tribuneindia...Business

	B U S I N E S S	Monday, July 27, 1998
weather n spotlight today's calendar

Banking industry now public utility service
CHANDIGARH, July 26 — The banking industry has been declared as a public utility service initially for a period of six months to improve its working and prevent the employees in the banking sector from frequently resorting to work-to-rule and strikes.

Software exports jump 49 per cent
BANGALORE, July 26 — India’s software exports have registered an impressive jump of 49 per cent in the first quarter of the current year.

Daewoo to roll out multi-utility vehicle
NEW DELHI, July 26 — Daewoo Motor Company of Korea is planning to roll out commercial vehicles, multi-utility models and cross-country vehicles from the Ssangyong motors product portfolio into the Indian market.

SBI tops in writing off bad debts
NEW DELHI, July 26 — Twentyseven public sector banks have written off Rs 6171.86 crore as bad debts during the last three years with the State Bank of India topping the list.

DSE plans late evening trading
NEW DELHI, July 26 — As a first step towards integrating trading with international bourses, the Delhi Stock Exchange (DSE) is planning to start a special late evening trading session between 6 p.m. and 8 p.m.

Power Grid to get WB loan
NEW DELHI, July 26 — The World Bank will give a $ 450 million loan to the Power Grid Corporation of India Limited (PGCIL) within four months, PGCIL Chairman-cum-Managing Director R.P. Singh said.
Industry bandh
KHANNA, July 26 — On the call of industrial organisations of the area, the industry in Khanna, Mandi Gobindgarh, Amloh and adjoining areas will observe complete bandh tomorrow.
Aviation notes
Market Scan

Banking industry now public utility service
By U.K. Bhanot
Tribune News Service
CHANDIGARH, July 26 — The banking industry has been declared as a public utility service initially for a period of six months to improve its working and prevent the employees in the banking sector from frequently resorting to work-to-rule and strikes more often than desirable.
The Ministry of Labour, Government of India, has taken this decision, realising little that such decisions have hardly helped the strike-oriented unions in improving working in any sector. In spite of the fact that postal services, health services and railway services are also considered as public utility services, there has been no end to strikes by employees of one sector after another.
However, the Labour Ministry’s decision comes in the wake of a firm request by the All-India Bank Depositors Association (AIBDA) to the Indian Bank’s Association to ensure that wage negotiations in the banking industry do not disrupt the banking services due to staff agitation. In a communication to the IBA, the AIBDA had listed a number of measures which should be kept in mind by the IBA during wage negotiation.
The AIBDA has said that there should be no disruption of wage by go slow programmes or planned strikes that would hurt the interests of depositors, it has also demanded that the number of bank holidays should be brought down to 10 days in a year.
Meanwhile, the RBI has pointed out that survey on collection of outstation instruments has shown that most of branches are still not affording immediate credit for cheques up to Rs 5000 as is desirable.
Also in the metropolitan centres having MICR cheques clearing system, majority of the banks branches are not affording credit for outstation cheques upto Rs 10,000 within a week.
At state capitals and centres with more than 100 bank offices, credit to customer’s account was not given within 10 days in number of cases. The findings of survey indicate that some of delays occur at the branch level whereas others happen to be transit delays. The entire time cycle of collection of instruments comprising four stages — registration, dispatch, receipt or realisation advice and crediting the customers account takes 24 days on an average.
To reduce the time taken for realisation of cheques the following measures should be adopted: (i) Separate register should be maintained for local and outstation cheques for better supervision and to speed up the collection of outstation instruments. (ii) Modern telecommunication technology like telex/fax should be used extensively. iii) Service of courier should be utilised to send dak. (iv) Dealing officers/head of the division/branch manager must monitor dispatch/receipt effectively. (v) Cheques drawn on MICR centres should invariably be presented through the National Clearing Cell. (vi) Electronic funds transfer system introduced by the RBI at Mumbai, Delhi and Chennai should be used by our branches at these centres to avail the maximum benefit. (vii) Branches should display at prominent place about availability of this facility for the customers’ knowledge. (viii) Inspecting officials should verify that instant credit of all outstation instrument as per guidelines issued on the subject is afforded. (ix) Controllers should identify the branches where the complaints in respect of collection of instruments and take steps for eliminating the complaints.

