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ICICI Bank hikes home loan rates
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Oil prices under watch: RBI
Tata-Marcopolo jv to build
Hyundai plans small diesel car
Reliance seeks permission for LPG export
Bank Account
Minimum balance shock to bank customers
Wipro bags NWSL for Rs 102 cr
RCoVL to raise Rs 4,500 cr through GDRs
IMF battles to avert cash crunch
Spice to invest Rs 2,000 cr
Corporate News
Microsoft bags Massive
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PM moots pan-Asian FTA
Hyderabad, May 5 “This pan-Asian FTA could be the future of Asia, and will, I am certain, open up new growth avenues for our country,” the Prime Minister told the opening session of the Board of Governors of the 39th Annual General Meeting of the ADB here. India has concluded free trade agreements with SAARC, Singapore and Thailand, and is working on similar arrangements with ASEAN, Japan, China and South Korea. “This web of engagements may herald an eventual free trade area in Asia covering all major Asian economies and possibly extending to Australia and New Zealand,” he said. Stating that India’s “Look East” policy marked a strategic shift in India’s evolving perspective of the world, the Prime Minister expressed his determination to carry forward the India-ASEAN partnership to an enlarged domain for making the 21st century “a truly Asian century.” He, however, reminded that the governments in the region must ensure a better balance in the distribution of gains across regions and social groups, even while pursuing policies to sustain growth momentum. Finance Minister P Chidambaram also juxtaposed the healthy growth figures of the region with the fact that the region was still home to two-third of the world’s poor. The challenge of extending Asia’s prosperity to the poorest among us remains a challenge, he said. Underlining the need for countries to collaborate, the Finance Minister, Mr P. Chidambaram said regional cooperation was critical to ensure that all of Asia became the model for equitable and sustainable growth. Describing the ADB as a “truly worthy partner” in helping Asia meet the challenges, the Finance Minister said the ADB could provide not only the financial resources, but also the best possible practices in its areas of expertise. In his address, Mr Haruhiko Kuroda, President, ADB, reaffirmed that the ADB’s mission was the elimination of poverty and inequality in the region. Referring to the two faces of Asia — growing economies and increasing inequalities — Mr Kuroda said the bank’s new medium term strategy, now being finalised, would address this challenge. Meanwhile, Mr Chidambaram said the recent moves by the RBI relating to hiking of interest rates would not affect flow of credit to the productive sectors, but will be "moderate lending" to housing, capital markets, personnel, loans and real estate. "The banks have increased a deposit and lending rates by 50 basis points. That is a consequence of the measures mandated by the RBI. The Central bank, identified four areas which in its view have been lending to a level which is not justified," he said on the sidelines of ADB AGM here. "I expect that lending to these four sectors would be moderated, but the RBI measures will not effect credit flow to the productive sectors," he said. S&P rating
Standard & Poor's, the independent credit rating agency, has upgraded India to positive from stable because of fiscal improvement. "The revision to positive reflects India's improved prospects of a stabilising debt burden based on greater efforts across all levels of governments to consolidate their fiscal positions," S&P's Asia team leader Ping Chew told reporters on the sidelines of 39th annual general meeting of the ADB. The credit rating agency, however, sounded a word of caution saying that India's fiscal weakness is one of the worst among rated countries, leaving it particularly vulnerable to decline in growth rates and increase in interest rates. Continued commitment to fiscal consolidation could, in future, help bring general government deficits below 8 per cent on a sustained basis, and eventually lead to a decline in debt burden, it said.
