Mumbai, June 9
A day after the Reserve Bank raised key short- term interest rates, ICICI Bank today kickstarted another round of a lending rate hike by announcing a 0.5 per cent increase on all retail and corporate loans.

However, other banks, both public sector and private sector, have adopted a wait –and- watch stance before revising their rates in the backdrop of rising cost of funds.

Some banks, including HDFC Bank, IDBI Bank and IndusInd Bank, will take a view on the interest rate hike in a week’s time while Punjab National Bank, Oriental Bank of Commerce and Syndicate Bank have no immediate plans to tinker with the rates.

The RBI raised both reverse repo, the rate at which it buys funds from banks, and repo, the rate for lending, by 0.25 per cent each to contain inflation following the recent increase in the fuel prices.

“Normally we see the rates slow down after January-March period. But this year this did not happen. Considering this scenario, we have taken this decision,” ICICI head (retail business) Chanda Kochar said here.

She also said that as of now the rates would continue to be higher and the bank would have to react according to the market conditions.

With this revision, the floating interest rate for home loans has increased to 9.5 per cent from earlier 9 per cent while the fixed interest loan rate has gone up to 10.75 per cent from 10.25 per cent.

The hike has also affected the corporate lending rates, which were not revised in June, when the bank hiked its rates. However, the bank has not changed the interest rates on deposits.

However, other private sector banks seem to have adopted a wait-and-watch policy and are likely to respond to the RBI decision by early next week.

“We see no immediate need to hike our home loan rates. We will take a view on this within a week,” Keki Mistry, Managing Director of HDFC, the country’s largest housing finance player, said here. Other banks, while not commenting on the ICICI decision, agreed that the process of increasing home loan rates has been kick-started by its move.

According to Mr Rajan Ghotgalkar, IDBI Bank Corporate Head (Retail Banking), many banks would wait to see how the competition reacted before taking a decision.

Punjab National Bank Chairman S. C. Gupta ruled out any change in the lending rates for two or three months. — PTI

New Delhi, June 9
ONGC has sought a discount of $4-5 per barrel on Cairn Energy's low- grade Rajasthan crude oil, saying without concessions it was uneconomical to transport the oil to its subsidiary MRPL.

Cairn's Rajasthan crude had high wax content and needed specialised pipelines with intermittent heating to transport it 400 km from Barmer district to Mundra port in Gujarat for further shipment to Mangalore Refinery for processing.

Sources said Cairn has sought an international price for the 1,50,000 barrels per day Rajasthan crude expected from end-2008, but ONGC says Rs 2,000 crore it plans to sink in the pipeline needs to be compensated through discounts without which its was uneconomical to process Rajasthan oil at MRPL.

Petroleum Ministry, sources said, has supported ONGC's demand and told Cairn Energy chief executive Bill Gammell at a meeting on May 25 unless the British firm gave discounts, the government will ask the company to make its own arrangements to transport the crude from Rajasthan to any port for export.

Cairn cannot sell the crude to any other refiner as the government had appointed ONGC/MRPL as offtakers in India.

Sources said ONGC has made it clear that its plans to set up a Rs 8,000-crore, 7.5 million tonnes-a-year refinery at Barmer district to process Cairn's Rajasthan crude depended on the discounts the British firm offered.

Without discounts, there would be no refinery, the company has said.

The pipeline, along with intermediate pumping and reheating stations and the export terminal tankage at Mundra, was expected to cost Rs 2,000 crore. The pumping and reheating energy cost was expected to be around $0.30 per barrel.

As per Cairn's projections, the production of crude will commence from the last quarter of 2008 with initial output of little over 100,000 barrels per day peaking to around 150,000 bpd from 2009 to 2012. The production declines from 2014, reaching a low of around 20,000 bpd by 2024.

Cairn had earlier stated that in-place reserves in the three main northern fields — Mangala, Bhagyam and Aishwariya — stood at around 800 million barrels of oil. All 18 discoveries together hold reserves in excess of 3.5 billion barrels of oil in place.

According to Cairn's earlier statements, its present focus was to bring Mangala on stream at the earliest opportunity followed by Bhagyam and Aishwariya.

The initial development investment for Mangala and Raageshwari gas by the joint venture to first production is estimated to be in the region of $800 million.— PTI 

New Delhi, June 9
Seeking to recover Rs 85 crore from BSNL, telecom major Reliance Communications has filed an appeal before TDSAT in a dispute pertaining to payment of interconnect usage charges.

Acting on the appeal, the Telecom Dispute Settlement and Appellate Authority issued notices to BSNL and the Department of Telecommunication (DoT).

The dispute pertains to payment of interconnect usage charge (IUC) under an agreement in January 23, 2003, for interconnectivity in different circles reached between the telecom PSU and the private company, then called Reliance Infocomm.

In its appeal, Reliance prayed for a direction from the tribunal to BSNL to settle bills (worth Rs 85 crore) raised by it and waive Rs 6.82 crore fine imposed by BSNL on it.

The Rs 85 crore that Reliance seeks to recover from BSNL includes a Rs 13.82 crore "excess" payment made by the private company to the telecom PSU.

