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FM lays down roadmap for banking reforms
New Delhi, November 11
Finance Minister P. Chidambaram today laid down the broad contours of the second stage of banking reforms, dropping enough hints that there could be stringent riders attached to the proposed consolidation exercise among public sector banks to prevent the creation of financial behemoths.

Nabard sanctions Rs 3,500 cr for coop banks
New Delhi, November 11
In a bid to enhance the flow of institutional credit to the cash-starved agriculture sector, the National Bank for Agriculture and Rural Development, has sanctioned a package of Rs 3,500 crore for refinancing of weak cooperative banks.

BMW shortlists Gurgaon for proposed project
Chandigarh, November 11
The Bavarian Motor Work, a world-renowned car manufacturer, has Gurgaon in Haryana as one of the sites for its proposed project in India.


Haryana Chief Minister Om Prakash Chautala being presented a souvenir by BMW Senior Vice-President Klaus Berning at the company’s headquarters at Munich on Thursday. Haryana Chief Minister Om Prakash Chautala being presented a souvenir by BMW Senior Vice-President Klaus Berning at the company’s headquarters at Munich on Thursday.










EARLIER STORIES

 
A Filipino makes a turn while testing a 1,000 cc Japanese motor cycle made into a giant ladies shoe at a busy street of Marikina city, east of Manila, on Thursday.
A Filipino makes a turn while testing a 1,000 cc Japanese motor cycle made into a giant ladies shoe at a busy street of Marikina city, east of Manila, on Thursday. The city government spent 91,000 pesos ($1,600) to build the galvanised iron shoe to promote Marikina's main shoe-making industry that has slackened due to cheap shoes imported from China. — Reuters

Bourses’ corporatisation by March, says Sebi
New Delhi, November 11
Market regulator Sebi has said stock exchanges will be corporatised and demutualised by March 31, 2005 on the lines of an ordinance in this regard. “We met representatives of stock exchanges on November 9 regarding the demutualisation and corporatisation process.

Nepal airlines offers stake to Indian operators
Kathmandu, November 11
Private airline operators in India have a golden opportunity to expand their base with the Nepal Government deciding to divest its stake in the Royal Nepal Airlines and willing to give management control to the successful bidder.

Panel to make India gold-trading hub set up
New Delhi, November 11
Minister of Commerce and Industry Kamal Nath has constituted a Committee to examine the regulatory structure of the Indian gold industry with a view to making India a gold trading hub.

Industrial growth up at 7.9 pc
New Delhi, November 11
Led by strong recovery in the manufacturing sector, industry grew at 7.9 per cent in the first six months of the current fiscal compared to 6.2 per cent in the same period last year.

Netherlands body to assist SMEs
Ludhiana, November 11
The Programme Upsorting Management, a Netherlands-based association of senior experts assisted by the Netherlands government, plans to take up over 120 consultancy projects free of cost this year in the small and medium enterprises sector.

Graphics:
India's industrial growth
Rate of inflation

Video
India says NRI investment proposals to get proper follow up.
(28k, 56k)

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FM lays down roadmap for banking reforms
Tribune News Service

New Delhi, November 11
Finance Minister P. Chidambaram today laid down the broad contours of the second stage of banking reforms, dropping enough hints that there could be stringent riders attached to the proposed consolidation exercise among public sector banks to prevent the creation of financial behemoths.

He also struck a note of caution that the government may consider bringing about a legislation of fair practice, which will define, within legal parameters, the liability of lenders.

“They (banks) have an equal obligation to ensure proper customer service.... In many countries, banks are mandated by law to respect the rights and interests of lenders, depositors and other customers. There is a demand for a similar law in India,” Mr Chidambaram said.

So far this is achieved through an advisory or guidelines and the RBI has circulated a Fair Practice Code.

“I am not sure how far it is adhered to. If they (banks) fail to show sufficient concern for customers, there will soon be a clamour for enacting a law. It may be difficult to deny such a demand indefinitely,” he said.

