New Delhi, May 5
Banks have been asked to consider "speedy implementation" of suggestions made by a working group for timely and adequate flow of credit to the micro and small enterprises (MSE) sector, the Reserve Bank said yesterday in a notification.

The banks were suggested to put in place a loan policy, governing extension of credit facilities to the MSE sector and restructuring or rehabilitation policy for revival of potentially viable sick units.

The RBI had constituted a working group led by Punjab National Bank chairman K C Chakrabarty in recognition of the problems being faced by the MSE sector, particularly rehabilitation of potentially viable sick units.

Besides its recomendations to the banks, for credit delivery to SMEs, the group made various recommendations to the government, states, commercial banks and the SIDBI.

It suggested the Centre to create an independent rehabilitation fund with a corpus of Rs 1,000crore, and a marketing development fund among others.

It also recommended that banks have a non-discretionary one-time settlement scheme for recovery of non-performing loans for the MSE sector.

"Banks are, therefore, advised to apply the Reserve Bank’s guidelines on debt restructuring optimally and in letter and spirit. This would be to their advantage as well as their MSE clients," the apex bank said.

The state governments may also have a separate Ministry for MSME, provide preference in power supply, and provide land at 50 per cent of the normal rate for exclusive industrial estates, among other suggestions.

The suggestions for banks also include starting of central registration of loan applications, simplified application cum sanction form for loans up to Rs 1 crore, and opening of more specialised MSME bank branches.

"It may be ensured that there are no cases where term loan has been sanctioned and working capital facilities are yet to be sanctioned," the group recommended. The group has further asked for an action taken report by June 30. — PTI 

New Delhi, May 5
Vijay Mallya-run Kingfisher Airlines is understood to be finalising a working capital loan of over Rs 2,000 crore from the country's largest lender, SBI, mainly aimed at clearing its fuel bills.

The carrier, which has a total outstanding of over Rs 785 crore to IndianOil Corp (IOC), Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL), is looking to service the dues through the loan from SBI, according to industry sources.

"Kingfisher Airlines is in very advanced stages of getting the loan from SBI, which could be over Rs 2,000 crore. This should help the carrier meet its immediate and short-term capital requirements," a source added.

When contacted, a Kingfisher Airlines spokesperson declined to comment on the issue, citing confidentiality.

"Fund raising is an ongoing issue and because we are bound by confidentiality and non-disclosure agreements, it will be inappropriate to offer any comment at this stage," the spokesperson said. SBI officials could not be contacted for comments. As on April 20, the carrier owed IOC about Rs 160 crore.

Kingfisher also owes HPCL, its largest aviation turbine fuel (ATF) supplier, Rs 336 crore, and BPCL Rs 290 crore, the sources said.

IOC had encashed a Rs 50 crore bank guarantee after a cheque issue by the carrier towards fuel dues bounced and it had put Kingfisher on cash-and-carry about 2-3 months ago after the airline failed to honour its commitment of making timely payments for fuel dues as had been agreed last year.

On the IOC issue, the Kingfisher spokesperson said: "It is not Kingfisher Airlines' policy to discuss its relationships with suppliers in the public domain ...Kingfisher Airlines is operating its full schedule of flights daily." Both IOC and BPCL have stopped credit to Kingfisher and are asking the airline to make payments each time it refuels. HPCL, however, continues to give some credit to the airline. — PTI

Mumbai, May 5
IT firm Satyam Computer today said its new owner Tech Mahindra has completed the process for acquiring 31 per cent stake in the company. In a filing to the BSE, Satyam said Tech Mahindra, via its subsidiary Venturbay Consultants, has been alloted 30,27,64,327 shares or 31 per cent stake in the firm.

Last month, Tech Mahindra had outbid others in the race to acquire a majority stake in the scam-tainted Satyam Computer, following which Venturbay had deposited Rs 1,756 crore in the escrow account as the subscription amount for the initial shares.

"Since the conditions precedent to the allotment of the initial shares have now been satisfied by the parties, the funds have been released from the escrow account to the company's account. The company expects to use the fund for general corporate purposes, including repayment of certain existing loans," the filing added.

Consequent to the said allotment, the paid-up capital of the company has gone up to Rs 195.34 crore, from Rs 134.79 crore, it said.

Further, Tech Mahindra would be making a cash tender offer to the public shareholders for acquiring an additional 20 per cent, at a minimum of Rs 58 per share, which is scheduled to begin on June 12.

Tech Mahindra, in which BT Group Plc owns 31 per cent, has valued Satyam at about Rs 5,800 crore.

Last month, the government-appointed board of Satyam had given its approval for acquisition of a 31 per cent stake by Tech Mahindra for Rs 1,756 crore. The deal has also been approved by the Company Law Board.

