Vajpayee's colleagues set agenda
New Delhi: Senior members of prime minister Atal Behari Vajpayee's cabinet, upon assuming office on 14 October, have made broad policy pronouncements and set their priorities. Banking sector reforms, opening up of all major industrial sectors to foreign direct investment, restructuring of the textile sector, implementation of reform measures already announced on the power front, an integrated transport policy for the whole country, and a continuation of the present civil aviation policy are some of the major items on the agenda of Mr Vajpayee's new team. Some of the important announcements made are:

Finance minister Yashwant Sinha says a series of reforms will be announced in order to make the economy strong and to take it on a growth phase. Privatisation, financial sector reforms, reforms for the industrial sectors and for the capital market are on the cards. He calls them "big ticket reforms".

A discussion paper will be prepared on the second generation of reforms. Although insurance sector privatisation is very much on the cards, the bill may not get passed in the Parliament session beginning 20 October. Other bills in the pipeline are the money laundering bill and the amendement of the Sick Industrial Companies Act. Banking sector reform is another priority, and the Verma committee report will be studied and specific recommendations implemented.

Commerce and industries minister Murasoli Maran says he will prefer to open up domestic industry to foreign direct investment and if possible dismantle the Foreign Investments Promotion Board. E-commerce will be made more popular and implemented on a large scale.

In civil aviation, the present policy will be largely followed, says civil aviation minister Sharad Yadav. However, he will not make any policy statements on issues like disinvestment of the government stake in Air-India and Indian Airlines and on acquisition of aircraft by the two national carriers.

Power minister Rangarajan Kumaramangalam has set a 100-day programme for his ministry. The emphasis will be on implementation of the policies framed during his earlier tenure. Mega power projects, financing of power projects, development of the hydel sector and a cess bill are among the priorities for the ministry.

The surface transport ministry will formulate an integrated national transport policy that will cover different sectors like roads, ports, railways and inland waterways. Surface transport minister Nitish Kumar has given national highways priority in the scheme of things.

Telecommunications minister Ram Vilas Paswan has set his goal of making the internet available in rural areas and small towns. He says he has asked the department of telecommunications to draw up a plan within one month on how Internet can be made more easily available in rural areas and in small towns. The ministry will also try to achieve the target of one telephone in every village by 2002 set by the national telecom policy 1999.

Textile minister Kashiram Rana says a new textile policy is on the anvil. The policy will be based on the recommendations of the Satyam Committee set up in 1998 to frame a new policy, as the global multi-fibre agreement will be dismantled in 2004. Mr Rana said a cotton technology mission will be set up and he will seek cabinet approval for the revival of the National Textile Corporation.

On the information and broadcasting front, Arun Jaitley, the new minister, says private broadcasters will be chartered, the Prasar Bharati Corporation will be accorded autonomy with accountability, and the cable law will be reviewed in order to make it more relevant to today's world.
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SBI, associates will merge
Mumbai: An ‘in principle’ decision has been taken by the State Bank of India to merge itself and its seven associate banks. This will create a $70 billion or Rs.3,00,000 crore giant.

The seven associate banks in the descending order of size in terms of assets are State Bank of Hyderabad, State Bank of Travancore, State Bank of Patiala, State Bank of Bikaner & Jaipur, State Bank of Mysore, State Bank of Saurashtra and State Bank of Indore.

The Reserve Bank of India holds 59 per cent of the equity of SBI. The SBI wants the RBI to reduce the stake to below 55 per cent so that the former can increase its equity by issuing American depository receipts. The SBI management feels that if the RBI is not interested in a dilution in its stake, there will be a strain on the future profitability of the bank.
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Forex brokerage war may erupt
Mumbai: ICICI Bank will pay only half the rates the State Bank of India pays on spot and long-swap transactions. While the SBI has a 60 per cent market share in the foreign exchange market and is in a position to dictate market rates, ICICI Bank’s brokerage has been accepted by some of the top foreign exchange brokers. ICICI Bank has only a 2 per cent market share in the foreign exchange market.

From 1 October 1999, the Foreign Exchange Dealers Association of India had decided to let banks fix foreign exchange brokerage charges as they wished. The SBI was the first to slash its rates, which have been considered to be the benchmark rate for all Indian banks.
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RBI rejects NBFC application
Mumbai: The Reserve Bank of India has refused to register Vijaya Commercial Credit Ltd., a Mangalore-based finance company as a non-banking finance company. Vijaya Commercial cannot operate any more as a NBFC.
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Bank of Scotland to formally bid for Natwest
London: The Bank of Scotland will make its $34.7 billion hostile bid on National Westminster Bank formal by issuing an offer document. The main rivals for Bank of Scotland are the Royal Bank of Scotland and Abbey National which also want to take over NatWest.
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Credit Suisse raided in Tokyo
Tokyo: Credit Suisse Financial Products’ Tokyo branch was raided by the police on charges of preventing inspection by the Japanese financial regulatory authorities.

The branch where the raid was conducted had allegedly instructed employees to shred some of the recorded transactions and erase e-mail records when the Financial Supervisory Agency was inspecting it in January 1999.

Earlier, when the FSA had accused it of malpractices, Credit Suisse had already made a public apology to Japan, ordered a report on the incident. It had lost its licence.  
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Sumitomo, Sakura banks to merge
Tokyo: Japan's Sumitomo Bank and Sakura Bank will merge to create a $925 billion behemoth. This will be the second largest bank in the world, after the $1,308 billion bank that was formed after the merger of the Industrial Bank of Japan, Dai-Ichi Kangyo Bank and Fuji Bank. An official announcement regarding the merger will be made at a later stage. Deutsche Bank of Germany is the third largest with $899 billion in assets.

The Japanese financial sector, troubled by bad loans and losses, has been reforming at a feverish pace.

The banks are members of Japan's 'keiretsu' groups -- industrial clusters with cross-shareholdings and other long-standing business ties.
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