank to toe the retail line
Mumbai: Centurion Bank is yet another bank that has planned to go retail. After just four months of taking over 20th Century Finance Corporation, the private bank is going retail.

The bank’s two-wheeler financing has gone up to Rs.15 crore in July 1999 from around Rs.7 crore in April 1999. Its automatic teller machine network, which currently has 30 machines, is expected to be doubled by March 2000. It is also planning to tie-up with a credit card company, and at a later date, also issue debit cards and credit cards.

Centurion Bank has already introduced tele-banking in Bangalore, and schemes such as loans against shares and dematerialisation services.
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GIC reports huge underwriting losses
Mumbai: According to a report in The Economic Times, General Insurance Corporation’s consolidated results for 1998-99, show a 78 per cent increase in underwriting losses at Rs.686.4 crore. The main contributors to the underwriting losses were GIC’s subsidiaries. Oriental Insurance’s underwriting loss was Rs.257 crore, National Insurance’s was Rs.212.8 crore, United India Assurance’s was at Rs.128 crore and GIC’s at Rs.101 crore.

The GIC group managed to show a net profit on account of its investment income, which stood at Rs.2,282 crore for 1998-99, compared to Rs.2,057 crore in 1997-98.

In this consolidated report, Oriental Insurance’s figures are only provisional as the company has not yet submitted its results.
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Bank of Nova Scotia performs well
Toronto: The third quarter earnings for the period ended July 1999 of the Bank of Nova Scotia, were C$ 397 million compared to C$358 million for the same period in 1998. On a per share basis this works out to 75 cents as compared to 68 cents for the quarter ended July 1998.

Bank of Nova Scotia is Canada’s most active bank internationally.
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