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CHANDIGARH

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THE TRIBUNE SPECIALS
50 YEARS OF INDEPENDENCE
TERCENTENARY CELEBRATIONS
B U S I N E S S

No pre-payment fee on floating rate loans
Mumbai, September 6
Banks can, however, levy pre-payment charges on fixed rate loans The Reserve Bank of india (RBI) in a release on Tuesday barred banks from imposing pre-payment charges on floating rate loans and also asked them to offer long-term fixed rate housing loans.

Banks can, however, levy pre-payment charges on fixed rate loans

Food Minister KV Thomas asks states to control rising onion prices
New Delhi, September 6
With food inflation hitting double-digits on the back of rising onion prices, vegetables, fruits and protein-based items, the government has stepped in to ensure that onions don’t prove to be a tear jerker for consumers in a repeat of last year. Consumer Affairs Food and Public Distribution Minister KV Thomas has directed NAFED and NCCF to intervene in the market immediately to keep onion prices under check. He has also asked States to take similar steps for market intervention through agencies under them.



EARLIER STORIES


Protectionism to be disastrous for world trade: WTO chief
WTO Director General Pascal LamyNew Delhi,September 6
Echoing India's concern over inward looking trade trends, WTO chief Pascal Lamy today said protectionism would lead to "disaster" with the weakening of global demand. Cautioning that world trade growth may slow down this year, Lamy said, the multilateral trading system is likely to feel the protectionist pressures.

WTO Director General Pascal Lamy

Reserve ratios need to come down, says RBI
Mumbai, September 6

The minimum mandatory amount of deposits that banks need to set aside to invest in government bonds need to come down gradually, Reserve Bank of India (RBI) governor Duvvuri Subbarao said on Tuesday, sparking concerns of excess supply of gilts in the secondary market. The RBI has mandated banks to set aside a portion of their deposits as statutory liquidity ratio (SLR) or the minimum amount it must hold in gold, cash or government bonds. 

SAIL-led group bids for mines in Afghanistan
New Delhi, September 6
A consortium of leading Indian steel and iron ore producers, led by SAIL, today said it is hopeful of being selected as the preferred bidder for Afghanistan’s Hajigak iron ore deposits, bids for which were opened today.

Indian investment overseas up 94 pc in April-June
New Delhi, September 6
Overseas investments by Indian firms jumped by 94 per cent to $5.5 billion in the April-June period of the current fiscal year, Parliament was informed today.

Tata rolls in new Vista
Chandigarh, September 6
Tata Motors today launched the new version of its premium hatchback, the Tata Vista, in Chandigarh at Joshi Autozone & Hind Motors. The new car comes with a new front chrome grill, complemented with a new triple barrelled head lamp, for excellent visibility in low-light conditions. The car has generous chrome package on the exteriors, sporty new alloy wheels and a new color, Summer Sparkle.

Do not see domestic steel prices falling: JSW Steel 
Mumbai, September 6
Sajjan Jindal-led JSW Steel today said it does not see domestic steel prices coming down in the near future as iron ore rates remain high.

Yamaha expects 40 pc growth in sales this year 
New Delhi, September 6
Two-wheeler maker Yamaha today said it expects sales to grow around 40 per cent to 5.2 lakh units this year as it looks to strengthen its market share in the 150cc segment.

Need to raise petrol prices: IOC
Singapore, September 6
State-run Indian Oil Corp said petrol prices need to be raised as revenue losses from selling the fuel at government controlled rates have widened more than seven-fold this month, head of finance PK Goyal said on Tuesday.





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No pre-payment fee on floating rate loans

Mumbai, September 6
The Reserve Bank of india (RBI) in a release on Tuesday barred banks from imposing pre-payment charges on floating rate loans and also asked them to offer long-term fixed rate housing loans.

In an annual conference of banking ombudsman, the RBI laid down 10 action points to improve customer service of banks and suggested banks should address their asset liability mistmatches by participating in the interest rate swap market.

"Floating rate loans pass on the interest rate risk from banks which are much better placed to manage it to borrowers and, thus, banks only substitute interest rate risk with potential credit risk," the RBI said in the release.

Banks can, however, levy pre-payment charges on fixed rate loans.

