Friday, October 30, 1998
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B U S I N E S S | Friday, October 30, 1998 |
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Steps to protect NBFC depositors NEW DELHI, Oct 29 — The host of regulatory measures for non-banking financial companies suggested by a Special Task Force in the Finance Ministry, if implemented, will be a boon for millions of depositors, who in the past had burnt their fingers by investing in dubious companies. Tisco profit improves MUMBAI, Oct 29 — The net profit of the Tata Iron and Steel Company Ltd (Tisco) improved in the quarter ended September 1998 to reach a figure of Rs 96.32 crore for the first half of 1998-99, but it is far less compared to Rs 176.48 crore for the corresponding six months of the previous year. |
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PTDC launches web site |
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PAN
card process time-consuming |
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Steps to protect NBFC depositors NEW DELHI, Oct 29 — The host of regulatory measures for non-banking financial companies (NBFCs) suggested by a Special Task Force in the Finance Ministry, if implemented, will be a boon for millions of depositors, who in the past had burnt their fingers by investing in dubious companies. Though NBFCs, especially chit fund companies, have been in vogue for long, lack of regulatory mechanism has encouraged fly-by-night operators. In the last couple of years in the wake of a general slump several NBFCs had found their investments going bad. They were unable to pay back hefty returns promised to their depositors. Since NBFCs generally operate in areas where the tightly-regulated banking systems fear to tread, they have often been exposed to risky investments in a wide range of areas like hire-purchase finance, housing finance, equipment leasing finance, loans and investments. The previous United Front Government, alarmed by the increasing number of companies going bankrupt, clamped strict measures which instead of helping the depositors, worsened their plight. Several NBFCs left depositors in the lurch. Even healthy NBFCs were constrained by the over restrictive and regulatory regime. Also, the procedure for taking over the assets and liquidation of defaulting and insolvent NBFCs remained deficient and was neither able to effectively prevent asset stripping nor did it enable quick disposal of assets for the benefit of all creditors whether secured or unsecured. It was in the this context that the Union Finance Minister, Mr Yashwant Sinha, appointed a seven-member task force, under the Special Secretary, Banking, Mr C.M. Vasudev, to review the regulatory framework for NBFCs. The committee in the report, presented yesterday, has recommended stringent prudential norms for NBFCs, including the setting up of a separate regulatory and supervising body for them under the aegis of the RBI. In a bid to impart greater financial soundness and achieve economies of scale in terms of efficiency of operations and higher managerial skills, the committee has recommended that the present minimum capital requirement of Rs 25 lakh itself may be reviewed upward. It has been suggested that the RBI be asked to draw up a time-bound programme for the disposal of applications for registration as NBFCs. Since the operations of NBFCs are often concentrated in far-flung areas, the RBI has been advised to apprise the State Governments of the companies which have been granted registration as well as the companies whose applications have been rejected. Given the relatively higher risk involved in NBFCs’ operations, a higher level of capital to risk asset ratio (CRAR) compared to banks has been recommended. The committee has said that while the present stipulation of 12 per cent of CRAR for all rated NBFCs may continue, the RBI may prescribe a higher CRAR of say 15 per cent for those NBFCs which seek public deposit without credit rating. In a bid to prevent deployment of public deposits in high risk and speculative avenues, the committee has said that the RBI should prescribe ceilings for exposure in risk-prone areas like real estate sector and investment in capital markets, specially unquoted shares. The RBI should stipulate that the NBFCs should invest at least 25 per cent of their reserves in marketable securities. While delinking credit rating of an NBFC from its ability to raise deposits, the committee has said that an NBFC with net owned funds (NOF) of less than Rs 25 lakh should be barred from accepting public deposits. It has been recommended that equipment and leasing and hire purchase finance (EL/HP) company without credit rating be allowed to accept public deposits equal to 1.5 times its NOF or Rs 10 crore which ever is lower; for EL/HP company with investment grade credit rating or above 4 times NOF and for loan investment companies with investment grade credit rating or above 1.5 times NOF. The committee has, suggested that the liquid asset ratio of the NBFCs should be increased to 25 per cent of public deposit so that an unsecured depositor is at least assured of a return of one-out-of-every four rupees deposited by him. The appointment of a
