tate-owned Union Bank of India will cut lending rates by July, its Chairman and Managing Director M V Nair said here on Thursday. He added that there had been a 15.5 per cent growth on credit last year and Union Bank had set a target of 25 per cent for the current financial year, well above the central bank's recommended 20 per cent.
The bank has already disbursed loans worth Rs 18,000 crore. Nair said that public sector banks have received 150 per cent more sanctions this year, but utilisation is low because demand has to pick up.
In the city to launch the bank's enhanced mobile banking services, Nair said the bank's electronic transactions have increased to 23 per cent from 6 per cent in the last year.
Friday, June 19, 2009
Union Bank to cut lending rates by July
T20 team manager suspended for hitting on women cricketers
The dust has barely settled on Team India's sorry exit from the ICC World Twenty20 in London when a new controversy has raised its ugly head. The team's manager and Andhra Cricket Association (ACA) secretary V Chamundeswaranath has been suspended for various misdemeanours, including allegedly seeking sexual favours from women cricketers.
The ACA satrap was still in London along with Dhoni's men when, after an emergency executive meeting here on Thursday, ACA president Gokaraju Gangaraju said the decision to suspend Chamundeswaranath was taken in view of the serious charges levelled against him.
"A few women cricketers have approached the association with a complaint that the secretary had been harassing them for sexual favours in return for a place in the team. It has been decided to issue a show-cause notice to Chamundi
to prove his innocence and keep him under suspension till the case is finalised,'' said Gangaraju.
The meeting, attended by 25 of its 32 members, also resolved to ask Gangaraju to act as secretary till July 26 when the extraordinary general body meeting will look into the explanation -- if Chamudeswaranath gives one.
Sources at the meeting said an enquiry committee report found irregularities in the purchases made by Chamundeswaranath for the stadium in Visakhapatnam. The report apparently claimed that a chair which he bought for Rs 1,350 does not cost more than Rs 600. Chamundi had bought 24,000 chairs at that price and the executive decided to seek an explanation from him for misuse of ACA funds.
Speaking to TOI from London, Chamundeswaranath wondered how he could have been involved in the affairs of women's cricket when a former India player, Poornima Rau, works with the ACA as a consultant as well as its selector.
"I don't get involved in selection matters, least of all that of women's teams. And then I have a proven record of helping sportswomen. When I can help Saina Nehwal and Sania Mirza who are not cricketers, how can I have such an attitude towards cricketers?" he said.
Chamundeswaranath felt that the timing of the emergency meeting betrays the desperation of some members to engineer such a decision in his absence as they know they can't do it in his presence.
"Even if the report submitted by the enquiry committee has proved my guilt, is it not fair that I was given a hearing before a decision was taken," asked Chamundi, adding that he is confident that he will come clean of all charges.
"I come from a zamindari family and I don't need to make money through illegal means," he said, adding that he does not need much time to turn the tide.
According to Chamundeswaranath, a conflict between players and non-players in the association has led to this situation. "I have involved all former cricketers in the affairs of the ACA and this has caused heartburn among the zonal secretaries who feel that they have little say in cricketing matters."
The charges and rebuttals notwithstanding, trouble has been brewing for some time now and ego clashes between Gangaraju, an industrialist with political clout, and Chamundi only fuelled the fire. Interestingly, the former was installed by the latter two years ago when the long-standing ACA chief N Venkat Rao was ousted from office.
Gangaraju has since been unhappy, with Chamundi running the show his own way and not surprisingly, the axe he wielded on `Mr Quickfix' came quicker than the BMW Chamundi drives.
Sebi scraps entry load for MFs, cuts fees of intermediaries
The Securities and Exchange Board of India has rationalised disclosure norms for rights issues. The market regulator has allowed investors to choose commission payable to mutual fund distributors and has cut fees for financial intermediaries by 50%. It has also approved the concept of anchor investor. CNBC-TV18 was the first to report these changes on June 16. The Sebi board which met today approved the concept of anchor investor, which are long-term strategic investors. An anchor investor has to be a qualified institutional buyer and can subscribe up to 30% of the institutional quota. The promoter group cannot be an anchor investor. There will also be a 30-day lock-in period for anchor investors. On rights issue: The Sebi board has also rationalised disclosure norms for rights issues. Henceforth, there will be no preferential issue for superior voting rights. Also, no listed company can issue shares with superior rights. On mutual fund schemes: Mutual fund investors have a reason to cheer. There will be no entry load on any mutual fund schemes from now on. Distributors will now have to disclose commission for schemes. In a landmark move, mutual fund investors will now decide on the commission payable to distributors. Fee cut for intermediaries: The board has decided to rationalise the fees charged by intermediaries. It plans to cut fees for financial intermediaries by 50%. Broker fees for debt deals have been cut to Rs 2.5 per Rs 1 crore of turnover. On initial public offerings: From here on, companies planning an initial public offering will have to list on at least one national exchange. Also see: This is to give you a brief summary of the decisions that were taken by the board today. The board decided today that any unlisted company making an IPO will have to list in at least one of the stock exchanges having nationwide trading terminals. This will provide a liquid trading platform to investors in securities of the company. The board also approved the concept of an 'anchor investor'. The concept will work like this. The anchor investor will have to be a QIB, what we call the Qualified Institutional Buyer. He can get up to 30% of the quota that is reserved for a QIB. In effect, about 15% of the issue can be given to the anchor investor. The issuer will carry out a bidding process one-day prior to the actual issue opening in order to decide the anchor investor for allotment. The anchor investor will have to bring in a margin