The central bank directed banks to compensate customers for losses arising out of non-authorised transactions on ATMs.

In case of dispute over ATM or internet banking transactions , the onus of proving the customer's negligence or mistake should be on the bank, the RBI said.— Reuters

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Food Minister KV Thomas asks states to control rising onion prices
Tribune News Service

New Delhi, September 6
With food inflation hitting double-digits on the back of rising onion prices, vegetables, fruits and protein-based items, the government has stepped in to ensure that onions don’t prove to be a tear jerker for consumers in a repeat of last year.

Consumer Affairs Food and Public Distribution Minister KV Thomas has directed NAFED and NCCF to intervene in the market immediately to keep onion prices under check. He has also asked States to take similar steps for market intervention through agencies under them.

Steps like market intervention through direct sales and curbing exports could also be considered by the government

Outlets of NAFED and NCCF in Delhi will sell onions at the rate of Rs. 20 per kg. Thomas also directed officials to keep a close watch on the price situation and take other appropriate measures like discouraging the export of the commodity, if required.

Rising onion prices even prompted Finance Minister Pranab Mukherjee to recently say that the trend was disturbing. In the wholesale market, a steep rise in prices of onions pushed up food inflation to double digits for the week ended August 20.

Thomas also discussed the issue in the recently held meeting of Committee of Secretaries. It was decided to have a fortnightly review of prices.

The estimated total onion production for 2011-12 will be 151.36 lakh tonnes which will be higher than the last year’s production of 145.62 lakh tonnes.

However, due to rain in some parts of the country and delayed sowing of kharif crop, prices have tended to be higher recently

The government has raised the Minimum Export Price (MEP ) of onions eight times since June to curtail exports and improve domestic supplies as retail prices showed little signs of easing . 

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Protectionism to be disastrous for world trade: WTO chief

New Delhi,September 6
Echoing India's concern over inward looking trade trends, WTO chief Pascal Lamy today said protectionism would lead to "disaster" with the weakening of global demand.

Cautioning that world trade growth may slow down this year, Lamy said, the multilateral trading system is likely to feel the protectionist pressures.

" (But) trade protectionism would be a recipe for disaster..." the WTO chief said at a function organised by the think tank,CUTS International here.

On much delayed Doha trade deal, Lamy asked the WTO members to be ready for "give and take".

The world trade grew by a record 14.5 per cent in 2010 and the WTO projected it to expand by 6.5 per cent this year.

"With the demand weakening,later this month we are likely to be revising downwards the prospects for the world trade in 2011," he said.

The WTO chief said while the countries are reducing tariffs unilaterally or through preferential trade agreements, "divergences in domestic regulatory frameworks require greater attention".

Lamy, who had consultations with the industry bodies,FICCI and CII earlier in the day, reiterated that the WTO member countries need to show pragmatism and spirit of compromise for resolving the "impasse" on the Doha trade negotiations.

"There has to be a give and take. There has to be flexibility...", he said. He also indicated that the level of ambitions for a multilateral deal for opening trade has be realistic.— PTI

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Reserve ratios need to come down, says RBI

Mumbai, September 6
The minimum mandatory amount of deposits that banks need to set aside to invest in government bonds need to come down gradually, Reserve Bank of India (RBI) governor Duvvuri Subbarao said on Tuesday, sparking concerns of excess supply of gilts in the secondary market.

The RBI has mandated banks to set aside a portion of their deposits as statutory liquidity ratio (SLR) or the minimum amount it must hold in gold, cash or government bonds. In addition, banks have to set aside a portion of their deposits as cash with the central bank, a requirement called the cash reserve ratio.

These reserves can act as a liquidity buffer for banks during crisis time.

"SLR at 24 per cent, CRR at 6 percent is still considered high. At some point it (CRR, SLR combined) was 65 per cent and now it is 30 per cent," said RBI Governor Duvvuri Subbarao in his address at the National Finance Symposium organised by the Indian Institute of Foreign trade.

"It is our objective in RBI to bring it down but in a calibrated way."

Government bond yields rose after Subbarao's comments on the need to lower SLR on concerns that such a move could prompt banks to offload some of their bond holdings. The minimum regulatory requirement acts a captive demand for government bonds.