depositors’ grievance redressal authority and
enactment of laws to make deposit taking by unregistered
NBFCs or unincorporated financial intermediaries a
cognisable offence, besides a ban on the issue of
advertisements soliciting deposits by any unincorporated
body are also part of the recommendations. |
PTDC launches web site CHANDIGARH, Oct 29 — The web site of the Punjab Tourism Development Corporation was launched here today by Mr Sukhbir Singh Badal, Union Minister of State for Industries. Ms Jagir Kaur Tourism Minister, Mr Naranjan Singh, Principal Secretary, Tourism and members of the Board of Directors were present at the launch ceremony. The web site has been prepared by the National Informatics Centre’s Punjab unit. The site is targeted at foreigners, especially the NRIs. Apart from a brief overview of activities of the corporation, the site provides detailed information on each tourist complex — its photograph address, telephone number, how to reach it, facilities offered, tariff and nearby places of tourist interest. Information regarding the holiday homes being run by PTDC at Shimla, Dharamsala, Mussoorie, Jaipur, Srinagar and Goa is also available. The facility of AC luxury buses from the international airport in New Delhi to Amritsar is likely to be of special interest to NRIs. A linkage of this site with detailed information on tourist related information of Punjab, will enable the interested surfer to explore various fascinating aspects of Punjab, including places of pilgrimage, forts, palaces, fairs & festivals. A provision for sending feedback has been made in the site so that continuous improvements can be made on the basis of suggestions received. This site can be accessed at the address: http://www.nic.in/ptdc. Leading private hoteliers
in the State also showed interest in the project. The
PTDC management is ready to open this site to the private
sector so that it becomes a general site on the hotels
and restaurants of Punjab. |
Consumer courts dogged by delays
WHEN the Consumer Protection Act came into being in 1986, the two key words used to describe the consumer justice system envisaged under it were “quick” and “inexpensive”. The law stipulated a time limit of 90 days for the adjudication of complaints and consumers did not have to pay any court fee or engage a lawyer to win a case. Twelve years hence, when consumer courts are dogged by delays, the use of the word “quick” in the context of disposal of cases seems highly inappropriate. In fact the latest data on the working of consumer courts in the country reveal that on an average, only 32 per cent of cases filed before the District Fora are disposed of within 90 days. Of the cases filed before the state commissions, only 24 per cent are disposed of within the stipulated time limit. The District Fora in Maharashtra, for example, which have registered the largest number of cases since the inception of the courts, have been able to dispose of only 64,507 cases within 90 days, out of a total of 27,0009 cases filed. Obviously, the existing number of courts there are unable to handle the load. The consumer courts at the district level in Andhra Pradesh could dispose of only 20,525 cases within 90 days, out of a total of 94,403 filed since their inception. Himachal Pradesh has stuck to the time limit with 3,464 cases out of a total of 10,068 complaints filed. The list of pending cases before the District Fora in some of the states is also alarming. In Maharashtra, 75,785 cases are pending before these courts at the district level, while in Uttar Pradesh, 53,984 cases are pending. Andhra Pradesh, Guajarat, Haryana, Karnataka, Rajasthan and Madhya Pradesh are some of the other states with long lists of pending cases ranging from 16,000 to 10,000. The implementation of the Consumer Protection Act has never been smooth, thanks to the indifference of the State governments to a legislation meant to protect the interest of consumers. In fact in 1993, the Supreme Court had to threaten the State Governments which had not implemented the law despite directives from the Apex Court, with contempt proceedings. Even in March 1996, monitoring of the working of consumer courts by the National Commission revealed a distressing state of affairs in many states, where delay in the appointment of presidents or members had rendered many District Fora non functional. In Maharashtra for example, 17 out of a total of 34 District Fora were not working. In Punjab, six District Fora were functioning while 12 were non-functional. In Assam, out of 23 District Fora, 7 were functioning independently and the rest were presided over the District Judges. Today, 