New vigilance
draft for banks
NEW DELHI, Oct 12 — The Reserve Bank of India is likely to relax vigilance inquiries for transactional losses suffered by banks as part of the vigilance draft being proposed by the central authority for the banking sector.

Handicraft exports rise13 pc, may exceed target
NEW DELHI, Oct 12 — The handicrafts exports are likely to exceed the target of Rs 5,249 crore during the current financial year, the EPCH said here today.

US banks may finance films
CHICAGO, Oct 12 — If life, as they say, imitates art, then there is hope for Indian industry. It may not be sanctions busting as yet, but several American banks and financial institutions are beginning to show interest in financing the Indian film industry.

2 foreign firms sign MoUs with PAIC CHANDIGARH, Oct 12 — Lassonde Industries of Canada signed an MoU with the PAIC for setting up a Rs 38 crore project for the production of fruit juice, nectars and drinks in Punjab.

Three-day course on safety begins
CHANDIGARH, Oct 12 — A three-day safety course on “Organising and motivating for safety” was inaugurated by Mr Anil Nehru, Director (Technical), Pfizer Ltd, Mumbai.

Exchange risk cover for RIBs
MUMBAI, Oct 12 — The government has worked out an arrangement with the Reserve Bank of India to cover exchange-rate risks under the Resurgent India Bond scheme.

SEBI calls meeting of bourses
NEW DELHI, Oct 12 — The Securities and Exchange Board of India has convened a meeting of stock exchanges on Wednesday to discuss ways to improve surveillance of markets and check manipulation of share prices.

New vigilance draft for banks

NEW DELHI, Oct 12 (PTI) — The Reserve Bank of India (RBI) is likely to relax vigilance inquiries for transactional losses suffered by banks as part of the vigilance draft being proposed by the central authority for the banking sector.

Elaborating on the new guidelines, the vigilance head of a nationalised bank said that losses from investments or loan decisions gone bad automatically led to vigilance action against the dealing officer.

The risk of losses is inherent in banking activities and as such bank officials should not be subject to unnecessary harassment for sanctioning loans which have proved to be doubtful on hindsight. “Banking operations are by nature risky,” the vigilance official said.

Fear of reprisals from vigilance authorities have slowed down the decision-making process in banks and bank managers are treading with caution on loan proposals. This is at least one of the reasons why credit to industry has slowed down for sometime now, he claimed.

At present all organisations across the industrial spectrum follow a common vigilance procedure. However pressure from bankers has persuaded the apex bank to format a separate set of guidelines for the banking system, in order to be more flexible in keeping with the uniqueness of its operations.

The new guidelines for banks will remove fear of ‘witchhunts’ among bankers and will give a much-needed fillip to credit disbursals in the future, bank officials said.

The proposed guidelines are also expected to contain provisions for inspection officials of banks and the RBI to work in close alignment with vigilance officers (VOs).

In fact sources familiar with the developments said that the new draft will also provide for close interaction between VOs and other investigating agencies in the country such as the Enforcement Directorate, the Central Bureau of Investigation, the excise authorities, Customs officials and so on.

The apex bank is aiming at preventive vigilance as in most of the cases the vigilance inquiry is initiated only after the fraud has occurred.

Here it may be pertinent to mention that for sometime now there have been plans to delink the RBI’s banking operations from its supervisory activities, which is to be turned over to a totally separate entity. But objections have been raised to this idea on the grounds that it would dilute the RBI’s role and nothing concrete has emerged so far with the issue still being debated.

The proposed guidelines will also tighten up the monitoring system in banks and inter-bank communications channels so that VOs have access to prospective customers’ records.

The draft will also focus on creating vigilance awareness among bank officers, as many irregularities do not come to light in the initial stages due to ignorance among officers about the importance of the matter.

It will also incorporate some additional guidelines on the duties of vigilance officers.

US banks may finance films

CHICAGO, Oct 12 (IANS) — If life, as they say, imitates art, then there is hope for Indian industry. It may not be sanctions busting as yet, but several American banks and financial institutions are beginning to show interest in financing the Indian film industry.