In a sharp response to the International Monetary Fund’s (IMF) caution towards direct lending. Mr Chidambaram also made it amply clear that the government was not interfering in credit-related activities of public sector banks even as he asked banks to tap the “huge opportunities” that lie in India’s rural economy.

“We are certainly not attempting to direct credit. My message is that there is potential and opportunity in a variety of sectors within our country. We need to be pro-active; we need to research and develop appropriate skill sets and systems to tap these opportunities. We must not always walk down the trodden path, we must sometimes take a road less travelled, while taking precautions to manage the risks”, the Finance Minister said in his address at the Bankers Conference here.

On the consolidation exercise, he said while there is near-consensus on the issue, it has to be addressed “not merely to create large behemoths but also to benefit from the synergy created by mergers”.

“Their footprints should cover the most interior rural areas and provide support to far flung sectors which at present face enormous difficulty as small banks find such branches unviable,” he said.

While the entire process should be market driven and based purely on commercial and economic considerations, regional and ethnic considerations will have to be built into any proposal for consolidation.

Along with the Securitisation Act, which the Union Cabinet decided to amend today, the government also proposed to introduce Credit Information Companies (Regulation) Act, 2004, in the winter session of Parliament.

The Cabinet today decided to amend the Securitisation Act to enable banks and financial institutions speedily recover bad loans.

The Finance Minister said the amendments were aimed at “dissuading the borrowers from adopting dilatory tactics and enabling creditors to make speedy recovery by enforcement of securities”.

To sustain high profitability of banks, Mr Chidambaram said they should ensure that loans are diversified, introduce robust risk scoring techniques, improve credit monitoring systems, raise share of non-fund income, reduce operating expenses, improve management of market risks and reduce impact of operational risks.

Moreover, although the situation on non-performing assets (NPAs) has improved, a reason for lower NPAs has been the reluctance on the part of public sector banks to recognise bad loans as NPAs. Instead, they have tended to resort to restructuring or even ‘ever-greening’... Thus the problem of NPAs is in fact more complex then it appears at first sight”, he said.

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Nabard sanctions Rs 3,500 cr for coop banks
Tribune News Service

New Delhi, November 11
In a bid to enhance the flow of institutional credit to the cash-starved agriculture sector, the National Bank for Agriculture and Rural Development (Nabard), has sanctioned a package of Rs 3,500 crore for refinancing of weak cooperative banks.

Chairperson of Nabard Ranjana Kumar told newspersons on the sidelines of the Bankers’ Conference here today the funds would enable financially weak cooperative banks to lend to the agriculture sector.

In the present Rabi season, Nabard has already started holding meetings with state institutions of eight states, including Punjab, Haryana, Orissa and West Bengal.

So far during this fiscal, Nabard has disbursed about Rs 52,500 crore. This is about 50 per cent of the targeted disbursal during the current fiscal year. A target of Rs 1,05,000 crore is about 40 per cent higher as compared to the previous fiscal year.

Elaborating on the role of state governments in increasing the flow of institutional credit to the farm sector, Ms Kumar said the governments should ensure that quality seeds, pesticides and improved infrastructure facilities to farmers.

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BMW shortlists Gurgaon for proposed project
Tribune News Service

Chandigarh, November 11
The Bavarian Motor Work (BMW), a world-renowned car manufacturer, has Gurgaon in Haryana as one of the sites for its proposed project in India.

This was revealed in a meeting, which Haryana Chief Minister Om Prakash Chautala had with the top executives of the BMW during his visit to the Corporate headquarters of the BMW at Munich in Germany today, an official release said here.

The Chief Minister expressed the hope that the BMW would set up its production plant in India during the year 2005, which would mark the 500 year long ties of Indo-German trade.

Mr Chautala dwelled upon the special advantages that Haryana offered to automobile industry and pointed out that as a result of these, the state was manufacturing 60 per cent of all cars, 50 per cent of all tractors and 60 per cent of all motor cycles produced in India.

