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Friday,
November 16, 2001, Chandigarh, India  
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SBI fined $ 7.5 m by US bank regulators
Tax benefits for cinemas and bakeries likely
Enron to sell off money-losing assets
HDFC rules out merger with HDFC Bank |
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Infosys, ICICI launch B2B financial product
No revision in petro prices, says Naik
Japanese Airlines
to cut 5,000 jobs
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SBI fined $ 7.5 m by US bank regulators Washington, November 15 The State Bank of India, India’s largest commercial bank, consented to the fine, without admitting to any of the allegations, the Fed said in a joint statement with the Federal Deposit Insurance Corporation and the New York State Banking Department. Under the order, the bank also must ensure “full compliance with suspicious activity reporting,” and enhance and improve policies to comply with US regulations on reporting currency and foreign transactions. US bank regulators use suspicious activity reports from banks to monitor for illegal financial transactions, including those related to terrorist financing and money-laundering. The US also requires reporting of any currency transaction over $ 10,000. The order also requires the SBI to tighten its procedures for accepting funds for transfer out of the United States by its “Non-Resident Indian” department in its US operations. India is a large destination for remittances from its residents working overseas, officials have noted separately. The joint order requires an independent review of SBI’s books, including an analysis of funds-transfer accounts dating back to January 1, 1998. This review will determine whether records relating to transactions in these accounts are complete, and “identify and investigate suspicious or unusual activities, if any” conducted through these accounts. After the independent review, which should be complete within 120 days, the bank must provide regulators with a plan that provides for determining whether currency and other transactions “are being conducted for illegitimate purposes.”
AFP
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SBI group’s gross NPA stands at 21,054 cr New Delhi, November 15 SBI and associate banks, however, reduced their share of NPAs from 37.8 per cent of the industry aggregate till March 2001, to 37.2 per cent during the last half, official sources said today. SBI alone amassed rs 16,069 crore worth of gross NPAs till September 2001, which is 28.4 per cent of the industry. The bank’s gross NPA amounted to Rs 15,875 crore during the last fiscal. Gross NPA as a percentage of advances of SBI was at 13 per cent which is at par with the industry average. SBI’s net NPAs was about Rs 6,346 crore or 22.8 per cent of the industry total of Rs 27,856 crore. As a percentage of advances, SBI averaged better with 6 per cent net NPAs as against the industry average of 7 per cent. SBI and its associates had a cumulative Rs 8,985 crore worth of net NPAs which is 32.2 per cent of the total sticky assets of 27 PSU banks. SBI was followed by Bank of Baroda with a gross NPA of Rs 4,034 crore, Punjab National Bank (Rs 3,672 crore), Bank of India (Rs 3,629 crore) and Central Bank (Rs 3,240 crore). Canara Bank, Dena Bank, Indian Bank and Union Bank of India also had gross NPAs over Rs 2,000 crore. In percentage terms, Dena Bank topped the list with 26 per cent (Rs 2,059 crore) followed by United Bank of India (21 per cent), Indian Bank (20 per cent), Punjab & Sind Bank (19 per cent) and Allahabad Bank (17 per cent). |
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Tax benefits for cinemas and bakeries likely Chandigarh, November 15 The Chief Minister, Mr Parkash Singh Badal, has directed the authorities concerned in the Excise and Taxation Department to prepare the proposals in this connection for the clearance of the Council of
ministers. The proposal might come up for discussion at the next meeting of the council. There is a provision to charge 8 per cent tax on all sort of bakery items as per the national consensus on the floor rates of sales tax. However, bakery owners in the state have given several representations to the state government to exempt the bakery items from the tax. The issue is hanging fire for the past several months. Informed sources said that the Excise and Taxation Department had now proposed sales tax only on those bakery items which were prepared by the automatic plants, technically called as rotor units. There were only two or three such plants in the state. All other bakery units have traditional ovens operated by manual labour to prepare the eatable. Such units would be totally exempted from the tax. When asked, Mr Tikshan Sood, Minister of State for Excise and Taxation, confirmed that the Government had finalised a proposal in this connection. He said that decision in this regard would be taken soon. As far as giving tax relief to cinemas is concerned, the government has prepared two proposals, according to informed sources. The government has made up its mind to reduce the lumpsum tax that is paid by cinema owners by 33 per cent. It is paid on the basis of total seating capacity of a cinema. Approximately, a cinema having near 700 seats has to pay about Rs 50,000 as a tax in lumpsum per week in a city like Patiala. It is likely that the government to make the offer to cinema owners to opt any of the two tax systems to be proposed for the cinemas. One is a current lumpsum tax system and other is entry tax
system. Under the entry tax system, which was in operation a few years ago, 125 per cent entertainment tax was charged on the value of the every ticket sold. The government has proposed to peg it to 50 per cent. There are about 159 cinema in the state and the revenue earned from these is about Rs 10 crore. The entry tax system has many negative aspects. It would allow officials concerned of the Excise and Taxation Department to interfere in the functioning of the cinemas. Cinema owners fear that once again the era of special checkings, raids etc will stage come back. Under the lumpsum tax system, cinema owners face no such problem. In the representation submitted to the government, Punjab Cinema Owners Association has stated that the cinema industry was passing through difficult times. A number of cinemas in cities like Amritsar, Jalandhar, Ludhiana, Phagwara, Hoshiarpur, Pathankot, etc have downed their shutters because of financial unviability. As several parallel sources of entertainment like television, video parlours have emerged, cinema have suffered a set back.
