Tuesday, December 21, 1999
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B U S I N E S S | Tuesday, December 21, 1999 |
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UCO Bank turns Y2K compliant Walkout over Designs Bill Car prices to go up Free IT courses on Net IT network in Punjab Assocham says no to SEBI code Polaris to buy out Gurgaon firm |
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Report on
banks lands CII in soup NEW DELHI, Dec 20 — A CII report suggesting closure of three nationalised banks has snowballed into a controversy forcing it to withdraw that particular proposal from its report. CII had constituted a National Task Force (NTF) on non-performing assets (NPAs) under the chairmanship of the Managing Director and CEO of ICICI Ltd, Mr K.V. Kamath, to look into the reasons behind the high level of NPAs in public sector banks and suggest possible remedial measures. The report had recommended the closure of three ‘‘weak’’ public sector banks — Uco Bank, Indian Bank and the United Bank of India — stating that ‘‘it would be better to shut down these banks than to give them another dose of artificial respiration’’. Bank unions reacted sharply to this recommendation and the All-India Bank Employees Association (AIBEA) threatened to make public names of corporate defaulters. Bank unions accused ‘‘Indian industrialists and tycoons’’ of leaving ‘‘banks high and dry’’ after growing with banks’ assistance. They demanded that CII should exclude the names of loan defaulters from their list of members. According to union sources, disclosure of the defaulters list would severely embarrass CII as several top industrialists occupying important positions in the chamber figure in it. According to one estimate, of the Rs 58,000 crore that banks have as outstandings 70 per cent are due from private companies, of whom a majority are members of CII. CII now has made a U-turn and said that it was recommending the Government ‘‘not to consider this particular proposal relating to the closure of the weak banks’’. The task force had made 26 recommendations which also included the suggestion to privatise the State Bank of India, the Oriental Bank of Commerce,the Corporation Bank and the Bank of Baroda. The principle for closing down these three banks is based on two premises that no depositor will be hurt and every employee will get a generous severance package.The process is outlined in detail in the report and is estimated to cost a total of Rs 9800 crore. Although this is Rs 4300 crore higher than the Verma Committee estimate, CII report argues that closure is a better policy. For one, thre is no guarantee that the recapitalisation suggested by the Verma Committee will not be repeated in the near future. For another the CII estimate is a one-shot expenditure which also imposes a credible threat to inefficient banks. Meanwhile,hundreds of bank employees and officers today gheraoed the head office of CII here protesting against the cover provided by CII from deliquent industrialists who owe the nationalised banks a sum of Rs 50,000 crore. CII should not
‘‘fool around with the people and the
Government’’. The bank unions will be forced to
release the list of defaulting companies if the biased
and one sided CII report is not withdrawn forthwith, the
AIBEA said in a statement here. |
Raise ST
rates in UT: Punjab NEW DELHI, Dec 20 — Punjab Finance Minister Kanwaljit Singh today said there was a need to increase sales tax rates in union territory of Chandigarh to prevent diversion of trade from Punjab to the union territory. Participating in a meeting of the standing committee of state Finance Ministers to monitor sales tax reforms here, Capt Kanwaljit Singh said all goods sold from Chandigarh to Punjab were leviable to a tax of 1 per cent instead of 4 per cent as applicable under the provisions of the Central Sales Tax Act. He said since this has resulted in a huge diversion of trade from Punjab to Chandigarh, the union territory be urged to remove the anomaly. Today’s meeting was a follow up of the meeting of the state Finance Ministers held here on November 16 wherein a consensus decision had been reached on the implementation of uniform floor rates by the states and union territories to be implemented with effect from January 1, 2000; phasing out of sales tax incentives for industries from January 1, 2000, finalisation of modalities and time frame for introduction of value added tax (VAT) from April 1, 2000; and rationalisation of sales tax. On the implementation of uniform floor rates of sales tax by states and union territories, Punjab was of the opinion that domestic trade taxes in India needed reform. The minister said the rate of tax applicable on various commodities were different in various states and this resulted in a complex situation which was not suitable in an open market. He said the Punjab Government concurred with the view of the state Finance Ministers’ committee report of August 1995, that there was an urgent need to expand the tax base, rationalise the rate structure and harmonise the rates horizontally. On the list of items on which rate of tax was higher than that of the agreed floor rates at national level, he said on 45 commodities, the prevailing rate of tax in Punjab was higher than the agreed rates at national level. He said there was no need for Punjab to lower the prevailing rates of tax on these commodities but minor adjustments with respect to prevailing rate and the floor rates of 0,4,8,12 per cent would have to be carried out. He pointed out that the decision regarding the implementation