Mr Klaus Berning, senior vice-president, BMW, disclosed that Gurgaon was one of the candidate sites for their proposed India project.

Mr Chautala, while inviting the entrepreneurs of Germany to set up their units in his state, said apart from other incentives, 20 per cent rebate on cost of land was also admissible to those who commence their production within three years from the date of offer of the possession of the industrial plots.

The Chief Minister, while addressing a road show in Hotel Hilton in downtown Munich in Germany today, said Haryana was the first state in India to set up its own Foreign Direct Investment.

A number of multinational companies including the GE Capital, Honda, Nestle, Coca Cola, Pepsi, IBM, Aleate, Perfetti, Johnson Mathey, Denso, Metso and YKK had set up their units in Haryana, he said.

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Bourses’ corporatisation by March, says Sebi

New Delhi, November 11
Market regulator Sebi has said stock exchanges will be corporatised and demutualised by March 31, 2005 on the lines of an ordinance in this regard.

“We met representatives of stock exchanges on November 9 regarding the demutualisation and corporatisation process. We discussed the time frame for corporatisation of all bourses and it will take place by March 31, 2005,” Securities and Exchange Board of India (Sebi) Chairman B. N. Bajpai told UNI on the sidelines of Banking Conference BanCon 2004 here.

Demutualisation means separation of ownership and trading rights of brokers in a bourse while corporatisation implies converting an entity from association of partnerships to corporate body to safeguard the interest of investors and bring about greater transparency in stock exchanges.

The Centre issued the ordinance on October 12 barring brokers from managing bourses for ensuring greater trade in shares of small companies and safeguarding small investors. — UNI 

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Nepal airlines offers stake to Indian operators
R. Suryamurthy
Tribune News Service

Kathmandu, November 11
Private airline operators in India have a golden opportunity to expand their base with the Nepal Government deciding to divest its stake in the Royal Nepal Airlines and willing to give management control to the successful bidder.

In an exclusive interview, Nepal Minister of Civil Aviation Deep Kumar Upadhyay told The Tribune that the government has decided to disinvest 49 per cent stakes in the Royal Nepal Airlines.

“We will keep 51 per cent stake in the RNA. However, the management control of the national carrier will be given to the private player,” he said.

The airlines, which is in red, needs huge amounts of investment to keep it going.

Mr Upadhyay said the International Civil Aviation Organisation has completed its study and would soon present it report to the government.

The report focuses on asset evaluation, model of privatisation of the national carrier and the business plan for RNA.

The minister assured that the government would complete the disinvestment process at the earliest. He said the bidding process would be open to all, including private airline operators in India.

Managing Director of RNA M. P. Khanal told this correspondent that the national carrier has rights to fly to 35 countries but at present it is only flying to eight countries.

Thus, he clearly indicated the grave financial situation in which the airline was operating and according to one estimate the accumulated losses (loans and dues) were around Nepalese Rs 200 crore by the end of last fiscal.

Experts were, however, of the view that the Nepalese government to disinvest its stakes might not send a positive signal given the political climate and Maoist insurgency in the country.

Further, the government’s decision to retain majority stakes were unlikely to enthuse the private airline operator to invest heavily in the red RNA in a climate of uncertainity.

Critics pointed out that the when many international airlines decided against operating flights to Nepal in the backdrop of hijacking of Indian Airlines flight in 1999, the RNA helped the tourist inflow into the country.

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Panel to make India gold-trading hub set up

New Delhi, November 11
Minister of Commerce and Industry Kamal Nath has constituted a Committee to examine the regulatory structure of the Indian gold industry with a view to making India a gold trading hub.

