B U S I N E S S

RBI projects GDP growth at 6.5 pc
New Delhi, June 13
The Reserve Bank of India today projected an economic growth of 6 to 6.5 per cent for the current financial year and said there was enough liquidity in the system to take care of industrial recovery.

• Bank rate

Haryana to wind up export corpn by June 30
Chandigarh, June 13
The Haryana Government has decided to wind up the Haryana State Small Industries and Export Corporation reportedly by June 30. The government will also retrench about 300 employees of the corporation by paying them just one-month salary and other minimum benefits, applicable under the rules.

SEBI to involve SEs in listing authority
New Delhi, June 13
The Securities and Exchange Board of India (SEBI) will involve stock exchanges in the proposed Central Listing Authority (CLA) in a bid to bring uniformity in listing agreement and prevent unscrupulous promoters from listing on major bourses.

330 cr to states for boosting exports
New Delhi, June 13
In an attempt to ensure greater involvement of states and union territories in the exports effort with a view to achieving higher growth, the Centre has allocated a sum of Rs 330 crore assistance to the states for development of infrastructure for exports and another allied activities during 2002-03.

New initiatives by Bharti Cellular
New Delhi, June 13
Bharti Cellular Limited today announced new initiatives in mobile telephony market aimed at providing price benefits to subscribers to the extent of 85 per cent.

Ranbaxy to focus on biotech products’ R&D
New Delhi, June 13
Homegrown pharma multinational Ranbaxy Laboratories Limited has decided to focus on biotechnology and natural products research and development (R&D) as a part of its new initiatives.

UCO Bank net 400 pc
Chandigarh, June 13
Mr V.P. Shetty, CMD, UCO Bank, highlighted the various achievements and future plans of the bank at a customers meet here today. The business of the bank has crossed Rs 40,000 crore in the current fiscal year and has targeted Rs 1,00,000 crore in the next five years.

UBI pays 45 cr dividend
New Delhi, June 13
Union Bank of India today paid a dividend of Rs 45 crore for 2001-02 to the Government.

Govt to restructure Markfed
Chandigarh, June 13
The Punjab Government will restructure the operations of Markfed. This was disclosed here by Mr Gurbinder Singh Atwal, Parliamentary Secretary for Cooperation, presiding over a meeting of officers of Punjab Markfed. The loss-making units should be identified and restructured to generate profits.

ANALYST’S DIARY

It’s private banks vs PSU banks
Ashok Kumar
HAVING promised while signing off last week that we would delve further into the Indian banking sector scenario, let us kick off with a salute to technology which has resulted in a sea-change in the quality of service provided.

Videos

External Affairs Minister Jaswant Singh says the IT sector could be the vehicle to drive Indo-African ties. (28k, 56k)

Silver foil is facing tough competition against the cheap and hazardous aluminium foil in Varanasi.  (28k, 56k)

"Sai Kiran," a men's wear showroom in Hyderabad has adopted virtual imaging to woo its customers. (28k, 56k)

RBI projects GDP growth at 6.5 pc

New Delhi, June 13
The Reserve Bank of India today projected an economic growth of 6 to 6.5 per cent for the current financial year and said there was enough liquidity in the system to take care of industrial recovery.

“We still expect a rate of growth of 6-6.5 per cent and we hope this will happen,” Bimal Jalan, RBI Governor, told reporters after meeting Finance Minister Yashwant Sinha.

He said all the fundamentals were good including inflation, external sector and the market conditions.

Replying to a question, he said the liquidity condition in the market was good and bank rate would be adjusted if needed.

Asked about the impact of Indo-Pak border tension, he said there was nothing to worry about it and it would not factor into bank rate cut.

He said as a precautionary measure, security around banks and financial institutions was being tightened.

Bank rate

Favouring a soft interest rate regime, Reserve Bank of India (RBI) today said bank rate would be cut if the liquidity conditions demand so.

“If the liquidity conditions change in a way which require bank rate cut, we will cut it,” RBI Governor Bimal Jalan, who is here to meet Finance Minister Yashwant Sinha, told PTI.

He, however, said liquidity conditions are comfortable now. “We are maintaining adequate liquidity. The interest rates are soft. Inflation is low at 1.56 per cent. We have said that as long as this continues, we shall maintain soft interest rate policy.”

“Once it is required, it (bank rate cut) will be done. The idea is that it has to be done in such a way that it is sustainable,” Jalan said.

RBI had reduced bank rate to 6.5 per cent last fiscal. Jalan had also stated in the last credit policy that bank rates would be cut by another 0.5 per cent but had not given any timeframe.

