Private insurance firms face stiff norms
New Delhi: The Insurance Bill, when passed, will contain tough solvency margins, maximum foreign equity limits and mandatory rural exposure norms.

For life, general and re-insurance companies, a maximum limit of 26 per cent will be allowed as foreign equity. The Indian promoter, should initially hold a minimum 74 per cent stake and will have to bring it down to 26 per cent in ten years.

The minimum capital base for life and general insurance has been fixed at Rs.100 crore while for re-insurance it has been fixed at Rs.200 crore.

Private sector insurance firms will be compulsorily made to conduct business in rural areas. The exact ratio of such business to the total will be announced soon by the Insurance Development and Regulatory Authority.

Solvency margin, which is the excess of assets over liabilities, should be maintained by life and general insurers to the extent of Rs.50 crore, while for re-insurers, it is Rs.100 crore.
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IT Act next in row
New Delhi: One of the important new pieces of legislation which will come up for enactment is the Information Technology Bill. The passing of this bill will pave the way for e-commerce. One of the proposals in this bill is permission for 49 per cent foreign equity in e-commerce joint ventures in India.

The approval of foreign direct investment in e-commerce ventures is a contentious issue as there is confusion about whether it will come under the purview of the department of telecommunications or the information technology ministry.
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Syndicate Bank issue oversubscribed
New Delhi: The public sector Syndicate Bank, which had opened its maiden public issue on 25 October 1999, has met with an over-subscription of about two times the issue size of Rs.125 crore. The issue will be open until 30 October 1999.

The bank will use the issue proceeds to strengthen its capital base and increase long term resources.
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Corporation Bank profit up
Mumbai: The net profit of Corporation Bank has increased to Rs.111.7 crore for the first half of the financial year 1999-2000, from the Rs.106.7 crore recorded during the corresponding period last year. Total income for the first half of the current fiscal stood at Rs.907.9 crore, up 26.5 per cent from last year.

On 14 January 2000, the bank will launch a gold deposit scheme with a three to seven year maturity period and a minimum gold deposit requirement of 500 gm. The bank plans to bring down the average cost of deposits to 8.5 per cent by the end of the financial year 2000 from the current 8.9 per cent.
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FIPB puts ‘retail’ plans on hold
New Delhi: The Foreign Investments Promotion Board has, for the time being, decided not to entertain foreign direct investment proposals in the retail sector. Earlier, it had hinted that retail traders may be allowed to invest in India. It seems the commerce ministry has asked it to go slow in this matter.

The matter came into question when Honda Siel wanted to import other Honda car models from abroad, upon receiving indents from Indian customers. With the latest FIPB decision, Honda-Siel’s proposal will be shelved.
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Railways offer 16 per cent
New Delhi: The Indian Railways will offer a minimum internal rate of return of 16 per cent to private investors for investments made in build-own-lease-transfer, or BOLT, projects. Earlier, the railways had offered returns of 14 per cent, which failed to attract investors. The BOLT scheme will be applicable for projects such as laying of new lines and track doubling.

Bids will be finalised once the railway board approves the documents. Bids will now be finalised on the basis of the net present value as opposed to the bare construction cost basis adopted earlier.
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FDI will be $3.5 billion by end-1999
New Delhi: Foreign direct investment into the country will be around $3.5 billion by end-1999, according to Ajit Kumar, industry secretary. By end-September 1999, the figure had already reached $3 billion. Ajit Kumar further said that Canadian investment in India is just $42 million. He was speaking at the India-Canada Joint Business Council meeting.
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SBH likely to become autonomous
Hyderabad: The State Bank of Hyderabad may become autonomous since it has passed the four eligibility criteria laid down by the ministry of finance. The parameters specified by the ministry of finance include a capital adequacy ratio of more than 8 per cent, net owned funds of over Rs.100 crore, net non-performing assets of less than 9 per cent and a three-year net profit track record.

SBH has a capital adequacy ratio of 10.65 per cent, net owned funds of Rs.496 crore, net non-performing assets of 8.78 per cent and has been having a 30-year net profit track record.
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SBI cuts board size
Mumbai: The State Bank of India has removed the nominated and elected board of directors who have completed six years from the local boards. This follows an amendment made to the SBI Act.

Local boards oversee each of the 13 circles in SBI, and include chief general managers and general managers of the bank.
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Truckers, Govt hold talks
New Delhi: The All India Motor Transport Congress and Ashok Joshi, secretary, department of road transport and highways, met for the first time since the truckers called for a strike on 21 October 1999.

Some of the coalition partners of the BJP government have criticised the government's move to hold on to the diesel price hike.
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StanChart apologises to Mount Banking
Mumbai: Standard Chartered Bank has apologised to the UK’s Mount Banking Corporation and its owners, the Kenya-based Suresh Shah and Navin Shah for having accused the latter of money laundering during the 1992 securities scam in India.

The apology follows the UK’s banking tribunal stating that StanChart’s allegations were not proved as there was no evidence. StanChart has also made a donation to a charitable trust in Kenya.
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