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Friday,
July 18, 2003, Chandigarh, India  
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RBI caps interest rate on NRE deposits
SBI to acquire foreign bank branches
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HC stays order summoning Ambanis
IOC, ONGC allowed to set up trading desks
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IT alone can’t take India forward, says MurthyMumbai, July 17 Infosys Chief NR Narayan Murthy today called upon the Centre and State governments to develop adequate infrastructure in the country, saying Information Technology (IT) alone could not achieve President A.P.J. Abdul Kalam’s ‘Vision 2020’ of a prosperous India.
Jindal Strips net up 365.9 pc
TRAI seeks clarification on handset-linked schemes
Tractor sales
skid 25 pc
IBM net profit jumps to $ 1.7b
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RBI caps interest rate on NRE deposits Mumbai, July 17 The changes in the interest rates will also apply to repatriable NRE deposits renewed after their present maturity period, the RBI said in a release here. The maturity period of repatriable NRE deposits will continue to be one to three years and the interest rate as determined for three year deposits will also be applicable for the maturity period exceeding three years, it said. The capping on the interest rates on expatriate deposits will narrow down the opportunities to hedge between local and foreign currencies resulting in a slowdown in dollar inflows, analysts said. The SBI Managing Director P.N. Venkatachalam said even with this revised rate, the interest will be attractive provided the rupee was stable. The interest offered by the SBI on NRE deposits was currently pegged at 5 per cent and it will have to come down to 3.75 per cent as the LIBOR was at around 1.2 to 1.25 per cent. Buyback scheme The RBI will conduct an auction on Saturday on behalf of the government to buyback high-cost illiquid government securities (G-secs) of Rs 1,00,438 crore from banks and financial institutions and issue four low-cost bonds of equivalent value as replacement. The government will accept a minimum discount (as a percentage to market price) of 7.5 per cent that must be offered by eligible institutions and it will be uniform across securities offered for buyback, the RBI said in a release here today. The scheme will be structured as a switch, with the government offering to buyback 19 securities of total outstanding amount of Rs 1,00,438 crore. The banks and FIs will be issued existing four G-secs —6.65 per cent government stock 2009, 6.72 per cent stock 2014, 7.46 per cent stock 2017 and 6.25 per cent stock 2018 — for the equivalent face value. The reissuance of these four G-secs will be in the ratio of 20:40:20:20, the RBI said. The premium on the securities bought back will be paid in cash and the cut-off discount at the auction will be arrived on the basis of the target premium set by the government. In the Budget for 2003-04, Jaswant Singh had proposed a buyback of high-cost and illiquid securities from banks and FIs and providing tax benefits to them to use buyback proceeds to make provisions for non-performing assets, it said. —
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SBI to acquire foreign bank branches Mumbai, July 17 Indicating this, SBI Chairman A.K. Purwar told reporters here that his bank has plans to increase the number of foreign branches to 65 offices in 36 countries by the end of next fiscal year of 2004-05. Currently, it has 50 foreign offices in 28 countries, mostly engaged in promotion of the country’s external trade. “Our focus will be on Africa and Middle East and if the business requires, we may go for acquisition,” he observed. The bank has the largest deposits of the non-resident Indians (NRIs) which constituted about 17 per cent of the total SBI’s deposits. It also has plans to scale up its ATMs network from the current level of 1,630 to 3,000 by the end of March, 2004. It is investing about Rs 500 crore annually to upgrade its technology. In fact, many medium and small Indian banks has approached the SBI to share its vast ATM network on payment of fees. “We will take a decision at an appropriate time,” he added. Scheme for NRIs
in 2-3 weeks The SBI expects to firm up its new deposit investment scheme aimed at expatriates, including Resurgent India Bond (RIB) holders, in the next two or three weeks and plans to provide an in-built mechanism to manage exchange rate risk of this product. “We are working out the details and expect to finalise the details in two or three weeks. The bank will also conduct roadshows in August and September to attract investors”, A.K. Purwar said. The SBI expects to retain about 30-35 per cent of the total RIB redemptions totalling $ 5.5 billion, so the retention can be closed to $ 2 billion, he said, adding that, this idea of targeting these bond holders through a new product was on a “purely commercial consideration”. RIBs were issued in August, 1998, by the SBI with the approval of the government and the RBI for five years and the total subscription was equivalent of $ 4.23 billion. —
