1. The Standing Committee on Finance has urged the Government to hold detailed consultations on the proposed National Payment Corporation of India (NPCI), which is expected to take over the operations of retail payment systems in the country. The suggestion follows reservations expressed by the Reserve Bank's Officers and Employees Association. The consultations should cover the `business model' envisaged, terms and conditions of licensing the proposed company and service conditions of employees currently engaged in clearing house operations, the Standing Committee said in its report on the Payment and Settlement Systems Bill 2006.
2. Overall liquidity management has been a challenge in the past five to six months but the RBI has to deal with it, said Dr Rakesh Mohan, Deputy Governor, RBI. "Increased volatility in capital flows tending to inject excess liquidity into the system and bunching of tax payments that suck liquidity out of the system, have made the task of liquidity management somewhat more difficult over the past year," he said at a seminar on `European financial markets'. On the RBI's intervention in the forex market, Dr Mohan said the central bank does intervene in the currency market but the volume of intervention was smaller than the total turnover in the forex market. Exchange rate is market determined.
3. Bank of Baroda and Dun & Bradstreet (D&B) have signed an agreement under which D&B will assign ratings to the bank's small-scale industry (SSI) customers.Under the arrangement, Bank of Baroda will refer its existing and prospective SSI customers to D&B for rating. A discount will be offered to BOB customers in addition to the subsidy made available from National Small Industries Corporation (NSIC).
4. Shripal Morakhia, promoter of Mumbai-based financial services firm SSKI Financial, is ready to sell his 37% in Sharekhan Securities. Citigroup Venture Capital International is tipped to be preferred by Morakhia ahead of others for picking up a substantial stake in the retail brokerage arm of the Mumbai-based SSKI group. Others in the race include Baring Private Equity, TPG and 3i.
5. The finance ministry and the RBI are struggling to answer questions like who belongs to a minority community or which are the minority-dominated areas in the country. Sikhs are identified as a minority community in India but form majority in Punjab. Similarly, a Hindu should get minority status in Jammu & Kashmir. Finance ministry and RBI officials say they are finding it difficult to answer these as they sit down to frame guidelines for banks on lending the minority groups. These issues are causing confusion in formulating the final guidelines despite the fact that 103 districts in India have already been identified as areas dominated by minority communities.
6. United Spirits Ltd. (USL), the flagship of the UB group, has acquired 100% stake in Whyte & Mackay (W&M), a leading distiller of Scotch Whisky, for a consideration of £595 million (Rs. 4,800 crs). In terms of financing the transaction, USL has a large amount of treasury stock which will be sold to part finance the transaction and reduce the debt. The acquisition cost will be through non-recourse finance to USL. We have tied up a £325-mn loan from ICICI Bank with a moratorium of two years and the loan carries on for nine years. It has also tied up a £210-mn loan from Citibank with a moratorium of up to 30 months and thereafter for five years.
7. ICICI Bank is likely to offer its shares at a discount to the retail investors in its forthcoming equity issue. This is however subject to approval by the market regulator, SEBI. The bank, in an attempt to encourage retail participation, has also permitted the existing retail shareholders and retail individual bidders to bid at the cut-off price. It is planning to raise Rs 17,500 crs through domestic and American depository shares. It is entitled to retain 15% of the issue under the greenshoe option in case it gets oversubscribed. The total issue size inclusive of the green shoe option will be Rs 20,125 crs,
8. The commercial banks have begun issuing passbooks and account statements to the customers every month without charging any fees, following the diktat from the RBI. The banks were earlier issuing quarterly account statements. A customer wanting monthly account statements had to pay anywhere between Rs 100 and Rs 250. This step is expected to increase the costs of operations of both private and foreign banks. Since March, ICICI Bank has given its customers the choice to opt for a passbook or to continue with quarterly statements of account. The bank has around 13 mn account holders.
9. SBI would be at the mercy of Industrial & Commercial Bank of China unless the government allows takeovers to bridge an $800 billion gulf in assets. "If ICBC comes to India, State Bank will be nowhere,'' Chairman Om Prakash Bhatt said. SBI wants the government approval to merge with seven units to add 50% more branches and boost lending. While State Bank extends one in six loans in India and controls almost a quarter of Indian banking assets, it only ranks 69th globally. ICBC, based in Beijing, is worth more than the entire Indian banking sector seven months after it sold shares in the world's biggest public offering.
