Mumbai: Singapore’s largest bank in terms of assets DBS Bank Ltd on Tuesday announced the appointment of Sanjiv Bhasin as chief executive officer of its Indian arm. Bhasin will replace Pranam Wahi, who is moving to Singapore as managing director and head of DBS Bank’s group global transaction services. “Bhasin will take charge after necessary formal approvals are received from the Reserve Bank of India (RBI),” a DBS release said. Bhasin joined DBS from Rabo India Finance, the Indian subsidiary of Rabobank Nederland, where he has been CEO and managing director since 2004.
— Anita Bhoir
No plan to raise small savings interest rate
New Delhi: The government doesn’t plan to increase the interest rate on small savings, Union minister of state for finance Pawan Kumar Bansal said.
“At present, there is no proposal under consideration of the government to increase the interest rates on small savings schemes, including public provident fund and government provident fund,” Bansal said in a written reply to a question in Parliament in New Delhi on Tuesday.
Govt’s extra spending plan gets Lok Sabha nod
New Delhi: The Lower House of Parliament on Tuesday approved the government’s proposal to spend an extra Rs1.06 trillion during fiscal 2009.
The proposal was approved in the Lok Sabha through a voice vote after finance minister P. Chidambaram explained to lawmakers the reason for the additional expenditure. Chidambaram said the country’s food crisis has been overcome and it has an adequate food buffer stock.
The country is building a strategic food reserve, the minister said in Parliament.
Insurance Bill to go to cabinet, then Parliament
New Delhi: The Parliament will consider a legislation to raise the limit on overseas investment in insurance companies to 49% from 26% after the cabinet approves the Bill.
The group of ministers has approved the legislation, Union minister of state for finance Pawan Kumar Bansal said in Parliament on Tuesday. The Bill, with some changes sought by the ministerial panel, will now be presented to the cabinet, the minister said. He didn’t elaborate on the changes.
No windfall tax on oil refiners, says minister
Mumbai/New Delhi: The government doesn’t plan to impose a windfall tax on oil refiners, state finance minister S.S. Palanimanickam said on Tuesday.
A refinery is like any other manufacturing unit where the government is entitled to a share in the profits, the minister told Parliament. “There is no economic justification for imposition of any windfall or excess profit tax on the profits of manufacturing units like refineries,” Palanimanickam said.
The Samajwadi Party, a supporter of the United Progressive Alliance government, wants a 50% tax on the profit of private refiners and the cancellation of export incentives to Reliance Industries Ltd’s refinery in western India, ‘Mint’ reported on 8 July.
Separately, oil minister Murli Deora said Indian consumers will “have to wait” before the government decides to reduce retail fuel prices. The minister plans to meet officials from Indian Oil Corp. Ltd, the country’s biggest refiner, and its state-run counterparts on Wednesday to discuss dues owed by domestic airlines on jet fuel purchases, Deora said in New Delhi. Jet Airways (India) Ltd, the country’s biggest domestic airline, and its local rivals owe state-run refiners about Rs2,000 crore in fuel dues, Deora said.
Refiners will get bonds to partly cover Q1 losses
Mumbai: The country’s biggest refiner Indian Oil Corp. Ltd and its state-run counterparts will receive bonds worth Rs24,410 crore as partial compensation for selling fuels below cost, the government said. The bonds will help make good 50% of revenue losses in the three months ended 30 June, state minister for oil Dinsha Patel said in Parliament on Tuesday.
The refiners haven’t received bonds worth Rs14,960 crore for the three months ended March. The bonds are part of the Rs35,290 crore to be given as compensation for the year ended March, Patel said.
Govt to become party in RIL-RNRL gas dispute
Mumbai: The Bombay high court on Tuesday allowed the Union government to implead itself in the case between Reliance Industries Ltd (RIL) and Reliance Natural Resources Ltd (RNRL) on gas supply, after the Anil Ambani group company RNRL said it had no problem with the government being a party in the matter.
The hearing is now likely to continue after the Diwali vacation of the courts.
