Government decides to demerge four GIC subsidiaries
New Delhi: In a significant decision taken by the government, it has decided to demerge the four subsidiaries of the General Insurance Corporation and turn them into separate non-life insurance companies. With the demerger, it is proposed to make GIC a reinsurance company.

Simultaneously, the government has also decided to increase the equity of GIC and its four subsidiaries, Oriental Insurance, New India Assurance, United India, National Insurance, in keeping with the guidelines laid down by the insurance regulatory authority.

Further, to ensure that the companies don’t work at cross purposes it has been decided that an organisation on the lines of the Indian Banks Association will be set up for co-ordination between these companies.
Back to News Review index page  

Government eases IBP divestment norms
New Delhi: In a significant climbdown from its earlier stand that only companies with investments in upstream and downstream sector like refineries and exploration and production activities should be eligible to bid in the IBP divestment program, the government has decided to relax the eligibility criteria.

Now, companies depositing bank guarantees worth Rs 2,000 crore, in lieu of the company’s commitment for future investments, can take part in the international competitive bidding process, no matter if they already have an investment in the Indian petroleum sector or not. The government has retained the right to encash the guarantee in the event the company fails to fulfil its investment obligations.

The move would make a number of global oil majors, like Exxon, British Petroleum, Shell, Total, Kuwait Petroleum, Oman Oil, Saudi Aramco, Petronas and Esso, eligible for bidding.

The new norm will be a major step towards moving into the deregulated regime where foreign companies will be allowed to acquire marketing rights for petro-products.
Back to News Review index page  

MTNL may get long distance telephony licence
New Delhi: In a move that could help the basic telephony provider face competition, the government announced that it was considering granting Mahanagar Telephone Nigam Limited, a license for operating in the domestic long distance sector.

The department of telecom is also planning to recommend to the finance ministry the request of MTNL for grant of tax concessions under Section 80 IA which is available to those providing telecom services.
Back to News Review index page  

Cement majors hike prices
Mumbai: In a concerted move to combat adverse market conditions, three cement majors, Associated Cement Companies (ACC), Larsen & Toubro (L&T), and Gujarat Ambuja joined hands to hike up their prices by Rs 6-7 per 50 kg bag in Mumbai, effective from Monday.

While the three companies are fully aware of a possible dumping from other states, the company officials state that they have for the time being over-looked such aspects and concentrated on price realisation.

According to analysts, the manufacturers are going against the tide, trying to overlook the demand-and-supply dynamics. A price hike is highly unsustainable unless backed by supply arrangements. Further, a ban on construction in Madhya Pradesh and in other drought and semi-drought prone areas is also having a cascading effect.

It is understood that the three companies are willing to to experiment to what extent can the market absorb a price increase. If this fails, the manufacturers will offer special discounts to retailers.
Back to News Review index page  

Hong Kong bank - Merrill to launch e-banking in India
Hyderabad: A 50:50 joint venture between the HSBC group and Merill Lynch, to provide financial services to its customers through integrated electronic channels, including the Internet, interactive television and mobiles phones, is all set to be operational in Australia and Canada by next month, which will be followed by the launch in other countries, including India next year.

The joint venture company has also initiated a pilot project in the UK, which is due for completion by December this year.

HSBC India’s CEO Zarir J Cama said the company will serve individual customers across the world, except in the United States, providing the industry’s most comprehensive and innovative services for the consumers who prefer to make informed investment decisions for themselves.
Back to News Review index page