He also said there was no problem in carrying out government’s borrowing programme as the market was favourable.

The government targets to mop up over 1,40,000 crore in the current financial year. PTI

Haryana to wind up export corpn by June 30
Manoj Kumar
Tribune News Service

Chandigarh, June 13
The Haryana Government has decided to wind up the Haryana State Small Industries and Export Corporation reportedly by June 30. The government will also retrench about 300 employees of the corporation by paying them just one-month salary and other minimum benefits, applicable under the rules.

The Haryana Bureau of Public Enterprises Committee for Privatisation of Public Undertakings and Cooperative Institutions, headed by state Mr Om Parkash Chautala had already recommended the winding up operations within one month on March 25,2002. The meeting was attended by Chief Secretary L.M. Goyal and Mr Risal Singh, Minister for Social Welfare, among others. However, the implementation had been delayed by the government due to the employees’ pressure.

Mr L.M. Goyal, speaking to TNS confirmed that the Committee had recommended the winding up operations in view of heavy losses incurred by the corporation. He said, “the employees will not be adjusted in other departments and retrenched by paying one-month salary and other service benefits. The winding operation will soon be completed. However, the employees will be given preference while making recruitment for other government departments as per the government policy to keep 30 per cent seats for retrenched workers.”

Employees leaders have, however, alleged that the government is taking this decision in haste, and has been completely misguided by the state bureaucracy. Mr Karmvir Singh, state president, the All-India Confederation of SC/ST & BC Organisations ( Haryana) alleged that the corporation has suffered losses due to the corrupt and inefficient practices of bureaucrats.

He said that an officer of the corporation, posted at Faridabad, had been recently suspended for misappropriating funds of Rs 10 crore. He was involved in supplying government material without any receipts. However, the employees are being made scapegoats for the misdeeds of such officers.

The employees union has appealed to the Chief Minister to review this decision as the future of 300 families is at stake. They are being punished without any fault of their own.

The employees leaders have pointed out as per the government records, there was a backlog of 15,816 and 2,881 posts in the government departments reserved for SC and BC candidates, respectively, on March 31, 1999. The employees belonging to these categories could be adjusted against them.

SEBI to involve SEs in listing authority

New Delhi, June 13
The Securities and Exchange Board of India (SEBI) will involve stock exchanges in the proposed Central Listing Authority (CLA) in a bid to bring uniformity in listing agreement and prevent unscrupulous promoters from listing on major bourses.

In future, it may be mandatory for companies to get an approval from the CLA but may have the freedom to choose the bourse where they intend to list their shares.

“We are aggressively taking up CLA, which will look into listing agreement and carry out due diligence of companies. Stock exchanges will have representatives at the CLA,” SEBI Chairman G.N. Bajpai told PTI here.

A model National Listing Authority is being tried out in UK where the regulator has a say.

“But we are considering a CLA, which will not be part of the regulator,” he said. Indications are that SEBI would also have a representative.

The SEBI Chief declined to give a time-frame for setting up such an authority saying, “it is still a thought.”

“It will take at least two months for it to assume some shape,” he added.

The move assumes significance especially in the light of listing of Home Trade, which was allegedly involved in the multi-crore Government securities scam.

Home Trade, which got listed on Pune and Bangalore stock exchanges, had the intention to get listed on BSE.

The scam tainted firm, owned by Ketan Sheth, had earlier approached the country’s leading exchange but the proposal was shot down by the BSE board.

Referring to certain loopholes and lax listing norms, Bajpai said a company can get listed on small stock exchanges and then automatically on BSE and NSE even if it does not qualify for it.

The idea of CLA was mooted considering the lacklustre trade and dismal financial performance of thousands of companies that are listed on the country’s 23 stock exchanges.

The listing rules vary from bourse to bourse and the regulator was not able to weed out the companies which have raised money from the public but whose shares were not traded at all.

Once CLA comes up, the market regulator would be in a position to implement corporate governance for all companies irrespective of their size and geographical location.

Currently, companies intending to list on major bourses—BSE and NSE, require to put in place a sound corporate governance as part of their listing criteria.

This is absent in smaller bourses which enables unscrupulous promoters to list their company on regional stock exchanges.

Meanwhile, SEBI is awaiting Justice Kaniya’s report on demutualisation of bourses, which would separate the brokers from managing the exchanges.