of 25% on application. Immediately after the allotment is finalised, he will have to bring in the remaining 75% within two days. There will be a firm allotment to this anchor investor and therefore there will be a lock-in of 30 days after the issue gets listed. No person related to the promoter, promoter group or the book running lead managers will be allowed to apply as an anchor investor. This provision has been made in response to a request from issuers. A number of issuers found that some investors were prepared to come in with a prior commitment which would enhance their ability to sell the issue and generate more confidence in the minds of retail investors. At present, there is a requirement that shares offered for sale should be held for a period of one-year. There was a representation from the market that if those shares are held in the form of convertibles or depository receipts, then the period for which the convertibles or depository receipt has been held should also be taken into account. The board has agreed with this request. Continued on next page ... _PAGEBREAK_ The board decided that no listed companies can issue shares with superior voting rights. This is basically to avoid possible misuse by the persons who are in control of the company. The board also decided to rationalize the disclosure norms for rights issue. One of the representations from the market was that the disclosure documents for rights issues tends to be extremely bulky because it is treated like a public issue, whereas that company is already listed and has continuing disclosure requirements. Investors know not only the price of the shares but also know the continuing disclosures. So, is it possible for us to simplify and reduce this document? The board considered the question of the existing manner of payment to the mutual fund advisors by investors and decided that there will be no entry load for any schemes. The investor will decide the commission that he is to pay to the distributor directly. It will not be deducted by the fund and then paid to the distributor. If the investor is making an application for Rs 100 that means the entire Rs 100 will get invested. There will be no deduction from that because there is no entry load. The board also decided that if the distributor is selling different schemes then he must disclose to the investor as to what commission he is getting for different schemes. This will avoid the conflict of interest and will allow investors to understand why a particular scheme is being recommended to them. The board decided to rationalize the fees that are charged to intermediaries in the market. These intermediaries include brokers, derivative trading members including the currency segment, mutual fund's filing fee, foreign institutional investors, sub-accounts of foreign institutional investors, foreign venture capital funds, and custodians of securities. Roughly the reduction is about 50% of what the existing fees are.
Wednesday, June 17, 2009
RNRL may intervene in RIL-NTPC gas supply case
Close on the heels of the Bombay High Court's gas supply judgement in its favour, Anil Ambani group firm Reliance Natural Resources Ltd is
"RNRL will intervene in the RIL-NTPC High Court matter," a source familiar with the matter said.
Earlier this week, the Bombay High Court asked RIL to honour a 2005 family agreement to supply 28 million cubic meters per day of gas from its Krishna-Godavari basin fields at $2.34 per mmBtu for 17 years to RNRL.
As per the ruling, RIL has been asked to supply gas at a price 44 per cent lower than rates approved by the government.
The price for RNRL was derived from the 2004 agreement between RIL and NTPC.
However, this RIL-NTPC contract is also a subject matter of case before another bench of the Bombay High Court as RIL has said that the contract was not concluded.
Govt may join battle on KG gas to defend policy
The government, which will be earning close to $9 billion from RIL, as part of its profit share, is likely to intervene in the RIL vs
The gas policy, which was put in place soon after the government approved RIL's price of $4.2 per unit as per a directive by the empowered group of ministers (eGoM), provides for fertiliser companies to get the gas first, followed by power plants that are sitting on idle capacity for want of gas. This allocation policy has been the basis to provide gas to RIL's first set of consumers. However, this policy will not hold good if RIL gives the gas to RNRL.
The court order directs RIL to sell gas to RNRL, which in turn will sell it to its affiliate, Reliance Power. At present, R-Power does not have any gas-based plant; therefore, the company has two options: either to use it as fuel for the proposed power plant at Dadri, which is yet to come up, or to buy an existing one. And, selling gas to a new power plant is not allowed under the present gas utilisation policy.
Moreover, if RIL has to give 28 mmscmd to RNRL, it will be left with very little gas from its first block of 40 mmscmd gas meant for existing fertiliser and power plants as mandated by the government. It is this contradiction that may force the government to step in.
The government had earlier intervened in the dispute in October last but then withdrew two months later, after the court directed that third-party gas sales could start. What is although not clear is how the government will intervene in the case, which is now likely to be taken to the Supreme Court.
Senior petroleum ministry officials, who spent a large part of the day trying to understand the implications of Monday's high court order, said that allocating gas to RNRL will be against the basic principles of the gas allocation policy. The court has directed RIL to sell 28 million standard cubic metres of gas to Reliance Natural Resources at $2.34 per million British thermal unit (mmBtu).
Petroleum & natural gas minister Murli Deora said: "We are studying the judgement and the government will take the steps which are in the best interest of the nation." According to one of the officials in the oil ministry ET spoke to, the impact of the court's order will be conveyed to the eGoM, chaired by Pranab Mukherjee, and the group would decide on the future course of action.
"The government has specified distribution of the scarce natural resource in certain order in the best interest of the nation. It will defend its gas utilisation policy in an appropriate manner," the official said, requesting anonymity.
The government will protect its share of profit and ensure that priority of gas allocation set by the eGoM is not disturbed. "Fertiliser sector will be worst hit and that would hamper the country's agricultural growth," he said.
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