The company has already deposited Rs 2,910 crore in an escrow account for a 51 per cent controlling stake in Satyam Computer. Shares of Satyam closed at Rs 45.55, unchanged, while Tech Mahindra was down 0.58 per cent at Rs 333.65 on the BSE.— PTI 

Chandigarh, May 5
While ensuring that technology also reaches out to the differently abled, the RBI has asked all banks to make at least one-third of their new ATMs as talking ATMs for the visually impaired.

These directions come in the wake of several demands made by social welfare organisations demanding that steps be taken for the financial inclusion of visually impaired. These people are so far denied banking facilities because of unwillingness of banks to use technology for making services user-friendly for the visually impaired.

It is learnt that most of the banks allow the visually impaired to open only joint bank accounts. Since ATMs are not voice-enabled, they cannot be accessed. Even the cheques signed by the visually impaired are often put under scrutiny as there are problems in identifying signatures. Bank managers insist that the visually impaired customer come to the branch and sign cheques in front of them.

Though RBI has different symbols on currency notes, by the time the notes pass through different hands, all notes and coins feel the same. It is learnt that a Rs 500 note has a small circle, Rs 100 note has a rectangle and Rs 50 note has a square on the left hand side, which is slightly raised.

Moreover, the currency notes get shorter in length as their denomination decreases. Even different coins can be distinguished by touch. A Re 1 coin is soft to touch, Rs 2 coin is bigger in size (the older version also had rough edge), while Rs 5 coin is thicker.

The new directions issued by RBI for installing voice-enabled ATMs with Braille keypads, has finally set the ball rolling for financial inclusion of visually impaired. RBI has asked banks to ensure that these voice-enabled ATMs be put up in consultation with other banks to ensure that at least one such talking ATM with Braille keypads is available in each locality. Banks have also been asked to inform all their visually impaired customers about the location of such ATMs.

The RBI has also stepped up its efforts to ensure that the visually impaired come under the banking service net. It has asked all banks to provide cheque book, locker and ATM facility to them.

“They cannot be denied the right to avail these facilities on the pretext that there is risk involved in using these facilities, as the element of risk is involved in case of other customers as well,” says the directive.

The apex bank has also advised banks to take necessary steps for providing all existing ATMs and future ATMs with ramps, so that wheelchair-users or persons with disabilities can easily access them. It has also asked banks to make arrangements in such a way that the height of the ATM does not create an impediment in its use by a wheelchair-user.

Mumbai, May 5
Market regulator SEBI is believed to have issued show-cause notice to Reliance Industries and its associate entities following a probe into charges of insider trading in securities of group firm Reliance Petroleum Ltd (RPL).

While a company spokesperson did not comment on queries related to the notice, sources said SEBI had begun the probe in early 2008 after issue was raised in Parliament.

RIL had sold over four per cent equity in RPL in November 2007, prior to which heavy selling, said to be by various group entities, was noticed in the futures contract of RPL.

Sources said the gains made through these transactions could be over Rs 500 crore but no confirmation could be obtained from SEBI.

In the show-cause notice, SEBI is understood to have asked RIL and 12 associate entities, who said to have sold in the futures market, why action should not be taken against them under the SEBI Act and the Prevention of Fraudulent and Unfair Practices Regulation.

When contacted, SEBI's investigation department officials did not comment, saying they were not authorised to speak to media, while SEBI spokesperson could not be contacted. — PTI

New Delhi, May 5
India Inc expects the ongoing slowdown to continue for the next two years, but even then many corporate houses are confident of achieving at least 10 per cent growth in this fiscal.

According to a survey by consultancy firm Ernst and Young (E&Y) titled 'Opportunities in Adversity: India Inc's response to the financial downturn', 65 per cent of the respondents said they expected the slowdown to continue for at least two more years, while nearly 27 per cent saw the slowdown lasting 6-12 months.

The survey, which interviewed over 120 top management executives, found that 46 per cent of the respondents were confident of achieving at least 10 per cent overall growth in FY'10. "Organisations are relatively more optimistic about their own prospects as they have greater influence on their own performance, while they are more cautious on the macro-economic outlook as it is dependent on many additional factors," E&Y Partner and National Director (Markets) Sunil Chandiramani said.

"The last few months have been extremely tough and we have seen an increasing number of companies respond to these challenges with a slew of measures," he added.

Reflecting confidence in corporate prospects for FY'09, which many companies are yet to close, 42 per cent of the respondents said they would achieve 90 per cent of their targets, while 43 per cent were looking at meeting 70-90 per cent of their targets. Only 15 per cent said they would not attain more than 70 per cent of the targets, the survey added.

A number of issues, ranging from increasing pricing pressure to slowdown in order bookings, have dogged corporates and they are focusing on cost reduction. About 71 per cent of them have re-evaluated business plans to preserve cash.

Companies have also laid 'high' emphasis on rightsizing (which includes redeployment and workforce sharing instead of layoffs), with 69 per cent opting for this step as a cost-cutting measure. Another 61 per cent indicated a 'high' possibility of a hiring freeze.

