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Monday,
September 22, 2003, Chandigarh, India  
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Punjab & Sind
Bank IPO by Nov, says Gujral Govt urges SC to
vacate stay on attachment of defaulters’ assets Connectivity
blues for mobile users Ananda Bazar
Patrika enters electronic media Vinod Khosla on
Forbes list
Revised return
can be filed
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Sensex ends on
positive ground
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Punjab & Sind Bank IPO by Nov, says Gujral In an exclusive interview to The Tribune, Chairman and Managing Director of PSB N. S. Gujral said the bank has drafted a “five-year plan” which will culminate in 2008 coinciding with the 100th years of the bank’s institutionalisation. “The Initial Public Offer (IPO) will be of Rs 100 crore. We have already forwarded the mandatory request to the Finance Ministry and are awaiting a reply soon. We are hoping that the IPO will hit the market by end of November this year”, Mr Gujral said. The proposed IPO of PSB will follow the
successful public issues of Punjab National Bank (PNB) and Uco bank recently. Mr Gujral indicated that the slew of IPOs of public sector banks were based upon suggestions of the Finance Ministry that banks should look towards generating their own funds instead of seeking capital support from the government. “Although, there has been no official circular to this effect, the government has advised banks to generate funds from own internal resources and the market”, he said. The IPO of PSB will carry a “nominal” premium over the face value of Rs 10 per share and the funds so raised will be used for “expansion” of the banking services of PSB. The bank is also coming out with a subordinate debt issue of Rs 45 crore to boost its Tier-II Capital.” This will enable the bank to improve its profitability further by expanding its asset base in the coming years”, he said. On proposed foray into life insurance, Mr Gujral said it is still in the drawing board stage but “definitely in the pipeline” and should be launched within “one to two years”. Following the
permission from the RBI to act as a corporate agent to undertake distribution of life/non-life insurance products on agency basis without any risk participation, PSB has tied up with Bajaj Allianz General Insurance Company for selling non-life insurance products for the company through its branches. “We are also exploring the potential for additional business by cross-selling our products to those clients which buy non-life insurance products through our network of branches”, Mr Gujral said. The PSB Chairman exuded confidence that the public sector banks will eventually emerge winners despite the massive marketing and promotional onslaught launched by the new breed of private sector banks. “We will definitely survive— they will die their own death. For many products and services, they are still dependent on us. For instance, in cases of issuance of Letter of Credit, remittances, guarantee, etc, they are dependent on us”, he said. In fact, he said there is “nothing in common” between public sector and private sector banks. “Whereas these are operating purely as commercial institutions, we are not discontinuing our social obligations”. He, however, did admit that there was a “struggle for survival” as the “very character, composition, contour and chemistry” of the banking industry is undergoing a “paradigm shift”. “The banking sector is faced with multiple and concurrent challenges, increased competition, rising customer expectations and diminishing customer loyalty....
Profitability of banks is under severe strain and banks are looking for other avenues to increase income in an era of financial conglomerisation and bundling in provision of financial services”, he said. The chain in public sector banks is taking place but the improvement is not really perceptible “because we are large institutions”. On the impact of recent cut in the interest rate on farm credit to 9 per cent, Mr Gujral admitted that it will affect the income of banks. “Though banks’ bottom line will be hit to some extent, yet they can make it up through higher credit off-take. Most banks are at present flush with funds which they have to deploy in call money market or repo bids with the RBI which fetch them meagre interest rates of 4.5 per cent per annum only. Return on 10 years benchmark government securities is also ruling around 5.70 per cent at present”, he pointed out. Mr Gujral said the reduced interest rate on farm credit will result in an additional credit flow of about Rs 2,500 crore to the agriculture sector in 2003-04. Priority sector advances of public sector banks constituted 42.84 per cent of their total net bank credit as on March 31, 2003. He admitted that PSB is “not out of woods” on the front of non-performing assets but has managed to bring down the net NPA levels to less than 10 per cent as required by Capital Adequacy Norms of the RBI. During 2002-03, the bank has made recoveries worth Rs 187.78 crore in NPAs. “We are using the Securitisation Act very aggressively. We have gone to the Court of Law and have in act got passports impounded of defaulters”, Mr Gujral said. “The bank rate has been slashed by 5 per cent from 11 per cent to 6 per cent. Long-term deposits held by banks still carry a high rate of interest as call and put options are not available to banks”, he said.
