New Delhi, October 24
Market regulator SEBI today said all 20 sub-accounts (FIIs agents) issuing Participatory Notes (PNs) have sought the status of foreign institutional investors within the 24 hour-deadline set by the watchdog on Monday.

"We have 34 P-note issuing entities. Out of them, some are already FIIs. Those sub-accounts that were issuing P-notes have all applied for conversion... Everyone who we expected to write to us, have all written," SEBI chairman M Damodaran said at a function here.

He said on Monday during a video conference with FIIs that sub-accounts issuing PNs wanting to convert to FIIs must inform SEBI within 24 hours and apply within a week.

The market regulator had floated a discussion paper to curb participatory notes to check unregulated entities investing in Indian capital markets.

The proposal, which seeks to wind up derivatives-based PNs in 18 months and impose limit on such instruments based in assets under management of FIIs, will come up for discussion tomorrow at the SEBI's board meeting in Mumbai.

Refusing to comment on the outcome of the meeting, Damodaran said: "I cannot guess what will happen tomorrow.

The board will meet and will take a final decision." There are over 1,100 FIIs presently registered with SEBI. Of these, 34 deal in participatory notes and have set up proprietary sub-accounts to deal with these instruments.

At today's function, he ruled out setting up of a fund to stabilise the capital market in the event of a fall.

To a query from the floor whether SEBI will come out with "contra funds", Damodaran clarified that such funds are issued by the mutual funds.

Pointing out that the best form of investor protection is education, he said investors should realise that the market is an asset class where they should get in after understanding that there is both upside an downside. — PTI

New Delhi, October 24
The government today made it clear that a decision on the allocation of 3G spectrum will be taken only after the Telecom Engineering Centre (TEC), the technical arm of the Department of Telecommunications (DoT) submits its specific recommendations.

“No spectrum will be allotted till TEC comes up with specific guidelines, which is expected by November 13,” telecommunications and information technology minister A Raja said.

Amid imbroglio over how the much-needed spectrum be allocated to telecom operators, the DoT had asked the TEC last week to “further” study the proposal of the telecom regulatory authority for subscriber-linked criterion for the allotment. Amid mounting pressure from the telecom operators for early allocation of more spectrum, Raja had, on October 17, met national security advisor M K Narayanan to seek early vacation of spectrum from the defence.

The telecom ministry, which is hopeful that some spectrum would be vacated by the defence services by the end of November, had indicated that the spectrum will be allocated through auction or will be allotted directly and all players will be allowed to bid.

Meanwhile, the telecom and IT minister said India’s IT exports, which is around $37 billion with an average rate of 30 per cent growth per annum, will touch $80 billion mark by 2011.

He said plans are afoot to connect the nation with a network of communication technologies using optic fibre and wireless connections and providing facility to interact in 22 local languages.

On the rupee appreciation, which has considerably affected the margins, the minister said that this was a challenge to face in the coming years. He said his ministry was taking up the issue of continuance of exemptions available under 10A and 10B of the Income Tax Act to IT companies operating under the existing scheme of the software technology parks in the country.

New Delhi, October 24
Amid all the hoopla around India emerging as one of the world's fastest growing economies, the country has been named as the second least “globalised” nation.

International consultancy and research firm AT Kearney has ranked India at the 71st position in its annual ranking of the world’s most globalised nations.

The list of 72 countries is topped by Singapore for the third consecutive year, followed by Hong Kong, the Netherlands, Switzerland and Ireland in the top five. India fell 10 places from its 61st position in 2006.

The country was placed at the second bottom position last year as well in a list of 62 nations. This year 10 countries have debuted on the index and all of them have come at ranks higher than India.

AT Kearney said India’s low position is despite the country’s services export and the total trade rising by more than a third.

Despite a doubling of internet users in 2005, only five per cent of India’s population had access to the internet and less than half of its population was attached to the power grid, it noted.

The globalisation index is an annual study, which assesses the extent to which nations are becoming more or less globally connected. The lone ranker behind India is Iran.

The index is based on figures for 2005, the most recent year from which data is available, it added. — PTI

New Delhi, October 24
The delivery schedule of Boeing's B-787 Dreamliner to Air India (AI) has been delayed by four months, but it would not affect the operations of the national carrier which has ordered 27 of these long-haul aircraft.

The US aircraft manufacturer has informed Air India, which is the third launch customer of this next-generation plane, about the delay.

While the first customer, All Nippon Airways of Japan, would get its first B-787 six months later than scheduled, the delivery to Air India could be delayed by about four months only, a senior airline official said, adding that the first of these aircraft could be inducted by the third quarter of next year.

"Our operations will not be affected by this as we have not yet finalised our schedules for these planes," the official said in reply to questions. The national carrier could operate these aircraft for direct flights to the US, Europe or Australia and China.

The airline, before its merger with Indian, had placed orders for 68 Boeing aircraft. Now, it is in the process of firming up its requirements for more planes in view of the ever-growing air traffic. — PTI

New Delhi, October 24
The spread between deposit and lending rates should be a maximum of 2 per cent to usher in a healthy and dynamic monetary policy that can ensure credit to industry at internationally competitive rates, according to industry chamber PHDCCI.

Expressing concern about increasing cost of credit to industry that is eroding the competitiveness, PHDCCI president Sanjay Bhatia said, “The PLR of the banks has been going up steadily and unrealistically. It ranges from 12.5 per cent to 13.5 per cent in case of public sector banks and is steeper in the case of private banks between 13 per cent and 17.25 per cent. This is quite high when compared to LIBOR/prime rates of other countries.”