542 District Consumer Disputes Redressal Fora and 32 State Consumer Disputes Redressal Commissions are functioning in the country, besides the National Commission in New Delhi. Yet, problems of inadequate infrastructure, staff, delays in appointing new Presidents and members, delays in setting up additional consumer Fora, repeated adjournments, continue to hamper the smooth and efficient functioning of these courts. The National Commission and the Ministry of Consumer Affairs at the Centre have time and again tried to coax the states to provide better facilities for these consumer courts, but in vain. A working group constituted by the Ministry of Consumer Affairs in 1994 had suggested, among others, constitution of additional District Fora by the state governments, whenever the number of cases pending before a Forum exceeded 800. Similarly, appropriate provision should be made for setting up Benches in the state commissions and the national commission for quicker disposal of cases, the group had said. State governments should also appoint a panel of retired district judges and other members, who could adjudicate over complaints in the absence of regular members or the President. As of now, the working of the courts come to a grinding half whenever the President goes on leave or retires. State governments should also appoint new presidents and members without any delay. (The District Forum as well as the State Commission consists of a President and two members). There should also be
proper monitoring of consumer courts by the states. In
Kerala, for example, each District Forum sends at regular
intervals, detailed data on the functioning of the
courts, including the average number of sittings required
for a case, average number of cases posted every day and
the number disposed. The courts also specify the problems
faced by them, if any. Such monitoring has not only
helped the state government to suggest ways of hastening
the process of adjudication, but also set right the
problems relating to infrastructure. Another related
problem is the poor remuneration paid to the members of
the Fora in many states. Unless this is improved, it
would be difficult to attract competent people to the
post of members of these courts. |
Tisco profit improves MUMBAI, Oct 29 (PTI)— The net profit of the Tata Iron and Steel Company Ltd (Tisco) improved in the quarter ended September 1998 to reach a figure of Rs 96.32 crore for the first half of 1998-99, but it is far less compared to Rs 176.48 crore for the corresponding six months of the previous year.The second quarter ended September 1998 witnessed Tisco’s profit improve to Rs 69.23 crore against Rs 27.09 crore in the first quarter ended June 30, 1998.For the whole of 1997-98, Tisco’s net profit was Rs 322.08 crore. Tisco said the slowdown of the economy, which commenced two years ago, continues and has impacted the half yearly results of the company. While volumes and sales during the first six months of 1998-99 increased marginally, the net realisations were lower and income from operations came down by 6.60 per cent. The net income from operations were also down to Rs 2,817.53 crore during April-September 1998 from Rs 3,016.20 crore in the same period last year. Net sales were 1,286,838 tonnes for April-September 1998 against 1,239,405 tonnes in the corresponding period last year. Despite severe competition
both in the domestic and international markets, the
company was able to increase its sales tonnage by 4 per
cent. |
PAN card process time-consuming CHANDIGARH, Oct 29 — The income tax authorities here maintain that the delay in issuing laminated PAN cards is because of the long process involved. The Chief Commissioner, Ms Surinder Paul Kaur, says the actual work on PAN in this region started only on July 1. Because of the large number of assessees, inadequate infrastructure, use of new technology, fewer number of trained software operators, initial software problems and a few other organisational problems, the initial work has been slow. “But we have now been concentrating only on PAN. We hope to issue all PAN cards by July next year,” she adds. After an application has been received in form 49A, she says, there is first manual checking followed by cross-checking with blue book so as to segregate non-filers of IT from those who file IT returns. The forms so checked are sent to the computer centres. In the region, the computer centres are at Rohtak, Patiala, Jalandhar and Amritsar. Subsequently batches of 50 forms are made and an outside data entry vendor captures the information in the forms of magnetic media (floppies).The information on floppies also includes images (photograph of the applicant) and his or her signatures. The floppies are sent back to the computer centre, which after making corrections validate the data entered. In the PAN review, the allotment of number is confirmed. All the data on PAN applications is then sent