Mumbai: The Insurance Regulatory Development Authority (Irda) has come out with a new product planner rule, by which an insurance company can file only five products for approval in a year. However, Life Insurance Corporation of India (LIC), the country’s largest insurer, might be given a special dispensation by the regulator. In order to reduce the time taken for product approvals, Irda has asked life insurers for a product planner before every financial year. The planner would give an indication of the number of products an insurer proposes to file each quarter. S K Roy, chairman of LIC, explained that the product appetite of the marketing team of a company of its size is huge. “We have spoken to the regulator on this issue and should be able to get a special dispensation,” he said. Roy added LIC’s product portfolio has shrunk from 60 products to 16 life insurance products and eight group insurance products. Irda has said if the number of products exceeds five, the insurer should furnish supporting market research, product-wise persistency for the 13th month, 25th month and 37th month as on April 30 of the previous year. http://www.business-standard.com/article/finance/only-5-life-products-can-be-filed-in-a-year-irda-114110100020_1.html
FINANCE MINISTRY REJIGS TEAM, NEW CHIEFS FOR APEX BODIES
New Delhi: The finance ministry, which has started preparations for the annual budget for 2015-16, has got a new team of officials at the helm with a new secretary in the Department of Economic Affairs and new chiefs for the the apex policy making bodies for direct and indirect taxes. On Friday afternoon, senior civil servant Rajiv Mehrishi took charge as the secretary in DEA, the department that makes the union budget, after Arivnd Mayaram demited office to accept new assignment as secretary in the Ministry of Minority Affairs, said an official statement. The Central Board of Direct Taxes (CBDT) will have a new chairperson from Monday—Anita Kapoor, who is currently a member in the the top policy making body for direct taxes. K V Chowdary, who retired as Chairman of CBDT on Friday has been appointed as an advisor to the Special Investigation Team probing into the black money issue. Kaushal Srivastava, member in Central Board of Excise and Customs (CBEC), will succeed J M Shanti Sundharam, who retired on Friday as the Board’s Chairperson. The government relieved Subash C Garg, an officer on special duty in DEA from his duties to take up his new assignment as Executive Director of World Bank. http://www.financialexpress.com/news/finance-ministry-rejigs-team-new-chiefs-for-apex-bodies/1303397
APPOINTMENT OF 8 PSU BANK HEADS EXPECTED BY NOV-END
New Delhi: The finance ministry said on Friday that the government will, by November-end, appoint chairman and managing directors of eight Public Sector Banks (PSB), where it had scrapped selections made by the UPA government. The ministry also said it will soon take to the union cabinet level a proposal for a R10,000 crore fund for recapitalisation of public sector banks (PSBs) in addition to the R11,200 crore announced in the Budget 2014-15 to help them meet global capital adequacy or Basel III norms. Besides, the ministry said the government will from next fiscal give more autonomy to PSBs in selecting statutory auditors. Addressing mediapersons, Department of financial services secretary GS Sandhu said panel led by RBI Governor Raghuram Rajan, and comprising Sandhu himself alongwith four external experts will on November 13 and 14 conduct interviews of eligible candidates for the post of CMDs of eight PSBs. He added that the aim is to hand over appointment letters to the selected candidates by November-end. Sandhu said before the final decision is taken, each of the eligible candidates will have to appear before three sub-committees comprising two members each from a panel of six members (including DFS secretary, RBI deputy governor, and four experts). http://www.financialexpress.com/news/appointment-of-8-psu-bank-heads-expected-by-novend/1303430
JAITLEY EXPECTS INFLATION TO DIP FURTHER; SAYS GDP GROWTH MAY TOUCH 5.9%