Customer service
The RBI has also given certain suggestions to improve the customer service at the branches. The suggestions given by RBI are exonerated below for the information of the branches: All customers present in the premises at the time of the closing of banking hours should be accommodated; Additional counters may be opened on days when receipts and payments are heavy, in case of large tenders of cash, arrangements may be made to accept the same under guarantee subject to verification on the next day; regular customers with large tenders may be advised to give a day’s prior notice so that suitable arrangements can be made; system of issue of paper token with the date of delivery of challans may be introduced; particulars to be filed in the challans by the payees may be prominently displayed.

Daewoo to roll out multi-utility vehicle
NEW DELHI, July 26 (UNI) — Daewoo Motor Company of Korea is planning to roll out commercial vehicles, multi-utility models and cross-country vehicles from the Ssangyong motors product portfolio into the Indian market.
Though the exact models to be introduced in India have not been finalised as yet, the South Korean conglomerate is studying a number of vehicles from the stables of Ssangyong motors, the sixth largest automobile manufacturer in South Korea which was acquired recently by Daewoo motors.
“The parent company is studying the market and certain Ssangyong products which could be useful for India and would suit the conditions here,” Daewoo Motors India Limited Managing Director S.G. Awasthi said.
The models which are being explored as probables for India include cross-country vehicles, four-wheel drive multi-utility vehicles (MUV) and commercial vehicles. “They have a huge range and we have shortlisted a few models for India. Now we are studying the market to ascertain which of them would be the ideal model for India.”
Besides, the Indian subsidiary is planning to roll out a MUV into the Indian market. This is part of the company’s plan to introduce cars in every emerging and growing segment of the Indian car market.
“We are presently working on the technical aspect of the MUV and trying to shortlist the probable base model for India. We are trying out various models and would finally come out with a model specially designed for India,” Mr Awasthi said.
“However, there is no question of phasing out Cielo,” Mr Awasthi said. “There would be constant upgradation on the model and new versions would be introduced from time to time but the model would not be phased out.”
The company is all set to roll out its two buses — Royal and Caravan — in the Indian market. These buses would be launched close on the heels of the introduction of the small car Matiz.
He said the company’s long term objective was to produce one million cars within 10 years, half of which will be exported back to support Daewoo’s global demands.
Regarding the buses, Mr Awasthi said, “the production was delayed by around three months because of efforts to meet the strict quality standards as also modify the tooling to meet Indian requirements.’”
The company has already bagged orders for supplying 40 buses to both domestic and export markets. To be priced around Rs 7 lakh, the buses would be exported to Tanzania. The company will be introducing a 26-seater and a 33-seater version in buses.
Meanwhile, DMIL, he said, is still working on the trucks, which the company intends to roll out shortly.

SBI tops in writing off bad debts
NEW DELHI, July 26 (UNI) — Twentyseven public sector banks have written off Rs 6171.86 crore as bad debts during the last three years with the State Bank of India (SBI) topping the list with a share of Rs 1056.08 crore.
The total amount which was written off during 1994-95 was Rs 2267.65 crore, but it came down to Rs 1742.21 crore in 1995-96 and went up to Rs 2162 crore in 1996-97.
In the case of the largest share of bad debts the SBI is followed by the Bank of India with Rs 784.61 crore, UCO Bank with Rs 496.62 crore and Indian Overseas Bank with Rs 456.68 crore.
The SBI topped the list in the first two years and the Indian Overseas Bank last year. In 1994-95 the SBI with Rs 363.72 crore was followed by Bank of Baroda with the SBI with Rs 363.72 crore was followed by Bank of Baroda with Rs 270.27 crore and Bank of India with Rs 260.38 crore.
In 1995-96, the SBI with Rs 398.69 crore was followed by Bank of India with Rs 307.08 crore and Canara Bank with Rs 169.49 crore.
The following year, 1996-97, the Indian Overseas Bank with Rs 375.73 crore was followed by the SBI with Rs 293.67 crore and the UCO Bank with Rs 220.57 crore.
According to the list prepared by the Finance Ministry the lowest debt which was written off in 1996-97 was Rs 94 lakh by Corporation Bank.
The introduction of the financial sector reforms and revised guidelines have necessitated banks to desist from the practice of taking unrealised income in their books and also to provide against possible loan losses.

