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RBI eases overseas borrowing for telcos
RBI allays concerns over capital inflows
Corporate Scams
3G Spectrum |
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Russia to buy 19.8 pc stake in Sistema
Food inflation rises to 19.05 pc
Central Bank launches reverse mortgage scheme
Emaar calls off merger with Dubai Holding
Grupo Mexico regains control of
Asarco
Easyday store
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RBI eases overseas borrowing for telcos
Mumbai, December 10 Ahead of the 3G spectrum auction, scheduled for January 14, the central bank in a notification yesterday said that telcos can use the funds raised through External Commercial Borrowings for buying airwaves to launch 3G telephony that offers faster data downloads. Accessing the ECB route to raise money to participate in 3G spectrum auction has been the long-standing demand of telecom companies. They need big money to take part in the auction as the reserve price is fixed at Rs 3,500 crore. The bank also re-imposed an all-inclusive interest ceiling for ECBs under the approval route of 300 basis points above London interbank offered rate, the benchmark for global borrowings and lendings, for loans with tenure of three to five years. The all-inclusive ceiling for loans with a maturity of more than five years would be 500 basis points. Last year, RBI had done away with the ceiling to help companies tide over the global credit crunch. Significantly, it has also decided to discontinue with the facility for buyback of foreign currency convertible bonds (FCCBs) by Indian companies with effect from January 1, 2010. "Keeping in view the prevailing macroeconomic conditions and global developments, especially the improvements in the stock prices, it has been decided to discontinue the facility with effect from January 1, 2010", the notification said. The RBI said the new ECB norms for telecom sector will apply with immediate effect. The central bank also extended the time for real estate sector for raising overseas funds for developing integrated townships under the approval route. Now, the facility is extended to December 31 2010. NBFCs, exclusively involved in financing infrastructure projects, have been allowed to avail of ECBs from the recognised lender category, including international banks, under the approval route, with immediate effect. — PTI |
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RBI allays concerns over capital inflows
Kolkata, December 10 "If there is too much liquidity, it has the potential for asset price build-up," Governor D Subbarao said. However, "every asset price build-up need not necessarily result in a bubble," he told reporters after a meeting of RBI's central board of directors here. Subbarao said capital inflows were in line with the country's requirement. The surge in capital flows was not like what happened between 2006-08, he said, adding "If and when there is excess of capital flows, we will have to respond to that situation." Subbarao said it was not possible at this point of time to speculate on what if anything the apex bank would do to contain the quantum of capital inflows. The RBI yesterday tightened the guidelines for corporates raising resources from external commercial borrowings. Subbarao said corporates were now able to raise resources from non-debt sources. On loan growth, Subbarao said that credit offtake would grow. He said non-food credit demand had grown by 10.4 per cent. On the ECB guidelines, Deputy Governor Shyamala Gopinath said these were relaxed during the time of economic crisis. "Spreads had gone up at that point of time." But with things coming back to normal, the spreads had now narrowed. "So we have reverted to what was there prior to the relaxation," Gopinath said. — PTI |
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Corporate Scams
New Delhi, December 10 Assuring the Lok Sabha today that steps were being taken to guard investor benefits, Corporate Affairs Minister Salman Khursheed said the Centre was considering allowing investors to claim compensation from companies that cause losses or indulge in fraud. “The Parliamentary Standing Committee is examining the Companies Bill, 2009, which allows Class Action Suit for the first time in the history of the country,” Khursheed said in the question hour, after NCP member Supriya Sule asked him if the government was doing anything to monitor media reports, corporate press releases and advertisements that had the potential of impacting share prices. In the detailed reply tabled in the House, the government said it had set up a Market Research and Analysis Unit in its Serious Fraud Investigation Office and would, through the same, coordinate with different investigative agencies to collect information on managerial and corporate behaviour. “The information thus collected will be synthesised with the information collected through media and the data gathered from the MCA-21 project. Eventually, it will be used to issue early alerts on deviation from the legally accepted behaviour of the corporate entities,” the government said. The Market Research and Analysis Unit will work further to improve regulatory systems in the corporate sector by collecting information from sources such as the media, investigating agencies, employees, investors, deposit holders and financial institutions, and analysing the trends to see if there was any misconduct or aberration at play. The unit will also analyse the completed investigated cases to see if investigations were conducted properly. “Any deviation and its resultant effect on the outcome of investigation would be brought out to form a base for further improvement in investigation skills,” the government said, adding that it would also study the investigations carried out by departments of respective agencies in other countries, and use the best practices to guide investigations of corporate frauds in India. |
