SEBI slaps curbs on credit rating agencies
NEW DELHI, June 23 — SEBI today tightened regulations for credit rating agencies and barred them from rating financial instruments floated by their promoters to mobilise resources.

IA proposal to buy aircraft under study NEW DELHI, June 23 — The Indian Airlines proposal for procurement of 50-seater aircraft is currently being considered by an inter-ministerial group and Rs 325 crore given by the government to it is only meant for the purchase of planes which would ply on feeder routes, Civil Aviation Minister Ananth Kumar said today.

Visitors line up to visit an Airbus A300 600ST Super Transporter cargo plane parked on the tarmac of the Bourget airport suburban Paris during the 43rd Paris Air Show. — AP/PTI

SBI deposits cross Rs 10,000 crore mark
CHANDIGARH, June 23 — The State Bank of India, Chandigarh circle comprising Punjab, Haryana, Himachal Pradesh, J&K and Chandigarh with 660 branches, saw its deposits grow by Rs 1520 crore (17.9 per cent) during 1998-99 to cross an all-time high level of Rs 10,031 crore, said Mr R.C Agrawala, General Manager of the bank.

Engineers India faces inquiry
NEW DELHI, June 23 — The Petroleum Ministry has ordered a probe into the alleged “violation of tendering norms,” including the tampering of bids by officials of the State-owned Engineers India and an oil infrastructure company on complaints by a Japanese company.

So much wheat — where to store it ?
CHANDIGARH: The problems of plenty which Punjab and Haryana, the two major surplus States, have been experiencing for the past several years, are heading for a crisis, particularly in Punjab, because of the unprecedented accumulation of the procured stocks in the two States.

SEBI slaps curbs on credit rating agencies

NEW DELHI, June 23 (PTI) — SEBI today tightened regulations for credit rating agencies and barred them from rating financial instruments floated by their promoters to mobilise resources.

The SEBI Board, which met here today, also decided to bar promoters, credit rating agencies and their rating committees from sharing common Chairman, Directors or employees, its Chairman D.R. Mehta told PTI.

This will be applicable to anybody who holds 10 per cent or more of the share capital in a credit rating agency.

However, credit rating agencies would be allowed to rate securities issued by its associate or subsidiary provided there is no common Chairman, Director or employee.

Similarly, instruments of associate, subsidiary or borrowers of promoters also could be rated if there were no common Chairman, Director or employee.

The new regulations for credit rating agencies, which would come into effect from next week, would mean that three leading agencies — Crisil, ICRA and CARE — would not be allowed to rate instruments floated by ICICI, IFCI and IDBI respectively.

The SEBI Board, which approved the market regulator’s annual report for the year 1998-99, also made it mandatory for companies to disclose unaccepted ratings to investors.

The board also incorporated an additional clause in the listing agreement of stock exchanges to make it mandatory for companies to cooperate which rating agencies in giving correct and adequate information.

Further, issuers coming out with public or rights issue of debt instruments would be required to incorporate an undertaking in their offer documents promising necessary cooperation with the rating agency in providing true and adequate information, Mehta said.

Regulations for credit agencies, which was approved by SEBI on March 19, 1999, was reviewed today following representations from credit rating agencies.

According to SEBI regulations, only commercial banks, public financial institutions, foreign banks operating in India, foreign credit rating agencies and companies with a networth of Rs 100 crore in the previous years, are eligible to promote rating agencies in India.

Moreover, rating agencies would be required to have a minimum network of Rs 5 crore.

SEBI said for all public and rights issues of debt securities of more than Rs 100 crore, ratings from two different agencies would be mandatory.

The Board also approved amendments to the SEBI (Stock Brokers and Sub Brokers) Regulations, 1992, to dispense with the formal enquiry process for suspending or cancelling the registration of brokers and sub brokers.

The Board also accepted recommendation of the YH Malegam Committee on accounting standards to extend the period for publication of audited results to three months from existing two months.

It decided to give investors an option for allotment of new public issues in physical form as against the existing norms of compulsory dematerialisation of all new issues.

SEBI has also asked stock exchanges to test validate and implement Y2K compliant systems by June 30 to draw up contingency measures in the event of potential failure of key parts of financial market infrastructure.

Companies coming out with public issues would have to declare their Y2K preparedness status in their prospectus, SEBI said.

FII investments touch $ 9.5 b

NEW DELHI, June 23 (PTI) —Responding to uptrends in the industrial production and economic recovery, the foreign institutional investors (FIIs) have pumped in $ 716 million in capital markets since April this year taking their total investment to an all-time high of $ 9.5 billion.