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Govt urges SC to vacate stay
on attachment of defaulters’ assets New Delhi, September 21 Rs 91,000 crore stuck up with the defaulters, including several big companies, over the years had been declared as NPAs by the government, causing a huge loss to the exchequer. “According to the
FIs, several defaulters had approached them to enter a compromise after the
enactment of the Act. However, after a stay on the alienation of the assets was granted, they have not been cooperating, and have not sought to
enter any compromise,” Sorabjee said. Of the Rs 91,000 crore
NPAs, nearly Rs 54,000 crore were owed to public sector banks as per the Finance Ministry’s official figures, the court was informed. The Securitisation Act, passed by the Centre last year, had empowered the DRTs to pass interim orders for sale of borrowers’ secured assets.
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Connectivity blues for mobile users Chandigarh, September 21 Mr Randhir Verma, President, Chandigarh Telecom Subscribers Association, said:"We are receiving regular complaints from customers about poor connectivity and low quality of voice in various towns on all networks. We have taken up the issue at TRAI and are awaiting some positive response from operators." He said TRAI had issued clear instructions to the telecom operators to call periodical meetings of consumer organisations to resolve problems but no operator have bothered to implement the decision. Officials of AirTel admitted that all operators are finding it difficult to provide service in the Punjab and Haryana Secretariat, high court, PGI and surrounding areas in Chandigarh, Amritsar, Ludhiana and Patiala since they could not install required number of towers due to government restrictions and locational problems. The customers said despite repeated complaints at customer care centres, they received the same answer: "This is a temporary problem," "we will look into the matter soon". The number of mobile subscribers have crossed over 13 lakh. But in evening almost all customers find it difficult to make calls from Ludhiana to Chandigarh and to Delhi. Mr Mandeep Bhatia, Vice- President ( Sales and Marketing), AirTel, claimed that it was installing 6 or 7 new towers every month to improve service. But despite advance payments, BSNL had not opened point of inter-connectivity (POIs) in various towns affecting the service. However, BSNL officials denied the allegation. He said," We are always ready to interact with genuine consumer organisations and resolve the customer problems." Mr Suresh Kumar, a subscriber at Saketri village near here, questioned what is the point of offering mobile service in this area if the operator cannot provide regular service. Subscribers of Reliance Infocom said, the company had so far failed to provide satisfactory service. They said if they wanted to make complaints against poor service they were asked to contact Mumbai office.
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Ananda Bazar Patrika enters electronic media Kolkata, September 21 Earlier, Star had stepped into India's news channel with Pranay Roy's NDTV and within a few years, monopolised the world of electronic media. But recently, Roy started an independent news channel, NDTV 24 x 7, in English. Star, on the other hand, continued with its news coverage in Hindi only. Under the new agreement with ABP Ltd, Star, the wholly-owned subsidiary of News Corporation, which will hold the equity of 26 per cent as per the government's guidelines on foreign investment, plans to re-enter the world of electronics media in a big way . On the other hand, ABP Ltd which has been monopolising the print media in the entire eastern region with its largest circulated Bengali daily, Ananda Bazar Patrika and an English daily, The Telegraph, will be making an inroad into the world of electronic media under the able leadership of Aveek Sarker, Arup Sarker and Aritra Sarker. According to the agreement, a new board of directors will shortly be constituted with the representation from both ABP Ltd and Star. But it has been decided that Ravida Raj Kohli will remain the president and Sanjay Pugalia the news director of the company.
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Vinod Khosla on Forbes list
Houston, September 21 Khosla, at 48, stands 357th in the list of 400 richest Americans, is the only person in the list with Indian origin. A Delhiite, Khosla is considered the man with the “golden touch.” He confounded Sun Microsystems and “retired” after Sun’s IPO in 1986 at the age of 30, to join venture capital firm Kleiner Perkins Caufield & Byers.
— PTI
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by R.N. Lakhotia Revised return can be filed
Q: I had filed my return for 2001-02 not within the period prescribed under Section 139(1) of the Income-tax Act, 1961. Subsequently it was discovered that Rs 70,000 was omitted to be shown in the return filed. Now I intend to file a revised return by disclosing additional income of Rs 70,000. But the problem is that the return originally filed was beyond the prescribed time under Section 139(1) and secondly the date by which the revised return can be filed has already expired. Kindly advice what should I do? If the return is revised after the expiry of the date by which it could be revised, will it be a valid return? If at all the return is revised, whether action under Section 271(1) (c) will be attracted? Whether there is any procurement on the basis of which penalty under Section 271(1) (c) is not levied, if
so, it may be quoted. Sanjay Kumar, Khanna Ans: For concealment of income in terms of Section 271(1) (c) of the Income-tax Act, 1961, penalty will be levied. However, on the facts stated by you, the concealment has not been detected by the Income-Tax Department and you propose to file the revised return on your own. Hence, the penalty can be avoided. It is recommended that you may file the revised return although delayed and make an application to the Commissioner of Income-tax stating the full facts and requesting for condonation of delay. Disability case Q: From A.Y. 2004-05 severe disability case deduction of Rs 75,000 will be allowed. What is the degree of severe disability in case of permanent deafness with hearing impairment, in both cases. Kindly give correct position. R.N. Dogra, Jalandhar city Ans: For the assessment year 2004-05 the deduction under section 80U is Rs 50,000 in respect of permanent physical disability. The details regarding permanent physical disability are contained in Rule 11D of the Income-tax Rules, 1962. In respect of deafness with hearing impairment, it is mentioned in the Rule that permanent deafness with hearing impairment of 71 decibles and above will be regarded as a permanent physical disability for the above section.