"Though it is RBI's medium term goal to reduce SLR and CRR, in a knee-jerk reaction, yields went up as they (traders) were worried that RBI may cut SLR to infuse liquidity," said a dealer at a foreign bank.

Currently banks' overall holding of SLR bonds is around 29 percent, according to analysts.

The central bank had last reduced the SLR by one percentage point to 24 percent, effective Dec. 18, 2010. Subbarao said that the SLR requirement had help protect Indian banks during the global credit crisis and the new global banking rules under Basel III have a provision which mimics the SLR rule.

Yet, the central bank chief said that some reduction in the ratio may be needed.

"We should bring it (SLR) down so that credit is available and so that private sector is not crowded out," Subbarao said on the sidelines of the event.

The RBI has also not tinkered with CRR since April 2010, when it had last raised the reserve ratio by 25 basis points to 6 percent.

"We are looking at reintroducing inflation indexed bonds. One concern of course is, in a period of relatively high inflation that we now have, whether it will be successful. We will think through this, but we will certainly introduce it."

However, an investor will be interested in buying such bonds only when they expect inflation to rise further going ahead unlike now, when most expect prices to cool off in next few months.— Reuters

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SAIL-led group bids for mines in Afghanistan

New Delhi, September 6
A consortium of leading Indian steel and iron ore producers, led by SAIL, today said it is hopeful of being selected as the preferred bidder for Afghanistan’s Hajigak iron ore deposits, bids for which were opened today.

The Indian proposal includes setting up of a steel plant in Afganisthan, the size of which will depend upon the feasibility report and regulatory approvals, a statement released by SAIL, on behalf of the consortium, said.

The Hajigak mines, located in mountainous Bamiyan province, 130 km west of Kabul, are among the biggest untapped such reserves in the world. It has an estimated reserves of about 1.8 billion tonnes of high quality magnetite with 62-63 per cent iron (Fe) content.

“The SAIL-led consortium is hopeful of being selected as the preferred bidder. The preferred bidder will have the opportunity to enter into a Hajigak Project Contract after carrying out the negotiations," the statement said.

The joint bid by Indian companies is also considered as part of the Indian government's strategy of ensuring a bigger role in the war-torn country, where it has invested nearly about $1.3 billion and it has been followed at top levels of the ministries of steel and foreign affairs.

The consortium has bid for all the four blocks , it said, adding the Afghanistan Mines Ministry is likely to announce preferred and reserved bidders on or about October 4.

“With Afghanistan holding strategic interest for India, we hope that our endeavour to obtain mining licences, there will be a stepping stone towards the larger objective of contributing to the much-needed economic growth of the country,” SAIL Chairman C S Verma said.

Besides SAIL, public sector companies NMDC and RINL are part of the consortium which includes private players JSW Steel, JSPL, JSW Ispat and Monnet Ispat as well. — PTI

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Indian investment overseas up 94 pc in April-June

New Delhi, September 6
Overseas investments by Indian firms jumped by 94 per cent to $5.5 billion in the April-June period of the current fiscal year, Parliament was informed today.

In the corresponding period of 2010-11, outward investment totalled $2.8 billion, according to the latest figures given by Finance Minister Pranab Mukherjee in a written reply in the Rajya Sabha.

Mauritius ($548.54 million) was the top destination for Indian investors in the first quarter of 2011-12, followed by the US ($185 million) and Singapore ($157.31 million). Even for the inward FDI Mauritius, with which India has a double taxation avoidance agreement (DTAA), is the preferred route.

Overseas investment by Indian firms was highest in agriculture sector ($1,419 mn) followed by community services ($1,349 mn) and construction ($1,336 mn).

Investments by resident individuals abroad in the same period stood at $63.9 million against $62 million in the previous year.— PTI

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Tata rolls in new Vista

Chandigarh, September 6
Tata Motors today launched the new version of its premium hatchback, the Tata Vista, in Chandigarh at Joshi Autozone & Hind Motors.

The new car comes with a new front chrome grill, complemented with a new triple barrelled head lamp, for excellent visibility in low-light conditions. The car has generous chrome package on the exteriors, sporty new alloy wheels and a new color, Summer Sparkle.