Bajpai said the report is expected within a month or so. “There are certain issues on which SEBI has to take a view. There are certain other areas like amendment in Securities Contract Regulation Act, which the government has to look into.” PTI

330 cr to states for boosting exports
Tribune News Service

New Delhi, June 13
In an attempt to ensure greater involvement of states and union territories in the exports effort with a view to achieving higher growth, the Centre has allocated a sum of Rs 330 crore assistance to the states for development of infrastructure for exports and another allied activities during 2002-03.

Out of the Rs 330 crore allocated for the current year Rs 160 crore has already been released in the first quarter under the ASIDE Scheme which is the single most important initiative launched by the government to involve the states in exports.

At a conference on export promotion efforts with Chief Secretaries of the states and union territories held under the chairmanship of Commerce Secretary Dipak Chaterjee, the states were urged to speed up utilisation under the scheme and designate a nodal agency for this purpose.

In order to implement the various schemes, the state governments have been requested to set up institutional mechanisms like export promotion councils (EPCs) under the chairmanship of the Chief Ministers of the states as also state level export promotion committees under the chairmanship of the Chief Secretaries and export promotion committees at the district level.

New initiatives by Bharti Cellular
Tribune News Service

New Delhi, June 13
Bharti Cellular Limited today announced new initiatives in mobile telephony market aimed at providing price benefits to subscribers to the extent of 85 per cent.

Among other things, the company, under the Airtel brand is shortly introducing subscriber local dialing (SLD). SLD is a feature by which calls made to roaming subscribers and inroamers logged onto to the Airtel network.

According to Sarvjit S Dhillon, CEO, Airtel (Delhi and UP West) said that the calls made through the SLD route will enable subscribers to make substantial savings on their call rates compared to regular STD/ISD rates. While Delhi subscribers save up to 70 per cent on SLD calls, national in-roamers save up to 85 per cent on SLD calls and international in-roamers save up to 45 per cent on SLD calls.

Available in Punjab and to be available to subscribers in UP (West), Uttaranchal and Haryana soon, the technology enabled by Airtel’s Intelligent Network.

Ranbaxy to focus on biotech products’ R&D

New Delhi, June 13
Homegrown pharma multinational Ranbaxy Laboratories Limited has decided to focus on biotechnology and natural products research and development (R&D) as a part of its new initiatives.

Ranbaxy proposes to develop high quality nutraceuticals including dietary supplements for Over the Counter (OTC) segment while subsequently moving into drug discovery as a part of this initiative.

While most of the products in phytomedicine and biotechnology research will be developed through in-house research, Ranbaxy is evaluating strategic tie-ups with other partners for expediting licensing and product development in this area, the company said in its annual report for 2001.

It will also focus on anti-diabetic, cardiovascular, respiratory, central nervous system, dermatology and urology therapeutic segments for prescription category. PTI

UCO Bank net 400 pc

Chandigarh, June 13
Mr V.P. Shetty, CMD, UCO Bank, highlighted the various achievements and future plans of the bank at a customers meet here today. The business of the bank has crossed Rs 40,000 crore in the current fiscal year and has targeted Rs 1,00,000 crore in the next five years. He said the bank has earned a net profit of 400 per cent.

He also said during the next three years the stress will be on technological developments for which a target of Rs 200 crores has been fixed. The UCO Shelter Scheme has been completely revised to make it customer-friendly and more attractive by offering a lowest bank interest of only 10.25 per cent. TNS

UBI pays 45 cr dividend

New Delhi, June 13
Union Bank of India today paid a dividend of Rs 45 crore for 2001-02 to the Government.

The dividend is 45 per cent higher than Rs 31.09 crore paid last year and this constituted 14.33 per cent on the share capital of the government.

The dividend cheque was handed over to Finance Minister Yashwant Sinha by the bank’s Chairman and Managing Director V Leeladhar.

The bank’s operating profit during 2001-02 went up by 70 per cent from Rs 511 crore to Rs 869 crore and net profit by 102 per cent from Rs 155 crore to Rs 314 crore. UNI

Govt to restructure Markfed

Chandigarh, June 13
The Punjab Government will restructure the operations of Markfed. This was disclosed here by Mr Gurbinder Singh Atwal, Parliamentary Secretary for Cooperation, presiding over a meeting of officers of Punjab Markfed. The loss-making units should be identified and restructured to generate profits. Punjab has sound cooperative structure for promoting agro processing activities which cater the needs of the millions of farmers and agri export promotion zone is the need of the hour.