New Delhi: With the softening of international prices of crude oil and food items in the domestic market, Finance Minister Arun Jaitley has expressed hope that inflation will come down in the coming months. Jaitley’s statement comes at a time, when the index for producer prices, better known as wholesale price index (WPI), is down to 2.38 per cent while index for consumer prices or retail inflation is at 6.46 per cent. This makes a strong case for interest rate cut by the Reserve Bank as it aims to achieve retail inflation target of 6 per cent by January 2016. Addressing the first meeting of the Consultative Committee attached to the Finance Ministry, on the topic ‘Sustaining Growth Momentum – The Road Ahead’, Jaitley said he expects growth to be in the range of 5.5-5.9 per cent. He said the priority of his Government is to bring back growth momentum into the economy. “Higher growth leads to more revenue collections, better employment opportunities and increase in Government’s capacity to finance social sector programmes, among others,” he said. The Modi Government got a boost as the GDP registered a growth of 5.7 per cent during first three months (April-June) of the current fiscsal as against 4.7 per cent recorded during corresponding period of the previous fiscal. This also ended two years of below 5 per cent growth. Earlier, in the Economic Survey, the Government had estimated growth to range between 5.4 and 5.9 per cent. http://www.thehindubusinessline.com/todays-paper/tp-news/jaitley-expects-inflation-to-dip-further-says-gdp-growth-may-touch-59/article6554008.ece
FOREX RESERVES UP $495 MN
The country’s foreign exchange reserves rose $495.5 million for the week ended October 24 to $314.18 billion, show Reserve Bank of India (RBI) data released on Friday. Foreign currency assets, a key component of reserves, rose $532.2 million to $288.33 billion. Gold reserves remained unchanged for the week at $20.01 billion. Special Drawing Rights (SDRs) fell $27 million to $4.29 billion, while the country’s reserve position with the International Monetary Fund was down $9.7 million to $1.54 billion. http://www.business-standard.com/article/finance/forex-reserves-up-495-mn-114110100019_1.html
UCO BANK SHOOTS OFF LETTERS TO KFA, UNITED BREWERIES ON ‘WILFUL DEFAULT’
Kolkata: Public sector lender UCO Bank, which has already identified Kingfisher Airlines (KFA) and its corporate guarantor United Breweries Holdings (UBHL) as “wilful defaulters”, shot off letters on Friday to both the firms, asking them to explain why they should not be declared as wilful defaulters. The grounded carrier and UB Holdings, which is the parent company of Vijay Mallya’s UB Group, would have 15 days from receiving the letter to explain their positions, a source in the bank told FE. Earlier, the lender said it was “in the process of identifying” Kingfisher Airlines as a ‘wilful defaulter’ for non-payment of about R300-crore outstanding dues. United Bank of India was the first bank to declare Kingfisher Airlines chairman Mallya and three other directors of the airline as “wilful defaulters”. Later, the company secured a stay from the Calcutta High Court on declaring the airline and its directors as wilful defaulters. The court has directed the bank to file its affidavit-in-opposition by November 3. United Bank had also served notice to UB Holdings, asking it to explain why it should not also be declared as a ‘wilful defaulter’ as it was the guarantor for the loan given to the airline. http://www.financialexpress.com/news/uco-bank-shoots-off-letters-to-kfa-united-breweries-on-wilful-default-/1303411
UNION BANK Q2 NET UP 78% AT Rs 371 CR
Mumbai: State-run lender Union Bank of India on Friday reported 78.4 per cent increase in its net profit to Rs 371 crore for the July-September quarter, mainly due to tax refund of Rs 140 crore. The tax expense for the bank during the period under review dropped to Rs 177 crore from Rs 800 crore recorded during the same period the previous year. Net interest income growth was a mere 6.7 per cent to Rs 2,085 crore during the quarter on the back of single-digit loan growth. Non-interest income, however, grew by 32.9 per cent to Rs 812 crore. The asset quality of the Mumbai-based lender worsened during the quarter following slippages of Rs 1,968 crore, which resulted in gross non-performing assets rising to 4.69 per cent as on end-September from 4.27 per cent in the preceding quarter. The ratio was 3.64 per cent during the second quarter of the previous year. “Two large accounts slipped during the quarter, one from the cement industry and the other from textile, which was not anticipated. These two accounts contributed to 38 per cent of the total slippages,” said Arun Tiwari, chairman and managing director, Union Bank of India. He said the lender is aiming to bring down gross non-performing assets to 4 per cent by March. http://www.business-standard.com/article/companies/union-bank-q2-net-up-78-at-rs-371-cr-114103101549_1.html
