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SBI sets base rate at 7.5 pc
Exporters demand tax refund on diesel
Sensex tanks 240 pts on rate hike fears
PM rules out imposition of Tobin tax
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Spice Mobiles to merge with parent firm
SEBI eases reporting norms for FIIs
TRAI to review telecom service quality quarterly
Bonanza for MMTC investors
Wipro bags Microsoft partner award
Campaign to promote olive oil launched
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SBI sets base rate at 7.5 pc
Mumbai, June 29 SBI is the first bank to announce its base rate in compliance with directives from the Reserve Bank of India. Earlier this year, RBI had announced that banks would have to phase out the benchmark prime lending rate (BPLR) and replace it with the base rate with effect from July 1. According to banking sources, banks are free to set their own base rate. However, the base rate would be determined by the overall costs of the bank, including costs of deposits, administrative costs, profit margins and cost of parking funds with the RBI in the form of Cash Reserve Ratio and SLR. Analysts said private banks with better cost efficiencies would be able to shave a few basis points from the base rate set by the country's largest bank. Some of the big private banks are expected to peg their base rate as low as 6.75 per cent. At present, a number of blue chip corporate houses borrow funds at the rate of 6.5 to 6.75 per cent per annum. Private banks are expected to woo them with a lower base rate, the analysts said. Private banks like HDFC and ICICI are expected to announce their base rates on Wednesday. Following the norms issued by the RBI, the practice by banks to lend money to blue chip corporate houses below market rate will come to a halt. However, not all borrowers would be able to borrow funds at the base rate. The base rate, says a banker, would only be a reference benchmark rate for floating rate products. Depending on the borrower's credit history and net worth, the banks may set lending rates higher than the base rate, say bankers. Meanwhile, Punjab National Bank, Union Bank of India and Central Bank of India fixed the benchmark rate at 8 per cent as part of the shift to new regime from July 1, replacing their prime lending rates that ranged between 11 and 14 per cent.
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Exporters demand tax refund on diesel
New Delhi, June 29 Any decision to decontrol diesel prices, even in a phased manner, would affect exporters as they are dependent on diesel due to erratic electricity supply, apex exporters' body FIEO said. "Allowing Cenvat credit on such essential inputs will be a logical step (to help exporters)," Federation of Indian Export Organisations president A Sakthivel said today. Petrol prices have been freed from government control, and there are indications that diesel prices would also be decontrolled in a phased manner. Industry sources said that running factories on generator sets would cost comparatively higher than electricity, thus raising input costs. Indian exporters are facing tough challenges in the price-competitive global markets. Central Value Added Tax Credit (Cenvat) credit is currently allowed only on fuels such as furnace oil and lubricants. "There is no logic in excluding high-speed diesel and light diesel oil from the purview of Cenvatable input," Sakthivel added. Though diesel oil is being used as an input to produce dutiable goods, Cenvat credit is denied to the manufacturer, the FIEO said. On June 27, the government hiked the price of petrol by Rs 3.50 a litre and diesel by Rs 2 a litre. It also raised the rate of LPG by Rs 35 a cylinder and kerosene, the poor man's cooking fuel, by Rs 3 a litre. PTI
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Sensex tanks 240 pts on rate hike fears
Mumbai, June 29 In tandem with Asian peers, the 30-share barometer opened weak and selling pressure in banking and metal stocks dragged the gauge to touch a low of 17,465 in the final hour of trade. The Sensex ended at 17,534.09, lower by 240.17 points, or 1.35 per cent, the lowest level since June 16. The wide-based 50-share Nifty also lost 1.45 per cent to finish at 5,256.15 points. Marketmen attributed the correction in local markets, as a fallout of sharp fall in Asian stocks on worries of slowdown in the Chinese economy. Metal stocks took a hit as traders feared a dip in the intake of China, the biggest consumer. Reliance Industries, which carries the maximum weight in the Sensex, ended nearly 2 per cent lower, dragging it down. Brokers also said investors feared an imminent hike in interest rates in the wake of the government increasing petrol and diesel prices last week. The central bank is expected to tighten money supply to rein in the headline inflation, which is already in double digits. With fears of lending rates going up, banking stocks came under severe selling. "The sentiment turned sour after the Shanghai composite index plunged, hitting a 14-month low amid worries over its future growth prospects," said IIFL vice- president (research) Amar Ambani. Asian markets ended in deep red, led by China's Shanghai index that tanked 4.27 per cent. Japan's Nikkei index dropped 1.27 per cent and Hong Kong's Hang Sang lost 2.3 per cent. PTI
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PM rules out imposition of Tobin tax
On Board PM's Special Aircraft, June 29 "Well the Tobin tax has merit in particular situations but as far as India is concerned we have not reached a stage where capital flows have become a problem. "I think if capital inflows into our country both by way of direct investment and by way of portfolio investment have been at reasonable levels, we don't face situations of the kind which would require an imposition of Tobin tax," he said in reply to a question on his views on the tax. There has been a talk among economists on a Tobin-like tax - a levy on all spot conversions of one currency into another - to prevent fluctuations in the market due to excessive capital inflows into the country. Foreign Institutional investors have been pumping in money into the Indian stock markets, adding to the capital inflows into the country. The inflows up to June this year were a little over Rs 31,000 crore. Since the country is battling double-digit inflation, there is a feeling in certain quarters that funds coming from overseas are adding to the pressure. He also said that the government was not into contemplating a legislation in the area of corporate social responsibility. "There is now a lot of discussion on corporate governance. I think good corporate houses are looking at what they can do in non-traditional areas of providing social services, education, health facilities for their employees. "I think that it is a corporate responsibility, which has to be shouldered by the corporate sector on its own. We are not contemplating any legislation in that area," the Prime Minister said. PTI
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Spice Mobiles to merge with parent firm
New Delhi, June 29 The merger would create a new entity, Spice Mobility. "Spice Mobiles will reverse-merge with Spice Televentures Pvt Ltd, and the new venture will be called Spice Mobility," Spice Group chairman BK Modi told reporters here. The merger will create 4.2 crore treasury shares, out of which one crore would be kept for employees, while the rest of the 3.2-crore equity would be put in the market to raise about Rs 300 crore, he added. As per the March quarter shareholding pattern available on the BSE, Spice Televentures Pvt Ltd held 63.25 per cent stake in Spice Mobiles. Shares of Spice Mobiles today closed at Rs 71 on the BSE, down 1.05 per cent from the previous close.
