Thursday, September 24, 1998
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B U S I N E S S | Thursday, September 24, 1998 |
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Badal: why collect M&M
to open |
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Loan waiving panel soon
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Badal: why collect here, invest
there? CHANDIGARH, Sept 23 — Banks collect deposits in Punjab and invest them outside the state. Of a Rs 100 deposit, only Rs 40-50 is invested in Punjab, said Mr Parkash Singh Badal, while opening Corporation Bank’s regional office in Sector 9 here today. The office will cover the bank’s branches in Punjab, Haryana, Himachal Pradesh and Chandigarh. Mr Badal asked banks to open more branches in remote corners of the state and make credit available to the needy, particularly youth, for self-employment projects. The interest rates abroad are only 3-4 per cent, while in India these are (18-19 per cent so high that many projects become unviable, the Chief Minister added. The Chandigarh region has
the bank’s 20 branches and the plans to open nine
more during 1998-99 — four in Punjab, three in
Haryana, one each in Himachal Pradesh and Chandigarh. |
Loan waiving panel soon CHANDIGARH, Sept 23 — The Government of India is reported to have asked the Reserve Bank of India to set up a permanent committee to frame broad guidelines for banks for writing off loans on a regular basis, particularly of the loanees in the priority sector. The committee will cover broadly the agriculture sector, including small and marginal farmers and loanees who have been extended assistance under the Government of India sponsored schemes for poverty alleviation programmes and rural development. The need for such a committee seems to have arisen in view of the reports of suicides by farmers in various regions, including the farmers’ failure to pay back loan/interest instalments because of repeated failure of crops due to uncertain weather conditions/floods. The reports first came from Andhra Pradesh followed by Bihar, Uttar Pradesh, Punjab and Haryana. Nearly 1,000 cases of farmers’ suicide have been reported so far. The committee being set up for writing off loans is certainly expected to release guidelines which will place the responsibility for distinguishing between wilful and genuine defaulters. It will also take into account failure of crops due to damage caused by adverse weather conditions or other unnatural happenings. At present each bank appears to have its own rules for writing off loans. The new committee will enforce a uniform code on the banks which may seriously damage their profitability and ultimately hurt the interest of depositors. The need for the committee is also being emphasised on account of, what is being claimed as the failure of the existing legal system because of its ineffectiveness in the matter of recovery. Even the constitution of the debt recovery tribunals for the banks has not been of much help in this direction. This is why a huge amount running into several thousand crores is locked in pending cases in the Supreme Court, the high courts and lower courts in different parts of the country. By setting up a permanent committee for writing off loans, the government would play havoc with the system which has so far worked over five decades, though not entirely to the satisfaction of experts. A sum of Rs 6,000 crore was reportedly written off and paid by the Government of India to the banks concerned when Mr Devi Lal got farmers loans up to Rs 10,000 written off. The new committee is likely to give still wider range writing off loans which may vary between Rs 25,000 and Rs 1 lakh in order to cover the Prime Minister’s Rozgar Yojna also. Some banks have even resorted to advancing loans to sick units to adjust their non-performing assets in order to escape reprimand from the higher authorities because of massive accumulation of NPAs. The State Bank of India tops the list with Rs 10,553.53 crore worth of non performing assets followed by Indian Bank (3140.90 crore), Bank of Baroda (Rs 2840.08 crore)and Punjab National Bank (Rs 25.18 crore). According to a report on
non-performing of public sector banks (Chairman Pannir
Selvam) submitted to the Indian Banks’ Association,
out of a total of Rs 2,44,214 crore of loan assets of
public sector banks, a huge sum of Rs 43,577 crore (17.8
per cent) is locked or lost in substandard, doubtful and
losing, in other words non-performing, assets. |