Market Scan
Profits up, market down
THE first quarter results announced so far are, with some exceptions, good but the market has been responding to them rather negatively. During the last week, the Sensitive Index was down by about 300 points (8.6 per cent). This is, however, not surprising. In this column, it had been indicated last fortnight that the sudden upsurge in the market should not be taken as a reversal of the bearish trend. The market was expected to recede. In fact I expect the market to move down even during the current week.
No doubt, almost 80 per cent of the companies which have announced their first half results have done very well. But these results have come from companies which are drawn from such sector of industry as were expected to do well. These sectors are: multinational companies manufacturing and trading pharma products, mass consumer goods with strong market brands, tea plantation companies, software companies.
Among the pharma companies, both the FERA and Indian companies have done well. Hoechst Marion’s first quarter results are excellent. The net profit is up by about 96 per cent (compared to the corresponding period last year) and the company has declared an interim dividend of 20 per cent. Dr Reddy’s net profit for the first quarter is higher by 68.90 per cent and Charminor Drugs’s net profit is higher by 272 per cent.
Among the consumer product companies with strong market brands, Indian Shaving products’ net profit is higher by 121.9 per cent. Cadbury has registered a rise of 61 per cent in its first quarter net profit. BPL and Philips too have improved their net profits. Eveready Industries, which has a double base in tea plantations and batteries, has announced a net profit of 12 crore which is higher by 50 per cent compared to Rs 8 crore in the corresponding period last year. AFT Industries (formerly Assam Frontier Tea Company) has done very well and has declared the final dividend of 70 per cent (in addition to the interim dividend of 40 per cent).
The financial institutions like ICICI (net profit 40 per cent higher), IDBI (net up by 11 per cent) and Industrial Finance Corporation have also done satisfactorily.
But some sectors of industry like automobiles have not done well, except for the manufacturers of two wheelers like Hero Honda and TVS Suzuki. Telco is not expected to do well at all. Even the ancillary industries relating to the automobile sector are not expected to do well, except for those connected with Maruti.
Tata Chemicals has announced better results but the market price has gone down from Rs 124 per share to Rs 108. Gujarat Alkalies has announced bad results and the market price is now below Rs 30 for its Rs 10 face value equity share. If this is the case with the leader in the caustic soda industry what can one expect from the other units?
Tisco’s first quarter results are disappointing and this should be taken as a clear indicator of what may be expected from the iron and steel units engaged in this industry. The same may be said of the ball-bearing industry if the first quarter results of SKF Bearings are taken as a fair sample.
Software industry units are doing well and may be expected to perform well, benefitting as it would from the concessions offered recently by the Finance Minister.
Why should the market slip downward when the first quarter results so far announced are good? There are a number of reasons for this. It is widely believed that the majority of companies declaring first quarter results would disappoint the market. The leaders have declared their results, the laggards are waiting to pour a lot of dirty water in this cup of champagne.
It is also widely believed that the economy is in a bad way and there may not be any clear indication of revival before October, if at all. The corporate sector is not expected to report good results for the accounting year ended March 31, 1999. The multinational companies in the pharma and speciality chemicals sectors may do quite well. Shares for the watch list are: Novarties India, Clariant, Essel Packaging, GKN Invel Transmission.