The uptrends in the industrial production and signs of economic recovery have boosted the FII investment in the current year, SEBI said in a statement. It was clear from these figures that political instability and disturbances on the border have not dampened the sentiments of the FIIs. The FIIs since April 1999 have invested $ 713 million till June 11 to take their investment to a high of $ 9523.7 million. The FII investment touched $ 9.5 billion mark for the first time since they were allowed to invest in Indian capital market in September 1992, the release added.

IA proposal to buy aircraft under study

NEW DELHI, June 23 (PTI) — The Indian Airlines (IA) proposal for procurement of 50-seater aircraft is currently being considered by an inter-ministerial group and Rs 325 crore given by the government to it is only meant for the purchase of planes which would ply on feeder routes, Civil Aviation Minister Ananth Kumar said today.

Stating that Rs 325 crore recently granted to IA was “only linked with upgradation of its fleet”. Kumar told reporters here that the proposal was being considered by a group of officials of finance, civil aviation and other ministries besides the Planning Commission.

After this group gives its nod, the proposal will move to the public investment board (PIB) and then to the Cabinet Committee on Economic Affairs (CCEA) for the final approval.

In a chat with journalists, the Minister also clarified that Rs 325 crore included Rs 125 crore which was to be granted to the IA in the last Budget but was not done. IA “has to adhere to strict scrutiny of public finance,” he said.

SBI deposits cross Rs 10,000 crore mark
Tribune News Service

CHANDIGARH, June 23 — The State Bank of India, Chandigarh circle comprising Punjab, Haryana, Himachal Pradesh, J&K and Chandigarh with 660 branches, saw its deposits grow by Rs 1520 crore (17.9 per cent) during 1998-99 to cross an all-time high level of Rs 10,031 crore, said Mr R.C Agrawala, General Manager of the bank.

The circle’s advances have recorded a growth of Rs 1,160 crore (27.2 per cent) over the previous year level. Total credit crossed the level of Rs 5,440 crore. The forex turnover exceeded Rs 3,100 crore with a growth of Rs 200 crore and the C&D ratio also improved from 57 per cent to 62 per cent.

Mr Agrawala said the bank’s branches in the Kargil sector are working normally but with less business. An extension counter of the bank has started functioning after the out-break of the present crisis at Partapur for the benefit of soldiers.

Responding to a question on bank frauds he said last year bank frauds involving Rs 70 lakh were detected. In the current fiscal no fraud has been detected so fair.

The number of loss-making branches has declined by 26 per cent i.e. from 46 to 34 units and there is an increase in business per employee from Rs 76.32 lakh to Rs 93.28 lakh.

Mr Agrawala said the bank plans to cross the deposits level of Rs 12,000 crore during the current year and will computerise 52 branches.

Engineers India faces inquiry

NEW DELHI, June 23 (PTI) — The Petroleum Ministry has ordered a probe into the alleged “violation of tendering norms,” including the tampering of bids by officials of the State-owned Engineers India (EIL) and an oil infrastructure company on complaints by a Japanese company.

Following a decision by Petroleum Minister V.K. Ramamurthy and his Deputy Santosh Kumar Gangwar, an office order was issued for inquiry into the “complaint alleging irregularities by officials of EIL and Petronet CCK Limited for violation of standard tendering norms.”

The complainant Marubeni India Private Limited, had written to EIL that “to our surprise we were told that you are not considering our offer due to reasons unknown to us even though our prices are the lowest (for supplying bare line pipes in response to a tender of Petronet CCK).”

The Indian subsidiary of the Japanese Trading giant later approached the Petroleum Ministry alleging tampering of the price bids for pipes for laying 425 km pipelines between Cochin, Coimbatore and Karur for use of Bharat Petroleum Corporation (BPCL), Ministry sources said.

Advantage North

NEW DELHI, June 23 (PTI) — Northern India has attracted maximum investments in the manufacturing sector, accounting for 21.3 per cent of total investments in the region, according to a study by PHDCCI.

Total investment proposals in the manufacturing sector in India was Rs 45,09,30 crore of which Northern India accounted for Rs 9,23,94 crore, the study on “pattern of investment flows in the northern region” revealed, a PHDCCI statement said.

Investment was largely concentrated in the chemicals industry accounting for nearly 48 per cent of total investment in the region.

Share of non-metallic mineral products, textiles and basic metals was respectively 10.8 per cent, 9.5 per cent and 9.1 per cent followed by transport equipment at 7 per cent, it said.