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HC stays order summoning Ambanis New Delhi, July 17 Issuing notice to the CBI, returnable September 11, Justice J.D. Kapoor stayed the May 7 order of Special Judge P.K. Bhasin after counsel for the Ambanis Kapil Sibal and D.C. Mathur argued that the Special Court could not have passed an order against the petitioner on his revision petition without giving him a hearing. Besides, how the Special Court could deviate from the substance of the revision — condonation of delay by the CBI in filing the complaint — and issue summons for the two Ambani brothers in addition to the three top RIL officials already charged in the case, it asked. On May 29, the High Court had postponed the trial court appearance of the Ambanis from July 7 to August 7 to face the charges. Justice R.C. Chopra said since there was no hearing fixed in the Official Secrets Act case in the trial court on July 7 the petitioners (Ambani brothers) could appear on August 7, the next date of hearing in the original case. The Ambanis had approached the High Court seeking postponement of their appearance saying that the date, July 7, was fixed for their appearance even though there was no hearing in the original case on that day. It was also the first day of reopening of the courts after the summer holidays so it would give no time for the petitioners to challenge the impugned orders, Mr Mathur said. On May 26, a Delhi court had directed the Ambani brothers to appear before the court on July 7 after they failed to appear on that day. The court was informed that both brothers were out of the country — Mukesh Ambani had gone to Geneva to attend the meeting of International Red Cross and Red Crescent Societies and Anil Ambani had gone for a meeting at the Warton School of University. —
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IOC, ONGC allowed to set up trading desks New Delhi, July 17 “IOC and ONGC have been permitted to set up specialised trading desks to further optimise oil procurement by tapping market opportunities and enhancing use of risk management tools to mitigate price risks arising from volatile international oil prices,” government sources said. ONGC plans to set up a trading desk in New Delhi for optimising procurement of crude oil for its subsidiary MRPL, marketing crude oil received from investments in oil fields abroad and exporting products. IOC, India’s largest petroleum refiner, wants to scrap its current system of importing crude oil through tenders and adopt modern practices. The two companies are likely to appoint consultants for setting up the trading and risk managing desk shortly, sources said. In a related development, the government has allowed ONGC to procure crude oil for its subsidiary Mangalore Refinery and Petrochemicals Ltd (MRPL) directly. Presently, IOC imports crude oil, including five million tonnes from Iran annually on term contract, for MRPL. “With this, ONGC would import all crude including the term contract with Iran, for MRPL,” they said. Sources said IOC was studying a report of KPMG, the consultant it appointed to suggest options for setting up oil trading desk in India. IOC also plans to operate in the Singapore over-the-counter (OTC) market for risk management. The company, which buys almost half of its 32 million tonnes crude oil imports from the spot market, had been talking to British Petroleum for a year on cooperating in crude imports and risk management. Last year it abandoned talks and decided to go alone. IOC choose India over London as it provided the advantage of operating in both Asian and European time zone. A trading desk in India would be able to capture the Singapore market when it opens in the morning (Singapore being ahead of India in time) and the American market when it closes. ONGC wants to optimise export of surplus products like jet fuel, gasoil and fuel oil from MRPL as also its own production of value added products like LPG, kerosene and naphtha, which till now are being done through tenders that give little margins, sources said. Besides managing risk and hedging volatalities in the international oil market, the desk would also help the firm locate buyers for 3 million tonnes per annum crude oil it would receive from a Sudan oil field. —