10. RBI has rejected IndusInd Bank's application to appoint Michael Bastin as the non-executive chairman of the bank. Michael Bastin was the ex-chairman and managing director of Syndicate Bank and has also worked as a general manager in Union Bank of India.
2. Overall liquidity management has been a challenge in the past five to six months but the RBI has to deal with it, said Dr Rakesh Mohan, Deputy Governor, RBI. "Increased volatility in capital flows tending to inject excess liquidity into the system and bunching of tax payments that suck liquidity out of the system, have made the task of liquidity management somewhat more difficult over the past year," he said at a seminar on `European financial markets'. On the RBI's intervention in the forex market, Dr Mohan said the central bank does intervene in the currency market but the volume of intervention was smaller than the total turnover in the forex market. Exchange rate is market determined.
3. Bank of Baroda and Dun & Bradstreet (D&B) have signed an agreement under which D&B will assign ratings to the bank's small-scale industry (SSI) customers.Under the arrangement, Bank of Baroda will refer its existing and prospective SSI customers to D&B for rating. A discount will be offered to BOB customers in addition to the subsidy made available from National Small Industries Corporation (NSIC).
4. Shripal Morakhia, promoter of Mumbai-based financial services firm SSKI Financial, is ready to sell his 37% in Sharekhan Securities. Citigroup Venture Capital International is tipped to be preferred by Morakhia ahead of others for picking up a substantial stake in the retail brokerage arm of the Mumbai-based SSKI group. Others in the race include Baring Private Equity, TPG and 3i.
5. The finance ministry and the RBI are struggling to answer questions like who belongs to a minority community or which are the minority-dominated areas in the country. Sikhs are identified as a minority community in India but form majority in Punjab. Similarly, a Hindu should get minority status in Jammu & Kashmir. Finance ministry and RBI officials say they are finding it difficult to answer these as they sit down to frame guidelines for banks on lending the minority groups. These issues are causing confusion in formulating the final guidelines despite the fact that 103 districts in India have already been identified as areas dominated by minority communities.
6. United Spirits Ltd. (USL), the flagship of the UB group, has acquired 100% stake in Whyte & Mackay (W&M), a leading distiller of Scotch Whisky, for a consideration of £595 million (Rs. 4,800 crs). In terms of financing the transaction, USL has a large amount of treasury stock which will be sold to part finance the transaction and reduce the debt. The acquisition cost will be through non-recourse finance to USL. We have tied up a £325-mn loan from ICICI Bank with a moratorium of two years and the loan carries on for nine years. It has also tied up a £210-mn loan from Citibank with a moratorium of up to 30 months and thereafter for five years.
7. ICICI Bank is likely to offer its shares at a discount to the retail investors in its forthcoming equity issue. This is however subject to approval by the market regulator, SEBI. The bank, in an attempt to encourage retail participation, has also permitted the existing retail shareholders and retail individual bidders to bid at the cut-off price. It is planning to raise Rs 17,500 crs through domestic and American depository shares. It is entitled to retain 15% of the issue under the greenshoe option in case it gets oversubscribed. The total issue size inclusive of the green shoe option will be Rs 20,125 crs,
8. The commercial banks have begun issuing passbooks and account statements to the customers every month without charging any fees, following the diktat from the RBI. The banks were earlier issuing quarterly account statements. A customer wanting monthly account statements had to pay anywhere between Rs 100 and Rs 250. This step is expected to increase the costs of operations of both private and foreign banks. Since March, ICICI Bank has given its customers the choice to opt for a passbook or to continue with quarterly statements of account. The bank has around 13 mn account holders.
9. SBI would be at the mercy of Industrial & Commercial Bank of China unless the government allows takeovers to bridge an $800 billion gulf in assets. "If ICBC comes to India, State Bank will be nowhere,'' Chairman Om Prakash Bhatt said. SBI wants the government approval to merge with seven units to add 50% more branches and boost lending. While State Bank extends one in six loans in India and controls almost a quarter of Indian banking assets, it only ranks 69th globally. ICBC, based in Beijing, is worth more than the entire Indian banking sector seven months after it sold shares in the world's biggest public offering.
10. RBI has rejected IndusInd Bank's application to appoint Michael Bastin as the non-executive chairman of the bank. Michael Bastin was the ex-chairman and managing director of Syndicate Bank and has also worked as a general manager in Union Bank of India.