The respondents showed a preference for term loans from banks (69 per cent), debt or equity from group entities (61 per cent) and mezzanine finance (which gives lenders the right to convert to ownership in case of default) (37 per cent), instead of accessing the capital market (10 per cent) and going in for private equity (20 per cent). A majority of the respondents (63 per cent) expected consolidation and were looking at mergers and acquisitions (58 per cent) for business growth. — PTI

Chandigarh, May 5
Industry body Assocham today said Ludhiana was likely to suffer a Rs 5000-crore loss of export volumes for industrial units due to demand constriction in Europe and West Asia.

Participating in a seminar on ‘New stimulus package to help SME exporters and banks’ organised by Assocham and the Chamber of Industrial and Commercial Undertaking (CICU) at Ludhiana, CICU general secretary Avtar Singh said Ludhaina export volume were Rs 25,000 crore in fiscal 2008-09.

“During this fiscal, these volumes would come down to less than Rs 20,000 crore as export demand of Ludhiana products in major markets of Europe and West Asia has fallen because of global meltdown,” he said.

The CICU general secretary demanded Assocham intervention in terms of lobbying with the RBI for asking schedule commercial banks to extend export credit to Ludhaiana exporters at not more than 5 per cent interest rate.

Banks, according to Singh, are continuing to charge high bill collection amount despite instructions from the RBI. As a result, export competitiveness of Ludhiana exporters is getting reduced, he rued.

More than 100 exporters participated in the seminar. They demanded lower export credit and special package for exporters of Ludhiana and the state.

Mumbai, May 5
Hinting at easing of borrowing costs for retail and corporate customers, ICICI Bank's new chief Chanda Kochhar has expressed hope that interest rates could fall to single-digit level in the coming months.

"I should hope for that because that is going to be good for the economy," Kochhar told PTI in an interview when asked whether she foresees single-digit interest rates by middle of this year as forecast by her predecessor K V Kamath.

Kochhar, who assumed office of ICICI Bank's Managing Director and CEO this month, said there was room for further correction in interest rates.

"I feel that some more correction can take place in interest rates, because given where inflation is and given the comfortable liquidity position, I think a little more correction can take place," Kochhar said.

ICICI Bank was the first bank to cut lending and deposit rates after the central bank slashed its key short-term policy rates on April 21.

The same day, ICICI Bank reduced the benchmark advance rate by 50 basis points to 16.25 per cent, while the deposit rates were cut by 25-50 basis points across maturities.

Asked whether ICICI Bank was mulling over further rate cuts, Kochhar said that its rate would "move as per how it moves for whole banking system actually". — PTI

BRIEFLY

Battered UBS reports $1.8-b Q1 loss
Zurich/New Delhi: Swiss banking major UBS has posted a first quarter loss of two billion Swiss francs (about $1.77 billion) and has warned of economic turmoil negatively impacting its credit-related provisioning in the coming months. For the three months ended March 31, 2009, the company has losses to the tune of two billion Swiss francs whereas in the year-ago period, the same stood at 11.62 billion Swiss francs, the entity said in a statement on Tuesday.— PTI

Swaraj Engines records highest-ever sales
Chandigarh: Driven by strong growth in engine supplies to Swaraj Tractors, now a part of Mahindra and Mahindra, Swaraj Engines Limited (SEL) registered its highest-ever yearly sale of Rs 208.2 crore as compared to last year’s sale of Rs 125.4 crore, a growth of 66 per cent. The board of directors of SEL, who met in New Delhi on Tuesday, said the profit before tax for the company was Rs 32.2 crore for the year 2008-09, as compared to Rs 22 crore for last fiscal. — TNS

Hyundai i20 diesel by Dec
Seoul: Korean auto major Hyundai Motor Company will bring the diesel variant of its premium hatchback 'i20' by the end of this year as part of its plan of introducing at least two new products in the Indian market annually for the next couple of years. The company is looking to enhance its share in the 10 lakh-units Indian car market through newer products.— PTI

L&T announces JV with EADS
Mumbai: Larsen & Toubro on Tuesday announced the formation of a joint-venture company with EADS Defence & Security for developing and designing defence electronics products, including radars, avionics, electronic warfare to cater to the domestic and overseas markets. The yet-to-be-named venture, which is awaiting clearances from the Indian Government, would target to clock Rs 2,000-2,500 crore revenue in five-seven years, L&T chief A M Naik said. — PTI

Tata Steel, RINL hike prices
New Delhi: Over six months after facing steep fall in prices of their products, steel producers Tata Steel and Rashtriya Ispat (RINL) have revised the rates of some of their long items, used in the construction sector, by up to Rs 1,000 a tonne. While Tata Steel has increased the prices in the range of Rs 300 and Rs 500 for the products to be sold in the spot market, state-run RINL has upped the rates by up to Rs 1,000 a tonne on rebars, which are mainly used in the housing sector.— PTI