KARNATAKA BANK NET UP 3 TIMES TO RS 88 CRORE IN Q2
Bangalore: Karnataka Bank on Friday reported three-times growth in net profit at Rs 88 crore for the quarter ended September, compared to Rs 29 crore in the corresponding quarter last year. Total income grew 11 per cent to Rs 1,278 crore against Rs 1,152 crore in the year-ago quarter. The rise in profits was mainly on account of lower provisions during the quarter. Provisions were lower by 34 per cent to Rs 84 crore compared to Rs 127 crore in the same quarter a year ago. The Bank’s operating profit declined 5.2 per cent to Rs 163 crore compared to Rs 172 crore a year ago. The net interest income has shown a modest increase of 4.5 per cent to Rs 298 crore from Rs 285 crore a year ago. Gross non-performing assets increased 10.2 per cent to Rs 1,061 crore during the quarter as against Rs 962 crore a year ago. The net NPA level also increased to Rs 702 crore as against Rs 593 crore in the same quarter last year, showing an increase of 18.3 per cent year on year. The percentage of net NPA rose to 2.37 per cent from 2.25 per cent year ago. http://www.business-standard.com/article/companies/karnataka-bank-net-up-3-times-to-rs-88-crore-in-q2-114103101419_1.html
FROM TODAY, FREE ATM USE CAPPED AT 5
Mumbai: Starting Saturday, you may have to pay up for using automated teller machines (ATMs) at your home bank ATMs as well. According to guidelines by RBI, banks are free to charge their customers after the first five free transactions. However, RBI has stated banks can still choose to offer more than five free transactions, if they so wished. Currently, none of the banks, barring State bank of India (SBI), the country’s largest lender, has decided to charge their customers for ATM usage. http://www.business-standard.com/article/finance/from-today-free-atm-use-capped-at-5-114103101637_1.html
IDBI BANK NET DROPS 38% IN SECOND QUARTER
Mumbai: Weighed down by higher provisions for bad loans, IDBI Bank reported a 38 per cent drop in net profit in the second quarter ended September. The public sector bank’s net profit fell to Rs. 118 crore from Rs. 192 crore in the year-ago period. In the reporting quarter, net interest income (the difference between interest earned and expended) was down 5 per cent at Rs. 1,406 crore ( Rs. 1,484 crore in the year-ago quarter). However, other income, comprising processing charges, profit on sale of investments, exchange profit and recovery in written-off accounts, increased 31 per cent to Rs. 760 crore ( Rs. 579 crore). Provision for bad loans and standard loans rose sharply to Rs. 719 crore ( Rs. 77 crore) and Rs. 74 crore ( Rs. 30 crore), respectively. Year-on-year, deposits increased 18 per cent to Rs. 2,38,006 crore. Loans nudged up 6 per cent to Rs. 1,95,057 crore. As at September-end 2014, net interest margin was lower at 1.93 per cent against 2.17 per cent in the year-ago period. As at September-end 2014, gross non-performing assets (NPAs) as a percentage of gross advances worsened to 5.72 per cent (4.98 per cent). http://www.thehindubusinessline.com/todays-paper/tp-money-banking/idbi-bank-net-drops-38-in-second-quarter/article6553972.ece
BANK OF JAPAN CHEER TURBOCHARGES MARKETS
Mumbai: Indian markets on Friday soared about two per cent, the most since May 12, when exit polls showed the National Democratic Alliance would come to power at the Centre after the Lok Sabha elections. The gains followed the Bank of Japan (BoJ) announcing a huge stimulus programme, triggering a rally in global stocks. In an unexpected move, the Japanese central bank raised its annual bond buying target to 80 trillion yen ($725 billion) from 60-70 trillion yen. Japan also increased the equity holding limit of foreign shares for its pension funds from 12 per cent to 25 per cent of the portfolio. Japan’s benchmark index, the Nikkei, soared five per cent, while the yen fell to a seven-year low against the dollar. Most Asian markets ended with gains exceeding one per cent, while the European markets opened on a strong note. Gaining for a fourth straight day, the benchmark Sensex closed at 27,865.83, up 519.5 points, or 1.9 per cent. The National Stock Exchange Nifty closed at 8,322.2, up 1.87 per cent, or 153 points. Both the indices scaled new record highs for a second straight day. The rupee strengthened against the dollar, while international gold prices dropped about two per cent on Friday. “Bulls have once again taken charge. The larger-than-expected quantitative easing programme announced by Japan has boosted sentiment,” said U R Bhat, managing director, Dalton Capital. The fresh stimulus package by the Japanese central bank came on a day when the six-year bond buying programme in the US came to an end. http://www.business-standard.com/article/markets/bank-of-japan-stimulus-turbo-charges-market-114103101144_1.html