So much wheat — where to store it ?
By B.K. Chum

CHANDIGARH: The problems of plenty which Punjab and Haryana, the two major surplus States, have been experiencing for the past several years, are heading for a crisis, particularly in Punjab, because of the unprecedented accumulation of the procured stocks in the two States. The looming crisis may break out in the next kharif crop season in October-November.

The final data of wheat production and procurement now available show that wheat production this year has been the highest-ever resulting in record procurement of the golden grain in the two States. All available storage space, both covered and under ‘CAP’ (cover and plinth) has been utilised for storing the procured stocks.

According to Dr M.S. Sonar, Director, Agriculture, Punjab, wheat production in the State this year was a record 144.73 lakh tonnes against last year’s 127 lakh tonnes and the earlier record of 136.78 lakh tonnes achieved in 1996-97. The higher production this year was partly due to the increase in the area from 33.01 lakh hectares to 33.55 lakh hectares and partly on account of higher yield which was 4314 kg per hectare against last year’s 3853 kg per hectare.

In Haryana, according to Mr Naseem Ahmed, Commissioner, Agriculture, the wheat production this year was 83 lakh tonnes, a record in the State’s 33 year history, exceeding even the ambitious target of 78.5 lakh tonnes fixed for the year and the earlier record of 76.77 lakh tonnes in 1996-97. Mr Ahmed said that the increase was partly due to the increase in the area to 21.5 lakh hectares. The ideal weather conditions during the crop maturity period helped by the moisture in the soil left over by the untimely rains during the last kharif season mainly contributed to the record production.

Wheat procurement figures in the two States have also beaten all previous records. As against the earlier highest procurement of about 73 lakh tonnes in 1995-96 in Punjab, the procurement this year was 78.25 lakh tonnes compared to last year’s 61.50 lakh tonnes. According to Mr P. Ram, Secretary, Food and Supplies, Punjab, the original procurement target was fixed at 70 lakh tonnes which was later revised to 75 lakh tonnes but has been exceeded by 3.25 lakh tonnes. Mr H.C. Disodia, Commissioner, Food and Supplies, Haryana says that by procuring 38.64 tonnes of wheat this year, Haryana has beaten its previous record of 34.50 lakh tonnes achieved in 1993-94 and also this year’s revised target of 35 lakh tonnes.

The record wheat procurement has taken the total inventory of the procured wheat and rice stocks to an unprecedented 170 lakh tonnes in Punjab with about 14 lakh tonnes of more rice expected to be procured out of the still unmilled paddy stocks of 21 lakh tonnes. But the monthly movement of foodgrains from the State is less than eight lakh tonnes against the State’s demand of at least nine lakh tonnes per month. In case large scale movement of stocks does not take place out of Punjab in the next three months when the new kharif crop starts arriving, the problem of foodgrains storage would worsen which , in turn, may have its political implications.

In Haryana also, 52 lakh tonnes of procured grains — 49.5 lakh tonnes wheat and 2.5 lakh tonnes rice — are lying unlifted as a result of tardy movement of stocks out of the state. In case six lakh tonnes of the procured foodgrains are not moved out every month till September, the problem of storing the new crop arrivals may become unmanageable.

Both Punjab and Haryana have brought the critical situation to the notice of the Centre urging it to take immediate remedial measures to avert storage crisis.

Canara Bank
CHANDIGARH, June 23 (TNS) — The employees of Canara Bank in Chandigarh today donated steel vessels for the 40 inmates of the leprosy home in Sector 47. The steel vessels were distributed by Mr H.D. Pai, General Manager, under a “Tram campaign” under which the employees of the bank voluntarily contribute three rupees a month for undertaking such social welfare activities.

BIS training
NEW DELHI, June 23 (TNS) — The Bureau of Indian Standards has chalked out an extensive schedule to train Indian industry to respond to the proposed changes in ISO 9000 revision. The BIS training programme will focus on the important changes in the 2000 version of ISO 9000 standards.In this version, there is greater emphasis on continuous quality improvement and satisfaction of the customer by meeting or exceeding his requirements.

Rupee weakens
MUMBAI, June 23 (PTI) — The rupee weakened considerably against the US dollar on heavy corporate demand, but ended off intraday lows in fairly active but choppy trade at the interbank foreign exchange (Forex) market here today. Opening lower around Rs 43.20/22 per dollar, the rupee dipped to an intraday low of Rs 43.27/29 due to a rush to cover dollar positions by banks and corporates.