Representatives of 20 American financial institutions, including executives from Morgan Stanley and Merrill Lynch, attended a meeting with members of the Federation of Indian Chambers of Commerce and Industry (FICCI) who accompanied Industry Minister Sikander Bakht on his US trip.

Issues discussed at the meeting were intellectual property rights vis-a-vis the Indian film industry and the modalities of financing a sector which had no physical assets other than celluloid reels.

The Indian film industry lacked the “risk diversifying mechanisms” and vertical integration of the American film industry which had physical assets like studios and movie halls, pointed out Amit Mitra, FICCI Secretary-General.

Handicraft exports rise13 pc, may exceed target
Tribune News Service

NEW DELHI, Oct 12 — The handicrafts exports are likely to exceed the target of Rs 5,249 crore during the current financial year, the Export Promotion Council of Handicraft (EPCH) said here today.

The total exports of handicrafts during April to August 1998-99 have shown an increase of 13 per cent,the Chairman of EPCH, Mr K. L. Katyal said while addressing a press conference.

Mr Katyal said that the major increase in handicrafts exports registered during the first five months of the current financial year was in embroidered and crocheted goods. This segment recorded a 25 per cent increase during this period compared to the corresponding period of the previous year.

This was followed by zari goods registering an increase of 24 per cent and the value of exports of this segment during this period stood at Rs 50 crore.

Mr Katyal said that the council has drawn a wide plan to promote lesser known crafts from northern and southern India which include hand embroidered goods, hand block printed items,fashion accessories, jute handicrafts, hand made paper products and dolls and toys.

The council has prepared ambitious projections to achieve the handicraft target of Rs 10,000 crore by the year 2002. The share of India’s handicrafts exports in the world market is only $ 1.4 billion whereas China’s share is $ 15 billion, the Executive Director of EPCH, Mr Rakesh Kumar, said.

German wine-maker loses spirit after delay

BONN, Oct 12 (IANS): Discouraged by bureaucratic tardiness, one of the world’s leading winemakers who planned to set up in India their first manufacturing base outside Europe is now looking for other destinations.

Germany’s Reh Kendermann Weinkellerei GmbH is rated among the world’s top five wine producers, boasting 11 production facilities in six countries and backed by a marketing and distribution network in 86 nations.

The company formed a joint venture called Reh Winery (India) Private Limited with the V.K. Gupta family to set up an integrated agro-based project for the manufacture, processing and bottling of international quality still and sparkling wines in India. The production unit was to be set up in Nasik, Maharasthra with an administrative office in Mumbai. The German partner would hold 74 per cent of the equity capital with the remainder with Vinit Kumar Gupta.

But things haven’t gone quite according to plan. Hans Simee, Managing Director of Reh Winery (India), said: “We are still awaiting approval of the FIPB of our application to start the joint venture operations.”

2 foreign firms sign MoUs with PAIC
Tribune News Service

CHANDIGARH, Oct 12 — Lassonde Industries of Canada signed an MoU with the PAIC for setting up a Rs 38 crore project for the production of fruit juice, nectars and drinks in Punjab.

Another MoU was signed by the PAIC and Rheeinhold and Mahla, a German firm, for setting up a Rs 26 crore project providing facilities to store, process and marked horticultural produce of Punjab.

Mr Parkash Singh Badal, Mr R.N. Gupta, Financial Commissioner, Development, and Mr Sarvesh Kaushal, Special Principal Secretary to the Chief Minister were present at the MoU signing ceremony.

Fruit juice production has been assigned to Lassonde Industries, while the storage processing and marketing of vegetable produce has been entrusted to the German firm.

Three-day course on safety begins
Tribune News Service

CHANDIGARH, Oct 12 — A three-day safety course on “Organising and motivating for safety” was inaugurated by Mr Anil Nehru, Director (Technical), Pfizer Ltd, Mumbai.

In his inaugural address, Mr Nehru emphasised that safety was a basic human need and by doing so managements would gain by way of high productivity from their motivated employees.

Mr G.K. Kapoor, Vice-Chairman of the Chapter, said that with growing awareness about safety it was no longer possible to ignore these issues.