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IT alone can’t take India forward, says Murthy Mumbai, July 17 Participating in a panel discussion with corporate leaders at ‘Gartner Summit India 2003’, being held here, Mr Narayan Murthy said he respected the President’s ‘Vision 2020’ but IT alone would not achieve it. Facilities like power, airports and roads have to be developed by the governments. Outlining his ‘Vision 2020’, Dr Kalam had chosen six areas —value-addition in agriculture, education, health, connectivity, strategic industries and composite rural development — to take India forward. Top Gartner officials, including senior analyst Bob Hayward, Senior Vice-president, Gartner Asia Pacific, John Roberts and others took part in the panel discussion along with Mr Murthy on a range of IT-related issues. Emphasising the need to improve productivity, the Infosys mentor said governments needed to improve the power sector. World class airports and highways should be constructed to attract more Foreign Direct Investment (FDI) which will boost the industry. Referring to liberalisation and globalisation, Mr Murthy said governments should “opt out from the business of carrying out business’’. They must stick to only key areas like defence, external affairs and internal security. In rest of the sectors, private sector must be allowed to do business, he said. He said one need not be afraid of market economy and globalisation. Liberalisation introduced since 1991 had yielded fruits for the country, he added. The Infosys Chairman explained that India was clearly divided into two-urban and rural. He said while most children in urban India received proper education and were exposed to television, restaurant and the cinema, his rural counterpart was deprived of even basic needs like proper nourishment and education. He said that the political class should ensure that the people, especially in rural India, received proper social infrastructure — education and health. Stressing on the need to take IT to the rural areas, Mr Narayan Murthy said that if a rural child developed, then he would bring prosperity to the family. He said that the subsidy provided to the rural masses were not reaching them. Regarding the IT role in Gross Domestic Product (GDP) growth, Mr Murthy said that IT would be helpful in reducing costs and improving speed. He pointed out that IT had played a vital role in USA’s GDP growth of 2.5 per cent, so also in the UK. The Infosys chief said governments were increasingly relying on IT to govern. He said that the government
was motivated to adopt e-governance to bring transparency in the governance. Moreover, IT helps in cutting costs. However, he allayed fears that IT will lead of unemployment. “Rather IT helps in
generating employment,” he added. — UNI |
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Jindal Strips net up 365.9 pc
New Delhi, July 17 The company’s sales rose by 26 per cent Rs 540.04 crore in the first quarter of the current fiscal as against Rs 428.81 crore in the first quarter of the 2002-03. Its cash profit rose by 77 per cent from Rs 45 crore to Rs 79 crore in Q1 of 2003-04.
Marico net rises
Marico Industries said today it has posted an 18 per cent increase in the net profit at Rs 15.9 crore for the first quarter ended June 30, 2003.The results announced were composite performance of the consumer products business of both Marico Industries (India operations) and Marico Bangladesh Ltd. Driven by volume growth in its high margin portfolio, Marico’s gross profit, too, moved up by 13 per cent at Rs 18.9 crore, while turnover rose by 14 per cent at Rs 208 crore for the June quarter. At its meeting held today, the Board of Marico Industries declared a first interim equity dividend of 15 per cent (Rs 1.5 per share of Rs 10 each) on the equity base of Rs 29 crore. —
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TRAI seeks clarification on handset-linked schemes New Delhi, July 17 “The tariff plan must be seen without the handset costs incurred by subscriber”, TRAI said in statement issued today. At the same time, TRAI clarified that it does not regulate handset prices or financing/leasing/insurance schemes for handsets. “It regulates telecom tariffs and any handset offer must make sure that all tariff plans available in the market are on offer to the customer whether he procures/obtains the handset from the service provider or from any other source”, the regulator said. TRAI examined the schemes offered by each of the operators and it is confirmed that in each case, the principles were not violated. In certain cases the customer is not informed about the flexibility that the tariff schemes are available irrespective of the source of the handset, TRAI said. |
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Tractor sales skid 25 pc
New Delhi, July 17 A total of 1,60,969 units were sold in India, world’s largest tractor market, during the year ended March 31, 2003 over 2,15,005 units a year earlier, the data released by Tractor Manufacturers Association showed. The decline was witnessed in all the segments, including the highest-selling 31-40 horse power segment which suffered a 21.2 per cent drop in sales at 90,314 units. Production was lower by 24.4 per cent at 1,56,613 units. during fiscal 2003. Sales of Mahindra and Mahindra, the country’s largest tractor maker, went down by 19 per cent to 47,033 units. Punjab Tractors, in which the government of Punjab is on the verge of divesting its 23.49 per cent stake, posted a 39.6 per cent drop at 24,200 units. —
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