M&M to open training schools CHANDIGARH, Sept 23 — On the suggestion of Mr Parkash Singh Badal, Mahindra & Mahindra has decided to open two “Tractor driver and mechanic training” schools — one in the ITI at Talwandi Sabo in Bathinda district and the other in the ITI Patti in Amritsar district. The training project in Talwandi Sabo will be opened on October 5 and in Patti, the project will commence on October 15. The Chief Minister, during a meeting with a Mahindra & Mahindra team last month, had suggested that as Punjab is a highly mechanised State with a high tractor density, some institutes must be opened for imparting training to drivers and mechanics. During the first phase
1,250 operators and 150 mechanics will be trained in the
two districts. |
SBI opens gold sale counters CHANDIGARH, Sept 23 — The SBI today launched the retail sale of gold bars at its Sector 17 main branch here. Mr K.K. Narula, Chief General Manager, opened the special gold sale counter. Mr Narula said the SBI’s four branches at Chandigarh, Jalandhar, Amritsar and Jammu have been designated for retail sale of gold in the shape of 10 tola bars weighing 116.638 grams of 0.999 purity which is the purest of gold. The rate will be quoted daily on the basis of international prices displayed on Reuter at 10 a.m. plus Customs duty and sales tax. There may be fluctuations in the gold prices, but the retail rate will remain the same throughout the day. Mr S.K. Jain, Deputy
General Manager, said the bank today sold 10 gold bars,
each costing Rs 50,000. The daily rate of gold will be
available on telephone Nos 702023 and 702009. The sale
counter will remain open from 10 a.m. to 2 p.m. daily
(except Saturday when it will open till 12 noon). |
NEW DELHI, Sept 23 — Indian roads are set to become glitzier with the arrival of a new small car, Santro, designed by Hyundai Motor Corporation of Korea. The Indian subsidiary of the company, Hyundai Motor India Ltd (HMIL), today unveiled the small beauty for the first time in the world to a select audience of media persons in the Capital today. The car will hit the Indian roads in the middle of October. Santro has a designer look and superb finish. The avant-garde “tall boy” design makes the car look spacious. The multi-functional, 999 cc Hyundai Santro, manufactured at HMIL’s plant near Chennai, will be available in three variants — Santro, Santro DX with power windows and central door locking, and Santro DX with power steering. The Santro will be priced at Rs 2.99 lakh, Santro DX with power windows and central door locking at Rs 3.49 lakh and Santro DX with power steering at Rs 3.69 lakh all ex-showroom Delhi prices. Mr Y.S. Kim, Managing Director of HMIL, said all the three variants of Santro would have CFC-free air-conditioning as a standard feature and would be available in six colours — vivid red, neutral silver, campus blue, noble white, lively green, and bambi beige. The cars would be booked against full payment. Customer orders will be accepted from October 8 to 12 and the delivery of the car would start from October 18, on the auspicious occasion of “Dhanteras”. The company has set up 70 dealers and workshops spread over 55 cities, including Jammu, Jalandhar, Ludhiana, Chandigarh, Patiala, Karnal, Gurgaon and Faridabad. Santro has a start-up 70 per cent indigenisation level and it has several features ideally suited to Indian conditions such as a multi-point injection system that gives improved fuel economy (27 km to a litre under test conditions), and a world class suspension system for a smoother ride. The safety features matches European standards and the environmental features are as per the year 2000 emission norms. Matiz The company is also looking at making India an export base for the Matiz. Commercial production of the car is due to commence on October 7, Managing Director Shiv Gopal Awasthi told newspersons here last evening. The three variants will be a base model, a middle level one and a fully loaded version with all power features. However, the company has no immediate plans to introduce an automatic transmission driven vehicle for the Indian roads. Neither would a diesel heart be introduced on the small car, he added. Petrol Escort The car is now priced at
Rs 767,783. However, the prices of diesel Escort has been
maintained at the previous levels, sources close to the
company told UNI here. |
Where are bankable projects? CHANDIGARH, Sept 23 — Money raised in Punjab is invested partly outside because there are not sufficient “bankable” project proposals forthcoming, said Corporation Bank’s Chairman and Managing Director R.S. Hugar, while addressing a press conference here today. The bank has advanced Rs 20 crore to PUDA, while a proposal for additional Rs 20 crore is under consideration, Mr H.S. Saini, Regional Manager, told TNS. While the bank has already extended Rs 10 crore to the Haryana Financial Corporation and Rs 20 crore to the HSIDC, it is still considering the Rs 10 crore demand of the Haryana Seeds Corporation. Corporation Bank, rated as No 1 among nationalised banks, is expected to improve its performance with its net worth going up to Rs 1,000 crore from the present Rs 760 crore. Its equity base is just Rs 120 crore, while the net profit during 1997-98 was Rs 167 crore. The book value has gone up to Rs 70.74 from Rs 48.73. Its NPA level of 2.93 per cent is one of the industry’s lowest. For this commendable performance Mr Hugar credits the bank’s high automation level (75 per cent of business computerised, 355 branches linked with e-mail), lack of excessive staff baggage, “conservative” approach and high staff productivity of Rs 1.42 crore per employee. The bank’s interest
