B U S I N E S S

India may attract $1 b fresh FDI, says Ernst & Young
New Delhi, April 10
India may attract about one billion dollars in fresh foreign investment this year and settle non- performing loans worth $ 3-5 billion in the near future, says Ernst and Young.

MasterCard relying on youth to shove plastic money
New Delhi, April 10
Global payments solutions company, MasterCard International, hopes the youth is going to provide the next big push in the credit card market in India. To this effect, the company has brought out specialised products primarily aimed at the younger generation.

ACs sell like hot cakes
Chandigarh, April 9
The air-conditioner market is on a roll. Easy availability of financing schemes, zero per cent interest facility and improved power scenario have fuelled the demand for Acs with the onset of summer, with the dealers predicting a growth rate of 20-25 per cent in the market size.

Visitors take a look at a Yamaha motor cycle at one of the stalls of Roadscape 2004 auto exhibition in Bangalore on Saturday. India’s 1991 economic liberalisation ushered in a virtual automobile revolution with dozens of models on offer from global giants. — AFP

Steel traders jittery
Ludhiana, April 10
Resentment prevails among the steel consuming industries over the rise in the steel prices. There was a marginal fall in the prices of steel during the past two to three weeks following pressure from the consumers on the NDA government.

SC Judge for special trade dispute courts
New Delhi, April 10
A Supreme Court Judge today suggested setting up specialised courts to adjudicate commercial or economic disputes in time — saying it is essential for economic growth.

No TDS on savings bonds, says RBI
Mumbai, April 10
The Reserve Bank of India has directed banks not to deduct tax at source on either the interest or the maturity proceeds of the 8 per cent savings (taxable) bonds, 2003.

Capital bank inaugurates 2 branches
Chandigarh, April 10
Capital Local Area Bank inaugurated two rural branches, one each at Shankar and Rurkee in Jalandhar district. With this, the total number of branches of the bank have gone upto 12.

Forex reserves touch $ 112 bn
Mumbai, April 10
India’s foreign exchange reserves surged ahead in the first week of the new fiscal following fresh accretion of over US$ one billion to move past the record levels of US 112 billion during the week ending April 2, 2004.

Sun, Microsoft sign licensing pact
Sanfransisco, April 10
Sun Microsystems said it gave Microsoft a 10-year option to license its products for as much as $ 450 million as part of an agreement reached between the two companies to settle a decade of feuding.

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India may attract $1 b fresh FDI, says Ernst & Young

New Delhi, April 10
India may attract about one billion dollars in fresh foreign investment this year and settle non- performing loans worth $ 3-5 billion in the near future, says Ernst and Young.

According to the report on Global Non-Performing Loans 2004, resolution of non- performing loans worth $ 3-5 billion in the near future will be led by Asset Reconstruction Company Ltd and other ARCs being set up in India.

This will for the first time enable real financial restructuring in distressed corporates, laying the platform for better utilisation of non-performing assets and also promote mergers and acquisitions, a statement said here today.

Ernst & Young CEO Rajiv Memani said, “recent NPL legislation, framework for the formation of ARCs, large market potential and the strong India shining story were attracting investors to India.’’

He said major investors such as CDC Capital Partners, Standard Chartered Bank, Merrill Lynch, Colony Capital, Cerebrus, Morgan Stanley, GE Capital, Shinsei Bank, GW Fund, Newbridge and ICICI Ventures, among others, were actively looking at opportunities in India.

The report said though Asian banks had successfully managed to clear non-performing loans worth more than one trillion dollars from their balance sheets since the financial crisis of the late 1990s, another trillion dollars were still on the books of the banks and government-created asset management companies. — UNI

MasterCard relying on youth to shove plastic money
Gaurav Choudhury
Tribune News Service

New Delhi, April 10
Global payments solutions company, MasterCard International, hopes the youth is going to provide the next big push in the credit card market in India.

To this effect, the company has brought out specialised products primarily aimed at the younger generation.

“MasterCard has tied up with Citibank and MTV to provide potential cardholders a credit card specially designed to the reflect the shape of things to come,” vice-president and General Manager, South Asia, Mastercard International, Mr Nitin Gupta, told The Tribune in an interview.

He said the credit card market in India is estimated at 14 million according to a recent survey conducted by global management consultant McKinsey.