The 12-member committee, headed by the Secretary, Department of Commerce, Ministry of Commerce and Industry, as Chairman, includes the following: Joint Secretary, Ministry of Finance, Department Of Economic Affairs; Joint Secretary, Department of Consumer Affairs;

Representatives from the Reserve Bank of India (RBI); the Security Exchange Board of India; Forward Market Commission; one Bullion Association; National Commodity and Derivative Exchange; Associated Chamber of Commerce and Industry of India; Gems and Jewellery Export Promotion Council; the Directorate General of Foreign Trade and a representative of a nominated agency, besides any other person, as and when required for the purpose of the Committee. — UNI 

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Industrial growth up at 7.9 pc

New Delhi, November 11
Led by strong recovery in the manufacturing sector, industry grew at 7.9 per cent in the first six months of the current fiscal compared to 6.2 per cent in the same period last year.

According to quick estimates of the Index of Industrial Production, the manufacturing sector, representing nearly three-fourths of the weightage of IIP, grew by a whopping 8.2 per cent during April-September 2004 over 6.7 per cent in the same period last fiscal.

In September this year, the industrial sector registered a growth of 7.7 per cent. — PTI

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Netherlands body to assist SMEs
Tribune News Service

Ludhiana, November 11
The Programme Upsorting Management (Pum), a Netherlands-based association of senior experts assisted by the Netherlands government, plans to take up over 120 consultancy projects free of cost this year in the small and medium enterprises sector.

“Our aim is to provide the benefit of expertise to industry in other countries,” Mr J. Rakhorst, country coordinator, Pum, told The Tribune. The association, which gets a budget of almost £ 45 million every year from the Netherlands government, provides consultancy of senior experts, most of them retired, to various industries across the globe, disclosed 65-year-old Mr Rokherst, who himself is a specialist on energy related issues.

“Industrial units and companies, particularly in developing countries, feel the need for expert knowledge which is often either insufficiently available or beyond their affordability. It is the objective of senior Netherlands experts to participate in this process of emerging competitive by making knowledge and expertise available,” he said.

These experts have so far provided expert consultancy in India to units in various industries like agro-processing, textiles, metals, chemicals etc. and on various issues ranging from utilisation of energy to environment and process improvement. 

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BRIEFLY

Markets closed
Mumbai, November 11
Most of the major markets, including the Bombay Stock Exchange (BSE), National Stock Exchange (NSE), Foreign Exchange (Forex), money and commodity markets will remain closed tomorrow for Divali. However, there will be special Divali “Mahurat” trading sessions at the NSE and BSE from 5.30 pm to 6.45 pm to usher in Samvat year 2061. — PTI

Inflation down
New Delhi, November 11
The annual rate of inflation for the week ended October 30 declined by 0.32 per cent to 7.06 per cent from the previous week's level of 7.38 per cent despite an increase in the prices of primary articles and manufactured products. The wholesale price inflation stood at 5.55 per cent in the corresponding week last year. — UNI

Oil prices fall
London, November 11
World oil prices eased on Thursday as signs of strong supply on physical crude markets encouraged dealers to take profits from a bounce in the previous session. U.S. light crude slipped under $49 a barrel to trade 59 cents a barrel lower at $48.27, more than $7 lower than the record $55.67 peak struck in late October. — Reuters

Intel-Unesco pact
New Delhi, November 11
Intel Corporation and Unesco have signed a MoU to collaborate on the development of a model curriculum to improve the use of information and communications technology in classrooms worldwide. According to a press note issued here, the MoU stipulates that Unesco and Intel will work together on a multi-stakeholder initiative to set standards to improve the quality of ICT teacher training programs. — TNS

Maple ESM Tech
Chennai, November 11
The Chennai-based Maples ESM Technologies, a tier-2 consulting firm focusing on enterprise solutions management, would soon start its operations in the US and the UK. Maples chairman and CEO N. Rama Subramani said: “The company had so far invested around Rs 10 crore. We will soon launch our operations in the US and UK.” — TNS

Kores
Chandigarh, November 11
Kores, a stationery-items manufacturing company, has launched an adhesive for the furniture market. Named Vishwas, the adhesive has been launched in North India. The CEO of Kores India, Mr V.M. Mane, was in the city to launch the product. — TNS
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