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| Thursday, May 18, 2000, Chandigarh, India  
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SC upholds RBI ban Share market safe: Sinha Korean team to study Punjab rice mills Plan to hike power tariff opposed Punters can take up Infosys, Zee
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NEW DELHI, May 17 (PTI) — Thousands of firms thriving on mutual current account transactions will close shop with the Supreme Court upholding the RBI decision to ban unincorporated bodies or individuals form carrying on their business by raising money from the public. RBI through a 1997 amendment to Section 45-S of the RBI Act banned unincorporated bodies from raising money from the public to carry on their financial business but said it was open to them to do the business either from their own funds or the funds borrowed from their relatives or from financial institutions. This was challenged in the Supreme Court. Dismissing a petition challenging the RBI decision, a Division Bench comprising Justice B.N. Kirpal and Justice M.B. Shah said: “The need for such restrictions had become acute and imperative in view of large scale mismanagement of public funds by such unincorporated bodies.” RBI was left with no alternative but to prohibit such entities from conducting financial business as such type of financial institutions “mushroom overnight and then vanish without a trace taking with them the depositors money”, Justice Kirpal, writing the judgement for the Bench, said. Referring to several such petitions pending in various high courts, some of which had stayed the RBI decision, the Bench directed the high courts to dispose of the petitions in terms of the apex court order. RBI during the course of hearing had informed the court that a number of rural branches of commercial banks, which were 1833 in June 1969, have increased to 33069 as on June 1996 and several regional rural banks have opened branches with a view to making available institutional finance easily. Justice Kirpal said: “With these facilities now being available and in view of the inherent risks to the general public at the hands of the unincorporated bodies engaged in financial activities and accepting public deposits, we agree that the restrictions now imposed by the amended Section 45-S cannot be considered as being unreasonable.” The Bench said the restrictions were necessary also because RBI was finding it difficult to regulate them due to the sheer number of such firms operating in various States. |
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NEW DELHI, May 17 (PTI) — Finance Minister Yashwant Sinha today allayed fears of investors over stability of the share market, saying the market is “safe” and announced the setting up of a technical committee to streamline guidelines for bank financing on equities. “We need not have any apprehensions on this front. Fluctuations are less as compared to outside markets. It poses no danger to the market,” he said while replying to a calling attention motion in the Lok Sabha. The proposed committee will review the status and make suitable recommendations with regard to banks’ role in capital market after consultations with banks and market participants. The committee, comprising officers from the Reserve Bank of India and SEBI will consider among other issues the desirability of having appropriate ceilings for advance against shares and issues relating to prudent levels of margins on advances against shares and initial public offerings. The motion moved by BJP members Kirit Somaiya and Dilip Kumar M. Gandhi drew the attention of the House to the situation arising out of reported loss to small investors due to sudden crashing of points in the stock market and sanction of loans by banks against shares. They wanted the Minister to come out with the steps taken in this regard. Sinha read out his statement and replied to the members’ clarifications amid shouting of slogans by Samajwadi Party members who trooped into the well protesting against the proposed Bills for creation of new States of
Uttrakhand, Chattisgarh and Jharkhand. As the din continued, Speaker GMC Balayogi adjourned the House for the lunch recess. Sinha said it would not be proper to compare the 1992 situation, when there were fluctuations in the market in the wake of the securities scam, with the present one. Since then there has been a strong regulatory body in the form of SEBI which along with the RBI has been taking steps to streamline the operating guidelines for bank financing on equities. The Minister said the price fluctuations on the stock markets were influenced by multiple factors which included expectations of investors regarding the performance of the corporate sector and the economy in general, about economic policies and developments in international capital markets. During the last two months, the BSE sensex had been generally on a downtrend “but it cannot be said to have crashed,” he said. The sensex peaked on February 11, this year at 5933.26 and closed at 4230.13 on May 16. The reported losses due to such fluctuations were, however, “notional” since the sensex was generally on the rise for several months before February 2000. SEBI has taken various measures to ensure safety of the market and to curb excessive volatility. It has put in place risk containment measures comprising capital adequacy, margining system, exposure controls and price bands, he said. SEBI has also been interacting regularly with the stock exchanges which had been alerted to keep a close watch over the market. The RBI has already issued guidelines in respect of advances against shares, units and debentures and PSU bonds to individuals, stock brokers and corporates. |