The course is being organised by the National Safety Council, Mumbai, in collaboration with the North Zone Chapter and help from HMT Ltd, Pinjore.

Ashok Huria, Secretary of the Chapter, highlighted the importance of setting up systems for proper safety, health and environment.

Exchange risk cover for RIBs

MUMBAI, Oct 12 (PTI) — The government has worked out an arrangement with the Reserve Bank of India (RBI) to cover exchange-rate risks under the Resurgent India Bond (RIB) scheme.

The RBI would open a separate account, “RIB-maintenance of value account” (RIB-MOV), to enable the State Bank of Indis (SBI) and the government to make contributions to this account every year on account of exchange variation of receipts under the RIB scheme.

Floated by the SBI, after the US sanctions in the aftermath of nuclear tests by India, the BIBs had fetched $ 4.21 billion.

At the end of September every year, commencing from last month, until the redemption of bonds, the exchange loss or gain would be worked as the difference between the weighted average rate at which the currencies were initially acquired by the RBI and the prevailing market rate, according to a press note.

As per the arrangement between the government and the SBI, the exchange loss, if any, would be borne by the SBI to the extent of one per cent per annum of the rupee exuivalent of the amount initially credited and an exchange loss up to one per cent per annum (compounded annually) of the rupee equivalent of the interest accrued or paid thereon.

Any loss in excess of this percentage would be borne by the government.

The SBI on its part would pay its share of the exchange loss for the year, if any, to the credit of the RIB-MOV account, the RBI said.

For payment of interest or repayment of the bonds, the RBI would sell foreign currencies directly to the SBI at the then prevailing exchange rate, it said adding that the SBI would pay the amount initially received by it and the balance would be met out of the RIB-MOV account.

The scheme would terminate at the end of September 2003. However, a period of six months ending March 2004 would be allowed for the final settlement of the accounts.

The MOV arrangement was restricted to the transactions between the government, the SBI and the RBI in respect with the rib scheme, the apex bank clarified.

SEBI calls meeting of bourses

NEW DELHI, Oct 12 (PTI) — The Securities and Exchange Board of India (SEBI) has convened a meeting of stock exchanges on Wednesday to discuss ways to improve surveillance of markets and check manipulation of share prices.

The meeting assumes significance in the wake of heavy selling on the bourses by foreign institutional investors (FIIs) following reports of erosion of Unit Trust of India (UTIs) reserves.

The SEBI is expected to ask stock exchanges to monitor trading activities more closely and may stress on the need to put in place in the stock-watch system, Sebi sources said.

Stock-watch system involves an automatic system which would alert fall in share prices beyond a certain level.

The system, for instance, gives a redlight for fall in share prices beyond 10 per cent, or say yellow if the fall is above five per cent. The system works in the reverse you.

Sebi sources said top officials from leading bourses in the country namely, National Stock Exchange, Bombay Stock Exchange and Delhi and Calcutta are expected to attend the meeting.

Trade deficit with New Delhi reduced

Pakistan has reduced its trade deficit with India by 4.5 billion rupees in 1997-98 because of a 100 per cent increase in exports and a 66 per cent fall in imports.

Quoting trade data of Pakistan’s Federal Bureau of Statistics, a report of the News Network International (NNI) agency has said that in 1996-97 Pakistan recorded a $ 168.02 million (Rs 7.40 billion) deficit in trade with India by exporting $ 36.13 million worth of goods and importing $ 204.15 million worth.

The hostile diplomatic relations between the two countries took their toll to some extent. Goods traded between Pakistan and India are transported by sea or rail and Commerce Ministry officials said exports to India by rail were hampered over the past four to five months because of erratic train schedules stemming from the sour relations.

Analysts point out that geographical contiguity opens tremendous potential for bilateral trade because of low freight charges and less delivery time, and yet India and Pakistan have not made much headway because of strained ties. Besides, there is a growing perception that stepped-up trade would go a long way in ironing out political differences between the two countries. — IANS

Reliance fund

The cash-starved Pakistani Government plans to raise about one billion dollars through a self-reliance fund comprising loans and donations from the rich including Nawaz Sharif in a desperate bid to avoid an imminent default on its international debt repayment commitments.