“MasterCard added three million credit cards in the last three years in India and the growth in the credit card base in the country is nearly 40 per cent per year,” Mr Gupta said.

MasterCard is primarily the infrastructure provider that issues cards by its member banks. In India, most of the banks are members of the MasterCard International providing a variety of products, including debit cards, credit cards, ATM cards and other forms of plastic money.

“Apart from providing the infrastructure, we provide the recommended best practice guide to our member banks. However, banks follow their own systems and practices, making them the decision makers to issue cards to individuals”, he said.

Mr Gupta said contrary to the belief of many, “it is safe to shop online using a credit card on a secure site.”

“The reality is entering your credit card number on a secure online order form is as safe as giving your credit card to a teller or a cashier,” he said.

In this respect, he said that the company has been focussing on implementing the best practices and technologies on a sustained and continuous basis to ensure that “member financial institutions, consumers and merchants are protected from fraud in the online world of e-commerce.”

“In 2002, we introduced the MasterCard SecureCode, which is a global e-commerce security position for protecting confidential card holder data over the Internet. It works for both debit and credit transactions,” Mr Gupta said.

“Shopping online opens up a world of choices and convenience — along with some risks that could be countered by being extra vigilant,” he said.

Mr Gupta, however, did acknowledge that misuse of a credit card is a reality. “In India, though, it is not as much as in the US,” he added.

Mr Gupta suggested that it was imperative for a buyer, who is shopping online, to do business only with a “reputable Internet merchant.”

“A reputed Website often has a clearly stated privacy policy in an accessible place. Read the privacy policy so you know exactly how the merchant intends to use the information,” he said.

It is also advisable to pay with payment card — “as this is often the safest way to pay online.”

“In North America, the cardholder has the right to dispute charges if the goods or services are misrepresented or never delivered. Also, you are not responsible for fraudulent purchase made,” Mr Gupta said.

On the new product mc2, co-branded with MTV and Citibank, Mr Gupta said “this is the first time the company has launched a variant of MasterCard mc2 in India. We believe the card will become a fashion statement with the youth and young-at-heart segment in the country.”

The new product is not rectangular in shape. “We are confident that this new three-corner plastic, backed by exciting benefits will find tremendous appeal with the younger generation and further consolidate our leadership position in the cards market,” Mr Gupta said.

ACs sell like hot cakes
Tribune News Service

Chandigarh, April 9
The air-conditioner (AC) market is on a roll. Easy availability of financing schemes, zero per cent interest facility and improved power scenario have fuelled the demand for Acs with the onset of summer, with the dealers predicting a growth rate of 20-25 per cent in the market size. A visit to Coolex-2004, a four-day exhibition being organised by the Confederation of Indian Industry (CII) here, has brought out that one-time US-based market leaders have lost the market to the new Korean kids on the block. According to industry estimates, LG has become the largest player in the Indian AC industry with a market share of 35 per cent, significantly higher than 12 per cent of Samsung and Voltas and 9 to 10 per cent of Hitachi, Carrier and Blue Star.An overall change in the lifestyle of people coupled with ACs becoming affordable have further pushed up the demand. It may be pointed out that North is the biggest AC market. Mr Gaurav Malik , marketing manager for Voltas Limited said ACs are selling like hot cakes.

Another interesting trend that came to light from the inquiries made by people at various stalls was that people were going in for multinational brands. Manufacturers of branded products claim that sell anything between 2,000 to 2,500 ACs a month in Chandigarh, an important market for the North. Mr Jyoti Das, regional sales manager, Godrej and Boyce Mfg Co Ltd., also said that room ACs had good growth rate. In fact, more and more people are now opting for split ACs, as the price difference has been reduced between the window and the split ones.

The sale figures of LG air-conditioners following the price reduction indicate that the sales of local brands have declined sharply. “Owing an AC has now become a matter of comfort rather than luxury,” Mr Gaurav Tikoo, marketing manager of LG Electronics Limited said.

People are going in for ACs, which are now high-priced but have rotary compressors. Besides freebies, companies are offering finance options to lure consumers. Their interest rate varies from zero to 6-7 per cent.

Steel traders jittery
K.S. Chawla

Ludhiana, April 10
Resentment prevails among the steel consuming industries over the rise in the steel prices. There was a marginal fall in the prices of steel during the past two to three weeks following pressure from the consumers on the NDA government. Again since past two days, the prices are on a rise. The MS round steel was quoted at Rs 25,500 to 26,500 per tonne today and has witnessed an increase of Rs 1500 per tonne. HR coil was sold for Rs 30,000 per tonne and there has been an increase of Rs 2,000 per tonne in the same.