rates for consumer durables, medical equipment and home
finances are among the lowest, claimed Mr M.V. Nair,
General Manager. |
US company to acquire stake in Tasty Bite WASHINGTON, Sept 23 (PTI) — The USA based Preferred Brand Incorporation (PBI) proposes to acquire majority stake in the Indian fast moving consumer goods company “Tasty Bite Eatables Ltd’ (TBEL). PBI is acquiring 20 per cent stake in the company through an open offer at Rs 21.25 per share through preferred brands Foods India Private Ltd, while it will buy 50.92 per cent stake from Grand Foods and Catering Consultants Private Ltd , promoter of TBEL. PBI’s offer carries a discount of 66 per cent to the current market price of Rs 35.35 per share on the BSE. Announcing the offer PBI said the acquisition of TBEL was consistent with its commitment to promote value-added food processing in India and strategy to create global Indian food brands. The acquisition is part of PBI plans to participate actively in the management of TBEL along with assisting in developing sound marketing programmes through its expertise in the USA and key European markets. The open offer to acquire 20 per cent stake was made through ICICI Securities and Finance Company Ltd (I-Sec) and expected to open on October 30 and close on November 28. Kalyani scouts for US company HOSPET (Karnataka), Sept 23 (PTI) — The Kalyani group of companies, a Rs 1,500 crore Pune-based group, is scouting for an American forging company for its “possible acquisition”, group Chairman Baba N. Kalyani said. “We have not targetted any company as such,” Kalyani said here yesterday after attending the inauguration of “praxair”, India’s first air separation plant which would supply oxygen to “Hospet Steel”, owned by Kalyani Ferrous Industries. Kalyani hinted that a deal was expected to be clinched early next year, but declined to give more details. To a query, he said Nandi Highway Development, the group’s road business arm, had started work on laying the 30 km stretch of Hubli-Dharwad highway. RIL results on October 8 MUMBAI Sept 23 (PTI) — Reliance Industries Limited (RIL) will announce its half-yearly results for 1998-99 on October 8. A notice to this effect has been sent to the stock exchanges today. RIL in the first quarter had a 37 per cent increase in sales (Rs 3,645 crore) over the corresponding period in the previous year and a 18 per cent rise in net profits (Rs 441 crore) during the same period. Boots jv with Nicholas LONDON, Sept 22 (Dow Jones) — The Boot Company Plc is setting up a joint venture with Nicholas Piramal India Ltd (NPIL) to develop and market consumer healthcare products in India. The joint venture company will be known as Boots Piramal Healthcare Ltd, the company said today adding that its initial share capital would be £ 0.7 million (approx Rs 5 crore), with Boots and NPIL contributing 51 per cent and 49 per cent respectively. Turnaround plan by SAIL NEW DELHI, Sept 23 (PTI)
— SAIL today announced a turnaround strategy
involving closure of uneconomic units, withdrawal from
non-core areas, besides financial and organisational
restructuring. Addressing the annual general meeting
(AGM), SAIL Chairman Arvind Pande said the company would
approach the government for financial restructuring on
the basis of recommendations of (IDBI). SAIL, which
posted a massive Rs 311 crore net loss in the first
quarter of 1998-99, would forge new joint ventures,
downsize manpower, disinvest in its power plants and
upgrade product mix with an eye on exports, Pande said.
The turnaround plan includes fresh round of voluntary
retirement scheme (VRS), steps for competitive
repositioning, JV partners for Durgapur finishing mill
and service centres, partner for Salem backward
integration, closing some mills and business and
financial restructuring. |
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| Forex rates MUMBAI, Sept 23 (PTI) — The following were interbank forex and RBI rates (in rupee per unit). U.S. $ Rs 42.54/55 Stg £ Rs 71.46/48 D. Mark Rs 25.17/19 Jap Yen (100) Rs 31.13/16. The RBI reference rate was Rs 42.54. Gold falls Jisco Allianz Cap IFFCO MD Office-bearers |
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