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ICICI Bank hikes home loan rates
Mumbai, May 5 The move will increase the interest rates on the floating rate home loans from 8.5 per cent to 9 per cent. The interest rate on fixed- rate home loans will also go up from 9.75 per cent to 10.25 per cent. For the existing floating rate customers, the increase in floating reference rate (FRR) by 0.50 per cent will be effective from July 1, 2006, in line with the bank’s policy of resetting rates on a quarterly basis. The existing fixed- rate home loan customers will, however, not be impacted by this increase and their contracted rates will remain unchanged. New customers (both floating and fixed) will be charged the increased interest rates with effect from May 8. —UNI
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Mussoorie, May 5 “We are conscious of the uncertainty in the oil situation.. As of now we do not know how things will evolve.” But the situation is no different from what it was at the time of announcement of the monetary policy (April 18),” Reserve Bank Governor Y. V. Reddy said here. The global oil prices have been hovering over $70 a barrel leading to global imbalances and there are fears that this unprecedented rise could affect the economic growth of oil importing and developing countries like India. Though the global oil prices have skyrocketed, the inflation rate in the country has been at a moderate level and the weekly wholesale price index fell to 3.54 per cent. Mr Reddy said the moderation in inflation was not totally “unexpected”. The oil prices pass- through was yet to happen and “we will have to see how and when it happens”. On liquidity, Mr Reddy maintained that there was a plenty. In a matter of few weeks liquidity had turned from a difficult to comfortable situation, indicating that it was a problem of “frictional liquidity”. He said the RBI would not hesitate to use all instruments it had to moderate liquidity, consistent with the monetary policy stance.— PTI
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Tata-Marcopolo jv to build buses, coaches
Mumbai, May 5 The joint venture - with Tata Motors holding 51 per cent of the equity and Marcopolo 49 per cent - will set up a new manufacturing facility to be operational in a year. It will produce a variety of buses, including 16 to 54-seater standard buses, 18 and 45- seater luxury buses, luxury coaches, and low-floor city buses. The joint venture will also explore emerging opportunities in the bus rapid transit system, the company said. Tata Motors Chairman Ratan Tata said: “The rapidly expanding and improving road network, connecting cities and also rural areas, is expected to substantially grow passenger transport. The joint venture with Marcopolo will enable Tata Motors to successfully address the growing demand in India as well as in relevant markets abroad.” In the joint venture, Tata Motors will provide help in technology and expertise in chassis and aggregates, whereas expertise, know-how in processes and systems for bus bodybuilding and body design would come from Marcopolo. Both companies will actively participate in the management. The buses will conform to international standards in quality and safety, and will be marketed not only in India but also in all company- focussed markets globally.
—UNI
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Hyundai plans small diesel car
New Delhi, May 5 "We are developing a new version of a compact car as we need more models in the category," Hyundai Motor India Ltd Managing Director H. S. Lheem said. Dispelling talks about the new car being a replacement for Santro, he said: "This will be a car in the same segment of Santro but this will not be a replacement of our flagship brand. Santro would continue to be in the market". "I think, we can have more than one car in the compact car category as the volume of the segment is huge," he said. Meanwhile, the company said today it would set up its second engine and transmission plant in Chennai in two years time, which could entail an investment of about $600 million, and would hire 800 persons for its R&D to be located at Hyderabad, Hyundai Motor India Ltd Managing Director and CEO HS Lheem said here. He said the company was in the process of increasing its production, which would touch 600,000 cars once the second assembly units went onstream by 2007. “We already have space reserved for it (engine and transmission plant) near our current second assembly facility at Chennai,” he said. — PTI
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Reliance seeks permission for LPG export
New Delhi, May 5 Indian Oil Corp, on behalf of the industry, had last fiscal tied-up several tonnes of LPG imports from suppliers, including Saudi Aramco of Saudi Arabia and Abu Dhabi National Oil Corp. Industry sources said Reliance wants the IOC, which had tied-up the imports for itself and on behalf of sister public sector oil firms Hindustan Petroleum and Bharat Petroleum, to import the contracted cargoes and the surplus LPG in the system could be exported by RIL from its Jamnagar refinery. “As RIL suffers losses in disposal of LPG import cargoes in the international market, it would be prudent for RIL to plan export of its own produced LPG,” the company wrote to the Petroleum Ministry. Currently, LPG cannot be exported without government nod.
— PTI
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Bank Account
Hyderabad, May 5 The bank is also planning to expand aggressively in the overseas market, including opening an office in Pakistan, as around 20 per cent of its total business comes from foreign operations, Bank of India CMD M. Balachandran told reporters at an ADB function here. The public sector bank has RBI’s permission to go for medium- term notes for $1 billion, to be raised on the Singapore Stock Exchange. Of this, $250 million had already been raised, the bank CMD said. UBI dividend
After a gap of 14 years, the United Bank of India has approved a dividend of Rs 45.97 crore to the Government of India against the net profit of Rs 204.57 crore earned during 2005-06. The last dividend paid by the UBI to the government was Rs 50 lakh in 1991-92, bank Chairman and Managing Director P. K. Gupta told a press conference while declaring the annual financial results. The bank’s profit after providing for the proposed dividend and tax thereon, had been appropriated towards statutory reserve of Rs 51.14 crore, capital reserve of Rs 17.62 crore and revenue reserve of Rs 83.38 crore, he said.
OBC interest rates
The Oriental bank of Commerce has hiked interest rates on foreign currency non-resident (FCNR) deposits on all maturities terms. FCNR for dollar deposits has been increased to 5.33 per cent on a maturity period of 1-2 years, 5.34 per cent for 2-3 years, 5.53 per cent for 3-4 years, 5.39 per cent for 4-5 years and 5.43 per cent for 5 years, a release from the bank said here today.