"Declare and direct the respondent (BSNL) to refrain to transfer inter- circle calls as wired routed calls and set aside the demands raised by them in this regard," the company said in its prayer.

Reliance Communications also prayed for a direction to BSNL for repaying Rs 19.38 crore paid by it towards non-roaming calls under the agreement.

Reliance has also prayed the TDSAT to direct BSNL to provide the full details of the billing records of calls terminating at BSNL's network for the verification purpose.

The Tribunal, which is on vacation, will hear the matter in the first week of July. 
— PTI 

New Delhi, June 9
The much-controversial four-page IT form, which would be optional this year along with ‘Saral’ form for filing returns, is unlikely to capture the widespread black money deals in real estate and other businesses worth thousands of crores annually.

“It is true that a large number of citizens are evading tax by not declaring their income from other sources, especially from household rent, part-time business and black money earned from real estate business,” said Mr Revenue Secretary K.M. Chandrasekhar today.

But the new form will not be able to capture such tax evasion, and we will have to depend on local intelligence and cooperation of state governments, he added.

A parliamentary panel attached with the Finance Ministry had recently raised serious concerns about huge tax evasion in real estate business and asked the government to take measures in this regard.

Instead of taking measures to check black money, experts said, “the new form seems to be an exercise of harassment of honest taxpayers.

“The filing of cash-flow statements and details of all bank accounts is still optional in the new form. But people can get notices from the tax authorities in case of major discrepancies in their income and expenditure at the time of scrutiny as we have access to information on transactions through information gathered from annual information returns (AIR) of banks, credit card companies and others,” said Mr Chandrasekhar.

On whether the government has any proposal to make it mandatory for the landowners to give receipts of rent, he said, “We have no such proposal at the moment.

In the NCR alone, where the real estate and rent prices have gone up manifold over the past year, market observers said people were evading tax amounting to hundreds of crores annually earned through household rent, part-time work etc.

“To capture black money in real estate business, we will depend on local intelligence apart from the land rates notified by the state governments. Since the states are also losing stamp duty on property deals, we are emphasising on better coordination between the Centre and states,” he said. “Even if we are able to capture half a per cent of real estate black money this year, it would prove a deterrent for others,” he said.

London, June 9
The Canadian Competition Bureau has confirmed that it will not challenge the bid by Mittal Steel to acquire Arcelor, a Mittal Steel statement said here.

Along with the granting of EU anti-trust clearance on June 2 and the expiry of the waiting period under the US Hart-Scott-Rodino Antitrust Improvements Act of 1976 on May 11, this clearance is being seen as an important turn in the ongoing bidding process.

Describing the clearance as unconditional, the company said, no offer to exchange or purchase any Arcelor shares or convertible bonds had been or wouldl be made in the Netherlands or in any jurisdiction other than Belgium, France, Luxembourg, Spain and the United States.

ALMATY: Mittal Steel said on Friday it had started discussions with Arcelor on its proposed takeover of the rival company. ‘’We have started discussions with Arcelor. Yesterday was the first day,’’ Mr Malay Mukherjee, Mittal’s Chief Operating Officer, told reporters during a trip to Almaty.

“Right from the very beginning we said we were willing to talk.’’ Mittal’s hopes of carrying out its 21.5 billion euro ($27.6 billion) bid hinge largely in enough Arcelor shareholders rejecting an alternative in the form of a deal with Russian steel company Severstal “The offer is very attractive even if you look at it in terms of the present stock prices,’’ said Mr Mukherjee. — Agencies

Chandigarh, June 9
Cellebrum.com Pvt. Ltd, Asia's leading integrated telecom value- added service (VAS) solutions provider, an MCorpGlobal group company, and UK's premier mobile interactive community service provider, ICE 365, have entered into an alliance to offer community VAS services to global markets.

This partnership will see the emergence of India's single largest mobile interactive VAS provider that promises to offer community VAS services on multiple platforms viz. GPRS, USSD and IVRS.

Mr Paul Shoker, Group Chief Executive Officer, ICE 365 Ltd, said, "The alliance with Cellebrum will help us tap the booming Indian telecom market, and together we will provide a one-stop solution to VAS needs of the country. He said this association was consistent with ICE 365's strategy of developing the company's global footprint in growth markets. It may be mentioned that ICE 365 is setting up its facility in Mohali, with an initial investment of $1 million.

Mr Saket Agarwal, Chief Operating Officer, Cellebrum.com said, "With the support of ICE 365 we are confident of executing the strategy chalked out by us for our global expansion in the areas of information, communication and entertainment". 

Mumbai, June 9
Deccan Aviation has postponed the listing of its much-discussed IPO which is now likely to get listed on June 12, company sources said here. The IPO fell into controversy from its first day of opening as it saw markets crashing by over 800 points on May 18.

The issue consisting of 2.45 crore equity shares was to be closed on May 23, but due to a poor market response it was extended till May 26. Also, the price band was lowered from Rs 150-175 per share to Rs 146-175. — PTI