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GIC aims for a share in global reinsurance business
New Delhi: The General Insurance
Corporation (GIC) is opening its first representative office in London, in a bid to
capture a slice of international reinsurance business. GIC is targeting $300-400 million
of inward premiums in the next two years and proposes to enter into strategic agreements
with large insurance companies in the South-Asian region, Middle East, Saarc, African and
East-European countries, including Russia and CIS countries.
The GIC as an Indian-Reinsurer aims to
benchmark its standard of services and business quality with the world leaders. AM Best,
the agency which exclusively rates insurance companies worldwide, has rated GIC as
"A" excellent.
GIC plans to undertake several activities
in the context of its role as the India Reinsurer. These would include, managing
obligatory cessions, their excess loss protection and retrocession, organise and manage
market pools for fire, marine hull and other classes and arrange for their excess loss
protection, accept treaty and faculting business from Indian companies. GIC will also
assist Insurance Regulatory & Development Authority (IRDA) in maintaining market
retention at 1999-2000 level and ensuring that business will not be ceded, outside India
without fully utilising the Indian market capacity.
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GTB shareholders okay merger
with UTI Bank
Mumbai: The shareholders of Global Trust Bank have approved the bank’s merger
with UTI Bank, at an extra-ordinary general meeting held in Hyderabad on Monday. The UTI
Bank shareholders had earlier approved the merger on Saturday. Both the banks, have
decided to amalgamate to form UTI Global Bank and have approached the Reserve Bank of
India (RBI) to seek approval for the merger proposal.
The boards of the two banks had approved a stock swap ratio of 2.25:1, which translates
into four shares of GTB, for every nine UTI Bank shares held. The paid-up capital of UTI
Global Bank will be Rs 180 crore, consisting of 18 crore shares of Rs 10 each.
UTI Bank has a share capital of Rs 131
crore and GTB has a capital base of Rs 121 crore. The capital adequacy of the new bank
will be somewhere close to 11 per cent. UTI Global Bank will have a net worth of Rs 928
crore, on a balance sheet size of Rs 20,000 crore. The bank will have a deposit base of
around Rs 16,000 crore, and advances of around Rs 7,900 crore. The bank will have a
network of 157 branches and 336 ATMs.
UTI is the principal shareholder in UTI Bank, with a 60.7 per cent equity stake.
Post-merger, UTI will be the largest shareholder in UTI Global Bank, with a holding of
19.8 per cent.
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IDBI panel to finalise
report on film financing
Kolkata: The inter-institutional committee formed by IDBI, IFCI and ICICI to
prepare norms and procedures for film financing will be finalising its report on Tuesday
before submitting its recommendations to the government early next month.
The committee, headed by IDBI executive director S K Kapoor, would place its report at a
senior executive meeting of the financial institution today. The committee members would
vet the report for possible loopholes. The modalities for film financing have been worked
out by the FI in consultation with the Reserve Bank of India, leading banks and FIs,
besides various film personalities including producers, directors and technicians.
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ICICI to divest 15% stake in
bank to strategic partner
Mumbai: ICICI has decided to divest around 15 per cent stake in ICICI Bank to a
foreign strategic partner to bring down the promoter’s holding to around 40 per cent
from the current level of 55.7 per cent, as per Reserve Bank of India’s licensing
norms.
ICICI has reportedly short-listed four
prospective "strategic partners" and a formal announcement on likely partner is
expected over the next two weeks. The short-listed banks include Development Bank of
Singapore, Prudential of the UK, UBS and Barclays.
ICICI’s 62.2 per cent stake in the
bank will come down to 55 per cent, once Bank of Madura’s merger with ICICI Bank is
formalised. However, ICICI will be required to further bring down its stake in order to
meet the RBI-stipulated licensing norms for new banks. RBI has stipulated new private
banks to reduce promoters’ stake to 40 per cent by March 31.
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Readymade garment exports
decline 16% in January
New Delhi: Exports of readymade garments have witnessed a decline of 16 per cent in
value terms at Rs 2,251.87 crore in January, compared to Rs 2,522.54 crore in the same
month last year. Decrease in exports has been attributed to non-endorsement of outside the
bilateral agreement (OBA) items, which has declined by around 46 per cent.
According to data compiled by the
Apparel Export Promotion Council (AEPC), exports to OBA countries during January 2001
decreased by about 46 per cent at Rs 314.68 crore over last year. Figures however, did not
represent actual exports to OBA markets as the commerce ministry had abolished the
requirement of export certification by councils and exporters making shipment without
certification from AEPC.
Exports of readymade garments declined by
13.75 per cent at 133.6 million pieces compared to 154.9 million pieces in the same month
in 2000. However, exports of readymade garments during the period April-January 2000-01
increased by 3.43 per cent in value terms at Rs 20,296.21 crore and 3.79 per cent in terms
of quantity at 1,162.9 million pieces.
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NCAER suggests lower tax
rates and scrapping surcharge
New Delhi: The National Council of Applied Economic Research (NCAER) has called for
lowering of tax rates in the forthcoming union budget to create a conducive environment
for investment, increased GDP growth rate and lower fiscal deficit.
In its latest report, Macro Track, NCAER has said that the budget for the next
fiscal must address the issue of providing an environment that is conducive to new
investments that could sustain economic growth. "For a reduction in tax rate by 10
per cent and investments of this amount, real GDP would increase by increase by 0.36 per
cent," it said, adding that the fiscal deficit would also come down by 1.5 per cent
from the present level. However, such a tax cut would lead to rise in inflation rate by
0.19 per cent.
NCAER has also said there is a case for reducing the surcharge that was imposed two years
ago as a temporary measure. The report said incentives for savings are important for
raising the gross savings to GDP ratio. The report noted that investment scene lacked
significant growth in demand for capital goods as well as demand for investment funds.
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