of recommendations of the committee of Finance Ministers could be implemented only if all states and union territories do so from January 1, 2000, and could not be implemented by the state in isolation. The minister informed that all preparatory steps required to switch over to VAT was being taken up by the state and it was committed to implement VAT with effect from April 1, 2001. The Finance Minister also pointed out that several commodities, especially those related to the agriculture sector like chemicals, fertilisers, pesticides, insecticides, poultry feed and cattle feed were exempted in Punjab but had been placed at the floor level of 4 per cent. Referring to the recommendation of the committee that states might like to retain some flexibility regarding exemptions to cater to the state’s specific conditiions as long as such flexibility had no inter-state implications, he pointed out that Punjab was primarily an agricultural state and the biggest contributor towards the central pool. The agricultural economy in Punjab could be sustained only if subsidies and tax exemptions on agricultural inputs raw materials and implements were allowed, he said. The minister advocated
that the state should retain the present status of
taxation in respect of these items as such a situation
was not likely to result in any trade diversion
detrimental to any other state. Tractors had been placed
at floor level of 8 per cent whereas presently, these
were being taxed at the rate of 2 per cent. The state
should retain this rate of tax also, he remarked. |
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NEW DELHI, Dec 20 (UNI) — Several members made a strong demand in the Lok Sabha today for publication of the list of corporate bank loan defaulters who owed Rs 45,000 crore and said the recommendation of the CII Task Force for the liquidation of three banks was to prevent the exposure of certain names.The matter was raised by Mr Selva Ganapathy (AIADMK) during zero hour and he was supported by members from other parties, including former Prime Minister Chandra Shekhar and Mr Rajesh Pilot (Congress). When several members stood in support and Mr Chandra Shekhar insisted on a statement from the Government, Parliamentary Affairs Minister Promod Mahajan said he would bring the matter to the notice of the Finance Minister. He said the Government has nothing to hide in this matter. Mr Ganapathy said the Task Force’s recommendation for the liquidation of UCO Bank, Indian Bank and United Bank of India has created panic among depositors and would lead to a run of these banks. He said that this report, which was withdrawn subsequently, was to prevent the exposure of some defaulters. He alleged that industrialists Rahul Bajaj and Bharat Ram together owed Rs 850 crore to the banks. Fearing exposure of these names, the CII task force recommended liquidation of the three banks, he said. Mr Ganapathy said the corporate sector owed Rs 45,000 crore to the nationalised banks. The Government is shielding the defaulters and wanted their names to be published. Mr Chandra Shekhar said that in the name of liberalisation the Government cannot commit financial crimes. The Government should make a statement, otherwise it would amount to concealing financial crimes and dereliction of duty. Mr P.H. Pandian (ADMK)
and Mr Pilot said this is a serious matter demanding
action by the government. |
‘Permit
banks to name names’ CHANDIGARH, Dec 20 — The three banks — Uco Bank, Indian Bank and the United Bank of India — have approached the RBI to seek permission for making public the names of bank loan defaulters. Bankers here argue the Task Force represents only one point of view and the general public need not give any credence to this. This task force has no official existence. The CII has no moral grounds to condemn banks as they represent industries which are responsible for a large part of NPAs and consequent problems of banks. A better approach would have been to suggest removal of procedure and legislative bottenecks that have come in the way of banks expeditiously enforcing their claims on borrowers. In fact many quarters talk about cynical exploitation by unscrupulous promoters to stall the recovery of banks dues by utilising the process of law. If there can be a legal
reform which can enable a bank to encash the assets that
have been charged to them to cover the NPAs at market
related prices, all the weak banks would become
profitable, they argue. |
UCO Bank
turns Y2K compliant CHANDIGARH, Dec 20 — UCO Bank which claims to be Y2K compliant, has advised customers to get their pass-books updated, complete financial transactions, disburse salary, withdraw pension, avail cash credit, overdraft etc prior to December 31, 1999. The bank spent Rs 1557.47 lakh on the upgradation of its computer systems, their testing and auditing, said Mr F.C. Sachdeva, Zonal Manager of the bank, here today. Addressing a press conference, he said the bank has drawn up a contingency plant to take care of any failure of the computer systems due to the Y2K bug. Project work groups will implement the plan. Event management centers have been opened with teams of IT-trained officials to rectify problems in the computerised system. In case of disruption of the system, the bank will switch over to manual transactions. Hard copies containing details of customers accounts and transactions made up to December 31 will be taken. Adequate liquid cash too has been arranged. The branches will be well stocked to meet sudden requirements of cash by customers up to January 31, 2000. Help desks have been set up to clarify doubts and solve problems, if any. All employees involved
