Mumbai, May 19
After suffering huge losses following the Central government's decision to waive off farm loans, the State Bank of India has decided to curtail loans to the agricultural sector. SBI lends the maximum to farmers across the country.

According to a circular issued by the bank, loans for the purchase of tractors and farm mechanisation equipment like tillers and harvesters would henceforth be put on hold till further notice. The notice was issued by the bank's agri-finance division on Friday, according to sources here.

The bank has suffered a huge increase in non-performing assets after the UPA government announced its farm loan waiver scheme amounting to Rs 60,000 crore.

Last week, O.P. Bhatt, chairman, SBI, told a conference call with analysts that farmers stopped paying the loan after the government announced loan waivers. SBI's gross non-performing assets, or NPAs, rose to Rs 12,837 crore at the end of March 2008, from Rs 10,641 crore during the year before mainly on account of default by borrowers in the agriculture sector.

Analysts here say, other nationalised banks may also stop lending to the agriculture sector following the UPA government's loan waiver scheme. This could badly affect the rural economy and companies that manufacture tractors and other agriculture equipment could take a hit.

PTI adds: "The decision will be reviewed based on the progress achieved in reduction of overdues, in due course," the circular said.

While presenting the Budget for 2008-09, Chidambaram had offered Rs 60,000-crore debt package comprising waiving all loans overdue as on December 2007 for small and marginal farmers owning less than two hectares of land and one time settlement for large farmers.

The bank has also asked all its branches to get in touch with tractor dealers and get details of tractor borrowers and educate them about the benefits under the Debt Relief Scheme (one time settlement scheme) announced by the government for distressed farmers.

While following the direction, all branches have been asked to maintain the secrecy on customer account, keeping in view bank's obligation.

Later, SBI spokesperson from Mumbai said "the non-performing assets in tractor financing had increased close to 17 per cent, so the decision has been taken to put on hold the financing of this segment for the time being." As the situation improves, an appropriate decision will be taken, the spokesperson said.

Asked what is the acceptable limit of NPAs in this segment, the spokesperson said "there is no such level of NPAs. As and when we feel comfortable, we will start the financing again." 

New Delhi, May 19
Top business house Reliance Industries has given its chief Mukesh Ambani, the country's richest person and presumably top-paid executive, a hefty pay hike of about 45 per cent to take his annual remuneration to over $10 million.

Mukesh Ambani, chairman and managing director of Reliance Industries, got a total payout of Rs 44.02 crore in financial year 2007-08, marking an increase of about Rs 13.5 crore from the previous fiscal.

In fiscal 2006-07, Ambani's annual remuneration had increased to Rs 30.46 crore, from Rs 24.77 crore previously.

However, a large part of Ambani's full-year pay cheque comes in the form of commissions that the company pays to select executives as a ratio of its net profits.

According to the company's annual report being sent to shareholders, Ambani got a salary of Rs 60 lakh (Rs 5 lakh per month) and another Rs 48 lakh (Rs 4 lakh per month) in the name of "perquisites and allowances".

In addition, he got Rs 18.75 lakh under the head of "retiral benefits" and Rs 4,275.44 lakh toward commission on net profit, taking his total to Rs 4,402.19 lakh for 2007-08.

RIL chief was the top-paid executive in fiscal 2006-07, followed by Madras Cement's chief P R R Rajha, who had an annual payout of about Rs 24.8 crore.

However, Ambani, who was ranked as world's fifth richest by Forbes magazine earlier this year with a net worth of $43 billion, may not find a place even among the 200 most-paid chiefs globally.

In a separate list, Forbes named Oracle's CEO Larry Ellision at the top of 500 most paid CEOs in the US with a pay cheque of $192.9 million. A total 177 CEOs in the list had a salary of over $10 million. — PTI

New Delhi, May 19
Mukesh Ambani-led Reliance group is looking to rope in more international partners in its retail business, on top of the joint ventures already announced for various store formats.

