Mumbai, August 16
Investing in mutual funds might become more expensive, but retail investors will be assured of a minimum number of shares in initial public offers as market regulator Securities & Exchange Board of India on Thursday announced extensive changes in its rules for mutual funds and IPOs.

It has also recommended to the government tax benefits to equity MF investors under the proposed Rajiv Gandhi Equity Savings Scheme , SEBI chairman U.K. Sinha said.

Talking to reporters after a board meeting, Sinha said the board discussed and approved some "very far-reaching reforms" which include steps for expanding the reach of IPOs and MFs across the country.

In a major decision that could make it expensive for investors to put money in mutual funds, SEBI decided that any service tax would be charged to ultimate investor, not to the asset management company (AMC) as is the practice at present.

The various decisions also include allowing mutual funds flexibility in using fund expense charges and said a committee is being set up to frame a national mutual funds policy.

SEBI decided that a minimum lot of shares would be assured to retail investors in IPOs. It also approved the e-IPO procedure for electronic bidding in public offers to help investors across the country bid for shares in a cost-effective manner. The regulator would also frame new rules for investment advisers, Sinha said.

Among other decisions, nonretail investors cannot withdraw or reduce their price or offer size in IPOs, but can enhance the same, as is the rule for retail investors. For firms coming out with IPOs, they would now have to disclose the price band at least five working days before the opening of the bidding, as against the current norm for two days. — PTI

London/New York, Aug 16
Standard Chartered is pursuing a collective settlement with other US authorities after agreeing to pay $340 million to New York's financial regulator under mounting pressure from shareholders.

The bank said it made a "pragmatic decision" to settle after having seen its share price slump by more than 30 percent at one stage last week, following accusations that it concealed Iran-linked transactions worth a total of $250 billion.

The transactions were at the centre of a fresh legal challenge on Wednesday when the estates of victims of the 1983 bombing of US Marine barracks sued the bank. The suit claimed the transactions were part of Iran's efforts to avoid judgements against it over the bombing.

With the New York settlement agreed, subject to formalities, the bank's US lawyers at Sullivan & Cromwell will look to accelerate talks with other US agencies to enable Standard Chartered to draw a line under an episode that has caused lasting damage to its reputation.

"Negotiations are going on between the other agencies, and we are talking to them. It is safe to assume we are now seeking a collective agreement with the other agencies," a spokesman for the bank said on Wednesday, declining to put a time frame on the process.

The spokesman had earlier said a collective deal with the other agencies was likely. Subsequently he said this was not the case, only that a collective agreement was the outcome the bank was seeking.

Having cut short a family vacation in Canada last week, CEO Peter Sands is now pushing for a comprehensive deal that removes lingering uncertainty. The bank is still the subject of probes by the US Treasury, the Federal Reserve, the Justice Department and New York prosecutors.

Shares of Standard Chartered rose 4.1 per cent to close at 1,429.35 pence, still well below their value before the accusations against the bank on August 6. — Reuters

New Delhi, August 16
Commerce & Industry Minister Anand Sharma said Thursday the government would announce decisions to boost the subdued sentiment in the industrial sector in the next three weeks. Speaking after the fourth meeting of the government-industry task force here, he said there was concern over the declining industrial production, particularly the manufacturing sector.

“I’ve said so earlier, that the government will take decisions which are the expectations of the industry and the investors. We hope that in the next three weeks there will be decisions by the government which will bring about a positive improvement”, Sharma said.

On the issue of FDI, Sharma said the government had “taken stock of every issue related to FDI. These are policy pronouncements and I’m sure there are concerns that some decisions got delayed. The government will take the appropriate and correct view”.

Industry captains raised the issue of the cost of credit. Sharma agreed and said most other countries have brought down the cost of credit this needs to be seriously considered.

Acknowledging industry’s concerns with regard to land acquisition, Sharma assured he would be taking up their case. “We’ve already registered these issues, that the manufacturing zones, the DMIC, SEZs have to be included in what is described as the public purpose,” he said.

CII president Adi Godrej said India’s economic growth was decelerating rapidly mainly on account of rising global uncertainty, slowing domestic investment momentum and downbeat consumer sentiments. He added the government needed to take steps on fiscal consolidation, providing incentives to industry, boosting exports, allowing more FDI and removing the bottlenecks in the infrastructure sector.

Pointing to the seriousness of the situation, FICCI secretary general Rajiv Kumar stated India was on the verge of a crisis and government needs to make strong policy announcements to prop-up the sullen business sentiments.

He remarked 70 clearances are currently required to set up a manufacturing unit, making it a tedious process. He suggested the government should rather allow self-certification and third party certification in labour and environmental laws to speed up the process.

Chandigarh, August 16
Slow credit offtake this year, especially by the corporate sector, could bring down the growth rate for Indian Bank. As against a 21.4% rise in advances and 19% rise in deposits in 2011-12, the bank has cut down on growth targets for advances and deposits to 18% for this fiscal.

However, as the bank tries to keep up with its profitability, the growth drivers will continue to be retail, housing, SMEs and agriculture loans. The bank is also looking at expanding its network within and outside the country this year.

Chairman & MD T.M. Bhasin said though the bank is not getting large investment proposals now, they were confident of 18% growth this fiscal with retail and farm credit and loans to SMEs becoming the thrust areas. “Since the loan to value is 80% in these sectors, we are sure of a positive growth by focusing on these sectors,” he said.

The bank’s total business as of now is Rs 2.25 lakh crore, of which Rs 95,000 crore are advances. Gross NPAs are 1.66% (Rs 1,580 crore) as on June 2012 and the bank has been able to bring Rs 5,500 crore of loan books under corporate debt restructuring to normal health. Of the rescheduled loans, NPAs are Rs 360 crore while Rs 152 cr has been recovered in cash till June this year.

Bhasin also said that following the guidelines of RBI, the bank has started rescheduling and restructuring the loans to the farm sector because of the drought like conditions prevailing in various parts of the country. “We’re not treating agriculture loans in drought-hit areas as NPAs, but are deferring the repayment of loans to the next cropping cycle. We’re also simultaneously funding for the next crop cycle,” he said. The farm sector accounts for 21% of the bank’s gross NPAs.

Bhasin said the bank will be adding 400 branches this year across the country. “We’ll also be looking at opening four new foreign branches — three in Sri Lanka and one in Hong Kong,” he added.

He also stated the bank had been granted approval for a rights issue planned to be floated in the next fiscal. 

New Delhi, August 16
State-owned oil firms are losing Rs 450 crore per day on sale of diesel and cooking fuels as the rupee slide and the rise in international oil prices have widened fuel losses.

Indian Oil, Bharat Petroleum Corp Ltd and Hindustan Petroleum Corp Ltd sell diesel, domestic cooking gas (LPG) and kerosene for PDS sales at government- controlled rates which are way below cost. The oil firms have seen losses on diesel sales widen to Rs 15.55 per litre this fortnight from Rs 13.65 a litre they were losing in the first half of August, official sources said.

Besides, they are losing Rs 29.97 a litre on kerosene and Rs 231 on sale of every 14.2-kg LPG cylinder. The losses are besides close to Rs 3.8 per litre loss on the sale of petrol, a commodity which was deregulated in June 2010 but whose rates haven't moved in tandem with cost because of government's aim to keep inflation under check.

Losses on diesel, the most consumed fuel in the country, have soared to Rs 305 crore per day from about Rs 275 crore, they said, adding at the current rate the three firms may end the fiscal with a record revenue loss of Rs 167,468 crore. The revenue loss incurred this fiscal compares with Rs 138,541 crore of underrecovery on fuel sales in FY2011-12. — PTI