Software exports jump 49 per cent
BANGALORE, July 26 (PTI) — India’s software exports have registered an impressive jump of 49 per cent in the first quarter of the current year, belying all apprehensions of a fall in the growth rate in the wake of US imposed sanctions.
Mr Dewang Mehta, one of the members in the Prime Minister’s Task Force on Information Technology and Software Development, which held a one-day meeting here, told reporters that it was found that sanctions had no direct impact on software exports.
Dr Seshadri, task force convenor, said a cursory look at the export scenario revealed that the impact of sanctions would be more on the importing nations.
Task force Co-Chairman Dr M.G.K. Menon said the Centre, at a cabinet meeting yesterday, had accepted the force’s recommendations, given as part of its first report compiled in just one month after being set up in May, to make India a superpower in the information technology (I.T.) sector.
The force would now address itself to the task of evolving an appropriate mechanism to implement its recommendations.
Though the task force had set a three-month time frame to work out a mechanism, it would have to be extended as several issues, including legal ones, were involved, he added.
Mr Seshadri said hardware exports were targetted to touch $ 10 billion by 2008 and this was not a difficult task to achieve.
The task force proposed to turn one of the fully literate districts in Kerala to a “I.T district”, for which the state government had already agreed to extend support, he said.
Dr Sudhendra Kulkarni, another member, suggested that governments set up task forces at the state level to ensure that the benefits arising out of it reached the disadvantaged sections of society.
Earlier, addressing the meeting, Karnataka Chief Minister J.H. Patel outlined the steps taken by the state for developing the software industry.
Mr Patel said work on the expansion of the electronic city had begun. A training institute would soon be set up for software personnel.
The government had unveiled its software policy, under which concessions and incentives had been announced to attract I.T. Industries, he said.

DSE plans late evening trading
NEW DELHI, July 26 (UNI) — As a first step towards integrating trading with international bourses, the Delhi Stock Exchange (DSE) is planning to start a special late evening trading session between 6 p.m. and 8 p.m.
With this session, the exchange also intends to reduce kerb deals in the market and impart transparency in the transactions, DSE sources told UNI here today.
“However, before this, we need to operationalise the trade guarantee fund (TGF), commence Demat (scrip-less) trading and go national. Once these have been put in place, the exchange will go ahead and introduce this special trading session,” the sources said.
Though the exact time frame for the same has not been fixed as yet, the new session is expected to commence within two months.
The basic aim, the sources pointed out, is to integrate timings and functioning of the DSE with the stock markets across the globe.
“The players are the same. If there is a late-evening trading session here, we can catch the mid-day trends in the European markets, the morning opening rates in Wall Street as also the afternoon rates at the London Stock Exchange.”
Moreover, with most of the major events taking place and policy announcements from the government being made late in the evening, trading in kerb deals have been flourishing.
“With this session on, the foreign institutional investors will be able to trade legally and the funds could be brought into the system. This will also help reduce bad delivery cases in the exchange,” the sources added.
Presently, trading at the DSE is held from 10 a.m. to 3.30 p.m. This new session is not being planned as a continuation but a second separate session.
Besides, the exchange also hopes to get the Sebi permission for going national within a week. To start with, it would enlarge its reach by going into the non-stock exchange centres.
The exchange is also negotiating with various regional exchanges across the country for linkages and joint trading terminals.

Power Grid to get WB loan
NEW DELHI, July 26 (UNI) — The World Bank will give a $ 450 million loan to the Power Grid Corporation of India Limited (PGCIL) within four months, PGCIL Chairman-cum-Managing Director R.P. Singh said.
“We have received positive feelers from the World Bank that the loan would be sanctioned within four months,” Mr Singh told UNI here.
The amount would be invested in the company’s Talchar High Voltage Direct Current (HVDC) unit in Orissa and the Sasaram HVDC plant in Bihar, besides, the fund would also be utilised to spruce functioning at the corporation’s eastern and western region load despatch centres.
This loan was, in fact, stated to be among the first casualties of the economic sanctions imposed against India following the nuclear tests conducted recently.
However, Mr Singh said, “it has never been a casualty, we had never doubted whether this loan would not come.”
Besides, the PGCIL is going ahead full stream with the plans to put in place a SAARC grid in a bid to ease the power situation in the region.