In Ludhiana, Jalandhar and other industrial towns of Punjab, an agitation by various industrial organisations was held against this unprecedented hike. The small-scale steel consuming industries have also set up a steel consumers’ forum to look into the matter.

The troubles for the industry started in April 2002, when steel export was started to China leading to a jump in the steel prices. The producers allegedly created an artificial scarcity of steel in the country and the traders made fortunes.

The Ludhiana Electroplaters Association has sent an ‘appeal’ to the Prime Minister urging him to take steps to check the rise in the prices of steel.

Mr Inderjit Singh Pradhan, president, Chamber of Industrial and Commercial Undertakings, has called upon the government to check the hoarding of steel by the traders and take action against them under the Essential Commodities Act.

SC Judge for special trade dispute courts

New Delhi, April 10
A Supreme Court Judge today suggested setting up specialised courts to adjudicate commercial or economic disputes in time — saying it is essential for economic growth.

“In my view,” Justice Rajendra Babu told a conference, “We could concentrate in establishing specialised courts for adjudicating commercial or economic disputes.”

The conference on “Justice in Time” was co-organised by the Federation of Indian Chambers of Commerce and Industry and the Bar Association of India.

Participants focused on what was described as reinventing Indian legal system to achieve double-digit economic growth.

Speaking of economic growth, Justice Rajendra Babu said it was “impossible to achieve without a vibrant legal system.” He cited the role played by strong legal systems in the economic advances of China and other East Asian nations and, conversely, the collapse of Argentine economy in the absence of “a strong legal system.”

Justice Rajendra Babu noted, “modern business is all about timings. And time, invariably is the essence of the business transaction. Therefore, justice in time is a sine qua non of modern business transactions.” — UNI

No TDS on savings bonds, says RBI

Mumbai, April 10
The Reserve Bank of India (RBI) has directed banks not to deduct tax at source on either the interest or the maturity proceeds of the 8 per cent savings (taxable) bonds, 2003.

Acting on a notification from the government, RBI said, banks would no longer be required to deduct tax at source on either the interest or the maturity proceeds of the 8 per cent savings (taxable) bonds, 2003.

The government in January this year, withdrew this requirement of deducting tax at source on the interest payable or due and on maturity proceeds of these bonds. — UNI

Capital bank inaugurates 2 branches
Tribune News Service

Chandigarh, April 10
Capital Local Area Bank inaugurated two rural branches, one each at Shankar and Rurkee in Jalandhar district. With this, the total number of branches of the bank have gone upto 12.

The ‘Rurkee branch’ of Capital Local Area Bank Ltd. was inaugurated by S. Amarjit Singh Samra, Revenue and Agriculture Minister, Punjab. Mr Samra is also the principal promoter of the bank. This branch will meet a long standing demand of a cluster of villages around Rurkee, which have been without a regular bank branch all these years. The Shankar branch of the bank was inaugurated on April 4, 2004.

The total business of the bank has crossed Rs 182.00 crore mark last fiscal with total customer base of more than 40,000 and is accredited with zero NPA level even with the introduction of new NPA norms.

Forex reserves touch $ 112 bn

Mumbai, April 10
India’s foreign exchange reserves surged ahead in the first week of the new fiscal following fresh accretion of over US$ one billion to move past the record levels of US 112 billion during the week ending April 2, 2004.

Market purchases by the RBI, revaluation of the US dollar vis-a-vis other currencies, export remittances and fresh inflows led to inflows of $1,068 million enabling forex reserves to climb to $ 1,12,680 million, according to Reserve Bank of India’s weekly statistical bulletin released here today. — PTI

Sun, Microsoft sign licensing pact

Sanfransisco, April 10
Sun Microsystems said it gave Microsoft a 10-year option to license its products for as much as $ 450 million as part of an agreement reached between the two companies to settle a decade of feuding.

The licensing accord is in addition to Redmond, Washington-based Microsoft's agreement last week to pay Sun $ 1.6 billion to resolve legal and patent disputes. The agreement can be extended each year until 2014, Santa Clara, California-based Sun said in a filing. The pact may help keep legal peace between the two companies. — Bloomberg