New Delhi, June 6
The government is watching the outcome of the June 17 elections in Greece before beginning its ambitious Rs 30,000 crore divestment programme, as poll results will stir course of the eurozone crisis that has impacted markets the world over.

Interestingly, the debt-ridden nation is going for its second election in just six weeks as the May election could not come out with a clear mandate for either the Syriza party or New Democracy.

Experts are not ruling out a third poll as well. "Merchant bankers for the RINL issue recently suggested the government to revise the marketing time-line and wait for the Greece elections. The election may also see the exit of Greece from the European Union. This will release a lot of pressure from other European Union nations," a source in the department of disinvestment said.

The outcome of the Greece election has a lot of bearing on the European economy in particular and the world economy in general. The European Union insisted that Greece go an austerity drive in lieu of a bailout package. Syriza party has vowed to cancel austerity plan, while New Democracy supports the bailout.

Global markets have been volatile since May in view of Greece election. High rate of volatility was seen across the world as the US, European, Asian and Indian markets declined by 6%, 7%, 11% and 6%, respectively.

"Increased fluctuations in crude prices and the bullion and the euro-dollar rate going to its 52-week low of 1.23 have led investors moving towards safer havens. The two-year US government treasury yield fell to 0.25% whereas German bonds are yielding negative," he said.

Moreover, equity raising sentiment is negative as seen by 43 transactions being withdrawn from May 1 till date with three transactions that have been pulled from the Hong Kong markets last week alone totalling US $1.6 billion, he added.

"Attempting a pre-RHP roadshow will affect the quality and quantity of meetings, feedback and resulting impact on indicative valuation and shadow book building," the official said.

The government has deferred the initial public offering of state-run Rashtriya Ispat Nigam by three weeks from earlier scheduled July 3 on account of volatile market conditions.

It has lined up for around a dozen public sector units for disinvestment in the current fiscal which include SAIL, BHEL, Hindustan Copper, Oil India and Hindustan Aeronautics. — PTI

Frankfurt/Main, June 6
The European Central Bank left interest rates at 1 percent on Wednesday, dashing some market expectations that it might move quickly to combat fears about the health of the eurozone.

Markets were unsure how the ECB would react to the recent wave of weak economic data, knowing that the bank also wants to keep the pressure on eurozone leaders to tackle the crisis more effectively.

"I can imagine that the market is a little disappointed that they didn't cut rates," said Rabobank economist Elwin de Groot.

"It had been pricing some action on this front. Eonia swap rates have been trading at 0.272 so the key question for the market now is whether the ECB will cut rates next month and whether it is willing to also lower the deposit rate."

The euro was steady at $1.25 after the decision, Europe's benchmark stock market trimmed gains, while closely watched German bund future were also little changed.

Focus now flips to the ECB's 1230 GMT news conference where head of the bank, Mario Draghi, will detail the decision, give its latest assessment of the euro zone's troubles and lay out any additional support that it plans to put in place.

It is widely expected to announce a lengthy extension to banks unlimited access to European Central Bank loans, while experts are also looking for any hints of another injection of 3-year funding and a further loosening of its lending rules to ensure troubled banks can get ECB money. — Reuters

New Delhi, June 6
Telecom sector regulator Telecom Regulatory Authority of India’s recommendation on refarming of the spectrum has had the GSM technology based telecom operators crying foul.

The chiefs of telecom majors Bharti Airtel, Vodafone and Idea Cellular have written a letter to the finance minister seeking an intervention on spectrum refarming, a move which the telecom chiefs said would result in call rates going up by as much 64 paise per minute.

The spectrum refarming as recommended by the telecom regulator would mean operators would have to migrate from the current 800 MHz and 900 MHz to 1800 MHz of spectrum when their permits come up for renewal.

“…The current TRAI proposal will have a substantial cost to the industry, result in an increase in retail tariffs and cause significant inconvenience to consumers with no benefit to any stakeholder... the maximum harm will be to the rural consumer… as well as to the large population of waiting-to-be-connected,” the CEOs said in their letter to Pranab Mukherjee.

The letter was jointly written by Sanjay Kapoor, CEO (India & South Asia) Bharti Airtel, Marten Pieters MD & CEO, Vodafone India, and Idea Cellular MD Himanshu Kapania. The letter cited findings from a study conducted by global telecom advisory firm Analysys Mason, which analyzed the impact of spectrum refarming on the industry.

The findings from Analysys Mason study said after moving to 1800 MHz, telecom operators using the 900 Mhz spectrum would need to replace 290,000 base stations and install an additional 1.7 towers to provide equivalent coverage. “This would require an incremental capital expenditure of Rs 54,739 crore and incremental annual operating expenditure of Rs 11,762 crore,” the study said.