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Korean team to study Punjab rice mills LUDHIANA, May 17 — A four-member survey team of farm industry experts from Korea will visit Punjab later this month to study the rice mill industry in the state and suggest ways and means of upgrading and modernising it. This was disclosed here yesterday by the Punjab Minister for Food and Supplies, Mr Madan Mohan Mittal. He told TNS that the team was undertaking the visit in response to an invitation from the Punjab Rice Millers’ Association headed by Mr Bhagirath Lal Singla. The suggestion for the visit to Punjab by the Korean team was made by the minister during his recent visit to that country. Mr Mittal said there was no doubt that the Korean firm, Hansung Industrial Co Ltd, which was supplying six modern rice mills to Markfed for the installation in the state, had done commendable work. Meanwhile, Markfed has defended its deal with the Korean firm for setting up six rice mills in Amritsar, Faridkot, Muktsar and Bathinda districts. Informed sources in Markfed say the hi-tech paddy milling plants being set up would give 67 per cent recovery of paddy. All byproducts like husk, bran, nakku and broken would also be kept by Markfed for sale in the open market. This would give the advantage of a high yield and low broken rice for the further benefit of Markfed. “We shall be able to earn a profit of Rs 2.40 crore from the new plants if the recovery is calculated at 67 per cent”, say the sources. However, M/s Hansung Industrial Co has confirmed, aftar testing various types of paddy, that about 70 per cent recovery in their plants is expected which will increase the profitability of the plant to Rs 4.56 crore and taking into account about 80 per cent efficiency of these mill operations, about Rs 3.50 crore of profit every year from these mills will be earned. The Korean company has been adjudged the best-developed rice milling technology at an economical price of Rs 2.43 crore, each plant of 4-tonne capacity, compared to similar plants from Germany and Japan at a cost of Rs 4.50 crore and 6.00 crore, respectively. The highlight of the technology is primarily in the drier where paddy is dried in stages and the moisture removed slowly after tampering paddy in-between so as to avoid thermal stress on the paddy kernel which results in low percentage of broken rice. The machinery for de-husking paddy has pneumatically-controlled rollers which can be adjusted for different kinds of paddy crops and has an inbuilt arrangement for removing the hot air to cool the de-husking operation, to further reduce broken rice. Another feature is the polisher which further reduces the risk of broken rice and improves the quality of the rice production. The sources emphasise that because of this technological advancement, Markfed is going to take a lead in Punjab. An example will be set for other rice milling plants. It will act as a catalyst for the rehabilitation and renovation process in old rice mills. If renovation is done and the recovery improved, a saving of about Rs 1,800 crore will give a huge benefit to the industry. |
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Plan to hike power tariff opposed LUDHIANA, May 17 — The Industry and Trade Forum along with more than half a dozen other industrial bodies has threatened to launch a state-wide agitation if the government went ahead with the Punjab State Electricity Board (PSEB) proposal to hike the power tariff for all categories of consumers, including the small scale industry. Addressing a news conference here today, the Industry and Trade Forum Punjab President, Mr Harish Khanna, asserted that the small scale sector was in no position to absorb any more financial burden by way of increase in the power tariff and in case of a hike being effected, the industry would resort to protests, including dharnas and hunger strikes. Mr Balwant Rai, President of Northern India Chamber of Commerce and Industry, Mr Roop Lal Narang, President and Mr Jaswant Singh Birdi, General Secretary of the United Cycle and Parts Manufacturers Association, Mr Parminder Singh, General Secretary of the Ludhiana Small Scale Manufacturers Association, Mr Satish Bahl, President of Sanatkar Sabha and Mr Inderjit Singh, General Secretary of Punjab Scooter Parts Manufacturers and Traders Association were also present. |
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Punters can take up Infosys, Zee IT definitely seems to be crunch time for the Indian bourses which seems delicately poised at this moment. The Fed rate hike of 50 basis points is what the markets had expected it. Taking a call on the market at the moment is fraught with even higher risk than usual. Yet, compulsive punters can consider taking up long positions at the counters of Infosys Technologies at Rs 6779 (square up at Rs 7461) and Zee Telefilms at Rs 474 (square up at Rs 527), while short positions could be considered at the counters of ITC at Rs 641 (cover up at Rs 604) and Global Tele at Rs 997 (cover up at Rs 953). The dark horse bet of this week is HPCL and discerning investors eyeing a bargain buy to pack into their portfolio can keep an eye on the counter of VSNL whose share price dip has been exaggerated. — Ashok Kumar |
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CHANDIGARH, May 17 (TNS) — Referring to the UNI report “Daewoo hikes Matiz prices by Rs 20,000” in today’s edition, Daewoo Motors India Ltd has stated that the report indicates that Daewoo has increased the prices in the normal course. If sales tax rationalisation is the criterion for a price increase, then Daewoo alone would not increase the price. Prices of other cars too have gone up, but that does not reflect in the report. Daewoo has not increased the prices of its cars. Rather these have gone up because of the sales tax increase to 12 per cent. |
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Tata Steel PAT rises by 50 pc July 18 HLL share split date Reliance to increase PFY output Jagsonpal net rises 65 pc
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Indian Bank Thomas Cook Alcatel Diwan Saheb Padmini Appli P&G project
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