Reliance Industries has recognised "strategic alliances" to be a key driver to its retail business, and accordingly, it established key JVs with international partners in apparel, optical and office products businesses in 2007-08, the company said in its annual report being sent to the shareholders.

The company said Reliance Retail would "continue to seek synergistic opportunities with other international players as well." Besides, Reliance Retail would continue its focus on rapid expansion of the existing and other new formats across India in the current fiscal, the annual report noted.

Drawing parallels with the urban and industrial prosperity brought in by sectors like IT and communications, Reliance Industries said its retail business would bring about prosperity in the rural part of the country.

In his letter to shareholders, RIL's chairman Mukesh Ambani said that Reliance Retail continued its roll out of stores during the last fiscal.

"With 590 stores in 57 cities, spanning 13 states, and over 3.5 million square feet of trading space, I am confident that our newest business will scale the same heights as all our other businesses have," he noted.

"I believe that with the stated aim of generating one million jobs in retail, this is a truly transformational venture whose success will further our national priorities," Ambani said. — PTI 

Chandigarh, May 19
It is double whammy for the small- scale pharma industry in the country. While on one hand the National Productivity Council has failed to release the Rs 500 crore funds for technical upgradation of these units, on the other, the government has started cancelling licences of these units for failing to comply with the stipulations regarding facility upgradation as laid down in Schedule M of the Drugs and Cosmetics Act.

Sources in the pharma industry informed TNS that the government had cancelled hundreds of licences of the small-scale drug manufacturers for failing to comply with the good manufacturing practices (GMP). The licences are reportedly being cancelled for failing to comply with the stipulations of space (minimum 120 sq feet for making tablets).

The Schedule M of the Drugs and Cosmetics Act lays down that no matter what the quality of product, the environment in which it is produced should be good. However, small-scale pharma units say that nowhere in the world, including in the GMP laid down by WHO, are there any such stipulations of space, says Jagdeep Singh, president of Punjab Drug Manufacturers Association, adding that the small scale industry can implement GMP only after the grant is released to them and technical guidance is provided by the government for implementing Schedule M.

The market share of the small- scale units in the Rs 33,000-crore pharmaceutical industry has been increasing rapidly and they now command a 40 per cent share. Accusing the government of playing in the hands of the large drug manufacturers, the SME Pharma Industry Confederation has alleged that the compliance for GMP was being imposed on them in order to financially drain these units. They have further alleged that even the decision to implement Central Drugs Authority Bill, which lays down the importance of centralised drug licensing authority to control the spurious drugs, is aimed to destroy the small-scale industry.

Taking up the matter with Prime Minister Manmohan Singh and the Select Committee of Health and Family Welfare, the Confederation has also said that the MRP-based excise was levied with anomalies in January 2005, which were not removed despite Prime Minister’s intervention. This led to the hike in MRP of several drugs manufactured in the tax-exempt states for profiteering.

Though the Pronab Sen recommendation of 2006 for excise reduction have been implemented in Budget 2008, the abatement has been reduced deliberately from 42.5 per cent to 35.5 per cent to further truncate SSI exemption limit to half. The new abatement may be fair for payment of excise, but the fact that it truncates the exemption limit of Rs 1.5 crore is unfair. 

New Delhi, May 19
India has emerged as the second largest seller of carbon credits in the global market with 6 per cent share in 2007, while China tops the list with a huge 73 per cent, a World Bank report said.

"India and Brazil, at 6 per cent market share each, transacted the highest volumes after China in 2007," said the report ‘State and trends of the carbon market 2008’.

Certified emission reduction (CER), that are traded on the global climate exchanges, are carbon credits issued by the Clean Development Mechanism (CDM) Executive Board for emission reductions achieved by CDM projects and verified under the rules of the Kyoto Protocol.