The CDMA operators’ body AUSPI, however, is in favour of refarming. 

New Delhi, June 6
A whopping Rs 1.36 lakh crore of bank funds is locked up in debt recovery tribunals (DRTs). Finance Minister Pranab Mukherjee asked the debt recovery appellate tribunals to expedite the unlocking of resources of various banks locked in the form of nonperforming assets to the tune of Rs 1.36 lakh crore.

Addressing a conference of debt recovery tribunals, he said banks are facing the problem of increasing NPAs which needs to be addressed on a priority basis and there can be no lending unless there is recovery.

He said the government had advised bankers to closely monitor their NPAs and added the role of debt recovery tribunals is all the more important in helping out banks to deal with the mounting NPAs/loss assets as they were part of the mechanism for recovery of loss assets.

Mukherjee said it should be the endeavour of the tribunals to decide the case in 180 days but the DRTs have not been able to adhere to this time line. He added that 67,000 cases are pending in the tribunals involving an amount of Rs 1.36 lakh crore as on March 31, 2012. He stressed this was a matter of great concern.

Mukhejee said pendency of cases has increased and there was a need to increase the pace of disposal by DRTs. He noted there were delays at times as banks’ representatives did not submit complete documents or seek adjournments. He added there was need for proactive action and approach to be taken by the banks.

The minister further said some of the DRTs may be over burdened due to increased number of filing of cases or their large jurisdictions. Noting there was a need to look into the territorial jurisdiction of the existing DRTs, he added there was also a need to rationalize and, if deemed absolutely necessary, the setting up of additional tribunals could also be considered.

Mumbai, June 6
The country's largest carmaker, Maruti Suzuki India, has cut production of some petrol models, including the best selling Alto, as sales of such cars have declined due to high fuel costs.

"Petrol car sales are very low in these days as the market sentiment is down ... We do not believe in creating excess stock. So, we adjust our production accordingly," Maruti Suzuki managing executive officer (marketing & sales) Mayank Pareek said.

The company had recently stopped production of petrol models, including the Alto, M800, A-Star, Estilo and Omni, for three days to prevent inventories piling up further, he added.

"Normally we have inventories for three weeks. However, for petrol models, it is now around four and a half weeks," Pareek said, without sharing any numbers.

According to sources, Maruti Suzuki had stopped production lines of petrol models on May 25-26 and June 2 at its Gurgaon facility. The Manesar unit worked normally. "The company had cut production of 8,000-8,500 units of petrol cars in these three days," a source said.

In May, the company's sales declined first time after four consecutive months of growth. It had reported 4.99 per cent fall in total sales at 98,884 units last month, mainly due to declining sales of petrol-driven small cars.

The company's volume-driven mini-segment cars, comprising the M800, A-Star, Alto and WagonR, fell by 29.03% to 29,895 units during the month from 42,125 units in May 2011.

Last month petrol prices in India witnessed the steepest increase of Rs 7.54 a litre in its history. However, a partial rollback was done later. — PTI

Chandigarh, June 6
The global economic meltdown has cast its shadow on loan recovery by banks. With the Indian economy too not insulated from the impact, loans taken by small and medium enterprises have not only become nonperforming assets but they have also not been enthused with the one-time settlement scheme floated by banks to clear their accounts.

Data collected by The Tribune shows that less than 30% of the SME NPA accounts have come forward to settle their accounts with the banks, that offered the OTS scheme. As a result, many banks that had floated the OTS policy have now withdrawn it, after March 2012. Amongst the major banks that had offered the scheme were State Bank of India, Punjab National Bank and Central Bank of India.

Central Bank of India zonal manager B. Akbaraly said the response to the OTS scheme from the SMEs was not very encouraging. “Only 10-15% of the defaulting SMEs had availed of the OTS scheme. “In fact last year, only 2,500 SMEs having outstanding dues of over Rs 10 lakh, had availed of this scheme. On our part, we have repeatedly organized customer camps, exhorting the SMEs to clear their accounts,” he said, adding the OTS scheme for micro, small and medium enterprises having outstanding dues of up to Rs 10 lakh has now been withdrawn.

Under the OTS scheme banks were offering many concessions to MSMEs on the interest rate they were being charged. PNB was offering a waiver on the interest rates if those availing of the scheme paid all their pending dues (as decided under the OTS) within three months, while SBI had asked them to pay 5% of the total outstanding initially in order to apply for the OTS policy, while 25% of the dues were to be cleared once they had signed up for the OTS policy.