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Enron to sell off money-losing assets Houston, November 15 The effort is aimed at improving Enron’s financial health following disclosures that the company inflated profit figures and didn’t reveal large amounts of debt to shareholders, Enron President and Chief Executive Ken Lay told investors today. Businesses Enron wants to shed include a high-speed Internet unit and power operations in India and Brazil, which Lay said “have performed far worse than we ever could have imagined when we made these investments.” “In hindsight, we made some very bad investments in non-core businesses,” Lay said during the conference call for investors and analysts. Dynegy announced Friday it would buy Enron in a deal now worth $ 10.5 billion, and Lay said the company is focusing on conserving cash and getting the most out of the core businesses Enron will keep. Enron executives also said they expect the company’s fourth quarter earnings to be hurt by the ongoing financial problems. No details were offered, but the executives said they would issue guidance for forth quarter earnings in two weeks. Dynegy agreed to buy Enron after the energy trading giant’s stock price plunged about 80 per cent in the weeks following Enron’s posting of a $ 618 million third quarter loss. Dynegy will also assume $ 13 billion of Enron debt. Last week, Enron disclosed a $ 1.2 billion reduction in shareholder equity related to partnerships run by company officers, which allowed Enron to keep about half a billion dollars in debt off its books. Those partnerships are now under investigation by the Securities and Exchange Commission. Enron ousted Chief Financial Officer Andrew Fastow, who ran some of the partnerships, and restated its earnings back to 1997. But those actions failed to restore investor confidence. “I could not have ever contemplated the events we as a company and you as a stakeholder have faced over the last several weeks,” Lay said today. “This has resulted in a complete loss of investor confidence. We are fully committed to fixing the problems.” Neither Lay nor other top Enron executives said how many of the company’s 20,000 employees worldwide would lose jobs as those businesses are sold. Officials said it could take months to sell non-core assets. “Our debt balances too high and we need to raise cash,” said Jeff McMahon, Chief Financial Officer. Lay said cash gained from asset sales also would support its core businesses. Enron is the country’s top buyer and seller of natural gas, and the No. 1 wholesale power marketer. The company operates a 40,225-km gas pipeline system, and also markets and trades metals, paper, coal, chemicals, and fiber-optic bandwidth.
