Tides of 27.03.2007

1. It was back in October 2006 that the RBI announced that it would allow an increase in the extent to which banks could borrow overseas, through the external commercial borrowings (ECB) route. In the `Mid-term review of Annual Policy for 2006-07' of October 2006, the RBI had said that it would allow banks to borrow through ECB upto 50 per cent of their tier-I capital, but this would include borrowing to give export credit. Earlier, banks were allowed to borrow 25 per cent of their tier-I capital, but excluding any loans taken for onlending to exporters. It's four months down the line; the RBI is yet to formalise guidelines for this, in the absence of which banks will not be able to utilise the enhanced ECB facilities. This delay has irked bankers. Several bankers were waiting eagerly for the guidelines. There is a good demand for enhanced ECB from banks and the delay is not being helpful.

2. IndusInd Bank plans to raise above Rs 130 crs through global depository receipts, on the Luxembourg Stock Exchange. The bank will issue close to 30 mn shares, which will bring down the promoters' stake from 31.3% to 28%.

3. Bajaj Allianz Life Insurance Company has hiked its capital base by Rs 130 crs to Rs 700 crs. The pace of growth will accelerate tremendously and this infusion of capital will enable it to continue with expansion plans and achieve sustained growth. Bajaj Allianz Life is currently present in 900 towns and has two lakh agents. The company has crossed over Rs 7,000 crs of new business in five years of operations and over 30 lakh policies have been sold.

4. The Kerala Government will amend the Money-lenders Act to deal with the private banks that operate in violation of rules in the State. The Act would contain provisions to curb exploitation by hire-purchase companies also.

5. Cartridge World, printer cartridge refilling services brand, has tied up with SBI, to fund prospective franchisees to expand the company's operations in India. The SBI tie-up franchisees can approach the bank for loans at convenient terms that can further speed up the process of making Cartridge World's technology and quality of products and services available to consumers. It has opened stores in three major cities of India and received overwhelming response. Its target is to have over 250 Cartridge World stores across the country by 2010.

6. In an era when companies across the board are tapping customer convenience, Andhra Bank and Kingfisher Airlines have come up with a novel idea. As per a MoU signed between, you can swipe your debit/ATM card into one of the bank's 500 usual or biometric ATMs anywhere in India and control the payment procedure for procurement of a Kingfisher ticket. The service will be available not just to the account holders of the bank but to Visa cardholders of any bank. All one needs to do is to dial the airline's toll-free number, or any other number of the call centre, and give the basic details of the itinerary, the date and sector of travel. The traveller will be given a booking reference number, also called BRN. The traveller can then visit an Andhra Bank ATM and follow the procedure after selecting the airline ticket booking option. At the end of it, he/she will receive a transaction slip that can be used to collect the ticket or boarding pass from the airline's office at the airport.

7. Syndicate Bank has entered into an MoU with CARE, one of the leading credit rating agencies in the country. The MoU was signed today to utilise the services of CARE for supporting SMEs by making available affordable, transparent, comprehensive and reliable rating services to enhance credit acceptance.

8. After meeting with the Prime Minister and Government officials to " review plans in India", Mr Charles Prince, Chairman and CEO of Citigroup, seemed upbeat on the India story. He said the group would be increasing headcount in the country, and ramping up operations, particularly in developing infrastructure and expanding presence in the rural markets. On the infrastructure front, Citigroup has recently launched a $5-bn fund, of which $1 bn will be raised in the next couple of months. The fund, aimed at financing infrastructure development projects in the country, would be a combination of debt and equity, and would be utilised across various sectors such as telecom, power, oil and gas. On the group's penetration into the rural markets, Mr Prince said that they would focus on micro finance and look at innovative ways for distribution.