The recent inconclusive talks with the IMF in Washington and its refusal to offer an immediate bail-out package has forced the Pakistani Government to chalk out an immediate “new strategy” to avoid default in the coming weeks, Dawn has said quoting official sources. — PTI

Exports fall

Pakistan’s exports declined by 9.26 per cent during the July-September first quarter of fiscal 1998-99 compared to the same period last year.

Ayub Mahar, a senior executive in the textile sector, said textile exports were down by 14 per cent during August alone compared to the figures for the same month in the previous year.

Textile exports constitute more than 62 per cent of Pakistan’s total annual exports.

He attributed the slide to the imposition of anti-dumping duties by the European Union, growing international competition and rising input costs as well as high power rates in the country. — AFP

Hubco

Foreign-backed power company Hubco today denied all Pakistani Government charges of corruption and over-charging and said it would defend itself.

A spokesman for the company said it had received no letter from the government terminating parts of its contract and would fight all charges by the government’s Ehtesab (accountability) Department of over-charging and corruption.

News that the government was cancelling the Hubco contract caused shares on the Karachi stock exchange (KSE) to open 7.02 per cent lower on Monday.

The government-Hubco row is seen as a key factor affecting the investment climate. The government charges that independent power producers (IPPs) fixed excessive tariffs and got their contracts through corruption have hung over the KSE for months. — Reuters

Infosys to pay 25 pc interim

BANGALORE, Oct 12 (PTI) — Infosys Technologies Ltd, one of the leading IT companies, has announced an interim dividend of 25 per cent after recording a total income of Rs 218.86 crore and a net profit of Rs 52.07 crore for the first half ending September 30, 1998. The total income was Rs 107.69 crore and the net profit Rs 23.03 crore last year, the company’s Chairman and Managing Director N.R. Narayana Murthy said in a press release after its board meeting here today. The company had also recorded an impressive overseas income of Rs 214.48 crore from software developed, compared to Rs 102.93 crore last year.

Philips plans brand-building

MUMBAI, Oct 12 (PTI) — Philips India Ltd has launched a massive brand-building exercise involving a $ 7 million advertising campaign aimed at revitalising the brand in India. The programme, which is a part of a $ 80 million international exercise, would be spent in the next three months, Director and Vice-President of Philips Electronics Asia Pacific (P) Ltd, Aaron Boey, said. The domestic market had off late reduced certain categories of consumer durables to almost a price sensitive commodity product with various exchange offers and discounts, said Kaushik Roy, Head of Corporate Brand Strategy, adding that “our research has shown that consumers are now realising the power of a brand”.

Promoted
NEW DELHI, Oct 12 (PTI) — To smoothen the administrative machinery and facilitate exports at various ports, the government today promoted 47 officers Joint Director-General of Foreign Trade.

CAs’ meeting
CHANDIGARH, Oct 12 (TNS) — The Institute of Chartered Accountants of India (Punjab State Task Force) organised a meeting on “Taking Punjab into the next millennium” here yesterday where senior officials, bankers, industrialists and chartered accountants participated. Mr Vinod Jain, Chairman of the Professional Development Committee offered support of the CA fraternity for attracting investment in the state. Mr Ashok Khanna, Vice-President, PHD Chamber of Commerce and Industry, said that the growth rate of industry in Punjab should be increased to 12-15 per cent.

Forex rates
MUMBAI, Oct 12 (PTI) — The following were today’s interbank forex and the RBI rates (in rupees per unit).

US $ Rs 42.32/33
Pound £ Rs 71.50/52
Deutsche mark Rs 25.62/64
Jap yen (100) Rs 35.84/86

The reference rate was Rs 42.36.

Silver falls
NEW DELHI, Oct 12 (PTI) — Silver prices tumbled down on the bullion market today on persistent selling by stockists against fresh supply and closed with notable losses. The quotations: Silver .999 (ready). 7,310, delivery 7,340, coins buyer 11,000 and seller 11,100. Standard gold 4350, ornaments 4200 and sovereign 3650.