AP
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HDFC rules out merger with HDFC Bank New Delhi, November 15 “HDFC and HDFC Bank are separate entities. HDFC is not planning to become a universal bank. HDFC Bank, however, will go for acquisition provided we get the right bank and the right price,” HDFC Chairman Deepak Parekh told PTI here. NYSE-listed HDFC Bank had acquired Times Bank in February 2000, and has completed the manpower and technology integration. Some of the banks that match the profile of HDFC Bank are UTI Bank, IDBI Bank, IndusInd Bank and Centurion Bank. UTI Bank has recently offered 26 per cent stake to CDC while IDBI Bank has decided to offer stake to Bank of Muscat. Hinduja-promoted IndusInd Bank is believed to have a merger plan with the group company Ashok Leyland Finance while Centurion Bank’s promoters are also believed to have asked stakeholders, IFC and ADB, to hike their stake in the bank. HDFC currently has 28.3 per cent stake in the banking arm while Chase Capital has 13.4 per cent through Indian Private Equity Fund and Indocean Financial Holdings. FIIs, NRIs and OCBs have about 17 per cent stake in HDFC Bank while the remaining is with the public. HDFC Bank share is currently trading at about Rs 220 in domestic bourses. The parent company HDFC has also put on hold its plans of listing in US bourses within the next two years. “We do not need additional capital now,” Parekh said but did not rule out ADR in future. HDFC Chief said the company would finalise its non-life insurance venture within the next 2-3 weeks. Parekh declined to give names of the foreign partner but indications are that it could be an Asian or a US-based general insurance company. HDFC has already started its life insurance operations with Standard Life of US. Also on the anvil is the Credit Information Bureau India Ltd, being jointly promoted by HDFC and State Bank of India, with 40 per cent stake each. Dun & Bradstreet and Trans Union International would have 10 per cent stake each in the venture. About company’s performance, Parekh said loan sanctions are slated to grow by 40 per cent this fiscal. HDFC’s loan sactions have buoyed by a boom in the retail housing sector, which witnessed 50 per cent growth during last month. HDFC’s loan sanctions in the first half were about Rs 8,500 crore while disbursement stood at Rs 7,500 crore.
PTI
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Infosys, ICICI launch B2B financial product
Bangalore, November 15 The product facilitates effective, efficient, risk-less and fraud-free transactions between buyers, sellers and B2B transactions, even when the parties are not regular customers of the bank, the two companies said in a release. The financial
fulfillment product has been jointly developed by Infosys and ICICI and makes ICICI the first financial intermediary to be live with this B2B model of transaction. It would be available through icicimarkets.Com. The gateway for corporates to ICICI. The first phase of this B2B model of transaction uses an escrow route for financial fulfilment. The buyer’s funds are parked in an escrow account in the bank and are disbursed to the seller when specified conditions are met. With this B2B model of transaction, a deal which is struck at a B2B exchange, is acquired by the bank electronically. The bank then takes over the entire process of the deal, from issuing multi-level approvals, providing alerts on the status of the deal and ensuring the structured release of payments, to monitoring the various status such as approval, remittance, dispatch of goods, rejection, the release said.
PTI
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No revision in petro prices, says Naik
New Delhi, November 15 “There is no need for revision in the prices of petroleum products in the domestic market as the OPEC has decided not to effect any cuts in oil production upto January 1, 2002,” Petroleum Minister Ram Naik said in a statement. Responding to OPEC announcement of conditional production cut from January 1 next year, Naik said it was a result of drop in international oil prices. “Under this low price scenario the oil pool deficit of Rs 13,000 crore, as of end of October 2001, is expected to decline,” Naik said and added that there was no need for any increase in the prices of petro products in the domestic market. The OPEC decision suggests that oil prices may remain at lower levels at least upto December 2001, the minister said, adding the lower oil price levels, witnessed from mid-September 2001, had a favourable impact on the oil pool deficit of the country. OPEC has formally announced plans to cut oil production by 1.5 million barrels per day, effective from January 1, 2002, subject to the condition that non-OPEC exporters like Russia, Norway, Mexico and others also cut oil production at least half a million barrels per day.
PTI
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Markets closed
Mumbai, November 15 |
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Japanese Airlines to cut 5,000 jobs Tokyo, November 15 The reported job cuts, which would be done over a five-year period after they merge in September 2002, would help the merged company to reduce personnel costs in a bid to increase its competitiveness, the Asahi Shimbun said without citing sources. “The companies plan to reduce jobs by hiring fewer people,” the Asahi said.
AFP Mitsubishi profit
up 63.5 pc Tokyo Mitsubishi attributed the profit gain to robust earnings in its energy business and the weakness of the Japanese yen. But group net profit shrank 44.8 per cent to 41.94 billion yen for the first six months of the current business year because it posted one-off gains from the sale a year earlier of shares in Photonic Integration Research Inc., a Mitsubishi affiliate that makes optical waveguide devices.
DPA Cairn discovers oil in Rajasthan New
Delhi This is the second discovery by Cairn Energy in the block. The oil company discovered oil in the well RJ-H-1. Cairn Energy owns 50 per cent of the block while the balance is owned by European Oil conglomerate Royal Dutch Shell. The British oil major had first struck oil at Guda-2 in 1999. Last month Cairn Energy had made a hydrocarbon find in deepwaters of Krishna Godavari, offshore Andhra Pradesh.
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