Markfed has been declared nodal agency for setting up agriculture export promotion zone of potatoes in Punjab with the help of APEDA at Singhpura (Patiala) with satellite towns in major potatoes producing areas, including Jalandhar, Ludhiana, Muktsar and Rampura Phool. The AEZ will be implemented in two phases and the scheme will be supported by the Central and state government agencies under their existing schemes. TNS

ANALYST’S DIARY

HAVING promised while signing off last week that we would delve further into the Indian banking sector scenario, let us kick off with a salute to technology which has resulted in a sea-change in the quality of service provided. Private sector banks have leveraged the Internet effectively in taking away the customers from public sector banks and significantly increased their revenue potential.

Internet banking is just one manifestation of these bank’s technological capabilities. These banks commenced operations a few years ago and have negligible excesses in terms of branches and employees. Therefore unlike most other banks around the world, e-banking is not an added cost for them.

In fact it is expected to contribute significantly to their revenues and profits in the years to come. Those banks which have already started e-banking will have to continuously update their services to retain their potential customers since any customer is just a click away from a competitor elsewhere. However, one cannot afford to depend only on Internet banking; brick and mortar will continue to play an important role.

The creation of universal banks will further erode profitability because the fee-based income market has been largely the domain of banks and not the financial institutions. For instance, non-banks do not earn any forex fees at all which is exclusively a banking activity. Investments in technology platforms offer the greatest scope for superior service and hence customer acquisition.

In FY2003, ICICI has merged into ICICI Bank. A global theme, the unbundling of manufacturing and distribution of financial products, is also being played out in this segment — some banks are using their branche networks to sell insurance and mutual fund products. However, I have my doubts whether ICICI Bank shareholders should be jumping for joy having been saddled with ICICI’s considerable excess baggage that it accumulated over the years. Well, more about that another week!

Today, retail customers are a source of low cost deposits to banks and offer banks an avenue for highly profitable loans. Given the massive disintermediation of corporate banking, the banks are increasingly finding it difficult to deploy funds profitably with corporates making retail banking one of the few profitable avenues left in the banking industry. Also, the cost of managing a retail customer has come down drastically with the advances in technology.

Again, Internet banking will further reduce it. This puts all old banks, especially the public sector banks, at a distinct disadvantage. Once their tremendous advantage, branches today are mostly high cost deposit mobilisation centres. Customer service is almost non-existent. Moreover, branches have become very inconvenient to the customers with the advent of ATMs in almost every street in the metros providing the convenience of 24 hour anywhere banking.

Most companies have transferred or are in the process of transferring their payrolls to the new private sector or foreign banks in these cities. Even otherwise, the minimum deposit requirements of these banks match that of a PSU banks and with their added service levels, are an automatic choice of customers.

Yet, at the end of the day, it must be admitted that the PSU banks too rapidly embracing technology and implementing aggressive VRS schemes, the field is set for an all out turf war. The good part of this story is that customers will emerge winners there from.

BIZ BRIEFS

SEZ at Garhi
Chandigarh, June 13
The Haryana Government has decided to locate a Special Economic Zone (SEZ) at Garhi Harsaru, Gurgaon, over an area of 3000 acres at an estimated cost of Rs 948 crore which would not only help in accelerating promotion of foreign direct investment and restaurant exports. This disclosed by an official sopokesman here today who informed that the state government had decided to set up SEZ within the scope of Exim Policy, 2000. The SEZ site selected by HSIDC at Garhi Harsaru. TNS

IDBI Bank
Mumbai, June 13
IDBI Bank, a leading player in the private sector, has joined MasterCard International’s global online ATM network, making it the only network in the country accepting Visa, MasterCard, Amex and Swadhan cards across its network. The bank will offer cash withdrawal facility to all MasterCard, Maestro and Cirrus cardholders globally at its 244 ATMs spread over 60 cities. UNI

Haldia Petrochem
Kolkata, June 13
Haldia Petrochemicals Limited (HPL), which is facing troubled times owing to high interest outflow, would largely benefit from the recent dip in the prices of polymers in the international market. PTI

Palm oils
New Delhi, June 13
The government today increased the price at which the customs duty is imposed (tariff value) on palm oils by $ 48-51 a tonne, in line with the global spurt in rates of the commodity. The tariff value for crude palm oil (CPO) has been increased to $ 392 per tonne cost, insurance and freight (CIF) from $ 344 a tonne. PTI

Radico Khaitan
New Delhi, June 13
ICRA has assigned A1+ rating to the enhanced Rs 150 million commercial paper programme of Radico Khaitan indicating highest safety. UNI

Philips CD player
Chandigarh, June 13
Philips India has launched its new CD portable player AZ 1007. The launch of the AZ 1007 at a break-through price of Rs 3,990 by Philips is in line with its mission of putting a ‘CD System in every Indian home’. TNS