Pointing out that high price expectation for CERs in India and Brazil is hindering growth, the report said the sellers in these two nations favour sale of already issued CERs in the range of £15-16.50 per CER instead of selling forward CER streams.

For the third consecutive year, China was the world leader in CER supply with a 73 per cent market share in terms of volumes last year against 54 per cent in 2006.

Citing reasons for China still being the destination of choice for buyers of credits, the report said "the large size, economies of scale in origination, and its favourable investment climate" have attracted investors.
"China consolidated its position as the pre-eminent carbon supplier, by quadrupling its number of projects in the pipeline from January 2007 to March 2008," it said.

The carbon market is the most visible result of early regulatory efforts to mitigate climate change. — PTI 

Mumbai, May 19
BSEL Infrastructure Realty Limited today announced its plan to invest Rs 18,000 crore in an infrastructure development project in Malaysia.

BSEL Infra has signed a memorandum of understanding (MoU) with Malaysia's statutory body, Iskandar Regional development Authority (IRDA). Under the tie-up, the company would invest the amount over a period of 12 years in three phases of four years each. Capital infusion of Rs 2,500 crore will be made in the first phase of execution, the company said in a release here today.

As per the MoU, the company will invest in two economic zones in Iskandar of peninsular Malaysia, for which IRDA will help in seeking approval and permission from various authorities for facilitating development process in the country, BSEL Infra managing director Dharmendra Raichura said. He also claimed that the collaboration between IRDA and BSEL was the first collaboration of an Indian company with Iskandar. — UNI 

Nathu La (East Sikkim), May 19
Enthusiasm was visible on both sides of the border on the inaugural day of the Nathu La border trade between Sikkim and Tibetan Autonomous Region (TAR) that witnessed the crossing over of 81 Chinese traders into this side of the border.

Led by TAR commerce head Tshering Choden, the Chinese traders completed immigration formalities at the Nathu La border post and then trooped down at an impressive convey of 16 vehicles to Sherathang Trade Mart.

No Sikkimese traders reached the border today to participate in the trade proceedings at Rinchingqang Trade Mart on TAR side.

'' We don't mind the absence of the Sikkimese traders and are hopeful that they will come from tomorrow. We want the relationship between the two countries to be strengthened by trade through this route,'' said Choden.

The TAR official informed that they have allocated four more shops to the Indian traders at Rinchingqang Trade Mart from this season taking the total to ten.

However, the TAR traders could not achieve much as it started snowing soon after forcing them to pack off.

Sikkim Commerce and Industries minister R B Subba, was present at the border with his officials to welcome the TAR traders for the third edition of border trade.

Subba later assured the TAR officials that traders from Sikkim will definitely be participating in the border trade from tomorrow. — UNI

BRIEFLY

REC lends Rs 3,796 cr to NTPC
New Delhi: Rural Electrification Corporation (REC) on Monday said it has sanctioned a loan of Rs 3,796 crore to NTPC Tamil Nadu Power Company, a 50:50 joint venture of NTPC and Tamil Nadu Electricity Board (TNEB), for a thermal power project. The project would come up at Kuruvimedu village near Chennai. The first unit is expected to be commissioned in 2010-11. — PTI

Zylog to buy Dubai-based Co
New Delhi: Chennai-based software services company Zylog Systems on Monday said it would pick up 60 per cent stake in a Dubai-based firm for an undisclosed amount in a bid to expand its footprint in West Asia. The Dubai firm, valued at 27.5 million dirhams (Rs 31 crore) provides mobile and wireless services. "Initially, Zylog will pick up 60 per cent stake in the company and the rest later," Zylog finance controller S.P. Srihari said.— PTI

ICICI Bank awarded
Chandigarh: ICICI Bank has won an award from The Asian Banker Excellence in Retail Financial Services programme for the bank’s outstanding performance in its remittance business in 2007. The bank received the award at The Asian Banker Excellence in Retail Financial Services 2007 Awards ceremony, held in Bangkok recently.— TNS