The Tribune, Chandigarh, India

Oil cos may get rights to choose exploration blocks
Production Sharing Contracts for 31 blocks inked

New Delhi, June 30
After eight rounds of auction, India is moving towards Open Acreage Licensing Policy (OALP), where oil firms can choose the blocks they want to explore without waiting for the government to put them on offer.

"Our intention is to move to the OALP regime as soon as possible," Oil Minister Murli Deora said at the signing of the Production Sharing Contract for blocks awarded in the eighth round of auction.

"Under this policy, companies can suggest any block for offer at any time, without waiting for the announcement of the bids under New Exploration Licensing Policy (NELP)," he said.

Companies can choose any area or block they wish to explore for oil and gas and approach the Government for award.

The government will then put up an offer for that particular area. "The block will be awarded to the party giving the best bid," Deora said.

The OALP is likely to be preceded by a last round of auction under NELP (NELP-IX) by the end of the year.

"It would be our endeavour to launch NELP-IX round in the third quarter of 2010," Deora said.

For the OALP to become operational, the establishment of the National Data Repository (NDR) was a pre-requisite.

"Directorate General of Hydrocarbon (DGH) is in the process of setting up the NDR, which will archive all E&P data, under one roof," Minister of State for Petroleum and Natural Gas Jitin Prasada said.

DGH Director-General SK Srivastava said that $1.34 billion investment has been committed in oil and gas hunt in the 36 blocks that were bid for in the NELP-VIII round that concluded last year."This was better than $1.2 billion investment committed in the previous round (NELP-VII)," he said.

ONGC and its partners will sign contracts for half of 34 oil and gas blocks awarded in NELP-VIII.

In all, Production Sharing Contracts (PSCs) for 31 out of the 36 exploration areas that were bid for in the eighth edition of NELP were signed today.ONGC and its partner won 17 areas out of a maximum of 25 blocks they bid for.

Among the 24 deep water blocks that the government had put on offer, only 8 received bids, all of which were single bids.

ONGC and partners signed PSC for seven, while Cairn Energy Plc of UK inked contract for the other. Of the 28 shallow water blocks on offer, 13 received bids.

BHP Billiton Petroleum won three, while ONGC got five of these as lead partner and one where Oil India Ltd (OIL) was the operator. Cairn Energy got a KG basin offshore block. — PTI

Shale gas blocks on cards

India is planning its first-ever offer of shale gas areas for exploration in 2012, even as it targets the launch of the ninth and possibility last auction of oil and gas blocks later this year.

"Shale gas (gas locked in sedimentary rocks) is an emerging area. It has become an important source of energy in a few countries who have been able to commercially exploit this resource," Oil Minister Murli Deora said at the signing of contracts for blocks awarded under the eighth round of the New Exploration Licencing Policy.

UK withdraws old £20 note

London, June 30
Indians who travel to Britain for sight-seeing, shopping or on business purpose, please note: from tomorrow, the £20 note featuring the image of composer Edward Elgar will be withdrawn from circulation.

Every year, thousands of Indian tourists, students and business people travel to Britain.

New foreign exchange regulations in India allow a certain amount to be carried as cash, which is dispensed by banks and licensed foreign exchange dealers.

The £20 note featuring Elgar has been replaced by a note of the same denomination but features 18th century economist Adam Smith.

The Bank of England said for several months after the end of June most banks, building societies and post offices will accept the Elgar £20 notes for deposit to customer accounts and for other customer transactions, but this will be at the discretion of the individual institution.

However, the apex bank said it will always exchange its old notes.

Indians are among the highest shoppers in London's West End, and a consortium of retailers recently launched a campaign with the Home Office to relax visa norms for Indian and Chinese shoppers before the Olympics.

The withdrawal of Elgar's £20 note has been criticised as a 'national disgrace' by the music industry. — PTI

Maharatna status for SBI mooted

New Delhi, June 30
A government-appointed panel today called for according the coveted Maharatna status to the nation's largest lender State Bank of India and Navaratna and Miniratna tags to other state-owned banks to foster competition.

"We are suggesting SBI as Maharatna bank. Other banks be given Navaratna and Miniratna to foster competition. For that a study group should be constituted. Efficiency ratio to be a key criteria," former Bank of Baroda chairman A K Khandelwal, who headed the panel, told newsmen after submitting the report to Financial Services Secretary R Gopalan.

These tags give more autonomy to PSUs to decide on investment and other matters. Maharatna PSUs can decide on its own investment up to Rs 5,000 crore in one project while Navratna can do so worth Rs 1,000 crore.

With banks vying to get these status, they will improve on their functioning and greater competition can be ecouraged.

Currently, the Department of Public Enterprises awards these status to state-run companies on the basis of their performance. But no banks have so far been given this tag.