Aviation notes
A tribute to national carrier
A span of 50 years since Independence has been blended with joy and turbulence in the annals of country’s aviation which, after a lot of procrastination, has shown signs of taking off. The span is indeed not long enough in the history of our nation.
Inspired by the rich heritage and culture, as also fully entrenched in the world of Indian aviation, the Chairman and Managing Director of Indian Airlines P.C. Sen thought it appropriate for bringing out a book entitled: “The Indian Experience”.
The book is unique in many ways. It is the airline’s tribute to the spirit and ethos of our nation and has enhanced the national carrier’s image. Many airline and aviation experts, who have been presented this monumental work, have nothing but praise for the national carrier, which has weathered many a storm. The foreword to the book is by a scholar of reputation P.N. Haksar.
Need of Aerobridges
The new terminal building I-A for the exclusive use of the national carrier’s departures is a better building than the previous one, which was burnt about two years ago. There is widespread satisfaction on this count. But there is a lot of disappointment among regular flyers who strongly feel that the Airports Authority of India (AAI) should have planned and built a modern building at the airport without thinking about the technology of aerobridges.
A regular flyer in a letter says: “...In fact, this technology is fairly old aboard and is a standard fitment at any reasonable size airport. Even in India, three other metro cities, namely, Mumbai, Chennai and Calcutta, have the aerobridges, although limited, for I-A terminal use. Unfortunately, our national capital does not have it”.
Chairman of KD and D Rajendra K. Saboo, a frequent flyer on national and international circuits, says: “If aerobridges are too expensive to install, like modern highways, I suppose we will continue to live in the past compared to the advancement that airports even in smaller countries have made abroad”.
According to Saboo, if aerobridges cannot be provided, the AAI should at least provide special low chassis wide-bodied buses. Such buses are used as additional transport system within the airport in many countries”.
This mode of transport is considered much better than the age-old three-step buses.
It is time the AAI undertook responsibility to standardise the buses.
The AAI is after all surviving because of the patronage of the users. If a survey is undertaken, it will be realised that the AAI gets much more from the airlines and other users than wheat it ploughs back into them.
The first and foremost concern of the AAI should be to serve the cause of passengers and visitors in addition to many other users. Unfortunately the Airlines Operators Committee (AOC) and other units portray a bleak picture of the AAI which, supported so far by a strong IAS lobby, looks only towards balance-sheet instead of serving the public.
After years’ of stagnation, the AAI has fortunately got a chairman. The new incumbent (V.Gupta) will hopefully inject fresh blood in the body, which has been gasping for breath for years.

Industry bandh
From Our Correspondent
KHANNA, July 26 — On the call of industrial organisations of the area, the industry in Khanna, Mandi Gobindgarh, Amloh and adjoining areas will observe complete bandh tomorrow.
The main organisations are Small Scale Steel Re-Rollers Association, Steel Chamber, AISRA, SRMA and induction furnace associations. According to Mr Vinod Vashisht, member joint action committee of the organisations, a deputation met Mr S.K. Tuteja, chairman, PSEB, at Patiala. Mr Tuteja advised the deputationists to wait for two days for his review to the situation.

Biz briefs
Inflation
NEW DELHI, July 26 (PTI) — Annual rate of inflation touched a 136-week high of 8.08 per cent for the week ended July 11, as pressure on prices of primary articles, especially vegetables continued unabated. This is the highest inflation since November 18, 1995, when it touched 8.3 per cent. The rate of increase in price rise, based on wholesale price index (WPI), rose by 0.49 percentage points during the week.

Oral care
CHANDIGARH, July 26 (TNS)— The Indian Dental Association (IDA) has launched a national oral health programme, “Smiles for all-national oral health programme”. The programme aims to cover 5 million children in one month and will continue till August 15. This is part of the IDA-Colgate collaboration to create oral care awareness.

LIC
PATIALA, July 26 (TNS)— Mr J.S. Gulati, Development Officer, LIC, Branch Office, Patiala Unit -1 has topped the list of Development Officers by standing first in Chandigarh Division. Mr Gulati procured a business of Rs 11.57 crore in the previous financial year.

Director
JAMMU, July 26 (TNS) — Mr Devender Singh Rana, an economic expert has been reappointed Director of the Board of Jammu and Kashmir Bank alongwith Mr G.R. Khan. Mr Rana’s reappointment was announced by the Chairman of the bank Mr M.Y. Khan during the annual general body meeting of the shareholders.

Export council
JALANDHAR, July 26 (TNS)— Mr D.J. Moulick, general secretary of the All-India Engineering Export Promotion Council employees’ Association has said the engineering export promotion council has been promoting engineering exports of the country since 1955. In a press statement here today, Mr Moulick urged the government to restore its financial support which was withdrawn following liberalisation in early 90s’ boost the activities of the council.