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SEBI eases reporting norms for FIIs
Mumbai, June 29 FIIs now have to disclose the information on a weekly basis instead of daily. However, foreign institutional investors (FIIs) issuing participatory notes (PNs) will have to immediately report their short position. PNs are instruments through which unregistered entities in India invest in stock markets while short-selling means selling of borrowed shares at high prices with the intention of repurchasing them in the future when the prices fall. "It has been decided to modify the periodicity of these reports from daily submissions to weekly submissions...The FIIs shall now be required to submit the reports every Friday," the SEBI said in a circular. The circular becomes effective from July 2. However, analysts feel the new requirements will not have much implications as the securities lending market is not very mature in India. Securities lending means a brokerage lending securities owned by its clients to short-sellers. As per the data available on the National Stock Exchange, daily data on the Securities Lending and Borrowing (SLB) segment shows little action. "It really does not make any difference as to whether the data is submitted on a daily, weekly or quarterly basis as hardly any trade is executed in SLB segment in India," SMC Capitals Equity Head Jagannadham Thunuguntla said. However, in other countries, such as the US, where the securities lending is a big market, the order would have made a difference, he said. The market regulator said that public dissemination of the disclosure by FIIs will be made twice in a week - on Tuesday and Friday. PTI
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TRAI to review telecom service quality quarterly
New Delhi, June 29 According to officials, the TRAI would be reverting to a quarterly audit of services from next month. The change comes as there have been increasing number of complaints about the quality of service being provided by the telecom operators, specially about the connectivity. As per the earlier schedule, the service providers used to submit their data on defined parameters of quality of service quarterly but audit was done only annually by the TRAI. But now with the TRAI seeking to carry out the audit every quarter, the service providers would be under pressure to keep upgrading their networks constantly and swiftly redress subscriber complaints. TRAI is also seeking to simplify the tariff plan literature offered by operators, as subscribers do not get the right kind of information about hidden costs and benefits of different plans. Meanwhile, the regulator will be launching web-based 'Telecom Consumer Grievances Monitoring System' by July 15, enabling the subscribers to lodge their complaints and monitor their redressal on web through Internet.
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Bonanza for MMTC investors
Mumbai, June 29 In addition, the board has also approved the issue of bonus shares in the ratio of 1:1 to the existing equity holders of the company. MMTC's board has also proposed to split the company's shares in the ratio of 1:10, implying that shareholders would get 10 equity shares at a face value Rs 1 each for every share of Rs 10 face value they currently hold. The company will convene an extraordinary general meeting of its shareholders on July 20 to seek approval for the proposals mooted by the board.
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Wipro bags Microsoft partner award
Mumbai, June 29 The Microsoft Partner Awards, chosen from a pool of 3,000 global partners of Microsoft, are given to the companies that have developed and delivered exceptional Microsoft-based solutions over the previous year.
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Campaign to promote olive oil launched
New Delhi, June 29 The campaign financed by the European Union, in collaboration with Italy, provides a series of training activities and information services to disseminate correct knowledge of olive oils of European origin, in terms of their quality and healthy attributes. It includes an array of activities like workshops, training programmes for stakeholders, trade shows, exhibitions, tasting sessions, advertising campaigns in print, television and other media to explain the nutritional aspects of olive oil and its importance in a healthy and balanced diet. The aim is to promote olive oil to increase its use in traditional local and daily cuisine and to spread awareness about its health benefits. The campaign will involve participation of opinion makers from different parts of the society, said president of the EVC, Elia Fiorillo, who unveiled the campaign. This is a promotional campaign intended to provide correct information on European olive oil with emphasis on its quality, nutrition benefits and its usage in the kitchen, local and daily cuisine, he remarked. |
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New Delhi, June 29