As per the criteria for a Maharatna status, a PSU must have a Navratna status before which it must have been a Mininavratna. So if the criteria for banks are not changed, SBI could be given only a Miniratna status at first. — PTI

SBI extends teaser home loans till Sept 30

Mumbai: The State Bank of India today extended its 8 per cent concessional home loan scheme for another three months till September, which is 0.5 per cent higher than its minimum lending or base rate. SBI fixed its base rate, the minimum lending rate, at 7.5 per cent which would replace its benchmark prime lending rate (BPLR) from tomorrow.

The bank has decided to extend its popular home loan and car loan schemes and leave their terms unchanged, following the transition to base rate system from July 1, SBI said in a statement.

The rates will be valid till September 30, unless the base rate is revised in the meantime, it said. The floating rate component henceforth will, however, be linked to base rate, it said. The popular home loan and car loan schemes by SBI was due to expire today. — PTI

HDFC Bank base rate at 7.25 pc; ICICI 7.5 pc

Mumbai, June 30
Several banks today fixed their minimum lending or base rate at as high as 8.5 per cent, even as major players, including HDFC Bank and Citi Bank, pegged their rates below 7.5 per cent announced by SBI and ICICI Bank.

"ICICI Bank base rate (I-Base) is fixed at 7.5 per cent, effective July 1," the lender said in a late night statement. The lowest rate of 7 per cent came from some small private banks -- Dhanalakshmi Bank and DBS Bank -- followed by HDCF Bank and Citi Bank at 7.25 per cent each. Another private sector lender Axis Bank pegged its base rate at 7.5 per cent.

Base rate is the new interest regime that will be introduced from tomorrow as per the Reserve Bank directive for ensuring transparency in lending system and guarding against cheaper credit to lucrative corporate sector at the cost of other borrowers. Among the major lenders, Bank of Baroda, Oriental Bank of Commerce, UCO Bank, Allahabad Bank, Bank of India, Indian Bank and IDBI Bank have set their rate at 8 per cent. Syndicate Bank, Dena Bank, Vijaya Bank and Indian Overseas Bank have fixed the base rate at 8.25 per cent. Tamil Nadu-based private sector lender Karur Vysya Bank's rate is the highest so far at 8.5 per cent.

Mangalore-based Corporation Bank, State Bank of Mysore, State Bank of Bikaner and Jaipur and Federal Bank pegged the rate at 7.75 per cent. Under the base rate lending mechanism, borrowers will be charged interest rates over the base rate depending on their credit profile.

The system, however, will not apply to concessional loans for agriculture, export and other specified sectors. The base rate system will be applicable for all new loans and also existing loans that come up for renewal. Existing loans based on the benchmark PLR system may continue till maturity of the existing contract. However, existing borrowers have the option to switch over to the base rate system before the renewal or expiry of the existing contract without any charges. — PTI

Service tax on air tickets from today

New Delhi, June 30
Domestic and international air fares will rise by Rs 103 and Rs 515 respectively with a government notification to bring air travel into the service tax ambit coming into effect from tomorrow.

Government had proposed in the 2010-11 Budget that 10 per cent service tax be charged on air travel aiming at raising Rs 600 crore and Rs 1,000 crore annually. It had proposed to expand the scope of air transport services to attract service tax to include domestic journeys and international journeys in any class.

However, airline crew travelling on duty and UN staff are exempted from paying this service tax.

The notification, issued by the Department of Revenue over a week ago, said that for domestic travel, "10 per cent of the gross value of ticket or Rs 100 per journey, whichever is less" would be charged from passengers travelling in any class -- business or economy.

For international journey, it would be "10 per cent of the gross value of the ticket or Rs 500 per journey, whichever is less, for passengers embarking in India for an international journey in economy class." A service tax of little over 12 per cent is already imposed on foreign travel by business or first class since the past several years.

Air travellers would be exempted from paying this tax while embarking on a journey originating or terminating in an airport located in the northeastern states of Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim and Tripura and Bagdogra in West Bengal. They would also be exempted for journeys originating in Jammu and Kashmir from the airports of Srinagar, Leh and Jammu. — PTI

Bharti Airtel bets big on Africa
Girja Shankar Kaura/TNS

New Delhi, June 30
The country’s largest telecom service provider, Bharti Airtel, is betting big on Africa and has plans for major investments there as the teledensity in Africa is as low as 30 per cent.

Having gained a foothold in the African continent by acquiring the assets of Zain Telecom in 15 countries, Bharti is looking at emulating the Indian formula there also and empower the common man through telecom services.

It has plans to invest over $100 million in most of the 15 countries to upgrade the existing infrastructure and expand the network deeper into the markets. Besides, it would also be bringing in some of the innovative wireless products. The investment would be made over a period of next three years.

Bharti gained a foothold in Africa following its $10.7 billion acquisition of Zain Telecom's assets.