to the National Computer Centre at New Delhi for formal allotment of PAN. After allotment, the information is sent back to computer centres where PAN cards and intimation letters are printed and despatched to the applicants. The entire process takes a minimum of five to six months. If at any stage, any deficiency is noticed, the process gets stalled and letters are issued to the applicants to remove deficiencies. Some of the common mistakes made in the applications, she says, pertain to mention of initials rather than the full name of the assessee as required; the initials of father’s name or mention of husband’s name (father’s name is mandatory even in case of married women), age rather than date of birth and jurisdiction of the assessment office is left blank. Ms Surinder Paul Kaur says that those responsible for ensuring the mention of PAN or GIR numbers are required to forward the documents concerned to the Director of Income Tax (Investigation) within a month of the receipt of the documents. While talking about the uniqueness of PAN, she says the system has been so designed to make sure that no assessee can be issued more than one PAN. The uniqueness of the PAN, she says, is the generation of a phonetic code for every tax payer by combing five core-fields — full name (no abbreviations), father’s full name, date of birth, incorporation, agreement, partnership or trust deed formation; status of assessee (individual,HUF, etc.,) and sex (in case of individuals). In case any two or more core fields are the same, the computer will refer back the case for a re-check. Each PAN is a 10-digit alpha-numeric number which has a confidential alphabetic check digit and will have acceptability all over the country. The scope of PAN will be extended to other transactions only after the infrastructure and the system is geared up to take the entire load, she adds. (Concluded) |
Bullish trend on good results MUMBAI, Oct 29 (PTI) — Equities recovered their initial losses and even posted moderate gains pushing the sensex up by 12 points today in the wake of good buying from operators as well as financial institutions. Reflecting early weakness, the sensex had dipped to the intra-day low of 2787.90, a fall of over 45 points. It, however, recouped after midsession to close at 2845.16 as against yesterday’s close of 2833.04, netting a small rise of 12.12 points. The BSE-100 index edged up by 3.81 points to 1274.43 from previous close of 1270.62. Dealers said domestic institutions and mutual funds led by the Life Insurance Corporation made purchases in several scrips like EIH Ltd, HCL Infotech, Digital Equipments, MTNAL, HPCL, Hindalco, Glaxo, Tata Tea, Pentafour Software and Smithkline Co with a price limit. Operators, particularly bears, too covered their short sales positions following continuous flow of encouraging corporate news. Raymond, Hindalco, Indian Rayon, Esab India, Thermax and MTNL announced their working results for the second quarter of the financial year 1998-99. Raymond, which had suffered a setback in the first quarter with a loss of Rs 12 crore, made a turnaround showing a net profit of Rs 47 crore in the second quarter. Dealers said today’s recovery has filled the gap of the rally witnessed on Monday after the buyback shares announcement indicating that the market has now bottomed out. They anticipated further upward movements tomorrow on fresh buying support and bear covering on the last day of the current settlement. The BSE-200 and the Dollex were quoted fractionally up at 297.15 and 116.98 compared with previous close of 296.59 and 116.88 respectively. The volume of business was very low at Rs 888.19 crore, sharply down from yesterday’s turnover of Rs 1217.74 crore. ITC led the market with the highest turnover of Rs 169.21 crore followed by Satyam Computer (Rs 131.21 crore), Zee Tele (Rs 84.55 crore), SBI (Rs 54.46 crore) and RIL (Rs 51.03 crore). ITC rose by 2.75 to
718.50. Satyam Computer was up by 8.25 at 597, Zee
Telefilms by 13 at 679.75, SBI by 2.40 at 160.40, Telco
by 4.10 at 113.60, Tisco by 2.50 at 80.55, Hind Lever by
14.75 at 1616.50 and Infosys Tech by 44.25 at 2433.50.
RIL was fractionally up at 113.30 from previous close of
113. |
Marico net soars 19 pc CHANDIGARH, Oct 29 — Marico Industries Limited (Marico) has for the first half year ended September 30 ((Hi Fy 99), achieved a turnover of Rs 248 crore, a growth of 9.15 per cent over the first half of 1997-98 (Hi Fy 98). The operating margin
profit was maintained at 11.5 per cent of sales. Despite
a higher depreciation charge for the period, lower
finance costs helped Marico post pre-tax profit Rs 23.9
crore a growth of 10 per cent. Net profit at Rs 20.4
crore was up by 19 per cent. Earning per share for the
six months was Rs 14 (annualised Rs 28) as compared to Rs
11.9 during Hi Fy 98. The Board of Directors has
recommended an interim dividend of 35 per cent, as
against 30 per cent declared for Hi Fy 98.