Cataloguing its wish list for the forthcoming review of the monetary policy, the chamber said the RBI should reduce cash reserve ratio (CRR) in a phased manner from 7 per cent to its target of 3 per cent. This will improve the liquidity in the system.

The RBI should use flexibility regarding stipulation of holding of liquidity instruments (SLR) by banks to enhance the lendable resources by reducing the floor limit of SLR presently pegged at 25 per cent.

Equally significant is an informed debate on the capital adequacy ratio, which some banks maintain at 16 per cent or so, leading to lock-in of capital resources. Increase in capital adequacy ratio was stipulated at a time when there were apprehensions about some banks on the brink of liquidation on account of mounting non-performing assets.

RBI may evolve a uniform credit rating code for the banks to follow in determination of credit rating of the borrowers. It should also be made mandatory that credit rating be disclosed to the concerned borrower and based on a holistic assessment.

The chamber also demanded that the pre-payment charges on foreclosure of high-cost borrowings should also be done away with.

Tokyo, October 24
Japanese car major Honda is betting big on India as it plans to enter the highly competitive compact car segment by 2009 with the launch of Jazz, its first hatchback in the country.

"We started with premium cars and gradually expanded the portfolio. With the entry into the compact cars, we will further strengthen our position," Honda Motor CEO and president Takeo Fukui said here on the sidelines of Tokyo Motor Show.

Fukui said Honda could use India as an export hub for some select models if "it complemented with other global manufacturing places such as Thailand", however, the priority of each operation would be to focus on their respective domestic markets.

Honda Siel Car India (HSCI), the company's joint venture with the Sriram group, is currently expanding capacity at its Greater Noida facility to 1 lakh units per year, besides setting up a greenfield facility at Rajasthan with an initial investment of Rs 1,000 crore having a starting capacity of 60,000 units.

"Once the facility is ready, we will roll out the Jazz, with a 1.2 litre engine from the plant. This will enable us to enjoy the excise benefit on small car," HSCI president and CEO M Takedagawa said.

Takedagawa also said the company would be launching its hybrid Civic in India.
— PTI

New Delhi, October 24
Triggering speculation of another round of battle between the two brothers, Anil Ambani group today gave SEBI names of "suspects" who it thinks are working against Reliance Power's proposed IPO.

A Reliance ADA Group spokesperson said it has filed a formal complaint with the regulator to probe a "disinformation campaign" launched by some "vested interests" against the planned IPO. The public issue is estimated to raise about Rs 12,000 crore.

"The suspects behind the disinformation campaign have been named in the complaint filed with SEBI," the official said in a statement.

The spokesperson, however, did not divulge the names of the suspects, who the group has named in the complaint lodged with SEBI.

However, people close to the development indicated that the list contains names of officials of Mukesh Ambani-run Reliance Industries (RIL).

On October 15, after the Bombay High Court's ruling in connection with the gas supply agreement between RIL and RNRL, the Anil Ambani group had alleged that Mukesh Ambani group controlled Reliance Industries was circulating remarks against the judgement and they were in "bad taste." — PTI

New Delhi, October 24
Oil India Ltd (OIL) today said it would come out with its public issue in the first quarter of next year, which is expected to generate resources to the tune of Rs 1,430 crore for the company, while handing over a cheque of Rs 157.50 crore to the petroleum ministry as final dividend for 2006-07.

OIL’s proposed IPO, and issuance of shares to employees have been approved by the government and it plans to come out with the issue during the first quarter of 2008, said M.R.Pasrija, CMD, Oil India, here today.

The Cabinet Committee of Economic Affairs had approved fresh issue of 10 per cent of OIL’s paid-up capital through IPO. This apart, the company will also issue an additional 1 per cent capital to the employees.

Also, the government will disinvest 10 per cent of OIL’s paid-up capital in favour of IndianOil, BPCL and HPCL. While IOC will pick up 5 per cent stake in OIL, BPCL and HPCL will get 2.5 per cent stake each.

He said the company had earlier paid first interim dividend of 110 per cent amounting to Rs 231 crore and a second interim dividend of 75 per cent amounting to Rs 157.50 crore during the year. Thus, the total dividend paid to the government for the year 2006-2007 amounts to Rs 546 crore being 260 per cent of the paid-up capital of Rs 210 crore held by the government.

The company recorded a total income of Rs 6,007.78 crore and profit after tax of Rs 1,639.99 crore for the year 2006-07. Net worth of the company increased to Rs 6,849.07 crore, up by 17 per cent over the previous year’s figure of Rs 5,848 crore.

Chandigarh, October 24
The State-Level Bankers’ Committee, Punjab, discussed strategies and action plan for the effective contribution of banking industry to the objectives of the state for creating a new paradigm for inclusive economic growth and reviewed the performance of banks as on June, 2007, at its 101st meeting held here today.

Principal secretary, finance, Punjab, D.S. Kalha, was the chief guest, while J.M.Garg, executive director, Punjab National Bank, presided over the meeting.

Garg said it was heartening to note that banks had completed the process of 100 per cent financial inclusion in all villages of six more districts of the state. He added that all rural households in these districts have been linked with the bank either through deposit account and/or credit facility.

While maintaining that banks have initiated the process of financial inclusion in the remaining 12 districts, banks in the state have already opened “no- frills” accounts.

While reviewing the performance of banks in Punjab, Garg stated that 163 new branches of commercial banks were opened in the state during the review period, thus raising the network to 2,941 as on June, 2007.

While welcoming the participants, I.D. Singh, general manager, PNB, and convener, SLBC (Punjab), apprised the gathering of the implementation of government-sponsored programmes and schemes in Punjab on top priority.