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3G Spectrum
New Delhi, December 10 A fourth slot has already been awarded to state-owned MTNL (that operates in Delhi and Mumbai) and BSNL (rest of India). It had earlier planned to auction spectrum to four private bidders, in addition to the state-run firms. The decision comes in the wake of the Ministry of Defence's reluctance to vacate the designated spectrum (air waves) for commercial use, official sources said, adding that the required notification would be issued soon. The government has fixed the reserve price of spectrum at Rs 3,500 crore for pan-India 3G spectrum and Rs 1,750 crore for Wimax (wireless internet/broadband) and the auction is scheduled to begin from January 14 next year. The government had projected a revenue of Rs 25,000 crore from the sale of spectrum, but this could now fall short of estimates as it would have to forgo at least Rs 5,250 crore due to cancellation of one slot. Asked if the decision would require empowered Group of Ministers' nod in view of the change, officials said it has been discussed by the members and would be formally notified. On the issue of the Ministry of Defence refusing to vacate the spectrum, the officials said as per their Memorandum of Understanding with the Department of Telecom, 10 MHz of spectrum was vacated immediately and another 10 MHz would be given by June, 2010. — PTI |
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Russia to buy 19.8 pc stake in Sistema
New Delhi, December 10 Stake sale to the Russian Federation will be through issuance of fresh equity shares. Post this, Sistema's stake in the joint venture would come down to 54.2 per cent, while Shyam of India would continue to have 23.5 per cent equity. The approval to issue fresh shares was given by the Extra Ordinary General Body meeting of the company here. The proposal to sell shares to the Russian Federation was recently cleared by the Foreign Investment Promotion Board (FIPB) under the Ministry of Finance. "The new share holding pattern will improve financial stability of SSTL and will increase its share value. The funds will be used for further development of SSTL business in telecom circles of its current operation, as well as for network deployment in new regions," SSTL CEO Vsevolod Rozanov said. SSTL has licence and spectrum to provide mobile telecom services in all 22 circles across the country and claims to have over 2.8 million subscribers.— PTI |
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Food inflation rises to 19.05 pc
New Delhi, December 10 Food inflation was 17.47 per cent for the week ended November 21. However, the overall wholesale price index-based inflation for the month ended October stood at 1.34 per cent.— PTI |
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Central Bank launches reverse mortgage scheme
New Delhi, December 10 "Central Bank of India and Star Union Dai-chi Life Insurance Co have launched reverse-mortgage enabled loan annuity product branded as CENT Swabhiman Plus," the bank chairman and managing director S Sridhar said. The product will help senior citizens avail of regular payments throughout their lives by mortgaging their house with the bank. The scheme is open for senior citizens above the age of 60 and a spouse with a minimum of 55 years. "They can also continue to stay in the house as long as the last surviving spouse is alive," Sridhar added. This annuity product is an improvement to the reverse mortgage loan product, Cent Swabhiman, offered by Central Bank and by some other banks and housing finance companies.The new product assures lifetime payment against a maximum of 20 years in the existing similar products. Besides, the quantum of monthly payment is significantly higher. Features of the product include regular income within a month of joining the scheme, a choice of monthly, quarterly, half-yearly and yearly annuity payment and also an option of lump sum payment of 25 per cent of the loan amount, with a maximum Rs 15 lakh. The loan quantum will depend on the market value of the house, borrower's age, and prevalent interest rate. The quantum of the loan will be at discretion of the lending institution. — PTI |
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Emaar calls off merger with Dubai Holding
Dubai/New Delhi, December 10 The move comes in the midst of realty firm Emaar-MGF, the Dubai entity's joint venture with domestic company MGF Development, preparing an initial public offering for over Rs 3,800 crore. Emaar Properties has said the decision to cancel the proposed merger with Dubai Holding was taken after intensive feasibility studies that were undertaken by a group of international experts and economic analysts. In a statement, Emaar noted the results of "these studies proved that the proposed consolidation (with Dubai Holding entities) discussed earlier was not economically viable in the current economic climate".
— PTI |
Grupo Mexico regains control of Asarco New York, December 10 "Grupo Mexico announced today that its subsidiary, Americas Mining Corp, has consummated its bankruptcy plan for Asarco LLC, reuniting Asarco with its parent company," the South American company said in a statement. The reunion follows the last month's ruling of a US district court favouring Grupo Mexico's about $2.4 billion bid over that of Sterlite Industries' $2.5 billion offer for acquiring the US-based company. Grupo Mexico had acquired Asarco in 1999 but lost control of the subsidiary due to bankruptcy in 2005. — PTI |
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DLF Pramerica plan Bharti AXA Insurance Fullerton to hire 300 persons |
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