in implementing the Y2K contingency plan will work on
Sundays and holidays as also before and after normal
office hours. The event management centers will work 24
hours a day from December 25 to January 7 and again from
February 28 to March 7, 2000. They will not be allowed
leave except in emergency. |
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NEW DELHI, Dec 20 (PTI) — Non-Congress opposition parties today staged a walkout in the Rajya Sabha as the House took up the Designs Bill saying the government was rushing through some of the WTO-related legislation which needed time to study as they were of highly technical in nature. Demanding that the Designs Bill, 1999, to consolidate and amend the law relating to protection of designs, be sent to a Standing Committee or a Select Committee, CPM members Biplab Dasgupta and Jibon Roy said the Bill was full of technical terms and it would be ‘‘unfortunate to hurry them’’. Parliamentary Affairs Minister Pramod Mahajan said if the Designs Bill was not taken up today it was not likely be passed in the Lok Sabha in the current session. Industrial
Security Bill: A legislation aimed at expanding
the scope of the Central Industrial Security Force (CISF)
to take on other duties, including those in the private
sector, received parliamentary approval today. The Lok
Sabha passed the CISF (Amendment and Validation) Bill
1999 by voice vote. The Bill had earlier been approved by
the Rajya Sabha. |
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NEW DELHI, Dec 20 (UNI) — Close on the heels of an imminent price rise by Maruti and Hyundai, Daewoo Motors India Limited is also going to increase the price of Matiz by around Rs 25,000 early next month. DMIL will announce a 6 to 8 per cent price rise in Matiz due to an increase in input and transport costs, besides 20 per cent appreciation in won in Korea, Mr Byung-Soh Min, DMIL Deputy Managing Director (corporate affairs) said today. Maruti Udyog Limited has
already said Zen will be costlier by Rs 21,000 to Rs
24,000 from January 3, while Hyundai Motors India Limited
will increase the price of Santro by Rs 10,000 to Rs
15,000 (ex-showroom) in Delhi later this month. |
Free IT
courses on Net NEW DELHI, Dec 20 — Learning software programming with a hefty sum of money paid to different training institutions would be the thing of the past soon. Buy a PC, get connected to the Internet and log on to www.freeskills.com and in your own pace learn the programming skills. The site created by
Visualsoft U.K. Ltd, an Internet-based training
institute, offers wide range of courses free of cost. The
site features courses ranging from MS Word 97 Essentials
through to NT 4.0 System Support, Oracle, C++, Visual
Basic, MS SQL Server and Novel Netware design. |
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MOGA, Dec 20 (UNI) — The Punjab Government has decided to establish an information technology network connecting State Headquarters with all district headquarters in the first phase. The district headquarters will be connected with sub-divisional headquarters and block level offices in the second phase, said State Information Systems and Reforms Director Nirmaljit Singh Kalsi here yesterday. The network will carry
the voice, video and data for the Government. The field
offices will be able to communicate with State
Headquarters on the IT network and EBABX through
intra-governmental telephone calls without payment of any
charge to the Telephones Department. |
Polaris to buy out Gurgaon firm Polaris Software on Monday announced that it will acquire the entire share capital of Tip Top Holdings for Rs 2.78 crore.In a notice to Madras Stock Exchange, the company said a decision to acquire the entire share capital of 8.55 lakh equity shares in Tip Top Holdings was taken at its Board meeting on Saturday last. The notice neither gave details of the business done by Tip Top Holdings, based in Gurgaon nor did it provide any financial details of that company. Sri Adhikari Brothers: Sri Adhikari Brothers Television Network Limited is seeking the consent of the shareholders to allow FIIs to invest and hold up to 30 per cent of the company’s equity capital. The company has convened a meeting of the shareholders on January 7, 2000, to approve the scheme. Wipro to float ADR: Wipro is seeking to acquire software companies both in India and abroad and planning to float an American Depository Receipt (ADR) to fund these activities, as part of its major expansion plans for its e-commerce business. NIIT-Relativity tie-up: NIIT Limited today announced partnership with the US-based e-business solutions provider Relativity Technologies to enable traditional businesses integrate legacy applications with the Internet. Sterling
Cellular: The Essar group and the Hutchison
Whampoa Group announced on Monday that Hutchison
Telecommunications International Limited has agreed to
buy 49 per cent of the equity of Sterling Cellular Ltd
from Swisscom AG and others. — agencies |
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NEW DELHI, Dec 20 (PTI) — Assocham today urged the Government not to make “mandatory” on Indian companies implementation of the Corporate Governance Code, being evolved by SEBI. Shekhar Bajaj, who took
over as Assocham President for the year 2000, said there
were just a handful of companies who were enforcing
corporate governance, as suggested by CII, and such a
discipline should come from within instead of through
“government controls”. |
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