Four top of the line safety & security features like ABS with EBD, dual airbags, crumple zones and side intrusion beams are provided.

Features like engine immobilizer and remote keyless entry are provided. The car will cost Rs 3.91 lakh (ex-showroom Chandigarh) for the Safire petrol range and from Rs. 4.85 lakh for the Quadrajet diesel range (ex-showroom, Delhi). —TNS

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Do not see domestic steel prices falling: JSW Steel 

Mumbai, September 6
Sajjan Jindal-led JSW Steel today said it does not see domestic steel prices coming down in the near future as iron ore rates remain high.

"In case of coking coal, we are seeing some softness as the trend of global production is somewhat downward, but not in the case of iron ore.

“Still iron ore prices are strong... Steel price won't go down,” JSW Steel Deputy Managing Director MVS Seshagiri Rao told PTI, when asked whether there was an upward bias on steel prices.

Coking coal price has been ruling high in international markets as a result of flash floods in Queensland province of Australia, which meets more than half of the raw material demand of the world market. — PTI

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Yamaha expects 40 pc growth in sales this year 

New Delhi, September 6
Two-wheeler maker Yamaha today said it expects sales to grow around 40 per cent to 5.2 lakh units this year as it looks to strengthen its market share in the 150cc segment.

The company, whose market share in the 150cc segment has grown to 15 per cent in January-August period this year, plans to increase it to 20 per cent by the end of 2011.

"We have grown by 42 per cent from the previous year, especially in the 150cc deluxe segment, which is also our focus area. Our aim is to increase the market share in this segment to 20 per cent by the end of this year," India Yamaha Motor CEO and MD Hiroyuki Suzuki said.

The wholly-owned Indian subsidiary of the Japanese giant Yamaha sold 3.8 lakh units in 2010 and is aiming to sell 5.2 lakh units in 2011.

"We aim to sell 5.2 lakh units in the current calender year. We plan to to sell 6.5 lakh units in 2012, and touch 1 million sales figure by 2013," Suzuki said.— PTI

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Need to raise petrol prices: IOC

Singapore, September 6
State-run Indian Oil Corp said petrol prices need to be raised as revenue losses from selling the fuel at government controlled rates have widened more than seven-fold this month, head of finance PK Goyal said on Tuesday.

Revenue losses on petrol sales now stand at about three rupees (6 US cents) compared to about 0.41 Re a litre in the fortnight ending Aug. 31 due to an increase in Singapore spot prices of the fuel, he said.

"There is scope to raise petrol prices," Goyal told Reuters in an interview on the sidelines of the Asia Pacific Petroleum Conference (APPEC). — Reuters

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BRIEFLY

All India Consumer Price Index for July
New Delhi:
The India Consumer Price Index Number for Industrial Workers (CPI-IW) on base 2001=100 for July 2011 increased by 4 points and stood at 193 (one hundred and ninety three) .— PTI

SJVN pays `213 cr dividend to the Centre
New Delhi:
State-run power producer SJVN today paid a final dividend of Rs 213 crore to the central government. The dividend cheque for about Rs 213.33 crore was handed over by SJVN CMD RP Singh to Power Minister Sushilkumar Shinde, the company said.— PTI

Audi posts two-fold jump in Aug sales
New Delhi:
German luxury car maker Audi on Tuesday eported an over two-fold increase in its sales to 510 units in August this year, compared to the same period previous fiscal. The company had sold 250 units in August 2010. For the period January–August, the company sold 3,655 cars, Audi said.— PTI

Ramky Infra bags contracts of `1,006 crore
New Delhi:
Ramky Infrastructure today said it has received construction orders worth Rs 1,006 crore from various firms, including Reliance Infrastructure and Hindustan Construction. “Ramky Infrastructure ... has secured new orders aggregating Rs 1,006 crore across building, industrial, water and waste water, road and power sectors,” the company said. — PTI

Credit offtake up 21 pc during 12 months
Mumbai:
Despite high interest rates, credit offtake from banks grew 20.7 per cent to over Rs 41 lakh crore during the one-year period ended August 26, 2011, indicating momentum in the country's economic activity. Credit offtake during the period was Rs 41.70 lakh crore as against Rs 34.54 lakh crore in the 12 months ending August 27.— PTI

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