ICICI Bank and Bank of Madura to merge
Mumbai: ICICI Bank and Bank of Madura are planning a merger of their operations. The boards of both the private banks are meeting separately to fix the share-swap ratio and related terms. Following the development, the ICICI Bank stock shot up 12 per cent to Rs 170, and Bank of Madura by 8 per cent to Rs 131.60 on Friday, ahead of the announcement of the board meeting.

Analysts say the swap ratio could be in the region of 10 shares of ICICI Bank for every 13 shares of Bank of Madura, based on current scrip values of both banks.

The 57-year old Bank of Madura, with corporate headquarters in Chennai, is 25 per cent owned by K M Thiagarajan and 12 per cent by the Kotak Mahindra group. Financial institutions hold between five and six per cent and the balance is held by the public, largely from the Chettiar community. The bank's paid-up capital is Rs 12 crore, backed by reserves of Rs 274 crore. For the year ended March 31, 2000, it recorded a net profit of Rs 46 crore.
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Sebi to implement report on corporate governance
New Delhi: The Securities and Exchange Board of India (SEBI) has adopted the Kumarmangalam Birla report on corporate governance code for listed companies, which calls for a number of mandatory requirements including appointment of independent directors and an audit committee.

The Birla committee's corporate governance code would be binding for companies seeking to list for the first time and those listed under group-A in the BSE and S&P CNX Nifty before March 2001. SEBI has asked the stock exchanges in the country to amend listing requirements and implement the mandatory recommendations on listed companies in phases.

Small companies with a minimum capital of Rs 10 crore or networth of Rs 25 crore would have to comply with the code before March 2002, and companies with capital of Rs three crore would require to meet the norms by March 2003.

Among the mandatory norms, companies would have to include non-executive independent directors along with executive directors. Companies would have to form an audit committee to oversee the company's financial reporting, disclosures and adequacy of internal control. The listed companies would mandatorily come up with a board procedure and a compliance report on corporate governance. Among the non-mandatory requirements, the code suggests setting up of a remuneration' committee and option of postal ballots.
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ICRA pegs GDP growth at 6.5 per cent
New Delhi: India’s gross domestic product growth is expected to be around 6.5 per cent this fiscal due to slow pace of reforms and a lower than expected industrial growth, credit rating agency ICRA has in its latest report.

Without the long-outstanding reforms in public sector utilities, government finances and in the banking sector, 7 per cent growth rate and above is purely wishful thinking, ICRA said in its 'Money & Finance' report.

Earlier, Central Statistical Organisation (CSO) had estimated first quarter growth at 5.8 per cent, while the Reserve Bank of India scaled down the year's growth projection to 6 to 6.5 per cent, CMIE to 5.8 per cent and NCAER to 6.1 per cent, against the official projection of 7 per cent.
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IDBI to bring down interest rate to 14 per cent
New Delhi: Industrial Development Bank of India (IDBI) has decided to reduce interest rate to 14 per cent across all sectors. According to the plan worked out for renegotiating interest rates, a borrower has to pay a certain proportion of the total interest burden—which varies from about 35 per cent to 75 per cent of the total interest amount due—to avail lower interest rates on the remaining loan amount.

Recently, IDBI reduced the rate of interest paid by Dabhol Power from 17 per cent to 14 per cent. IDBI chairman GP Gupta has said that the decision to lower interest rates from 17 per cent to 14 per cent as in case of Dabhol power project can be extended to all sectors, if the borrower agrees to 50 per cent pre-payment premium. While the proportion of pre-payment premium may vary from case to case it is usually in the range of 50 per cent of the total interest liability, say IDBI officials.

The decision is a part of the strategy to retain borrowers and also reduce the level of non-performing assets. IDBI officials said the decision has been taken after the institution found out that a number of its borrowers were able to avail loans at cheaper rates from other institutions and banks as the others are plush with funds. The present prime lending rate is 12.5 per cent and in sectors like power the institution lends at around 16 per cent.
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