Plantation companies warned NEW DELHI, Oct 29 (PTI) — The Delhi High Court today warned all the 592 plantation companies operating collective investment schemes that their properties will be attached if they failed to submit details of assets and liabilities within three weeks. Taking serious view of
non-compliance of its October 7 order, a Division Bench
comprising Justice Anil Dev Singh and Justice Mukul
Mudgal said all these companies should comply with the
direction otherwise the court would consider appointment
of a receiver and initiate the attachment proceedings. |
Raymond wipes out losses MUMBAI, Oct 29 (PTI) — Raymond Limited has wiped out its losses of Rs 12 crore in the first quarter and recorded a net profit of Rs 35 crore for the first half of the financial year 1998-99, a noticeable turnaround in the second quarter. The company has posted a net profit of Rs 47.96 crore in the second quarter of financial year 1998-99, an increase of 79 per cent over Rs 26.83 crore in comparable period last year. The total income rose by 15 per cent to Rs 374.37 crore during the second quarter as against Rs 325.71 crore in the corresponding period of 1997-98. MTNL posts Rs 675 cr profit NEW DELHI, Oct 29 (PTI) — Mahanagar Telephone Nigam Limited (MTNL) has posted a profit of Rs 675 crore, with a growth of 27.7 per cent for the six months ended September 30 over the same period last year. MTNL’s turnover grew by 17.5 per cent at Rs 2,605 crore over the same period last year, a press release announced after the Board of Directors’ meeting concluded here today. Indian Rayon net down MUMBAI, Oct 29 (PTI) — Indian Rayon and Industries Limited’s net profit in the first half of 1998-99 is lower at Rs 80.63 crore compared to Rs 101.05 crore in the corresponding period last year. Net profit was lower due to higher interest costs at Rs 67 crore (Rs 54 crore in the previous year) and higher depreciation which stood at Rs 54 crore (Rs 42 crore last year). Gross profit of the company for the period was lower at Rs 140.80 crore against Rs 152.84 crore in for April-September 1997. L&T net falls marginally MUMBAI, Oct 29 (PTI) — Larsen and Toubro (L&T) showed a marginal fall in its net profit during the first half of the current financial year at Rs 198.71 crore as against Rs 202.86 crore during the corresponding period last year. However, the company’s net sales and income from operations rose by 19 per cent to Rs 3092.95 crore from the previous year’s level of Rs 2621.93 crore. The company’s order booking of Rs 3742 crore during the first half of the current year showed a rise of 23 per cent over the previous year. Mr S.D. Kulkarni, Managing Director and Chief Executive of the company, told reporters here yesterday that cement sector could not make any significant profit during the first half due to poor cement prices. The economic crisis in the South Eastern countries also affected the company’s performance during this period, he said. Asian Paints to pay 35 pc MUMBAI, Oct 29 (PTI) — Asian Paints has reported a 14.9 per cent growth in turnover at Rs 597.32 crore for the first half of this fiscal while net profit was up marginally. Net profit stood at Rs 32.32 crore as against Rs 32.06 crore last year in the first six months of the current financial year, the company said in a statement adding that the board had announced an interim dividend of 35 per cent. There has been a significant increase in depreciation of around 65 per cent to Rs 12 crore and an interest by 14 per cent to Rs 11.68 crore for the six month period ending September 30 due to investment in additional capacities in three plants and reconstruction and recommissioning of another. Lupin net jumps 51 pc MUMBAI, Oct 29 (PTI) — Lupin Laboratories has reported a 51 per cent jump in its net profit for the first quarter ending September 30 to touch Rs 9.86 crore compared to Rs 6.55 crore during the corresponding period last year. The turnover for the first quarter was up by 25 per cent to Rs 185.81 crore. Chairman and Managing Director D.B. Gupta said the focus in the current year would be on reshuffling the product portfolio in favour of lower volume but higher margin products. Three new oral and two new injectible cephalosporins are to be introduced during the year, he said adding that the capacities of key bulk drugs like lisinopril and ehambutol would be augmented. WIPRO pat up 184 pc BANGALORE, Oct 29 (PTI) — Wipro Limited has posted a 36 per cent growth in gross revenue amounting to Rs 8,191 million in the half-year ended September last from Rs 6,066 million in the corresponding period last year. Profit after tax grew 184 per cent from Rs 235 million in September 1997 to Rs 665 million in September 1998, says a Wipro press release. The half-year turnover in software exports over the corresponding previous half year recorded 74 per cent growth at Rs 2,838 million. Wockhardt net up 18 pc MUMBAI, Oct 29 (PTI)
— Pharmaceutical major Wockhardt Limited has
reported a 18 per cent growth in its net profit and 32
per cent increase in its sales for the first quarter
ending September 30. Profit after tax was Rs 23.4 crore
(as against Rs 19.89 crore the previous quarter) while
sales was Rs 15.3 crore (Rs 11.56 crore). Wockhardt in a
statement said the increase in interest expenses was
primarily on account of fresh borrowings for the
acquisition of merind in July last. |
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| Hongkong Bank GURGAON, Oct 29 — Hongkong Bank today opened its 22nd branch here. Situated at the DLF Arcade in DLF Phase II, the branch provides personal banking products, including asset vantage and branch has also a 24-hour ATM facility. Sugar
mill GT Bank Forex rates Dabur Credit card Sun Pharma MUMBAI, Oct 29 (PTI)
— Sun Pharmaceutical Industries Ltd (spil) has
recorded a net profit of Rs 26.67 crore for the first six
months of 1998-99, a marginal increase of about 1.95 per
cent despite a sharp rise in sales. |
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