The CEO of Bharti's African operations, Manoj Kohli, said yesterday that the company would be investing $100 million over the next three years in Gabon.

Bharti is looking at penetrating the rural markets of most of the 15 African countries it entered last month. It has already announced similar investments in Zambia, Malawi and Uganda.

Bharti’s African deal takes its subscriber base to over 180 million people and will result in combined revenues of over $12.4 billion, vaulting it into the ranks of the world's top five telecom firms.

As per the plans, Bharti wants to capture the number one slot in Africa at the earliest, eating into leader MTN's shares. Currently, the subscriber gap between MTN and Zain Africa is 35 million. To begin with, in the second quarter of 2010-11, the company will launch its brand in all 15 countries. It will start executing the new business models from the third quarter.

The company will have specific strategy for each of the 15 countries where it would offer services. The company is also betting on superior network quality, deeper distribution, driving affordability, product innovations and global services to give its services a growth rate that would outpace its competitors in Africa.

Apart from the mobile tower company that it plans to set up in Africa, the company will focus on immediately offering wireless broadband services on second generation (2G) network. It hopes to offer mobile commerce in 2G.

However, it faces some hurdles by way of high inter-connect fee in some of the African markets, which the company plans to solve by partnering with the government to reduce the fee and increase the penetration on the other hand.

FDI limit hiked to 74 pc for DTH services

New Delhi, June 30
Telecom regulator TRAI today raised the foreign investment limit for broadcast carriage services like DTH to 74 per cent and that in FM radio to 26 per cent. The investment limit for news and current affairs TV channels has been retained at 26 per cent. The foreign investment limit for Local Cable Operators (LCO) will be 26 per cent.

The FDI limit for broadcast carriage services ie DTH, IPTV, Mobile TV, HITS, Teleport and MSOs who are upgrading to digital and addressable environment will be 74 per cent.

The foreign investment limits will be 26 per cent for News and Current Affairs TV Channels and FM Radio. While for TV and current news channels, the limit has been retained, for FM Radio the cap has been raised from 20 per cent to 26 per cent.

Maintaining the status quo, there will be no restrictions on foreign investments for uplinking and downlinking of TV channels other than news and current affairs.

All Foreign investment less than 26 per cent will be through automatic route. Investments of 26 per cent and above will require prior approval of the Government.

The Ministry of Information and Broadcasting has requested Telecom Regulatory Authority of India (TRAI) to review its recommendations dated April 26, 2008, on foreign investment in broadcasting sector in the light of recent changes in FDI policy.

The Consolidated FDI Policy dated March 31, 2010, issued by the Department of Industrial Policy and Promotion (DIPP) has come into effect since April 1, 2010.

This policy has modified the methodology of calculation of foreign investment in Indian companies.

The Ministry had recently said that it has restarted issuing licences for new television channels, but it will not accept any fresh applications until the TRAI recommendations come.

The regulator was studying the existing disparities in FDI limits in different sections of the media sector.

The government had stopped issuing licences to launch new television channels a few years back as it felt that many of the pending nearly 500 applications are not serious players and hence it wanted to keep away non-serious/fly-by night players from the market.

It was also forced by the limited availability of the radio waves for the industry. — PTI

No overwriting on cheques after Dec 1

Mumbai, June 30
The RBI directive to banks, asking them not to honour cheques with overwriting, will come into effect from December 1 instead of the earlier scheduled date of July 1, the apex bank said in its latest circular. The new rule is intended to prevent fraudulent withdrawal of money and expedite clearance of cheques.

Meanwhile, telecom company Bharti Airtel subscribers received an SMS on June 28 that said "as per RBI, cheques with changes in amount or payee name (despite signature next to them) will not be cleared with effect from July 1." However, Airtel today said that it is in the process of sending a revised advisory to its customers informing them about the change in the deadline to December 1.

RBI has also advised banks to create awareness among customers about the new norms, which were aimed at preventing fraud, besides expediting clearance of cheques where CTS (Cheque Truncation System) is used. Under CTS, image of cheque is sent to clearing house for transfer of funds.

When contacted, an RBI spokesperson said, "The notification regarding cheque truncation system which prohibits alteration will come into effect from December 1, 2010. There is no mention of July 1." The central bank in February had come out with circular on 'Standardisation and enhancement of security features in cheque forms' detailing the norms for image-based processing of cheques.

RBI had said that fresh cheques should be issued by customers in case of change in payee's name or amount (whether in figures or words). Changes, however, could be made with regard to date.

The new norms will not apply to those cheques, which are cleared by clearing houses that use Magnetic Ink Character Recognition (MICR) or non-MICR system. Also, it added, the norms will not be mandatory for over the counter collection of funds or for direct collection of cheques outside the Clearance House Arrangement. — PTI