RIL, owned by Anil’s brother Mukesh Ambani, had already said it does not mind the government being made a party. RIL and RNRL are locked in a dispute over the terms of a gas supply master agreement, whereby RIL is to supply gas for RNRL’s power projects.
The court will pass a formal order impleading the government as the third party to the case on Wednesday.
Separately, RNRL said on Tuesday its second quarter profit rose 4.9%.
Net income for the three months ended 30 September climbed to Rs20.1 crore from Rs19.16 crore a year ago, the firm said in a statement to the Bombay Stock Exchange. Revenue for the quarter rose to Rs80.91 crore from Rs61.31 crore.
— PTI/ Bloomberg
Bank operations hit by RBI employees strike
Mumbai: Cheque and electronic clearing systems came to a standstill across the country on Tuesday as around 25,000 Reserve Bank of India (RBI) employees observed on a one-day strike, demanding higher pension.
As per RBI data, on an average, cheques worth around Rs1.77 trillion are cleared daily. Electronic payments worth at least Rs1.32 trillion are processed daily. There was no trading in government securities, foreign exchange and interbank call money market on Tuesday. Anticipating the problem, the central bank had offered two-day money to banks through its repurchase, or repo, window on Monday.
RBI injects liquidity through its repo window and mops up excess cash from the system through its reverse repo window on a daily basis.
— Anita Bhoir
FIIs lent equities worth Rs512 cr from 15-17 Oct
Mumbai: Foreign Institutional Investors, or FIIs, in India lent equities worth Rs512.77 crore to entities abroad for short-selling during 15-17 October, according to data submitted by them to the Securities and Exchange Board of India, or Sebi, the capital markets regulator.
Shares of NTPC Ltd, the largest power producer in India, were the most sought-after by FIIs, with some 2.119 million shares worth Rs31.74 crore being lent overseas. It was followed by Hindustan Unilever Ltd, whose 1.575 million shares worth Rs37.96 crore were lent over the three-day period. The data was compiled from information provided by 33 of the 34 FIIs that have been issuing participatory notes.
On 15 October, Sebi had asked FIIs to compile and submit such data twice a week to increase transparency. More importantly, it was a move to clamp down on a parallel offshore market for short-selling Indian securities by foreign investors, and which had been dragging the markets down.
FIIs have already pulled out close to$12 billion (Rs58,560 crore) from the Indian equity markets this year.
The first set of this data collected by Sebi last week, for 10-14 October, showed that FIIs had lent equities worth Rs348 crore to entities abroad. Shares of ITC Ltd, the largest tobacco firm in India, were lent the most by FIIs, followed by Housing Development and Infrastructure Ltd.
— Khushboo Narayan
Credit quality of Indian companies ‘worsening’
Mumbai: Rating agency Crisil Ltd has said it expects intensified downward pressure on the credit quality of Indian firms. There were two defaults in the past six months, breaking a hiatus of three years without any default, the longest such period in the past 15 years.
Both defaults were from the manufacturing sector. “The real estate sector faces an immediate vulnerability to funding pressures, affecting creditworthiness. Demand slowdown in sectors such as textiles, information technology and automobiles has begun,” Crisil said in its ratings round up of the first half of fiscal year 2009.
While the telecommunications and power sectors would be less vulnerable, the banking sector has the advantage of government support, it said. In the past six months, there were three long-term ratings downgrades, and only one upgrade, the rating agency said.
“Given the unprecedented severity of the global financial sector turmoil and the significant economic slowdown, the next 12 months will be critical for credit quality,” it said, adding that it will monitor factors such as availability of adequate funding at reasonable rates, the intensity of demand slowdown and the exchange rate situation closely in this period.
— Anup Roy
UAE firm to build $5 bn hub in Hyderabad
Dubai: The United Arab Emirates’ (UAE) Ras Al Khaimah Investment Authority plans to build an integrated financial hub and health care city in Hyderabad at a cost of $5 billion (Rs24,400 crore).
The Authority, owned by the government of Ras Al Khaimah, one of UAE’s seven emirates, signed a deal with the Andhra Pradesh Industrial Infrastructure Corp. for the Hyderabad Economic City, it said in an e-mailed statement on Tuesday.