— PTI
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Minimum balance shock to bank customers
Chandigarh, May 5 In order to have maximum cash reserves at their disposal for lending, some of the private sector banks, have raised the minimum balance to Rs 5,000 while some public sector banks have raised the minimum balance to Rs 1,000. Incidentally, the banks have failed to notify the raising of bar for the minimum balance to their customers, who are now forced to pay fines. Beginning this fiscal among the private sector banks, Centurion Bank of Punjab, has raised the minimum balance for its saving accounts (except for those accounts opened under separate schemes like zero balance accounts) from Rs 2,500 to Rs 5,000. Customers maintain that they were not intimated about the raising of the minimum balance. Only after a fine of Rs 660 for a quarter was imposed on them that they realised about the increase in the limit. However, the bank maintains that the head office had issued letters to all its customers, informing them of the raise. Punjab National Bank and Canara Bank, too, have raised the minimum balance in saving accounts from Rs 5,00 to Rs 1,000. Other than displaying a notice in its branches, these banks have allegedly not informed the customers directly about the raise. Senior officials in the Regional Office of the RBI the banks were free to fix their own limits for the minimum balance. “However, the banks have to notify the raising of the limit, advertise it on their websites, send notices to its customers or issue a notice in a leading newspaper. In case the banks have flouted this regulation, we will look into the matter,” said a senior official in the banking supervision division of the RBI.
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Wipro bags NWSL for Rs 102 cr
New Delhi, May 5 The company has also entered into a manufacturing agreement with NWSL for a period of five years under which NWSL will manufacture switches under its brand name, while Wipro will take care of the sales and plant and machinery. ''Under this acquisition, which falls under the sub-compete clause and is on a sub-contractor basis, we have the Intellectual Property Rights for the brand while the manufacturing rights remain with NWSL,'' Wipro Consumer Care and Lighting President Vineet Agarwal told reporters here. On why the deal with NWSL, Mr Agarwal said, “The electrical switches segment is absolutely synergistic to our current business mix of domestic, commercial and institutional lighting’’. — UNI
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RCoVL to raise Rs 4,500 cr through GDRs
New Delhi, May 5 The equity share capital of the company will remain unchanged at Rs 1,022 crore, comprising approximately 204 crore shares of Rs 5 each, as the offer is in the secondary overseas market. With the domestic price ruling at around Rs 340 a share, the company could be offering maximum up to 5 per cent of its existing share capital to foreign investors through American and Global Depository Receipts, if it looks at a premium of up to Rs 100 on the domestic market. "The Board of Reliance Communication today approved a proposal to sponsor secondary market Global and American Depository Receipts (GDR, ADR) offering of up to Rs 4,500 crore at a premium to domestic market," a company spokesperson said.
— PTI
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IMF battles to avert cash crunch
Washington, May 5 The IMF said yesterday it would stop paying new money into its reserves, and would transfer the existing reserves of nearly $9 billion into a new investment account to generate extra returns on the bond markets. The global lender’s own finances have become strained as more and more clients emerge from years of economic crisis, during which they became reliant on IMF bailouts, to stand on their own feet. The decision of Argentina and Brazil this year to turn their backs on IMF tutelage has left the Fund facing an operating shortfall of $110 m this fiscal. —AFP
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Spice to invest Rs 2,000 cr Bangalore, May 5 Talking to mediapersons here, he said the investment would be mainly in the areas of training, building and research and development wings. Mr Modi said the company would focus more on entertainment, communication and software, besides establishing retail stores. It proposed to set up a mobile TV station in New Delhi within the next three months. He informed that Hollywood movies were likely to be available on Spice mobile from 2007, while Hindi movies would be available from this year.
— UNI
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Corporate News
Mumbai, May 5 The company’s total income (net of excise) for the quarter ended March 31, 2006, grew 17.13 per cent to Rs 746.17 crore from Rs 637.01 crore for the corresponding period in 2004-05, the company said The Board has recommended a dividend of Rs 4.50 on equity shares of Rs 10 each amounting to Rs 17.25 crore for the year ended March 31. For the year ended March 31, 2006 the net profit stood at Rs 78.17 crore as compared to Rs 67.63 crore for the year ended March 31, 2005. For 2005-06 the total income (net of excise) was Rs 2626.70 crore as compared to Rs 2245.30 crore in 2004-05. Cipla bonus shares
Cipla Ltd has alloted 46.63 crore bonus shares in the ratio of 2:3. The Board of Directors had allotted the bonus shares of Rs 2 each aggregating to Rs 93.27 crore in the proportion of three equity shares for every two equity shares held, the pharma company said
Liberty facility
The foundation stone of a new facility of Liberty Group, Liberty Polyurethanes, was laid at Raipur- Bhagwanpur industrial area in Uttaranchal today. The project is coming up in 32,000 square metres area, with an investment of Rs 50 crore. The plant will provide direct employment to 1,200 personnel and indirect employment to 5,000
persons. — PTI, TNS
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Microsoft bags Massive
Redmond (US), May 5
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