NBFCs HOPE FOR TIME FROM RBI TO ADHERE TO TOUGHER REGULATIONS
Mumbai: Non-banking finance companies are hoping that the Reserve Bank of India will give them adequate time to adjust to tougher norms once the regulator prescribes guidelines to bring them on a par with banks.The RBI, in its bi-monthly policy statement, had said it would soon issue norms for NBFCs pertaining to capital, asset classification, provisioning, deposit acceptance, corporate governance and consumer protection. The guidelines will be based on the recommendations of the committee under RBI former deputy governor Usha Thorat which gave its report in August 2011. “I am sure the regulator will give some time to NBFCs for conforming,” said Ramesh Bawa, managing director and CEO of IL&FS Financial Services. The committee has recommended that NBFCs should declare a loan as non-performing when the non-payment of interest or principal stretches beyond 90 days, instead of the present 180-day cycle. The panel has also suggested higher capital adequacy ratios and risk weightages. The change in NPA classification is expected to increase most NBFCs provisions and impact their profits. But, NBFC officials said some of them have already readied for stringent norms as the recommendations of the Thorat committee had come three years ago and were expected to be eventually notified as norms. “We have been readying ourselves for the norms as the recommendations had come long back,” said Bawa of IL&FS Financial Services. “Many NBFCs have been preparing themselves,” said Keki Mistry, vice-chairman and CEO at HDFC. http://www.financialexpress.com/news/nbfcs-hope-for-time-from-rbi-to-adhere-to-tougher-regulations/1303406
SEBI SLAPS RS 34 LAKH FINE ON SIX ENTITIES
MUMBAI: Market regulator Sebi today slapped a fine totalling Rs 34 lakh on six entities for failure to make shareholding disclosures within the stipulated timeline. The Securities and Exchange Board of India (Sebi) in three separate orders imposed “a penalty of Rs 25 lakh on all the noticees i.e. Vaman Madhav Apte, Devaki Laxman Apte, Vikram Vaman Apte and Mithila Vaman Apte.” Also, regulator levied a fine of Rs 7 lakh on Apte Amalgamations Ltd (AAL) and Rs 2 lakh on M. Apte Kantilal Pvt Ltd. These entities have violated SAST (Substantial Acquisition of Shares and Takeovers) by not disclosing the shareholding pattern within the required timeline. According to Sebi, four individuals failed to make public announcement for the acquisition of shares of AAL made by them on various ocassions in 2009. Besides, Sebi found that AAL had made the shareholding disclosures with a delay, for the years 1998 to 2009 except for the year 2005. The regulator noted that M Apte Kantilal Pvt Ltd acquired over 3.19 lakh shares of AAL on March 1, 2000, which resulted into increase in its shareholding to 16.34 per cent from nil. However, it failed to make the disclosures. http://economictimes.indiatimes.com/markets/stocks/policy/sebi-slaps-rs-34-lakh-fine-on-six-entities/articleshow/44996586.cms?prtpage=1
INDIAN REGULATOR PILES PRESSURE ON SAHARA TO SELL OVERSEAS HOTELS
MUMBAI: India’s markets regulator has accused Sahara of deliberately failing to sell its marquee overseas hotels in New York and London, seen as crucial to it complying with an order to repay investors and secure the release of jailed head Subrata Roy. Roy, one of India’s best-known business tycoons, has been held in a Delhi jail for nearly eight months over the conglomerate’s failure to refund billions of dollars the group raised in outlawed bonds. India’s Supreme Court has asked Sahara to pay 100 billion rupees ($1.6 billion) initially to secure bail for Roy, a flamboyant businessman who has often been photographed with senior politicians, professional cricketers and Bollywood movie stars. The Securities and Exchange Board of India (SEBI) says that the total amount Sahara owes to investors is about 470 billion Indian rupees and has petitioned the country’s top court to order the company to reveal details of offers it received for the sale or mortgage of its hotels, according to court documents seen by Reuters. http://www.reuters.com/article/2014/10/31/india-sahara-courts-idUSL4N0SQ7T520141031