Form 15-H Q:
In Tax and you column it was mentioned that if, for senior citizen, no tax is payable but his income is more than Rs 50,000 he can submit Form-H to the bank for not deducting the Income Tax from interest accrued on fixed deposit, but bank official do not agree with your views. Please inform me under which section this facility is available. During 2002-03 a tax rebate of Rs 20,000 available to the senior citizen please inform me under which section this facility is available. N.R. Chhura, Jalandhar Ans:
Form No. 15-H can be submitted by you for financial year 2003-04, especially when you are a senior citizen. You may now inform the bank that this form has recently been prescribed by the Government of India vide Notification No. 886 on 1-8-2003 through the Income-tax (Fourteenth Amendment) Rules 2003. For the financial year 2002-03 the tax rebate available to the senior citizens is Rs 15,000 only. However, for the current financial year 2003-04 this limit has been enhanced to Rs 20,000.
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by J.C. Anand Sensex ends on positive ground The stock market has been undergoing technical correction since September 11 but there have been a lot of intra-day fluctuations. The market is swinging widely from plus to minus and minus to plus index. Last Friday, the Sensex opened at a positive note and then moved downward but in the afternoon, it moved up to record 83 points. The market is still bearish but the undertone is certainly positive. The fall of about 300 points is regarded as a healthy correction to a strong bull market that has been prevailing in the stock market during the last one month and a half. There were also some other reasons for the decline in the market indices. The Supreme Court judgement on disinvestment of BPCL and HPCL also hit the market and had a negative role to play on the future disinvestment policy of the government and also on the heavy stakes built on these two petro-scrips by investors and speculators. It appears that disinvestment of HPCL and BPCL is likely to be delayed by at least one year or more unless the government decides to call a joint session of the two houses of Parliament for getting the approval. The NDA government is in a minority in the Rajya Sabha. Another factor affecting the market sentiment was the judgement of the Special Court in the Babri demolition case involving L.K. Advani and some other BJP leaders. The market, however, sustained itself in spite of the Supreme Court judgement on disinvestment though HPCL and BPCL scrips suffered considerable fall in the market prices. The undercurrent in the market is bullish. It is now clear that the economy is doing well. The IMF has stated that the Indian economy is likely to grow by 5.6 per cent during the current year and by 5.9 per cent during the year 2004. The S & P expects the economic growth at 6 per cent in the current year. Both the IMF and S & P, however, note that the fiscal deficit is very high and that there may be further delay in the fiscal consolidation on account of coming election. Their analysis indicates that the poor shape of the Indian economy is due to delay in the economic reforms and shortfalls in the disinvestment programmes. The Reserve Bank of India also expects economic growth at 6 per cent. The Chief Economic Adviser in the Ministry of Finance has indicated that that the fiscal deficit is likely to be much lower than 10 per cent as estimated by the IMF. It is likely to be close to that indicated in the Budget. The positive undertone of the market is due to two other major factors. First, according to the data released by Sebi, FIIs are pouring huge funds in the market. The economic adviser has stated that the foreign funds have largely been responsible for more than a 40 per cent rise in the Sensex since April. They have pumped in about $ 2.7 billion so far in the year 2003 which is more than double of the $ 750 million investment made in 2002. On last Friday, the FIIs also made heavy purchases in the market. There is no reason to believe that the FIIs will make any change in their “inflow of funds policy” in the market. The second positive factor is that the second quarter results will start pouring in by October 10 and are expected to be very good. The technical shares are expected to lead the rally as the US and the world economy are recovering. The IMF has sounded a positive note for the world economy. It is time to invest in scrips which are expected to boom next month. Apart from some top technological shares, the multi-pharma shares appear to be attractive. Tisco is also expected to do very well. It has made large advance tax deposits. Larsen & Toubro, Tata Chemicals and ABB are also likely to recover from the losses suffered during the period of technical correction.
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Inflation rises FII net buyers IOC scholarship Gautier Free cassette Sonalika tractor Cement plant HPCL selloff |
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New Delhi, September 21