The Mint report for 15 September 2009

The Mint report for 15 September 2009

New Delhi: India’s insurance industry could see some landmark changes. Insurance regulator IRDA is looking at ways in which it can stop companies from levying commissions on customers who apply for their insurance directly. Today, customers who buy their policies directly still have to pay insurance companies the same amount of commission that customers who go through agents pay.

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If IRDA goes ahead with its plan it will have a precedent. In a similar move last year, Sebi ordered mutual fund companies not to charge an entry load on customers who buy a scheme directly from them.

The government’s minerals trading firm MMTC is in the middle of a controversy again. Last month MMTC had scrapped a tender for importing coal after allegations of foul play. Now, one of the bidders for its new, reissued tender, is alleging that some of the tender provisions violate India’s foreign exchange laws. MMTC’s tender is for the import of 12.5 million tonnes of coal worth Rs6,000 crore for NTPC.

The government’s oil refining companies are set to buy a 10% stake in Oil India Limited. Bharat Petroleum and Hindustan Petroleum will each buy 5.35 million shares, while Indian Oil will buy 10.7 million shares in Oil India. The deal will be worth a total of Rs2,200 crore.

Investors are getting bullish on Indian IT stocks. Over the last few weeks, brokerages and institutional investment firms have increased their ratings of IT stocks from REDUCE and SELL to NEUTRAL and BUY. And the new optimism is showing on the Bombay Stock Exchange. The sectoral index BSE-IT has gained nearly 40% since 10 July, while the Sensex grew just 20% in the same period. While the consensus among analysts is that the worst is over for India’s IT companies, they’re only expecting weak growth in the sector.

Royal Bank of Scotland or RBS has resumed it sales talks with Standard Chartered Bank. Negotiations between the two banks had broken down in August when they couldn’t agree on a valuation of RBS assets. RBS had signed an exclusivity agreement with Standard Chartered to negotiate the sale of its assets in India, China, and Malaysia.